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Rule2023-28978

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

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Published

January 17, 2024

Effective

May 16, 2024

Issuing agencies

Energy Department

Abstract

The Energy Policy and Conservation Act, as amended ("EPCA"), prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including refrigerators, refrigerator-freezers, and freezers. In this direct final rule, the U.S. Department of Energy ("DOE") is adopting amended energy conservation standards for refrigerators, refrigerator-freezers, and freezers. DOE has determined that the amended energy conservation standards for these products would result in significant conservation of energy, and are technologically feasible and economically justified.

Full Text

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[Federal Register Volume 89, Number 11 (Wednesday, January 17, 2024)]
[Rules and Regulations]
[Pages 3026-3116]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-28978]

[[Page 3025]]

Vol. 89

Wednesday,

No. 11

January 17, 2024

Part II

Department of Energy

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10 CFR Part 430

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

Federal Register / Vol. 89, No. 11 / Wednesday, January 17, 2024 /
Rules and Regulations

[[Page 3026]]

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DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2017-BT-STD-0003]
RIN 1904-AF56

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

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

ACTION: Direct final rule.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''),
prescribes energy conservation standards for various consumer products
and certain commercial and industrial equipment, including
refrigerators, refrigerator-freezers, and freezers. In this direct
final rule, the U.S. Department of Energy (``DOE'') is adopting amended
energy conservation standards for refrigerators, refrigerator-freezers,
and freezers. DOE has determined that the amended energy conservation
standards for these products would result in significant conservation
of energy, and are technologically feasible and economically justified.

DATES: The effective date of this rule is May 16, 2024. The
incorporation by reference of certain material listed in the rule was
approved by the Director as of May 21, 2014, and November 12, 2021. If
adverse comments are received by May 6, 2024, and DOE determines that
such comments may provide a reasonable basis for withdrawal of the
direct final rule under 42 U.S.C. 6295(o), a timely withdrawal of this
rule will be published in the Federal Register. If no such adverse
comments are received, compliance with the amended standards
established for refrigerators, refrigerator-freezers, and freezers in
this direct final rule is required on and after January 31, 2029, for
the product classes listed in Table I.1 and January 31, 2030, for the
product classes listed in Table I.2.

ADDRESSES: The docket for this rulemaking, which includes Federal
Register notices, public meeting attendee lists and transcripts,
comments, and other supporting documents/materials, is available for
review at <a href="http://www.regulations.gov">www.regulations.gov</a>. All documents in the docket are listed
in the <a href="http://www.regulations.gov">www.regulations.gov</a> index. However, not all documents listed in
the index may be publicly available, such as information that is exempt
from public disclosure.
The docket web page can be found at <a href="http://www.regulations.gov/docket/EERE-2017-BT-STD-0003">www.regulations.gov/docket/EERE-2017-BT-STD-0003</a>. The docket web page contains instructions on how
to access all documents, including public comments, in the docket.
For further information on how to submit a comment or review other
public comments and the docket, contact the Appliance and Equipment
Standards Program staff at (202) 287-1445 or by email:
<a href="/cdn-cgi/l/email-protection#0d4c7d7d61646c636e685e796c63696c7f697e5c78687e796462637e4d686823696268236a627b">[email&#160;protected]</a>.

FOR FURTHER INFORMATION CONTACT:
Mr. Lucas Adin, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Office, EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone:
(202) 287-5904. Email: <a href="/cdn-cgi/l/email-protection#723302021e1b131c11172106131c161300160123071701061b1d1c013217175c161d175c151d04">[email&#160;protected]</a>.
Mr. Matthew Schneider, U.S. Department of Energy, Office of the
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC
20585-0121. Telephone: (240) 597-6265. Email:
<a href="/cdn-cgi/l/email-protection#a1ccc0d5d5c9c4d68fd2c2c9cfc4c8c5c4d3e1c9d08fc5cec48fc6ced7">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Direct Final 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 Consumer Refrigerators,
Refrigerator-Freezers, and Freezers
3. Joint Agreement Recommended Standard Levels
III. General Discussion
A. General Comments
B. Product Classes and 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. Product Classes
a. Product Classes With Automatic Icemakers
b. Special Door and Multi-Door Designs
c. Product Certification
d. Addition of Product Class 9A-BI
2. Technology Options
B. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
a. Built-in Products
b. Baseline Efficiency/Energy Use
c. Higher Efficiency Levels
d. VIP Analysis and Max-Tech Levels
e. Variable-Speed Compressor Supply Chain
f. Product Classes 11 and 12 Alignment
2. Cost Analysis
3. Cost-Efficiency Results
4. Manufacturer Selling Price
D. Markups Analysis
E. Energy Use Analysis
F. Life-Cycle Cost and Payback Period Analysis
1. Adjusted Volume Distribution
2. Product Cost
3. Installation Cost
4. Annual Energy Consumption
5. Energy Prices
6. Maintenance and Repair Costs
7. Product Lifetime
8. Discount Rates
9. Energy Efficiency Distribution in the No-New-Standards Case
10. Payback Period Analysis
G. Shipments Analysis
H. National Impact Analysis
1. Product Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model and Key Inputs
a. Manufacturer Production Costs
b. Shipments Projections
c. Product and Capital Conversion Costs
d. Manufacturer Markup Scenarios
3. 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

[[Page 3027]]

a. Industry Cash Flow Analysis Results
b. Direct Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Subgroups of Manufacturers
e. Cumulative Regulatory Burden
3. National Impact Analysis
a. Significance of Energy Savings
b. Net Present Value of Consumer Costs and Benefits
c. Indirect Impacts on Employment
4. Impact on Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
8. Summary of Economic Impacts
C. Conclusion
1. Benefits and Burdens of TSLs Considered for Refrigerator,
Refrigerator-Freezer, and Freezer Standards
2. Annualized Benefits and Costs of the Adopted Standards
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563, and 14094
B. Review Under the Regulatory Flexibility Act
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 Executive Order 12630
I. Review Under the Treasury and General Government
Appropriations Act, 2001
J. Review Under Executive Order 13211
K. Information Quality
L. Congressional Notification
M. Materials Incorporated by Reference
VII. Approval of the Office of the Secretary

I. Synopsis of the Direct Final Rule

The Energy Policy and Conservation Act, Public Law 94-163, as
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency
of a number of consumer products and certain industrial equipment. (42
U.S.C. 6291-6317) Title III, Part B of EPCA \2\ established the Energy
Conservation Program for Consumer Products Other Than Automobiles. (42
U.S.C. 6291-6309) These products include refrigerators, refrigerator-
freezers, and freezers, the subject of this direct final rule. (42
U.S.C. 6292(a)(7))
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\1\ All references to EPCA in this document refer to the statute
as amended through the Energy Act of 2020, Public Law 116-260 (Dec.
27, 2020), which reflect the last statutory amendments that impact
Parts A and A-1 of EPCA.
\2\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated Part A.
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Pursuant to EPCA, any new or amended energy conservation standard
must, among other things, 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 significant
conservation of energy. (42 U.S.C. 6295(o)(3)(B))
In light of the above and under the authority provided by 42 U.S.C.
6295(p)(4), DOE is issuing this direct final rule amending energy
conservation standards for refrigerators, refrigerator-freezers, and
freezers.
The adopted standard levels in this direct final rule were proposed
in a letter submitted to DOE jointly by groups representing
manufacturers, energy and environmental advocates, consumer groups, and
a utility. This letter, titled ``Energy Efficiency Agreement of 2023''
(hereafter, the ``Joint Agreement''),\3\ recommends specific energy
conservation standards for refrigerators, refrigerator-freezers, and
freezers that, in the commenters' view, would satisfy the EPCA
requirements in 42 U.S.C. 6295(o). DOE subsequently received letters of
support from states including California, Massachusetts, and New York
\4\ and utilities including San Diego Gas and Electric (``SDG&E'') and
Southern California Edison (``SCE'') \5\ advocating for the adoption of
the recommended standards and a follow-up letter from the parties to
the Joint Agreement that more specifically described the recommended
standards for refrigerators, refrigerator-freezers, and freezers, and
their rationale for entering into a negotiation to develop them.\6\
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\3\ This document is available in the docket at:
<a href="http://www.regulations.gov/document/EERE-2017-BT-STD-0003-0103">www.regulations.gov/document/EERE-2017-BT-STD-0003-0103</a>.
\4\ This document is available in the docket at:
<a href="http://www.regulations.gov/document/EERE-2017-BT-STD-0003-0104">www.regulations.gov/document/EERE-2017-BT-STD-0003-0104</a>.
\5\ This document is available in the docket at:
<a href="http://www.regulations.gov/comment/EERE-2017-BT-STD-0003-0107">www.regulations.gov/comment/EERE-2017-BT-STD-0003-0107</a>.
\6\ This document is available in the docket at:
<a href="http://www.regulations.gov/document/EERE-2017-BT-STD-0003-0105">www.regulations.gov/document/EERE-2017-BT-STD-0003-0105</a>.
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In accordance with the direct final rule provisions at 42 U.S.C.
6295(p)(4), DOE has determined that the recommendations contained in
the Joint Agreement are compliant with 42 U.S.C. 6295(o). As required
by 42 U.S.C. 6295(p)(4)(A)(i), DOE is also simultaneously publishing a
notice of proposed rulemaking (``NOPR'') that contains identical
standards to those adopted in this direct final rule. Consistent with
the statute, DOE is providing a 110-day public comment period on the
direct final rule. (42 U.S.C. 6295(p)(4)(B)) If DOE determines that any
comments received provide a reasonable basis for withdrawal of the
direct final rule under 42 U.S.C. 6295(o) or any other applicable law,
DOE will publish the reasons for withdrawal and continue the rulemaking
under the NOPR. (42 U.S.C. 6295(p)(4)(C)) See section II.A of this
document for more details on DOE's statutory authority.
The amended standards that DOE is adopting in this direct final
rule are the efficiency levels recommended in the Joint Agreement
(shown in Tables I.1 and I.2) expressed in terms of kilowatt hours per
year (``kWh/yr'') as measured according to DOE's current refrigerator,
refrigerator-freezer, and freezer test procedures codified at title 10
of the Code of Federal Regulations (``CFR''), part 430, subpart B,
appendices A (``appendix A'') and B (``appendix B'').
The amended standards recommended in the Joint Agreement are
represented as trial standard level (``TSL'') 4 in this document
(hereinafter the ``Recommended TSL'') and are described in section V.A
of this document. These standards apply to all products listed in Table
I.1 and manufactured in, or imported into the United States starting on
January 31, 2029, and all products listed in Table I.2 and manufactured
in, or imported into, the United States starting on January 31, 2030.

[[Page 3028]]

Table I.1--Energy Conservation Standards for Consumer Refrigerators, Refrigerator-Freezers, and Freezers With Corresponding Door Coefficient Table
[Compliance starting January 31, 2029]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Equations for maximum energy use (kWh/yr)
Product class (``PC'') ---------------------------------------------------------------------------------------------------------------
Based on AV (ft\3\) Based on av (L)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3-BI. Built-in refrigerator-freezer-- 8.24AV + 238.4 + 28I.................................. 0.291av + 238.4 + 28I.
automatic defrost with top-mounted
freezer.
3A-BI. Built-in All-refrigerators-- (7.22AV + 205.7)*K3ABI................................ (0.255av + 205.7)*K3ABI.
automatic defrost.
4-BI. Built-In Refrigerator-freezers-- (8.79AV + 307.4)*K4BI + 28I........................... (0.310av + 307.4)*K4BI + 28I.
automatic defrost with side-mounted
freezer.
5-BI. Built-In Refrigerator-freezers-- (8.65AV + 309.9)*K5BI + 28I........................... (0.305av + 309.9)*K5BI + 28I.
automatic defrost with bottom-mounted
freezer.
5A. Refrigerator-freezer--automatic (7.76AV + 351.9)*K5A.................................. (0.274av + 351.9)*K5A.
defrost with bottom-mounted freezer
with through-the-door ice service.
5A-BI. Built-in refrigerator-freezer-- (8.21AV + 370.7)*K5ABI................................ (0.290av + 370.7)*K5ABI.
automatic defrost with bottom-mounted
freezer with through-the-door ice
service.
7-BI. Built-In Refrigerator-freezers-- (8.82AV + 384.1)*K7BI................................. (0.311av + 384.1)*K7BI.
automatic defrost with side-mounted
freezer.
8. Upright freezers with manual defrost. 5.57AV + 193.7........................................ 0.197av + 193.7.
9-BI. Built-In Upright freezers with (9.37AV + 247.9)*K9BI + 28I........................... (0.331av + 247.9)*K9BI + 28I.
automatic defrost.
9A-BI. Built-In Upright freezers with 9.86AV + 288.9........................................ 0.348av + 288.9.
automatic defrost with through-the-door
ice service.
10. Chest freezers and all other 7.29AV + 107.8........................................ 0.257av + 107.8.
freezers except compact freezers.
10A. Chest freezers with automatic 10.24AV + 148.1....................................... 0.362av + 148.1.
defrost.
11. Compact refrigerator-freezers and 7.68AV + 214.5........................................ 0.271av + 214.5.
refrigerators other than all-
refrigerators with manual defrost.
11A. Compact all-refrigerators--manual 6.66AV + 186.2........................................ 0.235av + 186.2.
defrost.
12. Compact refrigerator-freezers-- (5.32AV + 302.2)*K12.................................. (0.188av + 302.2)*K12.
partial automatic defrost.
13. Compact refrigerator-freezers-- 10.62AV + 305.3 + 28I................................. 0.375av + 305.3 + 28I.
automatic defrost with top-mounted
freezer.
13A. Compact all-refrigerators-- (8.25AV + 233.4)*K13A................................. (0.291av + 233.4)*K13A.
automatic defrost.
14. Compact refrigerator-freezers-- 6.14AV + 411.2 + 28I.................................. 0.217av + 411.2 + 28I.
automatic defrost with side-mounted
freezer.
15. Compact refrigerator-freezers-- 10.62AV + 305.3 + 28I................................. 0.375av + 305.3 + 28I.
automatic defrost with bottom-mounted
freezer.
16. Compact upright freezers with manual 7.35AV + 191.8........................................ 0.260av + 191.8.
defrost.
17. Compact upright freezers with 9.15AV + 316.7........................................ 0.323av + 316.7.
automatic defrost.
18. Compact chest freezers.............. 7.86AV + 107.8........................................ 0.278av + 107.8.
--------------------------------------------------------------------------------------------------------------------------------------------------------
AV = Total adjusted volume, expressed in ft\3\, as determined in appendices A and B of subpart B of 10 CFR part 430.
av = Total adjusted volume, expressed in Liters.
I = 1 for a product with an automatic icemaker and = 0 for a product without an automatic icemaker.
Door Coefficients (e.g., K3ABI) are as defined in the following table.

----------------------------------------------------------------------------------------------------------------
Products without a
Products with a transparent door Products without a transparent door
Door coefficient transparent door with a door-in- or door-in-door with added external
door doors
----------------------------------------------------------------------------------------------------------------
K3ABI.............................. 1.10 1.0 1.0.
K4BI............................... 1.10 1.06 1 + 0.02 * (Nd-2).
K5BI............................... 1.10 1.06 1 + 0.02 * (Nd-2).
K5A................................ 1.10 1.06 1 + 0.02 * (Nd-3).
K5ABI.............................. 1.10 1.06 1 + 0.02 * (Nd-3).
K7BI............................... 1.10 1.06 1 + 0.02 * (Nd-2).
K9BI............................... 1.0 1.0 1 + 0.02 * (Nd-1).
K12................................ 1.0 1.0 1 + 0.02 * (Nd-1).
K13A............................... 1.10 1.0 1.0.
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ Nd is the number of external doors.
\2\ The maximum Nd values are 2 for K12, 3 for K9BI, and 5 for all other K values.

[[Page 3029]]

Table I.2--Energy Conservation Standards for Consumer Refrigerators, Refrigerator-Freezers, and Freezers With Corresponding Door Coefficient Table
[Compliance starting January 31, 2030]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Equations for maximum energy use (kWh/yr)
Product class ---------------------------------------------------------------------------------------------------------------
Based on AV (ft\3\) Based on av (L)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Refrigerator-freezers and 6.79AV + 191.3........................................ 0.240av + 191.3.
refrigerators other than all-
refrigerators with manual defrost.
1A. All-refrigerators--manual defrost... 5.77AV + 164.6........................................ 0.204av + 164.6.
2. Refrigerator-freezers--partial (6.79AV + 191.3)*K2................................... (0.240av + 191.3)*K2.
automatic defrost.
3. Refrigerator-freezers--automatic 6.86AV + 198.6 + 28I.................................. 0.242av + 198.6 + 28I.
defrost with top-mounted freezer.
3A. All-refrigerators--automatic defrost (6.01AV + 171.4)*K3A.................................. (0.212av + 171.4)*K3A.
4. Refrigerator-freezers--automatic (7.28AV + 254.9)*K4 + 28I............................. (0.257av + 254.9)*K4 + 28I.
defrost with side-mounted freezer.
5. Refrigerator-freezers--automatic (7.61AV + 272.6)*K5 + 28I............................. (0.269av + 272.6)*K5 + 28I.
defrost with bottom-mounted freezer.
6. Refrigerator-freezers--automatic 7.14AV + 280.0........................................ 0.252av + 280.0.
defrost with top-mounted freezer with
through-the-door ice service.
7. Refrigerator-freezers--automatic (7.31AV + 322.5)*K7................................... (0.258av + 322.5)*K7.
defrost with side-mounted freezer with
through-the-door ice service.
9. Upright freezers with automatic (7.33AV + 194.1)*K9 + 28I............................. (0.259av + 194.1)*K9 + 28I.
defrost.
--------------------------------------------------------------------------------------------------------------------------------------------------------
AV = Total adjusted volume, expressed in ft\3\, as determined in appendices A and B of subpart B of 10 CFR part 430.
Av = Total adjusted volume, expressed in Liters.
I = 1 for a product with an automatic icemaker and = 0 for a product without an automatic icemaker.
Door Coefficients (e.g., K3A) are as defined in the following table.

A. Benefits and Costs to Consumers

Table I.3 summarizes DOE's evaluation of the economic impacts of
the adopted standards on consumers of refrigerators, refrigerator-
freezers, and freezers, as measured by the average life-cycle cost
(``LCC'') savings and the simple payback period (``PBP'').\7\ The
average LCC savings are positive for all product classes for which a
standard is proposed, and the PBP is less than the average lifetime of
refrigerators, refrigerator-freezers, and freezers, which varies by
product class (see section IV.F.7 of this document).
---------------------------------------------------------------------------

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

Table I.3--Impacts of Energy Conservation Standards on Consumers of
Refrigerators, Refrigerator-Freezers, and Freezers
[The recommended TSL]
------------------------------------------------------------------------
Average LCC
Product class savings Simple payback
(2022$) period (years)
------------------------------------------------------------------------
PC 3.................................. 50.91 4.8
PC 5.................................. 55.23 5.6
PC 5BI................................ 91.13 2.1
PC 5A................................. 133.27 4.1
PC 7.................................. 142.56 1.6
PC 9.................................. 56.17 6.6
PC 10................................. N/A N/A
PC 11A (residential).................. 8.35 2.1

[[Page 3030]]

PC 11A (commercial)................... 3.16 3.2
PC 17................................. 36.86 4.1
PC 18................................. 23.55 4.1
------------------------------------------------------------------------
Note: The compliance year for the Recommended TSL (i.e., TSL 4) varies
by product class:
2029: PCs 5BI, 5A, 10, 11A, 17, and 18.
2030: PCs 3, 5, 7, and 9.

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

B. Impact on Manufacturers 8
---------------------------------------------------------------------------

\8\ All monetary values in this document are expressed in 2022
dollars.
---------------------------------------------------------------------------

The industry net present value (``INPV'') is the sum of the
discounted cash flows to the industry from the base year (2023) through
the end of the analysis period, which is 30 years from the analyzed
compliance date.\9\ Using a real discount rate of 9.1 percent, DOE
estimates that the INPV for manufacturers of refrigerators,
refrigerator-freezers, and freezers in the case without amended
standards is $4.91 billion.\10\ Under the adopted standards, which
align with the Recommended TSL for refrigerators, refrigerator-
freezers, and freezers, DOE estimates the change in INPV to range from
-10.3 percent to -7.8 percent, which is approximately -$504.4 million
to -$383.5 million. In order to bring products into compliance with
amended standards, it is estimated that industry will incur total
conversion costs of $830.3 million.
---------------------------------------------------------------------------

\9\ DOE's analysis period extends 30-years from the compliance
year. The analysis period ranges from 2023-2056 for the no-new-
standards case and all TSLs, except for TSL 4 (the Recommended TSL).
The analysis period for TSL 4 ranges from 2023-2058 for the product
classes listed in Table I.1 and 2023-2059 for the product classes
listed in Table I.2.
\10\ The no-new-standards case INPV of $4.91 billion reflects
the sum of discounted free cash flows from 2023-2056 (from direct
final rule publication to 30 years from the 2027 compliance date)
plus a discounted terminal value.
---------------------------------------------------------------------------

DOE's analysis of the impacts of the adopted standards on
manufacturers is described in sections IV.J and V.B.2 of this document.

C. National Benefits and Costs

DOE's analyses indicate that the adopted energy conservation
standards for refrigerators, refrigerator-freezers, and freezers would
save a significant amount of energy. Relative to the case without
amended standards, the lifetime energy savings for refrigerators,
refrigerator-freezers, and freezers purchased in the 30-year period
that begins in the anticipated year of compliance with amended
standards (2029-2058 for the product classes listed in Table I.1 and
2030-2059 for the product classes listed in Table I.2), amount to 5.6
quadrillion British thermal units (``Btu''), or quads.\11\ This
represents a savings of 11 percent relative to the energy use of these
products in the case without amended standards (referred to as the
``no-new-standards case'').
---------------------------------------------------------------------------

\11\ 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 of this document.
---------------------------------------------------------------------------

The cumulative net present value (``NPV'') of total consumer
benefits of the standards for refrigerators, refrigerator-freezers, and
freezers ranges from $9.0 billion (at a 7-percent discount rate) to
$27.0 billion (at a 3-percent discount rate). This NPV expresses the
estimated total value of future operating cost savings minus the
estimated increased product costs for refrigerators, refrigerator-
freezers, and freezers purchased in 2029-2058 for the product classes
listed in Table I.1 and 2030-2059 for the product classes listed in
Table I.2.
In addition, the adopted standards for refrigerators, refrigerator-
freezers, and freezers are projected to yield significant environmental
benefits. DOE estimates that the standards will result in cumulative
emission reductions (over the same period as for energy savings) of
100.8 million metric tons (``Mt'') \12\ of carbon dioxide
(``CO<INF>2</INF>''), 31.6 thousand tons of sulfur dioxide
(``SO<INF>2</INF>''), 186.1 thousand tons of nitrogen oxides
(``NO<INF>X</INF>''), 846.5 thousand tons of methane
(``CH<INF>4</INF>''), 1.0 thousand tons of nitrous oxide
(``N<INF>2</INF>O''), and 0.2 tons of mercury (``Hg'').\13\
---------------------------------------------------------------------------

\12\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO<INF>2</INF> are presented in short tons.
\13\ DOE calculated emissions reductions relative to the no-new-
standards-case, which reflects key assumptions in the Annual Energy
Outlook 2023 (``AEO2023''). AEO2023 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 AEO2023 assumptions that affect air pollutant
emissions.
---------------------------------------------------------------------------

DOE estimates the value of climate benefits from a reduction in
greenhouse gases (``GHG'') using four different estimates of the social
cost of CO<INF>2</INF> (``SC-CO<INF>2</INF>''), the social cost of
methane (``SC-CH<INF>4</INF>''), and the social cost of nitrous oxide
(``SC-N<INF>2</INF>O''). Together these represent the social cost of
GHG (``SC-GHG''). DOE used interim SC-GHG values developed by an
Interagency Working Group on the Social Cost of Greenhouse Gases
(``IWG'').\14\ 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 $5.0 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.
---------------------------------------------------------------------------

\14\ 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 $3.4 billion using a 7-percent discount rate, and $9.8 billion using
a 3-percent

[[Page 3031]]

discount rate.\15\ 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.
---------------------------------------------------------------------------

\15\ DOE estimates the economic value of these emissions
reductions resulting from the considered TSLs for the purpose of
complying with the requirements of Executive Order 12866.
---------------------------------------------------------------------------

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

Table I.4--Summary of Monetized Benefits and Costs of Adopted Energy
Conservation Standards for Refrigerators, Refrigerator-Freezers, and
Freezers
[The recommended TSL]
------------------------------------------------------------------------
Billion
(2022$)
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 36.4
Climate Benefits *...................................... 5.0
Health Benefits **...................................... 9.8
---------------
Total Benefits [dagger]............................. 51.2
Consumer Incremental Product Costs [Dagger]............. 9.4
---------------
Net Benefits........................................ 41.8
Change in Producer Cashflow (INPV) [Dagger][Dagger]..... (0.50)-(0.38)
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 14.0
Climate Benefits * (3% discount rate)................... 5.0
Health Benefits **...................................... 3.4
---------------
Total Benefits [dagger]............................. 22.5
Consumer Incremental Product Costs [Dagger]............. 5.0
---------------
Net Benefits........................................ 17.5
Change in Producer Cashflow (INPV) [Dagger][Dagger]..... (0.50)-(0.38)
------------------------------------------------------------------------
Note: This table presents present value (in 2022$) of the costs and
benefits associated with refrigerators, refrigerator-freezers, and
freezers shipped in 2029-2058 for the product classes listed in Table
I.1 and shipped in 2030-2059 for the product classes listed in Table
I.2. These results include benefits which accrue after 2058/9 from the
products shipped in 2029/30-2058/9.
* 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][Dagger] Operating Cost Savings are calculated based on the life-
cycle costs analysis and national impact analysis as discussed in
detail below. See sections IV.F and IV.H of this document. DOE's
national impact analysis (``NIA'') includes all impacts (both costs
and benefits) along the distribution chain beginning with the
increased costs to the manufacturer to manufacture the product and
ending with the increase in price experienced by the consumer. DOE
also separately conducts a detailed analysis on the impacts on
manufacturers (the MIA). See section IV.J of this document. In the
detailed MIA, DOE models manufacturers' pricing decisions based on
assumptions regarding investments, conversion costs, cashflow, and
margins. The MIA produces a range of impacts, which is the rule's
expected impact on the INPV. The change in INPV is the present value
of all changes in industry cash flow, including changes in production
costs, capital expenditures, and manufacturer profit margins. Change
in INPV is calculated using the industry weighted average cost of
capital value of 9.1 percent that is estimated in the manufacturer
impact analysis (see chapter 12 of the direct final rule technical
support document (``TSD'') for a complete description of the industry
weighted average cost of capital). For refrigerators, refrigerator-
freezers, and freezers, those values are -$504 million to -$383
million. DOE accounts for that range of likely impacts in analyzing
whether a TSL is economically justified. See section V.C of this
document. DOE is presenting the range of impacts to the INPV under two
markup scenarios: the Preservation of Gross Margin scenario, which is
the manufacturer markup scenario used in the calculation of Consumer
Operating Cost Savings in this table, and the Preservation of
Operating Profit scenario, where DOE assumed manufacturers would not
be able to increase per-unit operating profit in proportion to
increases in manufacturer production costs. DOE includes the range of
estimated INPV in the above table, drawing on the MIA explained
further in section IV.J of this document, to provide additional
context for assessing the estimated impacts of this direct final rule
to society, including potential changes in production and consumption,
which is consistent with OMB's Circular A-4 and E.O. 12866. If DOE
were to include the INPV into the net benefit calculation for this
direct final rule, the net benefits would range from $41.3 billion to
$41.4 billion at 3-percent discount rate and would range from $17.0
billion to $17.1 billion at 7-percent discount rate. Parentheses ( )
indicate negative values.

[[Page 3032]]

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

\16\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2022, the year
used for discounting the NPV of total consumer costs and savings.
For the benefits, DOE calculated a present value associated with
each year's shipments in the year in which the shipments occur
(e.g., 2020 or 2030), and then discounted the present value from
each year to 2022. Using the present value, DOE then calculated the
fixed annual payment over a 30-year period, starting in the
compliance year, that yields the same present value.
---------------------------------------------------------------------------

The national operating cost savings are domestic private U.S.
consumer monetary savings that occur as a result of purchasing the
covered products and are measured for the lifetime of refrigerators,
refrigerator-freezers, and freezers shipped in 2029-2058 for the
product classes listed in Table I.1 and shipped in 2030-2059 for the
product classes listed in Table I.2. The benefits associated with
reduced emissions achieved as a result of the adopted standards are
also calculated based on the lifetime of refrigerators, refrigerator-
freezers, and freezers shipped in 2029-2058 for the product classes
listed in Table I.1 and shipped in 2030-2059 for the product classes
listed in Table I.2. Total benefits for both the 3-percent and 7-
percent cases are presented using the average GHG social costs with 3-
percent discount rate. Estimates of SC-GHG values are presented for all
four discount rates in section IV.L of this document.
Table I.5 presents the total estimated monetized benefits and costs
associated with the proposed standard, expressed in terms of annualized
values. The results under the primary estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and
health benefits from reduced NO<INF>X</INF> and SO<INF>2</INF>
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated cost of the standards adopted
in this rule is $590.5 million per year in increased equipment costs,
while the estimated annual monetized benefits are $1.7 billion in
reduced equipment operating costs, $303.8 million in climate benefits,
and $410.6 million in health benefits. In this case, the net benefit
would amount to $1.8 billion per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the standards is $567.5 million per year in increased
equipment costs, while the estimated annual monetized benefits are $2.2
billion in reduced operating costs, $303.8 million in climate benefits,
and $592.9 million in health benefits. In this case, the net benefit
would amount to $2.5 billion per year.

Table I.5--Annualized Monetized Benefits and Costs of Adopted Standards for Refrigerators, Refrigerator-
Freezers, and Freezers
[TSL 4, the recommended TSL]
----------------------------------------------------------------------------------------------------------------
Million (2022$/year)
---------------------------------------------------------
Primary Low-net-benefits High-net-benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings....................... 2,200.5 2,023.9 2,326.6
Climate Benefits *.................................... 303.8 291.8 307.9
Health Benefits **.................................... 592.9 569.7 600.7
---------------------------------------------------------
Total Benefits [dagger]........................... 3,097.2 2,885.4 3,235.2
Consumer Incremental Product Costs [Dagger]........... 567.5 666.6 547.8
---------------------------------------------------------
Net Benefits...................................... 2,529.6 2,218.8 2,687.4
Change in Producer Cashflow (INPV) [Dagger][Dagger]... (49)-(37) (49)-(37) (49)-(37)
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings....................... 1,667.0 1,541.9 1,758.5
Climate Benefits * (3% discount rate)................. 303.8 291.8 307.9
Health Benefits **.................................... 410.6 395.8 415.7
---------------------------------------------------------
Total Benefits [dagger]........................... 2,381.4 2,229.5 2,482.0
Consumer Incremental Product Costs [Dagger]........... 590.5 677.9 569.6
---------------------------------------------------------
Net Benefits...................................... 1,790.9 1,551.6 1,912.5
Change in Producer Cashflow (INPV) [Dagger][Dagger]... (49)-(37) (49)-(37) (49)-(37)
----------------------------------------------------------------------------------------------------------------
Note: This table presents present value (in 2022$) of the costs and benefits associated with refrigerators,
refrigerator-freezers, and freezers shipped in 2029-2058 for the product classes listed in Table I.1 and
shipped in 2030-2059 for the product classes listed in Table I.2. These results include benefits which accrue
after 2056 from the products shipped in 2029-2058 for the product classes listed in Table I.1 and shipped in
2030-2059 for the product classes listed in Table I.2. The Primary, Low Net Benefits, and High Net Benefits
Estimates utilize projections of energy prices from the AEO2023 Reference case, Low Economic Growth case, and
High Economic Growth case, respectively. In addition, incremental equipment costs reflect a medium decline
rate in the Primary Estimate, a low decline rate in the Low Net Benefits Estimate, and a high decline rate in
the High Net Benefits Estimate. The methods used to derive projected price trends are explained in section
IV.H.3 of this document. Note that the Benefits and Costs may not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
at a 3-percent discount rate are shown; 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.

[[Page 3033]]

** 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, but DOE does not have a single central SC-GHG point estimate.
[Dagger][Dagger] Operating Cost Savings are calculated based on the life-cycle costs analysis and national
impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's NIA includes
all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the
manufacturer to manufacture the product and ending with the increase in price experienced by the consumer. DOE
also separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J of
this document. In the detailed MIA, DOE models manufacturers' pricing decisions based on assumptions regarding
investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is the rule's
expected impact on the INPV. The change in INPV is the present value of all changes in industry cash flow,
including changes in production costs, capital expenditures, and manufacturer profit margins. The annualized
change in INPV is calculated using the industry weighted average cost of capital value of 9.1 percent that is
estimated in the manufacturer impact analysis (see chapter 12 of the direct final rule TSD for a complete
description of the industry weighted average cost of capital). For refrigerators, refrigerator-freezers, and
freezers, those values are -$48.7 million to -$37.0 million. DOE accounts for that range of likely impacts in
analyzing whether a TSL is economically justified. See section V.C of this document. DOE is presenting the
range of impacts to the INPV under two manufacturer markup scenarios: the Preservation of Gross Margin
scenario, which is the manufacturer markup scenario used in the calculation of Consumer Operating Cost Savings
in this table, and the Preservation of Operating Profit Markup scenario, where DOE assumed manufacturers would
not be able to increase per-unit operating profit in proportion to increases in manufacturer production costs.
DOE includes the range of estimated annualized change in INPV in the above table, drawing on the MIA explained
further in section IV.J of this document, to provide additional context for assessing the estimated impacts of
this direct final rule to society, including potential changes in production and consumption, which is
consistent with OMB's Circular A-4 and E.O. 12866. If DOE were to include the INPV into the annualized net
benefit calculation for this direct final rule, the annualized net benefits would range from $2,480.9 million
to $2,492.6 million at 3-percent discount rate and would range from $1,742.2 million to $1,753.9 million at 7-
percent discount rate. Parentheses ( ) indicate negative values.

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

D. Conclusion

DOE has determined that the Joint Agreement was submitted jointly
by interested persons that are fairly representative of relevant points
of view, in accordance with 42 U.S.C. 6295(p)(4)(A). After considering
the recommended standards and weighing the benefits and burdens, DOE
has determined that the recommended standards are in accordance with 42
U.S.C. 6295(o), which contains the criteria for prescribing new or
amended standards. Specifically, the Secretary has determined that the
adoption of the recommended standards would result in the significant
conservation of energy and is the maximum improvement in energy
efficiency that is technologically feasible and economically justified.
In determining whether the recommended standards are economically
justified, the Secretary has determined that the benefits of the
recommended standards exceed the burdens. The Secretary has further
concluded that the recommended standards, when considering the benefits
of energy savings, positive NPV of consumer benefits, emission
reductions, the estimated monetary value of the emissions reductions,
and positive average LCC savings, would yield benefits that outweigh
the negative impacts on some consumers and on manufacturers, including
the conversion costs that could result in a reduction in INPV for
manufacturers.
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
standards for refrigerators, refrigerator-freezers, and freezers is
$590.5 million per year in increased product costs, while the estimated
annual monetized benefits are $1.7 billion in reduced product operating
costs, $303.8 million in climate benefits, and $410.6 million in health
benefits. The net monetized benefit amounts to $1.8 billion per year.
The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking.\17\ For
example, some covered products and equipment have most of their energy
consumption occur during periods of peak energy demand. The impacts of
these products on the energy infrastructure can be more pronounced than
products with relatively constant demand. Accordingly, DOE evaluates
the significance of energy savings on a case-by-case basis.
---------------------------------------------------------------------------

\17\ Procedures, Interpretations, and Policies for Consideration
in New or Revised Energy Conservation Standards and Test Procedures
for Consumer Products and Commercial/Industrial Equipment, 86 FR
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

As previously mentioned, the standards are projected to result in
estimated national energy savings of 5.6 quads (full-fuel cycle
(``FFC'')), the equivalent of the primary annual energy use of 37
million homes. In addition, they are projected to reduce CO<INF>2</INF>
emissions by 100.8 Mt. Based on these findings, DOE has determined the
energy savings from the standard levels adopted in this direct final
rule are ``significant'' within the meaning of 42 U.S.C. 6295(o)(3)(B).
A more detailed discussion of the basis for these conclusions is
contained in the remainder of this document and the accompanying
TSD.\18\
---------------------------------------------------------------------------

\18\ The TSD is available in the docket for this rulemaking at
<a href="http://www.regulations.gov/docket/EERE-2017-BT-STD-0003/document">www.regulations.gov/docket/EERE-2017-BT-STD-0003/document</a>.
---------------------------------------------------------------------------

Under the authority provided by 42 U.S.C. 6295(p)(4), DOE is
issuing this direct final rule amending the energy conservation
standards for refrigerators, refrigerator-freezers, and freezers.
Consistent with this authority, DOE is also simultaneously publishing
elsewhere in this Federal Register a NOPR proposing standards that are
identical to those contained in this direct final rule. See 42 U.S.C.
6295(p)(4)(A)(i).

II. Introduction

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

A. Authority

EPCA authorizes DOE to regulate the energy efficiency of a number
of consumer products and certain industrial equipment. Title III, Part
B of EPCA established the Energy Conservation Program for Consumer
Products Other Than Automobiles. These products include refrigerators,
refrigerator-freezers, and freezers, the subject of this document. (42
U.S.C. 6292(a)(1)) EPCA prescribed energy conservation standards for
these products (42 U.S.C. 6295(b)(1)), and directed DOE to conduct
future rulemakings to determine whether to amend these standards. (42
U.S.C. 6295(b)(3)) EPCA further provides that, not later than 6 years
after the issuance of any final rule establishing or

[[Page 3034]]

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 in limited instances 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(Ir)) 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 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 refrigerators, refrigerator-freezers, and freezers
appear at 10 CFR part 430, subpart B, appendix A, Uniform Test Method
for Measuring the Energy Consumption of Refrigerators, Refrigerator-
Freezers, and Miscellaneous Refrigeration Products (``appendix A''),
and appendix B, Uniform Test Method for Measuring the Energy
Consumption of Freezers (``appendix B'').
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products, including refrigerators,
refrigerator-freezers, and freezers. Any new or amended standard for a
covered product must be designed to achieve the maximum improvement in
energy efficiency that the Secretary of Energy 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)(B))
Moreover, DOE may not prescribe a standard (1) for certain
products, including refrigerators, refrigerator-freezers, and freezers,
if no test procedure has been established for the product, or (2) if
DOE determines by rule that the standard is not technologically
feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B)) In
deciding whether a proposed standard is economically justified, DOE
must determine whether the benefits of the standard exceed its burdens.
(42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after
receiving comments on the proposed standard, and by considering, to the
greatest extent practicable, the following seven statutory factors:
(1) The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the covered products in the type (or class) compared to any
increase in the price, initial charges, or maintenance expenses for the
covered products that are likely to result from the standard;
(3) The total projected amount of energy (or as applicable, water)
savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the covered
products likely to result from the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary of Energy (``Secretary'') considers
relevant.
(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA, as codified, 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, as codified, 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))
EPCA specifies requirements when promulgating an energy
conservation standard for a covered product that has two or more
subcategories. A rule prescribing an energy conservation standard for a
type (or class) of product must specify a different standard level for
a type or class of products that has the same function or intended use
if DOE determines that products within such group (A) consume a
different kind of energy from that consumed by other covered products
within such type (or class); or (B) have a capacity or other
performance-related feature which other products within such type (or
class) do not have and such feature justifies a higher or lower
standard. (42 U.S.C. 6295(q)(1)) In determining whether a performance-
related feature justifies a different standard for a group of products,
DOE consider such factors as the utility to the consumer of such a
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))
Additionally, pursuant to the amendments contained in the Energy
Independence and Security Act of 2007 (``EISA 2007''), Public Law 110-
140, final rules for new or amended energy conservation standards
promulgated after July 1, 2010, are 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,

[[Page 3035]]

adopt a separate standard for such energy use for that product. (42
U.S.C. 6295(gg)(3)(A)-(B)) DOE's current test procedures and standards
for refrigerators, refrigerator-freezers, and freezers address standby
mode and off mode energy use, as do the amended standards adopted in
this direct final rule.
Finally, EISA 2007 amended EPCA, in relevant part, to grant DOE
authority to issue a final rule (i.e., a ``direct final rule'')
establishing an energy conservation standard upon receipt of a
statement submitted jointly by interested persons that are fairly
representative of relevant points of view (including representatives of
manufacturers of covered products, States, and efficiency advocates),
as determined by the Secretary, that contains recommendations with
respect to an energy or water conservation standard. (42 U.S.C.
6295(p)(4)) Pursuant to 42 U.S.C. 6295(p)(4), the Secretary must also
determine whether a jointly-submitted recommendation for an energy or
water conservation standard satisfies 42 U.S.C. 6295(o) or 42 U.S.C.
6313(a)(6)(B), as applicable.
The direct final rule must be published simultaneously with a NOPR
that proposes an energy or water conservation standard that is
identical to the standard established in the direct final rule, and DOE
must provide a public comment period of at least 110 days on this
proposal. (42 U.S.C. 6295(p)(4)(A)-(B)) While DOE typically provides a
comment period of 60 days on proposed standards, for a NOPR
accompanying a direct final rule, DOE provides a comment period of the
same length as the comment period on the direct final rule--i.e., 110
days. Based on the comments received during this period, the direct
final rule will either become effective, or DOE will withdraw it not
later than 120 days after its issuance if: (1) one or more adverse
comments is received, and (2) DOE determines that those comments, when
viewed in light of the rulemaking record related to the direct final
rule, may provide a reasonable basis for withdrawal of the direct final
rule under 42 U.S.C. 6295(o), 42 U.S.C. 6313(a)(6)(B), or any other
applicable law. (42 U.S.C. 6295(p)(4)(C)) Receipt of an alternative
joint recommendation may also trigger a DOE withdrawal of the direct
final rule in the same manner. (Id.)
DOE has previously explained its interpretation of its direct final
rule authority. In a final rule amending the Department's ``Procedures,
Interpretations and Policies for Consideration of New or Revised Energy
Conservation Standards for Consumer Products'' at 10 CFR part 430,
subpart C, appendix A, DOE noted that it may issue standards
recommended by interested persons that are fairly representative of
relative points of view as a direct final rule when the recommended
standards are in accordance with 42 U.S.C. 6295(o) or 6313(a)(6)(B), as
applicable. 86 FR 70892, 70912 (Dec. 13, 2021). But the direct final
rule provision in EPCA does not impose additional requirements
applicable to other standards rulemakings, which is consistent with the
unique circumstances of rules issued as consensus agreements under
DOE's direct final rule authority. Id. DOE's discretion remains bounded
by its statutory mandate to adopt a standard that results in the
maximum improvement in energy efficiency that is technologically
feasible and economically justified--a requirement found in 42 U.S.C.
6295(o). Id. As such, DOE's review and analysis of the Joint Agreement
is limited to whether the recommended standards satisfy the criteria in
42 U.S.C. 6295(o).

B. Background

1. Current Standards
In a final rule published on September 15, 2011 (``September 2011
Final Rule''), DOE prescribed the current energy conservation standards
for refrigerators, refrigerator-freezers, and freezers manufactured on
and after September 15, 2014. 76 FR 57516. These standards are set
forth in DOE's regulations at 10 CFR 430.32(a).
2. Current Test Procedure
On December 23, 2019, DOE published a test procedure NOPR
(``December 2019 TP NOPR'') proposing to amend residential
refrigerator, refrigerator-freezer, and freezer test procedure. 84 FR
70842. On October 12, 2021, DOE published a test procedure final rule
(``October 2021 TP Final Rule'') establishing test procedures for
refrigerators, refrigerator-freezers, and freezers, at 10 CFR part 430,
subpart B, appendices A (``appendix A'') and B (``appendix B''). 86 FR
56790. The test procedure adopted the latest version of the relevant
industry standard published by the Association of Home Appliance
Manufacturers (``AHAM''), updated in 2019, AHAM Standard HRF-1,
``Energy and Internal Volume of Refrigerating Appliances'' (``HRF-1-
2019''). 10 CFR 430.3(i)(4). The standard levels proposed in the NOPR
are based on the annual energy use (``AEU'') metrics as measured
according to appendices A and B.
History of Standards Rulemaking for Consumer Refrigerators,
Refrigerator-Freezers, and Freezers
The National Appliance Energy Conservation Act of 1987 (``NAECA''),
Public Law 100-12, amended EPCA to establish prescriptive standards for
refrigeration products, with requirements that DOE conduct two cycles
of rulemakings to determine whether to amend these standards (42 U.S.C.
6295 (b)(1), (2), (3)(A)(i), and (3)(B)-(C)). DOE completed the first
of these rulemaking cycles in 1989 and 1990 by adopting amended
performance standards for all refrigeration products manufactured on or
after January 1, 1993. 54 FR 47916 (November 17, 1989); 55 FR 42845
(October 24, 1990). DOE completed a second rulemaking cycle to amend
the standards for refrigeration products by issuing a final rule in
1997, which adopted the current standards for these products. 62 FR
23102 (April 28, 1997).
In 2005, DOE granted a petition, submitted by a coalition of state
governments, utility companies, consumer and low-income advocacy
groups, and environmental and energy efficiency organizations,
requesting a rulemaking to amend the standards for residential
refrigerator-freezers. DOE then conducted limited analyses to examine
the technological and economic feasibility of amended standards at the
ENERGY STAR levels that were in effect for 2005 for the two most
popular product classes of refrigerator-freezers. These analyses not
only identified potential energy savings, benefits, and burdens from
such standards, but also assessed other issues related to them.
DOE initiated a rulemaking and also published a notice announcing
the availability of the framework document and a public meeting to
discuss the document in September 2008. It also requested public
comment on the published document. 73 FR 54089 (September 18, 2008).
The framework document described the procedural and analytical
approaches that DOE anticipated using to evaluate energy conservation
standards for refrigeration products and identified various issues to
resolve during the rulemaking. DOE published a final rule on September
15, 2011, to satisfy the statutory requirement that DOE publish a final
rule to determine whether to amend the standards for refrigeration
products manufactured in 2014. (42 U.S.C. 6295(b)(4)) The limited 2005
analyses served as background for the more extensive analysis conducted
for final

[[Page 3036]]

rule published on September 15, 2011. 76 FR 57516.
4. The Joint Agreement
On September 25, 2023, DOE received a joint statement (i.e., the
Joint Agreement) recommending standards for refrigerators,
refrigerator-freezers, and freezers that was submitted by groups
representing manufacturers, energy and environmental advocates,
consumer groups, and a utility.\19\ In addition to the recommended
standards for refrigerators, refrigerator-freezers, and freezers, the
Joint Agreement also included separate recommendations for several
other covered products.\20\ And, while acknowledging that DOE may
implement these recommendations in separate rulemakings, the Joint
Agreement also stated that the recommendations were recommended as a
complete package and each recommendation is contingent upon the other
parts being implemented. DOE understands this to mean that the Joint
Agreement is contingent upon DOE initiating rulemaking processes to
adopt all of the recommended standards in the agreement. That is
distinguished from an agreement where issuance of an amended energy
conservation standard for a covered product is contingent on issuance
of amended energy conservation standards for the other covered
products. If the Joint Agreement were so construed, it would conflict
with the anti-backsliding provision in 42 U.S.C. 6295(o)(1), because it
would imply the possibility that, if DOE were unable to issue an
amended standard for a certain product, it would have to withdraw a
previously issued standard for one of the other products. The anti-
backsliding provision, however, prevents DOE from withdrawing or
amending an energy conservation standard to be less stringent. As a
result, DOE will be proceeding with individual rulemakings that will
evaluate each of the recommended standards separately under the
applicable statutory criteria. The Joint Agreement recommends amended
standard levels for refrigerators, refrigerator-freezers, and freezers
as presented in Table II.3. (Joint Agreement, No. 103 at p. 4) Details
of the Joint Agreement recommendations for other products are provided
in the Joint Agreement posted in the docket.\21\
---------------------------------------------------------------------------

\19\ The signatories to the Joint Agreement include AHAM,
American Council for an Energy-Efficient Economy, Alliance for Water
Efficiency, Appliance Standards Awareness Project, Consumer
Federation of America, Consumer Reports, Earthjustice, National
Consumer Law Center, Natural Resources Defense Council, Northwest
Energy Efficiency Alliance, and Pacific Gas and Electric Company.
Members of AHAM's Major Appliance Division that manufacture the
affected products include: Alliance Laundry Systems, LLC; Asko
Appliances AB; Beko US Inc.; Brown Stove Works, Inc.; BSH; Danby
Products, Ltd.; Electrolux Home Products, Inc.; Elicamex S.A. de
C.V.; Faber; Fotile America; GEA, a Haier Company; L'Atelier Paris
Haute Design LLG; LG Electronics USA; Liebherr USA, Co.; Midea
America Corp.; Miele, Inc.; Panasonic Appliances Refrigeration
Systems (PAPRSA) Corporation of America; Perlick Corporation;
Samsung; Sharp Electronics Corporation; Smeg S.p.A; Sub-Zero Group,
Inc.; The Middleby Corporation; U-Line Corporation; Viking Range,
LLC; and Whirlpool.
\20\ The Joint Agreement contained recommendations for 6 covered
products: refrigerators, refrigerator-freezers, and freezers;
clothes washers; clothes dryers; dishwashers; cooking products; and
miscellaneous refrigeration products.
\21\ The term sheet is available in the docket at:
<a href="http://www.regulations.gov/document/EERE-2017-BT-STD-0003-0103">www.regulations.gov/document/EERE-2017-BT-STD-0003-0103</a>.

Table II.3--Recommended Amended Energy Conservation Standards for Residential Refrigerators, Refrigerator-Freezers, and Freezers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Product class Level (Based on AV (ft\3\)) Compliance date
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Refrigerator-freezers and 6.79AV + 191.3........................................ January 31, 2030.
refrigerators other than all-
refrigerators with manual defrost.
1A. All-refrigerators--manual defrost... 5.77AV + 164.6........................................
2. Refrigerator-freezers--partial (6.79AV + 191.3)*K2...................................
automatic defrost.
3. Refrigerator-freezers--automatic 6.86AV + 198.6 +28I...................................
defrost with top-mounted freezer.
3A. All-refrigerators--automatic defrost (6.01AV + 171.4)*K3A..................................
4. Refrigerator-freezers--automatic 7.28AV + 254.9........................................ January 31, 2030.
defrost with side-mounted freezer.
5. Refrigerator-freezers--automatic (7.61AV +272.6)*K5 + 28I.............................. January 31, 2030.
defrost with bottom-mounted freezer.
5A. Refrigerator-freezer--automatic (7.76AV + 351.9)*K5A.................................. January 31, 2029.
defrost with bottom-mounted freezer
with through-the-door ice service.
6. Refrigerator-freezers--automatic 7.14AV + 280.0........................................ January 31, 2030.
defrost with top-mounted freezer with
through-the-door ice service.
7. Refrigerator-freezers--automatic (7.31AV + 322.5)*K7................................... January 31, 2030.
defrost with side-mounted freezer with
through-the-door ice service.
8. Upright freezers with manual defrost. 5.57AV + 193.7........................................ January 31, 2029.
9. Upright freezers with automatic 7.33AV + 194.1 + 28I.................................. January 31, 2030.
defrost.
10. Chest freezers and all other 7.29AV + 107.8........................................ January 31, 2029.
freezers except compact freezers.
10A. Chest freezers with automatic 10.24AV + 148.1....................................... January 31, 2029.
defrost.
11. Compact refrigerator-freezers and 7.68AV + 214.5........................................ January 31, 2029.
refrigerators other than all-
refrigerators with manual defrost.
11A. Compact all-refrigerators--manual 6.66AV + 186.2........................................
defrost.
12. Compact refrigerator-freezers-- (5.32AV + 302.2)*K12.................................. January 31, 2029.
partial automatic defrost.
13. Compact refrigerator-freezers-- 10.62AV + 305.3 +28I.................................. January 31, 2029.
automatic defrost with top-mounted
freezer.
13A. Compact all-refrigerators-- (8.25AV + 233.4)*K13A.................................
automatic defrost.
14. Compact refrigerator-freezers-- 6.14AV + 411.2 + 28I..................................
automatic defrost with side-mounted
freezer.
15. Compact refrigerator-freezers-- 10.62AV + 305.3 + 28I.................................
automatic defrost with bottom-mounted
freezer.
16. Compact upright freezers with manual 7.35AV + 191.8........................................ January 31, 2029.
defrost.
17. Compact upright freezers with 9.15AV + 316.7........................................ January 31, 2029.
automatic defrost.
18. Compact chest freezers.............. 7.86AV + 107.8........................................ January 31, 2029.

[[Page 3037]]

3-BI. Built-in refrigerator-freezer-- 8.24AV + 238.4 + 28I.................................. January 31, 2029.
automatic defrost with top-mounted
freezer.
3A-BI. Built-in All-refrigerators-- (7.22AV + 205.7)*K3ABI................................
automatic defrost.
4-BI. Built-In Refrigerator-freezers-- 8.79AV + 307.4 + 28I.................................. January 31, 2029.
automatic defrost with side-mounted
freezer.
5-BI. Built-In Refrigerator-freezers-- (8.65AV + 309.9)*K5BI + 28I........................... January 31, 2029.
automatic defrost with bottom-mounted
freezer.
5A-BI. Built-in refrigerator-freezer-- (8.21AV + 370.7)*K5ABI................................ January 31, 2029.
automatic defrost with bottom-mounted
freezer with through-the-door ice
service.
7-BI. Built-In Refrigerator-freezers-- (8.82AV + 384.1)*K7BI................................. January 31, 2029.
automatic defrost with side-mounted
freezer.
9-BI. Built-In Upright freezers with 9.37AV + 247.9 + 28I.................................. January 31, 2029.
automatic defrost.
9A-BI. NEW PRODUCT CLASS: Upright built- 9.86AV + 288.9........................................ January 31, 2029.
in freezer w/auto defrost and through-
door-ice.
--------------------------------------------------------------------------------------------------------------------------------------------------------
AV = Total adjusted volume, expressed in ft\3\, as determined in appendices A and B of subpart B of 10 CFR part 430.
Av = Total adjusted volume, expressed in Liters.
I = 1 for a product with an automatic icemaker and = 0 for a product without an automatic icemaker. Door Coefficients (e.g., K3A) are as defined in
Table I.2.

----------------------------------------------------------------------------------------------------------------
Products without a
Products with a transparent door Products without a transparent door
Door coefficient transparent door with a door-in- or door-in-door with added external
door doors
----------------------------------------------------------------------------------------------------------------
K2................................. N/A N/A 1 + 0.02 * (Nd-1).
K3A................................ 1.10 N/A N/A.
K3ABI.............................. 1.10 N/A N/A.
K13A............................... 1.10 N/A N/A.
K4................................. 1.10 1.06 1 + 0.02 * (Nd-2).
K4BI............................... 1.10 1.06 1 + 0.02 * (Nd-2).
K5................................. 1.10 1.06 1 + 0.02 * (Nd-2).
K5BI............................... 1.10 1.06 1 + 0.02 * (Nd-2).
K5A................................ 1.10 1.06 1 + 0.02 * (Nd-3).
K5ABI.............................. 1.10 1.06 1 + 0.02 * (Nd-3).
K7................................. 1.10 1.06 1 + 0.02 * (Nd-2).
K7BI............................... 1.10 1.06 1 + 0.02 * (Nd-2).
K9................................. N/A N/A 1 + 0.02 * (Nd-1).
K9BI............................... N/A N/A 1 + 0.02 * (Nd-1).
K12................................ N/A N/A 1 + 0.02 * (Nd-1).
----------------------------------------------------------------------------------------------------------------
Note: Nd is the number of external doors.

DOE notes that it was conducting a rulemaking to consider amending
the standards for refrigerators, refrigerator-freezers, and freezers
when the Joint Agreement was submitted. As part of that process, on
February 27, 2023, DOE published a NOPR and announced a public webinar
(``February 2023 NOPR'') seeking comment on its proposed amended
standard to inform its decision consistent with its obligations under
EPCA and the Administrative Procedure Act (``APA''). 88 FR 12452. DOE
held a public webinar on April 11, 2023, to discuss and receive
comments on the NOPR and NOPR TSD. The NOPR TSD is available at:
<a href="http://www.regulations.gov/document/EERE-2017-BT-STD-0003-0045">www.regulations.gov/document/EERE-2017-BT-STD-0003-0045</a>.
Although DOE is adopting the Joint Agreement as a direct final rule
and no longer proceeding with its own rulemaking, DOE did consider
relevant comments, data, and information obtained during that
rulemaking process in determining whether the recommended standards
from the Joint Agreement are in accordance with 42 U.S.C. 6295(o). Any
discussion of comments, data, or information in this direct final rule
that were obtained during DOE's own prior rulemaking will include a
parenthetical reference that provides the location of the item in the
public record.\22\
---------------------------------------------------------------------------

\22\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for refrigerators, refrigerator-
freezers, and freezers (Docket No. EERE-2017-BT-STD-0003, which is
maintained at <a href="http://www.regulations.gov">www.regulations.gov</a>). The references are arranged as
follows: (commenter name, comment docket ID number, page of that
document).
---------------------------------------------------------------------------

III. General Discussion

DOE is issuing this direct final rule after determining that the
recommended standards submitted in the Joint Agreement meet the
requirements in 42 U.S.C. 6295(p)(4). More specifically, DOE has
determined that the recommended standards were submitted by interested
persons that are fairly representative of relevant points of view and
the recommended standards satisfy the criteria in 42 U.S.C. 6295(o).

A. Scope of Coverage

This direct final rule covers those consumer products that meet the
definition of ``refrigerator, refrigerator-freezer, and freezer'' as
codified at 10 CFR 430.2.
When evaluating and establishing energy conservation standards, DOE
divides covered products into product classes by the type of energy
used, or by capacity, or based upon performance-related features that
justify a higher or lower standard. (42 U.S.C. 6295(q)) In making a
determination whether a performance-related feature justifies a

[[Page 3038]]

different standard, DOE must consider such factors as the utility of
the feature to the consumer and other factors DOE determines are
appropriate. Id.
The Joint Agreement proposed special door and multi-door energy
allowances for product classes if manufacturers offer models with those
features. Energy allowances applied to energy use equations correspond
to performance-related features that would then justify new product
classes for those configurations with special door and multi-door
designs. The proposed approach also embeds within the energy use
equations the difference between classes that are otherwise identical
except for presence of an icemaker, using a logical variable I (equal
to 1 for a product with an icemaker and equal to 0 for a product
without an icemaker) multiplied by the constant icemaker energy use
adder.
The structure simplification and amendments in the Joint Agreement
are consistent with those proposed by DOE in the February 2023 NOPR.
Based on the comments received in response to the February 2023 NOPR
and DOE's evaluation of the Joint Agreement, the direct final rule
adopts these changes. See section IV.A.1 of this document for further
detail and discussion regarding the product classes analyzed in this
direct final rule.

B. Fairly Representative of Relevant Points of View

Under the direct final rule provision in EPCA, recommended energy
conservation standards must be submitted by interested persons that are
fairly representative of relevant points of view (including
representatives of manufacturers of covered products, States, and
efficiency advocates) as determined by DOE. (42 U.S.C. 6295(p)(4)(A))
With respect to this requirement, DOE notes that the Joint Agreement
included a trade association, AHAM, which represents 20 manufacturers
of refrigerators, refrigerator-freezers, and freezers. The Joint
Agreement also included environmental and energy-efficiency advocacy
organizations, consumer advocacy organizations, and a gas and electric
utility company. Additionally, DOE received a letter in support of the
Joint Agreement from the States of New York, California, and
Massachusetts (see comment No. 104). DOE also received a letter in
support of the Joint Agreement from the gas and electric utility,
SDG&E, and the electric utility, SCE (see comment No. 107). As a
result, DOE has determined that the Joint Agreement was submitted by
interested persons who are fairly representative of relevant points of
view.

C. Technological Feasibility

1. General
In each energy conservation standards rulemaking, DOE conducts a
screening analysis based on information gathered on all current
technology options and prototype designs that could improve the
efficiency of the products or equipment that are the subject of the
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 appendix A
to 10 CFR part 430, subpart C (``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.
Section 7(b)(2)-(5) of the Process Rule. Section IV.B of this document
discusses the results of the screening analysis for refrigerators,
refrigerator-freezers, and freezers, particularly the designs DOE
considered, those it screened out, and those that are the basis for the
standards considered in this rulemaking. For further details on the
screening analysis for this rulemaking, see chapter 4 of the direct
final rule 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(o)(2)(A)) Accordingly, in
the engineering analysis, DOE determined the maximum technologically
feasible (``max-tech'') improvements in energy efficiency for
refrigerators, refrigerator-freezers, and freezers, using the design
parameters for the most efficient products available on the market or
in working prototypes. The max-tech levels that DOE determined for this
rulemaking are described in section IV.C of this document and in
chapter 5 of the direct final rule TSD.

D. Energy Savings

1. Determination of Savings
For each trial standard level (``TSL''), DOE projected energy
savings from application of the TSL to refrigerators, refrigerator-
freezers, and freezers purchased in the 30-year period that begins in
the year of compliance with the amended standards (2027-2056 for all
TSLs other than TSL 4; for TSL 4, 2029-2058 for the product classes
listed in Table I.1 and 2030-2059 for the product classes listed in
Table I.2).\23\ The savings are measured over the entire lifetime of
products purchased in the 30-year analysis 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.
---------------------------------------------------------------------------

\23\ DOE also presents a sensitivity analysis that considers
impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------

DOE used its national impact analysis (``NIA'') spreadsheet models
to estimate national energy savings (``NES'') from potential amended
standards for refrigerators, refrigerator-freezers, and freezers. The
NIA spreadsheet model (described in section IV.H of this document)
calculates energy savings in terms of site energy, which is the energy
directly consumed by products at the locations where they are used. For
electricity, DOE reports national energy savings in terms of primary
energy savings, which is the savings in the energy that is used to
generate and transmit the site electricity. For natural gas, the
primary energy savings are considered to be equal to the site energy
savings. DOE also calculates NES in terms of full-fuel cycle (``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.\24\ DOE's
approach is based on the calculation of an FFC multiplier for each of
the energy types used by covered products or

[[Page 3039]]

equipment. For more information on FFC energy savings, see section
IV.H.2 of this document.
---------------------------------------------------------------------------

\24\ The FFC metric is discussed in DOE's statement of policy
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
To adopt any new or amended standards for a covered product, DOE
must determine that such action would result in significant energy
savings. (42 U.S.C. 6295(o)(3)(B))
The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking.\25\ 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. However, residential
refrigerators, freezers, and refrigerator-freezers have loads that are
more consistent throughout the year. Accordingly, DOE evaluates the
significance of energy savings on a case-by-case basis, taking into
account the significance of cumulative FFC national energy savings, the
cumulative FFC emissions reductions, and the need to confront the
global climate crisis, among other factors.
---------------------------------------------------------------------------

\25\ Procedures, Interpretations, and Policies for Consideration
in New or Revised Energy Conservation Standards and Test Procedures
for Consumer Products and Commercial/Industrial Equipment, 86 FR
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

As stated, the standard levels adopted in this direct final rule
are projected to result in national energy savings of 5.6 quads (FFC),
the equivalent of the primary annual energy use of 37 million homes.
Based on the amount of FFC savings, the corresponding reduction in
emissions, and need to confront the global climate crisis, DOE has
determined the energy savings from the standard levels adopted in this
direct final rule are ``significant'' within the meaning of 42 U.S.C.
6295(o)(3)(B).

E. Economic Justification

1. Specific Criteria
As noted previously, EPCA provides seven factors to be evaluated in
determining whether a potential energy conservation standard is
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)) The
following sections discuss how DOE has addressed each of those seven
factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of potential amended standards 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 payback period (``PBP'') associated with new or
amended standards. These measures are discussed further in the
following section. For consumers in the aggregate, DOE also calculates
the national net present value of the consumer costs and benefits
expected to result from particular standards. DOE also evaluates the
impacts of potential standards on identifiable subgroups of consumers
that may be affected disproportionately by a standard.
b. Savings in Operating Costs Compared To Increase in Price (LCC and
PBP)
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered product
that are likely to result from a standard. (42 U.S.C.
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP
analysis.
The LCC is the sum of the purchase price of a product (including
its installation) and the operating cost (including energy,
maintenance, and repair expenditures) discounted over the lifetime of
the product. The LCC analysis requires a variety of inputs, such as
product prices, product energy consumption, energy prices, maintenance
and repair costs, product lifetime, and discount rates appropriate for
consumers. To account for uncertainty and variability in specific
inputs, such as product lifetime and discount rate, DOE uses a
distribution of values, with probabilities attached to each value.
The PBP is the estimated amount of time (in years) it takes
consumers to recover the increased purchase cost (including
installation) of a more efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
due to a more stringent standard by the change in annual operating cost
for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will
purchase the covered products in the first year of compliance with new
or amended standards. The LCC savings for the considered efficiency
levels are calculated relative to the case that reflects projected
market trends in the absence of new or amended standards. DOE's LCC and
PBP analysis is discussed in further detail in section IV.F of this
document.
c. Energy Savings
Although significant conservation of energy is a separate statutory
requirement for adopting an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As
discussed in section IV.H of this document, DOE uses the NIA
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
In evaluating design options and the impact of potential standard
levels, DOE evaluates potential standards that would not lessen the
utility or performance of the considered products. (42 U.S.C.
6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards
adopted 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 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

[[Page 3040]]

competition likely to result from a 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 direct final rule to the Attorney General with a request that the
Department of Justice (``DOJ'') provide its determination on this
issue. DOE will consider DOJ's comments on the rule in determining
whether to withdraw the direct final rule. DOE will also publish and
respond to the DOJ's comments in the Federal Register in a separate
document.
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 adopted 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 adopted standards are likely to result in
environmental benefits in the form of reduced emissions of air
pollutants and greenhouse gases (``GHGs'') associated with energy
production and use. DOE conducts an emissions analysis to estimate how
potential standards may affect these emissions, as discussed in section
IV.K of this document; the estimated emissions impacts are reported in
section V.B.6 of this document. DOE also estimates the economic value
of emissions reductions resulting from the considered TSLs, as
discussed in section IV.L of this document.
g. Other Factors
In determining whether an energy conservation standard is
economically justified, DOE may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To
the extent DOE identifies any relevant information regarding economic
justification that does not fit into the other categories described
previously, DOE could consider such information under ``other
factors.''
2. Rebuttable Presumption
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a
rebuttable presumption that an energy conservation standard is
economically justified if the additional cost to the consumer of a
product that meets the standard is less than three times the value of
the first year's energy savings resulting from the standard, as
calculated under the applicable DOE test procedure. DOE's LCC and PBP
analyses generate values used to calculate the effect potential amended
energy conservation standards would have on the payback period for
consumers. These analyses include, but are not limited to, the 3-year
payback period contemplated under the rebuttable-presumption test. In
addition, DOE routinely conducts an economic analysis that considers
the full range of impacts to consumers, manufacturers, the Nation, and
the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The
results of this analysis serve as the basis for DOE's evaluation of the
economic justification for a potential standard level (thereby
supporting or rebutting the results of any preliminary determination of
economic justification). The rebuttable-presumption payback calculation
is discussed in section IV.F of this document.

IV. Methodology and Discussion of Related Comments

This section addresses the analyses DOE has performed for this
rulemaking with regard to refrigerators, refrigerator-freezers, and
freezers. Separate subsections address each component of DOE's
analyses, including relevant comments DOE received during its separate
rulemaking to amend the energy conservation standards for
refrigerators, refrigerator-freezers, and freezers prior to receiving
the Joint Agreement.
DOE used several analytical tools to estimate the impact of the
standards considered in this document. The first tool is a spreadsheet
that calculates the LCC savings and PBP of potential amended or new
energy conservation standards. The national impacts analysis uses a
second spreadsheet set that provides shipments projections and
calculates national energy savings and net present value of total
consumer costs and savings expected to result from potential energy
conservation standards. DOE uses the third spreadsheet tool, the
Government Regulatory Impact Model (``GRIM''), to assess manufacturer
impacts of potential standards. These three spreadsheet tools are
available on the DOE website for this rulemaking: <a href="http://www.regulations.gov/docket/EERE-2017-BT-STD-0003">www.regulations.gov/docket/EERE-2017-BT-STD-0003</a>. Additionally, DOE used output from the
latest version of the Energy Information Administration's (``EIA's'')
Annual Energy Outlook (``AEO'') for the emissions and utility impact
analyses.

A. Market and Technology Assessment

DOE develops information in the market and technology assessment
that provides an overall picture of the market for the products
concerned, including the purpose of the products, the industry
structure, manufacturers, market characteristics, and technologies used
in the products. This activity includes both quantitative and
qualitative assessments, based primarily on publicly available
information. The subjects addressed in the market and technology
assessment for this rulemaking include (1) a determination of the scope
of the rulemaking and product classes, (2) manufacturers and industry
structure, (3) existing efficiency programs, (4) shipments information,
(5) market and industry trends, and (6) technologies or design options
that could improve the energy efficiency of refrigerators,
refrigerator-freezers, and freezers. The key findings of DOE's market
assessment are summarized in the following sections. See chapter 3 of
the direct final rule TSD for further discussion of the market and
technology assessment.
1. Product Classes
The Joint Agreement specifies 32 product classes for refrigerators,
refrigerator-freezers, and freezers. (Joint Agreement, No. 103 at p.
15-16) In particular, the Joint Agreement recommends a consolidated
product class representation which incorporates icemaker energy adders
and door allowances into the energy use equations for product classes
in which they are applicable. In addition, the Join Agreement proposes
a new product class--upright built-in freezers with automatic defrost
and through-the-door ice service (``9A-BI''). (Id.) In this direct
final rule, DOE is adopting the product classes from the Joint
Agreement, as listed in Table IV.1.

[[Page 3041]]

Table IV.1--Recommended Amended Energy Conservation Standards for
Residential Refrigerators, Refrigerator-freezers, and Freezers
------------------------------------------------------------------------
Product class
-------------------------------------------------------------------------
1. Refrigerator-freezers and refrigerators other than all-refrigerators
with manual defrost.
1A. All-refrigerators--manual defrost.
2. Refrigerator-freezers--partial automatic defrost.
3. Refrigerator-freezers--automatic defrost with top-mounted freezer.
3A. All-refrigerators--automatic defrost.
4. Refrigerator-freezers--automatic defrost with side-mounted freezer.
5. Refrigerator-freezers--automatic defrost with bottom-mounted freezer.
5A. Refrigerator-freezer--automatic defrost with bottom-mounted freezer
with through-the-door ice service.
6. Refrigerator-freezers--automatic defrost with top-mounted freezer
with through-the-door ice service.
7. Refrigerator-freezers--automatic defrost with side-mounted freezer
with through-the-door ice service.
8. Upright freezers with manual defrost.
9. Upright freezers with automatic defrost.
10. Chest freezers and all other freezers except compact freezers.
10A. Chest freezers with automatic defrost.
11. Compact refrigerator-freezers and refrigerators other than all-
refrigerators
with manual defrost.
11A. Compact all-refrigerators--manual defrost.
12. Compact refrigerator-freezers--partial automatic defrost.
13. Compact refrigerator-freezers--automatic defrost with top-mounted
freezer.
13A. Compact all-refrigerators--automatic defrost
14. Compact refrigerator-freezers--automatic defrost with side-mounted
freezer.
15. Compact refrigerator-freezers--automatic defrost with bottom-mounted
freezer.
16. Compact upright freezers with manual defrost.
17. Compact upright freezers with automatic defrost.
18. Compact chest freezers.
3-BI. Built-in refrigerator-freezer--automatic defrost with top-mounted
freezer.
3A-BI. Built-in All-refrigerators--automatic defrost.
4-BI. Built-In Refrigerator-freezers--automatic defrost with side-
mounted freezer.
5-BI. Built-In Refrigerator-freezers--automatic defrost with bottom-
mounted freezer.
5A-BI. Built-in refrigerator-freezer--automatic defrost with bottom-
mounted freezer with through-the-door ice service.
7-BI. Built-In Refrigerator-freezers--automatic defrost with side-
mounted freezer.
9-BI. Built-In Upright freezers with automatic defrost.
9A-BI. NEW PRODUCT CLASS:
Upright built-in freezer w/auto defrost and through-door-ice.
------------------------------------------------------------------------

DOE further notes that product classes established through EPCA's
direct final rule authority are not subject to the criteria specified
at 42 U.S.C. 6295(q)(1) for establishing product classes. Nevertheless,
in accordance with 42 U.S.C. 6295(o)(4)--which is applicable to direct
final rules--DOE has concluded that the standards adopted in this
direct final rule will not result in the unavailability in any covered
product type (or class) of performance characteristics, features,
sizes, capacities, and volumes that are substantially the same as those
generally available in the United States currently.\26\ DOE's findings
in this regard are discussed in detail in section V.B.4 of this
document.
---------------------------------------------------------------------------

\26\ EPCA specifies that DOE may not prescribe an amended or new
standard if the Secretary finds (and publishes such finding) that
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 at the time of the
Secretary's finding. (42 U.S.C. 6295(o)(4))
---------------------------------------------------------------------------

a. Product Classes With Automatic Icemakers
The Joint Agreement includes a proposed simplification of maximum
allowable energy and would express the maximum allowable energy use for
both icemaking and non-icemaking classes in the same equation, thus
consolidating the presentation of classes and their energy conservation
standards. The energy use equations will, for those classes that may or
may not have an icemaker, include a term equal to the icemaking energy
use adder multiplied by a factor that is defined to equal 1 for
products with icemakers and to equal zero for products without
icemakers. This approach does not combine classes that are the same
other than the presence of an icemaker, but does simplify the list of
classes and representation of their maximum allowable energy use,
providing for each set of classes with and without ice makers a single
equation for maximum energy use. (88 FR 12452)
DOE is adopting the Joint Agreement proposal to express the maximum
allowable energy use for any set of classes differing only in whether
the class includes an icemaker or not within a single equation. The
single equation does this by including the icemaker energy use adder
multiplied by logical variable I that is set equal to 1 for a product
with an icemaker present and 0 for a product without an icemaker.
b. Special Door and Multi-Door Designs
The Joint Agreement made recommendations to establish new product
classes for models that implement special and multi-door designs. The
standards for these product classes include energy allowances (i.e.,
specific increases in maximum allowable energy use) corresponding to
the specific performance-related features (i.e., door-in-door designs,
transparent doors, and multi-door designs). The allowances include a 2-
percent energy use allowance for each externally opening door in excess
of the typical minimum for the class, a 6-percent total energy use
allowance for a product with a door-in-door feature implemented in one
or more of its doors, and a 10-percent total energy use allowance for a
product with a transparent door or doors.

[[Page 3042]]

In this direct final rule, DOE is implementing the recommended
special door and multi-door energy allowances. DOE's direct rulemaking
authority under 42 U.S.C. 6295(p)(4) is constrained only by the
requirements of 42 U.S.C. 6295(o), which does not include the product
class requirements in 42 U.S.C. 6295(q). DOE is relying on the product
classes provided in the Joint Agreement for consideration in this rule,
but DOE notes that special doors (i.e., transparent doors and door-in-
door features) and multi-door setups constitute performance-related
features that provide consumer utility when implemented. Transparent
doors allow for partial view into the interior of fresh food
compartments without the need for a door opening. Door-in-door features
generally allow for access to a partially separated fresh food
compartment without the need to fully expose the main interior fresh
food compartment. Multi-door setups provide at least one additional
externally opening door accessing either an existing compartment or a
separate compartment, thus providing additional options for storage and
access to food for the consumer.
Furthermore, DOE's analysis of these features suggests that special
door and multi-door designs impact energy usage with some combinations
accounting for additional energy consumption of up to 25 percent (based
on CERA simulations).\27\ DOE notes that the additional energy usage
results from additional thermal load associated with additional gasket
length necessary for multi-door and door-in-door features, and
associated with the higher thermal conductivity of transparent doors
compared to solid doors of the same size. DOE also proposed similar
special door and multi-door energy allowances in the February 2023 NOPR
and finds that the recommended allowances in the Joint Agreement are
justifiable on a similar basis in light of the analysis DOE performed
to develop the allowances proposed in the NOPR. See chapter 5 of the
direct final rule TSD for more information on DOE's analysis of special
door and multi-door features.
---------------------------------------------------------------------------

\27\ CERA is an updated version of the Environmental Protection
Agency's Refrigerator Analysis (``ERA'') program. Earlier versions
have been used in previous refrigerator, refrigerator-freezer, and
freezer energy conservation standards rulemaking. CERA allows for
the simulation of thermal load on refrigerators, refrigerator-
freezers, and freezers based of the inputs given for various
parameters including cabinet design, compartment dimensions, door
design, operating temperatures, controls, anti-sweat heat, and more.
More information regarding the software is found in the direct final
rule TSD.
---------------------------------------------------------------------------

For the reasons previously discussed, DOE is adopting the Joint
Agreement recommendations to establish new product classes for models
that implement special and multi-door designs.
Energy Use Allowance--Application
AHAM, Sub Zero Group, Inc. (``Sub Zero''), and Samsung also
recommended that DOE apply the door coefficient to PC 4, PC 4-BI, PC 9,
and PC 9-BI, as these classes have products offering multi-door setups
or special doors that provide similar customer utility. (AHAM, No. 69
at p. 8; Sub Zero, No. 77 at p. 4; Samsung, No. 78 at p. 3) True
Manufacturing (``TRUE'') similarly stated that PC 4I and PC 4, and any
other product classes with transparent doors, should have the same
transparent door allowance as PC 5A and PC 5. (TRUE, No. 57 at pp. 1-2)
DOE's assessment regarding the energy impact of designs featuring
multi-door and special door setups warranted the proposal of energy
allowances for classes where such features are offered. DOE reviewed
the market and requested input from commenters related to existing
models on the market in an effort to assess the prevalence of multi-
door designs or special doors in products on the market today and
concluded that there likely exist such models in PC 4I, PC 4I-BI, PC 9,
and PC 9-BI that implement multi-door setups, special doors, or both.
Therefore, DOE is adopting the multi-door and transparent door energy
allowances for PC 4, PC 4I, PC 4-BI, PC 4I-BI, PC 9, and PC 9-BI
consistent with feature availability. PC 4, PC 4I, PC 4-BI, and PC 4I-
BI will be eligible for transparent door and multi-door allowances,
while PC 9, and PC 9-BI will be eligible for the multi-door allowance.
The magnitude and application of the allowances adopted for the
aforementioned product classes are consistent with those recommended in
the Joint Agreement. DOE notes that PC 4 and PC 4-BI will be eligible
for a 2 percent allowance for each additional door for products without
a transparent door or door-in-door with added external doors, a 6
percent allowance for products without a transparent door with a door-
in-door, or a 10 percent transparent door allowance for the use of a
qualifying transparent door. PC 9 and PC 9-BI will be eligible for a 2
percent allowance for each additional door up to two additional doors.
Energy Use Allowance--Definitions
The Joint Agreement includes the following recommended definition
for a transparent door:
<bullet> Transparent door means a door for which 40 percent or more
of the surface area--as determined based on the area of the transparent
portion of the door divided by the product of the maximum width and
height dimension of the door--is transparent to allow viewing into the
refrigerated compartment.
<bullet> Conceptually, the parties recommend that DOE clarify that
products with only very small door or drawers that are transparent
should not be included in this definition--i.e., the door must be large
enough to justify the allowance.
Upon further consideration of the February 2023 NOPR proposed
transparent door definition, the feedback received from stakeholders,
and the Joint Agreement submitted by interested parties, including
AHAM, DOE conducted further market research into available models with
transparent panels, generating a list of models from various
manufacturers and product classes representative of the units currently
on the market that implement transparent doors. From this list, DOE
determined transparent panel and door area based on product literature,
in-person measurements, or use of scaled photographs. DOE then
determined the percentage of the door covered by the transparent area
for each model considered. DOE found that the transparent door on a
French door configuration typically had roughly 40 percent or more of
the total outer door area transparent, consistent with the percentage
recommended in the Joint Agreement. Other configurations, such as two
door bottom-mount refrigerator-freezers and compact refrigerators had
54 percent or more of their outer door area transparent. Based on this
assessment and consideration of the Joint Agreement recommendations,
DOE is adopting a modified definition from the February 2023 NOPR for
transparent doors to better align with the products on the market, as
follows:
Transparent door means an external fresh food compartment door
which meets the following criteria:
<bullet> The area of the transparent portion of the door is at
least 40 percent of the area of the door.
<bullet> The area of the door is at least 50 percent of the sum of
the areas of all the external doors providing access to the fresh food
compartments and cooler compartments.
<bullet> For the purposes of this evaluation, the area of a door is
determined as the product of the maximum height and maximum width
dimensions of the door, not considering potential extension of flaps
used to provide a seal to adjacent doors.

[[Page 3043]]

DOE notes that this amended transparent door definition not only
aligns with the typical implementation on the market, as previously
described, but also is a more straightforward approach compared to
those recommended and referenced by commenters. Specifically, DOE
expects that the suggested approach based on the internal cabinet
dimensions has some potential for questions about interpretation, given
the fact that the interior dimensions could vary from the front of the
cabinet to the rear. This could lead to varying internal cabinet area
determinations. Therefore, in order to eliminate this potential
variation, DOE is adopting the above definition and approach that
simplifies the determination of the transparent door area by measuring
and determining the area of the transparent portion divided by the
product of the maximum height and width dimensions of the door.
Energy Use Allowance--Summary
In summary, in this direct final rule DOE is adopting the multi-
door and special door energy use allowances as proposed in the Joint
Agreement, with the specified amendments as previously discussed.
c. Addition of Product Class 9A-BI
The Joint Agreement recommends the addition of a new product class
9A-BI (i.e., built-in upright freezers with automatic defrost and with
through-the-door ice service) and specific energy efficiency standards
for the new product class. The current energy conservation standards
for freezers do not include a separate product class for products of
this configuration, and DOE has not previously considered establishing
a separate product class for them because it has not been aware of the
existence of such products on the market, nor has it previously been
notified by any manufacturer of the potential introduction of such a
product. Under the current product class structure, any such product
would most appropriately fit into current class 9I-BI (i.e., built-in
upright freezers with automatic defrost with an automatic icemaker),
since there is no class that fits this description and also has
through-the-door ice service. Hence, in the absence of a product class
for this configuration, such products would be subject to the current
PC 9I-BI standards, which would, under the approach for designating
classes and standards provided in this direct final rule, correspond to
class grouping 9-BI with the icemaker variable I in the standards
equation equal to 1, indicating addition of the 28 kWh/year icemaker
energy use.
Considering that the recommendation carries support from a broad
cross-section of interests, including trade associations representing
these manufacturers, environmental and energy-efficiency advocacy
organizations, consumer advocates, and electric utility providers as
well as the support of several States, DOE believes it appropriate to
adopt this new product class, 9A-BI. DOE notes that the addition of a
PC 9A-BI, as suggested by the Joint Agreement, is warranted as the
application of a through-the-door icemaker constitutes a performance
related feature with consumer utility and is likely to be introduced on
the market in the near future.
DOE notes the standard as recommended by the Joint Agreement for PC
9A-BI is 5 percent higher than that of PC 9I-BI (built-in upright
freezers with automatic defrost with an automatic icemaker). When
considering class 9A-BI and 9I-BI, the key difference is the addition
of through-the-door ice service, and the potential additional thermal
load associated with its addition. Therefore, the 5 percent adjustment
between 9I-BI and 9A-BI can be attributed mainly to the addition of
through-the-door ice service. When comparing recommended standards to
other product classes in which the key difference is the addition of
through-the-door ice (i.e., 5I vs. 5A and 4I vs. 7), the 5 percent
adjustment remains consistent with DOE's adopted standards. As a result
of this consistency, DOE believes the recommended standard is
appropriate in its application.
Given the indication from the aforementioned stakeholders that such
a product class standard would be beneficial in its implementation, the
classification of through-the-door ice as a performance related
feature, and the recommendation's consistency with the other adopted
standards, DOE is adopting a PC 9A-BI standard in this direct final
rule.
See section V of this document for more information regarding the
TSL configuration and discussion of the adopted level for this product
class. See chapter 5 of the direct final rule TSD for more discussion
regarding the addition of this product class.
2. Technology Options
In the preliminary market analysis and technology assessment, DOE
identified 37 technology options initially determined to improve the
efficiency of refrigerators, refrigerator-freezers, and freezers, as
measured by the DOE test procedure:

Table IV.1--Technology Options Identified in the NOPR
------------------------------------------------------------------------

-------------------------------------------------------------------------
Insulation:
1. Improved resistivity of insulation (insulation type).
2. Inert blowing fluid CO2.
3. Increased insulation thickness.
4. Gas-filled insulation panels.
5. Vacuum-insulated panels (``VIP'').
Gasket and Door Design:
6. Improved gaskets.
7. Double door gaskets.
8. Improved door face frame.
9. Reduced heat load for through-the-door (``TTD'') feature.
Anti-Sweat Heater:
10. Condenser hot gas (Refrigerant anti-sweat heating).
11. Electric anti-sweat heater sizing.
12. Electric heater controls.
Compressor:
13. Improved compressor efficiency.
14. Variable-speed compressors.
15. Linear compressors.
Evaporator:
16. Increased surface area.
17. Improved heat exchange.

[[Page 3044]]

Condenser:
18. Increased surface area.
19. Microchannel condenser.
20. Improved heat exchange.
21. Force convection condenser.
Defrost System:
22. Reduced energy for automatic defrost.
23. Adaptive defrost.
24. Condenser hot gas defrost.
Control System:
25. Electronic Temperature control.
26. Anti-Distribution control.
Other Technologies:
27. Fan and fan motor improvements.
28. Improved expansion valve.
29. Fluid control or solenoid off-cycle valve.
30. Alternative refrigerants.
31. Component location.
32. Phase change materials.
Alternative Refrigeration Cycles:
33. Ejector refrigerator.
34. Dual-evaporator systems.
35. Two-stage system.
36. Dual-loop system.
37. Lorenz-Meutzner cycle.
------------------------------------------------------------------------

B. Screening Analysis

DOE uses the following four 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.

10 CFR part 430, subpart C, appendix A, sections 6(b)(3) and 7(b).
In summary, if DOE determines that a technology, or a combination
of technologies, fails to meet one or more of the listed five criteria,
it will be excluded from further consideration in the engineering
analysis. The reasons for eliminating any technology are discussed in
the following sections.
The subsequent sections include comments from interested parties
pertinent to the screening criteria, DOE's evaluation of each
technology option against the screening analysis criteria, and whether
DOE determined that a technology option should be excluded (``screened
out'') based on the screening criteria.
1. Screened-Out Technologies
In conducting the screening analysis for this direct final rule,
DOE considered comments it had received in response to the screening
analysis conducted for the February 2023 NOPR.
In the February 2023 NOPR, DOE screened out the technologies
presented in Table II.2 on the basis of technological feasibility,
practicability to manufacture, install, and service, adverse impacts on
utility or availability, adverse impacts on health and safety, and/or
unique-pathway proprietary technologies.

Table IV.2--Technologies Screened-Out in the NOPR
------------------------------------------------------------------------

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

[[Page 3045]]

Improved VIPs.
Inert Blowing Fluid CO2.
------------------------------------------------------------------------

GEA recommended that DOE screen out ``improved resistivity of
foam,'' which is primarily hydrofluoro-olefin (``HFO'') foams, as a
technology option. GEA stated that HFO foams represent a unique and
proprietary technology pathway and that the two listed by DOE in the
February 2023 NOPR TSD--Solstice LBA and Ecomate--should be excluded
through the technology screening analysis. GEA stated that Solstice
LBA, an HFO foam blowing agent is only produced by a single
manufacturer, Honeywell, and should therefore be screened out from
consideration in DOE's technology assessment in this rulemaking. GEA
noted that Ecomate has no proven commercialization in modern consumer
refrigerators or freezers. (GEA, No. 75 at pp. 4-5)
As discussed in the February 2023 NOPR, HFO foams are retained as a
design option and passed the screening analysis because the technology
option meets the five criteria previously mentioned. While GEA notes
Ecomate has no proven commercialization in modern consumer
refrigerators or freezer, as discussed in more detail in section
3.4.2.1 of the February 2023 NOPR TSD, improved resistivity foams such
as Solstice have been implemented in refrigerator-freezer models in the
United States, as of at least 2014 \28\ and DOE has not received
information regarding negative impacts to product utility or
impracticability to manufacture or service products using improved
resistivity foam. Some of the improved blowing agents reviewed by DOE
(e.g., CO<INF>2</INF>) have been found to be non-flammable and lower in
GWP than traditional insulation. DOE acknowledges that Solstice LBA is
patented by Honeywell but included other potential technologies such as
added carbon black and CO<INF>2</INF> blowing agents in its assessment.
Therefore, as a technology option, DOE maintains that HFO foams meet
the prerequisites to be included past the screening analysis. However,
because DOE could not determine the type of foam used in the directly
analyzed models from teardowns or based on the feedback from
manufacturers, DOE found that there was an insufficient basis to
implement this design option as a means to increase energy efficiency
in either the February 2023 NOPR or this direct final rule analysis.
---------------------------------------------------------------------------

\28\ Whirlpool. ``Whirlpool Corporation Partners with Honeywell,
Announces Use of Next Generation Solstice[supreg] Liquid Blowing
Agent in U.S. Refrigerators,'' January 2014. <a href="http://www.prnewswire.com/news-releases/whirlpool-corporation-partners-with-honeywell-announces-use-of-next-generation-solstice-liquid-blowing-agent-in-us-refrigerators-241489581.html">www.prnewswire.com/news-releases/whirlpool-corporation-partners-with-honeywell-announces-use-of-next-generation-solstice-liquid-blowing-agent-in-us-refrigerators-241489581.html</a> (accessed July 13, 2023).
---------------------------------------------------------------------------

An individual commented that microchannel condensers should not be
retained as a design option, citing issues with implementation in the
HVAC industry. The individual also stated that increased insulation
thickness should not be retained as a design option, citing lessening
of consumer utility. (Individual Commenter, No. 59 at p. 1)
DOE has observed implementation of microchannel heat exchangers in
PC 5I, PC 5A, and several built-in product classes. DOE has also
received no information regarding negative impacts in consumer utility
or safety, and therefore, DOE retained microchannel condensers as a
design option in this analysis As with the HFO foam design option,
while microchannel condensers passed the screening analysis, this
design option was not included as a design pathway to achieve higher
efficiency levels in the direct final rule analysis due to potential
system operation drawbacks including irregular refrigerant
distribution, greater refrigerant-side pressure drop, and greater air-
side pressure drop.\29\
---------------------------------------------------------------------------

\29\ Rametta, R.S., Boeng, J., and Melo, C. ``Theoretical and
Experimental Evaluation of Microchannel Condensers Applied to
Household Refrigerators,'' International Refrigeration and Air
Conditioning Conference, 2018, Paper 1843.
---------------------------------------------------------------------------

DOE expects that increased insulation thickness would impact either
the interior or exterior dimensions of a refrigerator, refrigerator-
freezer, or freezer, and as a result did not consider increased
insulation thickness as a design option to achieve the higher
efficiency levels for standard-size refrigerator-freezers. However, DOE
expects that there is potential to increase insulation thickness for
some types of freezers and compact refrigerators, given their typical
use in in spaces that allow increased exterior dimensions, and
therefore continues to consider increased thickness as a design option
to achieve higher efficiency levels for PC 10, PC 11A, and PC 18.
2. Remaining Technologies
Through a review of each technology, DOE concludes that all of the
other identified technologies listed in section IV.B.1 met all five
screening criteria to be examined further as design options in DOE's
direct final rule analysis. In summary, DOE did not screen out the
following technology options:

Table IV.3--Technologies Remaining in the Direct Final Rule
------------------------------------------------------------------------

-------------------------------------------------------------------------
Insulation:
1. Improved resistivity of insulation (insulation type.
2. Increased insulation thickness.
3. Gas-filled insulation panels.
4. Vacuum-insulated panel.
Gasket and Door Design:
5. Reduced heat load for TTD feature.
Anti-Sweat Heater:
6. Refrigerant anti-sweat heating.
7. Electric anti-sweat heater sizing.
8. Electric heater controls.
Compressor:
9. Improved compressor efficiency.
10. Variable-speed compressors.
Evaporator:
11. Improved expansion valve.

[[Page 3046]]

12. Increased surface area.
13. Dual-evaporator systems.
Condenser:
14. Increased surface area.
15. Microchannel condenser.
Defrost System:
16. Reduced energy for automatic defrost.
17. Adaptive defrost.
Control System:
18. Electronic Temperature control.
Other Technologies:
19. Fan and fan motor improvements.
20. Alternative refrigerants.
------------------------------------------------------------------------

DOE determined that these technology options are technologically
feasible because they are being used or have previously been used in
commercially available products or working prototypes. DOE also finds
that all of the remaining technology options meet the other screening
criteria (i.e., practicable to manufacture, install, and service and do
not result in adverse impacts on consumer utility, product
availability, health, or safety). For additional details, see chapter 4
of the direct final rule TSD.

C. Engineering Analysis

The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of refrigerators,
refrigerator-freezers, and freezers. There are two elements to consider
in the engineering analysis: the selection of efficiency levels to
analyze (i.e., the ``efficiency analysis'') and the determination of
product cost at each efficiency level (i.e., the ``cost analysis''). In
determining the performance of higher-efficiency products, DOE
considers technologies and design option combinations not eliminated by
the screening analysis. For each product class, DOE estimates the
baseline cost, as well as the incremental cost for the product/
equipment at efficiency levels above baseline. The output of the
engineering analysis is a set of cost-efficiency ``curves'' that are
used in downstream analyses (i.e., the LCC and PBP analyses and the
NIA).
1. Efficiency Analysis
DOE typically uses one of two approaches to develop energy
efficiency levels for the engineering analysis: (1) relying on observed
efficiency levels in the market (i.e., the efficiency-level approach),
or (2) determining the incremental efficiency improvements associated
with incorporating specific design options to a baseline model (i.e.,
the design option approach). Using the efficiency-level approach, the
efficiency levels established for the analysis are determined based on
the market distribution of existing products (in other words, based on
the range of efficiencies and efficiency level ``clusters'' that
already exist on the market). Using the design option approach, the
efficiency levels established for the analysis are determined through
detailed engineering calculations and/or computer simulations of the
efficiency improvements from implementing specific design options that
have been identified in the technology assessment. DOE may also rely on
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended
using the design option approach either to establish ``gap fill''
levels (to bridge large gaps between other identified efficiency
levels) and/or to extrapolate to the ``max-tech'' level (particularly
in cases where the ``max-tech'' level exceeds the maximum efficiency
level currently available on the market).
In defining the efficiency levels for this direct final rule, DOE
considered comments it had received in response to the efficiency
levels proposed in the February 2023 NOPR.
For its analysis in this rulemaking, DOE used a combined efficiency
level and design option approach. First, an efficiency-level approach
was used to establish an analysis tied to existing products on the
market. A design option approach was used to extend the analysis
through ``built-down'' efficiency levels and ``built-up'' efficiency
levels where there were gaps in the range of efficiencies of products
that were reverse engineered. Products from PC 3, PC 5, PC 5A, PC 5-BI,
PC 7, PC 9, PC 10, PC 11A, and PC 18 were tested and torn down to
provide information to lay the groundwork for the analysis. Other
product classes such as 9-BI (and the new PC 9A-BI recommended by the
Joint Agreement) were not directly analyzed as a part of DOE's
analysis, as they were not deemed sufficiently representative of the
market. A number of other product classes were indirectly analyzed,
based on relevant directly analyzed product classes. DOE's analysis for
PC-9BI, for example, is based on the directly analyzed PC 9.
DOE used design option analysis techniques to extend the analysis
to higher efficiency levels and to fill any efficiency level gaps. DOE
generally focuses its analysis on product classes with higher market
share as their energy impact and associated energy savings are the most
significant. Therefore, for this direct final rule analysis DOE chose
to test and teardown units from the product classes listed above that
represent a significant market share, and extrapolated the analysis to
all other product classes that were not directly analyzed, as
appropriate.
a. Built-In Products
For the analysis supporting this direct final rule, DOE used an
assessment of PC 5-BI (built-in refrigerator-freezer with bottom-
mounted freezer) to address built-in products. DOE conducted analysis
for a representative 5-BI product and compared it to analysis conducted
for freestanding models of class 5. DOE concluded that a built-in model
that is comparable to a freestanding model except the built-in
configuration would have 5 percent higher energy use. Therefore, for
example, the potential reduction in energy use for built-in PC 5 units
would be 5 percent lower than their freestanding counterparts, based on
the implementation of the same design options to satisfy a higher
efficiency level. DOE has applied this 5-percent differential in
selecting standard levels for other built-in classes for which DOE did
not conduct direct analysis (e.g., PC 3A, PC 7, and PC 9). More
information on the analysis of built-in product classes is available in
the direct final rule TSD.

[[Page 3047]]

b. Baseline Efficiency/Energy Use
For each product/equipment class, DOE generally selects a baseline
model as a reference point for each class, and measures changes
resulting from potential energy conservation standards against the
baseline. The baseline model in each product/equipment class represents
the characteristics of a product/equipment typical of that class (e.g.,
capacity, physical size). Generally, a baseline model is one that just
meets current energy conservation standards, or, if no standards are in
place, the baseline is typically the most common or least efficient
unit on the market. When selecting units for the analysis DOE selects
units at baseline from various manufacturers for each directly analyzed
product class.
In determining the baseline efficiency level for this direct final
rule analysis, DOE maintained the same approach as the February 2023
NOPR, and considered the current Federal energy conservation standards
as the baseline level, expressed as maximum annual energy consumption
as a function of the product's adjusted volume, adjusting for the
change in the automatic icemaker energy contribution for product
classes that include this feature. The current standards incorporate an
allowance of a constant 84 kWh/yr icemaker adder for product classes
with automatic icemakers, consistent with the current test procedure,
which requires adding this amount of annual energy use to the product's
tested performance if the product has an automatic icemaker. DOE
adjusted the baseline energy usage levels for each class to account for
the planned revision in the test procedure to reduce the icemaker
energy use adder to 28 kWh/yr.\30\
---------------------------------------------------------------------------

\30\ See the October 12, 2021, final rule for test procedures
for refrigeration products for more information regarding the
adoption of the 28 kWh/yr icemaker adder. 86 FR 56790.
---------------------------------------------------------------------------

DOE directly analyzed a sample of market representative models from
within nine product classes from multiple manufactures. For most
product classes a single representative adjusted volume was analyzed,
though for PC 3, PC 5, and PC 11, DOE directly analyzed two
representative adjusted volumes within the product class. DOE tested
and tore down 13 baseline units to provide a basis for development of
the cost-efficiency curves. DOE's analysis assumed that all baseline
models implement R-600a refrigerant, based on feedback during
manufacturer interviews suggesting the industry has or is in the
process of shifting to low-GWP refrigerants, in particular away from R-
134a, in accordance with regulatory efforts to phasedown of
hydrofluorocarbons.\31\ Further information on the design
characteristics of specific analyzed baseline models is summarized in
the direct final rule TSD.
---------------------------------------------------------------------------

\31\ See <a href="http://www.regulations.gov/document/EPA-HQ-OAR-2021-0044-0223">www.regulations.gov/document/EPA-HQ-OAR-2021-0044-0223</a>
for more information regarding the environmental protection agency's
final rule regarding the phasedown of hydrofluorocarbons.
---------------------------------------------------------------------------

BSH disagreed with DOE's use of HFO foam as representative of a
baseline refrigerator, refrigerator-freezer, and/or freezer's
insulation in the February 2023 NOPR, citing high environmental impact
of the insulation, and encouraged DOE to remove HFO foam from baseline
analysis. (BSH, No. 64 at pp. 1-2) AHAM also suggested that considering
HFO foam at baseline efficiency levels is inappropriate and result in
an artificially high baseline efficiency, excessively stringent
standards for high-volume product classes, and negative environmental
impacts. (AHAM, No. 69 at pp. 4-5)
DOE was unable to determine the type of insulation used in teardown
models and subsequently considered PU insulation at the baseline level
for all product classes in the February 2023 NOPR and in this direct
final rule. Furthermore, as described in section IV.B.2 of this
document, DOE retained the improved insulation resistivity design
option (i.e., HFOs) through the screening analysis, though DOE did not
utilize it as a design to achieve higher efficiency levels in the
engineering analysis. DOE further notes, that BSH and AHAM are parties
to the Joint Agreement and are supportive of the recommended standard
adopted in this direct final rule.
c. Higher Efficiency Levels
For this direct final rule, DOE maintained the same approach as the
February 2023 NOPR, and analyzed up to five incremental efficiency
levels beyond the baseline for each of the analyzed product classes.
For PC 3 and PC 7, DOE considered an efficiency level at roughly 5
percent more efficient than the current energy conservation standard.
For all product classes, DOE considered a level near 10 percent more
efficient than the current energy conservation standard, equivalent to
the current ENERGY STAR[supreg] level for refrigerators, refrigerator-
freezers, and freezers.\32\ DOE then extended the efficiency levels
(``ELs'') in steps of close to 5 percent of the current energy
conservation standard up to EL 4, using applicable technologies as
discussed in sections IV.A.2 and IV.B of this document. Finally, for
all product classes, EL 5 represents ``max-tech,'' using design option
analysis to extend the analysis beyond EL 4 using all applicable design
options, including the most efficient variable-speed compressors
available on the market, and considerable use of vacuum-insulated
panels (``VIPs'') in key areas of the cabinet walls and doors. The
efficiency levels analyzed beyond the baseline are shown in Table IV.4.
---------------------------------------------------------------------------

\32\ EnergyStar, ``Refrigerators & Freezers Key Product
Criteria,'' <a href="http://www.energystar.gov/products/appliances/refrigerators/key_product_criteria">www.energystar.gov/products/appliances/refrigerators/key_product_criteria</a> (accessed July 14, 2023).

[[Page 3048]]

Table IV.4--Incremental Efficiency Levels for Analyzed Products
[% Energy use less than baseline] \33\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Standard-size refrigerator Standard-size Compact refrigerators and freezers
----------------------------------------------------------------------------- freezers -------------------------------------------
Product Class (AV, ft) 5** 5** 5A** 5-BI ----------------------
3 (11.9) 3 (20.6) (23.0) (30.0) (35.0) (26.0) 7 (31.5) 9 (29.3) 10 (26.0) 11A (1.7) 11A (4.4) 17 (9.0) 18 (8.9)
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
EL 1............................................. 5% 5% 8% 7% * 11% * 10% 5% * 10% * 10% * 10% * 10% * 10% 10%
EL 2............................................. * 10% * 10% * 13% * 11% 16% 15% * 10% 15% 15% 15% 15% 15% 15%
EL 3............................................. 15% 15% 18% 15% 22% 16% 15% 20% 20% 20% 20% 20% 20%
EL 4............................................. 20% 20% 20% 17% ......... ......... 19% 25% 23% 32% 30% ......... 30%
EL 5............................................. 27% 28% ......... ......... ......... ......... 22% ......... ......... ......... ......... ......... .........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Efficiencies at or slightly better than the ENERGY STAR[supreg] efficiency of 10%
** Percentages are based on a 3-door configuration.

[[Page 3049]]

d. VIP Analysis and Max-Tech Levels
---------------------------------------------------------------------------

\33\ DOE notes the recommended TSL for this direct final rule is
TSL 4, discussed further in section V.A of this document.
---------------------------------------------------------------------------

As discussed in the previous section, DOE's NOPR analysis
considered the use of VIPs placed throughout the side walls and doors
at max-tech levels for many product classes.
AHAM disagreed with the extent of VIP use at higher efficiency
levels in the engineering analysis, asserting that DOE overestimates
the use and impact of VIPs in its analysis, despite acknowledging the
technology's limitations. AHAM cited panel cost, in the form of labor
and production costs, which are significant due to complex installation
requirements, processing controls, and quality checks. AHAM also cited
lower effectiveness in smaller units due to ``edge effects'' (i.e.,
heat around the edges caused by the membrane film that forms the walls
of the VIP). AHAM suggested that DOE not overestimate the impact of
VIPs in its analysis, considering that VIPs are not used in a majority
of products and manufacturers have reported varied levels of success
using the technology. (AHAM, No. 69 at pp. 5-6)
DOE's implementation of VIPs in the analyses at each stage of this
rulemaking is based on a combination of the best information gathered
from multiple sources related to cost, use, and energy efficiency
impacts. DOE did not specifically account for edge effect impacts on
thermal load for compact refrigerator, refrigerator-freezer, or freezer
models in its analysis. Regarding VIP pricing, DOE estimated VIP panel,
installation, processing, and quality check costs based on a number of
discussions with refrigerator manufacturers, VIP producers, and market
research. DOE conducted additional interviews and research in support
of this direct final rule, which further supported and solidified the
VIP cost estimates.
In manufacturer interviews, DOE also gathered information regarding
the implementation of VIPs (e.g., locations, number of panels, panel
area), and based on that information, DOE performed simulations to
estimate the energy impacts using CERA. CERA allowed DOE to analyze the
thermal load impact on a fresh food and/or freezer cabinet due to
different placements of VIP paneling throughout a cabinet (e.g., side
panels, doors, or both). DOE then compared the results from these
simulations to existing research into load reductions (which estimates
energy savings at around 30 percent) \34\ and based on both sources,
estimated that the full implementation of VIPs in existing cabinets can
reduce heat load by up to 23 percent. DOE did not specifically account
for edge effect impacts on thermal load for compact refrigerator,
refrigerator-freezer, or freezer models in its analysis. However, DOE
notes that the engineering analysis halves the thermal load impact as
observed in simulations in order to be conservative with energy savings
and to account for factors that are not captured in testing and/or
simulation (e.g., differences in VIP core material, VIP installation
method and location). DOE also notes VIPs are not implemented in most
classes until efficiency levels above that proposed in the February
2023 NOPR and adopted in this direct final rule.
---------------------------------------------------------------------------

\34\ ``Development of Nanoporous Materials for the Production of
Vacuum-Insulated Panels (VIPs),'' European Commission, January 2017.
Available at cordis.europa.eu/article/id/190833-insulation-
nanomaterials-for-energyefficient-refrigerators (last accessed
October 15, 2020).
---------------------------------------------------------------------------

Sub Zero commented that as a small, low-volume manufacturer of
niche built-in style refrigeration products, it is concerned that the
standards proposed in the February 2023 NOPR will create a significant
supply chain burden for them, as components like vacuum insulation
panels are supplied by a limited number of manufacturers, which will
impede their ability to deliver products to their consumers in a timely
manner. Sub Zero requested that DOE reduce the stringency level of
adopted standards for built-in products, to reduce these concerns. (Sub
Zero, No. 77 at p. 2)
To better characterize and understand the VIP market, DOE conducted
research and interviewed relevant VIP manufacturers to gather more data
regarding the current global VIP market, and to identify any potential
supply chain constraints related to the adoption of more stringent
energy conservation standards. DOE estimates that the current demand
for VIPs in the U.S. refrigerator market is roughly 1 to 3 million VIP
panels, whereas the global supply for VIPs is estimated to exceed 10
million panels. Despite relatively low demand for VIPs in the U.S.
market, there is notable VIP use in the European and Asian markets,
with supply available from at least three major VIP manufacturers.
Based on the information gathered, DOE expects that VIP production
lines can be quickly scaled up to meet demand of future amended
standards (within 1 to 2 years depending on the specific VIP design),
well within 3-year lead time between publication of amended standards
and the compliance date for those standards.
In response to stakeholder feedback on the February 2023 NOPR, DOE
carefully considered the use of VIPs in its analysis, generally
implementing VIPs at the highest efficiency levels as one of the last
design options considered. Therefore, based on the engineering analysis
and its consideration of VIPs, DOE expects that to meet the adopted
standards, manufacturers are likely to implement VIPs only in PC 5 (for
three-door, 30 AV configuration) and PC 5A, with partial VIP usage for
both classes.
e. Variable-Speed Compressor Supply Chain
Numerous commenters on the February 2023 NOPR suggested that supply
chains for VIPs and variable-speed compressor (``VSC'') may not support
the quantities of those components that may be required at the
efficiency levels proposed in the NOPR. AHAM recommended that DOE
conduct a review of component availability and supply chain capacity
for VSCs given the general global market trends for increasingly
stringent standards for cooling appliances, including both air
conditioning and refrigeration. (AHAM, No. 69 at p. 5) Whirlpool
further noted that the proposed standards may result in increased
component costs to manufacturers due to those same supply chain
constraints, especially given that VSCs would be necessary for nearly
all evaluated product classes. (Whirlpool, No. 70 at p. 5) Sub Zero
also expressed concern that the proposed standards will create a
significant supply chain burden for small, low-volume manufacturer of
niche market built-in style refrigeration products because VSCs are
provided by a limited number of suppliers. Sub Zero commented that the
proposed standards will impede the ability of these small manufacturers
to deliver to their niche consumers in a timely manner. (Sub Zero, No.
77 at p. 2)
Samsung supported DOE's proposed energy conservation standards for
refrigerators, refrigerator-freezers, and freezers and the use of VSC
technology as a significant energy-saving option. Samsung stated that
there is already significant market availability of VSCs, and a
regulatory certainty and 3-year compliance period would provide ample
time for manufacturers and suppliers to establish sufficient supply
availability of VSCs. (Samsung, No. 78 at p. 2)
In response to these comments, DOE interviewed relevant compressor
manufacturers to gather information

[[Page 3050]]

regarding the level of VSC implementation that would be required at the
efficiency levels in this rule, the current and predicted supply of
VSCs into the U.S. market, the predicted time to ramp up production of
VSCs, and pricing of VSC compressors and components. DOE notes that the
VSC compressors focused on in this supply chain analysis differ from
those utilized in air conditioners and other non-related cooling
appliances. VSC compressors utilized in refrigerators, refrigerator-
freezers, and freezers are generally different designs, are
manufactured in different factories, and are generally produced by
different manufacturers. Thus, based on the information provided by
these manufacturers, DOE has determined that the industry is able to
meet the increased demand of VSCs amid likely growing demand in the
U.S. market.
Based on manufacturer interviews, DOE estimates the current total
global demand for refrigerator, refrigerator-freezer, and freezer
compressors (all compressors, not just VSCs) is 230 million. Total
compressor production capacity is much higher than demand, with global
capacity for compressors estimated at over 400 million. Globally, there
has been a shift towards VSC utilization in response to increasing
energy efficiency regulations in the European Union (``EU'') and Japan.
Estimates project upwards of a quarter of the global market and a third
of the U.S. market currently utilize VSCs in refrigerators,
refrigerator-freezers, and freezers. Considering the U.S. market
accounts for an estimated 12 million consumer refrigeration products, a
conservative estimate puts U.S. current demand for VSC compressors at
roughly 4 million.
Given DOE's understanding of the compressor marketplace, the
expected time to build capacity to meet the new demand is expected to
be significantly shorter than the 5 and 6-year lead time between direct
final rule publication and the compliance date, with estimates ranging
from 8 months to 1 year. Compressor manufacturers indicated that VSC
production capacity has been increasing by 7 million per year between
2018 and 2022. Additionally, high-efficiency VSC compressor designs are
already developed and do not require additional qualification testing
before production. Research and development (``R&D'') time to develop
compressor designs is not required and thus would not be a factor
affecting availability.
DOE is aware that there have been supply constraints for VSCs
recently due to issues with electronic component supply caused by the
COVID-19 pandemic. Specifically, Chinese manufacturing and shipping of
compressors decreased significantly during COVID-related lockdowns
throughout the country between 2020 and 2022. Due to China's outsized
impact on global supply, the effects of lockdowns were felt globally.
Now that lockdowns have ended, however, the affected factories are open
again and in production. Compressor manufacturers also indicated that
they have been modifying sourcing strategies, in many cases
establishing their own electronic component assembly lines in order to
protect against potential future issues that could affect supply and
production of VSCs.
In considering all of the information provided by relevant
manufacturers of VSCs, DOE believes that significant increases in VSCs
in the U.S. market aligned with the standard levels adopted in this
direct final rule are well within the production capacity of the
compressor industry. DOE further notes, that AHAM, Whirlpool, Sub Zero,
and Samsung are parties to the Joint Agreement and are supportive of
the recommended standard adopted in this direct final rule.
f. Product Classes 11 and 12 Alignment
The Joint Agreement recommended that DOE adopt a level of 10
percent energy savings relative to the current PC 12 standard. In light
of the recommendation outlined in the Joint Agreement, and in
consideration of comments received in response to the February 2023
NOPR, DOE is adopting a percentage increase in efficiency for PC 12 at
10 percent lower relative to the current standard. Additionally, as
recommended in the Joint Agreement and proposed in the February 2023
NOPR, DOE is including a multi-door energy use allowance for PC 12 for
products with two doors.
2. Cost Analysis
The cost analysis portion of the engineering analysis is conducted
using one or a combination of cost approaches. The selection of cost
approach depends on a suite of factors, including the availability and
reliability of public information, characteristics of the regulated
product, the availability and timeliness of purchasing the product on
the market. The cost approaches are summarized as follows:
<bullet> Physical teardowns: Under this approach, DOE physically
dismantles a commercially available product, component-by-component, to
develop a detailed bill of materials for the product.
<bullet> Catalog teardowns: In lieu of physically deconstructing a
product, DOE identifies each component using parts diagrams (available
from manufacturer websites or appliance repair websites, for example)
to develop the bill of materials for the product.
<bullet> Price surveys: If neither a physical nor catalog teardown
is feasible (for example, for tightly integrated products such as
fluorescent lamps, which are infeasible to disassemble and for which
parts diagrams are unavailable) or cost-prohibitive and otherwise
impractical (e.g., large commercial boilers), DOE conducts price
surveys using publicly available pricing data published on major online
retailer websites and/or by soliciting prices from distributors and
other commercial channels.
In the direct final rule analysis, DOE conducted the analysis using
a combination of physical teardowns, catalog teardowns, and price
surveys. Where possible, physical teardowns were used to provide a
baseline of technology options and pricing for a specific product class
at a specific EL. Then with technology option information, DOE
estimated the cost of various design options including compressors,
VIPs, and insulation, by extrapolating the costs from price surveys.
With specific costs for technology options, DOE was then able to
``build-up'' or ``build-down'' from the various teardown models to
finish the cost-efficiency curves. DOE used this approach to calibrate
the analysis to certified or measured energy use of specific available
models where possible, while allowing a broader range of potential
efficiency levels to be considered.
The resulting bill of materials provides the basis for the
manufacturer production cost (``MPC'') estimates.
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 appliance manufacturing and whose
combined product range includes refrigerators, refrigerator-freezers,
and freezers.
3. Cost-Efficiency Results
The results of the engineering analysis are presented as cost-
efficiency data for each of the efficiency levels for each of the
analyzed product classes that were

[[Page 3051]]

analyzed. DOE developed estimates of MPCs for each unit in the teardown
sample, and also performed additional modeling based on representative
teardown samples, to extend the analysis to cover the range of
efficiency levels appropriate for a representative product. To estimate
the MPCs necessary to achieve higher efficiency levels, in particular
those beyond the highest-efficiency products in the test sample, DOE
considered design options that were most likely to be considered and
implemented by manufacturers to achieve the higher efficiency levels.
Based on input from manufacturers and an understanding of the markets,
DOE then estimated the costs associated with those design option to
determine the MPCs at each of the analyzed efficiency levels.
The efficiency levels and design option progression for the
analyzed standard-size refrigerator-freezers are presented in Table
IV.5. The cells in the table list the design options that DOE
considered at each higher efficiency level as compared with the next-
lower efficiency level. Similarly, the efficiency levels and design
options for standard-size freezers and Compact refrigerators,
refrigerator-freezers are presented in Table IV.6. The MPCs for the
analyzed product classes across the considered efficiency levels are
presented in Tables IV.7 and IV.8. See chapter 5 of the direct final
rule TSD for additional detail on the engineering analysis.

Table IV.5--Efficiency Levels and Design Options for Analyzed Standard-Size Refrigerator-Freezers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Product class (AV \5\) EL1 EL2 EL3 EL4 EL5
--------------------------------------------------------------------------------------------------------------------------------------------------------
3 (11.9):
EL Percent \1\................. 5%.................... 10%................... 15%.................. 20%.................. 27%.
Design Options Added........... Variable Defrost; Higher-EER Single Highest-EER Single VIP side walls and Variable-speed
Higher-Energy Speed Compressor. Speed Compressor. doors. compressor
Efficiency Ratio system.\3\
(EER) Single Speed
Compressor.
3 (21.0):
EL Percent \1\................. 5%.................... 10%................... 15%.................. 20%.................. 28%.
Design Options Added........... Higher-EER Single Variable Defrost; Higher-EER 66% of Max-tech VIP VIP side walls and
Speed Compressor. Higher-EER Single Compressor; Variable- \4\. doors.
Speed Compressor. speed compressor
system \3\.
5 (23.0): \2\
EL Percent \1\................. 8%.................... 13%................... 18%.................. 20%..................
Design Options Added........... Higher-EER Single Brushless-DC Highest-EER VIP side walls and
Speed Compressor. Evaporator Fan Motor; Compressor; 50% of doors..
Higher-EER compressor Max-tech VIP.
Variable-speed
compressor system \3\.
5 (30.0): \2\
EL Percent \1\................. 7%.................... 11%................... 15%.................. 17%..................
Design Options Added........... Variable Speed Higher-EER Compressor; Higher-EER Highest-EER
Compressor System \6\. \6\ Brushless-DC Compressor; 50% of Compressor; VIP side
Evaporator Fan Motor; Max-tech VIP. walls and doors..
50% of Max-tech VIP
\6\.
5-BI (26.0):
EL Percent \1\................. 10%................... 15%................... 16%..................
Design Options Added........... Variable-speed 50% of Max-tech VIP VIP side walls and
compressor system \3\. \4\. doors..
5A (35.0): \2\
EL Percent \1\................. 11%................... 16%................... 22%..................
Design Options Added........... Higher-EER Compressor; Highest-EER VIP side walls and
Variable-speed Compressor; Variable doors..
compressor system \3\. Speed Compressor
System; 42% of Max-
tech VIP \4\.
7 (31.5):
EL Percent \1\................. 5%.................... 10%................... 15%.................. 19%.................. 22%.
Design Options Added........... Highest-EER Single Brushless-DC Highest-EER Variable 75% of Max-tech VIP VIP side walls and
Speed Compressor. Evaporator Fan Motor; Speed compressor \4\. doors.
Variable-speed system.
compressor system \3\.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\1\ Percent energy use less than baseline.
\2\ For three-door configuration.
\3\ Includes two-speed fan control.
\4\ The percentage of surface area of VIP as compared with the VIP surface area used in the maximum-technology design, for which VIP would be installed
for full coverage of the side walls and doors.
\5\ Adjusted Volume in cubic feet.

Table IV.6--Efficiency Levels and Design Options for Analyzed Standard-Size Freezers and Compact Refrigerators,
Refrigerator-Freezers, and Freezers
----------------------------------------------------------------------------------------------------------------
Product class (AV \4\) EL1 EL2 EL3 EL4
----------------------------------------------------------------------------------------------------------------
9 (29.3):
EL Percent \1\.............. 10%............... 15%............... 20%............... 25%.
Design Options Added........ Switch to forced- Highest-EER 37% of Max-tech VIP side walls and
convection Compressor; VIP \3\. door.
condenser; Variable-speed
Brushless-DC compressor system
Condenser and \2\.
Evaporator fans.
10 (26.0):
EL Percent \1\.............. 10%............... 15%............... 20%............... 23%.
Design Options Added........ Variable-speed Wall thickness Highest-EER VIP door.
compressor system increase; Compressor;
\2\. Brushless-DC Variable-speed
Evaporator Fan. compressor system.
11A (1.7):
EL Percent \1\.............. 10%............... 15%............... 20%............... 32%.

[[Page 3052]]

Design Options Added........ Wall thickness Higher-EER Single Higher-EER Single Highest-EER Single
increase. Speed Compressor. Speed Compressor; Speed Compressor.
VIP sides and
door.
11A (4.4):
EL Percent \1\.............. 10%............... 15%............... 20%............... 30%.
Design Options Added........ Higher-EER Single Wall thickness Higher-EER Single Variable-speed
Speed Compressor. increase. Speed Compressor. Compressor
System; \2\ VIP
sides walls and
door.
17 (9.0):
EL Percent \1\.............. 10%............... 15%............... 20%...............
Design Options Added........ Highest-EER 50% of Max-tech VIP side walls and
Compressor; VIP \3\. door panels..
Variable-speed
Compressor
System; \2\
Variable Defrost.
18 (8.9):
EL Percent \1\.............. 10%............... 15%............... 20%............... 30%.
Design Options Added........ Higher-EER Single Wall thickness Highest-EER Single Variable-speed
Speed Compressor. increase. Speed Compressor; Compressor
VIP door. System.\2\
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ Percent energy use less than baseline.
\2\ Includes two-speed fan control.
\3\ The percentage of surface area of VIP as compared with the VIP surface area used in the maximum-technology
design, for which VIP would be installed for full coverage of the side walls and doors.
\4\ Adjusted Volume in cubic feet.

Table IV.7--Cost-Efficiency Curves for Standard-Size Refrigerator-Freezers
----------------------------------------------------------------------------------------------------------------
Product Class (AV \3\) EL0 EL1 EL2 EL3 EL4 EL5
----------------------------------------------------------------------------------------------------------------
3 (11.9):
EL Percent \1\...................... 0% 5% 10% 15% 20% 27%
MPC................................. $368.51 $375.65 $377.11 $378.79 $434.79 $464.09
Incremental MPC..................... $0.00 $7.14 $8.60 $10.28 $66.28 $95.58
3 (21.0):
EL Percent \1\...................... 0% 5% 10% 15% 20% 28%
MPC................................. $454.50 $456.08 $473.88 $498.64 $544.91 $570.09
Incremental MPC..................... $0.00 $1.59 $19.38 $44.14 $90.42 $115.59
5 (23.0): \2\
EL Percent \1\...................... 0% 8% 13% 18% 20%
MPC................................. $662.58 $678.47 $696.39 $736.57 $755.49
Incremental MPC..................... $0.00 $15.89 $33.81 $73.99 $92.91
5 (30.0): \2\
EL Percent \1\...................... 0% 7% 11% 15% 17%
MPC................................. $705.12 $740.80 $763.71 $774.63 $807.62
Incremental MPC..................... $0.00 $35.68 $58.58 $69.51 $102.50
5-BI (26.0):
EL Percent \1\...................... 0% 10% 15% 16%
MPC................................. $829.20 $848.87 $883.70 $918.52
Incremental MPC..................... $0.00 $19.67 $54.50 $89.32
5A (35.0): \2\
EL Percent \1\...................... 0% 11% 16% 22%
MPC................................. $765.69 $786.68 $824.44 $871.93
Incremental MPC..................... $0.00 $21.00 $58.75 $106.24
7 (31.5):
EL Percent \1\...................... 0% 5% 10% 15% 19% 22%
MPC................................. $669.60 $671.85 $691.36 $692.20 $750.52 $770.32
Incremental MPC..................... $0.00 $2.26 $21.77 $22.60 $80.92 $100.72
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ Percent energy use less than baseline.
\2\ For three-door configuration.
\3\ Adjusted volume in cubic feet.

Table IV.8--Cost-Efficiency Curves for Standard-Size Freezers and Compact Refrigerators, Refrigerator-Freezers,
and Freezers
----------------------------------------------------------------------------------------------------------------
Product class (AV \2\) EL0 EL1 EL2 EL3 EL4
----------------------------------------------------------------------------------------------------------------
9 (29.3):
EL Percent \1\.................................. 0% 10% 15% 20% 25%
MPC \2\......................................... $536.45 $553.18 $585.43 $614.85 $652.63
Incremental MPC................................. $0.00 $16.73 $48.97 $78.40 $116.17

[[Page 3053]]

10 (26.0):
EL Percent \1\.................................. 0% 10% 15% 20% 23%
MPC............................................. $522.18 $553.37 $577.47 $579.41 $602.71
Incremental MPC................................. $0.00 $31.19 $55.29 $57.23 $80.53
11A (1.7):
EL Percent \1\.................................. 0% 10% 15% 20% 32%
MPC............................................. $146.55 $151.55 $152.77 $176.94 $181.26
Incremental MPC................................. $0.00 $5.00 $6.22 $30.38 $34.70
11A (4.4):
EL Percent\1\................................... 0% 10% 15% 20% 30%
MPC............................................. $212.15 $214.64 $220.57 $231.84 $289.23
Incremental MPC................................. $0.00 $2.49 $8.42 $19.69 $77.08
17 (9.0):
EL Percent \1\.................................. 0% 10% 15% 20%
MPC............................................. $268.95 $294.85 $318.20 $341.55
Incremental MPC................................. $0.00 $25.91 $49.26 $72.61
18 (8.9):
EL Percent \1\.................................. 0% 10% 15% 20% 30%
MPC............................................. $256.22 $258.76 $268.00 $281.06 $311.99
Incremental MPC................................. $0.00 $2.54 $11.78 $24.84 $55.77
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ Percent energy use less than baseline.
\2\ Adjusted volume in cubic feet.

4. Manufacturer Selling Price
To account for manufacturers' non-production costs and revenue
attributable to the product, DOE applies a multiplier (the manufacturer
markup) to the MPC. The resulting manufacturer selling price (``MSP'')
is the price at which the manufacturer distributes a unit into
commerce. DOE developed an average manufacturer markup by examining the
annual Securities and Exchange Commission (``SEC'') 10-K reports \35\
filed by publicly traded manufacturers primarily engaged in appliance
manufacturing and whose combined product range includes refrigerators,
refrigerator-freezers, and freezers. See chapter 12 of the direct final
rule TSD for additional detail on the manufacturer markup.
---------------------------------------------------------------------------

\35\ U.S. Securities and Exchange Commission, Electronic Data
Gathering, Analysis, and Retrieval (EDGAR) system. Available at
<a href="http://www.sec.gov/edgar/search/">www.sec.gov/edgar/search/</a> (last accessed July 1, 2022).
---------------------------------------------------------------------------

D. Markups Analysis

The markups analysis develops appropriate markups (e.g., retailer
markups, wholesaler markups, contractor markups) in the distribution
chain and sales taxes to convert the MSP estimates derived in the
engineering analysis to consumer prices, which are then used in the LCC
and PBP analysis. At each step in the distribution channel, companies
mark up the price of the product to cover business costs and operating
profit.
For refrigerators, refrigerator-freezers, and freezers, the main
parties in the distribution chain are retailers, wholesalers, and
general contractors.
DOE developed baseline and incremental markups for each actor in
the distribution chain. Baseline markups are applied to the price of
products with baseline efficiency, while incremental markups are
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The 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.\36\
---------------------------------------------------------------------------

\36\ 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. Specifically, DOE used the
2017 Annual Retail Trade Survey for the ``electronics and appliance
stores'' sector to develop retailer markups,\37\ the 2017 Annual
Wholesale Trade Survey for the ``household appliances, and electrical
and electronic goods merchant wholesalers'' sector to estimate
wholesaler markups,\38\ and the industry series for the ``residential
building construction'' sector published by the 2017 Economic Census to
derive general contractor markups.\39\ DOE relied on economic data from
the U.S. Census Bureau to estimate average baseline and incremental
markups. Specifically, DOE used the 2017 Annual Retail Trade Survey for
the ``electronics and appliance stores'' sector to develop retailer
markups,\40\ the 2017 Annual Wholesale Trade Survey for the ``household
appliances, and electrical and electronic goods merchant wholesalers''
sector to estimate wholesaler markups,\41\ and the industry series for
the ``residential building construction'' sector published by the 2017
Economic Census to derive general contractor markups.\42\
---------------------------------------------------------------------------

\37\ U.S. Census Bureau, Annual Retail Trade Survey. 2017.
<a href="http://www.census.gov/programs-surveys/arts.html">www.census.gov/programs-surveys/arts.html</a>.
\38\ U.S. Census Bureau, Annual Wholesale Trade Survey. 2017.
<a href="http://www.census.gov/awts">www.census.gov/awts</a>.
\39\ U.S. Census Bureau. 2017 Economic Census. <a href="http://www.census.gov/newsroom/press-kits/2020/2017-economic-census.html">www.census.gov/newsroom/press-kits/2020/2017-economic-census.html</a>.
\40\ U.S. Census Bureau, Annual Retail Trade Survey. 2017.
<a href="http://www.census.gov/programs-surveys/arts.html">www.census.gov/programs-surveys/arts.html</a>.
\41\ U.S. Census Bureau, Annual Wholesale Trade Survey. 2017.
<a href="http://www.census.gov/awts">www.census.gov/awts</a>.
\42\ U.S. Census Bureau. 2017 Economic Census. <a href="http://www.census.gov/newsroom/press-kits/2020/2017-economic-census.html">www.census.gov/newsroom/press-kits/2020/2017-economic-census.html</a>.
---------------------------------------------------------------------------

In response to the February 2023 NOPR, AHAM commented on DOE's
reliance on the concept of incremental markups, stating that it is
based on discredited theory, and it is in contradiction to empirical
evidence provided by AHAM during the 2014

[[Page 3054]]

NOPR for Energy Conservation Standards for Residential Dishwashers.
(AHAM, No. 69 at p. 15-16)
DOE disagrees that the theory behind the concept of incremental
markups is discredited. DOE's incremental markup approach assumes that
an increase in profitability, which is implied by keeping a fixed
markup when the product price goes up, is unlikely to be viable over
time in a reasonably competitive market like household appliance
retailers. The Herfindahl-Hirschman Index (HHI) reported by the 2017
Economic Census indicates that household appliance stores sector (North
American Industry Classification System (NAICS) code 443141) is a
competitive marketplace.\43\ DOE recognizes that actors in the
distribution chains are likely to seek to maintain the same markup on
appliances in response to changes in manufacturer selling prices after
an amendment to energy conservation standards. However, DOE believes
that retail pricing is likely to adjust over time as those actors are
forces to readjust their markups to reach a medium-term equilibrium in
which per-unit profit is relatively unchanged before and after
standards are implemented.
---------------------------------------------------------------------------

\43\ 2017 Core Statistics Economic Census: Establishment and
Firm Size Statistics for the U.S. (NAICS 443141).
---------------------------------------------------------------------------

DOE acknowledges that markup practices in response to amended
standards are complex and varying with business conditions. However,
DOE's analysis necessarily considers a very simplified and hypothetical
version of the world of appliance retailing: namely, a situation in
which nothing changes except for those changes in appliance offerings
that occur in response to amended standards. Obtaining data on markup
practices in the situation described above is very challenging. Hence,
DOE continues to believe that its assumption that standards do not
facilitate a sustainable increase in profitability is reasonable.
Chapter 6 of the direct final rule TSD provides details on DOE's
development of markups for refrigerators, refrigerator-freezers, and
freezers.

E. Energy Use Analysis

The purpose of the energy use analysis is to determine the annual
energy consumption of refrigerators, refrigerator-freezers, and
freezers at different efficiencies in representative U.S. single-family
homes, multi-family residences, and commercial buildings, and to assess
the energy savings potential of increased product efficiency. The
energy use analysis estimates the range of energy use of refrigerators,
refrigerator-freezers, and freezers in the field (i.e., as they are
actually used by consumers). The energy use analysis provides the basis
for other analyses DOE performed, particularly assessments of the
energy savings and the savings in consumer operating costs that could
result from adoption of ame

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