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Proposed Rule2023-05363

Energy Conservation Program: Energy Conservation Standards for Miscellaneous Refrigeration Products

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Published

March 31, 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 miscellaneous refrigeration products. EPCA also requires the U.S. Department of Energy ("DOE") 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 miscellaneous refrigeration products, 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 62 (Friday, March 31, 2023)]
[Proposed Rules]
[Pages 19382-19447]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-05363]

[[Page 19381]]

Vol. 88

Friday,

No. 62

March 31, 2023

Part II

Department of Energy

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10 CFR Part 430

Energy Conservation Program: Energy Conservation Standards for
Miscellaneous Refrigeration Products; Proposed Rule

Federal Register / Vol. 88 , No. 62 / Friday, March 31, 2023 /
Proposed Rules

[[Page 19382]]

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DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2020-BT-STD-0039]
RIN 1904-AF00

Energy Conservation Program: Energy Conservation Standards for
Miscellaneous Refrigeration Products

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

ACTION: Notice of proposed rulemaking; 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
miscellaneous refrigeration products. EPCA also requires the U.S.
Department of Energy (``DOE'') 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 miscellaneous refrigeration products, 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 May 30, 2023.
Meeting: DOE will hold a public meeting via webinar on Tuesday, May
2, 2023, from 1:00 p.m. to 4:00 p.m. See section IV, ``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 May 1, 2023.

ADDRESSES: Interested persons are encouraged to submit comments using
the Federal Rulemaking Portal at <a href="http://www.regulations.gov">www.regulations.gov</a>, under by docket
number EERE-2020-BT-STD-0039. Follow the instructions for submitting
comments. Alternatively, interested persons may submit comments,
identified by docket number EERE-2020-BT-STD-0039, by any of the
following methods:
Email: <a href="/cdn-cgi/l/email-protection#1a57484a282a282a494e5e2a2a29235a7f7f347e757f347d756c">[email&#160;protected]</a>. Include the docket number EERE-
2020-BT-STD-0039 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-2020-BT-STD-0039">www.regulations.gov/docket/EERE-2020-BT-STD-0039</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#d9bcb7bcabbea0f7aaadb8b7bdb8abbdaa99acaabdb6b3f7beb6af">[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. Email: <a href="/cdn-cgi/l/email-protection#f0b180809c99919e9395a384919e9491829483a185958384999f9e83b09595de949f95de979f86">[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#0f626e7b7b676a78217c6c67616a666b6a7d4f677e216b606a21686079">[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#8acbfafae6e3ebe4e9efd9feebe4eeebf8eef9dbffeff9fee3e5e4f9caefefa4eee5efa4ede5fc">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Proposed Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for Miscellaneous
Refrigeration Products
3. Test Procedure
4. Off Mode and Standby Mode
C. Deviation From Appendix A
III. General Discussion
A. Product Classes and Scope of Coverage
B. Definitions
C. Test Procedure
D. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
E. Energy Savings
1. Determination of Savings
2. Significance of Savings
F. 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
a. Product Classes With Automatic Icemakers
b. Addition of a Built-In Combination Cooler-Refrigerator-
Freezer With Bottom-Mounted Freezer and Automatic Icemaker Product
Class
2. Technology Options
B. Screening Analysis

[[Page 19383]]

1. Screened-Out Technologies
2. Technology Options
C. Engineering Analysis
1. Efficiency Analysis
a. Built-In Classes
b. Baseline Efficiency/Energy Use
c. Higher Efficiency Levels
d. VIP and VSC Analysis
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. Product Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Maintenance and Repair Costs
6. Product Lifetime
7. Discount Rates
8. Energy Efficiency Distribution in the No-New-Standards Case
9. 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. Supply Chain Constraints
b. Built-in Product Classes
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 MREF 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 Webinar
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 \2\ of EPCA, established the Energy
Conservation Program for Consumer Products Other Than Automobiles. (42
U.S.C. 6291-6309) These products include miscellaneous refrigeration
products (``MREFs''), the subject of this 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 miscellaneous refrigeration products. The proposed standards, which
are expressed in kWh/yr, are shown in Table I.1. These proposed
standards, if adopted, would apply to all miscellaneous refrigeration
products listed in Table I.1 manufactured in, or imported into, the
United States starting on the date 5 years after the publication of the
final rule for this rulemaking.

Table I.1--Proposed Energy Conservation Standards for Miscellaneous
Refrigeration Products
------------------------------------------------------------------------
Equations for maximum energy use
Product class (kWh/yr)
------------------------------------------------------------------------
1. Freestanding compact coolers 5.52AV + 109.1
(``FCC'').
2. Freestanding coolers (``FC''). 5.52AV + 109.1
3. Built-in compact coolers 5.52AV + 109.1
(``BICC'').

[[Page 19384]]

4. Built-in coolers (``BIC'').... 6.30AV + 124.6
C-3A. Cooler with all- 4.11AV + 117.4
refrigerator--automatic defrost.
C-3A-BI. Built-in cooler with all- 4.67AV + 133.0
refrigerator--automatic defrost.
C-5-BI. Built-in cooler with 5.47AV + 196.2 + 28I
refrigerator-freezer--automatic
defrost with bottom-mounted
freezer.
C-9. Cooler with upright freezer 5.58AV + 147.7 + 28I
with automatic defrost without
an automatic icemaker.
C-9-BI. Built-in cooler with 6.38AV + 168.8 + 28I
upright freezer with automatic
defrost without an automatic
icemaker.
C-13A. Compact cooler with all- 4.74AV + 155.0
refrigerator--automatic defrost.
C-13A-BI. Built-in compact cooler 5.22AV + 170.5
with all-refrigerator--automatic
defrost.
------------------------------------------------------------------------
AV = Total adjusted volume, expressed in ft\3\, as determined in
appendix A to subpart B of 10 CFR part 430.
I = 1 for a product with an automatic icemaker and = 0 for a product
without an automatic icemaker.

A. Benefits and Costs to Consumers

Table I.2 presents DOE's evaluation of the economic impacts of the
proposed standards on consumers of MREFs, as measured by the average
life-cycle cost (``LCC'') savings and the simple payback period
(``PBP'').\3\ The average LCC savings are positive for all product
classes, and the PBP is less than the average lifetime of MREFs, which
varies by product class (see section IV.F.6 of this document).
---------------------------------------------------------------------------

\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.8 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.2--Impacts of Proposed Energy Conservation Standards on Consumers of Miscellaneous Refrigeration
Products
----------------------------------------------------------------------------------------------------------------
Product class Average LCC savings [2021$] Simple payback period (years)
----------------------------------------------------------------------------------------------------------------
FCC................................... 12.6............................... 6.8
FC.................................... 28.0............................... 8.0
BICC.................................. 2.9................................ 7.9
BIC................................... 57.3............................... 4.0
C-13A................................. 12.0............................... 6.9
C-13A-BI.............................. 15.3............................... 6.7
C-3A.................................. 31.5............................... 1.7
C-3A-BI............................... 36.7............................... 1.6
----------------------------------------------------------------------------------------------------------------
Note: See Table I.1 for definition of the product class acronyms.

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

B. Impact on Manufacturers

The industry net present value (``INPV'') is the sum of the
discounted cash flows starting with the publication year (2023) of the
NOPR and extending over a 30-year period following the expected
compliance date of the standards (2023 to 2058). Using a real discount
rate of 7.7 percent, DOE estimates that the INPV for manufacturers of
MREFs, in the case without amended standards is $742.0 million.\4\
Under the proposed standards, the change in INPV is estimated to range
from -12.1 percent to -8.4 percent, which is approximately -$89.8
million to -$62.7 million. In order to bring products into compliance
with amended standards, it is estimated that the industry would incur
total conversion costs of $126.9 million.
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\4\ Unless otherwise noted, all monetary values in this document
are expressed in 2021 dollars.
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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.

C. National Benefits and Costs

DOE's analyses indicate that the proposed energy conservation
standards for MREFs would save a significant amount of energy. Relative
to the case without amended standards, the lifetime energy savings for
MREFs purchased in the 30-year period that begins in the anticipated
year of compliance with the amended standards (2029-2058) amount to
0.31 quadrillion British thermal units (``Btu''), or quads.\5\ This
represents a savings of 19.6 percent relative to the energy use of
these products in the case without amended standards (refer ed to as
the ``no-new-standards case'').
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\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.1 of this document.
---------------------------------------------------------------------------

The cumulative net present value (``NPV'') of total consumer
benefits of the proposed standards for MREFs ranges from $0.14 billion
(at a 7-percent discount rate) to $0.69 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
miscellaneous refrigeration products purchased in 2029-2058.
In addition, the proposed standards for MREFs are projected to
yield significant environmental benefits. DOE estimates that the
proposed standards would result in cumulative emission

[[Page 19385]]

reductions (over the same period as for energy savings) of 10.4 million
metric tons (``Mt'') \6\ of carbon dioxide (``CO<INF>2</INF>''), 4.8
thousand tons of sulfur dioxide (``SO<INF>2</INF>''), 15.9 thousand
tons of nitrogen oxides (``NO<INF>X</INF>''), 70.3 thousand tons of
methane (``CH<INF>4</INF>''), 0.11 thousand tons of nitrous oxide
(``N<INF>2</INF>O''), and 0.03 tons of mercury (``Hg'').\7\ DOE used
interim SC-GHG values developed by an Interagency Working Group on the
Social Cost of Greenhouse Gases (IWG) for the CO<INF>2</INF>
projections.
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\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 (``AEO 2022''). AEO 2022 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 AEO 2022 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 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 monetized climate
benefits associated with the average SC-GHG at a 3-percent discount
rate are estimated to be $0.5 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 GHG 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>
(Last accessed September 22, 2022).
---------------------------------------------------------------------------

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 monetized health
benefits would be $0.3 billion using a 7-percent discount rate, and
$0.8 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.3 summarizes the economic benefits and costs expected to
result from the proposed standards for miscellaneous refrigeration
products. There are other important unquantified effects, including
certain unquantified climate benefits, unquantified public health
benefits from the reduction of toxic air pollutants, direct
PM<INF>2.5</INF> and other emissions, unquantified energy security
benefits, and distributional effects, among others.

Table I.3--Summary of Monetized Benefits and Costs of Proposed Energy
Conservation Standards for Miscellaneous Refrigeration Products (TSL 4)
[Billion 2021$]
------------------------------------------------------------------------

------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 2.0
Climate Benefits *...................................... 0.5
Health Benefits **...................................... 0.8
Total Monetized Benefits [dagger]....................... 3.3
Consumer Incremental Product Costs [Dagger]............. 1.3
Monetized Net Benefits.................................. 2.0
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 0.8
Climate Benefits * (3% discount rate)................... 0.5
Health Benefits **...................................... 0.3
Total Monetized Benefits [dagger]....................... 1.6
Consumer Incremental Product Costs...................... 0.7
Monetized Net Benefits.................................. 0.9
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with product
name shipped in 2029-2058. These results include benefits to consumers
which accrue after 2058 from the products shipped in 2029-2058.
* 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 GHG 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 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.

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

[[Page 19386]]

of purchasing the covered products and are measured for the lifetime of
miscellaneous refrigeration products shipped in 2029-2058. The benefits
associated with reduced emissions achieved as a result of the proposed
standards are also calculated based on the lifetime of miscellaneous
refrigeration products shipped in 2029-2058. Total benefits for both
the 3-percent and 7-percent cases are presented using the average GHG
social costs with 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.4 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 NOx 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
$81.2 million per year in increased equipment costs, while the
estimated annual benefits are $97.6 million in reduced equipment
operating costs, $28.9 million in monetized climate benefits, and $35.4
million in monetized health benefits. In this case, the monetized net
benefit would amount to $80.6 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards is $81.0 million per year in
increased equipment costs, while the estimated annual benefits are
$123.1 million in reduced operating costs, $28.9 million in monetized
climate benefits, and $49.5 million in monetized health benefits. In
this case, the monetized net benefit would amount to $120.4 million per
year.

Table I.4--Annualized Monetized Benefits and Costs of Proposed Energy Conservation Standards for Miscellaneous
Refrigeration Products (TSL 4)
[Million 2021$/year]
----------------------------------------------------------------------------------------------------------------
Low-net- High-net-
Primary benefits benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 123.1 116.3 131.2
Climate Benefits *.............................................. 28.9 28.1 29.6
Health Benefits **.............................................. 49.5 48.2 50.8
Total Monetized Benefits [dagger]............................... 201.4 192.6 211.6
Consumer Incremental Product Costs [dagger]..................... 81.0 82.3 79.4
Monetized Net Benefits.......................................... 120.4 110.3 132.2
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 97.6 92.7 103.3
Climate Benefits * (3% discount rate)........................... 28.9 28.1 29.6
Health Benefits **.............................................. 35.4 34.6 36.2
Total Monetized Benefits [dagger]............................... 161.9 155.4 169.2
Consumer Incremental Product Costs.............................. 81.2 82.4 79.8
Monetized Net Benefits.......................................... 80.6 72.9 89.4
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with miscellaneous refrigeration products shipped in
2029-2058. These results include benefits to consumers which accrue after 2058 from the products shipped in
2029-2058. 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
NOPR). 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 GHG
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. 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 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.

D. 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 regards to
technological feasibility products achieving these standard levels are
already commercially available for all product classes covered by this
proposal. As for economic justification,

[[Page 19387]]

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 miscellaneous refrigeration products is $81.2
million per year in increased product costs, while the estimated annual
benefits are $97.6 million in reduced product operating costs, $28.9
million in monetized climate benefits and $35.4 million in monetized
health benefits. The net monetized benefit amounts to $80.6 million 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 0.31 quad (FFC), the
equivalent of the electricity use of 3.4 million homes in one year. In
addition, they are projected to reduce GHG emissions. The NPV of
consumer benefit for these projected energy savings is $0.14 billion
using a discount rate of 7 percent, and $0.69 billion using a discount
rate of 3 percent. The cumulative emissions reductions associated with
these energy savings are 10.4 Mt of CO<INF>2</INF>, 4.8 thousand tons
of SO<INF>2</INF>, 15.9 thousand tons of NO<INF>X</INF>, 0.03 tons of
Hg, 70.3 thousand tons of CH<INF>4</INF>, and 0.11 thousand tons of
N<INF>2</INF>O. The estimated monetary value of the climate benefits
from reduced GHG emissions (associated with the average SC-GHG at a 3-
percent discount rate) is $0.5 billion. The estimated monetary value of
the health benefits from reduced SO<INF>2</INF> and NO<INF>X</INF>
emissions is $0.3 billion using a 7-percent discount rate and $0.8
billion using a 3-percent discount rate. As such, 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
miscellaneous refrigeration products.

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 which, in addition to identifying
particular consumer products and commercial equipment as covered under
the statute, permits the Secretary of Energy to classify additional
types of consumer products as covered products. (42 U.S.C. 6292(a)(20))
DOE added MREFs as covered products through a final determination of
coverage published in the Federal Register on July 18, 2016 (the ``July
2016 Final Coverage Determination''). 81 FR 46768. MREFs are consumer
refrigeration products other than refrigerators, refrigerator-freezers,
or freezers, which include coolers and combination cooler refrigeration
products. 10 CFR 430.2. MREFs include refrigeration products such as
coolers (e.g., wine chillers and other specialty products) and
combination cooler refrigeration products (e.g., wine chillers and
other specialty compartments combined with a refrigerator,
refrigerator-freezers, or freezers). EPCA further provides that, not
later than 6 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)) Not later than
three years after issuance of a final determination not to amend
standards, 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)(3)(B))
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 miscellaneous refrigeration products
appears at 10 CFR part 430, subpart B, appendix A,

[[Page 19388]]

Uniform Test Method for Measuring the Energy Consumption of
Refrigerators, Refrigerator-Freezers, and Miscellaneous Refrigeration
Products (``appendix A'').
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 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 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 miscellaneous
refrigeration products address standby mode and off mode energy use. In
this rulemaking, DOE intends to incorporate such energy use into any
amended energy conservation standards that it may adopt.

B. Background

1. Current Standards
DOE added MREFs as covered products through a final determination
of coverage published in the Federal Register on July 18, 2016 (the
``July 2016 Final Coverage Determination''). 81 FR 46768. In that
determination, DOE noted that MREFs, on average, consume more than 150
kilowatt hours per year (``kWh/yr'') and that the aggregate annual
national energy use of these products exceeds 4.2 terawatt hours
(``TWh''). 81 FR 46768, 46775. In addition to establishing coverage,
the July 2016 Final Coverage Determination established definitions for
``miscellaneous refrigeration products,'' ``coolers,'' and
``combination cooler refrigeration products'' in 10 CFR 430.2. 81 FR
46768, 46791-46792.
On October 28, 2016, DOE published a direct final rule (the
``October 2016 Direct Final Rule'') in which it adopted energy
conservation standards for MREFs consistent with the recommendations
from a negotiated rulemaking working group established under the
Appliance Standards and Rulemaking Federal Advisory Committee. 81 FR
75194. Concurrent with the October 2016 Direct Final Rule, DOE
published a NOPR in which it proposed and requested comments on the
standards set forth in the direct final rule. 81 FR 74950. On May 26,
2017, DOE published a notice in the Federal Register in which it
determined that the comments received in response to the October 2016
Direct Final Rule did not provide a reasonable basis for withdrawing
the rule and, therefore, confirmed the adoption of the energy
conservation standards established in that direct final rule. 82 FR
24214.
These current standards for MREFs are set forth in DOE's
regulations at 10 CFR 430.32(aa)(1)-(2) and are repeated

[[Page 19389]]

solely for reference in Table II.1 to aid the reader.

Table II.1--Federal Energy Conservation Standards for MREFs
------------------------------------------------------------------------
Equations for maximum energy use
Product class (kWh/yr)
------------------------------------------------------------------------
1. Freestanding compact coolers 7.88AV + 155.8
(``FCC'').
2. Freestanding coolers (``FC''). 7.88AV + 155.8
3. Built-in compact coolers 7.88AV + 155.8
(``BICC'').
4. Built-in coolers (``BIC'').... 7.88AV + 155.8
C-3A. Cooler with all- 4.57AV + 130.4
refrigerator--automatic defrost.
C-3A-BI. Built-in cooler with all- 5.19AV + 147.8
refrigerator--automatic defrost.
C-9. Cooler with upright freezer 5.58AV + 147.7
with automatic defrost without
an automatic icemaker.
C-9-BI. Built-in cooler with 6.38AV + 168.8
upright freezer with automatic
defrost without an automatic
icemaker.
C-9I. Cooler with upright freezer 5.58AV + 231.7
with automatic defrost with an
automatic icemaker.
C-9I-BI. Built-in cooler with 6.38AV + 252.8
upright freezer with automatic
defrost with an automatic
icemaker.
C-13A. Compact cooler with all- 5.93AV + 193.7
refrigerator--automatic defrost.
C-13A-BI. Built-in compact cooler 6.52AV + 213.1
with all-refrigerator--automatic
defrost.
------------------------------------------------------------------------
AV = Total adjusted volume, expressed in ft\3\, as determined in
appendix A to subpart B of 10 CFR part 430.

2. History of Standards Rulemaking for Miscellaneous Refrigeration
Products
On December 8, 2020, DOE published a notice that it was initiating
an early assessment review to determine whether any new or amended
standards would satisfy the relevant requirements of EPCA for a new or
amended energy conservation standard for MREFs and a request for
information (``RFI''). 85 FR 78964 (``December 2020 Early Assessment
Review RFI'').
Comments received following the publication of the December 2020
Early Assessment Review 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 technical
support document (``TSD'') on January 21, 2022 (``January 2022
Preliminary Analysis''). 87 FR 3229. DOE subsequently held a public
meeting on March 7, 2022, to discuss and receive comments on the
January 2022 Preliminary Analysis. The January 2022 Preliminary
Analysis that presented the methodology and results of the preliminary
analysis is available at: <a href="http://www.regulations.gov/document/EERE-2020-BT-STD-0039-0009">www.regulations.gov/document/EERE-2020-BT-STD-0039-0009</a>.
---------------------------------------------------------------------------

\13\ Comments are available at <a href="http://www.regulations.gov/docket/EERE-2020-BT-STD-0039/comments">www.regulations.gov/docket/EERE-2020-BT-STD-0039/comments</a>.
---------------------------------------------------------------------------

DOE received five docket comments in response to the January 2022
Preliminary Analysis from the interested parties listed in Table II.1.

Table II.1--January 2022 Preliminary Analysis Written Comments
------------------------------------------------------------------------
Reference in this
Organization(s) NOPR Organization type
------------------------------------------------------------------------
Association of Home Appliance AHAM.............. Trade
Manufacturers. Organization.
Appliance Standards Awareness ASAP.............. Efficiency
Project. Organization.
California Investor-Owned CA IOUs........... Utility Supplier.
Utilities.
Northwest Energy Efficiency NEEA.............. Efficiency
Alliance. Organization.
Sub Zero Group, Inc............. Sub Zero.......... Manufacturer.
------------------------------------------------------------------------

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 miscellaneous refrigeration
products. (Docket No. EERE-2020-BT-STD-0039, which is maintained at
<a href="https://www.regulations.gov/document/EERE-2020-BT-STD-0039">https://www.regulations.gov/document/EERE-2020-BT-STD-0039</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.
On October 12, 2021, DOE published in the Federal Register a final
rule amending the test procedures for MREFs and other consumer
refrigeration products at appendix A and appendix B of 10 CFR part 430
(the ``October 2021 TP Final Rule''). 86 FR 56790 (October 12, 2021).
The October 2021 TP Final Rule incorporates by reference the most
recent industry test procedure, AHAM Standard HRF-1, ``Energy and
Internal Volume of Consumer Refrigeration Products'' (``AHAM HRF-1-
2019''). However, DOE did not require 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 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
determined that the test procedure amendments are not expected to
impact the measured energy use of consumer refrigeration products,
including MREFs, as compared to the test procedure in place at the time
of the October 2021 Test Procedure Final Rule. 86 FR 56790.

[[Page 19390]]

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, which aligns with the icemaker energy use in HRF-1-2019. 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 in the October 2021 TP Final Rule. (See 86 FR
56822, October 12, 2021) Hence, this change is proposed in this
document.
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
test procedures for refrigeration products 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. 79 FR 22320, 22345. The approach of testing with
connected functions on but not connected to a network account for
energy consumption of such functions as part of active mode testing,
and as a result, this method provides consumers with representative
estimates of energy consumption.

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
appropriate to deviate from this step-in appendix A and to instead
publish this NOPR without issuing a framework document. A framework
document is intended to introduce and summarize the various analyses
DOE conducts during the rulemaking process and requests initial
feedback from interested parties. As discussed in the preceding
section, prior to this NOPR, DOE issued an early assessment request for
information in which DOE identified and sought comment on the analyses
conducted in support of the most recent energy conservation standards
rulemaking, for which, DOE provided a 75-day comment period. 85 FR
78964, 78965-78966 (Dec. 8, 2020) (the ``December 2020 Early Assessment
Review RFI'') DOE then issued the January 2022 Preliminary Analysis,
seeking further general comments from stakeholders regarding the
analyses conducted to support the upcoming standards rulemaking, for
which, DOE provided a 60-day comment period for the January 2022
Preliminary Analysis. 87 FR 3229 (Jan. 21, 2022)
As DOE is intending to rely on substantively the same analytical
methods as in the most recent rulemaking, publication of a framework
document would be largely redundant with the published early assessment
RFI and preliminary analysis. As such, DOE is not publishing a
framework document.
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 appropriate to provide a 60-day comment period. As
previously discussed, DOE provided a 60-day comment period on January
2022 Preliminary Analysis. 87 FR 3229. DOE subsequently held a public
meeting on March 7, 2022, to discuss and received comments on the
January 2022 Preliminary Analysis. Consequently, DOE has determined it
is appropriate to provide a 60-day comment period on the NOPR, which
the Department believes will provide interested parties with a
meaningful opportunity to comment on the proposed rule.

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))
To simplify the structure for presentation of maximum allowable
energy use equations, DOE is proposing, for class pairs for which one
class includes an icemaker and the other does not, to represent the
icemaker energy use adder in a single energy use equation rather than
in two separate equations. The product class discussion in section IV
below explores this issue further. In addition, DOE is proposing
standard levels for a new class covering built-in combination cooler-
refrigerator-freezers with a bottom-mounted freezer, both with and
without an automatic icemaker, (``combination cooler 5-BI''). This is
also discussion in greater detail in section IV of this document.

B. Definitions

In 10 CFR 430.2, DOE has established definitions for a variety of
refrigeration products, including refrigerators, refrigerator-freezers,
freezers, and coolers and combination cooler refrigeration products
defined as MREFs. DOE recognizes that there are some products that may,
based on their physical and operational characteristics, meet more than
one of the definitions in Sec. 430.2. This includes certain
combination cooler refrigeration products, such as cooler-
refrigerators, cooler-refrigerator-freezers, or cooler-freezers. When
standards for miscellaneous refrigeration products were established,
they were not established for all potential combination products.
Rather, standards were established for combination products that were
on the market at the time of the final rule. 81 FR 75194, 75210, 75215-
75216 (October 28, 2016). In doing so, DOE anticipated that
manufacturers would eventually introduce combination products for which
standards were not originally established under Sec. 430.32(aa). In
these cases, a particular product could also meet the definition of a
refrigerator, refrigerator-freezer, or freezer. To specifically
delineate between those products and MREF products currently

[[Page 19391]]

subject to an energy conservation standard in Sec. 430.32(aa), the
definitions of refrigerator, refrigerator-freezer, or freezer in Sec.
430.2 contain a provision that excludes any miscellaneous refrigeration
product that must comply with an applicable miscellaneous refrigeration
product energy conservation standard. Consequently, MREF products not
exempted by that provision may still be defined as a refrigerator,
refrigerator-freezer, or freezer.
In this NOPR, DOE is clarifying that a product that combines a
cooler with a refrigerator, refrigerator-freezer, or freezer that
otherwise meets the definition of one of those product types in Sec.
430.2 and is not excluded from the definition through coverage by a
standard in 10 CFR 430.32(aa) as a miscellaneous refrigeration product,
must be tested and certified as a refrigerator, refrigerator-freezer,
or freezer according to the applicable test procedure in appendix A or
appendix B (with additional instruction addressing the cooler
compartment of a cooler-freezer, as applicable--these additional
instructions are discussed in section III.C of this document), be
certified according to the certification requirements in 10 CFR 429.14,
and meet the energy conservation standard for the applicable product
class of refrigerator, refrigerator-freezer, or freezer. DOE concludes
that the current regulations require this approach for such products
and is proposing the changes to the regulatory language simply as
clarification.
To ensure this clarification is properly applied, DOE identified
potential clarifying amendments to the refrigerator and freezer
definitions in Sec. 430.2 that would lead to the appropriate
determination of coverage for combination refrigeration products that
do not have a prescribed MREF energy conservation standard. In
particular, in this NOPR DOE proposes to amend the refrigerator and
freezer definitions to clarify that the definitions do apply to
products that have a cooler compartment included in addition to the
fresh food compartment (for a refrigerator) or freezer compartment (for
a freezer). DOE notes that this coverage status is already clear in the
refrigerator-freezer definition, which explicitly allows for additional
compartments other than the fresh food and freezer compartments, which
are defined based on operating temperature, by including allowing the
product to have compartments that may operate outside these defined
parameters. DOE's proposal would make similar clarifications for the
refrigerator and freezer definitions.
DOE requests comment on its proposal to amend the refrigerator and
freezer definitions in Sec. 430.2 to clarify that products that would
otherwise be considered a refrigerator or a freezer that also include a
cooler compartment would be considered a refrigerator or a freezer,
unless a miscellaneous refrigeration product energy conservation
standard in Sec. 430.32(aa) is applicable for the product.

C. 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 miscellaneous refrigeration
products are expressed in terms of Annual Energy Use, expressed in kWh/
year. (See 10 CFR 430.32(a).)
As previously discussed, DOE planned to delay adopting for consumer
refrigeration products the revised icemaker energy use adder of 28 kWh/
yr that is in AHAM HRF-1-2019--which is the industry test standard--
until the compliance date of a possible amended standard. As discussed
in the October 2021 TP final rule, DOE determined it would not require
testing with the amended icemaker energy use adder until the compliance
dates of the next amended energy conservation standards for
refrigeration products. 86 FR 56815. Therefore, as discussed
previously, this NOPR proposes product classes that implement the 28
kWh/year icemaker adder, consistent with the icemaker energy use in
HRF-1-2019, and also proposes to adopt the updated icemaker adder for
MREF, to be used on or after the compliance date of revised standards.
As previously discussed, DOE is proposing clarifying amendments to
product definitions indicating that products that include a cooler
compartment in addition to a fresh food or freezer compartment but do
not have an MREF energy conservation standard, would still meet the
refrigerator or freezer definitions, as applicable. Additionally, DOE
is proposing clarifying amendments to appendix A and appendix B, as it
relates to testing combination cooler-freezers as well as testing
combination refrigeration products that do not have a prescribed MREF
energy conservation standards.
Specifically, DOE is proposing to add sub-sections to appendix A
and appendix B to clarify the calculation of average per-cycle energy
consumption for combination cooler-freezers and freezers with a cooler
compartment, by referring to section 5.9.3 of HRF-1 2019 and stating
specific ``k'' values to be used in equations presented therein. DOE
also proposes to amend appendix B section 5.2 to refer to section 5.2
of appendix A when testing freezers with cooler compartments, because
the appendix A requirements are more appropriate for products with more
than one compartment. Lastly, DOE proposes to amend appendix B by
adding a clarification to section 5.3 to specify the value of variable
``K'' when referencing section 5.8.2 of HRF-1-2019.
ASAP stated in response to the January 2022 Preliminary Analysis
that they understand that produce growers with a source of
refrigeration likely meet the definition of a cooler but, due to unique
components present in a produce grower that maintain an environment
with temperature and humidity controls that are conducive to growing
plants, produce growers cannot be tested in the same manner as coolers
whose primary function is to chill beverage products. NEEA commented on
a need for implementing different test procedures for produce growers,
citing technology differences between produce growers and other
miscellaneous refrigeration products. NEEA stated that test procedures
for produce growers should include energy use measurements for cabinet
temperature and humidity control systems, water distribution systems,
and carbon dioxide injection systems. ASAP and NEEA encouraged DOE to
establish test procedures for these products. (ASAP, No. 19, p. 3;
NEEA, No. 21, pp. 3-4)
DOE is aware of the produce grower market and appreciates input on
this topic. At this point, only GE Appliances, a Haier Company
(``GEA'') has submitted a petition for waiver from test procedures
covering MREFs. GEA initially also requested an interim waiver. In an
initial denial of the petition for interim waiver, DOE tentatively
concluded that the GEA model meets the definition of a cooler, because
the product consists of a cabinet used with one or more doors, and
maintains compartment temperatures no lower than 39 degrees Fahrenheit,
as determined when tested in a 90-degree Fahrenheit ambient
temperature. 86 FR 35766, 35768 (July 7, 2021). In addition to this,
DOE tentatively determined that the requested alternate test procedure

[[Page 19392]]

would not result in measured energy use of the basic model that is
representative of actual energy used during representative average use.
Id. In November 2021, GEA submitted a revised petition for waiver and
interim waiver for its grower product that proposed a revised
alternative test method designed to address the concerns that DOE
expressed in its denial of the GEA's original petition. Having
considered the merits of GEA's revised approach, and receiving no
comments in opposition, DOE approved use of the revised alternate test
procedure for rating GEA's product through the publication of a
notification of decision and order on October 17, 2022 (87 FR 62835),
reiterating that while the In-Home Grower basic model meets the cooler
definition, it is not subject to the cooler energy conservation
standards because of its unique characteristics, as discussed in the
November 2021 Notification of Petition for Waiver. (87 FR 62835, 62838)
In consideration of the other produce growers mentioned in ASAP's
comment--the Viking Under-counter Micro Green & Herb Cabinet--GCV12,
the Seedo Automated Home Grow Device, and the Bloom In-Home Grow
System--DOE has not received waiver petitions for these products but
will consider investigating these products, including whether they may
be subject to testing requirements based on meeting the definition of
an MREF product, as GEA's product does.
NEEA advocated for the implementation of a test procedure to
calculate the energy impact of interior lighting in all miscellaneous
refrigeration products. NEEA claims that the use of lighting differs
largely depending on manufacturer and personal usage, and with the
proliferation of glass doors for coolers, interior lighting plays a
large role in energy calculations. (NEEA, No. 21, pp. 4-5)
AHAM states the vast majority of the miscellaneous refrigeration
product designs on the market no longer use incandescent lighting and
have shifted to light-emitting diode (``LED'') technology, meaning
efficiency gains from lighting are limited, and efforts to further
regulate lighting options in miscellaneous refrigeration products will
place undue burden on manufacturers. (AHAM, No. 18, p. 7)
The test procedure does not include measurement of energy use with
lighting turned on. DOE last finalized its test procedure for consumer
refrigeration products including MREFs on October 12, 2021. 86 FR
56790. As part of the rulemaking to establish this test procedure, DOE
published a request for information (``RFI'') (82 FR 29780) on June 30,
2017, and a NOPR (84 FR 70842) on December 23, 2019. No comments in
response to the RFI or NOPR suggested that lighting energy use should
be included as part of the test procedure. In the final rule initially
establishing the test procedures for MREF on July 18, 2016, DOE
indicated that it set the requirement to test these products with light
switches in the off position based on field surveys indicating that 90
percent of consumers kept light switches off in coolers. 81 FR 46768,
46782. This requirement was also consistent with the recommendations of
the Working Group that negotiated MREF test procedures and energy
conservation standards under the auspices of the Appliance Standards
and Rulemaking Federal Advisory Committee (``ASRAC''). Id. When DOE
next considers revisions to the test procedure for MREF, DOE may
request information regarding trends affecting lighting energy use in
these products, and, based on information obtained, may consider at
that time, whether the test procedure should be revised to include
lighting energy.

D. 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
rulemaking. 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 CFR the
Process Rule.
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 miscellaneous refrigeration products, 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
technical support document (``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
miscellaneous refrigeration products, 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 rulemaking
are described in section IV.C.1.c of this proposed rule and in chapter
5 of the NOPR TSD.

E. Energy Savings

1. Determination of Savings
For each trial standard level (``TSL''), DOE projected energy
savings from application of the TSL to miscellaneous refrigeration
products purchased in the 30-year period that begins in the year of
compliance with the proposed standards (2029-2058).\15\ The savings are
measured over the entire lifetime of miscellaneous refrigeration
products purchased in the previous 30-year 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.
---------------------------------------------------------------------------

\15\ 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 miscellaneous refrigeration products.

[[Page 19393]]

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.\16\ 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.
---------------------------------------------------------------------------

\16\ 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.\17\ For
example, some covered products and equipment have most of their 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.
---------------------------------------------------------------------------

\17\ 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).
---------------------------------------------------------------------------

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,
health benefits, 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).

F. 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 manufacturing 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 \18\ of consumers that may be affected
disproportionately by a standard.
---------------------------------------------------------------------------

\18\ For this NOPR, DOE analyzed the impacts of the considered
standard levels on senior-only households.
---------------------------------------------------------------------------

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 products
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 will
purchase the covered products in the first year of compliance with new
or amended standards. 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
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.E, DOE uses the NIA spreadsheet model to
project NES.
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

[[Page 19394]]

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 and health 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; the estimated emissions impacts are reported in section I.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.9 of this proposed rule.

IV. Methodology and Discussion of Related Comments

This section addresses the analyses DOE has performed for this
rulemaking with regard to miscellaneous refrigeration products.
Separate paragraphs 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 rulemaking: <a href="http://www.regulations.gov/docket/EERE-2020-BT-STD-0039">www.regulations.gov/docket/EERE-2020-BT-STD-0039</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 in response to the January 2022
Preliminary Analysis 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 they support DOE in its efforts to ensure a national
marketplace through the Appliance Standards Program. AHAM also stated
that amended standards for MREFs may not be justified under EPCA given
the relatively low number of shipments in the MREF product category and
the limited opportunity for energy savings that result from that fact.
AHAM therefore stated, especially given DOE's large backlog of
rulemakings (many of which involve products with larger energy savings
opportunities), DOE should prioritize other rulemakings. (AHAM, No. 18,
p. 1)
While miscellaneous refrigeration products have a smaller number of
shipments when compared to refrigerators, refrigerator-freezers, and
freezers, (``RFs''), that is not a factor DOE considers in determining
when to proceed with reviewing a standard. DOE is mandated by 42 U.S.C.
6295(m)(1) to reconsider energy standards no later than 6 years after
issuance of any final rule establishing or amending standards.

[[Page 19395]]

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 rulemaking 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 miscellaneous refrigeration
products. 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 January 2022 Preliminary Analysis, DOE identified one
potential product class modification for miscellaneous refrigeration
products. DOE did receive a comment in response to the January 2022
Preliminary Analysis regarding the product class structure, which is
addressed.
a. Product Classes With Automatic Icemakers
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.
To represent the annual energy consumed by automatic icemakers in
MREFs, 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 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 require 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.
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 with the same equation, thus consolidating the presentation of
classes and simplifying the 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 with a single product class descriptor and
maximum energy use equation, while continuing to reflect that products
with and without icemakers may have different maximum energy use
values.
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.
b. Addition of a Built-In Combination Cooler-Refrigerator-Freezer With
Bottom-Mounted Freezer and Automatic Icemaker Product Class
Sub Zero stated they are planning to introduce a built-in
combination cooler-refrigerator-freezer with bottom-mounted freezer and
automatic icemaker. Sub Zero noted, although this configuration is an
MREF covered product, it was not on the market in 2016 so a standard
level was not set; using the same methodology used to set levels for
the eight combination cooler types for which a standard was prescribed,
the allowable maximum energy use would be 6.08AV + 302 kWh/yr. Sub Zero
stated it is their understanding that they will need to request
exception relief from DOE to certify this new product and requested
that a future standard level for this product class be set in the
upcoming MREF rulemaking. (Sub Zero, No. 17, pp. 2-3)
DOE is proposing energy use levels for the built-in combination
cooler-refrigerator-freezer with a bottom-mounted freezer, with and
without an automatic icemaker (``combination cooler 5-BI''), as
requested by Sub Zero.\19\ DOE agrees with Sub Zero that the baseline
energy use for the class with an automatic icemaker would be using the
methodology established in the MREF negotiations for setting energy use
standards for new classes of combination products, if calculated on the
basis of the 84 kWh/yr icemaker energy use of the current test
procedure. When considering the revised 28 kWh/yr icemaker, to be
implemented at the compliance date of any amended energy conservation
standards, the baseline energy use equation for the product class would
be 6.08AV + 246 kWh/yr. Since there are no products on the market that
could serve as the basis for analysis to support setting a future
standard, DOE is using combination cooler class 3A as a proxy for
setting of a future energy conservation standard for the new
combination cooler 5-BI class.
---------------------------------------------------------------------------

\19\ Although Sub Zero requested a new class only for models
with an automatic icemaker, DOE is extending the proposal to also
include products without an automatic icemaker, consistent with the
consolidation of the icemaker energy use into the energy use
equation in the presentation of energy use standards.
---------------------------------------------------------------------------

DOE requests comment on its proposal to establish energy
conservation standards for combination cooler 5-BI using the analysis
for combination class 3A as proxy for setting the standard level, based
on a baseline efficiency equal to 6.08AV + 218 +28*I kWh/yr, where I is
equal to 0 if the model has no automatic icemaker and equal to 1 if it
does.
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 miscellaneous refrigeration products, 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. Increased insulation thickness
3. Vacuum-insulated panels
4. Gas-filled insulation panels
Gaskets and Anti-Sweat Heat
5. Improved gaskets
6. Double door gaskets

[[Page 19396]]

7. Anti-sweat heat
Doors
8. Low-E coatings
9. Inert gas fill
10. Vacuum-insulated glass
11. Additional panes
12. Frame design
13. Solid door
Compressor
14. Improved compressor efficiency
15. Variable-speed compressors
16. Linear compressors
Evaporator
17. Increased surface area
18. Forced-convection evaporator
19. Tube and fin enhancements (including microchannel designs)
20. Multiple evaporators
Condenser
21. Increased surface area
22. Tube and fin enhancements (including microchannel designs
23. Forced-convection condenser
Defrost System
24. Off-cycle defrost
25. Reduced energy for active defrost
26. Adaptive defrost
27. Condenser hot gas defrost
Control System
28. Electronic temperature control
29. Air-distribution control
Other Technologies
30. Fan and fan motor improvements
31. Improved expansion valve
32. Fluid control or solenoid off-cycle valve
33. Alternative refrigerants
34. Improved refrigerant piping
35. Component location
36. Alternative refrigeration systems

Commenters provided feedback on some of these technology options.
These comments are summarized below, along with DOE's responses.
AHAM stated several of the evaluated technology options are
impractical or provide limited to no benefit given current
manufacturing and design processes past EL 1. However, AHAM did not
provide sufficient detail that would enable DOE to revise the listed
technology options and subsequent analysis. (AHAM, No. 18, p. 7)
AHAM also cited issues with DOE's use of LED lighting in its
analysis, DOE's over-reliance on vacuum-insulated panels (``VIPs'') in
its analysis, and an insufficient supply of variable-speed compressors
(``VSCs''). Specifically, AHAM states that the widespread use of LED
lighting in the market currently means the possible efficiency gains
from lighting will be limited. When considering VIPs, AHAM argues that
DOE overused VIPs in its analysis in a manner that is not consistent
with their current use on the market or overall effectiveness. Finally,
AHAM points to the use of VSCs in the higher ELs as risky due to a
potential shortfall of supply from manufacturers if they are included
in a standards rulemaking as a primary design option for energy
efficiency. (AHAM, No. 18, p. 7)
DOE is aware of the widespread use of LED lighting in the market
currently. Therefore, lighting technologies were not considered as a
technology option in the preliminary analysis. Likewise, they were also
not considered in the NOPR analysis.
When considering the impact of VIPs, DOE took into consideration
relevant rulemaking analyses for refrigerator, refrigerator-freezer,
and freezer classes as a basis for VIP effectiveness as well as
manufacturer feedback. With this information, VIP implementation in the
NOPR analysis was more limited than in the preliminary analysis. For
this analysis VIPs were only implemented partially in the max-tech
levels of every directly analyzed class.
The impact of VSCs on the miscellaneous refrigeration product
analyses was primarily based on their ability to provide a higher level
of efficiency when compared to their single-speed counterparts. As a
result of this compressor efficiency increase, they are prevalent in
the higher ELs of the efficiency analyses. DOE acknowledges that more
stringent standards would likely necessitate adoption of more efficient
technologies, such as variable-speed compressors. However, DOE expects
that standards, if adopted, would provide sufficient certainty for
manufacturers and suppliers to establish additional capacity in the
supply chain, if needed.

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:
(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.
10 CFR part 430, subpart C, appendix A, sections 6(b)(3) and 7(b).
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 January 2022 Preliminary Analysis, DOE screened out the
following technologies on the basis of technological feasibility,
practicability to manufacture, install, and service, adverse impacts on
utility or availability, adverse impacts on health or safety, and use
of unique-pathway proprietary technologies.

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

Solid doors
Ultra-low-E (reflective) glass doors
Vacuum-insulated glass
Improved gaskets and double gaskets
Linear compressors
Fluid control or solenoid off-cycle valves
Evaporator tube and fin enhancements
Condenser tube and fin enhancements (except microchannel condensers)
Condenser hot gas defrost
Improved refrigerant piping

[[Page 19397]]

Component location
Alternative refrigeration systems
Improved VIPs
2. Technology Options
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.2--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 Anti-Sweat Heat
5. Anti-sweat heat
Doors
6. Low-E coatings
7. Inert gas fill
8. Additional panes
9. Frame design
Compressor
10. Improved compressor efficiency
11. Variable-speed compressors
Evaporator
12. Forced-convection evaporator
13. Increased surface area
14. Multiple evaporators
Condenser
15. Increased surface area
16. Microchannel designs
17. Forced-convection condenser
Defrost System
18. Reduced energy for automatic defrost
19. Adaptive defrost
20. Off-cycle defrost
Control System
21. Electronic Temperature control
22. Air-distribution control
Other Technologies
23. Fan and fan motor improvements
24. Improved expansion valve
25. Alternative Refrigerants

DOE has initially 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 received comments regarding the screened-out technologies;
relevant comments are addressed.
AHAM agreed with DOE's decision to screen out solid doors as a
technology option for the reason that ELs requiring solid doors will
result in a significant loss in consumer utility. AHAM also agreed with
DOE's decision to screen out Ultra-Low-E Glass Doors for similar
reason, in that this technology also prevents the consumer from being
able to see clearly into the cabinet. AHAM stated, should DOE include a
door technology option in its final analysis for a possible amended
standard, that analysis should provide careful justification to ensure
that consumer utility and consumer costs are not unduly impacted.
(AHAM, No. 18, p. 8)
The CA IOUs urged DOE to reconsider several technologies that they
claimed were screened out of the analysis or improperly categorized.
These technologies include ultra-low E glass doors, Inert Gas-Filled
Glass, vacuum insulated glass, microchannel heat exchangers, and
variable speed compressors. In considering ultra-low E glass doors, the
CA IOUs request the DOE define an acceptable emissivity that does not
significantly hinder visibility while providing energy savings. For
inert gas-filled glass, the CA IOUs claim that triple-pane Argon-filled
glass with low-e coating is widely available throughout the market and
should be considered at lower ELs. Considering vacuum insulated glass,
the CA IOUs point to several manufacturers offering the glass for
refrigeration applications. Finally, the CA IOUs urged DOE to make more
consideration into the implementation of microchannel heat exchangers
and VSCs, claiming that their energy benefits were not fully considered
in the preliminary analysis. (CA IOUs, No. 20, pp. 4-6)
DOE screened out ultra-low E glass panels due to loss in consumer
utility associated with reduced visibility. DOE considers ultra-low E
glass panels to be those with at least three glass layers and more than
one low E coating. A large portion of the MREF market utilizes
transparent glass doors as an option to allow the consumer to see
inside the cooler compartment. Despite its ability to improve
efficiency, ultra-low E glass reduces visibility into the cooler
cabinet. In interviews, manufacturers specifically indicated that they
avoid use of glass panels with more than one low E layer due to
visibility concerns. DOE did include in its analysis triple-glazed
panels with argon fill and one low E layer, consistent with panels that
have been observed in available cooler products.
DOE likewise did not consider vacuum insulated glass as it impacts
practicability of manufacture, repair, and installation. While it
remains available as a technology option for use in refrigeration
equipment (e.g., walk-in cooler doors), DOE is not currently aware of
vacuum-insulated glass currently in use for any MREFs. Also, because
MREFs are typically much smaller than commercial refrigeration
equipment, vacuum-insulated glass may not yet be available for all MREF
sizes.
While the CA IOUs claim that five commercial refrigeration
manufacturers already have integrated microchannel condenser coils in
their equipment outside the MREF product category, DOE has not observed
microchannel condensers in any of the products in the teardown analysis
for MREFs. DOE notes that microchannel condensers may allow for
refrigerant charge reductions and improved heat transfer but known
drawbacks to these designs include irregular refrigerant distribution
and greater pressure drops on the refrigerant side and air side.
Therefore, microchannel condensers may not provide efficiency
improvements. Hence, DOE screened out microchannel condensers as a
technology option.
Variable speed compressors were included in the NOPR analysis and
are implemented in higher-level ELs throughout the analyzed product
classes. Published EER levels for VSCs are generally much higher than
published EERs for single-speed compressors in the capacity range
suitable for compact products, but DOE has not found many MREF products
that use VSCs, nor many related compact refrigerators that use VSCs,
and thus has little evidence on which to base confident predictions of
large efficiency improvements. DOE received a range of estimates of the
improvement potential associated with this technology from
manufacturers during interviews. DOE believes that its MREF NOPR
engineering analysis is representative of performance improvement
potential using variable-speed compressors.
The door technology options that remain for increasing the
efficiency of miscellaneous refrigeration products include low-e
coatings, inert gas fills, additional panes, and frame design changes.
Of these options, gas fills, additional panes, and low-e coating were
the options implemented in the final EL analyses, with max-tech doors
including triple-pane glass, argon gas fill, and a low-e layer on the
outermost glass. These options were implemented based on their current
use in the market.
DOE seeks further comment on any of the technologies screened out
in this NOPR analysis as they were determined to not meet the screening
criteria (i.e.,

[[Page 19398]]

practicable to manufacture, install, and service and do not result in
adverse impacts on consumer utility, product availability, health,
safety, or use of unique-pathway proprietary technologies). DOE also
seeks comment on those technologies retained for further consideration
in the engineering analysis, based on the determination that they are
technologically feasible and also meet the other screening criteria.

C. Engineering Analysis

The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of miscellaneous
refrigeration products. 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 January 2022 Preliminary Analysis, DOE used the physical
teardown approach supplemented with a catalog teardown approach for
coolers. Several products from the cooler class (compact and standard
size) and one product from the combination cooler class C-13A were used
in physical teardowns. The physical teardown combination cooler was
used to determine manufacturer production costs (``MPCs'') for one
analyzed product class (C-13A), but that analysis primarily relied on
the engineering conducted for the October 15, 2021, preliminary
analysis for consumer refrigerators, refrigerator-freezers, and
freezers (86 FR 57378) as the basis for other MPCs and incremental
costs.
For this NOPR analysis, DOE chose to analyze classes C-3A and C-9
in addition to the original C-13A. Due to the lack of physical teardown
products for these classes, the analysis relied heavily on adjusted
analyses from the consumer refrigerators, refrigerator-freezers, and
freezers (``RF'') classes 3 and 9. RF product class 3 represents
refrigerator-freezers with automatic defrost with top-mounted freezers
without an automatic icemaker while RF product class 9 represents
upright freezers with automatic defrost without an automatic icemaker.
Product class 3 was chosen as a proxy to C-3A due to its similar
configuration, and its analysis was able to be adapted relatively
easily. Likewise, C-9's analysis used RF product class 9's analysis due
to similarities in configuration.\20\ A survey approach was taken to
determine sizing and pricing for representative models, and relevant
design options from C-13A were used in the additional analyses. DOE
also considered input provided during manufacturer interviews to
improve upon design option energy savings and representative ELs.
---------------------------------------------------------------------------

\20\ As described in section IV.C.1.c of this document, DOE
conducted engineering analysis for class C-9, but did not conduct
further analysis due to the limited potential for efficiency
increase.
---------------------------------------------------------------------------

General comments regarding the efficiency analysis are addressed
below.
AHAM noted DOE builds its incremental MPC based on a set path of
technology options, but there is no standard ordering of technology
choice within a single company, let alone across the total industry.
AHAM stated DOE should recognize there is limited new technology that
would allow for significant per-unit reduction in energy consumption,
particularly true of technology options that DOE evaluated to reach
efficiency levels beyond EL 1. (AHAM, No. 18, pp. 6-7)
In response, DOE notes that the ordering of technologies is not
intended to be aligned with the ordering that would be considered by a
single company, nor is it intended to represent the ordering that the
total industry would adopt. Instead, it is intended to provide
reasonable representation, both of design options used by specific
reverse-engineered products, and of an ordering that would prioritize
the most cost-effective options, with gradual reductions in cost-
effectiveness as the EL increases. Also, the certified data shows that
existing products on the market demonstrate significant per-unit
reduction in energy consumption. For example, among DOE's tested and
reverse-engineered compact coolers was a 3.4 cuft cooler certified with
energy use 45% less than the standard, and a 5.1 cuft cooler certified
with energy use 49% less than the standard. These levels were EL3 for
the preliminary analysis and beyond EL4 for the NOPR analysis,
certainly beyond EL1. DOE test results confirmed that their energy use
was consistent with the certifications.
CA IOUs stated that in its review of products currently available
on the market, it was revealed that the incremental design options may
not be the most appropriate (as presented by DOE in Table 5.5.1 of the
preliminary TSD) as products on the market contain a combination of
technologies DOE has attributed to different ELs. For example, smaller
units within the compact category utilize efficiency features affecting
the thermal envelope (argon and/or triple-pane glass), whereas larger
units can utilize condenser, evaporator, and compressor efficiency
features. (CA IOUs, No. 20, pp. 1-2)
When analyzing the models pointed to by CA IOUs, DOE was unable to
confirm the efficiency level for one of the provided MREF models, due
to the fact it was not listed on the Compliance Certification Database
(``CCD'') as of August 2022. The compact model referred to above was
located on the CCD system and rated at around 13% lower energy use than
baseline; however, the model did not match the CCD rated AV, therefore,
the efficiency information may not be up to date. Information regarding
the design options used by each model was also limited, with relevant
engineering design options absent from promotional

[[Page 19399]]

material, user manuals, and specification sheets.
Considering the issues related to gathering information on the
specific models referenced in the comment, DOE is unable to point to
specific reasoning behind the design options implemented in each model.
DOE does note, however, that it considers design options in a manner as
described previously: with design options used by specific reverse-
engineered products, and of an ordering that prioritizes the most cost-
effective options for initial EL steps and gradual reduction in cost-
effectiveness as the EL increases.
DOE requests any further input from commenters regarding the
approach for design option selection and implementation for a given
model, beyond the information DOE has already considered.
a. Built-In Classes
In this NOPR analysis, DOE chose to continue using freestanding
MREF classes as proxies for built-in classes. DOE's analysis of the
current market for miscellaneous refrigeration products showed built-in
and freestanding products occupying the same range of efficiencies, and
DOE did not identify any unique characteristic that would inhibit
efficiency improvements for built-in products relative to freestanding
products based on a review on the market. As a result, DOE chose to
apply its freestanding products analyses to built-in classes. Several
comments were received following the preliminary analysis (which used
the same approach) and are addressed below.
According to AHAM, and echoed by Sub Zero and NEEA, freestanding
product classes are not a good proxy for built-in product classes, and
DOE should evaluate them separately. AHAM stated that DOE's assumption
that the products can employ similar technology options in order to
achieve higher efficiency levels is fundamentally flawed as built-in
designs face difference constraints than freestanding designs. NEEA and
Sub Zero both specifically mentioned insulation thickness increases and
airflow as a major difference between built-in and freestanding
products. (AHAM, No. 18, p. 9; Sub Zero, No. 17, p. 2; NEEA, No. 21,
pp. 2-3)
Based on the comments provided, DOE revisited its review of the
range of efficiency levels attainable by built-in and freestanding
coolers. DOE noted that many products certified as freestanding have
installation instructions that provide requirements for both
freestanding and built-in installation and are advertised for both
installations. DOE found that for such products, the majority of high-
efficiency models are advertised as capable of both freestanding and
built-in installations. For coolers between 2 and 6 cubic feet, DOE
found that all of the most efficient products reviewed (roughly 37%
better than baseline or more) were capable of both configurations,
whereas some of the products that were less efficient in that adjusted
volume range were advertised as freestanding only. This suggests that
built-in products are not inhibited in their ability to achieve high
efficiencies. For larger coolers between 14 and 16 cubic feet in
adjusted volume, DOE found products up to 15% greater than the baseline
level that were configurable in both, based on manufacturer
instructions. There were a few large cooler products that reached the
highest available efficiency reviewed, up to roughly 30% better than
baseline, that are advertised as only capable of a freestanding
configuration.
DOE also reviewed the depth of the various models considered to
determine if models advertised for built-in installation have any clear
dimensional limitation that might make achieving high efficiency levels
more difficult. DOE was unable to determine a clear correlation between
depth and energy use, for any of the models or capacity ranges
considered, nor between depth and instructions or advertising for
built-in installation. In fact, DOE found that the most efficient
freestanding-only model in the large cubic volume range had the
smallest depth of all the other models reviewed, suggesting that
dimensional restriction on depth was not a key factor relative to the
overall unit efficiency.
DOE also observed that the highest efficiency levels for coolers of
the built-in class and efficiency levels for freestanding coolers
having installation instructions or advertising for both freestanding
and built-in installation were at or close to the maximum technology
efficiency levels analyzed by DOE. DOE has not been provided evidence
that manufacturers are using design options in built-ins other than
those that have passed screening for this analysis. There are also no
manufacturer comments that suggest other design options have been used
to achieve max-tech efficiency levels in built-in products. Hence, DOE
concludes built-ins are using the same set of design options as
analyzed at max-tech for freestanding classes. Consequently, DOE did
not conduct separate analysis for built-in classes.
While DOE chose, in this NOPR analysis, to continue using
freestanding classes as proxies for built-in classes, DOE requests
additional information regarding the constraints for built-in designs
relative to freestanding designs, and the associated specific
efficiency and cost impacts.
b. 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 January 2022 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. The baseline levels
differ for coolers and combination coolers to account for design
differences; all coolers share the same baseline level, i.e., the
baseline is the same function of adjusted volume for both freestanding
and built-in models, for both compact and standard-size models.
For this NOPR, DOE kept the cooler baselines the same as the
preliminary analysis; the combination cooler baseline has also been
kept the same. From these baselines DOE conducted direct analyses for
three different AV coolers, and two combination coolers (C-13A, and C-
3A). In conducting these analyses, eight teardown units were used in
construction of cost curves, and had their characteristics determined
in large part by testing and reverse-engineering. Further information
on the design characteristics of specific analyzed baseline models is
summarized in the NOPR TSD.
c. Higher Efficiency Levels
For the NOPR analysis, DOE analyzed up to five incremental
efficiency levels beyond the baseline for each of the analyzed product
classes. The efficiency levels start at EL1, 10% more efficient than
the current energy conservation standard. For the compact coolers NOPR
analysis, DOE extended the efficiency levels in steps of 10% of the
current energy conservation standard up to EL 4; for full-size coolers,
EL 4 is analyzed at 35%. For combination coolers (excluding C-9)
efficiency levels above EL 1 are in steps of 5% up to EL 4.

[[Page 19400]]

Finally, EL 5 represents maximum technology (``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 maximum practical use of VIPs. For coolers, the
current Energy Star specifications correspond to EL 1 for freestanding
full-size coolers (10%), EL 2 for freestanding compact coolers (20%),
and EL 3 for both classes of built-in coolers (30%).
DOE conducted analysis for product class C-9 starting with analysis
for a class 9 upright freezer with comparable total refrigerated
volume. In its analysis, DOE concluded that application of all of the
design options being considered at max-tech would be required for the
product to be compliant with the current energy conservation standards.
Currently, the CCD includes only one product that is certified as C-9--
an LG product certified with energy use 17% below the standard. DOE did
not purchase, test, and reverse-engineer this product, in-part because
of the limited product offering and expected insignificant potential
for energy savings for the class. Thus, DOE is relying primarily on its
analysis of the RF product class 9 freezer, to suggest that
opportunities for energy savings are likely limited and likely not
cost-effective, even if improved efficiency is technically feasible.
DOE has not analyzed efficiency levels beyond baseline for this product
class in this NOPR, but has taken into consideration all design options
applied at max-tech in its analysis.
DOE received comments regarding intermediate efficiency levels as
shown below.
The CA IOUs expressed concern that the cost analysis performed in
the preliminary TSD is overly conservative; the marked drop in
calculated benefits between the lower ELs does not accurately reflect
the more nuanced state of the market. As such, they suggested DOE
implement an intermediate EL, between EL 1 and EL 2, for the Cooler-FC
and Cooler-F product classes. They also suggested an intermediate EL
between EL 2 and EL 3 for product class C-13A. NEEA voiced similar
concerns to CA IOUs and also suggested similar intermediate EL levels
for coolers and C-13A. ASAP also urged DOE to consider an intermediate
EL for compact coolers between ELs 1 and 2. (CA IOUs, No. 20, pp. 1-2;
NEEA, No. 21, pp. 5-6; ASAP, No. 19, pp. 2-3)
In response, DOE notes that the efficiency levels considered in the
NOPR analysis differ significantly from those considered in the January
2022 Preliminary Analysis.\21\ While all of the specific gap fill
levels suggested by stakeholders may not have been included, DOE
believes that, the levels suggested in this NOPR more accurately
reflect the full efficiency range of the market. The proposed EL steps
have been chosen to represent the full range of efficiency and reflect
the products on the market for each product class.
---------------------------------------------------------------------------

\21\ The January 2022 Preliminary Analysis TSD presenting the
preliminary analysis is available at: <a href="http://www.regulations.gov/document/EERE-2020-BT-STD-0039-0009">www.regulations.gov/document/EERE-2020-BT-STD-0039-0009</a>.
---------------------------------------------------------------------------

ASAP noted, in the preliminary TSD for consumer refrigerators and
freezers, DOE estimated a 9-percent improvement in compressor
efficiency associated with converting from a single-speed compressor to
a VSC with similar rated energy efficiency ratio (``EER'') values, and
ASAP stated they expect there to be similar savings for compact
coolers. ASAP further noted, however, in the preliminary analysis for
the 5.1 cubic foot compact cooler representative unit, DOE appears to
show energy savings of only about 2 percent when going from the most
efficient single-speed compressor at EL 3 to a VSC and a triple-pane
glass pack at EL 4. ASAP therefore stated concern that DOE may be
underestimating the energy savings associated with the design options
incorporated at EL 4 and urged DOE to ensure that its analysis is
appropriately capturing the savings from the incorporation of a VSC.
(ASAP, No. 19, p. 2)
When constructing a direct analysis of the 5.1 cubic foot compact
cooler DOE considered numerous design options when moving from EL 3 to
EL 4. The effect of the triple-pane glass and switch to VSC alone do
not contribute to the ultimate percentage difference between El 3 and
EL 4. DOE has continued to work with manufacturers in order to
accurately create ELs for both coolers and combination coolers that are
based on real-world information and energy consumption.
The efficiency levels analyzed for this NOPR beyond the baseline
are shown in Table IV.3.

Table IV.3--Incremental Efficiency Levels for Analyzed Products (% Energy Use Less Than Baseline)
----------------------------------------------------------------------------------------------------------------
Coolers Combination coolers
Product class (AV, cu.ft.) -------------------------------------------------------------------------------
FCC (3.1) (%) FCC (5.1) (%) FC (15.3) (%) C-13A (5) (%) C-3A (21) (%)
----------------------------------------------------------------------------------------------------------------
EL 1............................ 10 10 10 10 10
EL 2 *.......................... 20 20 20 16 15
EL 3............................ 30 30 30 20 20
EL 4............................ 40 40 35 25 24
EL 5............................ 59 50 38 28 30
----------------------------------------------------------------------------------------------------------------
* ENERGY STAR % level varies based on specific teardown units analyzed.

d. VIP and VSC Analysis
DOE received comments on the implementation of VIPs in its
analyses, and the comments are addressed below.
AHAM stated DOE does not account for the limitations of VIPs and
that DOE's modeling does not apply VIPs as they would likely be used in
actual products and, as a result, overestimates their use and impact in
its analysis. AHAM stated DOE should note the following when evaluating
the effectiveness of VIPs: covering all sides of an MREF casing in VIPs
is not reasonable or a good design practice, there are costs associated
with VIPs beyond the price of the panels themselves, a failed VIP in
the field cannot be repaired and it will require a total product
replacement, and VIPs are not effective for smaller products because of
``edge effects.'' AHAM stated DOE should further discuss these issues
with manufacturers during manufacturer interviews and evaluate more
products in order to get a better understanding of the complexities and
costs associated with VIPs and update its analysis accordingly. (AHAM,
No. 18, pp. 7-8)

[[Page 19401]]

In communicating with manufacturers DOE received similar comments
relating to decreased effectiveness of VIPs on miscellaneous
refrigeration products. For the NOPR analysis DOE aimed to adjust the
usage of VIPs in order to provide more accuracy in associated energy
savings. More focus was put on increasing efficiency in glass panels,
gas fills, and thickness changes when moving up in efficiency levels.
Only partial VIP coverage was included in max-tech levels for the NOPR
analysis.
ASAP expressed concern that DOE is underestimating the potential
savings from upgrading from a single-speed compressor to a VSC by not
accounting for the higher EER values of VSCs. ASAP noted that, in the
preliminary TSD, DOE states compressors typically present in MREFs have
capacities of 300 to 400 Btu per hour, but at a capacity of 300 BTU per
hour, for example, even the least efficient VSC has a higher EER than
the most efficient single-speed compressor. ASAP further noted that the
EER of the most efficient VSC at 300 BTU per hour appears to be about
30 percent higher than the most efficient single-speed compressor. ASAP
therefore urged DOE to ensure that its analysis is capturing the
improved full-load efficiency of VSCs relative to single-speed
compressors. (ASAP, No. 19, p. 1)
In the preliminary analysis, as laid out in figure 5.5.1 in the
preliminary TSD, DOE analyzed the capacity and efficiency ratings of
numerous VSCs through publicly available compressor performance data.
79 FR 71705. This figure does show that VSCs account for a higher EER
when compared to single-speed compressors as capacity (Btu/h) is
decreased. However, relating back ASAP's claim relating to 300 Btu/h
capacity compressors, manufacturer feedback indicates that these EER
efficiency increases are not generally realized when implementing this
technology. Manufacturers have reported a wide range of overall
efficiency increases associated with use of variable-speed compressors.
In in the NOPR analysis DOE considered manufacturer feedback regarding
experience with implementing VSC's in order to avoid overestimating
efficiency increases. The analysis primarily considers energy savings
associated with increased heat exchanger effectiveness associated with
lower compressor speed operation and reduced fan speeds, assuming that
fans would be operated at reduced speed when operating at low
compressor speed. VSCs are generally implemented at higher EL levels
throughout the analysis, consistent with their projected cost
effectiveness.
DOE seeks comment on the range of VSC nominal efficiencies and the
relative overall efficiency gains offered by VSCs when operating at
reduced compressor speeds along with reduced fan speeds in MREF
products.
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 product on
the market. The cost approaches are summarized as follows:
[ballot] 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.
[ballot] 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.
[ballot] 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 primarily
physical teardowns. Physical teardowns were used to provide a baseline
of technology options and their 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 of
relevant refrigerators, refrigerator-freezers, and freezers.
AHAM stated VSC supply is not sufficient to accommodate a standard
that requires their use for all MREF products, indicating that this
will drive up costs, and further noting that DOE's analysis does not
account for these increased costs. AHAM also stated MREFs are enclosed
systems and the use of VSCs entails significant redesign costs for
those that do not currently employ VSCs, which DOE's analysis also must
account for. (AHAM, No. 18, p. 8)
DOE has considered the comments regarding VSC availability and cost
of VSC implementation. For this NOPR analysis, DOE estimated the cost
of implementing VSCs based on the costs of relevant variable-speed
compressors available on the market for other refrigeration products.
Regarding component availability, DOE acknowledges that more stringent
standards would likely necessitate adoption of more efficient
technologies, such as variable-speed compressors. However, DOE expects
that standards, if adopted, would provide sufficient time and
regulatory certainty for manufacturers and suppliers to establish
additional capacity in the supply chain, if needed. Should this NOPR
proceed to a final rule, compliance with any amended standards would
not be required until 5-years after a final rule is published. DOE
expects that this 5-year compliance period provides adequate time for
OEMs to sign supply contracts with their compressor suppliers ahead of
anticipated demand.
DOE seeks comment on whether manufacturers expect manufacturing
capacity constraints would limit product availability to consumers in
the timeframe of the amended standard compliance date.
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, as well as those extrapolated from
a product class with similar cooling capacity and features. DOE
developed estimates of MPCs for each unit in the teardown sample, and
also performed additional modeling for each of the teardown samples, to
develop a comprehensive set of MPCs at each efficiency level. The
resulting weighted average incremental MPCs (i.e., the additional costs
manufacturers would likely incur by producing miscellaneous
refrigeration products at each efficiency level compared to the
baseline) are provided in Tables 5.5.5 and 5.5.6 in chapter 5 of the
NOPR TSD. 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.

[[Page 19402]]

Table IV.1--Incremental Design Options * by Efficiency Level and Product Class
----------------------------------------------------------------------------------------------------------------
Product
class (AV EL1 EL2 EL3 EL4 EL5
***)
----------------------------------------------------------------------------------------------------------------
FCC (3.1) EL Percent...... 10%............ 20%............ 30%............ 40%............ 59%.
Design Options Tube and Fin Static Higher-EER Variable-Speed Partial VIP;
Added. Evaporator; Condenser;. Compressor; Compressor; Triple Pane
Argon Filled Tube and Fin Roll Bond Glass **; Tube
Glass. Condenser. Evaporator; and Fin Bond
Manual Evaporator.
Defrost;
Increased
Insulation
Thickness.
FCC (5.1) EL Percent...... 10%............ 20%............ 30%............ 40%............ 50%.
Design Options Argon Filled Higher-EER Higher-EER Higher-EER Variable-Speed
Added. Glass; Higher- Compressor. Compressor; Compressor; Compressor;
EER Compressor. Hot Wall Tube and Fin Partial VIP;
Condenser. Evaporator; Triple Pane
HotWall + Tube Glass **.
and Fin
Condenser;
Increased
Insulation
Thickness.
FC (15.3) EL Percent...... 10%............ 20%............ 30%............ 35%............ 38%.
Design Options Higher-EER Higher-EER Variable-Speed Triple Pane Partial VIP.
Added. Compressor; Compressor. Compressor; Glass **.
Hot Wall + Variable
Tube and Fin Defrost; 3x
Condenser. Tube and Fin
Evaporator;
Increased
Insulation
Thickness.
C-13A (5) EL Percent...... 10%............ 16%............ 20%............ 25%............ 28%.
Design Options Higher-EER Higher-EER Variable-Speed Triple Pane Partial VIP.
Added. Compressor. Compressor. Compressor. Glass **.
C-3A EL Percent...... 10%............ 15%............ 20%............ 24%............
(20.6).
Design Options Higher-EER Variable-Speed Triple Pane Partial VIP;
Added. Compressor. Compressor; Glass**; Timed Variable (off-
Variable (off- (off-cycle) cycle) Defrost.
cycle) Defrost. Defrost;
Higher-EER
Variable Speed
Compressor.
----------------------------------------------------------------------------------------------------------------
* Design options are cumulative between efficiency levels (except for component replacements).
** Triple-pane glass pack consists of soft-coated low-E glass and argon gas fill (with a reduced gap size to
maintain door thickness).
*** AV represented in ft\3\.

Table IV.2--Cost-Efficiency Curves for Miscellaneous Refrigeration Products
----------------------------------------------------------------------------------------------------------------
Product Class (AV
*) EL0 EL1 EL2 EL3 EL4 EL5
----------------------------------------------------------------------------------------------------------------
FCC (3.1)........ EL Percent..... 0% 10% 20% 30% 40% 59%
MPC............ $273.66 $289.88 $299.61 $309.88 $343.55 $392.74
Incremental MPC $0.00 $16.21 $25.94 $36.22 $69.88 $119.08
FCC (5.1)........ EL Percent..... 0% 10% 20% 30% 40% 50%
MPC............ $307.76 $310.89 $313.29 $327.72 $354.18 $439.26
Incremental MPC $0.00 $3.13 $5.53 $19.96 $46.42 $131.50
FC (15.3)........ EL Percent..... 0% 10% 20% 30% 35% 38%
MPC............ $648.22 $661.71 $665.13 $709.87 $832.95 $845.25
Incremental MPC $0.00 $13.49 $16.91 $61.65 $184.72 $197.02
C-13A (5)........ EL Percent..... 0% 10% 15% 20% 25% 28%
MPC............ $533.25 $535.25 $537.01 $565.74 $589.63 $627.33
Incremental MPC $0.00 $2.00 $3.76 $32.48 $56.37 $94.07
C-3A (20.6)...... EL Percent..... 0% 10% 16% 20% 24% ...........
MPC............ $601.00 $604.17 $639.47 $733.13 $790.03 ...........
Incremental MPC $0.00 $3.17 $38.47 $132.13 $189.03 ...........
C-9 (20) **...... EL Percent..... 0% ........... ........... ........... ........... ...........
MPC............ $514.16 ........... ........... ........... ........... ...........
Incremental MPC $0 ........... ........... ........... ........... ...........
----------------------------------------------------------------------------------------------------------------
* Adjusted volumes provided in ft\3\.
** Only considered at baseline.

4. Manufacturer Selling Price
To account for manufacturers' non-production costs and profit
margin, DOE applies a multiplier (the manufacturer markup) to the MPC.
The resulting manufacturer selling price (``MSP'') is the price at
which the manufacturer distributes a unit into commerce. DOE developed
an average manufacturer markup by examining the annual Securities and
Exchange Commission (``SEC'') 10-K reports \22\ filed by publicly-
traded manufacturers primarily engaged in appliance manufacturing and
whose combined product range includes miscellaneous refrigeration
products. See chapter 12 of the NOPR TSD for additional detail on the
manufacturer markup.
---------------------------------------------------------------------------

\22\ 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 September 22, 2022).
---------------------------------------------------------------------------

D. Markups Analysis

The markups analysis develops appropriate markups (e.g., retailer
markups and distributor markups) in the distribution chain and sales
taxes to

[[Page 19403]]

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 markup equipment
prices to cover business costs and profit margin.
For MREFs, DOE identified two distribution channels: (1)
manufacturers to retailers to consumers, and (2) manufactures to
wholesalers to dealers/retailers to consumers. The parties involved in
the distribution channel are retailers, wholesalers and dealers.
DOE developed baseline and incremental markups for each actor in
the distribution channel. 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 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.
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, and the 2017 Annual
Wholesale Trade Survey for the ``household appliances, and electrical
and electronic goods merchant wholesalers'' sector to estimate
wholesaler markups. DOE recognized that the overall markup in the
wholesaler channel should be higher than the direct retailer channel.
Considering that most of the wholesalers and dealers/retailers hold
special contract in the wholesaler channel, DOE assumed that the
dealer/retailer markups are half of the values of the retailer makeups
in the direct retailer channel.
DOE requests comment on the assumption used in developing the
dealer/retailer markups and welcomes any feedback on the overall markup
in the wholesaler channel.
Chapter 6 of the NOPR TSD provides details on DOE's development of
markups for MREFs.

E. Energy Use Analysis

The purpose of the energy use analysis is to determine the annual
energy consumption of MREFs at different efficiencies in representative
U.S. households, and to assess the energy savings potential of
increased MREF efficiency. The energy use analysis estimates the range
of energy use of MREFs 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.
DOE determined a range of annual energy use of MREFs as a function
of unit volume. DOE developed distributions of adjusted volume of
product classes (Table IV.3) with more than one representative unit
base on the capacity distributions reported in the TraQline[supreg]
wine chiller data spanning from 2020 Q1 to 2022 Q1.23 24 DOE
also developed a sample of households that use MREFs based on the
TraQline wine chiller data (see section IV.G for details). For each
volume and considered efficiency level, DOE derived the energy
consumption as measured by the DOE test procedure at 10 CFR part 430,
subpart B, appendix A, with the exception that DOE used in its analysis
the reduced icemaker energy use contribution that would take effect on
the compliance date of new standards.
---------------------------------------------------------------------------

\23\ TraQline is a market research company that specialized in
tracking consumer purchasing behavior across a wide range of
products using quarterly online surveys.
\24\ DOE acknowledges that the pandemics which span the sample
period may contribute to the medium- to long-term consumer behavior
changes. DOE will continue monitor the consumer behavior trend and
may make alternative estimation in the next rulemaking phase.
---------------------------------------------------------------------------

DOE requests comment on its methodology to develop market share
distributions by adjusted volume in the compliance year for each
product class with two representative volumes, as well as data to
further inform these distributions in subsequent rounds of this
rulemaking.

Table IV.3--Distribution of Adjusted Interior Volumes by Product Class
------------------------------------------------------------------------
Adjusted volume (ft\3\) Percentage
------------------------------------------------------------------------
FCC
------------------------------------------------------------------------
3.1..................................................... 83.4
5.1..................................................... 16.6
------------------------------------------------------------------------
BICC
------------------------------------------------------------------------
3.1..................................................... 81.3
5.1..................................................... 18.7
------------------------------------------------------------------------
FC and BIC
------------------------------------------------------------------------
15.3.................................................... 100.0
------------------------------------------------------------------------
C-3A
------------------------------------------------------------------------
21...................................................... 100.0
------------------------------------------------------------------------
C-9
------------------------------------------------------------------------
20...................................................... 100.0
------------------------------------------------------------------------
C-13A
------------------------------------------------------------------------
5....................................................... 100.0
------------------------------------------------------------------------

Chapter 7 of the NOPR TSD provides details on DOE's energy use
analysis for MREFs.

F. Life-Cycle Cost and Payback Period Analysis

DOE conducted the LCC and PBP analyses to evaluate the economic
impacts on individual consumers of potential energy conservation
standards for MREFs. The effect of new or amended energy conservation
standards on individual consumers usually involves a reduction in
operating cost and an increase in purchase cost. DOE used the following
two metrics to measure consumer impacts:
<bullet> The LCC is the total consumer expense of an appliance or
product over the life of that product, consisting of total installed
cost (manufacturer selling price, distribution chain markups, sales
tax, and installation costs) plus operating costs (expenses for energy
use, maintenance, and repair). To compute the operating costs, DOE
discounts future operating costs to the time of purchase and sums them
over the lifetime of the product.
<bullet> 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
at higher efficiency levels by the change in annual operating cost for
the year that amended or new standards are assumed to take effect.
For any given efficiency level, DOE measures the change in LCC
relative to the LCC in the no-new-standards case, which reflects the
estimated efficiency distribution of MREFs in the absence of new or
amended energy conservation standards. In contrast, the PBP for a given
efficiency level is measured relative to the baseline product.
NEEA encouraged DOE to calculate and consider the return on
investment

[[Page 19404]]

(ROI) for each efficiency level as an additional metric of cost-
effectiveness, which would only require the use of simple payback and
device lifetime. (NEEA, No. 21, pp. 6-7).
DOE acknowledges that ROI is a metric that can be useful in
evaluating investments in energy efficiency. However, the measures that
DOE has historically used to evaluate the economic impacts of standards
on consumers--LCC savings and PBP--are more closely related to the
language in EPCA that 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)) Therefore, DOE finds it reasonable to continue to
use those measures.
For each considered efficiency level in each product class, DOE
calculated the LCC and PBP for a nationally representative set of
housing units. As stated previously, DOE developed household samples
based on TraQline wine chiller survey data. The survey panel is
weighted against the U.S. Census based on their demographic
characteristic to make the sample representative of the U.S.
population. The wine chiller survey asked respondents about the product
features of the wine chillers they recently purchased, as well as the
purchasing channel of the products. To account for the more recent MREF
consumers, DOE used the latest two years of survey data (2020 Q1 to
2022 Q1) to construct the household sample used in this NOPR.\25\
---------------------------------------------------------------------------

\25\ DOE acknowledges that the pandemics which span the sample
period may contribute to the medium- to long-term consumer behavior
changes. DOE will continue monitor the consumer behavior trend and
may make alternative estimation in the next rulemaking phase.
---------------------------------------------------------------------------

For each sample household, DOE determined the energy consumption
for the MREF(s) and the appropriate energy price. By developing a
representative sample of households, the analysis captured the
variability in energy consumption and energy prices associated with the
use of MREFs.
Inputs to the calculation of total installed cost include the cost
of the product--which includes MPCs, manufacturer markups, retailer and
distributor markups, and sales taxes--and installation costs. Inputs to
the calculation of operating expenses include annual energy
consumption, energy prices and price projections, repair and
maintenance costs (if applicable), product lifetimes, and discount
rates. DOE created distributions of values for product lifetime,
discount rates, and sales taxes, with probabilities attached to each
value, to account for their uncertainty and variability.
The computer model DOE uses to calculate the LCC and PBP relies on
a Monte Carlo simulation to incorporate uncertainty and variability
into the analysis. The Monte Carlo simulations randomly sample input
values from the probability distributions and MREF user samples. The
model calculated the LCC and PBP for products at each efficiency level
for 10,000 housing units per simulation run. The analytical results
include a distribution of 10,000 data points showing the range of LCC
savings for a given efficiency level relative to the no-new-standards
case efficiency distribution. In performing an iteration of the Monte
Carlo simulation for a given consumer, product efficiency is chosen
based on its probability. If the chosen product efficiency is greater
than or equal to the efficiency of the standard level under
consideration, the LCC and PBP calculation reveals that a consumer is
not impacted by the standard level. By accounting for consumers who
already purchase more-efficient products, DOE avoids overstating the
potential benefits from increasing product efficiency.
DOE calculated the LCC and PBP for all consumers of MREFs as if
each were to purchase a new product in the expected year of required
compliance with new or amended standards. New and amended standards
would apply to MREFs manufactured 5 years after the date on which any
new or amended standard is published. (42 U.S.C. 6295(l)(2)) At this
time, DOE estimates publication of a final rule in 2024. Therefore, for
purposes of its analysis, DOE used 2029 as the first year of compliance
with any amended standards for MREFs.
Table IV.4 summarizes the approach and data DOE used to derive
inputs to the LCC and PBP calculations. The paragraphs that follow
provide further discussion. Details of the spreadsheet model, and of
all the inputs to the LCC and PBP analyses, are contained in chapter 8
of the NOPR TSD and its appendices.

Table IV.4--Summary of Inputs and Methods for the LCC and PBP Analysis *
------------------------------------------------------------------------
Inputs Source/method
------------------------------------------------------------------------
Product Cost........................... Derived by multiplying MPCs by
manufacturer and retailer
markups and sales tax, as
appropriate. Used historical
data to derive a price scaling
index to project product
costs.
Installation Costs..................... Assumed no change with
efficiency level. Not
considered in the analysis.
Annual Energy Use...................... Derived from engineering inputs
(See chapter 5 of the NOPR
TSD).
Variability: Based on the
product class and rep unit
volume, where applicable.
Energy Prices.......................... Electricity: Based on 2021
average and marginal
electricity price data from
the Edison Electric Institute.
Variability: Electricity prices
vary by region.
Energy Price Trends.................... Based on AEO 2022 price
projections.
Repair and Maintenance Costs........... Assumed no change with
efficiency level. Not
considered in the analysis.
Product Lifetime....................... Average: 12.6 years.
Discount Rates......................... Approach involves identifying
all possible debt or asset
classes that might be used to
purchase the considered
appliances, or might be
affected indirectly. Primary
data source was the Federal
Reserve Board's Survey of
Consumer Finances.
Compliance Date........................ 2029.
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
in the sections following the table or in chapter 8 of the NOPR TSD.

[[Page 19405]]

1. Product Cost
To calculate consumer product costs, DOE multiplied the MSPs
developed in the engineering analysis by the markups described
previously (along with sales taxes). DOE used different markups for
baseline products and higher-efficiency products, because DOE applies
an incremental markup to the increase in MSP associated with higher-
efficiency products.
Economic literature and historical data suggest that the real costs
of many products may trend downward over time according to ``learning''
or ``experience'' curves. Experience curve analysis implicitly includes
factors such as efficiencies in labor, capital investment, automation,
materials prices, distribution, and economies of scale at an industry-
wide level.\26\ In the experience curve method, the real cost of
production is related to the cumulative production or ``experience''
with a manufactured product. DOE used historical Producer Price Index
(PPI) data for ``household refrigerator and home freezer
manufacturing'' from the Labor Department's Bureau of Labor Statistics'
(``BLS'') spanning the time period between 1989 and 2021 as a proxy of
the production cost for MREFs.\27\ This is the most relevant price
index for MREFs as the main technology options are similar to full-size
refrigerators and several refrigerator manufacturers also produce
MREFs. An inflation-adjusted price index was calculated by dividing the
PPI series by the gross domestic product index from Bureau of Economic
Analysis for the same years. The cumulative production of MREFs were
assembled from the estimated annual shipments using the stock
accounting approach between 2016 and 2021, and a flat shipment trend
was assumed prior to 1951. The estimated learning rate (defined as the
fractional reduction in price expected from each doubling of cumulative
production) is 15.5 <plus-minus> 1.7 percent.
---------------------------------------------------------------------------

\26\ Taylor, M. and Fujita, K.S. Accounting for Technological
Change in Regulatory Impact Analyses: The Learning Curve Technique.
LBNL-6195E. Lawrence Berkeley National Laboratory, Berkeley, CA.
April 2013. <a href="http://escholarship.org/uc/item/3c8709p4#page-1">http://escholarship.org/uc/item/3c8709p4#page-1</a>.
\27\ Household refrigerator and home freezer manufacturing PPI
series ID: PCU3352203352202; <a href="http://www.bls.gov/ppi/">www.bls.gov/ppi/</a>.
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DOE included variable-speed compressors as a technology option for
higher efficiency levels. To develop future prices specific for that
technology, DOE applied a different price trend to the controls portion
of the variable-speed compressor, which represents part of the price
increment when moving from an efficiency level achieved with the
highest efficiency single-speed compressor to an efficiency level with
variable-speed compressor. DOE used PPI data on ``semiconductors and
related device manufacturing'' between 1967 and 2021 to estimate the
historic price trend of electronic components in the control.\28\ The
regression, performed as an exponential trend line fit, results in an
R-square of 0.99, with an annual price decline rate of 6.3 percent. See
chapter 8 of the TSD for further details on this topic.
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\28\ Semiconductors and related device manufacturing PPI series
ID: PCU334413334413; <a href="http://www.bls.gov/ppi/">www.bls.gov/ppi/</a>.
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AHAM noted that any declining costs are due to value engineering
and/or productivity improvements, and agreed with DOE's decision not to
use a price learning curve in the preliminary analysis. AHAM also
stated that MREFs are not identical to refrigerators and freezers, and
therefore DOE should not apply the learning curve from the
refrigerators, refrigerator-freezers, and freezers rulemaking analysis.
(AHAM, No. 18, p. 6) On the other hand, NEEA, ASAP and the CA IOUs,
encouraged DOE to incorporate a price learning curve. ASAP and the CA
IOUs expressed concern that assuming constant prices will result in
overestimating the cost to achieve higher efficiency levels in the
assumed compliance year and beyond and suggested the use of price data
from consumer refrigerators to inform the development of an appropriate
learning rate for MREFs, as many of the same design options are used
for MREFs. (NEEA, No. 21, pp. 4-5, ASAP, No. 19 at p. 3, CA IOUs, No.
20, pp. 2-4).
As discussed earlier, in this NOPR DOE developed a price learning
based on the historical refrigerator and freezer PPI and the cumulative
production estimated specifically for MREFs, assuming that the
refrigerator and freezer PPI is representative of MREFs. Given that
similar design options are considered for units in higher efficiency
levels as for consumer refrigerators, DOE also considered a separate
price learning for the controls portion of the variable-speed
compressor in MREFs at higher efficiency levels. DOE is requesting
comment on this approach.
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the product. DOE is not aware of
any data that suggest the cost of installation changes as a function of
efficiency for MREFs. DOE therefore assumed that installation costs are
the same regardless of EL and do not impact the LCC or PBP. As a
result, DOE did not include installation costs in the LCC and PBP
analysis.
3. Annual Energy Consumption
DOE determined the energy consumption for MREFs at different
efficiency levels using the approach described previously in section
IV.E of this document.
4. Energy Prices
Because marginal electricity price more accurately captures the
incremental savings associated with a change in energy use from higher
efficiency, it provides a better representation of incremental change
in consumer costs than average electricity prices. Therefore, DOE
applied average electricity prices for the energy use of the product
purchased in the no-new-standards case, and marginal electricity prices
for the incremental change in energy use associated with the other
efficiency levels considered.
DOE derived electricity prices in 2021 using data from EEI Typical
Bills and Average Rates reports. Based upon comprehensive, industry-
wide surveys, this semi-annual report presents typical monthly electric
bills and average kilowatt-hour costs to the customer as charged by
investor-owned utilities. For the residential sector, DOE calculated
electricity prices using the methodology described in Coughlin and
Beraki (2018).\29\
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\29\ Coughlin, K. and B. Beraki.2018. Residential Electricity
Prices: A Review of Data Sources and Estimation Methods. Lawrence
Berkeley National Lab. Berkeley, CA. Report No. LBNL-2001169.
<a href="https://ees.lbl.gov/publications/residential-electricity-prices-review">https://ees.lbl.gov/publications/residential-electricity-prices-review</a> (Last accessed September 22, 2022).
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To estimate energy prices in future years, DOE multiplied the 2021
energy prices by the projection of annual average price changes from
the Reference case in AEO 2022, which has an end year of 2050.\30\ To
estimate price trends after 2050, DOE used the 2050 electricity prices,
held constant.
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\30\ EIA. Annual Energy Outlook 2022 with Projections to 2050.
Washington, DC. Available at <a href="http://www.eia.gov/forecasts/aeo/">www.eia.gov/forecasts/aeo/</a> (last
accessed September 22, 2022).
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5. Maintenance and Repair Costs
Repair costs are associated with repairing or replacing product
components that have failed in an appliance; maintenance costs are
associated with maintaining the operation of the product. Typically,
small incremental increases in product efficiency produce no, or only
minor, changes in repair and maintenance costs compared to baseline
efficiency

[[Page 19406]]

products. DOE is not aware of any data that suggest the cost of repair
or maintenance for MREFs changes as a function of efficiency. DOE
therefore assumed that these costs are the same regardless of EL and do
not impact the LCC or PBP. As a result, DOE did not include maintenance
and repair costs in the LCC and PBP analysis.
6. Product Lifetime
For MREFs, DOE used lifetime estimates from products that operate
using the same refrigeration technology: covered refrigerators and
refrigerator-freezers. DOE assumed a maximum lifetime of 40 years for
all product classes and an average lifetime of 10.3 years for compact
coolers and 17.3 years for full-size coolers. DOE also assumed that the
probability function for the annual survival of MREFs would take the
form of a Weibull distribution. See chapter 8 of the NOPR TSD for a
more detailed discussion.
DOE requests comment and data on the assumptions and methodology
used to calculate MREF survival probabilities.
7. Discount Rates
In the calculation of LCC, DOE applies discount rates appropriate
to households to estimate the present value of future operating cost
savings. DOE estimated a distribution of residential discount rates for
MREFs based on consumer financing costs and the opportunity cost of
consumer funds.
DOE applies weighted average discount rates calculated from
consumer debt and asset data, rather than marginal or implicit discount
rates.\31\ The LCC analysis estimates net present value over the
lifetime of the product, so the appropriate discount rate will reflect
the general opportunity cost of household funds, taking this time scale
into account. Given the long-time horizon modeled in the LCC analysis,
the application of a marginal interest rate associated with an initial
source of funds is inaccurate. Regardless of the method of purchase,
consumers are expected to continue to rebalance their debt and asset
holdings over the LCC analysis period, based on the restrictions
consumers face in their debt payment requirements and the relative size
of the interest rates available on debts and assets. DOE estimates the
aggregate impact of this rebalancing using the historical distribution
of debts and assets.
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\31\ The implicit discount rate is inferred from a consumer
purchase decision between two otherwise identical goods with
different first cost and operating cost. It is the interest rate
that equates the increment of first cost to the difference in net
present value of lifetime operating cost, incorporating the
influence of several factors: transaction costs; risk premiums and
response to uncertainty; time preferences; interest rates at which a
consumer is able to borrow or lend. The implicit discount rate is
not appropriate for the LCC analysis because it reflects a range of
factors that influence consumer purchase decisions, rather than the
opportunity cost of the funds that are used in purchases.
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To establish residential discount rates for the LCC analysis, DOE
identified all relevant household debt or asset classes in order to
approximate a consumer's opportunity cost of funds related to appliance
energy cost savings. It estimated the average percentage shares of the
various types of debt and equity by household income group using data
from the Federal Reserve Board's Survey of Consumer Finances (SCF) for
1995, 1998, 2001, 2004, 2007, 2010, 2013, 2016, and 2019.\32\ Using the
SCF and other sources, DOE developed a distribution of rates for each
type of debt and asset by income group to represent the rates that may
apply in the year in which amended standards would take effect. DOE
assigned each sample household a specific discount rate drawn from one
of the distributions. The average rate across all types of household
debt and equity and income groups, weighted by the shares of each type,
is 4.1 percent. See chapter 8 of the NOPR TSD for further details on
the development of consumer discount rates.
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\32\ U.S. Board of Governors of the Federal Reserve System.
Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010,
2013, 2016, and 2019. (Last accessed September 22, 2022.) <a href="http://www.federalreserve.gov/econresdata/scf/scfindex.htm">http://www.federalreserve.gov/econresdata/scf/scfindex.htm</a>.
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8. Energy Efficiency Distribution in the No-New-Standards Case
To accurately estimate the share of consumers that would be
affected by a potential energy conservation standard at a particular
efficiency level, DOE's LCC analysis considered the projected
distribution (market shares) of product efficiencies under the no-new-
standards case (i.e., the case without amended or new energy
conservation standards).
In the January 2022 Preliminary Analysis, DOE estimated the energy
efficiency distribution of MREFs for 2029 using model counts from DOE's
CCD. DOE assumed that the distribution of models was equivalent to the
distribution of products sold. AHAM commented that the distribution DOE
obtained through this approach did not reflect the shipment breakdown
by efficiency seen in the market and submitted shipment data by product
class and efficiency level collected from its members to illustrate the
discrepancy between the CCD data and the AHAM efficiency distributions.
(AHAM, No. 18, p. 2-5)
DOE appreciates AHAM's data submission and, for this NOPR, DOE is
using the efficiency distribution by product class as provided by AHAM.
DOE understands that this approach inherently assumes that the rest of
the MREF market has a similar distribution of efficiencies. However,
due to lack of efficiency data from non-AHAM members, DOE is not able
to verify whether this assumption is incorrect. For this analysis, DOE
also assumed that the current distribution of product efficiencies
would remain constant in 2029, and during the analysis period, in the
no-new-standards case.
The estimated market shares for the no-new-standards case for MREFs
are shown in Table IV.5 of this document. See chapter 8 of the NOPR TSD
for further information on the derivation of the efficiency
distributions.

Table IV.5--Efficiency Distributions for the No-New-Standards Case in the Compliance Year
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total adjusted 2029 Market share (%)
Product class volume (cu. ---------------------------------------------------------------------------------------------------------------
ft.) EL 0 EL 1 EL 2 EL 3 EL 4 EL 5 Total *
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Cooler-FC....................................................... 3.1 79 18 3 0 0 0 100
5.1
Cooler-BIC...................................................... 3.1 18 6 1 1 0 74 100
5.1
Cooler-F........................................................ 15.3 42 58 0 0 0 0 100
Cooler-BI....................................................... 15.3 72 8 20 0 0 0 100
C-13A........................................................... 5 99 1 0 0 0 0 100
C-3A............................................................ 21 100 0 0 0 0 .............. 100
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* The total may not sum to 100% due to rounding.

[[Page 19407]]

DOE requests comment and data on its efficiency distribution
assumptions and projection into future years. Specifically, DOE is
requesting comment and data on the efficiency distribution of non-AHAM
members, to more accurately derive the efficiency distribution for the
whole MREF market.
9. Payback Period Analysis
The payback period is the amount of time it takes the consumer to
recover the additional installed cost of more-efficient products,
compared to baseline products, through energy cost savings. Payback
periods are expressed in years. Payback periods that exceed the life of
the product mean that the increased total installed cost is not
recovered in reduced operating expenses.
The inputs to the PBP calculation for each efficiency level are the
change in total installed cost of the product and the change in the
first-year annual operating expenditures relative to the baseline. The
PBP calculation uses the same inputs as the LCC analysis, except that
discount rates are not needed.
As noted previously, 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 first year's energy savings resulting from the standard,
as calculated under the applicable test procedure. (42 U.S.C.
6295(o)(2)(B)(iii)) For each considered efficiency level, DOE
determined the value of the first year's energy savings by calculating
the energy savings in accordance with the applicable DOE test
procedure, and multiplying those savings by the average energy price
projection for the year in which compliance with the amended standards
would be required.

G. Shipments Analysis

DOE uses projections of annual product shipments to calculate the
national impacts of potential amended or new energy conservation
standards on energy use, NPV, and future manufacturer cash flows.\33\
The shipments model takes an accounting approach, tracking market
shares of each product class and the vintage of units in the stock.
Stock accounting uses product shipments as inputs to estimate the age
distribution of in-service product stocks for all years. The age
distribution of in-service product stocks is a key input to
calculations of both the NES and NPV, because operating costs for any
year depend on the age distribution of the stock.
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\33\ DOE uses data on manufacturer shipments as a proxy for
national sales, as aggregate data on sales are lacking. In general,
one would expect a close correspondence between shipments and sales.
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DOE defined two broad MREF product categories (coolers, and
combination cooler refrigeration products) and developed models to
estimate shipments for each category. DOE used various data and
assumptions to develop the shipments for each product class considered
in this rulemaking.
Given the limited available data sources on historical shipments of
coolers, DOE assumed a penetration rate of 13.3 percent in the U.S.
households based on online surveys \34\ to estimate the annual
shipments starting from 2016, the start year of AEO 2022 housing
projection data. 35 36 DOE multiplied the estimated
penetration by the total number of households from the AEO 2022, and
then determined the number of new shipments by dividing the total stock
by the mean product lifetime. DOE projected the annual shipments by
incorporating the lifetime distributions by product class and assuming
that the growth of new sales is consistent with the housing projections
from AEO 2022. To estimate shipments prior to 2016, DOE assumed a flat
historical shipment trend at the 2016 level. With even more limited
available data sources on historical shipments of combination cooler
refrigeration products, DOE estimated total shipments of combination
cooler refrigeration products in 2014 to be 36,000 units, based on
feedback from manufacturers from the October 2016 Direct Final Rule.
DOE assumed sales would increase in line with the increase in the
number of households in AEO 2022. Finally, DOE incorporated the 2021
shipment data provided by AHAM to re-calibrate total shipments for each
product class considered in this rulemaking.
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\34\ DOE also reviewed the recent release of the EIA 2020
Residential Energy Consumption Survey (RECS 2020), which identified
wine chillers in representative U.S. households. DOE found that the
penetration rate of wine chillers in RECS 2020 is significantly
lower compared to that estimated by DOE for MREFs based on previous
market surveys. Due to the uncertainty on the breakdown of MREFs
between wine chillers and other miscellaneous refrigeration
applications in the U.S. market, DOE continued to use the 13.3
percent penetration rate for MREFs in this NOPR. However, DOE also
modeled an alternative shipments scenario based on the lower
penetration rate of MREFs in American homes derived from the RECS
2020 data. For

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