[Federal Register Volume 74, Number 53 (Friday, March 20, 2009)]
[Proposed Rules]
[Pages 12000-12049]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-5818]
[[Page 11999]]
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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; Proposed Rule
Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 /
Proposed Rules
[[Page 12000]]
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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: Notice of proposed rulemaking and public meeting.
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SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as
amended, directs the U.S. Department of Energy (DOE) to establish
energy conservation standards for certain commercial and industrial
equipment, including commercial heating, air-conditioning, and water-
heating equipment. Of particular relevance here, the statute also
requires that each time the corresponding industry standard--the
American Society of Heating, Refrigerating and Air-Conditioning
Engineers, Inc. (ASHRAE)/Illuminating Engineering Society of North
America (IESNA) Standard 90.1--is amended, DOE must assess whether
there is a need to update the uniform national energy conservation
standards for the same equipment covered under EPCA. ASHRAE officially
released an amended version of this industry standard (ASHRAE Standard
90.1-2007) on January 10, 2008, thereby triggering DOE's related
obligations under EPCA. Specifically, pursuant to EPCA, DOE assessed
whether the revised ASHRAE efficiency levels are more stringent than
the existing Federal energy conservation standards; and for those
equipment classes for which ASHRAE set more-stringent efficiency levels
(i.e., commercial packaged boilers), analyzed the economic and energy
savings potential of amended national energy conservation standards (at
both the new ASHRAE Standard 90.1 levels and more-stringent efficiency
levels).
DOE has tentatively concluded that the statutory criteria have been
met 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,
thereby justifying consideration of national energy conservation
standards set at the revised levels in ASHRAE Standard 90.1-2007.
Furthermore, DOE has tentatively 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
for commercial packaged boilers. DOE has also tentatively concluded
that there are no 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 being currently
manufactured, and therefore, it is not possible to assess the economic
and energy savings potential for adopting efficiency levels at or above
the ASHRAE Standard 90.1-2007 efficiency levels for such equipment.
Accordingly, in this notice, DOE is proposing to amend the energy
conservation standards for commercial packaged boilers and to adopt 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 by ASHRAE Standard 90.1-2007. DOE is
also proposing related amendments to its test procedures for commercial
packaged boilers. In addition, DOE is announcing a public meeting to
receive comment on its proposal and related issues.
DATES: DOE will hold a public meeting on April 7, 2009, from 9 a.m. to
4 p.m., in Washington, DC. DOE must receive requests to speak at the
public meeting before 4 p.m., March 24, 2009. DOE must receive a signed
original and an electronic copy of statements to be made at the public
meeting before 4 p.m., March 31, 2009.
DOE will accept comments, data, and information regarding the
notice of proposed rulemaking (NOPR) before and after the public
meeting, but no later than June 3, 2009. See section VII, ``Public
Participation,'' of this NOPR for details.
ADDRESSES: The public meeting will be held at the U.S. Department of
Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue, SW.,
Washington, DC. Please note that foreign nationals visiting DOE
Headquarters are subject to advance security screening procedures. If
you are a foreign national and wish to participate in the public
meeting, please inform DOE as soon as possible by contacting Ms. Brenda
Edwards at (202) 586-2945 so that the necessary procedures can be
completed.
Any comments submitted must identify the NOPR for Energy
Conservation Standards and Test Procedures for ASHRAE Standard 90.1
Products, and provide the docket number EERE-2008-BT-STD-0013 and/or
Regulatory Information Number (RIN) 1904-AB83. Comments may be
submitted using any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: [email protected]. Include the
docket number EERE-2008-BT-STD-0013 and/or RIN 1904-AB83 in the subject
line of the message.
Postal Mail: Ms. Brenda Edwards, U.S. Department of
Energy, Building Technologies Program, Mailstop EE-2J, 1000
Independence Avenue, SW., Washington, DC 20585-0121. Please submit one
signed paper original.
Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department
of Energy, Building Technologies Program, 950 L'Enfant Plaza, 6th
Floor, Washington, DC 20024. Telephone: (202) 586-2945. Please submit
one signed paper original.
For detailed instructions on submitting comments and additional
information on the rulemaking process, see section VII, ``Public
Participation,'' of this document.
Docket: For access to the docket to read background documents or
comments received, visit the U.S. Department of Energy, Resource Room
of the Building Technologies Program, 950 L'Enfant Plaza, SW., 6th
Floor, Washington, DC 20024, (202) 586-2945, between 9 a.m. and 4 p.m.,
Monday through Friday, except Federal holidays. Please call Ms. Brenda
Edwards at the above telephone number for additional information
regarding visiting the Resource Room.
FOR FURTHER INFORMATION CONTACT: 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:
[email protected].
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) 586-9507. E-mail:
[email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Summary of Proposed Rule
II. Introduction
A. Authority
[[Page 12001]]
B. Background
1. ASHRAE Standard 90.1-2007
2. Notice of Data Availability and Request for Public Comment
III. General Discussion of Comments Regarding the ASHRAE Process and
DOE's Interpretation of EPCA's Requirements With Respect to ASHRAE
Equipment
A. The ASHRAE Process
B. The Definition of Amendment With Respect to the Efficiency
Levels in an ASHRAE Standard
C. Different Types of Changes in ASHRAE Standard 90.1-2007
D. DOE's Review of ASHRAE Equipment Independent of the ASHRAE
Standards Process
E. Equipment Classes With a Two-Tier Efficiency Level Specified
in ASHRAE Standard 90.1-2007
IV. General Discussion of the Changes in ASHRAE Standard 90.1-2007
and Determination of Scope for Further Rulemaking Analyses
A. Commercial Warm Air Furnaces
1. Gas-Fired Commercial Warm Air Furnaces
2. Oil-Fired Commercial Warm Air Furnaces
B. Commercial Package Air-Conditioning and Heating Equipment
1. Three-Phase Through-the-Wall Air-Cooled Air Conditioners and
Heat Pumps
2. Three-Phase, Small-Duct, High-Velocity Air-Cooled Air
Conditioners and Heat Pumps
3. Commercial Package Air-Cooled Air Conditioners With a Cooling
Capacity at or Above 760,000 Btu per Hour
4. Water-Cooled and Evaporatively-Cooled Commercial Package Air
Conditioners and Heat Pumps With a Cooling Capacity at or Above
135,000 Btu/h and Less Than 240,000 Btu/h
5. Water-Cooled and Evaporatively-Cooled Commercial Package Air
Conditioners and Heat Pumps With a Cooling Capacity at or Above
240,000 Btu/h and Below 760,000 Btu/h
C. Commercial Packaged Boilers
1. Efficiency Metric Description (Combustion Efficiency and
Thermal Efficiency)
2. Analysis of Energy Efficiency Levels in ASHRAE Standard 90.1-
1999
3. Analysis of Energy Efficiency Levels in ASHRAE Standard 90.1-
2007
4. Preliminary Conclusions From Market Analysis for Commercial
Packaged Boilers
a. Accuracy of Thermal Efficiency Ratings
b. Benefits of the Thermal Efficiency Metric
c. Overall Energy Savings
5. Conclusions Regarding the Efficiency Levels in ASHRAE
Standard 90.1-2007 for Commercial Packaged Boilers
V. Methodology and Discussion of Comments for Commercial Packaged
Boilers
A. Test Procedures
B. Market Assessment
1. Definitions of Commercial Packaged Boilers
2. Equipment Classes
3. Review of Current Market for Commercial Packaged Boilers
a. Trade Association Information
b. Manufacturer Information
c. Shipments Information
C. Engineering Analysis
1. Approach
2. Representative Input Capacities
3. Baseline Equipment
4. Identification of Efficiency Levels for Analysis
a. Small Gas-Fired Hot Water Commercial Packaged Boiler
Efficiency Levels
b. Small Gas-Fired Steam All Except Natural Draft Commercial
Packaged Boiler Efficiency Levels
c. Small Gas-Fired Steam Natural Draft Water Commercial Packaged
Boiler Efficiency Levels
d. Small Oil-Fired Hot Water Commercial Packaged Boiler
Efficiency Levels
e. Small Oil-Fired Steam Commercial Packaged Boiler Efficiency
Levels
f. Large Gas-Fired Hot Water Commercial Packaged Boiler
Efficiency Levels
g. Large Gas-Fired Steam, All Except Natural Draft Commercial
Packaged Boiler Efficiency Levels
h. Large Gas-Fired Steam Natural Draft Commercial Packaged
Boiler Efficiency Levels
i. Large Oil-Fired Hot Water Commercial Packaged Boiler
Efficiency Levels
j. Large Oil-Fired Steam Commercial Packaged Boiler Efficiency
Levels
5. Oil-Fired Commercial Packaged Boilers
6. Dual Output Boilers
7. Engineering Analysis Results
D. Markups to Determine Equipment Price
E. Energy Use Characterization
F. Life-Cycle Cost and Payback Period Analyses
1. Approach
2. Life-Cycle Cost Inputs
a. Equipment Prices
b. Installation Costs
c. Annual Energy Use
d. Fuel Prices
e. Maintenance Costs
f. Repair Costs
g. Equipment Lifetime
h. Discount Rate
3. Payback Period
G. National Impact Analysis--National Energy Savings and Net
Present Value Analysis
1. Approach
2. Shipments Analysis
3. Base-Case and Standards-Case Forecasted Distribution of
Efficiencies
H. Other Issues
1. Effective Date of the Proposed Amended Energy Conservation
Standards
VI. Analytical Results
A. Efficiency Levels Analyzed
B. Economic Justification and Energy Savings
1. Economic Impacts on Commercial Customers
a. Life-Cycle Cost and Payback Period
2. National Impact Analysis
a. Amount and Significance of Energy Savings
b. Net Present Value
C. Proposed Standards for Commercial Packaged Boilers
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
VIII. Public Participation
A. Attendance at Public Meeting
B. Procedure for Submitting Requests to Speak
C. Conduct of Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
IX. Approval of the Office of the Secretary
I. Summary of Proposed Rule
The Energy Policy and Conservation Act (EPCA) (42 U.S.C. 6291 et
seq.), as amended, 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, 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
[[Page 12002]]
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 stated that the statutory trigger requiring DOE to
adopt uniform national standards based on ASHRAE action is for
ASHRAE to change a standard 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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This NOPR sets forth DOE's determination of scope for consideration
of amended energy conservation standards with respect to certain
heating, ventilating, air-conditioning, and water-heating equipment
addressed in ASHRAE Standard 90.1-2007. Such inquiry is necessary to
ascertain whether the revised ASHRAE efficiency levels have become more
stringent, thereby ensuring that any new amended national standard
would not result in ``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).
DOE also found that ASHRAE set a more-stringent efficiency level 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. However, DOE did not analyze the
economic and energy savings potential of amended national energy
conservation standards because there is no equipment currently being
manufactured in this equipment class.
In light of the above, DOE has tentatively concluded that for ten
classes of commercial packaged boilers: (1) The revised efficiency
levels in ASHRAE 90.1-2007 \2\ are more stringent than current national
standards; and (2) their adoption as national standards would result in
significant energy savings. DOE has also tentatively concluded that
there is not clear and convincing evidence as would justify adoption of
more-stringent efficiency levels for this equipment.
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\2\ To obtain a copy of ASHRAE Standard 90.1-2007, visit http://www.ashrae.org/technology/page/548 or contact the ASHRAE
publications department by e-mail at [email protected] or by
telephone at (800) 527-4723.
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Thus, in accordance with these criteria discussed in this notice,
DOE is 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 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.
The proposed standards for commercial packaged boilers would 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 proposed
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 would 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))
In addition, DOE is proposing 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. Specifically, these amendments would update the citations and
references to the most recent version of the industry standards already
referenced in DOE's test procedures. In addition, these amendments
would specify a definition and methodology to test the thermal
efficiency of these boilers, which is the metric DOE is proposing 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 would make a small number
of technical modifications to DOE's existing test procedure for
commercial packaged boilers.
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 \3\ 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 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), labelling 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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\3\ This part was originally titled Part C; however, it was
redesignated Part A-1 after Part C of Title III of EPCA was repealed
by Public Law 109-58.
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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 package 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).
In acknowledgement of technological changes that yield energy
efficiency benefits, Congress further directed DOE through EPCA to
consider amending the existing Federal energy conservation standard for
each type of equipment listed, each time ASHRAE 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, DOE must adopt amended standards at the new efficiency level
in ASHRAE Standard 90.1, unless clear and convincing evidence supports
a determination that adoption of a more stringent level 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)) 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
[[Page 12003]]
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, it is noted that EPCA contains what is commonly known as
an ``anti-backsliding'' provision, which mandates that the Secretary
shall not prescribe 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)) It is a fundamental principle in EPCA's statutory scheme that
DOE cannot weaken standards from those that have been published as a
final rule. See Natural Resources Defense Council v. Abraham, 355 F.3d
179 (2d Cir. 2004).
When considering the possibility of a more-stringent standard,
DOE's more typical rulemaking requirements under EPCA apply (i.e., a
determination of technological feasibility, economic justification, and
significant 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) and
(b)) However, DOE can grant waivers of preemption for particular State
laws or regulations, in accordance with the procedures and other
provisions of section 327(d) of EPCA. (42 U.S.C. 6297(d) and
6316(b)(2)(D))
When considering more stringent standards for the ASHRAE equipment
under consideration here, EPCA states 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 LCC
and 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. The ASHRAE standard addresses efficiency levels for many types of
commercial heating, ventilating, air-conditioning (HVAC), and water-
heating equipment covered by EPCA. ASHRAE Standard 90.1-2007 revised
the efficiency levels for certain commercial equipment, but for the
remaining equipment, ASHRAE left in place the preexisting efficiency
levels (i.e., the efficiency levels specified in ASHRAE Standard 90.1-
1999 \4\).
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\4\ 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 existing Federal energy conservation
standards and the efficiency levels specified in ASHRAE Standard 90.1-
2007 for equipment where ASHRAE modified its requirements. DOE is
addressing this equipment in today's notice. In section IV of today's
NOPR, DOE assesses these equipment types to determine whether the
amendments in ASHRAE Standard 90.1-2007 constitute increased energy
conservation levels, as would necessitate further analysis. 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 such
revisions to the ASHRAE Standard 90.1 level would make the equipment
more or less efficient, as 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, but it is not
immediately clear whether a standard level will make equipment more or
less efficient. Therefore, DOE is undertaking this additional threshold
analysis in order to thoroughly evaluate the amendments in ASHRAE
Standard 90.1-2007 in a manner consistent with its statutory mandate.
[[Page 12004]]
Table II.1--Federal Energy Conservation Standards and Energy Efficiency Levels in ASHRAE Standard 90.1-2007 for
Specific Types of Commercial Equipment*
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ASHRAE standard 90.1-2007
Federal energy conservation -----------------------------------------
ASHRAE equipment class standards Effective
Energy efficiency levels date
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Commercial Warm Air Furnaces
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Gas-Fired Commercial Warm Air Furnace... Et = 80%.................... Ec = 80% Interrupted or 1/10/2008
intermittent ignition [Dagger]
device, jacket losses not
exceeding 0.75% of input
rating, power vent, or
flue damper**.
Oil-Fired Commercial Warm Air Furnace... Et =81%..................... Et = 81% Interrupted or 1/10/
intermittent ignition 2008[Dagger
device, jacket losses not ]
exceeding 0.75% of input
rating, power vent, or
flue damper**.
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Commercial Package Air-Conditioning and Heating Equipment
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Through-the-Wall Air Conditioners....... 13.0 SEER***................ 12.0 SEER.................. 1/23/2010
(Effective as of 06/19/08)..
Through-the-Wall Air-Cooled Heat Pumps.. 13.0 SEER................... 12.0 SEER.................. 1/23/2010
(Effective as of 06/19/08).. 7.4 HSPF[dagger]...........
Small Duct, High Velocity, Air-Cooled 13.0 SEER................... 10.0 SEER.................. 1/10/2008
Air Conditioners. (Effective as of 06/19/08)..
Small Duct, High-Velocity, Air-Cooled 13.0 SEER................... 10.0 SEER.................. 1/10/2008
Heat Pumps. (Effective as of 06/19/08).. 6.8 HSPF...................
Packaged Air-Cooled Air Conditioners None........................ 9.7 1/1/2010
with Cooling Capacity >=760,000 Btu/ EER[dagger][dagger][dagger
h[dagger][dagger] and with No Heating ].
or with Electric Resistance Heating.
Packaged Air-Cooled Air Conditioners None........................ 9.5 EER.................... 1/1/2010
with Cooling Capacity >=760,000 Btu/h
and with Heating That is Other Than
Electric Resistance Heating.
Water-Cooled and Evaporatively-Cooled 11.0 EER.................... 11.0 EER................... 1/10/
Air Conditioner with Cooling Capacity 2008[Dagger
>=135,000 and <240,000 Btu/h, and with ]
No Heating or with Electric Resistance
Heating.
Water-Cooled and Evaporatively Cooled 11.0 EER.................... 10.8 EER................... 1/10/
Air Conditioner with Cooling Capacity 2008[Dagger
>=135,000 and <240,000 Btu/h, and with ]
Heating That is Other Than Electric
Resistance Heating.
Water-Cooled and Evaporatively Cooled None........................ 11.0 EER................... 1/10/
Air Conditioner with Cooling Capacity 2008[Dagger
>=240,000 Btu/h and with No Heating or ]
with Electric Resistance Heating.
Water-Cooled and Evaporatively Cooled None........................ 10.8 EER................... 1/10/
Air Conditioner with Cooling Capacity 2008[Dagger
>=240,000 Btu/h and with Heating That ]
is Other Than Electric Resistance
Heating.
----------------------------------------------------------------------------------------------------------------
Commercial Packaged Boilers
----------------------------------------------------------------------------------------------------------------
Small Gas-Fired, Hot Water, Commercial EC = 80%.................... ET = 80%................... 3/2/2010
Packaged Boilers.
Small Gas-Fired, Steam, All Except EC = 80%.................... ET = 79%................... 3/2/2010
Natural Draft Commercial Packaged
Boilers.
Small Gas-Fired, Steam, Natural Draft, EC = 80%.................... ET = 77%................... 3/2/2010
Commercial Packaged Boilers. ET = 79%................... 3/2/2020
Small Oil-Fired, Hot Water, Commercial EC = 83%.................... ET = 82%................... 3/2/2010
Packaged Boilers.
Small Oil-Fired, Steam, Commercial EC = 83%.................... ET = 81%................... 3/2/2010
Packaged Boilers.
Large Gas-Fired, Hot Water, Commercial EC = 80%.................... EC = 82%................... 3/2/2010
Packaged Boilers.
Large Gas-Fired, Steam, All Except EC = 80%.................... ET = 79%................... 3/2/2010
Natural Draft, Boilers.
Large Gas-Fired, Steam, Natural Draft, EC = 80%.................... ET = 77%................... 3/2/2010
Commercial Packaged Boilers. ET = 79%................... 3/2/2020
Large Oil-Fired, Hot Water, Commercial EC = 83%.................... EC = 84%................... 3/2/2010
Packaged Boilers.
[[Page 12005]]
Large Oil-Fired, Steam, Commercial EC = 83%.................... ET = 81%................... 3/2/2010
Packaged Boilers.
----------------------------------------------------------------------------------------------------------------
*All equipment classes included in this table are equipment where there is a perceived difference between the
current Federal standard levels and the efficiency levels specified by ASHRAE Standard 90.1-2007. Although, in
some cases, the efficiency levels in this table may appear to be equal or lower than the Federal energy
conservation standards, DOE further reviewed the efficiency levels in ASHRAE Standard 90.1-2007 and presented
its findings in section III.
** A vent damper is an acceptable alternative to a flue damper for those furnaces that draw combustion air from
conditioned space.
*** Seasonal energy efficiency ratio
[dagger] Heating seasonal performance factor
[dagger][dagger] British thermal units per hour (Btu/h)
[dagger][dagger][dagger] Energy efficiency ratio
[Dagger]For the purposes of this NOPR, the date shown in this column is the date of publication of ASHRAE
Standard 90.1-2007 (Jan. 10, 2008) for equipment where the ASHRAE Standard 90.1-2007 initially appears to be
different from the Federal energy conservation standards and where no effective date was specified by ASHRAE
Standard 90.1-2007.
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. Id. at 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 presented a discussion in the July 2008 NODA of
the changes found in ASHRAE Standard 90.1-2007. Id. at 40776-86.
Lastly, the July 2008 NODA includes 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 have increased efficiency levels. For those types of
equipment in ASHRAE Standard 90.1 for which ASHRAE increased efficiency
levels, DOE subjected that equipment to the potential energy savings
analysis discussed above and presented the results in the July 2008
NODA for public comment. 73 FR 40770, 40776-86 (July 16, 2008).
As a result of the preliminary determination of scope set forth in
the July 2008 NODA, DOE found the only equipment type for which ASHRAE
increased the efficiency levels and equipment was available on the
market were commercial packaged boilers, generally. 73 FR 40770, 40776-
86 (July 16, 2008). 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. 73 FR 40770, 40786-91 (July 16, 2008).
III. General Discussion of Comments Regarding the ASHRAE Process and
DOE's Interpretation of EPCA's Requirements With Respect to ASHRAE
Equipment
In response to its request for comment on the July 2008 NODA, DOE
received six comments from manufacturers, trade associations, and
energy efficiency advocates. The issues raised in these comments, along
with DOE's responses, are set forth below.
A. The ASHRAE Process
In response to the preliminary determination of scope and analyses
set forth in the July 2008 NODA, DOE received several comments
regarding the ASHRAE process for considering revised efficiency levels
for certain commercial heating, ventilating, air-conditioning, and
water heater equipment, including commercial packaged boilers.
Edison Electric Institute (EEI) stated its belief that DOE should
make proposals for increased efficiency to ASHRAE and not perform a
separate rulemaking on commercial packaged boilers. EEI asserted this
would streamline DOE's efforts and provide opportunities to increase
equipment efficiency through the ASHRAE consensus process. (EEI, No. 2
at p. 2) \5\
---------------------------------------------------------------------------
\5\ ``EEI, No. 2 at p. 2'' refers to (1) a statement that was
submitted by the Edison Electric Institute and is 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 2; and (2) a passage that
appears on page 2 of that statement.
---------------------------------------------------------------------------
The Air-Conditioning, Heating, and Refrigeration Institute (AHRI)
asserted that the efficiency levels for commercial packaged boilers in
ASHRAE Standard 90.1-2007 are the product of a consensus agreement
between AHRI boiler manufacturer members, ACEEE, and several other
organizations. AHRI stated its belief these efficiency levels reflect
the collective experience of the manufacturers and the knowledge of the
relationship between combustion efficiency and thermal efficiency for
their models that comes from practical experience of transforming
design concepts to models coming off the production line. Further, AHRI
asserted DOE should accept the efficiency levels in ASHRAE Standard
90.1-2007 as negotiated standards that can be processed through an
expedited rulemaking. (AHRI, No. 3 at p. 4)
The American Council for an Energy-Efficient Economy (ACEEE), the
Appliance Standards Awareness Project (ASAP), the Alliance to Save
Energy (ASE), the California Energy Commission (CEC), the Natural
Resources Defense Council (NRDC), the Northeast Energy Efficiency
Partnerships (NEEP), and the Northwest Power and Conservation Council
(NPCC) submitted a joint comment in response to the July 2008 NODA
[[Page 12006]]
(hereafter referred to as the Advocates Comment). (The Advocates
Comment, No. 4 at p. 2) The Advocates Comment stated its support for
the adoption of the efficiency levels in ASHRAE Standard 90.1-2007 for
commercial boilers, except for any specific equipment class for which
further DOE analysis shows that adoption of the ASHRAE efficiency
levels would violate the anti-backsliding clause. The Advocates Comment
pointed out that the efficiency levels in ASHRAE Standard 90.1-2007 for
commercial packaged boilers are the result of a 2006 agreement between
several efficiency advocacy groups and the trade association for
commercial packaged boilers. (The Advocates Comment, No. 4 at p. 2)
Lastly, AHRI, ACEEE, ASAP, ASE, and NRDC submitted a joint letter
to the Assistant Secretary (hereafter referred to as the Joint Letter)
urging DOE to adopt as Federal minimum energy conservation standards
the efficiency levels contained in ASHRAE Standard 90.1-2007 for
commercial packaged boilers. (The Joint Letter, No. 5 at p. 1) The
Joint Letter asserted that the commercial boiler efficiency levels are
more stringent than the corresponding requirements in the previous
version of the ASHRAE Standard.\6\ In addition, the Joint Letter
pointed out that the efficiency levels in ASHRAE Standard 90.1-2007 for
commercial packaged boilers are the result of a consensus
recommendation. Finally, the Joint Letter stated its belief that given
the origin of these efficiency levels in the consensus process (both
with the negotiated agreement and the ASHRAE process) and their
significant potential energy savings, DOE should give these
recommendations deference and move to adopt them as a final rule as
expeditiously as possible. (The Joint Letter, No. 5 at p. 2)
---------------------------------------------------------------------------
\6\ DOE reviewed the previous efficiency levels for commercial
packaged boilers, which were incorporated into ASHRAE Standard 90.1-
1999, in a notice of document availability published on March 13,
2006. 71 FR 12634, 12639 (March 13, 2006). At that time, DOE
determined it could not adopt the efficiency levels in ASHRAE
Standard 90.1-1999 for small commercial packaged boilers due to
backsliding concerns. 71 FR 12634, 12639-41 (March 13, 2006). In
addition, DOE determined it did not have the authority to consider
amended energy conservation standards for large commercial packaged
boilers because ASHRAE did not change the existing energy
conservation standard levels in ASHRAE Standard 90.1-1999. 71 FR
12634, 12641-42 (March 13, 2006).
---------------------------------------------------------------------------
While DOE acknowledges that certain efficiency levels in ASHRAE
Standard 90.1-2007 are the result of consensus standards, including
those for commercial packaged boilers, EPCA specifies DOE's obligations
to review the amendments when ASHRAE issues revised standards.
Specifically, EPCA directs that if ASHRAE Standard 90.1 is amended, DOE
must adopt amended energy conservation standards at the new efficiency
level in ASHRAE Standard 90.1, unless clear and convincing evidence
supports a determination that adoption of a more stringent level as a
national standard would produce significant additional energy savings
and be technologically feasible and economically justified. (42 U.S.C.
6313(a)(6)(A)(ii)) In order to determine if more-stringent efficiency
levels would meet EPCA's criteria, DOE must review the efficiency
levels in ASHRAE Standard 90.1-2007 and more-stringent efficiency
levels for their energy savings and economic potentials irrespective of
whether the efficiency levels were once part of a consensus standard.
Contrary to what some commenters seem to suggest, DOE may not delegate
its standard-setting authority either directly or indirectly to ASHRAE
or any other party.
B. The Definition of Amendment With Respect to the Efficiency Levels in
an ASHRAE Standard
DOE stated in the July 2008 NODA that EPCA does not explicitly
define the term ``amended'' in the context of ASHRAE Standard 90.1, but
the July 2008 NODA pointed out that DOE provided its interpretation of
what would constitute an ``amended standard'' in a final rule published
in the Federal Register on March 7, 2007 (72 FR 10038). 73 FR 40770,
40771 (July 16, 2008). In that final rule, DOE stated that the
statutory trigger requiring DOE to adopt uniform national standards
based on ASHRAE action is for ASHRAE to change a standard 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. 72 FR 10038, 10042 (March 7, 2007). 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 40770, 40771 (July 16,
2008).
In response to DOE's interpretation of the definition of
``amendment,'' the Advocates Comment argued that DOE has applied an
unlawfully narrow definition to the word ``amendment.'' (The Advocates
Comment, No. 4 at pp. 2-3) Instead, the Advocates Comment asserts that
EPCA requires DOE to consider changes to the Federal minimum energy
conservation standards for covered products ``[i]f ASHRAE/IES Standard
90.1 is amended * * *'' (The Advocates Comment, No. 4 at pp. 2-3
(referring to 42 U.S.C. 6313(a)(6)(A)(i)) (emphasis in original)). In
other words, the Advocates Comment suggests that DOE has very broad
authority to consider amended standards for any and all ASHRAE
equipment, once ASHRAE acts to revise any of the levels in Standard
90.1. The Advocates Comment asserts that Congress's use of the neutral
terms ``amended'' and ``amendment'' imposes no threshold requirement
that before DOE can analyze the energy saving potential of revised
Federal energy conservation standards it must first determine that the
amended ASHRAE standard is more stringent than the prior Federal energy
conservation standard. The Advocates Comment stated its belief that
DOE's very limited definition of ``amendment'' is inconsistent with the
plain language of EPCA. (The Advocates Comment, No. 4 at p. 3)
DOE does not agree with the Advocates Comment's assertions. DOE
maintains its position that the statutory trigger requiring DOE to
adopt uniform national standards based on ASHRAE action is for ASHRAE
to change a standard 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. As described in the March
2007 final rule, the intent of section 342, generally, is for DOE to
maintain uniform national standards consistent with those set in ASHRAE
Standard 90.1. 72 FR 10038, 10042 (March 7, 2007). Given this intent,
if ASHRAE has not amended a standard for a product subject to section
342, there is no change, which 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 trigger for DOE to adopt ASHRAE's amended standards did not
occur with respect to this equipment. Id. The statutory language
specifically links ASHRAE's action in amending standards for specific
equipment to DOE's action for those same equipment. Id.
C. Different Types of Changes in ASHRAE Standard 90.1-2007
The Advocates Comment asserted that ASHRAE Standard 90.1-2007
includes at least three different types of amendments, which must
trigger DOE
[[Page 12007]]
review of the existing Federal energy conservation standards,
including: (1) A change in the efficiency performance metric; (2) an
addition of a new prescriptive or performance requirement; and (3) a
possible decrease to the efficiency standard. (The Advocates Comment,
No. 4 at p. 4-5) The Advocates Comment further asserted that DOE cannot
reject the consideration of amendments which change the performance
metric or which add new prescriptive or performance requirements on top
of existing Federal requirements. The Advocates Comment further stated
that even DOE's definition of ``amendment'' compels consideration of
amendments which add energy-saving requirements since these
requirements ``increase'' the level of energy efficiency for a given
equipment type. If DOE decides it cannot adopt multiple efficiency
requirements (an interpretation the Advocates Comment believes is
contrary to EPCA), the Advocates Comment argued that these requirements
still trigger DOE review. (The Advocates Comment, No. 4 at p. 4-5)
When reviewing the changes in ASHRAE Standard 90.1-2007, DOE stated
in the July 2008 NODA that for each class of commercial equipment for
which ASHRAE modified the existing standard, DOE would assess whether
the change made would increase energy efficiency and, therefore,
require further DOE analysis and consideration. 73 FR 40770, 40775
(July 16, 2008). DOE initially completed a comprehensive analysis of
the products covered under both EPCA and ASHRAE Standard 90.1-2007 to
determine which product types require further analysis. The July 2008
NODA contains a description of DOE's initial evaluation of each ASHRAE
equipment type for which energy conservation standards have been set
pursuant to EPCA, in order for DOE to determine whether the amendments
in ASHRAE Standard 90.1-2007 have resulted in increased efficiency
levels. 73 FR 40770, 40773-40786 (July 16, 2008).
DOE does not agree with the Advocates Comment's assertion that DOE
is required to review changes in ASHRAE Standard 90.1-2007, which do
not increase the efficiency level when compared to the current Federal
energy conservation standards for a given piece of equipment. Further
as DOE has previously explained, since 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. 72 FR 10038. In that rule, DOE stated that the statutory
trigger requiring DOE to adopt uniform national standards based on
ASHRAE action is for ASHRAE to change a standard 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. Even though DOE realizes that these
prescriptive requirements could save additional energy in addition to
the energy-efficiency level, DOE does not believe adding a prescriptive
requirement alone without increasing the efficiency level triggers DOE
review. In addition, if ASHRAE adds a prescriptive requirement for
equipment where an efficiency level is already specified, DOE does not
believe it has the authority to address a dual descriptor for a single
equipment type (see section IV.A.1 below for additional explanation).
In light of the above, DOE maintains its position set out in the July
2008 NODA. If the revised ASHRAE Standard 90.1 leaves the standard
level unchanged (even if ASHRAE adds prescriptive requirements) 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 40770, 40771 (July 16,
2008).
D. DOE's Review of ASHRAE Equipment Independent of the ASHRAE Standards
Process
The Advocates Comment pointed to language in EPCA (at 42 U.S.C.
6313(a)(6)(C)) that it believes triggers DOE review to determine the
need to amend the energy conservation standard for a given piece of
equipment, including a six-year timeframe elapsing since the last final
rule ``establishing or amending a standard'' for that product. (The
Advocates Comment, No. 4 at p. 5) The Advocates Comment also stated
that the same provision of EPCA further provides that if DOE determines
that the statutory criteria have not been met for amending the energy
conservation standard for a product, DOE must conduct the same review
process within the next three years. (The Advocates Comment, No. 4 at
p. 5) The Advocates Comment stated its belief that the timeline (three
or six years) has elapsed for several equipment categories, including:
(1) Central water-source and evaporatively-cooled AC products; (2)
warm-air furnaces; (3) gas and oil storage water heaters; (4) gas and
oil instantaneous water heaters; (4) tankless oil-fired instantaneous
water heaters and unfired hot water storage tanks; (5) electric water
heaters; (6) tankless gas-fired instantaneous water heaters; and (7)
commercial packaged boilers. (The Advocates Comment, No. 4 at p. 5-6)
In response, DOE acknowledges that section 305(b) of the Energy
Independence and Security Act of 2007 (EISA 2007), Pub. L. 110-140,
amended Section 342(a)(6) of EPCA to create an additional requirement
that directs 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.
Specifically, EPCA, as amended, 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
new 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.
DOE does not believe it was Congress's intention to apply these
requirements retroactively, so that DOE would immediately be in
violation of its legal obligations upon passage of the statute, thereby
failing from its inception. DOE does not believe that the
interpretation in the Advocates Comment is reasonable, nor does DOE
agree with the assertion that DOE is late and should initiate an
immediate review of certain commercial equipment cited by the
commenters above.
[[Page 12008]]
E. 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 divisions. For two of the ten equipment classes
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
equipment classes 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
determining whether the efficiency levels in ASHRAE Standard 90.1-2007
violated EPCA's anti-backsliding clause, DOE examined only the
efficiency levels with a 2010 effective date. However, DOE considers
the two-tier efficiency levels to be a ``package'' set of potential
amended energy conservation standards. DOE does not intend to adopt one
efficiency level without adopting the latter efficiency level.
Accordingly, in its economic and energy savings analysis DOE analyzes
these two equipment classes as if both the 2010 and 2020 levels will be
adopted on their respective effective dates.
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 or
not the ASHRAE Standard 90.1-2007 efficiency levels actually
represented an increase in efficiency above the current Federal
standard levels. This section discusses each equipment class where the
ASHRAE Standard 90.1-2007 efficiency level differs from the current
Federal standard level, along with DOE's preliminary conclusion as to
the action DOE would take with respect to that equipment.
A. Commercial Warm Air Furnaces
Under EPCA, a ``warm air furnace'' is defined as ``a self-contained
oil-or gas-fired furnace designed to supply heated air through ducts to
spaces that require it and includes combination warm-air furnace/
electric air-conditioning units but does not include unit heaters and
duct furnaces.'' (42 U.S.C. 6311(11)(A)) In its regulations, DOE
defines a ``commercial warm air furnace'' as a ``warm-air furnace that
is industrial equipment, and that has a capacity (rated maximum input)
of 225,000 Btu [British thermal units] per hour or more.'' 10 CFR
431.72. The amendments in ASHRAE Standard 90.1-2007 changed the
efficiency metric for gas-fired commercial warm air furnaces and added
design requirements for both gas-fired and oil-fired commercial warm
air furnaces, thereby triggering DOE to further review ASHRAE's changes
as presented below.
1. Gas-Fired Commercial Warm Air Furnaces
Gas-fired commercial warm air furnaces are fueled by either natural
gas or propane. The Federal energy conservation standard for commercial
gas-fired warm air furnaces corresponds to the efficiency level in
ASHRAE Standard 90.1-1999, which specifies that for equipment with a
capacity of 225,000 Btu per hour (h) or more, the thermal efficiency at
the maximum rated capacity (rated maximum input) must be no less than
80 percent. 10 CFR 431.77(a). The Federal energy conservation standard
for gas-fired commercial warm air furnaces applies to equipment
manufactured on or after January 1, 1994. 10 CFR 431.77.
ASHRAE changed the efficiency levels for gas-fired commercial warm
air furnaces by changing the metric from a thermal efficiency
descriptor to a combustion efficiency descriptor and adding three
design requirements. Specifically, the efficiency levels in ASHRAE
Standard 90.1-2007 specify a minimum combustion efficiency of 80
percent. ASHRAE Standard 90.1-2007 also specifies the following design
requirements for commercial gas-fired warm air furnaces: The gas-fired
commercial warm air furnace 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.
To evaluate the change in efficiency level (if any) specified by
the amended ASHRAE standard, DOE reviewed the change of metric for gas-
fired commercial warm air furnaces. In general, the energy efficiency
of a product is a function of the relationship between the product's
output of services and its energy input. A furnace's output is largely
the energy content of its output (i.e., warm air delivered to the
building). A furnace's energy losses consist of energy that escapes
through its flue (commonly referred to as ``flue losses''), and of
energy that escapes into the area surrounding the furnace (commonly
referred to as ``jacket losses'').
In a final rule published in the Federal Register on October 21,
2004 (the October 2004 final rule), DOE incorporated definitions for
commercial warm air furnaces and its efficiency descriptor, energy
efficiency test procedures, and energy conservation standards. 69 FR
61916 (Oct. 21, 2004). In the October 2004 final rule, DOE pointed out
that EPCA specifies the energy conservation standard levels for
commercial warm air furnaces in terms of thermal efficiency (42 U.S.C.
6313(a)(4)(A)-(B); 10 CFR 431.77), but provides no definition for this
term. Id. DOE proposed to interpret this term in the context of
commercial warm air furnaces to mean combustion efficiency (i.e., 100
percent minus percent flue loss). Id. Given the use of the thermal
efficiency term in EPCA and its continued use as the efficiency
descriptor for furnaces in ANSI Standard Z21.47, ``Gas-Fired Central
Furnaces'' (DOE's test procedure for this equipment), DOE stated that
it would be confusing to use the term ``combustion efficiency'' in the
final rule. Accordingly, DOE defined the term ``thermal efficiency'' to
mean 100 percent minus the percent flue loss in the October 2004 final
rule for gas-fired commercial warm air furnaces. Id.
DOE presented an initial review of the ASHRAE efficiency levels for
warm-air furnaces in the July 2008 NODA. DOE stated that upon reviewing
the efficiency levels and methodology specified in ASHRAE Standard
90.1-2007, DOE believed that despite changing the name of the energy
efficiency descriptor from ``thermal efficiency'' to ``combustion
efficiency,'' ASHRAE did not intend to change the efficiency metric for
gas-fired commercial warm air furnaces. 73 FR 40770, 40776 (July 16,
2008). When ASHRAE specified a newer version of the test procedure for
manufacturers' use with gas-fired commercial air furnaces (i.e., ANSI
Standard Z21.47-2001), the calculation of thermal efficiency did not
change from the previous version. Therefore, despite that change in the
name of the energy efficiency descriptor, the terms are synonymous in
the present context because the calculation of that value has not
changed (i.e., 100 percent minus the percent flue loss). DOE sees no
plausible reason why ASHRAE would have chosen to incorporate a
different metric than that used in the ANSI Standard Z21.47-2001 test
procedure. Consequently, because the amendments for this type of
equipment set out in ASHRAE Standard 90.1-2007 do not
[[Page 12009]]
appear to have substantively changed the efficiency level, DOE
tentatively decided to leave the existing Federal energy conservation
standards in place for gas-fired commercial warm air furnaces; these
standards specify a thermal efficiency of 80 percent using the
definition of ``thermal efficiency'' established by DOE in the October
2004 final rule and presented in subpart D to 10 CFR part 431. 73 FR
40770, 40776 (July 16, 2008).
In response to the preliminary review set forth in the July 2008
NODA, the Advocates Comment noted that ASHRAE added additional energy
saving requirements, including a standard limiting jacket losses, a
prescriptive requirement for intermittent or interrupted ignition
devices, and a requirement for power venting or flue dampers in ASHRAE
Standard 90.1-2007 for commercial gas-fired warm air furnaces. (The
Advocates Comment, No. 4 at p. 6) The Advocates Comment further stated
that the addition of these requirements triggers DOE review, which must
lead to either adoption of the new ASHRAE standards or more-stringent
standards. (The Advocates Comment, No. 4 at p. 6) The Advocates Comment
also asserted that ASHRAE recognized that combustion efficiency is an
inadequate efficiency descriptor and added these additional efficiency
requirements to capture off cycle losses, which can waste significant
amounts of energy. (The Advocates Comment, No. 4 at p. 6) Even though
the comments concluded DOE has asserted in other rulemakings that it
lacks the authority to apply more than one efficiency metric to a given
product, the commenters believe DOE's viewpoint is contrary to the
language and purposes of EPCA. (The Advocates Comment, No. 4 at p. 7)
Further, the Advocates Comment stated that because ASHRAE has adopted a
performance standard and multiple design requirements, DOE must read
the statute as permitting DOE sufficient authority to harmonize Federal
and ASHRAE requirements. Lastly, the comments point out that some of
the multi-part standards (e.g., those for commercial storage
instantaneous water heaters and commercial heat pumps) are based on
equivalent multi-part requirements in ASHRAE 90.1. (The Advocates
Comment, No. 4 at p. 6-7)
DOE has determined that the design requirements in ASHRAE Standard
90.1-2007 for gas-fired commercial warm air furnaces are beyond the
scope of its legal authority. EPCA authorizes the Secretary to amend
the energy conservation standards for specified equipment. (42 U.S.C.
6313(a)(6)) Section 340(18) of EPCA defines the term ``energy
conservation standard'' as:
``(A) a performance standard that prescribes a minimum level of
energy efficiency or a maximum quantity of energy use for a product; or
(B) a design requirement for a product.''
(42 U.S.C. 6311(18))
The language of EPCA authorizes DOE to establish a performance
standard or a single design standard. 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, which goes
beyond EPCA's limit of one design requirement for the specified covered
equipment.
Therefore, DOE has not changed its preliminary review set forth in
the July 2008 NODA. Because the amendments for this type of equipment
set out in ASHRAE Standard 90.1-2007 do not appear to have changed the
efficiency level, DOE is leaving the existing Federal energy
conservation standards in place for gas-fired commercial warm air
furnaces; these standards specify a thermal efficiency of 80 percent
using the definition of ``thermal efficiency'' established by DOE in
the October 2004 final rule and presented in subpart D to 10 CFR part
431. 73 FR 40770, 40776 (July 16, 2008). DOE is not conducting any
further analysis on gas-fired commercial warm air furnaces.
2. Oil-Fired Commercial Warm Air Furnaces
The Federal energy conservation standard for commercial oil-fired
warm air furnaces corresponds to the efficiency level in ASHRAE
Standard 90.1-1999, which specifies that for equipment with a capacity
of 225,000 [British thermal units per hour] (Btu/h) or more, the
thermal efficiency at the maximum rated capacity (rated maximum input)
must be no less than 81 percent. 10 CFR 431.77(b). The Federal energy
conservation standard for oil-fired commercial warm air furnaces
applies to equipment manufactured on or after January 1, 1994. 10 CFR
431.77.
The efficiency level in ASHRAE Standard 90.1-2007 specifies a
minimum thermal efficiency of 81 percent. 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.
DOE published a final rule in the Federal Register on March 7,
2007, which states that the statutory trigger that requires DOE to
adopt uniform national standards based on ASHRAE action is for ASHRAE
to change a standard by increasing the energy efficiency of the
equipment listed in EPCA section 342(a)(6)(A)(i) (42 U.S.C.
6313(a)(6)(A)(i)). 72 FR 10038, 10042.
In practice, 42 U.S.C. 6313 generally allows ASHRAE Standard 90.1
to set energy efficiency levels for equipment as a model building code
and directs DOE to use these efficiency levels as the basis for
maintaining consistent, uniform national energy conservation standards
for the same equipment, provided all other applicable statutory
requirements are met. DOE stated in the July 2008 NODA that if ASHRAE
has not changed an efficiency level for a class of equipment subject to
42 U.S.C. 6313, DOE does not have authority to consider amending the
uniform national standard at the time of publication of the amended
ASHRAE Standard 90.1. 73 FR 40770, 40777 (July 16, 2008). DOE also
pointed out that although ASHRAE added design requirements in ASHRAE
Standard 90.1-2007, it did not change the efficiency levels for oil-
fired commercial warm air furnaces. Id. Therefore, DOE tentatively
concluded that it does not have authority to amend the uniform national
standard for this equipment. Id.
In response to the preliminary review of oil-fired commercial warm
air furnaces set forth in the July 2008 NODA, the Advocates Comment
made the same assertion regarding the three design requirements added
by ASHRAE as it did for gas-fired commercial warm air furnaces above.
(The Advocates Comment, No. 4 at p. 7)
DOE does not have any reason to treat oil-fired commercial warm air
furnaces any differently than gas-fired commercial warm air furnaces.
The language of EPCA authorizes DOE to establish a performance standard
or a single design standard. As such, DOE is concluding a standard for
oil-fired commercial warm air furnaces that establishes both a
performance standard and a design requirement is beyond the scope of
DOE's legal authority, as it did with gas-fired commercial warm air
furnaces.
Therefore, DOE has not changed its preliminary review set forth in
the July 2008 NODA. Because the amendments for this equipment type set
out in
[[Page 12010]]
ASHRAE Standard 90.1-2007 did not change the efficiency level for oil-
fired commercial warm air furnaces, DOE is leaving the existing Federal
energy conservation standards in place for this equipment; these
standards specify a thermal efficiency of 81 percent. Accordingly, DOE
is not conducting any further analysis on oil-fired commercial warm air
furnaces.
B. Commercial Package Air-Conditioning and Heating Equipment
EPCA, as amended, defines ``commercial package air-conditioning and
heating equipment'' as ``air-cooled, water-cooled, evaporatively
cooled, or water source (not including ground water source)
electrically operated, unitary central air conditioners and central
air-conditioning heat pumps for commercial application.'' (42 U.S.C.
6311(8)(A); 10 CFR 431.92) EPCA also defines ``small,'' ``large,'' and
``very large commercial package air-conditioning and heating
equipment'' based on the equipment's rated cooling capacity. (42 U.S.C.
6311(8)(B)-(D); 10 CFR 431.92) Specifically, the term ``small
commercial package air-conditioning and heating equipment'' means
``commercial package air-conditioning and heating equipment that is
rated below 135,000 Btu per hour (cooling capacity).'' (42 U.S.C.
6311(8)(B); 10 CFR 431.92) The term ``large commercial package air-
conditioning and heating equipment'' means ``commercial package air-
conditioning and heating equipment that is rated: (i) At or above
135,000 Btu per hour and (ii) below 240,000 Btu per hour (cooling
capacity).'' (42 U.S.C. 6311(8)(C); 10 CFR 431.92) The term ``very
large commercial package air-conditioning and heating equipment'' means
``commercial package air-conditioning and heating equipment that is
rated: (i) at or above 240,000 Btu per hour; and (ii) below 760,000 Btu
per hour (cooling capacity).'' (42 U.S.C. 6311(8)(D); 10 CFR 431.92)
The amendments in ASHRAE Standard 90.1-2007 include: (1)
Identifying separate efficiency levels for three-phase through-the-wall
air-cooled air conditioners and heat pumps and three-phase, small-duct,
high-velocity air-cooled air conditioners and heat pumps; (2) adding
equipment classes corresponding efficiency levels for commercial
package air-cooled air conditioners with a cooling capacity at or above
760,000 Btu/h 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 (3) changing the efficiency levels for water-
cooled and evaporatively-cooled commercial package air conditioners and
heat pumps with a cooling capacity at or above 135,000 Btu/h and less
than 240,000 Btu/h, thereby triggering DOE to further review ASHRAE's
changes as presented below.
1. Three-Phase Through-the-Wall Air-Cooled Air Conditioners and Heat
Pumps
ASHRAE Standard 90.1-2007 identifies efficiency levels for three-
phase through-the-wall air-cooled air conditioners and heat pumps,
single-package and split systems, with a cooling capacity of no greater
than 30,000 Btu/h. The efficiency levels specified by ASHRAE Standard
90.1-2007 include a seasonal energy efficiency ratio of 12.0 for
cooling mode and a heating seasonal performance factor of 7.4 for
equipment manufactured on or after January 23, 2010.\7\ ASHRAE aligned
these efficiency levels and its corresponding effective dates with the
efficiency levels established in EPCA for single-phase residential
versions of the same products.
---------------------------------------------------------------------------
\7\ ASHRAE provides the same requirement for single-phase and
three-phase through-the-wall air-cooled air conditioners and heat
pumps used in covered commercial buildings, but points out that
single-phase products are regulated as residential products under 10
CFR 430.32(c)(2).
---------------------------------------------------------------------------
Neither EPCA nor DOE has established a specific definition for
commercial ``through-the-wall air-cooled air conditioners and heat
pumps.'' Residential through-the-wall air-cooled air conditioners and
heat pumps are consumer products covered as ``central air
conditioners'' under EPCA, as amended, which are defined at 42 U.S.C.
6291(21) and 10 CFR 430.2. Residential through-the-wall air-cooled air
conditioners and heat pumps are by definition single-phase products
(Id.), whereas the commercial through-the-wall air-cooled air
conditioners and heat pumps mentioned in ASHRAE Standard 90.1-2007 are
three-phase products. In DOE's regulations, a residential ``[t]hrough-
the-wall air conditioner and heat pump'' means ``a central air
conditioner or heat pump that is designed to be installed totally or
partially within a fixed-size opening in an exterior wall * * *'' 10
CFR 430.2. Furthermore to be covered, this equipment (1) must be
manufactured before January 23, 2010; (2) must not be weatherized; (3)
must be clearly and permanently marked for installation only through an
exterior wall; (4) have a rated cooling capacity no greater than 30,000
Btu/h; (5) exchange all of its outdoor air across a single surface of
the equipment cabinet; and (6) have a combined outdoor air exchange
area of less than 800 square inches (split systems) or less than 1,210
square inches (single packaged systems) as measured on the surface
described in paragraph (5) of this definition. Id.
In terms of equipment construction, commercial and residential
through-the-wall air-cooled air conditioners and heat pumps use the
same components in the same configurations to provide space cooling and
heating. Commercial versions of through-the-wall air-cooled air
conditioners and heat pumps are essentially the same as residential
versions, except that they are powered using three-phase electric
power.
EPCA does not separate three-phase through-the-wall air-cooled air
conditioners and heat pumps from other types of small commercial
package air-conditioning and heating equipment in its definitions.
Therefore, EPCA's definition of ``small commercial package air-
conditioning and heating equipment'' would include three-phase through-
the-wall air-cooled air conditioners and heat pumps. Although EPCA does
not use the term ``three-phase through-the-wall air-cooled air
conditioners and heat pumps,'' the three-phase versions of this
equipment, regardless of cooling capacity, fall within the definition
of ``small commercial package air-conditioning and heating equipment.''
(42 U.S.C. 6311(8)(A)-(B)) There is no language in EPCA to indicate
that three-phase through-the-wall air-cooled air conditioners and heat
pumps are a separate class of covered equipment.
The Federal energy conservation standards for three-phase
commercial package air conditioners and heat pumps less than 65,000
Btu/h were established by EISA 2007 for such products manufactured on
or after June 19, 2008. Specifically, section 314(b)(4)(C) of EISA 2007
amended section 342(a)(7) of EPCA (42 U.S.C. 6313(a)(7)) by adding new
provisions for three-phase commercial package air conditioners with a
cooling capacity of less than 65,000 Btu/h. (42 U.S.C. 6313(a)(7)(D))
These provisions in EISA 2007 mandate SEERs for cooling mode and HSPFs
for heating mode of air-cooled three-phase electric central air
conditioners and central air-conditioning heat pumps with a cooling
capacity of less than 65,000 Btu/h.\8\
[[Page 12011]]
Three-phase through-the-wall air-cooled air conditioners and heat pumps
are a smaller subset of three-phase commercial package air conditioners
with a cooling capacity of less than 65,000 Btu/h, and were not
explicitly excluded from the standards in section 314(b)(4)(C) of EISA
2007. DOE noted in the July 2008 NODA that since EISA 2007 set these
standards, DOE must follow them, and they are more stringent than the
levels contained in ASHRAE Standard 90.1-2007 for three-phase through-
the-wall air-cooled air conditioners and heat pumps. 73 FR 40770, 40778
(July 16, 2008). Accordingly, DOE affirmed that the EISA 2007
efficiency levels for small commercial package air-conditioning and
heating equipment less than 65,000 Btu/h, as set forth at 42 U.S.C.
6313(a)(7)(D), apply to three-phase through-the-wall air-cooled air
conditioners and heat pumps with a cooling capacity no greater than
30,000 Btu/h. Id.
---------------------------------------------------------------------------
\8\ Section 314(b)(4)(C) of EISA 2007 specifies for ``equipment
manufactured on or after the later of January 1, 2008, or the date
that is 180 days after the date of enactment of the Energy
Independence and Security Act of 2007--
(i) the minimum seasonal energy efficiency ratio of air-cooled
3-phase electric central air conditioners and central air-
conditioning heat pumps less than 65,000 Btu per hour (cooling
capacity), split systems, shall be 13.0;
(ii) the minimum seasonal energy efficiency ratio of air-cooled
3-phase electric central air conditioners and central air-
conditioning heat pumps less than 65,000 Btu per hour (cooling
capacity), single package, shall be 13.0;
(iii) the minimum heating seasonal performance factor of air-
cooled 3-phase electric central air-conditioning heat pumps less
than 65,000 Btu per hour (cooling capacity), split systems, shall be
7.7; and
(iv) the minimum heating seasonal performance factor of air-
cooled 3-phase electric central air-conditioning heat pumps less
than 65,000 Btu per hour (cooling capacity), single package, shall
be 7.7.'' (42 U.S.C. 6313(a)(7)(D)).
---------------------------------------------------------------------------
In response to the preliminary conclusions set forth in the July
2008 NODA, AHRI stated that the minimum energy efficiency standards for
small commercial package air conditioning and heating equipment less
than 65,000 Btu/h specified in ASHRAE Standard 90.1-2007 were initially
amended by addendum f to ASHRAE/IES 90.1-2004 in 2005, well before
Congress enacted EISA 2007. (AHRI, No. 3 at pp. 1-2) AHRI further
commented ``[t]he intent behind addendum f was to harmonize the minimum
energy efficiency standards, product classes and effective dates for
the three-phase products covered by ASHRAE Standard 90.1 with the
respective efficiency standards, product classes and effective dates
established under EPCA for single-phase residential products.'' Id.
AHRI further noted that it believes the intent of Congress was very
clear in EISA 2007 (i.e., to harmonize the standard for three-phase
commercial products with cooling capacities less than 65,000 Btu/h with
that of the single-phase residential products of the same capacity).
Further, AHRI commented that Congress never intended to require a
minimum 13 SEER/7.7 HSPF standards for three-phase, through-the-wall,
air-cooled air conditioners and heat pumps; DOE itself found it
impossible to meet that efficiency level during the last rulemaking on
central air conditioners and heat pumps. (AHRI, No. 3 at pp. 1-2)
AHRI also stated its belief that DOE has the authority to establish
a separate product class for three-phase, through-the-wall, air-cooled
air conditioners and heat pumps. (AHRI, No. 2 at p. 2) AHRI pointed out
that prior to the last rulemaking on residential central air
conditioners (i.e., single-phase, air-cooled air conditioners and heat
pumps), EPCA did not specifically address through-the-wall products.
AHRI asserted it was DOE that established the product class when it
determined that through-the-wall products had unique space-constraint
challenges that warranted a lower minimum efficiency standard than
conventional systems. (AHRI, No. 3 at p. 2) AHRI commented that DOE can
and should do the same for commercial three-phase versions of these
products. AHRI also stated that DOE can adopt the proposed ASHRAE 90.1-
2007 efficiency levels for three-phase through-the-wall air-cooled air
conditioners and heat pumps because the efficiency levels were
developed and justified by DOE through a lengthy rulemaking process
(i.e., the 2001 rulemaking on central air conditioners and heat pumps
\9\). Lastly, AHRI pointed out that due to space-constraint issues,
three-phase through-the-wall air-cooled air conditioners and heat pumps
cannot meet the 13 SEER/7.7 standard established by EISA 2007. AHRI
stated that manufacturers of three-phase commercial through-the-wall
products would have no choice but to file for a waiver if the ASHRAE
Standard 90.1-2007 efficiency levels were not adopted by DOE for this
equipment class. (AHRI, No. 3 at p. 2)
---------------------------------------------------------------------------
\9\ DOE published a final rule amending the energy conservation
standards for residential central air conditioners and heat pumps on
January 22, 2001. 66 FR 7170 (Jan. 22, 2001).
---------------------------------------------------------------------------
DOE does not agree with AHRI's assertions regarding three-phase
through-the-wall air-cooled air conditioners and heat pumps.
Specifically, while ASHRAE may have been trying to harmonize the
definitions, equipment classes, and energy conservation standards for
equipment classes of similar types with their residential counterparts,
the energy conservation standards specified by EISA 2007 supersede the
efficiency levels in ASHRAE Standard 90.1-2007. EISA 2007 did not
explicitly exclude three-phase through-the-wall air-cooled air
conditioners and heat pumps from its regulations for the larger class
of small commercial package air conditioning and heating equipment.
As to AHRI's assertion regarding establishing a separate equipment
class for these subsets of equipment, DOE agrees with AHRI that DOE has
the authority to adopt a separate equipment class for this equipment
when initially established by ASHRAE Standard 90.1-2007. However, DOE
does not have the authority to adopt a less stringent efficiency level
for a separate equipment class, including three-phase through-the-wall
air-cooled air conditioners and heat pumps in contravention of the
prescriptive standard levels set by EISA 2007. Effectively, the
efficiency levels in ASHRAE Standard 90.1-2007 are less stringent than
the energy conservation standards specified by EISA 2007 for three-
phase, through-the-wall, air-cooled air conditioners and heat pumps. As
DOE stated in the July 2008 NODA, DOE is affirming in today's notice
that the EISA 2007 efficiency levels set forth in 42 U.S.C.
6313(a)(7)(D) for small commercial package air-conditioning and heating
equipment less than 65,000 Btu/h apply to three-phase through-the-wall
air-cooled air conditioners and heat pumps with a cooling capacity no
greater than 30,000 Btu/h. 73 FR 40770, 40778 (July 16, 2008). DOE does
not have authority to grant exception relief from the prescriptive
standard levels set by EISA 2007 for three-phase commercial through-
the-wall air conditioners and heat pumps, nor can it provide a waiver
from the test procedure as a means of avoiding this statutory
requirement.
2. Three-Phase, Small-Duct, High-Velocity Air-Cooled Air Conditioners
and Heat Pumps
ASHRAE Standard 90.1-2007 identifies efficiency levels for three-
phase small-duct, high-velocity (SDHV) air-cooled air conditioners and
heat pumps, both single-package and split systems, with a cooling
capacity less than 65,000 Btu/h.\10\ The efficiency levels specified by
ASHRAE Standard 90.1-2007 include a SEER of 10.0 for cooling mode and a
HSPF of 6.8 for
[[Page 12012]]
equipment. ASHRAE aligned these efficiency levels and the corresponding
effective dates with the efficiency levels established in EPCA for
single-phase residential versions of the same products.\11\
---------------------------------------------------------------------------
\10\ ASHRAE Standard 90.1-2007 includes efficiency levels for
three-phase and single-phase SDHV air-cooled air conditioners and
heat pumps used in commercial buildings. ASHRAE Standard 90.1-2007
also includes a footnote to these provisions, which indicates that
the single-phase versions of this equipment are regulated as
residential products under 10 CFR 430.32(c)(2).
\11\ DOE notes that the residential versions of SDHV are subject
to an exception issued by DOE's Office of Hearing and Appeals (OHA).
On October 14, 2004, OHA granted an exception to SpacePak and Unico,
Inc., authorizing them to manufacture SDHV systems (as defined in 10
CFR 430.2) with a SEER of no less than 11.0 and a heating seasonal
performance factor (HSPF) of 6.8. The exception relief will remain
in effect until DOE modifies the general energy efficiency standard
for central air conditioners and establishes a different standard
for SDHV systems that complies with EPCA. However, this exception
only applies to the residential single-phase SDHV systems and would,
therefore, exclude three-phase SDHV equipment. (DOE's Office of
Hearing and Appeals, Decision and Order: Applications for Exception
(Oct. 14, 2004) (Available at: http://www.oha.doe.gov/cases/ee/tee0010.pdf.))
---------------------------------------------------------------------------
Just as with three-phase through-the-wall air-cooled air
conditioners and heat pumps, neither EPCA nor DOE has established a
specific definition for commercial ``three-phase SDHV air conditioners
and heat pumps.'' In its regulations, DOE defines a residential ``SDHV
air-cooled air conditioner or heat pump'' as ``a heating and cooling
product that contains a blower and indoor coil combination that: (1) Is
designed for and produces at least 1.2 inches of external static
pressure when operated at the certified air volume rate of 220-350 CFM
[cubic feet per minute] per rated ton of cooling; and (2) When applied
in the field, uses high-velocity room outlets generally greater than
1,000 fpm [feet per minute] which have less than 6.0 square inches of
free area.'' 10 CFR 430.2.
In terms of equipment construction, commercial and residential SDHV
air conditioners and heat pumps utilize the same components in the same
configurations to provide space cooling and heating. Commercial
versions of SDHV systems are essentially the same as residential
versions powered with single-phase electric power, except that they are
powered using three-phase electric power.
EPCA does not separate three-phase SDHV air conditioners and heat
pumps from other types of small commercial package air-conditioning and
heating equipment in its definitions. Therefore, EPCA's definition of
``small commercial package air-conditioning and heating equipment''
would include three-phase SDHV air conditioners and heat pumps.
Although EPCA does not use the term ``three-phase SDHV air conditioners
and heat pumps,'' the three-phase versions of this equipment,
regardless of cooling capacity, fall within the definition of ``small
commercial package air-conditioning and heating equipment.'' (42 U.S.C.
6311(8)(A)-(B)) There is no language in EPCA to indicate that three-
phase SDHV air conditioners and heat pumps are a separate type of
covered equipment.
The Federal energy conservation standards for three-phase,
commercial package air conditioners and heat pumps less than 65,000
Btu/h were established by EISA 2007 for products manufactured on or
after June 19, 2008. Specifically, section 314(b)(4)(C) of EISA 2007
amended section 342(a) of EPCA (42 U.S.C. 6313(a)) by adding new
provisions for three-phase commercial package air conditioners with a
cooling capacity of less than 65,000 Btu/h. (42 U.S.C. 6313(a)(7)(D))
As mentioned previously, this provision in EISA 2007 mandates seasonal
energy efficiency ratios for cooling mode and heating seasonal
performance factors for heating mode of air-cooled three-phase electric
central air conditioners and central air-conditioning heat pumps with a
cooling capacity of less than 65,000 Btu/h. (42 U.S.C. 6313(a)(7)(D))
Three-phase SDHV air conditioners and heat pumps are a smaller subset
of three-phase commercial package air conditioners with a cooling
capacity of less than 65,000 Btu/h and were not explicitly excluded
from the standards in section 314(b)(4)(C) of EISA 2007. Because EISA
2007 set such standards, and because they are more stringent than the
levels contained in ASHRAE Standard 90.1-2007 for those products, DOE
must continue to implement the EISA 2007 standards and will not
consider amended standard levels based on ASHRAE's action.
Thus, manufacturers of three-phase SDHV equipment must follow the
energy conservation standards in EISA 2007. DOE affirms that the EISA
2007 efficiency levels for three-phase small commercial package air-
conditioning and heating equipment less than 65,000 Btu/h apply to
three-phase SDHV air-cooled air conditioners and heat pumps with a
cooling capacity less than 65,000 Btu/h. Accordingly, DOE is not
conducting any further analysis on three-phase SDHV equipment. DOE
notes that it does not have authority to grant exception relief from
the prescriptive standard levels set by EISA 2007 for three-phase SDHV
air-cooled air conditioners and heat pumps, nor can it provide a waiver
from the test procedure as a means of avoiding this statutory
requirement.
3. Commercial Package Air-Cooled Air Conditioners With a Cooling
Capacity at or Above 760,000 Btu per Hour
EPCA specifies energy conservation standards for small (cooling
capacities at or above 65,000 and less than 135,000 Btu/h), large
(cooling capacities at or above 135,000 and less than 240,000 Btu/h),
and very large (cooling capacities at or above 240,000 and less than
760,000 Btu/h) commercial package air-cooled air conditioners. (42
U.S.C. 6313(a)(1)-(2), (7)-(9); 10 CFR 431.97) However, there are no
Federal energy conservation standards for commercial package air-cooled
air conditioners with a cooling capacity at or above 760,000 Btu/h. In
contrast, ASHRAE Standard 90.1-2007 sets the energy efficiency levels
for commercial package air-cooled air conditioners with a cooling
capacity at or above 760,000 Btu/h at 9.7 EER for equipment with
electric resistance heating, and 9.5 EER for equipment with any other
type of heating or without heating. The efficiency level in ASHRAE
Standard 90.1-2007 applies to equipment manufactured on or after
January 1, 2010.
Units with capacities at or above 760,000 Btu/h fall outside the
definitions of the small, large, and very large commercial package air-
cooled air conditioner equipment classes established in EPCA. (42
U.S.C. 6311(8)(A)-(D); 10 CFR 431.92) Therefore, DOE has concluded that
it does not have the authority to review the efficiency level for that
equipment. Accordingly, DOE is not conducting any further analysis on
commercial package air-cooled air conditioners with a cooling capacity
at or above 760,000 Btu/h.
4. Water-Cooled and Evaporatively-Cooled Commercial Package Air
Conditioners and Heat Pumps With a Cooling Capacity at or Above 135,000
Btu/h and Less Than 240,000 Btu/h
The Federal energy conservation standard for water-cooled and
evaporatively-cooled commercial package air conditioners and heat pumps
with a cooling capacity at or above 135,000 Btu/h and less than 240,000
Btu/h requires an EER no less than 11.0 for equipment manufactured on
or after October 29, 2004. 10 CFR 431.97, Table 1.
ASHRAE Standard 90.1-2007 includes the same efficiency level for
water-cooled and evaporatively-cooled commercial package air
conditioners and heat pumps with a cooling capacity at or above 135,000
Btu/h and less than 240,000 Btu/h that use electric
[[Page 12013]]
resistance heating (i.e., an EER no less than 11.0). However, ASHRAE
Standard 90.1-2007 specifies a different efficiency level for water-
cooled and evaporatively-cooled commercial package air conditioners and
heat pumps with a cooling capacity at or above 135,000 Btu/h and less
than 240,000 Btu/h that use any type of heating other than electric
resistance (i.e., an EER no less than 10.8).
DOE reviewed a final rule published on January 12, 2001 (hereafter
referred to as the January 2001 final rule) which considered ASHRAE
Standard 90.1-1999 to determine the efficiency levels applicable to
water-cooled and evaporatively-cooled commercial package air
conditioners and heat pumps with a cooling capacity at or above 135,000
Btu/h and less than 240,000 Btu/h. 66 FR 3336, 3340 (Jan. 12, 2001).
DOE adopted the efficiency levels specified by ASHRAE Standard 90.1-
1999 for water-cooled and evaporatively-cooled commercial package air
conditioners and heat pumps with a cooling capacity at or above 135,000
Btu/h and less than 240,000 Btu/h in the January 2001 final rule. Id.
at 33340. The January 2001 final rule did not establish different
efficiency levels for different types of supplemental heating systems
associated with this equipment. Id. All large water-cooled and
evaporatively-cooled commercial package air conditioners and heat pumps
were subject to the same efficiency level of 11.0 EER regardless of
heating type. ASHRAE Standard 90.1-1999 did establish different
efficiency levels applicable to water-cooled and evaporatively-cooled
commercial package air conditioners and heat pumps with a cooling
capacity at or above 135,000 Btu/h and less than 240,000 Btu/h for
different types of supplemental heating systems.
DOE has concluded that the ASHRAE Standard 90.1-2007 efficiency
levels for water-cooled and evaporatively-cooled commercial package air
conditioners and heat pumps with a cooling capacity at or above 135,000
Btu/h and less than 240,000 Btu/h that utilize electric resistance
heating or no heating would maintain the efficiency level in the
current Federal energy conservation standard. ASHRAE Standard 90.1-2007
would effectively lower the efficiency levels (i.e., EER) required by
EPCA and allow increased energy consumption for equipment that utilize
any type of heating other than electric resistance. Not only has ASHRAE
Standard 90.1-2007 not increased the efficiency levels for water-cooled
and evaporatively-cooled commercial package air conditioners and heat
pumps with a cooling capacity at or above 135,000 Btu/h and less than
240,000 Btu/h, but it could result in backsliding for those products
that utilize any type of heating other than electric resistance.
Accordingly, DOE is not conducting any further analysis on water-cooled
and evaporatively-cooled commercial package air conditioners and heat
pumps with a capacity at or above 135,000 Btu/h and less than 240,000
Btu/h.
5. Water-Cooled and Evaporatively-Cooled Commercial Package Air
Conditioners and Heat Pumps With a Cooling Capacity at or Above 240,000
Btu/h and Below 760,000 Btu/h
Under EPCA, ``commercial package air-conditioning and heating
equipment'' means ``air-cooled, water-cooled, evaporatively cooled, or
water source (not including ground water source) electrically operated,
unitary central air conditioners and central air-conditioning heat
pumps for commercial application.'' (42 U.S.C. 6311(8)(A); 10 CFR
431.92) EPCA goes on to define ``very large commercial package air-
conditioning and heating equipment'' as commercial package air-
conditioning and heating equipment that is rated at or above 240,000
Btu per hour and below 760,000 Btu per hour (cooling capacity). (42
U.S.C. 6311(8)(D); 10 CFR 431.92) Although 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 fall within the definition of very large commercial package air-
conditioning and heating equipment, EPCA does not specify Federal
energy conservation standards for this equipment class. (EPCA set
standards for air-cooled systems only, under 42 U.S.C. 6313(a)(7)-(9).)
ASHRAE added this new equipment class to ASHRAE Standard 90.1-2007,
setting efficiency levels at 11.0 EER for equipment with electric
resistance heating or without heating, and at 10.8 EER for equipment
with all other types of heating. Under EPCA, DOE must either adopt the
efficiency level specified in ASHRAE Standard 90.1-2007 for this new
class of equipment, or consider a more stringent level that would
result in significant additional energy savings and is technologically
feasible and economically justified. (42 U.S.C. 6313(a)(6))
For the July 2008 NODA, DOE reviewed the market for water-cooled
and evaporatively-cooled commercial package air conditioners and heat
pumps and found that manufacturers offer few models. 73 FR 40770,
40779-80 (July 16, 2008). For this study, DOE surveyed the AHRI
Directory of Certified Product Performance, but did not identify any
equipment on the market with a cooling capacity at or above 240,000
Btu/h. Id. DOE stated in the July 2008 NODA that there are no energy
savings associated with this class because there is no equipment being
manufactured in this class, and therefore, it is not possible to assess
the potential for additional energy savings beyond the levels
anticipated in ASHRAE Standard 90.1-2007. Id. Thus, DOE did not perform
a potential energy-savings analysis on this equipment type. DOE
specifically sought comment from interested parties on the market and
energy savings potential for this equipment type in the July 2008 NODA.
73 FR 40770, 40780 and 40791 (July 16, 2008).
In response to the March 2008 NODA, DOE did not receive any
comments on the market for water-cooled and evaporatively-cooled
commercial package air conditioners and heat pumps with a cooling
capacity at or above 240,000 Btu/h. In absence of a market for water-
cooled and evaporatively-cooled equipment in the given capacity range,
DOE cannot perform an economic and energy savings analysis.
However, DOE is proposing to adopt the ASHRAE Standard 90.1-2007
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 as required by EPCA.
(42 U.S.C. 6313(a)(6)(A)(ii)) Even though ASHRAE 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, DOE is specifying an upper bound to the cooling capacity since
DOE's authority under the very large commercial package air-
conditioning and heating equipment definition only covers equipment
with cooling capacities less than 760,000 Btu/h. (42 U.S.C.
6311(8)(D)(ii)) DOE is proposing to add subsection (d) to 10 CFR Part
431.97, which will specify the proposed standards and effective dates
for this equipment. These standards would be applicable to any water-
cooled and evaporatively-cooled commercial package air conditioner or
heat pump with a cooling capacity at or above 240,000 Btu/h and less
than 760,000 Btu/h manufactured on or after the effective date, which
is three years after the effective date specified in ASHRAE
[[Page 12014]]
Standard 90.1-2007. (42 U.S.C. 6313(a)(6)(D)(ii)) Since ASHRAE Standard
90.1-2007 does not explicitly set an effective date for this equipment,
DOE is interpreting the effective date of amended standards to be three
years from the publication of ASHRAE Standard 90.1-2007 (i.e., January
10, 2011).
C. Commercial Packaged Boilers
EPCA defines a ``packaged boiler'' as ``a boiler that is shipped
complete with heating equipment, mechanical draft equipment, and
automatic controls; usually shipped in one or more sections.'' (42
U.S.C. 6311(11)(B)) In its regulations, DOE further refined the
``packaged boiler'' definition to exclude a boiler that is custom
designed and field constructed. 10 CFR 431.102. Additionally, if the
boiler is shipped in more than one section, the sections may be
produced by more than one manufacturer, and may be originated or
shipped at different times and from more than one location. Id. In the
marketplace, there are various different types of commercial packaged
boilers, which can be distinguished based on the input capacity size
(i.e., small or large), fuel type (i.e., oil or gas), output (i.e., hot
water or steam), and draft type (i.e., natural draft or other).
However, the current Federal energy conservation standards separate
commercial packaged boilers only by the type of fuel used by the
boiler, creating two equipment classes: (1) Gas-fired, and (2) oil-
fired. (42 U.S.C. 6313(a)(4)(C)-(D); 10 CFR 431.87) As set forth below,
EPCA specified minimum Federal standards for commercial packaged
boilers manufactured on or after January 1, 1994. Id. The minimum
combustion efficiency at the maximum rated capacity of a gas-fired
packaged boiler with capacity of 300,000 Btu/h (300 kBtu/h) or more
must be 80 percent. (42 U.S.C. 6313(a)(4)(C); 10 CFR 431.87(a)) The
minimum combustion efficiency at the maximum rated capacity of an oil-
fired packaged boiler with capacity of 300,000 Btu/h or more must be 83
percent. (42 U.S.C. 6313 (a)(4)(D); 10 CFR 431.87(b))
In contrast, ASHRAE has adopted a different approach when
considering commercial packaged boilers, as described below. ASHRAE
Standard 90.1-2007 further divided these two equipment classes into the
following ten classes:
Small gas-fired hot water boilers;
Small gas-fired steam, all except natural draft boilers;
Small gas-fired steam, natural draft boilers;
Small oil-fired hot water boilers;
Small oil-fired steam boilers;
Large gas-fired hot water boilers;
Large gas-fired steam, all except natural draft boilers;
Large gas-fired steam, natural draft boilers;
Large oil-fired hot water boilers; and
Large oil-fired steam boilers.
Table IV.1 shows the ten equipment classes and efficiency levels
established by ASHRAE.
Table IV.1--ASHRAE Standard 90.1-2007 Energy Efficiency Levels for Commercial Packaged Boilers
----------------------------------------------------------------------------------------------------------------
ASHRAE standard ASHRAE standard
Size category 90.1-2007 90.1-2007
Equipment type (Input kBtu/h) (effective 3/2/ (effective 3/2/
2010)* 2020)*
----------------------------------------------------------------------------------------------------------------
Small Gas-fired Hot Water.............................. 300-2,500 ET = 80% ET = 80%
Small Gas-fired Steam All Except Natural Draft......... 300-2,500 ET = 79% ET = 79%
Small Gas-fired Steam Natural Draft.................... 300-2,500 ET = 77% ET = 79%
Small Oil-fired Hot Water.............................. 300-2,500 ET = 82% ET = 82%
Small Oil-fired Steam.................................. 300-2,500 ET = 81% ET = 81%
Large Gas-fired Hot Water.............................. >2,500 EC = 82% EC = 82%
Large Gas-fired Steam All Except Natural Draft......... >2,500 ET = 79% ET = 79%
Large Gas-fired Steam Natural Draft.................... >2,500 ET = 77% ET = 79%
Large Oil-fired Hot Water.............................. >2,500 EC = 84% EC = 84%
Large Oil-fired Steam.................................. >2,500 ET = 81% ET = 81%
----------------------------------------------------------------------------------------------------------------
*EC = combustion efficiency; ET = thermal efficiency.
Of particular relevance here, ASHRAE changed the metric for
determining energy efficiency for five equipment classes of small
commercial packaged boilers and three equipment classes of large
commercial packaged boilers in ASHRAE Standard 90.1-2007. Whereas the
Federal energy conservation standards for these eight equipment classes
are expressed in terms of combustion efficiency (42 U.S.C. 6313(a)(4)),
the efficiency levels in ASHRAE Standard 90.1-2007 are expressed in
terms of thermal efficiency. ASHRAE initially attempted to transition
small commercial boilers from an energy conservation standard using the
combustion efficiency metric to a standard using the thermal efficiency
metric the last time the efficiency levels for commercial packaged
boilers in ASHRAE Standard 90.1 were revised, in 1999 (i.e., ASHRAE
Standard 90.1-1999). However, DOE was unable to accept those efficiency
levels due to EPCA's anti-backsliding clause, which resulted in DOE
leaving the existing standard levels in place in terms of combustion
efficiency, as explained below. 72 FR 10038, 10043 (March 7, 2007). The
sections below detail the following: (1) The differences between the
thermal and combustion efficiency metrics; (2) the analysis done for
DOE's review of small commercial packaged boiler efficiency levels in
ASHRAE Standard 90.1-1999; (3) the market analysis developed for DOE's
current review of the efficiency levels in ASHRAE Standard 90.1-2007;
(4) the preliminary conclusions regarding the market analysis; and (5)
DOE's conclusions regarding the efficiency levels contained in ASHRAE
Standard 90.1-2007 for commercial packaged boilers.
1. Efficiency Metric Description (Combustion Efficiency and Thermal
Efficiency)
In general, the energy efficiency of a product is a function of the
relationship between the product's output of services and its energy
input. A boiler's output of services is measured largely by the energy
content of its output (steam or hot water). Consequently, its
efficiency is understood to be the ratio between its energy output and
its energy input, with the energy output being calculated as the energy
input minus the energy lost in producing the output. A boiler's energy
losses consist of energy that escapes through its flue (commonly
referred to as ``flue losses''), and of energy that escapes into the
area
[[Page 12015]]
surrounding the boiler (commonly referred to as jacket losses).
However, the combustion efficiency descriptor used for commercial
packaged boilers in EPCA only accounts for flue losses, and is defined
as ``100 percent minus percent flue loss.'' (42 U.S.C. 6313(a)(4)(C)-
(D); 10 CFR 431.82) The thermal efficiency descriptor used in ASHRAE
Standard 90.1-2007 accounts for jacket losses as well as flue losses,
and can be considered combustion efficiency minus jacket loss. Because
all boilers will have at least some jacket losses (even if small) and
because thermal efficiency takes these losses into account, the thermal
efficiency for a particular boiler, as measured under the same set of
conditions, must necessarily be lower than its combustion efficiency.
While the above-described relationship exists between combustion
and thermal efficiencies, there is no direct mathematical correlation
between these two measures of efficiency. The factors that contribute
to jacket loss (e.g., the boiler's design and materials) have little or
no direct bearing on combustion efficiency. The lack of correlation
between combustion efficiency and thermal efficiency causes
difficulties in comparing an energy conservation standard that is based
on thermal efficiency to an energy conservation standard based on
combustion efficiency. However, when DOE last evaluated the change in
efficiency metric for commercial packaged boilers in response to ASHRAE
Standard 90.1-1999, it developed a methodology to determine
quantitatively whether backsliding could occur, as explained in section
IV.C.2 below. DOE uses the methodology developed for determining
backsliding in DOE's review of ASHRAE Standard 90.1-1999, along with
the consideration of several other factors (described in detail in the
sections below) to evaluate the appropriateness of the efficiency
levels for commercial packaged boilers specified by ASHRAE Standard
90.1-2007.
2. Analysis of Energy Efficiency Levels in ASHRAE Standard 90.1-1999
Prior to publishing ASHRAE Standard 90.1-2007, the last time ASHRAE
revised the efficiency levels for commercial packaged boilers in ASHRAE
Standard 90.1 occurred in 1999 (ASHRAE Standard 90.1-1999). DOE
reviewed the efficiency levels in ASHRAE Standard 90.1-1999 for small
commercial packaged boilers and issued a Notice of Data Availability
(NODA) in March 2006 (here after referred to the March 2006 NODA) to
present its findings. 71 FR 12634 (March 13, 2006). In the March 2006
NODA, DOE examined whether the thermal efficiencies for small gas-fired
and small oil-fired commercial packaged boilers specified in ASHRAE
Standard 90.1-1999 would result in a decrease in the required
efficiency for particular piece of equipment compared to the Federal
energy conservation standard established by EPCA. Id.
For the 2006 analysis, DOE examined the average thermal efficiency
of small commercial packaged boiler models that were minimally
compliant with the Federal standard. Id. DOE defined ``minimally
compliant'' as being within one percent of the minimum combustion
efficiency set by EPCA. 71 FR 12634, 12684 (March 13, 2006). DOE
specifically examined the minimally complying boilers because the anti-
backsliding clause in EPCA mandates that DOE not prescribe a standard
that ``decreases the minimum required energy efficiency.'' (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(1)) \12\ DOE determined that it would be
appropriate to examine the boilers currently at the minimum required
combustion efficiency established in EPCA to determine whether the
potential adoption of the thermal efficiency levels in ASHRAE Standard
90.1, as Federal minimums, would allow for a decrease in the efficiency
of those models.
---------------------------------------------------------------------------
\12\ At the time, a different anti-backsliding clause was in
effect for commercial boilers, although it contained language
identical to that quoted here in the text (previously, 42 U.S.C.
6313(a)(6)(B)(ii) prior to the enactment of EISA 2007).
---------------------------------------------------------------------------
DOE calculated the average thermal efficiency of the boilers
classified as minimally compliant and compared it to the thermal
efficiency specified in ASHRAE Standard 90.1-1999. DOE found that the
thermal efficiency levels for small commercial packaged boilers
specified in ASHRAE Standard 90.1-1999 were significantly lower (i.e.,
1.8 percent lower for small gas-fired boilers and 3.1 percent lower for
small oil-fired boilers) than the average thermal efficiency of the
minimally complying models on the market. 71 FR 12634, 12640 (March 13,
2006). DOE stated in the March 2006 NODA that this analysis did not
establish directly that the small boiler efficiency levels in Standard
90.1-1999 were lower than those in EPCA because EPCA's combustion
efficiency standards for this equipment set maximum amounts of flue
losses, but do not regulate jacket losses. Id. Thermal efficiency is a
function of both flue losses (i.e., combustion efficiency) and jacket
losses. 71 FR 12634, 12640 (March 13, 2006). Since these two losses can
be independent of one another, in theory, a small boiler could meet or
exceed EPCA's applicable combustion efficiency standard, but have
sufficiently large jacket losses that cause it to have a thermal
efficiency lower than the efficiency levels specified in ASHRAE
Standard 90.1-1999. Id. Thus, DOE stated that adoption of ASHRAE
Standard 90.1-1999 thermal efficiency levels would not have directly
decreased the minimum combustion efficiencies required in EPCA for
small boilers. Id. However, the adoption of the ASHRAE Standard 90.1-
1999 thermal efficiency levels for small boilers would have had the
effect of lowering minimum combustion efficiency levels required by
EPCA. Id.
DOE outlined its basis for rejecting the efficiency levels for
small commercial boilers specified by ASHRAE Standard 90.1-1999 in the
March 2006 NODA. The basis for DOE's decision was as follows:
The thermal efficiency of a small commercial boiler is a
function of (1) the manufacturer's compliance with the applicable
EPCA combustion efficiency standard and (2) decisions it makes
independent of EPCA concerning the boiler's design, materials, and
other features that affect jacket losses. Although EPCA does not
regulate jacket losses, for both small gas-fired and oil-fired
commercial packaged boilers with relatively low combustion
efficiencies, manufacturers restricted jacket losses to levels that
kept thermal efficiencies, within an average of 2.6 percentage
points below their combustion efficiencies. [DOE] does not believe
its adoption of Standard 90.1-1999's thermal efficiency levels for
small commercial boilers would result in manufacturers' increasing
the amount of jacket losses for this equipment. No reason is readily
apparent as to why manufacturers would alter their current practices
to make equipment that has greater jacket losses, even if mandatory
thermal efficiency levels were set below the levels that equipment
was currently achieving. However, setting thermal efficiency
standards at levels lower than the thermal efficiencies of existing
equipment could potentially result in equipment with lower
combustion efficiencies. This allows for the possibility of
equipment having lower efficiencies than permitted by EPCA, meaning
that the current Federal minimum (required) efficiency would be
decreased.
For these reasons, it appears to [DOE] that EPCA precludes it
from prescribing as amended Federal energy conservation standards
the ASHRAE Standard 90.1-1999 thermal efficiency levels (one for
gas-fired and the other for oil-fired equipment) for small
commercial packaged boilers because each would decrease the minimum
required efficiency of the equipment. (42 U.S.C. 6313(a)(6)(B)(ii))
71 FR 12634; 12641 (March 13, 2006).
[[Page 12016]]
3. Analysis of Energy Efficiency Levels in ASHRAE Standard 90.1-2007
For its current analysis of the efficiency levels for commercial
packaged boilers in ASHRAE Standard 90.1-2007, DOE based the
preliminary market assessment and potential energy savings analysis
performed for the July 2008 NODA solely on the information provided by
the January 2008 edition of the I=B=R Ratings for Boilers, Baseboard
Radiation, Finned Tube (Commercial) Radiation and Indirect-Fired Water
Heaters\13\ (referred to hereafter as the January 2008 I=B=R
Directory).
---------------------------------------------------------------------------
\13\ The Hydronics Institute division of the Air Conditioning,
Heating, and Refrigerating Institute, I=B=R Ratings for Boilers,
Baseboard Radiation, Finned Tube (Commercial) Radiation, and
Indirect-Fired Water Heaters (Jan. 2008). Available at: http://
www.gamanet.org/gama/inforesources.nsf/vAttachmentLaunch/
E9E5FC7199EBB1BE85256FA100838435/$FILE/01-08_CBR.pdf.
---------------------------------------------------------------------------
Regarding the preliminary analysis performed in the July 2008 NODA,
AHRI stated its belief that the January 2008 I=B=R Directory is
incomplete because participation in the certification program and
listing in the directory is voluntary and some manufacturers do not
participate. (AHRI, No. 3 at p.3) Burnham Hydronics made a similar
assertion, pointing out that Bryan Steam's (another Burnham Holdings
subsidiary) boilers are not listed in the January 2008 I=B=R Directory
(Burnham Hydronics, No. FDMS DRAFT 0003 at pp. 1-2).
In response to these comments and in an effort to enhance its
analysis, DOE made further efforts to identify commercial boiler
manufacturers along with commercial boiler equipment produced by these
manufacturers that are not included in the January 2008 I=B=R
Directory. DOE examined the Canadian Standards Association-
International (CSA-International) certified product listings and the
South Coast Air Quality Management District (SCAQMD) list of certified
boiler equipment. For the CSA-International product listings, DOE only
identified those manufacturers that certified their equipment to U.S.
standards. From these two product listings, DOE went to each
manufacturer's Web site and verified that they produced equipment that
meets the definition of commercial packaged boilers. From this review,
DOE identified 16 additional commercial boiler manufacturers, as listed
in section V.B.3.b. DOE also identified manufacturers with other model
offerings not included in the January 2008 I=B=R Directory. When DOE
found equipment that fit the definition of ``commercial packaged
boiler'' and found efficiency ratings reported for that equipment in
manufacturer literature, DOE included the equipment in its database of
commercial boiler equipment used for this analysis (hereafter referred
to as DOE's commercial boiler database).
However, for today's analysis of commercial packaged boilers, DOE
did not use all of the models in the January 2008 I=B=R Directory or in
its own database. DOE filtered out any boiler models that did not
contain all of the information needed for DOE's analysis or that
appeared to have erroneous efficiency ratings before analyzing
commercial packaged boiler data for its market analysis. DOE divided
the boilers into the equipment classes in which they would be
classified to apply ASHRAE Standard 90.1-2007. Then, for the eight
equipment classes where ASHRAE Standard 90.1-2007 specifies an
efficiency level in thermal efficiency, DOE filtered out boilers that
did not contain a thermal efficiency rating. DOE did not filter out
models without a thermal efficiency rating for the two equipment
classes where ASHRAE Standard 90.1-2007 specifies an efficiency level
in combustion efficiency. Next, for all equipment classes, DOE
eliminated any boilers where both thermal and combustion efficiency
were provided, but the thermal efficiency was higher than the
combustion efficiency. DOE eliminated those boilers because it is
physically impossible for a boiler to have a thermal efficiency that is
higher than its combustion efficiency, which led DOE to conclude that
the efficiency ratings for those boilers may be inaccurate.\14\ See
chapter 2 of the NOPR Technical Support Document (TSD)\15\ for other
market data regarding DOE's commercial packaged boiler database of
equipment.
---------------------------------------------------------------------------
\14\ These anomalous ratings are likely due to Hydronics
Institute's (HI) de-rating procedures, manufacturers' interpolation
of results, varying test chambers and instrument calibration among
manufacturers, or submittal of erroneous ratings.
\15\ Available at: http://www1.eere.energy.gov/buildings/appliance_standards/commercial/ashrae_products_docs_meeting.html.
---------------------------------------------------------------------------
To review the commercial packaged boiler efficiency levels
specified in ASHRAE Standard 90.1-2007, DOE first developed a
quantitative analysis similar to that conducted for the March 2006 NODA
for the commercial boiler equipment classes specified in ASHRAE
Standard 90.1-2007. DOE analyzed the available market data to estimate
the percentage of the market held by each equipment class. DOE also
examined the percentage of models available on the market below the
efficiency levels in ASHRAE Standard 90.1-2007, the average efficiency
of models currently available on the market, and the range of
efficiencies currently on the market for each equipment class. In
addition, for each equipment class with an efficiency metric change,
DOE separated out the models that minimally comply with the existing
EPCA standard levels (i.e., models with 80 <= EC < 81 for
gas-fired boilers and 83 <= EC < 84 for oil-fired boilers),
and then calculated the average thermal efficiency of those models for
each equipment class based on the thermal efficiencies in DOE's
database of market data. Table IV.2 shows the results of DOE's
quantitative market analysis for the eight equipment classes where
ASHRAE Standard 90.1-2007 specifies a thermal efficiency level, as well
as for the two equipment classes where ASHRAE Standard 90.1-2007
specifies a combustion efficiency level.
Table IV.2--Results of DOE's Commercial Packaged Boiler Quantitative Market Analysis *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percentage of
ASHRAE Average Range of market below
Current standard 90.1- thermal thermal ASHRAE Average
Equipment class Market share** federal energy 2007 efficiency of efficiencies standard 90.1- efficiency of
conservation efficiency minimally of minimally 2007 equipment
standard level complying complying efficiency class
boilers boilers level
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small Gas-fired Hot Water............... 24.2% 80% EC 80% ET 78.3% ET 77.0%-80.0% 8.9% 84.9% ET
Small Gas-fired Steam All Except Natural 8.2% 80% EC 79% ET 79.6% ET 79.3%-79.9% 9.0% 80.5% ET
Draft..................................
[[Page 12017]]
Small Gas-fired Steam Natural Draft..... 12.6% 80% EC 77% ET (2010) 76.7% ET 75.4%-78.6% 26.5% (2010) 77.4% ET
79% ET (2020) 77.6% (2020)
Small Oil-fired Hot Water............... 6.8% 83% EC 82% ET 80.7% ET 79.2%-81.8% 29.3% 83.8% ET
Small Oil-fired Steam................... 11.4% 83% EC 81% ET 81.6% ET 79.7%-83.6% 17.5% 82.2% ET
Large Gas-fired Hot Water............... 3.9% 80% EC 82% EC .............. .............. 17.0% 83.6% EC
Large Gas-fired Steam All Except Natural 7.1% 80% EC 79% ET 79.4% ET 78.8%-79.9% 17.7% 80.6% ET
Draft..................................
Large Gas-fired Steam Natural Draft..... 9.1% 80% EC 77% ET (2010) 78.1% ET 75.4%-79.4% 3.3% (2010) 78.9% ET
79% ET (2020) 57.7% (2020)
Large Oil-fired Hot Water............... 1.9% 83% EC 84% EC .............. .............. 0% 86.5% EC
Large Oil-fired Steam................... 15.0% 83% EC 81% ET 81.9% ET 81.1%-83.5% 0% 82.8% ET
--------------------------------------------------------------------------------------------------------------------------------------------------------
* EC is combustion efficiency and ET is thermal efficiency.
** DOE calculated the percentage of boilers in each equipment class based on the number of models it analyzed for that equipment class divided by the
total number of models it analyzed in all equipment classes. These totals were taken after all filters and modifications to DOE's commercial packaged
boiler database, described in section 3, were applied.
4. Preliminary Conclusions From Market Analysis for Commercial Packaged
Boilers
Based solely on the quantitative analysis, DOE found that the
average thermal efficiency of the minimally compliant equipment was
higher than the efficiency level specified by ASHRAE Standard 90.1-2007
for five of the commercial packaged boiler equipment classes, as shown
in Table IV.2. This indicates that it would be theoretically possible
for backsliding to occur for those equipment classes. As explained
below, several interested parties commented on DOE's method for
determining backsliding in response to the preliminary analysis
presented in the July 2008 NODA. However, when DOE also evaluated a
number of other considerations (including accuracy of the thermal
efficiency ratings), it tentatively concluded that backsliding is
unlikely to occur for any of the classes in question. This topic is
discussed in further detail below.
Burnham Hydronics stated that DOE could not use the least efficient
boiler on the market as the de facto standard for determining whether a
standard is backsliding. (Burnham Hydronics, No. FDMS DRAFT 0003 at p.
2) Burnham Hydronics asserted that ``DOE's legal framework defines
backsliding in terms of `maximum allowable energy use,' not `maximum
energy actually used by an individual product on the market at a
particular moment in time.' '' (Burnham Hydronics, No. FDMS DRAFT 0003
at p. 2) To determine that an efficiency level is backsliding, Burnham
Hydronics stated that DOE must ``prove that a less efficient boiler
could not be built under the current [F]ederal standards [than could be
built if the efficiency levels in ASHRAE Standard 90.1-2007 were
adopted as Federal energy conservation standards].'' (Burnham
Hydronics, No. FDMS DRAFT 0003 at pp. 2)
In response, DOE does not agree with Burnham's assertion that to
determine backsliding DOE must prove that a less efficient boiler could
not be built under the Federal standards than could be built if the
efficiency levels in ASHRAE Standard 90.1-2007 were adopted as Federal
energy conservation standards. EPCA's anti-backsliding clause states,
``[t]he Secretary may not prescribe any amended standard which
increases the maximum allowable energy use * * * or decreases the
minimum required energy efficiency of a covered product.'' (42 U.S.C.
6295(o)(1); 42 U.S.C. 6316(a)) Because the Federal standard levels for
commercial packaged boilers are specified in terms of an energy
efficiency requirement rather than an allowable energy use requirement,
DOE believes that the applicable part of EPCA's anti-backsliding clause
here is the requirement that the Secretary may not prescribe any
amended standard that ``decreases the minimum required efficiency'' of
this equipment. DOE believes that to determine backsliding it must
prove that the efficiency levels in ASHRAE Standard 90.1-2007 would
allow for the construction of equipment with lower combustion
efficiencies than the current Federal standards require, thereby
decreasing the minimum required energy efficiency. Therefore, to
determine backsliding, DOE examined whether the thermal efficiency
levels in ASHRAE Standard 90.1-2007 would effectively result in a
decrease in the required combustion efficiencies currently specified in
EPCA (i.e., 80 percent combustion efficiency for gas-fired equipment
and 83 percent combustion efficiency for oil-fired equipment).
Further, Federal standards currently do not regulate the thermal
efficiency or the jacket losses of commercial packaged boilers.
Consequently, although it is not practical, a boiler could
theoretically be constructed with 100 percent jacket losses under the
Federal standards, resulting in an infinite amount of energy use. If
DOE were to examine ``the maximum allowable energy use,'' as Burnham
suggests, then any thermal efficiency level would not constitute
backsliding because there are no existing Federal energy conservation
standards regulating the jacket losses. Therefore, DOE has investigated
the potential for backsliding with respect to the energy efficiency of
the equipment rather than the allowable energy use (as noted above).
DOE does note, however, that models currently being manufactured
with the highest jacket losses (i.e., the models
[[Page 12018]]
with the lowest thermal efficiencies) represent the practical limit to
the amount of jacket losses that occur in commercial boilers. DOE also
notes that there is equipment manufactured with thermal efficiencies
lower than the thermal efficiency levels specified by ASHRAE Standard
90.1-2007, which would create the need for manufacturers to discontinue
or redesign certain models to meet the efficiency levels in ASHRAE
Standard 90.1-2007 if those levels are adopted as Federal minimums.
Because certain models manufactured under the current Federal standards
would be discontinued or replaced with higher-efficiency models if the
ASHRAE Standard 90.1-2007 levels were adopted as Federal minimums, DOE
recognizes that the ASHRAE Standard 90.1-2007 efficiency levels
represent an increase in efficiency and a decrease in energy use when
compared to the EPCA levels.
AHRI stated that the criterion to determine backsliding (where a
specific minimum thermal efficiency requirement is considered less
stringent if it might theoretically allow a model to have a combustion
efficiency lower than the current minimum combustion efficiency
requirement) is overly stringent because there is no direct
mathematical correlation between combustion and thermal efficiency.
(AHRI, No. 3 at p. 2)
DOE considered both Burnham Hydronics' and AHRI's comments when
determining whether the efficiency levels for commercial packaged
boilers are in violation of EPCA's anti-backsliding clause. DOE
considered the difference between the average thermal efficiency of
minimally-complying models and the efficiency levels specified in
ASHRAE Standard 90.1-2007. DOE used the average thermal efficiency
because DOE found there was a range of thermal efficiencies that
correspond to the minimally-complying models. DOE found that the
difference is very small (between 0.4 and 0.9 percent) for those
equipment classes where it is believed that backsliding could
potentially occur. Therefore, there are several other important issues
to consider in determining whether the efficiency levels specified in
ASHRAE Standard 90.1-2007 are, in fact, backsliding. DOE also
considered the uncertainty of the reported thermal efficiency ratings,
the benefit of switching to an energy conservation standard using a
thermal efficiency metric, and the overall energy savings that could
result from adopting the ASHRAE Standard 90.1-2007 efficiency levels
for commercial packaged boilers. Each of these considerations is
discussed below.
a. Accuracy of Thermal Efficiency Ratings
The Federal energy conservation standards for commercial packaged
boilers are expressed only using the combustion efficiency metric. 10
CFR 431.86. Although the industry standard incorporated by reference in
the applicable DOE test procedure also contains a test for thermal
efficiency, DOE's test procedures only specify that manufacturers need
to conduct the combustion efficiency test for determining the energy
efficiency of commercial packaged boilers. Id. Consequently, all
manufacturers test for combustion efficiency, but only some of the
manufacturers test for thermal efficiency. Of the manufacturers that
report results for thermal efficiency, only some actually test for
thermal efficiency, while the others estimate it. The method of
estimation can vary from one manufacturer to another and is not
described in manufacturer literature. The fact that a requirement to
test and rate the thermal efficiency of commercial packaged boilers in
accordance with an approved DOE test procedure does not exist brings
into question the validity of the reported values for thermal
efficiency. The reported thermal efficiency ratings are the basis for
the vast majority of DOE's quantitative analysis for this equipment.
Since DOE has no way of determining which thermal efficiency ratings
are the result of actual testing and which are simply manufacturer
estimates, DOE cannot be absolutely certain of the accuracy and
validity of the thermal efficiency ratings used in its analyses. In
fact, when performing an analysis of its data, DOE had to exclude
nearly one-fifth of the ratings because they appeared to be
erroneous.\16\ However, with the exclusion of the models with erroneous
ratings and the uncertainties in accuracy of the considered ratings,
DOE believes that it has adequately controlled for the potential
sources of error and that the 2008 I=B=R Directory and manufacturer
catalogs represent the best available sources of information that could
be used for the analyses that DOE must conduct in this rulemaking.
---------------------------------------------------------------------------
\16\ These boiler models list a thermal efficiency rating
greater than its combustion efficiency rating, which is physically
impossible. These anomalous ratings are likely due to Hydronics
Institute's (HI's) de-rating procedures, manufacturers'
interpolation of results, variances in test chambers and instrument
calibration among manufacturers, or submittal of erroneous ratings.
---------------------------------------------------------------------------
As mentioned previously, AHRI stated that DOE's analysis relied too
heavily on the information presented in the 2008 I=B=R Directory. AHRI
stated that the directory is incomplete because participation in the
certification program and listing in the directory is voluntary and
some manufacturers do not participate. Because the program does not
require a manufacturer to list all the models that come within the
scope of the program, AHRI asserted that the commercial boiler listings
are incomplete, and stated that it can be assumed manufacturers do not
list their least-efficient offerings. Further, AHRI stated that due to
anomalous combustion and thermal listings caused by a variety of
testing issues, the values from the tests cannot be used definitively
to evaluate the true relationship between combustion and thermal
efficiency for a specific listing. (AHRI, No. 3 at pp. 3-4)
Burnham Hydronics also stated that the I=B=R Directory is
unsuitable for use as the basis for DOE's analysis. Burnham Hydronics
stated that the I=B=R Directory does not consistently represent the
relationship between thermal and combustion efficiency. (Burnham
Hydronics, No. FDMS DRAFT 0003 at pp. 1-2)
DOE agrees with the comments made by AHRI and Burnham Hydronics,
and recognizes the inconsistent relationship between combustion and
thermal efficiencies listed in the January 2008 I=B=R Directory.
However, because no other widely-recognized source for commercial
packaged boiler ratings exists, DOE relied on the January 2008 I=B=R
Directory and manufacturers' catalogs as its primary sources for its
analysis. Whenever possible, DOE checked the efficiency ratings in the
January 2008 I=B=R Directory against manufacturers' literature for
consistency. Also, although manufacturers are not required to test for
thermal efficiency and report it to the I=B=R Directory, DOE believes
the majority of the ratings in the I=B=R Directory are valid. DOE
believes the I=B=R Directory, with the addition of boiler models from
manufacturers that are not included from the directory, provides a good
proxy of what the thermal efficiency ratings would be if all commercial
boiler models were tested and rated according to the Hydronics
Institute (HI) BTS-2000 test procedure for thermal efficiency (i.e.,
the industry standard incorporated by reference in the DOE test
procedure for these products).
Once DOE has determined the efficiency levels in ASHRAE Standard
90.1-2007 for commercial packaged boilers represent, on average, an
increase in energy efficiency when
[[Page 12019]]
compared to the Federal energy conservation standards for this
equipment, DOE will further consider amended energy conservation
standards at the ASHRAE Standard 90.1-2007 efficiency levels as
presented in section V. The limited confidence in the thermal
efficiency data being reported for commercial packaged boilers and the
lack of a mathematical conversion between thermal and combustion
efficiency (explained in section IV.A.1) become an issue when deciding
whether efficiency levels in ASHRAE Standard 90.1-2007 are comparable
to Federal energy conservation standards, which would be based solely
on the average thermal efficiency of minimally-complying equipment. In
addition, even if all commercial packaged boilers were tested for
thermal efficiency, there would be some margin of error inherent to the
testing and measurement of thermal efficiency. For these reasons, DOE
believes the difference between the listed thermal efficiencies of the
minimally-complying models and the efficiency levels in ASHRAE Standard
90.1-2007 is within the margin of error of this analysis. (See chapter
2 of the NOPR TSD for more details about thermal efficiency of
minimally-complying models.)
This identified problem would be mitigated if DOE migrates to a
thermal efficiency metric, because DOE would amend its test procedure
to require manufacturers to verify their equipment's thermal efficiency
ratings through testing in accordance with a DOE-mandated test
procedure. A Federal energy conservation standard based on thermal
efficiency, rather than combustion efficiency, would also require
manufacturers to rate the thermal efficiency of their equipment,
thereby resolving the issue of uncertainty in the reporting of the
thermal efficiency metric.
b. Benefits of the Thermal Efficiency Metric
In the March 2006 NODA, DOE stated that the thermal efficiency
metric provides a preferred method for measuring the efficiency of
commercial boilers because it is more inclusive and better reflects the
total energy losses of the equipment, as compared to the combustion
efficiency metric prescribed by EPCA. 71 FR 12634, 12641 (March 13,
2006). In addition, the thermal efficiency metric is more consistent
with EPCA's definition of ``energy efficiency'' \17\ for commercial
equipment. Id. Interested parties agree that thermal efficiency is
superior to combustion efficiency as a metric for rating boilers
because it is a more complete measure of efficiency. (AHRI, No. 3 at p.
3) Although DOE preferred the thermal efficiency approach expressed in
ASHRAE Standard 90.1-1999, DOE was prevented from adopting those
standard levels due to the backsliding concerns discussed above. ASHRAE
Standard 90.1-2007, for the reasons discussed below, has largely
resolved such concerns. Not adopting the efficiency levels in ASHRAE
Standard 90.1-2007 for several of the equipment classes would prevent
the efficiency metric change (from combustion efficiency to thermal
efficiency) that DOE has recognized in the past and continues to
recognize as beneficial in the regulation of commercial packaged
boilers.
---------------------------------------------------------------------------
\17\ For commercial equipment, ``[t]he term `energy efficiency'
means the ratio of the useful output of services from an article of
industrial equipment to the energy use by such article, determined
in accordance with test procedures under section 6314 of [title 42
of the United States Code].'' (42 U.S.C. 6311(3))
---------------------------------------------------------------------------
In a written comment to DOE, AHRI stated that there are several key
aspects that support rating commercial boilers using the thermal
efficiency metric. These key factors include: (1) Thermal efficiency
provides more useful information since it indicates the energy being
put into the water; (2) in many cases the specified minimum thermal
efficiency will require models to have a combustion efficiency higher
than the current minimum combustion efficiency, and the current
combustion efficiency requirements allow models to have significantly
lower thermal efficiency values; and (3) even if the thermal efficiency
is two or three points less than the corresponding combustion
efficiency, it is still more stringent than a combustion efficiency
standard because it focuses on energy transferred rather than energy
not lost through the flue. (AHRI, No. 3 at p. 2)
DOE agrees with AHRI that the thermal efficiency metric does
provide key benefits over the current combustion efficiency metric for
commercial packaged boilers used in EPCA. As stated in the March 2006
NODA, the thermal efficiency metric provides a preferred method for
measuring the efficiency of commercial boilers because it is more
inclusive and better reflects the total energy losses in the equipment
than the combustion efficiency metric prescribed by EPCA. 71 FR 12634,
12641 (March 13, 2006). In addition, because ASHRAE Standard 90.1 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. Once the issue of differing
efficiency metrics is resolved, DOE will again be able to make direct
comparisons with future versions of ASHRAE Standard 90.1.
c. Overall Energy Savings
As a further consideration, the efficiency levels specified in
ASHRAE Standard 90.1-2007, taken together, when compared to the Federal
energy conservation standards, would result in increased energy savings
to the Nation. Conversely, a decision by DOE not to adopt the
efficiency levels in ASHRAE Standard 90.1-2007 for the equipment
classes where it believes backsliding could possibly occur would result
in a loss of potential energy savings by not adopting the thermal
efficiency levels provided in ASHRAE Standard 90.1-2007 for those five
equipment classes (See chapter 7 of the NOPR TSD for details on the
potential energy savings). Although not controlling on the issue of
determining backsliding, it does carry some weight in terms of how DOE
acts in resolving the uncertainties associated with conversions and
calculations between the two different metrics.
5. Conclusions Regarding the Efficiency Levels in ASHRAE Standard 90.1-
2007 for Commercial Packaged Boilers
When considering if adopting ASHRAE Standard 90.1-2007's efficiency
levels would violate EPCA's anti-backsliding provision, DOE considered
the uncertainty in the reporting of the thermal efficiency metric, the
benefits of rating the efficiency of commercial packaged boilers with a
thermal efficiency metric, and the overall energy savings that would
result from the adoption of ASHRAE Standard 90.1-2007. When viewed
comprehensively, DOE has tentatively concluded that these
considerations justify analyzing and proposing adoption of the
efficiency levels in ASHRAE Standard 90.1-2007 as Federal energy
conservation standards (see section V for a discussion of the
commercial packaged boiler analysis methodology and section VI for the
analytical results of the commercial packaged boiler analysis).
Although the average thermal efficiency of minimally-compliant \18\
models on the market is slightly higher than the levels specified in
ASHRAE Standard 90.1-2007 for 5 of the 10 equipment classes, the
difference
[[Page 12020]]
between the two values are small, which is within the margin of error
of the analysis.\19\ The current situation is unlike the boiler
analysis conducted for the March 2006 NODA, which reviewed the
commercial packaged boiler efficiency levels in ASHRAE Standard 90.1-
1999 and found the differences between the ASHRAE Standard 90.1-1999
efficiency levels and the average thermal efficiency of minimally-
compliant models to be relatively large (i.e., significantly greater
than a percentage point).
---------------------------------------------------------------------------
\18\ It is noted here that in the selection of ``minimally
compliant'' boilers, DOE included boilers whose combustion
efficiency was up to 0.9 percentage point above the EPCA minimum
level.
\19\ DOE believes the small differences between the two
efficiency metrics attributing to the margin of error could arise
from a number of factors including manufacturing tolerances, testing
tolerances, and equipment design differences.
---------------------------------------------------------------------------
Therefore, based upon this analysis of the efficiency levels in
ASHRAE Standard 90.1-2007, DOE has tentatively concluded that the
qualitative considerations outweigh the slight differences revealed by
the quantitative analysis of the ASHRAE Standard 90.1-2007 efficiency
levels for the five equipment classes at issue. In light of the
foregoing, DOE has determined that the efficiency levels for all ten
equipment classes identified in ASHRAE Standard 90.1-2007 represent an
increase in efficiency for commercial packaged boilers as compared to
the current Federal energy conservation standards. Consequently, DOE
performed a market analysis, economic analysis, and energy savings
analysis for all of the identified commercial packaged boiler equipment
classes to consider energy conservation standards at the ASHRAE
Standard 90.1-2007 efficiency levels, as well as levels more stringent
than those found in ASHRAE Standard 90.1-2007, in accordance with EPCA.
(42 U.S.C. 6313 (a)(6)(A)(ii)(II))
V. Methodology and Discussion of Comments for Commercial Packaged
Boilers
This section addresses the analyses DOE has performed for this
rulemaking with respect to commercial packaged boilers. A separate
subsection addresses each analysis. DOE used a spreadsheet to calculate
the life-cycle cost (LCC) and payback periods (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 proposes 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. In addition, DOE is proposing to remove certain
outdated provisions from the test procedure (e.g., references to an
alternate test procedure that has been phased out).
A. Test Procedures
Section 343(a) of EPCA requires the Secretary to amend the test
procedures for packaged boilers to the latest version generally
accepted by industry or the rating procedures developed or recognized
by the Air-Conditioning and Refrigeration Institute (ARI) \20\ or by
ASHRAE, as referenced by ASHRAE/IES Standard 90.1, unless the Secretary
determines by clear and convincing evidence that the latest version of
the industry test procedure does not meet the requirements for test
procedures described in paragraphs (2) and (3) of section 343(a). (42
U.S.C. 6314(a)(4)(B)) 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.
---------------------------------------------------------------------------
\20\ 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 and reaffirmed BTS-
2000 (Rev06.07) as the testing standard for commercial boilers. The
changes include updating the numbering of the subsections and a change
to the tolerance of the inlet temperature for condensing boilers (from
5 [deg]F to 10 [deg]F). DOE compared the two
versions and found that the only changes were to the inlet temperature
tolerances and there were no other changes to the testing method.
Furthermore, DOE believes the changes to the test tolerances do not
significantly affect the measure of energy efficiency. Therefore, DOE
is proposing to update the uniform test procedure for commercial
packaged boilers to incorporate by reference the version of HI BTS-2000
(Rev06.07) that AHRI reaffirmed in 2007.
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
Because DOE no longer accepts the ASME PTC 4.1 as a method for
testing steel commercial packaged boilers, DOE is proposing to remove
item (b)(2) of 10 CFR 431.85, which listed ASME PTC 4.1 as a material
incorporated by reference. Further, DOE proposes to delete item (d) of
10 CFR 431.86, which describes use of ASME PTC 4.1 as an alternative
test method for commercial packaged boilers. Finally, in item (c) of 10
CFR 431.86, DOE proposes to remove the sentence instructing
manufacturers to follow either the provisions in (c) or (d) of that
part for steel commercial packaged boilers because part (d) will be
removed. Manufacturers are required to use the provisions in part (c)
for all commercial packaged boilers. 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 still 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.
[[Page 12021]]
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 notice, DOE is proposing
to adopt as Federal energy conservation standards several thermal
efficiency levels described in ASHRAE Standard 90.1-2007. For this
reason, DOE intends to amend 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 (Rev06.07) test procedure. Thus, DOE is
proposing to add the definition of ``thermal efficiency'' to 10 CFR
431.82 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 proposing to amend the definition of
``combustion efficiency'' to remove the statement describing it as
``the efficiency descriptor for packaged boilers.'' DOE is proposing
this change because after the effective date of the final rule amending
the energy conservation standards for commercial packaged boilers to
include efficiency levels based on those specified in ASHRAE Standard
90.1-2007 (i.e., March 2, 2012), combustion efficiency would no longer
be the efficiency descriptor for all commercial packaged boiler
equipment classes. Thus, DOE proposes to amend the definition of
``combustion efficiency'' in 10 CFR 431.82 to read: ``Combustion
efficiency for a commercial packaged boiler is determined using the
test procedures prescribed under Sec. 431.86 and equals to 100 percent
minus percent flue loss (percent flue loss is based on input fuel
energy).'' DOE is seeking input from interested parties about its
proposed definitions for ``thermal efficiency'' and ``combustion
efficiency.'' This is identified as Issue 1 under ``Issues on Which DOE
Seeks Comment'' in section VIII.E of today's NOPR.
In addition, DOE is proposing to modify 10 CFR 431.86 (Uniform test
method for measurement of energy efficiency of commercial packaged
boilers) to include requirements for the measurement of thermal
efficiency for those commercial packaged boiler classes where the
thermal efficiency metric is being proposed in today's notice. In 10
CFR 431.86(a), Scope, DOE is proposing to modify the scope to state
that in addition to procedures for measuring combustion efficiency of
commercial packaged boilers, that section also contains procedures for
measuring the thermal efficiency of commercial packaged boilers. Under
10 CFR 431.86(c), ``Test Method for Commercial Packaged Boilers--
General,'' DOE is proposing to update several items. DOE proposes to
amend subparagraph (c)(1)(ii), the test setup requirements, to require
manufacturers to perform the thermal efficiency test in section 5.1
(thermal efficiency test) of the HI BTS-2000 (Rev06.07) for the
following eight commercial packaged boiler equipment classes, if the
ASHRAE Standard 90.1-2007 efficiency levels go into effect as Federal
energy conservation standards, as proposed:
Small gas-fired hot water;
Small gas-fired steam all except natural draft;
Small gas-fired steam natural draft;
Small oil-fired hot water;
Small oil-fired steam;
Large gas-fired steam all except natural draft;
Large gas-fired steam, natural draft;
Large oil-fired steam.
DOE proposes to direct manufacturers rating their commercial
packaged boilers before March 2, 2012 (the effective date of a final
rule for amended energy conservation standards) to use the test setup
requirements in section 5.2 (Combustion Efficiency Test) of the HI BTS-
2000 (Rev06.07) for all commercial packaged boiler equipment classes in
accordance with the Federal energy conservation standards in 10 CFR
431.86. 69 FR 61961 (Oct. 21, 2004). DOE is proposing that
manufacturers use the revised version of the test procedure (i.e., HI
BTS-2000 (Rev06.07) effective thirty days from the publication of the
final rule in the Federal Register to represent their model's energy
efficiency and compliance with the current Federal energy conservation
standards. DOE is also proposing to revise the requirement to conduct
the combustion efficiency test to specify that beginning on March 2,
2012 (the effective date if DOE were to adopt the ASHRAE Standard 90.1-
2007 efficiency levels as Federal energy conservation standards) the
combustion efficiency test will only be required for large gas-fired
hot water and large oil-fired hot water boilers.
In 10 CFR 431.86(c)(1)(iv), ``Test Conditions,'' DOE proposes to
add a requirement to use the test conditions from section 8.0 of HI
BTS-2000 (Rev06.07) for testing the thermal efficiency, in addition to
the combustion efficiency (which is already provided, along with
certain exclusions). DOE proposes to update the exclusions for the
combustion efficiency test conditions to exclude only section 8.6.2 to
reflect the changes made to HI BTS-2000 (Rev06.07) when it was
reaffirmed in 2007. In addition, DOE proposes to delete 10 CFR
431.86(c)(1)(iv)(A). DOE is proposing to eliminate 10 CFR
431.86(c)(1)(iv)(A) from the test procedure, because in the HI BTS-2000
(Rev06.07) (reaffirmed 2007), the test procedures for condensing
boilers were amended to be identical to those listed in 10 CFR
431.86(c)(1)(iv)(A). Therefore, paragraph (c)(1)(iv)(A) and any
provisions referring to it are no longer necessary. Eliminating this
paragraph and replacing it with a reference to the applicable HI BTS-
2000 (Rev06.07) section (section 8.5.2 for test conditions and section
9.1.2.1.4 for test procedures) would not introduce any changes to the
test procedure because the requirements in HI BTS-2000 (Rev06.07) are
now the same as the requirements that had been set forth in 10 CFR
431.86(c)(1)(iv)(A).
In 10 CFR 431.86(c)(2), ``Test Measurements,'' DOE is proposing to
include an additional provision to measure thermal efficiency according
to sections 9.1 and 10.1 of the HI BTS-2000 (Rev06.07) for the
commercial packaged boiler equipment classes in cases where the Federal
standard would be specified in thermal efficiency. DOE is proposing
that manufacturers should continue to measure the combustion efficiency
of equipment in those eight equipment classes until proposed amended
energy conservation standards based on the ASHRAE Standard 90.1-2007
efficiency levels would become effective on March 2, 2012. At such
time, manufacturers would be expected to begin measuring the thermal
efficiency for the applicable equipment classes. Also, DOE proposes to
update the instructions for measuring combustion efficiency in the Test
Measurements section to specify that combustion efficiency only needs
to be measured for the two equipment classes where the Federal standard
will be specified in combustion efficiency (i.e., large gas-fired hot
water and large oil-fired hot water commercial packaged boilers) after
the effective date of a final rule for amended national standards.
DOE also proposes to update the instructions for measuring
combustion efficiency in 10 CFR 431.86(c)(2). DOE proposes to remove
the provision in 10 CFR 431.86(c)(2) that excludes section 9.1.2.1.4 of
HI-BTS 2000 and replaces it with the requirements in 10 CFR
431.86(c)(1)(iv)(A) for condensing boiler tests. DOE is proposing to
allow for the use of section 9.1.2.1.4 because in HI BTS-2000
(Rev06.07), the requirements
[[Page 12022]]
in that section were modified to be the same as those in 10 CFR
431.86(c)(1)(iv)(A). Such modification would not introduce any
substantive changes to the test procedure because the requirements in
HI BTS-2000 are now the same as the requirements in 10 CFR
431.86(c)(1)(iv)(A).
Under 10 CFR 431.86(c)(2)(iii), ``Test Measurements for a Boiler
Capable of Supplying Either Steam or Water,'' DOE is proposing to
update the provision that allows manufacturers to measure and rate the
combustion efficiency of these boilers only as steam boilers. DOE
proposes to change that provision to require the testing and
measurement of thermal efficiency in addition to combustion efficiency
for any boiler capable of producing steam and hot water that is being
tested only as a steam boiler for equipment manufactured on and after
March 2, 2012. Prior to that date, DOE proposes to instruct
manufacturers to continue testing only for combustion efficiency of
those boilers being tested in steam mode only. DOE must require
manufacturers to test for both the combustion and thermal efficiencies
in steam mode for units capable of producing both steam and hot water
because, due to the new efficiency levels specified in ASHRAE Standard
90.1-2007, the boilers would be required to meet an efficiency level
using both metrics under any amended energy conservation standard based
upon ASHRAE Standard 90.1-2007. In other words, DOE is proposing to
allow manufacturers to test dual output boilers (i.e., those capable of
producing both steam and hot water) in only steam mode. However, DOE is
modifying its existing provisions to require manufacturers to conduct
both the combustion efficiency and the thermal efficiency test for
these dual output boilers. This 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. In
essence, manufacturers will be required to rate dual output boilers
using both the thermal and combustion efficiency metrics. DOE points
out that the only other alternative for testing dual output boilers
would be for manufacturers to separately run the combustion efficiency
test in hot water mode and the thermal efficiency test in steam mode on
or after March 2, 2012. Because DOE believes running two independent
tests on the same boiler could be burdensome and that testing only in
steam mode would suffice for compliance purposes, DOE is proposing to
allow manufacturers to only test in steam mode for both metrics to
mitigate this additional testing burden to manufacturers.
In addition to allowing boilers capable of producing both steam and
hot water to be tested only in steam mode, the test procedure at 10 CFR
431.86(c)(2)(iii) also allows boilers capable of producing steam and
hot water to be tested and rated in both steam mode and hot water mode
separately. DOE proposes to amend 10 CFR 431.86(c)(2)(iii) of the test
procedure to specify that when testing a large gas-fired or oil-fired
boiler in hot water mode on or after March 2, 2012, combustion
efficiency must be tested for and rated; however, for large gas- or
oil-fired boilers in steam mode or for any other boiler equipment
class, the thermal efficiency must be tested and rated.
Finally, DOE proposes to amend 10 CFR 431.86(c), ``Test Method for
Commercial Packaged Boilers--General,'' by adding a provision to
calculate the thermal efficiency using the calculation procedure
described in section 11.1 of HI BTS-2000. DOE proposes to note in this
provision that thermal efficiency should be calculated only for the
eight equipment classes of commercial packaged boilers for which DOE is
proposing to adopt a Federal energy conservation standard using a
thermal efficiency metric. In addition, DOE proposes to specify this
should only be done on or after March 2, 2012, the anticipated
effective date of the corresponding amended energy conservation
standards for this equipment.
In addition, DOE proposes to modify the ``Calculation of Combustion
Efficiency'' under 10 CFR 431.86(c)(3) to specify that on or after
March 2, 2012, combustion efficiency only needs to be calculated when
rating commercial packaged boiler equipment classes with a Federal
energy conservation standard specified in combustion efficiency (i.e.,
large gas-fired hot water and large oil-fired hot water commercial
packaged boilers).
See the regulatory text at the end of today's notice for all 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
When beginning a review of the ASHRAE Standard 90.1-2007 efficiency
levels, DOE developed information that provides an overall picture of
the market for the equipment concerned, including the purpose of the
equipment, the industry structure, and market characteristics. This
activity includes both quantitative and qualitative assessments based
primarily on publicly-available information. The subjects addressed in
the market assessment for this rulemaking include equipment classes,
manufacturers, quantities, and types of equipment sold and offered for
sale. The key findings of DOE's market assessment are summarized below.
For additional detail, see chapter 2 of the NOPR TSD.
1. Definitions of Commercial Packaged Boilers
EPCA defines a ``packaged boiler'' as ``a boiler that is shipped
complete with heating equipment, mechanical draft equipment, and
automatic controls; usually shipped in one or more sections.'' (42
U.S.C. 6311(11)(B)) In its regulations at 10 CFR 431.102, DOE further
refined the ``packaged boiler'' definition to exclude a boiler that is
custom designed and field constructed. Additionally, 10 CFR 431.102
provides that if the boiler is shipped in more than one section, the
sections may be produced by more than one manufacturer, and may be
originated or shipped at different times and from more than one
location. In its regulations in 10 CFR 431.82, DOE also defines a
``commercial packaged boiler'' as a type of packaged low pressure
boiler that is industrial equipment with a capacity, (rated maximum
input) of 300,000 BTU per hour (Btu/h) or more which, to any
significant extent, is distributed in commerce: (1) For heating or
space conditioning applications in buildings; or (2) For service water
heating in buildings but does not meet the definition of 'hot water
supply boiler' in [part 431]. 10 CFR 431.82.
2. Equipment Classes
Federal energy conservation standards currently separate commercial
packaged boilers only by the type of fuel used by the boiler, creating
two equipment classes: (1) Gas-fired, and (2) oil-fired. (42 U.S.C.
6313(a)(4)(C)-(D); 10 CFR 431.87) However, commercial packaged boilers
can be distinguished by several factors, which include the input
capacity size (i.e., small or large), fuel type (i.e., oil or gas),
output (i.e., hot water or steam), and draft type (i.e., natural draft
or other). ASHRAE
[[Page 12023]]
Standard 90.1-2007 further divided the two equipment classes designated
in EPCA into the following ten classes:
Small gas-fired hot water boilers;
Small gas-fired steam, all except natural draft;
Small gas-fired steam, natural draft boilers;
Small oil-fired hot water boilers;
Small oil-fired steam boilers;
Large gas-fired hot water boilers;
Large gas-fired steam all except natural draft boilers;
Large gas-fired steam natural draft boilers;
Large oil-fired hot water boilers; and
Large oil-fired steam boilers.
In general, DOE divides equipment classes by the type of energy
used or by capacity or other performance-related features that affect
efficiency. Different energy conservation standards may apply to
different equipment classes. (42 U.S.C. 6295(q)) In the context of the
present rulemaking, DOE believes input capacity size (i.e., small or
large), fuel type (i.e., oil or gas), output (i.e., hot water or
steam), and draft type (i.e., natural draft or other) are all
performance-related features that affect commercial packaged boiler
efficiency. By examining the market data, DOE found commercial packaged
boilers in a wide range of efficiencies depending on their design and
features. Consequently, DOE is proposing the ten equipment classes in
ASHRAE Standard 90.1-2007 to differentiate between types of commercial
packaged boilers.
3. Review of Current Market for Commercial Packaged Boilers
In order to obtain the information needed for the market assessment
for this rulemaking, DOE consulted a variety of sources, including
trade associations, manufacturers, and shipments data (i.e., the
quantities and types of equipment sold and offered for sale). The
information DOE gathered serves as resource material throughout the
rulemaking. Chapter 2 of the NOPR TSD provides additional detail on the
market assessment.
a. Trade Association Information
AHRI, formerly GAMA (and sometimes referred to as such in this
notice), is the trade association representing commercial packaged
boiler manufacturers. AHRI develops and publishes technical standards
for residential and commercial equipment using rating criteria and
procedures for measuring and certifying equipment performance. The DOE
test procedure is an AHRI standard. The HI division of AHRI has
developed the Boiler Testing Standard (BTS) 2000 ``Method to Determine
the Efficiency of Commercial Space Heating Boilers,'' as discussed in
section IV.A above. The DOE test procedure incorporates by reference
this AHRI standard.\21\
---------------------------------------------------------------------------
\21\ DOE has incorporated by reference HI BTS-2000 as the DOE
test procedure at 10 CFR 431.85.
---------------------------------------------------------------------------
The Institute of Boiler and Radiator Manufacturers (I=B=R), a
division of the HI, developed a certification program that the majority
of the manufacturers in the commercial packaged boiler industry use to
certify their equipment. Through the certification program, AHRI
determines if the equipment conforms to HI BTS-2000. Once AHRI has
determined that the equipment has met all the requirements under the HI
BTS-2000 standards and certification program, it is added to the I=B=R
Directory. DOE used I=B=R's certification data, as summarized by the
January 2008 I=B=R Directory, in the engineering analysis.
Another trade association representing the interests of commercial
boiler manufacturers is the American Boiler Manufacturers Association
(ABMA). ABMA represents manufacturers serving a number of markets. One
of these markets is boilers intended for use in commercial systems.
ABMA's Web site \22\ describes ``light commercial'' systems as having
Btu input capacities of 400,000 to 12.5 MMBH and applications that
include ``hydronic hot water heating boilers, low-pressure steam
boilers * * * for heating * * * applications.'' Because such boilers
meet the definition of commercial packaged boilers covered by this
rulemaking, ABMA is a trade association that could represent commercial
packaged boiler manufacturers covered by this rulemaking.
---------------------------------------------------------------------------
\22\ For more information on ABMA's commercial systems group,
visit http://www.abma.com/commercialSystems.html.
---------------------------------------------------------------------------
b. Manufacturer Information
DOE initially identified manufacturers of commercial packaged
boilers by reviewing AHRI's January 2008 I=B=R Directory of commercial
packaged boilers and equipment literature. Table V.1 shows the 26
separate commercial packaged boiler manufacturers identified in the
January 2008 I=B=R Directory. Several of these manufacturers share the
same parent company, which is shown in parentheses next to the
individual brand name.
Table V.1--Commercial Packaged Boiler Manufacturers Represented in
AHRI's January 2008 I=B=R Ratings Directory
A.O. Smith Water Products Co.------------New Yorker Boiler Co., Inc.----
(Burnham Holdings, Inc.)
AERCO International, Inc P B Heat, LLC.
BIASI, S.p.A. c/o QHT, Inc Pennco (ECR International,
Inc.).
Bosch Thermotechnology Corp Raypak, Inc.
Burnham Commercial (Burnham Holdings, RBI Water Heaters (Mestek,
Inc.) Inc.).
Burnham Hydronics (Burnham Holdings, Slant/Fin Corporation.
Inc.)
Columbia Boiler Company of Pottstown Smith Cast Iron Boilers.
Crown Boiler Co. (Burnham Holdings, Thermal Solutions Products, LLC
Inc.) (Burnham Holdings, Inc.).
De Dietrich Thermo-Dynamics Boiler Co.
Dunkirk Boilers (ECR International, Triangle Tube.
Inc.)
Heat Transfer Products Inc Utica Boilers (ECR
International, Inc.).
LAARS Heating Systems Company Viessmann Manufacturing
Company, Inc.
Lochinvar Corporation Weil-McLain.
------------------------------------------------------------------------
While several of the manufacturers listed in Table V.1 specialize
in residential boiler equipment, all offer at least some equipment with
capacities that classify them as commercial boilers. DOE also
identified 20 additional manufacturers of commercial packaged boiler
equipment from ABMA's member listings, and from searching the
[[Page 12024]]
SCAQMD certification directory and the CSA-International product
listings. The additional manufacturers DOE identified through these
methods were: AESYS Technologies, Inc.; Ajax Boiler, Inc.; Bryan Steam,
LLC; Cleaver-Brooks, Inc.; Easco Boiler Corporation; Johnston Boiler
Company; Miura; Sellers Engineering; Superior Boiler Works, Inc.; Vapor
Power International; Fulton Boiler; Parker Boiler; Patterson-Kelley
Company (division of Harsco); Triad Boiler Systems; CAMUS Hydronics,
Ltd.; Gasmaster Industries; General Boiler Co., Inc.; Hurst Boiler and
Welding Co., Inc.; Lattner Boiler Company; and Unilux Advanced
Manufacturing, LLC. Each commercial boiler manufacturer generally
specializes in a specific type of commercial boiler construction. For
example, manufacturers such as Weil-McLain, Smith Cast Iron, and
Burnham Commercial specialize in cast iron boilers; manufacturers such
as Raypak and Lochinvar tend to manufacture a higher number of copper-
tube boilers.
c. Shipments Information
DOE obtained data on estimated annual shipments for commercial
packaged boilers from AHRI, which totaled approximately 36,000 units in
2007. DOE notes that these estimated total shipments likely
underestimates the actual total shipments of the commercial packaged
boiler market because the data only include information provided
through AHRI. Some manufacturers have not have provided information to
AHRI regarding their shipments. However, DOE believes the fraction of
shipments not included in this total would be small. Further details
regarding the shipments estimates and forecasts can be found in section
V.G., National Impact Analysis, below.
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 possibility for energy efficiency improvements. A
baseline piece of equipment here refers to a model having features and
technologies typically found in equipment currently offered for sale.
The baseline model in each equipment class represents the typical
characteristics of equipment in that class and, for equipment already
subject to energy conservation standards, usually is a model that just
meets the current Federal standard. After identifying the baseline
models, DOE estimates the costs to the customer through an analysis of
contractor costs and markups. ``Markups'' are the multipliers DOE uses
to determine the costs to the customer based on contractor cost.
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
For this analysis, DOE used an efficiency-level approach to
evaluate the cost of commercial packaged boilers at the baseline
efficiency level, as well as efficiency levels above the baseline. DOE
used the efficiency level approach because of the wide variety of
designs available of the market and because the efficiency level
approach does not examine a specific design in order 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 equipment distributors of
commercial boiler equipment to develop its cost-efficiency relationship
for commercial packaged boilers. (See chapter 3 of the NOPR TSD for
further detail.)
2. Representative Input Capacities
For commercial packaged boilers, each energy efficiency level is
expressed as either a thermal efficiency or combustion efficiency,
which covers the full output capacity range. For each ``small''
equipment class analyzed, DOE collected contractor cost data for three
representative rated output capacities of small commercial packaged
boilers: 400, 800, and 1,500 kBtu/h. DOE then normalized the contractor
costs by capacity for each small commercial packaged boiler equipment
class. DOE used all the normalized contractor costs on a per kBtu/h
basis to create a single cost-efficiency curve with 800 kBtu/h as the
representative capacity. DOE chose 800 kBtu/h because it is the median
of the three representative capacities and because a large number of
shipments correspond to this capacity.
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. (See
chapter 3 of the NOPR TSD for additional details.)
3. Baseline Equipment
DOE selected baseline efficiency levels as reference points for
each equipment class, against which it measured changes resulting from
potential amended energy conservation standards. DOE defined the
baseline efficiency levels in the engineering analysis and the LCC and
PBP analyses as reference points to compare the technology, energy
savings, and cost of equipment with higher energy efficiency levels.
Typically, units at the baseline efficiency level just meet Federal
energy conservation standards and provide basic consumer utility.
However, DOE is not able to consider efficiency levels lower than those
specified in ASHRAE Standard 90.1-2007 for commercial packaged boilers.
Therefore, the baseline efficiency levels DOE identified for this
analysis were the efficiency levels specified for each commercial
packaged boiler equipment class in ASHRAE Standard 90.1-2007. Table V.2
lists the ASHRAE Standard 90.1-2007 efficiency levels for each
commercial packaged boiler equipment class.
Table V.2--Baseline Efficiency Levels for Commercial Packaged Boilers
------------------------------------------------------------------------
ASHRAE
standard
90.1-2007
Equipment class efficiency
level
(percent)
------------------------------------------------------------------------
Small Gas-Fired Hot Water.................................. 80 ET
Small Gas-Fired Steam All Except Natural Draft............. 79 ET
Small Gas-Fired Steam Natural Draft........................ 77 ET
Small Oil-Fired Hot Water.................................. 82 ET
Small Oil-Fired Steam...................................... 81 ET
Large Gas-Fired Hot Water.................................. 82 EC
Large Gas-Fired Steam, All Except Natural Draft............ 79 ET
Large Gas-Fired Steam Natural Draft........................ 77 ET
Large Oil-Fired Hot Water.................................. 84 EC
Large Oil-Fired Steam...................................... 81 ET
------------------------------------------------------------------------
[[Page 12025]]
4. Identification of Efficiency Levels for Analysis
In the engineering analysis, DOE established energy efficiency
levels for each equipment class that reflect the current commercial
packaged boiler market. DOE reviewed the commercial packaged boiler
market to determine what types of equipment are available to consumers.
DOE examined all of the manufacturers' product offerings to identify
the energy efficiencies that correspond to efficiency levels with
models already widely available on the market. DOE used these energy
efficiencies to develop the efficiency levels of the engineering
analysis. For this NOPR, DOE used an efficiency level approach, which
allows DOE to estimate the costs and benefits associated with a
particular efficiency level rather than a particular design. Table V.3
through Table V.12 show the efficiency levels analyzed for each
equipment class.
a. Small Gas-Fired Hot Water Commercial Packaged Boiler Efficiency
Levels
For small gas-fired hot water commercial packaged boilers, DOE
selected four efficiency levels to analyze above the baseline
efficiency level. Table V.3 shows the efficiency levels DOE selected.
DOE examined these efficiency levels for the representative output
capacity (i.e., 800 kBtu/h) for analysis purposes. However, DOE notes
these efficiency levels can be found at numerous other capacities
within the range of covered capacities.
Table V.3--Small Gas-Fired Hot Water Commercial Packaged Boiler
Efficiency Levels
------------------------------------------------------------------------
Thermal
efficiency
(ET) levels
Efficiency level for
analysis
(percent)
------------------------------------------------------------------------
Baseline Efficiency........................................ 80
Efficiency Level 1......................................... 82
Efficiency Level 2......................................... 84
Efficiency Level 3......................................... 86
Efficiency Level 4 (Condensing)............................ 92
------------------------------------------------------------------------
b. Small Gas-Fired Steam All Except Natural Draft Commercial Packaged
Boiler Efficiency Levels
For small gas-fired steam all except natural draft commercial
packaged boilers, DOE selected four efficiency levels to analyze above
the baseline efficiency level. Table V.4 shows the efficiency levels
DOE selected. DOE examined these efficiency levels for the 800 kBtu/h
representative output capacity for analysis purposes. However, DOE
notes these efficiency levels can be found at numerous other capacities
within the range of covered capacities.
Table V.4--Small Gas-Fired Steam, All Except Natural Draft Commercial
Packaged Boiler Efficiency Levels
------------------------------------------------------------------------
Thermal
efficiency
(ET) levels
Efficiency level for
analysis
(percent)
------------------------------------------------------------------------
Baseline Efficiency........................................ 79
Efficiency Level 1......................................... 80
Efficiency Level 2......................................... 81
Efficiency Level 3......................................... 82
Efficiency Level 4......................................... 83
------------------------------------------------------------------------
c. Small Gas-Fired Steam Natural Draft Water Commercial Packaged Boiler
Efficiency Levels
For small gas-fired steam natural draft commercial packaged
boilers, DOE selected three efficiency levels to analyze above the
baseline efficiency level. Table V.5 shows the efficiency levels DOE
selected. DOE examined these efficiency levels for the 800 kBtu/h
representative output capacity for analysis purposes. However, DOE
notes these efficiency levels can be found at numerous other capacities
within the range of covered capacities.
Table V.5--Small Gas-Fired Steam Natural Draft Commercial Packaged
Boiler Efficiency Levels
------------------------------------------------------------------------
Thermal
efficiency
(ET) levels
Efficiency level for
analysis
(percent)
------------------------------------------------------------------------
Baseline Efficiency........................................ 77
Efficiency Level 1......................................... 78
Efficiency Level 2......................................... 79
Efficiency Level 3......................................... 80
------------------------------------------------------------------------
d. Small Oil-Fired Hot Water Commercial Packaged Boiler Efficiency
Levels
For small oil-fired hot water commercial packaged boilers, DOE
selected three efficiency levels to analyze above the baseline
efficiency level. Table V.6 shows the efficiency levels DOE selected.
DOE examined these efficiency levels for the 800 kBtu/h representative
output capacity for analysis purposes. However, DOE notes these
efficiency levels can be found at numerous other capacities within the
range of covered capacities.
Table V.6--Small Oil-Fired Hot Water Commercial Packaged Boiler
Efficiency Levels
------------------------------------------------------------------------
Thermal
efficiency
(ET) levels
Efficiency level for
analysis
(percent)
------------------------------------------------------------------------
Baseline Efficiency........................................ 82
Efficiency Level 1......................................... 84
Efficiency Level 2......................................... 86
Efficiency Level 3......................................... 88
------------------------------------------------------------------------
e. Small Oil-Fired Steam Commercial Packaged Boiler Efficiency Levels
For small oil-fired steam commercial packaged boilers DOE selected
three efficiency levels to analyze above the baseline efficiency level.
Table V.7 shows the efficiency levels DOE selected. DOE examined these
efficiency levels for the 800 kBtu/h representative output capacity for
analysis purposes. However, DOE notes these efficiency levels can be
found at numerous other capacities within the range of covered
capacities.
Table V.7--Small Oil-Fired Steam Commercial Packaged Boiler Efficiency
Levels
------------------------------------------------------------------------
Thermal
efficiency
(ET) levels
Efficiency level for
analysis
(percent)
------------------------------------------------------------------------
Baseline Efficiency........................................ 81
Efficiency Level 1......................................... 82
Efficiency Level 2......................................... 83
Efficiency Level 3......................................... 85
------------------------------------------------------------------------
f. Large Gas-Fired Hot Water Commercial Packaged Boiler Efficiency
Levels
For large gas-fired hot water commercial packaged boilers, DOE
selected four efficiency levels to analyze above the baseline
efficiency level. Table V.8 shows the efficiency levels DOE selected.
DOE examined these efficiency levels for the 3,000 kBtu/h
representative output capacity for analysis purposes. However, DOE
notes these efficiency levels can be found at numerous other capacities
within the range of covered capacities.
[[Page 12026]]
Table V.8--Large Gas-Fired Hot Water Commercial Packaged Boiler
Efficiency Levels
------------------------------------------------------------------------
Combustion
efficiency
(EC) levels
Efficiency level for
analysis
(percent)
------------------------------------------------------------------------
Baseline Efficiency........................................ 82
Efficiency Level 1......................................... 83
Efficiency Level 2......................................... 84
Efficiency Level 3......................................... 85
Efficiency Level 4 (Condensing)............................ 95
------------------------------------------------------------------------
g. Large Gas-Fired Steam, All Except Natural Draft Commercial Packaged
Boiler Efficiency Levels
For large gas-fired steam, all except natural draft commercial
packaged boilers, DOE selected four efficiency levels to analyze above
the baseline efficiency level. Table V.9 shows the efficiency levels
selected by DOE. DOE examined these efficiency levels for the 3,000
kBtu/h representative output capacity for analysis purposes. However,
DOE notes these efficiency levels can be found at numerous other
capacities within the range of covered capacities.
Table V.9--Large Gas-Fired Steam, All Except Natural Draft Commercial
Packaged Boiler Efficiency Levels
------------------------------------------------------------------------
Thermal
efficiency
(ET) levels
Efficiency level for
analysis
(percent)
------------------------------------------------------------------------
Baseline Efficiency........................................ 79
Efficiency Level 1......................................... 80
Efficiency Level 2......................................... 81
Efficiency Level 3......................................... 82
Efficiency Level 4......................................... 83
------------------------------------------------------------------------
h. Large Gas-Fired Steam Natural Draft Commercial Packaged Boiler
Efficiency Levels
For large gas-fired steam natural draft commercial packaged
boilers, DOE selected four efficiency levels to analyze above the
baseline efficiency level. Table V.10 shows the efficiency levels DOE
selected. DOE examined these efficiency levels for the 3,000 kBtu/h
representative output capacity for analysis purposes. However, DOE
notes these efficiency levels can be found at numerous other capacities
within the range of covered capacities.
Table V.10--Large Gas-Fired Steam Natural Draft Commercial Packaged
Boiler Efficiency Levels
------------------------------------------------------------------------
Thermal
efficiency
(ET) levels
Efficiency level for
analysis
(percent)
------------------------------------------------------------------------
Baseline Efficiency........................................ 77
Efficiency Level 1......................................... 78
Efficiency Level 2......................................... 79
Efficiency Level 3......................................... 80
Efficiency Level 4......................................... 81
------------------------------------------------------------------------
i. Large Oil-Fired Hot Water Commercial Packaged Boiler Efficiency
Levels
For large oil-fired hot water commercial packaged boilers, DOE
selected three efficiency levels to analyze above the baseline
efficiency level. Table V.11 shows the efficiency levels DOE selected.
DOE examined these efficiency levels for the 3,000 kBtu/h
representative output capacity for analysis purposes. However, DOE
notes these efficiency levels can be found at numerous other capacities
within the range of covered capacities.
Table V.11--Large Oil-Fired Hot Water Commercial Packaged Boiler
Efficiency Levels
------------------------------------------------------------------------
Combustion
efficiency
(EC) levels
Efficiency level for
analysis
(percent)
------------------------------------------------------------------------
Baseline Efficiency........................................ 84
Efficiency Level 1......................................... 86
Efficiency Level 2......................................... 87
Efficiency Level 3......................................... 88
------------------------------------------------------------------------
j. Large Oil-Fired Steam Commercial Packaged Boiler Efficiency Levels
For large oil-fired steam commercial packaged boilers, DOE selected
four efficiency levels to analyze above the baseline efficiency level.
Table V.12 shows the efficiency levels DOE selected. DOE examined these
efficiency levels for the 3,000 kBtu/h representative output capacity
for analysis purposes. However, DOE notes these efficiency levels can
be found at numerous other capacities within the range of covered
capacities.
Table V.12--Large Oil-Fired Steam Commercial Packaged Boiler Efficiency
Levels
------------------------------------------------------------------------
Thermal
efficiency
(ET) levels
Efficiency level for
analysis
(percent)
------------------------------------------------------------------------
Baseline Efficiency........................................ 81
Efficiency Level 1......................................... 82
Efficiency Level 2......................................... 83
Efficiency Level 3......................................... 84
Efficiency Level 4......................................... 86
------------------------------------------------------------------------
5. Oil-Fired Commercial Packaged Boilers
DOE estimated that oil-fired commercial packaged boilers are, on
average, 3 percent more efficient than gas-fired boilers of identical
construction. Because 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 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 (e.g., DOE shifted the small gas-fired hot water curve 3
percent higher in efficiency to obtain the small oil-fired hot water
curve).
For the steam curves, where gas-fired equipment is divided into
natural draft and all except natural draft curves, DOE used the all
except natural draft curves to develop the cost-efficiency curves for
oil-fired steam boilers. This is because the majority of oil-fired
steam boilers in DOE's database are categorized as all except natural
draft.
6. Dual Output Boilers
Dual output boilers are boilers capable of producing either hot
water or steam as the boiler's output of services. DOE analyzed dual
output boilers by classifying them as steam only boilers. DOE did this
because the current test procedure for commercial packaged boilers
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).
[[Page 12027]]
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). Therefore, DOE assumed the
efficiency ratings for dual output boilers were representative of the
efficiency of the boiler tested in steam mode only. DOE seeks comment
from interested parties regarding the efficiency of dual output boilers
in both steam mode and hot water mode. Specifically, DOE is interested
in receiving data or comments, which would allow DOE to convert the
steam ratings in the I=B=R Directory and manufacturers' catalogs to hot
water ratings. This is identified as Issue 2 under ``Issues on Which
DOE Seeks Comment'' in section VIII.E of today's NOPR.
7. Engineering Analysis 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
refers to the contractor cost--provided directly from mechanical
contractors or equipment distributors--as the ``absolute cost.'' DOE
correlated the absolute cost as a function of each commercial packaged
boiler's rated efficiency. Most manufacturers publish the rated thermal
and/or combustion efficiencies of their commercial packaged boilers
according to AHRI specifications. DOE only presents the incremental
costs of increasing the efficiency of a commercial packaged boiler in
the NOPR TSD to avoid the possibility of revealing sensitive
information about individual manufacturers' equipment. Different
manufacturers might have substantially different absolute costs for
their equipment at the same efficiency level due to design
modifications and manufacturing practices.
To determine the relationship of incremental cost versus efficiency
for each of the representative capacities in each equipment class, DOE
aggregated the absolute cost data. After aggregating the data, DOE fit
an exponential curve to the data at each representative capacity for
each equipment class and normalized the data. That is, DOE adjusted 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 (Table V.2). The normalized exponential cost curves from the
aggregated data establish cost-efficiency curves for each equipment
class that represent the average incremental cost of increasing
efficiency above the ASHRAE Standard 90.1-2007 levels.
The 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. It should be noted that in 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. For
example, small gas hot water boilers are commonly manufactured as
copper tube boilers or as cast iron sectional boilers. The difference
in the two materials and the construction of these boilers results in a
wide range of prices and efficiencies for this boiler equipment class.
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. Chapter 3 of the NOPR 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.
Typical distribution channels for commercial HVAC equipment include
manufacturers' national accounts, wholesalers, mechanical contractors,
and/or general contractors. DOE developed costs for mechanical
contractors directly in the engineering analysis and estimated cost to
customers 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. Because of the
complexity of installation and based on few shipments to mercantile/
retail building types, DOE estimated most sales of commercial packaged
boilers involved mechanical contractors. Consequently, DOE did not
develop separate markups for costs through a national account
distribution chain or directly from wholesalers.
DOE developed supply chain 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. DOE then added sales taxes and
installation costs to arrive at the final installed equipment prices
for baseline and higher-efficiency equipment. See chapter 5 of the NOPR
TSD for additional details on markups. DOE identified two separate
distribution channels for commercial boilers to describe how the
equipment passes from the mechanical contractor to the customer (Table
V.13).
*COM022*Table V.13--Distribution Channels for Commercial Packaged Boiler
Equipment
------------------------------------------------------------------------
Channel 1 (replacements) Channel 2 (new construction)
------------------------------------------------------------------------
Mechanical Contractor..................... Mechanical Contractor.
General Contractor.
Customer.................................. Customer.
------------------------------------------------------------------------
DOE assumed that general contractors would be involved in new
construction involving installation of commercial boilers. DOE assumed
that replacement of existing boilers would not involve general
contractors.
DOE estimated percentages for both the new construction and
replacement markets based on data developed for the shipment's model
and based on growth in new construction and replacement of existing
stock as shown in Table V.14. Based on these results, DOE assumes that
approximately 33 percent of commercial boilers purchased will be
installed in new construction, and the remaining 67 percent will
replace existing commercial boilers.
[[Page 12028]]
Table V.14--Percentage of Commercial Packaged Boiler Market Shares
Passing Through Each Distribution Channel
------------------------------------------------------------------------
Channel 1 (%) Channel 2 (%)
------------------------------------------------------------------------
Replacement Market.................... 100 0
New Construction Market............... 0 100
------------------------------------------------------------------------
For each step in the distribution channels presented above, DOE
estimated a baseline markup and an incremental markup. DOE defined a
baseline markup as a multiplier that converts the mechanical contractor
cost of equipment with baseline efficiency to the customer purchase
price for the equipment at the same baseline efficiency level. An
incremental markup is defined as the multiplier to convert the
incremental increase in mechanical contractor cost of higher-efficiency
equipment to the customer purchase price for the same equipment. Both
baseline and incremental markups only depend on the particular
distribution channel and are independent of the boiler efficiency
levels.
DOE developed the markups for each distribution channel based on
available financial data. DOE based the mechanical contractor markups
on data from the Air Conditioning Contractors of America (ACCA) \23\
and on the 2002 U.S. Census Bureau financial data \24\ 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.
---------------------------------------------------------------------------
\23\ Air Conditioning Contractors of America. Financial Analysis
for the HVACR Contracting Industry, 2005. Available at: http://www.acca.org.
\24\ 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.
Because the State-by-State distribution of boiler unit sales varies by
building type, the National distribution of the markups varies among
business types. Chapter 5 of the NOPR 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. 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'' \25\ (hereafter, 2000 Screening Analysis) (66
FR 3336 (Jan. 12, 2001)) and used 7 different building types and 11
different U.S. climates.
---------------------------------------------------------------------------
\25\ 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 nominal equipment
efficiency level DOE considered.
In addition for condensing hot water boilers, it is 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.
For DOE's analysis, the rated thermal efficiencies for fully condensing
equipment were further adjusted to reflect return water conditioners
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 during
the year. See chapter 4 of the TSD for further details.
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, as were used in the 2000 Screening Analysis.
Because detailed statistical information related to where and in what
types of buildings the equipment is currently being installed is
generally unavailable, DOE developed an allocation process. The
estimated allocation of national shipments to market segments was based
on information from the 2003 Commercial Buildings Energy Consumption
Survey (CBECS) \26\ related to floor space and relative fraction of
floor space reporting use of boilers for each market segment.
---------------------------------------------------------------------------
\26\ Energy Information Administration (2003). Available at:
http://www.eia.doe.gov/emeu/cbecs/contents/html (2003).
---------------------------------------------------------------------------
DOE developed the energy use estimates for the seven key commercial
building types in 11 geographic regions. Seven of these regions
correspond directly to U.S. Census divisions. The Pacific and Mountain
Census divisions were subdivided individually into northern and
southern regions to
[[Page 12029]]
account for north-south climate variation within those Census
divisions, as discussed in the 2000 Screening Analysis. The LCC and
national energy savings (NES) analyses use the annual energy
consumption of commercial boilers in each equipment class analyzed. As
expected, annual energy use of commercial boilers decreased as the
efficiency level increased from the baseline efficiency level to the
highest efficiency level analyzed. Chapter 4 of the NOPR 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. DOE first analyzed these impacts for commercial
packaged boilers by calculating the change in customers' LCCs likely to
result from higher efficiency levels compared with the baseline
efficiency levels. The LCC calculation considers total installed cost
(contractor cost, sales taxes, distribution chain markups, and
installation cost), operating expenses (energy, repair, and maintenance
costs), equipment lifetime, and discount rate. DOE calculated the LCC
for all customers as if each would purchase a new commercial boiler
unit in the year the standard takes effect. Since DOE is considering
both the efficiency levels in ASHRAE Standard 90.1-2007 and more-
stringent efficiency levels, an amended energy conservation standard
becomes effective on different dates depending upon the efficiency
level and equipment class. The statutory lead times for DOE adopting of
the ASHRAE Standard 90.1-2007 efficiency levels and more-stringent
efficiency levels are different. (See section V.H.1 below for
additional explanation of the effective dates.) However, from the
customer's viewpoint, there is only a single boiler purchase date in
determining the LCC benefits to the customer from purchase of a boiler
at more-stringent efficiency levels. To account for this, DOE presumes
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 efficiency level. To
compute LCCs, DOE discounted future operating costs to the time of
purchase and summed them over the lifetime of the equipment.
Second, DOE analyzed the effect of changes in installed costs and
operating expenses by calculating the PBP of potential standards
relative to baseline efficiency levels. 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. Similar to the LCC, the PBP is based on the total
installed cost and the operating expenses. However, unlike the LCC, DOE
only considers the first year's operating expenses in the PBP
calculation. Because the PBP does not account for changes in operating
expense over time or the time value of money, it is also referred to as
a simple PBP.
DOE conducted the LCC and PBP analyses using a commercially-
available spreadsheet model. This spreadsheet accounts for variability
in energy use, installation costs and maintenance costs, and energy
costs, and uses weighting factors to account for distributions of
shipments to different building types and States to generate national
LCC savings by efficiency level. The results of DOE's LCC and PBP
analyses are summarized in section VI below and described in detail in
chapter 5 of the NOPR TSD.
1. Approach
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 financial data appropriate for
the customers in each building type. Each type of building has typical
customers who have different costs of financing because of the nature
of the business. DOE derived the financing costs based on data from the
Damodaran Online site.\27\
---------------------------------------------------------------------------
\27\ Damodaran Online. Leonard N. Stern School of Business, New
York University (Jan. 2006). Available at: http://www.stern.nyu.edu/adamodar/New_Home_Page/data.html.
---------------------------------------------------------------------------
The LCC analysis 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, it
varies by State. Aside from energy use, other important factors
influencing the LCC and PBP analyses are energy prices, installation
costs, equipment distribution markups, and sales tax. At the national
level, the LCC spreadsheets explicitly modeled both the uncertainty and
the variability in the model's inputs, using probability distributions
based on the shipment of commercial packaged boiler equipment to
different States.
As mentioned above, DOE generated LCC and PBP results by building
type and State and used developed weighting factors to generate
national average LCC savings and PBP for each efficiency level. As
there is a unique LCC and PBP for each calculated value at the building
type and State level, the outcomes of the analysis can also be
expressed as probability distributions with a range of LCC and PBP
results. A distinct advantage of this type of approach is that DOE can
identify the percentage of customers achieving LCC savings or attaining
certain PBP values due to an increased efficiency level, in addition to
the average LCC savings or average PBP for that efficiency level.
2. Life-Cycle Cost Inputs
For each efficiency level DOE analyzed, the LCC analysis required
input data for the total installed cost of the equipment, its operating
cost, and the discount rate. Table V.15 summarizes the inputs and key
assumptions DOE used to calculate the customer economic impacts of all
energy efficiency levels analyzed in this rulemaking. A more detailed
discussion of the inputs follows.
Table V.15--Summary of Inputs and Key Assumptions Used in the LCC and PBP Analyses
----------------------------------------------------------------------------------------------------------------
Inputs Description
----------------------------------------------------------------------------------------------------------------
Affecting Installed Costs
----------------------------------------------------------------------------------------------------------------
Equipment Price...................................... Equipment price was derived by multiplying contractor
cost (from the engineering analysis) by mechanical and
general contractor markups as needed plus sales tax from
the markups analysis.
[[Page 12030]]
Installation Cost.................................... Installation cost includes installation labor, installer
overhead, and any miscellaneous materials and parts,
derived from RS Means CostWorks 2007.\28\ DOE added
additional costs to reflect the installation of near
condensing and condensing boilers at efficiency levels
more stringent than ASHRAE Standard 90.1-2007 efficiency
levels. These costs include control modifications,
stainless steel flues, and condensate pumps and piping
to remove condensate.
----------------------------------------------------------------------------------------------------------------
Affecting Operating Costs
----------------------------------------------------------------------------------------------------------------
Annual Energy Use.................................... DOE derived annual energy use using FLEOH data for
commercial boilers combined with thermal efficiency
estimates for each boiler efficiency level analyzed. DOE
did not incorporate differences in annual electricity
use by efficiency level. DOE used State-by-State
weighting factors to estimate the national energy
consumption by efficiency level.
Fuel Prices.......................................... DOE developed average commercial natural gas and fuel oil
prices for each State using EIA's State Energy Database
Data for 2006 for natural gas and oil price data.\29\
DOE used AEO2008 energy price forecasts to project oil
and natural gas prices into the future.
Maintenance Cost..................................... DOE estimated annual maintenance costs for commercial
boilers based on MARS 8 Facility Cost Forecast System
Database \30\ for commercial boilers. Annual maintenance
cost did not vary as a function of efficiency.
Repair Cost.......................................... DOE estimated the annualized repair cost for baseline
efficiency commercial boilers based on cost data from
MARS 8 Facility Cost Forecast System Database for
commercial boilers. DOE assumed that repair costs would
vary in direct proportion with the MSP at higher
efficiency levels because it generally costs more to
replace components that are more efficient.
----------------------------------------------------------------------------------------------------------------
Affecting Present Value of Annual Operating Cost Savings
----------------------------------------------------------------------------------------------------------------
Equipment Lifetime................................... DOE estimated equipment lifetime assuming a 30-year
lifespan for all commercial boilers based on data
published by ASHRAE.
Discount Rate........................................ Mean real discount rates for all buildings range from 2.3
percent for education buildings to 5.9 percent for
retail building owners.
Analysis Start Year.................................. Start year for LCC is 2014, which is four years after the
publication of the final rule for amended energy
conservation standards higher than ASHRAE.
----------------------------------------------------------------------------------------------------------------
Analyzed Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Analyzed Efficiency Levels........................... DOE analyzed the baseline efficiency levels (ASHRAE
Standard 90.1-2007) and up to four higher efficiency
levels for all ten equipment classes. See the
engineering analysis for additional details.
----------------------------------------------------------------------------------------------------------------
a. Equipment Prices
The price of a commercial boiler reflects the application of
distribution channel markups (mechanical and general contractor
markups) and sales tax to the mechanical contractor cost established in
the engineering analysis. As described in section V.C, DOE determined
mechanical contractor costs for ten commercial boilers defined by a
single representative equipment capacity (output capacity) for each of
ten equipment classes. For each equipment class, the engineering
analysis provided contractor costs for the baseline equipment and up to
four higher equipment efficiencies.
---------------------------------------------------------------------------
\28\ RS Means CostWorks 2007, R.S. Means Company, Inc. 2007.
Kingston, Massachusetts (2007). Available at: http://www.meanscostworks.com/.
\29\ Natural Gas Price and Expenditure Estimates by Sector, EIA,
2006. Available at: http://www.eia.doe.gov/emeu/states/sep_fuel/html/fuel_pr_ng.html. 2006 Distillate Fuel Price and Expenditure
Estimates by Sector, EIA, 2006. Available at: http://www.eia.doe.gov/emeu/states/hf.jsp?incfile=sep_fuel/html/fuel_pr_df.html
\30\ MARS 8 Facility Cost Forecast System Database, Whitestone
Research, 2008. Washington, DC. Available at: http://www.whitestoneresearch.com/mars/index.htm.
---------------------------------------------------------------------------
The markup is the percentage increase in price as the commercial
packaged boiler equipment passes through the distribution channel. As
explained in section V.D, distribution chain markups are based on two
truncated distribution channels, starting with a mechanical contractor
cost for each efficiency level, based on whether the equipment is being
purchased for the new construction market or to replace existing
equipment.
b. Installation Costs
DOE derived national average installation costs for commercial
boilers from data provided in RS Means CostWorks 2007 (RS Means) for
commercial boiler equipment with efficiencies at or below the ASHRAE
Standard 90.1-2007 efficiency levels.\31\ RS Means provides estimates
for installation costs for hot water and steam boilers by equipment
capacity and fuel type, as well as cost indices that reflect the
variation in installation costs for 295 cities in the United States.
The RS Means data identifies several cities in all 50 States and the
District of Columbia. DOE incorporated location-based cost indices into
the analysis to capture variation in installation cost, depending on
the location of the customer.
---------------------------------------------------------------------------
\31\ RS Means CostWorks 2007, R.S. Means Company, Inc. 2007.
Kingston, Massachusetts (2007). Available at: http://www.meanscostworks.com/.
---------------------------------------------------------------------------
For more-stringent efficiency levels, DOE estimated the cost for
stainless steel venting at more-stringent efficiency levels based on an
assumed 35-foot flue length and applied the entire materials cost to
commercial packaged boilers going into the replacement market. In
addition, DOE assumed additional costs for control modifications for
higher-efficiency boilers and for condensate removal for near
condensing and condensing boilers. DOE recognized, however, that
installation costs could potentially be higher with higher efficiency
commercial packaged boilers due primarily to venting concerns with
existing flues and chimney cases in the replacement market. DOE did not
have data to calibrate the extent to which additional cost should
apply. This is identified as Issue 3 under ``Issues on Which DOE Seeks
Comment'' in section VIII.E of today's NOPR.
[[Page 12031]]
c. Annual Energy Use
DOE estimated the annual natural gas or fuel oil energy consumed by
each class of commercial boiler, by efficiency level, based on the
energy use characterization described in section V.E. DOE aggregated
the average annual energy use per unit at the State level by applying a
regional building-type weighting factor to establish the relative
building type shipments for each of 11 geographic regions composed of
select States, and then a population-weighting factor for each State
within the geographic regions.
DOE adjusted the condensing efficiency levels identified in the
engineering analysis for small and large gas-fired hot water commercial
packaged boilers to more accurately reflect actual field efficiencies.
In both cases, DOE degraded the thermal efficiencies to 88 percent. DOE
assumed that commercial packaged boilers serve a standard fan coil or
air handler delivery system and that the load of the system varies
linearly with the outdoor temperature from a balance point of 50
degrees Fahrenheit. Chapter 4 of the NOPR TSD describes the annual
energy use calculations.
In determining the reduction in energy consumption of commercial
packaged boiler equipment due to increased efficiency, DOE did not take
into account a rebound effect. The rebound effect occurs when a piece
of equipment, after it is made more efficient, is used more
intensively, and therefore the expected energy savings from the
efficiency improvement do not fully materialize. For the commercial
boilers that are the subject of this rulemaking, DOE has no basis for
concluding that a rebound effect would occur and has not taken the
rebound effect into account in the energy use characterization.
d. Fuel Prices
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 used average effective commercial natural gas
and commercial fuel oil prices at the State level from Energy
Information Administration (EIA) data for 2006 and 2007. Where 2006
data were used, EIA fuel escalation factors from the 2008 Annual Energy
Outlook (AEO2008) were used to escalate prices to 2007 average fuel
price estimates. This approach captured a wide range of commercial fuel
prices across the United States. Furthermore, different kinds of
businesses typically use electricity in different amounts at different
times of the day, week, and year, and therefore face different
effective prices. To make this adjustment, DOE used EIA's 2003 CBECS
\32\ data set to identify the average prices the seven building types
paid and compared them with the average prices all commercial customers
paid.\33\ DOE used the ratios of prices paid by the seven types of
businesses to the national average commercial prices seen in the 2003
CBECS as multipliers to adjust the average commercial 2007 State price
data.
---------------------------------------------------------------------------
\32\ 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.
\33\ EIA's 2003 CBECS is the most recent version of the data
set.
---------------------------------------------------------------------------
DOE weighted the prices each building type paid in each State by
the estimated sales of commercial boilers to each building type to
obtain a weighted-average national electricity and national average
fuel oil price for 2007. The State/building type weights reflect the
probabilities that a given boiler unit shipped will operate with a
given fuel price. The effective prices (2007$) range from approximately
$4.75 per million Btu to approximately $27.98 per million Btu for
natural gas, and from approximately $14.83 per million Btu to
approximately $17.56 cents per million Btu for commercial fuel oil.
(See chapter 5 of the NOPR TSD.)
The natural gas and fuel price trends provide the relative change
in fuel costs for future years to 2042. DOE applied the AEO2008
reference case as the default scenario and extrapolated the trend in
values from 2020 to 2030 of the forecast to establish prices in 2030 to
2042. This method of extrapolation is in line with methods the EIA uses
to forecast fuel prices for the Federal Energy Management Program. DOE
provides a sensitivity analysis of the LCC savings and PBP results to
different fuel price scenarios using both the AEO2008 high-price and
low-price forecasts in chapter 5 of the NOPR TSD.
e. Maintenance Costs
Maintenance costs are the costs to the customer of maintaining
equipment operation. Maintenance costs include services such as
cleaning heat-exchanger coils and changing air filters. DOE estimated
annual routine maintenance costs for commercial boiler equipment as
$1.445/kbtu-hr output capacity per year for boilers with output
capacities of nominally 800 kBtu/h, and as $0.945/kbtu-hr output
capacity per year for boilers with output capacities of 3000 kBtu/h,
reported in the MARS 8 Facility Cost Forecast System database. Because
data were not available to indicate how maintenance costs vary with
equipment efficiency, DOE decided to use preventive maintenance costs
that remain constant as equipment efficiency increases.
f. Repair Costs
The repair cost is the cost to the customer of replacing or
repairing components that have failed in the commercial boiler. DOE
estimated the annualized repair cost for baseline efficiency commercial
boilers as $443/yr for boilers with output capacities of nominally 800
kBtu/h, and as $820/yr for boilers with output capacities of 3000 kBtu/
h, based on costs for component repair documented in MARS 8 Facility
Cost Forecast System database. DOE determined that repair costs would
increase in direct proportion with increases in equipment prices.
Because the price of boilers increases with efficiency, the cost for
component repair will also increase as the efficiency of equipment
increases.
g. Equipment Lifetime
DOE defines equipment lifetime as the age when a commercial boiler
is retired from service. DOE reviewed available literature and
consulted with manufacturers to establish typical equipment lifetimes.
The literature and experts consulted offered a wide range of typical
equipment lifetimes. DOE used a 30-year lifetime for commercial boilers
in the 2000 Screening Analysis based on data from ASHRAE's 1995
Handbook of HVAC Applications.\34\ DOE continued to use this estimate
for the LCC analysis. Chapter 5 of the NOPR TSD contains a discussion
of equipment lifetime.
---------------------------------------------------------------------------
\34\ ASHRAE Handbook: 1995 Heating, Ventilating, and Air-
Conditioning Applications, ASHRAE, 1995. Available for purchase at:
http://www.ashrae.org/publications/page/1287.
---------------------------------------------------------------------------
h. Discount Rate
The discount rate is the rate at which future expenditures are
discounted to establish their present value. DOE estimated the discount
rate by estimating the cost of capital for purchasers of commercial
boilers. Most purchasers use both debt and equity capital to fund
investments. Therefore, for most purchasers, the discount rate is the
weighted-average cost of debt and equity financing, or the weighted-
average cost of capital (WACC), less the expected inflation.
[[Page 12032]]
To estimate the WACC of commercial boiler purchasers, DOE used a
sample of over 2000 companies grouped to be representative of operators
of each of five of seven commercial building types (food service,
lodging, office, retail, and warehouse) and drawn from a database of
7,369 U.S. companies presented on the Damodaran Online website.\35\
This database includes most of the publicly-traded companies in the
United States. For public assembly and education buildings, DOE
estimated the cost of capital based on composite tax exempt bond rates.
When one or more of the variables needed to estimate the discount rate
was missing or could not be obtained, DOE discarded the firm from the
analysis. The WACC approach for determining discount rates accounts for
the current tax status of individual firms on an overall corporate
basis. DOE did not evaluate the marginal effects of increased costs,
and thus depreciation due to more expensive equipment, on the overall
tax status.
---------------------------------------------------------------------------
\35\ Damodaran financial data used for determining cost of
capital available at: http://pages.stern.nyu.edu/~adamodar/ for
commercial businesses. Data for determining financing for public
buildings available at: http://finance.yahoo.com/bonds/composite_bond_rates.
---------------------------------------------------------------------------
DOE used the final sample of companies to represent purchasers of
commercial boilers. For each company in the sample, DOE derived the
cost of debt, percent debt financing, and systematic company risk from
information on the Damodaran Online Web site. Damodaran estimated the
cost of debt financing from the long-term government bond rate (4.39
percent) and the standard deviation of the stock price. DOE then
determined the weighted average values for the cost of debt, range of
values, and standard deviation of WACC for each category of the sample
companies. Deducting expected inflation from the cost of capital
provided estimates of real discount rate by ownership category. Based
on this database, DOE calculated the weighted average after-tax
discount rate for commercial boiler purchases, adjusted for inflation,
in each of the seven building types used in the analysis. Chapter 5 of
the NOPR TSD contains the detailed calculations on the discount rate.
3. Payback Period
DOE also determined the economic impact of potential amended energy
conservation standards on customers by calculating the PBP of more-
stringent efficiency levels relative to a baseline efficiency level.
The PBP measures the amount of time it takes the commercial customer to
recover the assumed higher purchase expense of more-efficient equipment
through lower operating costs. Similar to the LCC, the PBP is based on
the total installed cost and the operating expenses for each building
type and State, weighted on the probability of shipment to each market.
Because the PBP does not take into account changes in operating expense
over time or the time value of money, DOE considered only the first
year's operating expenses to calculate the PBP, unlike the LCC. Chapter
5 of the NOPR TSD provides additional details about the PBP.
G. 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 net present value (NPV) (future amounts discounted to the
present) and the NES of total commercial customer costs and savings,
which are expected to result from amended standards at specific
efficiency levels. 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 as 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 in each year relative to the base case
as the difference between total operating cost savings and 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.
1. Approach
Over time, equipment that is more efficient in the standards case
gradually replaces less-efficient equipment. This affects the
calculation of both the NES and NPV, which are a function of the total
number of units in use and their efficiencies. Both the NES and NPV
depend on annual shipments and equipment lifetime, including changes in
shipments and retirement rates in response to changes in equipment
costs due to amended energy conservation standards. Both calculations
start by using the shipments estimate and the quantity of units in
service derived from the shipments model.
With regard to estimating the NES, because more-efficient boilers
gradually replace less-efficient ones, the energy per unit of capacity
used by the boilers in service gradually decreases in the standards
case relative to the base case. DOE calculated the NES by subtracting
energy use under a standards-case scenario from energy use in a base
case scenario.
Unit energy savings for each equipment class are the weighted-
average values calculated in the LCC spreadsheet. To estimate the total
energy savings for each efficiency level, DOE first calculated the
national site energy consumption (i.e., the energy directly consumed by
the units of equipment in operation) for each class of commercial
packaged boilers for each year of the analysis period. The NES and NPV
analysis periods began with the earliest expected effective date of
amended Federal energy conservation standards (i.e., 2012) based on DOE
adoption of the baseline ASHRAE 90.1-2007 efficiency levels. For the
analysis of DOE adoption of more-stringent efficiency levels, the
earliest effective date is 2014, four years after DOE would likely
issue a final rule requiring such standards. Second, DOE determined the
annual site energy savings, consisting of the difference in site energy
consumption between the base case and the standards case for each class
of boiler. Third, DOE converted the annual site energy savings into the
annual amount of energy saved at the source of gas generation (the
source energy), using a site-to-source conversion factor. Finally, DOE
summed the annual source energy savings from 2012 to 2042 to calculate
the total NES for that period. DOE performed these calculations for
each efficiency level considered for commercial packaged boilers in
this rulemaking.
DOE considered whether a rebound effect is applicable in its NES
analysis. A rebound effect occurs when an increase in equipment
efficiency leads to an increased demand for its service. EIA in its
national energy modeling system (NEMS) model assumes a certain
elasticity factor to account for an increased demand for service due to
the increase in cooling (or heating) efficiency.\36\ EIA refers to this
as an efficiency rebound.\37\ For the
[[Page 12033]]
commercial heating equipment market, there are two ways that a rebound
effect could occur: (1) Increased use of the heating equipment within
the commercial buildings they are installed in; and (2) additional
instances of heating a commercial building where it was not being
heated before.
---------------------------------------------------------------------------
\36\ DOE used the NEMS version consistent with AEO2008. An
overview of the NEMS model and documentation is found at http://www.eia.doe.gov/oiaf/aeo/overview/index.html.
\37\ EIA, Assumptions to the Annual Energy Outlook 2007 (2007).
Available at: http://www.eia.doe.gov/oiaf/aeo/assumption/index.html.
---------------------------------------------------------------------------
The first instance does not occur often because commercial
buildings are generally heated to the thermal comfort temperatures
desired in these buildings during the occupied periods. DOE also does
not believe that increases in the efficiency of commercial boilers
would result in significant increases in operating hours during which
heating might be utilized in buildings.
With regard to the second instance, commercial boilers are unlikely
to be installed in previously unheated building spaces, because
commercial packaged boilers are not primarily found in warehouse
buildings. Furthermore, relatively little unheated commercial building
space exists outside of warehouse buildings. For warehouse buildings
generally, other heating equipment types tend to be utilized today and
will likely continued to be used in the future, because of lower first
costs with direct heating equipment such as furnaces and unit heaters
as well as the use of high temperature radiant heaters for human
comfort in some warehouses. Therefore, DOE did not assume a rebound
effect in the present NOPR analysis. DOE seeks input from interested
parties on whether there will be a rebound effect for improvements in
the efficiency of commercial packaged boilers. If interested parties
believe a rebound effect will occur, DOE is interested in receiving
data quantifying the effects as well as input regarding how should DOE
quantify this in its analysis. This is identified as Issue 4 under
``Issues on Which DOE Seeks Comment'' in section VIII.E of today's
NOPR.
To estimate NPV, DOE calculated the net impact as the difference
between total operating cost savings (including electricity, repair,
and maintenance cost savings) and increases in total installed costs
(including customer prices and installation cost). DOE calculated the
NPV of each standard level over the life of the equipment using the
following three steps. First, DOE determined the difference between the
equipment costs under the standard-level case and the base case in
order to obtain the net equipment cost increase resulting from the
higher standard level. Second, DOE determined the difference between
the base-case operating costs and the standard-level operating costs in
order to obtain the net operating cost savings from each higher
efficiency level. Third, DOE determined the difference between the net
operating cost savings and the net equipment cost increase in order to
obtain the net savings (or expense) for each year. DOE then discounted
the annual net savings (or expenses) to 2008 for boilers bought on or
after 2012 and summed the discounted values to provide the NPV of an
efficiency level. An NPV greater than zero shows net savings (i.e., the
efficiency level would reduce customer expenditures relative to the
base case in present value terms). An NPV that is less than zero
indicates that the efficiency level would result in a net increase in
customer expenditures in present value terms.
To make the analysis more transparent to all interested parties,
DOE used a commercially-available spreadsheet model to calculate the
energy savings and the national economic costs and savings from amended
standards. Chapter 7 of the NOPR TSD helps explain the models and how
to use them. Interested parties can review DOE's analyses by changing
various input quantities within the spreadsheet.
Unlike the LCC analysis, the NES spreadsheet does not use
distributions for inputs or outputs, but relies on national average
first costs and energy costs developed from the LCC spreadsheet. DOE
examined sensitivities by applying different scenarios. DOE used the
NES spreadsheet to perform calculations of energy savings and NPV using
the annual energy consumption and total installed cost data from the
LCC analysis. DOE forecasted the energy savings, energy cost savings,
equipment costs, and NPV of benefits for equipment sold in each boiler
equipment class from 2012 through 2042. The forecasts provided annual
and cumulative values for all four output parameters described above.
2. Shipments Analysis
Equipment shipments are an important element in the estimate of the
future impact of a standard. DOE developed shipments projections under
a base case and each of the standards cases using a shipments model.
DOE used the standards-case shipments projection and, in turn, the
standards-case equipment stock to determine the NES. The shipments
portion of the spreadsheet model forecasts boiler shipments from 2012
to 2042. Chapter 6 of the NOPR TSD provides details of the shipment
projections.
DOE developed shipments forecasts by accounting for (1) the growth
in the stock of commercial buildings which use boilers; (2) equipment
retirements; and (3) equipment lifetimes.
The shipments model assumes that in each year, each existing boiler
either ages by one year or breaks down, and that equipment that breaks
down is replaced. In addition, new equipment can be shipped into new
commercial building floor space, and old equipment can be removed
through demolitions. DOE's shipments model is based on current
shipments for commercial packaged boilers based on data provided by
AHRI, as described above, as well as on an existing boiler survival
function consistent with a 30-year equipment life. Shipments are
separated into two groups: (1) Shipments to new construction; and (2)
shipments for replacements. Total commercial boiler shipment data for
2007 from AHRI was first disaggregated into these two groups using the
relative floor space between new construction and existing stock (as
determined in the NEMS model for 2007) and assuming the same saturation
rate for boiler usage between new and existing buildings. DOE then
disaggregated total boiler shipments into shipments by equipment class,
based on the relative fraction of models for each equipment class
reflected in DOE's market database. This data allowed DOE to allocate
sales of equipment to the different equipment classes. Annual shipments
to new construction grew in proportion to the annual construction put
in place as forecast by the NEMS model. Shipments for replacements in
each year are based on a replacement model, which tracks the quantity
and types of boilers that must be replaced in the building stock based
on the boiler survival function. Chapter 2 of the NOPR TSD summarizes
the total shipments data and the market database.
Table V.16 shows the forecasted shipments for the different
equipment classes of commercial boilers for selected years from 2012 to
2042 for the base case. As equipment purchase price increases with
efficiency, DOE recognizes that higher first costs can result in a drop
in shipments. However, DOE had no basis for estimating the elasticity
of shipments for commercial packaged boilers as a function of either
first costs or operating costs. Therefore, DOE presumed that total
shipments do not change with higher standard levels. Table V.16 also
shows the cumulative shipments for boilers from 2012 to 2042. Chapter 6
of the NOPR TSD provides additional details on the shipments forecasts,
including the standards case forecast.
[[Page 12034]]
Table V.16--Base-Case Shipments Forecast for Commercial Boilers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Thousands of units shipped by year and equipment class
-----------------------------------------------------------------------------------------------------
Equipment Cumulative
2012 2015 2020 2025 2030 2035 2040 2042 shipments
(2012-2042)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small gas-fired hot water......................... 6,853 7,112 7,494 7,922 8,848 10,343 12,239 12,984 73,795
Small gas-fired steam all except natural draft.... 2,322 2,410 2,539 2,684 2,998 3,505 4,147 4,399 25,005
Small gas-fired steam natural draft............... 3,568 3,703 3,902 4,125 4,607 5,385 6,372 6,760 38,422
Small oil-fired hot water......................... 1,926 1,999 2,106 2,226 2,486 2,906 3,439 3,648 20,736
Small oil-fired steam............................. 3,228 3,350 3,530 3,732 4,168 4,872 5,765 6,116 34,763
Large gas-fired hot water......................... 1,104 1,146 1,208 1,277 1,426 1,667 1,972 2092 11,893
Large gas-fired steam all except natural draft.... 2,011 2,087 2,199 2,324 2,596 3,034 3,591 3,809 21,651
Large gas-fired steam natural draft............... 2,577 2,674 2,818 2,979 3,327 3,889 4,602 4,882 27,750
Large oil-fired hot water......................... 538 558 588 622 695 812 961 1,019 5,794
Large oil-fired steam............................. 4,248 4,408 4,645 4,910 5,485 6,411 7,586 8,048 45,741
-----------------------------------------------------------------------------------------------------
Total......................................... 28,376 29,449 31,030 32,801 36,637 42,824 50,675 53,758 305,550
--------------------------------------------------------------------------------------------------------------------------------------------------------
3. Base-Case and Standards-Case Forecasted Distribution of Efficiencies
The annual energy consumption of a commercial boiler unit is
inversely related to the thermal efficiency of the unit. Thus, DOE
forecasted shipment-weighted average equipment thermal efficiencies
that, in turn, enabled a determination of the shipment-weighted annual
energy consumption values for the base case and each efficiency level
analyzed. DOE determined shipment-weighted average efficiency trends
for commercial boilers equipment by first converting the 2008 equipment
shipments by equipment class into market shares by equipment class. DOE
then reviewed DOE's market database to determine the distribution of
efficiency levels for commercially-available models within each
equipment class. DOE bundled the efficiency levels into ``efficiency
ranges'' and determined the percentage of models within each range. DOE
applied the percentages of models within each efficiency range to the
total unit shipments for a given equipment class to estimate the
distribution of shipments within the base case. To determine the
percentage of models in each efficiency range, DOE considered models
greater than or equal to the lower bound of the efficiency range and
models with efficiencies less than the upper bound of the efficiency
range. For example, for the thermal efficiency range of 79-80 percent,
DOE considered models with thermal efficiency levels from 79.0 to 79.9
to be within this range. Then, from those market shares and projections
of shipments by equipment class, DOE extrapolated future equipment
efficiency trends both for a base-case scenario and standards-case
scenarios. The difference in equipment efficiency between the base case
and standards cases was the basis for determining the reduction in per-
unit annual energy consumption that could result from amended
standards.
For the base case, DOE assumed that, absent amended standards,
forecasted market shares would remain frozen at the 2012 efficiency
levels until the end of the forecast period (30 years after the
effective date, or 2042). This prediction could cause DOE to
overestimate the savings associated with the higher efficiency levels
discussed in this notice because historical data indicated boiler
efficiencies or relative efficiency class preferences may change
voluntarily over time. Therefore, DOE seeks comment on this assumption
and the potential significance of any overestimation of savings. In
particular, DOE requests data that would allow it to better
characterize the likely increases in packaged boiler efficiencies that
would occur over the 30-year analysis period absent adoption of either
the ASHRAE 90.1-2007 efficiency levels or higher efficiency levels
considered in this rule. This is identified as Issue 5 under ``Issues
on Which DOE Seeks Comment'' in section VIII.E of today's NOPR.
For each efficiency level analyzed, DOE used a ``roll-up'' scenario
to establish the market shares by efficiency level for the year that
standards become effective (i.e., 2014 if DOE adopts more-stringent
efficiency levels than those in ASHRAE Standard 90.1-2007). DOE
collected information that suggests the efficiencies of equipment in
the base case that did not meet the standard level under consideration
would roll up to meet the standard level. This information also
suggests that equipment efficiencies in the base case that were above
the standard level under consideration would not be affected.
DOE seeks input on its basis for the NES-forecasted base-case
distribution of efficiencies and its prediction of how amended energy
conservation standards affect the distribution of efficiencies in the
standards case. This is identified as Issue 6 under ``Issues on Which
DOE Seeks Comment'' in section VIII.E of today's NOPR.
4. National Energy Savings and Net Present Value
The commercial boiler equipment stock is the total number of
commercial boilers in each equipment class purchased or shipped from
previous years that have survived until the point at which stock is
taken. The NES spreadsheet,\38\ through use of the shipments model,
keeps track of the total number of commercial boilers shipped each
year. For purposes of the NES and NPV analyses, DOE assumes that
retirements follow a Weibull \39\ distribution with a 30-year mean
lifetime. Retired units are replaced until 2042. For units shipped in
2042, any units still remaining at the end of 2085 are retired.
---------------------------------------------------------------------------
\38\ The NES spreadsheet can be found on the DOE's ASHRAE
Products Web site at: http://www1.eere.energy.gov/buildings/appliance_standards/commercial/ashrae_products_docs_meeting.html.
\39\ The Weibull distribution is a continuous probability
distribution used to understand the failure and durability of
equipment. It is popular because it is extremely flexible and can
accurately model various types of failure processes. A two-parameter
version of the Weibull was used and is described in chapter 7 of the
TSD.
---------------------------------------------------------------------------
[[Page 12035]]
The national annual energy consumption is the product of the annual
unit energy consumption and the number of boiler units of each vintage
in the stock. This approach accounts for differences in unit energy
consumption from year to year. In determining national annual energy
consumption, DOE first calculated the annual energy consumption at the
site (i.e., million Btus of fuel consumed by commercial boilers) and
multiplied that by a conversion factor to account for distribution
losses.
To discount future impacts, DOE follows Office of Management and
Budget (OMB) guidance in using discount rates of 7 percent and 3
percent in evaluating the impacts of regulations. In selecting the
discount rate corresponding to a public investment, OMB directs
agencies to use ``the real Treasury borrowing rate on marketable
securities of comparable maturity to the period of analysis.'' \40\ The
7-percent rate is an estimate of the average before-tax rate of return
on private capital in the United States 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 discount rate to capture the potential effects
of standards on private customers' consumption (e.g., reduced
purchasing of equipment due to higher prices 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 V.17 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 below and described in detail in chapter 7 of the NOPR
TSD.
---------------------------------------------------------------------------
\40\ OMB Circular No. A-94, ``Guidelines and Discount Rates for
Benefit-Cost Analysis of Federal Programs'' (Oct. 29, 1992) section
8.c.1.
Table V.17--Summary of NES and NPV Model Inputs
------------------------------------------------------------------------
Inputs Description
------------------------------------------------------------------------
Shipments.................... Annual shipments from shipments model
(see chapter 6 of the NOPR TSD).
Effective Date of Standard... 2014 for adoption of a more-stringent
efficiency level than those specified by
ASHRAE Standard 90.1-2007. 2012 for
adoption of the efficiency levels
specified by ASHRAE Standard 90.1-2007.
Base Case Efficiencies....... Distribution of base-case shipments by
efficiency level.
Standard Case Efficiencies... Distribution of shipments by 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-average values
are a function of efficiency level. (See
chapter 4 of the NOPR TSD.)
Total Installed Cost per Unit Annual weighted-average values are a
function of efficiency level. (See
chapter 5 of the NOPR TSD.)
Repair Cost per Unit......... Annual weighted-average values increase
with manufacturer's cost level. (See
chapter 5 of the NOPR TSD.)
Maintenance Cost per Unit.... See chapter 5 of the NOPR TSD.
Escalation of Fuel Prices.... AEO2008 forecasts (to 2030) and
extrapolation for beyond 2030. (See
chapter 5 of the NOPR TSD.)
Site-Source Conversion....... Based on average annual site-to-source
conversion factor for natural gas from
AEO2008.
Discount Rate................ 3 percent and 7 percent real.
Present Year................. Future costs are discounted to 2008.
------------------------------------------------------------------------
H. Other Issues
1. Effective Date of the Proposed Amended Energy Conservation Standards
Generally, covered equipment to which a new or amended energy
conservation standard applies must comply with the standard if such
equipment is manufactured or imported on or after a specified date. In
today's NOPR, DOE is evaluating whether more-stringent efficiency
levels than those in ASHRAE Standard 90.1-2007 would be economically
justified and result in a significant amount of energy savings. If DOE
were to propose a rule prescribing energy conservation standards at the
efficiency levels contained in ASHRAE Standard 90.1-2007, EPCA states
that any such standards shall 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 standard * *
*''. (42 U.S.C. 6313(a)(6)(D)) DOE has applied this two-year
implementation period to determine the effective date of any energy
conservation standard equal to the efficiency levels specified by
ASHRAE Standard 90.1-2007 proposed by this rulemaking. Thus, if DOE
decides to adopt one of the efficiency levels in ASHRAE Standard 90.1-
2007 for the equipment classes where a two-tier standard is set-forth,
the effective date of the rulemaking would be dependent upon the
effective date specified in ASHRAE Standard 90.1-2007. For example, in
certain cases, the effective date in ASHRAE Standard 90.1-2007 is March
2, 2010 for the initial efficiency level (which would require an
effective date of 2012), but the effective date is March 2, 2020 for
the second tier efficiency level (which would require an effective date
of 2022).
If DOE were to propose 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
[[Page 12036]]
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 from
the date of publication of the final rule.\41\
---------------------------------------------------------------------------
\41\ Since ASHRAE published ASHRAE Standard 90.1-2007 on January
10, 2008, EPCA requires that DOE publish a final rule adopting more-
stringent standards than those in ASHRAE 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.18 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.18--Anticipated Effective Date of an Amended Energy Conservation
Standard for Each Equipment Class of Commercial Packaged Boilers
------------------------------------------------------------------------
Anticipated
Anticipated effective date
effective date for adopting
for adopting the more-stringent
Equipment class efficiency efficiency
levels in ASHRAE levels than
standard 90.1- those in ASHRAE
2007 standard 90.1-
2007
------------------------------------------------------------------------
Small Gas-Fired Hot Water Commercial 2012 2014
Packaged Boilers...................
Small Gas-Fired Steam, All Except 2012 2014
Natural Draft Commercial Packaged
Boilers............................
Small Gas-Fired Steam Natural Draft 2012 or 2022 2014
Commercial Packaged Boilers........
Small Oil-Fired Hot Water Commercial 2012 2014
Packaged Boilers...................
Small Oil-Fired Steam Commercial 2012 2014
Packaged Boilers...................
Large Gas-Fired Hot Water Commercial 2012 2014
Packaged Boilers...................
Large Gas-Fired Steam, All Except 2012 or 2022 2014
Natural Draft Commercial Packaged
Boilers............................
Large Gas-Fired Steam Natural Draft 2012 2014
Commercial Packaged Boilers........
Large Oil-Fired Hot Water Commercial 2012 2014
Packaged Boilers...................
------------------------------------------------------------------------
VI. Analytical Results
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 proposed rule. The baseline
efficiency levels correspond to the efficiency levels specified by
ASHRAE Standard 90.1-2007. 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 capacity Efficiency levels
Equipment class kBtu/h analyzed (percent)
----------------------------------------------------------------------------------------------------------------
Small gas-fired hot water..................................... 800 Baseline--80 ET
82 ET
....................... 84 ET
....................... 86 ET
....................... Condensing--92 ET
Small gas-fired steam all except natural draft................ 800 Baseline--79 ET
80 ET
....................... 81 ET
....................... 82 ET
....................... 83 ET
Small gas-fired steam natural draft........................... 800 Baseline--77 ET
78 ET
....................... 79 ET
....................... 80 ET
Small oil-fired hot water..................................... 800 Baseline--82 ET
84 ET
....................... 86 ET
....................... 88 ET
Small oil-fired steam......................................... 800 Baseline--81 ET
82 ET
....................... 83 ET
....................... 85 ET
Large gas-fired hot water..................................... 3,000 Baseline--82 EC
83 EC
....................... 84 EC
....................... 85 EC
....................... Condensing--95 EC
[[Page 12037]]
Large gas-fired steam all except natural draft................ 3,000 Baseline--79 ET
80 ET
....................... 81 ET
....................... 82 ET
....................... 83 ET
Large gas-fired steam natural draft........................... 3,000 Baseline--77 ET
78 ET
....................... 79 ET
....................... 80 ET
....................... 81 ET
Large oil-fired hot water..................................... 3,000 Baseline--84 EC
86 EC
....................... 87 EC
....................... 88 EC
Large oil-fired steam......................................... 3,000 Baseline--81 ET
82 ET
....................... 83 ET
....................... 84 ET
....................... 86 ET
----------------------------------------------------------------------------------------------------------------
B. Economic Justification and Energy Savings
1. Economic Impacts on Commercial Customers
a. Life-Cycle Cost and Payback Period
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 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 NOPR 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.
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 (%)............................. 11 26 47 66
Equipment with No Change in LCC (%)............................. 77 48 25 18
Equipment with Net LCC Savings (%).............................. 12 27 28 17
Mean LCC Savings ($)............................................ $860 $2,007 ($319) ($6,649)
Mean PBP (years)................................................ 26.8 30.7 42.5 56.5
Increase in Total Installed Cost ($)............................ $3,754 $5,936 $9,486 $14,642
----------------------------------------------------------------------------------------------------------------
Note: Numbers in parentheses indicate negative LCC savings.
[[Page 12038]]
Table VI.3--Summary LCC and PBP Results for Small Gas-Fired Steam All Except Natural Draft, 800 kBtu/h Output
Capacity
----------------------------------------------------------------------------------------------------------------
Efficiency level
Small gas-fired steam all except natural draft -----------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Thermal Efficiency (ET)......................................... 80% 81% 82% 83%
Equipment with Net LCC Increase (%)............................. 30 60 73 75
Equipment with No Change in LCC (%)............................. 64 19 10 7
Equipment with Net LCC Savings (%).............................. 6 21 17 18
Mean LCC Savings ($)............................................ ($1,530) ($1,545) ($3,521) ($4,163)
Mean Payback Period (years)..................................... 44.1 42.8 51.2 50.7
Increase in Total Installed Cost ($)............................ $3,592 $5,350 $8,103 $10,109
----------------------------------------------------------------------------------------------------------------
Note: Numbers in parentheses indicate negative savings.
Table VI.4--Summary LCC and PBP Results for Small Gas-Fired Steam
Natural Draft Boilers, 800 kBtu/h Output Capacity
------------------------------------------------------------------------
Efficiency level
Small gas-fired steam natural draft --------------------------------
1 2 3
------------------------------------------------------------------------
Thermal Efficiency (ET)................ 78% 79% 80%
Equipment with Net LCC Increase (%).... 49 39 51
Equipment with No Change in LCC (%).... 32 22 3
Equipment with Net LCC Savings (%)..... 19 38 46
Mean LCC Savings ($)................... ($712) $789 $1,103
Mean PBP (years)....................... 33.5 26.6 28.9
Increase in Total Installed Cost ($)... $3,261 $4,321 $5,972
------------------------------------------------------------------------
Note: Numbers in parentheses indicate negative savings.
Table VI.5--Summary LCC and PBP Results for Small Oil-Fired Hot Water
Boilers, 800 kBtu/h Output Capacity
------------------------------------------------------------------------
Efficiency level
Small oil-fired hot water --------------------------------
1 2 3
------------------------------------------------------------------------
Thermal Efficiency (ET)................ 84% 86% 88%
Equipment with Net LCC Increase (%).... 20 25 37
Equipment with No Change in LCC (%).... 39 27 7
Equipment with Net LCC Savings (%)..... 41 48 56
Mean LCC Savings ($)................... $2,441 $5,376 $5,212
Mean PBP (years)....................... 19.2 19.6 26.6
Increase in Total Installed Cost ($)... $3,897 $6,325 $10,185
------------------------------------------------------------------------
Table VI.6--Summary LCC and PBP Results for Small Oil-Fired Steam
Boilers, 800 kBtu/h Output Capacity
------------------------------------------------------------------------
Efficiency level
Small oil-fired hot water --------------------------------
1 2 3
------------------------------------------------------------------------
Thermal Efficiency (ET)................ 82% 83% 85%
Equipment with Net LCC Increase (%).... 29 46 54
Equipment with No Change in LCC (%).... 58 24 6
Equipment with Net LCC Savings (%)..... 13 30 40
Mean LCC Savings ($)................... ($732) $88 $864
Mean PBP (years)....................... 35.1 33.7 35.0
Increase in Total Installed Cost ($)... $3,524 $5,142 $8,670
------------------------------------------------------------------------
Note: Numbers in parentheses indicate negative savings.
Table VI.7--Summary LCC and PBP Results for Large Gas-Fired Hot Water Boilers, 3,000 kBtu/h Output Capacity
----------------------------------------------------------------------------------------------------------------
Efficiency level
Large gas-fired hot water -----------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Combustion Efficiency (EC)...................................... 83% 84% 85% 95%
Equipment with Net LCC Increase (%)............................. 9 20 34 49
Equipment with No Change in LCC (%)............................. 51 23 17 6
[[Page 12039]]
Equipment with Net LCC Savings (%).............................. 40 58 49 46
Mean LCC Savings ($)............................................ $5,254 $9,421 $8,678 $7,637
Mean PBP (years)................................................ 16.0 19.3 27.8 37.1
Increase in Total Installed Cost ($)............................ $4,489 $8,172 $14,043 $37,821
----------------------------------------------------------------------------------------------------------------
Table VI.8--Summary LCC and PBP Results for Large Gas-Fired Steam, All Except Natural Draft Boilers, 3,000 kBtu/
h Output Capacity
----------------------------------------------------------------------------------------------------------------
Efficiency level
Large gas-fired steam all except natural draft -----------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Thermal Efficiency (ET)......................................... 80% 81% 82% 83%
Equipment with Net LCC Increase (%)............................. 6 5 4 4
Equipment with No Change in LCC (%)............................. 61 26 23 20
Equipment with Net LCC Savings (%).............................. 33 69 73 77
Mean LCC Savings ($)............................................ $6,711 $16,291 $25,415 $34,087
Mean Payback Period (years)..................................... 12.5 9.1 8.1 7.7
Increase in Total Installed Cost ($)............................ $4,364 $6,048 $7,824 $9,697
----------------------------------------------------------------------------------------------------------------
Table VI.9--Summary LCC and PBP Results for Large Gas-Fired Steam Natural Draft Boilers, 3,000 kBtu/h Output
Capacity
----------------------------------------------------------------------------------------------------------------
Efficiency level
Large gas-fired steam natural draft -----------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Thermal Efficiency (ET)......................................... 78% 79% 80% 81%
Equipment with Net LCC Increase (%)............................. 1 3 6 10
Equipment with No Change in LCC (%)............................. 88 42 24 7
Equipment with Net LCC Savings (%).............................. 11 55 71 82
Mean LCC Savings ($)............................................ $8,339 $17,917 $25,371 $30,669
Mean Payback Period (years)..................................... 9.8 8.2 9.1 10.8
Increase in Total Installed Cost ($)............................ $3,800 $5,893 $9,073 $13,367
----------------------------------------------------------------------------------------------------------------
Table VI.10--Summary LCC and PBP Results for Large Oil-Fired Hot Water
Boilers, 3,000 kBtu/h Output Capacity
------------------------------------------------------------------------
Efficiency level
Large oil-fired hot water -----------------------------------
1 2 3
------------------------------------------------------------------------
Combustion Efficiency (EC).......... 86% 87% 88%
Equipment with Net LCC Increase (%). 5 11 15
Equipment with No Change in LCC (%). 52 24 24
Equipment with Net LCC Savings (%).. 43 65 61
Mean LCC Savings ($)................ $18,874 $23,498 $27,342
Mean PBP (years).................... 9.3 12.9 15.4
Increase in Total Installed Cost ($) $7,063 $12,536 $18,256
------------------------------------------------------------------------
Table VI.11--Summary LCC and PBP Results for Large Oil-Fired Steam Boilers, 3,000 kBtu/h Output Capacity
----------------------------------------------------------------------------------------------------------------
Efficiency level
Large oil-fired steam -----------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Thermal Efficiency (ET)......................................... 82% 83% 84% 86%
Equipment with Net LCC Increase (%)............................. 4 7 11 12
Equipment with No Change in LCC (%)............................. 66 41 16 11
Equipment with Net LCC Savings (%).............................. 30 53 73 77
Mean LCC Savings ($)............................................ $9,613 $19,472 $26,117 $40,322
Mean Payback Period (years)..................................... 9.7 9.3 11.2 12.3
Increase in Total Installed Cost ($)............................ $4,280 $7,392 $12,189 $20,635
----------------------------------------------------------------------------------------------------------------
[[Page 12040]]
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 due to
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 NOPR 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.................................. 0.022 0.072 0.140 0.212
Small gas-fired steam, all except natural draft............ (0.000) 0.014 0.030 0.045
Small gas-fired steam natural draft........................ (0.006) 0.016 0.042 ...........
Small oil-fired hot water.................................. 0.015 0.034 0.057 ...........
Small oil-fired steam...................................... 0.009 0.027 0.068 ...........
Large gas-fired hot water.................................. 0.014 0.037 0.061 0.176
Large gas-fired steam, all except natural draft............ 0.022 0.063 0.105 0.148
Large gas-fired, steam natural draft....................... (0.022) 0.002 0.032 0.067
Large oil-fired hot water.................................. 0.014 0.024 0.034 ...........
Large oil-fired steam...................................... 0.039 0.106 0.198 0.410
----------------------------------------------------------------------------------------------------------------
* 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.................................. 0.004 0.015 0.029 0.043
Small gas-fired steam, all except natural draft............ (0.000) 0.003 0.006 0.009
Small gas-fired steam natural draft........................ (0.000) 0.004 0.009 ...........
Small oil-fired hot water.................................. 0.003 0.007 0.012 ...........
Small oil-fired steam...................................... 0.002 0.005 0.014 ...........
Large gas-fired hot water.................................. 0.003 0.008 0.012 0.036
Large gas-fired steam, all except natural draft............ 0.004 0.013 0.021 0.030
Large gas-fired, steam natural draft....................... (0.003) 0.002 0.008 0.015
Large oil-fired hot water.................................. 0.003 0.005 0.007 ...........
Large oil-fired steam...................................... 0.008 0.022 0.041 0.084
----------------------------------------------------------------------------------------------------------------
* 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.................................. 0.010 0.035 0.068 0.103
Small gas-fired steam, all except natural draft............ (0.000) 0.007 0.014 0.022
Small gas-fired, steam natural draft....................... (0.002) 0.008 0.021 ...........
Small oil-fired hot water.................................. 0.007 0.016 0.027 ...........
Small oil-fired steam...................................... 0.004 0.013 0.033 ...........
Large gas-fired hot water.................................. 0.007 0.018 0.030 0.085
Large gas-fired steam, all except natural draft............ 0.010 0.031 0.051 0.072
Large gas-fired steam, natural draft....................... (0.009) 0.002 0.017 0.034
Large oil-fired hot water.................................. 0.007 0.012 0.016 ...........
[[Page 12041]]
Large oil-fired steam...................................... 0.019 0.051 0.096 0.199
----------------------------------------------------------------------------------------------------------------
* 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 NOPR 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............................... ($0.014) ($0.010) ($0.166) ($0.543)
Small gas-fired steam, all except natural draft......... ($0.038) ($0.041) ($0.081) ($0.114)
Small gas-fired, steam natural draft.................... ($0.037) ($0.016) ($0.028) ............
Small oil-fired hot water............................... ($0.008) ($0.000) ($0.041) ............
Small oil-fired steam................................... ($0.031) ($0.040) ($0.085) ............
Large gas-fired hot water............................... $0.011 $0.028 $0.003 ($0.093)
Large gas-fired steam, all except natural draft......... $0.027 $0.127 $0.226 $0.322
Large gas-fired steam, natural draft.................... ($0.054) ($0.021) ($0.013) ($0.045)
Large oil-fired hot water............................... $0.042 $0.071 $0.063 ............
Large oil-fired steam................................... $0.062 $0.184 $0.248 $0.504
----------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative NPV.
Table VI.16--Summary of Cumulative Net Present Value for Boilers
[Discounted at three percent]
----------------------------------------------------------------------------------------------------------------
Net present value (billion 2008$)
-------------------------------------------------------
Equipment class Efficiency Efficiency Efficiency Efficiency
level 1 level 2 level 3 level 4
----------------------------------------------------------------------------------------------------------------
Small gas-fired hot water............................... $0.077 $0.274 $0.146 ($0.510)
Small gas-fired steam, all except natural draft......... (0.076) (0.014) (0.034) (0.050)
Small gas-fired steam, natural draft.................... (0.100) 0.041 0.125 ............
Small oil-fired hot water............................... 0.053 0.137 0.121 ............
Small oil-fired steam................................... (0.023) 0.014 0.049 ............
Large gas-fired hot water............................... 0.093 0.222 0.259 0.483
Large gas-fired steam, all except natural draft......... 0.166 0.576 0.984 1.391
Large gas-fired steam, natural draft.................... (0.257) (0.081) 0.077 0.174
Large oil-fired hot water............................... 0.146 0.243 0.262 ............
Large oil-fired steam................................... 0.302 0.830 1.328 2.702
----------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative NPV.
[[Page 12042]]
C. Proposed 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 0.10 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 0.14 quads to 1.26 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.a,
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 savings ranges from $860 to a
mean LCC cost of $6,649 for efficiency level 1 through efficiency level
4. The total installed cost increases from $3,754 to $14,642 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. As noted in section IV.C.4.a, due to current test
procedure requirements, 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 several energy-efficiency advocacy
groups. DOE strongly encourages stakeholders to work together to
propose agreements to DOE. When DOE receives
[[Page 12043]]
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 strongly 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. In light of those considerations, DOE
is presenting the results for all the efficiency levels analyzed for
commercial packaged boilers for stakeholder feedback.
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, which 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 is seeking comments from
interested parties regarding these potential differences in expected
lifetime.
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 proposing 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 has tentatively concluded to propose
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 in
order to propose 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 level necessary to support
these 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 the
overstatement or understatement 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 tentatively
concluded that the efficiency levels beyond those in ASHRAE Standard
90.1-2007 for commercial packaged boilers are not economically
justified and is proposing as Federal minimum standards the efficiency
levels in ASHRAE Standard 90.1-2007 for all ten equipment classes of
commercial packaged boilers. DOE seeks comments from interested parties
on its proposed amended energy conservation standards for commercial
packaged boilers as well as the other efficiency levels considered.
Although DOE currently believes that it would be appropriate to adopt
the efficiency levels in ASHRAE Standard 90.1-2007 for commercial
packaged boilers, DOE would consider the possibility of setting
standards at more-stringent efficiency levels if public comments and
additional data supply clear and convincing evidence in support of such
an approach. Table VI.17 shows the proposed energy conservation
standards for commercial packaged boilers.
Table VI.17--Proposed Energy Conservation Standards for Commercial Packaged Boilers
----------------------------------------------------------------------------------------------------------------
Efficiency level *
-------------------------
Equipment type Subcategory Size category (input) Effective Effective
date: March date: March
2, 2012 2, 2022
----------------------------------------------------------------------------------------------------------------
Hot Water Commercial Packaged Gas-fired................ >= 300,000 Btu/h and <= 80% ET 80% ET
Boilers. 2,500,000 Btu/h.
Hot Water Commercial Packaged Gas-fired................ > 2,500,000 Btu/h....... 82% EC 82% EC
Boilers.
Hot Water Commercial Packaged Oil-fired................ >=300,000 Btu/h and <= 82% ET 82% ET
Boilers. 2,500,000 Btu/h.
[[Page 12044]]
Hot Water Commercial Packaged Oil-fired................ > 2,500,000 Btu/h....... 84% EC 84% EC
Boilers.
Steam Commercial Packaged Boilers Gas-fired--all, except >= 300,000 Btu/h and <= 79% ET 79% ET
natural draft. 2,500,000 Btu/h.
Steam Commercial Packaged Boilers Gas-fired--all, except > 2,500,000 Btu/h....... 79% ET 79% ET
natural draft.
Steam Commercial Packaged Boilers Gas-fired--natural draft. >= 300,000 Btu/h and <= 77% ET 79% ET
2,500,000 Btu/h.
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 81% ET
2,500,000 Btu/h.
Steam Commercial Packaged Boilers Oil-fired................ > 2,500,000 Btu/h....... 81% ET 81% ET
----------------------------------------------------------------------------------------------------------------
* ET is the thermal efficiency and EC is the combustion efficiency.
VII. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866
Today's proposed 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 plans to prepare an environmental assessment (EA) of the
impacts of the proposed rule 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). This assessment would include a concise examination
of the impacts of emission reductions likely to result from the rule.
Most of these impacts are likely to be positive. The EA will be
incorporated into the final rule TSD. DOE requests that interested
members of the public, Tribes, and States submit any relevant data or
other information for DOE to consider when preparing the EA.
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 has reviewed today's proposed rule under the provisions of the
Regulatory Flexibility Act and the policies and procedures published on
February 19, 2003. 68 FR 7990. 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 proposing to adopt the efficiency
levels in ASHRAE Standard 90.1-2007, which are part of the prevailing
industry standard and were a 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 proposed in today's
NOPR 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 requests public comment on the impact
of this proposed rule on small entities.
For the reasons stated above, DOE certifies that the proposed rule,
if promulgated, 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. DOE
transmitted its certification and a supporting statement of factual
basis to the Chief Counsel for Advocacy of the SBA for review pursuant
to 5 U.S.C. 605(b).
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)) This NOPR would not impose any new
information or recordkeeping requirements. Accordingly, OMB clearance
is not required under the PRA.
[[Page 12045]]
E. Review Under the Unfunded Mandates Reform Act of 1995
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).
Today's proposed rule contains 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. Accordingly, no assessment or analysis is
required under 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. This rule would not have any impact on the autonomy or
integrity of the family as an institution. Accordingly, DOE has
concluded that it is unnecessary to prepare a Family Policymaking
Assessment.
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 intergovernmental consultation
process it will follow in the development of such regulations. 65 FR
13735. DOE has examined this proposed rule and has 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. EPCA governs and prescribes Federal preemption of State
regulations as to energy conservation for the equipment that are the
subject of today's proposed 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 proposed 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.
Today's regulatory action would not have a significant adverse
effect on the supply, distribution, or use of energy, and, therefore,
is not a significant energy action. Furthermore, this regulatory action
has not been designated as a significant energy action
[[Page 12046]]
by the Administrator of OIRA. Accordingly, DOE has not prepared a
Statement of Energy Effects.
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), DOE must comply with all laws applicable to the former
Federal Energy Administration, including 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 (DOJ) and the FTC concerning the impact of
the commercial or industry standards on competition.
The amendments and revisions to the test procedure for commercial
packaged boilers proposed in this notice incorporate updates to
commercial standards already codified in the CFR. DOE has evaluated
these revised 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., that they were developed in a manner that
fully provides for public participation, comment, and review). DOE will
consult with the Attorney General and the Chairman of the FTC
concerning the impact of these test procedures on competition before
prescribing a final rule.
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 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.
VIII. Public Participation
A. Attendance at Public Meeting
DOE will hold a public meeting on April 7, 2009, from 9 a.m. to 4
p.m. in Washington, DC. The meeting will be held at the U.S. Department
of Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue,
SW., Washington, DC. To attend the public meeting, please notify Ms.
Brenda Edwards at (202) 586-2945. As explained in the ADDRESSES
section, foreign nationals visiting DOE Headquarters are subject to
advance security screening procedures. Any foreign national wishing to
participate in the meeting should advise DOE of this fact as soon as
possible by contacting Ms. Brenda Edwards to initiate the necessary
procedures.
B. Procedure for Submitting Requests to Speak
Any person who has an interest in today's notice, or who is a
representative of a group or class of persons that has an interest in
these issues, may request an opportunity to make an oral presentation.
Such persons may hand-deliver requests to speak to the address shown in
the ADDRESSES section at the beginning of this notice of proposed
rulemaking between the hours of 9 a.m. and 4 p.m., Monday through
Friday, except Federal holidays. Requests may also be sent e-mail to:
[email protected].
Persons requesting to speak should briefly describe the nature of
their interest in this rulemaking and provide a telephone number for
contact. DOE requests persons scheduled to make a presentation submit
an advance copy of their statements at least two weeks before the
public meeting. At its discretion, DOE may permit any person who cannot
supply an advance copy of their statement to participate, if that
person has made advance alternative arrangements with the Building
Technologies Program. The request to give an oral presentation should
ask for such alternative arrangements.
C. Conduct of Public Meeting
DOE will designate a DOE official to preside at the public meeting
and may use a professional facilitator to aid discussion. The meeting
will not be a judicial or evidentiary-type public hearing, but DOE will
conduct it in accordance with 5 U.S.C. 553 and section 336 of EPCA (42
U.S.C. 6306). A court reporter will be present to record the
proceedings and prepare a transcript. DOE reserves the right to
schedule the order of presentations and to establish the procedures
governing the conduct of the public meeting. After the public meeting,
interested parties may submit further comments on the proceedings as
well as on any aspect of the rulemaking until the end of the comment
period.
The public meeting will be conducted in an informal, conference
style. DOE will present summaries of comments received before the
public meeting, allow time for presentations by participants, and
encourage all interested parties to share their views on issues
affecting this rulemaking. Each participant will be allowed to make a
prepared general statement (within time limits determined by DOE),
before the discussion of specific topics. DOE will permit other
participants to comment briefly on any general statements.
At the end of all prepared statements on a topic, DOE will permit
participants to clarify their statements briefly and comment on
statements made by others. Participants should be prepared to answer
questions by DOE and by other participants concerning these issues. DOE
representatives may also ask questions of participants concerning other
matters relevant to this rulemaking. The official conducting the
[[Page 12047]]
public meeting will accept additional comments or questions from those
attending, as time permits. The presiding official will announce any
further procedural rules or modification of the above procedures that
may be needed for the proper conduct of the public meeting.
DOE will make the entire record of this proposed rulemaking,
including the transcript from the public meeting, available for
inspection at the U.S. Department of Energy, Forrestal Building,
Resource Room of the Building Technologies Program, 950 L'Enfant Plaza,
SW., 6th Floor, Washington, DC 20024, (202) 586-9127, between 9 a.m.
and 4 p.m., Monday through Friday, except Federal holidays. Any person
may buy a copy of the transcript from the transcribing reporter.
D. Submission of Comments
DOE will accept comments, data, and information regarding the
proposed rule before or after the public meeting, but no later than the
date provided at the beginning of this notice of proposed rulemaking.
Information submitted should be identified by docket number EERE-2008-
BT-STD-0013 and/or RIN 1904-AB83. Please submit comments, data, and
information electronically, to the following e-mail address: [email protected]. Stakeholders should submit electronic
comments in WordPerfect, Microsoft Word, PDF, or text (ASCII) file
format and avoid the use of special characters or any form of
encryption, and whenever possible carry the electronic signature of the
author. Comments, data, and information submitted to DOE via mail or
hand delivery/courier should include one signed paper original. No
telefacsimiles (faxes) will be accepted.
Pursuant to 10 CFR 1004.11, DOE requires any person submitting
information that he or she believes to be confidential and exempt by
law from public disclosure to submit two copies: one copy of the
document including all the information believed to be confidential, and
one copy of the document with the information believed to be
confidential deleted. DOE will make its own determination about the
confidential status of the information and treat it according to its
determination.
Factors of interest to DOE when evaluating requests to treat
submitted information as confidential include: (1) A description of the
items; (2) whether and why such items are customarily treated as
confidential within the industry; (3) whether the information is
generally known by or available from other sources; (4) whether the
information has previously been made available to others without
obligation concerning its confidentiality; (5) an explanation of the
competitive injury to the submitting person which would result from
public disclosure; (6) when such information might lose its
confidential character due to the passage of time; and (7) why
disclosure of the information would be contrary to the public interest.
E. Issues on Which DOE Seeks Comment
DOE is particularly interested in receiving comments and views of
interested parties concerning the following issues:
1. DOE's proposed definitions for ``thermal efficiency'' and
``combustion efficiency'' for commercial packaged boilers.
2. The efficiency of dual output boilers in both steam mode and
water mode. Specifically, DOE is interested in receiving data or
comments, which would allow DOE to convert the steam ratings in the
I=B=R Directory and manufacturers' catalogs to hot water ratings.
3. DOE's assumption of fixed installation cost for each equipment
class independent of equipment efficiency. DOE seeks data or comment on
how installation costs could potentially increase with higher-
efficiency commercial boilers due primarily to venting concerns.
4. The potential for a rebound effect to occur in the commercial
packaged boiler industry.
5. DOE's assumption and the potential significance of any
overestimation of savings. In particular, DOE requests data that would
allow it to better characterize the likely increases in packaged boiler
efficiencies that would occur over the 30-year analysis period absent
amended energy conservation standards.
6. The NES-forecasted base-case distribution of efficiencies and
DOE's prediction of how amended energy conservation standards affect
the distribution of efficiencies in the standards case.
IX. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of today's Notice
of Proposed Rulemaking.
List of Subjects in 10 CFR Part 431
Administrative practice and procedure, Confidential business
information, Energy conservation, and Reporting and recordkeeping
requirements.
Issued in Washington, DC, on March 10, 2009.
Steven G. Chalk,
Principal Deputy Assistant Secretary, Energy Efficiency and Renewable
Energy.
For the reasons set forth in the preamble, DOE proposes to amend
Chapter II of Title 10, Code of Federal Regulations, Part 431 to read
as set forth below:
PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND
INDUSTRIAL EQUIPMENT
1. The authority citation for part 431 continues to read as
follows:
Authority: 42 U.S.C. 6291-6317.
2. In Sec. 431.82, revise the definition ``combustion efficiency''
and add the definition ``thermal efficiency,'' in alphabetical order to
read as follows:
Sec. 431.82 Definitions concerning commercial packaged boilers.
* * * * *
Combustion Efficiency for a commercial packaged boiler is
determined using test procedures prescribed under Sec. 431.86 and
equals 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.
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 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
[[Page 12048]]
available for inspection at the 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.
Hydronics Institute Division of GAMA, P.O. Box 218, Berkeley Heights,
NJ 07922, or http://www.gamanet.org/publist/hydroordr.htm.
(1) HI BTS-2000 (Rev06.07), Method to Determine Efficiency of
Commercial Space Heating Boilers, June 2007, IBR approved for Sec.
431.86.
(2) [Reserved]
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/hr 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 (Rev06.07) (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.
(1) Test Setup--(i) Classifications. If employing boiler
classification, you must classify boilers as given in Section 4.0 of
the HI BTS-2000 (Rev06.07) (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 (Rev06.07) (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
(Rev06.07) 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 (Rev06.07)
(incorporated by reference, see Sec. 431.85) 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 (Rev06.07) (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. For oil-fired and power
gas outdoor boilers, the integral venting means may have to be revised
to permit connecting the test flue apparatus described in section 7.2.1
of HI BTS-2000 (Rev06.07). A gas-fired boiler for outdoor installation
with a venting system provided as part of the boiler must be tested
with the venting system in place.
(iv) Test Conditions. Use test conditions from Section 8.0
(excluding 8.6.2) of HI BTS-2000 (Rev06.07) (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 (Rev06.07) 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 (Rev06.07) (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 (Rev06.07) (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 (Rev06.07) (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 (Rev06.07).
(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
2500 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 2500 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 (Rev06.07) (incorporated by reference, see Sec. 431.85).
[[Page 12049]]
(ii) Thermal Efficiency. Use the calculation procedure for the
thermal efficiency test specified in Section 11.1 of the HI BTS-2000
(Rev06.07) (incorporated by reference, see Sec. 431.85).
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/hr 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/hr or more, the combustion efficiency at the
maximum rated capacity must be not less than 83 percent.
(b) Each commercial packaged boiler manufactured on or after the
effective date listed in Table 1 to Sec. 431.87, must meet the
applicable energy conservation standard in Table 1.
Table 1 to Sec. 431.87--Commercial Packaged Boiler Energy Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Efficiency level
-------------------------
Equipment type Subcategory Size category (input) Effective Effective
date: March date: March
2, 2012* 2, 2022*
----------------------------------------------------------------------------------------------------------------
Hot Water Commercial Packaged Gas-fired................ >= 300,000 Btu/h and <= 80.0% ET 80.0% ET
Boilers. 2,500,000 Btu/h.
Hot Water Commercial Packaged Gas-fired................ > 2,500,000 Btu/h....... 82.0% EC 82.0% EC
Boilers.
Hot Water Commercial Packaged Oil-fired................ >= 300,000 Btu/h and <= 82.0% ET 82.0% ET
Boilers. 2,500,000 Btu/h.
Hot Water Commercial Packaged Oil-fired................ > 2,500,000 Btu/h....... 84.0% EC 84.0% EC
Boilers.
Steam Commercial Packaged Boilers Gas-fired--all, except >= 300,000 Btu/h and <= 79.0% ET 79.0% ET
natural draft. 2,500,000 Btu/h.
Steam Commercial Packaged Boilers Gas-fired--all, except > 2,500,000 Btu/h....... 79.0% ET 79.0% ET
natural draft.
Steam Commercial Packaged Boilers Gas-fired--natural draft. >= 300,000 Btu/h and <= 77.0% ET 79.0% ET
2,500,000 Btu/h.
Steam Commercial Packaged Boilers Gas-fired--natural draft. > 2,500,000 Btu/h....... 77.0% ET 79.0% ET
Steam Commercial Packaged Boilers Oil-fired................ >= 300,000 Btu/h and <= 81.0% ET 81.0% ET
2,500,000 Btu/h.
Steam Commercial Packaged Boilers Oil-fired................ > 2,500,000 Btu/h....... 81.0% ET 81.0% ET
----------------------------------------------------------------------------------------------------------------
* Where EC is combustion efficiency and ET is thermal efficiency as defined in Sec. 431.82.
6. In Sec. 431.97, add paragraph (d) to read as follows:
Sec. 431.97 Energy conservation 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.
[FR Doc. E9-5818 Filed 3-19-09; 8:45 am]
BILLING CODE 6450-01-P