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Proposed Rule2023-03436

Energy Conservation Program: Energy Conservation Standards for Refrigerators, Refrigerator-Freezers, and Freezers

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Published

February 27, 2023

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 refrigerators, refrigerator-freezers, and freezers. EPCA also requires the U.S. Department of Energy ("DOE" or "the Department") to periodically determine whether more stringent standards would be technologically feasible and economically justified, and would result in significant energy savings. In this notice of proposed rulemaking ("NOPR"), DOE proposes amended energy conservation standards for refrigerators, refrigerator-freezers, and freezers, and also announces a public meeting to receive comment on these proposed standards and associated analyses and results.

Full Text

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[Federal Register Volume 88, Number 38 (Monday, February 27, 2023)]
[Proposed Rules]
[Pages 12452-12536]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-03436]

[[Page 12451]]

Vol. 88

Monday,

No. 38

February 27, 2023

Part II

Department of Energy

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10 CFR Part 430

Energy Conservation Program: Energy Conservation Standards for
Refrigerators, Refrigerator-Freezers, and Freezers; Proposed Rule

Federal Register / Vol. 88, No. 38 / Monday, February 27, 2023 /
Proposed Rules

[[Page 12452]]

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DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2017-BT-STD-0003]
RIN 1904-AD80

Energy Conservation Program: Energy Conservation Standards for
Refrigerators, Refrigerator-Freezers, and Freezers

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

ACTION: Notice of proposed rulemaking and announcement of public
meeting.

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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
refrigerators, refrigerator-freezers, and freezers. EPCA also requires
the U.S. Department of Energy (``DOE'' or ``the Department'') to
periodically determine whether more stringent standards would be
technologically feasible and economically justified, and would result
in significant energy savings. In this notice of proposed rulemaking
(``NOPR''), DOE proposes amended energy conservation standards for
refrigerators, refrigerator-freezers, and freezers, and also announces
a public meeting to receive comment on these proposed standards and
associated analyses and results.

DATES:
Comments: DOE will accept comments, data, and information regarding
this NOPR no later than April 28, 2023.
Meeting: DOE will hold a public meeting via webinar on Tuesday,
April 11, 2023, from 1:00 p.m. to 4:00 p.m., in Washington, DC. See
section VII, ``Public Participation,'' for webinar registration
information, participant instructions and information about the
capabilities available to webinar participants. Comments regarding the
likely competitive impact of the proposed standard should be sent to
the Department of Justice contact listed in the ADDRESSES section on or
before March 29, 2023.

ADDRESSES: Interested persons are encouraged to submit comments using
the Federal eRulemaking Portal at <a href="http://www.regulations.gov">www.regulations.gov</a>, under by docket
number EERE-2017-BT-STD-0003. Follow the instructions for submitting
comments. Alternatively, interested persons may submit comments,
identified by docket number EERE-2017-BT-STD-0003, by any of the
following methods:
Email: <a href="/cdn-cgi/l/email-protection#f2b19d9c81879f9780a09794809b95b4809797889780c0c2c3c5a1a6b6c2c2c2c1b29797dc969d97dc959d84">[email&#160;protected]</a>. Include the
docket number EERE-2017-BT-STD-0003 in the subject line of the message.
Postal Mail: Appliance and Equipment Standards Program, U.S.
Department of Energy, Building Technologies Office, Mailstop EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone:
(202) 287-1445. If possible, please submit all items on a compact disc
(``CD''), in which case it is not necessary to include printed copies.
Hand Delivery/Courier: Appliance and Equipment Standards Program,
U.S. Department of Energy, Building Technologies Office, 950 L'Enfant
Plaza SW, 6th Floor, Washington, DC 20024. Telephone: (202) 287-1445.
If possible, please submit all items on a CD, in which case it is not
necessary to include printed copies.
No telefacsimiles (``faxes'') will be accepted. For detailed
instructions on submitting comments and additional information on this
process, see section VII of this document.
Docket: The docket for this activity, which includes Federal
Register notices, 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/EERE-2017-BT-STD-0003">www.regulations.gov/docket/EERE-2017-BT-STD-0003</a>. The docket web page contains instructions on how
to access all documents, including public comments, in the docket. See
section VII of this document for information on how to submit comments
through <a href="http://www.regulations.gov">www.regulations.gov</a>.
EPCA requires the Attorney General to provide DOE a written
determination of whether the proposed standard is likely to lessen
competition. The U.S. Department of Justice Antitrust Division invites
input from market participants and other interested persons with views
on the likely competitive impact of the proposed standard. Interested
persons may contact the Division at <a href="/cdn-cgi/l/email-protection#cfaaa1aabda8b6e1bcbbaea1abaebdabbc8fbabcaba0a5e1a8a0b9">[email&#160;protected]</a> on or
before the date specified in the DATES section. Please indicate in the
``Subject'' line of your email the title and Docket Number of this
proposed rule.

FOR FURTHER INFORMATION CONTACT:
Mr. Lucas Adin, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Office, EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone:
(202) 287-5904. Email: <a href="/cdn-cgi/l/email-protection#662716160a0f0708050335120708020714021537130315120f0908152603034802090348010910">[email&#160;protected]</a>.
Mr. Matthew Schneider, U.S. Department of Energy, Office of the
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC
20585-0121. Telephone: (240) 597-6265. Email:
<a href="/cdn-cgi/l/email-protection#c6aba7b2b2aea3b1e8b5a5aea8a3afa2a3b486aeb7e8a2a9a3e8a1a9b0">[email&#160;protected]</a>.
For further information on how to submit a comment, review other
public comments and the docket, or participate in the public meeting,
contact the Appliance and Equipment Standards Program staff at (202)
287-1445 or by email: <a href="/cdn-cgi/l/email-protection#cf8ebfbfa3a6aea1acaa9cbbaea1abaebdabbc9ebaaabcbba6a0a1bc8faaaae1aba0aae1a8a0b9">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Proposed Rule
1. Benefits and Costs to Consumers
2. Impact on Manufacturers
3. National Benefits and Costs
4. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for Consumer Refrigerators,
Refrigerator-Freezers, and Freezers
3. Test Procedure
C. Deviation From Appendix A
III. General Discussion
A. Product Classes and Scope of Coverage
B. Test Procedure
C. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
D. Energy Savings
1. Determination of Savings
2. Significance of Savings
E. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Consumers
b. Savings in Operating Costs Compared To Increase in Price (LCC
and PBP)
c. Energy Savings
d. Lessening of Utility or Performance of Products
e. Impact of Any Lessening of Competition
f. Need for National Energy Conservation
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
A. Market and Technology Assessment
1. Scope of Coverage and Product Classes
2. Technology Options
B. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
a. Built-In Products
b. Representativeness of Reverse-Engineered and Analyzed
Products

[[Page 12453]]

c. Baseline Efficiency/Energy Use
d. Higher Efficiency Levels
e. VIP Analysis and Max-Tech Levels
2. Cost Analysis
3. Cost-Efficiency Results
4. Manufacturer Selling Price
D. Markups Analysis
E. Energy Use Analysis
F. Life-Cycle Cost and Payback Period Analysis
1. Adjusted Volume Distribution
2. Product Cost
3. Installation Cost
4. Annual Energy Consumption
5. Energy Prices
6. Maintenance and Repair Costs
7. Product Lifetime
8. Discount Rates
9. Energy Efficiency Distribution in the No-New-Standards Case
10. Payback Period Analysis
G. Shipments Analysis
H. National Impact Analysis
1. Product Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model and Key Inputs
a. Manufacturer Production Costs
b. Shipments Projections
c. Product and Capital Conversion Costs
d. Manufacturer Markup Scenarios
3. Manufacturer Interviews
a. Specialty Doors and Multiple Door Designs
b. Viability of Low-Cost Standard-Size Refrigerator-Freezers
c. Built-In Product Classes
d. Supply Chain Constraints
4. Discussion of MIA Comments
K. Emissions Analysis
1. Air Quality Regulations Incorporated in DOE's Analysis
L. Monetizing Emissions Impacts
1. Monetization of Greenhouse Gas Emissions
a. Social Cost of Carbon
b. Social Cost of Methane and Nitrous Oxide
2. Monetization of Other Emissions Impacts
M. Utility Impact Analysis
N. Employment Impact Analysis
V. Analytical Results and Conclusions
A. Trial Standard Levels
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
b. Consumer Subgroup Analysis
c. Rebuttable Presumption Payback
2. Economic Impacts on Manufacturers
a. Industry Cash Flow Analysis Results
b. Direct Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Subgroups of Manufacturers
e. Cumulative Regulatory Burden
3. National Impact Analysis
a. Significance of Energy Savings
b. Net Present Value of Consumer Costs and Benefits
c. Indirect Impacts on Employment
4. Impact on Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
8. Summary of Economic Impacts
C. Conclusion
1. Benefits and Burdens of TSLs Considered for Refrigerator,
Refrigerator-Freezer, and Freezer Standards
2. Annualized Benefits and Costs of the Proposed Standards
D. Reporting, Certification, and Sampling Plan
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
B. Review Under the Regulatory Flexibility Act
1. Description of Reasons Why Action Is Being Considered
2. Objectives of, and Legal Basis for, Rule
3. Description on Estimated Number of Small Entities Regulated
4. Description and Estimate of Compliance Requirements Including
Differences in Cost, if Any, for Different Groups of Small Entities
5. Duplication, Overlap, and Conflict With Other Rules and
Regulations
6. Significant Alternatives to the Rule
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act 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. Information Quality
VII. Public Participation
A. Attendance at the Public Meeting
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of the Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary

I. Synopsis of the Proposed Rule

The Energy Policy and Conservation Act, Public Law 94-163, as
amended (``EPCA'') ,\1\ authorizes DOE to regulate the energy
efficiency of a number of consumer products and certain industrial
equipment. (42 U.S.C. 6291-6317) Title III, Part B of EPCA \2\
established the Energy Conservation Program for Consumer Products Other
Than Automobiles. (42 U.S.C. 6291-6309) These products include
refrigerators, refrigerator-freezers, and freezers, the subject of this
proposed rulemaking.
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\1\ 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 reflect the last statutory amendments that impact
Parts A and A-1 of EPCA.
\2\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated Part A.
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Pursuant to EPCA, any new or amended energy conservation standard
must be designed to achieve the maximum improvement in energy
efficiency that DOE determines is technologically feasible and
economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new
or amended standard must result in a significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B)) EPCA also provides that not later
than 6 years after issuance of any final rule establishing or amending
a standard, DOE must publish either a notice of determination that
standards for the product do not need to be amended, or a notice of
proposed rulemaking including new proposed energy conservation
standards (proceeding to a final rule, as appropriate). (42 U.S.C.
6295(m))
In accordance with these and other statutory provisions discussed
in this document, DOE proposes amended energy conservation standards
for refrigerators, refrigerator-freezers, and freezers. The proposed
standards, which are expressed in kWh/yr, are shown in Table I.1. These
proposed standards, if adopted, would apply to all refrigerators,
refrigerator-freezers, and freezers listed in Table I.1 manufactured
in, or imported into, the United States starting on the date 3 years
after the publication of the final rule for this proposed rule.

[[Page 12454]]

Table I.1--Proposed Energy Conservation Standards for Refrigerators, Refrigerator-Freezers, and Freezers
----------------------------------------------------------------------------------------------------------------
Equations for maximum energy use (kWh/yr)
Product class ------------------------------------------------------------------------
Based on AV (ft\3\) Based on av (L)
----------------------------------------------------------------------------------------------------------------
1. Refrigerator-freezers and 6.79AV + 191.3............ 0.240av + 191.3.
refrigerators other than all-
refrigerators with manual defrost.
1A. All-refrigerators--manual defrost.. 5.77AV + 164.6............ 0.204av + 164.6.
2. Refrigerator-freezers--partial (6.79AV + 191.3)*K2....... (0.240av + 191.3)*K2.
automatic defrost.
3. Refrigerator-freezers--automatic 6.86AV + 198.6 + 28I...... 0.242av + 198.6 + 28I.
defrost with top-mounted freezer.
3-BI. Built-in refrigerator-freezer-- 8.24AV + 238.4 + 28I...... 0.291av + 238.4 + 28I.
automatic defrost with top-mounted
freezer.
3A. All-refrigerators--automatic (6.01AV + 171.4)*K3A...... (0.212av + 171.4)*K3A.
defrost.
3A-BI. Built-in All-refrigerators-- (7.22AV + 205.7)*K3ABI.... (0.255av + 205.7)*K3ABI.
automatic defrost.
4. Refrigerator-freezers--automatic 6.89AV + 241.2 + 28I...... 0.243av + 241.2 + 28I.
defrost with side-mounted freezer.
4-BI. Built-In Refrigerator-freezers-- 8.79AV + 307.4 + 28I...... 0.310av + 307.4 + 28I.
automatic defrost with side-mounted
freezer.
5. Refrigerator-freezers--automatic (7.61AV + 272.6)*K5 + 28I. (0.269av + 272.6)*K5 + 28I.
defrost with bottom-mounted freezer.
5-BI. Built-In Refrigerator-freezers-- (8.65AV + 309.9)*K5BI + (0.305av + 309.9)*K5BI + 28I.
automatic defrost with bottom-mounted 28I.
freezer.
5A. Refrigerator-freezer--automatic (7.26AV + 329.2)*K5A...... (0.256av + 329.2)*K5A.
defrost with bottom-mounted freezer
with through-the-door ice service.
5A-BI. Built-in refrigerator-freezer-- (8.21AV + 370.7)*K5ABI.... (0.290av + 370.7)*K5ABI.
automatic defrost with bottom-mounted
freezer with through-the-door ice
service.
6. Refrigerator-freezers--automatic 7.14AV + 280.0............ 0.252av + 280.0.
defrost with top-mounted freezer with
through-the-door ice service.
7. Refrigerator-freezers--automatic (6.92AV + 305.2)*K7....... (0.244av + 305.2)*K7.
defrost with side-mounted freezer with
through-the-door ice service.
7-BI. Built-In Refrigerator-freezers-- (8.82AV + 384.1)*K7BI..... (0.311av + 384.1)*K7BI.
automatic defrost with side-mounted
freezer.
8. Upright freezers with manual defrost 5.57AV + 193.7............ 0.197av + 193.7.
9. Upright freezers with automatic 7.76AV + 205.5 + 28I...... 0.274av + 205.5 + 28I.
defrost.
9-BI. Built-In Upright freezers with 9.37AV + 247.9 + 28I...... 0.331av + 247.9 + 28I.
automatic defrost.
10. Chest freezers and all other 7.29AV + 107.8............ 0.257av + 107.8.
freezers except compact freezers.
10A. Chest freezers with automatic 10.24AV + 148.1........... 0.362av + 148.1.
defrost.
11. Compact refrigerator-freezers and 7.68AV + 214.5............ 0.271av + 214.5.
refrigerators other than all-
refrigerators with manual defrost.
11A. Compact all-refrigerators--manual 6.66AV + 186.2............ 0.235av + 186.2.
defrost.
12. Compact refrigerator-freezers-- (7.68AV + 214.5)*K12...... (0.271av + 214.5)*K12.
partial automatic defrost.
13. Compact refrigerator-freezers-- 10.62AV + 305.3 + 28I..... 0.375av + 305.3 + 28I.
automatic defrost with top-mounted
freezer.
13A. Compact all-refrigerators-- (8.25AV + 233.4)*K13A..... (0.291av + 233.4)*K13A.
automatic defrost.
14. Compact refrigerator-freezers-- 6.14AV + 411.2 + 28I...... 0.217av + 411.2 + 28I.
automatic defrost with side-mounted
freezer.
15. Compact refrigerator-freezers-- 10.62AV + 305.3 + 28I..... 0.375av + 305.3 + 28I.
automatic defrost with bottom-mounted
freezer.
16. Compact upright freezers with 7.35AV + 191.8............ 0.260av + 191.8.
manual defrost.
17. Compact upright freezers with 9.15AV + 316.7............ 0.323av + 316.7.
automatic defrost.
18. Compact chest freezers............. 7.86AV + 107.8............ 0.278av + 107.8.
----------------------------------------------------------------------------------------------------------------
AV = Total adjusted volume, expressed in ft \3\, as determined in appendices A and B of subpart B of 10 CFR part
430.
av = Total adjusted volume, expressed in Liters.
I = 1 for a product with an automatic icemaker and = 0 for a product without an automatic icemaker.
Door Coefficients (e.g., K3A) are as defined in Table I.2.

Table I.2--Description of Door Coefficients for Proposed Maximum Energy Use Equations for Refrigerators,
Refrigerator-Freezers, and Freezers
----------------------------------------------------------------------------------------------------------------
Products without a
Products with a Products without a transparent door or
Door coefficient transparent door transparent door with a door-in-door with
door-in-door added external doors
----------------------------------------------------------------------------------------------------------------
K2.................................. N/A N/A 1 + 0.02 * (Nd-1).
----------------------------------------------------------------------------------------------------------------
K3A................................. 1.10 N/A N/A.
K3ABI...............................
K13A................................
----------------------------------------------------------------------------------------------------------------
K5.................................. 1.06 1 + 0.02 * (Nd-2).
K5BI................................
K5A................................. 1 + 0.02 * (Nd-3).
K5ABI...............................
K7.................................. 1 + 0.02 * (Nd-2).
K7BI................................
----------------------------------------------------------------------------------------------------------------
K12................................. N/A N/A 1 + 0.02 * (Nd-1).
----------------------------------------------------------------------------------------------------------------
Nd is the number of external doors.

1. Benefits and Costs to Consumers

Table I.3 presents DOE's evaluation of the economic impacts of the
proposed standards on consumers of refrigerators, refrigerator-
freezers, and freezers, as measured by the average life-cycle cost
(``LCC'') savings and the simple payback period (``PBP'').\3\ The
average LCC

[[Page 12455]]

savings are positive for all product classes for which a standard is
proposed, and the PBP is less than the average lifetime of
refrigerators, refrigerator-freezers, and freezers, which varies by
product class (see section IV.F.7 of this document).
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\3\ The average LCC savings refer to consumers that are affected
by a standard and are measured relative to the efficiency
distribution in the no-new-standards case, which depicts the market
in the compliance year in the absence of new or amended standards
(see section IV.F.9 of this document). The simple PBP, which is
designed to compare specific efficiency levels, is measured relative
to the baseline product (see section IV.C of this document).

Table I.3--Impacts of Proposed Energy Conservation Standards on
Consumers of Refrigerators, Refrigerator-Freezers, and Freezers
[TSL 5]
------------------------------------------------------------------------
Average LCC
Product class savings Simple payback
(2021$) period (years)
------------------------------------------------------------------------
PC 3.................................. 36.04 5.3
PC 5.................................. 49.73 4.8
PC 5BI................................ 39.94 5.7
PC 5A................................. 115.76 5.7
PC 7.................................. 101.33 5.0
PC 9.................................. 69.26 3.9
PC 10................................. N/A N/A
PC 11A (residential).................. 9.97 2.1
PC 11A (commercial)................... 3.42 3.2
PC 17................................. 21.90 5.0
PC 18................................. 17.59 4.2
------------------------------------------------------------------------

DOE's analysis of the impacts of the proposed standards on
consumers is described in section IV.F of this document.

2. Impact on Manufacturers \4\
---------------------------------------------------------------------------

\4\ All monetary values in this document are expressed in 2021
dollars.
---------------------------------------------------------------------------

The industry net present value (``INPV'') is the sum of the
discounted cash flows to the industry from the NOPR publication year
through the end of the analysis period (2023-2056). Using a real
discount rate of 9.1 percent, DOE estimates that the INPV for
manufacturers of refrigerators, refrigerator-freezers, and freezers, in
the case without amended standards is $4.97 billion. Under the proposed
standards, the change in INPV is estimated to range from -20.2 percent
to -16.0 percent, which is approximately -$1.0 billion to -$792.8
million. In order to bring products into compliance with amended
standards, it is estimated that the industry would incur total
conversion costs of $1.32 billion.
DOE's analysis of the impacts of the proposed standards on
manufacturers is described in section IV.J of this document. The
analytic results of the manufacturer impact analysis (``MIA'') are
presented in section V.B.2 of this document.

3. National Benefits and Costs

DOE's analyses indicate that the proposed energy conservation
standards for refrigerators, refrigerator-freezers, and freezers would
save a significant amount of energy. Relative to the case without
amended standards, the lifetime energy savings for refrigerators,
refrigerator-freezers, and freezers purchased in the 30-year period
that begins in the anticipated year of compliance with the amended
standards (2027-2056) amount to 5.3 quadrillion British thermal units
(``Btu''), or quads.\5\ This represents a savings of 12 percent
relative to the energy use of these products in the case without
amended standards (referred to as the ``no-new-standards case'').
---------------------------------------------------------------------------

\5\ The quantity refers to full-fuel-cycle (``FFC'') energy
savings. FFC energy savings includes the energy consumed in
extracting, processing, and transporting primary fuels (i.e., coal,
natural gas, petroleum fuels), and, thus, presents a more complete
picture of the impacts of energy efficiency standards. For more
information on the FFC metric, see section IV.H.2 of this document.
---------------------------------------------------------------------------

The cumulative net present value (``NPV'') of total consumer
benefits of the proposed standards for refrigerators, refrigerator-
freezers, and freezers ranges from $6.6 billion (at a 7-percent
discount rate) to $20.4 billion (at a 3-percent discount rate). This
NPV expresses the estimated total value of future operating-cost
savings minus the estimated increased product costs for refrigerators,
refrigerator-freezers, and freezers purchased in 2027-2056.
In addition, the proposed standards for refrigerators,
refrigerator-freezers, and freezers are projected to yield significant
environmental benefits. DOE estimates that the proposed standards would
result in cumulative emission reductions (over the same period as for
energy savings) of 179.2 million metric tons (``Mt'') \6\ of carbon
dioxide (``CO<INF>2</INF>''), 83.1 thousand tons of sulfur dioxide
(``SO<INF>2</INF>''), 274.4 thousand tons of nitrogen oxides
(``NO<INF>X</INF>''), 1,204.7 thousand tons of methane
(``CH<INF>4</INF>''), 1.9 thousand tons of nitrous oxide
(``N<INF>2</INF>O''), and 0.5 tons of mercury (``Hg'').\7\
---------------------------------------------------------------------------

\6\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO<INF>2</INF> are presented in short tons.
\7\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy
Outlook 2022 (``AEO2022''). AEO2022 represents current federal and
state legislation and final implementation of regulations as of the
time of its preparation. See section IV.K of this document for
further discussion of AEO2022 assumptions that effect air pollutant
emissions.
---------------------------------------------------------------------------

DOE estimates the value of climate benefits from a reduction in
greenhouse gases (GHG) using four different estimates of the social
cost of CO<INF>2</INF> (``SC-CO<INF>2</INF>''), the social cost of
methane (``SC-CH<INF>4</INF>''), and the social cost of nitrous oxide
(``SC-N<INF>2</INF>O''). Together these represent the social cost of
GHG (SC-GHG).\8\ DOE used interim SC-GHG values developed by an
Interagency

[[Page 12456]]

Working Group on the Social Cost of Greenhouse Gases (IWG).\9\ The
derivation of these values is discussed in section IV.L of this
document. For presentational purposes, the climate benefits associated
with the average SC-GHG at a 3-percent discount rate are estimated to
be $8.1 billion. DOE does not have a single central SC-GHG point
estimate and it emphasizes the importance and value of considering the
benefits calculated using all four SC-GHG estimates.
---------------------------------------------------------------------------

\8\ On March 16, 2022, the Fifth Circuit Court of Appeals (No.
22-30087) granted the federal government's emergency motion for stay
pending appeal of the February 11, 2022, preliminary injunction
issued 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. As reflected in
this rule, DOE has reverted to its approach prior to the injunction
and presents monetized greenhouse gas abatement benefits where
appropriate and permissible under law.
\9\ See Interagency Working Group on Social Cost of Greenhouse
Gases, Technical Support Document: Social Cost of Carbon, Methane,
and Nitrous Oxide. Interim Estimates Under Executive Order 13990,
Washington, DC, February 2021 (``February 2021 SC-GHG TSD'').
<a href="http://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf">www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf</a>.
---------------------------------------------------------------------------

DOE estimated the monetary health benefits of SO<INF>2</INF> and
NO<INF>X</INF> emissions reductions, also discussed in section IV.L of
this document. DOE estimated the present value of the health benefits
would be $5.3 billion using a 7-percent discount rate, and $14.2
billion using a 3-percent discount rate.\10\ DOE is currently only
monetizing (for SO<INF>2</INF> and NO<INF>X</INF>) PM<INF>2.5</INF>
precursor health benefits and (for NO<INF>X</INF>) ozone precursor
health benefits, but will continue to assess the ability to monetize
other effects such as health benefits from reductions in direct
PM<INF>2.5</INF> emissions.
---------------------------------------------------------------------------

\10\ DOE estimates the economic value of these emissions
reductions resulting from the considered TSLs for the purpose of
complying with the requirements of Executive Order 12866.
---------------------------------------------------------------------------

Table I.4 summarizes the economic benefits and costs expected to
result from the proposed standards for refrigerators, refrigerator-
freezers, and freezers. There are other important unquantified effects,
including certain unquantified climate benefits, unquantified public
health benefits from the reduction of toxic air pollutants and other
emissions, unquantified energy security benefits, and distributional
effects, among others.

Table I.4--Summary of Monetized Benefits and Costs of Proposed Energy
Conservation Standards for Refrigerators, Refrigerator-Freezers, and
Freezers
[TSL 5]
------------------------------------------------------------------------
Billion 2021$
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 32.7
Climate Benefits *...................................... 8.1
Health Benefits **...................................... 14.2
---------------
Total Benefits [dagger]............................. 55.1
Consumer Incremental Product Costs [Dagger]............. 12.3
---------------
Net Benefits........................................ 42.7
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 13.6
Climate Benefits * (3% discount rate)................... 8.1
Health Benefits **...................................... 5.3
---------------
Total Benefits [dagger]............................. 27.0
Consumer Incremental Product Costs...................... 6.9
---------------
Net Benefits........................................ 20.1
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with product
name shipped in 2027-2056. These results include benefits to consumers
which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the
social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
(SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent
discount rates; 95th percentile at 3 percent discount rate) (see
section IV.L of this document). Together these represent the global SC-
GHG. For presentational purposes of this table, the climate benefits
associated with the average SC-GHG at a 3 percent discount rate are
shown, but the Department does not have a single central SC-GHG point
estimate. On March 16, 2022, the Fifth Circuit Court of Appeals (No.
22-30087) granted the Federal government's emergency motion for stay
pending appeal of the February 11, 2022, preliminary injunction issued
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. As reflected in this rule, DOE has
reverted to its approach prior to the injunction and presents
monetized greenhouse gas abatement benefits where appropriate and
permissible under law.
** Health benefits are calculated using benefit-per-ton values for NOX
and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
precursor health benefits and (for NOX) ozone precursor health
benefits, but will continue to assess the ability to monetize other
effects such as health benefits from reductions in direct PM2.5
emissions. See section IV.L of this document for more details.
[dagger] Total and net benefits include those consumer, climate, and
health benefits that can be quantified and monetized. For presentation
purposes, total and net benefits for both the 3-percent and 7-percent
cases are presented using the average SC-GHG with a 3-percent discount
rate, but the Department does not have a single central SC-GHG point
estimate. DOE emphasizes the importance and value of considering the
benefits calculated using all four SC-GHG estimates.

[[Page 12457]]

The benefits and costs of the proposed standards can also be
expressed in terms of annualized values. The monetary values for the
total annualized net benefits are (1) the reduced consumer operating
costs, minus (2) the increase in product purchase prices and
installation costs, plus (3) the value of climate and health benefits
of emission reductions, all annualized.\11\
---------------------------------------------------------------------------

\11\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2022, the year
used for discounting the NPV of total consumer costs and savings.
For the benefits, DOE calculated a present value associated with
each year's shipments in the year in which the shipments occur
(e.g., 2030), and then discounted the present value from each year
to 2022. Using the present value, DOE then calculated the fixed
annual payment over a 30-year period, starting in the compliance
year, that yields the same present value.
---------------------------------------------------------------------------

The national operating savings are domestic private U.S. consumer
monetary savings that occur as a result of purchasing the covered
products and are measured for the lifetime of refrigerators,
refrigerator-freezers, and freezers shipped in 2027-2056. The benefits
associated with reduced emissions achieved as a result of the proposed
standards are also calculated based on the lifetime of refrigerators,
refrigerator-freezers, and freezers shipped in 2027-2056. Total
benefits for both the 3-percent and 7-percent cases are presented using
the average GHG social costs with a 3-percent discount rate. Estimates
of SC-GHG values are presented for all four discount rates in section
IV.L of this document.
Table I.5 presents the total estimated monetized benefits and costs
associated with the proposed standard, expressed in terms of annualized
values. The results under the primary estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and
health benefits from reduced NO<INF>X</INF> and SO<INF>2</INF>
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated cost of the standards
proposed in this rule is $730.0 million per year in increased equipment
costs, while the estimated annual monetized benefits are $1.4 billion
in reduced equipment operating costs, $467.9 million in climate
benefits, and $563.3 million in health benefits. In this case, the net
monetized benefit would amount to $1.7 billion per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards is $707.4 million per year in
increased equipment costs, while the estimated annual monetized
benefits are $1.9 billion in reduced operating costs, $467.9 million in
climate benefits, and $815.2 million in health benefits. In this case,
the net monetized benefit would amount to $2.5 billion per year.

Table I.5--Annualized Monetized Benefits and Costs of Proposed Energy Conservation Standards for Refrigerators,
Refrigerator-Freezers, and Freezers
[TSL 5]
----------------------------------------------------------------------------------------------------------------
Million 2021$/year
---------------------------------------------------------
Primary Low-net-benefits High-net-benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings....................... 1,878.6 1,745.5 2,030.6
Climate Benefits *.................................... 467.9 453.4 482.4
Health Benefits **.................................... 815.2 790.3 840.1
---------------------------------------------------------
Total Benefits [dagger]........................... 3,161.7 2,989.3 3,353.1
Consumer Incremental Product Costs [Dagger]........... 707.4 774.3 681.3
---------------------------------------------------------
Net Benefits...................................... 2,454.3 2,215.0 2,671.9
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings....................... 1,431.7 1,339.6 1,534.2
Climate Benefits * (3% discount rate)................. 467.9 453.4 482.4
Health Benefits **.................................... 563.3 547.4 579.1
---------------------------------------------------------
Total Benefits [dagger]........................... 2,462.9 2,340.4 2,595.7
Consumer Incremental Product Costs.................... 730.0 788.4 706.3
---------------------------------------------------------
Net Benefits...................................... 1,732.9 1,552.0 1,889.4
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with refrigerators, refrigerator-freezers, and
freezers shipped in 2027-2056. These results include benefits to consumers which accrue after 2056 from the
products shipped in 2027-2056. The Primary, Low Net Benefits, and High Net Benefits Estimates utilize
projections of energy prices from the AEO 2022 Reference case, Low Economic Growth case, and High Economic
Growth case, respectively. In addition, incremental equipment costs reflect a medium decline rate in the
Primary Estimate, a low decline rate in the Low Net Benefits Estimate, and a high decline rate in the High Net
Benefits Estimate. The methods used to derive projected price trends are explained in section IV.H.3 of this
document. Note that the Benefits and Costs may not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
at a 3 percent discount rate are shown, but the Department does not have a single central SC-GHG point
estimate, and it emphasizes the importance and value of considering the benefits calculated using all four SC-
GHG estimates. On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the Federal
government's emergency motion for stay pending appeal of the February 11, 2022, preliminary injunction issued
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. As
reflected in this rule, DOE has reverted to its approach prior to the injunction and presents monetized
greenhouse gas abatement benefits where appropriate and permissible under law.

[[Page 12458]]

** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
(for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
continue to assess the ability to monetize other effects such as health benefits from reductions in direct
PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with a
3-percent discount rate, but the Department does not have a single central SC-GHG point estimate.

DOE's analysis of the national impacts of the proposed standards is
described in sections IV.H, IV.K, and IV.L of this document.

4. Conclusion

DOE has tentatively concluded that the proposed standards represent
the maximum improvement in energy efficiency that is technologically
feasible and economically justified, and would result in the
significant conservation of energy. Specifically, with regard to
technological feasibility, products achieving these proposed standard
levels are already commercially available for all covered product
classes. As for economic justification, DOE's analysis shows that the
benefits of the proposed standard exceed, to a great extent, the
burdens of the proposed standards.
Using a 7-percent discount rate for consumer benefits and costs and
NO<INF>X</INF> and SO<INF>2</INF> reduction benefits, and a 3-percent
discount rate case for GHG social costs, the estimated cost of the
proposed standards for refrigerators, refrigerator-freezers, and
freezers is $730.0 million per year in increased product costs, while
the estimated annual monetized benefits are $1.4317 billion in reduced
product operating costs, $467.9 million in climate benefits and $563.3
million in health benefits. The net monetized benefit amounts to
$1.7329 billion per year.
The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking.\12\ For
example, some covered products and equipment have substantial energy
consumption occur during periods of peak energy demand. The impacts of
these products on the energy infrastructure can be more pronounced than
products with relatively constant demand. Accordingly, DOE evaluates
the significance of energy savings on a case-by-case basis.
---------------------------------------------------------------------------

\12\ Procedures, Interpretations, and Policies for Consideration
in New or Revised Energy Conservation Standards and Test Procedures
for Consumer Products and Commercial/Industrial Equipment, 86 FR
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

As previously mentioned, the proposed standards are projected to
result in estimated national energy savings of 5.3 quads (FFC), the
equivalent of the electricity use of 57 million homes in one year. In
addition, they are projected to reduce GHG emissions. Based on these
findings, DOE has initially determined the energy savings from the
proposed standard levels are ``significant'' within the meaning of 42
U.S.C. 6295(o)(3)(B). A more detailed discussion of the basis for this
tentative conclusion is contained in the remainder of this document and
the accompanying technical support document (``TSD'').
DOE also considered more stringent energy efficiency levels as
potential standards and is still considering them in this rulemaking.
However, DOE has tentatively concluded that the potential burdens of
the more stringent energy efficiency levels would outweigh the
projected benefits.
Based on consideration of the public comments DOE receives in
response to this document and related information collected and
analyzed during the course of this rulemaking effort, DOE may adopt
energy efficiency levels presented in this document that are either
higher or lower than the proposed standards, or some combination of
level(s) that incorporate the proposed standards in part.

II. Introduction

The following section briefly discusses the statutory authority
underlying this proposed rule, as well as some of the relevant
historical background related to the establishment of standards for
refrigerators, refrigerator-freezers, and freezers.

A. Authority

EPCA authorizes DOE to regulate the energy efficiency of a number
of consumer products and certain industrial equipment. Title III, Part
B of EPCA established the Energy Conservation Program for Consumer
Products Other Than Automobiles. These products include refrigerators,
refrigerator-freezers, and freezers, the subject of this document. (42
U.S.C. 6292(a)(1)) EPCA prescribed initial energy conservation
standards for these products (42 U.S.C. 6295(b)(1)-(2)), and directed
DOE to conduct three cycles of future rulemakings during which the
Department was tasked with determining whether to amend these
standards. (42 U.S.C. 6295(b)(3)(A)(i), (b)(3)(B), and (b)(4)). DOE has
completed these rulemakings. EPCA further provides that, not later than
six years after the issuance of any final rule establishing or amending
a standard, DOE must publish either a notice 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. 6295(m)(1))
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 specifically include
definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293),
labeling provisions (42 U.S.C. 6294), energy conservation standards (42
U.S.C. 6295), and the authority to require information and reports from
manufacturers (42 U.S.C. 6296).
Federal energy efficiency requirements for covered products
established under EPCA generally supersede State laws and regulations
concerning energy conservation testing, labeling, and standards. (42
U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal
preemption for particular State laws or regulations, in accordance with
the procedures and other provisions set forth under EPCA. (See 42
U.S.C. 6297(d))
Subject to certain criteria and conditions, DOE is required to
develop test procedures to measure the energy efficiency, energy use,
or estimated annual operating cost of each covered product. (42 U.S.C.
6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered products
must use the prescribed DOE test procedure as the basis for certifying
to DOE that their products comply with the applicable energy
conservation standards adopted under EPCA and when making
representations to the public regarding the energy use or efficiency of
those products. (42 U.S.C. 6293(c) and 42 U.S.C. 6295(s)) Similarly,
DOE must use these test procedures to determine whether the products
comply with standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)).
The DOE test procedures for consumer refrigerators, refrigerator-
freezers, and freezers appear at 10 CFR part 430, subpart B, appendix

[[Page 12459]]

A, Uniform Test Method for Measuring the Energy Consumption of
Refrigerators, Refrigerator-Freezers, and Miscellaneous Refrigeration
Products (``appendix A'') and 10 CFR part 430, subpart B, appendix B,
Uniform Test Method for Measuring the Energy Consumption of Freezers
(``appendix B'').
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products, including refrigerators,
refrigerator-freezers, and freezers. Any new or amended standard for a
covered product must be designed to achieve the maximum improvement in
energy efficiency that the Secretary of Energy (``Secretary'')
determines is technologically feasible and economically justified. (42
U.S.C. 6295(o)(2)(A) and 42 U.S.C. 6295(o)(3)(B)) Furthermore, DOE may
not adopt any standard that would not result in the significant
conservation of energy. (42 U.S.C. 6295(o)(3))
Moreover, DOE may not prescribe a standard: (1) for certain
products, including refrigerators, refrigerator-freezers, and freezers,
if no test procedure has been established for the product, or (2) if
DOE determines by rule that the standard is not technologically
feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B)) In
deciding whether a proposed standard is economically justified, DOE
must determine whether the benefits of the standard exceed its burdens.
(42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after
receiving comments on the proposed standard, and by considering, to the
greatest extent practicable, the following seven statutory factors:

(1) The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated
average life of the covered products in the type (or class) compared
to any increase in the price, initial charges, or maintenance
expenses for the covered products that are likely to result from the
standard;
(3) The total projected amount of energy (or as applicable,
water) savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the
covered 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 and water conservation; and
(7) Other factors the Secretary of Energy (``Secretary'')
considers relevant.

(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA establishes a rebuttable presumption that a standard
is economically justified if the Secretary finds that the additional
cost to the consumer of purchasing a product complying with an energy
conservation standard level will be less than three times the value of
the energy savings during the first year that the consumer will receive
as a result of the standard, as calculated under the applicable test
procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
EPCA also contains what is known as an ``anti-backsliding''
provision, 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. 6295(o)(1)) Also, the Secretary may not prescribe an amended
or new standard if interested persons have established by a
preponderance of the evidence that the standard is likely to result in
the unavailability in the United States in any covered product type (or
class) of performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as those generally available in the United States. (42 U.S.C.
6295(o)(4))
Additionally, EPCA specifies requirements when promulgating an
energy conservation standard for a covered product that has two or more
subcategories. DOE must specify a different standard level for a type
or class of product that has the same function or intended use, if DOE
determines that products within such group: (A) consume a different
kind of energy from that consumed by other covered products within such
type (or class); or (B) have a capacity or other performance-related
feature which other products within such type (or class) do not have
and such feature justifies a higher or lower standard. (42 U.S.C.
6295(q)(1)) In determining whether a performance-related feature
justifies a different standard for a group of products, DOE must
consider such factors as the utility to the consumer of the feature and
other factors DOE deems appropriate. Id. Any rule prescribing such a
standard must include an explanation of the basis on which such higher
or lower level was established. (42 U.S.C. 6295(q)(2))
Finally, pursuant to the amendments contained in the Energy
Independence and Security Act of 2007 (``EISA 2007''), Public Law 110-
140, any final rule for new or amended energy conservation standards
promulgated after July 1, 2010, is required to address standby mode and
off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE
adopts a standard for a covered product after that date, it must, if
justified by the criteria for adoption of standards under EPCA (42
U.S.C. 6295(o)), incorporate standby mode and off mode energy use into
a single standard, or, if that is not feasible, adopt a separate
standard for such energy use for that product. (42 U.S.C.
6295(gg)(3)(A)-(B)) DOE's current test procedures for refrigerators,
refrigerator-freezers, and freezers address standby mode and off mode
energy use. In this proposed rule, DOE intends to incorporate such
energy use into any amended energy conservation standards that it may
adopt.

B. Background

1. Current Standards
In a final rule published on September 15, 2011 (``September 2011
Final Rule''), DOE prescribed the current energy conservation standards
for consumer refrigerators, refrigerator-freezers, and freezers
manufactured on and after September 15, 2014. 76 FR 57516. These
standards are set forth in DOE's regulations at 10 CFR 430.32(a) and
are repeated in Table I.2 of this document.

Table II.1--Current Federal Energy Conservation Standards for Consumer Refrigerators, Refrigerator-Freezers, and
Freezers
----------------------------------------------------------------------------------------------------------------
Equations for maximum energy use
(kWh/yr)
Product class -------------------------------------
Based on AV
(ft\3\) Based on av (L)
----------------------------------------------------------------------------------------------------------------
1. Refrigerator-freezers and refrigerators other than all-refrigerators 7.99AV + 225.0 0.282av + 225.0
with manual defrost......................................................
1A. All-refrigerators--manual defrost..................................... 6.79AV + 193.6 0.240av + 193.6

[[Page 12460]]

2. Refrigerator-freezers--partial automatic defrost....................... 7.99AV + 225.0 0.282av + 225.0
3. Refrigerator-freezers--automatic defrost with top-mounted freezer 8.07AV + 233.7 0.285av + 233.7
without an automatic icemaker............................................
3-BI. Built-in refrigerator-freezer--automatic defrost with top-mounted 9.15AV + 264.9 0.323av + 264.9
freezer without an automatic icemaker....................................
3I. Refrigerator-freezers--automatic defrost with top-mounted freezer with 8.07AV + 317.7 0.285av + 317.7
an automatic icemaker without through-the-door ice service...............
3I-BI. Built-in refrigerator-freezers--automatic defrost with top-mounted 9.15AV + 348.9 0.323av + 348.9
freezer with an automatic icemaker without through-the-door ice service..
3A. All-refrigerators--automatic defrost.................................. 7.07AV + 201.6 0.250av + 201.6
3A-BI. Built-in All-refrigerators--automatic defrost...................... 8.02AV + 228.5 0.283av + 228.5
4. Refrigerator-freezers--automatic defrost with side-mounted freezer 8.51AV + 297.8 0.301av + 297.8
without an automatic icemaker............................................
4-BI. Built-In Refrigerator-freezers--automatic defrost with side-mounted 10.22AV + 357.4 0.361av + 357.4
freezer without an automatic icemaker....................................
4I. Refrigerator-freezers--automatic defrost with side-mounted freezer 8.51AV + 381.8 0.301av + 381.8
with an automatic icemaker without through-the-door ice service..........
4I-BI. Built-In Refrigerator-freezers--automatic defrost with side-mounted 10.22AV + 441.4 0.361av + 441.4
freezer with an automatic icemaker without through-the-door ice service..
5. Refrigerator-freezers--automatic defrost with bottom-mounted freezer 8.85AV + 317.0 0.312av + 317.0
without an automatic icemaker............................................
5-BI. Built-In Refrigerator-freezers--automatic defrost with bottom- 9.40AV + 336.9 0.332av + 336.9
mounted freezer without an automatic icemaker............................
5I. Refrigerator-freezers--automatic defrost with bottom-mounted freezer 8.85AV + 401.0 0.312av + 401.0
with an automatic icemaker without through-the-door ice service..........
5I-BI. Built-In Refrigerator-freezers--automatic defrost with bottom- 9.40AV + 420.9 0.332av + 420.9
mounted freezer with an automatic icemaker without through-the-door ice
service..................................................................
5A. Refrigerator-freezer--automatic defrost with bottom-mounted freezer 9.25AV + 475.4 0.327av + 475.4
with through-the-door ice service........................................
5A-BI. Built-in refrigerator-freezer--automatic defrost with bottom- 9.83AV + 499.9 0.347av + 499.9
mounted freezer with through-the-door ice service........................
6. Refrigerator-freezers--automatic defrost with top-mounted freezer with 8.40AV + 385.4 0.297av + 385.4
through-the-door ice service.............................................
7. Refrigerator-freezers--automatic defrost with side-mounted freezer with 8.54AV + 432.8 0.302av + 432.8
through-the-door ice service.............................................
7-BI. Built-In Refrigerator-freezers--automatic defrost with side-mounted 10.25AV + 502.6 0.362av + 502.6
freezer with through-the-door ice service................................
8. Upright freezers with manual defrost................................... 5.57AV + 193.7 0.197av + 193.7
9. Upright freezers with automatic defrost without an automatic icemaker.. 8.62AV + 228.3 0.305av + 228.3
9I. Upright freezers with automatic defrost with an automatic icemaker.... 8.62AV + 312.3 0.305av + 312.3
9-BI. Built-In Upright freezers with automatic defrost without an 9.86AV + 260.9 0.348av + 260.9
automatic icemaker.......................................................
9I-BI. Built-in upright freezers with automatic defrost with an automatic 9.86AV + 344.9 0.348av + 344.9
icemaker.................................................................
10. Chest freezers and all other freezers except compact freezers......... 7.29AV + 107.8 0.257av + 107.8
10A. Chest freezers with automatic defrost................................ 10.24AV + 148.1 0.362av + 148.1
11. Compact refrigerator-freezers and refrigerators other than all- 9.03AV + 252.3 0.319av + 252.3
refrigerators with manual defrost........................................
11A. Compact all-refrigerators--manual defrost............................ 7.84AV + 219.1 0.277av + 219.1
12. Compact refrigerator-freezers--partial automatic defrost.............. 5.91AV + 335.8 0.209av + 335.8
13. Compact refrigerator-freezers--automatic defrost with top-mounted 11.80AV + 339.2 0.417av + 339.2
freezer..................................................................
13I. Compact refrigerator-freezers--automatic defrost with top-mounted 11.80AV + 423.2 0.417av + 423.2
freezer with an automatic icemaker.......................................
13A. Compact all-refrigerators--automatic defrost......................... 9.17AV + 259.3 0.324av + 259.3
14. Compact refrigerator-freezers--automatic defrost with side-mounted 6.82AV + 456.9 0.241av + 456.9
freezer..................................................................
14I. Compact refrigerator-freezers--automatic defrost with side-mounted 6.82AV + 540.9 0.241av + 540.9
freezer with an automatic icemaker.......................................
15. Compact refrigerator-freezers--automatic defrost with bottom-mounted 11.80AV + 339.2 0.417av + 339.2
freezer..................................................................
15I. Compact refrigerator-freezers--automatic defrost with bottom-mounted 11.80AV + 423.2 0.417av + 423.2
freezer with an automatic icemaker.......................................
16. Compact upright freezers with manual defrost.......................... 8.65AV + 225.7 0.306av + 225.7
17. Compact upright freezers with automatic defrost....................... 10.17AV + 351.9 0.359av + 351.9
18. Compact chest freezers................................................ 9.25AV + 136.8 0.327av + 136.8
----------------------------------------------------------------------------------------------------------------
AV = Total adjusted volume, expressed in ft\3\, as determined in appendices A and B of subpart B of this part.
av = Total adjusted volume, expressed in Liters.

2. History of Standards Rulemaking for Consumer Refrigerators,
Refrigerator-Freezers, and Freezers
On November 15, 2019, DOE published a request for information
(``RFI'') to collect data and information to help DOE determine whether
any new or amended standards for consumer refrigerators, refrigerator-
freezers, and freezers would result in a significant amount of
additional energy savings and whether those standards would be
technologically feasible and economically justified. 84 FR 62470
(``November 2019 RFI'').

[[Page 12461]]

Comments received following the publication of the November 2019
RFI helped DOE identify and resolve issues related to the subsequent
preliminary analysis.\13\ DOE published a notice of public meeting and
availability of the preliminary TSD on October 15, 2021 (``October 2021
Preliminary Analysis''). 86 FR 57378. DOE subsequently held a public
meeting on December 1, 2021, to discuss and receive comments on the
preliminary TSD. The preliminary TSD that presented the methodology and
results of the preliminary analysis is available at:
<a href="http://www.regulations.gov/document/EERE-2017-BT-STD-0003-0021">www.regulations.gov/document/EERE-2017-BT-STD-0003-0021</a>.
---------------------------------------------------------------------------

\13\ Comments submitted in response to the RFI are available at
<a href="http://www.regulations.gov/document/EERE-2017-BT-STD-0003-0021/comment">www.regulations.gov/document/EERE-2017-BT-STD-0003-0021/comment</a>.
---------------------------------------------------------------------------

DOE received nine docket comments in response to the October 2021
Preliminary Analysis from the interested parties listed in Table II.2.

Table II.2--October 2021 Preliminary Analysis Written Comments
----------------------------------------------------------------------------------------------------------------
Organization(s) Reference in this NOPR Organization type
----------------------------------------------------------------------------------------------------------------
Association of Home Appliance Manufacturers.......... AHAM........................ Trade Organization.
Appliance Standards Awareness Project, American Joint Advocates............. Efficiency Organization.
Council for an Energy-Efficient Economy, National
Consumer Law Center (On behalf of its low-income
clients).
California Investor-Owned Utilities.................. CA IOUs..................... Utility Supplier.
Shorey Consulting.................................... Shorey...................... Consultant.
ComEd Energy Solutions Center, Northwest Energy ComEd and NEEA.............. Joint Commenters.
Efficiency Alliance.
GE Appliances, a Haier company....................... GEA......................... Manufacturer.
Samsung Electronics America, Inc..................... Samsung..................... Manufacturer.
Sub-Zero Group, Inc.................................. Sub-Zero.................... Manufacturer.
Whirlpool Corporation................................ Whirlpool................... Manufacturer.
Anonymous............................................ Anonymous................... Individual.
----------------------------------------------------------------------------------------------------------------

A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\14\
---------------------------------------------------------------------------

\14\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for refrigerators, refrigerator-
freezers, and freezers. (Docket No. EERE-2017-BT-STD-0003, which is
maintained at <a href="https://www.regulations.gov/document/EERE-2017-BT-STD-0003">https://www.regulations.gov/document/EERE-2017-BT-STD-0003</a>). The references are arranged as follows: (commenter name,
comment docket ID number, page of that document).
---------------------------------------------------------------------------

3. Test Procedure
EPCA sets forth generally applicable criteria and procedures for
DOE's adoption and amendment of test procedures. (42 U.S.C. 6293)
Manufacturers of covered products must use these test procedures to
certify to DOE that their product complies with energy conservation
standards and to quantify the efficiency of their product. DOE must
finalize new or amended test procedures that impact measured energy use
or efficiency at least 180 days prior to publication of a NOPR
proposing new or amended energy conservation standards. (Section 8(d)
of 10 CFR part 430, subpart C, appendix A (``Process Rule''))
DOE's current energy conservation standards for consumer
refrigerators, refrigerator-freezers, and freezers are expressed in
terms of annual energy use (``AEU'') in kilowatt-hours per year (``kWh/
yr'') as measured by the current test procedures at appendix A and
appendix B, as applicable. (10 CFR 430.32(a)) The current test
procedure incorporates by reference the Association of Home Appliance
Manufacturers (``AHAM'') industry test procedure updated in 2019, AHAM
Standard HRF-1, ``Energy and Internal Volume of Refrigerating
Appliances,'' (``HRF-1-2019''). 10 CFR 430.3(i)(4). The current test
procedure was finalized in a final rule published on October 12, 2021
(``October 2021 TP Final Rule''). 86 FR 56790. The October 2021 TP
Final Rule amended the test procedure by incorporating the latest
industry test standard (HRF-1-2019). However, DOE did not adopt the
change in icemaker energy use included in the 2019 revision of HRF-1.
86 FR 56793. While DOE had proposed to implement this change in the in
the proposed test procedure rulemaking (84 FR 70842, 70848-70850
(December 23, 2019)), DOE indicated in the October 2021 TP Final Rule
that it would not require the calculations until the compliance dates
of any amended energy conservation standards for these products, which
incorporated the amended automatic icemaker energy consumption. 86 FR
56793. DOE concluded that the test procedure would not alter the
measured energy use of consumer refrigeration products. Id.
The analysis presented in this NOPR is based on the test procedure
as finalized in the October 2021 TP Final Rule, except for the
calculation of the change in energy use attributed to icemaker energy
use. The change in icemaker energy use is discussed further in section
III.B of this document. DOE is proposing implementation of the revised
icemaker energy use calculation in this NOPR. The value of the revised
icemaker energy use and the plans to implement this change coincident
with the date of future energy conservation standards were discussed at
length and included in the most recent test procedure final rule,
consistent with the Process Rule.
AS/NZ 4474.1:2007 is referenced in the amendatory text of this
document but has already been approved for appendix A. No changes are
proposed.
4. Off Mode and Standby Mode
Pursuant to the amendments contained in the Energy Independence and
Security Act of 2007 (``EISA 2007''), Public Law 110-140, any final
rule for new or amended energy conservation standards promulgated after
July 1, 2010, is required to address standby mode and off mode energy
use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE adopts a standard
for a covered product after that date, it must, if justified by the
criteria for adoption of standards under EPCA (42 U.S.C. 6295(o)),
incorporate standby mode and off mode energy use into a single
standard, or, if that is not feasible, adopt a separate standard for
such energy use for that product. (42 U.S.C. 6295(gg)(3)(A)-(B)) DOE's
current test procedures for consumer refrigerators, refrigerator-
freezers, and freezers measure the energy use of these products during
extended time periods that include periods when the compressor and
other key components are cycled off. All of the energy these products
use during the ``off cycles'' is already included in the measurements.

[[Page 12462]]

A given refrigeration product being tested could include auxiliary
features that draw power in a standby or off mode. In such instances,
the DOE test procedures generally instruct manufacturers to set certain
auxiliary features to the lowest power position during testing. See
section 5.5.2(e) of AHAM Standard HRF-1-2008. In this lowest power
position, any standby or off mode energy use of such auxiliary features
would be included in the energy measurement. As a result, DOE's current
energy conservation standards, and any amended energy conservation
standards would account for standby mode and off mode energy use in the
AEU metric.

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 pre-NOPR stages for an energy
conservation standards rulemaking. Section 6(a)(2) of appendix A states
that if the Department determines it is appropriate to proceed with a
rulemaking, the preliminary stages of a rulemaking to issue or amend an
energy conservation standard that DOE will undertake will be a
framework document and preliminary analysis, or an advance notice of
proposed rulemaking. For the reasons that follow, DOE finds it
necessary and appropriate to deviate from this step in appendix A and
to instead publish this NOPR without conducting these preliminary
stages. DOE finds that there would be little benefit in repeating the
preliminary stages of this proposed rule. The earlier stages of a
rulemaking are intended to introduce the various analyses DOE conducts
during the rulemaking process, present preliminary results, and request
initial feedback from interested parties to seek early input. As DOE is
using similar analytical methods in this NOPR to previous amendments to
the standard for refrigerators, refrigerator-freezers and freezers,
publication of a framework document, preliminary analysis, or ANOPR
would be largely redundant of previously published documents.
Stakeholders have previously provided numerous rounds of input on these
methodologies in the most recent rulemaking. However, as discussed in
section IV of this NOPR, DOE has updated analytical inputs in its
analyses where appropriate and welcomes submission of additional data,
information, and comments.
Section 6(f)(2) of appendix A provides that the length of the
public comment period for the NOPR will be at least 75 days. For this
NOPR, DOE finds it necessary and appropriate to provide a 60-day
comment period. As stated previously, the analytical methods used for
this NOPR are similar to those used in previous rulemaking notices.
Consequently, DOE has determined it is necessary and appropriate to
provide a 60-day comment period, which the Department has determined
provides sufficient time for interested parties to review the NOPR and
develop comments.

III. General Discussion

DOE developed this proposal after considering oral and written
comments, data, and information from interested parties that represent
a variety of interests. The following discussion addresses issues
raised by these commenters.

A. Product Classes and Scope of Coverage

When evaluating and establishing energy conservation standards, DOE
divides covered products into product classes by the type of energy
used or by capacity or other performance-related features that justify
differing standards. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such
factors as the utility of the feature to the consumer and other factors
DOE determines are appropriate. (42 U.S.C. 6295(q))
When establishing the product classes, DOE is proposing to revise
the class structure by eliminating the classes that add icemakers and
through-the-door ice dispensers while maintaining the same AEU
calculations. The product class discussion in section IV of this
document explores this issue further.

B. Test Procedure

EPCA sets forth generally applicable criteria and procedures for
DOE's adoption and amendment of test procedures. (42 U.S.C. 6293)
Manufacturers of covered products must use these test procedures to
certify to DOE that their product complies with energy conservation
standards and to quantify the efficiency of their product. DOE's
current energy conservation standards for refrigerators, refrigerator-
freezers, and freezers are expressed in terms of AEU, expressed in kWh/
year. (See 10 CFR 430.32(a).)
AHAM stated it would have been preferable for DOE to conduct its
analysis with the final test procedure that DOE published before the
preliminary analysis and that will be used to demonstrate compliance
with a possible amended standard and that, in this case, the revised
test procedure does not change measured efficiency so much that they
would expect that the entire analysis would need to be redone as a
result of the new test procedure. (AHAM, Public Meeting Transcript, No.
30 at p. 1) \15\
---------------------------------------------------------------------------

\15\ A notation in the form ``AHAM, No. 31 at pp. 6-7''
identifies a written comment: (1) Made by the Association of Home
Appliance Manufacturers; (2) recorded in document number 27 that is
filed in the docket of this test procedure rulemaking (Docket No.
EERE-2014-BT-STD-0003) and available for review at
<a href="http://www.regulations.gov">www.regulations.gov</a>; and (3) which appears on pages 6 and 7 of
document number 31.
---------------------------------------------------------------------------

DOE responds that it conducted the preliminary analysis consistent
with the test procedure currently used to demonstrate compliance with
standards. Specifically, the icemaker energy use adder used in the
preliminary analysis was 84 kWh/yr. For the NOPR analysis, DOE adopted
the revised test procedure finalized in the October 2021 TP final rule
(to be used to demonstrate compliance with a possible amended standard)
which included a revised icemaker energy use adder of 28 kWh/yr, that
is more closely aligned with AHAM's HRF-1-2019--which represents the
industry standard. As discussed in the October 2021 TP final rule, DOE
determined it would not require testing with the amended icemaking
energy use adder until the compliance dates of the next amended energy
conservation standards for refrigeration products. This NOPR proposes
that product class representations made on or after the compliance date
of revised standards would require use of the 28 kWh/year value.
The California IOUs stated the existing test procedures in
appendices A and B do a poor job predicting efficiency at ambient
conditions below 90 [deg]F and that they would benefit significantly by
including an additional ambient test condition to properly inform
consumers about what products work well in a real-world use cycle. From
their testing, the California IOUs stated that not testing at both 90
[deg]F and 60 [deg]F leaves a significant gap in representative
performance evaluation of an average use cycle based on the significant
unit-to-unit variation and rank order impact changes shown by the DOE
and CA IOU product testing. They therefore asked DOE to reconsider
their conclusion in the October 2021 Test Procedure Final Rule to not
require testing at two ambient conditions, per IEC 62552, in the DOE
consumer refrigeration test procedure. (California IOUs, No. 33, pp. 6-
9)

[[Page 12463]]

ComEd and NEEA agreed with the sentiment from California IOUs that
testing should require a set of lower ambient temperatures along with
the 90-degree temperature mark and recommended that DOE consider
adopting the IEC Refrigerator Test Procedure, which their analysis
suggests will permit more representative energy values to be calculated
than the current DOE test procedure of user interactions with
refrigerators. Along with Samsung, they also recommended that DOE
collect more field data on refrigerator energy use to understand how to
improve the representativeness of the test procedure. (ComEd Energy
Solutions Center & Northwest Energy Efficiency Alliance, No. 37, pp. 9-
10; Samsung, No. 32, p. 3)
In another comment, ComEd and NEEA cited average usage of models in
ambient temperatures lower than 90 degrees and cited how requiring a
lower test point would create an incentive for manufacturers to focus
on the broad range of ambient temperatures. (ComEd Energy Solutions
Center & Northwest Energy Efficiency Alliance, No. 37, pp. 2-4) ComEd
and NEEA also pointed to energy savings that could result from testing
products at a lower ambient temperature. (ComEd Energy Solutions Center
& Northwest Energy Efficiency Alliance, No. 37, pp. 4-7)
DOE responds that it has already finalized the test procedure
without requiring additional lower ambient testing based both on data
provided by a manufacturer and on its own test data, which indicated
that the current test procedure conducted in a 90 [deg]F ambient
temperature does not underestimate the benefit of variable-speed
technology. 86 FR 56790, 56790-56825 (October 12, 2021) DOE appreciates
the additional data, which DOE will consider when considering revisions
to the test procedure as required by the 7-year lookback provision. (42
U.S.C. 6314(a)(1)(A))
ComEd and NEEA further recommended that DOE adopt an optional
method of testing for ice makers and undertake further testing and
analysis. They stated they also believe that considerable variation
exists in the efficiency of the ice making process itself and that the
test method should include a way to quantify this aspect. They strongly
urged DOE to reword the test method regarding the setup of ice makers
to specify the base method as one in which the appliance makes ice and
deactivates the icemaking process itself when the ice bucket is full
(or an equivalent set of actions to achieve this) to reduce
circumvention. (ComEd Energy Solutions Center & Northwest Energy
Efficiency Alliance, No. 37, pp. 8-9)
In response, DOE notes that it has considered the test burden
associated with measurement of the energy use associated with icemaking
(rather than using the fixed icemaking energy use adder) as part of the
most recent concluded test procedure rulemaking. DOE concluded that the
benefits of a direct measurement of icemaking energy use would not
outweigh the additional test burden associated with making the
measurement, due in part to the updated understanding that the
magnitude of ice usage is significantly less than initially thought. 84
FR 70842, 70848-70849 (December 23, 2019). DOE did not adopt an
icemaking energy use test, either mandatory or optional, in the
recently concluded test procedure rulemaking cycle and has finalized
the test procedure on that basis. 86 FR 56790 (October 12, 2021).
Regarding the potential for circumvention by making the icemaker
inoperative during the test, DOE notes that the wording of section
5.5.2(j) of HRF-1-2019, which is incorporated by reference by the DOE
test procedure, has clear instructions that only the harvesting of ice
shall be interrupted when an icemaker is made inoperative during an
energy test and that the inoperative state should simulate the state
when the icemaker senses that the bin is filled. Any tests that reduce
the power of additional components when the icemaker is inoperative
during an energy test would be invalid. DOE believes that these
requirements are sufficiently clear and that it would not be justified
to impose the additional burden of connecting a water supply to a test
unit to allow the ice bin to be filled and the bin sensor to make the
icemaker inoperative.

C. Technological Feasibility

1. General
In each energy conservation standards rulemaking, DOE conducts a
screening analysis based on information gathered on all current
technology options and prototype designs that could improve the
efficiency of the products or equipment that are the subject of the
proposed rule. As the first step in such an analysis, DOE develops a
list of technology options for consideration in consultation with
manufacturers, design engineers, and other interested parties. DOE then
determines which of those means for improving efficiency are
technologically feasible. DOE considers technologies incorporated in
commercially available products or in working prototypes to be
technologically feasible. Sections 6(b)(3)(i) and 7(b)(1) of appendix A
to 10 CFR part 430, subpart C.
After DOE has determined that particular technology options are
technologically feasible, it further evaluates each technology option
in light of the following additional screening criteria: (1)
practicability to manufacture, install, and service; (2) adverse
impacts on product utility or availability; (3) adverse impacts on
health or safety, and (4) unique-pathway proprietary technologies.
Sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5) of the Process Rule. Section
IV.B of this document discusses the results of the screening analysis
for refrigerators, refrigerator-freezers, and freezers, particularly
the designs DOE considered, those it screened out, and those that are
the basis for the standards considered in this rulemaking. For further
details on the screening analysis for this rulemaking, see chapter 4 of
the NOPR TSD.
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt an amended standard for a type or class
of covered product, it must determine the maximum improvement in energy
efficiency or maximum reduction in energy use that is technologically
feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the
engineering analysis, DOE determined the maximum technologically
feasible (``max-tech'') improvements in energy efficiency for
refrigerators, refrigerator-freezers, and freezers, using the design
parameters for the most efficient products available on the market or
in working prototypes. The max-tech levels that DOE determined for this
proposed rulemaking are described in section IV.C.1.e of this proposed
rule and in chapter 5 of the NOPR TSD.

D. Energy Savings

1. Determination of Savings
For each trial standard level (``TSL''), DOE projected energy
savings from application of the TSL to refrigerators, refrigerator-
freezers, and freezers purchased in the 30-year period that begins in
the year of compliance with the proposed standards (2027-2056).\16\ The
savings are measured over the entire lifetime of refrigerators,
refrigerator-freezers, and freezers purchased in the previous 30-year

[[Page 12464]]

period. DOE quantified the energy savings attributable to each TSL as
the difference in energy consumption between each standards case and
the no-new-standards case. The no-new-standards case represents a
projection of energy consumption that reflects how the market for a
product would likely evolve in the absence of amended energy
conservation standards.
---------------------------------------------------------------------------

\16\ Each TSL is composed of specific efficiency levels for each
product class. The TSLs considered for this NOPR are described in
section V.A of this document. DOE conducted a sensitivity analysis
that considers impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------

DOE used its national impact analysis (``NIA'') spreadsheet model
to estimate national energy savings (``NES'') from potential amended or
new standards for refrigerators, refrigerator-freezers, and freezers.
The NIA spreadsheet model (described in section IV.H of this document)
calculates energy savings in terms of site energy, which is the energy
directly consumed by products at the locations where they are used. For
electricity, DOE reports NES in terms of primary energy savings, which
is the savings in the energy that is used to generate and transmit the
site electricity. DOE also calculates NES in terms of FFC energy
savings. The FFC metric includes the energy consumed in extracting,
processing, and transporting primary fuels (i.e., coal, natural gas,
petroleum fuels), and thus presents a more complete picture of the
impacts of energy conservation standards.\17\ DOE's approach is based
on the calculation of an FFC multiplier for each of the energy types
used by covered products or equipment. For more information on FFC
energy savings, see section IV.H.2 of this document.
---------------------------------------------------------------------------

\17\ The FFC metric is discussed in DOE's statement of policy
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
To adopt any new or amended standards for a covered product, DOE
must determine that such action would result in significant energy
savings. (42 U.S.C. 6295(o)(3)(B))
The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking.\18\ Certain
covered products and equipment may have most of their energy
consumption occur during periods of peak energy demand. The impacts of
such products on the energy infrastructure can be more pronounced than
products with relatively constant demand. However, residential
refrigerators, freezers, and refrigerator-freezers have loads that are
more consistent throughout the year. Accordingly, DOE evaluates the
significance of energy savings on a case-by-case basis, taking into
account the significance of cumulative FFC national energy savings, the
cumulative FFC emissions reductions, and the need to confront the
global climate crisis, among other factors. DOE has initially
determined the energy savings from the proposed standard levels are
``significant'' within the meaning of 42 U.S.C. 6295(o)(3)(B).
---------------------------------------------------------------------------

\18\ The numeric threshold for determining the significance of
energy savings established in a final rule published on February 14,
2020 (85 FR 8626, 8670), was subsequently eliminated in a final rule
published on December 13, 2021 (86 FR 70892).
---------------------------------------------------------------------------

E. Economic Justification

1. Specific Criteria
As noted previously, EPCA provides seven factors to be evaluated in
determining whether a potential energy conservation standard is
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)) The
following sections discuss how DOE has addressed each of those seven
factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of a potential amended standard on
manufacturers, DOE conducts an MIA, as discussed in section IV.J of
this document. DOE first uses an annual cash-flow approach to determine
the quantitative impacts. This step includes both a short-term
assessment--based on the cost and capital requirements during the
period between when a regulation is issued and when entities must
comply with the regulation--and a long-term assessment over a 30-year
period. The industry-wide impacts analyzed include (1) INPV, which
values the industry on the basis of expected future cash flows, (2)
cash flows by year, (3) changes in revenue and income, and (4) other
measures of impact, as appropriate. Second, DOE analyzes and reports
the impacts on different types of manufacturers, including impacts on
small manufacturers. Third, DOE considers the impact of standards on
domestic manufacturer employment and manufacturing capacity, as well as
the potential for standards to result in plant closures and loss of
capital investment. Finally, DOE takes into account cumulative impacts
of various DOE regulations and other regulatory requirements on
manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and PBP associated with new or amended standards. These
measures are discussed further in the following section. For consumers
in the aggregate, DOE also calculates the national net present value of
the consumer costs and benefits expected to result from particular
standards. DOE also evaluates the impacts of potential standards on
identifiable subgroups of consumers that may be affected
disproportionately by a standard.
b. Savings in Operating Costs Compared to Increase in Price (LCC and
PBP)
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered product
that are likely to result from a standard. (42 U.S.C.
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP
analysis.
The LCC is the sum of the purchase price of a product (including
its installation) and the operating expense (including energy,
maintenance, and repair expenditures) discounted over the lifetime of
the product. The LCC analysis requires a variety of inputs, such as
product prices, product energy consumption, energy prices, maintenance
and repair costs, product lifetime, and discount rates appropriate for
consumers. To account for uncertainty and variability in specific
inputs, such as product lifetime and discount rate, DOE uses a
distribution of values, with probabilities attached to each value.
The PBP is the estimated amount of time (in years) it takes
consumers to recover the increased purchase cost (including
installation) of a more efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
due to a more stringent standard by the change in annual operating cost
for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers who follow
existing purchase patterns will purchase the covered products in the
first year of compliance with new or amended standards. Consumer
response to higher costs associated with the rule may reduce sales
below the levels that otherwise would have been expected in the absence
of a new standard. The LCC savings for the considered efficiency levels
are calculated relative to the case that reflects projected market
trends in the absence of new or amended standards. DOE's LCC and PBP
analysis is discussed in further detail in section IV.F of this
document.
c. Energy Savings
Although significant conservation of energy is a separate statutory

[[Page 12465]]

requirement for adopting an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As
discussed in section III.D of this document, DOE uses the NIA
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
In establishing product classes and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data
available to DOE, the standards proposed in this document would not
reduce the utility or performance of the products under consideration
in this rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from a proposed standard. (42 U.S.C.
6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine
the impact, if any, of any lessening of competition likely to result
from a proposed standard and to transmit such determination to the
Secretary within 60 days of the publication of a proposed rule,
together with an analysis of the nature and extent of the impact. (42
U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of this proposed
rule to the Attorney General with a request that the Department of
Justice (``DOJ'') provide its determination on this issue. DOE will
publish and respond to the Attorney General's determination in the
final rule. DOE invites comment from the public regarding the
competitive impacts that are likely to result from this proposed rule.
In addition, stakeholders may also provide comments separately to DOJ
regarding these potential impacts. See the ADDRESSES section for
information to send comments to DOJ.
f. Need for National Energy Conservation
DOE also considers the need for national energy and water
conservation in determining whether a new or amended standard is
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy
savings from the proposed standards are likely to provide improvements
to the security and reliability of the Nation's energy system.
Reductions in the demand for electricity also may result in reduced
costs for maintaining the reliability of the Nation's electricity
system. DOE conducts a utility impact analysis to estimate how
standards may affect the Nation's needed power generation capacity, as
discussed in section IV.M of this document.
DOE maintains that environmental and public health benefits
associated with the more efficient use of energy are important to take
into account when considering the need for national energy
conservation. The proposed standards are likely to result in
environmental benefits in the form of reduced emissions of air
pollutants and greenhouse gases (``GHGs'') associated with energy
production and use. DOE conducts an emissions analysis to estimate how
potential standards may affect these emissions, as discussed in section
IV.K of this document; the estimated emissions impacts are reported in
section V.B.6 of this document. DOE also estimates the economic value
of emissions reductions resulting from the considered TSLs, as
discussed in section IV.L of this document.
g. Other Factors
In determining whether an energy conservation standard is
economically justified, DOE may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To
the extent DOE identifies any relevant information regarding economic
justification that does not fit into the other categories described
previously, DOE could consider such information under ``other
factors.''
2. Rebuttable Presumption
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a
rebuttable presumption that an energy conservation standard is
economically justified if the additional cost to the consumer of a
product that meets the standard is less than three times the value of
the first year's energy savings resulting from the standard, as
calculated under the applicable DOE test procedure. DOE's LCC and PBP
analyses generate values used to calculate the effects that proposed
energy conservation standards would have on the payback period for
consumers. These analyses include, but are not limited to, the 3-year
payback period contemplated under the rebuttable-presumption test. In
addition, DOE routinely conducts an economic analysis that considers
the full range of impacts to consumers, manufacturers, the Nation, and
the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The
results of this analysis serve as the basis for DOE's evaluation of the
economic justification for a potential standard level (thereby
supporting or rebutting the results of any preliminary determination of
economic justification). The rebuttable presumption payback calculation
is discussed in section IV.F.10 of this proposed rule.

IV. Methodology and Discussion of Related Comments

This section addresses the analyses DOE has performed for this
proposed rulemaking with regard to refrigerators, refrigerator-
freezers, and freezers. Separate subsections address each component of
DOE's analyses.
DOE used several analytical tools to estimate the impact of the
standards proposed in this document. The first tool is a spreadsheet
that calculates the LCC savings and PBP of potential amended or new
energy conservation standards. The national impacts analysis uses a
second spreadsheet set that provides shipments projections and
calculates national energy savings and net present value of total
consumer costs and savings expected to result from potential energy
conservation standards. DOE uses the third spreadsheet tool, the
Government Regulatory Impact Model (``GRIM''), to assess manufacturer
impacts of potential standards. These three spreadsheet tools are
available on the DOE website for this proposed rulemaking:
<a href="http://www.regulations.gov/docket/EERE-2017-BT-STD-0003">www.regulations.gov/docket/EERE-2017-BT-STD-0003</a>. Additionally, DOE
used output from the latest version of the Energy Information
Administration's (``EIA's'') Annual Energy Outlook (``AEO''), a widely
known energy projection for the United States, for the emissions and
utility impact analyses.
DOE received some comments that, rather than addressing specific
aspects of the analysis, are general statements regarding the
appropriateness of amending energy conservation standards and/or the
efficiency levels that might be appropriate.
AHAM stated that the preliminary analysis relied heavily on the use
of technologies that can affect reliability, longevity, and
affordability of products. Accordingly, they claimed that DOE had
placed too much emphasis on the implementation of variable-speed
compressors later in the EL progression, and that DOE was
overestimating the impact of vacuum insulated panels (``VIPs'') in
reducing energy consumption. (AHAM, No. 31, pp. 8-11)

[[Page 12466]]

Sub-Zero fully supported and affirmed the comments that were
submitted by AHAM, which emphasized that there are significant
limitations to further energy regulation if products are to remain
reliable, long-lived and affordable. Sub-Zero also stated that further
increases in efficiency for the built-in \19\ products they manufacture
are not justified and will save minimal energy worldwide and pose a
significant and unnecessary burden on manufacturers and noted that
built-ins comprise only 1.3 percent of total U.S. refrigerator and
freezer shipments according to AHAM 2019 shipment data. (Sub-Zero, No.
34, p. 1; Sub-Zero, No. 34, p. 2)
---------------------------------------------------------------------------

\19\ DOE defines a built-in consumer refrigeration product as
one that is no more than 24 inches in depth, excluding doors,
handles, and custom front panels; that is designed, intended, and
marketed exclusively to be (1) Installed totally encased by
cabinetry or panels that are attached during installation; (2)
Securely fastened to adjacent cabinetry, walls or floor; (3)
Equipped with unfinished sides that are not visible after
installation; and (4) Equipped with an integral factory-finished
face or built to accept a custom front panel (see 10 CFR 430.2).
---------------------------------------------------------------------------

AHAM and Sub-Zero comments suggesting that amending standards might
reduce reliability and product life are addressed in section IV.F.6 of
this document. AHAM's comments and those of other stakeholders
regarding the impact of VIPs are discussed in section IV.A.2 of this
document. In response to Sub-Zero regarding built-in products, DOE
revised the analysis in the NOPR phase to more specifically address
built-in classes--this is discussed in more detail in section IV.C.1.a
of this document.
Samsung noted the freestanding top-mount product classes (3, 3A,
and 3I) serves as a great example of increased energy savings given it
has significant market share of 42 percent and it has the ability to
adapt to a tightening of standards given the room for innovation with
energy efficiency technologies compared to other freestanding products.
They stated that improving on the EL for these classes can provide
nearly double the energy savings. (Samsung, No. 32, p. 2)
When considering the information provided in the preliminary
analysis TSD published in October 2021, DOE found that in 2020 top-
mount refrigerator-freezers and classes for which they are a proxy (PC
1, 2, 3, 6) constituted 36.7% of the market, while bottom-mounts alone
constituted 40.2 percent (PC 5, 5A). These data indicate that, in
contrast to the Samsung claim, focusing on the bottom-mount product
classes could actually lead to greater energy savings due to its larger
market share. In any case, DOE agrees that increasing stringency for
classes that have large market shares could be very effective in
achieving national energy savings.
The California IOUs stated they generally support DOE analyzing the
updated energy conservation standards levels for this equipment and the
finding that there are significantly higher efficiency levels with
positive net present value (NPV) for consumers. (California IOUs, No.
33, p. 1)
The California IOUs included two tables, which identified the
highest EL that DOE presented in the preliminary analysis for which DOE
found a positive NPV for freestanding and built-in product classes.
Barring updates to the preliminary analysis that incorporate other
comments, they asked that DOE adopt the efficiency level for each
product class with the highest savings while still having a positive
NPV. (California IOUs, No. 33, p. 5-6) DOE notes that EPCA requires
consideration of seven factors when setting standard levels including
total projected energy savings, among others (see the discussion in
section III.E.1 of this document).

A. Market and Technology Assessment

DOE develops information in the market and technology assessment
that provides an overall picture of the market for the products
concerned, including the purpose of the products, the industry
structure, manufacturers, market characteristics, and technologies used
in the products. This activity includes both quantitative and
qualitative assessments, based primarily on publicly available
information. The subjects addressed in the market and technology
assessment for this proposed rule include (1) a determination of the
scope of the rulemaking and product classes, (2) manufacturers and
industry structure, (3) existing efficiency programs, (4) shipments
information, (5) market and industry trends; and (6) technologies or
design options that could improve the energy efficiency of consumer
refrigerators, refrigerator-freezers, and freezers. The key findings of
DOE's market assessment are summarized in the following sections. See
chapter 3 of the NOPR TSD for further discussion of the market and
technology assessment.
1. Scope of Coverage and Product Classes
In the October 2021 Preliminary Analysis, DOE identified two
potential product class modifications, products with icemakers, and
products with multiple doors or specialty doors. The following two
subsections address these topics.
Product Classes With Automatic Icemakers
As discussed later in this section, DOE has identified an
opportunity to simplify and consolidate the presentation of maximum
allowable energy use for products within product classes that may or
may not have an automatic icemaker, and in doing so DOE expects the
product class representations to be more streamlined and simplified.
To represent the annual energy consumed by automatic icemakers in
refrigerators, refrigerator-freezers, and freezers, DOE's test
procedures specify a constant energy-use adder of 84 kWh/year (by use
of a 0.23 kWh/day adder; see section 5.3(a)(i) of 10 CFR part 430,
subpart B, appendix A and section 5.3.(a) of appendix B). With this
constant adder, the standard levels for product classes with an
automatic icemaker are equal to the standards of their counterparts
without an icemaker plus the 84 kWh/year. Consistent with prior
discussions in the test procedure rulemaking, this NOPR proposes to
amend this equation such that for representations made on or after the
compliance date of any potential new energy conservation standards, the
adder to be used shall change from 84 kWh/yr to 28 kWh/yr. DOE
determined as part of the October 2021 TP Final Rule that the revised
adder would more accurately reflect energy use during a representative
average use cycle. 86 FR 56811. However, DOE indicated that it would
not adopt this change in the test procedure until the date of potential
future energy conservation standard amendments. Id. at 86 FR 56793.
Thus, this change is being proposed in this document, with an
implementation date to coincide with the compliance date of the
standards proposed in this document.
AHAM reiterated their support for merging product classes for
products with and without automatic icemakers due to use of the
icemaker adder rather than a measured value but stated DOE must ensure
that the icemaking classes do not end up with a more stringent standard
as a result. (AHAM, No. 31, pp. 6-7; AHAM, Public Meeting Transcript,
No. 30, pp. 13-14)
DOE has concluded that because the standards for the product
classes with and without automatic icemakers are effectively the same,
except for the constant adder, there is an opportunity to express the
maximum allowable energy use for both icemaking and non-icemaking
classes in the same equation,

[[Page 12467]]

thus consolidating the presentation of classes and their energy
conservation standards. The equation would, for those classes that may
or may not have an icemaker, include a term equal to the icemaking
energy use adder multiplied by a factor that is defined to equal 1 for
products with icemakers and to equal zero for products without
icemakers. This approach would consolidate the product class structure,
and while products with and without ice makers would be represented by
a single product class descriptor and maximum energy use equation, they
would continue to have different maximum energy use values, due to the
ice maker coefficient in the equations.
DOE requests comments on its proposal to consolidate the
presentation of maximum allowable energy use for products of classes
that may or may not have an automatic icemaker.
Special Door and Multi-Door Designs
In the October 2021 Preliminary Analysis, DOE considered certain
refrigerators, refrigerator-freezers, and freezers available on the
market that offer special door types that allow consumers to access or
view the internal storage compartment without a typical door opening.
Some products available on the market offer glass doors to allow a view
inside the cabinet. Potential changes to product class structure to
address changes to energy consumption as a result of these features
were considered, and more information was requested from interested
parties.
Door-in-door design is a relatively new setup offered in certain
standard-size refrigerator-freezers. Typically, manufacturers add a
second smaller door between the fresh food compartment's outer door and
the inner cabinet. This design allows the consumer to access items
loaded in the door shelves without opening an interior door that
encloses the inner cabinet. Some door-in-door designs have an outer
glass door, providing the user a transparent view of the inner cabinet.
Some refrigerators, refrigerator-freezers, and freezers, available on
the market also offer multi-door setups which deviate from the popular
French-door design. Some designs include one or more ``drawers'' which
can be pulled out of the main compartment and allow for more fresh food
storage than more traditional designs. Other designs may include a
``quadrant'' design in which four doors are placed in a two-by-two
configuration with two doors for the freezer compartment, and two for
the fresh food.
AHAM commented that in its preliminary analysis DOE declined to
adopt a separate product class or an energy use allowance for products
with glass door or door-in-door type features. They stated that other
jurisdictions have a constant multiplier used in the development of
standards to account for the number of doors on a product, and there
are separate product classes for glass door products in commercial
refrigerators. (AHAM, No. 31, p. 7) GEA supported AHAM's position on
multidoor products and suggested using gasket area as a basis for a
multidoor multiplier. (GEA, No. 38, p. 3) Whirlpool also noted that
there is justification for applying a multiplier for multidoor
products. (Whirlpool, No. 35, pp. 8-10) Sub-Zero asked DOE to consider
adding a product class for built-ins with specialty doors and urged DOE
to define additional product classes for analyses and set separate
standards levels for built-ins with specialty doors. (Sub-Zero, No. 34,
p. 2)
DOE reviewed the prevalence of products with multiple or specialty
doors and conducted analysis to assess the energy use impact of such
design features. More detail regarding this assessment is provided in
Chapters 3 and 5 of the NOPR TSD. As a result, DOE concluded that some
allowance for multiple doors and specialty doors would be appropriate
for classes where such features are offered. Specifically, DOE is
proposing the following allowances for classes for which the specific
features are relevant.
<bullet> Two percent energy use allowance for each externally-
opening door in excess of the typical minimum for the class (i.e., more
than 2 doors for refrigerator-freezer classes 5 and 7, and more than 3
doors for class 5A). This would be applicable for current product
classes 5, 5A, and 7, with a limits of six percent for product classes
5 and 7, representing a product with five doors (three in excess of the
typical minimum), and four percent for product class 5A, also
representing a product with five doors (in this case two in excess of
the typical minimum). For the purposes of this provision, a drawer with
an externally-exposed face would be considered an externally-opening
door.
<bullet> Six percent total energy use allowance for a product with
a door-in-door feature implemented in one or more of its doors. This
would apply instead of any multiple-door allowance for product classes
5, 5A, and 7.
<bullet> Ten percent total energy use allowances for a product with
a transparent door or doors. This would apply instead of any multiple-
door or door-in-door allowance for product classes 3A, 5, 5A, 7, and
13A.
With this proposed approach, the maximum energy use allowance would
be ten percent, for a glass door. However, if the standard level for
any of the eligible classes is set at a level for which this allowance
would represent backsliding, i.e., allow such a product to have more
energy use than the current standard (adjusted for the change in
icemaker energy use adder), the allowance would be reduced to eliminate
such backsliding. The proposal uses the number of doors in excess of
the typical minimum number of doors, rather than using an adjustment
based on gasket size, as suggested by GEA, in an attempt to maintain
better simplicity of the adjustment and determination of the maximum
allowable energy use. In response to Sub-Zero, DOE notes that this
provision would apply to built-in classes as well as freestanding
classes.
DOE requests comment on its proposal for establishing energy use
allowances for multiple doors and/or specialty doors. Should such an
energy use allowance structure be established, and, if so, are the
proposed energy use allowance levels appropriate? If they are not
appropriate, DOE requests input on what the energy use allowance values
should be, with supporting data to demonstrate that the alternative
levels suggested are justified.
DOE also considered whether any definitions would be required to
clarify what products the door allowances would apply to. As described
previously, the allowances for multiple doors would apply for
externally-opening doors or drawers. DOE believes that these
descriptions provide sufficient clarity such that additional
definitions regarding multiple doors would not be required.
For transparent doors, DOE proposes to add a definition that aligns
with the definition of display doors for walk-in coolers and freezers,
which defines a display door as a door that either is designed for
product display or has 75 percent or more of its surface area composed
of glass or another transparent material. (See 10 CFR 431.302).
Specifically, DOE proposes to define transparent door as a door for
which 75 percent or more of the surface area is glass or another
transparent material.
For door-in-door features, DOE proposes to add a clarifying
definition indicating that a door-in-door is a set of doors or an outer
door and inner drawer for which (a) both doors (or both the door and
the drawer) must be opened to provide access to the interior through a
single opening, (b) gaskets for both doors (or both the door and the
drawer)

[[Page 12468]]

are exposed to external ambient conditions on the outside around the
full perimeter of the respective openings, and (c) the space between
the two doors (or between the door and the drawer) achieves temperature
levels consistent with the temperature requirements of the interior
compartment to which the door-in-door provides access.
DOE requests comments on the proposed definitions to clarify
transparent door and door-in-door features. If the proposed definitions
are not appropriate, DOE requests comment on what specific changes
should be made to the definitions, or what other definitions are
necessary, so that they would appropriately describe the intended
specialized doors.
2. Technology Options
In the preliminary market analysis and technology assessment, DOE
identified 37 technology options that would be expected to improve the
efficiency of refrigerators, refrigerator-freezers, and freezers, as
measured by the DOE test procedure:

Table IV.1--Technology Options Identified in the Preliminary Analysis
------------------------------------------------------------------------

-------------------------------------------------------------------------
Insulation:
1. Improved resistivity of insulation (insulation type).
2. Inert blowing fluid CO2.
3. Increased insulation thickness.
4. Gas-filled insulation panels.
5. Vacuum-insulated panels (``VIP'').
Gasket and Door Design:
6. Improved gaskets.
7. Double door gaskets.
8. Improved door face frame.
9. Reduced heat load for through-the-door (``TTD'') feature.
Anti-Sweat Heater:
10. Condenser hot gas (Refrigerant anti-sweat heating).
11. Electric anti-sweat heater sizing.
12. Electric heater controls.
Compressor:
13. Improved compressor efficiency.
14. Variable-speed compressors.
15. Linear compressors.
Evaporator:
16. Increased surface area.
17. Improved heat exchange.
Condenser:
18. Increased surface area.
19. Microchannel condenser.
20. Improved heat exchange.
21. Force convection condenser.
Defrost System:
22. Reduced energy for automatic defrost.
23. Adaptive defrost.
24. Condenser hot gas defrost.
Control System:
25. Electronic Temperature control.
26. Anti-Distribution control.
Other Technologies:
27. Fan and fan motor improvements.
28. Improved expansion valve.
29. Fluid control or solenoid off-cycle valve.
30. Alternative refrigerants.
31. Component location.
32. Phase change materials.
Alternative Refrigeration Cycles:
33. Ejector refrigerator.
34. Dual evaporator systems.
35. Two-stage system.
36. Dual-loop system.
37. Lorenz-Meutzner cycle.
------------------------------------------------------------------------

Several commenters provided feedback on some of these technology
options. These comments are summarized, along with DOE's responses.
Samsung agreed with the DOE's various technology options,
specifically DOE's identification of variable-speed compressors and R-
600a as means to improve energy efficiency. (Samsung, No. 32, pp. 2-3)
AHAM clarified that when considering ``alternate refrigerants'' as
a technology option, DOE recognize that the use of R-600a should not be
considered an option to account for a decrease in energy consumption if
DOE's analysis accounts for a full transition from HFCs by January 1,
2023. AHAM also stated DOE's analysis regarding refrigerant for product
classes 5, 5I, and 5A are flawed as the alternative refrigerants
considered may not be accurate of the current or transitioning market.
AHAM further stated the R-600a compressors only at ELs 3 and 4 is not
reflective of the market; AHAM shipment data indicate a significant
number of units are already using Isobutane (R-600a) refrigerant and/or
variable-speed compressors to meet the current DOE standard or ENERGY
STAR[supreg] levels. AHAM stated DOE needs to redo its analysis of
product classes 5, 5I and 5A to incorporate market representative
models and adjust the projected technology paths to account for options
already in use. (AHAM, No. 31, pp. 4, 8-9)
In response, DOE reassessed its treatment of R-600a as a design
option in the October 2021 Preliminary Analysis. It is DOE's
understanding, confirmed through discussions with manufacturers, that
following the removal of HFC-134a as a viable refrigerant for consumer
refrigeration product in the U.S., manufacturers are primarily using R-
600a as a replacement.\20\ Hence, DOE assumed for its NOPR analysis
that all consumer refrigeration products, even those at baseline
efficiency levels, now use R-600a. DOE is aware that other alternative
refrigerant choices are allowed to be used and further would not be
banned by a recent EPA proposal restricting refrigerants.\21\ However,
based on all available information, DOE is not aware of any instances
in which these alternatives are being considered by manufacturers as
viable approaches for increases in efficiency in these products. 87 FR
76738, 76785 (December 15, 2022). Hence, refrigerant change has not
been included as a technology option in this NOPR.
---------------------------------------------------------------------------

\20\ In a final rule published December 1, 2016, the
Environmental Protection Agency (``EPA''), as part of its
Significant New Alternatives Policy (``SNAP'') program covering
ozone-depleting refrigerants and related substances, changed the
status of HFC-134a, the refrigerant to ``unacceptable'' for consumer
refrigeration products starting January 1, 2021. 81 FR 86778, 86893.
\21\ On December 15, 2022, EPA published a proposed rule
restricting the use of refrigerants with GWP of 150 or greater. 87
FR 76738. Refrigerants including R-290, R-441A, R-600a, and HFC-152a
meet this GWP requirement and are listed as acceptable under EPA's
SNAP rules (see <a href="https://www.epa.gov/snap/substitutes-household-refrigerators-and-freezers">https://www.epa.gov/snap/substitutes-household-refrigerators-and-freezers</a>).
---------------------------------------------------------------------------

Darren Rains stated that the current design of many homes,
commercial, and industrial refrigeration units allow cooling fans to
pull air directly over a unit's condenser coils, resulting in dust and
debris clogging the coils. As a result of this Rains states that
accumulation of dust, hair, and lint on the condenser coils lowers the
unit's ability to dissipate heat. Rains suggests that all incoming
airflow openings must be covered by filtering materials sufficient to
keep out the vast majority of debris, lint, and hair away from the
condenser coils, and that filtering materials be easy to remove,
replace, and are resistant to cleaning with a vacuum. Rains also
suggests that gaps underneath refrigeration units have closed cell foam
to address suction of debris into the unit. (Rains, No. 27, pp. 1-2)
DOE responds that consumer refrigeration products are tested before
installation in homes and therefore before there is the potential to
clog the condenser coil. Hence, even though air filters and/or other
protection of the coils from dust or other debris may provide an
efficiency benefit during home use, they would not be expected to
affect the measurement of efficiency in the DOE test procedure. This is
a factor that AHAM could potentially consider in development of a
future revision of the HRF-1 test standard, and is also a factor that
DOE may consider in a future test procedure rulemaking.

[[Page 12469]]

The Joint Commenters stated they believe DOE may be underestimating
VIP performance by relying on outdated information and/or otherwise
inappropriate assumptions. The Joint Commenters noted DOE did not
provide ample explanation for the 50 percent degradation factor/scaling
factor and urged DOE to investigate an appropriate, updated scaling
factor informed by recent interviews with manufacturers rather than
relying on the previous rulemaking. They also stated the energy savings
from VIPs presented in the preliminary analysis appear to be notably
smaller than those found in a 2018 study and therefore urged DOE to
reevaluate its modeling to ensure that the energy savings from VIPs are
appropriately being captured. (Joint Commenters, No. 36, pp. 3-4)
DOE notes that, while the use of VIPs has become more common, it is
not yet a technology that is used in a majority of products. DOE found
few VIPs in the products that it purchased, and reverse engineered
using destructive teardowns. The use of VIPs is not advertised in
manufacturer product literature; thus, it is difficult to conduct
statistical analysis to correlate efficiency levels with use of the
technology. Manufacturers have reported varied levels of success using
the technology. The information that DOE has been able to obtain on
this topic through manufacturer interviews is by no means exhaustive,
but it doesn't suggest that energy use reduction associated with use of
VIPs is significantly different than would be estimated by the approach
derivative of the previous rulemaking that was adopted in the
preliminary analysis. DOE has used this approach also for the NOPR
analysis. The details of the VIP analysis are described further in
Chapter 5 of the NOPR TSD.
Based on the comments received, DOE has not identified any new
technologies to add to the list provided as part of the preliminary
analysis, and has removed alternative refrigerants as a technology
option, since it would already be used in products at any efficiency
level.
For Product Class 11A, ASAP recognized that many of the most
efficient models are powered coolers that have small, adjusted volumes.
However, they encouraged DOE to investigate the design features present
in these very high-efficiency models to determine if such design
features are more broadly applicable to the product class. (ASAP,
Public Meeting Transcript, No. 30, p. 22)
In response, DOE notes that several of the most efficient products
certified under product class 11A are DC-input models marketed for use
in cars or boats. For example, the Alpicool TS50 is rated as a 1.8 cuft
model with energy use 40% less than the maximum allowable annual energy
use for products in its class. Product information shows that it is
intended for car or boat service, and thus, it cannot be considered
representative of the market. (``Alpicool TS Series'', No. XXXX)

B. Screening Analysis

DOE uses the following five screening criteria to determine which
technology options are suitable for further consideration in an energy
conservation standards rulemaking: \22\
---------------------------------------------------------------------------

\22\ 10 CFR part 430, subpart C, appendix A, sections 6(b)(3)
and 7(b).
---------------------------------------------------------------------------

(1) Technological feasibility. Technologies that are not
incorporated in commercial products or in working prototypes will not
be considered further.
(2) Practicability to manufacture, install, and service. If it is
determined that mass production and reliable installation and servicing
of a technology in commercial products could not be achieved on the
scale necessary to serve the relevant market at the time of the
projected compliance date of the standard, then that technology will
not be considered further.
(3) Impacts on product utility or product availability. If it is
determined that a technology would have a significant adverse impact on
the utility of the product for significant subgroups of consumers or
would result in the unavailability of any covered product type with
performance characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as products
generally available in the United States at the time, it will not be
considered further.
(4) Adverse impacts on health or safety. If it is determined that a
technology would have significant adverse impacts on health or safety,
it will not be considered further.
(5) Unique-Pathway Proprietary Technologies. If a design option
utilizes proprietary technology that represents a unique pathway to
achieving a given efficiency level, that technology will not be
considered further due to the potential for monopolistic concerns.
In summary, if DOE determines that a technology, or a combination
of technologies, fails to meet one or more of the listed five criteria,
it will be excluded from further consideration in the engineering
analysis. The reasons for eliminating any technology are discussed in
the following sections.
The subsequent sections include comments from interested parties
pertinent to the screening criteria, DOE's evaluation of each
technology option against the screening analysis criteria, and whether
DOE determined that a technology option should be excluded (``screened
out'') based on the screening criteria.
1. Screened-Out Technologies
In the October 2021 preliminary analysis, DOE screened out the
technologies presented in Table IV.2 on the basis of technological
feasibility, practicability to manufacture, install, and service,
adverse impacts on utility or availability, adverse impacts on health
and safety, and/or unique-pathway proprietary technologies.
AHAM stated DOE's analysis relies heavily on the use of variable-
speed compressors (``VSCs'') to achieve efficiency gains, indicating
that (a) for some product classes, achieving even EL1 would require the
use of VSCs, (b) there is additional design work and related costs
required to implement VSCs, and (c) there are potential concerns about
harmonic and interference issues. (AHAM, No. 31, p. 10) GEA stated
DOE's analysis of the potential use of VSCs to reach certain energy
levels fails to account for several costs associated with the use of
VSCs. (GEA, No. 38 at p. 10)
DOE notes that it is clear from AHAM's statements, review of
product literature, and discussions with manufacturers, that VSCs are a
common design option used in a large percentage of currently-shipped
consumer refrigeration products, with around one third of the U.S.
refrigerator market adapting to VSCs and increasing implementation.
(Samsung, No. 32, pp. 2-3) Furthermore, while AHAM suggested that DOE
consider harmonics and possible electric grid interference from VSCs,
DOE is not aware of any issues related to VSCs and harmonics to date,
nor any requirements in place at this time. DOE is aware that Natural
Resources Canada (NRCan) has released a comprehensive energy efficiency
guide regarding variable frequency drives for informative purposes,
with discussion of harmonics.\23\ DOE notes, however, that the stated
primary focus of the NRCan publication is for 'off-the-shelf', low-
voltage variable frequency drives typically used in conjunction

[[Page 12470]]

with AC, polyphase, and induction motors, which does not include drives
for consumer refrigeration VSCs. Hence, because VSCs are currently
implemented in a substantive number of products and DOE is not aware of
harmonic interference at this time, DOE believes it is inappropriate to
screen out this technology.
---------------------------------------------------------------------------

\23\ The NRCan publication regarding variable frequency drives
can be found at <a href="https://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/energy/pdf/energystar/variable-frequency-drives-eng.pdf">https://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/energy/pdf/energystar/variable-frequency-drives-eng.pdf</a>.

Table IV.2--Technologies Screened-Out in the Preliminary Analysis
------------------------------------------------------------------------

-------------------------------------------------------------------------
Improved Gaskets, Double Gaskets, and Improved Door Face Frame.
Linear Compressors.
Fluid Control or Solenoid Off-Cycle Valves.
Improved Evaporator Heat Exchange.
Improved Condenser Heat Exchange.
Forced Convection Condenser.
Condenser Hot Gas Defrost.
Compressor Location at Top.
Evaporator Fan Motor Location Outside Cabinet.
Air Distribution Control.
Phase Change Materials.
Lorenz-Meutzner Cycle.
Dual-Loop Systems.
Two-Stage System.
Ejector Refrigerator.
Improved VIPs.
Inert Blowing Fluid CO2.
------------------------------------------------------------------------

2. Remaining Technologies
Through a review of each technology, DOE concluded in the
preliminary analysis that all of the other identified technologies
listed in section IV.A.2 of this document met all five screening
criteria to be examined further as design options in DOE's NOPR
analysis. In summary, DOE did not screen out the following technology
options:

Table IV.3--Technologies Remaining in the Preliminary Analysis
------------------------------------------------------------------------

-------------------------------------------------------------------------
Insulation:
1. Improved resistivity of insulation (insulation type).
2. Increased insulation thickness.
3. Gas-filled insulation panels.
4. Vacuum-insulated panels.
Gasket and Door Design:
5. Reduced heat load for TTD feature.
Anti-Sweat Heater:
6. Refrigerant anti-sweat heating.
7. Electric anti-sweat heater sizing.
8. Electric heater controls.
Compressor:
9. Improved compressor efficiency.
10. Variable-speed compressors.
Evaporator:
11. Improved expansion valve.
12. Increased surface area.
13. Dual evaporator systems.
Condenser:
14. Increased surface area.
15. Microchannel condenser.
Defrost System:
16. Reduced energy for automatic defrost.
17. Adaptive defrost.
Control System:
18. Electronic Temperature control.
Other Technologies:
19. Fan and fan motor improvements.
20. Alternative refrigerants.
------------------------------------------------------------------------

DOE has determined that these technology options are
technologically feasible because they are being used or have previously
been used in commercially available products or working prototypes. DOE
also finds that all of the remaining technology options meet the other
screening criteria (i.e., practicable to manufacture, install, and
service and do not result in adverse impacts on consumer utility,
product availability, health, or safety, unique-pathway proprietary
technologies). For additional details, see chapter 4 of the NOPR TSD.
DOE did not receive any comments specifically about screening
technologies that have not already been mentioned previously. DOE's
assessment of screening technologies has not changed for the NOPR
analysis, and thus DOE has screened out that same group of technologies
in the NOPR phase. Hence, the technologies remaining, that are
considered as design options for the engineering analysis, are the same
as those in the preliminary analysis, except for alternative
refrigerants, which DOE has removed from the technology option list for
the reasons mentioned in section IV.A.2 of this document.

C. Engineering Analysis

The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of consumer refrigerators,
refrigerator-freezers, and freezers. There are two elements to consider
in the engineering analysis; the selection of efficiency levels to
analyze (i.e., the ``efficiency analysis'') and the determination of
product cost at each efficiency level (i.e., the ``cost analysis''). In
determining the performance of higher-efficiency products, DOE
considers technologies and design option combinations not eliminated by
the screening analysis. For each product class, DOE estimates the
baseline cost, as well as the incremental cost for the product at
efficiency levels above the baseline. The output of the engineering
analysis is a set of cost-efficiency ``curves'' that are used in
downstream analyses (i.e., the LCC and PBP analyses and the NIA).
1. Efficiency Analysis
DOE typically uses one of two approaches to develop energy
efficiency levels for the engineering analysis: (1) relying on observed
efficiency levels in the market (i.e., the efficiency-level approach),
or (2) determining the incremental efficiency improvements associated
with incorporating specific design options to a baseline model (i.e.,
the design-option approach). Using the efficiency-level approach, the
efficiency levels established for the analysis are determined based on
the market distribution of existing products (in other words, based on
the range of efficiencies and efficiency level ``clusters'' that
already exist on the market). Using the design option approach, the
efficiency levels established for the analysis are determined through
detailed engineering calculations and/or computer simulations of the
efficiency improvements from implementing specific design options that
have been identified in the technology assessment. DOE may also rely on
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended
using the design option approach to ``gap fill'' levels (to bridge
large gaps between other identified efficiency levels) and/or to
extrapolate to the max-tech level (particularly in cases where the max-
tech level exceeds the maximum efficiency level currently available on
the market).
For the preliminary analysis, DOE used a combined efficiency-level
and design-option approach. First, an efficiency-level approach was
used to establish an analysis tied to existing products on the market.
A design option approach was used to extend the analysis through
``built-down'' efficiency levels and ``built-up'' efficiency levels
where there were gaps in the range of efficiencies of products that
were reverse engineered. Products from the product classes 3, 5, 5A, 7,
9, 10, 11A, & 18 were tested and torn down to provide information to
lay the groundwork for the analysis. Design option analysis techniques
were used to extend the analysis to higher efficiency levels and to
fill any efficiency level gaps. Due to limitations in acquiring models
from every product class for testing, DOE did not acquire for test and
teardown, nor construct analysis for, all product classes. DOE focused
the analysis on products with the highest market share. Regarding
built-in product classes, certification data collected in DOE's
Compliance Certification Database (``CCD'') indicated that the

[[Page 12471]]

potential for efficiency improvement was comparable for built-in
classes and their corresponding freestanding classes. (See Section
5.2.1 of the Preliminary Analysis TSD) Thus, DOE concluded that the
freestanding classes could act as proxies for the built-in classes.
Section 10.4 of the preliminary analysis TSD discusses use of the
engineering analysis for the analyzed classes to represent the cost-
efficiency relationship for the classes for which engineering analysis
was not conducted.
AHAM raised two general comments regarding representativeness of
the classes and products analyzed for the preliminary analysis. First,
AHAM claimed that DOE used product classes as proxy for other classes
which were not sufficiently representative--this comment primarily
addressed built-in classes. (AHAM, No. 31, pp. 5-6) Second, AHAM
asserted that DOE selected models for teardown that were not
representative of the specific classes analyzed--this comment primarily
addressed the increase in multi-door product configurations, mainly for
product classes 5, 5I, and 5A. (AHAM, No. 31, p. 2) These general
comments are discussed in detail below.
a. Built-In Products
AHAM agreed that, given the significant number of product classes,
it is appropriate for DOE to evaluate some classes in detail and use
that analysis as a proxy for other similar product classes. However,
AHAM stated DOE consolidated its analysis too much. (AHAM, Public
Meeting Transcript, No. 30, p. 7-8 \24\) Specifically, AHAM stated
freestanding product classes are not a proxy for built-in product
classes and DOE should evaluate them separately. (AHAM, No. 31, 5-6) In
addition to AHAM, GEA also objected to the use of freestanding products
as analogues for built-in products in DOE's analysis and requested a
separate analysis for built-in product classes. GEA stated built-in
products are fundamentally different than freestanding products in that
built-in products have different physical constraints as to size and
shape, different configurations for their mechanical systems, and
different markets and customer segments. Sub-Zero also noted that
built-ins now utilize combinations of every practical energy saving
design option identified by DOE and therefore urged DOE to seriously
address the reality that a more stringent standard is not justified for
some product classes, such as built-ins. (GEA, No. 38, p. 2; Sub-Zero,
No. 34, p. 2)
---------------------------------------------------------------------------

\24\ A notation in the form ``AHAM, Public Meeting Transcript,
No. 30 at p. 3'' identifies an oral comment that DOE received on
December 1, 2021, during the public meeting, and was recorded in the
public meeting transcript posted in the docket for this test
procedure rulemaking (Docket No. EERE-2014-BT-STD-0003). This
particular notation refers to a comment (1) made by the Association
of Home Appliance Manufacturer during the public meeting; (2)
recorded in document number 30, which is the public meeting
transcript that is filed in the docket of this test procedure
rulemaking; and (3) which appears on page 3 of document number 30.
---------------------------------------------------------------------------

On the other hand, the Joint Commenters stated they support DOE's
approach of analyzing the same potential efficiency increases for
built-in product classes as those for corresponding freestanding
product classes. (Joint Commenters, No. 36, p. 5)
In response to these comments, DOE revised its analysis to address
built-in products more directly. Specifically, DOE conducted additional
analysis for class 5-BI, based on information from the 5-BI analysis
conducted to support the September 2011 Final Rule, CCD and product
literature data, and information provided by built-in product
manufacturers during interviews. DOE has used the differences in the
analyses between class 5 and 5-BI to approximate the differences
between freestanding and built-in class pairs for other relevant built-
in classes (e.g., classes 3A, 7, and 9).
b. Representativeness of Reverse-Engineered and Analyzed Products
AHAM expressed concern that in some cases the features present in
the teardown products were not representative of the market. (AHAM,
Public Meeting Transcript, No. 30, pp. 7, 14-17) According to AHAM,
DOE's analysis of product classes 5 and 5A in the preliminary analysis
did not appear to be representative of the market in terms of volume,
features, and number of doors; specifically, DOE's analysis focused on
bottom-mount refrigerator/freezers with only two doors--one for the
refrigerator and one for the freezer. AHAM stated it is unclear whether
the analysis accounts for the differences between classes 5 and 5A and
urged DOE to conduct further consultation with manufacturers in order
to better account for these distinctions. (AHAM, No. 31, p. 2-3)
Whirlpool agreed with these AHAM comments. (No. 35, pp. 2-3)
The California IOUs expressed similar concerns about whether all of
the models selected to represent specific classes and efficiency levels
were fully representative. They specifically pointed to the high cost
of dual-evaporator systems, used in the DOE analysis for product
classes 5A and 7 to reach EL2, as being non-representative. (California
IOUs, Public Meeting Transcript, No. 30, p. 30) ASAP also noted that,
when going from efficiency level 1 to 2 in the preliminary analysis,
there is an incremental cost increase of more than $300 for Product
Class 5A and more than $250 for Product Class 7 and that the technology
options added at EL-2 are a higher-efficiency compressor and a single
VIP for Product Class 5A and then dual evaporators in a single VIP for
Product Class 7. ASAP requested an explanation of what is driving that
incremental cost in both cases of going from EL-1 to EL-2. (ASAP,
Public Meeting Transcript, No. 30, p. 27-28)
In response to these comments regarding the representativeness of
the models analyzed, DOE investigated and came to similar conclusions.
Thus, DOE revised the analysis for this NOPR such that (a) analyses for
both product classes 5 and 5A are based on three-door designs, (b) the
capacities of the product class 5 representative units are larger, (c)
the capacities of the product class 5A units are smaller, and (d) the
analyses for product classes 5A and 7 do not consider use of dual
evaporators as a design option, remaining more consistent with a more
representative single-evaporator design. DOE believes the analyses
conducted for this NOPR are representative of the product classes in
the market.
c. Baseline Efficiency/Energy Use
For each product/equipment class, DOE generally selects a baseline
model as a reference point for each class, and measures changes
resulting from potential energy conservation standards against the
baseline. The baseline model in each product/equipment class represents
the characteristics of a product/equipment typical of that class (e.g.,
capacity, physical size). Generally, a baseline model is one that just
meets current energy conservation standards, or, if no standards are in
place, the baseline is typically the most common or least efficient
unit on the market.
For the preliminary analysis, DOE chose baseline efficiency levels
represented by the current Federal energy conservation standards,
expressed as maximum annual energy consumption as a function of the
product's adjusted volume, with the exclusion of the automatic icemaker
energy contribution for product classes that include this feature. The
current standards incorporate allowance of a constant 84 kWh/yr
icemaker adder for product classes with automatic icemakers, consistent
with the current test procedure, which requires adding

[[Page 12472]]

this amount of annual energy use to the product's tested performance if
the product has an automatic icemaker.
For the analysis in this NOPR, DOE adjusted the baseline energy
usage levels for each class to account for the planned revision in the
test procedure of the icemaker energy use adder to 28 kWh/year. From
this baseline DOE conducted direct analyses for 9 product classes, with
some classes including two representative adjusted volumes. In
conducting these analyses, 13 baseline units were used in construction
of cost curves, and had their characteristics determined in large part
by purchased, tested, and reverse engineered tear-down models. Further
information on the design characteristics of specific analyzed baseline
models is summarized in the NOPR TSD.
d. Higher Efficiency Levels
AHAM commented that DOE should examine a gap-fill EL between the
current DOE standard and the previously analyzed EL 1 for freestanding
bottom-mount refrigerator-freezers (product classes 5, 5I, and 5A).
Whirlpool agreed, but expanded on this, indicating that DOE should
examine a gap-fill EL between the current DOE standard and the analyzed
EL 1 for freestanding top-mount and side-by-side refrigerator-freezers
(product classes 3, 3I, 4, 6, and 7). (AHAM, No. 31, p. 4; Whirlpool,
No. 35, p. 4-5)
Whirlpool also noted that in the last refrigerator, refrigerator-
freezer, and freezer energy conservation standards rulemaking, DOE
considered (in the corresponding TSD) gap-fill efficiency levels
between baseline and ESTAR Version 4.0 levels, which at the time were
20% more efficient than the DOE federal minimum for most product
classes. Whirlpool stated DOE should analyze gap fill levels like those
considered in the last rulemaking due to their own precedent and to at
least consider them at this state and due to distinct technology
options, product cost, and customer impacts of refrigerators,
refrigerator-freezers, and freezers produced at these levels compared
to refrigerators, refrigerator-freezers, and freezers at baseline and
EL1. Whirlpool further stated it is extremely important that DOE
consider these gap fill levels for the non-built-in top mount and side-
by-side product classes. They stated the product costs needed to
improve even a 5% gap fill level for those PCs will be substantially
lower than their estimated costs of meeting EL1 and that savings would
still be delivered to consumers, but at a much lower product cost
increase, which would minimize the impact from amended standards to
low-income consumers often from disadvantaged communities. (Whirlpool,
No. 35, p. 4-8)
In interviews, manufacturers reiterated that gap-fill ELs should be
evaluated, particularly for top-mount and side-by-side refrigerator-
freezers.
In response, in this NOPR analysis DOE analyzed a 5% EL for product
classes 3 and 7 (the top-mount refrigerators-freezers, and side-by-side
refrigerator-freezers, respectively).
For the NOPR analysis, DOE analyzed up to five incremental
efficiency levels beyond the baseline for each of the analyzed product
classes. For products classes 3 and 7, this included an efficiency
level roughly 5% more efficient than the current energy conservation
standard. For other classes, the efficiency levels start at EL2, near
10% more efficiency than the current energy conservation standard,
equivalent to the current ENERGY STAR[supreg] level for refrigerators,
refrigerator-freezers, and freezers. For the NOPR analysis, DOE
extended the efficiency levels in steps of close to 5% of the current
energy conservation standard up to EL 4. Finally, EL 5 represents
``max-tech'', using design option analysis to extend the analysis
beyond EL 4 using all applicable design options, including max
efficiency variable-speed compressors, and considerable use of VIPs.
For Product Classes 5A, 7, and 11A, ASAP, California IOUs, and
Joint Commenters stated they found that there are models listed in
DOE's Compliance Certification Database that are more efficient than
DOE's max-tech levels. They further stated that DOE presented a figure
in the PTSD that showed available models that are more efficient than
the max-tech efficiency level for Product Class 7. They therefore
encouraged DOE to reevaluate the max-tech efficiency levels for Product
Classes 5A, 7, and 11A so that they represent true max-tech levels.
(ASAP, Public Meeting Transcript, No. 30, p. 22; California IOUs, No.
30; pp. 24-26; Joint Commenters, No. 36, p. 1-2) As indicated in
section IV.A.2, DOE notes that some of the most efficient products of
product class 11A are DC-input products and thus not generally
representative of the refrigerator market. As for product classes 5A
and 7, the max-tech efficiency levels analyzed in this NOPR were 21.5%
and 22%, respectively. These max-tech levels are consistent with the
maximum available efficiency levels of representative products sold by
major manufacturers with which DOE conducted interviews.
The Joint Commenters noted that the TSD states that the energy
efficiency ratios (``EER'') for VSCs are typically consistent with
those of the highest available efficiency single-speed compressors
(``SSC'') at the same capacity but stated that low-capacity compressors
(generally models less than \1/4\ hp or 500 BTU/hr) would typically be
present in compact product classes. They included a figure which
showed, for both R-134a and R-600a compressors, the EER of a VSC can be
1 to 2 points higher than that of the most efficient SSC at the same
capacity (<500 BTU/hr) and, therefore, DOE may be underestimating the
savings from VSC for compact products by failing to capture the
improved full-load efficiency in addition to the part-load savings.
(Joint Commenters, No. 36, p. 4-5)
While published EER levels for VSCs may be much higher than
published EERs for single-speed compressors in the capacity range
suitable for compact products, DOE has not found many such products
that use such compressors, and thus has little evidence that the
suggested efficiency improvements could be guaranteed. DOE believes
that its engineering analysis for compact products is representative of
likely performance using VSCs.
The efficiency levels analyzed beyond the baseline are shown in
Table IV.4.

[[Page 12473]]

Table IV.4--Incremental Efficiency Levels for Analyzed Products
[% Energy Use Less Than Baseline]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Standard-size refrigerator Standard-size Compact refrigerators and freezers
----------------------------------------------------------------------------- freezers -------------------------------------------
Product class (AV, ft) 5 ** 5 ** 5A ** 5-BI ** ----------------------
3 (11.9) 3 (20.6) (23.0) (30.0) (35.0) (26.0) 7 (31.5) 9 (29.3) 10 (26.0) 11A (1.7) 11A (4.4) 17 (9.0) 18 (8.9)
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
EL 1 *........................................... 5 5 8 7 11 8 5 10 10 10 10 10 10
EL 2 *........................................... 10 10 13 11 16 13 9.5 15 15 15 15 15 15
EL 3............................................. 15 15 18 15 21.5 14 14.5 20 20 20 20 20 20
EL 4............................................. 20 20 20 17 ......... ......... 19 25 23 32 30 ......... 30
EL 5............................................. 27 28 ......... ......... ......... ......... 22 ......... ......... ......... ......... ......... .........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* ENERGY STAR[supreg] % level varies based on specific teardown units analyzed.
** Percentages are based on a 3-door configuration.

[[Page 12474]]

e. VIP Analysis and Max-Tech Levels
ASAP noted that a 2018 study \25\ found that the installation of
vacuum insulated panels (``VIPs'') in the rear cabinet wall reduced
energy consumption by 5 percent and when VIPs were added to the doors,
the total reduction was almost 12 percent. ASAP further noted that,
with VIPs added to the side walls and top wall (where VIPs cover
approximately half of the cabinet area), the total reduction energy
consumption was about 20 percent. ASAP therefore stated DOE's
conclusion of a 4 to 6 percent energy savings from the installation of
VIPs covering half of the cabinet area seems lower than expected and
questioned this discrepancy. California IOUs also reiterated energy
savings from using VIPs was being undercounted. (ASAP, Public Meeting
Transcript, No. 30, pp. 22-23; California IOUs, No. 33, pp. 2-3)
---------------------------------------------------------------------------

\25\ Thiessen, S., Knabben, F.T., Melo, C., & Gon[ccedil]alves,
J.M. (2018). A study on the effectiveness of applying vacuum
insulation panels in domestic refrigerators. International Journal
of Refrigeration, 96, p. 10-16. <a href="https://doi.org/10.1016/j.ijrefrig.2018.09.006">https://doi.org/10.1016/j.ijrefrig.2018.09.006</a>.
---------------------------------------------------------------------------

The California IOUs recommended that DOE increase the maximum ELs
in the PTSD by reviewing design options for commercialized products
that meet or exceed the max-tech levels. The California IOUs stated
that it is likely that DOE is underestimating the energy savings that
can be achieved at max-tech level because there is no indication that
any of the products analyzed have VIPs, which is the additional design
option for most product classes at max-tech. They therefore requested
that DOE revise EL 3 and EL 4 to either incorporate additional design
options or revise the energy savings attributed to the included design
options if they are the only ones used in these commercialized
products. (California IOUs, No. 33, p. 3-4)
ASAP requested specific information, particularly dimensions, of
the single VIP referenced in table 5.5.1 of the preliminary analysis
which shows the design options by efficiency level for each product
class. ASAP also noted there is a reference to the VIPs covering half
of the cabinet area and requested clarification on whether the full
cabinet area is referring to all five sides being the top, bottom, two
sides, and rear (excluding the doors) or if it was something else.
(ASAP, Public Meeting Transcript, No. 30, pp. 15-17 & 21-22)
ASAP noted that DOE assumed a mid-panel thermal conductivity for
the VIPs but then used a scaling factor of 50 percent to account for
the actual versus expected performance of VIPs and requested
clarification regarding what the 50 percent factor is capturing. (ASAP,
Public Meeting Transcript, No. 30, p. 23)
On the other hand, AHAM stated DOE does not account for the
limitations of VIPs and does not apply it as it would likely be used in
actual products and, as a result, overestimates the use and impact of
VIPs in its analysis. AHAM noted DOE's emphasis on VIPs appears to
result from the teardown of a single unit, which is likely not
representative of how VIPs are generally deployed on a larger scale.
GEA stated DOE must also account for the technical limitations of VIPs
including edge effects, which is particularly important when analyzing
their use in smaller products. GEA also noted that DOE's analysis
indicates manufactures will implement VIPs to achieve higher energy
levels, but stated that many manufacturers, including GEA, already use
VIPs to meet existing standards minimums and EL 1. (AHAM, No. 31, pp.
10-11; GEA, No. 38, p. 2)
In response to the ASAP and California IOUs comments regarding a
study involving use of VIPs, DOE notes that the Department's analysis
was generally consistent with the study in terms of how and where VIPs
would be applied into the products. DOE further notes that its analysis
also was consistent with information provided by manufacturers in
interviews on VIP placement--specifically, that VIPs would primarily be
used on the door(s), the walls, and the tops of cabinets,
preferentially for the freezer compartments. In response to ASAP's
question about the 50 percent factor, this was an adjustment that DOE
used in the analysis leading up to the September 2011 Final Rule based
on information regarding VIP experiences by manufacturers at that time.
Based on discussions with manufacturers in the current rulemaking, it
is not clear that success using VIPs in production settings has
significantly increased. While the cited study provides some indication
that VIPs can provide significant energy savings, DOE is now aware of
evidence showing commercialized products are consistently achieving
such levels of improvement.
Regarding table 5.5.1 of the preliminary analysis TSD and Product
Classes 5A and 7, the California IOUs acknowledged that the breakdown
for different ELs was determined by the units that were selected for a
direct analysis that were purchased by DOE. The California IOUs
requested clarification regarding whether there were other design
options, like the dual evaporators, that were not necessarily used
primarily to improve efficiency. They pointed to the transition to the
R600A refrigerant in the new variable-speed compressor which has its
own added costs at EL-3. (California IOUs, Public Meeting Transcript
No. 30, p. 28-29)
The Joint Commenters stated DOE is significantly overestimating the
incremental cost to meet intermediate efficiency levels for Product
Classes 5A and 7 in the preliminary analysis. They stated that DOE
included dual evaporators as a design option at EL2, but it is not
reasonable to assume that dual evaporators would be employed to meet
intermediate ELs (i.e., EL2 and EL3) given their high cost if they
became the minimum standard. (Joint Commenters, No. 36, p. 2-3)
In response, DOE notes that while dual evaporators were considered
for product classes 5A and 7 in the preliminary analysis, DOE did not
include dual evaporators in its engineering analysis for the NOPR, due
to its high cost compared to efficiency gains.
The Joint Commenters stated that, since recent state laws and the
American Innovation and Manufacturing (``AIM'') Act of 2020 have caused
manufacturers to already transition to R-600a and since they expect a
full transition to occur well before any amended DOE standards would
take effect, DOE should not attribute conversion costs associated with
the refrigerant transition to updated efficiency standards. (Joint
Commenters, No. 36, p. 5-6) The California IOUs requested that Iso-
Butane (R-600a) be included as a refrigerant design option for all
products and be incorporated into efficiency levels with positive NPV
for Product Classes 5A and 7, before other less cost-effective design
options. (California IOUs, No. 33, p. 1-2)
DOE agrees that all manufacturers will have transitioned to R-600a
by the time of the compliance date for any new energy conservation
standards. Hence, the NOPR analysis assumes that all products will use
R-600a at all efficiency levels.
2. Cost Analysis
The cost analysis portion of the engineering analysis is conducted
using one or a combination of cost approaches. The selection of cost
approach depends on a suite of factors, including the availability and
reliability of public information, characteristics of the regulated
product, the availability and timeliness of purchasing the

[[Page 12475]]

product on the market. The cost approaches are summarized as follows:
Physical teardowns: Under this approach, DOE physically dismantles
a commercially available product, component-by-component, to develop a
detailed bill of materials for the product.
Catalog teardowns: In lieu of physically deconstructing a product,
DOE identifies each component using parts diagrams (available from
manufacturer websites or appliance repair websites, for example) to
develop the bill of materials for the product.
Price surveys: If neither a physical nor catalog teardown is
feasible (for example, for tightly integrated products such as
fluorescent lamps, which are infeasible to disassemble and for which
parts diagrams are unavailable) or cost-prohibitive and otherwise
impractical (e.g., large commercial boilers), DOE conducts price
surveys using publicly available pricing data published on major online
retailer websites and/or by soliciting prices from distributors and
other commercial channels.
In the present case, DOE conducted the analysis using a combination
of physical teardowns, catalog teardowns, and price surveys. Where
possible, physical teardowns were used to provide a baseline of
technology options and pricing for a specific product class at a
specific EL level. Then with technology option information, DOE
estimated the cost of various design options including compressors,
VIPs, and insulation, by extrapolating the costs from price surveys.
With specific costs for technology options, DOE was then able to
``build-up'' or ``build-down'' from the various teardown models to
finish the cost-efficiency curves. DOE used this approach primarily
because it allowed the comparison of different technologies and design
options.
3. Cost-Efficiency Results
The results of the engineering analysis are presented as cost-
efficiency data for each of the efficiency levels for each of the
product classes that were analyzed. DOE developed estimates of MPCs for
each unit in the teardown sample, and also performed additional
modeling based on representative teardown samples, to extend the
analysis to cover the range of efficiency levels appropriate for a
representative product. In this way, DOE estimated key design details
for this range of efficiency levels. The manufacturer interviews
provided input for these design details--DOE selected design options
that were, to the extent possible, representative of manufacturer input
regarding what design options would be required to attain specific
efficiency levels for the analyzed product classes. DOE then calculated
differential MPCs based on design option differences across the
efficiency levels--using the calculated MPCs of the teardown units and
the differential MPCs, DOE calculated MPCs for each considered
efficiency level. The efficiency levels and design option progression
for the analyzed standard-size refrigerator-freezers are presented in
Table IV.5 and Table IV.6 of this document. The cells in the table list
the design options that would be applied at each higher efficiency
level as compared with the next-lower efficiency level. Similarly, the
efficiency levels and design options for the other analyzed classes are
presented in Table IV.7 of this document. The resulting MPCs for the
analyzed classes across the considered efficiency levels are presented
in Tables IV.8 and IV.9 of this document. See chapter 5 of the NOPR TSD
for additional detail on the engineering analysis.
DOE seeks comment on the method for estimating manufacturing
production costs and on the resulting cost-efficiency curves.
See section VII.E of this document for a list of issues on which
DOE seeks comment.

Table IV.5--Efficiency Levels and Design Options for Analyzed Standard-Size Refrigerator-Freezers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Product class (AV \5\) EL1 EL2 EL3 EL4 EL5
--------------------------------------------------------------------------------------------------------------------------------------------------------
3 (11.9)
EL Percent \1\................. 5%.................... 10%................... 15%.................. 20%.................. 27%.
Design Options Added........... Variable Defrost; Higher-EER Compressor. Highest-EER VIP side walls and Variable-speed
Higher-EER Compressor. Compressor. doors. compressor
system.\3\
3 (21.0)
EL Percent \1\................. 5%.................... 10%................... 15%.................. 20%.................. 28%.
Design Options Added........... Higher-EER Compressor. Variable Defrost; Variable-speed 40% of Max-tech VIP VIP side walls and
Higher-EER Compressor. compressor system \4\. doors.
\3\.
5 (23.0) \2\
EL Percent \1\................. 8%.................... 13%................... 18%.................. 20%..................
Design Options Added........... BLDC Evaporator Fan Highest-EER Variable- 71% of Max-tech VIP VIP side walls and
Motor; Variable-speed speed Compressor. \4\. doors.
compressor system \3\.
5 (30.0) \2\
EL Percent \1\................. 7%.................... 11%................... 15%.................. 17%..................
--------------------------------------------------------------------------------------------------------------------
Design Options Added........... Efficiency levels were shifted such that the number of EL's matches that of the 23 AV analysis. MPCs were
interpolated to these new EL numbers. See Table IV.6IV.6 for design options for the efficiency levels analyzed in
the engineering analysis.
--------------------------------------------------------------------------------------------------------------------
5-BI \2\ (26.0)
EL Percent \1\................. 8%.................... 13%................... 14%..................
Design Options Added........... Variable-speed 90% of Max-tech VIP VIP side walls and
compressor system; \4\. doors.
\3\ 43% of Max-tech
VIP.
5A (35.0) \2\
EL Percent \1\................. 11%................... 16%................... 21.5%................
Design Options Added........... Variable-speed Highest-EER Variable- VIP side walls and
compressor system \3\. speed Compressor; 42% doors.
of Max-tech VIP \4\.
7 (31.5)
EL Percent \1\................. 5%.................... 9.5%.................. 14.5%................ 19%.................. 22%.
Design Options Added........... Highest-EER Compressor BLDC Evaporator Fan 38% of Max-tech VIP Highest-EER Variable- VIP side walls and
Motor; Variable-speed \4\. speed Compressor; doors.
compressor system \3\. 75% of Max-tech VIP
\4\.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\1\ Percent energy use less than baseline.
\2\ For three-door configuration.

[[Page 12476]]

\3\ Includes two-speed fan control.
\4\ The percentage of surface area of VIP as compared with the VIP surface area used in the maximum-technology design, for which VIP would be installed
for full coverage of the side walls and doors.
\5\ Adjusted Volume in cubic feet.

Table IV.6--Product Class 5, 30 AV, 3-Door Design Options and Manufacturing Production Cost
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Percent Energy use below Baseline 0% 8%................. 13%................ 17%.
Design Options Added............. Highest-EER Variable-speed VIP side walls and
Compressor; BLDC compressor system; doors.
Evaporator Fan \3\ 50% of Max-
Motor. tech VIP.
MPC.............................. $748 $776............... $809............... $845.
Incremental MPC.................. $28................ $62................ $97.
----------------------------------------------------------------------------------------------------------------
Note: This information is the initial engineering analysis output. LCC, PBP, and other downstream analyses used
the EL's and MPC's in Table IV.8.

Table IV.7--Efficiency Levels and Design Options for Analyzed Standard-Size Freezers and Compact Refrigerators,
Refrigerator-Freezers, and Freezers
----------------------------------------------------------------------------------------------------------------
Product class (AV \4\) EL1 EL2 EL3 EL4
----------------------------------------------------------------------------------------------------------------
9 (29.3)
EL Percent \1\.............. 10%............... 15%............... 20%............... 25%.
Design Options Added........ Highest-EER Highest-EER 38% of Max-tech VIP side walls and
Compressor; Variable-speed VIP \3\. door.
Switch to forced- compressor system
convection \2\.
condenser; BLDC
fans.
10 (26.0)
EL Percent \1\.............. 10%............... 15%............... 20%............... 23%.
Design Options Added........ Variable-speed Wall thickness Highest-EER VIP door.
compressor system increase. Variable-speed
\2\. Compressor.
11A (1.7)
EL Percent \1\.............. 10%............... 15%............... 20%............... 32%.
Design Options Added........ Wall thickness Higher-EER Higher-EER Highest-EER
increase. Compressor. Compressor; VIP Compressor.
sides and door.
11A (4.4)
EL Percent \1\.............. 10%............... 15%............... 20%............... 30%.
Design Options Added........ Higher-EER Wall thickness Higher-EER Variable Speed
Compressor. increase. Compressor. Compressor
System; \2\ VIP
sides walls and
door.
17 (9.0)
EL Percent \1\.............. 10%............... 15%............... 20%...............
Design Options Added........ Highest-EER 50% of Max-tech VIP side walls and
Variable Speed VIP \3\. door panels..
Compressor
System; \2\
Variable Defrost.
18 (8.9)
EL Percent \1\.............. 10%............... 15%............... 20%............... 30%.
Design Options Added........ Higher-EER Wall thickness Higher-EER Variable Speed
Compressor; increase. Compressor; VIP Compressor
Variable Defrost. door. System.\2\
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ Percent energy use less than baseline.
\2\ Includes two-speed fan control.
\3\ The percentage of surface area of VIP as compared with the VIP surface area used in the maximum-technology
design, for which VIP would be installed for full coverage of the side walls and doors.
\4\ Adjusted Volume in cubic feet.

Table IV.8--Cost-Efficiency Curves for Standard-Size Refrigerator-Freezers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Product class (AV \3\) EL0 EL1 EL2 EL3 EL4 EL5
--------------------------------------------------------------------------------------------------------------------------------------------------------
3 (11.9)
EL Percent \1\...................................... 0% 5% 10% 15% 20% 27%
MPC................................................. $419 $426 $427 $429 $478 $507
Incremental MPC..................................... $0 $7.14 $8.60 $10 $59 $88
3 (21.0)
EL Percent \1\...................................... 0% 5% 10% 15% 20% 28%
MPC................................................. $511 $513 $530 $554 $580 $618
Incremental MPC..................................... $0 $1.59 $19 $43 $69 $107
5 (23.0) \2\
EL Percent \1\...................................... 0% 8% 13% 18% 20% ..............
MPC................................................. $666 $691 $693 $736 $753 ..............
Incremental MPC..................................... $0 $25 $27 $70 $87 ..............
5 (30.0) \2\
EL Percent \1\...................................... 0% 7% 11% 15% 17% ..............
MPC................................................. $748 $773 $796 $827 $845 ..............
Incremental MPC..................................... $0 $26 $48 $79 $97 ..............
5-BI \3\ (26.0)
EL Percent \1\...................................... 0% 10% 15% 16% .............. ..............

[[Page 12477]]

MPC................................................. $947 $983 $1,015 $1,020 .............. ..............
Incremental MPC..................................... $0 $35 $68 $72 .............. ..............
5A (35.0) \2\
EL Percent \1\...................................... 0% 11% 16% 21.5% .............. ..............
MPC................................................. $818 $839 $872 $914 .............. ..............
Incremental MPC..................................... $0 $21 $55 $96 .............. ..............
7 (31.5)
EL Percent \1\...................................... 0% 5% 9.5% 14.5% 19% 22%
MPC................................................. $706 $708 $728 $748 $775 $791
Incremental MPC..................................... $0 $2.26 $22 $42 $69 $85
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\1\ Percent energy use less than baseline.
\2\ For three-door configuration.
\3\ Adjusted volume in cubic feet.

Table IV.9--Cost-Efficiency Curves for Standard-Size Freezers and Compact Refrigerators, Refrigerator-Freezers,
and Freezers
----------------------------------------------------------------------------------------------------------------
Product class (AV \2\) EL0 EL1 EL2 EL3 EL4
----------------------------------------------------------------------------------------------------------------
9 (29.3)
EL Percent \1\.............. 0% 10% 15% 20% 25%
MPC \2\..................... $519 $536 $568 $592 $620
Incremental MPC............. $0 $17 $49 $73 $101
10 (26.0)
EL Percent \1\.............. 0% 10% 15% 20% 23%
MPC......................... $549 $580 $604 $606 $629
Incremental MPC............. $0 $31 $55 $57 $81
11A (1.7)
EL Percent \1\.............. 0% 10% 15% 20% 32%
MPC......................... $170 $175 $176 $197 $201
Incremental MPC............. $0 $5.00 $6.22 $26.78 $31
11A (4.4)
EL Percent \1\.............. 0% 10% 15% 20% 30%
MPC......................... $255 $257 $263 $274 $322
Incremental MPC............. $0 $2.19 $8.12 $19 $67
17 (9.0)
EL Percent \1\.............. 0% 10% 15% 20% ..............
MPC......................... $226 $252 $272 $293 ..............
Incremental MPC............. $0 $26 $47 $67 ..............
18 (8.9)
EL Percent \1\.............. 0% 10% 15% 20% 30%
MPC......................... $213 $215 $225 $238 $269
Incremental MPC............. $0 $2.54 $12 $25 $56
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ Percent energy use less than baseline.
\2\ Adjusted volume in cubic feet.

4. Manufacturer Selling Price
To account for manufacturers' non-production costs and revenue
attributable to the product, DOE applies a multiplier (the manufacturer
markup) to the MPC. The resulting manufacturer selling price (``MSP'')
is the price at which the manufacturer charges its direct customer
(e.g., a retailer). DOE developed an average manufacturer markup by
examining the annual Securities and Exchange Commission (``SEC'') 10-K
reports \26\ filed by publicly traded manufacturers primarily engaged
in appliance manufacturing and whose combined product range includes
refrigerators, refrigerator-freezers, and freezers. See chapter 12 of
the NOPR TSD for additional detail on the manufacturer markup.
---------------------------------------------------------------------------

\26\ U.S. Securities and Exchange Commission, Electronic Data
Gathering, Analysis, and Retrieval (EDGAR) system. Available at
<a href="http://www.sec.gov/edgar/search/">www.sec.gov/edgar/search/</a> (last accessed July 1, 2022).
---------------------------------------------------------------------------

D. Markups Analysis

The markups analysis develops appropriate markups (e.g., retailer
markups, distributor markups, contractor markups) in the distribution
chain and sales taxes to convert the MSP estimates derived in the
engineering analysis to consumer prices, which are then used in the LCC
and PBP analysis. At each step in the distribution channel, companies
mark up the price of the product to cover business costs and profit
margin.
For refrigerators, refrigerator-freezers, and freezers, the main
parties in the distribution chain are retailers, wholesalers and
general contractors.
DOE developed baseline and incremental markups for each actor in
the distribution chain. Baseline markups are applied to the price of
products with baseline efficiency, while incremental markups are
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The

[[Page 12478]]

incremental markup is typically less than the baseline markup and is
designed to maintain similar per-unit operating profit before and after
new or amended standards.\27\
---------------------------------------------------------------------------

\27\ Because the projected price of standards-compliant products
is typically higher than the price of baseline products, using the
same markup for the incremental cost and the baseline cost would
result in higher per-unit operating profit. While such an outcome is
possible, DOE maintains that in markets that are reasonably
competitive it is unlikely that standards would lead to a
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------

Based on microeconomic theory, the degree to which firms can pass
along a cost increase depends on the level of market competition, as
well as sensitivity to price changes on both the supply and demand
sides (e.g., supply and demand elasticity). DOE examined industry data
from IBISWorld and the results suggest that the competition level among
each industry group and between industry groups involved in appliance
retail is medium to high.\28\ In addition, consumer demand for
household appliances is relatively inelastic with respect to price
(i.e., demand is not expected to decrease substantially with an
increase in the price of product). Given the medium to high level of
competition, it may be tenable for retailers to maintain a fixed markup
for a short period of time after an input price increase, but the
market competition should eventually force them to readjust their
markups to reach a medium-term equilibrium in which per-unit margin is
relatively unchanged before and after standards are implemented. DOE
developed the incremental markup approach based on the effect of energy
efficiency standards under second-degree price discrimination.\29\
Initially, firms supply products with a wide range of energy
efficiencies with the ``premium'' models significantly more energy
efficient than ``basic'' models. The firm earns low margins on the
basic models, and high margins on the premium models, based on customer
willingness to pay for relative energy efficiency. An energy efficiency
standard temporarily narrows the quality gap between the basic and
premium models. To prevent premium product customers shifting to basic
products that have lower margins, firms maintain their margins on
premium products by reducing their markups.
---------------------------------------------------------------------------

\28\ IBISWorld. US Industry Reports (NAICS): 45211--Department
Stores; 44311--Consumer Electronics Stores; 44411--Home Improvement
Stores; 42362 TV & Appliance Retailers in the US. 2022. IBISWorld.
(Last accessed February 1, 2022.) <a href="http://www.ibisworld.com">www.ibisworld.com</a>.
\29\ Spurlock, C.A., and Fujita, K.S. (2022). Equity
implications of market structure and appliance energy efficiency
regulation. Energy Policy, vol. 165, 112943, 1-12.
---------------------------------------------------------------------------

To estimate the markup under standards, DOE derived an incremental
markup that is applied to the incremental product costs of higher
efficiency products. The overall markup on the products meeting
standards is an average of the markup on the component of the cost that
is equal to the baseline product and the markup on the incremental cost
accrued due to standards, weighted by the share of each in the total
cost of the standards-compliant product.
DOE relied on economic data from the U.S. Census Bureau to estimate
average baseline and incremental markups. Specifically, DOE used the
2017 Annual Retail Trade Survey for the ``electronics and appliance
stores'' sector to develop retailer markups,\30\ the 2017 Annual
Wholesale Trade Survey for the ``household appliances, and electrical
and electronic goods merchant wholesalers'' sector to estimate
wholesaler markups,\31\ and the industry series for the ``residential
building construction'' sector published by the 2017 Economic Census to
derive general contractor markups.\32\
---------------------------------------------------------------------------

\30\ U.S. Census Bureau, Annual Retail Trade Survey. 2017.
<a href="http://www.census.gov/programs-surveys/arts.html">www.census.gov/programs-surveys/arts.html</a>.
\31\ U.S. Census Bureau, Annual Wholesale Trade Survey. 2017.
<a href="http://www.census.gov/awts">www.census.gov/awts</a>.
\32\ U.S. Census Bureau. 2017 Economic Census. <a href="https://www.census.gov/newsroom/press-kits/2020/2017-economic-census.html">https://www.census.gov/newsroom/press-kits/2020/2017-economic-census.html</a>.
---------------------------------------------------------------------------

Chapter 6 of the NOPR TSD provides details on DOE's development of
markups for refrigerators, refrigerator-freezers, and freezers.
DOE requests comment on its markups analysis and the underlying
assumptions, including price elasticities specific to the market for
new refrigeration products and any potential effects from a market for
second refrigerators or second-hand products.

E. Energy Use Analysis

The purpose of the energy use analysis is to determine the annual
energy consumption of refrigerators, refrigerator-freezers, and
freezers at different efficiencies in representative U.S. single-family
homes, multi-family residences, and commercial buildings, and to assess
the energy savings potential of increased product efficiency. The
energy use analysis estimates the range of energy use of refrigerators,
refrigerator-freezers, and freezers in the field (i.e., as they are
actually used by consumers). The energy use analysis provides the basis
for other analyses DOE performed, particularly assessments of the
energy savings and the savings in consumer operating costs that could
result from adoption of amended or new standards.
The DOE test procedure produces standardized results that can be
used to assess or compare the performance of products operating under
specified conditions. Actual energy usage in the field often differs
from that estimated by the test procedure because of variation in
operating conditions, the behavior of users, and other factors. In the
case of refrigerators, refrigerator-freezers, and freezers, DOE u

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