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Proposed Rule2023-09968

Energy Conservation Program: Energy Conservation Standards for Refrigerated Bottled or Canned Beverage Vending Machines

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Published

May 25, 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 refrigerated bottled or canned beverage vending machines (BVMs). 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 BVMs, and also announces a public meeting to receive comment on these proposed standards and associated analyses and results.

Full Text

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<title>Federal Register, Volume 88 Issue 101 (Thursday, May 25, 2023)</title>
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[Federal Register Volume 88, Number 101 (Thursday, May 25, 2023)]
[Proposed Rules]
[Pages 33968-34027]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-09968]

[[Page 33967]]

Vol. 88

Thursday,

No. 101

May 25, 2023

Part II

Department of Energy

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10 CFR Part 431

Energy Conservation Program: Energy Conservation Standards for
Refrigerated Bottled or Canned Beverage Vending Machines; Proposed Rule

Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 /
Proposed Rules

[[Page 33968]]

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DEPARTMENT OF ENERGY

10 CFR Part 431

[EERE-2020-BT-STD-0014]
RIN 1904-AE68

Energy Conservation Program: Energy Conservation Standards for
Refrigerated Bottled or Canned Beverage Vending Machines

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

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

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SUMMARY: The Energy Policy and Conservation Act, as amended (EPCA),
prescribes energy conservation standards for various consumer products
and certain commercial and industrial equipment, including refrigerated
bottled or canned beverage vending machines (BVMs). 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 BVMs, 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 July 24, 2023.
Meeting: DOE will hold a public meeting via webinar on Wednesday,
June 7, 2023, from 1:00 p.m. to 4:00 p.m. See section VII, ``Public
Participation,'' for webinar registration information, participant
instructions, and information about the capabilities available to
webinar participants.
Comments regarding the likely competitive impact of the proposed
standard should be sent to the U.S. Department of Justice (DOJ) contact
listed in the ADDRESSES section on or before June 26, 2023.

ADDRESSES: Interested persons are encouraged to submit comments using
the Federal eRulemaking Portal at <a href="http://www.regulations.gov">www.regulations.gov</a> under docket
number EERE-2020-BT-STD-0014. Follow the instructions for submitting
comments. Alternatively, interested persons may submit comments,
identified by docket number EERE-2020-BT-STD-0014, by any of the
following methods:
Email: <a href="/cdn-cgi/l/email-protection#afedf9e29d9f9d9ffcfbeb9f9f9e9befcaca81cbc0ca81c8c0d9">[email&#160;protected]</a>. Include the docket number number
EERE-2020-BT-STD-0014 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-0014">www.regulations.gov/docket/EERE-2020-BT-STD-0014</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 DOJ 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#a4c1cac1d6c3dd8ad7d0c5cac0c5d6c0d7e4d1d7c0cbce8ac3cbd2">[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
rulemaking.

FOR FURTHER INFORMATION CONTACT:
Mr. Bryan Berringer, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Office, EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone:
(202) 586-0371. Email: <a href="/cdn-cgi/l/email-protection#9ddcededf1f4fcf3fef8cee9fcf3f9fceff9eecce8f8eee9f4f2f3eeddf8f8b3f9f2f8b3faf2eb">[email&#160;protected]</a>.
Ms. Sarah Butler, U.S. Department of Energy, Office of the General
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121.
Telephone: (202) 586-1777. Email: <a href="/cdn-cgi/l/email-protection#3d6e5c4f5c55137f484951584f7d554c13595258135a524b">[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#266756564a4f4748454375524748424754425577534355524f4948556643430842494308414950">[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 BVMs
C. Deviation From Process Rule
1. Framework Document
2. Public Comment Period
3. Amended Test Procedures
III. General Discussion
A. General Comments
B. Scope of Coverage
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. Equipment Classes
a. Combination A
2. Technology Options
a. Compressors
b. Alternative Refrigerants
c. Insulation
d. Fan Motors
e. Evaporators and Condensers

[[Page 33969]]

f. Glass Packs
g. Payment Mechanisms
h. Low Power Modes
i. Additional Concerns
B. Screening Analysis
1. Screened Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
a. Baseline Energy Use
b. Higher Efficiency Levels
2. Cost Analysis
3. Cost-Efficiency Results
D. Markups Analysis
E. Energy Use Analysis
F. Life-Cycle Cost and Payback Period Analysis
1. Equipment Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Maintenance and Repair Costs
6. Equipment Lifetime
7. Discount Rates
8. Energy Efficiency Distribution in the No-New-Standards Case
9. Split Incentives
10. Payback Period Analysis
G. Shipments Analysis
H. National Impact Analysis
1. Product Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model and Key Inputs
a. Manufacturer Production Costs
b. Shipments Projections
c. Product and Capital Conversion Costs
d. Manufacturer Markup Scenarios
3. Manufacturer Interviews
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 BVM 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, 13563, and 14094
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. Participation in the Webinar
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of the Webinar
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.
These products include BVMs, the subject of this proposed rulemaking.
(42 U.S.C. 6295(v)) \3\
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\1\ All references to EPCA in this document refer to the statute
as amended through the Infrastructure Investment and Jobs Act,
Public Law 117-58 (Nov. 15, 2021).
\2\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated Part A.
\3\ Because Congress included BVMs in Part A of Title III of
EPCA, the consumer product provisions of Part A (rather than the
industrial equipment provisions of Part A-1) apply to BVMs. DOE
placed the regulatory requirements specific to BVMs in 10 CFR part
431, ``Energy Efficiency Program for Certain Commercial and
Industrial Equipment'' as a matter of administrative convenience
based on their type and will refer to BVMs as ``equipment''
throughout this document because of their placement in 10 CFR part
431. Despite the placement of BVMs in 10 CFR part 431, the relevant
provisions of Title A of EPCA and 10 CFR part 430, which are
applicable to all product types specified in Title A of EPCA, are
applicable to BVMs. See 74 FR 44914, 44917 (Aug. 31, 2009) and 80 FR
45758, 45759 (Jul. 31, 2015). The regulatory provisions of 10 CFR
430.33 and 430.34 and subparts D and E of 10 CFR part 430 are
applicable to BVMs.
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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 3 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 NOPR
including new proposed energy conservation standards (proceeding to a
final rule, as appropriate). (42 U.S.C. 6295(m)(3)(B))
In accordance with these and other statutory provisions discussed
in this document, DOE proposes amended energy conservation standards
for BVMs. The proposed standards, which are expressed in maximum daily
energy consumption as a function of refrigerated volume, if adopted,
would apply to all BVMs listed in Table I.1 manufactured in, or
imported into, the United States starting on the date 3 years after the
publication of the final rule for this proposed rulemaking.

Table I.1--Proposed Energy Conservation Standards for BVMs
------------------------------------------------------------------------
Maximum daily energy
Equipment class consumption (kilowatt hours
per day)
------------------------------------------------------------------------
Class A................................... 0.029 x V * + 1.34.
Class B................................... 0.029 x V * + 1.21.
Combination A............................. 0.048 x V * + 1.50.
Combination B............................. 0.052 x V * + 0.96.
------------------------------------------------------------------------
* V is the representative value of refrigerated volume (ft\3\) of the
BVM model, as calculated pursuant to 10 CFR 429.52(a)(3).

[[Page 33970]]

A. Benefits and Costs to Consumers

Table I.2 presents DOE's evaluation of the economic impacts of the
proposed standards on consumers of BVMs, as measured by the average
life-cycle cost (LCC) savings and the simple payback period (PBP).\4\
The PBP is less than the average lifetime of BVMs, which is estimated
to be 13.4 years (see section IV.F of this document).
---------------------------------------------------------------------------

\4\ The average LCC savings refer to consumers that are affected
by a standard and are measured relative to the efficiency
distribution in the no-new-standards case, which depicts the market
in the compliance year in the absence of new or amended standards
(see section IV.F.9 of this document). The simple PBP, which is
designed to compare specific efficiency levels, is measured relative
to the baseline product (see section IV.C of this document).

Table I.2--Impacts of Proposed Energy Conservation Standards on
Consumers of Refrigerated Bottled or Canned Beverage Vending Machines
------------------------------------------------------------------------
Simple
Average LCC payback
Equipment class savings * period
(2021$) (years)
------------------------------------------------------------------------
Class A....................................... (5.52) 5.7
Class B....................................... 206.01 1.2
Combination A................................. 190.03 1.4
Combination B................................. 287.16 2.2
------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.

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 to the industry from the base year through the end of the
analysis period (2028-2057). Using a real discount rate of 8.5 percent,
DOE estimates that the INPV for manufacturers of BVMs in the case
without amended standards is $85.5 million in 2021$. Under the proposed
standards, the change in INPV is estimated to range from a loss of 2.2
percent to a gain 0.6 percent, which is approximately -$1.9 million to
$0.5 million. In order to bring equipment into compliance with amended
standards, it is estimated that the industry would incur total
conversion costs of $1.5 million.
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 \5\
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\5\ All monetary values in this document are expressed in 2021
dollars.
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DOE's analyses indicate that the proposed energy conservation
standards for BVMs would save a significant amount of energy. Relative
to the case without amended standards, the lifetime energy savings for
BVMs purchased in the 30-year period that begins in the anticipated
year of compliance with the amended standards (2028-2057) amount to
0.09 quadrillion British thermal units (Btu or quads).\6\ This
represents a savings of 30 percent relative to the energy use of this
equipment in the case without amended standards (referred to as the
``no-new-standards case'').
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\6\ 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.
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The cumulative net present value (NPV) of total consumer benefits
of the proposed standards for BVMs ranges from $0.09 billion (at a 7-
percent discount rate) to $0.25 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 BVMs purchased
in 2028-2057.
In addition, the proposed standards for BVMs are projected to yield
significant environmental benefits. DOE estimates that the proposed
standards would result in cumulative emission reductions (over the same
period as for energy savings) of 3.0 million metric tons (Mt) \7\ of
carbon dioxide (CO<INF>2</INF>), 1.4 thousand tons of sulfur dioxide
(SO<INF>2</INF>), 4.7 thousand tons of nitrogen oxides
(NO<INF>X</INF>), 21 thousand tons of methane (CH<INF>4</INF>), 0.03
thousand tons of nitrous oxide (N<INF>2</INF>O), and 0.009 tons of
mercury (Hg).\8\
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\7\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO<INF>2</INF> are presented in short tons.
\8\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy
Outlook 2022 (AEO2022). AEO2022 represents current federal and state
legislation and final implementation of regulations as of the time
of its preparation. See section IV.K of this document for further
discussion of AEO2022 assumptions that effect air pollutant
emissions.
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DOE estimates the value of climate benefits from a reduction in
greenhouse gases (GHGs) 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 GHGs
(``SC-GHGs''). 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 climate benefits
associated with the average SC-GHG at a 3-percent discount rate are
estimated to be $0.14 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 sets of SC-GHG
estimates.
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\9\ To monetize the benefits of reducing GHG emissions this
analysis uses the interim estimates presented in the Technical
Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide
Interim Estimates Under Executive Order 13990 published in February
2021 by the IWG. (``February 2021 SC-GHG TSD''). <a href="http://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf">www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf</a>.
---------------------------------------------------------------------------

DOE estimated the monetary health benefits of SO<INF>2</INF> and
NO<INF>X</INF> emissions reductions using benefit per ton estimates
from the scientific literature, as discussed in section IV.L of this
document. DOE estimated the present value of the health benefits would
be $0.10 billion using a 7-percent discount rate and $0.27 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 E.O. 12866.
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Table I.3 summarizes the monetized benefits and costs expected to
result from the proposed standards for BVMs. There are other important
unquantified effects, including certain unquantified climate benefits,
unquantified public health benefits from the reduction of toxic air
pollutants and other emissions, unquantified energy security benefits,
and distributional effects, among others. The monetization of climate
and health benefits that have been quantified is explained in section
IV.L of this document.

[[Page 33971]]

Table I.3--Summary of Monetized Benefits and Costs of Proposed Energy
Conservation Standards for Refrigerated Bottled or Canned BVMs
[TSL 4]
------------------------------------------------------------------------
Billion
($2021)
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings.............................. 0.33
Climate Benefits *........................................... 0.14
Health Benefits **........................................... 0.27
Total Benefits [dagger]...................................... 0.75
Consumer Incremental Product Costs [Dagger].................. 0.08
----------
Net Benefits............................................. 0.66
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings.............................. 0.14
Climate Benefits * (3% discount rate)........................ 0.14
Health Benefits **........................................... 0.10
Total Benefits[dagger]....................................... 0.38
Consumer Incremental Product Costs[Dagger]................... 0.05
----------
Net Benefits............................................. 0.33
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with BVMs
shipped in 2028-2057. These results include benefits to consumers
which accrue after 2057 from the products shipped in 2028-2057.
* 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; however, DOE emphasizes the importance and value of considering
the benefits calculated using all four sets of SC-GHG estimates. To
monetize the benefits of reducing GHG emissions, this analysis uses
the interim estimates presented in the Technical Support Document:
Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates
Under Executive Order 13990 published in February 2021 by the IWG.
** 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 DOE does not have a single central SC-GHG point estimate.
DOE emphasizes the importance and value of considering the benefits
calculated using all four sets of SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as
installation costs.

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 2021, 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 2021. 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 cost savings are domestic private U.S.
consumer monetary savings that occur as a result of purchasing the
covered equipment and are measured for the lifetime of BVMs shipped in
2028-2057. The benefits associated with reduced emissions achieved as a
result of the proposed standards are also calculated based on the
lifetime of BVMs shipped in 2028-2057. Total benefits for both the 3-
percent and 7-percent cases are presented using the average GHG social
costs with a 3-percent discount rate. Estimates of SC-GHG values are
presented for all four discount rates in section V.B.6 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 NO<INF>X</INF> and SO<INF>2</INF>
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated cost of the standards
proposed in this rule is $5.8 million per year in increased equipment
costs, while the estimated annual benefits are $16 million in reduced
equipment operating costs, $8.5 million in climate benefits, and $12
million in health benefits. In this case. The net benefit would amount
to $30 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards is $4.9 million per year in
increased equipment costs, while the estimated annual benefits are $20
million in reduced operating costs, $8.5 million in climate benefits,
and $16 million in health benefits. In this case, the net benefit would
amount to $39 million per year.

Table I.4--Annualized Benefits and Costs of Proposed Energy Conservation Standards for Beverage Vending Machines
[TSL 4]
----------------------------------------------------------------------------------------------------------------
Million 2021$/year
--------------------------------------------------------
Low net benefits High net benefits
Primary estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings........................ 20 19 20
Climate Benefits *..................................... 8.5 8.5 8.5
Health Benefits **..................................... 16 16 17
Total Benefits [dagger]................................ 44 44 45
Consumer Incremental Product Costs [Dagger]............ 4.9 5.2 4.9
--------------------------------------------------------

[[Page 33972]]

Net Benefits....................................... 39 38 40
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings........................ 16 15 16
Climate Benefits * (3% discount rate).................. 8.5 8.5 8.5
Health Benefits **..................................... 12 12 12
Total Benefits [dagger]................................ 36 35 36
Consumer Incremental Product Costs [Dagger]............ 5.8 6.0 5.7
--------------------------------------------------------
Net Benefits....................................... 30 29 31
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with BVMs shipped in 2028-2057. These results
include benefits to consumers which accrue after 2057 from the products shipped in 2028-2057. The Primary, Low
Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the AEO2022 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 sections IV.F.1 and IV.H.3 of this document. Note that the Benefits
and Costs may not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
at a 3-percent discount rate are shown; however, DOE emphasizes the importance and value of considering the
benefits calculated using all four sets of SC-GHG estimates. To monetize the benefits of reducing GHG
emissions, this analysis uses the interim estimates presented in the Technical Support Document: Social Cost
of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021
by the IWG.
** 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 benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate.
[Dagger] Costs include incremental equipment costs as well as installation costs.

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, equipment achieving these standard levels is
already commercially available for all product classes covered by this
proposal. As for economic justification, DOE's analysis shows that the
benefits of the proposed standard exceed, to a great extent, the
burdens of the proposed standards.
Using a 7-percent discount rate for consumer benefits and costs and
NO<INF>X</INF> and SO<INF>2</INF> reduction benefits, and a 3-percent
discount rate case for GHG social costs, the estimated cost of the
proposed standards for BVMs is $5.8 million per year in increased
equipment costs, while the estimated annual benefits are $16 million in
reduced equipment operating costs, $8.5 million in climate benefits,
and $12 million in health benefits. The net benefit amounts to $30
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\ 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).
---------------------------------------------------------------------------

As previously mentioned, the standards are projected to result in
estimated national energy savings of 0.09 quad full-fuel-cycle (FFC),
the equivalent of the primary annual energy use of 2.4 million homes.
In addition, they are projected to reduce CO<INF>2</INF> emissions by
3.0 Mt. Based on these findings, DOE has initially determined the
energy savings from the proposed standard levels are ``significant''
within the meaning of 42 U.S.C. 6295(o)(3)(B). A more detailed
discussion of the basis for these tentative conclusions is contained in
the remainder of this document and the accompanying technical support
document (TSD).
DOE also considered more stringent energy efficiency levels (ELs)
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
BVMs.

A. Authority

EPCA authorizes DOE to regulate the energy efficiency of a number
of

[[Page 33973]]

consumer products and certain industrial equipment. (42 U.S.C. 6291-
6317) Title III, Part B of EPCA established the Energy Conservation
Program for Consumer Products Other Than Automobiles. These products
include BVM equipment, the subject of this document. (42 U.S.C.
6295(v)) EPCA directed DOE to prescribe energy conservation standards
for BVMs not later than 4 years after August 8, 2005. (42 U.S.C
6295(v)(1)) 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))
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 BVMs appear at title 10 of the Code of Federal
Regulations (CFR) part 431, subpart Q, appendix B.
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products, including BVMs. Any new or
amended standard for a covered product must be designed to achieve the
maximum improvement in energy efficiency that the Secretary of Energy
(Secretary) determines is technologically feasible and economically
justified. (42 U.S.C. 6295(o)(2)(A) and 42 U.S.C. 6295(o)(3)(B))
Furthermore, DOE may not adopt any standard that would not result in
the significant conservation of energy. (42 U.S.C. 6295(o)(3))
Moreover, DOE may not prescribe a standard (1) for certain
products, including BVMs, if no test procedure has been established for
the product, or (2) if DOE determines by rule that the standard is not
technologically feasible or economically justified. (42 U.S.C.
6295(o)(3)(A)-(B)) In deciding whether a proposed standard is
economically justified, DOE must determine whether the benefits of the
standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make
this determination after receiving comments on the proposed standard,
and by considering, to the greatest extent practicable, the following
seven statutory factors:

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

(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA establishes a rebuttable presumption that a standard
is economically justified if the Secretary finds that the additional
cost to the consumer of purchasing a product complying with an energy
conservation standard level will be less than three times the value of
the energy savings during the first year that the consumer will receive
as a result of the standard, as calculated under the applicable test
procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
EPCA also contains what is known as an ``anti-backsliding''
provision, which prevents the Secretary from prescribing any amended
standard that either increases the maximum allowable energy use or
decreases the minimum required energy efficiency of a covered product.
(42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended
or new standard if interested persons have established by a
preponderance of the evidence that the standard is likely to result in
the unavailability in the United States in any covered product type (or
class) of performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as those generally available in the United States. (42 U.S.C.
6295(o)(4))
Additionally, EPCA specifies requirements when promulgating an
energy conservation standard for a covered product that has two or more
subcategories. DOE must specify a different standard level for a type
or class of product that has the same function or intended use, if DOE
determines that products within such group (A) consume a different kind
of energy from that consumed by other covered products within such type
(or class), or (B) have a capacity or other performance-related feature
that 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

[[Page 33974]]

reviewed the operating modes available for BVM equipment and determined
that this equipment does not have operating modes that meet the
definition of standby mode or off mode, as established at 42 U.S.C.
6295(gg)(3). Specifically, BVM equipment is typically always providing
at least one main function--refrigeration. (42 U.S.C. 6295(gg)(1)(A))
DOE recognizes that in a unique equipment design, the low power mode
includes disabling the refrigeration system, while for other equipment
the low power mode controls only elevate the thermostat set point.
Because low power modes still include some amount of refrigeration for
most equipment, DOE believes that such a mode does not constitute a
``standby mode,'' as defined by EPCA, for BVM equipment. Therefore, DOE
believes that BVM equipment does not operate under standby and off mode
conditions as defined in EPCA, and that the energy use of BVM equipment
would be captured in any standard established for active mode energy
use. This NOPR does not specifically address standby and off mode
energy consumption for this equipment.

B. Background

1. Current Standards
In the final rule published on January 8, 2016, DOE prescribed the
current energy conservation standards for BVM equipment manufactured on
and after January 8, 2019 (``January 2016 Final Rule''). 81 FR 1028.
These standards are set forth in DOE's regulations at 10 CFR 431.296(b)
and are repeated in Table II.1.

Table II.1--Federal Energy Conservation Standards for Refrigerated
Bottled or Canned Beverage Vending Machines
------------------------------------------------------------------------
Maximum daily energy
Equipment class consumption (kilowatt hours
per day)
------------------------------------------------------------------------
Class A................................... 0.052 x V [dagger] + 2.43.
Class B................................... 0.052 x V [dagger] + 2.20.
Combination A............................. 0.086 x V [dagger] + 2.66.
Combination B............................. 0.111 x V [dagger] + 2.04.
------------------------------------------------------------------------
[dagger] ``V'' is the representative value of refrigerated volume (ft3)
of the BVM model, as calculated pursuant to 10 CFR 429.52(a)(3).

2. History of Standards Rulemaking for BVMs
On June 10, 2020, DOE published a request for information (``June
2020 RFI'') that identified various issues on which DOE sought comment
to inform its determination of whether the standards need to be
amended. 85 FR 35394.
On April 26, 2022, DOE published a notice that announced the
availability of the preliminary analysis (``April 2022 Preliminary
Analysis'') it conducted for purposes of evaluating the need for
amended energy conservation standards for BVM equipment. 87 FR 24469.
In that notification, DOE sought comment on the analytical framework,
models, and tools that DOE used to evaluate efficiency levels for BVM
equipment, the results of preliminary analyses performed, and the
potential energy conservation standard levels derived from these
analyses, which DOE presented in the accompanying preliminary TSD
(``April 2022 Preliminary TSD'').
On May 23, 2022, DOE held a public webinar in which it presented
the methods and analysis in the April 2022 Preliminary Analysis and
solicited public comment.\13\
---------------------------------------------------------------------------

\13\ See <a href="http://www.regulations.gov/document/EERE-2020-BT-STD-0014-0013">www.regulations.gov/document/EERE-2020-BT-STD-0014-0013</a>
for a PDF version of the transcript.
---------------------------------------------------------------------------

DOE received comments in response to the April 2022 Preliminary
Analysis from the interested parties listed in Table II.2.

Table II.2--April 2022 Preliminary Analysis Written Comments
----------------------------------------------------------------------------------------------------------------
Comment No. in
Commenter(s) Abbreviation the docket Commenter type
----------------------------------------------------------------------------------------------------------------
Appliance Standards Awareness Project, ASAP, ACEEE............... 15 Efficiency Organization.
American Council for an Energy-
Efficient Economy.
National Automated Merchandising NAMA...................... 14 Trade Association.
Association.
----------------------------------------------------------------------------------------------------------------

A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\14\
To the extent that interested parties have provided written comments
that are substantively consistent with any oral comments provided
during the May 2022 public meeting, DOE cites the written comments
throughout this document. Any oral comments provided during the webinar
that are not substantively addressed by written comments are summarized
and cited separately throughout this document.
---------------------------------------------------------------------------

\14\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for BVMs. (Docket No. EERE-2020-BT-
STD-0014, which is maintained at <a href="http://www.regulations.gov">www.regulations.gov</a>). The
references are arranged as follows: (commenter name, comment docket
ID number, page of that document).
---------------------------------------------------------------------------

C. Deviation from Process Rule

In accordance with section 3(a) of 10 CFR part 430, subpart C,
appendix A (``Process Rule''), DOE notes that it is deviating from the
provision in the Process Rule regarding the pre-NOPR and NOPR stages
for an energy conservation standards rulemaking.
1. Framework Document
Section 6(a)(2) of the Process Rule states that if DOE 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. While DOE
published a preliminary analysis for this rulemaking (see 87 FR 24469),
DOE did not publish a framework document in conjunction with the
preliminary analysis. DOE notes, however, that chapter 2 of the
preliminary technical support document that accompanied the preliminary
analysis--entitled Analytical Framework, Comments from Interested
Parties, and DOE Responses--describes the general analytical framework
that DOE uses in evaluating and developing potential amended energy
conservation standards.\15\ As such, publication of a separate
Framework Document would be largely redundant of previously published
documents.
---------------------------------------------------------------------------

\15\ The preliminary technical support document is available at
<a href="http://www.regulations.gov/document/EERE-2020-BT-STD-0014-0007">www.regulations.gov/document/EERE-2020-BT-STD-0014-0007</a>.
---------------------------------------------------------------------------

2. Public Comment Period
Section 6(f)(2) of the Process Rule specifies that the length of
the public

[[Page 33975]]

comment period for a NOPR will be not less than 75 calendar days. For
this NOPR, DOE has opted instead to provide a 60-day comment period.
DOE is opting to deviate from the 75-day comment period because
stakeholders have already been afforded multiple opportunities to
provide comments on this proposed rulemaking. As noted previously, DOE
requested comment on various issues pertaining to this standards
proposed rulemaking in the June 2020 RFI and provided stakeholders with
a 60-day comment period. 85 FR 35394. Additionally, DOE initially
provided a 60-day comment period for stakeholders to provide input on
the analyses presented in the April 2022 Preliminary TSD. 87 FR 24469.
The analytical assumptions and approaches used for the analyses
conducted for this NOPR are similar to those used for the preliminary
analysis. Therefore, DOE believes a 60-day comment period is
appropriate and will provide interested parties with a meaningful
opportunity to comment on the proposed rule.
3. Amended Test Procedures
NAMA requested that DOE finish the test procedure rulemaking before
the standards rulemaking process begins. (NAMA, No. 14 at p. 16).
Section 8(d)(1) of the Process Rule specifies that test procedure
rulemakings establishing methodologies used to evaluate proposed energy
conservation standards will be finalized prior to publication of a NOPR
proposing new or amended energy conservation standards. Additionally,
new test procedures and amended test procedures that impact measured
energy use or efficiency will be finalized at least 180 days prior to
the close of the comment period for (1) a NOPR proposing new or amended
energy conservation standards or (2) a notice of proposed determinaton
that standards do not need to be amended. In the BVM test procedure
final rule issued on April 25, 2023 (April 2023 Test Procedure Final
Rule), DOE amended the test procedures for BVMs.\16\ DOE determined
that the amendments adopted will not alter (i.e., will not impact) the
measured efficiency of BVMs. Id. As such, the requirement that the
amended test procedure be finalized at least 180 days prior to the
close of the comment period for this NOPR do not apply.
---------------------------------------------------------------------------

\16\ See <a href="http://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=29">www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=29</a>.
---------------------------------------------------------------------------

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. General Comments

This section summarizes general comments received from interested
parties regarding rulemaking timing and process.
NAMA requested that DOE pay considerable attention to the economic
impacts of new energy regulations on an industry under pressure due to
factors such as the COVID-19 pandemic and the switch from
hydrofluorocarbons (HFCs) to lower global warming potential (GWP)
chemicals. (NAMA, No. 14 at p. 3)
NAMA commented to ask that DOE return to in-person meetings,
stating that while electronic meetings provide value, they present
challenges to full dialogue on these important subjects. (NAMA, No. 14
at p. 3)
NAMA commented that DOE should not discount the time and resources
needed to evaluate and respond to all proposed test procedures and
energy conservation standards for multiple products proposed over a
short period, as is currently the case. (NAMA, No. 14 at p. 16) It
noted that when these rulemakings occur simultaneously, as they are now
and have in the past, the cumulative burden increases substantially.
Id.
NAMA commented that it requested an extension to the Cooperative
Research and Development Agreement (CRADA) between the NAMA Foundation,
DOE, and the Oak Ridge National Laboratory (ORNL) so that the remaining
items revolving around energy efficiency gains can be studied, and
asked that DOE wait until the CRADA is finished before pursuing a
regulation. (NAMA, No. 14 at p. 9) NAMA also commented that in the
preliminary analysis TSD, DOE recognizes the existence of the CRADA
between NAMA, DOE, and ORNL; however, NAMA stated the status of this
CRADA is not current or correct in the TSD. Id. NAMA stated that most
of the activities of the 2019-2021 CRADA were directed toward reduction
of the risk involved in a possible leak situation if it were ever to
occur. Id. NAMA commented that ORNL did extensive testing on leak
scenarios and proposed new methods to reduce the risk from such a leak
in a public space. Id. NAMA stated that, in nearly all the scenarios
tested by ORNL, this involved the use of additional fans to circulate
air. Id. NAMA commented that the energy used by additional ventilation
is not accounted for in the preliminary analysis TSD and that,
according to the proposed DOE test procedure, BVM manufacturers would
be penalized to use additional ventilation and thus to reduce the
safety risk. Id.
DOE has evaluated potential improvements to the energy efficiency
of BVMs to support this NOPR through testing, teardowns, manufacturer
interviews, market review, and comments submitted by stakeholders. DOE
welcomes any additional comments and supporting data, including any
additional results of the CRADA, in response to this NOPR.
In the April 2023 Test Procedure Final Rule, DOE determined to
amend the test procedure to include additional instructions for
refrigerant leak mitigation controls.\17\ DOE specified that for
refrigerant leak mitigation controls that are independent from the
refrigeration or vending performance of the BVM, such controls must be
disconnected, disabled, or otherwise de-energized for the duration of
testing. Id. For refrigerant leak mitigation controls that are
integrated into the BVM cabinet such that they cannot be de-energized
without disabling the refrigeration or vending functions of the BVM or
modifying the circuitry, such controls must be placed in an external
accessory standby mode, if available, or their lowest energy-consuming
state. Id.
---------------------------------------------------------------------------

\17\ See <a href="http://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=29">www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=29</a>.
---------------------------------------------------------------------------

Section 2.5.1.1 of the preliminary analysis TSD states that DOE
acknowledges the ongoing research at ORNL. DOE recognized that leak
mitigation technologies are still under development and continues to
request comment and data on the use of such technologies and how they
may impact BVM energy use. Id. DOE acknowledged that ASHRAE 15-2019,
ASHRAE 34-2019, and UL 541 specified limitations on placing beverage
vending machines using propane refrigerant in hallways or corridors and
that these industry standards are often adopted as part of local codes.
Id. DOE noted that, since the initial publication of the standards,
addenda \18\ to ASHRAE 15 and 34 have been published to remove the
limitations on placing beverage vending machines using propane in
hallways or

[[Page 33976]]

corridors. Id. These addenda specify a maximum charge limit based on
the lower flammability limit of a refrigerant. Id. For BVM equipment
using propane, the maximum charge limit permitted under the addenda is
114 grams. Id. DOE determined in the preliminary analysis TSD that this
charge limit would allow BVM units in all equipment classes and
available sizes to transition to propane without restricting
installation locations of BVM units for end users. Id. Similarly, DOE
states that it has already observed in the market and tested BVM units
utilizing flammable refrigerants, specifically R-290. Id. In this NOPR,
DOE has tentatively determined, based on manufacturer interviews, test
data, and teardown data, that BVM units in all equipment classes and
available sizes can use a R-290 charge of 114 grams or less. DOE has
not observed any refrigeration leak mitigation controls that consume
additional energy on BVMs using flammable refrigerants and, based on
interviews conducted in support of this NOPR, refrigeration leak
mitigation controls on BVMs using R-290 are not required because all
BVMs use less than 114 grams of R-290. See chapter 5 of the NOPR TSD
for additional discussion.
---------------------------------------------------------------------------

\18\ ASHRAE 15-2019 Addendum C, published August 2020, and
ASHRAE 34-2019 Addendum F, published December 2019, specifically
address this issue and can be accessed at <a href="http://www.techstreet.com/ashrae/standards/ashrae15-2019-packaged-w-34-2019?product_id=2046531">www.techstreet.com/ashrae/standards/ashrae15-2019-packaged-w-34-2019?product_id=2046531</a>.
---------------------------------------------------------------------------

B. Scope of Coverage

This NOPR covers equipment that meet the definition of a
refrigerated bottled or canned beverage vending machine, as codified at
10 CFR 431.292.
A ``refrigerated bottled or canned beverage vending machine'' is
defined as a commercial refrigerator (as defined in 10 CFR 431.62) that
cools bottled or canned beverages and dispenses the bottled or canned
beverages on payment. 10 CFR 431.292.
See section IV.A.1 of this document for discussion of the equipment
classes analyzed in this NOPR.

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 BVM equipment are expressed
in terms of maximum daily energy consumption as a function of the
refrigerated volume of the equipment; see 10 CFR 431.296(b).

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 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 BVM equipment, particularly the designs DOE considered, those it
screened out, and those that are the basis for the standards considered
in this rulemaking. For further details on the screening analysis for
this rulemaking, see chapter 4 of the NOPR TSD.
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt an amended standard for a type or class
of covered product, it must determine the maximum improvement in energy
efficiency or maximum reduction in energy use that is technologically
feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the
engineering analysis, DOE determined the maximum technologically
feasible (``max-tech'') improvements in energy efficiency for BVM
equipment 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.b of this document 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 the application of the TSL to BVMs purchased in the 30-year period
that begins in the year of compliance with the proposed standards
(2028-2057).\19\ The savings are measured over the entire lifetime of
BVMs 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.
---------------------------------------------------------------------------

\19\ 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 BVMs. 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.\20\ 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.1 of this document.
---------------------------------------------------------------------------

\20\ 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).
---------------------------------------------------------------------------

NAMA commented that DOE overestimated energy savings over the 30
year analysis period. (NAMA, No. 14 at p. 14) DOE clarifies that the
energy savings referenced are FFC energy savings, where the energy
usage calculated by NAMA appears to be site energy usage. DOE also
clarifies that energy savings are based on 30 years of shipments, but
BVMs shipped in year

[[Page 33977]]

30 can continue to save energy until they are retired from service.
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.\21\ 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. Accordingly, DOE evaluates
the significance of energy savings on a case-by-case basis, taking into
account the significance of cumulative FFC national energy savings, the
cumulative FFC emissions reductions, and the need to confront the
global climate crisis, among other factors. DOE has initially
determined the energy savings from the proposed standard levels are
``significant'' within the meaning of 42 U.S.C. 6295(o)(3)(B).
---------------------------------------------------------------------------

\21\ 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 13 December 2021 (86 FR 70892).
---------------------------------------------------------------------------

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 proposed rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of a potential amended standard on
manufacturers, DOE conducts an MIA, as discussed in section IV.J of
this document. DOE first uses an annual cash flow approach to determine
the quantitative impacts. This step includes both a short-term
assessment--based on the cost and capital requirements during the
period between when a regulation is issued and when entities must
comply with the regulation--and a long-term assessment over a 30-year
period. The industry-wide impacts analyzed include (1) INPV, which
values the industry on the basis of expected future cash flows, (2)
cash flows by year, (3) changes in revenue and income, and (4) other
measures of impact, as appropriate. Second, DOE analyzes and reports
the impacts on different types of manufacturers, including impacts on
small manufacturers. Third, DOE considers the impact of standards on
domestic manufacturer employment and manufacturing capacity, as well as
the potential for standards to result in plant closures and loss of
capital investment. Finally, DOE takes into account cumulative impacts
of various DOE regulations and other regulatory requirements on
manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and PBP associated with new or amended standards. These
measures are discussed further in the following section. For consumers
in the aggregate, DOE also calculates the national NPV of the consumer
costs and benefits expected to result from particular standards. DOE
also evaluates the impacts of potential standards on identifiable
subgroups of consumers that may be affected disproportionately by a
standard.
b. Savings in Operating Costs Compared to Increase in Price (LCC and
PBP)
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered product
that are likely to result from a standard. (42 U.S.C.
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP
analyses.
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 analyses, 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 analyses 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 of this document, DOE uses the NIA
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
In establishing product classes and evaluating design options and
the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data
available to DOE, the standards proposed in this document would not
reduce the utility or performance of the products under consideration
in this rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from a proposed standard. (42 U.S.C.
6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine
the impact, if any, of any lessening of competition likely to result
from a proposed standard and to transmit such determination to the
Secretary within 60 days of the publication of a proposed rule,
together with an analysis of the nature and extent of the impact. (42
U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of this proposed
rule to the Attorney General with a request that the DOJ provide its
determination on this issue. DOE will publish and

[[Page 33978]]

respond to the Attorney General's determination in the final rule. DOE
invites comment from the public regarding the competitive impacts that
are likely to result from this proposed rule. In addition, stakeholders
may also provide comments separately to DOJ regarding these potential
impacts. See the ADDRESSES section for information to send comments to
DOJ.
f. Need for National Energy Conservation
DOE also considers the need for national energy and water
conservation in determining whether a new or amended standard is
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy
savings from the proposed standards are likely to provide improvements
to the security and reliability of the Nation's energy system.
Reductions in the demand for electricity also may result in reduced
costs for maintaining the reliability of the Nation's electricity
system. DOE conducts a utility impact analysis to estimate how
standards may affect the Nation's needed power generation capacity, as
discussed in section IV.M of this document.
DOE maintains that environmental and public health benefits
associated with the more efficient use of energy are important to take
into account when considering the need for national energy
conservation. The proposed standards are likely to result in
environmental benefits in the form of reduced emissions of air
pollutants and GHGs associated with energy production and use. DOE
conducts an emissions analysis to estimate how potential standards may
affect these emissions, as discussed in section IV.K of this document;
the estimated emissions impacts are reported in section V.B.6 of this
document. DOE also estimates the economic value of emissions reductions
resulting from the considered TSLs, as discussed in section IV.L of
this document.
g. Other Factors
In determining whether an energy conservation standard is
economically justified, DOE may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To
the extent DOE identifies any relevant information regarding economic
justification that does not fit into the other categories described
previously, DOE could consider such information under ``other
factors.''
2. Rebuttable Presumption
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a
rebuttable presumption that an energy conservation standard is
economically justified if the additional cost to the consumer of a
product that meets the standard is less than three times the value of
the first year's energy savings resulting from the standard, as
calculated under the applicable DOE test procedure. DOE's LCC and PBP
analyses generate values used to calculate the effects that proposed
energy conservation standards would have on the PBP for consumers.
These analyses include, but are not limited to, the 3-year PBP
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 of this document.

IV. Methodology and Discussion of Related Comments

This section addresses the analyses DOE has performed for this
proposed rulemaking with regard to BVM equipment. Separate subsections
address each component of DOE's analyses.
DOE used several analytical tools to estimate the impact of the
standards proposed in this document. The first tool is a spreadsheet
that calculates the LCC savings and PBP of potential amended or new
energy conservation standards. The national impacts analysis uses a
second spreadsheet set that provides shipments projections and
calculates national energy savings and net present value of total
consumer costs and savings expected to result from potential energy
conservation standards. DOE uses the third spreadsheet tool, the
Government Regulatory Impact Model (GRIM), to assess manufacturer
impacts of potential standards. These three spreadsheet tools are
available on the DOE website for this proposed rulemaking:
<a href="http://www.regulations.gov/docket/EERE-2020-BT-STD-0014">www.regulations.gov/docket/EERE-2020-BT-STD-0014</a>. For this NOPR
analysis, the Energy Information Administration (EIA) Annual Energy
Outlook 2022 (AEO2022),\22\ a widely known energy projection for the
United States, was used for the life-cycle cost, emissions, and utility
impact analyses, which was current for the analysis phase. However,
near the time of publication of the NOPR, EIA released AEO2023. DOE
plans to shift to AEO2023 in the final rule analysis. A preliminary
review of the electricity prices in AEO2023 indicates lower electricity
prices than AEO2022 in the Reference case. Lower electricity prices
could reduce the life-cycle savings and affect the related payback
period calculations. DOE will update other variables and data sets in
the final rule analysis in addition to use of AEO2023, as well as
incorporate feedback from commenters.
---------------------------------------------------------------------------

\22\ U.S. Department of Energy-Energy Information
Administration. Annual Energy Outlook 2022. Washington, DC.
Available at <a href="https://www.eia.gov/outlooks/archive/aeo22//">https://www.eia.gov/outlooks/archive/aeo22//</a>.
---------------------------------------------------------------------------

A. Market and Technology Assessment

DOE develops information in the market and technology assessment
that provides an overall picture of the market for the equipment
concerned, including the purpose of the equipment, the industry
structure, manufacturers, market characteristics, and technologies used
in the equipment. 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 equipment classes, and (2) technologies or design
options that could improve the energy efficiency of BVM equipment. 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. Equipment Classes
When evaluating and establishing energy conservation standards, DOE
may establish separate standards for a group of covered products (i.e.,
establish a separate product class) if DOE determines that separate
standards are justified based on the type of energy used, or if DOE
determines that a product's capacity or other performance-related
feature justifies a different standard. (42 U.S.C. 6295(q)) 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. Id.
DOE currently separates BVM equipment into four equipment classes
categorized by physical characteristics

[[Page 33979]]

that affect equipment utility and equipment efficiency: (1) whether 25
percent or more of the surface area on the front side of the BVM is
transparent and (2) whether two or more compartments of the BVM are
separated by a solid partition that may or may not share a product
delivery chute, in which at least one compartment is designed to be
refrigerated--as demonstrated by the presence of temperature controls--
and at least one compartment is not (i.e., a combination vending
machine). The equipment classes are defined as follows:
Class A means a refrigerated bottled or canned beverage vending
machine that is not a combination vending machine and in which 25
percent or more of the surface area on the front side of the beverage
vending machine is transparent.
Class B means a refrigerated bottled or canned beverage vending
machine that is not considered to be Class A and is not a combination
vending machine.
Combination A means a combination vending machine where 25 percent
or more of the surface area on the front side of the beverage vending
machine is transparent.
Combination B means a combination vending machine that is not
considered to be Combination A.
DOE currently sets forth energy conservation standards and relevant
definitions for BVM equipment at 10 CFR 431.296 and 10 CFR 431.292,
respectively, and the energy conservation standards are repeated in
Table II.1.
a. Combination A
In the January 2016 Final Rule, DOE noted that the optional test
protocol to determine the transparency of materials and the relative
surface areas of transparent and non-transparent surfaces would be
applicable to combination vending machines except that, the external
surface areas surrounding the non-refrigerated compartment(s) would not
be considered. 81 FR 1027, 1048. That is, all the surfaces that
surround and enclose the compartment designed to be refrigerated (as
demonstrated by the presence of temperature controls) as well as any
surfaces that do not enclose any product-containing compartments (e.g.,
surfaces surrounding any mechanical equipment or containing the product
selection and delivery apparatus) would be considered in the
calculation of transparent and non-transparent surface area for a BVM,
as shown in Figure IV.1. Id.
[GRAPHIC] [TIFF OMITTED] TP25MY23.000

DOE notes that the January 2016 Final Rule and Figure IV.1 do not
mention the solid partition that separates two or more compartments in
a combination vending machine. The definition of combination vending
machine at 10 CFR 431.292 does not limit the size or shape of the solid
partition that might separate refrigerated and non-refrigerated
subcompartments. Based on BVM teardowns conducted in support of this
NOPR, DOE has initially determined that the solid partition projected
to the front surface would constitue a small portion of the overall
transparent surface area calculation. DOE has observed solid partitions
with a projected front surface area of 0.5 inches of thickness and span
the width of the internal compartment resulting in approximately 1.0%
of the front surface area. Therefore, in this NOPR, DOE proposes to
clarify that the solid partition would be considered in the calculation
of transparent and non-transparent surface area for BVM equipment up to
the centerline of the solid partition projected to the front surface
for the surfaces that surround and enclose the compartment designed to
be refrigerated (as demonstrated by the presence of temperature
controls).

[[Page 33980]]

The definition of Combination A requires that ``25 percent or more
of the surface area on the front side of the beverage vending machine
is transparent.'' 10 CFR 431.292. Consistent with the January 2016
Final Rule, DOE proposes to revise the definition of Combination A to
clarify the exclusion of the external surface areas surrounding the
non-refrigerated compartment(s) in the calculation of surface areas of
transparent and non-transparent surfaces:
Combination A means a combination vending machine where 25 percent
or more of the surface area on the front side of the beverage vending
machine that surrounds the refrigerated compartment(s) is transparent.
DOE requests comment on its proposal to revise the definition of
Combination A.
2. Technology Options
In the preliminary market analysis and technology assessment, DOE
identified 29 technology options that would be expected to improve the
efficiency of BVM equipment, as measured by the DOE test procedure and
shown in Table IV.1.

Table IV.1--Technology Options for Refrigerated Bottled or Canned
Beverage Vending Machines in the April 2022 Preliminary TSD
------------------------------------------------------------------------

-------------------------------------------------------------------------
Insulation:
Improved resistivity of insulation (insulation type).
Increased insulation thickness.
Vacuum insulated panels.
Improved Glass Packs:
Low-E coatings.
Inert gas fill.
Vacuum insulated glass.
Additional panes.
Frame design.
Compressor:
Improved compressor efficiency.
Variable speed compressors.
Linear compressors.
Evaporator:
Increased surface area.
Tube and fin enhancements (including microchannel designs).
Low pressure differential evaporator.
Condenser:
Increased surface area.
Tube and fin enhancements (including microchannel designs).
Microchannel heat exchanger.
Fans and Fan Motors:
Evaporator fan motors.
Evaporator fan blades.
Evaporator fan controls.
Condenser fan motors.
Condenser fan blades.
Other Technologies:
Lighting.
Anti-sweat heater controls.
Defrost systems.
Expansion valve improvements:
Alternative refrigerants.
Low power payment mechanisms.
Low power states.
------------------------------------------------------------------------

DOE received several comments in response to the April 2022
Preliminary Analysis regarding the technology options.
a. Compressors
NAMA commented that, at the present time, variable speed and two-
speed compressors are not available for the size range of compressors
for most BVMs. (NAMA, No. 14 at p. 24)
NAMA commented that when moving from single speed compressors to
variable speed compressors, in order to take full advantage of this
level of energy efficiency, other components, such as metering devices
(i.e., expansion valves and capillary tubes), must be changed. (NAMA,
No. 14 at p. 24) NAMA added that a control system will have to be added
to monitor the system of the compressor, the cycle, the temperatures,
and environmental conditions, and that these changes must be factored
into the total cost. Id. NAMA commented that it is necessary for DOE to
understand that the refrigeration cycle is only on for 20-25 percent of
the time and that any savings must be allocated across the full set of
DOE test procedure measurements. Id.
NAMA also commented that linear compressors are not available for
BVMs and are many years away from concept design. In addition, NAMA
commented that several manufacturers of linear compressors appear to
have discontinued production. (NAMA, No. 14 at p. 24)
DOE has reviewed variable speed compressors available on the market
and found that variable speed compressors are offered at the same
cooling capacities as single speed compressors currently used in BVMs.
All variable speed compressors observed had more than two speeds.
In this NOPR, DOE did not assume that additional components other
than the variable speed compressor were required to reduce the energy
use for the variable speed compressor design option. DOE is aware of
refrigerant systems which use a capillary tube and a variable speed
compressor which suggests that expansion valve changes are not
necessary. Based on feedback received during manufacturer interviews,
information collected during BVM teardowns, and market research, DOE
has tentatively determined that control systems are already present in
BVM equipment.
In the NOPR analysis, DOE considered the refrigeration cycle
duration in the engineering analysis for the variable speed compressor
design option. See chapter 5 of the NOPR TSD for additional details.
In the April 2022 Preliminary Analysis, DOE did not screen out
linear compressors but did include linear compressors as a ``design
option not directly analyzed.'' DOE included linear compressors as a
technology option because compressor manufacturers had begun
development on linear compressors for residential refrigerators.
However, recent lawsuits and a lack of availability of linear
compressors on the market have prevented further development of this
technology for BVM equipment; therefore, DOE has tentatively determined
that linear compressors meet the screening criterion of ``impacts on
product utility or product availability.'' DOE has screened out linear
compressors as a design option for improving the energy efficiency of
BVM equipment. See section IV.B.1 of this document and chapter 4 of the
NOPR TSD for additional details.
b. Alternative Refrigerants
NAMA commented that the changes necessary to adopt the lower GWP
refrigerants are being made but have not been fully realized in all
models of BVMs. (NAMA, No. 14 at p. 4) NAMA commented that DOE's
statement that BVMs currently available on the market have already
transitioned to R-290 refrigerant is incorrect. (NAMA, No. 14 at p. 16)
NAMA commented that the 114 grams of refrigerant that is allowed
for the low GWP refrigerant is 36 grams less than what is allowed in a
household or commercial refrigerator, which limits the size of the
machine and restricts design options that require additional energy.
(NAMA, No. 14 at p. 8)
DOE notes that the U.S. Environmental Protection Agency (EPA)
proposed refrigerant restrictions pursuant to the American Innovation
and Manufacturing Act (``AIM Act'') \23\

[[Page 33981]]

affecting BVM equipment in a NOPR published on December 15, 2022
(``December 2022 EPA NOPR''). 87 FR 76738. Specifically, EPA proposed
prohibitions for new vending machines (EPA's term for this equipment)
for the use of HFCs and blends containing HFCs that have a GWP of 150
or greater. 87 FR 76738, 76780. The proposal would prohibit manufacture
or import of such vending machines starting January 1, 2025, and would
ban sale, distribution, purchase, receive, or export of such vending
machines starting January 1, 2026. 87 FR 76740. DOE considered the use
of alternative refrigerants that are not prohibited for BVM equipment
in the December 2022 EPA NOPR.
---------------------------------------------------------------------------

\23\ Under subsection (i) of the AIM Act, entitled ``Technology
Transitions,'' the EPA may by rule restrict the use of
hydrofluorocarbons (HFCs) in sectors or subsectors where they are
used. A person or entity may also petition EPA to promulgate such a
rule. ``H.R.133--116th Congress (2019-2020): Consolidated
Appropriations Act, 2021.'' <a href="http://Congress.gov">Congress.gov</a>, Library of Congress, 27
December 2020, <a href="http://www.congress.gov/bill/116thcongress/house-bill/133">www.congress.gov/bill/116thcongress/house-bill/133</a>.
---------------------------------------------------------------------------

DOE notes that several manufactuerers currently rate BVM models to
both ENERGY STAR \24\ and DOE \25\ with BVM equipment using R-290 and
that manufacturers indicated in manufacturer interviews that the
industry is planning to transition to R-290.
---------------------------------------------------------------------------

\24\ See <a href="http://www.energystar.gov/productfinder/product/certified-vending-machines/results">www.energystar.gov/productfinder/product/certified-vending-machines/results</a>.
\25\ See <a href="http://www.regulations.doe.gov/certification-data/CCMS-4-Refrigerated_Bottled_or_Canned_Beverage_Vending_Machines.html#q=Product_Group_s%3A%22Refrigerated%20Bottled%20or%20Canned%20Beverage%20Vending%20Machines%22">www.regulations.doe.gov/certification-data/CCMS-4-Refrigerated_Bottled_or_Canned_Beverage_Vending_Machines.html#q=Product_Group_s%3A%22Refrigerated%20Bottled%20or%20Canned%20Beverage%20Vending%20Machines%22</a>.
---------------------------------------------------------------------------

DOE is aware of the 114 gram charge limit for R-290 in BVM
equipment located in a public corridor or lobby as specified in
Addendum C to ANSI/ASHRAE Standard 15-2019, ``Safety Standard for
Refrigeration Systems'' and UL 60335-2-89, ``Particular Requirements
for Commercial Refrigerating Appliances and Ice-Makers with an
Incorporated or Remote Refrigerant Unit or Motor-Compressor.'' Based on
feedback received during manufacturer interviews, information collected
during BVM teardowns, and market research, DOE has tentatively
determined that the 114 gram charge limit does not restrict the size of
the machine nor any technology options considered in this NOPR. DOE has
tentatively determined that all BVM equipment can use less than 114
grams of R-290.
In response to the December 2022 EPA NOPR, this NOPR reflects the
alternative refrigerant design changes made by manufacturers at the
baseline levels for BVM equipment, which incorporate a refrigerant
conversion to R-290 (i.e., the most efficient refrigerant DOE is
currently aware of on the market for BVM equipment), instead of as a
design option as presented in the April 2022 Preliminary Analysis.
See section IV.C.1.a and chapter 5 of the NOPR TSD for additional
details.
NAMA recommended that this be the last rulemaking to raise the
issue of CO<INF>2</INF> as a refrigerant, and provided many details on
the design differences and challenges in using CO<INF>2</INF> as a
refrigerant. (NAMA, No. 14 at pp. 24-25)
While DOE mentioned CO<INF>2</INF> refrigerants in the April 2022
Preliminary TSD as background information on the January 2016 Final
Rule, DOE did not consider CO<INF>2</INF> refrigerant as a technology
option in the April 2022 Preliminary TSD or this NOPR.
c. Insulation
NAMA commented that the term ``extra insulation'' is vague, and
manufacturers have been using ``extra'' insulation since the inception
of BVMs. (NAMA, No. 14 at p. 21)
In the April 2022 Preliminary TSD, DOE provided context that
``extra insulation'' refers to an extra \1/4\ inch of insulation
thickness. See chapter 5 of the April 2022 Preliminary TSD for
additional details.
NAMA asserted that in low-volume manufacturing, with multiple
variations of size, features, and designs, vacuum panels are not a
feasible design option. (NAMA, No. 14 at p. 22) NAMA stated that vacuum
panels often leak over time and return very little overall energy
savings during the life of the product. Id. NAMA added that vacuum
panels are very costly as individual parts, but even more so in tooling
costs spread over very small volumes. Id.
Vacuum insulated panels (VIPs) may require cabinet redesign and
additional tooling costs to properly incorporate VIPs in BVMs without
leaks or damage to the panel. DOE has considered the investments
required in additional tooling, equipment, and processes for any
cabinet redesign in the engineering analysis (sunk cost per unit) and
manufacturer impact analysis (capital conversion costs). See chapter 5
and 12 of the NOPR TSD for additional discussion on VIPs.
d. Fan Motors
NAMA commented that manufacturers changing to R-290 have already
incorporated electronically commutated fan motors (ECMs) into their
machines and many did this years ago. (NAMA, No. 14 at p. 21) NAMA
added that, with the change to R-290, manufacturers of BVMs must
utilize ADAC controls and components (sometimes called ``spark-proof''
motors). Id. NAMA further stated that current designs of permanent
split capacitor motors (PSCs) are much more energy efficient than they
were 5 or 10 years ago, and that NAMA approximates the energy use of an
ECM to be higher than the value provided in the April 2022 Preliminary
TSD. Id.
DOE considered the requirement for motors to be ``spark-proof'' for
use with the R-290 refrigerant. DOE notes that, based on feedback
received during manufacturer interviews, information collected during
BVM teardowns, and market research, DOE has tentatively determined that
manufacturers currently use shaded pole motors (SPMs), PSCs, and ECMs,
although not all motor types are used in each BVM equipment class.
Based on feedback from commenters, market research, and additional
testing, DOE has tentatively determined to update the fan motor
efficiency assumptions in this NOPR. Consistent with commenters, DOE
increased the assumed motor efficiency of SPMs and PSCs, and decreased
the assumed motor efficiency of ECMs in this NOPR.
As noted in the April 2022 Preliminary TSD, DOE is also aware of an
additional motor technology that is available for use in BVMs,
permanent magnet synchronous (PMS) motors. PMS motor technology has
shown the potential for motor efficiency improvement beyond ECMs, as
indicated in a 2019 ORNL study comparing PMS motors and ECMs.\26\ Due
to the motor efficiency improvements PMS motors provide in comparison
to ECMs, and based on DOE's updated fan motor efficiency assumptions
(i.e., ECM assumed efficiencies in this NOPR are less than the assumed
PMS motor efficiencies), DOE has tentatively determined to include PMS
motors as a design option for BVMs.
---------------------------------------------------------------------------

\26\ Permanent Magnet Synchronous Motors for Commercial
Refrigeration: Final Report, available at: <a href="http://info.ornl.gov/sites/publications/Files/Pub115680.pdf">info.ornl.gov/sites/publications/Files/Pub115680.pdf</a>.
---------------------------------------------------------------------------

See chapter 5 of the NOPR TSD for additional details on fan motors.
e. Evaporators and Condensers
NAMA commented that true microchannel designs are prone to
significant clogging and have been shown to exhibit pin-hole sized
leaks, making them inadvisable with a flammable refrigerant. (NAMA, No.
14 at p. 23)
DOE acknowledges that microchannel condensers may experience
clogging over the lifetime of a unit due to a lack of maintenance by
the end user or other factors; however, DOE's BVM standards

[[Page 33982]]

consider the performance of the unit as measured by the DOE BVM test
procedure, which measures the performance of new BVMs. Additionally,
tube and fin condensers may also experience clogging over the lifetime
of a unit and require proper maintence of the condenser.
DOE notes that microchannel heat exchangers are currently used in a
variety of applications, including mobile air-conditioning, commercial
air-conditioning, residential air-conditioning, and commercial
refrigeration equipment. Although DOE acknowledges that some
microchannel condenser designs could have the potential to leak, DOE
has observed the use of microchannel condensers with flammable
refrigerants in similar applications (e.g., automatic commercial ice
makers). Additionally, pin-hole sized leaks are not unique to
microchannel heat exchangers. Furthermore, DOE notes that the CRADA was
established, in part, to mitigate leak risks and assess potential
hazards, including flammability.\27\
---------------------------------------------------------------------------

\27\ See <a href="http://www.energy.gov/eere/buildings/articles/five-new-cooperative-research-agreements-invest-efficiency-performance-and">www.energy.gov/eere/buildings/articles/five-new-cooperative-research-agreements-invest-efficiency-performance-and</a>.
---------------------------------------------------------------------------

f. Glass Packs
NAMA commented that the change from double pane to triple pane
glass would require a significant increase in the overall structural
design of the machine. (NAMA, No. 14 at p. 22) NAMA noted that the
doors would have to increase in size, thickness, and weight, and that
the wall structure and frame would have to be increased to accommodate
the hanging weight. Id. NAMA added that the overall machine weight
would increase, thereby increasing shipping weight and the
corresponding transportation costs (and thus the carbon footprint of
the machine). Id.
DOE observed both double pane and triple pane glass doors in BVM
equipment and used the teardown analysis of units containing each door
type to inform the NOPR analysis. DOE considered the additional cost
related to structural changes when upgrading from double pane to triple
pane glass doors. DOE did not receive any data which supported an
increase in transporation costs when switching from double pane to
triple pane glass doors. See chapter 5 of the NOPR TSD for additional
detail.
g. Payment Mechanisms
ASAP and ACEEE encouraged DOE to include low-power coin and bill
payment mechanisms as a design option in the engineering analysis, as
BVMs are usually shipped with the payment mechanisms, and their energy
consumption is captured in the test procedures. (ASAP & ACEEE, No. 15
at p. 1)
In the April 2023 Test Procedure Final Rule, DOE determined to
maintain the current 0.20 kWh/day adder to account for the energy use
of payment mechanisms.\28\ The available information demonstrates that
a wide (and growing) variety of payment systems are currently available
on the market; the most common scenario is for the payment mechanism to
be specified (and in some cases, provided) by the customer; and the
customer may decide whether or not to have the payment mechanism
installed by the BVM manufacturer at the time of sale. Id. Therefore,
DOE did not consider low-power payment mechanisms as a design option in
this NOPR. See chapter 5 of the NOPR TSD for additional details.
---------------------------------------------------------------------------

\28\ See <a href="http://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=29">www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=29</a>.
---------------------------------------------------------------------------

h. Low Power Modes
NAMA commented that it is unclear from the April 2022 Preliminary
TSD exactly what DOE means by ``automatic lighting controls.'' (NAMA,
No. 14 at pp. 19, 20) NAMA added that most of the machines sold today
will go into a ``sleep'' mode after a period of inactivity, which is
not the type of proximity control system used in display case products.
Id. NAMA further commented that customers do not want a vending machine
to go completely to ``sleep,'' because they want users to see the
machine as fully functioning and not dark. Id. NAMA asserted that
machines going completely ``dark'' is a change in utility of the
machine and should be accounted for in a different category.
The ``automatic lighting control'' design option is based on the
``accessory low power mode'' section of the BVM test procedure which
allows for 6 hours of operation in the accessory low power mode during
the test (i.e., the lowest energy-consuming lighting and control
settings that constitute an accessory low power mode). Appendix B to
subpart Q of 10 CFR part 431. Therefore, in the preliminary and NOPR
analyses, DOE modeled 18 hours of light on time for the automatic
lighting control design option and 6 hours of light off time.
``Accessory low power mode'' is defined as a state in which a
beverage vending machine's lighting and/or other energy-using systems
are in low power mode, but that is not a refrigeration low power mode.
Functions that may constitute an accessory low power mode may include,
for example, dimming or turning off lights, but does not include
adjustment of the refrigeration system to elevate the temperature of
the refrigerated compartment(s). Id.
DOE notes that there are currently 17 out of 53 Class A and
Combination A models certified to DOE's Compliance Certification
Database (CCD) \29\ that use accessory low power mode. DOE also notes
that manufacturers provide information on their low power mode
operation in the unit's user manual for varying customer demands.
---------------------------------------------------------------------------

\29\ See <a href="http://www.regulations.doe.gov/certification-data/CCMS-4-Refrigerated_Bottled_or_Canned_Beverage_Vending_Machines.html#q=Product_Group_s%3A%22Refrigerated%20Bottled%20or%20Canned%20Beverage%20Vending%20Machines%22">www.regulations.doe.gov/certification-data/CCMS-4-Refrigerated_Bottled_or_Canned_Beverage_Vending_Machines.html#q=Product_Group_s%3A%22Refrigerated%20Bottled%20or%20Canned%20Beverage%20Vending%20Machines%22</a>. (Accessed February 9, 2023).
---------------------------------------------------------------------------

NAMA commented that many BVMs can be programmed into an ``energy
saver'' mode based on inactivity or schedule. (NAMA, No. 14 at p. 20)
NAMA added that consumers can set the machine to somewhat reduce the
refrigeration cycle during nighttime if the location is truly ``shut
down'' for many hours, but that DOE only allows a credit of 3 percent
for this feature. Id. NAMA stated that mandating some form of automatic
low power mode is different and will be beneficial only if the low
power mode period is significantly longer, adding that if it is short,
the energy savings will be offset by the additional energy required to
bring the product back to the lower temperature. Id.
NAMA commented most current customers of BVMs do not want a low
power mode that affects the holding temperature or lengthens the
pulldown time, and that any change to this could have a direct effect
on the utility and performance of the machine and should be avoided.
(NAMA, No. 14 at p. 20)
DOE acknowledges that there is variability in customer location and
activity and that some of the energy savings of the low power mode will
be offset by the pulldown period to return to normal operation. As
noted in the BVM test procedure NOPR published on August 11, 2014 (2014
BVM test procedure NOPR), DOE understands that refrigeration low power
modes are extremely variable in terms of their control strategies and
operation and, in addition, may require specific instructions from the
manufacturer to precisely modify or adjust the control systems to
accommodate the specific provisions of the DOE test procedure. 79 FR
46908, 46924-46925. As noted in BVM test procedure final rule published
on July 31, 2015 (2015 BVM test procedure Final Rule), DOE's estimate
of 3 percent energy savings due to the

[[Page 33983]]

operation of low power modes is based on the data available and that
DOE believes 3-percent is representative of the common types of
refrigeration low power modes DOE has observed in the market place. 80
FR 45758, 45786. In the April 2023 Test Procedure Final Rule, DOE
maintained the existing test procedure provisions and 3-percent energy
credit for refrigeration low power mode.\30\ In this NOPR, DOE has
tentatively determined that 3-percent continues to be representative of
the common types of refrigeration low power modes DOE has observed in
the marketplace. See chapter 5 of the NOPR TSD for additional details.
---------------------------------------------------------------------------

\30\ See <a href="http://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=29">www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=29</a>.
---------------------------------------------------------------------------

DOE notes that there are currently 55 out of 107 BVM models
certified to DOE's CCD \31\ that use refrigeration low power mode. DOE
also notes that manufacturers provide information on their low power
mode operation in the unit's user manual for varying customer demands.
---------------------------------------------------------------------------

\31\ See <a href="http://www.regulations.doe.gov/certification-data/CCMS-4-Refrigerated_Bottled_or_Canned_Beverage_Vending_Machines.html#q=Product_Group_s%3A%22Refrigerated%20Bottled%20or%20Canned%20Beverage%20Vending%20Machines%22">www.regulations.doe.gov/certification-data/CCMS-4-Refrigerated_Bottled_or_Canned_Beverage_Vending_Machines.html#q=Product_Group_s%3A%22Refrigerated%20Bottled%20or%20Canned%20Beverage%20Vending%20Machines%22</a>. (Accessed February 9, 2023).
---------------------------------------------------------------------------

i. Additional Concerns
NAMA commented that several of the design options shown in the
April 2022 Preliminary TSD (larger condensers or evaporators, more
insulation, changes to type of glass) would require more space inside
the machine, leading to a reduction in the overall capacity of the
machine, which should be considered in the TSD. (NAMA, No. 14 at p. 11)
In this NOPR, DOE did not consider design options that expanded the
size or footprint of BVM equipment (e.g., larger condensers or
evaporators, more insulation) because BVM equipment may be used in
locations prioritizing smaller equipment footprints and an increase in
cabinet sizes may adversely impact the availability of equipment at a
given refrigerated volume. DOE assumed, based on feedback received
during manufacturer interviews and from equipment teardowns, that the
design options which changed the type of glass would not increase the
door thickness but may require different frame materials or hinges,
which DOE has considered as a cost adder to the design option in this
NOPR. See chapter 5 of the NOPR TSD for additional details.
NAMA commented that several of the design options (e.g., lower
wattage refrigeration systems, vacuum panel insulation, different
evaporators or condensers, and lower wattage fan motors) could
potentially affect the overall performance of the machine, and
therefore should be reviewed in the TSD not only for their energy
efficiency but also the ability to maintain the critial design features
and performance of these machines. (NAMA, No. 14 at p. 12)
In this NOPR, DOE did not consider design options that changed the
measured performance as compared with existing BVM equipment. See
chapter 5 of the NOPR TSD for additional details.

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 commercially viable,
existing prototypes will not be considered further.
(2) Practicability to manufacture, install, and service. If it
is determined that mass production of a technology in commercial
products and reliable installation and servicing of the technology
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. If a technology is determined to
have a significant adverse impact on the utility of the product to
subgroups of consumers, or 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) Safety of technologies. 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 technology has
proprietary protection and represents a unique pathway to achieving
a given efficiency level, it will not be considered further, due to
the potential for monopolistic concerns.

See sections 6(b)(3) and 7(b) of the Process Rule.
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.
DOE did not receive any comments in response to the April 2022
Preliminary Analysis specific to the screening analysis.
1. Screened Out Technologies
For BVM equipment, the screening criteria were applied to the
technology options to either retain or eliminate each technology for
consideration in the engineering analysis.
In the April 2022 Preliminary Analysis, DOE did not screen out
linear compressors but did include linear compressors as a ``design
option not directly analyzed.'' DOE included linear compressors as a
technology option because compressor manufacturers had begun
development on linear compressors for residential refrigerators.
However, recent lawsuits and a lack of availability of linear
compressors on the market have prevented further development of this
technology for BVM equipment; therefore, DOE has tentatively determined
that linear compressors meet the screening criterion of ``impacts on
product utility or product availability.'' DOE has tentatively
determined to screen out linear compressors as a design option for
improving the energy efficiency of BVM equipment in this NOPR. See
chapter 4 of the NOPR TSD for additional details.
2. Remaining Technologies
Through a review of each technology, DOE tentatively concluded 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 technology options in Table IV.2.

Table IV.2--Retained Design Options for BVMs
------------------------------------------------------------------------

------------------------------------------------------------------------
Insulation Condenser
------------------------------------------------------------------------
Improved resistivity of insulation Increased surface area.
(insulation type).
Increased insulation thickness......... Tube and fin enhancements
(including microchannel
designs).

[[Page 33984]]

Vacuum insulated panels................ Microchannel heat exchanger.
------------------------------------------------------------------------
Improved Glass Packs Fans and Fan Motors
------------------------------------------------------------------------
Low-E coatings......................... Evaporator fan motors.
Inert gas fill......................... Evaporator fan blades.
Vacuum insulated glass................. Evaporator fan controls.
Additional panes....................... Condenser fan motors.
Frame design........................... Condenser fan blades.
------------------------------------------------------------------------
Compressor Other Technologies
------------------------------------------------------------------------
Improved compressor efficiency......... Lighting.
Variable speed compressors............. Anti-sweat heater controls.
Defrost systems.
------------------------------------------------------------------------
Evaporator Expansion valve improvements
------------------------------------------------------------------------
Increased surface area................. Alternative refrigerants.
Tube and fin enhancements (including Low power payment mechanisms.
microchannel designs).
Low pressure differential evaporator... Low power states.
------------------------------------------------------------------------

DOE has initially determined that these design options are
technologically feasible because they are being used or have previously
been used in commercially available equipment or working prototypes.
DOE also finds that all of the remaining design 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.

C. Engineering Analysis

The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of BVM equipment. 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 equipment cost at each efficiency level (i.e., the
``cost analysis''). In determining the performance of higher-efficiency
equipment, DOE considers technologies and design option combinations
not eliminated by the screening analysis. For each equipment class, DOE
estimates the baseline cost, as well as the incremental cost for the
equipment 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 equipment (i.e., 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 equipment 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 in which the
max-tech level exceeds the maximum efficiency level currently available
on the market).
In this proposed rulemaking, DOE relies on a design option
approach, supported with testing and reverse engineering multiple
analysis units. DOE generally relied on test data and reverse
engineering to inform a range of design options used to reduce energy
use. The design options were incrementally added to the baseline
configuration and continued through the ``max-tech'' configuration
(i.e., implementing the ``best available'' combination of available
design options).
Consistent with the January 2016 Final Rule analysis (see chapter 5
of the January 2016 Final Rule TSD), DOE estimated the performance of
design option combinations using an engineering analysis spreadsheet
model. This model estimates the daily energy consumption of BVM
equipment in kWh/day at various performance levels using a design
option approach. The model calculates energy consumption at each
performance level separately for each analysis configuration.
For Class A and Class B, DOE analyzed machines of different sizes
to assess how energy use varies with size via energy testing and
reverse engineering. In this NOPR, representative volumes were chosen
for each equipment class, based on current market offerings: medium and
large for Class A and Class B BVMs, and medium for Combination A and
Combination B. These equipment classes and representative unit volumes
are listed in Table IV.3.

[[Page 33985]]

Table IV.3--Representative Refrigerated Volumes in the NOPR
------------------------------------------------------------------------
Representative
Equipment class Size volume (ft\3\)
------------------------------------------------------------------------
Class A......................... Medium............. 26
Large.............. 35
Class B......................... Medium............. 22
Large.............. 31
Combination A................... Medium............. 11
Combination B................... Medium............. 10
------------------------------------------------------------------------

See chapter 5 of the NOPR TSD for additional detail on the
different units analyzed.
a. Baseline Energy Use
For each 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 equipment class represents the characteristics
of 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 this NOPR, DOE considered the current standards for BVM
equipment when developing the baseline energy use for each analyzed
equipment class. For higher efficiency levels, DOE assessed BVM
efficiencies as a percent improvement relative to the baseline. This
provides a consistent efficiency comparison across each equipment
class. DOE considered the efficiency improvements associated with
implementing available design options beyond the baseline to the max-
tech efficiency level.
In response to the April 2022 Preliminary Analysis, NAMA commented
that most of the analysis appears to have been performed prior to 2020,
yet the industry has been in the midst of considerable change from 2019
to 2022. (NAMA, No. 14 at p. 3)
NAMA commented that current machines on the market today that use
low GWP refrigerants and incorporate most of the design options shown
in Table 2.3 of the April 2022 Preliminary Analysis should be used
together with current costs, and that these should be the baseline
machines. (NAMA, No. 14 at p. 6) NAMA added that DOE should acknowledge
the costs already incurred by manufacturers in order to meet the goals
stated by the Biden Administration to reduce global warming. Id.
DOE expects that NAMA is referring to the December 2022 EPA NOPR in
its comment regarding the goals stated by the Biden Administration to
reduce global warming. As recommended by stakeholders, DOE is
considering the cost and impact of the December 2022 EPA NOPR on this
NOPR. The proposed date of the proposed GWP limit on BVMs is 2 years
earlier than the expected compliance date for any amended BVM standards
associated with the proposals in this document. Hence, the proposed
refrigerant prohibitions listed in the December 2022 EPA NOPR are
assumed to be enacted for the purpose of DOE's analysis in support of
this NOPR.
Refrigerants not prohibited from use in BVM equipment in the
December 2022 EPA NOPR are presumed to be permitted for use in BVM
equipment. As noted in section IV.A.2.b, several manufactuerers
currently rate BVM models to both ENERGY STAR \32\ and DOE \33\ with
BVM equipment using R-290, manufacturers indicated in manufacturer
interviews that the industry is planning to transition to R-290, and
DOE has tentatively determined that all BVM equipment can use less than
114 grams of R-290.
---------------------------------------------------------------------------

\32\ See <a href="http://www.energystar.gov/productfinder/product/certified-vending-machines/results">www.energystar.gov/productfinder/product/certified-vending-machines/results</a>.
\33\ See <a href="http://www.regulations.doe.gov/certification-data/CCMS-4-Refrigerated_Bottled_or_Canned_Beverage_Vending_Machines.html#q=Product_Group_s%3A%22Refrigerated%20Bottled%20or%20Canned%20Beverage%20Vending%20Machines%22">www.regulations.doe.gov/certification-data/CCMS-4-Refrigerated_Bottled_or_Canned_Beverage_Vending_Machines.html#q=Product_Group_s%3A%22Refrigerated%20Bottled%20or%20Canned%20Beverage%20Vending%20Machines%22</a>.
---------------------------------------------------------------------------

DOE expects that the use of R-290 generally will improve efficiency
as compared with the refrigerants currently in use (e.g., R-134a),
which are proposed to be prohibited by the December 2022 EPA NOPR,
because R-290 has higher refrigeration cycle efficiency than the
current refrigerants. Thus, DOE expects that the December 2022 EPA NOPR
will require redesign that will improve efficiency of BVM equipment.
Hence, the baseline levels for BVM equipment in this NOPR reflect the
design changes made by manufacturers in response to the December 2022
EPA NOPR, which incorporate refrigerant conversion to R-290. The
expected efficiency improvement associated with this refrigerant change
varies by class and is presented in Table IV.4.
DOE's analysis considers that these efficiency improvements,
equipment costs, and manufacturer investments required to comply with
the December 2022 EPA NOPR will be in effect prior to the time of
compliance for the proposed amended DOE BVM standards for all BVM
equipment classes and sizes. DOE updated its baseline equipment costs
to reflect current costs based on feedback received during manufacturer
interviews, information collected during BVM teardowns, and market
research.

Table IV.4--Proposed December 2022 EPA NOPR R-290 Energy Use Baseline
------------------------------------------------------------------------
Energy use
reduction
Equipment class below DOE
standard
(%)
------------------------------------------------------------------------
Class A.................................................... 12.7
Class B.................................................... 15.1
Combination A.............................................. 19.6
Combination B.............................................. 14.7
------------------------------------------------------------------------

The expected efficiency improvement associated with this
refrigerant change is based on R-290 single speed compressors currently
available on the market suitable for BVM equipment. In this NOPR, DOE
did not consider additional single speed compressor efficiency
improvements beyond the baseline because DOE expects that the single
speed compressors currently available on the market for refrigerants
used to comply with the December 2022 EPA NOPR represent the maximum
single speed compressor efficiency achievable for each respective
equipment class.
NAMA commented that the improved evaporator coils design option
seems to be indicating a high fin density and higher pitched coils, but
any increase in fin density may increase the fan motor power required
and energy

[[Page 33986]]

consumption. (NAMA, No. 14 at p. 20) NAMA added that current designs
are optimized based on cost versus energy efficiency, and that changes
would increase capital costs. Id.
In the April 2022 Preliminary Analysis, DOE analyzed ``baseline''
and ``high efficiency'' evaporator and condenser design options,
consistent with the January 2016 Final Rule. Based on stakeholder
comments, interviews with manufacturers, and CoilDesigner simulation,
DOE tentatively determined that the ``high efficiency'' evaporator and
condenser design options are representative of current manufacturer
designs. Therefore, DOE tentatively determined to analyze the ``high
efficiency'' evaporator and condenser coil as ``baseline'' in this NOPR
and remove the ``high efficiency'' evaporator and condenser design
options in the NOPR. See chapter 5 of the NOPR TSD for additional
details.
NAMA commented that according to the Process Rule, DOE should not
pursue a rulemaking if there were less than 0.30 quad of savings over
30 years, as the last published Process Rule dictates. (NAMA, No. 14 at
p. 7) NAMA added that it doesn't believe there will be greater than 5-
10 percent improvement in energy baseline by 2028 to justify the rule.
Id. NAMA stated that, including the fact that many of the improvements
in the design options have already been incorporated several years ago,
the actual improvements it projected to be seen are much less than 10
percent. Id.
DOE notes that on December 13, 2021, DOE published a Final Rule
which revised the Process Rule NAMA is referring to in its comment,\34\
and determinations of significance for energy savings are made on a
case-by-case basis. 86 FR 70892, 70906. DOE discusses the walk-down
analysis to determine the TSL that represents the maximum improvement
in energy efficiency that is technologically feasible and economically
justified as required under EPCA in section V.C.1.
---------------------------------------------------------------------------

\34\ See <a href="http://www.regulations.gov/document/EERE-2021-BT-STD-0003-0075">www.regulations.gov/document/EERE-2021-BT-STD-0003-0075</a>.
---------------------------------------------------------------------------

DOE requests comments on its proposal to use baseline levels for
BVM equipment based upon the design changes made by manufacturers in
response to the December 2022 EPA NOPR.
DOE further requests comment on its estimates of energy use
reduction associated with the design changes made by manufacturers in
response to the December 2022 EPA NOPR.
b. Higher Efficiency Levels
As part of DOE's analysis, the maximum available efficiency level
is the highest efficiency unit currently available on the market. DOE
also defines a ``max-tech'' efficiency level to represent the maximum
possible efficiency for a given equipment.
After conducting the screening analysis described in section IV.B
of this document and chapter 4 of the NOPR TSD, DOE considered the
remaining design options in the engineering analysis to achieve higher
efficiency levels. See chapter 5 of the NOPR TSD for additional detail
on the design options.
NAMA commented that although DOE estimates 25 percent energy
savings for improved evaporator coils, their review of design options
indicates that this is overstated by a factor of 10. (NAMA, No. 14 at
p. 20)
DOE expects that NAMA is referring to the total energy use
reduction below the baseline at a given efficiency level instead of the
energy use reduction for each design option. However, as discussed in
section IV.C.1.a of this document, DOE tentatively determined to
analyze the ``high efficiency'' evaporator coil as ``baseline'' in this
NOPR and remove the ``high efficiency'' evaporator design option in the
NOPR.
NAMA commented that for moving from single speed compressors to
variable speed compressors, the promised energy savings is more in the
area of 5-15 percent (depending on the model), rather than the 49
percent estimated in the April 2022 Preliminary Analysis TSD. (NAMA,
No. 14 at p. 24)
DOE expects that NAMA is referring to the total energy use
reduction below the baseline at a given efficiency level instead of the
energy use reduction for each design option. In this NOPR, DOE assumed
an energy use reduction of 7-14% for variable speed compressors
compared to single speed compressors, depending on the equipment class,
which is consistent with NAMA's estimates. See chapter 5 of the NOPR
TSD for additional details.
NAMA commented that DOE's estimate of a 43 percent improvement in
energy efficiency with the switch from double pane to triple pane glass
is much higher than NAMA's estimate of 12-15 percent improvement in
energy efficiency. (NAMA, No. 14 at p. 22)
DOE expects that NAMA is referring to the total energy use
reduction below the baseline at a given efficiency level instead of the
energy use reduction for each design option. In this NOPR, DOE assumed
an energy use reduction of 1-3% for triple pane glass pack compared to
double pane glass pack, depending on the equipment class, which is
lower than NAMA's estimates but is consistent with data collected from
teardowns and DOE's modeling. See chapter 5 of the NOPR TSD for
additional details.
NAMA commented that when moving from triple pane glass to vacuum
insulated glass, the efficiency improvements are in the vicinity of 2-3
percent gain. (NAMA, No. 14 at p. 24)
In this NOPR, DOE assumed an energy use reduction of approximately
1% for vacuum insulated glass compared to triple pane glass pack, which
is consistent with NAMA's estimates. See chapter 5 of the NOPR TSD for
additional details.
NAMA commented that there is not sufficient space in a BVM to allow
for the recommended change to insulation thickness. (NAMA, No. 14 at p.
21) NAMA stated that there is not sufficient space to allow for
insulation to equate to a reduction of even 10 percent in energy, much
less 31 percent, without impacting utility and performance. Id.
DOE expects that NAMA is referring to the total energy use
reduction below the baseline at a given efficiency level instead of the
energy use reduction for each design option. In this NOPR, DOE did not
consider design options that expanded the size or footprint of BVM
equipment (e.g., more insulation) because BVM equipment may be used in
locations prioritizing smaller equipment footprints and an increase in
cabinet sizes may adversely impact the availability of equipment at a
given refrigerated volume. See chapter 5 of the NOPR TSD for additional
details.
NAMA commented that it believes the 0.15 quad savings at max-tech
is an inflated value based on errors in the engineering analysis, and
asserted that the savings would in fact be considerably lower and no
longer significant enough for the changes in regulation to be
justified. (NAMA, No. 14 at p. 7)
In this NOPR, DOE estimates a combined total of 0.138 quads of FFC
energy savings over the analysis period at the max-tech efficiency
levels for BVM equipment. DOE has considered feedback from
stakeholders, manufacturer interviews, and current market data to
update its engineering analysis in this NOPR. See section V for
additional details.
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

[[Page 33987]]

of public information, characteristics of the regulated equipment, and
the availability and timeliness of purchasing the equipment on the
market. The cost approaches are summarized as follows:
<bullet> Physical teardowns: Under this approach, DOE physically
dismantles a commercially available equipment, component-by-component,
to develop a detailed bill of materials for the equipment.
<bullet> Catalog teardowns: In lieu of physically deconstructing a
equipment, 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 equipment.
<bullet> Price surveys: If neither a physical nor catalog teardown
is feasible (e.g., 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 teardowns and
feedback received from manufacturers during interviews. See chapter 5
of the NOPR TSD for additional details.
DOE received several comments in response to the April 2022
Preliminary Analysis regarding the cost analysis.
NAMA believes that DOE should factor the unprecedented increase in
inflation of basic constituents of the BVM machine and its
manufacturing into the costs shown for design options and the economic
analysis. (NAMA, No. 14 at p. 10)
DOE used current prices when estimating the baseline manufacturer
production costs and design option costs. See chapter 5 of the NOPR TSD
for additional details.
NAMA commented that the analyses in the April 2022 Preliminary TSD
do not address the major changes necessary to the machines to utilize
the lower GWP refrigerants (e.g., R-290). (NAMA, No. 14 at p. 4) NAMA
asserted that for low GWP, flammable A-3 refrigerants to be allowed for
use in machines, redesign of the evaporator and condensor system and
the use of new compressors and expansion valves would be necessary. Id.
Additionally, NAMA noted that all switches, electrical components,
motors (including robotic or vend motors), wiring, and connectors must
be compliant with ``spark-proof'' connections to shield against the
possibility of a leak of such refrigerant. Id. NAMA commented that
neither this level of redesign nor the use of these expensive
components was addressed in the April 2022 Preliminary TSD. Id.
NAMA commented that the incremental cost given in the DOE chart of
$11.28 to switch from an R-134 compressor to an R-290 compressor is
inaccurate considering that the compressor is only one of many
components that must change if the refrigerant is changed to an A-3
refrigerant. (NAMA, No. 14 at pp. 5, 19) NAMA stated that the increase
in the cost of the compressor by itself is more than $40, and from
their sample of five manufacturers, the cost of the change from R-134
to R-290 is approximately $200 per machine rather than $11.28 when all
the components that must change are factored in. Id.
As discussed in section IV.C.1.a of this document, DOE has analyzed
R-290 as the baseline refrigerant for this NOPR, and as a result, DOE
updated its baseline equipment costs to reflect current costs based on
feedback received during manufacturer interviews, information collected
during BVM teardowns, and market research, which includes the costs for
component changes and additions related to R-290. DOE's analysis
considers that these efficiency improvements, equipment costs, and
manufacturer investments required to comply with the December 2022 EPA
NOPR will be in effect prior to the time of compliance for the proposed
amended DOE BVM standards for all BVM equipment classes and sizes. See
chapter 5 of the NOPR TSD for additional details.
NAMA commented that for moving from single speed compressors to
variable speed compressors, the current data shows cost increases in
other product categories much higher than the $103.12 shown, and that
early cost estimates are more than $200 per machine. (NAMA, No. 14 at
p. 24)
NAMA commented that DOE's estimate of $16.72 per machine for
improved evaporator coils is significantly below NAMA's estimates of
the parts alone, and that NAMA's initial estimate is double this amount
and perhaps more when considering capital costs, design, and
recertification. (NAMA, No. 14 at p. 20)
NAMA commented that DOE's estimated cost of $32.36 for the extra
insulation likely does not factor in the cost of redesigning new
tooling to encompass additional insulation. (NAMA, No. 14 at p. 21)
NAMA commented that the cost estimate of $15.31 for moving from
tube and fin to microchannels is not realistic and is not borne out by
discussion with vendors, as this change would require a complete
redesign of all parts of the vending machine refrigeration system and
would need to include a large associated capital cost. (NAMA, No. 14 at
p. 23)
NAMA commented that the cost estimates its industry has seen are
three to four times the cost of glass mentioned in the April 2022
Preliminary TSD when moving from triple pane glass to vacuum insulated
glass. (NAMA, No. 14 at p. 24)
NAMA commented that the cost estimate of $72.84 with the switch to
multiple panes of glass is about half of the total cost when
considering increased structural components at extremely high volumes.
(NAMA, No. 14 at p. 22) NAMA stated that because of these factors, most
manufacturers would not realize this energy efficiency improvement and
would see much higher costs for little or no energy improvement. Id.
DOE notes that, as discussed in section IV.C.1.a of this document,
DOE did not analyze evaporator improvements or extra insulation as
design options.
DOE assumed, based on feedback received during manufacturer
interviews and from equipment teardowns, that the design options which
changed the type of glass may require different frame materials or
hinges, which DOE has considered as a cost adder to these design
options in this NOPR.
DOE updated its baseline and design option costs to reflect current
costs based on feedback received during manufacturer interviews,
information collected during BVM teardowns, stakeholder comments, and
market research. See chapter 5 of the NOPR TSD for additional details.
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 filed by publicly traded
manufacturers primarily engaged in equipment manufacturing and whose
combined equipment range includes BVM equipment.
3. Cost-Efficiency Results
The results of the engineering analysis are reported as cost-
efficiency data (or ``curves'') in the form of daily energy

[[Page 33988]]

consumption (in kWh) versus MSP (in dollars). DOE developed six curves
representing the four equipment classes. The methodology for developing
the curves started with determining the energy consumption for baseline
equipment and MPCs for this equipment. Above the baseline, design
options were implemented until all available technologies were employed
(i.e., at a max-tech level). See chapter 5 of the NOPR TSD for
additional detail on the engineering analysis and appendix 5B of the
NOPR TSD for complete cost-efficiency results.

D. Markups Analysis

The markups analysis develops appropriate markups (e.g., retailer
markups, distributor markups, contractor markups) in the distribution
chain and sales taxes to convert the MSP estimates derived in the
engineering analysis to consumer prices, which are then used in the LCC
and PBP analyses and in the manufacturer impact analysis. At each step
in the distribution channel, companies mark up the price of the product
to cover business costs and profit margin.
For BVMs, the main parties in the distribution chain are
manufacturers, wholesalers, and the end users.
DOE developed baseline and incremental markups for each actor in
the distribution chain. Baseline markups are applied to the price of
products with baseline efficiency, while incremental markups are
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The 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.\35\
---------------------------------------------------------------------------

\35\ Because the projected price of standards-compliant products
is typically higher than the price of baseline products, using the
same markup for the incremental cost and the baseline cost would
result in higher per-unit operating profit. While such an outcome is
possible, DOE maintains that in markets that are reasonably
competitive, it is unlikely that standards would lead to a
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------

DOE relied on economic data from the U.S. Census Bureau to estimate
average baseline and incremental markups.
Chapter 6 of the NOPR TSD provides details on DOE's development of
markups for BVMs.

E. Energy Use Analysis

The purpose of the energy use analysis is to determine the annual
energy consumption of BVMs at different efficiencies in representative
U.S. commercial and industrial buildings, and to assess the energy
savings potential of increased BVM efficiency. For the NOPR analysis,
DOE selected seven efficiency levels (ELs) for each equipment class,
each characterized as a percentage of rated daily energy consumption
from the baseline, up to the max-tech efficiency levels defined for
each class in the engineering analysis. Each level with the
corresponding percentage of baseline rated energy consumption varies by
equipment class and can be found in Chapter 7 of the NOPR TSD.
The energy use analysis then estimates the range of energy use of
BVMs 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 operating costs that could result from adoption of amended
or new standards.
The energy use analysis assessed the estimated annual energy
consumption of a BVM installed in the field. DOE recognizes that a
variety of factors may affect the energy use of a BVM, including
ambient conditions, use and stocking profiles, and other factors.
However, very limited data exist on field energy consumption of BVMs.
DOE estimated that the daily energy consumption produced by the DOE
test procedure is representative of the average daily energy
consumption of a BVM in an indoor environment. DOE developed a
methodology to account for the impact of ambient conditions on the
average annual energy consumption. To model the annual energy
consumption of each BVM unit, DOE separately estimated the energy use
of BVMs located indoors and outdoors to account for the impact of
ambient conditions on installed BVM energy use. Chapter 7 of the NOPR
TSD provides details on DOE's energy use analysis for BVMs.
In response to the April 2022 Preliminary Analysis, NAMA commented
that the energy used by additional ventilation to reduce the risk of a
leak in a public space was not accounted for in the April 2022
Preliminary TSD. (NAMA, No. 14 at p. 9)
In response to the NAMA comment, DOE notes that the NAMA concern
regarding additional ventilation needs is due to the presumed use of
hydrocarbon refrigerants. DOE notes that the analysis assumes
hydrocarbon refrigerants at all efficiency levels analyzed, including
the baseline, and any building energy impact due to additional
ventilation requirements in spaces surrounding BVMs is the same at all
efficiency levels and does not impact the differential energy
consumption between efficiency levels or the subsequent economic
calculations.
NAMA commented that although DOE has asserted that coin and bill
payment systems are typically included with BVMs as shipped, its survey
has indicated that this is not uniform and is unique to certain
manufacturers and customers. (NAMA, No. 14 at p. 12) NAMA also
questioned whether the approximation of 0.2 kWh per day is accurate for
the energy consumption of a payment mechanism, although it considers
the present solution to be preferable to the significant amount of time
it would take testing in laboratories to determine a more accurate
approximation resulting in a difference of a fraction of a kWh per day.
(NAMA, No. 14 at p. 13)
In the April 2023 Test Procedure Final Rule, DOE determined to
maintain the current 0.20 kWh/day adder to account for the energy use
of payment mechanisms.\36\ The available information demonstrates that
a wide (and growing) variety of payment systems are currently available
on the market; the most common scenario is for the payment mechanism to
be specified (and in some cases, provided) by the customer; and the
customer may decide whether or not to have the payment mechanism
installed by the BVM manufacturer at the time of sale. Id. Therefore,
DOE did not consider low-power payment mechanisms as a design option in
this NOPR. See chapter 5 of the NOPR TSD for additional details.
---------------------------------------------------------------------------

\36\ See <a href="http://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=29">www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=29</a>.
---------------------------------------------------------------------------

F. Life-Cycle Cost and Payback Period Analysis

DOE conducted LCC and PBP analyses to evaluate the economic impacts
on individual consumers of potential energy conservation standards for
BVMs. 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 a 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, refurbishment, 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.

[[Page 33989]]

<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 BVMs 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 equipment.
For each considered efficiency level in each equipment class, DOE
calculated the LCC and PBP for a nationally representative set of
consumers. As stated previously, DOE developed consumer samples from
the most recent industry reports. For each sample consumer, DOE
determined the energy consumption for the BVM and the appropriate
energy price. By developing a representative sample of consumers, the
analysis captured the variability in energy consumption and energy
prices associated with the use of BVMs.
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,
refurbishment, and maintenance costs; equipment lifetimes; and discount
rates. DOE created distributions of values for equipment 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 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 BVM user samples. For this
rulemaking, the Monte Carlo approach is implemented in MS Excel
together with the Crystal Ball TM add-on.\37\ The model
calculated the LCC for products at each efficiency level for 10,000
consumers 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, equipment efficiency is chosen based
on its probability. If the chosen equipment efficiency is greater than
or equal to the efficiency of the standard level under consideration,
the LCC calculation reveals that a consumer is not impacted by the
standard level. By accounting for consumers who already purchase more
efficient equipment, DOE avoids overstating the potential benefits from
increasing equipment efficiency.
---------------------------------------------------------------------------

\37\ Crystal Ball TM is commercially available
software tool to facilitate the creation of these types of models by
generating probability distributions and summarizing results within
Excel, available at <a href="http://www.oracle.com/technetwork/middleware/crystalball/overview/index.html">www.oracle.com/technetwork/middleware/crystalball/overview/index.html</a> (last accessed July 6, 2018).
---------------------------------------------------------------------------

DOE calculated the LCC and PBP for consumers of BVMs as if each
were to purchase a new BVM in the expected year of required compliance
with new or amended standards. New and amended standards would apply to
BVMs manufactured 3 years after the date on which any new or amended
standard is published. (42 U.S.C. 6295(v)(3)) At this time, DOE
estimates publication of a final rule in 2025. Therefore, for purposes
of its analysis, DOE used 2028 as the first year of compliance with any
amended standards for BVMs.
Table IV.5 summarizes the approach and data DOE used to derive
inputs to the LCC and PBP calculations. The subsections 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.5--Summary of Inputs and Methods for the LCC and PBP Analyses*
------------------------------------------------------------------------
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
component costs.
Installation Costs..................... Installation costs for BVMs are
subsumed in the MSP and markup
and not modeled as an
incremental cost.
Annual Energy Use...................... The total annual energy use
varies by equipment class and
efficiency level. Based on
engineering and energy use
analyses.
Energy Prices.......................... Electricity: Based on EIA's
Form 861 data for 2021.
Variability: Energy prices
determined for 50 states and
the District of Columbia.
Energy Price Trends.................... Based on AEO2022 price
projections.
Variability: Energy price
trends vary by nine census
regions.
Repair, Refurbishment and Maintenance Based on RS Means and United
Costs. States Bureau of Labor
Statistics data. Vary by
efficiency level.
Product Lifetime....................... Average: 13.4 years.
Discount Rates......................... Approach involves identifying
all possible debt or asset
classes that might be used to
purchase the considered
equipment, or might be
affected indirectly. Primary
data source was Damodaran
Online.
Compliance Date........................ 2028.
------------------------------------------------------------------------
* Not used for PBP calculation. 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.

In the April 2022 Preliminary Analysis, DOE requested comment on
the overall methodology and results of the LCC and PBP analyses. In
response to that request, NAMA made three comments.
NAMA stated that DOE should factor the unprecedented increase in
inflation into the economic analysis in addition

[[Page 33990]]

to the design option costs. (NAMA No. 14, at p. 10)
DOE acknowledges the comment from NAMA and applies the annual
implicit price deflators for gross domestic product (GDP) from the U.S.
Bureau of Economic Analysis to the LCC and PBP analyses to capture the
impact of price changes between the years of available cost data and
the analysis year. Equipment and design option costs are developed in
the engineering analysis and are incorporated into the LCC and PBP
analyses by being reflected in the MPCs.
In response to the April 2022 Preliminary Analysis, NAMA commented
to request that in the Economic Impact Analysis on the cost of labor,
real cases from 2021 and 2022 are used rather than the cost of labor in
2018. (NAMA, No. 14 at p. 11)
DOE acknowledges the comment from NAMA and will use the most recent
data available for the LCC and PBP analyses. If the most recent data
available is from prior to 2021, the annual implicit price deflators
for GDP from the U.S. Bureau of Economic Analysis will be used to
reflect the costs in the year 2021.
NAMA commented that in the April 2022 Preliminary Analysis, the
lower efficiency levels resulted in trivial energy savings and the
higher efficiency levels showed a large portion of consumers
experiencing a net cost in the LCC analysis. (NAMA, No. 14 at p. 15)
DOE acknowledges the comment from NAMA and will consider total
energy savings and the portion of consumers experiencing net cost when
proposing new energy efficiency standards.
In response to the April 2022 Preliminary Analysis, NAMA commented
that it is only at low efficiency levels where consumers or business
owners do not experience a net cost according to DOE's analysis, and
that energy savings at those levels are trivial and do not justify DOE
setting new energy efficiency standards for BVMs. (NAMA, No. 14 at p.
15)
DOE acknowledges the comment from NAMA and considers the percentage
of customers that experience a net benefit ot net cost in addition to
energy savings in the economic analysis to determine if the proposed
rule is economically justified.
1. Equipment Cost
To calculate consumer equipment 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 equipment because DOE applies
an incremental markup to the increase in MSP associated with higher-
efficiency equipment.
BVMs are made of many different components. DOE's research
indicates flat future prices for a majority of the components of BVMs.
DOE included future price reductions for semiconductor and similar
technologies. Semiconductor technology price learning applies to
efficiency levels that include design options with higher-efficiency
evaporator and condenser fan motors (i.e., ECM and permanent magnet
synchronous (PMS) motors). Price learning applies to a proportion of
the motor cost representing the semiconductor technology. Some variable
speed compressors have price learning. Therefore, DOE applied price
learning to compressor components in BVM equipment at efficiency levels
that included variable speed compressors.
2. Installation Cost
Installation costs for BVMs are subsumed in the MSP and markup and
not modeled as an incremental cost. DOE found no evidence that
installation costs would be impacted with increased efficiency levels.
3. Annual Energy Consumption
For each sampled consumer, DOE determined the energy consumption
for a BVM at different efficiency levels using the approach described
previously in section IV.E of this document.
4. Energy Prices
DOE derived electricity prices from the EIA energy price data by
sector and by state(EIA Form 861) for average electricity price data
for the commercial and industrial sectors. DOE used projections of
these electricity prices for commercial and industrial consumers to
estimate future energy prices in the LCC and PBP analyses. EIA's
AEO2022 was used as the source of projections for future electricity
prices.
DOE developed 2021 commercial and industrial retail electricity
prices for each state and the District of Columbia based on EIA Form
861. To estimate energy prices in future years, DOE multiplied the 2021
energy prices by the projection of annual average price changes for
each of the nine census divisions from the Reference case in AEO2022,
which has an end year of 2050.\38\ To estimate price trends after 2050,
the 2041-2050 average was used for all years DOE used EIA's 2018
Commercial Building Energy Consumption Survey \39\ (CBECS 2018) to
determine the difference in commercial energy prices by building type.
DOE applied the ratio of a specific building type's electricity prices
to average commercial electricity prices in the LCC and PBP analyses.
---------------------------------------------------------------------------

\38\ 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 February 2023).
\39\ <a href="http://www.eia.gov/consumption/commercial/">www.eia.gov/consumption/commercial/</a>.
---------------------------------------------------------------------------

DOE's methodology allows electricity prices to vary by sector,
state, region, and building type. In the analysis, variability in
electricity prices is chosen to be consistent with the way the consumer
economic and energy use characteristics are defined in the LCC
analysis. Chapter 8 of the NOPR TSD provides more detail about DOE's
approach to developing energy prices and price trends.
5. Maintenance and Repair Costs
Repair costs are associated with repairing or replacing equipment
components that have failed in an appliance; maintenance costs are
associated with maintaining the operation of the product. Typically,
small incremental increases in equipment efficiency entail no, or only
minor, changes in repair and maintenance costs compared to baseline
efficiency equipment. The repair cost is the cost to the consumer for
replacing or repairing BVM components that have failed. For the LCC
analysis, repair costs also include refurbishment costs and the cost of
replacing BVM components routinely within the lifetime of a BVM. The
LCC analysis models compressors, evaporator fan motors and condenser
fan motors being repaired or replaced twice in the lifetime of the BVM.
The maintenance cost is the cost to the consumer of maintaining
equipment operation. Chapter 8 of the NOPR TSD provides more detail
about DOE's maintenance, repair, and refurbishment cost calculations.
DOE request comments on the frequency and nature of compressor and
motor repairs or replacements in BVMs.
6. Equipment Lifetime
For BVMs, DOE used information from various literature sources and
input from manufacturers and other interested parties to establish
equipment lifetimes for use in the LCC and PBP analyses. This analysis
assumes an average lifetime of 13.4 years based on refurbishments of
major components occurring twice during the life of the equipment at an
interval of 4.5 years. This estimate is based on a 2010

[[Page 33991]]

ENERGY STAR webinar,\40\ which reported average lifetimes of 12 to 15
years, and data on the distribution of equipment ages in the stock of
BVMs in the Pacific Northwest from the Northwest Power and Conservation
Council 2007 Regional Technical Forum \41\ (RTF), which observed the
age of the units in service to be approximately 8 years on average.
---------------------------------------------------------------------------

\40\ EPA. ``Always Count Your Change, How ENERGY STAR
Refrigerated Vending Machines Save Your Facility Money and Energy.''
2010. <a href="http://www.energystar.gov/ia/products/vending_machines/Vending_Machine_Webinar_Transcript.pdf">www.energystar.gov/ia/products/vending_machines/Vending_Machine_Webinar_Transcript.pdf</a>.
\41\ Haeri, H., D. Bruchs, D. Korn, S. Shaw, J. Schott.
Characterization and Energy Efficiency Opportunities in Vending
Machines for the Northwestern US Market. Prepared for Northwest
Power and Conservation Council Regional Technical Forum by Quantec,
LLC and The Cadmus Group, Inc. Portland, OR. July 24, 2007.
---------------------------------------------------------------------------

In response to the April 2022 Preliminary Analysis, NAMA commented
that DOE should develop a model showing what impact increasing the
retail price of a new BVM has on purchasing refurbished machines and
delaying purchases of new machines. (NAMA, No. 14 at p. 13) NAMA
pointed out that any sale of a refurbished machine reduces the sales of
a new machine designed to the new energy standards, thus increasing the
amount of time that the overall impact on the net change to U.S. energy
consumption of the United States by vending machines would occur. Id.
DOE acknowledges this comment and uses the data available to
determine the lifetime assumptions of BVMs in the LCC and PBP analyses.
DOE models two refurbishment processes, each adding to the average
lifetime of equipment. DOE does not have data available to support how
higher MSPs would impact the lifetime of BVMs. DOE uses the latest
industry report to determine shipments and amount of annual shipments
and sales of new BVMs.
7. Discount Rates
The discount rate is the rate at which future expenditures are
discounted to establish their present value. In the calculation of LCC,
DOE determined the discount rate by estimating the cost of capital for
purchasers of BVMs. Most purchasers use both debt and equity capital to
fund investments. Therefore, for most purchasers, the discount rate is
the weighted-average cost of debt and equity financing, or the
weighted-average cost of capital (WACC), less the expected inflation.
To estimate the WACC of BVM purchasers, DOE used a sample of nearly
1,200 companies grouped to be representative of operators of each of
the commercial business types (health care, lodging, foodservice,
retail, education, food sales, and offices) drawn from a database of
6,177 U.S. companies presented on the Damodaran Online website. This
database includes most of the publicly traded companies in the United
States. The WACC approach for determining discount rates accounts for
the current tax status of individual firms on an overall corporate
basis. DOE did not evaluate the marginal effects of increased costs,
and, thus, depreciation due to more expensive equipment, on the overall
tax status.
DOE used the final sample of companies to represent purchasers of
BVMs. For each company in the sample, DOE combined company-specific
information from the Damodaran Online website, long-term returns on the
Standard & Poor's 500 stock market index from the Damodaran Online
website, nominal long-term Federal government bond rates, and long-term
inflation to estimate a WACC for each firm in the sample.
For most educational buildings and a portion of the office
buildings and cafeterias occupied and/or operated by public schools,
universities, and State and local government agencies, DOE estimated
the cost of capital based on a 40-year geometric mean of an index of
long-term tax-exempt municipal bonds (<=20 years). Federal office space
was assumed to use the Federal bond rate, derived as the 40-year
geometric average of long-term (<=10 years) U.S. government securities.
See chapter 8 of the NOPR TSD for further details on the
development of consumer discount rates.
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).
To estimate the energy efficiency distribution of BVMs for 2028,
DOE relied on publicly available energy use data. Specifically, the
market efficiency distribution was determined separately for each
equipment class for which certification information was available in
the DOE certification \42\ and ENERGY STAR databases.\43\ The estimated
market shares for the no-new-standards case for BVMs are shown in Table
IV.6. See chapter 8 of the NOPR TSD for further information on the
derivation of the efficiency distributions.
---------------------------------------------------------------------------

\42\ See <a href="http://www.regulations.doe.gov/ccms">www.regulations.doe.gov/ccms</a>.
\43\ See <a href="http://www.energystar.gov/productfinder/product/certified-vending-machines/results">www.energystar.gov/productfinder/product/certified-vending-machines/results</a>.

Table IV.6--Efficiency Level Distribution Within Each Equipment Class in No-New-Standards Case for Beverage
Vending Machines
----------------------------------------------------------------------------------------------------------------
Efficiency level
Equipment class -----------------------------------------------------------------------
0 (%) 1 (%) 2 (%) 3 (%) 4 (%) 5 (%) 6 (%) 7 (%)
----------------------------------------------------------------------------------------------------------------
Class A................................. 67 17 0 11 0 0 0 6
Class B................................. 44 44 0 11 0 0 0 0
Combo A................................. 47 6 0 24 18 0 6 0
Combo B................................. 100 0 0 0 0 0 0 0
----------------------------------------------------------------------------------------------------------------

The LCC Monte Carlo simulations draw from the efficiency
distributions and randomly assign an efficiency to the BVMs purchased
by each sample household in the no-new-standards case. The resulting
percent shares within the sample match the market shares in the
efficiency distributions.
9. Split Incentives
DOE understands that, in most cases, the purchasers of BVMs (a
bottler or a vending services company) do not pay the energy costs for
operation and thus will not directly reap any energy cost savings from
more efficient equipment. However, DOE assumes that BVM owners will
seek to pass on higher equipment costs to the users who pay the energy
costs, if possible. DOE

[[Page 33992]]

understands that the BVM owner typically has a financial arrangement
with the company or institution on whose premises the BVM is located,
in which the latter may pay a fee or receive a share of the revenue
from the BVM. Thus, DOE expects that BVM owners could modify the
arrangement to effectively pass on higher equipment costs. Therefore,
DOE's LCC and PBP analyses uses the perspective that the company or
institution on whose premises the BVM is located pays the higher
equipment cost and receives the energy cost savings.
In response to the April 2022 Preliminary Analysis, NAMA commented
that the purchaser of a refrigerated vending machine is typically not
the company who will utilize the machine, and that the market
explanation given in the April 2022 Preliminary Analysis TSD does not
reflect this. (NAMA, No. 14 at p. 7)
DOE acknowledges the comment and agrees with NAMA that the
purchaser of a BVM is not typically the same entity that utilizes the
BVM and receives energy savings. DOE assumes in the LCC analysis that
the increased purchase costs of higher-efficiency equipment is passed
on to the entity that utilizes the BVM. The perspective of the LCC and
PBP analyses is that the entity that utilizes the BVM effectively pays
the higher equipment costs and receives the reduction in energy
expenses.
10. Payback Period Analysis
The PBP is the amount of time (expressed in years) it takes the
consumer to recover the additional installed cost of more efficient
products, compared to baseline products, through energy cost savings.
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. DOE
refers to this as a ``simple PBP'' because it does not consider changes
over time in operating cost savings. The PBP calculation uses the same
inputs as the LCC analysis when deriving first-year operating costs.
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 equipment 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.\44\
The shipments model takes an accounting approach, tracking market
shares of each equipment 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.
---------------------------------------------------------------------------

\44\ 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.
---------------------------------------------------------------------------

In the BVM NOPR analysis, DOE modeled shipments of BVMs based on
data from Vending Times State of the Industry Reports.\45\ The industry
reports BVM stock trends that were averaged and used to model annual
shipments. Chapter 9 of the NOPR TSD includes more details on the BVM
shipments analysis.
---------------------------------------------------------------------------

\45\ Annual Report: State of the Industry 2021
cdn.baseplatform.io/files/base/cygnus/vmw/document/2022/06/
autm_SOI_NoAds.62b3896290401.pdf.
---------------------------------------------------------------------------

NAMA stated that DOE should consider the impact of major supply
chain issues, disruptions, and shortages from the past 24 months as
part of the impact of new energy efficiency standard levels. (NAMA, No.
14 at p. 10)
In response to the April 2022 Preliminary Analysis, NAMA commented
that although they were unable to do a detailed analysis of the
percentage of Class A, Class B, Class Combo A, and Class Combo B BVMs
against the models, they believe that the percentage of Class A and
Class Combo A are under-represented by the DOE assumption. (NAMA, No.
14 at p. 6)
DOE recognizes that the industry has been disrupted in recent
years; therefore, DOE's shipment analysis uses data from recent
industry reports that reflect the 2020 and 2021 BVM industry and the
changes from years prior to 2020.

H. National Impact Analysis

The NIA assesses the NES and the NPV from a national perspective of
total consumer costs and savings that would be expected to result from
new or amended standards at specific efficiency levels.\46\
(``Consumer'' in this context refers to consumers of the equipment
being regulated.) DOE calculates the NES and NPV for the potential
standard levels considered based on projections of annual equipment
shipments, along with the annual energy consumption and total installed
cost data from the energy use and LCC analyses. For the present
analysis, DOE projected the energy savings, operating cost savings,
equipment costs, and NPV of consumer benefits over the lifetime of BVMs
sold from 2028 through 2057.
---------------------------------------------------------------------------

\46\ The NIA accounts for impacts in the 50 states and U.S.
territories.
---------------------------------------------------------------------------

DOE evaluates the impacts of new or amended standards by comparing
a case without such standards with standards case projections. The no-
new-standards case characterizes energy use and consumer costs for each
equipment class in the absence of new or amended energy conservation
standards. For this projection, DOE considers historical trends in
efficiency and various forces that are likely to affect the mix of
efficiencies over time. DOE compares the no-new-standards case with
projections characterizing the market for each equipment class if DOE
adopted new or amended standards at specific energy efficiency levels
(i.e., the TSLs or standards cases) for that class. For the standards
cases, DOE considers how a given standard would likely affect the
market shares of equipment with efficiencies greater than the standard.
DOE uses a spreadsheet model to calculate the energy savings and
the national consumer costs and savings from each TSL. Interested
parties can review DOE's analyses by changing various input quantities
within the spreadsheet. The NIA spreadsheet model uses typical values
(as opposed to probability distributions) as inputs.
Table IV.7 summarizes the inputs and methods DOE used for the NIA
analysis for the NOPR and discussion of these inputs and methods
follows. See chapter 10 of the NOPR TSD for further details.

[[Page 33993]]

Table IV.7--Summary of Inputs and Methods for the National Impact
Analysis
------------------------------------------------------------------------
Inputs Method
------------------------------------------------------------------------
Shipments.............................. Annual shipments from shipments
model.
Compliance Date of Standard............ 2028.
Efficiency Trends...................... No-new-standards case:
Standards cases:
Annual Energy Consumption per Unit..... Annual weighted-average values
are a function of energy use
at each TSL.
Total Installed Cost per Unit.......... Annual weighted-average values
are a function of cost at each
TSL.
Incorporates projection of
future equipment prices based
on historical data.
Annual Energy Cost per Unit............ Annual weighted-average values
as a function of the annual
energy consumption per unit
and energy prices.
Repair and Maintenance Cost per Unit... Annual values from the LCC
analysis that increase with
efficiency levels.
Energy Price Trends.................... AEO2022 projections (to 2050)
and extrapolation thereafter.
Energy Site-to-Primary and FFC A time-series conversion factor
Conversion. based on AEO2022.
Discount Rate.......................... 3 percent and 7 percent.
Present Year........................... 2022.
------------------------------------------------------------------------

1. Product Efficiency Trends
A key component of the NIA is the trend in energy efficiency
projected for the no-new-standards case and each of the standards
cases. Section IV.F.8 of this document describes how DOE developed an
energy efficiency distribution for the no-new-standards case (which
yields a shipment-weighted-average efficiency) for each of the
considered equipment classes for the year of anticipated compliance
with an amended or new standard. To project the trend in efficiency
absent amended standards for BVMs over the entire shipments projection
period, DOE assumed that the efficiency distribution will remain the
same in future years due to lack of information available to inform a
different trend. The approach is further described in chapter 10 of the
NOPR TSD.
To develop standards case efficiency trends after 2028, DOE applied
a ``roll-up'' scenario approach to establish the efficiency
distribution for the compliance year. Under the ``roll-up'' scenario,
DOE assumed that (1) equipment efficiencies in the no-new-standards
case that do not meet the standard level under consideration will
``roll-up'' to meet the new standard level, and (2) equipment
efficiencies above the standard level under consideration will not be
affected.
2. National Energy Savings
The national energy savings analysis involves a comparison of
national energy consumption of the considered equipment between each
potential standards case (TSL) and the case with no new or amended
energy conservation standards. DOE calculated the national energy
consumption by multiplying the number of units (stock) of each product
(by vintage or age) by the unit energy consumption (also by vintage).
DOE calculated annual NES based on the difference in national energy
consumption for the no-new-standards case and for each higher-
efficiency standard case. DOE estimated energy consumption and savings
based on site energy and converted the electricity consumption and
savings to primary energy (i.e., the energy consumed by power plants to
generate site electricity) using annual conversion factors derived from
AEO2022. Cumulative energy savings are the sum of the NES for each year
over the timeframe of the analysis.
In 2011, in response to the recommendations of a committee on
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy
Efficiency Standards'' appointed by the National Academy of Sciences,
DOE announced its intention to use FFC measures of energy use and GHGs
and other emissions in the national impact analyses and emissions
analyses included in future energy conservation standards rulemakings.
76 FR 51281 (Aug. 18, 2011). After evaluating the approaches discussed
in the August 18, 2011 notice, DOE published a statement of amended
policy in which DOE explained its determination that EIA's National
Energy Modeling System (NEMS) is the most appropriate tool for its FFC
analysis and its intention to use NEMS for that purpose. 77 FR 49701
(Aug. 17, 2012). NEMS is a public domain, multi-sector, partial
equilibrium model of the U.S. energy sector \47\ that EIA uses to
prepare its AEO. The FFC factors incorporate losses in production and
delivery in the case of natural gas (including fugitive emissions) and
additional energy used to produce and deliver the various fuels used by
power plants. The approach used for deriving FFC measures of energy use
and emissions is described in appendix 10D of the NOPR TSD.
---------------------------------------------------------------------------

\47\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009.
Available at <a href="https://www.eia.gov/outlooks/aeo/nems/overview/pdf/0581">https://www.eia.gov/outlooks/aeo/nems/overview/pdf/0581</a>(2009).pdf (last accessed February 2023).
---------------------------------------------------------------------------

In response to the April 2022 Preliminary Analysis, NAMA commented
that they believe the national energy savings estimated by DOE as 0.152
quads for CSL 6 are in fact the FFC savings, and that DOE should not be
advertising a savings of 0.152 when the data show less. (NAMA, No. 14
at p. 15)
DOE acknowledges the comment and understands that FFC savings will
be higher than primary savings. Both primary and FFC savings are
reported in section V.B.3 of this document.
3. Net Present Value Analysis
The inputs for determining the NPV of the total costs and benefits
experienced by consumers are (1) total annual installed cost, (2) total
annual operating costs (energy costs and repair and maintenance costs),
and (3) a discount factor to calculate the present value of costs and
savings. DOE calculates net savings each year as the difference between
the no-new-standards case and each standards case in terms of total
savings in operating costs versus total increases in installed costs.
DOE calculates operating cost savings over the lifetime of each product
shipped during the projection period.
As discussed in section IV.F.1 of this document, DOE developed BVM
price trends based on historical PPI data. DOE applied the same trends
to project prices for each product class at each considered efficiency
level. PPI data was deflated using implicit GDP

[[Page 33994]]

deflators and found to be constant on average. Although prices for
overall BVM equipment were found to be constant, DOE developed
component price trends for certain design options using historical PPI
data for semiconductors and related devices. Efficiency levels that
include ECM and PMS motors, and variable speed compressors have price
learning applied to the appropriate portion of the MSP. DOE found that
prices for semiconductor related components decreased by 5.88 percent
annually. DOE's projection of equipment prices is described in chapter
10 of the NOPR TSD.
To evaluate the effect of uncertainty regarding the price trend
estimates, DOE investigated the impact of different product price
projections on the consumer NPV for the considered TSLs for BVMs. In
addition to the default price trend, DOE considered two product price
sensitivity cases: (1) a high price decline case based on PPI data up
to 2005 and (2) a low price decline case based on PPI data from 2005
onward. The derivation of these price trends are described in chapter 8
of the NOPR TSD.
The energy cost savings are calculated using the estimated
electricity savings in each year and the projected price of
electricity. To estimate energy prices in future years, DOE multiplied
the average regional energy prices by the projection of annual
national-average energy price changes in the AEO2022 Reference case,
which has an end year of 2050. To estimate price trends after 2050, the
2035-2050 average was used for all years. As part of the NIA, DOE also
analyzed scenarios that used inputs from variants of the AEO2022
Reference case that have lower and higher economic growth. Those cases
have lower and higher energy price trends compared to the Reference
case. NIA results based on these cases are presented in appendix 10B of
the NOPR TSD.
In calculating the NPV, DOE multiplies the net savings in future
years by a discount factor to determine their present value. For this
NOPR, DOE estimated the NPV of consumer benefits using both a 3-percent
and a 7-percent real discount rate. DOE uses these discount rates in
accordance with guidance provided by the Office of Management and
Budget (OMB) to Federal agencies on the development of regulatory
analysis.\48\ The discount rates for the determination of NPV are in
contrast to the discount rates used in the LCC analysis, which are
designed to reflect a consumer's perspective. The 7-percent real value
is an estimate of the average before-tax rate of return to private
capital in the U.S. economy. The 3-percent real value represents the
``social rate of time preference,'' which is the rate at which society
discounts future consumption fl

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