Energy Conservation Program for Certain Industrial Equipment: Energy Conservation Standards and Test Procedures for Commercial Heating, Air-Conditioning, and Water-Heating Equipment

As Enacted ( Federal Register)

Cited authorities 15

Cited in

Federal Register, Volume 80 Issue 5 (Thursday, January 8, 2015)

Federal Register Volume 80, Number 5 (Thursday, January 8, 2015)

Proposed Rules

Pages 1171-1236

From the Federal Register Online via the Government Printing Office www.gpo.gov

FR Doc No: 2014-30839

Page 1171

Vol. 80

Thursday,

No. 5

January 8, 2015

Part III

Department of Energy

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10 CFR Part 431

Energy Conservation Program for Certain Industrial Equipment: Energy Conservation Standards and Test Procedures for Commercial Heating, Air-

Conditioning, and Water-Heating Equipment; Proposed Rule

Page 1172

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DEPARTMENT OF ENERGY

10 CFR Part 431

Docket No. EERE-2014-BT-STD-0015

RIN 1904-AD23

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: Notice of proposed rulemaking (NOPR) and announcement of public meeting.

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SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as amended, prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including several classes of commercial heating, air-conditioning, and water-

heating equipment. EPCA also requires that each time the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) Standard 90.1 is amended with respect to the standard levels or design requirements applicable to that equipment, the U.S. Department of Energy (DOE) must adopt amended uniform national standards for this equipment equivalent to those in ASHRAE Standard 90.1, unless DOE determines that there is clear and convincing evidence showing that more-stringent, amended standards would be technologically feasible and economically justified, and would save a significant additional amount of energy. ASHRAE most recently amended Standard 90.1 on October 9, 2013. Based upon its analysis of the energy savings potential of amended energy conservation standards and the lack of clear and convincing evidence to support more-stringent standards, DOE is proposing to adopt the amended standards in ASHRAE Standard 90.1 for: Small three-phase commercial air-cooled air conditioners (single package only) and heat pumps (single package and split system) less than 65,000 Btu/h; water-source heat pumps; and commercial oil-fired storage water heaters. DOE is also making a proposed determination that the standards for small three-phase commercial air-cooled air conditioners (split system) do not need to be amended. Finally, DOE is proposing updates to the current Federal test procedures to incorporate by reference the most current version of the American National Standards Institute (ANSI) Z21.47, Gas-fired central furnaces, specified in ASHRAE Standard 90.1 applicable to commercial warm-air furnaces, and to the most current version of ASHRAE 103, Method of Testing for Annual Fuel Utilization Efficiency of Residential Central Furnaces and Boilers. This document also announces a public meeting to receive comment on these proposed standards and associated analyses and results, as well as the proposed test procedure provisions.

DATES: Meeting: DOE will hold a public meeting on Friday, February 6, 2015 from 1:00 p.m. to 4:00 p.m., in Washington, DC. The meeting will also be broadcast as a webinar. See section X, ``Public Participation,'' for webinar registration information, participant instructions, and information about the capabilities available to webinar participants.

Comments: DOE will accept comments, data, and information regarding this notice of proposed rulemaking (NOPR) before and after the public meeting, but no later than March 24, 2015. See section X, ``Public Participation,'' for details.

ADDRESSES: The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue SW., Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at (202) 586-2945. Please note that foreign nationals visiting DOE Headquarters are subject to advance security screening procedures. Any foreign national wishing to participate in the meeting should advise DOE as soon as possible by contacting Ms. Edwards at the phone number above to initiate the necessary procedures. Please also note that any person wishing to bring a laptop or tablet into the Forrestal Building will be required to obtain a property pass. Visitors should avoid bringing laptops, or allow an extra 45 minutes. Persons may also attend the public meeting via webinar. For more information, refer to section X, ``Public Participation,'' near the end of this document.

Due to the REAL ID Act implemented by the Department of Homeland Security (DHS), there have been recent changes regarding identification (ID) requirements for individuals wishing to enter Federal buildings from specific States and U.S. territories. As a result, driver's licenses from the following States or territory will not be accepted for building entry, and instead, one of the alternate forms of ID listed below will be required.

DHS has determined that regular driver's licenses (and ID cards) from the following jurisdictions are not acceptable for entry into DOE facilities: Alaska, American Samoa, Arizona, Louisiana, Maine, Massachusetts, Minnesota, New York, Oklahoma, and Washington.

Acceptable alternate forms of Photo-ID include: U.S. Passport or Passport Card; an Enhanced Driver's License or Enhanced ID-Card issued by the States of Minnesota, New York or Washington (Enhanced licenses issued by these States are clearly marked Enhanced or Enhanced Driver's License); a military ID or other Federal government-issued Photo-ID card.

Instructions: Any comments submitted must identify the NOPR on Energy Conservation Standards and Test Procedures for ASHRAE Standard 90.1 Equipment, and provide docket number EERE-2014-BT-STD-0015 and/or regulatory information number (RIN) 1904-AD23. Comments may be submitted using any of the following methods:

1. Federal eRulemaking Portal: www.regulations.gov. Follow the instructions for submitting comments.

2. E-Mail: ComHeatingACWHEquip2014STD0015@ee.doe.gov. Include the docket number and/or RIN in the subject line of the message. Submit electronic comments in WordPerfect, Microsoft Word, PDF, or ASCII file format, and avoid the use of special characters or any form of encryption.

3. Postal Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Office, Mailstop EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. If possible, please submit all items on a compact disc (CD), in which case it is not necessary to include printed copies.

4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Office, 950 L'Enfant Plaza SW., Suite 600, Washington, DC 20024. Telephone: (202) 586-2945. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies.

Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this proposed rule may be submitted to Office of Energy Efficiency and Renewable Energy through the methods listed above and by email to Chad_S_Whiteman@omb.eop.gov.

No telefacsimilies (faxes) will be accepted. For detailed instructions on submitting comments and additional

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information on the rulemaking process, see section X of this document (Public Participation).

Docket: The docket, which includes Federal Register notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials, is available for review at www.regulations.gov. All documents in the docket are listed in the www.regulations.gov index. However, some documents listed in the index may not be publicly available, such as those containing information that is exempt from public disclosure.

A link to the docket Web page can be found at: www.regulations.gov/#!docketDetail;D=EERE-2014-BT-STD-0015. This Web page contains a link to the docket for this document on the www.regulations.gov site. The www.regulations.gov Web page contains simple instructions on how to access all documents, including public comments, in the docket. See section X, ``Public Participation,'' for further information on how to submit comments through www.regulations.gov.

For further information on how to submit a comment, review other public comments and the docket, or participate in the public meeting, contact Ms. Brenda Edwards at (202) 586-2945 or by email: Brenda.Edwards@ee.doe.gov.

FOR FURTHER INFORMATION CONTACT: Ms. Ashley Armstrong, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-6590. Email: Ashley.Armstrong@ee.doe.gov.

Mr. Eric Stas, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC 20585-

0121. Telephone: (202) 586-9507. Email: Eric.Stas@hq.doe.gov.

For information on how to submit or review public comments, contact Ms. Brenda Edwards at (202) 586-2945 or by email: Brenda.Edwards@ee.doe.gov.

SUPPLEMENTARY INFORMATION: DOE proposes to incorporate by reference the following industry standards into 10 CFR 431.76:

ANSI Z21.47-2012, ``Gas-Fired Central Furnaces,'' ANSI approved on March 27, 2012.

Copies of ANSI Z21.47-2012 can be obtained from ANSI. American National Standards Institute. 25 W. 43rd Street, 4th Floor, New York, NY 10036. (212) 642-4900, or by going to http://www.ansi.org.

ASHRAE Standard 103-2007, sections 7.2.2.4, 7.8, 9.2, and 11.3.7, ``Method of Testing for Annual Fuel Utilization Efficiency of Residential Central Furnaces and Boilers,'' ANSI approved on March 25, 2008.

Copies of ASHRAE Standard 103-2007 can be obtained from ASHRAE. American Society of Heating, Refrigerating and Air-Conditioning Engineers Inc., 1791 Tullie Circle NE., Atlanta, Georgia 30329. (404) 636-8400, or by going to http://www.ashrae.org.

Table of Contents

I. Summary of the Proposed Rule

II. Introduction

Authority
Background

1. ASHRAE Standard 90.1-2013

2. Notice of Data Availability

III. General Discussion of Comments Regarding the ASHRAE Process and DOE's Interpretation of EPCA's Requirements With Respect to ASHRAE Equipment

IV. General Discussion of the Changes in ASHRAE Standard 90.1-2013 and Determination of Scope for Further Rulemaking Activity
Commercial Package Air-Conditioning and Heating Equipment

1. Air-Cooled Equipment

2. Water-Source Equipment

3. Packaged Terminal Air Conditioners and Heat Pumps

4. Small-Duct, High-Velocity, and Through-the-Wall Equipment

5. Single-Package Vertical Air Conditioners and Single-Package Vertical Heat Pumps
Commercial Water Heaters
Test Procedures

V. Methodology for Small Commercial Air-Cooled Air Conditioners and Heat Pumps Less Than 65,000 Btu/h
Market Assessment

1. Equipment Classes

2. Review of Current Market
1. Trade Association Information
2. Manufacturer Information
3. Market Data
Engineering Analysis

1. Approach

2. Baseline Equipment

3. Identification of Increased Efficiency Levels for Analysis

4. Engineering Analysis Results
1. Manufacturer Markups
2. Shipping Costs
Markups Analysis
Energy Use Analysis
Life-Cycle Cost and Payback Period Analysis

1. Equipment Costs

2. Installation Costs

3. Unit Energy Consumption

4. Electricity Prices and Electricity Price Trends

5. Maintenance Costs

6. Repair Costs

7. Equipment Lifetime

8. Discount Rate

9. Base-Case Market Efficiency Distribution

10. Compliance Date

11. Payback Period Inputs
National Impact Analysis--National Energy Savings and Net Present Value Analysis

1. Approach

2. Shipments Analysis

3. Base-Case and Standards-Case Forecasted Distribution of Efficiencies

4. National Energy Savings and Net Present Value

VI. Methodology for Water-Source Heat Pumps
Market Assessment

1. Equipment Classes

2. Review of Current Market
1. Trade Association Information
2. Manufacturer Information
3. Market Data
Engineering Analysis

1. Approach

2. Baseline Equipment

3. Identification of Increased Efficiency Levels for Analysis

4. Engineering Analysis Results
1. Manufacturer Markups
2. Shipping Costs
Markups Analysis
Energy Use Analysis
Life-Cycle Cost and Payback Period Analysis

1. Equipment Costs

2. Installation Costs

3. Unit Energy Consumption

4. Electricity Prices and Electricity Price Trends

5. Maintenance Costs

6. Repair Costs

7. Equipment Lifetime

8. Discount Rate

9. Base-Case Market Efficiency Distribution

10. Compliance Date

11. Payback Period Inputs
National Impact Analysis--National Energy Savings and Net Present Value Analysis

1. Approach

2. Shipments Analysis

3. Base-Case and Standards-Case Forecasted Distribution of Efficiencies

4. National Energy Savings and Net Present Value

VII. Methodology for Emissions Analysis and Monetizing Carbon Dioxide and Other Emissions Impacts
Emissions Analysis
Monetizing Carbon Dioxide and Other Emissions Impacts

1. Social Cost of Carbon
1. Monetizing Carbon Dioxide Emissions
2. Development of Social Cost of Carbon Values
3. Current Approach and Key Assumptions
2. Valuation of Other Emissions Reductions

VIII. Analytical Results and Conclusions
Efficiency Levels Analyzed

1. Small Commercial Air-Cooled Air Conditioners and Heat Pumps Less Than 65,000 Btu/h

2. Water-Source Heat Pumps

3. Commercial Oil-Fired Storage Water Heaters
Energy Savings and Economic Justification

1. Small Commercial Air-Cooled Air Conditioners and Heat Pumps Less Than 65,000 Btu/h

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1. Economic Impacts on Commercial Customers
2. National Impact Analysis
  
  2. Water-Source Heat Pumps
3. Economic Impacts on Commercial Customers
4. National Impact Analysis
  
  3. Commercial Oil-Fired Storage Water Heaters
Need of the Nation To Conserve Energy
Proposed Standards

1. Small Commercial Air-Cooled Air Conditioners and Heat Pumps Less Than 65,000 Btu/h

2. Water-Source Heat Pumps

3. Commercial Oil-Fired Storage Water Heaters

IX. Procedural Issues and Regulatory Review
Review Under Executive Order 12866 and 13563
Review Under the Regulatory Flexibility Act
Review Under the Paperwork Reduction Act of 1995
Review Under the National Environmental Policy Act of 1969
Review Under Executive Order 13132
Review Under Executive Order 12988
Review Under the Unfunded Mandates Reform Act of 1995
Review Under the Treasury and General Government Appropriations Act, 1999

I. Review Under Executive Order 12630
Review Under the Treasury and General Government Appropriations Act, 2001
Review Under Executive Order 13211

L. Review Under the Information Quality Bulletin for Peer Review

X. Public Participation
Attendance at the Public Meeting
Procedure for Submitting Prepared General Statements for Distribution
Conduct of the Public Meeting
Submission of Comments
Issues on Which DOE Seeks Comment

XI. Approval of the Office of the Secretary

I. Summary of the Proposed Rule

Title III, Part C \1\ of the Energy Policy and Conservation Act of 1975 (``EPCA'' or ``the Act''), Public Law 94-163, (42 U.S.C. 6311-

6317, as codified), added by Public Law 95-619, Title IV, section 441(a), established the Energy Conservation Program for Certain Industrial Equipment, which sets forth a variety of provisions designed to improve energy efficiency. These encompass several types of commercial heating, air-conditioning, and water-heating equipment, including those that are the subject of this rulemaking. (42 U.S.C. 6311(1)(B) and (K)) EPCA, as amended, also requires the U. S. Department of Energy (DOE) to consider amending the existing Federal energy conservation standard for certain types of listed commercial and industrial equipment (generally, commercial water heaters, commercial packaged boilers, commercial air-conditioning and heating equipment, and packaged terminal air conditioners and heat pumps) each time the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) Standard 90.1, Energy Standard for Buildings Except Low-Rise Residential Buildings, 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, 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 under the statutory criteria, DOE must establish such more-stringent standard not later than 30 months after publication of the revised ASHRAE Standard 90.1. (42 U.S.C. 6313(a)(6)(B)) ASHRAE officially released ASHRAE Standard 90.1-2013 on October 9, 2013, thereby triggering DOE's previously referenced obligations pursuant to EPCA to determine for those types of equipment with efficiency level or design requirement changes beyond the current Federal standard, whether: (1) The amended industry standard should be adopted; or (2) clear and convincing evidence exists to justify more-stringent standard levels.

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\1\ For editorial reasons, upon codification in the U.S. Code, Part C was redesignated Part A-1.

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Accordingly, this NOPR sets forth DOE's determination of scope for consideration of amended energy conservation standards with respect to certain heating, ventilating, air-conditioning, and water-heating equipment addressed in ASHRAE Standard 90.1-2013. Such inquiry is necessary to ascertain whether the revised ASHRAE efficiency levels have become more stringent, thereby ensuring that any new amended national standard would not result in prohibited ``backsliding.'' For those equipment classes for which ASHRAE set more-stringent efficiency levels \2\ (i.e., small three-phase air-cooled air conditioners (single package only) and heat pumps (single package and split system) less than 65,000 Btu/h; water-source heat pumps; commercial oil-fired storage water heaters; single package vertical units; and packaged terminal air conditioners), DOE analyzed the energy savings potential of amended national energy conservation standards (at both the new ASHRAE Standard 90.1 efficiency levels and more-stringent efficiency levels). For small three-phase air-cooled air conditioners and heat pumps less than 65,000 Btu/h and water-source heat pumps, DOE analyzed the economic savings potential of amended national energy conservation standards at more-stringent efficiency levels, in addition to the energy savings potential. For commercial oil-fired storage water heaters, DOE determined that the potential for energy savings from adopting more-stringent levels than the ASHRAE Standard 90.1 levels was not significant, and, thus, DOE is proposing to adopt the ASHRAE Standard 90.1 levels without further analysis (see section IV.B for further details). For single package vertical units and packaged terminal air conditioners, DOE is performing economic analyses and responding to relevant comments from the NODA in separate rulemakings that were previously ongoing,\3\ and consequently, the analysis for this equipment and further discussion or proposal of standard levels will not be discussed in this NOPR.

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\2\ ASHRAE Standard 90.1-2013 did not change any of the design requirements for the commercial (HVAC) and water-heating equipment covered by EPCA.

\3\ See Packaged Terminal Air Conditioners and Heat Pumps Standards Rulemaking Web page: www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/64 and Single Package Vertical Air Conditioners and Heat Pumps Standards Rulemaking Web page: www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx?ruleid=107.

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DOE has tentatively concluded that for three classes of small three-phase air-cooled air conditioners and heat pumps less than 65,000 Btu/h, three classes of water-source heat pumps, and one class of commercial oil-fired storage water heaters: (1) The revised efficiency levels in ASHRAE 90.1-2013 \4\ are more stringent than current national standards; and (2) their adoption as Federal energy conservation standards would result in energy savings where models exist below the revised efficiency levels. DOE has also tentatively concluded that there is not clear and convincing evidence that would justify adoption of more-stringent efficiency levels for this equipment.

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\4\ To obtain a copy of ASHRAE Standard 90.1-2013, visit https://www.ashrae.org/resources--publications/bookstore/standard-90-1.

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It is noted that DOE's regulations currently have a single equipment class for small, three-phase commercial air-cooled air conditioners less than 65,000 Btu/h, which covers both split-system and single-package models. Although ASHRAE Standard 90.1-2013 did not amend standard levels for the split-system models within that equipment class, it did so for the single-package models. Given this split, DOE is proposing to once again separate these two types of equipment into separate equipment classes. In the NOPR, DOE is proposing to evaluate amended standards for split-system models under the six-year-lookback provision at 42 U.S.C. 6313(a)(6)(C). Following this evaluation, DOE has tentatively concluded that there is not clear and convincing evidence that would justify adoption of more-stringent efficiency levels for small three-phase split-system air-cooled air conditioners less than 65,000 Btu/h, where the efficiency level in ASHRAE 90.1-2013 is the same as the current Federal energy conservation standards.

Thus, in accordance with the criteria discussed elsewhere in this document, DOE is proposing amended energy conservation standards for three classes of small three-phase air-cooled air conditioners and heat pumps less than 65,000 Btu/h, three classes of water-source heat pumps, and one class of commercial oil-fired storage water heaters by adopting the efficiency levels specified by ASHRAE Standard 90.1-2013, as shown in Table I.1. The proposed standards, if adopted, would apply to all equipment listed in Table I.1 and manufactured in, or imported into, the United States on or after the date two years after the effective date specified in ASHRAE Standard 90.1-2013 (i.e., by January 1, 2017 for small air-cooled air conditioners and heat pumps and by October 9, 2015 for water-source heat pumps and oil-fired storage water heaters). (42 U.S.C. 6313(a)(6)(D)(i)) DOE is making a determination that standards for split-system air-cooled air conditioners less than 65,000 Btu/h do not need to be amended.

Table I.1--Proposed Energy Conservation Standards for Specific Types of Commercial Equipment

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Equipment class Efficiency level Anticipated compliance date

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Three-Phase Air-Cooled Single-Package Air 14.0 SEER................... January 1, 2017.

Conditioners 105,000 80% Et...................... October 9, 2015.

Btu/h and =17,000 and =65,000 and =17,000 12.0 EER, 4.2 COP. 13.0 EER, 4.3 12.0 EER, 4.2 COP. Yes--See section

and =65,000 12.0 EER, 4.2 COP. 13.0 EER, 4.3 12.0 EER, 4.2 COP. Yes--See section

and =7,000 and x x x IV.A.3.

15,000 Btu/h, 10/8/12). 1/2015). IV.A.3.

Standard Size (New

Construction) dagger.

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Commercial Package Air-Conditioning and Heating Equipment--SDHV and TTW

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Through-the-Wall (TTW), Air- 13.0 SEER, 7.4 12.0 SEER, 7.4 13.0 SEER, 7.7 No--See section

Cooled Heat Pumps, =65,000 and IV.A.5.

=135,000 and IV.A.5.

=65,000 and =135,000 and 30,000 and

30,000 and

12 kW, >=20 gal. DaggerDagger, DaggerDagger DaggerDagger IV.B.

Btu/h. Dagger %/h. Dagger %/h.

Gas Storage Water Heaters, 80% Et; Q/800 + 80% Et; Q/799 + 80% Et; Q/800 + No--See Section

>75,000 Btu/h, 105,000 Btu/h, =200,000 Btu/h, >=4,000 Btu/h/ 110 V1/2 SL 16.6 V1/2 SL 110 Vr1/2 Btu/hr. IV.B.

gal, >=10 gal. diamso, Btu/h. diamso, Btu/

hdiamsodiamso.

Oil Instantaneous Water Heaters, 78% Et, Q/800 + 78% Et, Q/799 + 78% Et, Q/800 + No--See Section

>210,000 Btu/h, >=4,000 Btu/h/ 110 V1/2 SL 16.6 V1/2 SL 110 Vr1/2 Btu/hr. IV.B.

gal, >=10 gal. diamso, Btu/h. diamso, Btu/

hdiamsodiamso.

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* ``Et'' means thermal efficiency; ``EER'' means energy efficiency ratio; ``SEER'' means seasonal energy

efficiency ratio; ``HSPF'' means heating seasonal performance factor; ``COP'' and ``COPH'' mean coefficient of

performance; and ``Btu/h'' or ``Btu/hr'' means British thermal units per hour.

** ASHRAE Standard 90.1-2013 equipment classes may differ from the equipment classes defined in DOE's

regulations, but no loss of coverage will occur (i.e., all previously covered DOE equipment classes remain

covered equipment).

*** While ASHRAE Standard 90.1-2013 added a subscript H to COP for all heat pumps, its definition for

``coefficient of performance (COP), heat pump--heating'' has not changed. As a result, DOE believes the

subscript to be a clarifying change of nomenclature (to differentiate from the COP metric used for

refrigeration) only, rather than a change to the metric itself.

dagger ``Standard size'' refers to PTAC equipment with wall sleeve dimensions >=16 inches high or >=42 inches

wide. For DOE's purposes, this equipment class applies to standard-size equipment regardless of application

(e.g., new construction or replacement).

daggerdagger ``Cap'' means cooling capacity in kBtu/h at 95degF outdoor dry-bulb temperature.

daggerdaggerdagger This may have been an editorial error in ASHRAE 90.1-2010.

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Dagger While ASHRAE Standard 90.1-2013 added this equipment class, DOE believes that equipment falling into

these classes is already covered by Federal standards, most commonly in the residential space-constrained

central air conditioning equipment class with minimum standards of 12.0 SEER for air conditioners and heat

pumps and 7.4 HSPF for heat pumps. See section II.A.5.1 of this NODA for further detail.

DaggerDagger ``V'' means rated volume in gallons; ``SL'' means standby loss.

DaggerDaggerDagger ``Vm'' means measured volume in tank.

diamso ``Q'' means the nameplate input rate in Btu/hr; ``V'' means rated volume in gallons; ``SL'' means

standby loss. DOE's descriptor, ``Vr,'' also means rated volume in gallons and differs only in nomenclature.

diamsodiamso As explained in section IV.B, DOE believes that all changes to standby loss levels for these

equipment classes were editorial errors because they are identical to SI (International System of Units;

metric system) formulas rather than I-P (Inch-Pound; English system) formulas.

DOE notes that ASHRAE 90.1-2013 also increased integrated energy efficiency ratio (IEER) levels for additional equipment not listed in Table II.1, including small, large, and very large air-cooled and water-cooled air conditioners and heat pumps. However, because current Federal energy conservation standards for this equipment do not use IEER as a rating metric, DOE is not triggered to review this equipment. In September 2014, DOE published a notice of proposed rulemaking (NOPR) for commercial air-cooled equipment. 79 FR 58948 (Sept. 30, 2014). In the NOPR, DOE proposed amended standards for small, large, and very large air-cooled commercial air conditioners and heat pumps based on IEER as the energy efficiency descriptor. Should DOE finalize new standards using IEER as the metric, future increases in IEER levels in ASHRAE Standard 90.1 as compared to the Federal energy conservation standards would trigger DOE to review its efficiency levels for that equipment.

2. Notice of Data Availability

On April 11, 2014, DOE published a notice of data availability (April 2014 NODA) in the Federal Register and requested public comment as a preliminary step required pursuant to EPCA when DOE considers amended energy conservation standards for certain types of commercial equipment covered by ASHRAE Standard 90.1. 79 FR 20114. Specifically, the April 2014 NODA presented for public comment DOE's analysis of the potential energy savings estimates related to amended national energy conservation standards for the types of commercial equipment for which DOE was triggered by ASHRAE action, based on: (1) The modified efficiency levels contained within ASHRAE Standard 90.1-2013; and (2) more-stringent efficiency levels. Id. at 20134-36. 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 presented a discussion in the April 2014 NODA of the changes found in ASHRAE Standard 90.1-2013. Id. at 20119-25. The April 2014 NODA includes a description of DOE's evaluation of each ASHRAE equipment type in order for DOE to determine whether the amendments in ASHRAE Standard 90.1-2013 have increased efficiency levels or changed design requirements. As an initial matter, DOE sought to determine which requirements for covered equipment in ASHRAE Standard 90.1, if any: (1) Have been revised solely to reflect the level of the current Federal energy conservation standard (where ASHRAE is merely ``catching up'' to the current national standard); (2) have been revised but with a reduction in stringency; or (3) have had any other revisions made that do not change the standard's stringency, in which case, DOE is not triggered to act under 42 U.S.C. 6313(a)(6) for that particular equipment type. For those types of equipment in ASHRAE Standard 90.1 for which ASHRAE actually increased efficiency levels above the current Federal standard, DOE subjected that equipment to the potential energy savings analysis discussed previously and presented the results in the April 2014 NODA for public comment. 79 FR 20114, 20134-36 (April 11, 2014). Lastly, DOE presented an initial assessment of the test procedure changes included in ASHRAE Standard 90.1-2013. Id. at 20124-25.

As a result of the preliminary determination of scope set forth in the April 2014 NODA, DOE found that there were equipment types for which ASHRAE increased the efficiency levels (thereby triggering further analysis) including: (1) Three classes of small three-phase air-cooled air conditioners and heat pumps less than 65,000 Btu/h; (2) three classes of small water-source heat pumps; (3) six classes of single package vertical units; (4) three classes of packaged terminal air conditioners; and (5) commercial oil-fired storage water heaters. 79 FR 20114, 20119-23 (April 11, 2014). DOE presented its methodology, data, and results for the preliminary energy savings analysis developed for these equipment classes in the April 2014 NODA for public comment. 79 FR 20114, 20125-38 (April 11, 2014).

III. General Discussion of Comments Regarding the ASHRAE Process and DOE's Interpretation of EPCA's Requirements With Respect to ASHRAE Equipment

In response to its request for comment on the April 2014 NODA, DOE received 11 comments from manufacturers, trade associations, utilities, and energy efficiency advocates. Commenters included: First Co.; Lennox International Inc.; National Comfort Products (NCP); Earthjustice; Goodman Global, Inc.; California Investor-Owned Utilities (CA IOUs); GE Appliances; a group including Appliance Standards Awareness Project (ASAP), the American Council for an Energy-Efficient Economy (ACEEE), the Natural Resources Defense Council (NRDC), and the Northwest Energy Efficiency Alliance (jointly referred to as the Advocates); Daikin Applied; Edison Electric Institute (EEI); and the Air-conditioning, Heating, and Refrigeration Institute (AHRI). As discussed previously, these comments are available in the docket for this rulemaking and may be reviewed as described in the ADDRESSES section. The following section summarizes the issues raised in these comments, along with DOE's responses.

DOE received numerous comments regarding whether it should, in general, adopt levels contained in ASHRAE standard 90.1-2013 as the Federal energy conservation standard, rather than more-stringent levels. Several commenters stated that DOE should follow ASHRAE's lead (e.g., Daikin Applied, No. 0022 at p. 1; Goodman Global, Inc., No. 0018 at p. 4; Lennox International Inc., No. 0015 at p. 1-2). AHRI stated that the ASHRAE revisions represent consensus standards that were subject to rigorous public review and were evaluated for cost-

effectiveness. (AHRI, No. 24 at p. 1) Because the current Federal values are lower than ASHRAE 90.1-2013 values, EEI argued that less-

efficient equipment could continue to enter the market until the effective date of any DOE standards, which would be four years after DOE completes the rulemaking for levels higher than ASHRAE. (EEI, No. 23 at p. 2) EEI added that adopting ASHRAE would reduce the amount of DOE

Page 1180

resources needed for updating these standards. (Id.)

On the other hand, the Advocates and CA IOUs commented that significant, non-trivial energy savings would be achievable by adopting higher efficiency levels than those in ASHRAE 90.1-2013 for the equipment classes analyzed in the NODA, at least when considered in aggregate. (Advocates, No. 21 at p. 1; CA IOUs, No. 19 at pp. 2-3) The commenters provided justifications for adopting higher efficiency levels for specific equipment classes; these details are discussed in the relevant sections of this NOPR.

In response to the submitted comments, DOE notes that it makes decisions about whether to adopt levels in ASHRAE 90.1-2013 or higher efficiency levels based on application of the statutory criteria to potential standard levels for individual equipment types (per its mandate under EPCA), rather than upon some general assessment of perceived benefits of a shorter process by adopting the ASHRAE levels or any other reason. Specifically, EPCA directs that if ASHRAE Standard 90.1 is amended, 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 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)) In order to determine if more-stringent efficiency levels would meet EPCA's criteria, DOE must review the efficiency levels in ASHRAE Standard 90.1-2013 and more-stringent efficiency levels for their energy savings and economic potentials irrespective of whether the efficiency levels were part of a consensus standards process. The specific rationale for DOE's decisions for each equipment type can be found in the relevant sections of this document.

AHRI also lodged several complaints regarding the analyses described in the April 2014 NODA. AHRI stated that DOE's analysis ignored the energy savings from changes ASHRAE implemented even before Standard 90.1-2013 was published. For example, AHRI argued that ASHRAE's water-source heat pump level was developed in 2011, adopted in 2012, and took effect immediately. (AHRI, No. 24 at p. 2) Thus, the products have been providing energy savings for at least 2 years. (Id.) AHRI further asserted that DOE's analysis ignores the savings that occur from implementation of the ASHRAE standard in 2015 or 2017, rather than developing its own revised standard that would take effect in 2020. According to AHRI, DOE's rulemaking process will lose 3 to 5 years of energy savings, and DOE's analysis must consider the energy savings associated with earlier implementation of the ASHRAE 90.1-2013. (Id.) Finally, AHRI stated that the April 2014 NODA did not address technological feasibility and economic justification, unlike ASHRAE 90.1. (Id.)

In response, DOE only takes into account energy savings that result from adoption of a Federal standard, not from adoption of an industry standard such as ASHRAE Standard 90.1. However, DOE did take the savings gap into account in the April 2014 NODA by using an analysis period of 30 years beginning with 2015 or 2017 for the ASHRAE level, and a shorter analysis period beginning in 2020 but with the same end date for efficiency levels higher than ASHRAE. As part of any rulemaking triggered by ASHRAE, DOE follows EPCA's mandate by only addressing energy savings in the NODA and analyzing technological feasibility and economic justification in the NOPR where the potential for energy savings appears to be significant. DOE further notes that it can only take credit for savings from mandatory Federal standards and, therefore, cannot take credit for early adoption of ASHRAE Standard 90.1 levels prior to the compliance date of the corresponding DOE standard when evaluating any decision to amend DOE standards. DOE commends ASHRAE's action to amend Standard 90.1, as well as any early adoption of these levels by manufacturers to improve commercial equipment efficiency and to reduce national energy use. DOE strives to consider such early adoption in its analysis to the extent that further energy savings associated with DOE's adoption of either the ASHRAE 90.1 standard level or a more-stringent standard level would be negated or reduced. In other words, DOE seeks to determine any shifts in the baseline prior to adoption of amended DOE standards, thereby allowing for a more accurate assessment of energy savings. See section V.F.3 for more information regarding efficiency distributions of equipment shipments that allow proper consideration of the energy savings generated specifically by DOE's potential actions.

IV. General Discussion of the Changes in ASHRAE Standard 90.1-2013 and Determination of Scope for Further Rulemaking Activity

As discussed previously, before beginning an analysis of the potential economic impacts and energy savings that would result from adopting the efficiency levels specified by ASHRAE Standard 90.1-2013 or more-stringent efficiency levels, DOE first sought to determine whether or not the ASHRAE Standard 90.1-2013 efficiency levels actually represented an increase in efficiency above the current Federal standard levels. This section discusses each equipment class for which the ASHRAE Standard 90.1-2013 efficiency level differs from the current Federal standard level, along with DOE's preliminary conclusion as to the action DOE is taking with respect to that equipment. (Once again, DOE notes that ASHRAE Standard 90.1-2013 did not change any of the design requirements for the commercial HVAC and water-heating equipment covered by EPCA, so DOE is not conducting further analysis in the sections below on that basis.)
Commercial Package Air-Conditioning and Heating Equipment

EPCA, as amended, defines ``commercial package air conditioning and heating equipment'' as air-cooled, evaporatively-cooled, water-cooled, or water-source (not including ground water-source) electrically operated, unitary central air conditioners and central air conditioning heat pumps for commercial use. (42 U.S.C. 6311(8)(A); 10 CFR 431.92) EPCA also defines ``small,'' ``large,'' and ``very large'' commercial package air conditioning and heating equipment based on the equipment's rated cooling capacity. (42 6311(8)(B)-(D); 10 CFR 431.92) ``Small commercial package air conditioning and heating equipment'' means equipment rated less than 135,000 Btu per hour (cooling capacity). (42 U.S.C. 6311(8)(B); 10 CFR 431.92) ``Large commercial package air conditioning and heating equipment'' means equipment rated at or above 135,000 Btu per hour and less than 240,000 Btu per hour (cooling capacity). (42 U.S.C. 6311(8)(C); 10 CFR 431.92) ``Very large commercial package air conditioning and heating equipment'' means equipment rated at or above 240,000 Btu per hour and less than 760,000 Btu per hour (cooling capacity). (42 U.S.C. 6311(8)(D); 10 CFR 431.92)

1. Air-Cooled Equipment

The current Federal energy conservation standards for the three

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classes of air-cooled commercial package air conditioners and heat pumps for which ASHRAE Standard 90.1-2013 amended efficiency levels are shown in Table II.1 and can be found in DOE's regulations at 10 CFR 431.97. The Federal energy conservation standards for air-cooled air conditioners and heat pumps are differentiated based on the unit's cooling capacity (i.e., small, large, or very large). For small equipment, there is an additional disaggregation into: (1) Equipment less than 65,000 Btu/h and (2) equipment greater than or equal to 65,000 Btu/h and less than 135,000 Btu/h. In setting initial standards for three-phase equipment less than 65,000 Btu/h, Congress used the same metric for this commercial equipment as for residential single-

phase equipment (i.e., seasonal energy efficiency ratio (SEER)), which is reflected in DOE's current regulations. Unlike the current Federal energy conservation standards, ASHRAE Standard 90.1 also differentiates the equipment that is less than 65,000 Btu/h into split system and single package subcategories. Historically, ASHRAE has set equivalent efficiency levels for this equipment; however, effective January 1, 2015, ASHRAE Standard 90.1-2013 increases the efficiency level for single package air conditioners but not split system air conditioners. The increased efficiency level for single package air conditioners surpasses the current Federal energy conservation standard level for the overall equipment class, while the efficiency level for split system air conditioners meets and does not exceed the Federal energy conservation standard for the overall equipment class. ASHRAE Standard 90.1-2013 also increases the efficiency levels, effective January 1, 2015, for both single package and split system air-cooled heat pumps, for SEER and heating seasonal performance factor (HSPF), to efficiency levels that surpass the current Federal energy conservation standard levels. ASHRAE Standard 90.1-2013 increases the HSPF level for split systems above that for single package heat pumps.

Because ASHRAE increased the standard for only single package air conditioners, and increased the HSPF level to a more stringent level for split system heat pumps than for single package heat pumps, in the April 2014 NODA, DOE proposed to consider separate equipment classes for single package and split system equipment in the overall equipment classes of small commercial package air conditioners and heat pumps (air-cooled, three-phase) less than 65,000 Btu/h, as existed prior to codification of EISA 2007, and requested comment on this issue.

In response, AHRI, Goodman Global, and Lennox International agreed that DOE should re-create separate classes for split system and single package equipment with input ratings less than 65,000 Btu/h. (AHRI, No. 24 at p. 2; Goodman Global, Inc., No. 18 at p. 2; Lennox International Inc., No. 15 at p. 5) The CA IOUs instead preferred having only two equipment classes, one for air conditioners, and one for heat pumps, with identical levels across single package and split system equipment. (CA IOUs, No. 19 at p. 4) In order to facilitate following the statutory requirements of the ASHRAE trigger, in this NOPR, DOE continues to propose the re-creation of separate equipment classes.

With regard to split system three-phase air conditioners, Earthjustice stated that standards must be reviewed, if not under the ASHRAE trigger, then under the six-year look back, as the clock will expire next year. (Earthjustice, No. 17 at pp. 1-2) Specifically, Earthjustice opined that ASHRAE has amended the Standard 90.1 levels for airhyphencooled, threehyphenphase airhyphenconditioners less than 65,000 Btu/h by increasing the required SEER levels for single package air conditioners and all heat pump units. The fact that ASHRAE did not also increase the Standard 90.1hyphenrequired SEER level for split system air conditioners in this equipment class does not insulate split system units from DOE's obligation to consider amended standards. The ``more stringent'' standard that EPCA obliges DOE to consider for this equipment class may be one that, for example, applies a SEER 14 level (or a higher SEER level) to all airhyphencooled 3hyphenphase air-conditioners less than 65,000 Btu/h (see 42 U.S.C. 6313(a)(6)(A)(ii)(II)). (Earthjustice, No. 17 at p. 1) In addition, more than six years have elapsed since EISA 2007 amended the standards for the split system air conditioners at issue, and even if the 6hyphenyear clock began to run only when DOE incorporated the EISA 2007 levels into the Code of Federal Regulations, the time limit for DOE's review will expire next year.\8\ (Earthjustice, No. 17 at pp. 1-

2) The CA IOUs also requested that DOE update efficiency levels for split-system air conditioners even though ASHRAE did not update them. (CA IOUs, No. 19 at p. 4)

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\8\ DOE notes that pursuant to the EISA 2007 amendments to EPCA, under 42 U.S.C. 6313(a)(6)(C), the agency must periodically review its already established energy conservation standards for ASHRAE equipment. In December 2012, this provision was further amended by the American Energy Manufacturing Technical Corrections Act (AEMTCA) to clarify that DOE's periodic review of ASHRAE equipment must occur ``every six years.'' (42 U.S.C. 6313(a)(6)(C)(i)) The final rule incorporating the EISA 2007 prescribed levels into the CFR was published on March 23, 2009. 74 FR 12058.

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In response, DOE initially notes that EPCA's trigger regarding ASHRAE equipment is tied to the equipment that ASHRAE acts to amend. (42 U.S.C. 6313(a)(6)(A)) In this case, DOE was triggered for 3-phase air-cooled single-package air conditioners less than 65,000 Btu/h, but not the split-system variant, even though both types of units were included in a more comprehensive DOE equipment class. As noted previously, DOE is acting to prevent confusion by proposing to re-

create separate product classes for the two types of systems. However, DOE has decided to now consider amended standards for 3-phase air-

cooled split-system air conditioners less than 65,000 Btu/h under its 6-year look back authority. (42 U.S.C. 6313(a)(6)(C)(i)) It is worth noting that DOE did not consider ASHRAE's single-package air conditioner level of 14 SEER as the default adoption value for split-

system air conditioners. Instead, DOE is treating those as a separate equipment class and has reviewed the adoption of 14 SEER for split-

system air conditioners as a level more stringent than ASHRAE that must result in significant additional conservation of energy and be technologically feasible and economically justified.

In the April 2014 NODA, DOE conducted an analysis of the potential energy savings due to amended standards for single-package air conditioners and single-package and split-system heat pumps (air-

cooled, three-phase, less than 65,000 Btu/h). At that time, DOE did not conduct an analysis of the potential energy savings for split-system air conditioners, but it added it to the analysis performed for this NOPR.

In response to the April 2014 NODA, Goodman Global supported the ASHRAE levels for small air-cooled air conditioners and heat pumps so that single-phase and three-phase products would have the same minimum efficiencies, which is a reduced burden. (Goodman Global, Inc., No. 17 at p. 4) Goodman Global added that it does not believe higher values than ASHRAE Standard 90.1-2013 could be justified from a simple payback perspective. (Id.) In contrast, the Advocates and the CA IOUs supported higher efficiency levels for three-phase equipment. The CA IOUs argued that the higher annual operating hours in nonresidential applications would support a higher

Page 1182

efficiency standard. (CA IOUs, No. 19 at p. 4) The Advocates stated that three-phase commercial units use a three-phase compressor, which is generally more efficient than a single-phase compressor, which suggests that a three-phase central air conditioner or heat pump has the potential to be more efficient than a comparable single-phase unit does. (Advocates, No. 21 at p. 1) Furthermore, the Advocates commented that efficiency levels were found on the market that were much higher than the ASHARE Standard 90.1-2013 level of SEER 14 and that energy savings as high as 0.2 quads may be possible. (Advocates, No. 21 at p. 3) The CA IOUs stated that more than one-fifth of the models of three-

phase air-cooled single-package units for sale in California could meet a 16 SEER standard, which would result in energy savings five times greater than the 0.02 quad savings from simply adopting the ASHRAE level. (CA IOUs, No. 0019 at p. 2) The CA IOUs added that most manufacturers currently have products that meet 15 SEER, and given that a compliance date for more-stringent levels would be 2020, the manufacturers that do not would have 6 years to redesign. (Id.)

Upon reviewing the results of the potential energy savings analysis in the April 2014 NODA, DOE agrees with the Advocates and the CA IOUs that additional significant energy savings are possible and has conducted additional economic analysis on this equipment. However, after analysis, DOE has tentatively determined that efficiency levels higher than those in ASHRAE Standard 90.1-2013 are not economically justified for any of the four equipment classes and is proposing in this NOPR to adopt the energy efficiency levels contained in ASHRAE Standard 90.1-2013 for small air-cooled commercial package air conditioning and heating equipment less than 65,000 Btu/h (see section VIII.D.1). For split system air conditioners, DOE is not updating standards, as the ASHRAE levels are equal to the current Federal minimum.

For small commercial three-phase equipment less than 65,000 Btu/h, the CA IOUs stated that DOE should consider including the energy efficiency ratio (EER) metric, along with SEER, to align more closely with industry standards. (CA IOUs, No. 0019 at p. 3-4) The commenter noted that original equipment manufacturers would use both metrics when rating a unit. The CA IOUs also commented that the SEER metric is based on residential use patterns and, by itself, may not be appropriate to characterize energy use in nonresidential buildings. According to the commenter, full-load EER better approximates performance during peak loading conditions. (Id.)

In response, DOE does not have authority to adopt multiple metrics for a single equipment class. Pursuant to 42U.S.C. 6313(a)(6), the Secretary has authority to amend the energy conservation standards for specified equipment, but under 42 U.S.C. 6311(18), the statute's definition of the term ``energy conservation standard'' is limited to: (A) A performance standard that prescribes a minimum level of energy efficiency or a maximum quantity of energy use for a product; or (B) a design requirement for a product. The language of EPCA authorizes DOE to establish a single performance standard or a single design standard, but not multiple performance standards.

2. Water-Source Equipment

The current Federal energy conservation standards for the three classes of commercial water-source heat pumps for which ASHRAE Standard 90.1-2013 amended efficiency levels are shown in Table II.1 and can be found in DOE's regulations at 10 CFR 431.97. The Federal energy conservation standards for water-source equipment are differentiated based on the model's cooling capacity. ASHRAE Standard 90.1-2013 increased the energy efficiency levels for all three equipment classes to efficiency levels that surpass the current Federal energy conservation standard levels. Therefore, DOE conducted an analysis of the potential energy savings due to amended standards for this equipment in the April 2014 NODA.

In response to the April 2014 NODA, the Advocates requested that DOE conduct further analysis to consider higher efficiency levels than those in ASHRAE Standard 90.1-2013 efficiency levels for water-source heat pumps, because efficiency levels as high as 21 EER are available on the market and higher efficiency levels could achieve additional national energy savings of as much as 1 quad. (The Advocates, No. 21 at p. 1) Upon reviewing the results of the potential energy savings analysis in the April 2014 NODA, DOE agrees with the Advocates that additional energy savings are possible and has conducted further analysis on this equipment. However, after the analysis, DOE has tentatively determined that there is not clear and convincing evidence that efficiency levels higher than those in ASHRAE 90.1-2013 are economically justified for any of the three water-source heat pump classes and is proposing in this NOPR to adopt the energy efficiency levels contained in ASHRAE Standard 90.1-2013 for water-source heat pumps (see section VIII.D.2).

ASHRAE Standard 90.1-2013 also changed the name of this equipment class from ``water source'' to ``water to air, water-loop'' and changed the heating-mode descriptor for this equipment from COP to COPH. In the April 2014 NODA, DOE suggested that these were editorial changes only and that this new nomenclature refers to the same water-source heat pump equipment covered by Federal energy conservation standards, but with the metric nomenclature serving to clarify the difference between COP for refrigeration and COP for heat pumps. DOE requested comment on this issue. 79 FR 20114, 20120, 20137 (April 11, 2014). In response, AHRI agreed that the nomenclature changes were editorial. (AHRI, No. 24 at p. 3)

In the April 2014 NODA, DOE noted that EPCA does not define ``water-source heat pump'' other than to exclude ground-water-source units from the definition of ``commercial package air conditioning and heating equipment'' at 42 U.S.C. 6311(8)(A). 79 FR 20114, 20120 (April 11, 2014). However, DOE noted that there are several related types of water-source and ground-water-source heat pumps, as shown in Table IV.1. ASHRAE Standard 90.1-2013 included new nomenclature for all such types of heat pumps. DOE further noted that the vast majority of water-

source (water-to-air, water-loop) heat pump models are also rated for performance in ground-loop or ground-water heat pump applications. It is DOE's understanding that design differences of the models used in the different applications are minimal, including potential use of material with better corrosion resistance in the water coil (for open-

loop systems only) and/or added insulation for ground-water or ground-

loop systems. Efficiency ratings are different across these three application types primarily because of the different test conditions. (Ground and ground-water-source systems are tested with cooler entering water.) Because of the similarity in models across applications, DOE believes that increased efficiency standards for water-loop applications may affect heat pumps for ground-source and ground-water applications, although they are excluded from coverage. Id.

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Table IV.1--Nomenclature for Types of Water-Loop, Ground-Loop, and

Ground-Water-Source Heat Pumps

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ASHRAE standard 90.1-

ASHRAE standard 90.1-2010 2013 Test procedure

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Water-source (86deg entering Water-to-air, water- ISO Standard

water). loop. 13256-1.

Ground-water-source (59deg Water-to-air, ground-

entering water). water.

Ground-water source (77deg Brine-to-air, ground-

entering water). loop.

Water-source water-to-water Water-to-water, water- ISO Standard

(86deg entering water). loop. 13256-2.

Water-source water-to-water Water-to-water, ground-

(59deg entering water). water.

Ground-water-source brine-to- Brine-to-water, ground-

water (77deg entering loop.

water).

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In the April 2014 NODA, DOE considered adding a definition for ``water-source heat pump'' to the Code of Federal Regulations (CFR) that would include both single-phase and three-phase units of all capacities (up to 760,000 Btu/h) and would be applicable to water-to-

air heat pumps. Specifically, DOE considered adapting the definition from that in the ASHRAE handbook: \9\ ``A water-source heat pump is a single-phase or three-phase reverse-cycle heat pump that uses a circulating water loop as the heat source for heating and as the heat sink for cooling. The main components are a compressor, refrigerant-to-

water heat exchanger, refrigerant-to-air heat exchanger, refrigerant expansion devices, and refrigerant reversing valve.'' DOE requested comment on this definition. 79 FR 20114, 20120 (April 11, 2014).

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\9\ 2012 ASHRAE Handbook, Heating, Ventilating, and Air-

Conditioning Systems and Equipment. ASHRAE, Chapter 9 (Available at: https://www.ashrae.org/resources-publications/description-of-the-2012-ashrae-handbook-hvac-systems-and-equipment).

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Regarding the proposed definition, Goodman Global agreed that it is beneficial to all stakeholders to define as clearly as possible the products being regulated. (Goodman Global, Inc., No. 17 at p. 2) On the other hand, AHRI stated that a definition for ``water-source heat pump'' was outside the scope of activity of this document, because ASHRAE Standard 90.1 does not contain any definition of a water-source heat pump. (AHRI, No. 24 at p. 3) AHRI also argued that the lack of definition has not hampered implementation of Federal minimum efficiency for such equipment and that DOE has not established any significant need or provided any compelling reasons that require the addition of this definition. (Id.) DOE agrees with Goodman Global and does not agree with AHRI, tentatively concluding that the nomenclature changes in ASHRAE Standard 90.1 that moved away from the term ``water-

source'' necessitate inclusion of a definition for clarity.

AHRI and Daikin Applied expressed concern with the definition covering capacities up to 760,000 Btu/h, noting that neither ASHRAE Standard 90.1 nor DOE have standards for models above 135,000 Btu/h. (AHRI, No. 24 at p. 3; Daikin Applied, No. 22 at p. 1) Daikin Applied further commented that the size of the market above 135,000 Btu/h is approximately 2-3 percent of the total, that the AHRI certification program stops at 166,000 Btu/h, and that practically speaking, the largest models on the market are 250,000 Btu/h. (Id.) Daikin Applied argued that there would be test burdens associated with accommodating the larger sizes in test labs. (Id.) In response, DOE notes that regardless of any current size limits on water-source heat pump standards, it does not change the fact that Congress set forth the scope of coverage in the statutory definitions for ``commercial package air conditioning and heating equipment'' and ``very large commercial package air conditioning and heating equipment,'' which is limited to equipment with a cooling capacity below 760,000 Btu per hour. (42 U.S.C. 6311(8)(A) and (D)) However, setting in place a definition of ``water-source heat pump'' that clearly delineates what that equipment entails, as well as the limits on DOE's regulatory authority, would not in and of itself generate any standards compliance responsibilities or test burden. If the market changed and larger-size units became the norm, such standards might be appropriate, with ASHRAE presumably setting levels for such equipment. However, providing increased clarity through an appropriate definition is not directly tied to any such future developments.

Accordingly, DOE proposes to adopt the following definition, adapted from the ASHRAE Handbook and the definition proposed in the April 2014 NODA, and specifically referencing the new nomenclature included in ASHRAE 90.1-2013: ``Water-source heat pump means a single-

phase or three-phase reverse-cycle heat pump of all capacities (up to 760,000 Btu/h) that uses a circulating water loop as the heat source for heating and as the heat sink for cooling. The main components are a compressor, refrigerant-to-water heat exchanger, refrigerant-to-air heat exchanger, refrigerant expansion devices, refrigerant reversing valve, and indoor fan. Such equipment includes, but is not limited to, water-to-air water-loop heat pumps.'' DOE requests additional comment on this proposed definition. This is identified as Issue 1 under ``Issues on Which DOE Seeks Comment'' in section X.E of this NOPR.

Furthermore, DOE is proposing to revise the nomenclature for its water-source heat pump equipment classes to match the revised nomenclature in ASHRAE 90.1-2013: water-to-air, water-loop. Specifically, DOE proposes to revise Table 1 to 10 CFR 431.96 and Tables 1 and 2 to 10 CFR 431.97 to refer to ``water-source (water-to-

air, water-loop)'' heat pumps rather than simply ``water-source'' heat pumps. Throughout this document, any reference to water-source heat pump equipment classes should be considered as referring to water-to-

air, water-loop heat pumps.

In preparing this rulemaking, DOE noticed that the 2013 CFR \10\ and the current e-CFR \11\ contained errors in Table 1 and Table 2 to 10 CFR 431.96 and Table 2 to 10 CFR 431.97 for small water-source heat pumps (i.e., less than 135,000 Btu/h), as well as in Table 1 to 10 CFR 431.97 for small, large, and very large water-source heat pumps. DOE has determined that these errors were incorporated through the previous ASHRAE-trigger final rule. 77 FR 28928 (May 16, 2012). By this rulemaking, DOE seeks to clarify the relevant tables by removing the inadvertently amended language.

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\10\ See http://www.gpo.gov/fdsys/pkg/CFR-2013-title10-vol3/pdf/CFR-2013-title10-vol3-part431-subpartF.pdf.

\11\ See http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=1f6aa69cce81d1ccc6e9158c94d81e91&r=PART&n=pt10.3.431#sp10.3.431.f.

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3. Packaged Terminal Air Conditioners and Heat Pumps

EPCA defines a ``packaged terminal air conditioner'' as ``a wall sleeve and a separate unencased combination of heating and cooling assemblies specified by the builder and intended for mounting through the wall. It includes a prime source of refrigeration, separable outdoor louvers, forced ventilation, and heating availability by

Page 1184

builder's choice of hot water, steam, or electricity.'' (42 U.S.C. 6311(10)(A)) EPCA defines a ``packaged terminal heat pump'' as ``a packaged terminal air conditioner that utilizes reverse cycle refrigeration as its prime heat source and should have supplementary heat source available to builders with the choice of hot water, steam, or electric resistant heat.'' (42 U.S.C. 6311(10)(B)) DOE codified these definitions at 10 CFR 431.92 in a direct final rule published in the Federal Register on October 21, 2004. 69 FR 61962, 61970.

The current Federal energy conservation standards for the three classes of PTACs for which ASHRAE Standard 90.1-2013 amended efficiency levels are shown in Table II.1 and are found in DOE's regulations at 10 CFR 431.97. The Federal energy conservation standards for PTACs are differentiated based on the cooling capacity and physical dimensions (standard versus nonstandard size). ASHRAE Standard 90.1-2013 increased the energy efficiency levels for all three standard-size PTAC equipment classes to efficiency levels that meet those for PTHPs and surpass the current Federal energy conservation standard levels for PTACs. Therefore, DOE conducted an analysis of the potential energy savings due to amended standards for standard-size PTACs in the April 2014 NODA. 79 FR 20114, 20120-21 (April 11, 2014).

Prior to the ASHRAE trigger, in February 2013, DOE published a notice of public meeting and availability of the Framework Document regarding energy conservation standards for packaged terminal air conditioners and heat pumps standards. 78 FR 12252 (Feb. 22, 2013). This Framework Document was published as a first step toward meeting the six-year look back requirement specified in EISA 2007. (42 U.S.C. 6313(a)(6)(C)(i)) As part of the six-year look back, in September 2014, DOE issued a NOPR for PTAC and PTHP equipment that included equipment classes for which ASHRAE Standard 90.1-2013 increased efficiency levels (i.e., standard-size PTACs), as well as those for which it did not. 79 FR 55537 (Sept. 16, 2014). Consequently, PTACs will not be discussed in the remainder of this document; comments received on the April 2014 NODA related to PTACs were discussed in the PTAC NOPR.

4. Small-Duct, High-Velocity, and Through-The-Wall Equipment

EPCA does not separate three-phase small-duct high-velocity (SDHV) or through-the-wall (TTW) heat pumps from other types of small commercial package air-conditioning and heating equipment in its definitions. (42 U.S.C. 6311(8)) Therefore, EPCA's definition of ``small commercial package air conditioning and heating equipment'' would include three-phase SDHV and TTW heat pumps. In contrast, single-

phase SDHV and space-constrained equipment (including TTW), which are not the subject of this document, have separate product classes under DOE's residential central air conditioner and heat pump standards (see 10 CFR 430.32(c)).

ASHRAE Standard 90.1-2013 appeared to change some of the efficiency levels for three-phase SDHV and TTW equipment. Specifically, ASHRAE Standard 90.1-2010 had increased the cooling efficiency requirements for TTW heat pumps to 13.0 SEER in comparison to the efficiency levels of 12.0 SEER in ASHRAE Standard 90.1-2007. However, in March 2011, ASHRAE issued Proposed Addendum h for public review that would correct the minimum SEER for this equipment to 12.0 SEER, and this addendum was approved and incorporated into ASHRAE Standard 90.1-2013. Therefore, this change in ASHRAE Standard 90.1-2013 was correcting an editorial error in ASHRAE Standard 90.1-2010.

For SDHV air conditioners and heat pumps, ASHRAE Standard 90.1-2013 increases the cooling efficiency requirement from 10.0 SEER to 11.0 SEER. It also includes a heating efficiency requirement for SDHV heat pumps of 6.8 HSPF, which was present in ASHRAE 90.1-2007 but not ASHRAE 90.1-2010 (which DOE also thought to be an editorial error). These changes were made through Addendum bj to ASHRAE 90.1-2010, which noted that the previously adopted Addendum j to ASHRAE Standard 90.1-2010 had deleted the SDHV equipment class entirely because all SDHV models sold were single-phase residential products, but that Addendum bj was re-

establishing the equipment class because manufacturers had expressed an intention to introduce three-phase equipment to the market. In addition, Addendum bj noted that it contained minimum efficiency levels identical to those established by DOE for single-phase residential SDHV products.

The DOE standards for both commercial (three-phase) TTW and SDHV air conditioners, which are 13.0 SEER, and for heat pumps, which are 13.0 SEER and 7.7 HSPF, were established for the overall equipment category of small commercial package air-conditioning and heating equipment by EISA 2007, which amended EPCA. (42 U.S.C. 6313(a)(7)(D)) Because the ASHRAE Standard 90.1-2013 efficiency levels for three-phase TTW and SDHV equipment are less than the applicable Federal standards, DOE has tentatively concluded that it is not required to take action on this equipment at this time (see 42 U.S.C. 6313(a)(6)(A)(i) and (B)(iii)(I)). DOE did not receive comment on this issue and reaffirms this position.

5. Single-Package Vertical Air Conditioners and Single-Package Vertical Heat Pumps

EPCA, as amended, defines ``single package vertical air conditioner'' as air-cooled commercial package air conditioning and heating equipment that:

(1) Is factory-assembled as a single package that:

(i) Has major components that are arranged vertically;

(ii) is an encased combination of cooling and optional heating components; and

(iii) is intended for exterior mounting on, adjacent interior to, or through an outside wall;

(2) is powered by a single- or 3-phase current;

(3) may contain one or more separate indoor grilles, outdoor louvers, various ventilation options, indoor free air discharges, ductwork, wall plenum, or sleeves; and

(4) has heating components that may include electrical resistance, steam, hot water, or gas, but may not include reverse cycle refrigeration as a heating means.

(42 U.S.C. 6311(22) ; 10 CFR 431.92)

EPCA, as amended, defines ``single package vertical heat pump'' as a single-package vertical air conditioner that

(1) uses reverse cycle refrigeration as its primary heat source; and

(2) may include secondary supplemental heating by means of electrical resistance, steam, hot water, or gas.

(42 U.S.C. 6311(23); 10 CFR 431.92)

The current Federal energy conservation standards for the six classes of single-package vertical units (SPVUs) for which ASHRAE Standard 90.1-2013 amended efficiency levels are shown in Table II.1 and can be found in DOE's regulations at 10 CFR 431.97. The equipment classes for SPVACs and SPVHPs, as well as their attendant Federal energy conservation standards, are differentiated based on cooling capacity. ASHRAE Standard 90.1-2013 increased the energy efficiency levels for all six equipment classes to efficiency levels that surpass the current Federal energy conservation standard levels. Therefore, DOE conducted an analysis of the potential energy savings

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due to amended standards for this equipment in the April 2014 NODA. 79 FR 20114, 20121 (April 11, 2014).

In response to the April 2014 NODA, Lennox urged DOE to adopt the ASHRAE Standard 90.1-2013 efficiency levels for SPVUs. (Lennox International Inc., No. 0015 at p. 2) On the other hand, the Advocates encouraged DOE to initiate a rulemaking for SPVUs to consider higher efficiency levels than those in ASHRAE Standard 90.1-2013 because of potential national energy savings up to 0.48 quads. (Advocates, No. 21 at p. 3) DOE notes that prior to the release of ASHRAE Standard 90.1-

2013, DOE had already been conducting a rulemaking on SPVUs as a result of a one-time review requirement added by EISA 2007. See 76 FR 25622, 25633 (May 5, 2011). DOE will continue to conduct its SPVU analysis as part of a separate rulemaking that will also meet the requirements of the ASHRAE trigger, and accordingly, DOE has not included any further analysis or results regarding SPVUs in this NOPR. In the April 11, 2014 NODA, DOE also discussed its consideration of a space-constrained SPVU equipment class (79 FR 20114, 20121-23); DOE's consideration of that issue will also occur in the separate SPVU rulemaking.
Commercial Water Heaters

EPCA defines ``storage water heater'' as a water heater that heats and stores water within the appliance at a thermostatically controlled temperature for delivery on demand. This term does not include units with an input rating of 4,000 Btu/h or more per gallon of stored water. (42 U.S.C. 6311(12)(A)) DOE further clarified this definition in its regulations by adding that it is industrial equipment. 10 CFR 431.102. EPCA defines ``instantaneous water heater'' as a water heater that has an input rating of at least 4,000 Btu/h per gallon of stored water. (42 U.S.C. 6311(12)(B)) DOE further clarified this definition in its regulations by adding that it is industrial equipment, including products meeting this description that are designed to heat water to temperatures of 180degF or higher. 10 CFR 431.102.

The current Federal energy conservation standards for the five classes of storage and instantaneous water heaters for which ASHRAE Standard 90.1-2013 amended efficiency levels are shown in Table II.1 and set forth in DOE's regulations at 10 CFR 431.110. The equipment classes for commercial storage and instantaneous water heaters, and attendant Federal energy conservation standards, are differentiated based on fuel type and size category. ASHRAE Standard 90.1-2013 appeared to change the standby loss levels for four equipment classes (gas-fired storage water heaters, oil-fired storage water heaters, gas-

fired instantaneous water heaters, and oil-fired instantaneous water heaters) to efficiency levels that surpass the current Federal energy conservation standard levels. However, as discussed in the April 11, 2014 NODA, upon review of the changes, DOE believes that all changes to standby loss levels for these equipment classes were editorial errors because they are identical to SI (International System of Units; metric system) formulas rather than I-P (Inch-Pound; English system) formulas. 79 FR 20114, 20123. Therefore, DOE did not conduct an analysis of the potential energy savings for this equipment. DOE received no comment on this issue.

As discussed in the April 11, 2014 NODA, ASHRAE Standard 90.1-2013 also changed the standby loss level for electric storage water heaters, in this case in a purposeful manner to align with the current Federal energy conservation standard level. Id. Because these levels meet and do not exceed the current Federal standards, DOE did not conduct an analysis of the potential energy savings for this equipment class.

ASHRAE Standard 90.1-2013 also increased the thermal efficiency levels for oil-fired storage water heaters to efficiency levels that surpass the current Federal energy conservation standards. Therefore, DOE conducted an analysis of the potential energy savings due to amended thermal efficiency standards for oil-fired storage water heaters in the April 2014 NODA. Id.

DOE did not receive any comments from stakeholders specific to the efficiency level DOE should adopt for oil-fired storage water heaters. Based on the results of the April 2014 NODA, DOE has determined that there are minimal energy savings available from this equipment and has not conducted further analyses on these products. Therefore, DOE is proposing in this NOPR to adopt the energy efficiency levels contained in ASHRAE Standard 90.1-2013 for commercial oil-fired storage water heaters (see section VIII.D.3).

In response to the April 2014 NODA, DOE received comment from the Advocates that the standards for all commercial water heaters, not just oil-fired storage water heaters, are due for a six-year look back. (Advocates, No. 21 at p. 3) Although DOE acknowledges its statutory obligation to review the standards for commercial water heaters, in order to best allocate available resources, DOE is limiting the scope of this current rulemaking to ASHRAE-triggered equipment. However, in October 2014, the agency issued a request for information (RFI) regarding commercial water heaters to initiate a separate six-year look back rulemaking for all categories of commercial water heating equipment. 79 FR 62899 (Oct. 21, 2014).
Test Procedures

EPCA requires the Secretary to amend the DOE test procedures for covered ASHRAE equipment to the latest version of those generally accepted industry testing procedures or the rating procedures developed or recognized by AHRI or by ASHRAE, as referenced by ASHRAE/IES Standard 90.1, unless the Secretary determines by rule published in the Federal Register and supported by clear and convincing evidence that the latest version of the industry test procedure does not meet the requirements for test procedures described in paragraphs (2) and (3) of 42 U.S.C. 6314(a).\12\ (42 U.S.C. 6314(a)(4)(B)) ASHRAE Standard 90.1-

2013 updated several of its test procedures for ASHRAE equipment. Specifically, ASHRAE Standard 90.1-2013 updated to the most recent editions of test procedures for small commercial package air conditioners and heating equipment (AHRI 210/240-2008 with Addendum 1 and 2, Performance Rating of Unitary Air-Conditioning & Air-Source Heat Pump Equipment), large and very large commercial package air conditioners and heating equipment (AHRI 340/360-2007 with Addenda 1 and 2, Performance Rating of Commercial and Industrial Unitary Air-

Conditioning and Heat Pump Equipment), variable refrigerant flow equipment (AHRI 1230-2010 with Addendum 1, Performance Rating of Variable Refrigerant Flow (VRF) Multi-Split Air-Conditioning and Heat Pump Equipment), commercial warm-air furnaces (ANSI (American National Standards Institute) Z21.47-2012, Standard for Gas-Fired Central

Page 1186

Furnaces), and commercial water heaters (ANSI Z21.10.3-2011, Gas Water Heaters, Volume III, Storage Water Heaters with Input Ratings Above 75,000 Btu Per Hour, Circulating and Instantaneous).

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\12\ (2) Test procedures prescribed in accordance with this section shall be reasonably designed to produce test results which reflect energy efficiency, energy use, and estimated operating costs of a type of industrial equipment (or class thereof) during a representative average use cycle (as determined by the Secretary), and shall not be unduly burdensome to conduct. (3) If the test procedure is a procedure for determining estimated annual operating costs, such procedure shall provide that such costs shall be calculated from measurements of energy use in a representative average-use cycle (as determined by the Secretary), and from representative average unit costs of the energy needed to operate such equipment during such cycle. The Secretary shall provide information to manufacturers of covered equipment respecting representative average unit costs of energy.

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In the April 2014 NODA, DOE preliminarily reviewed each of the test procedures that were updated in ASHRAE Standard 90.1-2013 and discussed the changes to those industry test procedures. 79 FR 20114, 20123-25 (April 11, 2014). DOE found that for AHRI 210/240, AHRI 340/360, AHRI 1230, and ANSI Z1.10.3, DOE had already incorporated by reference the most recent version \13\ and did not need to take action. DOE received no comment on this issue. For ANSI Z21.47, DOE determined that the changes to the 2012 version do not impact those provisions of that industry test procedure that are used under the DOE test procedure for gas-fired warm air furnaces, and, therefore, such changes do not affect the energy efficiency ratings for gas-fired furnaces. Consequently, DOE determined that no further action was required at the time. Id. at 20124-25. In response to the April 2014 NODA, AHRI, Goodman Global, and Lennox International agreed with DOE's substantive assessment of ANSI Z21.47-2012. (AHRI, No. 24 at p. 5; Goodman Global, Inc., No. 18 at p. 2; Lennox International, Inc., No. 15 at p. 6) However, in keeping with EPCA's mandate to incorporate the latest version of the applicable industry test procedure pursuant to 42 U.S.C. 6314(a)(4)(B), DOE is proposing to incorporate by reference ANSI Z21.47-2012. Once again, DOE anticipates no substantive change or increase in test burden to be associated with this test procedure amendment for warm air furnaces.

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\13\ This final rule for commercial heating, air-conditioning, and water-heating equipment was published in the Federal Register on May 16, 2012. 77 FR 28928.

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DOE is also required to review the test procedures for covered ASHRAE equipment at least once every seven years. (42 U.S.C. 6314(a)(1)(A)) In addition to the updates to the referenced standards discussed previously, DOE is proposing to update the citations and incorporations by reference in DOE's regulations for commercial warm-

air furnaces to the most recent version of ASHRAE 103, Method of Testing for Annual Fuel Utilization Efficiency of Residential Central Furnaces and Boiler (i.e., ASHRAE 103-2007). The applicable sections of this standard include measurement of condensate and calculation of additional heat gain and heat losses for condensing furnaces. DOE notes that the most recent version does not contain any updates to the sections currently referenced by the DOE test procedure, so no additional burden would be expected to result from this test procedure update.

DOE is aware that some commercial furnaces are designed for make-up air heating (i.e., heating 100 percent outdoor air). DOE defines ``commercial warm air furnace'' at 10 CFR 431.72 as self-contained oil-

fired or gas-fired furnaces designed to supply heated air through ducts to spaces that require it, with a capacity (rated maximum input) at or above 225,000 Btu/h. Further, DOE's definitions specify that this equipment includes combination warm air furnace/electric air conditioning units but does not include unit heaters and duct furnaces. Given the characteristics of this category of commercial furnaces, DOE tentatively concludes that gas-fired and oil-fired commercial furnaces that are designed for make-up air heating and that have input ratings at or above 225,000 Btu/h meet the definition of ``commercial warm air furnace'' because they are self-contained units that supply heated air through ducts. Consequently, DOE is clarifying that commercial warm air furnaces that are designed for make-up air heating are subject to DOE's regulatory requirements, including being tested according to the test procedure specified in 10 CFR 431.76.

DOE is seeking comments on any relevant issues that would affect the test procedure for commercial warm air furnaces. Interested parties are welcome to comment on any aspect of the DOE commercial warm air furnaces test procedure as part of this comprehensive 7-year-review. This is identified as issue 2 in section X.E, ``Issues on Which DOE Seeks Comment.''

V. Methodology for Small Commercial Air-Cooled Air Conditioners and Heat Pumps Less Than 65,000 Btu/h

This section addresses the analyses DOE has performed for this rulemaking with respect to small commercial air-cooled air conditioners and heat pumps less than 65,000 Btu/h. A separate subsection addresses each analysis. In overview, DOE used a spreadsheet to calculate the life-cycle cost (LCC) and payback periods (PBPs) of potential energy conservation standards. DOE used another spreadsheet to provide shipments projections and then calculate national energy savings and net present value impacts of potential amended energy conservation standards.
Market Assessment

To begin its review of the ASHRAE Standard 90.1-2013 efficiency levels, DOE developed information that provides an overall picture of the market for the equipment concerned, including the purpose of the equipment, the industry structure, and market characteristics. This activity included both quantitative and qualitative assessments based primarily on publicly-available information. The subjects addressed in the market assessment for this rulemaking include equipment classes, manufacturers, quantities, and types of equipment sold and offered for sale. The key findings of DOE's market assessment are summarized in the following sections. For additional detail, see chapter 2 of the NOPR technical support document (TSD).

1. Equipment Classes

As discussed previously, the Federal energy conservation standards for air-cooled air conditioners and heat pumps are differentiated based on the cooling capacity (i.e., small, large, or very large). For small equipment, there is an additional disaggregation into: (1) Equipment less than 65,000 Btu/h and (2) equipment greater than or equal to 65,000 Btu/h and less than 135,000 Btu/h. ASHRAE Standard 90.1-2013 also differentiates the equipment that is less than 65,000 Btu/h into split system and single package subcategories. In the past, DOE has followed the same disaggregation. However, when EISA 2007 increased the efficiency levels to identical levels across single package and split system equipment, effective in 2008, DOE combined the equipment classes in the CFR, resulting in only two equipment classes, one for air conditioners and one for heat pumps. 74 FR 12058, 12074 (March 23, 2009). Because ASHRAE has increased the standard for only single package air conditioners, and has increased the HSPF level to a more stringent level for split system heat pumps than for single package heat pumps, and DOE is obligated to adopt, at a minimum, the increased level in ASHRAE 90.1-2013 for that equipment class, DOE proposes to re-

create separate equipment classes for single package and split system equipment in the overall equipment classes of small commercial package air conditioners and heat pumps (three-phase air-cooled) less than 65,000 Btu/h, as shown in Table V.1.

Page 1187

Table V.1--Proposed Equipment Classes for Small Commercial Packaged Air-

Conditioning and Heating Equipment =17,000 and =65,000 and =17,000 and >=65,000 and

=17,000 and >=65,000 and

=17,000 and pumps >=65,000 and

h =17,000 and =65,000 and 2), nitrogen oxides (NOX), sulfur dioxide (SO2), and mercury (Hg) from potential amended energy conservation standards for the ASHRAE equipment that is the subject of this document. In addition, DOE estimates emissions impacts in production activities (extracting, processing, and transporting fuels) that provide the energy inputs to power plants. These are referred to as ``upstream'' emissions. Together, these emissions account for the full-fuel cycle (FFC). In accordance with DOE's FFC Statement of Policy (76 FR 51281 (Aug. 18, 2011) as amended at 77 FR 49701 (August 17, 2012)), the FFC analysis also includes impacts on emissions of methane (CH4) and nitrous oxide (N2O), both of which are recognized as greenhouse gases. The combustion emissions factors and the method DOE used to derive upstream emissions factors are described in chapter 9 of the NOPR TSD. The cumulative emissions reduction estimated for the subject ASHRAE equipment is presented in section VIII.C.

DOE primarily conducted the emissions analysis using emissions factors for CO2 and most of the other gases derived from data in AEO 2014. Combustion emissions of CH4 and N2O were estimated using emissions intensity factors published by the U.S. Environmental Protection Agency (EPA) in its Greenhouse Gas (GHG) Emissions Factors Hub.\46\ DOE developed separate emissions factors for power sector emissions and upstream emissions. The method that DOE used to derive emissions factors is described in chapter 9 of the NOPR TSD.

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\46\ See http://www.epa.gov/climateleadership/inventory/ghg-emissions.html.

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EIA prepares the AEO using NEMS. Each annual version of NEMS incorporates the projected impacts of existing air quality regulations on emissions. AEO 2014 generally represents current legislation and environmental regulations, including recent government actions, for which implementing regulations were available as of October 31, 2013.

SO2 emissions from affected electric generating units (EGUs) are subject to nationwide and regional emissions cap-and-trade programs. Title IV of the Clean Air Act sets an annual emissions cap on SO2 for affected EGUs in the 48 contiguous States and the District of Columbia (DC). (42 U.S.C. 7651 et seq.) SO2 emissions from 28 eastern States and DC were also limited under the Clean Air Interstate Rule (CAIR). 70 FR 25162 (May 12, 2005). CAIR, which created an allowance-based trading program that operates along with the Title IV program, was remanded to the EPA by the U.S. Court of Appeals for the District of Columbia Circuit, but it remained in effect.\47\ In 2011, EPA issued a replacement for CAIR, the Cross-State Air Pollution Rule (CSAPR). 76 FR 48208 (Aug. 8, 2011). On August 21, 2012, the D.C. Circuit issued a decision to vacate CSAPR.\48\ The court ordered EPA to continue administering CAIR. The emissions factors used for this NOPR, which are based on AEO 2014, assume that CAIR remains a binding regulation through 2040.\49\

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\47\ See North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008); North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008).

\48\ See EME Homer City Generation, LP v. EPA, 696 F.3d 7, 38 (D.C. Cir. 2012), cert. granted, 81 U.S.L.W. 3567, 81 U.S.L.W. 3696, 81 U.S.L.W. 3702 (U.S. June 24, 2013) (No. 12-1182).

\49\ On April 29, 2014, the U.S. Supreme Court reversed the judgment of the D.C. Circuit and remanded the case for further proceedings consistent with the Supreme Court's opinion. The Supreme Court held in part that EPA's methodology for quantifying emissions that must be eliminated in certain states due to their impacts in other downwind states was based on a permissible, workable, and equitable interpretation of the Clean Air Act provision that provides statutory authority for CSAPR. See EPA v. EME Homer City Generation, No 12-1182, slip op. at 32 (U.S. April 29, 2014). On October 23, 2014, the D.C. Circuit lifted the stay of CSAPR. Pursuant to this action, CSAPR will go into effect (and the Clean Air Interstate Rule will sunset) as of January 1, 2015. However, because DOE used emissions factors based on AEO 2014 for this NOPR, the analysis assumes that CAIR, not CSAPR, is the regulation in force. The difference between CAIR and CSAPR is not relevant for the purpose of DOE's analysis of SO2 emissions.

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The attainment of emissions caps is typically flexible among EGUs and is enforced through the use of emissions allowances and tradable permits. Beginning in 2016, however, SO2 emissions will decline significantly as a result of the Mercury and Air Toxics Standards (MATS) for power plants. 77 FR 9304 (Feb. 16, 2012). In the final MATS rule, EPA established a standard for hydrogen chloride as a surrogate for acid gas hazardous air pollutants (HAP), and also established a standard for SO2 (a non-HAP acid gas) as an alternative equivalent surrogate standard for acid gas HAP. The same controls are used to reduce HAP and non-HAP acid gas; thus, SO2 emissions will be reduced as a result of the control technologies installed on coal-fired power plants to comply with the MATS requirements for acid gas. AEO 2014 assumes that, in order to continue operating, coal plants must have either flue gas desulfurization or dry sorbent injection systems installed by 2016. Both technologies are used to reduce acid gas emissions, and also reduce SO2 emissions. Under the MATS, emissions

Page 1209

will be far below the cap established by CAIR, so it is unlikely that excess SO2 emissions allowances resulting from the lower electricity demand would be needed or used to permit offsetting increases in SO2 emissions by any regulated EGU. Therefore, DOE believes that energy efficiency standards will reduce SO2 emissions in 2016 and beyond.

CAIR established a cap on NOX emissions in 28 eastern States and the District of Columbia.\50\ Energy conservation standards are expected to have little effect on NOX emissions in those States covered by CAIR, because excess NOX emissions allowances resulting from the lower electricity demand could be used to permit offsetting increases in NOX emissions. However, standards would be expected to reduce NOX emissions in the States not affected by the caps, so DOE estimated NOX emissions reductions from the standards considered in this NOPR for these States.

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\50\ CSAPR also applies to NOX, and it would supersede the regulation of NOX under CAIR. As stated previously, the current analysis assumes that CAIR, not CSAPR, is the regulation in force. The difference between CAIR and CSAPR with regard to DOE's analysis of NOX is slight.

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The MATS limit mercury emissions from power plants, but they do not include emissions caps. DOE estimated mercury emissions using emissions factors based on AEO 2014, which incorporates the MATS.
Monetizing Carbon Dioxide and Other Emissions Impacts

As part of the development of this proposed rule, DOE considered the estimated monetary benefits from the reduced emissions of CO2 and NOX that are expected to result from each of the efficiency levels considered. In order to make this calculation analogous to the calculation of the NPV of consumer benefit, DOE considered the reduced emissions expected to result over the lifetime of equipment shipped in the forecast period for each efficiency level. This section summarizes the basis for the monetary values used for each of these emissions and presents the values considered in this NOPR.

For this NOPR, DOE relied on a set of values for the social cost of carbon (SCC) that was developed by a Federal interagency process. The basis for these values is summarized in the next section, and a more detailed description of the methodologies used is provided as an appendix to chapter 14 of the NOPR TSD.

1. Social Cost of Carbon

The SCC is an estimate of the monetized damages associated with an incremental increase in carbon emissions in a given year. It is intended to include (but is not limited to) changes in net agricultural productivity, human health, property damages from increased flood risk, and the value of ecosystem services. Estimates of the SCC are provided in dollars per metric ton of CO2. A domestic SCC value is meant to reflect the value of damages in the United States resulting from a unit change in CO2 emissions, while a global SCC value is meant to reflect the value of damages worldwide.

Under section 1(b) of Executive Order 12866, ``Regulatory Planning and Review,'' 58 FR 51735 (Oct. 4, 1993), agencies must, to the extent permitted by law, ``assess both the costs and the benefits of the intended regulation and, recognizing that some costs and benefits are difficult to quantify, propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs.'' The purpose of the SCC estimates presented here is to allow agencies to incorporate the monetized social benefits of reducing CO2 emissions into cost-benefit analyses of regulatory actions. The estimates are presented with an acknowledgement of the many uncertainties involved and with a clear understanding that they should be updated over time to reflect increasing knowledge of the science and economics of climate impacts.

As part of the interagency process that developed these SCC estimates, technical experts from numerous agencies met on a regular basis to consider public comments, explore the technical literature in relevant fields, and discuss key model inputs and assumptions. The main objective of this process was to develop a range of SCC values using a defensible set of input assumptions grounded in the existing scientific and economic literatures. In this way, key uncertainties and model differences transparently and consistently inform the range of SCC estimates used in the rulemaking process.
1. Monetizing Carbon Dioxide Emissions
  
  When attempting to assess the incremental economic impacts of CO2 emissions, the analyst faces a number of challenges. A report from the National Research Council \51\ points out that any assessment will suffer from uncertainty, speculation, and lack of information about: (1) Future emissions of GHGs; (2) the effects of past and future emissions on the climate system; (3) the impact of changes in climate on the physical and biological environment; and (4) the translation of these environmental impacts into economic damages. As a result, any effort to quantify and monetize the harms associated with climate change will raise questions of science, economics, and ethics and should be viewed as provisional.
  
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  \51\ National Research Council, Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use, National Academies Press: Washington, DC (2009).
  
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  Despite the limits of both quantification and monetization, SCC estimates can be useful in estimating the social benefits of reducing CO2 emissions. The agency can estimate the benefits from reduced (or costs from increased) emissions in any future year by multiplying the change in emissions in that year by the SCC values appropriate for that year. The NPV of the benefits can then be calculated by multiplying each of these future benefits by an appropriate discount factor and summing across all affected years.
  
  It is important to emphasize that the interagency process is committed to updating these estimates as the science and economic understanding of climate change and its impacts on society improves over time. In the meantime, the interagency group will continue to explore the issues raised by this analysis and consider public comments as part of the ongoing interagency process.
2. Development of Social Cost of Carbon Values
  
  In 2009, an interagency process was initiated to offer a preliminary assessment of how best to quantify the benefits from reducing carbon dioxide emissions. To ensure consistency in how benefits are evaluated across Federal agencies, the Administration sought to develop a transparent and defensible method, specifically designed for the rulemaking process, to quantify avoided climate change damages from reduced CO2 emissions. The interagency group did not undertake any original analysis. Instead, it combined SCC estimates from the existing literature to use as interim values until a more comprehensive analysis could be conducted. The outcome of the preliminary assessment by the interagency group was a set of five interim values: Global SCC estimates for 2007 (in 2006$) of $55, $33, $19, $10, and $5 per metric ton of CO2. These interim values represented the first sustained interagency effort within the U.S. government to develop an SCC for use in regulatory analysis. The results of this preliminary effort
  
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  were presented in several proposed and final rules.
3. Current Approach and Key Assumptions
  
  After the release of the interim values, the interagency group reconvened on a regular basis to generate improved SCC estimates. Specifically, the group considered public comments and further explored the technical literature in relevant fields. The interagency group relied on three integrated assessment models commonly used to estimate the SCC: the FUND, DICE, and PAGE models. These models are frequently cited in the peer-reviewed literature and were used in the last assessment of the Intergovernmental Panel on Climate Change (IPCC). Each model was given equal weight in the SCC values that were developed.
  
  Each model takes a slightly different approach to model how changes in emissions result in changes in economic damages. A key objective of the interagency process was to enable a consistent exploration of the three models, while respecting the different approaches to quantifying damages taken by the key modelers in the field. An extensive review of the literature was conducted to select three sets of input parameters for these models: Climate sensitivity, socio-economic and emissions trajectories, and discount rates. A probability distribution for climate sensitivity was specified as an input into all three models. In addition, the interagency group used a range of scenarios for the socio-economic parameters and a range of values for the discount rate. All other model features were left unchanged, relying on the model developers' best estimates and judgments.
  
  In 2010, the interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values are based on the average SCC from the three integrated assessment models, at discount rates of 2.5, 3, and 5 percent. The fourth set, which represents the 95th percentile SCC estimate across all three models at a 3-percent discount rate, was included to represent higher-than-expected impacts from climate change further out in the tails of the SCC distribution. The values grow in real terms over time. Additionally, the interagency group determined that a range of values from 7 percent to 23 percent should be used to adjust the global SCC to calculate domestic effects,\52\ although preference is given to consideration of the global benefits of reducing CO2 emissions. Table VII.1 presents the values in the 2010 interagency group report,\53\ which is reproduced in appendix 10-A of the NOPR TSD.
  
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  \52\ It is recognized that this calculation for domestic values is approximate, provisional, and highly speculative. There is no a priori reason why domestic benefits should be a constant fraction of net global damages over time.
  
  \53\ Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866, Interagency Working Group on Social Cost of Carbon, United States Government (February 2010) (Available at: www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf).
  
  Table VII.1--Annual SCC Values From 2010 Interagency Report, 2010-2050
  
  2007$ per metric ton CO2
  
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  Discount rate
  
  ---------------------------------------------------------------
  
  5% 3% 2.5% 3%
  
  Year ---------------------------------------------------------------
  
  95th
  
  Average Average Average percentile
  
  ----------------------------------------------------------------------------------------------------------------
  
  2010............................................ 4.7 21.4 35.1 64.9
  
  2015............................................ 5.7 23.8 38.4 72.8
  
  2020............................................ 6.8 26.3 41.7 80.7
  
  2025............................................ 8.2 29.6 45.9 90.4
  
  2030............................................ 9.7 32.8 50.0 100.0
  
  2035............................................ 11.2 36.0 54.2 109.7
  
  2040............................................ 12.7 39.2 58.4 119.3
  
  2045............................................ 14.2 42.1 61.7 127.8
  
  2050............................................ 15.7 44.9 65.0 136.2
  
  ----------------------------------------------------------------------------------------------------------------
  
  The SCC values used for this document were generated using the most recent versions of the three integrated assessment models that have been published in the peer-reviewed literature.\54\
  
  ---------------------------------------------------------------------------
  
  \54\ Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866, Interagency Working Group on Social Cost of Carbon, United States Government (May 2013; revised November 2013) (Available at: http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf).
  
  ---------------------------------------------------------------------------
  
  Table VII.2 shows the updated sets of SCC estimates from the 2013 interagency update in 5-year increments from 2010 to 2050. The full set of annual SCC estimates between 2010 and 2050 is reported in appendix 10-B of the NOPR TSD. The central value that emerges is the average SCC across models at the 3-percent discount rate. However, for purposes of capturing the uncertainties involved in regulatory impact analysis, the interagency group emphasizes the importance of including all four sets of SCC values.
  
  Table VII.2--Annual SCC Values From 2013 Interagency Report, 2010-2050
  
  2007$ per metric ton CO2
  
  ----------------------------------------------------------------------------------------------------------------
  
  Discount rate
  
  ---------------------------------------------------------------
  
  5% 3% 2.5% 3%
  
  Year ---------------------------------------------------------------
  
  95th
  
  Average Average Average percentile
  
  ----------------------------------------------------------------------------------------------------------------
  
  2010............................................ 11 32 51 89
  
  2015............................................ 11 37 57 109
  
  Page 1211
  
  2020............................................ 12 43 64 128
  
  2025............................................ 14 47 69 143
  
  2030............................................ 16 52 75 159
  
  2035............................................ 19 56 80 175
  
  2040............................................ 21 61 86 191
  
  2045............................................ 24 66 92 206
  
  2050............................................ 26 71 97 220
  
  ----------------------------------------------------------------------------------------------------------------
  
  It is important to recognize that a number of key uncertainties remain, and that current SCC estimates should be treated as provisional and revisable because they will evolve with improved scientific and economic understanding. The interagency group also recognizes that the existing models are imperfect and incomplete. The 2009 National Research Council report mentioned previously points out that there is tension between the goal of producing quantified estimates of the economic damages from an incremental ton of carbon and the limits of existing efforts to model these effects. There are a number of analytical challenges that are being addressed by the research community, including research programs housed in many of the Federal agencies participating in the interagency process to estimate the SCC. The interagency group intends to periodically review and reconsider those estimates to reflect increasing knowledge of the science and economics of climate impacts, as well as improvements in modeling.
  
  In summary, in considering the potential global benefits resulting from reduced CO2 emissions, DOE used the values from the 2013 interagency report adjusted to 2013$ using the implicit price deflator for gross domestic product (GDP) from the Bureau of Economic Analysis. For each of the four sets of SCC cases specified, the values for emissions in 2015 were $12.0, $40.5, $62.4, and $119 per metric ton avoided (values expressed in 2013$). DOE derived values after 2050 using the relevant growth rates for the 2040-2050 period in the interagency update.
  
  DOE multiplied the CO2 emissions reduction estimated for each year by the SCC value for that year in each of the four cases. To calculate a present value of the stream of monetary values, DOE discounted the values in each of the four cases using the specific discount rate that had been used to obtain the SCC values in each case.
  
  2. Valuation of Other Emissions Reductions
  
  As noted previously, DOE has taken into account how considered energy conservation standards would reduce site NOX emissions nationwide and increase power sector NOX emissions in those 22 States not affected by the CAIR. DOE estimated the monetized value of net NOX emissions reductions resulting from each of the efficiency levels considered for this NOPR based on estimates found in the relevant scientific literature. Estimates of monetary value for reducing NOX from stationary sources range from $476 to $4,893 per ton in 2013$.\55\ DOE calculated monetary benefits using a medium value for NOX emissions of $2,684 per short ton (in 2013$) and real discount rates of 3 percent and 7 percent.
  
  ---------------------------------------------------------------------------
  
  \55\ U.S. Office of Management and Budget, Office of Information and Regulatory Affairs, 2006 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (2006) (Available at: www.whitehouse.gov/sites/default/files/omb/assets/omb/inforeg/2006_cb/2006_cb_final_report.pdf).
  
  ---------------------------------------------------------------------------
  
  DOE is evaluating appropriate monetization of avoided SO2 and Hg emissions in energy conservation standards rulemakings. DOE has not included monetization of those emissions in the current analysis.
  
  VIII. Analytical Results and Conclusions
Efficiency Levels Analyzed

1. Small Commercial Air-Cooled Air Conditioners and Heat Pumps Less Than 65,000 Btu/h

The methodology for small commercial air-cooled air conditioners and heat pumps less than 65,000 Btu/h was presented in section V of this NOPR. Table VIII.1 presents the market baseline efficiency level and the higher efficiency levels analyzed for each equipment class of small commercial air-cooled air conditioners and heat pumps less than 65,000 Btu/h subject to this proposed rule. The EPCA baseline efficiency levels correspond to the lowest efficiency levels currently available on the market. The efficiency levels above the baseline represent efficiency levels specified by ASHRAE Standard 90.1-2013 and efficiency levels more stringent than those specified in ASHRAE Standard 90.1-2013 where equipment is currently available on the market. Note that for the energy savings and economic analysis, efficiency levels above those specified in ASHRAE Standard 90.1-2013 are compared to ASHRAE Standard 90.1-2013 as the baseline rather than the EPCA baseline (i.e., the current Federal standards). For split-

system air conditioners, for which ASHRAE 90.1-2013 did not change the efficiency level, all efficiency levels are compared to the Federal or EPCA baseline.

Page 1212

Table VIII.1--Efficiency Levels Analyzed for Small Commercial Air-Cooled Air Conditioners and Heat Pumps =17,000 pumps >=65,000

pumps 105,000

Btu/h and =17,000 Btu/h and =17,000 Btu/h and =65,000 Btu/h and =65,000 Btu/h and =17,000 and =65,000 and =17,000 to =65,000 to 135,000 Btu/h...................

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

Notes: Numbers in parentheses indicate negative NPV.

The net present value for efficiency levels more stringent than those specified by ASHRAE Standard 90.1-2013

were calculated relative to the efficiency levels that would result if ASHRAE Standard 90.1-2013 standards

were adopted. Economic analysis was not conducted for the ASHRAE levels (EL 0).

* The base-case efficiency distribution has 0-percent market share at the ASHRAE baseline; therefore, there are

no savings for EL1.

** The max-tech level for this equipment class is EL 4.

Table VIII.28--Summary of Cumulative Net Present Value for Water-Source (Water-to-Air, Water-Loop) Heat Pumps

Discounted at three percent

Net Present Value (Billion 2013$)

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

Efficiency Efficiency Efficiency Efficiency Efficiency

Equipment class level 1 level 2 level 3 level 4 level 5

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

Water-Source (Water-to-Air, Water-Loop) HP (0.00) (0.05) (0.19) (0.29) (0.46)

=17,000 to =65,000 to 135,000 Btu/h.................

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

Notes: Numbers in parentheses indicate negative NPV.

The net present value for efficiency levels more stringent than those specified by ASHRAE Standard 90.1-2013

were calculated relative to the efficiency levels that would result if ASHRAE Standard 90.1-2013 standards

were adopted. Economic analysis was not conducted for the ASHRAE levels (EL 0).

* The base-case efficiency distribution has 0-percent market share at the ASHRAE baseline; therefore, there are

no savings for EL1.

** The max-tech level for this equipment class is EL 4.

3. Commercial Oil-Fired Storage Water Heaters

DOE estimated the potential primary energy savings in quads (i.e., 10\15\ Btu) for each efficiency level considered within each equipment class analyzed. Table VIII.29 shows the potential energy savings resulting from the analyses conducted as part of the April 2014 NODA. 79 FR 20114, 20136 (April 11, 2014). In response to the NODA, AHRI stated that DOE's derivation of unit energy consumption for oil-fired storage water heaters based on a proportional relationship to gas-fired storage water heaters in the Commercial Building Energy Consumption Survey (CBECS) might not be fully correct because of regional variations between the two energy sources. (AHRI, No. 24 at p. 7) After re-examining the energy savings analysis for oil-fired storage water heaters, DOE has tentatively determined

Page 1221

that any resulting imprecision in this estimate would not be enough to make the energy-savings estimates for this class non-trivial, and, therefore, DOE did not adjust its analysis for the NOPR.

Table VIII.29--Potential Energy Savings Estimates for Commercial Oil-

Fired Storage Water Heaters >105,000 Btu/h and 2, NOX, and Hg emissions reductions for each efficiency level in chapter 9 of the NOPR TSD. As discussed in section VII.A, DOE did not include NOX emissions reduction from power plants in States subject to CAIR, because an energy conservation standard would not affect the overall level of NOX emissions in those States due to the emissions caps mandated by CAIR.

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

\57\ Because DOE did not conduct additional analysis for oil-

fired storage water heaters, estimates of environmental benefits for amended standards for that equipment type are not shown here.

Table VIII.30--Cumulative Emissions Reduction for Potential Standards for Small Three-Phase Air-Cooled Air Conditioners and Heat Pumps 2 and NOX estimated for each of the efficiency levels analyzed for small air-cooled air conditioners and heat pumps less than 65,000 Btu/h, water-source heat pumps, and oil-fired storage water heaters. As discussed in section VII.B.1, for CO2, DOE used values for the SCC developed by an interagency process. The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets are based on the average SCC from three integrated assessment models, at discount rates of 2.5 percent, 3 percent, and 5 percent. The fourth set, which represents the 95th-percentile SCC estimate across all three models at a 3-percent discount rate, is included to represent higher-than-expected impacts from temperature change further out in the tails of the SCC distribution. The four SCC values for CO2 emissions reductions in 2015, expressed in 2013$, are $12.0/ton, $40.5/

ton, $62.4/ton, and $119/ton. The values for later years are higher due to increasing emissions-related costs as the magnitude of projected climate change increases.

Table VIII.32 and Table VIII.33 present the global value of CO2 emissions reductions at each efficiency level. For each of the four cases, DOE calculated a present value of the stream of annual values using the same discount rate as was used in the studies upon which the dollar-per-ton values are based. DOE calculated domestic values as a range from 7 percent to 23 percent of the global values, and these results are presented in chapter 10 of the NOPR TSD.

Table VIII.32--Global Present Value of CO2 Emissions Reduction for Potential Standards for Small Three-Phase Air-

Cooled Air Conditioners and Heat Pumps 2 and other GHG emissions to changes in the future global climate and the potential resulting damages to the world economy

Page 1224

continues to evolve rapidly. Thus, any value placed in this rulemaking on reducing CO2 emissions is subject to change. DOE, together with other Federal agencies, will continue to review various methodologies for estimating the monetary value of reductions in CO2 and other GHG emissions. This ongoing review will consider the comments on this subject that are part of the public record for this and other rulemakings, as well as other methodological assumptions and issues. However, consistent with DOE's legal obligations, and taking into account the uncertainty involved with this particular issue, DOE has included in this NOPR the most recent values and analyses resulting from the interagency review process.

DOE also estimated a range for the cumulative monetary value of the economic benefits associated with NOX emissions reductions anticipated to result from amended standards for the small air-cooled air conditioners and heat pumps less than 65,000 Btu/h, water-source heat pumps, and oil-fired storage water heaters that are the subject of this NOPR. The dollar-per-ton values that DOE used are discussed in section VII.B.2.

Table VIII.34 and Table VIII.35 present the present value of cumulative NOX emissions reductions for each efficiency level calculated using the average dollar-per-ton values and 7-percent and 3-percent discount rates.

Table VIII.34--Present Value of NOX Emissions Reduction for Potential

Standards for Small Three-Phase Air-Cooled Air Conditioners and Heat

Pumps =17,000 to =65,000 to 135,000 Btu/h. 4.3 COP.....................

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

DOE seeks comments from interested parties on its proposed amended energy conservation standards for water-source heat pumps, as well as the other efficiency levels considered. This is identified as Issue 12 under ``Issues on Which DOE Seeks Comment'' in section X.E of this NOPR. Although DOE currently believes that it would be appropriate to adopt the efficiency levels in ASHRAE Standard 90.1-2013 for water-

source heat pumps, DOE may consider the possibility of setting standards at more-stringent efficiency levels if public comments and additional data supply clear and convincing evidence in support of such an approach.

3. Commercial Oil-Fired Storage Water Heaters

EPCA specifies that, for any commercial and industrial equipment addressed under 42 U.S.C. 6313(a)(6)(A)(i), DOE may prescribe an energy conservation standard more stringent than the level for such equipment in ASHRAE 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 oil-fired storage water-heating equipment than those specified by ASHRAE Standard 90.1-2013, DOE reviewed the results in terms of the significance of their additional energy savings. DOE believes that the energy savings from increasing national energy conservation standards for oil-fired storage water heaters above the levels specified by ASHRAE Standard 90.1-2013 would be minimal. As such, DOE does not have ``clear and convincing evidence'' that significant additional conservation of energy would

Page 1227

result from adoption of more-stringent standard levels. Therefore, DOE did not examine whether the levels are economically justified, and DOE is proposing to adopt the energy efficiency levels for this equipment type as set forth in ASHRAE Standard 90.1-2013. Table VIII.38 presents the proposed energy conservation standard and compliance date for oil-

fired storage water heaters.

Table VIII.38--Proposed Energy Conservation Standards for Oil-Fired Storage Water Heaters

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

Equipment type Efficiency level (Et) Compliance date

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

Oil-Fired Storage Water Heaters >105,000 80%......................... October 9, 2015.

Btu/h and 2 (carbon dioxide) for oil-fired commercial warm air furnaces. In addition to the flue temperature measurement specified in section 40.6.8 of UL 727-2006 (incorporated by reference, see Sec. 431.75), you must locate one or two sampling tubes within six inches downstream from the flue temperature probe (as indicated on Figure 40.3 of UL 727-2006). If you use an open end tube, it must project into the flue one-third of the chimney connector diameter. If you use other methods of sampling CO2, you must place the sampling tube so as to obtain an average sample. There must be no air leak between the temperature probe and the sampling tube location. You must collect the flue gas sample at the same time the flue gas temperature is recorded. The CO2 concentration of the flue gas must be as specified by the manufacturer for the product being tested, with a tolerance of 0.1 percent. You must determine the flue CO2 using an instrument with a reading error no greater than 0.1 percent.

(2) Procedure for the measurement of condensate for a gas-fired condensing commercial warm air furnace. The test procedure for the measurement of the condensate from the flue gas under steady-state operation must be conducted as specified in sections 7.2.2.4, 7.8, and 9.2 of ASHRAE 103-2007 (incorporated by reference, see Sec. 431.75) under the maximum rated input conditions. You must conduct this condensate measurement for an additional 30 minutes of steady-state operation after completion of the steady-state thermal efficiency test specified in paragraph (c) of this section.

(e) Calculation of thermal efficiency--(1) Gas-fired commercial warm air furnaces. You must use the calculation procedure specified in section 2.39, Thermal Efficiency, of ANSI Standard Z21.47-2012 (incorporated by reference, see Sec. 431.75).

(2) Oil-fired commercial warm air furnaces. You must calculate the percent flue loss (in percent of heat input rate) by following the procedure specified in sections 11.1.4, 11.1.5, and 11.1.6.2 of the HI BTS-2000 (incorporated by reference, see Sec. 431.75). The thermal efficiency must be calculated as:

Thermal Efficiency (percent) = 100 percent - flue loss (in percent).

(f) Procedure for the calculation of the additional heat gain and heat loss, and adjustment to the thermal efficiency, for a condensing commercial warm air furnace. (1) You must calculate the latent heat gain from the condensation of the water vapor in the flue gas, and calculate heat loss due to the flue condensate down the drain, as specified in sections 11.3.7.1 and 11.3.7.2 of ASHRAE Standard 103-2007 (incorporated by reference, see Sec. 431.75), with the exception that in the equation for the heat loss due to hot condensate flowing down the drain in section 11.3.7.2, the assumed indoor temperature of 70emsp14degF and the temperature term TOA must be replaced by the measured room temperature as specified in section 2.2.8 of ANSI Z21.47-2012 (incorporated by reference, see Sec. 431.75).

(2) Adjustment to the thermal efficiency for condensing furnaces. You must adjust the thermal efficiency as calculated in paragraph (e)(1) of this section by adding the latent gain, expressed in percent, from the condensation of the water vapor in the flue gas, and subtracting the heat loss (due to the flue condensate down the drain), also expressed in percent, both as calculated in paragraph (f)(1) of this section, to obtain the thermal efficiency of a condensing furnace.

0

4. Section 431.92 is amended by adding in alphabetical order a definition for ``Water-source heat pump'' to read as follows:

Sec. 431.92 Definitions concerning commercial air conditioners and heat pumps.

* * * * *

Water-source heat pump means a single-phase or three-phase reverse-

cycle heat pump that uses a circulating water loop as the heat source for heating and as the heat sink for cooling. The main components are a compressor, refrigerant-to-water heat exchanger, refrigerant-to-air heat exchanger, refrigerant expansion devices, refrigerant reversing valve, and indoor fan. Such equipment includes, but is not limited to, water-to-air water-loop heat pumps.

0

5. Section 431.97 is amended by:

0
1. Revising paragraph (b);
  
  0
2. Redesignating Tables 4 through 8 as Tables 5 through 9 respectively, in paragraphs (c), (d), (e) and (f); and
  
  0
3. Revising paragraph (c).
  
  The revisions read as follows:
  
  Sec. 431.97 Energy efficiency standards and their compliance dates.
  
  * * * * *
  
  (b) Each commercial air conditioner or heat pump (not including single package vertical air conditioners and single package vertical heat pumps, packaged terminal air conditioners and packaged terminal heat pumps, computer room air conditioners, and variable refrigerant flow systems) manufactured on or after the compliance date listed in the corresponding table must meet the applicable minimum energy efficiency standard level(s) set forth in Tables 1, 2, 3, and 4 of this section.
  
  Table 1 to Sec. 431.97--Minimum Cooling Efficiency Standards for Air-Conditioning and Heating Equipment
  
  Not including single package vertical air conditioners and single package vertical heat pumps, packaged terminal air conditioners and packaged terminal
  
  heat pumps, computer room air conditioners, and variable refrigerant flow multi-split air conditioners and heat pumps
  
  --------------------------------------------------------------------------------------------------------------------------------------------------------
  
  Compliance date:
  
  equipment
  
  Equipment category Cooling capacity Sub-category Heating type Efficiency level manufactured on and
  
  after . . .
  
  --------------------------------------------------------------------------------------------------------------------------------------------------------
  
  Small Commercial Packaged Air- =65,000 Btu/h and AC................... No Heating or EER = 11.2................ January 1, 2010.
  
  Conditioning and Heating =135,000 Btu/h and AC................... No Heating or EER = 11.0................ January 1, 2010.
  
  Conditioning and Heating =240,000 Btu/h and AC................... No Heating or EER = 10.0................ January 1, 2010.
  
  Conditioning and Heating =65,000 Btu/h and AC................... No Heating or EER = 12.1................ June 1, 2013.
  
  Equipment (Water-Cooled). =135,000 and AC................... No Heating or EER = 12.5................ June 1, 2014.
  
  Conditioning and Heating =240,000 and AC................... No Heating or EER = 12.4................ June 1, 2014.
  
  Conditioning and Heating =65,000 and =135,000 and AC................... No Heating or EER = 12.0................ June 1, 2014.
  
  Conditioning and Heating =240,000 and AC................... No Heating or EER = 11.9................ June 1, 2014.
  
  Conditioning and Heating =17,000 Btu/h and HP................... All................. EER = 12.0................ October 29, 2003.\2\
  
  Equipment (Water-Source: Water-to- =65,000 Btu/h and HP................... All................. EER = 12.0................ October 29, 2003.\2\
  
  =65,000 Btu/h and COP = 3.3.................. January 1, 2010.
  
  Conditioning and Heating Equipment =135,000 Btu/h and COP = 3.2.................. January 1, 2010.
  
  Conditioning and Heating Equipment =240,000 Btu/h and COP = 3.2.................. January 1, 2010.
  
  Conditioning and Heating Equipment =17,000 Btu/h and HP................... All................. EER = 13.0................ October 9, 2015.
  
  =65,000 Btu/h and HP................... All................. EER = 13.0................ October 9, 2015.
  
  155,000 Btu/hr. Q/800 + 110(Vr)1/ 80%.................. 80%.
  
  2 (Btu/hr).
  
  Oil-fired storage water 155,000 Btu/hr. Q/800 + 110(Vr)1/ 78%.................. 80%.
  
  2 (Btu/hr).
  
  Gas-fired instantaneous water =10 gal........ Q/800 + 110(Vr)1/ 80%.................. 80%.
  
  2 (Btu/hr).
  
  Oil-fired instantaneous water =10 gal........ Q/800 + 110(Vr)1/ 78%.................. 78%.
  
  2 (Btu/hr).
  
  ----------------------------------------------------------------------------------------------------------------
  
  Equipment category Size Minimum thermal insulation
  
  ----------------------------------------------------------------------------------------------------------------
  
  Unfired hot water storage tank All............. R-12.5
  
  ----------------------------------------------------------------------------------------------------------------
  
  \a\ Vm is the measured storage volume, and Vr is the rated volume, both in gallons. Q is the nameplate input
  
  rate in Btu/hr.
  
  \b\ For hot water supply boilers with a capacity of less than 10 gallons: (1) The standards are mandatory for
  
  products manufactured on and after October 21, 2005, and (2) products manufactured prior to that date, and on
  
  or after October 23, 2003, must meet either the standards listed in this table or the applicable standards in
  
  subpart E of this part for a ``commercial packaged boiler.''
  
  \c\ Water heaters and hot water supply boilers having more than 140 gallons of storage capacity need not meet
  
  the standby loss requirement if: (1) The tank surface area is thermally insulated to R-12.5 or more; (2) a
  
  standing pilot light is not used; and (3) for gas or oil-fired storage water heaters, they have a fire damper
  
  or fan assisted combustion.
  
  FR Doc. 2014-30839 Filed 1-7-15; 8:45 am
  
  BILLING CODE 6450-01-P

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Energy Conservation Program for Certain Industrial Equipment: Energy Conservation Standards and Test Procedures for Commercial Heating, Air-Conditioning, and Water-Heating Equipment

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Thousands of Data Sources

Find What You Need, Quickly

Over 2 million registered users

You can sign up for a trial and make the most of our service including these benefits.

Why Sign-up to vLex?

Over 100 Countries

Thousands of Data Sources

Find What You Need, Quickly

Over 2 million registered users

You can sign up for a trial and make the most of our service including these benefits.

Why Sign-up to vLex?

Over 100 Countries

Thousands of Data Sources

Find What You Need, Quickly

Over 2 million registered users

Why Sign-up to vLex?

Over 100 Countries

Thousands of Data Sources

Find What You Need, Quickly

Over 2 million registered users

You can sign up for a trial and make the most of our service including these benefits.

Why Sign-up to vLex?

Over 100 Countries

Thousands of Data Sources

Find What You Need, Quickly

Over 2 million registered users