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Proposed Rule2022-08868

Energy Conservation Program: Energy Conservation Standards for Commercial Warm Air Furnaces

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Published

April 26, 2022

Issuing agencies

Energy Department

Abstract

The Energy Policy and Conservation Act, as amended ("EPCA"), prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including commercial warm air furnaces ("CWAFs"). EPCA also requires the U.S. Department of Energy ("DOE") to periodically review standards. In this notification of proposed determination ("NOPD"), DOE has initially determined that it lacks clear and convincing evidence that amended energy conservation standards for CWAFs would be economically justified. DOE requests comment on this proposed determination.

Full Text

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[Federal Register Volume 87, Number 80 (Tuesday, April 26, 2022)]
[Proposed Rules]
[Pages 24455-24469]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-08868]

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Proposed Rules
Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 87, No. 80 / Tuesday, April 26, 2022 /
Proposed Rules

[[Page 24455]]

DEPARTMENT OF ENERGY

10 CFR Part 431

[EERE-2019-BT-STD-0042]
RIN 1905-AE59

Energy Conservation Program: Energy Conservation Standards for
Commercial Warm Air Furnaces

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.

ACTION: Notification of proposed determination and request for comment.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''),
prescribes energy conservation standards for various consumer products
and certain commercial and industrial equipment, including commercial
warm air furnaces (``CWAFs''). EPCA also requires the U.S. Department
of Energy (``DOE'') to periodically review standards. In this
notification of proposed determination (``NOPD''), DOE has initially
determined that it lacks clear and convincing evidence that amended
energy conservation standards for CWAFs would be economically
justified. DOE requests comment on this proposed determination.

DATES:
Meeting: DOE will hold a webinar on Tuesday, June 7, 2022, from
1:00 p.m. to 4:00 p.m. See section V, ``Public Participation,'' for
webinar registration information, participant instructions, and
information about the capabilities available to webinar participants.
Comments: Written comments and information are requested and will
be accepted on or before June 27, 2022.

ADDRESSES: Interested persons are encouraged to submit comments using
the Federal eRulemaking Portal at <a href="http://www.regulations.gov">www.regulations.gov</a>. Follow the
instructions for submitting comments. Alternatively, interested persons
may submit comments, identified by docket number EERE-2019-BT-STD-0042,
by any of the following methods:
1. Federal eRulemaking Portal: <a href="http://www.regulations.gov">www.regulations.gov</a>. Follow the
instructions for submitting comments.
2. Email: to <a href="/cdn-cgi/l/email-protection#3868535f706e797b7e4d4a56595b5d0a0809016b6c7c08080c0a785d5d165c575d165f574e">[email&#160;protected]</a>. Include docket
number EERE-2019-BT-STD-0042 and/or RIN 1904-AE59 in the subject line
of the message.
No telefacsimiles (``faxes'') will be accepted. For detailed
instructions on submitting comments and additional information on this
process, see section V of this document (Public Participation).
Although DOE has routinely accepted public comment submissions
through a variety of mechanisms, including postal mail and hand
delivery/courier, the Department has found it necessary to make
temporary modifications to the comment submission process in light of
the ongoing coronavirus (``COVID-19'') pandemic. DOE is currently
suspending receipt of public comments via postal mail and hand
delivery/courier. If a commenter finds that this change poses an undue
hardship, please contact Appliance Standards Program staff at (202)
586-1445 to discuss the need for alternative arrangements. Once the
COVID-19 pandemic health emergency is resolved, DOE anticipates
resuming all of its regular options for public comment submission,
including postal mail and hand delivery/courier.
Docket: The docket, which includes Federal Register notices, public
meeting attendee lists and transcripts, comments, and other supporting
documents/materials, is available for review at <a href="http://www.regulations.gov">www.regulations.gov</a>.
All documents in the docket are listed in the <a href="http://www.regulations.gov">www.regulations.gov</a>
index. However, not all documents listed in the index may be publicly
available, such as information that is exempt from public disclosure.
The docket web page can be found at <a href="http://www.regulations.gov/docket?D=EERE-2019-BT-STD-0042">www.regulations.gov/docket?D=EERE-2019-BT-STD-0042</a>. The docket web page contains
instructions on how to access all documents, including public comments,
in the docket. See section V, ``Public Participation,'' for further
information on how to submit comments through <a href="http://www.regulations.gov">www.regulations.gov</a>.

FOR FURTHER INFORMATION CONTACT: Ms. Julia Hegarty, U.S. Department of
Energy, Office of Energy Efficiency and Renewable Energy, Building
Technologies Office, EE-5B, 1000 Independence Avenue SW, Washington, DC
20585-0121. Telephone: (240) 597-6737. Email:
<a href="/cdn-cgi/l/email-protection#a7e6d7d7cbcec6c9c4c2f4d3c6c9c3c6d5c3d4f6d2c2d4d3cec8c9d4e7c2c289c3c8c289c0c8d1">[email&#160;protected]</a>.
Mr. Eric Stas, U.S. Department of Energy, Office of the General
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121.
Telephone: (202) 586-5827. Email: <a href="/cdn-cgi/l/email-protection#4f0a3d262c611c3b2e3c0f273e612b202a61282039">[email&#160;protected]</a>.
For further information on how to submit a comment or review other
public comments and the docket contact the Appliance and Equipment
Standards Program staff at (202) 287-1445 or by email:
<a href="/cdn-cgi/l/email-protection#c485b4b4a8ada5aaa7a197b0a5aaa0a5b6a0b795b1a1b7b0adabaab784a1a1eaa0aba1eaa3abb2">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Proposed Determination
II. Introduction
A. Authority
B. Background
C. Deviation From Appendix A
III. General Discussion and Rationale
A. General Comments
B. Equipment Classes and Scope of Coverage
1. Equipment Class Structure
2. Definition and Coverage
C. Test Procedures
D. Market and Technology Assessment, and Engineering Analysis
E. Economic and Energy Analyses
F. Proposed Determination
1. Significant Conservation of Energy
2. Technological Feasibility
3. Economic Justification
IV. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866 and 13563
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act of 1995
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Review Under the Information Quality Bulletin for Peer Review
V. Public Participation
A. Participation in the Public Meeting Webinar

[[Page 24456]]

B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of the Public Meeting Webinar
D. Submission of Comments
VI. Approval of the Office of the Secretary

I. Synopsis of the Proposed Determination

Title III, Part C \1\ of EPCA,\2\ established the Energy
Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311-
6317) Such equipment includes CWAFs, which are the subject of this
NOPD.\3\ (42 U.S.C. 6311(J))
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\1\ For editorial reasons, upon codification in the U.S. Code,
Part C was re-designated Part A-1.
\2\ All references to EPCA in this document refer to the statute
as amended through the Energy Act of 2020, Public Law 116-260 (Dec.
27, 2020), which reflects the last statutory amendments that impact
Parts A and A-1 of EPCA.
\3\ Air-cooled commercial package air conditioning and heating
equipment (referred to as ``air-cooled unitary air conditioners and
air-cooled unitary heat pumps'' or ``ACUACs and ACUHPs'') were also
included in the scope of the request for information (``RFI'')
published by DOE on May 12, 2020 (``May 2020 RFI'') that precedes
this NOPD. 85 FR 27941. In this NOPD, DOE only addresses CWAFs. DOE
will address ACUACs and ACUHPs in a separate proceeding.
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Pursuant to EPCA, DOE is triggered to consider amending the energy
efficiency standards for certain types of commercial and industrial
equipment, including the equipment at issue in this document, whenever
the American Society of Heating, Refrigerating, and Air Conditioning
Engineers (``ASHRAE'') amends the standard levels or design
requirements prescribed in ASHRAE Standard 90.1, ``Energy Standard for
Buildings Except Low-Rise Residential Buildings,'' (``ASHRAE Standard
90.1''). Under a separate provision of EPCA, DOE is required to review
the existing energy conservation standards for those types of covered
equipment subject to ASHRAE Standard 90.1, at a minimum, every 6 years
after issuance of any final rule establishing or amending a standard
(42 U.S.C. 6313(a)(6)(A)-(C)). DOE is conducting this review of the
energy conservation standards for CWAFs under EPCA's six-year-lookback
authority. (42 U.S.C. 6313(a)(6)(C))
For this proposed determination, DOE considered CWAFs subject to
the current Federal energy conservation standards specified in the Code
of Federal Regulations (CFR) at 10 CFR 431.77. In a direct final rule
published in the Federal Register on January 15, 2016 (``January 2016
final rule''), DOE, in relevant part, established amended standards for
CWAFs, including energy conservation standards for which compliance is
required beginning on January 1, 2023. 81 FR 2420. DOE has tentatively
determined that there is significant uncertainty regarding whether
more-stringent standards would be economically justified at this time,
a matter which the Department discusses in more detail in section III.F
of this document. Therefore, DOE has preliminarily determined that the
energy conservation standards for CWAFs do not need to be amended
because there is not clear and convincing evidence that amended
standards would be economically justified, as required by EPCA to
establish a more-stringent standard. (42 U.S.C. 6313(a)(6)(A)(ii)(II))

II. Introduction

The following section briefly discusses the statutory authority
underlying this proposed determination, as well as the historical
background relevant to the establishment of energy conservation
standards for CWAFs.

A. Authority

EPCA, Public Law 94-163 (42 U.S.C. 6291-6317, as codified), among
other things, authorizes DOE to regulate the energy efficiency of a
number of consumer products and certain industrial equipment. Title
III, Part C of EPCA, added by Public Law 95-619, Title IV, section
441(a) (42 U.S.C. 6311-6317, as codified), established the Energy
Conservation Program for Certain Industrial Equipment, which sets forth
a variety of provisions designed to improve energy efficiency. This
equipment includes CWAFs, the subject of this document. (42 U.S.C.
6311(J))
The energy conservation program under EPCA consists essentially of
four parts: (1) Testing, (2) labeling, (3) the establishment of Federal
energy conservation standards, and (4) certification and enforcement
procedures. Relevant provisions of EPCA include definitions (42 U.S.C.
6311), energy conservation standards (42 U.S.C. 6313), test procedures
(42 U.S.C. 6314), labeling provisions (42 U.S.C. 6315), and the
authority to require information and reports from manufacturers (42
U.S.C. 6316).
Federal energy conservation requirements for covered equipment
established under EPCA generally supersede State laws and regulations
concerning energy conservation testing, labeling, and standards. (42
U.S.C. 6316(a) and 42 U.S.C. 6316(b); 42 U.S.C. 6297) DOE may, however,
grant waivers of Federal preemption in limited circumstances for
particular State laws or regulations, in accordance with the procedures
and other provisions set forth under EPCA. (42 U.S.C. 6316(b)(2)(D),
which incorporates the preemption waiver provisions of 42 U.S.C.
6297(d))
EPCA prescribed initial mandatory energy conservation standards for
CWAFs. (42 U.S.C. 6313(a)(4)) In doing so, EPCA established Federal
energy conservation standards that generally corresponded to the levels
in the ASHRAE Standards 90.1 in effect on October 24, 1992 (i.e.,
ASHRAE Standard 90.1-1989).
In overview, if ASHRAE Standard 90.1 is amended with respect to the
standard levels or design requirements applicable under that standard
for certain commercial equipment, including CWAFs, not later than 180
days after the amendment of the standard, DOE must publish in the
Federal Register for public comment an analysis of the energy savings
potential of amended energy efficiency standards. (42 U.S.C.
6313(a)(6)(A)(i)) DOE must adopt amended energy conservation standards
at the new efficiency level in ASHRAE Standard 90.1, unless DOE
determines that there is clear and convincing evidence to support a
determination that the adoption of a more stringent efficiency level as
a uniform national standard would produce significant additional energy
savings and be technologically feasible and economically justified.\4\
(42 U.S.C. 6313(a)(6)(A)(ii))
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\4\ In determining whether a more-stringent standard is
economically justified, EPCA directs DOE to determine, after
receiving views and comments from the public, whether the benefits
of the proposed standard exceed the burdens of the proposed standard
by, to the maximum extent practicable, considering the following
seven factors: (1) The economic impact of the standard on the
manufacturers and consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the product compared to any increases in the initial price
of, initial charges for, or maintenance expense of the products that
are likely to result from the standard; (3) The total projected
amount of energy savings likely to result directly from the
standard; (4) Any lessening of the utility or the performance of the
products likely to result from 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 standard; (6) The need
for national energy conservation; and (7) Other factors the
Secretary of Energy (``Secretary'') considers relevant. (42 U.S.C.
6313(a)(6)(B)(ii))
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If DOE decides to adopt, as a uniform 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, supported by clear and convincing evidence,
that a more-stringent uniform national standard would result in
significant additional conservation of energy and is technologically
feasible and

[[Page 24457]]

economically justified, then DOE must establish the more-stringent
standard not later than 30 months after publication of the amended
ASHRAE Standard 90.1. (42 U.S.C. 6313(a)(6)(A)(ii)(II) and (B)(i))
EPCA also requires that every six years DOE shall evaluate the
energy conservation standards for each class of certain covered
commercial equipment, including CWAFs, and publish either a notice of
determination that the standards do not need to be amended, or a notice
of proposed rulemaking (``NOPR'') that includes new proposed energy
conservation standards (proceeding to a final rule, as appropriate).
(42 U.S.C. 6313(a)(6)(C)(i)) EPCA further provides that, not later than
three years after the issuance of a final determination not to amend
standards, DOE must publish either a notification of determination that
standards for the product do not need to be amended, or a NOPR
including new proposed energy conservation standards (proceeding to a
final rule, as appropriate). (42 U.S.C. 6313(a)(6)(C)(iii)(II))
A determination of whether amended energy conservation standards
are needed must be based on the same considerations as if it were
adopting a standard that is more stringent than an amendment to ASHRAE
Standard 90.1. (42 U.S.C. 6313(a)(6)(C)(i)(II); 42 U.S.C.
6313(a)(6)(A)-(B)) DOE must make the analysis on which a determination
is based publicly available and provide an opportunity for written
comment. (42 U.S.C. 6313(a)(6)(C)(ii)) Further, there must be clear and
convincing evidence that a determination that more-stringent standards
would (1) result in significant additional conservation of energy, (2)
be technologically feasible and (3) be economically justified. (42
U.S.C. 6313(a)(6)(C)(i); 42 U.S.C. 6313(a)(6)(A))
DOE is publishing this NOPD in satisfaction of the six-year-
lookback review requirement in EPCA, having initially determined that
DOE lacks clear and convincing evidence that amended standards for
CWAFs would be economically justified.

B. Background

In a final rule published in the Federal Register on October 21,
2004 (``October 2004 final rule''), DOE codified energy conservation
standards for CWAFs equal to those established in EPCA (i.e., a thermal
efficiency of 80 percent for gas-fired CWAFs, and a thermal efficiency
of 81 percent for oil-fired CWAFs). 69 FR 61916, 61941. The standards
established in the October 2004 final rule are the same as DOE's
current CWAF standards for CWAFs manufactured before January 1, 2023.
10 CFR 431.77.
As noted previously, DOE most recently amended the energy
conservation standards for CWAFs in the January 2016 final rule, which
requires compliance beginning on January 1, 2023. 81 FR 2420 (Jan. 15,
2016).
Since publication of the January 2016 final rule, ASHRAE published
two updated versions of ASHRAE Standard 90.1, one in 2016 (``ASHRAE
Standard 90.1-2016'') and another in 2019 (``ASHRAE Standard 90.1-
2019''). The CWAF standards adopted in the January 2016 final rule
(i.e., the standards which take effect on and after the January 1, 2023
compliance date) are more stringent than the minimum efficiency levels
for CWAFs in ASHRAE Standard 90.1-2016. ASHRAE 90.1-2019 updated the
minimum efficiency levels for CWAFs to align with those adopted by DOE
in the January 2016 final rule.\5\ Because neither ASHRAE Standard
90.1-2016 nor ASHRAE Standard 90.1-2019 contained minimum efficiency
levels more stringent than the current Federal standards for CWAFs, DOE
was not triggered to examine amended standards for this equipment under
42 U.S.C. 6313(a)(6)(A).\6\ As a result, despite these intervening
ASHRAE actions, the Federal standards for CWAFs are those set forth in
the January 2016 final rule and codified in DOE's regulations at 10 CFR
431.77.
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\5\ It is DOE's understanding that the relevant provisions of
ASHRAE Standard 90.1-2019 pertaining to CWAF standards contained a
typographical error. Table 6.8.1-5 of ASHRAE Standard 90.1-2019
specifies a thermal efficiency (TE) requirement of 82 percent for
oil-fired CWAFs applicable after January 1, 2023, which aligns with
the standard adopted by the January 2016 final rule. However, Table
6.8.1-5 of ASHRAE 90.1-2019 also specifies a TE requirement of only
80 percent for oil-fired CWAFs applicable before January 1, 2023,
whereas the previous version, ASHRAE 90.1-2016, specified a TE
requirement of 81 percent for this class. DOE understands the 80-
percent level in ASHRAE Standard 90.1-2019 to be a typographical
error, and that the TE requirement for oil-fired warm-air furnaces
>=225,000 Btu/h before January 1, 2023 should be 81 percent, thereby
aligning with ASHRAE Standard 90.1-2016 and the current Federal
standard. Since the 80-percent level in ASHRAE Standard 90.1-2019 is
lower than the corresponding current Federal standard, DOE cannot
consider adopting the ASHRAE Standard 90.1-2019 level due to the
``anti-backsliding'' provision in EPCA, which prevents the Secretary
from prescribing any amended standard that either increases the
maximum allowable energy use or decreases the minimum required
energy efficiency of a covered product. (42 U.S.C.
6313(a)(6)(B)(iii)(I)) Further, because the revised ASHRAE Standard
90.1-2019 lowers the standard, as compared to the level specified by
the uniform national standard adopted pursuant to EPCA, DOE did 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)(ii)(II) (i.e., DOE is not triggered). See 84 FR 3910,
3915 (Feb. 13, 2019).
\6\ DOE assessed whether it was triggered based upon
consideration of the current Federal standards codified at 10 CFR
431.77, which were promulgated through the final rule published in
the Federal Register on 81 FR 2420 (Jan. 15, 2016). In doing so, DOE
considered the totality of these CWAF standard levels, even though
compliance with certain of those standards is not yet required
(i.e., a compliance date of January 1, 2023).
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More specifically, for gas-fired CWAFs manufactured starting on
January 1, 1994, until January 1, 2023, the thermal efficiency (``TE'')
at the maximum rated capacity (i.e., rated maximum input) must be not
less than 80 percent. For gas-fired CWAFs manufactured starting on
January 1, 2023, the TE at the maximum rated capacity must be not less
than 81 percent. For oil-fired CWAFs manufactured starting on January
1, 1994, until January 1, 2023, the TE at the maximum rated capacity
must be not less than 81 percent. For oil-fired CWAFs manufactured
starting on January 1, 2023, the TE at the maximum rated capacity must
be not less than 82 percent. 10 CFR 431.77
In the January 2016 final rule, DOE rejected more-stringent
standards on the basis that benefits of energy savings, emission
reductions, and the estimated monetary value of the emissions
reductions would be outweighed by the economic burden on many
consumers, negative net present value (``NPV'') of consumer benefits,
and the impacts on manufacturers, including the conversion costs and
profit margin impacts that could result in a large reduction in
industry net present value (``INPV''). 81 FR 2420, 2522 (Jan. 15,
2016).
In support of its present review of the CWAF energy conservation
standards, DOE published in the Federal Register a request for
information (RFI) on May 12, 2020 (May 2020 RFI), which identified
various issues on which DOE sought comment, data, and information to
inform its determination of whether the current Federal standards need
to be amended. (It is again noted that the May 2020 RFI addressed
ACUACs and ACUHPs, in addition to CWAFs.) 85 FR 27941.
DOE received numerous comments in response to the May 2020 RFI from
interested parties, as listed in Table II-1. While Table II-1 includes
all parties that commented in response to the May 2020 RFI, only those
comments relevant to CWAFs are summarized and addressed in this
NOPD.\7\ As previously mentioned, DOE will consider ACUACs and ACUHPs
in a separate proceeding,

[[Page 24458]]

in which the Department will address comments received in response to
the May 2020 RFI related to ACUACs and ACUHPs.
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\7\ The following stakeholders listed in Table II-1 did not
provide comments relevant to CWAFs and, therefore, are not discussed
further in this document: PGE, UCA, Verified Inc., Heinemeier, and
Walsh.

Table II-1--Interested Parties That Provided Written Comment on the May
2020 RFI
------------------------------------------------------------------------
Acronym used in
Commenter(s) this NOPD Commenter type
------------------------------------------------------------------------
United CoolAir Corporation...... UCA............... Manufacturer.
Lennox International, Inc....... Lennox............ Manufacturer.
Carrier Corporation............. Carrier........... Manufacturer.
Trane Technologies.............. Trane............. Manufacturer.
Goodman Manufacturing Company, Goodman........... Manufacturer.
L.P.
Spire Inc....................... Spire............. Utility.
Air-Conditioning, Heating, and AHRI.............. Trade Association.
Refrigeration Institute.
American Public Gas Association. APGA.............. Trade Association.
Portland General Electric PGE............... Utility.
Company.
Northwest Energy Efficiency NEEA.............. Efficiency
Alliance. Organization.
California Investor-Owned CA IOUs........... Utility.
Utilities.
Appliance Standards Awareness Joint Advocates... Efficiency
Project, American Council for Organizations and
an Energy-Efficient Economy, State Government.
California Energy Commission,
Natural Resources Defense
Council, and Northeast Energy
Efficiency Partnerships.
Institute for Policy Integrity Policy Integrity.. Academic
at NYU School of Law. Institution.
Robert Mowris................... Verified Inc...... Other Stakeholder.
Kristin Heinemeier.............. Heinemeier........ Other Stakeholder.
John Walsh...................... Walsh............. Other Stakeholder.
Daniel Harkins.................. Harkins........... Other Stakeholder.
------------------------------------------------------------------------

A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\8\
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\8\ The parenthetical reference provides a reference for
information located in the docket. (Docket No. EERE-2019-BT-STD-
0042, which is maintained at <a href="http://www.regulations.gov/docket?D=EERE-2019-BT-STD-0042">www.regulations.gov/docket?D=EERE-2019-BT-STD-0042</a>). The references are arranged as follows: (Commenter
name, comment docket ID number, page of that document).
---------------------------------------------------------------------------

C. Deviation From Appendix A

In accordance with section 3(a) of 10 CFR part 430, subpart C,
appendix A (``appendix A''), DOE notes that it is deviating from the
provision in appendix A regarding the comment period for a notice of
proposed rulemaking. Section 6(f)(2) of appendix A specifies that the
length of the public comment period for a NOPR will not be less than 75
days. For this proposed determination, DOE has opted to instead provide
a 60-day comment period. As stated previously, DOE requested comment in
the May 2020 RFI on the technical and economic analyses that would be
used to determine whether, based on clear and convincing evidence, a
more-stringent standard would result in significant additional
conservation of energy and is technologically feasible and economically
justified. DOE has determined that a 60-day comment period, in
conjunction with the prior May 2020 RFI, provides sufficient time for
interested parties to review the proposed rule and develop comments.

III. General Discussion and Rationale

DOE developed this proposed determination after a review of the
CWAF market, including product literature and product listings in the
DOE Compliance Certification Management System (CCMS) database. DOE
also considered comments, data, and information from interested parties
that represent a variety of interests. This notice addresses issues
raised by these commenters.

A. General Comments

DOE received multiple comments from stakeholders stating generally
that DOE should not amend the current Federal standards for CWAFs.
(AHRI, No. 14 at p. 3; Carrier, No. 13 at pp. 4-5, 18-19; Lennox, No.
15 at pp. 1, 3; Trane, No. 16 at p. 2; APGA, No. 19 at pp. 1-3; Spire,
No. 21 at pp. 2-3) More specifically, AHRI, Carrier, Lennox, and Trane
argued that the current Federal standards should not be amended because
of the regulatory burdens manufacturers already face. (AHRI, No. 14 at
p. 2; Carrier, No. 13 at pp. 18-19; Lennox, No. 15 at p. 4; Trane, No.
16 at p. 2) Commenters also asserted that the impacts associated with
the 2023 standards cannot be assessed at this time because the
standards have yet to take effect, and, therefore, considering new
standards prior to 2023 would be premature. (Lennox, No. 15 at pp. 2-3;
AHRI, No. 14 at p. 3; Carrier, No. 13 at p. 8; Trane, No. 16 at p. 2)
DOE also received comments from several other stakeholders
generally expressing support for DOE evaluating and amending the
current energy conservation standards for CWAFs. (Joint Advocates, No.
23 at p. 1; CA IOUs No. 20 at pp. 1-7; NEEA, No. 24 at pp. 1-10) More
specifically, the Joint Advocates stated that very large energy savings
could result from amended standards for CWAFs, citing the max-tech
efficiency levels analyzed in the January 2016 final rule, as well as
the range of efficiencies in the current market. (Joint Advocates, No.
23 at pp. 1-2) NEEA and the CA IOUs similarly commented as to the
potential for energy savings. (CA IOUs No. 20 at pp. 1-7; NEEA, No. 24
at pp. 1, 5-7)
In response to the May 2020 RFI, AHRI asserted that DOE is not
statutorily required to review amended standards under the six-year-
lookback rulemaking for CWAFs, based on the fact that the 2023
standards adopted in the January 2016 final rule have not yet come into
effect. (AHRI, No. 14 at p. 3) DOE disagrees with AHRI's reading of the
statute. The statute does not reference compliance dates from previous
rulemakings in setting the timing for DOE's required review, but
instead, the language of EPCA simply requires DOE to evaluate amended
standards for CWAFs every 6 years, which DOE has interpreted as running
from publication of the last final rule to amend the applicable
standards. (see 42 U.S.C. 6313(a)(6)(C)(i)) However, DOE acknowledges
that if it were to set standards under EPCA's six-year-lookback
provision, the statute would require DOE to set a compliance date

[[Page 24459]]

that is the later of: (1) The date three years after publication of the
final rule establishing the amended standard or (2) the date that is
six years after the effective date of the current standard for a
covered product (in this case 2029). (see 42 U.S.C. 6313(a)(6)(C)(iv))
Therefore, pursuant to its statutory obligations (particularly
EPCA's required six-year-lookback review under 42 U.S.C. 6313(a)(6)(C))
and as discussed in this NOPD, DOE has considered the potential for
amended standards for CWAFs. Such review is necessary for DOE to
determine whether potential amended energy conservation standards for
CWAFs would meet the applicable statutory criteria. DOE's analyses in
this proceeding also allow it to evaluate the opposing view of the
comments previously discussed regarding the appropriateness of amended
CWAF standards.

B. Equipment Classes and Scope of Coverage

For CWAFs, the current energy conservation standards specified in
10 CFR 431.77 are based on two equipment classes determined according
to fuel type: Gas-fired CWAFs and oil-fired CWAFs. The current
standards are consistent with the equipment class structure in the
current version of ASHRAE Standard 90.1.
1. Equipment Class Structure
In response to the May 2020 RFI, NEEA recommended that DOE should
consider dividing the gas-fired CWAF equipment class into two or more
classes by capacity. NEEA argued that smaller units are more prominent
in commercial buildings, that analyzing them as a separate equipment
class would help identify their unique characteristics and challenges,
and that the cost-effectiveness of efficiency features for smaller
units will be different than those of larger units. (NEEA, No. 24 at p.
3)
DOE declines to make NEEA's recommended changes to the CWAF class
structure for the reasons that follow. First, as discussed in section
III.F of this document, DOE has tentatively determined that it lacks
clear and convincing evidence that amended standards for CWAFs would be
economically justified. As explained in that section, DOE has
tentatively determined that the market for CWAFs has not yet fully
responded to the pending 2023 energy conservation standards. This
uncertainty extends to the energy characteristics of the market against
which any alternate equipment class scheme would be compared. However,
more importantly, DOE has determined that it lacks statutory authority
to make the changes NEEA requests, as explained subsequently.
As a general rule, for covered consumer products, EPCA requires
that a rule prescribing an energy conservation standard for a type (or
class) of covered products shall specify a different level of energy
use or efficiency (either higher or lower) than that which applies (or
would apply) to any group of covered products that have the same
function or intended use, if the Secretary determines that covered
products within such group either: (1) Consume a different kind of
energy; or (2) have a capacity or other performance-related feature
which other products within such type (or class) do not have and such
feature justifies a different standard from that which applies (or will
apply) to other products within such type (or class). (42 U.S.C.
6295(q)(1)) These provisions also apply to covered commercial and
industrial equipment--other than ASHRAE equipment--through the
statutory crosswalk provision at 42 U.S.C. 6316(a). In contrast, ASHRAE
equipment, which includes CWAFs, has its own separate statutory scheme
under EPCA, as described in section II.A of this document. For ASHRAE
equipment, there is neither a companion provision nor crosswalk to 42
U.S.C. 6295(q)(1). Therefore, EPCA in essence requires DOE to establish
energy conservation standards for CWAFs at the minimum efficiencies set
forth in ASHRAE Standard 90.1 (unless DOE has clear and convincing
evidence to adopt more-stringent standards), consistent with the
equipment class structure in ASHRAE Standard 90.1. (See 42 U.S.C.
6313(a)(6)(A)) Consequently, DOE is not considering amendments to the
equipment classes for CWAFs.
2. Definition and Coverage
EPCA defines a ``warm air furnace'' 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)) A ``commercial warm air furnace'' is further
defined in DOE's regulations as a warm air furnace that is industrial
equipment, and that has a capacity (rated maximum input) of 225,000
British thermal units (``Btu'') per hour or more. 10 CFR 431.72. In the
May 2020 RFI, DOE requested comment on whether the Department's
regulatory definition for ``commercial warm air furnace,'' or related
definitions, require any revisions, and if so, how those definitions
should be revised. 85 FR 27941, 27945 (May 12, 2020).
Trane stated that it does not see the need for any changes to the
definition of CWAF. (Trane, No. 16 at p. 3) Conversely, NEEA
recommended that DOE should consider updating its definition for CWAF
to account for different operating characteristics, different
functions, or use cases in order to reduce uncertainty as to the
applicable standard and test procedure and to provide more
comprehensive coverage. (NEEA, No. 24 at p. 5)
In response, DOE reviewed the definition of ``commercial warm air
furnace.'' The codified definition of ``warm air furnace'' at 10 CFR
431.72 matches EPCA's definition of a ``warm air furnace'' at 42 U.S.C
6311(11)(A). A CWAF is defined at 10 CFR 431.72 as a warm air furnace
with the additional requirements that it be industrial equipment having
a capacity (rated maximum input) of 225,000 Btu per hour (``Btu/h'') or
more, which picks up where the upper limit of consumer furnace input
capacity for consumer furnaces leaves off (see 42 U.S.C. 6291(23)(D)).
After careful review, DOE considers this definition to be appropriately
aligned with the definition in EPCA and to adequately cover commercial
furnaces. (As discussed later in this section, DOE identified a small
number of furnace models that are not covered by either the consumer
furnace definition or the CWAF definition, but tentatively concludes
that amending the CWAF definition in the CFR to cover those models is
unnecessary because it would be duplicative, and would provide little
opportunity for energy savings.) Therefore, DOE has tentatively
determined that no amendments to the regulatory definitions for
``commercial warm air furnace'' or ``warm air furnace'' are needed.
AHRI and Carrier suggested modifying the definition of ``commercial
warm air furnace'' to introduce an upper limit to the input capacity of
covered CWAFs. (AHRI, No. 14 at p. 4; Carrier, No. 13 at p. 3) DOE
notes that the topic of an upper capacity limit was discussed
previously in a NOPR published in the Federal Register on February 4,
2015 (``February 2015 NOPR''). 80 FR 6182, 6192-6193. In the February
2015 NOPR, DOE noted that neither EPCA nor DOE's existing regulations
for CWAFs specify an upper limit to the input rating of covered
equipment, and that establishing an upper limit would potentially
remove coverage of models that would have otherwise been covered by DOE
regulations. Because of this, DOE did

[[Page 24460]]

not propose an upper limit on the input capacity of covered CWAF. Id.
DOE tentatively maintains its position taken in the February 2015 NOPR
and, therefore, is not proposing an upper limit on the input capacity
of covered CWAFs.
Carrier stated that there are gaps in coverage between the consumer
furnace and CWAF definitions, so the commenter recommended that the
CWAF definition should be modified to address those gaps. Specifically,
Carrier stated that three-phase furnaces with input ratings less than
225,000 Btu/h, as well as single-phase furnaces with input ratings less
than 225,000 Btu/h that are installed within the same cabinet as an air
conditioner with a cooling capacity greater than 65,000 Btu/h, are not
covered by either definition. Carrier recommended that the CWAF
definition be expanded to classify furnaces that are currently
unregulated as CWAFs, with the option of rating either with annual fuel
utilization efficiency (``AFUE'') or TE, as allowed in ASHRAE Standard
90.1. (Carrier, No. 13 at pp. 2-3)
As previously stated, 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 per hour or more. 10 CFR
431.72. DOE defines a consumer ``furnace'' as a product which utilizes
only single-phase electric current, or single-phase electric current or
DC current in conjunction with natural gas, propane, or home heating
oil, and which: (1) Is designed to be the principal heating source for
the living space of a residence; (2) is not contained within the same
cabinet with a central air conditioner whose rated cooling capacity is
above 65,000 Btu per hour; (3) is an electric central furnace, electric
boiler, forced-air central furnace, gravity central furnace, or low-
pressure steam or hot water boiler; and (4) has a heat input rate of
less than 300,000 Btu per hour for electric boilers and low-pressure
steam or hot water boilers and less than 225,000 Btu per hour for
forced-air central furnaces, gravity central furnaces, and electric
central furnaces. 10 CFR 430.2. This potential gap in coverage was
addressed in the February 2015 NOPR, in which DOE did not propose to
extend CWAF coverage to three-phase, less than 225,000 Btu/h equipment.
80 FR 6182, 6192 (Feb. 4, 2015). In the February 2015 NOPR, DOE agreed
with commenters that there is limited potential for energy savings from
coverage of such units due to the fact that equipment with these
characteristics are already meeting efficiency levels specified by
ASHRAE Standard 90.1. In its review of the market at the time, DOE did
not identify any equipment with an efficiency level below that
specified in ASHRAE Standard 90.1 levels for analogous equipment, and
thus, tentatively determined that a separate equipment class and
standard for this equipment may be unnecessarily duplicative and
provide little opportunity for energy savings. Id.
For this notice, DOE reexamined this matter, and the agency once
again reviewed the market and found a small number of gas-fired furnace
models that are three-phase with an input rating less than 225,000 Btu/
h. The Department found that for all of these models, manufacturers
provide efficiency ratings, and the models meet or exceed the current
gas-fired CWAF standards. Further, a majority of models identified also
meet or exceed the 2023 gas-fired CWAF standards. In addition, DOE
notes that these individual models make up a very small portion
(roughly 2 percent) of the total CWAF market. Therefore, DOE
tentatively maintains its previous conclusion that there is limited
potential for energy savings from extending the ``commercial warm air
furnace'' definition to cover this equipment due to the small size of
the market and the fact that these products appear to meet or exceed
the minimum energy conservation standards despite falling in a coverage
gap. DOE also was unable to identify any models currently on the market
with input ratings less than 225,000 Btu/h and that are contained
within the same cabinet as a central air conditioner with a cooling
capacity greater than 65,000 Btu/h, indicating that there would likely
be no potential for additional energy savings from covering this
equipment. Therefore, DOE has tentatively determined that amending the
CWAF definition to cover such equipment would provide little
opportunity for energy savings and is not proposing to do so in this
notice.

C. Test Procedures

EPCA sets forth generally applicable criteria and procedures for
DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a)) As
a general matter, manufacturers of covered ASHRAE equipment must use
these test procedures to certify to DOE that their equipment complies
with energy conservation standards and to quantify the efficiency of
their equipment. (42 U.S.C. 6316(b); 42 U.S.C. 6296) DOE's current
energy conservation standards for CWAFs are expressed in terms of a
minimum thermal efficiency in percent. (See 10 CFR 431.77) The
applicable test procedure for CWAFs is found at 10 CFR 431.76,
``Uniform Test Method for Measurement of Energy Efficiency of
Commercial Warm Air Furnaces.''
In commenting on the May 2020 RFI, DOE received input from multiple
stakeholders regarding DOE's CWAF test procedure, particularly as
relates to jacket loss. (Joint Advocates, No. 23 at pp. 3-4; NEEA, No.
24 at pp. 6-7; CA IOUs, No. 20 at p. 4; AHRI, No. 14 at p. 4; Carrier,
No. 13. at p. 5; Goodman, No. 17 at p. 2) DOE also received comments
from stakeholders regarding DOE's CWAF test procedure relating to
auxiliary electrical consumption. (Joint Advocates, No. 23 at pp. 2-3)
However, on May 5, 2020, DOE published a test procedure RFI for CWAFs
(``May 2020 CWAF TP RFI'') in the Federal Register to initiate its
review of the CWAF test procedure. DOE notes that the May 2020 CWAF TP
RFI specifically requested comment on jacket loss and auxiliary
electrical consumption. 85 FR 26626, 26631, 26332 (May 5, 2020). DOE
reasons that it is most appropriate to consider issues related to the
CWAF test procedure as part of a separate, dedicated test procedure
rulemaking for such equipment. Consequently, DOE will address comments
received in response to both the May 2020 RFI and May 2020 CWAF TP RFI
regarding these topics as part of the CWAF test procedure proceeding.

D. Market and Technology Assessment, and Engineering Analysis

In the May 2020 RFI, DOE requested comment on topics related to
performing a market and technology assessment, screening analysis, and
engineering analysis. 85 FR 27941, 27945-27950 (May 12, 2020). More
specifically, DOE requested comment on: (1) Technology options that
should be considered in a potential market and technology assessment;
(2) the representative designs and characteristics of models that would
be expected to be on the market after the 2023 compliance date; (3) the
screening criteria used to determine whether technologies are included
in the engineering analysis; (4) baseline efficiency levels; (5) max-
tech efficiency levels; (6) manufacturer production costs; and (7)
manufacturer selling prices. Id.
Regarding CWAF technology options, Carrier and Lennox stated that
the technology options considered in the analysis for the January 2016
final rule and presented in the May 2020 RFI for CWAFs are appropriate.
(Lennox, No. 15 at p. 5; Carrier, No. 13 at p. 4) Trane

[[Page 24461]]

asserted that pre-mixed burners \9\ do not provide benefits, that
burner de-rating \10\ may result in oversizing burners for CWAF
applications, and that concentric venting may not be appliable to
rooftop applications due to the length of the vent. (Trane, No. 16 at
p. 4) NEEA and the Joint Advocates suggested that DOE should consider
additional technology options for CWAFs that are were not listed in the
May 2020 RFI. (NEEA, No. 24 at p. 6; Joint Advocates, No. 23 at p. 4)
More specifically, NEEA recommended that increased jacket insulation,
decreased casing leakage, heat recovery equipment, high- efficiency
fans, variable-speed motors, low-leak dampers, modulating heat or
cooling, and advanced controls such as demand control ventilation
should be considered, and the Joint Advocates recommended DOE should
consider insulation improvements and any technology options that may
reduce the auxiliary electrical consumption of CWAFs. Id. Harkins
recommended DOE consider all technologies that increase efficiency.
(Harkins, No. 25 at p. 1)
---------------------------------------------------------------------------

\9\ Pre-mixed burners mix the primary air and the fuel prior to
combustion, which reduces or eliminates the need for secondary air
and results in more complete combustion.
\10\ ``Burner de-rating'' means decreasing the burner firing
rate to increase the ratio of heat transfer area to fuel input.
---------------------------------------------------------------------------

Regarding the designs and characteristics of the CWAF markets after
the 2023 compliance date of the current set of standards, DOE received
comments from multiple stakeholders asserting that the current CWAF
markets are not representative of the models that would be expected to
be on the market after the 2023 standards take effect. (Carrier, No. 13
at pp. 7-8; Trane, No. 16 at p. 7) AHRI commented that it is impossible
to forecast the market impact of the 2023 standards on CWAFs. (AHRI,
No. 14 at p. 3) Carrier asserted that manufacturers will be working to
optimize efficiencies, lower cost, and implement new entry-level
products, and that the upcoming 2023 standards are causing
manufacturers to further optimize their higher-efficiency equipment.
(Carrier, No. 13 at pp. 7-8) According to Trane, the furnaces currently
on the market will need to be redesigned to meet the 2023 standards.
(Trane, No. 16 at p. 7) In contrast, Lennox commented that the CWAF
models on the market are representative of designs and characteristics
of models that would be expected to be on the market after the 2023
compliance date, although Lennox acknowledged that the market impacts
of the 2023 standards are unknown because of uncertainties in assessing
the evolving market, including uncertainties in future shipments, the
economic impact on manufacturers and consumers, and the total projected
energy savings. (Lennox, No. 15 at pp. 5-6)
In response to these comments, DOE explains that it conducted a
preliminary market assessment based on the current CWAF market. DOE
found that the characteristics of the current CWAF market are largely
the same as when DOE assessed the CWAF market in the context of the
proceeding culminating in the January 2016 final rule. However, unlike
the market at that time, there are currently no condensing CWAFs (which
typically have a TE of 90 percent or greater) or gas-fired CWAFs with a
TE of 82 percent certified to DOE through the CCMS.\11\ Furthermore,
DOE's review of the market indicates that the available technologies
used to achieve the 2023 baseline efficiency level, as compared to the
technologies that could be used to achieve higher levels of thermal
efficiency (i.e., condensing technology) under the existing test
procedure, have not changed significantly. Although NEEA and the Joint
Advocates suggest analyzing numerous technologies (e.g., increased
jacket insulation, decreased jacket leakage, heat recovery equipment,
high-efficiency fans, variable-speed motors, low-leak dampers,
modulating heat or cooling, advanced controls such as demand control
ventilation, and any technology options that may reduce the auxiliary
electrical consumption of CWAFs), none of the technologies identified
by these commenters would improve thermal efficiency as it is measured
today. More specifically, these technology options are not currently
incorporated into the DOE CWAF test procedure, or the measurement of
CWAF performance, because the current DOE test method does not require
measurement of jacket losses and accounts for operation only when
operating at the maximum input rating at steady state. DOE initially
decided to exclude jacket loss from the calculation of TE in a NOPR
published on December 13, 1999. 64 FR 69598, 69601 (December 1999
NOPR).\12\ Therefore, because the technologies would not impact the
regulatory metric (TE), it would not be appropriate to consider them as
potential technologies for improving CWAF efficiency at this time.
---------------------------------------------------------------------------

\11\ DOE's Compliance Certification Database for CWAFs is
available at: <a href="http://www.regulations.doe.gov/ccms">www.regulations.doe.gov/ccms</a> (Last accessed Jan. 12,
2022).
\12\ In the December 1999 NOPR, DOE did not include jacket loss
in the TE calculation, having determined that, consistent with
adopting industry test standards referenced in ASHRAE/IES Standard
90.1-1989, the statute's intent was to assign the same meaning to
the term ``thermal efficiency'' as its definition in the
corresponding referenced standards (i.e., 100 percent minus percent
flue loss). 64 FR 69598, 69601 (Dec. 13, 1999). DOE's determination
in the December 1999 NOPR was informed by a public workshop held on
April 14 and 15, 1998, and what DOE understood to be the consensus
of the participants that TE should not include jacket loss, because
ANSI Z21.47 defined TE without jacket loss. Id.
---------------------------------------------------------------------------

Regarding the screening criteria and analysis, AHRI and Carrier
supported screening out CWAF technology options along the lines
presented in the May 2020 RFI (which were the same technology options
screened out in the January 2016 final rule). (AHRI, No. 14 at p. 5;
Carrier, No. 13 at p. 7) Carrier also recommended that an additional
screening criterion be added to address the cost of the technology
option. (Carrier, No. 13 at pp. 6-7)
In response to Carrier's suggestion that DOE include an additional
screening criterion to address cost of the technology option, DOE notes
that the current screening criteria are included in 10 CFR part 430,
subpart C, Appendix A, ``Procedures, Interpretations, and Policies for
Consideration of New or Revised Energy Conservation Standards and Test
Procedures for Consumer Products and Certain Commercial/Industrial
Equipment.'' See sections 6(b)(3) and 7(b). These criteria do not
include an evaluation of the cost of a technology option, which is
instead evaluated in the engineering analysis and subsequently in the
consumer economic analyses. Thus, DOE asserts that it would be
inappropriate to exclude a technology option from consideration based
solely on incremental technology cost increases, because changes in the
cost of equipment are more appropriately considered as part of the
consumer economic analyses.
Regarding baseline efficiency levels, multiple commenters stated
that the 2023 CWAF standards would be the correct baseline efficiency
to be used in a future DOE analysis. (AHRI, No. 14 at p. 6; Lennox, No.
15 at p. 6; Goodman, No. 17 at p. 3; Carrier, No. 13 at pp. 8-9)
Regarding the max-tech levels, multiple stakeholders asserted that
the 2023 CWAF standards are the highest possible for non-condensing
equipment and recommended that a higher standard requiring condensing
operation should not be considered. (AHRI, No. 14 at p. 7; Trane, No.
16 at pp. 4, 7; Carrier, No. 13 at pp. 4-5, 10; Goodman, No. 17 at p.
3; Spire, No. 21 at p. 2; Lennox, No. 15 at p. 5) Carrier, Trane, and
Lennox cautioned that increasing the baseline efficiency past

[[Page 24462]]

the 2023 standards by utilizing improvements in these technology
options would result in condensing operation, thereby imposing
additional burden on manufacturers. (Lennox, No. 15 at p. 5; Carrier,
No. 13 at pp. 4-5; Trane, No. 16 at p. 4) Commenters citied
technological problems associated with implementing CWAF standards at a
level that would require condensing operation, including issues related
to condensate disposal. Such issues included high costs, as well as
practicality and the ability to dispose of condensate properly. Id. In
contrast, the Joint Advocates and NEEA recommended that DOE should
consider a condensing standard because of the potential for energy
savings. (Joint Advocates, No. 23 at p. 4, NEEA, No. 24 at p. 7). DOE
discusses the merits of establishing a condensing standard in section
III.F of this document.
Regarding manufacturer production costs, manufacturer selling
price, and how manufacturers would incorporate technology options to
increase energy efficiency above the baseline, Carrier and Trane stated
that the technology options listed in the May 2020 RFI (which were the
options considered in the January 2016 final rule) are used to increase
efficiency. (Carrier, No. 13 at p. 11; Trane, No. 16 at p. 8) AHRI
stated that generally, the engineering analysis in the January 2016
final rule was accurate at the time. (AHRI, No. 14 at p. 7)
DOE considered how the manufacturer production cost and selling
price of CWAFs have changed since the January 2016 final rule. As
discussed previously, the designs and technologies used in equipment on
the market are generally the same as those on the market at the time of
the January 2016 final rule. DOE, therefore, has tentatively determined
that relevant factors such as manufacturing processes, materials, and
components are the same as or similar to those in use in January 2016.
However, a review of the producer price index (PPI) \13\ for furnaces
found that it has increased significantly, and DOE has tentatively
determined such an increase would apply to technologies used to improve
CWAF efficiency as well.\14\ These factors indicate that to the extent
that the cost of CWAFs (and in particular the cost of improving CWAF
efficiency) has changed since the engineering analysis was conducted
for the January 2016 final rule, it has increased. Thus, DOE does not
expect that conducting additional engineering analysis would provide
clear and convincing evidence that would lead DOE to differ in its
conclusions from the January 2016 final rule regarding economic
justification of adopting levels more stringent than those adopted in
the January 2016 final rule. DOE notes that other factors also
contribute to the economic justification of potential standards, and
additional discussion of those factors is included in section III.E of
this document.
---------------------------------------------------------------------------

\13\ The U.S. Bureau of Labor Statistics publishes PPI data. PPI
measures the average change over time in the selling prices received
by domestic producers for their output. The prices included in the
PPI are from the first commercial transaction for many products and
some services. For more information see: <a href="http://www.bls.gov/ppi/">www.bls.gov/ppi/</a>.
\14\ Specifically, DOE reviewed the series ID PCU 333415333415C,
which provides PPI information for warm air furnaces, including duct
furnaces and humidifiers, and electric comfort heating. The PPI
index as of August 2021 (i.e., the last month for which data is
available that is not subject to revision by BLS) was 186.7 as
compared to 142.8 in January 2016, an increase of over 30 percent.
Although recent price increases could be temporary, reviewing the
10-year trend indicates that an increase of approximately 19 percent
would be expected.
---------------------------------------------------------------------------

In summary, DOE considered the preliminary market assessment
conducted for this rulemaking, as well as comments received that are
relevant to the market and technology assessment, screening, and
engineering analysis. For the reasons discussed previously, DOE has
tentatively determined that the current CWAF market conditions
(including issues in meeting more-stringent standards that would
require use of condensing technology) are largely the same as those
analyzed in the January 2016 final rule.

E. Economic and Energy Analyses

In the May 2020 RFI, DOE requested comment on a number of issues
related to mark-ups and distribution channels, the energy use analysis,
the life-cycle cost analysis, repair and maintenance costs, the
shipments analysis, and the national impact analysis. 85 FR 27941,
27950-27953 (May 12, 2020). DOE specifically requested information to
describe how equipment moves from the manufacturer to the customer, the
relative sales volume through each channel, data to estimate the mark-
ups at each segment in the distribution channel, the energy use
methodology, inputs to the life-cycle-cost model such as equipment
lifetime, installation, repair, and maintenance costs, energy prices,
the no-new-standards efficiency distribution, historical shipments, and
future efficiency trends. Id.
Regarding mark-ups and distribution channels, DOE received comments
from AHRI and Carrier. AHRI commented that it is researching
distribution channels; however, it had no feedback at the time the
comment was provided. AHRI disagreed with DOE's use of incremental
mark-ups and recommended that DOE revert to using the baseline mark-up
for both baseline and incremental costs. (AHRI, No. 14 at p. 8) Carrier
commented that it has not observed large shifts in the distribution
channels, as the industry remains mature in the United States.
(Carrier, No. 13 at p. 12)
In response, DOE notes that in the January 2016 final rule, the
efficiency levels above the amended standard level were not
economically justified. As DOE has received no feedback to indicate the
distribution channels have changed and no feedback that markups have
decreased (which would reduce the incremental costs of higher-
efficiency products), DOE does not expect the outcome to change from
the January 2016 final rule.
Regarding the energy use analysis, DOE received comments from the
CA IOUs, AHRI, Carrier, Trane, Goodman, and NEEA. The CA IOUs commented
that DOE should update the weather data used in the energy use analysis
to reflect the temperatures recorded in the United States in recent
years. Along these lines, the CA IOUs recommended that DOE should
consider the methodology used by the California Energy Commission to
update weather files to analyze Title 24 of the Building Energy
Efficiency Standard.\15\ (CA IOUs, No. 20 at p. 5) AHRI expressed
concern that use of the 2003 Commercial Building Energy Consumption
Survey (CBECS 2003) and estimating the energy consumption using an
equivalent full-load hour approach does not accurately reflect
equipment that is optimized for part-load performance (AHRI, No. 14 at
p. 9). Trane commented that a more up-to-date building inventory
analysis should be used to measure CWAF energy use. (Trane, No. 16 at
p. 9) Carrier and Goodman commented that the previous analysis, from
the January 2016 final rule, was based on perimeter conditions (i.e.,
outdoor air conditions). (Carrier, No. 13 at p. 14; Goodman, No. 17 at
p. 4) Carrier commented that CWAFs do not run very often due to the
internal loads on the building, and Goodman commented that CWAFs
normally only provide morning warm up and night set back heating.
(Carrier, No. 13 at p. 14; Goodman, No. 17 at p. 4) NEEA recommended
that DOE should account for part-load operation, staged

[[Page 24463]]

systems, and varying percentages of outside air. (NEEA, No. 24 at p. 9)
---------------------------------------------------------------------------

\15\ For analysis of Title 24-2022, the California Energy
Commission used data from DOE's National Renewable Energy
Laboratory's National Solar Radiation Database to include weather
data collected between 1998-2017 (Available at: <a href="https://nsrdb.nrel.gov/">https://nsrdb.nrel.gov/</a>).
---------------------------------------------------------------------------

In response, DOE notes that while the previous analysis relied on
CBECS 2003, the CWAF energy consumption was adjusted for projected
decreases in heating degree days between CBECS 2003 and the compliance
year.\16\ Furthermore, DOE notes that the main driver of CWAF energy
consumption in the January 2016 final rule is the building heating
load, which is based on the reported space heating energy consumption
of buildings with a furnace in CBECS 2003.\17\ The previous analysis
was not based on full-load hours or perimeter conditions. Finally, as
stated in section III.D of this document, the Department's research
suggests that the characteristics of the CWAF market are largely the
same as when analyzed for the January 2016 final rule and that none of
the technology options presented would improve thermal efficiency as
measured in the current test procedure. Given the similar market, DOE
does not anticipate the energy use to have changed sufficiently to
drive a different outcome, as compared to that in the January 2016
final rule.
---------------------------------------------------------------------------

\16\ Chapter 7 of the January 2016 Final Rule Technical Support
Document (Available at: <a href="http://www.regulations.gov/document/EERE-2013-BT-STD-0021-0050">www.regulations.gov/document/EERE-2013-BT-STD-0021-0050</a>).
\17\ Id.
---------------------------------------------------------------------------

Regarding equipment lifetime, DOE received comments from AHRI,
Carrier, and Trane. AHRI disagreed with the Weibull approach to
lifetimes and stated its understanding that service lifetimes are in
the range of 12 to 15 years. (AHRI, No. 14 at p. 10) In contrast, Trane
stated that the Weibull approach is appropriate and that equipment
lifetime should be the same as in the January 2016 final rule. (Trane,
No. 16 at p. 10) Carrier likewise stated that the lifetimes determined
by DOE's proposed approach seem reasonable. (Carrier, No. 13 at p. 14)
AHRI and Carrier both stated that location is an important determinant
of lifetime. (AHRI, No. 14 at p. 10; Carrier, No. 13 at p. 14)
In response, DOE notes that the CWAF lifetime was developed based
on the lifetime model for ACUACs as nearly all CWAFs are packaged with
an ACUAC. The ACUAC lifetime model was calibrated based on historical
shipments data.\18\ Given the similar market characteristics to the
January 2016 final rule, DOE does not expect that equipment lifetime
has changed significantly, and, therefore, it would not warrant changes
to the findings regarding CWAF lifetimes presented in the January 2016
final rule.
---------------------------------------------------------------------------

\18\ See Appendix 8F of the January 2016 final rule technical
support document (Available at: <a href="http://www.regulations.gov/document/EERE-2013-BT-STD-0021-0050">www.regulations.gov/document/EERE-2013-BT-STD-0021-0050</a>).
---------------------------------------------------------------------------

Regarding repair and maintenance costs, DOE received comments from
AHRI, Trane, Carrier, and Goodman. AHRI stated that the costs used in
previous analyses do not reflect actual repair and maintenance costs
and that typical maintenance costs are double the values reported in RS
Means.\19\ (AHRI, No. 14 at p. 10) Trane stated that the methodology
used in the January 2016 final rule for repair and maintenance costs is
adequate, although an update to a more recent version of RS Means is
appropriate. (Trane, No. 16 at p. 10) Carrier stated that the higher
efficiency standards in 2023 will include more costly components, and,
therefore, an increased cost of equipment which could lead end users to
opt for repair instead of replacement. As the higher efficiency levels
require more advanced components, it will increase overall cost.
Carrier also commented that the impact of A2L refrigerants and low
global warming potential (GWP) regulations on repair and maintenance
costs is still unknown; however, the commenter believes that equipment
with A2L refrigerants will inherently have increased repair and
maintenance costs due to additional safety components in the equipment.
(Carrier, No. 13 at p. 16) Goodman stated that repair and maintenance
costs will be higher for products using alternative refrigerants. In
addition, Goodman commented that DOE's modeling on repair and
maintenance costs should be appropriately revised to account for the
baseline technologies that will be required to meet the amended
standards beginning on January 1, 2023. (Goodman, No. 17 at p. 4)
---------------------------------------------------------------------------

\19\ RS Means provides construction cost information that DOE
uses to estimate installation, maintenance, and repair costs of
CWAFs (Available at: <a href="https://www.rsmeansonline.com/">https://www.rsmeansonline.com/</a>) (Last accessed
April 10, 2013).
---------------------------------------------------------------------------

In response, DOE notes that the increased repair and maintenance
costs presented in the January 2016 analysis for higher-efficiency
products reflects the increased cost of more advanced components.
Moreover, the Department has tentatively concluded that an update to
the most current RS Means would not reduce the incremental difference
in repair and maintenance costs by efficiency level, and, therefore, it
would not be expected to change the outcome as compared to the January
2016 final rule.
Regarding energy prices, DOE received comments from Spire and APGA.
Spire commented that the gas prices used in developing the January 2016
final rule for amended CWAF energy conservation standards were
overstated and that gas prices have decreased since 2016. Spire also
asserted that DOE did not properly measure the marginal gas rates when
calculating the energy savings for CWAFs in the January 2016 final
rule. (Spire, No. 21 at pp. 3-6) APGA commented that the natural gas
supply has increased, allowing for stable or declining prices in some
markets. APGA also stated that DOE should be utilizing marginal
consumption-based prices, as they more accurately determine the impact
of efficiency savings for an end-user. (APGA, No. 19 at p. 2)
In response, DOE notes that the majority of CWAFs use natural gas.
The Department uses the Annual Energy Outlook (``AEO'') to project
future natural gas prices. In the January 2016 final rule, DOE used the
natural gas price projections from AEO 2015.\20\ The most current AEO
is AEO 2021,\21\ and the natural gas price projections of AEO 2021 are
indeed lower than for AEO 2015, in real dollars. With similar CWAF
products and lower natural gas price projections, DOE does not expect
the annual energy costs to rise compared to the January 2016 final
rule.
---------------------------------------------------------------------------

\20\ Available at: <a href="https://www.eia.gov/outlooks/aeo/tables_side.php">https://www.eia.gov/outlooks/aeo/tables_side.php</a>.
\21\ Available at: <a href="https://www.eia.gov/outlooks/archive/aeo21/">https://www.eia.gov/outlooks/archive/aeo21/</a>.
---------------------------------------------------------------------------

Regarding the no-new-standards efficiency distribution and future
efficiency trends, DOE received comments from Carrier and Trane.
Carrier commented that it expects most shipments in 2023 to be near the
standards level. (Carrier, No. 13 at p. 15) Trane asserted that the
majority of shipments (60-80 percent) will be at the minimum standard
level in 2023. (Trane, No. 16 at p. 10) Carrier and Trane further
commented that they expect the efficiency trends to remain close to the
Federal standard level after 2023. (Carrier, No. 13 at p. 17; Trane,
No. 16 at p. 11)
Regarding historical shipments, Carrier, Goodman, and Trane
commented that historical shipments would not accurately portray the
market for CWAFs, as the impacts of COVID-19 on the heating,
ventilation, and air-conditioning (``HVAC'') industry are not yet
known. (Carrier, No. 13 at p. 16; Goodman, No. 17 at p. 4; Trane, No.
16 at p. 11) Goodman argued that the CWAF market and shipments will be
negatively impacted by future electrification trends and regulations.
(Goodman, No. 17 at p. 4)

[[Page 24464]]

In response, DOE did not receive any historical shipments data in
response to the May 2020 RFI. However, the CWAF market is mature, and
in the January 2016 final rule, shipments were projected to grow
approximately 1 percent per year, with the large majority of shipments
going to the replacement market.\22\ The no-new-standards distribution
projected that in 2023, nearly all shipments would be at or near the
baseline level analyzed in the January 2016 final rule.\23\ As to
comments on impacts related to the COVID-19 pandemic, it is too soon to
tell what long-term effects that event may have on CWAF shipment
trends, if any. Likewise, DOE cannot adequately account for future
statutory or regulatory efforts to promote electrification until they
are finalized. At this point, DOE finds these factors to be too
speculative to account for in the present analysis for CWAFs.
Accordingly, given the mature market, the expectation that most
shipments will be at the baseline level in 2023, and no anticipated
increase in equipment lifetime, DOE does not expect the shipments
estimates and no-new-standards distributions from the January 2016
final rule to change significantly for CWAFs.
---------------------------------------------------------------------------

\22\ The January 15, 2016 direct final rule relied on the
December 14, 2015 National Impact Analysis Spreadsheet (Available
at: <a href="http://www.regulations.gov/document/EERE-2013-BT-STD-0021-0052">www.regulations.gov/document/EERE-2013-BT-STD-0021-0052</a>).
\23\ Id.
---------------------------------------------------------------------------

DOE also received comments from Policy Integrity regarding the
social cost of carbon used in the emissions monetization analysis.
Policy Integrity urged DOE to account for the benefits of greenhouse
gas emissions reductions from the use of higher-efficiency equipment
using the global estimate of the social cost of greenhouse gases, and
the commenter added that the values developed by the interagency
working group for the social cost of greenhouse gases are the best
available. (Policy Integrity, No. 7, at pp. 2-3, 5)
On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-
30087) granted the Federal government's emergency motion for a stay
pending appeal of the February 11, 2022, preliminary injunction in
Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of
the Fifth Circuit's order, the preliminary injunction is no longer in
effect, pending resolution of the Federal government's appeal of that
injunction or a further court order. Among other things, the
preliminary injunction enjoined the defendants in that case from
``adopting, employing, treating as binding, or relying upon'' the
interim estimates of the social cost of greenhouse gases--which were
issued by the Interagency Working Group on the Social Cost of
Greenhouse Gases on February 26, 2021--to monetize the benefits of
reducing greenhouse gas emissions. In the absence of further
intervening court orders, DOE will revert to its approach prior to the
injunction and present monetized benefits where appropriate and
permissible under law. However, in this NOPD, the Department will not
be monetizing the cost of greenhouse gas emissions, as DOE is not
proposing any amended standards. Should DOE follow this NOPD with a
final determination that amended standards for CWAFs would not meet the
applicable statutory criteria, no change in greenhouse gas emissions
would be expected to result from this proceeding.
Finally, DOE received a comment from Lennox asserting that DOE
lacks clear and convincing evidence to support a finding that
implementing amended standards above the levels scheduled for
compliance in 2023 would be economically justified. (Lennox, No. 15 at
p. 8)
DOE considered the comments provided on the economic and energy use
analyses and reviewed the inputs used in the life-cycle-cost,
shipments, and national impact analysis from the January 2016 final
rule. As discussed above, DOE has tentatively determined that there
have not been any significant changes to the mark-ups and distribution
channels, energy use, equipment lifetimes, repair and maintenance
costs, energy prices, the no-new-standards efficiency distributions,
and shipments that would lead to higher life-cycle-cost savings,
increased national energy savings, and increased net present value of
consumer benefits from the analysis that was conducted for the January
2016 final rule. Therefore, as discussed in section III.F of this
document, DOE has tentatively determined that the analyses conducted
for the January 2016 final rule are appropriate for the present
determination.

F. Proposed Determination

After carefully considering the comments on the May 2020 RFI and
the available data and information, DOE has tentatively determined that
the energy conservation standards for CWAFs do not need to be amended,
for the reasons explained in the paragraphs immediately following. DOE
will consider all comments received on this proposed determination
prior to issuing the next document in this rulemaking proceeding.
As previously discussed, EPCA specifies that for any commercial and
industrial equipment addressed under 42 U.S.C. 6313(a)(6)(A)(i),
including CWAFs, DOE may prescribe an energy conservation standard more
stringent than the level for such equipment in ASHRAE Standard 90.1
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)(C)(i); 42 U.S.C. 6313(a)(6)(A)(ii)(II)) The ``clear and
convincing'' evidentiary threshold applies both when DOE is triggered
by ASHRAE action and when DOE conducts a six-year-lookback rulemaking,
with the latter being the basis for the current proceeding. DOE
addresses each of these statutory criteria in turn.
1. Significant Conservation of Energy
EPCA mandates that DOE consider whether amended energy conservation
standards for CWAFs would result in significant additional conservation
of energy. (42 U.S.C. 6313(a)(6)(C)(i); 42 U.S.C.
6313(a)(6)(A)(ii)(II))
DOE acknowledges that more-stringent standards for CWAFs have the
potential to result in significant additional conservation of energy.
In the January 2016 final rule, DOE estimated that establishing a
condensing standard (i.e., 92-percent thermal efficiency) for gas-fired
and oil-fired CWAFs would result in 2.1 quads of primary energy savings
compared to a no-new-standards case over the lifetime of the CWAF (2019
through 2048). 81 FR 2420, 2508 (Jan. 15, 2016). However, as discussed
in section III.F.3 of this document, DOE has preliminarily determined
that it lacks clear and convincing evidence to show that the potential
amended standard levels considered would be economically justified.
2. Technological Feasibility
EPCA mandates that DOE consider whether amended energy conservation
standards for CWAFs would be technologically feasible. (42 U.S.C.
6313(a)(6)(C)(i); 42 U.S.C. 6313(a)(6)(A)(ii)(II)) As previously
discussed, establishing more-stringent standards for CWAFs would likely
require condensing operation,\24\ and

[[Page 24465]]

DOE previously analyzed levels requiring condensing operation (i.e.,
92-percent thermal efficiency) for the January 2016 final rule. 81 FR
2420 (Jan. 15, 2016). In the analysis for the January 2016 final rule,
DOE identified a small number of condensing gas-fired CWAF models (four
models at 90-percent thermal efficiency and four models at 92-percent
thermal efficiency) and one condensing oil-fired CWAF model,\25\
indicating that the market for condensing CWAFs is still very small,
and DOE's subsequent review suggests that it is now potentially smaller
than it was at the time of the analysis for the January 2016 final
rule. Although there is some uncertainty in how the market will respond
once compliance is required with the 2023 energy conservation
standards, DOE does not expect that the upcoming standards would spur
significant development of condensing CWAFs, as there are certain
technological and implementational challenges associated with use of
condensing CWAFs, including condensate disposal and freezing in many
commercial buildings/applications. In addition, DOE notes that the
amended standards in the January 2016 final rule implemented a 1-
percent increase in standard level for both gas-fired and oil-fired
CWAFs, which can be achieved without use of condensing technology, and
are levels at which models currently exist using non-condensing
technology. However, DOE is not aware of any models on the market
currently with an efficiency above the amended standards from the
January 2016 final rule and that are non-condensing. Additionally,
there are currently no condensing CWAFs certified to DOE through the
compliance certification management system at this time.\26\
---------------------------------------------------------------------------

\24\ Although DOE analyzed 82-percent thermal efficiency for
gas-fired CWAFs in the January 2016 final rule, currently there are
no non-condensing models available on the market with an efficiency
exceeding the minimum standard of 81 percent. In addition,
discussion during the negotiations that led to the January 2016
final rule indicated that it is not clear that CWAFs operating at
82-percent efficiency are always non-condensing.
\25\ See Chapter 3 of the Technical Support Document for the
January 2016 final rule (Available at: <a href="https://www.regulations.gov/document/EERE-2013-BT-STD-0021-0050">https://www.regulations.gov/document/EERE-2013-BT-STD-0021-0050</a>).
\26\ See DOE's Compliance Certification Database for CWAFs
(Available at: <a href="http://www.regulations.doe.gov/ccms">www.regulations.doe.gov/ccms</a>) (Last accessed Jan. 12,
2022).
---------------------------------------------------------------------------

3. Economic Justification
In the January 2016 final rule, DOE concluded that energy
conservation standards at levels requiring condensing operation would
not be economically justified, due to the economic burden on most
consumers, the negative NPV of consumer benefits using a 7-percent
discount rate, and the impacts on manufacturers, including the
conversion costs and profit margin impacts that could result in a large
reduction in INPV. Id. at 81 FR 2522 (Jan. 15, 2016). In examining the
current market, DOE has found that market conditions are largely the
same as at the time of the January 2016 final rule.
Given the similar market size, DOE has tentatively determined that
the manufacturing costs and manufacturer impacts would not be
significantly different now than projected in the January 2016 final
rule. In addition, DOE has tentatively determined that installation
costs, which for condensing levels included costs for condensate
removal, would be similar to those estimated in the previous analysis,
and that energy cost savings would not increase as compared to the
previous analysis, as updated AEO projections of energy prices show
declining prices. For these reasons, DOE has tentatively determined
that any analysis of a condensing level for CWAFs would not result in a
significantly different economic outcome from the January 2016 final
rule, and that as such, it lacks clear and convincing evidence that
more-stringent standard levels for CWAFs would be economically
justified.
DOE notes that the tentative determination, that it lacks clear and
convincing evidence, is specific to this rulemaking. DOE will evaluate
its ability to reach clear and convincing evidence on a case-by-case
basis.
DOE requests comment on its proposed determination that the
existing energy conservation standards for CWAFs do not need to be
amended.

IV. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866 and 13563

Executive Order (``E.O.'') 12866, ``Regulatory Planning and
Review,'' 58 FR 51735 (Oct. 4, 1993), as supplemented and reaffirmed by
E.O. 13563, ``Improving Regulation and Regulatory Review,'' 76 FR 3821
(Jan. 21, 2011), requires agencies, to the extent permitted by law, to:
(1) Propose or adopt a regulation only upon a reasoned determination
that its benefits justify its costs (recognizing that some benefits and
costs are difficult to quantify); (2) tailor regulations to impose the
least burden on society, consistent with obtaining regulatory
objectives, taking into account, among other things, and to the extent
practicable, the costs of cumulative regulations; (3) select, in
choosing among alternative regulatory approaches, those approaches that
maximize net benefits (including potential economic, environmental,
public health and safety, and other advantages; distributive impacts;
and equity); (4) to the extent feasible, specify performance
objectives, rather than specifying the behavior or manner of compliance
that regulated entities must adopt; and (5) identify and assess
available alternatives to direct regulation, including providing
economic incentives to encourage the desired behavior, such as user
fees or marketable permits, or providing information upon which choices
can be made by the public. DOE emphasizes as well that E.O. 13563
requires agencies to use the best available techniques to quantify
anticipated present and future benefits and costs as accurately as
possible. In its guidance, the Office of Information and Regulatory
Affairs (``OIRA'') in the Office of Management and Budget (``OMB'') has
emphasized that such techniques may include identifying changing future
compliance costs that might result from technological innovation or
anticipated behavioral changes. For the reasons stated in the preamble,
this proposed regulatory action is consistent with these principles.
OMB has determined that this proposed determination does not
constitute a ``significant regulatory action'' under section 3(f) of
E.O. 12866. Accordingly, this action was not subject to review under
E.O. 12866 by OIRA at OMB.

B. 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 (``IRFA'')
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 E.O. 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 rulemaking process. 68 FR 7990. DOE has made its
procedures and policies available on the Office of the General
Counsel's website (<a href="http://energy.gov/gc/office-general-counsel">energy.gov/gc/office-general-counsel</a>).
The Small Business Administration (SBA) considers a business entity
to be a small business, if, together with its affiliates, it employs
less than a threshold number of workers specified in 13 CFR part 121.
The equipment covered by this rule are classified under North American
Industry Classification

[[Page 24466]]

System (``NAICS'') code 333415,\27\ ``Air-Conditioning and Warm Air
Heating Equipment and Commercial and Industrial Refrigeration Equipment
Manufacturing.'' In 13 CFR 121.201, the SBA sets a threshold of 1,250
employees or fewer for an entity to be considered as a small business
for this category.
---------------------------------------------------------------------------

\27\ The size standards are listed by NAICS code and industry
description and are available at: <a href="http://www.sba.gov/document/support--table-size-standards">www.sba.gov/document/support--table-size-standards</a> (Last accessed March 4, 2022).
---------------------------------------------------------------------------

DOE has conducted a focused inquiry into small business
manufacturers of the equipment covered by this rulemaking. The
Department used available public information to identify potential
small manufacturers. DOE accessed its Compliance Certification Database
(``CCD'') \28\ to identify a list of companies that manufacture the
CWAFs covered by this proposal. Using these sources, DOE identified a
total of eight distinct manufacturers of CWAFs. DOE screened out
companies that do not meet the definition of a ``small business'' or
are foreign-owned and operated. Of these manufacturers, DOE identified
one small, domestic manufacturer as a potential small business.
---------------------------------------------------------------------------

\28\ U.S. Department of Energy Compliance Certification
Management System (Available at: <a href="http://www.regulations.doe.gov/ccms">www.regulations.doe.gov/ccms</a>).
---------------------------------------------------------------------------

DOE reviewed this proposed determination under the provisions of
the Regulatory Flexibility Act and the policies and procedures
published on February 19, 2003. Because DOE is not proposing to amend
standards for CWAFs, the determination, if adopted, would not amend any
energy conservation standards. On the basis of the foregoing, DOE
certifies that the proposed determination, if adopted, would not have a
significant economic impact on a substantial number of small entities.
Accordingly, DOE has not prepared an IRFA for this proposed
determination. DOE will transmit this certification and supporting
statement of factual basis to the Chief Counsel for Advocacy of the
Small Business Administration for review under 5 U.S.C. 605(b).

C. Review Under the Paperwork Reduction Act of 1995

This proposed determination, which proposes to determine that
amended energy conservation standards for CWAFs are unneeded under the
applicable statutory criteria, would impose no new informational or
recordkeeping requirements. Accordingly, OMB clearance is not required
under the Paperwork Reduction Act. (44 U.S.C. 3501 et seq.)

D. Review Under the National Environmental Policy Act of 1969

DOE is analyzing this proposed action in accordance with the
National Environmental Policy Act of 1969 (``NEPA'') and DOE's NEPA
implementing regulations (10 CFR part 1021). DOE's regulations include
a categorical exclusion for actions which are interpretations or
rulings with respect to existing regulations. 10 CFR part 1021, subpart
D, appendix A4. DOE anticipates that this action qualifies for
categorical exclusion A4 because it is an interpretation or ruling in
regard to an existing regulation and otherwise meets the requirements
for application of a categorical exclusion. See 10 CFR 1021.410. DOE
will complete its NEPA review before issuing the final action.

E. Review Under Executive Order 13132

E.O. 13132, ``Federalism,'' 64 FR 43255 (August 10, 1999), imposes
certain requirements on Federal agencies formulating and implementing
policies or regulations that preempt State law or that have Federalism
implications. The Executive order requires agencies 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 determination
and has tentatively 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 is the subject of this proposed
determination. States can petition DOE for exemption from such
preemption to the extent, and based on criteria, set forth in EPCA. (42
U.S.C. 6316(a) and (b); 42 U.S.C. 6297) As this proposed determination
would not amend the standards for CWAFs, there is no impact on the
policymaking discretion of the States. Therefore, no further action is
required by E.O. 13132.

F. Review Under Executive Order 12988

With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil
Justice Reform,'' 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 (4) promote simplification and burden reduction. 61 FR
4729 (Feb. 7, 1996). Regarding the review required by section 3(a),
section 3(b) of E.O. 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 section 3(a) and section 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, this proposed determination meets
the relevant standards of E.O. 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'')
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For a proposed regulatory action likely to result in a rule that may
cause the expenditure 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 that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) The UMRA also 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

[[Page 24467]]

intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect them. On March 18, 1997, DOE published
a statement of policy on its process for intergovernmental consultation
under UMRA. 62 FR 12820. DOE's policy statement is also available at
<a href="http://energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf">energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf</a>.
DOE examined this proposed determination according to UMRA and its
statement of policy and determined that the proposed determination does
not contain a Federal intergovernmental mandate, nor is it expected to
require expenditures of $100 million or more in any one year by State,
local, and Tribal governments, in the aggregate, or by the private
sector. As a result, the analytical requirements of UMRA do not apply.

H. 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 rule that may affect family well-being.
This proposed determination would not have any impact on the autonomy
or integrity of the family as an institution. Accordingly, DOE has
concluded that it is not necessary to prepare a Family Policymaking
Assessment.

I. Review Under Executive Order 12630

Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (March
15, 1988), DOE has determined that this proposed determination would
not result in any takings that might require compensation under the
Fifth Amendment to the U.S. Constitution.

J. 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 Federal agencies to review
most disseminations of information to the public under information
quality 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). Pursuant to OMB Memorandum M-19-15, ``Improving
Implementation of the Information Quality Act'' (April 24, 2019), DOE
published updated guidelines which are available at: <a href="http://www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IAQ%20Guidelines%20Dec%202019.pdf">www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IAQ%20Guidelines%20Dec%202019.pdf</a>. DOE has
reviewed this NOPD under the OMB and DOE guidelines and has concluded
that it is consistent with applicable policies in those guidelines.

K. Review Under Executive Order 13211

E.O. 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 the OIRA at
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 promulgates 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 Executive 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.
This proposed determination, which does not propose to amend energy
conservation standards for CWAFs, is not a significant regulatory
action under Executive Order 12866. Moreover, it would not have a
significant adverse effect on the supply, distribution, or use of
energy, nor has it been designated as such by the Administrator at
OIRA. Therefore, it is not a significant energy action, and
accordingly, DOE has not prepared a Statement of Energy Effects.

L. 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 (``the 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 rulemaking analyses are ``influential scientific
information,'' which the Bulletin defines 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.'' Id. at 70 FR 2667.
In response to OMB's Bulletin, DOE conducted formal peer reviews of
the energy conservation standards development process and the analyses
that are typically used and has prepared Peer Review report pertaining
to the energy conservation standards rulemaking analyses.\29\
Generation of this report involved a rigorous, formal, and documented
evaluation 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. Because available
data, models, and technological understanding have changed since 2007,
DOE has engaged with the National Academy of Sciences (NAS) to review
DOE's analytical methodologies to ascertain whether modifications are
needed to improve the Department's analyses. DOE is in the process of
evaluating the resulting December 2021 NAS report.\30\
---------------------------------------------------------------------------

\29\ ``Energy Conservation Standards Rulemaking Peer Review
Report.'' 2007 (Available at: <a href="http://energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0">energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0</a>).
\30\ The December 2021 NAS report is available at
<a href="http://www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards">www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards</a>.
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V. Public Participation

A. Participation in the Public Meeting Webinar

The time and date of the webinar are listed in the DATES section at
the beginning of this document. Webinar registration information,
participant instructions, and information about the capabilities
available to webinar participants will be published on DOE's website:
<a href="http://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=49">www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=49</a>. Participants are responsible for ensuring
their systems are compatible with the webinar software.

B. Procedure for Submitting Prepared General Statements for
Distribution

Any person who has an interest in the topics addressed in this
NOPD, or who

[[Page 24468]]

is representative of a group or class of persons that has an interest
in these issues, may request an opportunity to make an oral
presentation at the webinar. Such persons may submit requests to speak
by email to the Appliance and Equipment Standards Program,
<a href="/cdn-cgi/l/email-protection#d091a0a0bcb9b1beb3b583a4b1beb4b1a2b4a381a5b5a3a4b9bfbea390b5b5feb4bfb5feb7bfa6">[email&#160;protected]</a>. Persons who wish to speak
should include with their request a computer file in Microsoft Word,
PDF, or text (ASCII) file format that briefly describes the nature of
their interest in this proposed determination and the topics they wish
to discuss. Such persons should also provide a daytime telephone number
where they can be reached.
DOE requests persons selected to make an oral presentation to
submit an advance copy of their statements at least two weeks before
the webinar. At its discretion, DOE may permit persons who cannot
supply an advance copy of their statement to participate, if those
persons have made advance alternative arrangements with the Building
Technologies Office. As necessary, requests to give an oral
presentation should ask for such alternative arrangements.

C. Conduct of the Public Meeting Webinar

DOE will designate a DOE official to preside at the webinar and may
also 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 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 webinar. There shall not be discussion of proprietary information,
costs or prices, market share, or other commercial matters regulated by
U.S. anti-trust laws. After the webinar and until the end of the
comment period, interested parties may submit further comments on the
proceedings and any aspect of the proposed determination.
The webinar will be conducted in an informal, conference style. DOE
will present a summary of the proposed determination, allow time for
prepared general statements by participants, and encourage all
interested parties to share their views on issues affecting this
proposed determination. Each participant will be allowed to make a
general statement (within time limits determined by DOE), before the
discussion of specific topics. DOE will allow, as time permits, 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 proposed determination. The official
conducting the webinar 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 webinar.
A transcript of the public meeting webinar will be included in the
docket, which can be viewed as described in the Docket section at the
beginning of this NOPD. In addition, 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 this
proposed determination no later than the date provided in the DATES
section at the beginning of this proposed determination. Interested
parties may submit comments, data, and other information using any of
the methods described in the ADDRESSES section at the beginning of this
document.
Submitting comments via <a href="http://www.regulations.gov">www.regulations.gov</a>. The
<a href="http://www.regulations.gov">www.regulations.gov</a> web page will require you to provide your name and
contact information. Your contact information will be viewable to DOE
Building Technologies staff only. Your contact information will not be
publicly viewable except for your first and last names, organization
name (if any), and submitter representative name (if any). If your
comment is not processed properly because of technical difficulties,
DOE will use this information to contact you. If DOE cannot read your
comment due to technical difficulties and cannot contact you for
clarification, DOE may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment itself or in any documents attached to your
comment. Any information that you do not want to be publicly viewable
should not be included in your comment, nor in any document attached to
your comment. Otherwise, persons viewing comments will see only first
and last names, organization names, correspondence containing comments,
and any documents submitted with the comments.
Do not submit to <a href="http://www.regulations.gov">www.regulations.gov</a> information for which
disclosure is restricted by statute, such as trade secrets and
commercial or financial information (hereinafter referred to as
Confidential Business Information (``CBI'')). Comments submitted
through <a href="http://www.regulations.gov">www.regulations.gov</a> cannot be claimed as CBI. Comments received
through the website will waive any CBI claims for the information
submitted. For information on submitting CBI, see the Confidential
Business Information section.
DOE processes submissions made through <a href="http://www.regulations.gov">www.regulations.gov</a> before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
simultaneously, your comment may not be viewable for up to several
weeks. Please keep the comment tracking number that <a href="http://www.regulations.gov">www.regulations.gov</a>
provides after you have successfully uploaded your comment.
Submitting comments via email. Comments and documents submitted via
email also will be posted to <a href="http://www.regulations.gov">www.regulations.gov</a>. If you do not want
your personal contact information to be publicly viewable, do not
include it in your comment or any accompanying documents. Instead,
provide your contact information in a cover letter. Include your first
and last names, email address, telephone number, and optional mailing
address. With this instruction followed, the cover letter will not be
publicly viewable as long as it does not include any comments.
Include contact information each time you submit comments, data,
documents, and other information to DOE. No telefacsimiles (faxes) will
be accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, or text (ASCII) file format. Provide documents that are not
secured, that are written in English, and that are free of any defects
or viruses. Documents should not contain special characters or any form
of encryption and, if possible, they should carry the electronic
signature of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.

[[Page 24469]]

Confidential Business Information. Pursuant to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
email two well-marked copies: One copy of the document marked
``confidential'' including all the information believed to be
confidential, and one copy of the document marked ``non-confidential''
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.
It is DOE's policy that all comments may be included in the public
docket, without change and as received, including any personal
information provided in the comments (except information deemed to be
exempt from public disclosure).

VI. Approval of the Office of the Secretary

The Secretary of Energy has approved publication of this
notification of proposed determination and request for comment.

Signing Authority

This document of the Department of Energy was signed on April 20,
2022, by Kelly J. Speakes-Backman, Principal Deputy Assistant Secretary
for Energy Efficiency and Renewable Energy, pursuant to delegated
authority from the Secretary of Energy. That document with the original
signature and date is maintained by DOE. For administrative purposes
only, and in compliance with requirements of the Office of the Federal
Register, the undersigned DOE Federal Register Liaison Officer has been
authorized to sign and submit the document in electronic format for
publication, as an official document of the Department of Energy. This
administrative process in no way alters the legal effect of this
document upon publication in the Federal Register.

Signed in Washington, DC, on April 21, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2022-08868 Filed 4-25-22; 8:45 am]
BILLING CODE 6450-01-P

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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.