[Federal Register: April 7, 2008 (Volume 73, Number 67)]
[Proposed Rules]
[Page 18857-18916]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07ap08-21]
[[Page 18857]]
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Part II
Department of Energy
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Office of Energy Efficiency and Renewable Energy
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10 CFR Part 431
Energy Conservation Program for Commercial and Industrial Equipment:
Packaged Terminal Air Conditioner and Packaged Terminal Heat Pump
Energy Conservation Standards; Proposed Rule
[[Page 18858]]
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DEPARTMENT OF ENERGY
Office of Energy Efficiency and Renewable Energy
10 CFR Part 431
[Docket No. EERE-2007-BT-STD-0012]
RIN 1904-AB44
Energy Conservation Program for Commercial and Industrial
Equipment: Packaged Terminal Air Conditioner and Packaged Terminal Heat
Pump Energy Conservation Standards
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking and public meeting.
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SUMMARY: The Energy Policy and Conservation Act (EPCA) prescribes
energy conservation standards for various consumer products and
commercial and industrial equipment, and requires the Department of
Energy (DOE) to administer an energy conservation program for these
products. In this notice, DOE is proposing amended energy conservation
standards for packaged terminal air conditioners (PTACs) and packaged
terminal heat pumps (PTHPs) and is announcing a public meeting.
DATES: DOE will hold a public meeting on May 1, 2008, from 9 a.m. to 4
p.m., in Washington, DC. DOE must receive requests to speak at the
public meeting before 4 p.m., April 21, 2008. DOE must receive a signed
original and an electronic copy of statements to be given at the public
meeting before 4 p.m., April 21, 2008.
DOE will accept comments, data, and information regarding the
notice of proposed rulemaking (NOPR) before and after the public
meeting, but no later than June 6, 2008. See section VII, ``Public
Participation,'' of this NOPR for details.
ADDRESSES: The public meeting will be held at the U.S. Department of
Energy, Forrestal Building, Room 1E-245, 1000 Independence Avenue, SW.,
Washington, DC. Please note that foreign nationals visiting DOE
Headquarters are subject to advance security screening procedures,
requiring a 30-day advance notice. If you are a foreign national and
wish to participate in the public meeting, please inform DOE as soon as
possible by contacting Ms. Brenda Edwards at (202) 586-2945 so that the
necessary procedures can be completed.
You may submit comments identified by docket number EERE-2007-BT-
STD-0012 and/or Regulation Identifier Number (RIN) 1904-AB44 using any
of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: ptac_hp@ee.doe.gov. Include EERE-2007-BT-STD-0012
and/or RIN 1904-AB44 in the subject line of your message.
Postal Mail: Ms. Brenda Edwards, U.S. Department of
Energy, Building Technologies Program, Mailstop EE-2J, 1000
Independence Avenue, SW., Washington, DC 20585-0121. Telephone: (202)
586-2945. Please submit one signed paper original.
Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department
of Energy, Building Technologies Program, 950 L'Enfant Plaza, 6th
Floor, Washington, DC 20024. Please submit one signed original paper
copy.
Instructions: All submissions received must include the agency name
and docket number or RIN for this rulemaking. For detailed instructions
on submitting comments and additional information on the rulemaking
process, see section VII, ``Public Participation,'' of this document.
Docket: For access to the docket to read background documents or
comments received, visit the U.S. Department of Energy, Forrestal
Building, Resource Room of the Building Technologies Program, 950
L'Enfant Plaza, SW., 6th Floor, Washington, DC 20024, (202) 586-2945,
between 9 a.m. and 4 p.m., Monday through Friday, except Federal
holidays. Please call Ms. Brenda Edwards at the above telephone number
for additional information regarding visiting the Resource Room.
FOR FURTHER INFORMATION CONTACT: Wes Anderson, Project Manager, Energy
Conservation Standards for Packaged Terminal Air Conditioners and
Packaged Terminal Heat Pumps, U.S. Department of Energy, Energy
Efficiency and Renewable Energy, Building Technologies Program, EE-2J,
1000 Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-
7335. E-mail: Wes.Anderson@ee.doe.gov. Francine Pinto, Esq., or Eric
Stas, Esq., U.S. Department of Energy, Office of General Counsel, GC-
72, 1000 Independence Avenue, SW., Washington, DC 20585-0121, (202)
586-9507. E-mail: Francine.Pinto@hq.doe.gov or Eric.Stas@hq.doe.gov.
SUPPLEMENTARY INFORMATION:
I. Summary of the Proposed Rule
II. Introduction
A. Overview
B. Authority
C. Background
1. Current Standards
2. History of Standards Rulemaking for Packaged Terminal Air
Conditioners and Packaged Terminal Heat Pumps
III. General Discussion
A. Test Procedures
B. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
C. Energy Savings
1. Determination of Savings
2. Significance of Savings
D. Economic Justification
1. Economic Impact on Manufacturers and Commercial Customers
2. Life-Cycle Costs
3. Energy Savings
4. Lessening of Utility or Performance of Equipment
5. Impact of Any Lessening of Competition
6. Need of the Nation to Conserve Energy
7. Other Factors
IV. Methodology and Analyses
A. Market and Technology Assessment
1. Definitions of a PTAC and a PTHP
2. Equipment Classes
3. Market Assessment
a. Trade Association
b. Manufacturers
c. Shipments
4. Technology Assessment
B. Screening Analysis
C. Engineering Analysis
1. Approach
2. Equipment Classes Analyzed
3. Cost Model
4. Baseline Equipment
5. Alternative Refrigerant Analysis
a. R-22
b. R-410A
c. R-410A Compressor Availability
d. R-410A Manufacturing Production Cost
6. Cost-Efficiency Results
7. Mapping Energy Efficiency Ratio to Coefficient of Performance
D. Markups to Determine Equipment Price
E. Energy Use Characterization
1. Building Type
2. Simulation Approach
F. Life-Cycle Cost and Payback Period Analyses
1. Approach
2. Life-Cycle Cost Inputs
a. Equipment Prices
b. Installation Costs
c. Annual Energy Use
d. Electricity Prices
e. Maintenance Costs
f. Repair Costs
g. Equipment Lifetime
h. Discount Rate
3. Payback Period
G. 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
H. Life-Cycle Cost Sub-Group Analysis
I. Manufacturer Impact Analysis
[[Page 18859]]
1. Overview
a. Phase 1, Industry Profile
b. Phase 2, Industry Cash Flow Analysis
c. Phase 3, Sub-Group Impact Analysis
2. Government Regulatory Impact Model Analysis
3. Manufacturer Interviews
a. Issues
b. Government Regulatory Impact Model Scenarios and Key Inputs
i. Base Case Shipments Forecast
ii. Standards Case Shipments Forecast
iii. R-410A Base Case and Amended Energy Conservation Standards
Markup Scenarios
iv. Equipment and Capital Conversion Costs
J. Employment Impact Analysis
K. Utility Impact Analysis
L. Environmental Analysis
M. Discussion of Other Issues
1. Effective Date of the Proposed Amended Energy Conservation
Standards
2. ASHRAE/IESNA Standard 90.1-1999 Labeling Requirement
V. Analytical Results
A. Trial Standard Levels
B. Economic Justification and Energy Savings
1. Economic Impacts on Commercial Customers
a. Life-Cycle Cost and Payback Period
b. Life-Cycle Cost Sub-Group Analysis
2. Economic Impacts on Manufacturers
a. Industry Cash Flow Analysis Results
i. Standard Size PTACs and PTHPs
ii. Non-Standard Size PTACs and PTHPs
b. Cumulative Regulatory Burden
c. Impacts on Employment
d. Impacts on Manufacturing Capacity
e. Impacts on Subgroups of Manufacturers
3. National Impact Analysis
a. Amount and Significance of Energy Savings
b. Net Present Value
c. Impacts on Employment
4. Impact on Utility or Performance of Equipment
5. Impact of Any Lessening of Competition
6. Need of the Nation to Conserve Energy
7. Other Factors
C. Proposed Standard
1. Overview
2. Conclusion
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866
B. Review Under the Regulatory Flexibility Act/Initial
Regulatory Flexibility Analysis
1. Reasons for the proposed rule
2. Objectives of, and legal basis for, the proposed rule
3. Description and estimated number of small entities regulated
4. Description and estimate of compliance requirements
5. Duplication, overlap, and conflict with other rules and
regulations
6. Significant alternatives to the rule
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act of 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act of 2001
K. Review Under Executive Order 13211
L. Review Under the Information Quality Bulletin for Peer Review
VII. Public Participation
A. Attendance at Public Meeting
B. Procedure for Submitting Requests to Speak
C. Conduct of Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary
I. Summary of the Proposed Rule
The Energy Policy and Conservation Act (EPCA), as amended, provides
the Department of Energy (DOE) the authority to establish energy
conservation standards for certain commercial equipment covered by the
American Society of Heating, Refrigerating, and Air-Conditioning
Engineers (ASHRAE) and the Illuminating Engineering Society of North
America (IESNA) Standard 90.1, including packaged terminal air
conditioners (PTACs) and packaged terminal heat pumps (PTHPs), the
subject of this proceeding. (42 U.S.C. 6313(a)(6)(A)) Section
342(a)(6)(A) provides that DOE may prescribe a standard more stringent
than the level in ASHRAE/IESNA Standard 90.1, after ASHRAE amends the
energy conservation standards found in ASHRAE/IESNA Standard 90.1, if
DOE can demonstrate ``by clear and convincing evidence,'' that such 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) In accordance with these
criteria discussed in this notice, DOE proposes to amend the energy
conservation standards for PTACs and PTHPs by raising the efficiency
levels for this equipment to the levels shown in Table I.1, above the
efficiency levels specified by ASHRAE/IESNA Standard 90.1-1999. The
proposed standards would apply to all covered PTACs and PTHPs
manufactured on or after the date four years after publication of the
final rule in the Federal Register. (42 U.S.C. 6313(a)(6)(D)) The
proposed standards for PTACs and PTHPs represent an improvement in
energy efficiency of 12 to 33 percent compared to the efficiency levels
specified by ASHRAE/IESNA Standard 90.1-1999, depending on the
equipment class.
Table I.1.--Proposed Energy Conservation Standards for PTACs and PTHPs
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Equipment class
------------------------------------------------------------------------------------ Proposed energy
Equipment Category Cooling capacity conservation standards*
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PTAC............................... Standard Size**....... <7,000 Btu/h.......... EER = 11.4
>=7,000 Btu/h and EER = 13.0-(0.233 x
<=15,000 Btu/h. Cap[dagger][dagger])
>15,000 Btu/h......... EER = 9.5
Non-Standard <7,000 Btu/h.......... EER = 10.2
Size[dagger].
>=7,000 Btu/h and EER = 11.7-(0.213 x
<=15,000 Btu/h. Cap[dagger][dagger])
>15,000 Btu/h......... EER = 8.5
PTHP............................... Standard Size**....... <7,000 Btu/h.......... EER = 11.8
COP = 3.3
>=7,000 Btu/h and EER = 13.4-(0.233 x
<=15,000 Btu/h. Cap[dagger][dagger])
COP = 3.7-(0.053 x
Cap[dagger][dagger])
>15,000 Btu/h......... EER = 9.9
COP = 2.9
Non-Standard <7,000 Btu/h.......... EER = 10.8
Size[dagger]. COP = 3.0
>=7,000 Btu/h and EER = 12.3-(0.213 x
<=15,000 Btu/h. Cap[dagger][dagger])
COP = 3.1-(0.026 x
Cap[dagger][dagger])
[[Page 18860]]
>15,000 Btu/h......... EER = 9.1
COP = 2.8
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* For equipment rated according to the DOE test procedure (ARI Standard 310/380-2004), all energy efficiency
ratio (EER) values must be rated at 95[deg]F outdoor dry-bulb temperature for air-cooled equipment and
evaporatively-cooled equipment and at 85[deg]F entering water temperature for water cooled equipment. All
coefficient of performance (COP) values must be rated at 47[deg]F outdoor dry-bulb temperature for air-cooled
equipment, and at 70[deg]F entering water temperature for water-source heat pumps.
** Standard size refers to PTAC or PTHP equipment with wall sleeve dimensions greater than or equal to 16 inches
high, or greater than or equal to 42 inches wide.
[dagger] Non-standard size refers to PTAC or PTHP equipment with wall sleeve dimensions less than 16 inches high
and less than 42 inches wide.
[dagger][dagger] Cap means cooling capacity in thousand British thermal units per hour (Btu/h) at 95[deg]F
outdoor dry-bulb temperature.
DOE's analyses indicate that the proposed energy conservation
standards, trial standard level (TSL) 4 for PTAC and PTHP equipment
(See section V.A for a discussion of the TSLs), would save a
significant amount of energy--an estimated 0.019 quadrillion British
thermal units (Btu), or quads, of cumulative energy over 30 years
(2012-2042). The economic impacts on the nation (i.e., national net
present value) and the commercial customer (i.e., the average life-
cycle cost (LCC) savings) are positive.
The national net present value (NPV) of TSL 4 is $17 million using
a 7 percent discount rate and $61 million using a 3 percent discount
rate, cumulative from 2012 to 2062 in 2006$. This is the estimated
total value of future savings minus the estimated increased equipment
costs, discounted to 2008. The benefits and costs of the standard can
also be expressed in terms of annualized 2006$ values over the forecast
period 2012 through 2062. Using a 7 percent discount rate for the
annualized cost analysis, the cost of the standard is $3.4 million per
year in increased equipment and installation costs while the annualized
benefits are $5.0 million per year in reduced equipment operating
costs. Using a 3 percent discount rate, the annualized cost of the
standard is $2.9 million per year while the annualized benefits of
today's standard are $5.6 million per year. See section V.B.3 for
additional details.
Using a real corporate discount rate of 5 percent, DOE estimated
the industry's NPV (INPV) for manufacturers of PTACs and PTHPs to be
$332 million in 2006$. The impact of the proposed standards on INPV of
manufacturers of standard size PTACs and PTHPs is estimated to be
between an 18 percent loss and a 2 percent loss (-$56 million to -$5
million). The non-standard size PTAC and PTHP industry is estimated to
lose between 44 percent and 34 percent of its NPV (-$12 million to -$9
million) as a result of the proposed standards. Additionally, based on
DOE's interviews with manufacturers of PTACs and PTHPs, DOE expects
minimal plant closings or loss of employment as a result of the
proposed standards.
DOE's analyses indicate that the proposed standard, TSL 4, has
energy savings and environmental benefits. All of the energy saved is
electricity, and DOE expects the energy savings from the proposed
standards to eliminate the need for approximately 81 megawatts (MW) of
generating capacity by 2042. These results reflect DOE's use of energy
price projections from the U.S. Energy Information Administration
(EIA)'s Annual Energy Outlook 2007 (AEO2007).\1\ The proposed standard
has environmental benefits leading to reductions in greenhouse gas
emissions (i.e., cumulative (undiscounted) emission reductions) of 2.7
million tons (Mt) of carbon dioxide (CO2) from 2012 to 2042.
Additionally, the standard would likely result in 0.16 thousand tons
(kt) of nitrogen oxides (NOX) emissions reductions or generate a
similar amount of NOX emissions allowance credits in areas where such
emissions are subject to emissions caps.
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\1\ DOE intends to use EIA's Annual Energy Outlook 2008
(AEO2008) to generate the results for the final rule. In addition,
DOE will use 2007$ to reflect all dollar values in the final rule.
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In view of its analyses, DOE believes that the proposed standard,
TSL 4, represents the maximum improvement in energy efficiency of PTAC
and PTHP equipment that is technologically feasible and economically
justified. DOE found that the benefits to the Nation (energy savings,
customer average LCC savings, national NPV increase, and emission
reductions) of the proposed standards outweigh the burdens (loss of
INPV and LCC increases for some customers). When DOE considered higher
energy efficiency levels as TSLs, it found that the burdens (loss of
manufacturer NPV and LCC increase for some customers) of the higher
efficiency levels outweighed the benefits (energy savings, LCC savings
for some customers, national NPV increase, and emission reductions) of
those higher levels.
DOE recognizes that manufacturers of PTAC and PTHP equipment are
also facing a mandated refrigerant phase-out on January 1, 2010. R-22,
the only refrigerant currently used by PTACs and PTHPs, is an HCFC
refrigerant and subject to the phase-out requirement. Phase-out of this
refrigerant could have a significant impact on the manufacturing,
performance, and cost of PTAC and PTHP equipment. DOE further discusses
and estimated the impacts of the refrigerant phase-out on PTAC and PTHP
equipment and on the manufacturers of this equipment in today's notice.
II. Introduction
A. Overview
The proposed standard will save a significant amount of energy and,
as a result of less energy being produced, result in a cleaner
environment. In the 30-year period after the amended standard becomes
effective, the nation will save 0.019 quads of primary energy. These
energy savings also will result in significantly reduced emissions of
air pollutants and greenhouse gases associated with electricity
production, by avoiding the emission of 2.7 Mt of CO2 and
0.16 kt of NOX. In addition, once the standard is
implemented in 2012, DOE expects to eliminate the need for the
construction of approximately 81 MW of new power plants by 2042. In
total, DOE estimates the net present value to the Nation of this
standard to be $17 million from 2012 to 2062 in 2006$.
Finally, commercial customers will see benefits from the proposed
standard. Although DOE expects the price of the high efficiency PTAC
and PTHP equipment to be approximately 2 percent higher than the
average price of
[[Page 18861]]
this equipment today, the energy efficiency gains will result in lower
energy costs. Based on this calculation, DOE estimates that the mean
payback period for the high efficiency PTACs will be approximately 11.2
years and the mean payback period for the high efficiency PTHPs will be
approximately 4.4 years. When these savings are summed over the
lifetime of the high efficiency equipment, customers of PTACs will save
$4, on average, and customers of PTHPs will save $35, on average,
compared to their expenditures on today's baseline PTACs and PTHPs.
B. Authority
Part A-1 of Title III of EPCA addresses the energy efficiency of
certain types of commercial and industrial equipment.\2\ (42 U.S.C.
6311-6317) It contains specific mandatory energy conservation standards
for commercial PTACs and PTHPs. (42 U.S.C. 6313(a)(3)) The Energy
Policy Act of 1992 (EPACT), Public Law 102-486, also amended EPCA with
respect to PTACs and PTHPs, providing definitions in section 122(a),
test procedures in section 122(b), labeling provisions in section
122(c), and the authority to require information and reports from
manufacturers in section 122(e).\3\ DOE publishes today's notice of
proposed rulemaking (NOPR) pursuant to Part A-1. The PTAC and PTHP test
procedures appear at Title 10 Code of Federal Regulations (CFR) section
431.96.
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\2\ This part was originally titled Part C., However, it was
redesignated Part A-1 after Part B of Title III of EPCA was repealed
by Public Law 109-58.
\3\ These requirements are codified in Part C of Title III of
EPCA, now Part A-1, as amended, 42 U.S.C. 6311-6316, and Title 10 of
the Code of Federal Regulations, Part 431 (10 CFR Part 431) at 10
CFR 431.92, 431.96, 431.97, and subparts U and V.
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EPCA established Federal energy conservation standards that
generally correspond to the levels in ASHRAE/IESNA Standard 90.1, as in
effect on October 24, 1992 (ASHRAE/IESNA Standard 90.1-1989), for each
type of covered equipment listed in section 342(a) of EPCA, including
PTACs and PTHPs. (42 U.S.C. 6313(a)) For each type of equipment, EPCA
directed that if ASHRAE/IESNA Standard 90.1 is amended, DOE must adopt
an amended standard at the new level in ASHRAE/IESNA 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)(II).
EPCA also provides that in deciding whether such a more stringent
standard is economically justified, DOE must, after receiving comments
on the proposed standard, determine whether the benefits of the
standard exceed its burdens by considering, to the greatest extent
practicable, the following seven factors:
(1) The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the product in the type (or class) compared to any increase in
the price of, or in the initial charges for, or maintenance expenses of
the products which are likely to result from the imposition of the
standard;
(3) The total projected amount of energy savings likely to result
directly from the imposition of the standard;
(4) Any lessening of the utility or the performance of the products
likely to result from the imposition of the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
imposition of the standard;
(6) The need for national energy conservation; and
(7) Other factors the Secretary considers relevant.
(42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)-(ii)).
Furthermore, EPCA contains what is commonly known as an ``anti-
backsliding'' provision. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(1)) This
provision mandates that the Secretary not prescribe any amended
standard that either increases the maximum allowable energy use or
decreases the minimum required energy efficiency of covered equipment.
It is a fundamental principle in EPCA's statutory scheme that DOE
cannot amend standards downward; that is, weaken standards, from those
that have been published as a final rule. Natural Resources Defense
Council v. Abraham, 355 F.3d 179 (2nd Cir. 2004).
Additionally, the Secretary may not prescribe an amended standard
if interested persons have established by a preponderance of the
evidence that the amended standard is ``likely to result in the
unavailability in the United States of any product type (or class)''
with performance characteristics, features, sizes, capacities, and
volumes that are substantially the same as those generally available in
the United States at the time of the Secretary's finding. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(4))
Federal energy efficiency requirements for commercial equipment
generally supersede State laws or regulations concerning energy
conservation testing, labeling, and standards. (42 U.S.C. 6316(a) and
(b)) DOE can, however, grant waivers of preemption for particular State
laws or regulations, in accordance with the procedures and other
provisions of section 327(d) of EPCA. (42 U.S.C. 6297(d) and
6316(b)(2)(D))
C. Background
1. Current Standards
The current energy conservation standards in EPCA for PTACs and
PTHPs apply to all equipment manufactured on or after January 1, 1994,
(42 U.S.C. 6313(a)(3)) and correspond to the minimum efficiency levels
in ASHRAE/IESNA Standard 90.1-1989. These levels consist of the EER for
the cooling mode and the COP for the heating mode. The EER means ``the
ratio of the produced cooling effect of an air conditioner or heat pump
to its net work input, expressed in Btu/watt-hour.'' 10 CFR 431.92. The
COP means ``the ratio of produced cooling effect of an air conditioner
or heat pump (or its produced heating effect, depending on model
operation) to its net work input, when both the cooling (or heating)
effect and the net work input are expressed in identical units of
measurement.'' 10 CFR 431.92. Table II.1 depicts the Federal energy
conservation standards for PTACs and PTHPs found in 10 CFR 431.97.
Table II.1.--Existing Federal Energy Conservation Standards for PTACs
and PTHPs
------------------------------------------------------------------------
Equipment class Existing federal
--------------------------------------------------- energy conservation
Equipment Cooling capacity standards*
------------------------------------------------------------------------
PTAC........................ < 7,000 Btu/h....... EER = 8.88
>= 7,000 Btu/h and EER = 10.0 - (0.16 x
<= 15,000 Btu/h Cap**)
[[Page 18862]]
> 15,000 Btu/h EER = 7.6
PTHP........................ < 7,000 Btu/h....... EER = 8.88
COP = 2.7
>= 7,000 Btu/h and EER = 10.0-(0.16 x
<= 15,000 Btu/h Cap**)
COP = 1.3 + (0.16 x
EER)
> 15,000 Btu/h EER = 7.6
COP = 2.5
------------------------------------------------------------------------
* For equipment rated according to the Air-Conditioning and
Refrigeration Institute (ARI) standards, all EER values must be rated
at 95 [deg]F outdoor dry-bulb temperature for air-cooled products and
evaporatively-cooled products and at 85 [deg]F entering water
temperature for water cooled products. All COP values must be rated at
47 [deg]F outdoor dry-bulb temperature for air-cooled products, and at
70 [deg]F entering water temperature for water-source heat pumps.
** Cap means cooling capacity in kBtu/h at 95 [deg]F outdoor dry-bulb
temperature.
2. History of Standards Rulemaking for Packaged Terminal Air
Conditioners and Packaged Terminal Heat Pumps
On October 29, 1999, ASHRAE's Board of Directors approved ASHRAE/
IESNA Standard 90.1-1999 (ASHRAE/IESNA Standard 90.1-1999), which
addressed efficiency standard levels for 34 categories of commercial
heating, ventilating and air-conditioning (HVAC) and water heating
equipment covered by EPCA, including PTACs and PTHPs. In amending the
ASHRAE/IESNA Standard 90.1-1989 levels for PTACs and PTHPs, ASHRAE
acknowledged the physical size constraints between the varying sleeve
sizes on the market. Specifically, the wall sleeve dimensions of the
PTAC and PTHP affect the energy efficiency of the equipment.
Consequently, ASHRAE/IESNA Standard 90.1-1999 used the equipment
classes defined by EPCA, which are distinguished by equipment (i.e.,
air conditioner or heat pump) and cooling capacity, and further
separated these equipment classes by wall sleeve dimensions as further
discussed in section IV.C.2. Table II.2 shows the efficiency levels in
ASHRAE/IESNA Standard 90.1-1999 for PTACs and PTHPs.
Table II.2.--ASHRAE/IESNA Standard 90.1-1999 Energy Efficiency Levels for PTACs and PTHPs
----------------------------------------------------------------------------------------------------------------
Equipment class ASHRAE/IESNA standard 90.1-
------------------------------------------------------------------------------------ 1999 efficiency levels*
Equipment Category Cooling capacity
----------------------------------------------------------------------------------------------------------------
PTAC............................... Standard Size**....... < 7,000 Btu/h......... EER = 11.0
>= 7,000 Btu/h and <= EER = 12.5-(0.213 x
15,000 Btu/h Cap[dagger][dagger])
> 15,000 Btu/h EER = 9.3
Non-Standard < 7,000 Btu/h EER = 9.4
Size[dagger].
>= 7,000 Btu/h and <= EER = 10.9-(0.213 x
15,000 Btu/h Cap[dagger][dagger])
> 15,000 Btu/h EER = 7.7
PTHP............................... Standard Size**....... < 7,000 Btu/h......... EER = 10.8
COP = 3.0
>= 7,000 Btu/h and <= EER = 12.3-(0.213 x
15,000 Btu/h Cap[dagger][dagger])
COP = 3.2-(0.026 x
Cap[dagger][dagger])
> 15,000 Btu/h EER = 9.1
COP = 2.8
Non-Standard < 7,000 Btu/h......... EER = 9.3
Size[dagger]. COP = 2.7
>= 7,000 Btu/h and <= EER = 10.8-(0.213 x
15,000 Btu/h Cap[dagger][dagger])
COP = 2.9-(0.026 x
Cap[dagger][dagger])
>15,000 Btu/h EER = 7.6
COP = 2.5
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* For equipment rated according to ARI standards, all EER values must be rated at 95[deg]F outdoor dry-bulb
temperature for air-cooled products and evaporatively-cooled products and at 85[deg]F entering water
temperature for water cooled products. All COP values must be rated at 47[deg]F outdoor dry-bulb temperature
for air-cooled products, and at 70[deg]F entering water temperature for water-source heat pumps.
** Standard size refers to PTAC or PTHP equipment with wall sleeve dimensions greater than or equal to 16 inches
high, or greater than or equal to 42 inches wide.
[dagger] Non-standard size refers to PTAC or PTHP equipment with wall sleeve dimensions less than 16 inches high
and less than 42 inches wide. ASHRAE/IESNA Standard 90.1-1999 also includes a factory labeling requirement for
non-standard size PTAC and PTHP equipment as follows: ``MANUFACTURED FOR REPLACEMENT APPLICATIONS ONLY; NOT TO
BE INSTALLED IN NEW CONSTRUCTION PROJECTS.''
[dagger][dagger] Cap means cooling capacity in kBtu/h at 95[deg]F outdoor dry-bulb temperature.
Following the publication of ASHRAE/IESNA Standard 90.1-1999, DOE
performed a screening analysis that covered 24 of the 34 categories of
equipment addressed in ASHRAE/IESNA Standard 90.1-1999, to determine if
more stringent levels would result in significant additional energy
conservation of energy, be technologically feasible and economically
justified. For each of these types of equipment, the screening analysis
examined a range of efficiency levels that included the levels
specified in EPCA and ASHRAE/IESNA Standard 90.1-1999, as well as the
maximum technologically feasible efficiency levels. The report
``Screening Analysis for EPACT-Covered Commercial [Heating, Ventilating
and Air-Conditioning] HVAC and Water-Heating
[[Page 18863]]
Equipment'' (commonly referred to as the 2000 Screening Analysis) \4\
summarizes this analysis, and estimates the annual national energy
consumption and the potential for energy savings that would result if
the covered equipment were to meet efficiency levels higher than those
specified in ASHRAE/IESNA Standard 90.1-1999. The baselines for the
comparison were the corresponding levels specified in ASHRAE/IESNA
Standard 90.1-1999 and EPCA.
---------------------------------------------------------------------------
\4\ U.S. Department of Energy, Office of Energy Efficiency and
Renewable Energy. ``Energy Conservation Program for Consumer
Products: Screening Analysis for EPACT-Covered Commercial HVAC and
Water-Heating Equipment Screening Analysis.'' April 2000.
---------------------------------------------------------------------------
On January 12, 2001, DOE published a final rule for commercial HVAC
and water heating equipment, which concluded that the 2000 Screening
Analysis indicated at least a reasonable possibility of finding ``clear
and convincing evidence'' that more stringent standards ``would be
technologically feasible and economically justified and would result in
significant additional conservation of energy'' for PTACs and PTHPs. 66
FR 3336, 3349. Under EPCA, these are the criteria for DOE adoption of
standards more stringent than those in ASHRAE/IESNA Standard 90.1. (42
U.S.C. 6313(a)(6)(A)(ii)(II))
In addition, on March 13, 2006, DOE issued a Notice of Availability
(NOA) announcing the availability of a technical support document (TSD)
DOE was using in re-assessing whether to adopt, as uniform national
standards, energy conservation standards contained in amendments to the
ASHRAE/IESNA Standard 90.1-1999 for certain types of commercial
equipment. 71 FR 12634. In the NOA, DOE revised the energy savings
analysis from the 2000 Screening Analysis and summarized the
assumptions and results in the NOA TSD. Id. DOE also stated that, even
though the revised analysis reduced the potential energy savings that
might result from more stringent standards than the efficiency levels
specified in ASHRAE/IESNA Standard 90.1-1999 for PTACs and PTHPs, DOE
believed that there was a possibility that clear and convincing
evidence exists that more stringent standards are warranted. Therefore,
DOE stated in the NOA that it was inclined to seek more stringent
standard levels than the efficiency levels in ASHRAE/IESNA Standard
90.1-1999 for PTACs and PTHPs through a separate rulemaking. 71 FR
12639. Lastly, on March 7, 2007, DOE issued a final rule reaffirming
DOE's inclination in the March 2006 NOA and stating DOE's decision to
explore more stringent efficiency levels than in ASHRAE/IESNA Standard
90.1-1999 for PTACs and PTHPs through a separate rulemaking. 72 FR
10038, 10044.
In January 2008, ASHRAE published ASHRAE/IESNA Standard 90.1-2007,
which reaffirmed the definitions and efficiency levels for PTACs and
PTHPs in ASHRAE/IESNA Standard 90.1-1999. Since the definitions and
efficiency levels for PTACs and PTHPs are the same in the two versions
of ASHRAE/IESNA Standard 90.1, DOE is only referencing the ASHRAE/IESNA
Standard 90.1-1999 version throughout today's notice even though DOE
reviewed both versions.
III. General Discussion
A. Test Procedures
Section 343(a) of EPCA authorizes the Secretary to amend the test
procedures for PTACs and PTHPs to the latest version generally accepted
by industry or the rating procedures developed by the Air-Conditioning
and Refrigeration Institute (ARI) \5\, as referenced by ASHRAE/IESNA
Standard 90.1, unless the Secretary determines by clear and convincing
evidence the latest version of the industry test procedure does not
meet the requirements for test procedures described in paragraphs (2)
and (3) of that section. (42 U.S.C. 6314(a)(4))
---------------------------------------------------------------------------
\5\ The Air-Conditioning and Refrigeration Institute (ARI) and
the Gas Appliance Manufacturers Association (GAMA) announced on
December 17, 2007, that their members voted to approve the merger of
the two trade associations to represent the interests of cooling,
heating, and commercial refrigeration equipment manufacturers. The
merged association became AHRI on Jan. 1, 2008.
---------------------------------------------------------------------------
DOE published a final rule on October 21, 2004, that amends its
test procedure for PTACs and PTHPs to incorporate by reference the most
recent amendments to the industry test procedure for PTACs and PTHPs,
ARI Standard 310/380-2004. 69 FR 61962 (October 21, 2004). DOE does not
believe further modifications to this test procedure are necessary at
this time because no further amendments have been made to the industry
test procedure for PTACs and PTHPs.
B. Technological Feasibility
1. General
DOE considers design options technologically feasible if the
industry is already using them or if research has progressed to
development of a working prototype. DOE defines technological
feasibility as: ``Technologies incorporated in commercially available
products or in working prototypes will be considered technologically
feasible.'' 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(i).
In each energy conservation standards rulemaking, DOE conducts a
screening analysis based on information gathered on all current
technology options and prototype designs that could improve the
efficiency of the equipment that is the subject of the rulemaking. In
consultation with interested parties, DOE develops a list of design
options for consideration in the rulemaking. All technologically
feasible design options are candidates in this initial assessment. DOE
eliminates from consideration, early in the process, any design option
that is not practicable to manufacture, install, or service; that will
have adverse impacts on equipment utility or availability; or for which
there are adverse impacts on health or safety. 10 CFR 430, subpart C,
appendix A, section 4(a)(4). In addition, for the types of equipment
identified in section 342(a) of EPCA, 42 U.S.C. 6313(a), which includes
PTACs and PTHPs, DOE eliminates from consideration any design option
whose technological feasibility is not supported by clear and
convincing evidence.
The design options DOE considered as part of this rulemaking all
have the potential to improve EER or COP. DOE considered any design
option for PTACs and PTHPs to be technologically feasible if it is used
in equipment the PTAC and PTHP industry distributes in commerce or is
in a working prototype.
2. Maximum Technologically Feasible Levels
In developing today's proposed standards, DOE has determined the
maximum improvement in energy efficiency that is technologically
feasible (``max tech'') for PTACs and PTHPs. EPCA requires that DOE
adopt amended energy conservation standards for equipment covered by
ASHRAE/IESNA Standard 90.1 that achieves the maximum improvement in
energy efficiency that is technologically feasible and economically
justified, or to identify the ``max tech'' efficiency levels. (42
U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A)) Therefore, in reviewing the
amended ASHRAE/IESNA Standard 90.1 efficiency standards for PTACs and
PTHPs, DOE identified the ``max tech'' levels as part of the
engineering analysis (Chapter 5 of the TSD). At the present time, those
levels are the levels set forth in TSL 7. For the representative
cooling capacities within a given equipment class, PTACs and PTHPs
utilizing R-22 with these efficiency levels already are being offered
for sale and there is no
[[Page 18864]]
equipment at higher efficiency levels that are currently available.
Table III.1 lists the ``max tech'' levels that DOE identified for this
rulemaking.
Table III.1.--``Max Tech'' Efficiency Levels (>=7,000 Btu/h and <=15,000 Btu/h Equipment Classes)\*\
----------------------------------------------------------------------------------------------------------------
Cooling
Equipment type Equipment class capacity ``Max tech'' efficiency
(Btu/h) level\**\
----------------------------------------------------------------------------------------------------------------
PTAC..................................... Standard Size[dagger]....... 9,000 12.0 EER
12,000 11.5 EER
Non-standard 11,000 11.2 EER
Size[dagger][dagger].
----------------------------------------------------------------------------------------------------------------
PTHP..................................... Standard Size[dagger]....... 9,000 12.0 EER
3.5 COP
12,000 11.7 EER
3.3 COP
Non-standard 11,000 11.4 EER
Size[dagger][dagger]. 2.9 COP
----------------------------------------------------------------------------------------------------------------
\*\ As discussed in section IV.C.2 of today's notice, DOE is presenting the results for two cooling capacities
of standard size PTACs and PTHPs, 9,000 Btu/h and 12,000 Btu/h, which fall within the equipment classes of
PTACs and PTHPs with cooling capacities >=7,000 Btu/h and <=15,000 Btu/h.
\**\ For equipment rated according to the DOE test procedure, all EER values would be rated at 95[deg]F outdoor
dry-bulb temperature for air-cooled products and evaporatively-cooled products and at 85[deg]F entering water
temperature for water cooled products. All COP values must be rated at 47[deg]F outdoor dry-bulb temperature
for air-cooled products, and at 70[deg]F entering water temperature for water-source heat pumps.
[dagger] Standard size refers to PTAC or PTHP equipment with wall sleeve dimensions greater than or equal to 16
inches high, or greater than or equal to 42 inches wide.
[dagger][dagger] Non-standard size refers to PTAC or PTHP equipment with wall sleeve dimensions less than 16
inches high and less than 42 inches wide.
C. Energy Savings
1. Determination of Savings
DOE used the national energy savings (NES) Microsoft Excel
spreadsheet to estimate energy savings that could result from amended
energy conservation standards for PTACs and PTHPs. The spreadsheet
forecasts energy savings over the period of analysis for TSLs relative
to the base case. DOE quantified the energy savings attributable to an
energy conservation standard as the difference in energy consumption
between the trial standards case and the base case. The base case
represents the forecast of energy consumption in the absence of amended
mandatory energy conservation standards beyond the levels in ASHRAE/
IESNA Standard 90.1-1999. Section IV.G of this Notice and Chapter 11 of
the TSD describes the NES spreadsheet model.
The NES spreadsheet model calculates the energy savings in both
site energy (in kilowatt-hours (kWh)) or source energy (in British
thermal units (Btu)). Site energy is the energy directly consumed at
building sites by PTACs and PTHPs. DOE expresses national energy
savings in terms of source energy savings (i.e., savings in energy used
to generate and transmit the energy consumed at the site). Chapter 11
of the TSD contains a table of factors used to convert site energy
consumption in kWh to source energy consumption in Btu. DOE derived
these conversion factors, which change over time, from EIA's AEO2007.
2. Significance of Savings
Section 342(a)(6)(A)(ii)(II) of EPCA allows DOE to adopt a more
stringent standard for PTACs and PTHPs than the amended level in
ASHRAE/IESNA Standard 90.1, if clear and convincing evidence supports a
determination that the more stringent standard would result in
``significant'' additional energy savings. (42 U.S.C.
6313(a)(6)(A)(ii)(II)) While EPCA does not define the term
``significant,'' a U.S. Court of Appeals, in Natural Resources Defense
Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985), indicated
that Congress intended ``significant'' energy savings in section 325 of
EPCA to mean savings that are not ``genuinely trivial.'' For all the
TSLs considered in this rulemaking, DOE's estimates of energy savings
provide clear and convincing evidence that the additional energy
savings to be achieved from exceeding the corresponding efficiency
level[s] in ASHRAE/IESNA Standard 90.1-1999 are nontrivial, and
therefore DOE considers them ``significant'' as required by section 342
of EPCA. (42 U.S.C. 6313 (a)(6)(A)(ii)(II))
D. Economic Justification
As noted earlier, EPCA provides seven factors for DOE to evaluate
in determining whether an energy conservation standard for PTAC and
PTHP is economically justified. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)-(ii)) The following discussion explains how DOE has
addressed each factor in this rulemaking.
1. Economic Impact on Manufacturers and Commercial Customers
DOE has established procedures, interpretations, and policies to
guide DOE in considering new or amended appliance energy conservation
standards. DOE investigates the impacts of amended energy conservation
standards of PTACs and PTHPs on manufacturers through the manufacturer
impact analysis (MIA) (see Chapter 13 of the TSD). First, DOE uses an
annual cash flow approach in determining the quantitative impacts of a
new or amended energy conservation standard on manufacturers. This
includes both a short- and long-term assessment based on the cost and
capital requirements during the period between the announcement of a
regulation and the time when the regulation comes into effect. Impacts
analyzed include INPV, cash flows by year, changes in revenue and
income, and other measures of impact, as appropriate. Second, DOE
analyzes and reports the impacts on different types of manufacturers,
paying particular attention to impacts on small manufacturers. Third,
DOE considers the impact of standards on domestic manufacturer
employment, manufacturing capacity, plant closures, and loss of capital
investment. Finally, DOE takes into account cumulative impacts of
different DOE regulations on manufacturers.
For customers, DOE measures the economic impact as the change in
installed cost and life-cycle operating costs, i.e., the LCC. Chapter 8
of the TSD presents the LCC of the equipment at
[[Page 18865]]
each efficiency level examined. LCC, described below, is one of the
seven factors EPCA requires DOE to consider in determining the economic
justification for a new or amended standard. (42 U.S.C. 6316(a); 42
U.S.C. 6295(o)(2)(B)(i)(II))
2. Life-Cycle Costs
The LCC is the sum of the purchase price, including the
installation and operating expense (including operating energy
consumption, maintenance, and repair expenditures) discounted over the
lifetime of the equipment. To determine the purchase price including
installation, DOE estimated the markups that are added to the
manufacturer selling price (MSP) by distributors and contractors, and
estimated installation costs from an analysis of PTAC and PTHP
installation cost estimates for each of the equipment classes. DOE
determined that maintenance cost is not dependent on PTAC and PTHP
efficiency and that repair cost increases with MSP.
In estimating operating energy costs, DOE used the average
commercial electricity price in each State, using EIA data from
2006.\6\ DOE modified the 2006 average commercial electricity prices to
reflect the average electricity prices for each of four types of
businesses examined in this analysis. The LCC savings analysis compares
the LCCs of equipment designed to meet possible proposed energy
conservation standards with the LCC of the equipment likely to be
installed in the absence of amended energy conservation standards. The
LCC analysis also defines a range of energy price forecasts for
electricity used in the economic analyses.
---------------------------------------------------------------------------
\6\ The EIA data for 2006 is the latest data set published by
EIA on commercial electricity prices by State.
---------------------------------------------------------------------------
For each PTAC and PTHP equipment class, DOE calculated both the LCC
and LCC savings at various efficiency levels. The LCC analysis
estimated the LCC for representative equipment used in four types of
buildings, two of which were hotels/motels and health care facilities
that are representative of the segment of U.S. commercial building
stock that uses PTACs and PTHPs.
To account for uncertainty and variability in specific inputs, such
as equipment lifetime and discount rate, DOE used a distribution of
values with probabilities attached to each value. For each of the four
types of commercial buildings, DOE sampled the value of these inputs
from the probability distributions. As a result, the analysis produced
a range of LCCs. A distinct advantage of this approach is that DOE can
identify the percentage of customers achieving LCC savings or attaining
certain payback values due to an increased energy conservation
standard, in addition to identifying the average LCC savings or average
payback period for that standard. DOE gives the LCC savings as a
distribution, with a mean value and a range. DOE's analysis assumes
that the customer purchases the PTAC and PTHP in 2012. Chapter 8 of the
TSD contains the details of the LCC calculations.
3. Energy Savings
While significant additional energy conservation is a separate
statutory requirement for imposing a more stringent energy conservation
standard than the level in ASHRAE/IESNA Standard 90.1, EPCA requires
that DOE consider the total projected energy savings expected to result
directly from the standard when determining the economic justification
for a standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(III))
DOE used the NES spreadsheet results in its consideration of total
projected savings. Section V.B.3 discusses the savings figures.
4. Lessening of Utility or Performance of Equipment
In establishing equipment classes, and in evaluating design options
and the impact of proposed standards, DOE has attempted to avoid
proposing amended standards for PTACs and PTHPs that would lessen the
utility or performance of such equipment. (See 42 U.S.C. 6316(a); 42
U.S.C. 6295(o)(2)(B)(i)(IV)) The design options considered in the
engineering analysis of this rulemaking do not involve changes in
equipment design or unusual installation requirements that could reduce
the utility or performance of PTACs and PTHPs. In addition, DOE is also
considering manufacturers' concerns that one-third of the non-standard
size market subject to the more stringent standards under ASHRAE/IESNA
Standard 90.1-1999 would not be able to meet the efficiency levels
specified by ASHRAE/IESNA Standard 90.1-1999 for standard size
equipment due to the physical size constraints of the wall sleeve as
further discussed in section IV.A.2.
5. Impact of Any Lessening of Competition
EPCA directs that DOE consider any lessening of competition that is
likely to result from proposed standards. The Attorney General
considers the impact, if any, of any lessening of competition likely to
result from imposition of a proposed standard. (42 U.S.C. 6316(a); 42
U.S.C. 6295(o)(2)(B)(i)(V)) DOE has transmitted a copy of this NOPR to
the Attorney General soliciting written views on this issue.
6. Need of the Nation To Conserve Energy
The non-monetary benefits of the proposed standards are likely to
be reflected in improvements to the security and reliability of the
Nation's energy system-namely, reductions in the overall demand for
energy will result in a reduction in the Nation's reliance on foreign
sources of energy and increased reliability of the Nation's electricity
system. DOE conducts a utility impact analysis to show the reduction in
installed generation capacity. The proposed standards are also likely
to result in improvements to the environment. In quantifying these
improvements, DOE has defined a range of primary energy conversion
factors and associated emission reductions based on the generation
displaced by energy conservation standards. DOE reports the
environmental effects from each TSL in the environmental assessment,
Chapter 16 of the TSD. (42 U.S.C. 6313(a); 42 U.S.C.
6295(o)(2)(B)(i)(VI))
7. Other Factors
EPCA allows the Secretary of Energy, in determining whether a
proposed standard is economically justified, to consider any other
factors that the Secretary deems to be relevant. (42 U.S.C. 6316(a); 42
U.S.C. 6295(o)(2)(B)(i)(VII)) DOE considered the impacts of setting
different amended energy conservation standards for PTACs and PTHPs
(i.e., the amended standard level for a given PTAC cooling capacity
would be different from the amended standard level for a give PTHP with
the same cooling capacity). DOE also considered the effects of
potential equipment switching within the PTAC and PTHP market (e.g.,
switching from PTHPs to PTACs, which include a less-efficient heating
system). In addition, DOE also considered the uncertainty associated
with the market due to the impending refrigerant phase-out in 2010,
including equipment availability, compressor availability, and the
available efficiencies of R-410A PTACs and PTHPs. Lastly, DOE
considered the uniqueness of the non-standard size of this equipment
and any differential impacts that might result on this industry from
amended energy conservation standards. The non-standard size market is
further discussed in section IV and the impacts on the non-standard
size industry from
[[Page 18866]]
amended energy conservation standards are estimated in section V.
IV. Methodology and Analyses
This section addresses the analyses DOE has performed for this
rulemaking. A separate sub-section addresses each analysis. DOE used a
spreadsheet to calculate the LCC and payback periods (PBPs) of
potential amended energy conservation standards. Another spreadsheet
was used to provide shipments forecasts and then calculates national
energy savings and net present value impacts of potential amended
energy conservation standards. DOE also assessed manufacturer impacts,
largely through use of the Government Regulatory Impact Model (GRIM).
DOE also estimated the impacts of proposed PTAC and PTHP energy
conservation standards on electric utilities and the environment using
a version of EIA's National Energy Modeling System (NEMS). The NEMS
model simulates the U.S. energy economy and has been developed over
several years by the EIA primarily for preparing the AEO. The NEMS
produces a widely known baseline forecast for the United States through
2030 that is available in the public domain. The version of NEMS used
for the proposed energy conservation standards analysis is called NEMS-
BT , and is based on the AEO2007 version with minor modifications. The
NEMS-BT offers a sophisticated picture of the effect of standards,
since it can measure the interactions between the various energy supply
and demand sectors and the economy as a whole.
A. Market and Technology Assessment
When beginning an energy conservation standards rulemaking, DOE
develops 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 includes
both quantitative and qualitative assessments based primarily on
publicly available information. The subjects addressed in the market
and technology assessment for this rulemaking (see Chapter 3 of the
TSD) include equipment classes, manufacturers, quantities, and types of
equipment sold and offered for sale, retail market trends, and
regulatory and non-regulatory programs.
1. Definitions of a PTAC and a PTHP
Section 340 of 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 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 in 10 CFR 431.92 in a final rule issued October 21,
2004. 69 FR 61970.
2. Equipment Classes
When evaluating and establishing energy conservation standards, DOE
generally divides covered equipment into equipment classes by the type
of energy used or by capacity or other performance-related features
that affect efficiency. Different energy conservation standards may
apply to different equipment classes. (42 U.S.C. 6316(a); 42 U.S.C.
6295(q))
PTACs and PTHPs can be divided into various equipment classes
categorized by physical characteristics that affect equipment
efficiency. Key characteristics affecting the energy efficiency of the
PTAC or PTHP are whether the equipment has reverse cycle heating (i.e.,
air conditioner or heat pump), the cooling capacity, and the physical
dimensions of the unit.
The existing Federal energy conservation standards for PTACs and
PTHPs correspond to the efficiency levels in ASHRAE/IESNA Standard
90.1-1989, as shown in Tables 1 and 2 of 10 CFR Part 431.97, dividing
PTACs and PTHPs into six equipment classes. These equipment classes are
differentiated by whether the equipment has supplemental heating or
reverse cycle heating (i.e., air conditioner or heat pump) and by
cooling capacity in Btu/h.
When installed, PTACs and PTHPs are fitted into a wall sleeve.
There is a wide variety of wall sleeve sizes found in different
buildings. These wall sleeves are market driven (i.e., the applications
or facilities where the PTACs or PTHPs are installed is what determines
the ``market standard'' wall sleeve dimension) and require
manufacturers to offer various PTACs and PTHPs that can fit into
various wall sleeve dimensions. For new units, the industry has
standardized the wall sleeve dimension for PTACs and PTHPs in buildings
over the past 20 years to be 16 inches high by 42 inches wide.
Therefore, units that have a wall sleeve dimension of 16 inches high by
42 inches wide are considered ``standard size'' equipment and all other
units are considered ``non-standard size'' equipment. In contrast, the
industry does not have a common wall sleeve dimension that is typical
for all older existing facilities. These facilities, such as high-rise
buildings found in large cities, typically use non-standard size
equipment. In these installations, altering the existing wall sleeve
opening to accommodate the more efficient, standard size equipment
could include extensive structural changes to the building, could be
very costly, and is therefore, rarely done.
When ASHRAE amended the efficiency levels for PTACs and PTHPs in
1999, it acknowledged the physical size constraints among various
sleeve sizes on the market. Consequently, ASHRAE/IESNA Standard 90.1-
1999 used the equipment classes defined by EPCA, which are
distinguished by whether the product has reverse cycle heating (i.e.,
air conditioner or heat pump) and cooling capacity in Btu/h, and
further separated these equipment classes by wall sleeve dimensions.
ASHRAE/IESNA Standard 90.1-1999 refers to wall sleeve dimensions in
two categories: ``New Construction'' and ``Replacement.'' ASHRAE/IESNA
Standard 90.1-1999 does not describe ``New Construction,'' but Table
6.21D, footnote b of ASHRAE/IESNA Standard 90.1-1999 states that
``replacement'' efficiencies apply only to units: (1) ``Factory labeled
as follows: Manufactured for Replacement Applications Only; Not to be
Installed in New Construction Projects''; and (2) ``with existing wall
sleeves less than 16 inches high and less than 42 inches wide.'' DOE
understands that the ``New Construction'' category under ASHRAE/IESNA
Standard 90.1-1999 is residual, and covers all other PTAC and PTHPs.
Hence, this category consists of equipment with wall sleeve dimensions
greater than or equal to 16 inches high and greater than or equal to 42
inches wide, or lacking the requisite label. In addition, when ASHRAE
approved ASHRAE/IESNA Standard 90.1-1999, not only did it include
delineations by wall sleeve dimensions, but it also associated these
delineations with specified efficiency levels. The efficiency levels
associated with non-standard equipment, or ``Replacement'' equipment,
are significantly less stringent than those associated with standard
size equipment, or ``New Construction'' equipment.
ARI recently submitted a continuous maintenance proposal on PTAC
and
[[Page 18867]]
PTHP equipment to the ASHRAE/IESNA Standard 90.1 committee, which in
part suggests alterations to the delineations within ASHRAE/IESNA
Standard 90.1-1999 for standard and non-standard size equipment.\7\ ARI
believes ASHRAE misclassified approximately one-third of the non-
standard size market when it adopted ASHRAE/IESNA Standard 90.1-1999.
ARI believes the one third of the non-standard size market subject to
the more stringent standards under ASHRAE/IESNA Standard 90.1-1999 are
not capable of meeting the efficiency levels specified by ASHRAE/IESNA
Standard 90.1-1999 for standard size equipment due to the physical size
constraints of the wall sleeve. For example, a PTAC or PTHP unit with
wall sleeve dimensions of 16.5 inches high and 27 inches wide would be
classified as standard size equipment under ASHRAE's delineations and
would be required to meet the higher efficiency levels specified by
ASHRAE/IESNA Standard 90.1-1999. However, since this unit does not have
the industry standard wall sleeve dimension of 16 inches high by 42
inches wide, ARI believes these units are solely non-standard units
that are used in very old buildings and should therefore be considered
as replacement units. Due to the space limitations typically associated
with non-standard size PTACs and PTHPs, manufacturers have few options
to increase energy efficiency. As noted above, many of the existing
buildings cannot be retrofitted to accommodate larger wall sleeves
associated with more efficient standard-size units.
---------------------------------------------------------------------------
\7\ Air-Conditioning and Refrigeration Institute. Continuous
Maintenance Proposal on Package Terminal Equipment. October 5, 2007.
---------------------------------------------------------------------------
In response to this apparent misclassification within ASHRAE/IESNA
Standard 90.1-1999, ARI proposed a continuous maintenance proposal to
ASHRAE that includes a new definition for non-standard size PTACs and
PTHPs in place of the ``replacement'' delineation in ASHRAE/IESNA
Standard 90.1-1999. The new definition of non-standard size PTACs and
PTHPs reads: ``equipment with existing sleeves having an external wall
opening of less than 16 in. high or less than 42 in. wide, and having a
cross-sectional area less than 670 in 2.'' Effectively, this
new definition of non-standard equipment would allow approximately five
percent of the total PTAC and PTHP market to qualify for the less
stringent, non-standard efficiency levels.
DOE recognizes ARI's concerns regarding non-standard size equipment
and the possible misclassification under the delineations established
by ASHRAE/IESNA Standard 90.1-1999. When ASHRAE approved ASHRAE/IESNA
Standard 90.1-1999, not only did it include delineations by wall sleeve
dimensions, but it also associated these delineations with specified
efficiency levels. The efficiency levels associated with non-standard
equipment, or ``Replacement'' equipment, are significantly less
stringent than those associated with standard size equipment, or ``New
Construction'' equipment.
DOE reviewed the ARI shipment data and found approximately 15
percent of the total market (i.e., approximately 67,000 units shipped
annually) are non-standard size equipment. Under ASHRAE/IESNA Standard
90.1-1999, approximately 5 percent of the total non-standard size
equipment market would be required to meet the more stringent standards
established for standard size equipment. If DOE were to adopt equipment
classes consistent with those delineations in ASHRAE/IESNA Standard
90.1-1999, manufacturers could be forced to cease production of those
equipment lines, which are potentially misclassified and could not meet
the more stringent standards. Under the ARI continuous maintenance
proposal to ASHRAE, all of the non-standard size equipment would be
subject to the less stringent standards.
Since ARI's proposed definitions would effectively reclassify some
equipment under ASHRAE/IESNA 90.1-1999's delineations as non-standard
size equipment, DOE believes ASHRAE must adopt ARI's continuous
maintenance proposal before DOE can officially use this definition as
the basis for DOE's standard. (42 U.S.C. 6313(a)(6)(A)(ii)) DOE
understands that the ARI continuous maintenance proposal on PTACs and
PTHPs has been approved by ASHRAE as Addendum t to ASHRAE/IESNA
Standard 90.1-2007 and will be the subject of public review. If ASHRAE
is able to adopt Addendum t to ASHRAE/IESNA Standard 90.1-2007 prior to
September 2008, when DOE must issue a final rule on this rulemaking,
DOE proposes to incorporate that version of the ASHRAE standard,
including the modified definition in its final rule.
At this time, DOE seeks stakeholder comment on Addendum t to
ASHRAE/IESNA Standard 90.1-2007 (i.e., ARI's continuous maintenance
proposal to ASHRAE). Specifically, Addendum t to ASHRAE/IESNA Standard
90.1-2007 incorporates the following revised definition for non-
standard size equipment: ``equipment with existing sleeves having an
external wall opening of less than 16 in. high or less than 42 in.
wide, and having a cross-sectional area less than 670 in
2.'' If ASHRAE were to approve Addendum t to ASHRAE/IESNA
Standard 90.1-2007 prior to September 2008, DOE proposes to adopt
equipment classes in the final rule for PTACs and PTHPs as shown in
Table IV.1.
Table IV.1.--Equipment Classes for PTACs and PTHPs if ASHRAE Adopts
Addendum T to ASHRE/IESNA Standard 90.1-2007
------------------------------------------------------------------------
Equipment Class
-------------------------------------------------------------------------
Equipment Category Cooling capacity
------------------------------------------------------------------------
PTAC.......................... Standard Size*... < 7,000 Btu/h
>= 7,000 Btu/h and <=
15,000 Btu/h
> 15,000 Btu/h
Non-Standard < 7,000 Btu/h
Size**.
>= 7,000 Btu/h and <=
15,000 Btu/h
> 15,000 Btu/h
PTHP.......................... Standard Size*... < 7,000 Btu/h
>= 7,000 Btu/h and <=
15,000 Btu/h
> 15,000 Btu/h
Non-Standard < 7,000 Btu/h
Size**.
[[Page 18868]]
>= 7,000 Btu/h and <=
15,000 Btu/h
> 15,000 Btu/h
------------------------------------------------------------------------
* Standard size refers to PTAC or PTHP equipment with wall sleeve
dimensions having an external wall opening of greater than or equal to
16 inches high or greater than or equal to 42 inches wide, and having
a cross-sectional area greater than or equal to 670 inches squared.
** Non-standard size refers to PTAC or PTHP equipment with existing wall
sleeve dimensions having an external wall opening of less than 16
inches high or less than 42 inches wide, and having a cross-sectional
area less than 670 inches squared.
DOE would add the definitions of standard size and non-standard
size as defined in the footnotes of Table IV.1 under 10 CFR 431.2. This
is identified as Issue 1 under ``Issues to Which DOE Seeks Comment'' in
section VII.E of today's proposed rule.
In the absence of final action by ASHRAE on the addendum, DOE would
subdivide EPCA's existing classes for this equipment by wall sleeve
dimensions, consistent with ASHRAE/IENSNA Standard 90.1-1999.
Specifically, DOE would adopt equipment classes in the final rule for
PTACs and PTHPs as shown in Table IV.2.
Table IV.2.--Equipment Classes for PTACs and PTHPs if ASHRAE Does Not
Adopt Addendum T to ASHRE/IESNA Standard 90.1-2007
------------------------------------------------------------------------
Equipment class
-------------------------------------------------------------------------
Equipment Category Cooling capacity
------------------------------------------------------------------------
PTAC.......................... Standard Size*... < 7,000 Btu/h
>= 7,000 Btu/h and <=
15,000 Btu/h
> 15,000 Btu/h
Non-Standard < 7,000 Btu/h
Size**.
>= 7,000 Btu/h and <=
15,000 Btu/h
> 15,000 Btu/h
PTHP.......................... Standard Size*... < 7,000 Btu/h
>= 7,000 Btu/h and <=
15,000 Btu/h
> 15,000 Btu/h
Non-Standard < 7,000 Btu/h
Size**.
>= 7,000 Btu/h and <=
15,000 Btu/h
> 15,000 Btu/h
------------------------------------------------------------------------
* Standard size refers to PTAC or PTHP equipment with wall sleeve
dimensions greater than or equal to 16 inches high, or greater than or
equal to 42 inches wide.
** Non-standard size refers to PTAC or PTHP equipment with wall sleeve
dimensions less than 16 inches high and less than 42 inches wide.
DOE would add the definitions of standard size and non-standard
size as defined in the footnotes of Table IV.2 under section 10 CFR
431.2.
For the purposes of today's notice, DOE has based the proposed
standards and the proposed definitions of non-standard and standard
size PTACs and PTHPs as shown in the rule language of today's notice on
the delineations in ASHRAE/IESNA Standard 90.1-1999. However as stated
above, if ASHRAE adopts Addendum t to ASHRAE/IESNA Standard 90.1-2007
prior to September 2008, DOE proposes to incorporate the modified
definitions from the Addendum in the final rule. (42 U.S.C.
6313(a)(6)(A)(ii)) If Addendum t is not available for DOE to include in
the final rule, DOE's ability to do so at a later date will be
constrained by the anti-backsliding provision. (42 U.S.C. 6316(a); 42
U.S.C. 6295(o)(1))
3. Market Assessment
The subjects addressed in this market assessment for this
rulemaking include trade associations, manufacturers, and the
quantities and types of equipment sold and offered for sale. The
information DOE gathered serves as resource material throughout the
rulemaking. Chapter 3 of the TSD provides additional detail on the
market assessment.
a. Trade Association
The Air-Conditioning, Heating, and Refrigeration Institute (AHRI),
formerly and throughout this notice referred to as ARI, is the trade
association representing PTAC and PTHP manufacturers. ARI and the Gas
Appliance Manufacturers Association (GAMA) announced on December 17,
2007, that their members voted to approve the merger of the two trade
associations to represent the interests of cooling, heating, and
commercial refrigeration equipment manufacturers. The merged
association became AHRI on Jan. 1, 2008.
ARI develops and publishes technical standards for residential and
commercial equipment using rating criteria and procedures for measuring
and certifying equipment performance. The DOE test procedure is an ARI
standard. ARI has developed a certification program that the majority
of the manufacturers in the PTAC and PTHP industry have used to certify
their equipment. Manufacturers certify their own equipment by providing
ARI with test data. Through the ARI certification program, ARI
evaluates the test data and determines if the equipment conforms to ARI
310/380-2004.\8\ Once ARI has determined that the equipment has met all
the requirements under ARI 310/380-2004 standards and certification
[[Page 18869]]
program, it is added to a directory of certified equipment. DOE used
ARI's certification data, as summarized by the 2006 ARI directory of
certified PTACs and PTHPs, in the engineering analysis.
---------------------------------------------------------------------------
\8\ DOE has incorporated by reference ARI Standard 310/380-2004
as the DOE test procedure at 10 CFR 431.97.
---------------------------------------------------------------------------
b. Manufacturers
DOE identified five large manufacturers of standard size PTAC and
PTHP that hold approximately 90 percent of the market in terms of
shipments. These five manufacturers include: General Electric (GE)
Company, Carrier Corporation, Amana,\9\ Trane,\10\ and McQuay
International. Three major manufacturers including McQuay
International, RetroAire, and Fedders Islandaire, Inc. share the non-
standard size PTAC and PTHP market. All of the major manufacturers
certify their equipment with ARI and are included in the ARI directory
of certified products.
---------------------------------------------------------------------------
\9\ Amana is a trademark of Maytag Corporation and is used under
license to Goodman Global, Inc.
\10\ Trane is a trademark and business of American Standard
companies.
---------------------------------------------------------------------------
The standard size PTAC and PTHP market differs from the non-
standard size PTAC and PTHP industry in that many of the manufacturers
are domestically owned with manufacturing facilities located outside of
the United States. Currently there is only one major manufacturer of
standard size PTAC and PTHP equipment manufacturing equipment in the
United States. In addition, there has been a recent trend in the PTAC
and PTHP standard size market for foreign owned companies to enter and
sell equipment in the United States.
Almost all of the manufacturers of non-standard size PTACs and
PTHPs are domestically owned with manufacturing facilities located
inside of the United States. The non-standard manufacturers tend to
specialize in equipment solely for replacement applications. In
addition, non-standard size manufacturers produce PTAC and PTHP
equipment on a made-to-order basis. Unlike standard size manufacturers,
there has not been an influx of foreign owned companies to sell non-
standard size PTAC and PTHP equipment in the United States.
In addition, DOE takes into consideration the impact of amended
energy conservation standards on small businesses. At this time, DOE
has identified several small business in both the standard size and
non-standard size PTAC and PTHP industry that fall under the Small
Business Administration (SBA)'s definition as having 750 employees or
fewer. DOE studies the potential impacts on these small businesses in
detail during the MIA (section IV.I of today's notice and Chapter 13 of
the TSD).
c. Shipments
DOE reviewed data collected by the U.S. Census Bureau and ARI to
evaluate the annual PTAC and PTHP equipment shipment trends and the
value of these shipments. The historical shipments data shown in Tables
IV.3 provide a picture of the market for PTAC and PTHP equipment. The
historical shipments for PTACs and PTHPs are based on data provided by
ARI for the years 1997-2005.
Table IV.3.--2006 Total PTAC and PTHP Industry Estimated Shipment Data
from ARI (Standard and Non-Standard)
------------------------------------------------------------------------
Total
Year (thousands
of units)
------------------------------------------------------------------------
2005....................................................... 484
2004....................................................... 446
2003....................................................... 399
2002....................................................... 389
2001....................................................... 388
2000....................................................... 402
1999....................................................... 453
1998....................................................... 471
1997....................................................... 434
------------------------------------------------------------------------
Using currently available data, ARI estimated that 85 percent of
the shipments for PTACs and PTHPs are standard size units, while 15
percent are non-standard size units. In addition, ARI identified the
two cooling capacities for standard size PTACs and PTHPs with the
highest number of shipments, which are 9,000 Btu/h and 12,000 Btu/h.
4. Technology Assessment
In the technology assessment, DOE identified technologies and
design options that could improve the efficiency of PTACs and PTHPs.
This assessment provides the technical background and structure on
which DOE bases its screening and engineering analyses. For PTACs and
PTHPs, DOE based its list of technologically feasible design options on
input from manufacturers, industry experts, component suppliers, trade
publications, and technical papers.
In surveying PTAC and PTHP technology options, DOE considered a
wide assortment of equipment literature, information derived from the
teardown analysis, information derived from the stakeholder interviews,
and the previous DOE energy conservation standards rulemaking for air-
conditioning rulemaking analyses. The following technology options were
identified as potential means to improve PTAC and PTHP performance:
Scroll compressors
Variable-speed compressors
Higher efficiency compressors
Complex control boards
Higher efficiency fan motors
Microchannel heat exchangers
Increase heat exchanger area
Material treatment of heat exchanger
Recircuiting heat exchanger coils
Improved air flow and fan design
Heat pipes
Corrosion protection
B. Screening Analysis
The purpose of the screening analysis is to evaluate the
technologies that improve equipment efficiency to determine which
technologies to consider further and which to screen out. DOE consulted
with a range of parties, including industry, technical experts, and
others to develop a list of technologies for consideration. DOE then
applied the following four screening criteria to determine which
technologies are unsuitable for further consideration in the rulemaking
(10 CFR Part 430, Subpart C, Appendix A at 4(a)(4) and 5(b)):
(1) Technological feasibility. Technologies incorporated in
commercial equipment or in working prototypes will be considered
technologically feasible.
(2) Practicability to manufacture, install, and service. If mass
production of a technology in commercial equipment and reliable
installation and servicing of the technology could be achieved on the
scale necessary to serve the relevant market at the time of the
effective date of the standard, then that technology will be considered
practicable to manufacture, install, and service.
(3) Adverse impacts on equipment utility or equipment availability.
If a technology is determined to have significant adverse impact on the
utility of the equipment to significant subgroups of customers, or
result in the unavailability of any covered equipment type with
performance characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as equipment
generally available in the United States at the time, it will not be
considered further.
(4) Adverse impacts on health or safety. If it is determined that a
technology will have significant adverse impacts on health or safety,
it will not be considered further.
DOE eliminated three technologies because they have no effect on,
or do
[[Page 18870]]
not increase EER or COP as measured by the test procedure since the
test procedure measures steady-state energy efficiency. However, these
features (i.e., variable speed compressors, complex control boards, and
corrosion protection) can reduce the energy consumption of the PTAC or
PTHP in actual applications, since they affect the cyclic operation of
the equipment. They do not affect the measure of efficiency (i.e., EER
and COP) since both are steady-state measures, not cyclic measures.
DOE also eliminated six of the technologies it identified in the
market and technology assessment. The specific technologies that were
eliminated based on the four screening criteria outlined above are: (1)
Scroll compressors, (2) higher efficiency fan motors, (3) microchannel
heat exchangers, (4) material treatment of heat exchangers, (5)
improved airflow and fan design, and (6) heat pipes. DOE screened out
scroll compressors because they are not currently practical to
manufacturer in the sizes necessary for use in PTACs and PTHPs. DOE
screened out higher efficiency fan motors, improved airflow and fan
design because further gains in PSC fan motor technology or changing
the type of fan design would affect the size of the motor or fan.
Because PTACs and PTHPs are space-constrained equipment, it is unlikely
that manufacturers would be able to redesign the motor or fans that
would be practical to manufacture, install, and service on a scale
necessary to serve the relevant market at the time of the effective
date of the standard. DOE screened out microchannel heat exchangers
because they are still in the research stage for PTAC and PTHP
equipment and would not be practicable to manufacture, install, or
service on a scale necessary to serve the relevant market at the time
of the effective date of the standard. DOE screened out material
treatment of heat exchangers because it is currently patented and only
used by one PTAC and PTHP manufacturer; thus, it would not be practical
to manufacture on broad scale for the entire industry. Lastly, DOE
screened out heat pipes because they are still in the research stage
and their energy savings potential has not been fully established.
Based on equipment literature, teardown analysis, and manufacturer
interviews, DOE has identified higher efficiency compressors,\11\
increasing the heat exchanger area, and recircuiting the heat exchanger
coils as the most common ways by which manufacturers improve the energy
efficiency of their PTACs and PTHPs as measured by the test procedure
and that are not excluded by the four criteria in Appendix A to Subpart
B of 10 CFR Part 430 listed above. See Chapter 3 of the TSD for
additional detail on the technology assessment and technologies
analyzed.
---------------------------------------------------------------------------
\11\ Currently, all PTAC and PTHP manufacturers incorporate
rotary compressors into their equipment designs. DOE is referring to
rotary compressors throughout today's notice unless specifically
noted.
---------------------------------------------------------------------------
There are PTACs and PTHPs utilizing R-22 in the market at various
efficiency levels incorporating the three design options analyzed in
today's notice. DOE believes this constitutes clear and convincing
evidence that all of the efficiency levels discussed in today's notice
is technologically feasible. However, DOE recognizes the uncertainty
associated with the conversion to R-410A refrigerant and will take this
into further consideration when weighing the benefits and burdens for
each TSL. For more details on how DOE developed the technology options
and the process for screening these options, refer to the market and
technology assessment (see Chapter 3 of the TSD) and the screening
analysis (see Chapter 4 of the TSD).
C. Engineering Analysis
The purpose of the engineering analysis is to establish the
relationship between the cost and efficiency of PTACs and PTHPs, to
show the manufacturing costs of achieving increased efficiency. For
each equipment class, this analysis estimates the baseline manufacturer
cost, as well as the incremental cost for equipment at efficiency
levels above the baseline. In determining the performance and the costs
of more efficient equipment, DOE considers technologies and design
option combinations not eliminated in the screening analysis. The
output of the engineering analysis is a set of cost-efficiency
relationships or cost-efficiency curves that are used in further
analyses (e.g., the LCC and PBP analyses and the national impact
analysis (NIA)).
DOE typically structures its engineering analysis around one of
three methodologies: (1) The design-option approach, which calculates
the incremental costs of adding specific design options to a baseline
model; (2) the efficiency-level approach, which calculates the relative
costs of achieving increases in energy efficiency levels, without
regard to the particular design options used to achieve such increases;
and (3) the reverse-engineering or cost-assessment approach, which
involves ``bottom-up'' manufacturing cost assessments for achieving
various levels of increased efficiency, based on detailed data derived
from equipment tear-downs, as to costs for parts, material, labor,
shipping/packaging, and investment for models that operate at
particular efficiency levels.
1. Approach
For PTACs and PTHPs, each energy efficiency level is expressed as
an EER, which is a function of cooling capacity. For each class
analyzed, DOE used representative cooling capacities corresponding to
the cooling capacities with the highest equipment shipments within a
given equipment class. For the purposes of conducting the analyses, DOE
believes that the results from the representative cooling capacities
can be extrapolated to the entire range of cooling capacities for each
equipment class. DOE's approach for extending the results to the
omitted cooling capacities is discussed further in section V.1 of this
NOPR. DOE seeks comment on this approach to extend the engineering
analysis to cooling capacities for which complete analysis was not
performed. This is identified as Issue 2 under ``Issues to Which DOE
Seeks Comment'' in section VII.E of today's proposed rule.
For this analysis, DOE used a design option approach, which
involved consultation with outside experts, review of publicly
available cost and performance information, and modeling of equipment
cost. The design options DOE considered in the Engineering Analysis
include higher efficiency compressors, increasing the heat exchanger
area, and recircuiting the heat exchanger coils. The design option
analysis provides transparency of assumptions and results and the
ability to perform independent analyses for verification. The
methodology used to perform design-option analysis and derive the cost-
efficiency relationship is described in detail in Chapter 5 of the TSD.
2. Equipment Classes Analyzed
For the engineering analysis, DOE reviewed all twelve equipment
classes covered by this rulemaking. Since the wall sleeve dimensions
effect the energy efficiency of the equipment, DOE examined standard
size and non-standard size PTACs and PTHPs separately. In addition,
since the energy efficiency equations for PTACs and PTHPs established
by EPCA and ASHRAE/IESNA Standard 90.1-1999 are a function of the
equipment's cooling capacity, DOE examined specific cooling capacities
for standard size and non-standard size PTACs and PTHPs, which are
referred to as representative cooling capacities. See
[[Page 18871]]
Table 1 and Table 2 of 10 CFR Part 431.97 and ASHRAE/IESNA Standard
90.1-1999 for the energy efficiency equations. DOE reviewed the
shipments data provided by ARI for the 2000 Screening Analysis and
today's rulemaking,\12\ and found the majority of shipments have a
cooling capacity within the 7,000 Btu/h to 15,000 Btu/h range. See
Chapter 3 of the TSD for more details on the shipments data.
Consequently, DOE choose to examine these four equipment classes
further.
---------------------------------------------------------------------------
\12\ ARI provided DOE shipments data from 2000 for the 2000
Screening Analysis and shipments data from 2006 for today's
rulemaking.
---------------------------------------------------------------------------
For standard size PTAC and PTHP equipment classes, DOE identified
two representative cooling capacities. The representative cooling
capacities for standard size PTACs and PTHPs are 9,000 Btu/h and 12,000
Btu/h. DOE found these two representative cooling capacities to have
the highest number of shipments based on data in the 2006 ARI
Directory, the ACEEE database of equipment, as well as the shipment
information provided to DOE found in the 2000 Screening Analysis. For
non-standard size equipment, DOE could not identify representative
cooling capacities or wall sleeve dimensions. The non-standard size
PTAC and PTHP market also has a greater variety of shipments based on
the customers that use them and specialized applications. DOE used
11,000 Btu/h as the representative cooling capacity for non-standard
size equipment because it is the middle of the cooling capacity range.
Therefore, for the engineering analysis and subsequent analyses, DOE
analyzed non-standard size PTACs and PTHPs with 11,000 Btu/h cooling
capacity. See Chapter 5 of the TSD for additional details.
DOE developed the cost-efficiency curves based on these
representative cooling capacities and wall sleeve-size units. Table
IV.4 exhibits the representative cooling capacities within each
equipment class analyzed in the engineering analysis.
Table IV.4.--Representative Cooling Capacities for the Engineering
Analysis
------------------------------------------------------------------------
Representative
Equipment type Equipment class cooling capacity
(Btu/h)
------------------------------------------------------------------------
PTAC.......................... Standard Size*....... 9,000
12,000
Non-Standard Size**.. 11,000
PTHP.......................... Standard Size*....... 9,000
12,000
Non-Standard Size**.. 11,000
------------------------------------------------------------------------
* Standard size refers to PTAC or PTHP equipment with wall sleeve
dimensions greater than or equal to 16 inches high, or greater than or
equal to 42 inches wide.
** Non-standard size refers to PTAC or PTHP equipment with wall sleeve
dimensions less than 16 inches high and less than 42 inches wide.
DOE's selection of representative cooling capacities for further
examination is based on shipment information provided by ARI. For the
PTAC and PTHP equipment classes with a cooling capacity greater than or
equal to 7,000 Btu/h and less than or equal to 15,000 Btu/h, the energy
efficiency equation characterizes the relationship between the EER of
the equipment and cooling capacity (i.e., EER is a function of the
cooling capacity of the equipment). Therefore, for these equipment
classes, DOE explicitly analyzed the two cooling capacities with the
greatest number of shipments, which allows DOE to investigate the slope
of the energy efficiency capacity relationship. For all cooling
capacities less than 7,000 Btu/h and all cooling capacities greater
than 15,000 Btu/h, the EER is calculated based on the energy efficiency
equation for 7,000 Btu/h or 15,000 Btu/h, respectively.
For PTACs and PTHPs, DOE is proposing to equate the amended energy
conservation standards for equipment with a cooling capacity less than
7,000 Btu/h with the amended energy conservation standards for
equipment with a cooling capacity equal to 7,000 Btu/h. Similarly, for
PTACs and PTHPs, DOE is proposing to equate the amended energy
conservation standards for equipment with a cooling capacity greater
than 15,000 Btu/h to the amended energy conservation standards for
equipment with a cooling capacity equal to 15,000 Btu/h. This is the
same method established in the Energy Policy Act of 1992 as shown by
the existing Federal minimum energy conservation standards and
maintained by ASHRAE Standard 90.1-1999 for calculating the EER and COP
of equipment with cooling capacities less than 7,000 Btu/h and greater
than 15,000 Btu/h. More details explaining how DOE developed the
proposed energy efficiency equations based on the analysis results for
the representative cooling capacities are found in section V.A of
today's notice.
3. Cost Model
DOE developed a manufacturing cost model to estimate the
manufacturing production cost (MPC) of PTACs and PTHPs. The
manufacturing cost model is a spreadsheet model, which details the
structured bill of materials to estimate the MPCs of a PTAC or PTHP
based on all the manufacturing and fabrication resources required to
manufacture the equipment. Developing the cost model involved
disassembling various PTACs and PTHPs, analyzing the materials and
manufacturing processes, and developing component costing flexible
enough to be applicable to all equipment classes. In addition to
disassembling various PTACs and PTHPs, manufacturers provided DOE
supplemental component data for various PTAC and PTHP equipment. The
manufacturing cost model used the component specifications supplied by
manufacturers, the teardown data, component cost sources, and
engineering interviews to estimate the MPCs. DOE reported the MPCs in
aggregated form to maintain confidentiality of sensitive component
data. DOE obtained input from stakeholders on the MPC estimates and
assumptions to confirm accuracy. DOE used the cost model for all of the
representative cooling capacities within the PTAC and PTHP equipment
classes. Chapter 5 of the TSD provides details and assumptions of the
cost model.
DOE applied a manufacturer markup to the MPC estimates to arrive at
the MSP. This is the price at which the
[[Page 18872]]
manufacturer can recover both production and non-production costs \13\
and earns a profit. DOE developed a market-share-weighted average
industry markup by examining the major PTAC and PTHP manufacturers'
gross margin information from annual reports and Securities and
Exchange Commission (SEC) 10-K reports. The manufacturers DOE examined
represent approximately 75 percent of the PTAC and PTHP industry. Each
of these companies is a subsidiary of a more diversified parent company
that manufactures equipment other than PTACs and PTHPs. Because the SEC
10-K reports do not provide gross margin information at the subsidiary
level, the estimated markups represent the average markups that the
parent company applies over its entire range of offerings.
---------------------------------------------------------------------------
\13\ Full production costs include direct labor, direct
material, and direct overhead. Non-production costs include selling,
general and administrative, research and development, and interest.
See Chapter 5 of the TSD for more details.
---------------------------------------------------------------------------
DOE evaluated manufacturer markups from 2002 to 2006, except for
one manufacturer, whose markup was evaluated from 1998 to 2002 because
data from the latter years was not publicly available. The manufacturer
markup is calculated as 100/(100 - average gross margin), where gross
margin is calculated as revenue - cost of goods sold (COGS). DOE used
Internal Revenue Service industry statistics to validate the SEC 10-K
and annual report information. DOE estimated the average manufacturer
markup within the industry as 1.29. See Chapter 5 of the TSD for
additional details.
4. Baseline Equipment
As mentioned above, the engineering analysis estimates the
incremental costs for equipment with efficiency levels above the
baseline in each equipment class. For the purpose of the engineering
analysis, DOE used the engineering baseline EER as the starting point
to build the cost efficiency curves. DOE usually uses the Federal
minimum energy conservation standards to represent the baseline model's
energy efficiency in the engineering analysis. However, all of the PTAC
and PTHP equipment offered for sale, according to the ARI directory,
exceed the efficiency levels specified by the existing Federal minimum
energy conservation standards. Consequently, DOE identified the lowest
efficiency equipment currently on the market and is utilizing it as the
engineering baseline.
DOE established engineering baseline specifications for each of the
equipment classes modeled in the engineering analysis by reviewing
available manufacturer data, selecting several representative units
from available manufacturer data, and then aggregating the physical
characteristics of the selected units. These specifications include
wall sleeve dimensions, number of components, and other equipment
features that affect energy consumption, as well as a base cost (the
cost of a piece of equipment not including the major efficiency-related
components such as compressors, fan motors, and heat exchanger coils).
By excluding the equipment designs, which can be attributable to
specific manufacturers, DOE created an engineering baseline that is
representative of each equipment class with average characteristics,
including dimensions, components, and other equipment features that are
necessary to calculate the MPC of each unit within each equipment
class. The cost model was used to develop the MPC for each equipment
class. Specifications of the baseline equipment are provided in Chapter
5 of the TSD.
In estimating the economic impacts of standards, DOE used the
efficiency levels in ASHRAE/IESNA Standard 90.1-1999 as the baseline
efficiencies in order to estimate the impacts of standards more
stringent than ASHRAE/IESNA Standard 90.1-1999. ASHRAE/IESNA Standard
90.1-1999 is the least stringent energy efficiency level DOE could
adopt since EPCA directs that if ASHRAE/IESNA Standard 90.1 is amended,
DOE must adopt an amended standard at the new level in ASHRAE/IESNA
Standard 90.1 unless clear and convincing evidence supports a
determination that adoption of a more stringent level as a national
standard would produce significantly more energy savings and be
technologically feasible and economically justified. (42 U.S.C.
6313(a)(6)(A)(ii)(II)) Consequently, the minimum energy conservation
standard levels DOE could adopt in this rulemaking proceeding would be
the efficiency levels contained in ASHRAE/IESNA Standard 90.1-1999.
Thus, DOE is evaluating in this rulemaking whether efficiency levels
above those contained in ASHRAE/IESNA Standard 90.1-1999 are
technologically feasible and economically justified.\14\
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\14\ DOE's estimates of potential energy savings from an amended
energy conservation standard are further discussed in section V.3.
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5. Alternative Refrigerant Analysis
a. R-22
In 1987, the United Nations Environment Programme (UNEP) adopted
the Montreal Protocol on Substances that Deplete the Ozone Layer
(Montreal Protocol), which regulates the phase-out of ozone-depleting
substances through a collaborative and international effort. In 1988,
the United States ratified the Montreal Protocol and thus committed to
the phase-out.\15\
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\15\ The 1987 Montreal Protocol on Substances that Deplete the
Ozone Layer (as agreed in 1987). United Nations Environment
Programme. http://ozone.unep.org/Ratification--status/montreal--
protocol.shtml.
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In 1990, the Clean Air Act was amended to include Title VI,
``Stratospheric Ozone Protection,'' to implement the Montreal Protocol.
(42 U.S.C. 7671, et seq.) Title VI mandated the phase-out by 2020 of
hydrochlorofluorocarbon (HCFC) refrigerants for use in new air-
conditioning systems. (42 U.S.C. 7671d) Title VI, however, also
authorized the Environmental Protection Agency (EPA) to accelerate this
date if certain criteria were met, (42 U.S.C. 7671e) and EPA
subsequently adopted a rule on December 10, 1993 to require the phase-
out of HCFC refrigerants for use in new equipment by 2010. 58 FR 65018.
R-22, the only refrigerant currently used by PTACs and PTHPs, is an
HCFC refrigerant and subject to the phase-out requirement. Phase-out of
this refrigerant could have a significant impact on the manufacturing,
performance, and cost of PTAC and PTHP equipment.
b. R-410A
As part of the engineering analysis, DOE performed an alternative
refrigerant analysis to characterize the performance implications on
PTACs and PTHPs. This analysis included researching technical journal
reports, discussions with industry experts and manufacturers, and
developing an analysis that used the methodology DOE used in performing
the engineering analysis as to equipment using the R-22 refrigerant.
ARI, in comment on the March 13, 2006, Notice of Document Availability
(71 FR 12634) commented that R-410A is the most likely replacement
refrigerant for R-22 in standard and non-standard size PTACs and PTHPs.
(Docket No. EE-RM/STD-03-100, EE-RM/STD-03-200, EE-RM/STD-03-300, ARI,
No. 26 at pp. 2-3) \16\
[[Page 18873]]
Every manufacturer interview confirmed that the industry is planning to
substitute R-410A for R-22 in PTACs and PTHPs. Industry representatives
expressed a preference for R-410A due to its performance similarities
to R-22 and experience with other HVAC equipment that use R-410A.
Therefore, DOE performed its alternative refrigerant analysis based on
the use of R-410A. See Chapter 5 of the TSD for additional details.
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\16\ ``ARI, No. 26 at pp 2-3'' refers (1) to a statement that
was submitted by the Air-Conditioning and Refrigeration Institute
and is recorded in the Resource Room of the Building Technologies
Program in the docket under ``Energy Efficiency Program for
Commercial and Industrial Equipment: Efficiency Standards for
Commercial Heating, Air-Conditioning and Water Heating Equipment,''
Docket Number EE-RM-STD-03-100, EE-RM-STD-03-200, and EE-RM-STD-03-
300, as comment number 26; and (2) a passage that appears on pages 2
and 3 of that statement.
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DOE identified the ``max-tech'' efficiency levels as described in
section III.B.2 of today's proposed rule. These ``max-tech'' efficiency
levels are based on currently available R-22 PTACs and PTHPs for a
given representative cooling capacity within a given equipment class.
In order to analyze the impact of using R-410A in PTACs and PTHPs, DOE
considered the impact of using R-410A on PTAC components, the
engineering analysis of past rulemakings that addressed the refrigerant
phase-out, and markets in which a similar transition has occurred.
First, DOE expects that the phase-out of R-22 and the subsequent
adoption of R-410A refrigerants in PTACs and PTHPs will require the
redesign of the sealed systems found inside the PTAC and PTHP units.
The sealed system consists of the indoor and outdoor heat exchangers,
the compressor, refrigerant flow-control devices, and any piping that
connects these components through which refrigerant flows during unit
operation. Since R-22 refrigerants have different operating
characteristics than R-410A, the sealed system in a PTAC or PTHP unit
using R-410A will have to be redesigned to optimize the unit for
operation with R-410A. Specifically, equipment using R-410A operates at
higher system pressure requiring stronger sealed system walls and the
use of different oils (i.e., R-410 equipment will use POE, while R-22
equipment uses mineral). In addition, R-410A compressors must also be
designed with thicker and stronger compressor shells and components to
withstand 50 percent to 60 percent more pressure than R-22
compressors.\17\
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\17\ Emerson Climate Technologies. R410A Questions. http://
www.emersonclimate.com/faq_copeland.htm#R410A (Last accessed August
2, 2007.) We will need to save the portion of this web site that we
rely upon for the administrative record.
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The loss in compressor efficiency can be overcome with optimized
heat exchanger design to a limited extent. As discussed in the market
and technology assessment (Chapter 3 of the TSD), different heat
exchanger redesigns not currently associated with compressors could
increase overall system performance. According to manufacturers, some
redesigns, such as adding coils, re-circuiting, and increasing the
frontal heat exchanger surface area, are applicable to PTACs and PTHPs
regardless of the refrigerant used. However, DOE does not have
sufficient information to predict with precision the performance
benefits of heat exchanger redesigns. Initially, DOE expects any such
redesigns to result in efficiency improvements insufficient to offset
the efficiency reductions resulting from the switch from R-22 to R-
410A. Thus, DOE expects the overall system efficiency of R-410A PTAC
and PTHP equipment will be lower than if that equipment used R-22, as
predicted by manufacturer testing, ARI's research,\18\ National
Institute of Standards and Technology studies,\19\ and as observed in
response to the transition from R-22 to R-410A in the residential air
conditioning market. Optimizing the heat exchanger and HVAC circuits to
compensate could be costly, depending on whether a heat exchanger
manufacturer needs to change the fin tooling, expansion, and assembly
systems.
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\18\ Air-Conditioning and Refrigeration Institute. Response to
ASHRAE 90.1 Continuous Maintenance Proposal on Package Terminal
Equipment. May 18, 2006.
\19\ Payne, W., Domanski, P. A Comparison of an R22 and an R410A
Air Conditioner Operating at High Ambient Temperatures. National
Institute of Standards and Technology Building Environment Division:
Thermal Machinery Group. http://www.fire.nist.gov/bfrlpubs/build02/
PDF/b02186.pdf. (Last accessed August 2, 2007.)
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Therefore, in this rulemaking, DOE is using an overall lower system
performance for PTAC and PTHP equipment with R-410A. For standard size
PTACs and PTHPs with 9,000 Btu/h cooling capacity, DOE calculated an
overall system performance degradation consistent with ARI estimates of
6.3 percent.\20\ For standard size PTACs and PTHPs with 12,000 Btu/h
cooling capacity, DOE calculated overall system performance degradation
consistent with ARI estimates of 7.6 percent.\21\ For non-standard size
PTACs and PTHPs of all cooling capacities, DOE calculated overall
system performance degradation of 6.8 percent. See Chapter 5 of the TSD
for additional details.
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\20\ Air-Conditioning and Refrigeration Institute. Response to
ASHRAE 90.1 Continuous Maintenance Proposal on Package Terminal
Equipment. May 18, 2006.
\21\ Id.
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DOE has no evidence that the incremental efficiency gains from the
design options used in the R-22 case would have a different effect on
the system performance of R-410A equipment. Therefore, DOE assumed the
design options for the R-22 analysis previously discussed are
applicable to the alternative refrigerant analysis. DOE also assumed
that the corresponding incremental EER improvement for each design
option in the R-22 analysis would be the same in the alternative
refrigerant analysis. See Chapter 5 of the TSD for additional details.
Similar issues existed within the residential, central air
conditioning industry. Systems utilizing R-410A have been available in
the residential air-conditioning market for several years, and DOE
believes the impact of the refrigerant transition to R-410A for PTACs
and PTHPs and on the manufacturers and purchasers of central air
conditioners and heat pumps will be similar. The residential air-
conditioning market is a much larger market than the PTAC and PTHP
market, and thus offers greater incentives for compressor manufacturers
to make the necessary investments to produce more efficient R-410A
compressors. Initially, DOE found that the R-410A compressors available
for use in residential, central air conditioning equipment were less
efficient than their R-22 counterparts they were replacing. However,
DOE has observed that residential, central air conditioning
manufacturers were able to develop technologies and redesign their
equipment, so that the R-22 phase-out has had little effect on system
efficiency when the equipment eventually came onto the market.
At a minimum, DOE believes manufacturers of PTAC and PTHP equipment
will be able to manufacture equipment with R-410A at the efficiency
levels specified by ASHRAE/IESNA Standard 90.1-1999. Since PTAC and
PTHP equipment utilizing R-22 exists at efficiency levels well above
ASHRAE/IESNA Standard 90.1-1999, DOE believes the manufacturers will be
able to produce equipment utilizing R-410A at least at the efficiency
levels specified by ASHRAE/IESNA Standard 90.1-1999, even after the
estimated performance degradations from the engineering analysis are
applied. DOE has preliminarily concluded that the R-410A compressors
available for use in PTAC and PTHP equipment could be less efficient
than their R-22 counterparts could at the time the takes effect, based
upon manufacturer feedback during interviews and by examining other
air-conditioning markets where similar refrigerant transitions have
taken place. However, DOE is hopeful that over time component
manufacturers and PTAC and PTHP manufacturers will be able to
[[Page 18874]]
overcome the degradation in system efficiency caused by the switch to
R-410A refrigerant. Therefore, DOE is continuing to analyze, the
higher, R-22-based, energy efficiency levels identified in section
III.B.2 as the ``max-tech'' efficiency levels. DOE will give particular
attention to the PTAC and PTHP efficiency levels that cannot be met
with current technologies and practices with R-410A in weighing the
benefits and burdens of the various TSLs. Based on information received
in public comments concerning this NOPR, DOE may consider and adopt in
the final rule other potential standard levels that take into account
the impact of R-410A.
c. R-410A Compressor Availability
The availability of R-410A compressors in a wide range of
efficiencies is uncertain. Several compressor manufacturers make R-22,
PTAC and PTHP compressors of different capacities and efficiencies for
standard and non-standard equipment. When the market transitions to R-
410A, these manufacturers may only offer one line of compressors for
PTACs and PTHPs. In engineering interviews, compressor manufacturers
said they do not know if R-410A compressors will have equivalent
performance to R-22 compressors by the 2010 date. They also stated in
interviews that they expect to offer R-410A compressors at only one
efficiency level in the initial stages of the phase-out, which could
further reduce compressor options for PTAC and PTHP manufacturers.
d. R-410A Manufacturing Production Cost
To derive the baseline MPCs for the R-410A PTACs and PTHPs, DOE
made additional cost determinations (e.g., R-410 refrigerant pricing,
R-410A compressor pricing, etc.) and incorporated them in the same cost
model used for the R-22 engineering analysis. See Chapter 5 of the TSD
for additional details about component prices using R-410A. DOE assumed
a 25 percent increase in heat exchanger tubing thickness to account for
the higher pressures of R-410A refrigerant based on technical journals
and manufacturer interviews. DOE switched the working refrigerant in
the cost model to R-410A and used the current R-410A refrigerant price
based upon cost estimates from refrigerant suppliers and engineering
interviews with manufacturers. During engineering interviews, several
manufacturers of PTAC and PTHP equipment and several component
manufacturers stated that compressor prices would increase anywhere
between 10 percent and 20 percent from current R-22 compressor prices.
To incorporate manufacturers' comments, DOE assumed that compressor
costs would increase by 15 percent, which is consistent with the
feedback DOE received during the engineering interviews. Using the
above assumptions, DOE recalculated baseline equipment and design
option MPCs to establish the cost-efficiency relationship for R-410A
equipment.
The physical differences between PTACs and PTHPs are mainly in the
reversing valve and other minor components. The results from the
engineering and teardown analysis showed that the sum of the MPCs for
reversing valves and other minor components are constant across the
cost-efficiency relationship for the R-22 case. Therefore, DOE
initially concluded that the cost-efficiency relationship (i.e., cost-
efficiency curves) of PTACs is the same as the cost-efficiency
relationship of PTHPs, minus the MPCs for the reversing valve and other
minor components at various cooling capacities. In performing the
alternative refrigerant analysis, DOE found no evidence that the cost-
efficiency relationships for PTACs and PTHPs would be any different for
equipment using R-410A. Therefore, DOE assumed that incremental
cumulative MPCs for PTACs and PTHPs of the same equipment class would
be the same as in the R-22 case (i.e., that both PTACs and PTHPs have
the same incremental cost-efficiency curves in the R-410A case). To be
consistent, DOE used the same cost model as in the R-22 analysis to
estimate MPCs of equipment at various efficiency levels in the R-410A
analysis. Chapter 5 of the TSD provides additional details on the
alternative refrigerant analysis.
6. Cost-Efficiency Results
The results of the engineering analysis are reported as a set of
cost-efficiency data (or ``curves'') in the form of MPC (in dollars)
versus EER, which form the basis for other analyses in the NOPR. DOE
created cost-efficiency curves for the six representative cooling
capacities within the four equipment classes of PTACs and PTHPs, as
discussed in section IV.C.2, above. DOE used the R-410A cost-efficiency
curves for all subsequent analyses in the NOPR. See Chapter 5 of the
TSD for additional detail on the engineering analysis and complete
cost-efficiency results.
DOE also conducted a sensitivity analysis on material prices to
examine the effect of spikes in metal prices that the industry has
experienced over the past few years. The sensitivity analysis used the
annual average 2006 prices for various metals used in the manufacturing
of PTACs and PTHPs. Chapter 5 of the TSD shows the results of the
sensitivity analysis.
7. Mapping Energy Efficiency Ratio to Coefficient of Performance
DOE used the analyses detailed in the sections above to determine
the relationship between cost and cooling efficiency (EER) for PTACs
and PTHPs. DOE also performed an analysis to determine the heating
efficiency (COP) that corresponds to the cooling efficiency (EER)
analyzed. DOE reviewed the 2006 ARI directory and the PTHP units
listed. There were 675 units listed, which DOE separated into two
groups based on wall sleeve size (standard size and non-standard size).
DOE then selected all of the standard size 9,000 and 12,000 Btu/h
cooling capacity units, and all of the non-standard units. Within each
group, DOE next eliminated repetitive and discontinued units and then
constructed a listing of the units by EER and ranked them by COP. DOE
graphed each listing (EER versus COP) and calculated the minimum,
maximum, and average COPs. Table IV.5 shows the average EER and COP
pairings for PTHPs. DOE seeks comment on the average EER and COP
pairings for PTHPs as shown in Table IV.5, which DOE has identified as
Issue 3 under ``Issues to Which DOE Seeks Comment'' in section VII.E of
this NOPR. Additional details detailing how DOE arrived at the average
EER and COP pairings for PTHPs is shown in Chapter 5 of the TSD.
Table IV.5.--Average EER and COP Pairings for PTHPs
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Equipment class Efficiency level
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Standard Size PTHP--9,000 Btu/h EER = 10.9 EER = 11.1 EER = 11.3 EER = 11.5 EER = 12
Cooling Capacity. COP = 3.1 COP = 3.2 COP = 3.3 COP = 3.3 COP = 3.5
Standard Size PTHP--12,000 Btu/h EER = 10.2 EER = 10.4 EER = 10.6 EER = 10.8 EER = 11.7
Cooling Capacity. COP = 3.0 COP = 3.1 COP = 3.1 COP = 3.1 COP = 3.3
[[Page 18875]]
Non-Standard Size PTHP--11,000 Btu/ EER = 9.4 EER = 9.7 EER = 10.0 EER = 10.7 EER = 11.4
h Cooling Capacity. COP = 2.8 COP = 2.8 COP = 2.9 COP = 2.9 COP = 2.9
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D. Markups To Determine Equipment Price
DOE understands that the price of PTAC or PTHP equipment depends on
the distribution channel the customer uses to purchase the equipment.
Typical distribution channels include manufacturers' national accounts,
wholesalers, mechanical contractors, and/or general contractors.
The customer price of this equipment is not generally known.
Therefore, DOE developed supply chain markups in the form of
multipliers that represent increases above MSP and include distribution
costs. DOE applied these markups (or multipliers) to the MSPs it
developed from the engineering analysis, and then added sales taxes and
installation costs, to arrive at the final installed equipment prices
for baseline and higher efficiency equipment. See Chapter 6 of the TSD
for additional details on markups. As shown in Table IV.6, DOE
identified four distribution channels for PTACs and PTHPs to describe
how