[Federal Register: July 22, 2009 (Volume 74, Number 139)]
[Rules and Regulations]
[Page 36311-36356]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22jy09-10]
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Part II
Department of Energy
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10 CFR Part 431
Energy Conservation Program for Certain Industrial Equipment: Energy
Conservation Standards and Test Procedures for Commercial Heating, Air-
Conditioning, and Water-Heating Equipment; Final Rule
[[Page 36312]]
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DEPARTMENT OF ENERGY
10 CFR Part 431
[Docket No. EERE-2008-BT-STD-0013]
RIN 1904-AB83
Energy Conservation Program for Certain Industrial Equipment:
Energy Conservation Standards and Test Procedures for Commercial
Heating, Air-Conditioning, and Water-Heating Equipment
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Final rule.
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SUMMARY: The U.S. Department of Energy (DOE) is adopting amended energy
conservation standards for commercial packaged boilers and adopting a
new energy conservation standard for water-cooled and evaporatively-
cooled commercial package air conditioners and heat pumps with a
cooling capacity at or above 240,000 Btu/h and less than 760,000 Btu/h
at the efficiency levels specified in the American Society of Heating,
Refrigerating and Air-Conditioning Engineers, Inc. (ASHRAE)/
Illuminating Engineering Society of North America (IESNA) Standard
90.1-2007. DOE has determined that the ASHRAE Standard 90.1-2007
efficiency levels for commercial packaged boilers are more stringent
than the existing Federal energy conservation standards and will result
in economic and energy savings compared to existing energy conservation
standards. Furthermore, DOE has concluded that clear and convincing
evidence does not exist, as would justify more-stringent standard
levels than the efficiency levels in ASHRAE Standard 90.1-2007. In
addition, DOE is adopting related amendments to its test procedures for
commercial packaged boilers.
DATES: This rule is effective September 21, 2009. The standards for
commercial packaged boilers established in this final rule will apply
starting on March 2, 2012. The standards for water-cooled and
evaporatively-cooled commercial package air conditioners and heat pumps
with a cooling capacity at or above 240,000 Btu/h and less than 760,000
Btu/h established in this final rule will apply starting on January 10,
2011. The incorporation by reference of certain publications listed in
this final rule was approved by the Director of the Federal Register on
September 21, 2009.
ADDRESSES: For access to the docket to read background documents or
comments received, visit the U.S. Department of Energy, Resource Room
of the Building Technologies Program, 950 L'Enfant Plaza, SW., 6th
Floor, Washington, DC 20024, (202) 586-2945, between 9 a.m. and 4 p.m.,
Monday through Friday, except Federal holidays. Please call Ms. Brenda
Edwards at the above telephone number for additional information
regarding visiting the Resource Room. You may also obtain copies of the
final rule in this proceeding, related documents (e.g., the notice of
proposed rulemaking and technical support document DOE used to reassess
whether to adopt certain efficiency levels in ASHRAE Standard 90.1),
draft analyses, public meeting materials, and related test procedure
documents from the Office of Energy Efficiency and Renewable Energy's
Web site at: http://www1.eere.energy.gov/buildings/appliance_
standards/commercial/ashrae_products_docs_meeting.html.
FOR FURTHER INFORMATION CONTACT: Mr. Mohammed Khan, U.S. Department of
Energy, Office of Energy Efficiency and Renewable Energy, Building
Technologies Program, Mailstop EE-2J, 1000 Independence Avenue, SW.,
Washington, DC 20585-0121. Telephone: (202) 586-7892. E-mail:
Mohammed.Khan@ee.doe.gov.
Mr. Michael Kido or Mr. Eric Stas, U.S. Department of Energy,
Office of the General Counsel, Mailstop GC-72, Forrestal Building, 1000
Independence Avenue, SW., Washington, DC 20585-0121. Telephone: (202)
586-8145 or (202) 586-5827. E-mail: Michael.Kido@hq.doe.gov or
Eric.Stas@hq.doe.gov.
SUPPLEMENTARY INFORMATION:
This final rule incorporates by reference into subpart E of Title
10, Code of Federal Regulations, part 431 (10 CFR part 431), the
following standard:
The Hydronics Institute Division of GAMA BTS-2000 Testing
Standard, (``HI BTS-2000, Rev06.07''), Method to Determine Efficiency
of Commercial Space Heating Boilers, Second Edition (Rev 06.07), 2007.
The Gas Appliance Manufacturers Association (GAMA) merged in 2008
with the Air-Conditioning and Refrigeration Institute to become the
Air-Conditioning, Heating, and Refrigeration Institute (AHRI). The
Hydronics Institute BTS-2000 Testing Standard can be obtained from
AHRI. Copies of HI BTS-2000 can be obtained from the Hydronics
Institute Section of AHRI, P.O. Box 218, Berkeley Heights, NJ 07922-
0218, (866) 408-3831, or go to: http://www.ahrinet.org/Content/
OrderaStandard_573.aspx.
Table of Contents
I. Summary of Final Rule
II. Introduction
A. Authority
B. Background
1. ASHRAE Standard 90.1-2007
2. Notice of Data Availability and Request for Public Comment
3. Notice of Proposed Rulemaking
4. Notice of Data Availability and Request for Public Comment--
Environmental Assessment and Emissions Monetization
III. General Discussion of Comments Regarding the March 2009 NOPR,
the ASHRAE Process, and DOE's Interpretation of EPCA's Requirements
With Respect to ASHRAE Equipment
A. Equipment Classes With a Two-Tier Efficiency Level Specified
in ASHRAE Standard 90.1-2007
B. The Definition of Amendment With Respect to the Efficiency
Levels in an ASHRAE Standard
C. DOE's Review of ASHRAE Equipment Independent of the ASHRAE
Standards Process
D. Combination Efficiency Level and Design Requirements in
ASHRAE Standard 90.1-2007
E. The Proposed Energy Conservation Standards for Commercial
Packaged Boilers
F. Commercial Electric Instantaneous Water Heaters
IV. General Discussion of the Changes in ASHRAE Standard 90.1-2007
and Determination of Scope for Further Rulemaking Analyses
V. Methodology and Discussion of Comments for Commercial Packaged
Boilers
A. Test Procedures
B. Market Assessment
C. Engineering Analysis
1. Approach and Assumptions
2. Results
D. Markups To Determine Equipment Price
E. Energy Use Characterization
F. Life-Cycle Cost and Payback Period Analyses
G. Shipments Analysis
H. National Impact Analysis--National Energy Savings and Net
Present Value Analysis
I. Environmental Assessment
1. Sulfur Dioxide
2. Nitrogen Oxides
J. Monetizing Carbon Dioxide and Other Emissions Impacts
K. Other Issues
1. Impact of Standards on Natural Gas Prices
2. Effective Date of the Amended Energy Conservation Standards
for Commercial Packaged Boilers
VI. Analytical Results for Commercial Packaged Boilers
A. Efficiency Levels Analyzed
B. Economic Justification and Energy Savings
1. Economic Impacts on Commercial Customers
2. National Impact Analysis
3. Need of the Nation To Conserve Energy
C. Amended Energy Conservation Standards for Commercial Packaged
Boilers
[[Page 36313]]
D. Amended Energy Conservation Standards for Water-Cooled and
Evaporatively-Cooled Commercial Package Air Conditioners and Heat
Pumps With a Cooling Capacity at or Above 240,000 Btu/h and Less
Than 760,000 Btu/h
VII. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866
B. Review Under the National Environmental Policy Act
C. Review Under the Regulatory Flexibility Act
D. Review Under the Paperwork Reduction Act
E. Review Under the Unfunded Mandates Reform Act of 1995
F. Review Under the Treasury and General Government
Appropriations Act, 1999
G. Review Under Executive Order 13132
H. Review Under Executive Order 12988
I. Review Under the Treasury and General Government
Appropriations Act, 2001
J. Review Under Executive Order 13211
K. Review Under Executive Order 12630
L. Review Under Section 32 of the Federal Energy Administration
Act of 1974
M. Review Under the Information Quality Bulletin for Peer Review
N. Congressional Notification
VIII. Approval of the Office of the Secretary
I. Summary of Final Rule
The Energy Policy and Conservation Act (42 U.S.C. 6291 et seq.), as
amended (EPCA), requires DOE to consider amending the existing Federal
energy conservation standard for each type of equipment listed
(generally, commercial water heaters, commercial packaged boilers,
commercial air conditioning and heating equipment, and packaged
terminal air conditioners and heat pumps), each time ASHRAE Standard
90.1, Energy Standard for Buildings Except Low-Rise Residential
Buildings (ASHRAE Standard 90.1 or, in context, Standard 90.1), is
amended with respect to such equipment. (42 U.S.C. 6313(a)(6)(A)) For
each type of equipment, EPCA directs that if ASHRAE Standard 90.1 is
amended,\1\ DOE must adopt amended energy conservation standards at the
new efficiency level in ASHRAE Standard 90.1, unless clear and
convincing evidence supports a determination that adoption of a more-
stringent efficiency level as a national standard would produce
significant additional energy savings and be technologically feasible
and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)) If DOE
decides to adopt as a national standard the efficiency levels specified
in the amended ASHRAE Standard 90.1, DOE must establish such standard
not later than 18 months after publication of the amended industry
standard. (42 U.S.C. 6313(a)(6)(A)(ii)(I)) If DOE determines that a
more-stringent standard is appropriate, DOE must establish an amended
standard not later than 30 months after publication of the revised
ASHRAE Standard 90.1. (42 U.S.C. 6313(a)(6)(B))
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\1\ Although EPCA does not explicitly define the term
``amended'' in the context of ASHRAE Standard 90.1, DOE provided its
interpretation of what would constitute an ``amended standard'' in a
final rule published in the Federal Register on March 7, 2007
(hereafter referred to as the March 2007 final rule). 72 FR 10038.
In that rule, DOE explained that the statutory trigger requiring DOE
to adopt uniform national standards based on ASHRAE action is the
amending of an efficiency level by ASHRAE for any of the equipment
listed in EPCA section 342(a)(6)(A)(i) (42 U.S.C. 6313(a)(6)(A)(i))
by increasing the energy efficiency level for that equipment type.
Id. at 10042. In other words, if the revised ASHRAE Standard 90.1
leaves the standard level unchanged or lowers the standard, as
compared to the level specified by the national standard adopted
pursuant to EPCA, DOE does not have the authority to conduct a
rulemaking to consider a higher standard for that equipment pursuant
to 42 U.S.C. 6313(a)(6)(A).
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DOE published a notice of proposed rulemaking on March 20, 2009
(March 2009 NOPR), in the Federal Register describing DOE's
determination of scope for considering amended energy conservation
standards with respect to certain heating, ventilating, air-
conditioning, and water-heating equipment addressed in ASHRAE Standard
90.1-2007. 74 FR 12000; 12008-20. ASHRAE Standard 90.1-2007, which was
formally adopted by the group's Board of Directors in early January
2008, generally retained the energy efficiency levels already in place,
except with respect to commercial packaged boilers and one class of
commercial package air conditioners and heat pumps--water cooled and
evaporatively cooled air conditioners and heat pumps with a cooling
capacity at or above 240,000 Btu/h and less than 760,000 Btu/h. See 74
FR 12004.
For the commercial package air conditioning and heating equipment
covered in this rulemaking, ASHRAE assigned an effective date of
January 10, 2008. For eight equipment classes of commercial packaged
boilers, ASHRAE assigned an effective date of March 2, 2010. For the
remaining two equipment classes of commercial packaged boilers covered
by this rulemaking, ASHRAE created two-tiered effective dates--March 2,
2010, for an initial increase in the efficiency level and March 2,
2020, for the next required level.
In determining the scope of the rulemaking, DOE is statutorily
required to ascertain whether the revised ASHRAE efficiency levels have
become more stringent, thereby ensuring that any new amended national
standard would not result in ``backsliding,'' which is prohibited under
42 U.S.C. 6295(o)(1) and 42 U.S.C. 6316(a). For those equipment classes
for which ASHRAE set more-stringent efficiency levels (i.e., commercial
packaged boilers), DOE analyzed the economic and energy savings
potential of amended national energy conservation standards (at both
the new ASHRAE Standard 90.1 efficiency levels and more-stringent
efficiency levels) in the March 2009 NOPR. 74 FR 12037-41.
The energy conservation standards in today's final rule, which
apply to all commercial packaged boilers and water-cooled and
evaporatively-cooled commercial package air conditioners and heat pumps
with a cooling capacity at or above 240,000 Btu/h and less than 760,000
Btu/h, satisfy all applicable requirements of EPCA and will achieve the
maximum improvements in energy efficiency that are technologically
feasible and economically justified. (See 42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(A)) DOE has concluded that, based on the information
presented and its analyses, there is not clear and convincing evidence
justifying adoption of more-stringent efficiency levels for this
equipment.
Thus, in accordance with the criteria discussed in this notice, DOE
is adopting amended energy conservation standards for ten equipment
classes of commercial packaged boilers and adopting a new energy
conservation standard for water-cooled and evaporatively-cooled
commercial package air conditioners and heat pumps with a cooling
capacity at or above 240,000 Btu/h and less than 760,000 Btu/h by
adopting the efficiency levels specified by ASHRAE Standard 90.1-2007.
Pursuant to EPCA, the compliance date for amended energy conservation
standards based upon the levels in ASHRAE Standard 90.1 is either two
or three years after the effective date of the requirement in the
amended ASHRAE standard, depending on the type and size of the
equipment. (See 42 U.S.C. 6313(a)(6)(D)) In the present case, the
amended standards for commercial packaged boilers apply to the ten
equipment classes of commercial packaged boilers manufactured on or
after the date two years after the effective date specified in ASHRAE
Standard 90.1-2007. (42 U.S.C. 6313(a)(6)(D)(i)) The amended standards
for water-cooled and evaporatively-cooled commercial package air
conditioners and heat pumps with a cooling capacity at or above 240,000
Btu/h and less than 760,000 Btu/h apply to such equipment manufactured
on or after the date three years after the effective date specified in
ASHRAE Standard 90.1-2007. (42 U.S.C. 6313(a)(6)(D)(ii)) Table I.1
shows the energy conservation standards that DOE
[[Page 36314]]
is adopting today and their respective effective dates.
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In addition, DOE is adopting amendments to its test procedures for
commercial packaged boilers, which manufacturers are required to use to
certify compliance with energy conservation standards mandated under
EPCA. See 42 U.S.C. 6314(a)(4) and 10 CFR part 431.86. Specifically,
these amendments, which were proposed in the March 2009 NOPR, update
the citations and references to the most recent version of the industry
standards already referenced in DOE's test procedures. 74 FR 12020-22.
In addition, these amendments specify a definition and methodology to
test the thermal efficiency of these boilers, which is the metric DOE
is adopting for eight of the ten equipment classes of commercial
packaged boilers to conform with the new energy efficiency metric
adopted in ASHRAE Standard 90.1-2007. Lastly, these amendments make a
small number of technical modifications to DOE's existing test
procedure for commercial packaged boilers, including deleting obsolete
references and renumbering appropriate sections of the CFR.
II. Introduction
A. Authority
Title III of EPCA, Public Law 94-163, as amended, sets forth a
variety of provisions concerning energy efficiency. Part A-1 \2\ of
Title III created the energy conservation program for certain
industrial equipment. (42 U.S.C. 6311-6317) In general, this program
addresses the energy efficiency of certain types of
[[Page 36315]]
commercial and industrial equipment. Part A-1 specifically includes
definitions (42 U.S.C. 6311), energy conservation standards (42 U.S.C.
6313), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C.
6315), and the authority to require information and reports from
manufacturers (42 U.S.C. 6316).
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\2\ For editorial reasons, Parts B (consumer products) and C
(commercial equipment) of Title III of EPCA were redesignated as
Parts A and A-1, respectively, in the United States Code.
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EPCA contains mandatory energy conservation standards for
commercial heating, air-conditioning, and water-heating equipment. (42
U.S.C. 6313(a)) Specifically, the statute sets standards for small,
large, and very large commercial packaged air-conditioning and heating
equipment, packaged terminal air conditioners (PTACs) and packaged
terminal heat pumps (PTHPs), warm air furnaces, packaged boilers,
storage water heaters, and unfired hot water storage tanks. Id. In
doing so, EPCA established Federal energy conservation standards that
generally correspond to the levels in ASHRAE Standard 90.1, as in
effect on October 24, 1992 (i.e., ASHRAE Standard 90.1-1989), for each
type of covered equipment listed in 42 U.S.C. 6313(a).
Congress further directed DOE to consider amending the existing
Federal energy conservation standard for each type of equipment listed
whenever ASHRAE amends the efficiency levels in Standard 90.1. (42
U.S.C. 6313(a)(6)(A)) For each type of listed equipment, EPCA directs
that if ASHRAE amends Standard 90.1, DOE must adopt amended standards
at the new ASHRAE efficiency level unless clear and convincing evidence
supports a determination that adoption of a more stringent level would
produce significant additional energy savings and would be
technologically feasible and economically justified. (42 U.S.C.
6313(a)(6)(A)(ii)) If DOE decides to adopt as a national standard the
efficiency levels specified in the amended ASHRAE Standard 90.1, DOE
must establish such standard not later than 18 months after publication
of the amended industry standard. (42 U.S.C. 6313(a)(6)(A)(ii)(I))
However, if DOE determines that a more-stringent standard is justified
under 42 U.S.C. 6313(a)(6)(A)(ii)(II), then it must establish such
more-stringent standard not later than 30 months after publication of
the amended ASHRAE Standard 90.1. (42 U.S.C. 6313(a)(6)(B))
ASHRAE officially released and made public on January 10, 2008,
ASHRAE Standard 90.1-2007. This action triggered DOE's obligations
under 42 U.S.C. 6313(a)(6), as outlined above.
Pertinent to any rulemaking in response to an ASHRAE revision of
Standard 90.1, DOE must evaluate the amended efficiency levels to
ensure that the adoption of the revised Standard 90.1 levels does not
result in the promulgation of any amended standard that either
increases the maximum allowable energy use or decreases the minimum
required energy efficiency of covered equipment. (42 U.S.C. 6295(o)(1);
42 U.S.C. 6316(a)) This ``anti-backsliding'' provision acts as a
statutory backstop to help preserve the stringency of established DOE
energy efficiency standards. See Natural Resources Defense Council v.
Abraham, 355 F.3d 179 (2d Cir. 2004).
When considering the possibility of a more-stringent standard, EPCA
requires DOE to consider a variety of factors, with the primary ones
being whether a more-stringent standard would be technologically
feasible, economically justified, and be likely to produce significant
additional energy savings. For example, EPCA provides that in deciding
whether such a standard is economically justified, DOE must determine,
after receiving comments on the proposed standard, whether the benefits
of the standard exceed its burdens by considering, to the greatest
extent practicable, the following seven factors:
1. The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
2. The savings in operating costs throughout the estimated average
life of the product in the type (or class) compared to any increase in
the price of, or in the initial charges for, or maintenance expenses of
the products which are likely to result from the imposition of the
standard;
3. The total projected amount of energy savings likely to result
directly from the imposition of the standard;
4. Any lessening of the utility or the performance of the products
likely to result from the imposition of the standard;
5. The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
imposition of the standard;
6. The need for national energy conservation; and
7. Other factors the Secretary considers relevant.
(42 U.S.C. 6295(o)(2)(B)(i)-(ii); 42 U.S.C. 6316(a))
Additionally, the Secretary may not prescribe an amended standard
if interested persons have established by a preponderance of the
evidence that the amended standard is ``likely to result in the
unavailability in the United States of any product type (or class)''
with performance characteristics, features, sizes, capacities, and
volumes that are substantially the same as those generally available in
the United States at the time of the Secretary's finding. (42 U.S.C.
6295(o)(4); 42 U.S.C. 6316(a))
Federal energy conservation requirements for commercial equipment
generally supersede State laws or regulations concerning energy
conservation testing, labeling, and standards. (42 U.S.C. 6316(a)-(b))
However, DOE can grant waivers of preemption for particular State laws
or regulations, in accordance with section 327(d) of EPCA. (42 U.S.C.
6297(d) and 6316(b)(2)(D))
When considering more stringent standards for the ASHRAE equipment
under consideration here, EPCA states, in relevant part, that there is
a rebuttable presumption that an energy conservation standard is
economically justified if the additional cost to the consumer of a
product that meets the standard level is less than three times the
value of the first-year energy (and, as applicable, water) savings
resulting from the standard, as calculated under the applicable DOE
test procedure. (42 U.S.C. 6295(o)(2)(B)(iii) and 42 U.S.C. 6316(a))
Generally, DOE's life cycle cost (LCC) and payback period (PBP)
analyses generate values that calculate the payback period for
consumers of potential energy conservation standards, which includes,
but is not limited to, the three-year payback period contemplated under
the rebuttable presumption test discussed above. However, DOE routinely
conducts a full economic analysis that considers the full range of
impacts, including those to the consumer, manufacturer, Nation, and
environment, as required under 42 U.S.C. 6295(o)(2)(B)(i) and 42 U.S.C.
6316(a). The results of this analysis serve as the basis for DOE to
definitively evaluate the economic justification for a potential
standard level (thereby supporting or rebutting the results of any
preliminary determination of economic justification).
B. Background
1. ASHRAE Standard 90.1-2007
On January 9, 2008, ASHRAE's Board of Directors gave final approval
to ASHRAE Standard 90.1-2007, which ASHRAE released on January 10,
2008. ASHRAE Standard 90.1 addresses efficiency levels for many types
of commercial heating, ventilating, air-conditioning (HVAC), and water-
heating equipment covered by EPCA; it revised the efficiency levels for
certain commercial equipment, while leaving in
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place the preexisting efficiency levels for the remaining equipment.
For the equipment classes where ASHRAE left the preexisting efficiency
in place, the efficiency levels specified in ASHRAE Standard 90.1-1999
were carried forward and continue to apply.\3\
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\3\ DOE reviewed and adopted some of the efficiency levels in
ASHRAE Standard 90.1-1999 in a Final Rule published on January 12,
2001. 66 FR 3336.
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Table II.1 below shows the current Federal energy conservation
standards and the new efficiency levels for equipment affected by the
changes made by ASHRAE Standard 90.1-2007. In section IV of the March
2009 NOPR, DOE assessed these equipment types to determine whether the
ASHRAE amendments constitute increased energy conservation levels that
would necessitate further analysis. 74 FR 12008-20. This step was
necessary because DOE found that while ASHRAE had made changes in
ASHRAE Standard 90.1-2007, it was not immediately apparent whether
these changes to the energy efficiency levels would make the equipment
more or less efficient, when compared to the existing Federal energy
conservation standards. For example, when setting a standard using a
different efficiency metric (as is the case for several types of
commercial packaged boiler equipment), ASHRAE Standard 90.1-2007
changes the standard level from that specified in EPCA. However, it is
not immediately clear whether this modified level will result in
increased or reduced efficiency. Therefore, DOE undertook this
additional threshold analysis to thoroughly evaluate the amendments in
ASHRAE Standard 90.1-2007 in a manner consistent with its statutory
mandate.
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2. Notice of Data Availability and Request for Public Comment
On July 16, 2008, DOE published a notice of data availability (July
2008 NODA) and request for public comment in the Federal Register as a
preliminary step pursuant to EPCA's requirements for DOE to consider
amended energy conservation standards for certain types of commercial
equipment covered by ASHRAE Standard 90.1. 73 FR 40770 (July 16, 2008).
Specifically, the July 2008 NODA presented for public comment DOE's
analysis of the potential energy savings estimates for amended national
energy conservation standards for types of commercial equipment based
on: (1) the modified efficiency levels contained within ASHRAE Standard
90.1-2007; and (2) more-stringent efficiency levels. 73 FR 40772. DOE
has described these analyses and preliminary conclusions and sought
input from interested parties, including the submission of data and
other relevant information. Id.
In addition, DOE discussed the changes introduced by Standard 90.1-
2007 and presented an initial description of DOE's evaluation of each
ASHRAE equipment type to determine which energy conservation standards,
if any, have been set pursuant to EPCA, in order for DOE to determine
whether the amendments in ASHRAE Standard 90.1-2007 result in increased
efficiency levels when compared with the current Federal standards. 74
FR 40776-86. Regarding equipment for which ASHRAE increased efficiency
levels through Standard 90.1-2007, DOE subjected these equipment
efficiency levels to the potential energy savings analysis discussed
above and presented the results for public comment. Id.
As a result of the preliminary determination of scope set forth in
the July 2008 NODA, DOE found that the ten equipment classes of
commercial packaged boilers described by ASHRAE were the only equipment
type available on the market for which ASHRAE increased the efficiency
levels. Id. DOE presented its methodology, data, and results for the
preliminary energy savings analysis developed for most of the
commercial packaged boiler equipment classes in the July 2008 NODA for
public comment. 72 FR 40786-91.
3. Notice of Proposed Rulemaking
On March 20, 2009, DOE published a NOPR in the Federal Register
proposing to amend the energy conservation standards for ten equipment
classes of commercial packaged boilers and to adopt a new energy
conservation standard for water-cooled and evaporatively-cooled
commercial packaged air conditioners and heat pumps with a cooling
capacity at or above 240,000 Btu/h and less than 760,000 Btu/h by
adopting the efficiency levels specified by ASHRAE Standard 90.1-2007.
74 FR 12000.
The March 2009 NOPR also contained DOE's determination of scope for
consideration of amended energy conservation standards with respect to
certain heating, ventilating, air-conditioning, and water-heating
equipment addressed in ASHRAE Standard 90.1-2007 and shown in Table
II.1, above. 74 FR 12008-20. For commercial packaged boilers, DOE
analyzed the economic and energy savings potential of amended national
energy conservation standards (at both the new ASHRAE Standard 90.1
efficiency levels and more stringent efficiency levels). See generally
74 FR 12020-41. DOE also explained in the March 2009 NOPR that it did
not analyze the economic and energy savings potential of amended
national energy conservation standards for water-cooled and
evaporatively cooled commercial packaged air conditioners and heat
pumps with a cooling capacity at or above 240,000 Btu/h and less than
760,000 Btu/h because there is no equipment currently being
manufactured in this equipment class. 74 FR 12013.
In addition, DOE proposed amendments to its test procedures for
commercial packaged boilers to update the citations and references to
the most recent version of the industry standards already referenced in
DOE's test procedures. 74 FR 12020-22. DOE also proposed to add a
definition and methodology to test the thermal efficiency for eight of
the ten equipment classes of commercial packaged boilers, which was the
metric DOE had proposed. Id.
4. Notice of Data Availability and Request for Public Comment--
Environmental Assessment and Emissions Monetization
On June 3, 2009, DOE published a NODA and request for public
comment on the environmental assessment (EA) for the March 2009 NOPR
proposing amended energy conservation standards for commercial packaged
boilers and water-cooled and evaporatively-cooled commercial package
air conditioners and heat pumps with a cooling capacity at or above
240,000 Btu/h and less than 760,000 Btu/h. 74 FR 26596. The EA included
a concise examination of the impacts of emission reductions likely to
result from the proposed standards for these two equipment types, as
presented in Chapter 8 of the NOPR TSD. DOE also performed an emissions
monetization analysis of those potential emission reductions and
described the results of the monetization analysis in Chapter 9 of the
NOPR TSD. Id. See http://www1.eere.energy.gov/buildings/appliance_
standards/commercial/pdfs/ch_8_ashrae_nopr_tsd.pdf for the EA and
http://www1.eere.energy.gov/buildings/appliance_standards/commercial/
pdfs/ch_9_ashrae_nopr_tsd.pdf for the monetization analysis. DOE
received no comments on the EA or the emissions monetization analysis
described by the June 2009 NODA. 74 FR 26596.
III. General Discussion of Comments Regarding the March 2009 NOPR, the
ASHRAE Process, and DOE's Interpretation of EPCA's Requirements With
Respect to ASHRAE Equipment
In response to the March 2009 NOPR, DOE received three comments
from manufacturers, trade associations, and energy efficiency
advocates. In addition, DOE received a comment from the U.S. Department
of Justice (DOJ) regarding the potential impact on competition of
proposed amended energy conservation standards for commercial packaged
boilers and certain commercial package air-conditions and heat pumps.
The issues raised in these comments, along with DOE's responses, are
set forth below.
A. Equipment Classes With a Two-Tier Efficiency Level Specified in
ASHRAE Standard 90.1-2007
For commercial packaged boilers, ASHRAE Standard 90.1-2007 further
divides the existing equipment classes (i.e., gas-fired and oil-fired)
into 10 different categories. For two of the ten categories specified
in ASHRAE Standard 90.1-2007, ASHRAE specifies a two-tier efficiency
level, with one efficiency level effective in 2010 and another more-
stringent efficiency level effective in 2020. The two categories where
ASHRAE Standard 90.1-2007 specifies a two-tier efficiency levels are
small gas-fired steam natural draft and large gas-fired steam natural
draft commercial packaged boilers.
In response to DOE's proposal for small gas-fired steam natural
draft and large gas-fired steam natural draft commercial packaged
boilers, several parties commented during the public meeting regarding
the adoption of two-tiered efficiency levels. The American Council for
an Energy-Efficient Economy (ACEEE) asserted that for a rulemaking with
an effective date of March 2, 2012, it is inappropriate for
[[Page 36320]]
DOE to pre-ordain any standards with an effective date of March 2,
2022. (ACEEE, Public Meeting Transcript, No. 12 at pp. 100-102) \4\
ACEEE further stated that it could not see any reason why DOE would
choose to bind itself today to any standards in 2022 and that in doing
so, the dynamic at ASHRAE would likely be influenced by DOE's actions.
(ACEEE, Public Meeting Transcript, No. 12 at p. 104) Lastly, ACEEE
stated it did not believe the second-tier efficiency level was the
subject of any ASHRAE discussions. (ACEEE, Public Meeting Transcript,
No. 12 at pp. 100-102)
---------------------------------------------------------------------------
\4\ ``ACEEE, Public Meeting Transcript, No. 12 at pp. 100-102''
refers to (1) to a statement that was submitted by the American
Council for an Energy-Efficient Economy during the March 2009 NOPR
Public Meeting. It was recorded in the Resource Room of the Building
Technologies Program in the docket under ``Energy Conservation
Program for Certain Industrial Equipment: Energy Conservation
Standards for Commercial Heating, Air-Conditioning, and Water-
Heating Equipment,'' Docket Number EERE-2008-BT-STD-0013, as comment
number 12; and (2) a passage that appears on pages 100 through 102
of that statement.
---------------------------------------------------------------------------
The Air-Conditioning, Heating, and Refrigeration Institute (AHRI)
asserted that for steam natural draft commercial packaged boilers, it
is worth having a second standard level with an effective date of March
2, 2022. (AHRI, Public Meeting Transcript, No. 12 at pp. 102-103)
Contrary to ACEEE's assertion, AHRI stated that the delayed effective
date (i.e., the second tier) was a part of the ASHRAE discussions and
the purpose of this two-tiered approach was to make an initial
incremental efficiency change while allowing for a longer lead time for
a larger improvement in efficiency for this very small segment of the
market. According to AHRI, the delayed date was to put manufacturers of
these products on notice that in 10 years the steam natural draft
equipment must be as efficient as non-natural draft equipment. (AHRI,
Public Meeting Transcript, No. 12 at pp. 102-103)
Burnham Hydronics Institute (Burnham) asserted that the proposed
levels for these two equipment classes are going to result in energy
savings through boilers being modified or taken off the market.
(Burnham, Public Meeting Transcript, No. 12 at pp. 103-104) Burnham
also predicted that natural gas steam natural draft products will be
essentially eliminated in 2022 due to the second-tier requirements in
ASHRAE Standard 90.1-2007. Burnham stated that manufacturers of these
products received additional time because some applications (e.g.,
boiler rooms with low head room) have no currently available
alternatives. Burnham stated that the extra 10 years affords
manufacturers and owners of buildings time to decide how to handle
those potential issues and to develop an alternative. (Burnham, Public
Meeting Transcript, No. 12 at pp. 103-104)
DOE is adopting the two-tier efficiency levels in ASHRAE Standard
90.1-2007 in today's final rule for small gas-fired steam natural draft
and large gas-fired steam natural draft commercial packaged boilers.
EPCA requires DOE to adopt energy efficiency standards for this
equipment at the minimum level specified in any amended ASHRAE standard
unless more-stringent standards are supported by clear and convincing
evidence. (42 U.S.C. 6313(a)(6)(A)) Unless more-stringent standards are
appropriate (in which case DOE can use its judgment to tailor the
relevant standard level(s)), the statute does not provide DOE latitude
to alter or disregard the ASHRAE Standard 90.1 levels in whole or part.
Because ASHRAE adopted a tiered standard, DOE cannot adopt one
efficiency level without adopting the latter efficiency level.
Accordingly, in its economic and energy savings analysis, DOE analyzed
these two equipment classes as if both the 2010 and 2020 levels will be
adopted on their respective effective dates. In addition, DOE is
adopting the two-tier efficiency levels in ASHRAE Standard 90.1-2007 as
a ``package'' in today's final rule for small gas-fired steam natural
draft and large gas-fired steam natural draft commercial packaged
boilers.
B. The Definition of Amendment With Respect to the Efficiency Levels in
an ASHRAE Standard
As DOE noted in the July 2008 NODA (73 FR 40771) and the March 2009
NOPR (74 FR 12006), EPCA does not explicitly define the term
``amended'' in the context of ASHRAE Standard 90.1. DOE had previously
interpreted what would constitute an ``amended standard'' in the
context of ASHRAE equipment in a final rule published in the Federal
Register on March 7, 2007 (72 FR 10038). In that final rule, DOE
explained that when ASHRAE increases the efficiency level for any of
the equipment specified in EPCA section 342(a)(6)(A)(i) vis-[aacute]-
vis the current DOE standards, that action triggers the requirement for
DOE to consider adoption of uniform national standards based on these
changes. 72 FR 10042. In other words, if the revised ASHRAE Standard
90.1 leaves the standard level unchanged or lowers the standard, as
compared to the level specified by the national standard adopted
pursuant to EPCA, DOE does not have the authority to conduct a
rulemaking to consider a higher standard for that equipment pursuant to
42 U.S.C. 6313(a)(6)(A). 73 FR 40771.
In response to DOE's interpretation of the definition of
``amendment,'' the Appliance Standards Awareness Project (ASAP), ACEEE,
the Alliance to Save Energy (ASE), the Natural Resources Defense
Council (NRDC), the Northeast Energy Efficiency Partnership (NEEP), and
the Northwest Power and Conservation Council (NPCC) submitted a joint
comment, referred to as ``the Joint Comment,'' disagreeing with DOE's
position in the March 2009 NOPR. (The Joint Comment, No. 19 at p. 1)
Specifically, the Joint Comment argued that DOE acknowledges that the
ASHRAE standards for several products have been revised relative to
earlier versions. However, the Joint Comment pointed out that DOE takes
an improperly constrained view of the meaning of ``amended,''
arbitrarily ruling out changes such as addition of prescriptive
requirements, changes in metric and decreases in the standard. The
Joint Comment referred to its earlier comments in response to the July
2008 NODA (i.e., the Advocacy Joint Comment, No. 4) for additional
detail and asserted that any of these changes fit within the meaning of
``amended'' and should be considered as changes requiring DOE review.
The Joint Comment stated its belief that DOE has applied an unlawfully
narrow definition to the word ``amendment.'' (The Joint Comment, No. 19
at p. 1)
DOE continues to view the statute's trigger as tied to an increased
energy efficiency level for the affected equipment type. As described
in the March 2007 final rule and the March 2009 NOPR, section 342 of
EPCA requires DOE to establish energy conservation standards for the
commercial equipment contained in this rulemaking at the minimum
efficiency level specified in any amended ASHRAE standard unless more
stringent standards are supported by clear and convincing evidence--in
other words, to maintain uniform national standards consistent with
those set in ASHRAE Standard 90.1 unless more stringent standards are
justified. 72 FR 10042 and 74 FR 12006. Therefore, if ASHRAE has not
amended a standard for a product subject to section 342, there is no
change that would require action by DOE to consider amending the
uniform national standard to maintain consistency with ASHRAE Standard
90.1. Id. If ASHRAE considered amending the standards for a given
equipment type but ultimately chose not to do so, the statutory
requirement that DOE adopt ASHRAE's amended
[[Page 36321]]
standards is not triggered with respect to this equipment. Id. The
statutory language specifically links ASHRAE's action to amend
efficiency levels for specific equipment to DOE's action affecting the
same equipment. Id. Given this statutory scheme, DOE does not agree
with the Joint Comment's suggestion that amendment of the level for any
ASHRAE product opens up the national standards for all ASHRAE products
to potential amendment.
C. DOE's Review of ASHRAE Equipment Independent of the ASHRAE Standards
Process
The Joint Comment asserted that the routine review of efficiency
standards required by the Energy Independence and Security Act of 2007
(EISA 2007), Public Law 110-140, (i.e., section 305(b) of EISA 2007)
clearly intends to establish a structure to review each DOE standard
for ASHRAE covered equipment at least every six years. (The Joint
Comment, No. 19 at pp. 1-2) The Joint Comment pointed out that several
ASHRAE standards were last reviewed in 2001, including commercial water
heaters and commercial furnaces. In the March 2009 NOPR, DOE maintained
that reviews are not due for products for which the six-year clock has
expired prior to enactment of EISA 2007. However, the commenters view
such an interpretation as sheltering these products from further review
by ASHRAE on an indefinite basis. According to the commenters, the
intent of EISA 2007 was to subject all standards to regular reviews,
not to create a haphazard special class with a potentially permanent
exception from periodic DOE review. The Joint Comment took the position
that DOE can rectify this situation by initiating a review of all
ASHRAE standards that have not been changed in more than six years
(e.g., commercial furnaces, commercial water heaters). The Joint
Comment argued that DOE must do so under the EISA 2007 provision. At a
minimum, the Joint Comment asserted that DOE should conduct an initial
analysis to assess potential energy savings from a full-fledged review
of product standards, which have not been updated since the January
2001 final rule (66 FR 3336). (The Joint Comment, No. 19 at pp. 1-2)
In response, DOE acknowledges that section 305(b) of EISA 2007
amended section 342(a)(6) of EPCA by directing DOE to assess whether
there is a need to update the Federal energy conservation standards for
certain commercial equipment (i.e., ASHRAE equipment) after a certain
amount of time has elapsed. The section states that the Secretary must
publish either a notice of determination that standards for a product
do not need to be amended, or a notice of proposed rulemaking including
amended proposed standards within 6 years after the issuance of any
final rule establishing or amending a standard. (42 U.S.C.
6313(a)(6)(C)(i)) In addition, if the Secretary chooses to publish a
notice of determination that the standards for a product do not need to
be amended, a new determination must be issued within 3 years of the
previous determination. (42 U.S.C. 6313(a)(6)(C)(iii)(II)) These
requirements are applicable to small commercial package air
conditioning and heating equipment, large commercial package air
conditioning and heating equipment, very large commercial package air
conditioning and heating equipment, packaged terminal air conditioners,
packaged terminal heat pumps, warm-air furnaces, packaged boilers,
storage water heaters, instantaneous water heaters, and unfired hot
water storage tanks. (42 U.S.C. 6313(a)(6)(A)(i))
DOE believes that the commenters have misconstrued the amendments
in section 305(b) of EISA 2007 by suggesting that the relevant
provisions should be applied retroactively, rather than prospectively.
As stated previously, 74 FR 12007, DOE does not believe Congress
intended to apply these requirements retroactively, which would cause
DOE to be in immediate violation of its legal obligations upon passage
of the statute, thereby failing from its inception. DOE does not agree
with the assertion that DOE is late and should initiate an immediate
review of certain commercial equipment cited by the commenters above.
D. Combination Efficiency Level and Design Requirements in ASHRAE
Standard 90.1-2007
For several classes of equipment, ASHRAE added design requirements
in addition to the efficiency level requirements in ASHRAE Standard
90.1. For example, ASHRAE did not change the efficiency levels for oil-
fired commercial warm air furnaces, but ASHRAE added three design
requirements. ASHRAE Standard 90.1-2007 now specifies that commercial,
oil-fired, warm air furnaces must use an interrupted or intermittent
ignition device, have jacket losses no greater than 0.75 percent of the
input rating, and use a power vent or flue damper.\5\ DOE stated in the
March 2009 NOPR that the language of EPCA authorizes DOE to establish a
performance standard or a single design standard for certain types of
commercial equipment, including oil-fired furnaces. 74 FR 12008-09.
---------------------------------------------------------------------------
\5\ ``Jacket losses'' refer generally to the heat loss to the
surroundings from the furnace, excluding flue losses.
---------------------------------------------------------------------------
The Joint Comment argued that rejecting multi-metric standards
reversed a prior position adopted by DOE in the central air conditioner
rulemaking. (The Joint Comment, No. 19 at p. 2) The Joint Comment
strongly urged the new Administration to reconsider this policy because
multi-metric standards are increasingly important for capturing cost-
effective energy savings. It argued that ASHRAE found that such
standards made sense for commercial furnaces and criticized DOE for not
considering the ASHRAE changes. The Joint Comment stated that energy
use for many products can be moderated through controls strategies,
which are often not represented in a product's test method. (The Joint
Comment, No. 19 at p. 2)
On that point, ASHRAE recommended that DOE consider the role of
prescriptive requirements in the setting of national efficiency levels
for commercial furnaces. (ASHRAE, No. FDMS DRAFT 5.1 at p. 2) ASHRAE
commented that these prescriptive requirements provide critical
characterizations of overall equipment efficiency and total energy use.
According to ASHRAE, these requirements are designed to work in
cooperation with the numerical efficiency metric to achieve greater
levels of energy efficiency than possible through the use of the
numerical metric alone. ASHRAE asserted that as it continues to develop
Standard 90.1 and to decrease the total energy use associated with that
standard, such additional prescriptive requirements likely will become
even more prevalent. It argued that increasing the stringency of
Standard 90.1 will require greater focus on systems as a whole and
consideration of all factors and attributes that contribute to the
energy use associated with that system. In order to achieve the maximum
energy efficiency envisioned by the standard, ASHRAE strongly
encouraged DOE to reconsider its policy of not including accompanying
prescriptive requirements in its energy conservation analysis. (ASHRAE,
No. FDMS DRAFT 5.1 at p. 2)
DOE notes that its response to this issue is grounded in the
requirements of EPCA, not DOE policy, and that the commenters offered
no other plausible alternative reading of this statutory provision. In
this rulemaking, DOE only reviewed the combination efficiency
[[Page 36322]]
level and design requirements for gas-fired and oil-fired commercial
warm air furnaces because these were the only equipment classes where
DOE's initial review of the efficiency levels in ASHRAE Standard 90.1-
2007 for this equipment revealed a perceived change when compared to
the Federal energy conservation standards for this equipment. As
described in the March 2009 NOPR, DOE has determined that the design
requirements in ASHRAE Standard 90.1-2007 for gas-fired and oil-fired
commercial warm air furnaces are beyond the scope of its legal
authority. 74 FR 12008-10. More specifically, the language of EPCA
authorizes DOE to establish ``energy conservation standards'' that set
either a single performance standard or a single design requirement--
not both. See 42 U.S.C. 6311(18). As such, a standard that establishes
both a performance standard and a design requirement is beyond the
scope of DOE's legal authority, as would be a standard that included
more than one design requirement. In this case, ASHRAE Standard 90.1-
2007 recommends three design requirements. Thus, if DOE were to replace
its existing, performance-based standard with a design requirement, the
statute would not permit adoption of all three design requirements in
ASHRAE Standard 90.1-2007. Furthermore, such a change would also
necessitate an initial DOE determination that the new requirement would
not result in backsliding when compared to the current standards.
E. The Proposed Energy Conservation Standards for Commercial Packaged
Boilers
In the March 2009 NOPR, DOE proposed the efficiency levels in
ASHRAE Standard 90.1-2007 for the ten classes of commercial packaged
boilers. 74 FR 12002. DOE received four comments in response to its
proposal for commercial packaged boilers. Specifically, the Joint
Comment stated its support for DOE's proposal on commercial packaged
boilers. (The Joint Comment, No. 19 at p. 1) Burnham also stated its
support for DOE's direction in the NOPR and urged DOE to issue a final
rule as soon as possible. (Burnham, Public Meeting Transcript, No. 12
at p. 96) AHRI stated that it agrees with DOE's direction in the NOPR
and pointed out that there is a ``residual value'' in transitioning
from the combustion efficiency metric to the thermal efficiency metric
for commercial packaged boilers. (AHRI, Public Meeting Transcript, No.
12 at pp. 97-98) ASHRAE commended DOE for its proposed handling of
commercial packaged boilers in the March 2009 NOPR. ASHRAE pointed out
consensus agreements between manufacturers and energy-efficiency
advocates provide a valuable means of improving energy efficiency with
necessary consideration for technological and economic feasibility, as
DOE has acknowledged. (ASHRAE, No. FDMS DRAFT 5.1 at p. 1)
Lastly, DOJ concluded that the proposed standards for commercial
packaged boilers are not likely to have an adverse effect on
competition. (DOJ, No. 15 at p. 2) In reaching this conclusion, DOJ
noted the absence of any competitive concerns raised by industry
participants at the public meeting. In addition, DOJ noted the
efficiency levels in the proposed standards are based on a consensus
recommendation submitted to ASHRAE by efficiency advocacy groups and
the trade association for manufacturers of commercial packaged boilers.
Based on these facts, DOJ stated its belief that the new standard would
not likely reduce competition. Id.
F. Commercial Electric Instantaneous Water Heaters
SEISCO INTERNATIONAL (SEISCO) commented that it has been (and would
continue to be) significantly adversely affected by DOE's decisions not
to create a product class for electric tankless water heaters having an
output rated greater than 12 kilowatts, as well as to exclude the
advanced electric tankless and electric resistance storage tank from
the ENERGY STAR program. (SEISCO, No. 17 at p. 1) SEISCO's comments
asserted that this type of equipment would provide energy savings
benefits when compared to traditional storage-type water heaters.
(SEISCO, No. 17 at p. 8)
While DOE acknowledges SEISCO's concerns with regard to the product
classes for electric tankless water heaters, these concerns are beyond
the scope of this rulemaking. Currently, ASHRAE Standard 90.1 does not
include an efficiency level or a prescriptive requirement for
commercial electric tankless water heaters. In order for DOE to
consider amendments, ASHRAE must amend Standard 90.1 to add test
procedures and efficiency levels for these equipment types. In
addition, DOE notes that it is not addressing SEISCO's concerns
regarding the ENERGY STAR program for electric tankless and electric
resistance storage water heaters because it is not part of the ASHRAE
rulemaking process.
IV. General Discussion of the Changes in ASHRAE Standard 90.1-2007 and
Determination of Scope for Further Rulemaking Analyses
As discussed above, before beginning an analysis of economic
impacts and energy savings that would result from adopting the
efficiency levels specified by ASHRAE Standard 90.1-2007 or more-
stringent efficiency levels, DOE first sought to determine whether the
amended Standard 90.1 efficiency levels represented an increase in
efficiency above the current Federal standard levels. DOE discussed
each equipment class where these levels differ from the current Federal
standard level, along with DOE's preliminary conclusion as to the
action DOE would take with respect to that equipment in the March 2009
NOPR. See 74 FR 12008-20. DOE tentatively concluded from this analysis
that the only efficiency levels that represented an increase in
efficiency above the current Federal standards were those for certain
classes of commercial packaged boilers and water cooled and
evaporatively cooled commercial package air conditioners and heat pumps
with a cooling capacity at or above 240,000 Btu/h and less than 760,000
Btu/h. For a more detailed discussion of this approach, readers should
refer to the preamble to the March 2009 NOPR. See Id. DOE received no
additional comments on this topic in response to the March 2009 NOPR,
so DOE is using the same approach in this final rule.
V. Methodology and Discussion of Comments for Commercial Packaged
Boilers
This section provides a brief overview of the analyses DOE has
performed for this rulemaking with respect to commercial packaged
boilers and the comments received in response to the March 2009 NOPR. A
separate subsection addresses each analysis and its respective
comments. DOE used a spreadsheet to calculate the LCCs and PBPs of
potential amended energy conservation standards. DOE used another
spreadsheet to provide shipments forecasts and then calculate national
energy savings and net present value impacts of potential amended
energy conservation standards.
This section also briefly describes the amendments to the DOE test
procedure for commercial packaged boilers to require testing in terms
of thermal efficiency, consistent with the amended efficiency levels in
ASHRAE Standard 90.1-2007. DOE described all of the test procedure
changes it is adopting in
[[Page 36323]]
today's final rule in the March 2009 NOPR. See 74 FR 12020-22.
A. Test Procedures
Section 343(a) of EPCA (42 U.S.C. 6314(a)) requires the Secretary
to amend the test procedures for packaged boilers to be the latest
version generally accepted by industry or the rating procedures
developed or recognized by the Air-Conditioning and Refrigeration
Institute (ARI) \6\ or by ASHRAE, as referenced by ASHRAE/IESNA
Standard 90.1, unless the Secretary determines by clear and convincing
evidence that the latest version of the industry test procedure: (1) Is
not reasonably designed to produce results reflecting energy
efficiency, energy use, and estimated operating costs and (2) would be
unduly burdensome to conduct. Additionally, if the procedure is one
used for determining estimated annual operating costs, the procedure
must provide that the costs are calculated from energy use measurements
in a representative average use cycle and from representative average
unit costs of the energy needed to operate the equipment during the
cycle. (42 U.S.C. 6314(a)(4)(B) and 42 U.S.C. 6314(a)(3)) DOE published
a final rule on October 21, 2004, that amended its test procedure for
commercial packaged boilers to incorporate by reference the industry
test procedure for commercial packaged boilers, the Hydronics Institute
(HI) division of the Gas Appliance Manufacturer's Association (GAMA)
Boiler Testing Standard BTS-2000, ``Method to Determine the Efficiency
of Commercial Space Heating Boilers'' (HI BTS-2000). 69 FR 61949. This
rulemaking responded to ASHRAE's action in ASHRAE Standard 90.1-1999 to
revise the test procedures for certain commercial equipment, including
commercial packaged boilers.
---------------------------------------------------------------------------
\6\ 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 January 1, 2008.
---------------------------------------------------------------------------
In 2007, AHRI made several changes to BTS-2000 (Testing Standard
for Commercial Space Heating Boilers) and reaffirmed the continued use
of BTS-2000 (Rev 06.07) as the recommended testing standard. As noted
in the NOPR, DOE believes the revised BTS-2000 (Rev 06.07) is
reasonably designed to produce results reflecting energy efficiency,
energy use, and estimated operating costs, and is not unduly burdensome
to conduct. 74 FR 12020. Therefore, DOE is amending the uniform test
procedure for commercial packaged boilers to incorporate by reference
HI BTS-2000 (Rev 06.07). In addition, for the reasons described in the
NOPR, DOE is removing the incorporation by reference of, and any
references to, the American Society of Mechanical Engineers (ASME)
Power Test Codes for Steam Generating Units, ASME PTC 4.1-1964,
reaffirmed 1991 (including 1968 and 1969 addenda) (ASME PTC 4.1) as an
alternate test method for rating the efficiency of steel commercial
packaged boilers.\7\ 74 FR 12020. DOE is making this change because
this particular test method is no longer an approved method of rating
the efficiency of steel commercial packaged boilers under DOE's
regulations. Eliminating the references to ASME PTC 4.1 in the CFR does
not introduce any changes to the test procedure for this equipment; it
simply removes obsolete references. Manufacturers are required to test
all steel boilers using the method that references the HI BTS-2000 test
procedure, as they have been since October 23, 2006.
---------------------------------------------------------------------------
\7\ In the October 2004 test procedure final rule for commercial
packaged boilers, DOE also incorporated by reference the American
Society of Mechanical Engineers (ASME) Power Test Codes for Steam
Generating Units, ASME PTC 4.1-1964, reaffirmed 1991 (including 1968
and 1969 addenda) (ASME PTC 4.1) as an alternate test method for
rating the efficiency of steel commercial packaged boilers only. 69
FR 61956 (Oct. 21, 2004). DOE provided ASME PTC 4.1, with
modifications, as an alternate test procedure for steel commercial
packaged boilers because many manufacturers of steel boilers were
unfamiliar with HI BTS-2000 and its predecessor, HI-1989, and
typically tested their boilers using the ASME PTC 4.1 test
procedure. Id. at 61951. DOE designated a transition period for
manufacturers to convert from using the ASME PTC 4.1 test procedure
to the HI BTS-2000 test procedure. Id. This would allow
manufacturers of steel boilers an opportunity to become familiar
with HI BTS-2000 and ensure that their equipment would be able to
comply with EPCA standards using that procedure. Id. at 61956. DOE
stated that it would allow the use of ASME PTC 4.1 as an alternate
test procedure for two years after the publication of the October
2004 final rule. Id. The transition period ended on October 23,
2006, and now all commercial boilers are required to be tested using
the HI BTS-2000 test procedure. 10 CFR 431.86.
---------------------------------------------------------------------------
Currently, the uniform test method for the measurement of energy
efficiency of commercial packaged boilers requires that only the
combustion efficiency be tested and calculated in accordance with the
HI BTS-2000. 10 CFR 431.86(c)(1)(ii). In this final rule, DOE is
adopting as Federal energy conservation standards several thermal
efficiency levels described in ASHRAE Standard 90.1-2007 that were
proposed in the NOPR. For this reason, DOE is amending the definitions
in 10 CFR 431.82 to incorporate the definition of ``thermal
efficiency'' as written in section 3.0 of the HI BTS-2000 (Rev 06.07)
test procedure and proposed in the NOPR. 74 FR 12021. Thus, DOE is
adding the definition of ``thermal efficiency'' to 10 CFR 431.82 to
read as follows: ``Thermal efficiency for a commercial packaged boiler
is determined using test procedures prescribed under Sec. 431.86 and
is the ratio of the heat absorbed by the water or the water and steam
to the higher heating value in the fuel burned.''
In addition to adding the definition of ``thermal efficiency'' to
its regulations, DOE is amending the definition of ``combustion
efficiency,'' as proposed and described in the NOPR, to remove the
language defining the term as ``the efficiency descriptor for packaged
boilers.'' 74 FR 12021. Thus, DOE is amending the definition of
``combustion efficiency'' in 10 CFR 431.82 to read as follows:
``Combustion efficiency for a commercial packaged boiler is determined
using the test procedures prescribed under Sec. 431.86 and equals 100
percent minus percent flue loss (percent flue loss is based on input
fuel energy).''
DOE is amending 10 CFR 431.86 (Uniform test method for measurement
of energy efficiency of commercial packaged boilers) to include
requirements for the measurement and rating of thermal efficiency for
those commercial packaged boiler equipment classes where the thermal
efficiency metric is being used in today's final rule, after the
effective date of this rulemaking (i.e., March 2, 2012). DOE is also
amending 10 CFR 431.86 to specify that combustion efficiency should be
measured and rated for the two commercial packaged boiler equipment
classes where the combustion efficiency metric is being used in today's
final rule (i.e., large gas hot water and large oil hot water
commercial packaged boilers). These changes are described in detail in
the NOPR and can be found in the regulatory text at the end of this
notice. 74 FR 12021, 12048-49. DOE did not receive any comments in
response to its test procedure proposals in the NOPR; thus, DOE is
adopting them as proposed. These test procedure changes will become
effective concurrently with the amended standard levels being adopted
in today's final rule.
DOE proposed several test procedure updates responding to the
changes made to HI BTS-2000 (Rev 06.07), 74 FR 12021-22, and is now
amending the test procedure to adopt those changes, which are described
in detail in the NOPR and are contained in the regulatory text at the
end of this notice. See id. These changes do not introduce any changes
to the methods in the test procedure. Manufacturers should use
[[Page 36324]]
the revised version of the test procedure (i.e., HI BTS-2000 (Rev
06.07)) to represent their model's energy efficiency and compliance
with the current Federal energy conservation standards effective
September 21, 2009.
DOE is also adopting the proposed amendments for 10 CFR
431.86(c)(2)(iii), ``Test Measurements for a Boiler Capable of
Supplying Either Steam or Water.'' As explained in the NOPR, DOE
proposed to require manufacturers of large dual output commercial
packaged boilers (i.e., boilers capable of producing both steam and hot
water) to test for both the combustion and thermal efficiencies of
these boilers. DOE is requiring both the combustion and thermal
efficiency test be conducted by manufacturers because the ASHRAE-
amended efficiency levels for large dual output commercial packaged
boilers would require this equipment to meet an efficiency level using
both metrics (i.e., combustion efficiency for a large boiler operated
in hot water mode, and thermal efficiency for operation in steam mode).
74 FR 12022. Consistent with this approach, DOE is amending 10 CFR
431.86(c)(2)(iii) to require the testing and measurement of both
thermal and combustion efficiency for any boiler capable of producing
steam and hot water (i.e., a dual output boiler) that is being tested
only as a steam boiler for equipment manufactured on and after March 2,
2012. For equipment manufactured prior to that date, manufacturers will
need to continue testing only for the combustion efficiency of dual
output boilers. Manufacturers could also choose to perform both tests
separately on large dual output boilers, including the combustion
efficiency test in hot water mode and the thermal efficiency test in
steam mode. Consequently, DOE is also amending the test procedure to
permit manufacturers to test large dual output boilers separately for
combustion efficiency in hot water mode and for thermal efficiency in
steam mode, as proposed in the NOPR, if they choose to do so. 74 FR
12022.
In addition, DOE is adopting provisions in this final rule allowing
commercial packaged boilers capable of supplying either steam or water
(i.e., dual output boilers) to test in steam mode only. In other words,
DOE is allowing manufacturers to test dual output boilers only in steam
mode, although large dual output boiler manufacturers must test for
both thermal and combustion efficiency. This approach will ensure that
a dual output boiler is meeting the thermal efficiency requirement when
operated in steam mode and the combustion efficiency requirement when
operated in hot water mode, because achieving compliance in steam mode
is generally more challenging. Thus, a boiler that complies with the
standard in steam mode would be presumed to meet the standard in hot
water mode. DOE believes that giving manufacturers the option of
testing dual output commercial packaged boilers only in steam mode
would suffice for compliance purposes, and will avoid an unnecessary
burden on manufacturers of dual output boilers.
The regulatory text following the preamble to today's notice
contains the changes made to the definitions, reference materials,
effective dates, and the uniform test procedure for commercial packaged
boilers in 10 CFR 431.86.
B. Market Assessment
For the NOPR phase of DOE's review of the ASHRAE Standard 90.1-2007
efficiency levels, DOE developed a market assessment that provides an
overall picture of the market for the equipment concerned, including
the purpose of the equipment, the industry structure, and market
characteristics. 74 FR 12022-24. The subjects addressed in the market
assessment for this rulemaking included equipment definitions,
equipment classes, manufacturers, quantities, and types of equipment
sold and offered for sale. In response to the March 2009 NOPR, DOE did
not receive any written or oral comments pertaining to the market
assessment. Consequently, DOE did not revise the market analysis that
was performed for the March 2009 NOPR. DOE summarized the key findings.
74 FR 12022-24. For additional detail, see chapter 2 of the final rule
TSD.
C. Engineering Analysis
The engineering analysis establishes the relationship between the
cost and efficiency of a piece of equipment DOE is evaluating for
potential amended energy conservation standards. This relationship
serves as the basis for cost-benefit calculations for individual
consumers and the Nation. The engineering analysis identifies
representative baseline equipment, which is the starting point for
analyzing the possible energy-efficiency improvements. DOE typically
structures its engineering analysis around one of three methodologies:
(1) The 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/or (3)
the reverse-engineering or cost-assessment approach, which involves a
``bottom-up'' manufacturing cost assessment based on a detailed bill of
materials derived from tear-downs of the product being analyzed.
1. Approach and Assumptions
As explained in the March 2009 NOPR, DOE used an efficiency-level
approach to evaluate the cost of commercial packaged boilers at the
baseline efficiency level, and those above it. 74 FR 12024-27. DOE used
the efficiency level approach because of the wide variety of designs
available on the market and because the efficiency level approach does
not examine a specific design to reach each of the efficiency levels.
The efficiency levels that DOE considered in the engineering analysis
were representative of commercial packaged boilers currently being
produced by manufacturers at the time the engineering analysis was
developed. DOE relied primarily on data collected through discussions
with mechanical contractors or commercial boiler equipment distributors
to develop its cost-efficiency relationship for commercial packaged
boilers. DOE chose to collect contractor costs at three representative
capacities for each ``small'' equipment class (400, 800, and 1500 kBtu/
h) and then normalize the contractor costs by capacity to create a
single cost-efficiency curve with 800 kBtu/h as the representative
capacity for each equipment class, as described in the NOPR. 74 FR
12024. For each ``large'' equipment class analyzed, DOE used a similar
approach, in which it collected cost data and created a cost-efficiency
curve for one representative output capacity, 3,000 kBtu/h.
To extend the analysis to oil-fired commercial packaged boilers,
DOE estimated that they are, on average, 3 percent more efficient than
gas-fired boilers of identical construction because of the similar
design characteristics. Also, since the construction of oil-fired and
gas-fired boilers is basically the same, with the exception of some
differences in controls, DOE assumed the incremental cost for
increasing the efficiency of both types of boilers would be the same.
The difference in the cost of controls would make no difference in the
incremental cost of equipment because the same additional cost for
controls would be applied across the range of oil-fired commercial
boiler efficiencies. Once the cost-efficiency curves were normalized,
the cost of the controls was subtracted. For these
[[Page 36325]]
reasons, DOE estimated the incremental cost-efficiency curves for oil-
fired equipment by shifting the cost-efficiency curves for each gas-
fired equipment class by 3 percent.
In addition, DOE analyzed dual output boilers by classifying them
as ``steam only'' boilers and assuming efficiency ratings for dual
output boilers were representative of the efficiency of the boiler
tested in ``steam mode.'' DOE assumed that the efficiency ratings for
dual output boilers were representative of the efficiency of the boiler
when tested in steam-only mode because the current procedure instructs
manufacturers to test boilers capable of producing both steam and hot
water either only in steam mode or in both steam mode and hot water
mode. 10 CFR 431.86(c)(2)(iii)(A). Further, the test procedure states
that if a manufacturer chooses to test a boiler in both steam mode and
hot water mode, the boiler must be rated for efficiency in each mode as
two separate listings in the I=B=R Directory. 10 CFR
431.86(c)(2)(iii)(B). 74 FR 12026-27. This approach had the effect of
analyzing the most energy-intensive mode of dual output boilers.
DOE only received one comment in response to the engineering
analysis presentation described in the March 2009 NOPR. ACEEE stated
that it would like DOE to review its estimates of increased cost versus
the historical record. (ACEEE, Public Meeting Transcript, No. 12 at p.
47) ACEEE stated that DOE is using a methodology asserted to be true
without an effort to verify it, which is unfair to the entire
community, including manufacturers.
DOE does not find merit to ACEEE's claims that the price change of
meeting an amended standard declines after the standards' adoption. DOE
recognizes that every change in minimum energy conservation standards
is an opportunity for manufacturers to make investments beyond what
would be required to meet the new standards in order to minimize the
costs or to respond to other factors. DOE's manufacturing cost
estimates seek to gauge the most likely industry response to the
proposed energy conservation standards. DOE's analysis of responses
must be based on currently available technology that will be
nonproprietary when a rulemaking becomes effective, and thus cannot
speculate on future product and market innovation.
DOE did not receive any other comments suggesting revisions to its
approach to the engineering analysis or to the assumptions included in
the engineering analysis in response to the March 2009 NOPR. Therefore,
DOE did not revise its engineering analysis. Chapter 3 of the final
rule TSD provides further detail on the methods used for the
engineering analysis.
2. Results
The result of the engineering analysis is a set of cost-efficiency
curves. Creating the cost-efficiency curves involved three steps: (1)
Plotting the contractor cost versus efficiency; (2) aggregating the
cost data by manufacturer; and (3) using an exponential regression
analysis to fit a curve that best defines the aggregated data. DOE
correlated the contractor cost as a function of each commercial
packaged boiler's rated efficiency. DOE also normalized the data by
adjusting the costs of every manufacturer's equipment so that the cost
of its equipment was zero at the baseline ASHRAE Standard 90.1-2007
efficiency levels. This was done to show the average incremental cost
of increasing efficiency above the ASHRAE Standard 90.1-2007 levels for
each equipment class. DOE only presents the incremental costs of
increasing the efficiency of a commercial packaged boiler in the final
rule TSD to avoid the possibility of revealing sensitive information
about individual manufacturers' equipment. While most manufacturers
publish the rated thermal and/or combustion efficiencies of their
commercial packaged boilers according to AHRI specifications, some do
not and different manufacturers might have substantially different
absolute costs for their equipment at the same efficiency level due to
design modifications and manufacturing practices.
The cost-efficiency curves do not represent any single
manufacturer, and they do not describe any variance among
manufacturers. The curves simply represent, on average, the industry's
cost to increase equipment efficiency. For this analysis, several types
of boiler construction are aggregated into single equipment classes,
and the cost-efficiency curves represent only an average boiler and not
any individual boiler with any specific design characteristics. DOE
attempted in its analysis to determine what the average cost-efficiency
relationship would look like across the range of boiler types included
in each equipment class. The results show that the cost-efficiency
relationships for each of the ten equipment classes are nonlinear. As
efficiency increases, manufacturing becomes more difficult and more
costly for manufacturers to meet higher efficiency levels. Chapter 3 of
the final rule TSD provides additional information about the
engineering analysis, as well as the complete set of cost-efficiency
results.
D. Markups To Determine Equipment Price
DOE understands that the price of commercial boilers depends on the
distribution channel the customer uses to purchase the equipment. In
the March 2009 NOPR, DOE explained how it developed the distribution
channel markups for commercial packaged boilers. 74 FR 12027-28. DOE
did not receive comments on the distribution channel markups or on
their development in response to the March 2009 NOPR. Consequently, DOE
used the same distribution channels and methodology to calculate
markups for the final rule analysis as was used in the March 2009 NOPR.
Because DOE had developed costs for mechanical contractors directly
in the engineering analysis, DOE estimated customer costs using a
markup chain beginning with the mechanical contractor cost. DOE did not
develop an estimate for manufacturer selling prices in the engineering
analysis and consequently, did not develop an estimate of markups for
national account distribution channels with sales directly from
manufacturers to customers. DOE estimated most sales of commercial
packaged boilers involved mechanical contractors because of
installation complexity and the relatively few shipments made to
mercantile/retail building types where national accounts are more
common. Consequently, it was unnecessary to develop separate markups
for costs through a national account distribution chain or directly
from wholesalers.
DOE developed distributional channel markups in the form of
multipliers that represent increases above the mechanical contractor
cost. DOE applied these markups (or multipliers) to the mechanical
contractor costs it developed from the engineering analysis. Sales
taxes and installation costs were added to arrive at the final
installed equipment prices for baseline and higher-efficiency
equipment. DOE used two distribution channels for commercial boilers to
describe how the equipment passes from the mechanical contractor to the
customer (Table V.1). All sales for replacement applications are
assumed to flow through channel 1. The analysis assumes that sales for
New Construction flow through channel 2 depicted below.
[[Page 36326]]
Table V.1--Distribution Channels for Commercial Packaged Boiler
Equipment
------------------------------------------------------------------------
Channel 1 (replacements) Channel 2 (new construction)
------------------------------------------------------------------------
Mechanical Contractor..................... Mechanical Contractor.
General Contractor.
Customer.................................. Customer.
------------------------------------------------------------------------
DOE estimated shipment weights of approximately 33% for new
construction and 67% for the replacement markets based on data
developed for the shipments model and based on growth in new
construction and replacement equipment in the existing stock. DOE
received no comment on the new construction and replacement shipment
fractions and did not modify these values for the final rule.
For each step in the distribution channels presented above, DOE
estimated a baseline markup and an incremental markup. Both baseline
and incremental markups depend only on the particular distribution
channel and are independent of the boiler efficiency levels. DOE based
the mechanical contractor markups on data from the Air Conditioning
Contractors of America (ACCA) \8\ and on the 2002 U.S. Census Bureau
financial data \9\ for the plumbing, heating, and air conditioning
industry. DOE derived the general contractor markups from U.S. Census
Bureau financial data for the commercial and institutional building
construction sector.
---------------------------------------------------------------------------
\8\ Air Conditioning Contractors of America. Financial Analysis
for the HVACR Contracting Industry, 2005. Available at: http://
www.acca.org.
\9\ The 2002 U.S. Census Bureau financial data for the plumbing,
heating, and air conditioning industry is the latest version data
set and was issued in December 2004. Available at: http://
www.census.gov/prod/ec02/ec0223i236220.pdf.
---------------------------------------------------------------------------
The overall markup is the product of all the markups (baseline or
incremental) for the different steps within a distribution channel plus
sales tax. DOE calculated sales taxes based on 2008 State-by-State
sales tax data reported by the Sales Tax Clearinghouse. Because both
contractor costs and sales tax vary by State, DOE developed
distributions of markups within each distribution channel by State.
Chapter 5 of the final rule TSD provides additional detail on markups.
E. Energy Use Characterization
DOE used the building energy use characterization analysis to
assess the energy savings potential of commercial boilers at different
efficiency levels. In the March 2009 NOPR, DOE explained how it
developed the energy use analysis for commercial packaged boilers. 74
FR 12028-29. This analysis estimates the energy use of commercial
boilers at specified efficiency levels by using previously calculated
Full Load Equivalent Operating Hour (FLEOH) metrics by building type
and by climate across the United States. FLEOHs are effectively the
number of hours that a system would have to run at full capacity to
serve a total load equal to the annual load on the equipment. Boiler
FLEOHs are calculated as the annual heating load divided by the
equipment capacity. The FLEOH values used for the boiler analysis were
based on simulations documented for the ``Screening Analysis for EPACT-
Covered Commercial [Heating, Ventilating and Air-Conditioning] HVAC and
Water-Heating Equipment'' \10\ (hereafter, 2000 Screening Analysis).
(66 FR 3336 (Jan. 12, 2001)) and incorporated seven different building
types and 11 different U.S. climates. DOE received no comments on the
FLEOH assumptions forming the basis of the energy use characterization.
---------------------------------------------------------------------------
\10\ 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).
---------------------------------------------------------------------------
For each equipment class, DOE estimated the energy use of a given
piece of equipment by multiplying the characteristic equipment output
capacity by the FLEOH appropriate to each combination of representative
building type and climate location. The product is effectively the
total annual heat output from the boiler. The input energy is then
determined by dividing the annual heat output by the thermal efficiency
of the equipment at each efficiency level. The thermal efficiency is
used here for all equipment classes since it defines the relationship
between energy input and useful output of a commercial packaged boiler.
For the two classes where a thermal efficiency metric was not specified
by ASHRAE Standard 90.1-2007, an estimate of the thermal efficiency of
equipment just meeting the combustion efficiency requirements specified
by ASHRAE Standard 90.1-2007 was developed based on DOE's market
analysis. DOE adjusted the unit energy use for each boiler to reflect
the equipment thermal efficiency level DOE considered.
For condensing hot water boilers, DOE recognized that the thermal
efficiency of a commercial packaged boiler in actual use depends on the
return water conditions. In turn, the return water conditions are
dependent upon the hydronic system design and control.\11\ For DOE's
analysis, the rated thermal efficiencies for fully condensing equipment
were further adjusted to reflect return-water conditions based on
installation in existing buildings with conventional hydronic heating
coils. DOE's estimates allow for the supply water temperature to reset
sufficiently to meet the estimated heating coil loads throughout the
year.
---------------------------------------------------------------------------
\11\ A hydronic system is the distribution system for hot or
cold water in a closed loop throughout a building or other type of
space for the purposes of heating or cooling. The description of
such a system would include the piping, the heating and cooling
coils, and radiators, as well as the controls used to operate the
system.
---------------------------------------------------------------------------
DOE received several specific comments on the energy use analysis
with regard to the development and use of seasonal efficiencies for
condensing boilers. During the public meeting, ACEEE commented that it
was concerned that the most typical application, particularly in the
replacement market, for a commercial packaged boiler is providing
hydronic heat, not supplemental heat in a variable air volume (VAV)
system. ACEEE asserted that the supply temperature modulation is highly
applicable as long as the user maintains the necessary return
temperature. (ACEEE, Public Meeting Transcript, No. 12 at p. 58) ACEEE
further commented that the discussion and treatment of supply
temperature reset controls, which influence the seasonal efficiency
parallels discussions used in the negotiated consensus agreement for
residential boilers that DOE rejected. (ACEEE, Public Meeting
Transcript, No. 12 at p. 61)
In response to the comments from ACEEE, DOE notes that the actual
calculations for the development of the seasonal efficiency, as
outlined in the TSD, assume a hydronic heating load that is a function
of outdoor temperature, the calculations were also not reflective of a
VAV-type reheat application. DOE's estimate of the average thermal
efficiency impact for condensing boilers reflects the load-weighted
thermal efficiency for a system serving hydronic air-heating coils in
that type of space heating application. This is discussed in chapter 4
of the final rule TSD.
EarthJustice asked a clarifying question regarding the magnitude of
the impact that reset temperature controls had on efficiency,
suggesting it was roughly 3 percent for condensing boilers and less
than 1 percent for non condensing boilers. (EarthJustice, Public
Meeting Transcript, No. 12 at p. 60).
[[Page 36327]]
In response to the comment from EarthJustice, DOE generally agrees
that this is a correct interpretation. Literature on the impact of
supply water temperature reset (i.e., resetting the supply water
temperature from the boiler in response to building heating load or a
suitable other sensed condition like outdoor temperature serving as a
proxy for load) on boiler efficiency generally shows that for return
water temperatures from 140 [deg]F to 180 [deg]F (i.e., above the
temperatures required for condensing), the change in boiler efficiency
is typically less than 1 percent, with the actual value dependent upon
the fraction of full load input, whether the boiler is a condensing
boiler or not. For condensing boilers, which can operate at lower
return temperatures, reducing the return water temperature below 140
[deg]F results in significant increases in the boiler's thermal
efficiency, with the magnitude of the impact being a function of the
fraction of full load input at these temperatures. Very low return
water temperatures (e.g., 60 [deg]F) can result in thermal efficiencies
of 99% in some condensing boiler equipment designs, but few hydronic
systems have such low return water temperatures. In a primarily space-
heating application (as opposed to a VAV reheat application), where hot
water supply temperature reset is used, both the temperature of water
delivered by the boiler and the thermal load met by the boiler both
increase with colder outside temperatures. During the period when the
majority of the load is met, the boiler is operating closer to its
design delivery point (i.e., at a higher temperature). DOE's
calculation of seasonal efficiency reflected the boiler's operating
conditions.
In responding to ACEEE's point on the joint proposal regarding
prescriptive requirements for resetting the water supply temperature
for residential boilers, DOE notes that there are many benefits to the
application of supply water reset controls on commercial boilers as
well. However, many of these benefits impact reduction in the total
heating load served by the boiler (through reduction of losses in the
distribution system, simultaneous heating and cooling in the building
HVAC hydronic and supply air reheat systems) rather than a change in
the boiler efficiency. Other benefits from supply water reset controls
include reducing both cycling losses in non-modulating boilers and, to
a lesser extent, shell and standby losses, which would accrue to both
condensing and non-condensing boilers similarly, but are most
significant at low load conditions.
Burnham asked whether the simulations used in the analysis included
supply temperature reset in condensing boilers and did not include
supply temperature reset for non-condensing boilers. (Burnham, Public
Meeting Transcript, No. 12 at p. 63) Burnham also wanted to know if
these simulations included distribution losses. Id. DOE clarified at
the public meeting that the original FLEOH simulation analysis did not
directly account for the impact of supply temperature reset on boiler
efficiency. DOE further clarifies here that hydronic system
distribution losses were not part of the original building simulations
used to develop the FLEOH metrics, but that the FLEOH development did
include estimates of heat used internally in the boiler to offset
standby loss impacts. As with residential boilers, DOE recognizes that
there are significant benefits to hot water supply temperature reset in
buildings. However, DOE does not have authority to mandate supply
temperature reset controls as part of a federal efficiency standard.
Commenting on the discussion on the impact of water temperature
reset, AHRI stated that they were in the process of developing rules
for commercial boiler manufacturers to provide additional information
on how boiler models will operate at different inlet water
temperatures. AHRI indicated that the professional designers of
commercial hydronic systems want that type of information because there
may be a broad range of ``design conditions'' depending on commercial
application. AHRI commented that they have an internal group working on
this issue within the certification program to help ensure
certification to the federal requirements and uniformity between other
information [regarding performance at varying conditions] manufacturers
provide to their customers. (AHRI, Public Meeting Transcript, No. 12 at
pp. 61-63)
DOE estimated the national energy impacts of higher efficiency
equipment by: (1) Mapping climate locations onto regions; and (2)
estimating the fraction of each year's national equipment shipments (by
product category) within market segments, as defined by a
representative building type within a particular region of the United
States. Seven representative building types were used, including:
Assembly, Education, Food Service, Lodging, Office, Retail, and
Warehouse buildings. The estimated allocation of national boiler
shipments to market segments was based on information from the 2003
Commercial Buildings Energy Consumption Survey (CBECS) \12\ and the
relative fraction of respondents reporting the use of boilers in
commercial building floor space within each market segment.
---------------------------------------------------------------------------
\12\ Energy Information Administration (2003). Available at:
http://www.eia.doe.gov/emeu/cbecs/contents.html.
---------------------------------------------------------------------------
DOE developed the annual energy consumption estimates for
commercial boilers for each of seven key commercial building types in
11 geographic regions and at each efficiency level. Chapter 4 of the
final rule TSD provides additional details on the energy use
characterization analysis.
F. Life-Cycle Cost and Payback Period Analyses
DOE conducted the LCC and PBP analyses to estimate the economic
impacts of potential standards on individual customers of commercial
packaged boilers. In the March 2009 NOPR, DOE explained the development
of these analyses for commercial packaged boilers. 74 FR 12029-32 DOE
used the same spreadsheet models to evaluate the LCC and PBP for the
final rule as it used for the NOPR; however, DOE updated certain
specific inputs to the models. Details of the spreadsheet model and of
all the inputs to the LCC and PBP analyses are in chapter 5 of the
final rule TSD. DOE conducted the LCC and PBP analyses using a
spreadsheet model developed in Microsoft Excel for Windows 2003.
The LCC is the sum of the total installed cost (taking into account
contractor cost, sales taxes, distribution chain markups, and
installation cost) and operating expenses (energy, repair, and
maintenance costs) over the equipment lifetime, with all costs
discounted back to the purchase date. Because DOE is considering both
the efficiency levels in ASHRAE Standard 90.1-2007 and more-stringent
efficiency levels, the date on which an amended energy conservation
standard would become effective depends on the efficiency level
ultimately adopted. To fairly compare the LCC and PBP for both the
ASHRAE Standard 90.1-2007 levels and higher efficiency levels, DOE
presumed that the purchase year for the LCC calculation is 2014, the
earliest year in which DOE can establish an amended energy conservation
level at an efficiency level more stringent than the ASHRAE Standard
90.1-2007 efficiency level. For each efficiency level analyzed, the LCC
analysis required input data for the total installed cost of the
equipment, the operating costs, including energy, repair
[[Page 36328]]
and maintenance costs, and the discount rate. To compute each LCC, DOE
discounted all future operating costs to the time of purchase and
summed them over the lifetime of the equipment.
The PBP estimates the amount of time it would take the customer to
recover the incremental increase in the purchase price of more-
efficient equipment through lower operating costs. The PBP is the
change in purchase price divided by the change in annual operating cost
that results from the standard. DOE expresses this period in years.
However, unlike the LCC, which uses a stream of operating expenses,
including energy expenses, the PBP is defined using a single year's
annual expenses. By convention, DOE uses the first year's operating
expenses in the PBP calculation.
Recognizing that each business that uses commercial packaged boiler
equipment is unique, DOE analyzed variability and uncertainty by
performing the LCC and PBP calculations assuming a one-to-one
correspondence between business types and market segments
(characterized as building types) for customers located in seven types
of commercial buildings. DOE developed discount rates appropriate for
the customers in each building type and used the estimated annual
energy use for each commercial packaged boiler unit described in
section V.E. Because energy use of commercial packaged boilers is
sensitive to climate and building usage, DOE's analysis included
variation by State and building type. Aside from energy use, other
important factors influencing the LCC and PBP analyses are energy
prices, installation costs, equipment distribution markups, and sales
tax. DOE used weighting factors representing fractional boiler sales by
state and building type to generate national average LCC savings and
PBP for each efficiency level.
DOE conducted the LCC and PBP analyses using a commercially-
available spreadsheet model. This spreadsheet accounts for variability
in energy use, installation costs, maintenance costs and energy costs,
and uses weighting factors for shipments to different building types
and to States to generate national LCC savings and PBP statistics by
efficiency level. The results of DOE's LCC and PBP analyses are
summarized in section VI and described in detail in chapter 5 of the
final rule TSD.
Table V.2 summarizes the inputs and key assumptions DOE used in the
LCC and PBP analysis and shows how DOE modified these inputs and key
assumptions for the final rule. The changes in the input data and the
discussion of the overall approach to the LCC analysis are provided in
more detail in chapter 5 of the final rule TSD.
Table V.2--Summary of Inputs and Key Assumptions Used in the LCC and PBP
Analyses
------------------------------------------------------------------------
Changes for final
Inputs NOPR description rule
------------------------------------------------------------------------
Affecting Installed Costs
------------------------------------------------------------------------
Equipment Price............. Equipment price was None.
derived by
multiplying
contractor cost
(from the
engineering
analysis) by
mechanical and
general contractor
markups as needed
plus sales tax from
the markups
analysis.
Installation Cost........... Installation cost Modified
includes installation costs
installation labor, to reduce
installer overhead, incremental control
and any costs charged at
miscellaneous condensing
materials and equipment levels.
parts, derived from Also removed costs
RS Means CostWorks for condensate pump
2007.\13\ DOE added below condensing
additional costs to levels, but
reflect the retained condensate
installation of drain costs for
near condensing and near condensing
condensing boilers levels (where
at efficiency corrosion resistant
levels more flues are
stringent than required).
ASHRAE Standard
90.1-2007
efficiency levels.
These costs include
control
modifications,
stainless steel
flues, and
condensate pumps
and piping to
remove condensate.
------------------------------------------------------------------------
Affecting Operating Costs
------------------------------------------------------------------------
Annual Energy Use........... DOE derived annual None.
energy use using
FLEOH data for
commercial boilers
combined with
thermal efficiency
estimates for each
boiler efficiency
level analyzed. DOE
did not incorporate
differences in
annual electricity
use by efficiency
level. DOE used
State-by-State
weighting factors
to estimate the
national energy
consumption by
efficiency level.
Fuel Prices................. DOE developed Updated State Energy
average commercial Database Data for
natural gas and natural gas and
fuel oil prices for fuel oil prices to
each State using 2007 data (most
EIA's State Energy recent available).
Database Data for Used AEO2009 energy
2006 for natural price forecasts
gas and oil price (April 2009
data.\14\ DOE used Reference Case
AEO2008 energy incorporating
price forecasts to AARA).
project oil and
natural gas prices
into the future.
Maintenance Cost............ DOE estimated annual None.
maintenance costs
for commercial
boilers based on
MARS 8 Facility
Cost Forecast
System Database
\15\ for commercial
boilers. Annual
maintenance cost
did not vary as a
function of
efficiency.
[[Page 36329]]
Repair Cost................. DOE estimated the None.
annualized repair
cost for baseline
efficiency
commercial boilers
based on cost data
from MARS 8
Facility Cost
Forecast System
Database for
commercial boilers.
DOE assumed that
repair costs would
vary in direct
proportion with the
MSP at higher
efficiency levels
because it
generally costs
more to replace
components that are
more efficient.
------------------------------------------------------------------------
Affecting Present Value of Annual Operating Cost Savings
------------------------------------------------------------------------
Equipment Lifetime.......... DOE estimated None.
equipment lifetime
assuming a 30-year
lifespan for all
commercial boilers
based on data
published by ASHRAE.
Discount Rate............... Mean real discount None.
rates for all
buildings range
from 2.3 percent
for education
buildings to 5.9
percent for retail
building owners.
Analysis Start Year......... Start year for LCC None.
is 2014, which is
four years after
the publication of
the final rule for
amended energy
conservation
standards higher
than ASHRAE.
------------------------------------------------------------------------
Analyzed Efficiency Levels
------------------------------------------------------------------------
Analyzed Efficiency Levels.. DOE analyzed the None.
baseline efficiency
levels (ASHRAE
Standard 90.1-2007)
and up to four
higher efficiency
levels for all ten
equipment classes.
See the engineering
analysis for
additional details.
------------------------------------------------------------------------
In response to the methodology presented in the March 2009 NOPR,
DOE received comments on the installation cost assumptions used in the
LCC analysis. Regarding the installation costs assumptions, ACEEE asked
whether DOE assumed that commercial customers did not replace the
control package for the lowest efficiency boilers with one specific to
that boiler. ACEEE further stated since one-third of the commercial
packaged boiler shipments went to new construction, it would seem that
these boilers would have to be installed with a controls package. In
addition, ACEEE asked whether the costs of controls should exist for a
replacement market given the fraction of boilers that would be shipped
there even without controls. ACEEE questioned an assumption that there
are no control costs for the lowest-efficiency boilers. (ACEEE, Public
Meeting Transcript, No. 12 at p. 72)
---------------------------------------------------------------------------
\13\ RS Means CostWorks 2007, R.S. Means Company, Inc. 2007.
Kingston, Massachusetts (2007). Available at: http://
www.meanscostworks.com/.
\14\ Natural Gas Price and Expenditure Estimates by Sector, EIA,
2007. Available at: http://www.eia.doe.gov/emeu/states/sep_fuel/
html/fuel_pr_ng.html. 2007 Distillate Fuel Price and Expenditure
Estimates by Sector, EIA, 2007. Available at: http://
www.eia.doe.gov/emeu/states/hf.jsp?incfile=sep_fuel/html/fuel_pr_
df.html.
\15\ MARS 8 Facility Cost Forecast System Database, Whitestone
Research, 2008. Washington, DC. Available at: http://
www.whitestoneresearch.com/mars/index.htm.
---------------------------------------------------------------------------
DOE responded to ACEEE at the public meeting that it did not
necessarily assume explicitly that there were no controls shipped with
the boiler, but that the analysis did include a differential control
cost for the higher-efficiency boilers.
AHRI commented that they were not aware of any data to indicate
what the differences in control costs might be for higher efficiency
boilers, but commented that there probably is going to be some type of
control to monitor and signal the boiler that it is getting rid of the
condensate and that this would be a control you wouldn't have
otherwise. (AHRI, Public Meeting Transcript, No. 12 at pp. 73-74) AHRI
also asked if DOE included any factor to account for possible
requirements to treat the boiler condensate.
For the final rule analysis, DOE reviewed and modified the
assumptions for control costs resulting in a reduction in the control
cost differential for the condensing boiler to $250. In addition, DOE
reviewed the assumptions for costs of condensate pumps generally. For
the March 2009 NOPR, condensate pumps were incorporated for both
condensing and near condensing boiler efficiency levels. Review of data
on options for boiler installations indicated that condensate pumps
would be common for many fully condensing boilers where condensate is
generated in the boiler itself, but other means could be incorporated
to help alleviate condensation directly in the flue that occurs with
near condensing efficiency levels. DOE included the cost for condensate
drainage for all near condensing and condensing efficiency levels
(levels for which a corrosion resistant flue was also incorporated).
With regard to the possible costs for condensate treatment, DOE is
aware that some jurisdictions may have requirements for condensate
treatment and that there are commercial products designed to provide
this treatment, but did not have sufficient information on the extent
that such requirements exist across the U.S. to estimate typical
installation costs and ongoing maintenance costs for such treatment.
Consequently, DOE did not adjust the maintenance (or repair) costs from
those used in the March 2009 NOPR. DOE acknowledges that to the extent
that condensate treatment is required, these would be an additional
installation and maintenance cost for the condensing efficiency levels.
Other modifications made to the LCC analysis were to update the
fuel prices and fuel price forecast data. Fuel prices are needed to
convert the gas or oil energy savings from higher-efficiency equipment
into energy cost savings. Because of the variation in annual fuel
consumption savings and equipment costs across the country, it is
important to consider regional differences in electricity prices. DOE
updated the average commercial natural gas and
[[Page 36330]]
commercial fuel oil prices at the State level using the latest
available Energy Information Administration (EIA) data (2007). These
data were converted to 2008$ using a Gross Domestic Product (GDP) price
inflator. The effective 2007 prices (in 2008$) range from approximately
$7.71 per million Btu to approximately $27.96 per million Btu for
natural gas, and from approximately $15.21 per million Btu to
approximately $18.04 per million Btu for commercial fuel oil. To
account for variation in fuel costs occurring in different kinds of
businesses, DOE followed the same procedure used in the NOPR to adjust
the state average fuel price to business-type specific fuel prices,
which was to use the ratio of the average fuel costs for that business
type to the commercial sectors as a whole, as provided in EIA's 2003
CBECS \16\ data set.
---------------------------------------------------------------------------
\16\ EIA's Commercial Buildings Energy Consumption Survey,
Energy Information Agency. Public use microdata available at: http:/
/www.eia.doe.gov/emeu/cbecs/cbecs2003/public_use_2003/cbecs_
pudata2003.html.
---------------------------------------------------------------------------
DOE also updated the fuel price forecast data to use the most
recent EIA/AEO forecasts. EIA updated the AEO forecasts in April 2009
to reflect the provisions of the American Recovery and Reinvestment Act
(ARRA) enacted in mid-February 2009. The reference case in the recently
published AEO2009, which reflected laws and regulations in effect as of
November 2008, does not include ARRA. The need to develop an updated
reference case following the passage of ARRA also provided the EIA with
an opportunity to update the macroeconomic outlook for the United
States and global economies, which have been changing at an unusually
rapid rate in recent months.
A very significant spike in oil prices in 2008, in conjunction with
a change in assumptions in the April AEO2009 reference case meant it
was not possible to use both the 2007 state oil cost data and the
future oil fuel price index to directly generate future national
commercial average fuel-oil prices that reasonably match those in the
AEO2009 forecast. To provide a more closely matched estimate, DOE
applied an adjustment factor to the fuel prices to both starting point
gas and oil prices such that the national average commercial prices
from 2012-2030 would match the AEO forecasts in constant years dollars,
but retain the state-by-state variation reflected in state pricing
data. As was done for the NOPR, DOE extrapolated the trend in fuel
prices between 2020 and 2030 of the forecast to establish prices for
the years from 2031 to 2042 for the LCC analysis.
See chapter 5 of the final rule TSD for further details on the LCC
and PBP analysis and assumptions.
G. Shipments Analysis
The shipments analysis develops future shipments for each class of
commercial packaged boiler based on current shipments and equipment
life assumptions, and takes into account the existing stock and
expected growth of buildings using commercial packaged boilers. DOE
assumed the relative distribution of shipments by size and boiler
equipment class would resemble that of current shipments. In the March
2009 NOPR, DOE explained the development of the shipment analysis for
commercial packaged boilers 74 FR 12033.
DOE received several comments on the assumptions used in the
shipments analysis for the NOPR. On the distribution of equipment
lifetimes, AHRI commented that in some regions of the country,
emissions regulations may promote early replacements of boilers, but
did not provide data on the frequency that this may occur or the impact
that this may have on the distribution for boiler lifetimes. (AHRI,
Public Meeting Transcript, No. 12 at p. 86) ACEEE commented that there
is a trend toward replacements of larger boilers with trains of smaller
boilers, but admitted to not having quantitative numbers to describe
the trend. (ACEEE, Public Meeting Transcript, No. 12 at p. 80) ACEEE
also commented that boilers are rated on input capacity, but since the
relationship between input and output capacity changes with
efficiencies, for a fixed output, the input capacities required for the
market will have a downward trend based on a change in efficiency
considered alone. In addition, ACEEE asserted that reductions in the
degree of historical [unnecessary] oversizing might be reduced in the
future, which would further result in a reduction in typical boiler
size. (ACEEE, Public Meeting Transcript, No. 12 at p. 81)
In responding to ACEEE at the public meeting, AHRI agreed that in
fact there are replacement situations where the use of trains of
modular or stage boilers makes sense today. AHRI also pointed out that
a target of ASHRAE 90.1 has been to achieve better sizing and better
system design as part of the overall goal to reduce energy consumption
in commercial buildings. AHRI did not have an idea of how much effect
these replacement situations would really have on shipments. (AHRI,
Public Meeting Transcript, No. 12 at p. 83)
In response to ACEEE regarding the natural reduction in input
capacity as a function of higher efficiency equipment, DOE notes that
the shipments model starting point, as well as the output of the model,
is the number of boilers shipped, not the total input capacity of all
shipments. Furthermore, the cost calculations developed in the
engineering analysis and subsequently used in the analysis are based on
the output capacity of the boiler. The sum total of output capacity and
shipments is not affected by the change in efficiency brought about by
standards. With regard to the other comments, given the lack of
sufficient quantitative data on the impact that these trends may have
on shipments by equipment size or class that would be needed to
calibrate a revised model, DOE did not revise the shipments model
methodology from that of the March 2009 NOPR.
DOE did update the model to reflect new estimates of future
building new construction and resulting building stock in each year
based on the April 2009 AEO2009 reference case. DOE reports the revised
shipment forecasts for the boiler market for selected years from 2012
to 2042 for the base case in Table V.3 below.
[[Page 36331]]
[GRAPHIC] [TIFF OMITTED] TR22JY09.003
H. National Impact Analysis--National Energy Savings and Net Present
Value Analysis
The national impacts analysis evaluates the impact of a proposed
energy conservation standard from a national perspective rather than
from the customer perspective represented by the LCC. This analysis
assesses the national energy savings (NES) and national net present
value (NPV) of the commercial customer costs and savings that are
expected to result from amended standards at the analyzed efficiency
levels. For the final rule analysis, DOE used the same spreadsheet
model used in the March 2009 NOPR to calculate the energy savings and
the national economic costs and savings from new standards, but with
updates to specific input data.
For each efficiency level analyzed, DOE calculated the NPV and NES
for adopting more-stringent standards than the efficiency levels
specified in ASHRAE Standard 90.1-2007. The NES refers to cumulative
energy savings from 2012 through 2042. DOE calculated new energy
savings in each year relative to a base case, defined to include DOE
adoption of the efficiency levels specified by ASHRAE Standard 90.1-
2007. The NPV refers to cumulative monetary savings. DOE calculated net
monetary savings for higher standards in each year relative to the base
case as the total operating cost savings minus the increases in total
installed cost. Cumulative savings are the sum of the annual NPV over
the specified period. DOE accounted for operating cost savings until
2085, when 95 percent of all the equipment installed in 2042 should be
retired.
Table V.4 summarizes the inputs to the NES spreadsheet model along
with a brief description of the data sources. The results of DOE's NES
and NPV analysis are summarized in section VI.B.2 and described in
detail in chapter 7 of the final rule TSD.
Table V.4--Summary of NES and NPV Model Inputs
----------------------------------------------------------------------------------------------------------------
Inputs Description Changes for final rule
----------------------------------------------------------------------------------------------------------------
Shipments................... Annual shipments from Used updated shipment estimates based on AEO2009
shipments model (see chapter reference case building stock forecasts.
6 of the final rule TSD).
[[Page 36332]]
Effective Date of Standard.. 2014 for adoption of a more- No change.
stringent efficiency level
than those specified by
ASHRAE Standard 90.1-2007.
2012 for adoption of the
efficiency levels specified
by ASHRAE Standard 90.1-2007.
Base Case Efficiencies...... Distribution of base-case No change.
shipments by efficiency level.
Standard Case Efficiencies.. Distribution of shipments by No change.
efficiency level for each
standards case. Standards-
case annual shipment-weighted
market shares remain the same
as in the base case and each
standard level for all
efficiencies above the
efficiency level being
analyzed. All other shipments
are at the efficiency level.
Annual Energy Use per Unit.. Annual national weighted- No change.
average values are a function
of efficiency level. (See
chapter 4 of the final rule
TSD.).
Total Installed Cost per Annual weighted-average values Modified to reflect changes in installation costs
Unit. are a function of efficiency from LCC analysis.
level. (See chapter 5 of the
final rule TSD.).
Repair Cost per Unit........ Annual weighted-average values No change.
increase with manufacturer's
cost level. (See chapter 5 of
the final rule TSD.).
Maintenance Cost per Unit... See chapter 5 of the final No change.
rule TSD.
Escalation of Fuel Prices... AEO2008 forecasts (to 2030) Modified to reflect April 2009 AEO2009 reference
and extrapolation for beyond case forecasts.
2030. (See chapter 5 of the
final rule TSD.).
Site-Source Conversion...... Based on average annual site- Based on average annual site-to-source conversion
to-source conversion factor factor for natural gas from AEO2009 reference
for natural gas from AEO2008. case.
Discount Rate............... 3 percent and 7 percent real.. No change.
Present Year................ Future costs are discounted to No change.
2008.
----------------------------------------------------------------------------------------------------------------
DOE received no comments on the general methodology and the results
for the NES and NPV analysis. As a result, DOE retained the same
methodology as was used in the NOPR for the final rule. Changes to
these results from the NOPR are due to changes in the development of
national average inputs to the NES and NPV analysis as a result of the
revisions to the LCC and shipments calculations.
I. Environmental Assessment
DOE prepared an environmental assessment (EA) which assesses the
impacts of the proposed rule pursuant to the National Environmental
Policy Act of 1969 (42 U.S.C. 4321 et seq.) (NEPA), the regulations of
the Council on Environmental Quality (40 CFR parts 1500-1508), and
DOE's regulations for compliance with the National Environmental Policy
Act (10 CFR part 1021). This EA includes a concise examination of the
impacts of emission reductions likely to result from the proposed
standards for commercial packaged boilers and water-cooled and
evaporatively cooled commercial packaged air conditioners and heat
pumps with a cooling capacity at or above 240,000 Btu/h and less than
760,000 Btu/h. The EA has been incorporated as chapter 8 in the final
rule TSD.
Specifically, DOE estimated the reduction in total emissions of
carbon dioxide (CO2), nitrogen oxides (NOX) and
sulfur dioxide (SO2). A fourth pollutant, mercury (Hg), is
emitted in only trace amounts by the equipment covered in this analysis
that further analysis of Hg in this EA would be uninformative; as such,
DOE does not discuss Hg emissions in this EA.
1. Sulfur Dioxide
Sulfur dioxide is a chemical compound that is produced by various
natural and industrial processes and is a key contributor to acid rain.
The Clean Air Act Amendments of 1990 set an SO2 emissions
cap on all power generation, but permitted flexibility among generators
through the use of emissions allowances and tradable permits. This
SO2 trading process (sometimes called ``cap and trade'')
does not, however, cover commercial packaged boilers. The EPA's New
Source Performance Standards (NSPS) limit, among other things,
SO2 emissions from boilers built after a certain date. In
particular, 40 CFR part 60 subpart Dc, Standards of Performance for
Small Industrial-Commercial-Institutional Steam Generating Units,
requires that small industrial-commercial-institutional steam
generating units constructed, modified, or reconstructed after June 9,
1989, must limit the allowable sulfur content in fuel oil to 0.5 weight
percent for any steam-generating unit that has a maximum design heat
input capacity of 100 million British thermal units (Btu) per hour. (40
CFR 60.40c-60.48c) Commercial packaged boilers that have a maximum
design heat input capacity of 100 million Btu per hour would be an
extremely small subset of all boilers being considered in this rule.
Consequently, there is a direct SO2 environmental benefit
from a reduction in fuel consumption resulting from the higher
efficiency standards for commercial packaged boilers being adopted in
today's final rule.
2. Nitrogen Oxides
Nitrogen oxides, or NOX, are the generic term for a
group of highly reactive gases, all of which contain nitrogen and
oxygen in varying amounts. Nitrogen oxides form when fossil fuel is
burned at high temperatures, as in a combustion process, and are
considered a criteria pollutant under the Clean Air Act. The primary
man-made sources of NOX emissions are motor vehicles,
electric utilities, and other industrial, commercial, and residential
sources that burn fossil fuels. NOX emissions from 28
eastern States and the District of Columbia (DC) are limited under the
Clean Air Interstate Rule, published in the Federal Register on May 12,
2005. Although the rule has been remanded to the EPA by the D.C.
Circuit Court, it will remain in effect until it is replaced by a rule
consistent with the Court's opinion in North Carolina v. EPA.\17\
[[Page 36333]]
Under CAIR, States must achieve the required emission reductions using
one of two compliance options: (1) Meet an emissions budget for each
regulated State by requiring power plants to participate in an EPA-
administered interstate cap-and-trade system that caps emissions in two
stages; or (2) meet an individual State emissions budget through
measures of the State's choosing. In general, however, CAIR basically
covers two general classes of NOX emitters: (1) Stationary,
fossil-fuel-fired boilers or stationary, fossil-fuel-fired combustion
turbines serving generators with nameplate capacity of more than 25 MW
of electricity and producing that electricity for sale; and (2) any
unit that has a maximum design heat input rate of greater than 250
million Btu/h (40 CFR 96.4). Commercial packaged boilers have a maximum
design heat input rate of less than 250 million Btu/h and are not used
for commercial power production. Hence, requirements of the CAIR do not
apply to commercial packaged boilers. Consequently, there is a direct
NOX environmental benefit from a reduction in fuel
consumption resulting from the higher efficiency standards for
commercial packaged boilers.
---------------------------------------------------------------------------
\17\ On July 11, 2008, the U.S. Court of Appeals for the
District of Columbia Circuit (D.C. Circuit) issued its decision in
North Carolina v. Environmental Protection Agency, in which the
Court vacated the CAIR rule. 531 F.3d 896 (D.C. Cir. 2008). However,
in a December 23, 2008 opinion, the same panel of the D.C. Circuit
reinstated the CAIR rule pending EPA's compliance with its July 11,
2008 ruling. 550 F.3d 1176 (D.C. Cir. 2008) (remand of vacatur). As
such, CAIR's trading programs and target deadlines remain in place
at present; however, the long term prospects for and shape of those
trading programs are unknown.
---------------------------------------------------------------------------
The EA assesses environmental impacts from alternate standard
levels analyzed for commercial packaged boilers based on the results of
the national energy savings analysis (see chapter 7). Standards for
water-cooled and evaporatively-cooled commercial package air
conditioners and heat pumps with a cooling capacity at or above 240,000
Btu/h and less than 760,000 Btu/h were also considered in this rule.
However, since no products could be identified on the market in this
class, no subsequent energy or environmental impacts were considered in
this EA. For commercial packaged boilers, DOE calculated emission
reductions using emission factors appropriate to commercial boilers
that use natural gas or fuel oil as fuel sources. The emissions factors
provide typical ratios of emissions for SO2, NOX,
and CO2 per unit of natural gas or fuel oil energy consumed.
DOE multiplied each emission factor, respectively, by the annual energy
savings for each class of commercial packaged boiler as developed in
the NES for the final rule. The annual emission reductions were then
summed over the period from 2012-2042 separately for each class. The
resulting emission reductions are shown in section VI.
J. Monetizing Carbon Dioxide and Other Emissions Impacts
DOE also calculated the possible monetary benefit of
CO2, NOX, and SO2 emissions
reductions. Cumulative monetary benefits were determined using discount
rates of 3 and 7 percent. DOE monetized reductions in CO2
emissions stemming from the standards adopted in this final rule using
a range of monetary values drawn from studies that attempt to estimate
the present value of the marginal economic benefits (based on the
avoided marginal social costs of carbon) likely to result from reducing
greenhouse gas emissions. The marginal social cost of carbon is an
estimate of the monetary value to society of the environmental damages
of CO2 emissions.
DOE monetized reductions in SO2 emissions using a ranges
estimates of monetized benefits that could be attributed to the
reduction of SO2 emissions from commercial packaged boilers.
At one end, DOE used the annual estimates of an SO2 trading
price as developed in the National Energy Modeling System (NEMS)
electricity market model for the western and eastern U.S. This model
estimates a trading price for SO2 in the utility markets,
and, while not directly applicable to commercial packaged boilers, it
reflects a market value for the cost of reducing SO2
emissions into the atmosphere. As DOE is interested in a national
estimate, it used a simple average of the trading prices from the
eastern and western electricity market models for the period from 2012-
2030, and extrapolated the prices out through 2042. The range in
SO2 costs from this source varied both by year and region
from $86 to $1,012 (2007$). At the higher end, DOE used an estimate of
environmental damage costs of $7,300 per ton of SO2 from
stationary sources, measured in 2001$ or $8,542 per ton in 2007$. These
low and high values were in turn multiplied by the reduction in
emissions of SO2 estimated for the period from 2012-2042.
DOE estimated the national monetized benefits of NOX
reductions associated with this rulemaking based on environmental
damage estimates from the literature. Available estimates suggest a
very wide range of monetary values for NOX emissions,
ranging from $370 per ton to $3,800 per ton of NOX from
stationary sources, measured in 2001$, or a range of $432 per ton to
$4,441 per ton in 2007$.
The resulting estimates of the present value of monetary benefits
associated with the national reduction of CO2,
NOX, and SO2 emissions resulting from adoption of
standards for commercial packaged boilers at the ASHRAE 90.1-2007
efficiency levels are shown in section VI. In addition, estimates of
the additional benefits for adopting standards higher than the ASHRAE
90.1-2007 efficiency levels are also provided in section VI.
DOE notes that neither EPCA nor NEPA requires that the economic
value of emissions reduction be incorporated in the LCC or NPV analysis
of energy savings. DOE has chosen to report these benefits separately
from the net benefits of energy savings, but considered these benefits
when weighing the benefits and burdens of standards.
K. Other Issues
1. Impact of Standards on Natural Gas Prices
In the March 2009 NOPR public meeting, EarthJustice pointed out
that DOE had, in certain residential rulemakings, begun to calculate
the potential impact of energy efficiency standards on natural gas
prices and encouraged DOE to do something similar in the ASHRAE
products rulemaking analysis. (EarthJustice, Public Meeting Transcript,
No. 13 at p. 61)
In response to these comments, DOE undertook a further review of
the potential impact of commercial packaged boiler energy efficiency
standards on natural gas prices. A review of the economic literature
indicates that there is support for the idea that an impact will occur
and that that impact would result in a reduction in overall natural gas
prices. DOE examined two preliminary analyses of the effect that a
reduction in natural gas usage due to efficiency standards would have
on natural gas prices. These were analyses and results published in the
2007 furnace and boiler final rule (72 FR 65136, 65152-54 (Nov. 19,
2007)) and in the preliminary analysis documented in the preliminary
TSD for standards for residential water heaters. The natural gas price
analysis for the furnaces and boilers rulemaking was conducted using a
version of the 2007 NEMS-BT that was modified to account for energy
savings associated with possible standards for residential gas
furnaces, and the price analysis for the residential water heaters
standards rulemaking was conducted using the 2008 NEMS-BT.
The preliminary analyses in both cases estimated that gas demand
reductions resulting from more stringent minimum energy conservation
standards would reduce the U.S.
[[Page 36334]]
average wellhead natural gas price. An inverse elasticity was
calculated in both studies, relating a percentage change in the average
wellhead natural gas price to a percentage reduction in total annual
natural gas consumption. In the furnace and boiler rule, DOE estimated
that this inverse elasticity was approximately 0.9 percent. In the
residential water heater preliminary analysis, DOE estimated an inverse
elasticity of approximately 0.8 percent. Given the closeness of these
two figures, and the corresponding similarity in energy end-use profile
expected for space heating equipment, DOE chose to estimate the impact
for commercial packaged boilers based on the elasticity estimated for
residential furnaces. DOE's analysis was based on the impact calculated
from adopting the highest efficiency level analyzed for the class of
small gas fired hot water boilers.
The condensing efficiency level for small gas fired hot water
boilers showed an estimated savings of 0.223 quads over the period from
2012-2042. DOE estimated the impact that the stream of energy savings
would have on natural gas prices over the same period. Using this time
period, DOE estimated that the average price changes amounted to a
decrease in the wellhead price for natural gas of 0.25 cents per
million Btu. Analysis done for the furnace and boiler rule showed that
while changes in price were both positive and negative depending on
sector, the effect on the wellhead price for natural gas was a
decrease.
In previous studies, the projected change in the natural gas price
varies among the end use sectors. For example, in the analysis for
residential furnaces, DOE estimated that natural gas prices would
decrease for the industrial and electric power sectors, and increase
for residential consumers. The increase in the residential price is
believed to occur because the fixed charges (e.g., transmission
infrastructure costs) are spread over fewer million Btu of gas sales in
the standards case, thus placing upward pressure on the average price
per million Btu. A similar pattern could be expected to occur in the
commercial sector.
Although the estimated reduction in average natural gas prices is
small, the estimated economy-wide savings in natural gas expenditures
over the 2012-2042 forecast period have an estimated net present value
of $0.29 billion at a seven-percent discount rate.
In addition to conducting its own analysis using NEMS, DOE reviewed
the results of: (1) Studies that used NEMS to investigate the price
impact of reductions in natural gas demand, and (2) studies that used
other energy-economic models to investigate the price impact of
substantial change in natural gas demand. While the results vary
considerably among the different studies, they generally show a price
response similar to or larger than that shown by DOE's NEMS analysis.
In the short run, DOE's preliminary analysis indicates that
consumer savings from lower natural gas prices would be offset by
declines in gas producer revenue. In the long run, the previous
analyses indicate that the reduction in natural gas prices mainly
results from changes in gas extraction costs. Since there is only a
limited supply of low-cost, conventional natural gas sources, natural
gas extraction costs rise over time as these low-cost sources are
depleted. Reduced gas demand puts downward pressure on extraction costs
and prices by delaying the depletion of the low-cost reserves and the
shift toward higher-cost sources. However, as changes in extraction
costs are projected to occur in 2030 and beyond, the uncertainty of the
actual savings that would be realized is increased.
Based on the discussed analysis, DOE recognizes that there is
uncertainty about the magnitude, distribution, and timing of the costs,
benefits, and net benefits within the economy. DOE's previous analyses
indicated that the prices of natural gas to the end use consumers
(residential) would increase slightly, due to fixed costs in the
distribution of natural gas to the consumer becoming a higher fraction
of the total cost. A similar effect is possible in the commercial
sector with commercial boilers. While DOE has not been able to estimate
these potential effects, DOE anticipates the effect will be small since
the magnitude of the gas price change is small (but likely to vary as
the natural gas savings increases).
Similarly, DOE is uncertain of the effects of the drop in natural
gas on producers and distributors of natural gas. While their revenues
and costs are expected to drop, it is uncertain whether they will drop
in proportion over time. The supply side will likely experience revenue
loss due to both the price changes and the reduction in gas sales that
they will experience.
DOE considered the potential impact on natural gas prices in the
establishment of the final standards, but because of the uncertainty of
these impacts, and because DOE's analysis has not been subjected to
public review, this factor had little impact on DOE's conclusion.
2. Effective Date of the Amended Energy Conservation Standards for
Commercial Packaged Boilers
Generally, covered equipment must comply with the applicable
standard if such equipment is manufactured or imported on or after a
specified date. As explained in the March 2009 NOPR, DOE evaluated
whether more-stringent efficiency levels than those in ASHRAE Standard
90.1-2007 would be technologically feasible and economically justified
and result in a significant amount of additional energy savings. 74 FR
12003. Because DOE found that more stringent standards did not meet
these requirements and is adopting energy conservation standards at the
efficiency levels contained in ASHRAE Standard 90.1-2007, EPCA requires
the standards to become effective ``on or after a date which is two
years after the effective date of the applicable minimum energy
efficiency requirement in the amended ASHRAE/IES[NA] standard * * *''.
(42 U.S.C. 6313(a)(6)(D)) Thus, for the equipment classes where a two-
tier standard is set-forth, the effective date of the rulemaking
depends on the effective date specified in ASHRAE Standard 90.1-2007.
The effective date in ASHRAE Standard 90.1-2007 for commercial packaged
boilers is March 2, 2010, for the initial efficiency level (which would
require an effective date of March 2, 2012), and the effective date in
ASHRAE Standard 90.1-2007 for the two commercial packaged boiler
equipment classes with a tiered efficiency level is March 2, 2020 for
the second tier efficiency level (which would require an effective date
of March 2, 2022).
For analysis purposes, if DOE were to adopt a rule prescribing
energy conservation standards higher than the efficiency levels
contained in ASHRAE Standard 90.1-2007, EPCA states that any such
standards ``shall become effective for products manufactured on or
after a date which is four years after the date such rule is published
in the Federal Register.'' (42 U.S.C. 6313(a)(6)(D)) DOE has applied
this 4-year implementation period to determine the effective date of
any energy conservation standard higher than the efficiency levels
specified by ASHRAE Standard 90.1-2007 that might be prescribed in a
future rulemaking. Thus, for products for which DOE might adopt a level
more stringent than the ASHRAE efficiency levels, the rule would apply
to products manufactured on or after July 2014, which is four years
[[Page 36335]]
from the date of publication of the final rule.\18\
---------------------------------------------------------------------------
\18\ Since ASHRAE published Standard 90.1-2007 on January 10,
2008, EPCA requires that DOE publish a final rule adopting more-
stringent standards than those adopted in Standard 90.1-2007 within
30 months of ASHRAE action (i.e., by July 2010). Thus, four years
from July 2010 would be July 2014, which would be the anticipated
effective date for DOE adoption of more-stringent standards.
---------------------------------------------------------------------------
Table V.5 presents the anticipated effective dates of an amended
energy conservation standard for each equipment class for which DOE
developed a potential energy savings analysis.
Table V.5--Anticipated Effective Date of an Amended Energy Conservation Standard for Each Equipment Class of
Commercial Packaged Boilers
----------------------------------------------------------------------------------------------------------------
Anticipated effective
date for adopting more
Anticipated effective date for adopting stringent efficiency
Equipment class the efficiency levels in ASHRAE standard levels than those in
90.1-2007 ASHRAE standard 90.1-
2007
----------------------------------------------------------------------------------------------------------------
Small Gas-Fired Hot Water Commercial 2012...................................... 2014
Packaged Boilers.
Small Gas-Fired Steam, All Except Natural 2012...................................... 2014
Draft Commercial Packaged Boilers.
Small Gas-Fired Steam Natural Draft Tier 1: 2012.............................. 2014
Commercial Packaged Boilers. Tier 2: 2022..............................
Small Oil-Fired Hot Water Commercial 2012...................................... 2014
Packaged Boilers.
Small Oil-Fired Steam Commercial Packaged 2012...................................... 2014
Boilers.
Large Gas-Fired Hot Water Commercial 2012...................................... 2014
Packaged Boilers.
Large Gas-Fired Steam, All Except Natural 2012...................................... 2014
Draft Commercial Packaged Boilers.
Large Gas-Fired Steam Natural Draft Tier 1: 2012.............................. 2014
Commercial Packaged Boilers. Tier 2: 2022..............................
Large Oil-Fired Hot Water Commercial 2012...................................... 2014
Packaged Boilers.
Large Oil-Fired Steam Commercial Packaged 2012...................................... 2014
Boilers.
----------------------------------------------------------------------------------------------------------------
VI. Analytical Results for Commercial Packaged Boilers
A. Efficiency Levels Analyzed
Table VI.1 presents the baseline efficiency level and the
efficiency levels analyzed for each equipment class of commercial
packaged boilers subject to today's final rule. The baseline efficiency
levels correspond to the efficiency levels specified by ASHRAE Standard
90.1-2007 for commercial packaged boilers. The efficiency levels above
the baseline represent efficiency levels above those specified in
ASHRAE Standard 90.1-2007 where equipment is currently available on the
market.
Table VI.1--Efficiency Levels Analyzed
----------------------------------------------------------------------------------------------------------------
Representative
Equipment class capacity (kBtu/ Efficiency levels analyzed
h)
----------------------------------------------------------------------------------------------------------------
Small gas-fired hot water.................... 800 Baseline--80% ET
82% ET
84% ET
86% ET
Condensing--92% ET
Small gas-fired steam, all except natural 800 Baseline--79% ET
draft. 80% ET
81% ET
82% ET
83% ET
Small gas-fired steam natural draft.......... 800 Baseline--77% ET
78% ET
79% ET
80% ET
Small oil-fired hot water.................... 800 Baseline--82% ET
84% ET
86% ET
88% ET
Small oil-fired steam........................ 800 Baseline--81% ET
82% ET
83% ET
85% ET
Large gas-fired hot water.................... 3,000 Baseline--82% EC
83% EC
84% EC
85% EC
Condensing--95% EC
[[Page 36336]]
Large gas-fired steam, all except natural 3,000 Baseline--79% ET
draft. 80% ET
81% ET
82% ET
83% ET
Large gas-fired steam natural draft.......... 3,000 Baseline--77% ET
78% ET
79% ET
80% ET
81% ET
Large oil-fired hot water.................... 3,000 Baseline--84% EC
86% EC
87% EC
88% EC
Large oil-fired steam........................ 3,000 Baseline--81% ET
82% ET
83% ET
84% ET
86% ET
----------------------------------------------------------------------------------------------------------------
B. Economic Justification and Energy Savings
1. Economic Impacts on Commercial Customers
To evaluate the economic impact of the efficiency levels on
commercial customers, DOE conducted an LCC analysis for each efficiency
level. More efficient commercial packaged boilers would affect these
customers in two ways: (1) Annual operating expense would decrease; and
(2) purchase price would increase. Inputs used for calculating the LCC
include total installed costs (i.e., equipment price plus installation
costs), operating expenses (i.e., annual energy savings, energy prices,
energy price trends, repair costs, and maintenance costs), equipment
lifetime, and discount rates.
The output of the LCC model is a mean LCC savings for each
equipment class, relative to the baseline commercial packaged boiler
efficiency level. The LCC analysis also provides information on the
percentage of customers that are negatively affected by an increase in
the minimum efficiency standard.
DOE also performed a PBP analysis as part of the LCC analysis. The
PBP is the number of years it would take for the customer to recover
the increased costs of higher-efficiency equipment as a result of
energy savings based on the operating cost savings. The PBP is an
economic benefit-cost measure that uses benefits and costs without
discounting. Chapter 5 of the final rule TSD provides detailed
information on the LCC and PBP analyses.
DOE's LCC and PBP analyses provided five key outputs for each
efficiency level above the baseline (i.e., efficiency levels more
stringent than those in ASHRAE Standard 90.1-2007), reported in Table
VI.2 through Table VI.11. The first three outputs are the proportion of
commercial boiler purchases where the purchase of a commercial packaged
boiler that is compliant with the amended energy conservation standard
creates a net LCC increase, no impact, or a net LCC savings for the
customer. The fourth output is the average net LCC savings from
standard-compliant equipment. The fifth output is the average PBP for
the customer investment in standard-compliant equipment. The sixth
output is the increase in total installed cost from standard-compliant
equipment.
Table VI.2--Summary LCC and PBP Results for Small Gas-Fired Hot Water Boilers, 800 kBtu/h Output Capacity
----------------------------------------------------------------------------------------------------------------
Efficiency level
Small gas-fired hot water ---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Thermal Efficiency (Et)......................... 82% 84% 86% 92%
Equipment with Net LCC Increase (%)............. 9 21 42 64
Equipment with No Change in LCC (%)............. 77 48 25 18
Equipment with Net LCC Savings (%).............. 14 31 33 19
Mean LCC Savings ($)............................ $1,700 $3,239 $1,329 ($4,760)
Mean PBP (years)................................ 25.4 30.6 42.7 56.7
Increase in Total Installed Cost ($)............ $3,364 $5,526 $9,045 $14,323
----------------------------------------------------------------------------------------------------------------
*Numbers in parentheses indicate negative LCC savings.
[[Page 36337]]
Table VI.3--Summary LCC and PBP Results for Small Gas-Fired Steam, All Except Natural Draft, 800 kBtu/h Output
Capacity
----------------------------------------------------------------------------------------------------------------
Efficiency level
Small gas-fired steam, all except natural draft ---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Thermal Efficiency (Et)......................... 80% 81% 82% 83%
Equipment with Net LCC Increase (%)............. 27 58 71 73
Equipment with No Change in LCC (%)............. 64 19 10 7
Equipment with Net LCC Savings (%).............. 9 23 19 20
Mean LCC Savings ($)............................ ($870) ($674) ($2,423) ($3,064)
Mean Payback Period (years)..................... 41.6 41.8 50.7 50.8
Increase in Total Installed Cost ($)............ $3,204 $4,946 $7,674 $9,831
----------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative savings.
Table VI.4--Summary LCC and PBP Results for Small Gas-Fired Steam Natural Draft Boilers, 800 kBtu/h Output
Capacity
----------------------------------------------------------------------------------------------------------------
Efficiency level
Small gas-fired steam natural draft -----------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
Thermal Efficiency (Et)......................................... 78% 79% 80%
Equipment with Net LCC Increase (%)............................. 44 35 43
Equipment with No Change in LCC (%)............................. 32 22 3
Equipment with Net LCC Savings (%).............................. 25 43 54
Mean LCC Savings * ($).......................................... ($50) $1,657 $2,184
Mean PBP (years)................................................ 30.9 25.4 28.7
Increase in Total Installed Cost ($)............................ $2,875 $3,926 $5,562
----------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative savings.
Table VI.5--Summary LCC and PBP Results for Small Oil-Fired Hot Water Boilers, 800 kBtu/h Output Capacity
----------------------------------------------------------------------------------------------------------------
Efficiency level
Small oil-fired hot water -----------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
Thermal Efficiency (Et)......................................... 84% 86% 88%
Equipment with Net LCC Increase (%)............................. 10 10 28
Equipment with No Change in LCC (%)............................. 39 27 7
Equipment with Net LCC Savings (%).............................. 51 63 65
Mean LCC Savings ($)............................................ $4,902 $9,770 $11,482
Mean PBP (years)................................................ 16.5 17.5 24.0
Increase in Total Installed Cost ($)............................ $3,506 $5,912 $9,737
----------------------------------------------------------------------------------------------------------------
Table VI.6--Summary LCC and PBP Results for Small Oil-Fired Steam Boilers, 800 kBtu/h Output Capacity
----------------------------------------------------------------------------------------------------------------
Efficiency level
Small oil-fired hot water -----------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
Thermal Efficiency (Et)......................................... 82% 83% 85%
Equipment with Net LCC Increase (%)............................. 29 46 54
Equipment with No Change in LCC (%)............................. 58 24 6
Equipment with Net LCC Savings (%).............................. 13 30 40
Mean LCC Savings * ($).......................................... ($732) $88 $864
Mean PBP (years)................................................ 35.1 33.7 35.0
Increase in Total Installed Cost ($)............................ $3,136 $4,739 $8,236
----------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative savings.
Table VI.7--Summary LCC and PBP Results for Large Gas-Fired Hot Water Boilers, 3,000 kBtu/h Output Capacity
----------------------------------------------------------------------------------------------------------------
Efficiency level
Large gas-fired hot water ---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Combustion Efficiency (EC)...................... 83% 84% 85% 95%
Equipment with Net LCC Increase (%)............. 8 15 31 45
Equipment with No Change in LCC (%)............. 51 23 17 6
[[Page 36338]]
Equipment with Net LCC Savings (%).............. 41 62 52 50
Mean LCC Savings ($)............................ $6,411 $11,303 $11,324 $13,271
Mean PBP (years)................................ 15.3 19.3 28.7 38.3
Increase in Total Installed Cost ($)............ $4,093 $7,742 $13,560 $37,293
----------------------------------------------------------------------------------------------------------------
Table VI.8--Summary LCC and PBP Results for Large Gas-Fired Steam, All Except Natural Draft Boilers, 3,000 kBtu/
h Output Capacity
----------------------------------------------------------------------------------------------------------------
Efficiency level
Large gas-fired steam, all except natural draft ---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Thermal Efficiency (Et)......................... 80% 81% 82% 83%
Equipment with Net LCC Increase (%)............. 4 4 3 3
Equipment with No Change in LCC (%)............. 61 26 23 20
Equipment with Net LCC Savings (%).............. 34 70 74 77
Mean LCC Savings ($)............................ $7,876 $18,144 $27,941 $37,065
Mean Payback Period (years)..................... 11.8 8.8 8.0 7.8
Increase in Total Installed Cost ($)............ $3,969 $5,638 $7,398 $9,423
----------------------------------------------------------------------------------------------------------------
Table VI.9--Summary LCC and PBP Results for Large Gas-Fired Steam Natural Draft Boilers, 3,000 kBtu/h Output
Capacity
----------------------------------------------------------------------------------------------------------------
Efficiency level
Large gas-fired steam natural draft ---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Thermal Efficiency (Et)......................... 78% 79% 80% 81%
Equipment with Net LCC Increase (%)............. 1 2 4 10
Equipment with No Change in LCC (%)............. 88 42 24 7
Equipment with Net LCC Savings (%).............. 12 55 72 83
Mean LCC Savings ($)............................ $9,531 $19,836 $28,016 $33,835
Mean Payback Period (years)..................... 9.1 8.0 9.0 11.0
Increase in Total Installed Cost ($)............ $3,410 $5,484 $8,635 $13,060
----------------------------------------------------------------------------------------------------------------
Table VI.10--Summary LCC and PBP Results for Large Oil-Fired Hot Water Boilers, 3,000 kBtu/h Output Capacity
----------------------------------------------------------------------------------------------------------------
Efficiency level
Large oil-fired hot water -----------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
Combustion Efficiency (EC)...................................... 86% 87% 88%
Equipment with Net LCC Increase (%)............................. 2 7 10
Equipment with No Change in LCC (%)............................. 52 24 24
Equipment with Net LCC Savings (%).............................. 46 69 66
Mean LCC Savings ($)............................................ $26,820 $35,114 $42,551
Mean PBP (years)................................................ 8.4 11.8 14.3
Increase in Total Installed Cost ($)............................ $6,644 $12,067 $17,736
----------------------------------------------------------------------------------------------------------------
Table VI.11--Summary LCC and PBP Results for Large Oil-Fired Steam Boilers, 3,000 kBtu/h Output Capacity
----------------------------------------------------------------------------------------------------------------
Efficiency level
Large oil-fired steam ---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Thermal Efficiency (Et)......................... 82% 83% 84% 86%
Equipment with Net LCC Increase (%)............. 1 2 8 9
Equipment with No Change in LCC (%)............. 66 41 16 11
Equipment with Net LCC Savings (%).............. 33 57 77 81
Mean LCC Savings ($)............................ $13,940 $27,598 $37,978 $59,175
Mean Payback Period (years)..................... 1 2 8 9
Increase in Total Installed Cost ($)............ $3,885 $6,970 $11,724 $20,263
----------------------------------------------------------------------------------------------------------------
[[Page 36339]]
2. National Impact Analysis
a. Amount and Significance of Energy Savings
To estimate the energy savings through 2042 due to amended energy
conservation standards, DOE compared the energy consumption of
commercial boilers under the base case (i.e., the ASHRAE 90.1-2007
efficiency levels) to energy consumption of boilers under higher
efficiency standards. DOE examined up to four efficiency levels higher
than those of ASHRAE Standard 90.1-2007. The amount of energy savings
depends not only on the potential increase in energy efficiency
resulting from the adoption of a standard, but also on the rate at
which the stock of existing, less-efficient commercial boilers will be
replaced over time after implementation of the amended energy
conservation standard. Table VI.12 shows the forecasted national energy
savings at each of the standard levels. DOE reports both undiscounted
and discounted estimates of energy savings. Table VI.13 and Table VI.14
show the magnitude of the energy savings if they are discounted at
rates of 7 percent and 3 percent, respectively. Each standard level
considered in this rulemaking would result in significant energy
savings, and the amount of savings increases with higher energy
conservation standards. (See chapter 7 of the final rule TSD.)
Table VI.12--Summary of Cumulative National Energy Savings for Commercial Boilers
[Energy savings for units sold from 2012 to 2042, undiscounted]
----------------------------------------------------------------------------------------------------------------
National energy savings (quads)*
----------------------------------------------------
Equipment class Efficiency Efficiency Efficiency Efficiency
level 1 level 2 level 3 level 4
----------------------------------------------------------------------------------------------------------------
Small gas-fired hot water.................................. 0.023 0.076 0.147 0.223
Small gas-fired steam, all except natural draft............ 0.000 0.015 0.031 0.048
Small gas-fired steam natural draft........................ (0.006) 0.017 0.044 n/a
Small oil-fired hot water.................................. 0.016 0.036 0.060 n/a
Small oil-fired steam...................................... 0.010 0.028 0.071 n/a
Large gas-fired hot water.................................. 0.015 0.039 0.064 0.185
Large gas-fired steam, all except natural draft............ 0.023 0.066 0.110 0.155
Large gas-fired, steam natural draft....................... (0.023) 0.004 0.039 0.079
Large oil-fired hot water.................................. 0.014 0.025 0.036 n/a
Large oil-fired steam...................................... 0.041 0.112 0.209 0.431
----------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative potential energy savings due to the delayed implementation of more-
stringent efficiency levels compared to the efficiency levels specified in ASHRAE Standard 90.1-2007.
Table VI.13--Summary of Cumulative National Energy Savings for Commercial Boilers
[Energy savings for units sold from 2012 to 2042, discounted at seven percent]
----------------------------------------------------------------------------------------------------------------
National energy savings (quads)*
----------------------------------------------------
Equipment class Efficiency Efficiency Efficiency Efficiency
level 1 level 2 level 3 level 4
----------------------------------------------------------------------------------------------------------------
Small gas-fired hot water.................................. 0.005 0.015 0.030 0.045
Small gas-fired steam, all except natural draft............ (0.000) 0.003 0.006 0.010
Small gas-fired steam natural draft........................ (0.000) 0.004 0.010 n/a
Small oil-fired hot water.................................. 0.003 0.007 0.012 n/a
Small oil-fired steam...................................... 0.002 0.006 0.015 n/a
Large gas-fired hot water.................................. 0.003 0.008 0.013 0.038
Large gas-fired steam, all except natural draft............ 0.005 0.014 0.023 0.032
Large gas-fired steam natural draft........................ (0.003) 0.002 0.009 0.018
Large oil-fired hot water.................................. 0.003 0.005 0.007 n/a
Large oil-fired steam...................................... 0.008 0.023 0.043 0.088
----------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative potential energy savings due to the delayed implementation of more-
stringent efficiency levels compared to the efficiency levels specified in ASHRAE Standard 90.1-2007.
Table VI.14--Summary of Cumulative National Energy Savings for Commercial Boilers
[Energy savings for units sold from 2012 to 2042, discounted at three percent]
----------------------------------------------------------------------------------------------------------------
National energy savings (quads)*
----------------------------------------------------
Equipment class Efficiency Efficiency Efficiency Efficiency
level 1 level 2 level 3 level 4
----------------------------------------------------------------------------------------------------------------
Small gas-fired hot water.................................. 0.011 0.037 0.071 0.108
Small gas-fired steam, all except natural draft............ (0.000) 0.007 0.015 0.023
Small gas-fired, steam natural draft....................... (0.002) 0.009 0.022 n/a
Small oil-fired hot water.................................. 0.008 0.017 0.029 n/a
Small oil-fired steam...................................... 0.005 0.013 0.035 n/a
Large gas-fired hot water.................................. 0.007 0.019 0.031 0.090
Large gas-fired steam, all except natural draft............ 0.011 0.032 0.054 0.075
Large gas-fired steam, natural draft....................... (0.010) 0.003 0.020 0.040
Large oil-fired hot water.................................. 0.007 0.012 0.017 n/a
[[Page 36340]]
Large oil-fired steam...................................... 0.020 0.054 0.101 0.209
----------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative potential energy savings due to the delayed implementation of more-
stringent efficiency levels compared to the efficiency levels specified in ASHRAE Standard 90.1-2007.
b. Net Present Value
The NPV analysis is a measure of the cumulative benefit or cost of
standards to the Nation. In accordance with OMB's guidelines on
regulatory analysis (OMB Circular A-4, section E (Sept. 17, 2003)), DOE
calculated NPV using both a 7-percent and a 3-percent real discount
rate. The 7-percent rate is an estimate of the average before-tax rate
of return on private capital in the U.S. economy, and reflects the
returns to real estate and small business capital as well as corporate
capital. DOE used this discount rate to approximate the opportunity
cost of capital in the private sector because recent OMB analysis has
found the average rate of return on capital to be near this rate. DOE
also used the 3-percent rate to capture the potential effects of
standards on private customers' consumption (e.g., reduced purchasing
of equipment due to higher prices for equipment and purchase of reduced
amounts of energy). This rate represents the rate at which society
discounts future consumption flows to their present value. This rate
can be approximated by the real rate of return on long-term government
debt (e.g., yield on Treasury notes minus annual rate of change in the
Consumer Price Index), which has averaged about 3 percent on a pre-tax
basis for the last 30 years. Table VI.15 and Table VI.16 provide an
overview of the NPV results. (See chapter 7 of the final rule TSD.)
Table VI.15--Summary of Cumulative Net Present Value for Boilers
[Discounted at seven percent]
----------------------------------------------------------------------------------------------------------------
Net present value (billion 2008$)
-------------------------------------------------------
Equipment class Efficiency Efficiency Efficiency Efficiency
level 1 level 2 level 3 level 4
----------------------------------------------------------------------------------------------------------------
Small gas-fired hot water............................... ($0.007) ($0.003) ($0.167) ($0.576)
Small gas-fired steam, all except natural draft......... (0.036) (0.039) (0.082) (0.120)
Small gas-fired steam natural draft..................... (0.033) (0.011) (0.023) n/a
Small oil-fired hot water............................... 0.020 0.057 0.048 n/a
Small oil-fired steam................................... (0.012) 0.004 0.019 n/a
Large gas-fired hot water............................... 0.015 0.031 0.006 (0.098)
Large gas-fired steam, all except natural draft......... 0.032 0.137 0.240 0.338
Large gas-fired steam natural draft..................... (0.055) (0.014) 0.004 (0.024)
Large oil-fired hot water............................... 0.064 0.111 0.120 n/a
Large oil-fired steam................................... 0.132 0.361 0.569 1.151
----------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative NPV.
Table VI.16--Summary of Cumulative Net Present Value for Boilers
[Discounted at three percent]
----------------------------------------------------------------------------------------------------------------
Net present value (billion 2008$)
-------------------------------------------------------
Equipment class Efficiency Efficiency Efficiency Efficiency
level 1 level 2 level 3 level 4
----------------------------------------------------------------------------------------------------------------
Small gas-fired hot water............................... $0.092 $0.288 $0.139 ($0.592)
Small gas-fired steam, all except natural draft......... (0.072) (0.010) (0.035) (0.065)
Small gas-fired, steam natural draft.................... (0.094) 0.049 0.132 n/a
Small oil-fired hot water............................... 0.131 0.297 0.376 n/a
Small oil-fired steam................................... 0.027 0.138 0.347 n/a
Large gas-fired hot water............................... 0.100 0.231 0.264 0.470
Large gas-fired steam, all except natural draft......... 0.178 0.599 1.020 1.431
Large gas-fired steam natural draft..................... (0.264) (0.057) 0.133 0.253
Large oil-fired hot water............................... 0.210 0.356 0.422 n/a
Large oil-fired steam................................... 0.496 1.330 2.240 4.552
----------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative NPV.
[[Page 36341]]
3. Need of the Nation To Conserve Energy
Improving the energy efficiency of commercial packaged boilers
would likely improve the security of the Nation's energy system by
reducing overall demand for energy, thus reducing the Nation's reliance
on foreign sources of energy. Energy savings for new energy
conservation standards for equipment covered under this rule would also
produce environmental benefits in the form of reduced emissions of air
pollutants and greenhouse gases associated with energy production.
Table VI.17 provides DOE's estimate of cumulative CO2,
NOX, and SO2 emissions reductions that would
result from the adoption of new standards for commercial packaged
boilers at the ASHRAE 90.1-2007 efficiency levels. Table VI.18 through
Table VI.20 provide estimates of additional cumulative CO2,
NOX, and SO2 emissions reductions that would
result from the adoption of new standards for commercial packaged
boilers that exceed the ASHRAE 90.1-2007 efficiency levels. The
expected energy savings from the amended standards for commercial
packaged boilers may also reduce the cost of maintaining nationwide
emissions standards and constraints. In the Environmental Impact
Analysis (chapter 8 of the final rule TSD), DOE reports estimated
annual changes in CO2, NOX, and SO2
emissions attributable to each efficiency level analyzed.
Table VI.17--Summary of Cumulative National Emissions Impacts for Commercial Boilers From 2012 to 2042 for
Adopting ASHRAE Standard 90.1-2007
----------------------------------------------------------------------------------------------------------------
Cumulative national emissions impacts from 2012 to 2042
-----------------------------------------------------------
Equipment class CO2 (metric
kilotons) NOX (short tons) SO2 (short tons)
----------------------------------------------------------------------------------------------------------------
Small gas-fired hot water........................... (674) (1,177) 0
Small gas-fired steam, all except natural draft..... (31) (54) 0
Small gas-fired steam natural draft................. (1,937) (3,382) 0
Small oil-fired hot water........................... (677) (837) (2,628)
Small oil-fired steam............................... (327) (404) (1,267)
Large gas-fired hot water........................... (296) (516) 0
Large gas-fired steam, all except natural draft..... (177) (308) 0
Large gas-fired steam natural draft................. (1,525) (2,662) 0
Large oil-fired hot water........................... 0 0 0
Large oil-fired steam............................... 0 0 0
----------------------------------------------------------------------------------------------------------------
Table VI.18--Summary of Cumulative CO2 Emissions Impacts for Commercial Boilers From 2012 to 2042 for Adoption
of Analyzed Higher Standards Over the ASHRAE Standard 90.1-2007 Levels
----------------------------------------------------------------------------------------------------------------
Cumulative national CO2 emissions impacts from 2012 to
2042, metric kilotons
Equipment class -------------------------------------------------------
Efficiency Efficiency Efficiency Efficiency
level 1 level 2 level 3 level 4
----------------------------------------------------------------------------------------------------------------
Small gas-fired hot water............................... (1,227) (4,039) (7,858) (11,880)
Small gas-fired steam, all except natural draft......... 4 (797) (1,666) (2,541)
Small gas-fired steam natural draft..................... 332 (879) (2,355) n/a
Small oil-fired hot water............................... (1,171) (2,596) (4,342) n/a
Small oil-fired steam................................... (704) (2,026) (5,189) n/a
Large gas-fired hot water............................... (799) (2,082) (3,425) (9,866)
Large gas-fired steam, all except natural draft......... (1,217) (3,533) (5,889) (8,281)
Large gas-fired steam natural draft..................... 1,226 (206) (2,054) (4,240)
Large oil-fired hot water............................... (1,032) (1,820) (2,590) n/a
Large oil-fired steam................................... (3,007) (8,110) (15,167) (31,354)
----------------------------------------------------------------------------------------------------------------
Table VI.19--Summary of Cumulative NOX Emissions Impacts for Commercial Boilers From 2012 to 2042 for Adoption
of Analyzed Higher Standards Over the ASHRAE Standard 90.1-2007 Levels
----------------------------------------------------------------------------------------------------------------
Cumulative national NOX emissions impact from 2012 to
2042, short tons*
Equipment class -------------------------------------------------------
Efficiency Efficiency Efficiency Efficiency
level 1 level 2 level 3 level 4
----------------------------------------------------------------------------------------------------------------
Small gas-fired hot water............................... (2,141) (7,049) (13,715) (20,734)
Small gas-fired steam, all except natural draft......... 6 (1,392) (2,907) (4,434)
Small gas-fired steam natural draft..................... 579 (1,534) (4,110) n/a
Small oil-fired hot water............................... (1,447) (3,208) (5,365) n/a
Small oil-fired steam................................... (870) (2,504) (6,413) n/a
Large gas-fired hot water............................... (1,395) (3,634) (5,978) (17,219)
Large gas-fired steam, all except natural draft......... (2,124) (6,167) (10,278) (14,452)
Large gas-fired steam natural draft..................... 2,140 (359) (3,585) (7,401)
Large oil-fired hot water............................... (1,276) (2,250) (3,201) n/a
Large oil-fired steam................................... (3,716) (10,022) (18,743) (38,746)
----------------------------------------------------------------------------------------------------------------
[[Page 36342]]
Table VI.20--Summary of Cumulative SO2 Emissions Impacts for Commercial Boilers From 2012 to 2042 for Adoption
of Analyzed Higher Standards Over the ASHRAE Standard 90.1-2007 Levels
----------------------------------------------------------------------------------------------------------------
Cumulative national SO2 emissions impacts from 2012 to
2042, short tons*
Equipment class -------------------------------------------------------
Efficiency Efficiency Efficiency Efficiency
level 1 level 2 level 3 level 4
----------------------------------------------------------------------------------------------------------------
Small gas-fired hot water............................... 0 0 0 0
Small gas-fired steam, all except natural draft......... 0 0 0 0
Small gas-fired steam natural draft..................... 0 0 0 n/a
Small oil-fired hot water............................... (4,543) (10,072) (16,847) n/a
Small oil-fired steam................................... (2,731) (7,863) (20,136) n/a
Large gas-fired hot water............................... 0 0 0 0
Large gas-fired steam, all except natural draft......... 0 0 0 0
Large gas-fired steam natural draft..................... 0 0 0 0
Large oil-fired hot water............................... (4,005) (7,064) (10,051) n/a
Large oil-fired steam................................... (11,667) (31,469) (58,854) (121,663)
----------------------------------------------------------------------------------------------------------------
To put the potential monetary benefits from reduced CO2
emissions into a form that would likely be most useful to decision
makers and interested parties, DOE used the same methods it used to
calculate the net present value of consumer cost savings. DOE converted
the estimated yearly reductions in CO2 emissions into
monetary values that represented the present value, in that year, of
future benefits resulting from that reduction in emissions, which were
then discounted from that year to the present using both 3-percent and
7-percent discount rates.
In chapter 9 of the TSD, which accompanied the June 2009 NODA, DOE
proposed to use the range $0 to $20 per ton for the year 2007 in 2007$.
74 FR 26596. These estimates were originally derived to represent the
lower and upper bounds of the costs and benefits likely to be
experienced in the United States and were also used in chapter 9 of the
draft TSD for this rulemaking. 74 FR 26596-7 (June 3, 2009). The lower
bound was based on an assumption of no benefit and the upper bound was
based on an estimate of the mean value of worldwide impacts due to
climate change that was reported by the Intergovernmental Panel on
Climate Change (IPCC).\19\ DOE expected that such domestic values would
be 10% or less of comparable global values; however, there were no
consensus estimates for the U.S. benefits likely to result from
CO2 emission reductions. Because U.S.-specific estimates
were unavailable, DOE used the global mean value as an upper bound U.S.
value.
---------------------------------------------------------------------------
\19\ During the preparation of its review of the state of
climate science, the IPCC identified various estimates of the
present value of reducing CO2 emissions by 1 ton over the
life that these emissions would remain in the atmosphere. The
estimates reviewed by the IPCC spanned a range of values. Absent a
consensus on any single estimate of the monetary value of
CO2 emissions, DOE used the estimates identified by the
study cited in ``Summary for Policymakers,'' prepared by Working
Group II of the IPCC's ``Fourth Assessment Report,'' to estimate the
potential monetary value of CO2 reductions likely to
result from standards considered in this rulemaking. According to
IPCC, the mean social cost of carbon (SCC) reported in studies
published in peer-reviewed journals was $43 per ton of carbon. This
translates into about $12 per ton of CO2. The literature
review (Tol 2005) from which this mean was derived did not report
the year in which these dollars were denominated. However, DOE
understands this estimate was for the year 1995 denominated in
1995$. Updating that estimate to 2007$ yields a SCC for the year
1995 of $15 per ton of CO2.
---------------------------------------------------------------------------
Given the uncertainty surrounding estimates of the social cost of
carbon, DOE previously concluded that relying on any single estimate
may be inadvisable because that estimate will depend on many
assumptions. Working Group II's contribution to the ``Fourth Assessment
Report'' of the IPCC notes the following:
The large ranges of SCC are due in the large part to differences
in assumptions regarding climate sensitivity, response lags, the
treatment of risk and equity, economic and non-economic impacts, the
inclusion of potentially catastrophic losses, and discount
rates.\20\
\20\ ``Climate Change 2007--Impacts, Adaptation and
Vulnerability.'' Contribution of Working Group II to the ``Fourth
Assessment Report'' of the IPCC, 17. Available at http://
www.ipcc.ch/ipccreports/ar4-wg2.htm (last accessed Aug. 7, 2008).
Because of this uncertainty, DOE used the SCC value from Tol
(2005), which was presented in the IPCC's ``Fourth Assessment Report''
and provided a comprehensive meta-analysis of estimates for the value
of SCC. 74 FR 16920, 17012 (April 13, 2009).
For today's final rule, DOE is relying on an updated range of
values consistent with that presented in the Model Year 2011 fuel
economy standard final rule issued by the National Highway Traffic
Safety Administration (NHTSA): $2, $33 and $80 per metric ton (2007$).
In the MY 2011 fuel economy standard final rule, NHTSA relied on a
range of estimates representing the uncertainty surrounding global
values of the SCC, while also encompassing, at the low end, possible
domestic values. These three values encompass much of the variability
in the estimates of the global value of the SCC. The lower end of this
range, $2, also approximates possible mean value for domestic benefits.
The middle of the range, $33, is equal to the mean value in Tol (2008)
and the high end of the range, $80, represents one standard deviation
above the mean global value. 74 FR 14196, 14346 (March 30, 2009). The
global value of $33 is based on Tol's (2008) expanded and updated
survey of 211 estimates of the global SCC.\21\ Tol's 2008 survey
encompasses a larger number of estimates for the global value of
reducing carbon emissions than its previously-published counterpart,
Tol (2005), and continues to represent the only recent, publicly-
available compendium of peer-reviewed estimates of the SCC that has
itself been peer-reviewed and published.
---------------------------------------------------------------------------
\21\ Richard S.J. Tol (2008), The social cost of carbon: Trends,
outliers, and catastrophes, Economics--the Open-Access, Open-
Assessment E-Journal, 2 (25), 1-24.
---------------------------------------------------------------------------
The domestic value ($2) was developed by NHTSA by using the mean
estimate of the global value of reduced economic damages from climate
change resulting from reducing CO2 emissions as a starting
point; estimating the fraction of the reduction in global damages that
is likely to be experienced within the U.S.; and applying this fraction
to the mean estimate of global benefits from reducing emissions to
obtain an estimate of the U.S. domestic benefits from lower GHG
emissions. NHTSA constructed the estimate of the U.S. domestic benefits
from reducing CO2
[[Page 36343]]
emissions using estimates of U.S. domestic and global benefits from
reducing greenhouse gas emissions developed by EPA and reported in
EPA's Technical Support Document accompanying its advance notice of
proposed rulemaking on motor vehicle CO2 emissions.\22\
---------------------------------------------------------------------------
\22\ U.S. EPA, Technical Support Document on Benefits of
Reducing GHG Emissions, June 12, 2008.
---------------------------------------------------------------------------
A complete discussion of NHTSA's analysis is available in Chapter
VIII of the Final Regulatory Analysis of the Corporate Average Fuel
Economy for MY 2011 Passenger Cars and Light Trucks (NHTSA, March
2009).
After considering comments and the currently available information
and analysis, which was reflected in the approach employed by NHTSA,
DOE concluded that it was appropriate to consider the global benefits
of reducing CO2 emissions, as well as the domestic benefits.
Consequently, DOE considered in its decision-process for this final
rule the potential benefits resulting from reduced CO2
emissions valued at $2, $33 and $80. The resulting range is based on
current peer-reviewed estimates of the value of SCC and, DOE believes,
fairly represents the uncertainty surrounding the global benefits
resulting from reduced CO2 emissions and, at the $2 level,
also encompasses the likely domestic benefits, DOE also concluded,
based on the most recent Tol analysis, that it was appropriate to
escalate these values at 3% per year to represent the expected
increases, over time, of the benefits associated with reducing
CO2 and other greenhouse gas emissions.
DOE also investigated the potential monetary benefit of reduced
NOX, and SO2, emissions from the TSLs it
considered. As previously stated DOE estimated the monetized value of
NOX emissions reductions resulting from each of the TSLs
considered for today's final rule based on environmental damage
estimates from the literature. Available estimates suggest a very wide
range of monetary values for NOX emissions, ranging from
$370 per ton to $3,800 per ton of NOX from stationary
sources, measured in 2001$ (equivalent to a range of $432 to $4,441 per
ton in 2007$ ($443 to $4,546 in 2008$). DOE estimated a low end
monetary value for SO2 emissions based on an SO2
trading price as developed in the National Energy Modeling System
(NEMS) electricity market model for the western and eastern U.S. DOE
used a simple average of the trading prices from the eastern and
western electricity market models for the period from 2012-2030, and
extrapolated the prices out through 2042. These range in SO2
costs from this source varied both by year and region from $86 to
$1,012 per ton in 2007$ ($89 to $1,037 in 2008$). For an upper range
estimated DOE used an estimate of environmental damage costs of $7,300
per ton of SO2 from stationary sources, measured in 2001$ or
$8,542 per ton in 2007$ ($8,733 in 2008$). These low and high values
for the value of emissions for CO2, NOX, and
SO2 were in turn multiplied by the annual emissions of each
pollutant for the period from 2012-2042, and the monetary values were
converted to present value using three and seven percent discount
rates.
Table VI.21 through Table VI.22 shows the resulting estimates of
the potential range of present value benefits associated with the
reduced CO2, NOx, and SO2 emissions for each
class of commercial boiler for adoption of the ASHRAE 90.1-2007
efficiency levels.
BILLING CODE 6450-01-P
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[GRAPHIC] [TIFF OMITTED] TR22JY09.005
Table VI.23 through Table VI.26 show the potential range of present
value benefits associated with the reduction of each emission for
adoption of efficiency levels higher than the ASHRAE 90.1-2007 levels.
[[Page 36345]]
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BILLING CODE 6450-01-C
[[Page 36349]]
C. Amended Energy Conservation Standards for Commercial Packaged
Boilers
EPCA specifies that, for any commercial and industrial equipment
addressed in section 342(a)(6)(A)(i) of EPCA, DOE may prescribe an
energy conservation standard more stringent than the level for such
equipment in ASHRAE/IESNA Standard 90.1, as amended, only if ``clear
and convincing evidence'' shows that a more-stringent standard ``would
result in significant additional conservation of energy and is
technologically feasible and economically justified.'' (42 U.S.C.
6313(a)(6)(A)(ii)(II))
In evaluating more-stringent efficiency levels for commercial
packaged boilers than those specified by ASHRAE Standard 90.1-2007, DOE
reviewed the results in terms of their technological feasibility,
economic justification, and significance of energy savings.
DOE first examined the potential energy savings that would result
from the efficiency levels specified in ASHRAE Standard 90.1-2007 and
compared that to the potential energy savings that would result from
proposing efficiency levels more stringent than those in ASHRAE
Standard 90.1-2007 as Federal energy conservation standards. All of the
efficiency levels examined by DOE resulted in cumulative energy
savings, including the efficiency levels in ASHRAE Standard 90.1-2007.
DOE estimates that a total of 0.11 quads of energy will be saved if DOE
adopts the efficiency levels for each commercial boiler equipment class
specified in ASHRAE Standard 90.1-2007. If DOE were to propose
efficiency levels more stringent than those specified by ASHRAE
Standard 90.1-2007 as Federal minimum standards, the potential
additional energy savings ranges from 0.11 quads to 1.12 quads.
Associated with proposing more-stringent efficiency levels is a two-
year delay in implementation compared to the adoption of energy
conservation standards at the level specified in ASHRAE Standard 90.1-
2007 (see section V.H.1). This two-year delay in implementation of
amended energy conservation standards would result in a small amount of
energy savings being lost in the first two years (2012 and 2013)
compared to the savings from adopting the levels in ASHRAE Standard
90.1-2007; however, this energy savings may be compensated for by
increased savings from higher standards in later years.
In addition to energy savings, DOE also examined the economic
justification of proposing efficiency levels more stringent than those
specified in ASHRAE Standard 90.1-2007. As shown in section VI.B.1,
higher efficiency levels result in a positive mean LCC savings for some
commercial packaged boiler equipment classes. For example, in the
largest commercial packaged boiler equipment class (i.e., small, gas-
fired hot water boilers), the mean LCC impact ranges from $1,700 LCC
savings to a mean LCC cost of $4,760 for efficiency level 1 through
efficiency level 4 respectively. The total installed cost increases
range from $3,364 to $14,323 for efficiency level 1 through efficiency
level 4 when compared to the baseline. Overall, there would be a wide
range of commercial customer LCC impacts based on climate, hydronic
system operating temperature, and installation costs, which might place
a significant burden on some commercial customers.
In general, there is a large range in the total installed cost of
different types of commercial boiler equipment, leading to a high
variance and uncertainty in the economic analyses. Many factors affect
the cost of a commercial boiler, including the type of commercial
packaged boilers, the material of the heat exchanger being used, and
the overall design. In addition, the installation costs of boilers vary
greatly depending on the efficiency, the location of the boiler, and
the venting system. In more efficient boilers, the flue must be made
out of corrosion-resistant materials to prevent the possibility of
corrosion caused due to condensing flue gases. Because the mean LCC
savings can be considered small in comparison to the total installed
cost of the equipment, a relatively minor change in the differential
installed cost estimate could negate the mean LCC savings realized by
proposing more-stringent efficiency levels as Federal minimum standards
for commercial packaged boilers.
After examining the potential energy savings and the economic
justification of proposing efficiency levels more stringent than those
specified in ASHRAE Standard 90.1-2007, DOE believes there are several
other factors it should consider before proposing amended energy
conservation standards for commercial packaged boilers.
First, DOE reexamined the certainty in its analysis of commercial
packaged boilers. Due to current test procedure requirements, which are
based on combustion, rather than thermal efficiency, not all
manufacturers test for the thermal efficiency of their commercial
boiler models, nor do they all report it to the I=B=R Directory or in
manufacturers' catalogs. Some manufacturers simply do not report
thermal efficiency, and of those manufacturers that do report thermal
efficiency, some may estimate the thermal efficiency ratings of their
equipment, rather than actually test for the thermal efficiency of
their equipment. DOE has no way to determine which thermal efficiency
ratings are the result of estimation and which are the result of actual
testing. Further, in the case of manufacturers that do test for thermal
efficiency, variances in testing facilities and equipment can lead to
inconsistent results in the thermal efficiency testing among the
manufacturers. The combination of these factors leads to concerns about
the viability of using the data from the I=B=R Directory and
manufacturers' catalogs as the source for thermal efficiency ratings
for the basis of this analysis. Such concerns are heightened the
further one moves away from the consensus efficiency levels in ASHRAE
Standard 90.1-2007 in the context of this standard-setting rulemaking.
Because ASHRAE Standard 90.1-2007 has switched to a thermal
efficiency metric for certain commercial packaged boiler equipment
classes, a one-time conversion in the DOE efficiency metric will be
required at some point. The transition to a thermal efficiency metric
will require manufacturers to test for and report thermal efficiency
for 8 out of 10 commercial boiler equipment classes. This would
mitigate the problem of uncertainty in the thermal efficiency ratings
for those equipment classes, allowing DOE to be able to make more
definitive comparisons with future versions of ASHRAE Standard 90.1.
DOE believes that an earlier transition to a rated thermal efficiency
across the industry will provide additional, near-term benefits
covering the entire industry that are not captured in the DOE analysis
presented. These benefits may include more rapid exposure of purchasers
to the rated thermal efficiency of competing products, which lays the
groundwork for assessing the benefits of one boiler against another in
the marketplace and will create greater competition among manufacturers
to provide customers with additional purchasing choices. DOE has no
information with which to calculate this benefit.
Second, DOE notes the efficiency levels in ASHRAE Standard 90.1-
2007 are part of a consensus agreement between the trade association
representing the manufacturers and
[[Page 36350]]
several energy-efficiency advocacy groups. DOE strongly encourages
stakeholders to work together to propose agreements to DOE. When DOE
receives a consensus agreement, DOE takes careful consideration to
review the agreement resulting from groups that commonly have
conflicting goals. DOE also points out that the Joint Letter submitted
by AHRI, ACEEE, ASAP, ASE, and NRDC urged DOE to adopt as Federal
minimum energy conservation standards the efficiency levels in ASHRAE
Standard 90.1-2007 for commercial packaged boilers. (The Joint Letter,
No. 5 at p. 1) DOE believes this negotiated agreement was made in good
faith, and DOE is hesitant to second guess the outcome based on a
limited analysis with many uncertainties. DOE presented these
efficiency levels for public comment and, as discussed earlier,
commenters supported the adoption of these levels.
Third, DOE has not assessed any likely change in the efficiencies
of models currently on the boiler market in the absence of setting
more-stringent standards. DOE recognizes that manufacturers would
continue to make future improvements in the boiler efficiencies even in
the absence of mandated energy conservation standards. Such ongoing
technological developments could have a disproportionately larger
impact on the analytical results for the more-stringent efficiency
levels analyzed in terms of reduced energy benefits as compared to the
ASHRAE Standard 90.1-2007 efficiency level scenario. When manufacturers
introduce a new product line, they typically introduce higher-
efficiency models, while maintaining their baseline product offering
(i.e., equipment at the ASHRAE Standard 90.1-2007 efficiency levels).
Any introduction of higher-efficiency equipment and subsequent purchase
by commercial customers, who usually buy higher-efficiency equipment,
could reduce the energy savings benefits of more-stringent efficiency
levels.
Fourth, DOE believes there could be a possible difference in life
expectancy between the commercial packaged boilers at the ASHRAE
Standard 90.1-2007 efficiency levels and those at more-stringent
efficiency levels, including condensing boilers. DOE did not have any
information to quantify these differences and did not receive any
additional comments from interested parties regarding these potential
differences in expected lifetime in response to the March 2009 NOPR.
Finally, DOE also recognizes that commercial packaged boilers are
one component in a hydronic system. Unlike most of the other
residential appliances and commercial equipment for which DOE mandates
energy conservation standards, the design and operation of that
hydronic system (i.e., the hot-water distribution system) can result in
significant variances in the annual field efficiencies of the
commercial packaged boilers compared to the rated efficiency levels of
these units. DOE recognizes that as a result, a critical piece of
information needed to ensure that the benefits of high nominal
efficiency commercial packaged boilers are actually achieved in the
field is not captured in the DOE analysis.
After weighing the benefits and burdens of adopting the ASHRAE
Standard 90.1-2007 efficiency levels as Federal standards for
commercial packaged boilers as compared to those for proposing more-
stringent efficiency levels, DOE is adopting the efficiency levels in
ASHRAE 90.1-2007 as amended energy conservation standards for all ten
commercial packaged boilers equipment classes. DOE must have ``clear
and convincing'' evidence to adopt efficiency levels more stringent
than those specified in ASHRAE 90.1-2007, and for the reasons explained
in this notice, the totality of information does not meet the ``clear
and convincing'' standard that would justify more stringent efficiency
levels. Given the relatively small mean LCC savings (in comparison to
the total installed cost), even a slight alteration in DOE's
installation estimates could result in the potential for negative mean
LCC savings. In addition, the uncertainty of the thermal efficiency
values reported may have resulted in an imprecise estimate of the
efficiency of some equipment, leading to even greater uncertainty in
the economic benefits of more-stringent standards.
DOE recognizes that the thermal efficiency metric is superior to
the combustion efficiency metric because thermal efficiency is a more
complete measure of boiler efficiency than the combustion efficiency
metric (thermal efficiency accounts for jacket losses and combustion
efficiency does not). DOE believes that once commercial packaged
boilers are transitioned from the combustion efficiency metric to the
thermal efficiency metric, the thermal efficiency ratings of certified
equipment will be more accurate and consistent. The efficiency levels
in ASHRAE Standard 90.1-2007 are an acceptable foundation that will
allow the commercial boiler industry to begin the transition from using
combustion efficiency to a thermal efficiency metric. DOE also takes
into account the consensus nature of the efficiency levels in ASHRAE
Standard 90.1-2007 for commercial packaged boilers.
Therefore, based on the discussion above, DOE has concluded that
the efficiency levels beyond those in ASHRAE Standard 90.1-2007 for
commercial packaged boilers are not economically justified and is
adopting as Federal minimum standards the efficiency levels in ASHRAE
Standard 90.1-2007 for all ten equipment classes of commercial packaged
boilers. Table VI.27 shows the amended energy conservation standards
for commercial packaged boilers.
Table VI.27--Amended Energy Conservation Standards for Commercial Packaged Boilers *
----------------------------------------------------------------------------------------------------------------
Equipment type Subcategory Size category (input) Efficiency level **
----------------------------------------------------------------------------------------------------------------
Hot Water Commercial Packaged Gas-fired................. >=300,000 Btu/h and 80% ET
Boilers. <=2,500,000 Btu/h.
Hot Water Commercial Packaged Gas-fired................. >2,500,000 Btu/h.......... 82% EC
Boilers.
Hot Water Commercial Packaged Oil-fired................. >=300,000 Btu/h and 82% ET
Boilers. <=2,500,000 Btu/h.
Hot Water Commercial Packaged Oil-fired................. >2,500,000 Btu/h.......... 84% EC
Boilers.
Steam Commercial Packaged Boilers.. Gas-fired--all, except >=300,000 Btu/h and 79% ET
natural draft. <=2,500,000 Btu/h.
Steam Commercial Packaged Boilers.. Gas-fired--all, except >2,500,000 Btu/h.......... 79% ET
natural draft.
Steam Commercial Packaged Boilers.. Gas-fired--natural draft.. >=300,000 Btu/h and 77% ET
<=2,500,000 Btu/h. 79% ET
Steam Commercial Packaged Boilers.. Gas-fired--natural draft.. >2,500,000 Btu/h.......... 77% ET
79% ET
Steam Commercial Packaged Boilers.. Oil-fired................. >=300,000 Btu/h and 81% ET
<=2,500,000 Btu/h.
[[Page 36351]]
Steam Commercial Packaged Boilers.. Oil-fired................. >2,500,000 Btu/h.......... 81% ET
----------------------------------------------------------------------------------------------------------------
* ET is the thermal efficiency and EC is the combustion efficiency.
** The effective date for the amended energy conservation standards is March 2, 2012. Where the table indicates
a two-tier efficiency level, the second efficiency level is effective March 2, 2022.
D. Amended Energy Conservation Standards for Water-Cooled and
Evaporatively-Cooled Commercial Package Air Conditioners and Heat Pumps
With a Cooling Capacity at or Above 240,000 Btu/h and Less Than 760,000
Btu/h
DOE is adopting new energy conservation standards for water-cooled
and evaporatively-cooled commercial package air conditioners and heat
pumps with a cooling capacity at or above 240,000 Btu/h and less than
760,000 Btu/h by adopting the efficiency levels specified by ASHRAE
Standard 90.1-2007. DOE did not analyze the economic and energy savings
potential of amended national energy conservation standards for water-
cooled and evaporatively-cooled commercial package air conditioners and
heat pumps with a cooling capacity at or above 240,000 Btu/h and less
than 760,000 Btu/h for the efficiency levels in ASHRAE Standard 90.1-
2007 or efficiency levels beyond those specified in ASHRAE Standard
90.1, because there is no equipment currently being manufactured in
this equipment class.\23\ 74 FR 12013. Table VI.28 shows the amended
energy conservation standards for this equipment. The standards for
water-cooled and evaporatively-cooled commercial package air
conditioners and heat pumps with a cooling capacity at or above 240,000
Btu/h and less than 760,000 Btu/h established in this final rule will
apply starting on January 10, 2011.
---------------------------------------------------------------------------
\23\ ASHRAE Standard 90.1-2007 specified efficiency levels for
water-cooled and evaporatively-cooled commercial package air
conditioners and heat pumps with a cooling capacity at or above
240,000 Btu/h and less than 760,000 Btu/h even though equipment does
not exist in the current marketplace in this category. ASHRAE's
actions for this equipment triggered DOE action regardless of
whether equipment is currently offered for sale.
[GRAPHIC] [TIFF OMITTED] TR22JY09.010
VII. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866
Today's final rule has been determined not to be a ``significant
regulatory action'' under section 3(f)(1) of Executive Order 12866,
``Regulatory Planning and Review.'' 58 FR 51735 (Oct. 4, 1993).
Accordingly, this action was not subject to review under that Executive
Order by the Office of Information and Regulatory Affairs (OIRA) of the
Office of Management and Budget.
B. Review Under the National Environmental Policy Act
DOE prepared an environmental assessment (EA) of the impacts of the
proposed standards in the March 2009 NOPR pursuant to the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), the
regulations of the Council on Environmental Quality (40 CFR parts 1500-
1508), and DOE's regulations for compliance with the National
Environmental Policy Act (10 CFR part 1021). 74 FR 26596. This
assessment included a concise examination of the impacts of emission
reductions likely to result from the rule. DOE found the environmental
effects associated with today's various standard levels for commercial
packaged boilers and water-cooled and evaporatively-cooled commercial
package air conditioners and heat pumps with a cooling capacity at or
above 240,000 Btu/h and less than 760,000 Btu/h to be not significant,
and therefore it is issuing a Finding of No Significant Impact (FONSI)
pursuant to the National Environmental Policy Act of 1969 (42 U.S.C.
4321 et seq.), the regulations of the Council on Environmental Quality
(40 CFR parts 1500-1508), and DOE's regulations for compliance with the
National Environmental Policy Act (10 CFR part
[[Page 36352]]
1021). The FONSI is available in the docket for this rulemaking.
C. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis for any rule
that by law must be proposed for public comment, unless the agency
certifies that the rule, if promulgated, will not have a significant
economic impact on a substantial number of small entities. As required
by Executive Order 13272, ``Proper Consideration of Small Entities in
Agency Rulemaking,'' 67 FR 53461 (August 16, 2002), DOE published
procedures and policies on February 19, 2003, to ensure that the
potential impacts of its rules on small entities are properly
considered during the DOE rulemaking process. 68 FR 7990. DOE has made
its procedures and policies available on the Office of the General
Counsel's Web site: http://www.gc.doe.gov.
DOE reviewed the March 2009 NOPR under the provisions of the
Regulatory Flexibility Act and the policies and procedures published on
February 19, 2003 (68 FR 7990). 74 FR 12044. As part of this
rulemaking, DOE examined the existing compliance costs manufacturers
already bear and compared them to the revised compliance costs, based
on the proposed revisions to the test procedure. Since DOE is adopting
the efficiency levels in ASHRAE Standard 90.1-2007, which are part of
the prevailing industry standard and the result of a consensus
agreement, DOE believes that commercial packaged boiler manufacturers
are already producing equipment at these efficiency levels. For water-
cooled and evaporatively-cooled commercial package air conditioners and
heat pumps with a cooling capacity at or above 240,000 Btu/h and less
than 760,000 Btu/h, DOE believes the efficiency levels being adopted
are also part of the prevailing industry standard and that
manufacturers would experience no impacts, because no such equipment is
currently manufactured. Furthermore, DOE believes the industry standard
was developed through a process, which would attempt to mitigate the
impacts on manufacturers, including any small commercial packaged
boiler manufacturers, while increasing the efficiency of this
equipment. In addition, DOE does not find that the costs imposed by the
revisions proposed to the test procedure for commercial packaged
boilers in this document would result in any significant increase in
testing or compliance costs.
DOE received no comments in response to the NOPR. For the reasons
stated above, DOE certifies that the final rule would not have a
significant economic impact on a substantial number of small entities.
Therefore, DOE did not prepare an initial regulatory flexibility
analysis for the proposed rule.
D. Review Under the Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.)
(PRA), a person is not required to respond to a collection of
information by a Federal agency, including a requirement to maintain
records, unless the collection displays a valid OMB control number. (44
U.S.C. 3506(c)(1)(B)(iii)(V)) DOE stated in the March 2009 NOPR that
this rulemaking would impose no new information and recordkeeping
requirements, and that OMB clearance is not required under the
Paperwork Reduction Act (44 U.S.C. 3501 et seq.). 74 FR 12044. DOE
received no comments on this in response to the NOPR and, as with the
proposed rule, today's final rule imposes no information and
recordkeeping requirements. DOE takes no further action in this
rulemaking with respect to the Paperwork Reduction Act.
E. Review Under the Unfunded Mandates Reform Act of 1995
As described in the March 2009 NOPR, DOE reviewed this regulatory
action under Title II of the Unfunded Mandates Reform Act of 1995
(UMRA) (Pub. L. 104-4), which requires each Federal agency to assess
the effects of Federal regulatory actions on State, local, and Tribal
governments and the private sector. For proposed regulatory actions
likely to result in a rule that may cause expenditures by State, local,
and Tribal governments, in the aggregate, or by the private sector of
$100 million or more in any one year (adjusted annually for inflation),
section 202 of UMRA requires a Federal agency to publish a written
statement assessing the resulting costs, benefits, and other effects of
the rule on the national economy (2 U.S.C. 1532(a) and (b)). Section
204 of UMRA requires a Federal agency to develop an effective process
to permit timely input by elected officers of State, local, and Tribal
governments on a proposed ``significant intergovernmental mandate.'' (2
U.S.C. 1534) Section 203 of UMRA requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments that may be affected before establishing any requirements
that might significantly or uniquely affect small governments. (2
U.S.C. 1533) On March 18, 1997, DOE published a statement of policy on
its process for intergovernmental consultation under UMRA (62 FR 12820)
(also available at: http://www.gc.doe.gov).
DOE concluded that the March 2009 NOPR contained neither an
intergovernmental mandate nor a mandate that may result in the
expenditure by State, local, and Tribal governments in the aggregate,
or by the private sector, of $100 million or more in any year. 74 FR
12045. Accordingly, no assessment or analysis was required under UMRA.
Id. DOE received no comments concerning the UMRA in response to the
NOPR, and its conclusions on this issue are the same for the final rule
as for the March 2009 NOPR. DOE takes no further action in today's
final rule with respect to the UMRA.
F. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any proposed rule that may affect family
well-being. As stated in the March 2009 NOPR, DOE decided this rule
would not have any impact on the autonomy or integrity of the family as
an institution. 74 FR 12045. Accordingly, DOE concluded that it was
unnecessary to prepare a Family Policymaking Assessment. Id. DOE
received no comments concerning Section 654 in response to the NOPR,
and thus takes no further action in today's final rule with respect to
this provision.
G. Review Under Executive Order 13132
Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4, 1999)
imposes certain requirements on agencies formulating and implementing
policies or regulations that preempt State law or that have Federalism
implications. Agencies are required to examine the constitutional and
statutory authority supporting any action that would limit the
policymaking discretion of the States and to carefully assess the
necessity for such actions. The Executive Order also requires agencies
to have an accountable process to ensure meaningful and timely input by
State and local officials in the development of regulatory policies
that have Federalism implications. On March 14, 2000, DOE published a
statement of policy describing the
[[Page 36353]]
intergovernmental consultation process it will follow in the
development of such regulations. 65 FR 13735. As explained in the March
2009 NOPR, DOE examined this proposed rule and determined that it would
not have a substantial direct effect on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government.
74 FR 12045. EPCA governs and prescribes Federal preemption of State
regulations as to energy conservation for the equipment that are the
subject of today's final rule. States can petition DOE for exemption
from such preemption to the extent, and based on criteria, as set forth
in EPCA. (42 U.S.C. 6297(d) and 6316(b)(2)(D)) No further action is
required by Executive Order 13132.
H. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform'' (61 FR 4729 (Feb. 7, 1996)) imposes on Federal
agencies the general duty to adhere to the following requirements: (1)
Eliminate drafting errors and ambiguity; (2) write regulations to
minimize litigation; (3) provide a clear legal standard for affected
conduct rather than a general standard and promote simplification and
burden reduction. With regard to the review required by section 3(a),
section 3(b) of Executive Order 12988 specifically requires that
Executive agencies make every reasonable effort to ensure that the
regulation (1) clearly specifies the preemptive effect, if any; (2)
clearly specifies any effect on existing Federal law or regulation; (3)
provides a clear legal standard for affected conduct while promoting
simplification and burden reduction; (4) specifies the retroactive
effect, if any; (5) adequately defines key terms; and (6) addresses
other important issues affecting clarity and general draftsmanship
under any guidelines issued by the Attorney General. Section 3(c) of
Executive Order 12988 requires Executive agencies to review regulations
in light of applicable standards in sections 3(a) and 3(b) to determine
whether they are met or it is unreasonable to meet one or more of them.
DOE has completed the required review and determined that, to the
extent permitted by law, the final rule meets the relevant standards of
Executive Order 12988.
I. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most
disseminations of information to the public under guidelines
established by each agency pursuant to general guidelines issued by
OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and
DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has
reviewed this notice under the OMB and DOE guidelines and has concluded
that it is consistent with applicable policies in those guidelines.
J. Review Under Executive Order 13211
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355
(May 22, 2001) requires Federal agencies to prepare and submit to OMB,
a Statement of Energy Effects for any proposed significant energy
action. A ``significant energy action'' is defined as any action by an
agency that promulgated or is expected to lead to promulgation of a
final rule, and that: (1) is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy; or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the action and their expected
benefits on energy supply, distribution, and use.
DOE determined the proposed rule would not have a significant
adverse effect on the supply, distribution, or use of energy, and,
therefore, is not a significant energy action. 74 FR 12045.
Furthermore, this regulatory action has not been designated as a
significant energy action by the Administrator or of OIRA. Accordingly,
DOE has not prepared a Statement of Energy Effects. Id. DOE received no
comments on this issue in response to the March 2009 NOPR. As with the
proposed rule, DOE has concluded that today's final rule is not a
significant energy action within the meaning of Executive Order 13211,
and has not prepared a Statement of Energy Effects on the rule.
K. Review Under Executive Order 12630
Pursuant to Executive Order 12630, ``Governmental Actions and
Interference with Constitutionally Protected Property Rights,'' 53 FR
8859 (March 15, 1988), DOE has determined that this rule would not
result in any takings that might require compensation under the Fifth
Amendment to the United States Constitution.
L. Review Under Section 32 of the Federal Energy Administration Act of
1974
Under section 301 of the Department of Energy Organization Act
(Pub. L. 95-91), the Department of Energy must comply with section 32
of the Federal Energy Administration Act of 1974 (Pub. L. 93-275), as
amended by the Federal Energy Administration Authorization Act of 1977
(Pub. L. 95-70). (15 U.S.C. 788) Section 32 provides that where a
proposed rule authorizes or requires use of commercial standards, the
notice of proposed rulemaking must inform the public of the use and
background of such standards. In addition, section 32(c) requires DOE
to consult with the Department of Justice and the Federal Trade
Commission (FTC) concerning the impact of the commercial or industry
standards on competition.
Certain amendments and revisions in this final rule incorporate
updates to commercial standards already codified in DOE's test
procedure regulations in the CFR. As stated in the March 2009 NOPR, DOE
has evaluated these updated standards and is unable to conclude whether
they fully comply with the requirements of section 32(b) of the Federal
Energy Administration Act, (i.e., determine that they were developed in
a manner that fully provides for public participation, comment, and
review). 74 FR 12046. DOE has consulted with the Attorney General and
the Chairman of the FTC concerning the impact of these standards on
competition, and neither recommended against their incorporation.
M. Review Under the Information Quality Bulletin for Peer Review
On December 16, 2004, OMB in consultation with the Office of
Science and Technology Policy (OSTP), issued its ``Final Information
Quality Bulletin for Peer Review'' (Bulletin). 70 FR 2664 (Jan. 14,
2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal government, including influential
scientific information related to agency
[[Page 36354]]
regulatory actions. The purpose of the bulletin is to enhance the
quality and credibility of the Government's scientific information.
Under the Bulletin, the energy conservation standards rulemakings
analyses are ``influential scientific information.'' The Bulletin
defines ``influential scientific information'' as ``scientific
information the agency reasonably can determine will have or does have
a clear and substantial impact on important public policies or private
sector decisions.'' 70 FR 2664, 2667 (Jan. 14, 2005).
In response to OMB's Bulletin, DOE conducted formal peer reviews of
the energy conservation standards development process and analyses, and
then prepared a Peer Review Report pertaining to the energy
conservation standards rulemaking analyses. Generation of this report
involved a rigorous, formal, and documented evaluation process using
objective criteria and qualified and independent reviewers to make a
judgment as to the technical/scientific/business merit, the actual or
anticipated results, and the productivity and management effectiveness
of programs and/or projects. The ``Energy Conservation Standards
Rulemaking Peer Review Report,'' dated February 2007, has been
disseminated and is available at http://www.eere.energy.gov/buildings/
appliance_standards/peer_review.html.
N. Congressional Notification
As required by 5 U.S.C. 801, DOE will submit to Congress a report
regarding the issuance of today's final rule prior to the effective
date set forth at the outset of this notice. The report will state that
it has been determined that the rule is a ``major rule'' as defined by
5 U.S.C. 804(2). DOE also will submit the supporting analyses to the
Comptroller General in the U.S. Government Accountability Office (GAO)
and make them available to Congress.
VIII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this final
rule.
List of Subjects in 10 CFR Part 431
Administrative practice and procedure, Confidential business
information, Energy conservation, Incorporation by reference, and
Reporting and recordkeeping requirements.
Issued in Washington, DC, on July 8, 2009.
Cathy Zoi,
Assistant Secretary, Energy Efficiency and Renewable Energy.
0
For the reasons set forth in the preamble, DOE is amending Chapter II
of Title 10, Code of Federal Regulations, Part 431 to read as set forth
below:
PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND
INDUSTRIAL EQUIPMENT
0
1. The authority citation for part 431 continues to read as follows:
Authority: 42 U.S.C. 6291-6317.
0
2. In Sec. 431.82, revise the definition ``combustion efficiency'' and
add definitions for ``Btu/h or Btu/hr'' and ``thermal efficiency,'' in
alphabetical order to read as follows:
Sec. 431.82 Definitions concerning commercial packaged boilers.
* * * * *
Btu/h or Btu/hr means British thermal units per hour.
Combustion efficiency for a commercial packaged boiler is
determined using test procedures prescribed under Sec. 431.86 and is
equal to 100 percent minus percent flue loss (percent flue loss is
based on input fuel energy).
* * * * *
Thermal efficiency for a commercial packaged boiler is determined
using test procedures prescribed under Sec. 431.86 and is the ratio of
the heat absorbed by the water or the water and steam to the higher
heating value in the fuel burned.
0
3. Revise Sec. 431.85 to read as follows:
Sec. 431.85 Materials incorporated by reference.
(a) General. We incorporate by reference the following standards
into Subpart E of Part 431. The material listed has been approved for
incorporation by reference by the Director of the Federal Register in
accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Any subsequent
amendment to a standard by the standard-setting organization will not
affect the DOE regulations unless and until amended by DOE. Material is
incorporated as it exists on the date of the approval and a notice of
any change in the material will be published in the Federal Register.
All approved material is available for inspection at the National
Archives and Records Administration (NARA). For information on the
availability of this material at NARA, call 202-741-6030 or go to
http://www.archives.gov/federal_register/code_of_federal_
regulations/ibr_locations.html. Also, this material is available for
inspection at U.S. Department of Energy, Office of Energy Efficiency
and Renewable Energy, Building Technologies Program, 6th Floor, 950
L'Enfant Plaza, SW., Washington, DC 20024, 202-586-2945, or go to:
http://www1.eere.energy.gov/buildings/appliance_standards/. Standards
can be obtained from the sources listed below.
(b) HI. The Gas Appliance Manufacturers Association (GAMA) merged
in 2008 with the Air-Conditioning and Refrigeration Institute to become
the Air-Conditioning, Heating, and Refrigeration Institute (AHRI). The
Hydronics Institute BTS-2000 Testing Standard can be obtained from
AHRI. For information on how to obtain this material, contact the
Hydronics Institute Section of AHRI, P.O. Box 218, Berkeley Heights, NJ
07922-0218, (866) 408-3831, or go to: http://www.ahrinet.org/Content/
OrderaStandard_573.aspx.
(1) The Hydronics Institute Division of GAMA BTS-2000 Testing
Standard, (``HI BTS-2000, Rev 06.07''), Method to Determine Efficiency
of Commercial Space Heating Boilers, Second Edition (Rev 06.07), 2007,
IBR approved for Sec. 431.86.
(2) [Reserved].
0
4. Revise Sec. 431.86, to read as follows:
Sec. 431.86 Uniform test method for the measurement of energy
efficiency of commercial packaged boilers.
(a) Scope. This section provides test procedures that must be
followed for measuring, pursuant to EPCA, the steady state combustion
efficiency and thermal efficiency of a gas-fired or oil-fired
commercial packaged boiler. These test procedures apply to packaged low
pressure boilers that have rated input capacities of 300,000 Btu/h or
more and are ``commercial packaged boilers,'' but do not apply under
EPCA to ``packaged high pressure boilers.''
(b) Definitions. For purposes of this section, the Department
incorporates by reference the definitions specified in Section 3.0 of
the HI BTS-2000, Rev 06.07 (incorporated by reference, see Sec.
431.85), with the exception of the definition for the terms ``packaged
boiler,'' ``condensing boilers,'' and ``packaged low pressure steam''
and ``hot water boiler.''
(c) Test Method for Commercial Packaged Boilers--General. Follow
the provisions in this paragraph (c) for all testing of packaged low
pressure boilers that are commercial packaged boilers.
[[Page 36355]]
(1) Test Setup--(i) Classifications: If employing boiler
classification, you must classify boilers as given in Section 4.0 of
the HI BTS-2000, Rev 06.07 (incorporated by reference, see Sec.
431.85).
(ii) Requirements: (A) Before March 2, 2012, conduct the combustion
efficiency test as given in Section 5.2 (Combustion Efficiency Test) of
the HI BTS-2000, Rev 06.07 (incorporated by reference, see Sec.
431.85) for all commercial packaged boiler equipment classes.
(B) On or after March 2, 2012, conduct the thermal efficiency test
as given in Section 5.1 (Thermal Efficiency Test) of the HI BTS-2000,
Rev 06.07 (incorporated by reference, see Sec. 431.85) for the
following commercial packaged boiler equipment classes: Small, gas, hot
water; small, gas, steam, all except natural draft; small, gas, steam,
natural draft; small, oil, hot water; small, oil, steam; large, gas,
steam, all except natural draft; large, gas, steam, natural draft; and
large, oil, steam. On or after March 2, 2012, conduct the combustion
efficiency test as given in Section 5.2 (Combustion Efficiency Test) of
the HI BTS-2000, Rev 06.07 for the following commercial packaged boiler
equipment classes: Large, gas-fired, hot water and large, oil-fired,
hot water.
(iii) Instruments and Apparatus: (A) Follow the requirements for
instruments and apparatus in sections 6 (Instruments) and 7
(Apparatus), of the HI BTS-2000, Rev 06.07 (incorporated by reference,
see Sec. 431.85), with the exception of section 7.2.5 (flue connection
for outdoor boilers) which is replaced with paragraph (c)(1)(iii)(B) of
this section:
(B) Flue Connection for Outdoor Boilers: Consistent with the
procedure specified in section 7.2.1 of HI BTS-2000, Rev 06.07
(incorporated by reference, see Sec. 431.85), the integral venting
used in oil-fired and power gas outdoor boilers may be modified only to
the extent necessary to permit the boiler's connection to the test flue
apparatus for testing.
(iv) Test Conditions: Use test conditions from Section 8.0
(excluding 8.6.2) of HI BTS-2000, Rev 06.07 (incorporated by reference,
see Sec. 431.85) for combustion efficiency testing. Use all of the
test conditions from Section 8.0 of HI BTS-2000, Rev 06.07 for thermal
efficiency testing.
(2) Test Measurements--(i) Non-Condensing Boilers: (A) Combustion
Efficiency. Measure for combustion efficiency according to sections 9.1
(excluding sections 9.1.1.2.3 and 9.1.2.2.3), 9.2 and 10.2 of the HI
BTS-2000, Rev 06.07 (incorporated by reference, see Sec. 431.85).
(B) Thermal Efficiency. Measure for thermal efficiency according to
sections 9.1 and 10.1 of the HI BTS-2000, Rev 06.07 (incorporated by
reference, see Sec. 431.85).
(ii) Procedure for the Measurement of Condensate for a Condensing
Boiler. For the combustion efficiency test, collect flue condensate as
specified in Section 9.2.2 of HI BTS-2000, Rev 06.07 (incorporated by
reference, see Sec. 431.85). Measure the condensate from the flue gas
under steady state operation for the 30 minute collection period during
the 30 minute steady state combustion efficiency test. Flue condensate
mass shall be measured immediately at the end of the 30 minute
collection period to prevent evaporation loss from the sample. The
humidity of the room shall at no time exceed 80 percent. Determine the
mass of flue condensate for the steady state period by subtracting the
tare container weight from the total container and flue condensate
weight measured at the end of the test period. For the thermal
efficiency test, collect and measure the condensate from the flue gas
as specified in Section 9.1.1 and 9.1.2 of HI BTS-2000, Rev 06.07.
(iii) A Boiler That is Capable of Supplying Either Steam or Hot
Water--(A) Testing. For purposes of EPCA, before March 2, 2012, measure
the combustion efficiency of any size commercial packaged boiler
capable of supplying either steam or hot water either by testing the
boiler in the steam mode or by testing it in both the steam and hot
water modes. On or after March 2, 2012, measure the combustion
efficiency and thermal efficiency of a large (fuel input greater than
2,500 kBtu/h) commercial packaged boiler capable of supplying either
steam or hot water either by testing the boiler for both efficiencies
in steam mode, or by testing the boiler in both steam and hot water
modes measuring the thermal efficiency of the boiler in steam mode and
the combustion efficiency of the boiler in hot water mode. Measure only
the thermal efficiency of a small (fuel input of greater than or equal
to 300 kBtu/h and less than or equal to 2,500 kBtu/h) commercial
packaged boiler capable of supplying either steam or hot water either
by testing the boiler for thermal efficiency only in steam mode or by
testing the boiler for thermal efficiency in both steam and hot water
modes.
(B) Rating. If testing a large boiler only in the steam mode, use
the efficiencies determined from such testing to rate the thermal
efficiency for the steam mode and the combustion efficiency for the hot
water mode. If testing a large boiler in both modes, rate the boiler's
efficiency for each mode based on the testing in that mode. If testing
a small boiler only in the steam mode, use the efficiencies determined
from such testing to rate the thermal efficiency for the steam mode and
the hot water mode. If testing a small boiler in both modes, rate the
boiler's efficiency for each mode based on the testing in that mode.
(3) Calculation of Efficiency--(i) Combustion Efficiency. Use the
calculation procedure for the combustion efficiency test specified in
Section 11.2 (including the specified subsections of 11.1) of the HI
BTS-2000, Rev 06.07 (incorporated by reference, see Sec. 431.85).
(ii) Thermal Efficiency. Use the calculation procedure for the
thermal efficiency test specified in Section 11.1 of the HI BTS-2000,
Rev 06.07 (incorporated by reference, see Sec. 431.85).
0
5. Revise Sec. 431.87 to read as follows:
Sec. 431.87 Energy conservation standards and their effective dates.
(a) Each commercial packaged boiler manufactured on or after
January 1, 1994, and before March 2, 2012, must meet the following
energy efficiency standard levels:
(1) For a gas-fired packaged boiler with a capacity (rated maximum
input) of 300,000 Btu/h or more, the combustion efficiency at the
maximum rated capacity must be not less than 80 percent.
(2) For an oil-fired packaged boiler with a capacity (rated maximum
input) of 300,000 Btu/h or more, the combustion efficiency at the
maximum rated capacity must be not less than 83 percent.
(b) Each commercial packaged boiler listed in Table 1 to Sec.
431.87 and manufactured on or after the effective date listed in Table
1 of this section, must meet the applicable energy conservation
standard in Table 1.
[[Page 36356]]
Table 1 to Sec. 431.87--Commercial Packaged Boiler Energy Conservation Standards
----------------------------------------------------------------------------------------------------------------
Efficiency level--
Equipment type Subcategory Size category (input) Effective date: March 2,
2012 *
----------------------------------------------------------------------------------------------------------------
Hot Water Commercial Packaged Gas-fired............... >=300,000 Btu/h and 80.0% ET
Boilers. <=2,500,000 Btu/h.
Hot Water Commercial Packaged Gas-fired............... >2,500,000 Btu/h........ 82.0% EC
Boilers.
Hot Water Commercial Packaged Oil-fired............... >=300,000 Btu/h and 82.0% ET
Boilers. <=2,500,000 Btu/h.
Hot Water Commercial Packaged Oil-fired............... >2,500,000 Btu/h........ 84.0% EC
Boilers.
Steam Commercial Packaged Gas-fired--all, except >=300,000 Btu/h and 79.0% ET
Boilers. natural draft. <=2,500,000 Btu/h.
Steam Commercial Packaged Gas-fired--all, except >2,500,000 Btu/h........ 79.0% ET
Boilers. natural draft.
Steam Commercial Packaged Gas-fired--natural draft >=300,000 Btu/h and 77.0% ET
Boilers. <=2,500,000 Btu/h.
Steam Commercial Packaged Gas-fired--natural draft >2,500,000 Btu/h........ 77.0% ET
Boilers.
Steam Commercial Packaged Oil-fired............... >=300,000 Btu/h and 81.0% ET
Boilers. <=2,500,000 Btu/h.
Steam Commercial Packaged Oil-fired............... >2,500,000 Btu/h........ 81.0% ET
Boilers.
----------------------------------------------------------------------------------------------------------------
* Where EC is combustion efficiency and ET is thermal efficiency as defined in Sec. 431.82.
(c) Each commercial packaged boiler listed in Table 2 to Sec.
431.87 and manufactured on or after the effective date listed in Table
2 of this section, must meet the applicable energy conservation
standard in Table 2.
Table 2 to Sec. 431.87--Commercial Packaged Boiler Energy Conservation Standards
----------------------------------------------------------------------------------------------------------------
Efficiency level--
Equipment type Subcategory Size category (input) Effective date: March 2,
2022 *
----------------------------------------------------------------------------------------------------------------
Steam Commercial Packaged Gas-fired--natural draft >=300,000 Btu/h and 79.0% ET
Boilers. <=2,500,000 Btu/h.
Steam Commercial Packaged Gas-fired--natural draft >2,500,000 Btu/h........ 79.0% ET
Boilers.
----------------------------------------------------------------------------------------------------------------
* Where EC is combustion efficiency and ET is thermal efficiency as defined in Sec. 431.82.
0
6. Add a new paragraph (d) to Sec. 431.97 to read as follows:
Sec. 431.97 Energy efficiency standards and their effective dates.
* * * * *
(d) Each water-cooled and evaporatively-cooled commercial package
air conditioning and heating equipment with a cooling capacity at or
above 240,000 Btu/h and less than 760,000 Btu/h manufactured on or
after January 10, 2011, shall meet the following standard levels:
(1) For equipment that utilizes electric resistance heat or without
heating, the energy efficiency ratio must be not less than 11.0.
(2) For equipment that utilizes all other types of heating, the
energy efficiency ratio must be not less than 10.8.
Note: The following appendix will not appear in the Code of
Federal Regulations.
Department of Justice, Antitrust Division, Christine A. Varney,
Assistant Attorney General, Main Justice Building, 950 Pennsylvania
Avenue, NW., Washington, DC 20530-0001, (202) 514-2401/(202) 616-
2645(f), antitrust.atr@usdoj.gov, http://www.usdoj.gov/atr.
May 8, 2009.
Eric J. Fygi, Acting General Counsel, Department of Energy,
Washington, DC 20585.
Dear Acting General Counsel Fygi: I am responding to your March
30, 2009 letter seeking the views of the Attorney General about the
potential impact on competition of proposed amended energy
conservation standards for commercial packaged boilers and certain
commercial packaged air-conditions and heat pumps. Your request was
submitted pursuant to Section 325(0)(2)(B)(i)(V) of the Energy
Policy and Conservation Act, as amended, 42 U.S.C.
6295(0)(2)(B)(i)(V), which requires the Attorney General to make a
determination of the impact of any lessening of competition that is
likely to result from the imposition of proposed energy conservation
standards. The Attorney General's responsibility for responding to
requests from other departments about the effect of a program on
competition has been delegated to the Assistant Attorney General for
the Antitrust Division in 28 CFR 0.40(g).
In conducting its analysis, the Antitrust Division examines
whether a proposed standard may lessen competition, for example, by
substantially limiting consumer choice leaving consumers with fewer
competitive alternatives, placing certain manufacturers of a product
at an unjustified competitive disadvantage compared to other
manufacturers; or by inducing avoidable inefficiencies in production
or distribution of particular products.
We have reviewed the proposed standards and the supplementary
information submitted to the Attorney General, and attended the
April 7, 2009 public hearing on the proposed standards.
We have concluded that the proposed standards are not likely to
have an adverse effect on competition. In reaching this conclusion,
we note the absence of any competitive concerns raised by industry
participants at the hearing. Indeed, the efficiency levels in the
proposed standards are based on a consensus recommendation submitted
by efficiency advocacy groups and the trade association for
manufacturers of commercial packaged boilers. Based on these facts,
we believe the new standard would not likely reduce competition.
Sincerely,
Christine A. Varney,
Assistant Attorney General.
[FR Doc. E9-16774 Filed 7-21-09; 8:45 am]
BILLING CODE 6450-01-P