Rule2024-08196
Clean Energy for New Federal Buildings and Major Renovations of Federal Buildings
Primary source
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Published
May 1, 2024
Effective
July 15, 2024
Issuing agencies
Energy Department
Abstract
The Department of Energy ("DOE") is publishing a rule that establishes energy performance standards for the new construction and major renovation of Federal buildings, including commercial buildings, multi-family high-rise residential buildings, and low-rise residential buildings per the Energy Conservation and Production Act ("ECPA"), as amended by the Energy Independence and Security Act of 2007 ("EISA"). Consistent with the requirements of ECPA and EISA, DOE is establishing Federal building energy performance standards that require Federal agencies to reduce their use of on-site use of fossil fuels (which include coal, petroleum, natural gas, oil shales, bitumens, tar sands, and heavy oils) consistent with the targets of ECPA and EISA. This final rule also provides processes by which Federal agencies may petition DOE for a modification to the final standards.
Full Text
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[Federal Register Volume 89, Number 85 (Wednesday, May 1, 2024)]
[Rules and Regulations]
[Pages 35384-35439]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-08196]
[[Page 35383]]
Vol. 89
Wednesday,
No. 85
May 1, 2024
Part III
Department of Energy
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10 CFR Parts 433 and 435
Clean Energy for New Federal Buildings and Major Renovations of Federal
Buildings; Final Rule
Federal Register / Vol. 89 , No. 85 / Wednesday, May 1, 2024 / Rules
and Regulations
[[Page 35384]]
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DEPARTMENT OF ENERGY
10 CFR Parts 433 and 435
[EERE-2010-BT-STD-0031]
RIN 1904-AB96
Clean Energy for New Federal Buildings and Major Renovations of
Federal Buildings
AGENCY: Federal Energy Management Program, Department of Energy.
ACTION: Final rule.
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SUMMARY: The Department of Energy (``DOE'') is publishing a rule that
establishes energy performance standards for the new construction and
major renovation of Federal buildings, including commercial buildings,
multi-family high-rise residential buildings, and low-rise residential
buildings per the Energy Conservation and Production Act (``ECPA''), as
amended by the Energy Independence and Security Act of 2007 (``EISA'').
Consistent with the requirements of ECPA and EISA, DOE is establishing
Federal building energy performance standards that require Federal
agencies to reduce their use of on-site use of fossil fuels (which
include coal, petroleum, natural gas, oil shales, bitumens, tar sands,
and heavy oils) consistent with the targets of ECPA and EISA. This
final rule also provides processes by which Federal agencies may
petition DOE for a modification to the final standards.
DATES: The effective date of this rule is July 15, 2024. Compliance
with revised performance standards established in this rule is required
for the construction of new and major renovation of Federal buildings,
including commercial buildings, multi-family high-rise residential
buildings, and low-rise residential buildings, for which design for
construction begins on or after May 1, 2025.
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.
The docket web page can be found at <a href="http://www.regulations.gov/docket/EERE-2010-BT-STD-0031">www.regulations.gov/docket/EERE-2010-BT-STD-0031</a>. The docket web page contains instructions on how
to access all documents, including public comments, in the docket.
FOR FURTHER INFORMATION CONTACT:
Mr. Rick Mears, U.S. Department of Energy, Office of the Under
Secretary for Infrastructure, Federal Energy Management Program, FEMP-
1, 1000 Independence Avenue SW, Washington, DC 20585-0121. Email: <a href="/cdn-cgi/l/email-protection#1d7e786f3074737b726f707c697472735d756c33797278337a726b"><span class="__cf_email__" data-cfemail="375452451a5e595158455a56435e5859775f461953585219505841">[email protected]</span></a>.
Ms. Laura Zuber, U.S. Department of Energy, Office of the General
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121.
Telephone: (240) 306-7651. Email: <a href="/cdn-cgi/l/email-protection#adc1ccd8dfcc83d7d8cfc8dfedc5dc83c9c2c883cac2db"><span class="__cf_email__" data-cfemail="e884899d9a89c6929d8a8d9aa88099c68c878dc68f879e">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
A. Authority
B. Background
C. Final Rule Overview
II. Public Comments on the 2022 SNOPR
III. Discussion of the Final Rule
A. Scope
1. Federal Buildings
2. Calculating Costs
a. Construction and Major Renovations Costs
b. Individual Buildings
c. Major Renovations
d. Energy Conservation Measures
3. Fossil Fuel-Generated Energy Consumption
a. Limitation to On-Site Use of Fossil Fuels
b. Exemptions and Exceptions
B. Performance Standards for Fossil Fuel-Generated Energy
Consumption
1. New Construction and Major Renovations of a Whole Building
2. Major Renovations Within a Building
3. Shift Adjustment Multiplier
4. Compliance Date
C. Petitions for Downward Adjustment
1. DOE Review of Petitions
2. Making Petitions for Downward Adjustment Public
3. Bundling Petitions
4. GSA Tenant Agencies
5. Petitions Submitted by the Department of Defense
D. Definitions
IV. Additional Issues Raised by Commenters
A. Authority
B. APA Concerns
V. Methodology, Analytical Results, and Conclusion
A. Cost-Effectiveness
B. Emissions Analysis
1. Air Quality Regulations Incorporated in DOE's Analysis
C. Monetizing Emissions Impacts
1. Monetization of Greenhouse Gas Emissions
a. Social Cost of Carbon
b. Social Cost of Methane and Nitrous Oxide
c. Sensitivity Analysis Using Updated 2023 SC-GHG Estimates
2. Monetization of Other Emissions Impacts
D. Public Comment
E. Conclusion
F. Reference Resources
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 the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Information Quality
VII. Approval of the Office of the Secretary
I. Introduction
The following section briefly discusses the statutory authority
underlying this final rule, as well as some of the relevant historical
background related to the establishment of a fossil fuel-generated
energy consumption reduction rule for certain Federal buildings.
A. Authority
Section 305 of ECPA established energy conservation requirements
for Federal buildings. 42 U.S.C. 6834. Section 433(a) of EISA amended
section 305 of ECPA and directed DOE to establish regulations that
require certain new Federal buildings and Federal buildings undergoing
major renovations to reduce their fossil fuel-generated energy
consumption. 42 U.S.C. 6834(a)(3)(D)(i). The fossil fuel-generated
energy consumption reductions only apply to Federal buildings that: (1)
are ``public buildings'' (as defined in 40 U.S.C. 3301) \1\ with
respect to which the
[[Page 35385]]
Administrator of General Services is required to transmit a prospectus
to Congress under 40 U.S.C. 3307; \2\ or (2) those that cost at least
$2,500,000 in costs adjusted annually for inflation. 42 U.S.C.
6834(a)(3)(D)(i).
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\1\ Under 40 U.S.C. 3301(a)(5), ``public building'' is a
building, whether for single or multitenant occupancy, and its
grounds, approaches, and appurtenances, which is generally suitable
for use as office or storage space or both by one or more Federal
agencies or mixed-ownership Government corporations. ``Public
building'' includes Federal office buildings, post offices,
customhouses, courthouses, appraisers stores, border inspection
facilities, warehouses, record centers, relocation facilities,
telecommuting centers, similar Federal facilities, and any other
buildings or construction projects the inclusion of which the
President considers to be justified in the public interest. The
definition does not include a building or construction project that
is on the public domain (including that reserved for national
forests and other purposes); that is on property of the Government
in foreign countries; that is on Native American and Native Alaskan
property held in trust by the Government; that is on land used in
connection with federal programs for agricultural, recreational, and
conservation purposes, including research in connection with the
programs; that is on or used in connection with river, harbor, flood
control, reclamation or power projects, for chemical manufacturing
or development projects, or for nuclear production, research, or
development projects; that is on or used in connection with housing
and residential projects; that is on military installations
(including any fort, camp, post, naval training station, airfield,
proving ground, military supply depot, military school, or any
similar facility of the Department of Defense); that is on
installations of the Department of Veterans Affairs used for
hospital or domiciliary purposes; or the exclusion of which the
President considers to be justified in the public interest.
\2\ 40 U.S.C. 3307 describes the minimum construction,
alteration, and lease costs that would trigger a prospectus to
Congress.
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For these buildings, section 305 of ECPA, as amended by EISA,
mandates that the buildings be designed so that a building's fossil
fuel-generated energy consumption is reduced as compared with such
energy consumption by a similar building in fiscal year (``FY'') 2003
(as measured by Commercial Buildings Energy Consumption Survey
(``CBECS'') or Residential Energy Consumption Survey (``RECS'') data
from the DOE's Energy Information Administration (``EIA'') by 55
percent beginning in FY 2010, 65 percent beginning in FY 2015, 80
percent beginning in FY 2020, 90 percent beginning in FY 2025, and 100
percent beginning in FY 2030, also shown in Table I.1. 42 U.S.C.
6834(a)(3)(D)(i)(I).
Table I-1--Building Percentage Reduction Requirements by Fiscal Year
------------------------------------------------------------------------
Percentage
Fiscal year reduction
------------------------------------------------------------------------
2010...................................................... 55
2015...................................................... 65
2020...................................................... 80
2025...................................................... 90
2030...................................................... 100
------------------------------------------------------------------------
In addition, ECPA, as amended by EISA, permits DOE to adjust the
applicable numeric reduction requirement downward with respect to a
specific building, if the head of the Federal agency requesting the
downward adjustment certifies in writing that meeting such requirement
would be technically impracticable in light of the agency's specified
functional needs for that building and DOE concurs with the agency's
conclusion. 42 U.S.C. 6834(a)(3)(D)(i)(II). Such an adjustment does not
apply to the General Services Administration (``GSA''). Id.
B. Background
In this final rule, DOE establishes regulations that require
certain new Federal buildings and Federal buildings undergoing major
renovations to be designed to reduce their fossil fuel-generated energy
consumption and provides a process for Federal agencies to petition for
a downward adjustment from these requirements if applicable. This rule
amends the regulations governing energy efficiency in Federal buildings
found in 10 CFR parts 433 and 435.
DOE previously published a notice of proposed rulemaking (``NOPR'')
in the Federal Register on October 15, 2010, which proposed a rule to
implement section 433 of EISA. 75 FR 63404. A public meeting on the
NOPR was held on November 12, 2010, and public comments were accepted
through December 14, 2010. DOE received several comments expressing
concern and encouraging DOE to re-examine the proposed regulations.\3\
In response to these comments, DOE identified additional areas for
clarification and consideration that would benefit from further public
comment. DOE issued a supplemental notice of proposed rulemaking
(``2014 SNOPR'') on October 14, 2014. 79 FR 61694. Comments were
accepted through December 15, 2014. Id. DOE received comments
requesting reconsideration of key issues.
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\3\ Complete contents of the docket folder may be found at
<a href="http://www.regulations.gov/#!docketDetail">www.regulations.gov/#!docketDetail</a>;D=EERE-2010-BT-STD-0031.
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DOE revisited its proposed rule and issued a second SNOPR on
December 21, 2022 (``2022 SNOPR''). 87 FR 78382. The rule proposed in
the 2022 SNOPR differed from the rule proposed in the 2014 SNOPR.
Specifically, the rule proposed in the 2022 SNOPR:
Limited its application to on-site fossil fuel usage or Scope 1 GHG
emissions in CO<INF>2</INF>e (``Carbon Dioxide Equivalent Gases'').
Introduced a shift multiplier for Federal commercial buildings that
operate on extended schedules compared to the private sector buildings
sampled in CBECS.
Revised the calculation of fossil fuel usage to be consistent with
how DOE measures fossil fuel usage and greenhouse gas emissions in
reporting related to Section 432 of EISA.
Clarified that the rule applies to EISA-subject major renovations
for (1) all on-site fossil fuel-using systems, (2) on-site fossil fuel-
using system level renovations, and (3) on-site fossil fuel-using
component level renovations.
Clarified when the rule applies to leased Federal facilities.
Refined an approach to determine required fossil fuel-generated
energy consumption levels for EISA-subject major renovations that are
limited to system or component level retrofits.
Provided an alternative compliance method for buildings with
process loads that are not included in CBECS and RECS.
Clarified that process loads of building types not included in
CBECS are not subject to the fossil fuel reduction requirements.
Stated that certain renewable fuels are exempt from the calculation
of fossil fuel usage.
Identified information Federal agencies must provide when
petitioning for a downward adjustment.
A public meeting on the 2022 SNOPR was held on January 5, 2023, and
public comments were accepted through March 23, 2023. 87 FR 78382; 88
FR 12267. The comment period was extended to accommodate requests from
stakeholders to provide additional time to analyze the information
presented in the 2022 SNOPR and accompanying technical support
document.
C. Final Rule Overview
The final rule adopts energy performance standards for new
construction and major renovation of Federal buildings. The final rule
adds standards for the maximum emissions resulting from on-site fossil
fuel usage, language related to the purpose of these new standards,
definitions associated with these standards, and a detailed process for
Federal agencies petitioning for a downward adjustment from these
standards to 10 CFR parts 433 (Federal commercial and multi-family
high-rise residential buildings) and 435 (Federal low-rise residential
buildings). The final rule adds the following provisions to 10 CFR
parts 433 and 435:
Adds a paragraph to the purpose and scope provisions which states
that the regulation also establishes the maximum allowable fossil fuel-
generated energy consumption standard for EISA-subject Federal
buildings.
Adds and revises definitions applicable to 10 CFR parts 433 and
435.
Adds subpart B that outlines the fossil fuel-generated energy
consumption requirement, the process for determining a Federal
building's fossil fuel-generated energy consumption, and the process
for petitioning for a downward adjustment.
Adds Appendix A to Subpart B that identifies the targets for
specific building types and climate zones for FY 2020-2024 and FY 2025-
2029.
After considering the comments submitted in response to the 2022
SNOPR, DOE makes the following substantive revisions to the rule
proposed in the 2022 SNOPR:
Revises the definitions of ``construction cost'' and ``major
[[Page 35386]]
renovation cost'' so that the definitions list similar costs associated
with the construction or major renovation of EISA-subject buildings.
Shortens the review period for the FEMP Director to review
petitions for downward adjustment related to construction of new
Federal buildings or major renovations from 45 days to 30 days.
Adds regulatory language that clarifies when Federal agencies may
bundle petitions for downward adjustments.
Additionally, DOE updated the datasets used for the underlying
modeling impact analysis. The final rule is discussed in greater detail
in section VII of this document.
II. Public Comments on the 2022 SNOPR
DOE received comments in response to the 2022 SNOPR from the
individuals and interested parties listed in Table II-1.\4\ These
comments are available in the public docket for this rulemaking. The
specific issues relating to the final rule raised by the commenters are
addressed in section III of this document. Additional concerns raised
by the commenters relating to DOE's authority to promulgate these
standards or potential procedural issues are addressed in Section IV of
this document. A parenthetical reference at the end of a comment
quotation or paraphrase provides the location of the item in the public
record.\5\ DOE also held a public meeting webinar on January 5, 2023,
where it sought input from stakeholders regarding its proposed rule.
DOE focuses on written comments in this final rule, as only one
stakeholder (Sierra Club) opted to speak during the public meeting
webinar, and its verbal comments were consistent with its written
comments later submitted.
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\4\ DOE received comments from an individual on April 11, 2023,
after the re-opened comment period closed. Doc. No. 127. Despite the
fact that these comments were filed late, DOE considered the issues
raised in these comments when reviewing the rule.
\5\ The parenthetical reference provides a reference for
information located in the docket for this rulemaking. (Docket No.
EERE-2010-BT-STD-0031, 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).
Table II-1--December 2022 SNOPR Written Comments
------------------------------------------------------------------------
Commenter(s) Abbreviation Document No.
------------------------------------------------------------------------
A J.......................... ......................... 118
Abbi J....................... ......................... 119
Aeroseal..................... ......................... 97
Alliance to Save Energy...... ASE...................... 76
American Chemistry Council... ACC...................... 88
American Council for an ACEEE et al.............. 126
Energy-Efficient Economy,
Earthjustice, Rewiring
America, Rocky Mountain
Institute, & Sierra Club.
American Gas Association..... AGA...................... 100
American Institute of AIA...................... 114
Architects.
American Public Gas APGA..................... 102
Association.
The American Society of ASHRAE................... 96
Heating, Refrigerating and
Air-Conditioning Engineers.
Anonymous.................... ......................... 82
Bloom Energy................. ......................... 85
Build SMART.................. ......................... 111
Business Council for BCSE..................... 115
Sustainable Energy.
Celsius Energy............... ......................... 117
Coalition of 66.............. ......................... 95
Combined Heat and Power CHPA..................... 104
Alliance.
Federal Bureau of FBI...................... 84
Investigation.
Fuel Cell & Hydrogen Energy FCHEA.................... 106
Association.
Geothermal Exchange.......... ......................... 103
Green Buildings Institute.... GBI...................... 120
Institute for Policy ......................... 93
Integrity at New York
University School of Law.
International Association of SMART.................... 91
Sheet Metal, Air, Rail and
Transportation Workers.
International Code Council... ICC...................... 98
Jenna B...................... ......................... 80
Lauren Schwarze.............. ......................... 79
Local Officials.............. ......................... 125
Michael Ladach............... ......................... 122
Microgrid Resources Coalition MRC...................... 105
Middle Tennessee Natural Gas ......................... 112
Utility District.
National Electrical NECA..................... 123
Contractors Association.
National Propane Gas NPGA..................... 90
Association.
Philadelphia Gas Works....... PGW...................... 116
Polyisocyanurate Insulation PIMA..................... 83
Manufacturers Association.
Rinnai America Corporation... ......................... 121
S. McKnight.................. ......................... 127
Samuel Smith................. ......................... 110
Sarah Lance.................. ......................... 81
Sierra Club members.......... ......................... 124
Think Microgrid.............. ......................... 92
U.S. Green Building Council.. ......................... 107
View Inc..................... ......................... 86
Washington Gas Light Company. WGL...................... 101
Gas Associations............. ......................... 99
------------------------------------------------------------------------
[[Page 35387]]
III. Discussion of the Final Rule
The following section discusses the final rule. The final rule
introduces energy performance standards for new construction and major
renovation of Federal buildings. The final rule adds standards for the
maximum emissions resulting from on-site fossil fuel usage, language
related to the purpose of these new standards, definitions associated
with these standards, and a detailed process for Federal agencies
petitioning for a downward adjustment from these standards to 10 CFR
parts 433 (Federal commercial and multi-family high-rise residential
buildings) and 435 (Federal low-rise residential buildings). The
revisions to 10 CFR parts 433 and 435, as summarized in this section,
are presented at the end of this document.
A. Scope
1. Federal Buildings
This final rule applies to a defined subset of new Federal
buildings and major renovations to Federal buildings, as specified in
section 433 of EISA. See 42 U.S.C. 6834(a)(3)(D)(i). The term ``Federal
building'' means ``any building to be constructed by, or for the use
of, any Federal agency [including] buildings built for the purpose of
being leased by a federal agency, and privatized military housing.'' 42
U.S.C. 6832(6). However, the rule would not apply in cases of Federal
agencies leasing space in buildings where the Federal Government does
not lease the entire building. Accordingly, if the building at issue is
not entirely leased to the Federal Government at the time of
renovation, the final energy performance standards do not apply.
The subset of Federal buildings to which this rule applies fall
under two categories and will be referred collectively to as ``EISA-
subject buildings.'' The first qualifying category of EISA-subject
buildings includes any new Federal buildings or major renovations to
Federal buildings that are public buildings, as defined in 40 U.S.C.
3301, for which transmittal of a prospectus to Congress is required
under 40 U.S.C. 3307. Under 40 U.S.C. 3307(a)(1), a transmittal of a
prospectus to Congress is required if a total expenditure in excess of
$1,500,000 is required to construct, alter, or acquire the public
building.\6\ Under 40 U.S.C. 3307(h), the GSA Administrator may adjust
this value annually to account for construction cost increases. GSA's
annual prospectus threshold for FY 2024 is $3,613,000.\7\ GSA also
provides a separate dollar threshold for alterations in leased public
buildings for which a prospectus is required; in FY 2024, this
threshold is $1,806,500.
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\6\ 40 U.S.C. 3307(a) also contains a second prospectus
threshold in 40 U.S.C. 3307(a)(3), which applies to alterations of
buildings that are leased by the Federal Government for use for a
public purpose if the cost of the alteration will exceed $750,000.
This threshold is one-half of the threshold for all other new
construction or alterations of existing buildings.
\7\ See GSA Annual Prospectus Thresholds, available at
<a href="http://www.gsa.gov/real-estate/design-and-construction/annual-prospectus-thresholds">www.gsa.gov/real-estate/design-and-construction/annual-prospectus-thresholds</a>.
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The second qualifying category of EISA-subject buildings includes
any new Federal buildings or major renovations to Federal buildings
that are not public buildings and for which the construction cost or
major renovation cost is at least $2,500,000 (in 2007 dollars, adjusted
for inflation).\8\ For the purposes of calculating this threshold,
agencies should use the inflated value of the $2,500,000 as of October
of the FY during which the design for construction of the project
begins. DOE is adopting a methodology that allows for a constant
inflator to be applied during the entirety of the year. By this
methodology, an agency should set the Bureau of Labor and Statistics
CPI Inflation calculator to $2,500,000 in October 2006 for the value of
the original cost threshold. As of the most recent update, October
2023, $2.5 million in 2007 dollars, when adjusted for inflation, is
$3,811,583. DOE revises regulatory text in Sec. Sec. 433.200(a) and
435.200(a) to clarify how the cost thresholds for new public and non-
public buildings should be adjusted for inflation.
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\8\ To find the adjusted cost threshold, go to <a href="http://data.bls.gov/cgi-bin/cpicalc.pl">data.bls.gov/cgi-bin/cpicalc.pl</a>.
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As noted previously, GSA also provides a separate dollar threshold
for alterations in leased public buildings ($1,806,500 in FY 2024). DOE
will use both thresholds (i.e., the $2,500,000 in 2007 dollars
threshold (adjusted for inflation) for Federal buildings that are not
public buildings, and the $1,806,500 in FY 2024 dollars threshold for
leased public buildings) for this second category of EISA-subject
buildings (i.e., buildings for which a prospectus is not required).
Using the lower GSA prospectus threshold for leased public buildings is
consistent with: (1) current agency practice for such buildings, and
(2) the scheme Congress established in EISA section 433 where the
prospectus dollar thresholds (e.g., $2,500,000 in 2007 dollars) are
also applied to buildings and renovations for which a prospectus is not
required.
Table III-1--Cost Thresholds for FY2024 (Million Dollars)
------------------------------------------------------------------------
Public Non-Public
buildings buildings
------------------------------------------------------------------------
Construction or Major Renovation to * $3.613 ** $3.812
Federally Owned Buildings..............
Major Renovation of Federally Leased [dagger] 1.806 [dagger][dagge
Buildings.............................. r] 1.806
------------------------------------------------------------------------
* Cost threshold for buildings that are owned public buildings, as
defined in 40 U.S.C. 3301, is determined by the GSA annual prospectus
thresholds published for each FY at <a href="http://www.gsa.gov/real-estate/design-and-construction/annual-prospectus-thresholds">www.gsa.gov/real-estate/design-and-construction/annual-prospectus-thresholds</a>.
** Cost threshold for any new construction or major renovation that is
in an owned, non-public building is determined by adjusting the
$2,500,000 in 2007$ for inflation to the current FY. DOE sets the
inflated value for the entire FY based on the value reported in
October of that FY in the Bureau of Labor and Statistics CPI Inflation
calculator <a href="http://www.bls.gov/data/inflation_calculator.htm">www.bls.gov/data/inflation_calculator.htm</a>.
[dagger] Cost threshold for major renovations within leased buildings is
determined by the GSA annual prospectus thresholds published for each
FY at <a href="http://www.gsa.gov/real-estate/design-and-construction/annual-prospectus-thresholds">www.gsa.gov/real-estate/design-and-construction/annual-prospectus-thresholds</a>.
[dagger][dagger] Cost threshold for major renovations within leased
buildings is determined by the GSA annual prospectus thresholds
published for each FY at <a href="http://www.gsa.gov/real-estate/design-and-construction/annual-prospectus-thresholds">www.gsa.gov/real-estate/design-and-construction/annual-prospectus-thresholds</a>.
For example, a building in the first category would include a
federal office building for which design for construction began in FY
2024 and with construction or renovation costs that are more than
$3,613,000. A building in the second category would include a
residential building (which is excluded from the definition of ``public
building'' under 40 U.S.C. 3301) with construction or renovation costs
of at least $3,811,583 in FY 2024 ($2,500,000 in 2007 dollars, adjusted
for inflation). DOE expects that most low-rise residential buildings
that meet the cost threshold will be low-rise
[[Page 35388]]
multi-family buildings or low-rise dormitories as Federal low-rise
single-family homes are not likely to meet the cost threshold.
The International Code Council (ICC) stated that this final rule
should apply to all new Federal buildings and major renovation
projects. ICC, Doc. No. 98, pg. 2. ICC asserted that doing so would
maximize the long term ecological and economic benefits of the rule.
Id. However, DOE notes that section 433 of EISA clearly identifies the
buildings to which the energy performance standards are to apply. Thus,
although DOE encourages Federal agencies consider these energy
performance standards holistically in developing their construction and
renovation plans, the final rule only applies to EISA-subject
buildings.
2. Calculating Costs
The final rule also outlines which costs Federal agencies must
include when calculating construction or major renovation costs to an
EISA-subject building.
a. Construction and Major Renovations Costs
In the final rule, DOE revises the definitions of ``construction
cost'' and ``major renovation cost'' proposed in the 2022 SNOPR. The
2022 SNOPR proposed to define ``construction cost'' as ``all costs
associated with design and construction of a federal building. It
includes the cost of design, permitting, construction (materials and
labor), and building commissioning.'' 87 FR 78382, 78420. However, the
2022 SNOPR explicitly stated that ``construction cost'' does not
include legal or administrative fees, or the cost of acquiring the
land. Id.
The 2022 SNOPR proposed to define ``major renovation cost'' as
costs associated with the ``[r]epairing, remodeling, improving, or
extending, or other changes in, a public building as per 40 U.S.C.
3301(a)(1).'' These costs included costs associated with the
``[p]reliminary planning, engineering, architectural, legal, fiscal[]
and economic investigations and studies, surveys, designs, plans,
working drawings, specifications, procedures, and other similar actions
necessary for the alteration of a public building[.]'' Id.
One individual commented on the definition of ``construction cost''
proposed on the 2022 SNOPR. Doc. No. 127, pg. 2. They stated that
``construction cost'' should include administrative and legal fees
because it would increase the number of buildings to which these energy
performance standards apply as more construction projects would meet
the threshold. Id. In addition, they claimed that including
administrative and legal fees when calculating construction costs would
promote fiscal responsibility with public funds. Id. This commenter
also argued that land acquisition costs should be included in the
definition of ``construction cost'' because doing so would
``incentivize project managers to prioritize the use of existing
Federal lands and renovations of existing buildings, rather than buying
new spaces'' Id.
After reviewing the definitions proposed in the 2022 SNOPR and
stakeholder comments, DOE amends the definitions of ``construction
cost'' to include a similar list of costs that DOE included in the
definition of ``major renovation cost.'' This includes, but is not
limited to, the costs of preliminary planning, engineering,
architectural, permitting, fiscal and economic investigations and
studies, surveys, designs, plans, working drawings, specifications,
procedures, and other similar actions necessary for the construction of
a new Federal building. Additionally, DOE amends the definition of
``construction cost'' to remove the language specifically excluding
legal or administrative fees from the calculation of ``construction
cost.'' If legal or administrative fees are associated with the
construction of a new Federal building, such as permitting fees, then
these costs must be included in the calculation of construction costs.
However, DOE notes that most administrative or legal costs are
generally part of overhead costs and are not associated with the
construction of a new Federal building.
DOE declines to adopt the commenter's suggestion that the cost of
acquiring the land should be included in the definition of
``construction cost.'' DOE previously stated that many new Federal
buildings are built on land already owned by the Federal Government. 79
FR 61694, 61698. Thus, including the land costs in the definition of
``construction cost'' is unnecessary and would have little practical
effect. Moreover, not including land costs for new Federal buildings in
the threshold calculation would be consistent with the threshold
calculation for major renovations, for which land costs are not
included.
In addition, DOE also amends the definition of ``major renovation
cost'' so that it aligns with the revised definition of ``construction
cost.'' First, the revised definition of ``major renovation cost''
provides a general description of major renovation costs--i.e., cost
associated with the repairing, remodeling, improving, extending, or
other changes in a federal building. Second, the revised definition
then lists specific associated costs included in the definition of
``major renovation costs.'' Third, the revised definition replaces
references to ``public buildings,'' as defined in 40 U.S.C. 3301(a)(1),
to ``Federal buildings,'' as defined in the final rule so that the
definition applies to both categories of EISA-subject buildings.
b. Individual Buildings
The final rule applies the cost thresholds to individual buildings
rather than multiple buildings in a single project. A commenter urged
DOE to reconsider the proposed definition of ``buildings'' to apply to
multiple buildings that are located within the grounds of another
public building, meaning that the standard would apply to multiple
buildings and ``projects'' would be the unit of analysis. Doc. No. 127,
pg. 1. However, the statute authorizes DOE to establish Federal
building energy efficiency performance standards that reduce fossil
fuel-generated energy consumption for ``new Federal buildings and
Federal buildings undergoing major renovations'' not ``projects'' that
could include multiple buildings or major renovations. 42 U.S.C.
6834(a)(3)(D)(i). The cost threshold and public building determination
stipulated in the statutory language is also specific to individual
buildings. Furthermore, the date that design for construction begins
(to determine the appropriate reduction target) is also building
specific. Thus, when calculating the costs to determine whether the
final rule applies, Federal agencies should calculate the costs for
individual buildings.
c. Major Renovations
In establishing these standards, DOE is sensitive to the notion
that Federal agencies might break up their major renovations into
smaller pieces to prevent associated costs from exceeding the
applicable threshold. DOE discourages the practice of ``breaking up
renovation projects to get around the cost threshold'' and intends to
further address this topic as part of the Department's implementation
guidance. Even in cases of replacing individual systems or equipment,
for which this rule applies, DOE believes agencies should prioritize
pairing energy efficiency measures with reducing fossil fuel use. DOE
notes that Section 433 of EISA states that ``[i]n establishing criteria
for identifying major renovations that are subject to the requirements
of this subparagraph,
[[Page 35389]]
[DOE] shall take into account the scope, degree, and types of
renovations that are likely to provide significant opportunities for
substantial improvements in energy efficiency.'' 42 U.S.C.
6834(a)(3)(D)(ii). Multiple sequential renovations to the same building
are likely to provide significant opportunities for substantial
improvements and their cumulative effect over time should be evaluated
and utilized to determine the cost of the project for the application
of this rule. In this final rule, DOE broadly applies the term ``major
renovations'' to include projects for which Federal agencies can
practicably implement the energy efficiency and fossil fuel reduction
goals of ECPA and EISA.
DOE is clarifying that the energy performance standards being
adopted in this final rule apply both to whole building retrofits as
well as multiple minor renovations that occur in phases on the same
Federal building as long as the building meets the cost thresholds as
explained above. More specifically, this final rule applies to
renovations that are so extensive that they replace all on-site fossil
fuel-using systems in the building, such as comprehensive replacement
or restoration of most or all major systems, interior work (e.g.,
ceilings, partitions, doors, floor finishes, etc.), or building
elements and features. DOE refers to such major renovations as ``whole
building'' renovations throughout this preamble. However, the final
rule also requires Federal agencies to consider major renovations that
are less than whole building renovations (i.e., component and system
level renovations, including multiple sequential renovations) that
provide significant opportunities for substantial improvements in
energy efficiency and reduce on-site fossil fuel usage across the
Federal building portfolio.
d. Energy Conservation Measures
When designing new or renovated buildings, DOE encourages agencies
to consider any energy conservation measures (``ECMs'') that have been
identified in that building and reported to DOE, as per 42 U.S.C.
8253(f)(3)(A). If identified ECMs include projects that impact on-site
fossil fuel usage, DOE urges the agency to evaluate and consider the
total of those project costs bundled together when implementing those
ECMs to determine whether the total cost meets the thresholds in
section 433 of EISA. ECMs that impact on-site fossil fuel usage
include, but are not limited to, adding new fossil fuel-using heating,
hot water, or cooking systems to an existing building; direct
replacement of existing fossil fuel-using heating, hot water, or
cooking systems in an existing building; and modification or
replacement of any building systems (including systems such as lighting
or building envelope systems that do not use fossil fuel directly) that
lead to an increase or decrease in the use of fossil fuel. Considering
ECM projects in a more comprehensive approach, rather than a piecemeal
approach, better aligns with the goals of section 433 of EISA.
3. Fossil Fuel-Generated Energy Consumption
a. Limitation to On-Site Use of Fossil Fuels
Section 433 of EISA directs DOE to establish regulations that
require certain new Federal buildings and Federal buildings undergoing
major renovations be designed to reduce their fossil fuel-generated
energy consumption. 42 U.S.C. 6834(a)(3)(D)(i). The scope of the
building energy covered by the final rule is limited by the term
``fossil fuel-generated energy consumption.'' In the 2022 SNOPR, DOE
noted that this term is not defined in section 433 of EISA and proposed
to define ``fossil fuel-generated energy consumption'' as on-site
stationary combustion of fossil fuels that contribute to Scope 1
emissions for generation of electricity, heat, cooling, or steam as
defined by ``Federal Greenhouse Gas Accounting and Reporting Guidance''
(Council on Environmental Quality, January 17, 2016). This includes,
but not limited to, combustion of fuels in stationary sources (e.g.,
boilers, furnaces, turbines, and emergency generators). This term does
not include mobile sources, fugitive emissions, or process emissions as
defined by ``Federal Greenhouse Gas Accounting and Reporting Guidance''
(Council on Environmental Quality, January 17, 2016).
87 FR 78382, 78421. Pursuant to this proposed definition, the
standard would apply to energy consumption from fossil fuels used by
equipment and systems designed to support building operations; that is,
fossil fuels consumed on site. The proposed definition would not apply
to the consumption of fossil fuels used to produce electricity off-
site.
DOE received several public comments in response to 2022 SNOPR's
proposed definition of ``fossil fuel-generated energy consumption.''
Several commenters supported the proposed definition. For example, the
Green Building Initiative (GBI) expressed support for focusing on on-
site generated energy because ``it presents the best opportunity to
clearly track improvements and more clearly measure improvements of
Federal buildings.'' GBI, Doc. No. 120, pg. 3. GBI also acknowledged
that many factors within off-site generated energy are outside the
control of the Federal government and that focusing on on-site
generated energy will assist the Federal government in improving the
factors that it can control. Id. Furthermore, one commenter urged DOE
to retain its focus on on-site fossil fuel reduction as it focused the
standard on outcomes. Doc. No. 79, pg. 4-5.
DOE also received comments that opposed the definition for ``fossil
fuel-generated energy consumption'' proposed in the 2022 SNOPR. For
example, several commenters questioned DOE's authority to define
``fossil fuel-generated energy consumption.'' See e.g., APGA, Doc. No.
102, pg. 3; NPGA, Doc. No. 90, pg. 3; AGA, Doc. No.100, pg. 11. NPGA
and AGA both alleged that DOE does not have authority to define
``fossil fuel-generated energy consumption'' because the meaning of the
term is clear. NPGA, Doc. No. 90, pg. 3; AGA, Doc. No.100, pg. 11. They
argued that the plain text of the statute unambiguously refers to the
total energy consumption of the buildings, rather than only the on-site
energy consumption. AGA, Doc. No.100, pg. 11.
Section 433 of EISA does not define the term ``fossil fuel-
generated energy consumption of the buildings.'' But when the text of
section 433 is considered as a whole, it is best read to apply
standards only to the on-site consumption of fossil fuels on the site
of the Federal building.
In section 433 of EISA, Congress sought to address how certain
Federal buildings are designed when they are constructed or undergo
major renovations. The operative sentence directing the imposition of
standards states that certain new Federal buildings or Federal
buildings undergoing major renovations ``shall be designed so that the
fossil fuel-generated energy consumption of the buildings is
reduced[.]'' 42 U.S.C. 6834(a)(3)(D)(i)(I) (emphasis added). Section
433 then prescribes standards that progressively reduce and then
entirely eliminate ``fossil fuel-generated energy consumption of the
buildings'' by FY 2030. 42 U.S.C. 6834(a)(3)(D)(i)(II).
With this text, Congress clearly indicated that section 433 covers
fossil fuel-generated energy consumption that can be reduced, and
ultimately eliminated, through building design measures. On-site
consumption of fossil fuel-generated energy can be reduced, and
entirely eliminated, through the use of building design measures. Such
[[Page 35390]]
measures may include the installation of electric equipment for space
and water heating, along with any insulation, ductwork, and electrical
work necessary to ensure the building's needs are met.
By contrast, off-site consumption of fossil fuels, such as the
combustion of natural gas and coal by distant power plants, cannot
practically be eliminated through building design measures. Building
design measures can reduce the amount of fossil-fuel derived
electricity that a federal building draws from the grid through various
efficiency measures and on-site generation. But such building design
measures could not eliminate entirely the consumption of fossil-fuel
derived electricity, as section 433 requires beginning in FY 2030,
unless section 433 were read to require every Federal building to use
on-site non-fossil generation to generate all of the electricity that
would be used by the building. While self-generation could be
achievable for some Federal facilities, for others it is not.
Particularly for buildings with high energy demands and limited
generation and storage space, such as high energy demand buildings with
small site footprints and/or located in areas with poor solar
resources, full on-site generation at all times of day could impose
extreme additional expense or even be technically impracticable. DOE
therefore finds it highly implausible that Congress intended that
outcome in adopting the requirement to reduce and eliminate fossil
fuel-generated energy consumption through the design of Federal
buildings. No commenter has offered any basis to conclude that it would
be reasonable to read section 433 as requiring that every new Federal
building or major renovation subject to EISA be designed to generate
all of its own electricity by FY 2030.
Consumers of electricity, including the Federal government,
sometimes seek to reduce the use of fossil fuels in electricity
generation through procurement practices, which can include directly
contracting for non-fossil generation or the purchase of energy
attribute certificates (EACs). These sorts of electricity procurement
practices could eliminate the off-site fossil fuel consumption
attributed to a building's consumption of electricity. Even so, the
availability of these procurement options does not persuade DOE to
conclude that section 433 should be read to cover off-site consumption
of fossil fuels for two reasons. First, again, section 433 states
clearly that the standards it prescribes are to be achieved through
design measures in new or renovated buildings. 42 U.S.C.
6834(a)(3)(D)(i)(I) (``buildings shall be designed so that the fossil
fuel-generated energy consumption of the buildings is reduced[.]'')
(emphasis added). A requirement to procure electricity from particular
sources or to purchase EACs is not a building design requirement.
Indeed, whether a federal building manager elects to purchase
electricity from one source or another has nothing to do with how the
building is designed.\9\
---------------------------------------------------------------------------
\9\ Further, depending on the geographic location, building
managers have limited discretion to elect the source from which they
procure electricity. Federal agencies (with limited exceptions) must
procure utility services from their serving utility, which may not
sell non-fossil fuel derived electricity. See 40 U.S.C. 501 & 591;
FAR Part 41.
---------------------------------------------------------------------------
Second, a reading that section 433 of EISA, a provision aimed at
Federal building design, was also intended to encompass the procurement
of electricity is hard to square with Congress' direct treatment of
that subject in section 203 of the Energy Policy Act of 2005. That
provision, enacted just two years earlier, required the Federal
government to procure renewable energy at levels no less than three
percent in fiscal years 2007 through 2009, 5 percent in fiscal years
2010 through 2012, and 7.5 percent in fiscal years 2013 and each fiscal
year thereafter. 42 U.S.C. 15852. That Congress had addressed renewable
energy procurement by the Federal Government in explicit terms so
recently, and had set standards that differ so markedly from those in
section 433, is yet another reason to disfavor a reading of section 433
that would necessitate the purchase of non-fossil fuel derived
electricity as a necessary means of compliance.
Several commenters noted that the definition for ``fossil fuel-
generated energy consumption'' proposed in the 2022 SNOPR, and the
scope of the rule, differed from what was proposed in the 2010 NOPR and
2014 SNOPR. In the 2022 SNOPR, in proposing to limit the scope of the
rule to only on-site energy consumption from on-site fossil fuel used
by equipment and systems designed to support the building, DOE
acknowledged that the proposed definition was a shift from the proposed
scope of the 2014 SNOPR. 87 FR 78382, 78385. In discussing this shift,
DOE observed that it received a comment in response to the 2014 SNOPR
that argued that the term should only apply to the on-site energy
consumption. 87 FR 78382, 78390, (see American Public Power Association
(APPA), Doc. No. 71, pg. 2). After considering the comment and
reviewing the relevant statutory language, DOE agreed with APPA's
analysis and proposed limiting the scope of the rule accordingly.\10\
Upon further review, and as proposed in the 2022 SNOPR, this final rule
adopts the definition of ``fossil fuel-generated energy consumption''
that limits the scope of the rule to on-site energy consumption.
---------------------------------------------------------------------------
\10\ A key attribute to the notice and comment rulemaking
process is that agencies invite the public to comment on their
proposed rules and agencies can benefit from this feedback.
Accordingly, agencies may revise their proposed rules based the
feedback they received.
---------------------------------------------------------------------------
Commenters also stated that the 2022 SNOPR proposed definition of
``fossil fuel-generated energy consumption'' would have less impact and
potential savings (particularly in terms of emissions) than the
potential savings under the definition proposed in the 2010 NOPR and
2014 SNOPR. ASHRAE Doc. No. 96, pg. 3; BCSE Doc. No. 115, pg. 2; Gas
Associations, Doc. No. 99, pg. 2; Doc. No 122, pg. 1; Doc. No 80, pg.
3. These commenters suggested that DOE include all or some off-site
generated energy (particularly purchased electricity generated by
fossil fuels) in the definition of ``fossil fuel-generated energy
consumption.''
Regarding comments on the effects of focusing the rule on on-site
energy use, DOE has further analyzed the impacts of the rule. DOE
projects site energy and full fuel cycle emissions savings even when
the rule is limited to on-site fossil fuel-generated energy
consumption. The expected savings are shown in section V.A-C and the
accompanying technical support document (``TSD''). DOE notes that the
estimated benefits of the rule are derived from purchasing and
installing less expensive electric equipment, along with the health and
climate benefits from the associated emissions reductions, while the
estimated costs come from the operation of such equipment. DOE also
expects the net benefits of this rulemaking to increase over time as
electricity rates decrease relative to those of natural gas and as the
grid continues to shift to a cleaner mix of generation.
DOE also notes that there are other tools available to Federal
agencies to reduce the use of off-site fossil fuel-generated energy,
such as on-site solar and procurement of renewable EACs. Although
Federal building managers can procure fossil fuel-free electricity,
primarily through EACs, such procurement measures are not building
design measures that reduce on-site fossil fuel-generated energy
consumption.\11\ Accordingly, requiring
[[Page 35391]]
such actions are outside the scope of DOE's authority under section 433
of EISA. Further, Congress did not give clear authority for fossil
fuel-free electricity procurement under section 433 of EISA, as it did
under the Energy Policy Act of 2005, which set forth the total
electricity from renewable sources that must be procured by the Federal
government (see 42 U.S.C. 15852). Therefore, although there are means
to reduce emissions from the electricity use in buildings, which DOE
encourages agencies to pursue, this final rule only requires building
design measures to reduce the use of on-site fossil fuel-generated
energy.
---------------------------------------------------------------------------
\11\ Additionally, at the design stage, the agency controlling
the design process would not necessarily be able to guarantee that
the building occupant would, in fact, procure the EACs that would be
necessary to meet the applicable fossil fuel energy standards.
---------------------------------------------------------------------------
Commenters also argued that the rule's proposed focus on the use of
on-site fossil fuel-generated energy is a departure from DOE's general
position of fuel neutrality. AGA, Doc. No. 100, pg. 9; Gas
Associations, Doc. No. 99, pg. 2 n.8. These commenters cite rulemakings
related to the energy conservation program for certain consumer and
commercial appliances under the Energy Policy and Conservation Act
(EPCA). Pursuant to EPCA, any new or amended energy conservation
standard must be designed to achieve the ``maximum improvement in
energy efficiency'' that DOE determines is technologically feasible and
economically justified. 42 U.S.C. 6295(o)(2)(A). In applying that
standard, DOE considers the improvement in energy efficiency feasible
and justified for electric products separately from gas- or oil-fueled
products, consistent with 42 U.S.C. 6295(q)(1)(A), which required
establishment of a separate standard for any covered products that
``consume a different kind of energy from that consumed by other
covered products within'' the regulated type of products.
In contrast, the language of section 433 is clearly not ``fuel
neutral,'' as the text singles out and disfavors fossil fuels relative
to other sources of energy. Further, as discussed above, the language
and structure of the statutory text strongly support limiting the scope
of the requirement to just the use of on-site fossil fuel-generated
energy. Accordingly, the specific applicable statutory text here
requires a departure from the fuel neutral approach that DOE uses when
setting energy conservation standards for certain consumer and
commercial appliances under EPCA.
After further considering the proposed approach in light of the
comments received, DOE determines that focusing on direct emissions
best aligns with section 433's directive to reduce and ultimately
eliminate fossil fuel-generated energy consumption through building
design measures of Federal buildings.
The final rule adopts the definition of ``fossil fuel-generated
energy consumption'' as proposed in the 2022 SNOPR, with three
revisions. First, the final rule revises the term to be defined from
``Scope 1 fossil fuel-generated energy consumption'' to ``fossil fuel-
generated energy consumption.'' This clarifies that the scope of this
rule aligns with the directive in section 433 of EISA. Second, the
final rule revises the definition so that it applies to ``on-site
stationary consumption'' of fossil fuels. This revision uses language
that is consistent with section 433 and clarifies that the definition
includes the on-site consumption of natural gas. Third, the final rule
deletes, ``for the purposes of this final rule'' from the definition
because this language is not necessary.
b. Exemptions and Exceptions
As proposed in the 2022 SNOPR, not all Scope 1 emissions are
included under this final rule. DOE identifies several on-site uses are
that exempted or excepted from this final rule. First, the standards
only apply to on-site fossil fuel use or Scope 1 emissions from
stationary combustion sources. Again, section 433 of EISA requires that
certain new Federal buildings and Federal buildings undergoing major
renovations be designed to reduce fossil fuel-generated energy
consumption. As such, this rule does not apply to emissions associated
with natural gas for alternatively fueled vehicles (``AFVs'') (or any
other ``alternative fuel,'' defined at 42 U.S.C. 13211) because
building design measures do not include use of AFVs. In addition, DOE
notes that because the CBECS and RECS data that provide the energy use
targets for this rule do not contain manufacturing or industrial
process loads, DOE excludes these loads from the scope of the energy
performance standards at this time. For buildings with such process
loads, the process loads will need to be accounted for in the analysis
of the building's fossil fuel consumption and GHG emissions, but such
loads would not be subject to the percentage reductions in fossil fuel-
generated energy consumption (Scope 1 GHG emissions) required for the
building related loads as related to this rule.
Second, this final rule does not apply to the on-site consumption
of fossil fuel (or the subsequent emissions) from energy generation
associated with the supply of emergency backup electricity. Again,
section 433 of EISA requires building design measures for certain
Federal buildings to reduce fossil fuel-generated energy consumption.
Thus, this rule is focused on the use of on-site energy as designed for
standard building operations. Emergency backup generation is generally
used infrequently and for short periods, for emergency services only
when Federal buildings are not operating as designed. In addition,
given their limited use, the impact from emergency backup generators,
in terms of both direct fossil fuel consumption and emissions, is
usually quite small relative to the impact from ongoing building
operations. However, non-emergency generation from backup generators
(such as those for peak shaving or peak shifting) is within in the
scope of this rule. DOE also notes that if Federal agencies use their
backup generators for both purposes, they will be required to calculate
the fraction of their backup generator emissions that is associated
with emergency use and the fraction associated with non-emergency use.
Third, the final rule does not apply to on-site energy generation
or Scope 1 emissions associated with biomass fuels because biomass
fuels are not fossil fuels. Because EISA directed DOE to establish
regulations that require fossil fuel-generated energy consumption
reductions, and biomass is not a fossil fuel, DOE has intentionally
left biomass fuels out of the CBECS and RECS targets developed for this
rule. DOE acknowledges that guidance from the Council on Environmental
Quality \12\ takes a somewhat different approach on biomass fuels, but
DOE believes CEQ's guidance is complementary to this final rulemaking.
CEQ's guidance states that the CO<INF>2</INF> emissions from biomass
and biofuel combustion are considered biogenic and are reported
separately from fossil fuel-generated GHGs and biomass and biofuel-
generated CH<INF>4</INF> and N<INF>2</INF>O. This CEQ guidance ensures
that any GHG emissions associated with biomass or biofuel use at a
covered Federal building are still taken into account in reporting
emissions (though reported separately). This rule does not cover such
fuels, however, as they are not fossil fuel derived and therefore fall
outside the statutory authority.
---------------------------------------------------------------------------
\12\ Federal Greenhouse Gas Accounting and Reporting Guidance,''
Council on Environmental Quality (CEQ), January 17, 2016 (CEQs
guidance).
---------------------------------------------------------------------------
DOE received numerous comments on the exemptions and exceptions
included in the final rule. These comments ranged from supporting
limiting the application of the standards to stationary combustion
sources and the exemptions for emergency backup
[[Page 35392]]
generators \13\ and the exception of biomass fuels, to urging DOE to
adopt additional exemptions or opposing some of the exemptions.
---------------------------------------------------------------------------
\13\ WGL, Doc. No. 101, pg. 5.
---------------------------------------------------------------------------
Two commenters opposed exempting backup generators from the final
rule. CHP Alliance and MRC both noted that emergency backup generators
run on fossil fuel. CHP Alliance, Doc. No. 104, pg. 4; MRC, Doc. No.
105, pg. 8. MRC also stated that that emergency backup generators must
run on a regular basis to keep them in good operating condition.\14\
CHP Alliance argued that reducing GHG emissions from this type of
fossil fuel-generated energy consumption is the purpose of section 433
of EISA. CHP Alliance, Doc. No. 104, pg. 4. Thus, these commenters
argued, exempting backup generators is counter to the entire purpose of
the final rule.
---------------------------------------------------------------------------
\14\ MRC, Doc. No. 105, pg. 8. MRC asserted that this results in
approximately 0.79 metric tons of GHG per MWh of backup supply.
---------------------------------------------------------------------------
DOE notes that although this rule exempts emergency backup systems,
this exemption is limited to when these generators are used solely for
emergencies. Therefore, any use of these backup generators for peak
shaving, peak shifting, or other demand management activities must be
included in the building energy consumption.
An individual commenter urged DOE to reconsider the exception for
emissions resulting from biomass fuel. Doc. No. 79, pg. 3. Although
this commenter acknowledged that biomass fuel is not fossil fuel-based,
the commenter argued that the rule should apply to biomass fuels
because they still emit GHG. Id. However, as previously noted, biomass
fuels are not fossil fuels. Because EISA directed DOE to establish
regulations that require Federal agencies to reduce their fossil fuel-
generated energy consumption, and biomass fuels are not fossil fuel-
based, Congress intentionally excluded biomass fuels from the targets
developed for this rule.
DOE received several comments urging DOE to exclude renewable fuels
such as biomethane (renewable natural gas), biopropane (renewable
propane), and clean hydrogen from the final rule. AGA and NPGA stated
that it is appropriate for DOE to exclude biomass fuels from this rule,
but argued that DOE should also consider excluding other renewable
fuels. AGA; Doc. No. 100, pg. 32-34; NPGA, Doc. No. 90, pg. 8; see WGL,
Doc. No. 101; pg. 6. Specifically, AGA and NPGA noted that there have
been developments in the production of synthetic hydrocarbon. AGA; Doc.
No. 100, pg. 32-34; NPGA, Doc. No. 90, pg. 8. Similarly, CHP Alliance
observed that combined heat and power (CHP) systems are extremely
efficient and some approach 90-percent efficiency. CHP Alliance, Doc.
104, pg. 5.
DOE acknowledges that purely renewable fuels would not fall within
the scope of this rulemaking as long as they are not fossil fuel-based
or made from blends that contain fossil fuels. A Federal building may
use renewable fuels if the Federal agency is able to verify the use of
such fuels on-site do not also include fossil fuels in their mixture.
Additional specification about fuel content of biofuels will be
provided in a companion implementation guidance.
DOE also received several comments on the NOPR and the 2014 SNOPR
about differentiating between fossil fuels used to generate purchased
electricity (i.e., natural gas versus crude oil). DOE notes that
because the rule is now focused on on-site fossil fuel use only, these
comments no longer apply. DOE acknowledges that the source emission
factors related to electricity are used in DOE's analysis of the
impacts of the rule and notes that DOE will use the latest available
source emission factors from DOE and EPA.
DOE also received several comments on the treatment of distributed
energy resources (DERs) in the 2022 SNOPR suggesting that DOE treat
DERs as a ``Scope 2'' impact and, thus, exempt DERs from these
standards. These commenters argued that because emissions from DERs are
considered Scope 2 emission for reporting purposes, these emissions
should also be considered as Scope 2 emissions for the purposes of this
rule.
DOE does not agree with this interpretation because the energy
generated by DERs is generated on-site and is consumed directly by one
building. Accordingly, the energy consumed by building processes
supplied by DERs and generated from fossil fuels falls within the
definition of ``fossil fuel-generated energy consumption.'' When an
EISA subject building is connected to an existing DER resource that is
located off the building site and is servicing more than one building
it may then be treated as energy generated off-site and the energy
stream would not be subject to this rule. New DER resources, when
qualified as an EISA-subject building, would be subject to this final
rule. Additionally, DOE notes that the terms ``Scope 1'' and ``Scope
2'' are more commonly utilized when performing GHG emissions
calculations and reporting. Here, DOE uses these terms to help describe
the scope of building energy use covered by this rule (as discussed in
Section III.A). The statutory authority for this rulemaking is based
upon the fossil fuel consumption of the energy source and systems that
service an applicable building, and the building must be subject to the
reduction targets, regardless of how subsequent emissions may be
accounted.
B. Performance Standards for Fossil Fuel-Generated Energy Consumption
To provide flexibility, the final rule establishes standards for a
fossil fuel-generated energy consumption metric expressed in thousand
British thermal units (``kBtu'') per square foot (``ft\2\'') of
building gross area and provides an equivalent conversion of the energy
metric measured in greenhouse gas (``GHG'') metrics. DOE opted to
include the GHG metric, which will measure Scope 1 emissions, because
agencies are already required to track and report their GHG emissions
annually utilizing CEQ's guidance. The final rule aligns the
quantifications and terminologies with those established in the Federal
Greenhouse Gas Accounting and Reporting Guidance. Although CEQ's
guidance categorizes Scope 1 emissions as ``Generation of electricity,
heat, cooling, or steam'', ``Mobile sources'', ``Fugitive emissions'',
or ``Process emissions,'' this final rule focuses only on the on-site
fossil fuel use associated with the ``Generation of electricity, heat,
cooling, or steam''.
This final rule provides agencies with two separate but equivalent
sets of fossil fuel generated energy consumption targets--(1) fossil
fuel-generated energy consumption based on a summation of on-site
fossil fuel usage expressed in kBtu per ft\2\ of building gross area,
and (2) a new carbon dioxide equivalent (``CO<INF>2</INF>e'') per ft\2\
metric based on the emissions associated with the on-site fossil fuel-
generated energy consumption. Agencies may use either metric for their
design targets. The CO<INF>2</INF>e metric is based upon the stationary
combustion of natural gas and is most appropriate when that is the only
fossil fuel being utilized. When a building is burning fuels other than
standard natural gas, it would be most appropriate to use the on-site
fossil fuel energy metric in units of kBtu per ft\2\ of building gross
area.
To develop these fossil fuel generated energy consumption targets,
DOE utilized CBECS and RECS data to determine the on-site fossil fuel
usage by fossil fuel type for each building type in CBECS or RECS. The
CBECS and RECS data was parsed into the format commonly utilized by DOE
to evaluate building energy codes and standards,
[[Page 35393]]
such as organizing by climate zone, which aligns with the technical
analysis methodology used to evaluate the Federal baseline standards
for commercial and multi-family high-rise residential buildings, which
rely on Standard 90.1-2019, as well as the Federal baseline standards
for low-rise residential buildings, which rely on the 2021 IECC.
DOE determined the kBtu per square foot targets by dividing fossil
fuel consumption data by the building area, applying the weighting
factors associated with the building, and assigning each building to
one of the building type/climate zone categories. DOE determined the
CO<INF>2</INF>e (in metric tons of CO<INF>2</INF>e) per square foot
targets by multiplying the fossil fuel usage for each fuel type by the
applicable GHG coefficient (from the CEQ guidance for each fuel type),
dividing by the building area, applying the weighting factors
associated with the building, and assigning each building to one of the
building type/climate zone categories. The resulting targets are shown
in Table A-1a and Table A-1b of appendix A to subpart B of parts 433
and 435.
For the purposes of establishing the targets, the final rule
identifies and defines 16 categories of commercial buildings and five
categories of residential dwelling units that cover all relevant
buildings in the Federal building portfolio, including low-rise
(single-family and multi-family), mid-rise apartment buildings, and
high-rise apartment buildings, to be utilized when referencing the
target defining tables in the regulatory text.
The 16 categories of commercial buildings defined are education,
food sales, food service, health care (inpatient), health care
(outpatient), laboratory, lodging, mercantile (enclosed and strip
shopping malls), office, public assembly, public order and safety,
religious worship (not applicable), retail (other than mall), service,
and warehouse and storage. Many of these commercial building categories
are further divided into building types, providing a total of 48
commercial building types. These building categories and building types
represent the high-level Principle Building Activity (``PBA'') and low-
level Principle Building Activity Plus categories in the 2003 CBECS.
The five categories of residential buildings are: mobile home,
multi-family in 2-4-unit buildings, multi-family in 5 or more-unit
buildings, single-family attached, and single-family detached. These
building types represent the housing unit types in the 2005 RECS (DOE
chose to use 2005 RECS data because the RECS was conducted in 2001 and
2005 but not 2003). Residential buildings that fall under 10 CFR part
435 and multi-family mid-rise and high-rise buildings that fall under
10 CFR part 433 will use these same categories. In analyzing the rule,
DOE assumes that most multi-family high-rise residential buildings will
fall into the ``multi-family in 5 or more-unit buildings'' category
based on the most typical buildings representative of the Federal
buildings.
Federal agencies must select from these 53 building categories
(including commercial building subcategories) to identify the fossil
fuel-generated energy consumption target (expressed in both kBtu per
ft\2\ and Scope 1 GHG emissions in CO<INF>2</INF>e per ft\2\) for a
specific building. DOE notes that the building types available from
CBECS and RECS do not correspond directly to the building types used in
the Federal Real Property Profile (``FRPP'') and that agencies should
exercise their best judgement to select the building category that best
matches the building's intended use. Additionally, some buildings may
be mixed use, so agencies may need to area-weight the floor space of
these CBECS and RECS targets for Federal buildings that do not
correspond directly to the CBECS or RECS building types. For example, a
Department of Defense (``DOD'') Post Exchange building might have
aspects of Food Sales, Food Service, and Mercantile, necessitating the
development of an area-weighted target. Similarly, a DOD barracks
building might include aspects of Lodging or Residential, Education,
and Warehouse, again necessitating the use of an area-weighted mapping.
1. New Construction and Major Renovations of a Whole Building
DOE developed quantitative requirements to determine compliance
with the fossil fuel reduction targets within the revised energy
performance standards for new construction and major renovations (i.e.,
major renovation of on-site fossil fuel-using systems or components in
a building) of EISA-subject buildings. The adopted quantitative
requirements require agencies to calculate the on-site fossil fuel-
generated energy consumption in kBtu of fossil fuels or the Scope 1 GHG
emissions in CO<INF>2</INF>e of their proposed building design and
compare that estimate to the allowable fiscal year percentage reduction
target found in the target tables in appendix A of subpart B to 10 CFR
parts 433 and 435. This is done by identifying the allowable target (in
either kBtu of on-site fossil fuels or Scope 1 GHG emissions attributed
to the generation of electricity, heat, cooling, or steam) for
stationary combustion sources as per the ``Federal Greenhouse Gas
Accounting and Reporting Guidance.'' The agencies then divide the kBtu
values or the metric tons of CO<INF>2</INF>e Scope 1 emissions by the
floor area of the building to calculate the per square foot (metric
tons of CO<INF>2</INF>e per square foot) value to compare with the
target values in appendix A. For buildings that combine two or more
building types, area-weighted averaging by square footage for each
building type will be used to calculate the maximum allowable fossil
fuel-generated energy consumption of the combined building.
2. Major Renovations Within a Building
DOE developed streamlined prescriptive requirements to determine
compliance with the energy performance standards for major renovations
of systems or components within EISA-subject buildings. Such
prescriptive requirements include requiring the systems within the
building undergoing major renovation to be brought up to the
performance requirements of the individual sections of Standard 90.1-
2019 (chapters 5-10). Under the rule, agencies will begin implementing
the energy performance standards upon the effective date of the rule.
For major renovations in EISA-subject buildings that meet the project
cost threshold and coverage requirements and are less than whole
building renovations (i.e., projects within the existing building
comprising retrofits to a single system or component, such as a HVAC
system or a chiller), agencies are required to adhere to the following
requirements.
For component level renovations, meaning an individual product or
piece of equipment, the final rule requires agencies to utilize
electric or non-fossil fuel-using Federal Energy Management Program
(``FEMP'') designated or ENERGY STAR equipment, which follow existing
Federal requirements for equipment efficiency (found in 10 CFR part
436, subpart C, ``Agency Procurement of Energy Efficient Products'').
For system level renovations, meaning a group of equipment pieces
that function together to satisfy a building load, agencies must
utilize electric or non-fossil fuel-using FEMP designated or ENERGY
STAR equipment, in alignment with 10 CFR part 436, subpart C and must
also meet the system level requirements for the systems being
renovated, as specified in the model energy codes used to establish
baseline energy efficiency standards for Federal buildings (i.e., the
current Standard 90.1
[[Page 35394]]
for Federal commercial and high-rise multi-family buildings covered
under 10 CFR part 433 or the current IECC for Federal low-rise
buildings covered under 10 CFR part 435).
DOE received three comments in response to the 2022 SNOPR from
BCSE, Polyisocyanurate Insulation Manufacturers Association (PIMA), and
Aeoroseal stating that DOE should require agencies to implement energy
efficiency upgrades before undertaking larger scale electrification
renovations. BCSE, Doc. No. 115, pg. 2; PIMA, No. 83, pg. 2; Aeroseal,
No. 97, pg. 3. DOE agrees with the commenters that energy efficiency is
a key component of decarbonization. Not only does energy efficiency
provide more traditional payback periods from operational cost savings,
but it can often result in additional capital savings, such as when
equipment can be downsized due to the associated energy load
reductions. Additional details on the order of application will be
provided in separate implementation guidance, but DOE encourages
agencies and individual project teams to meet the energy efficiency
requirements of 10 CFR parts 433 and 435 prior to applying additional
design changes to meet the emissions reduction targets defined in this
final rule.
Although this final rule only covers systems and components that
utilize on-site fossil fuels, agencies should ensure that projects that
could have secondary impacts on fossil fuel-using equipment, such as
lighting, appliance or window replacement projects, are considered. DOE
encourages agencies to consider whole building optimization for any
type of major renovation project to ensure no adverse impacts to on-
site fossil fuel use. DOE also encourages on-site renewables such as
solar and energy storage systems as good practice. DOE is not including
on-site solar as a means to offset on-site fossil fuel consumption
because it will not reduce the overall on-site contribution of fossil
fuels directly consumed, even though on-site solar is a means to reduce
emissions from the electricity use in buildings.
In response to the 2022 SNOPR, DOE received multiple comments
discussing the base reference code for Federal building efficiency,
noting that newer and different codes or above-code programs (e.g.,
Standard 90.1-2022 or Passive House) may be able to demonstrate
additional energy savings. NECA, Doc. No. 123, pg. 2; Build SMART, Doc.
No. 111, pg. 1. In response, DOE acknowledges that ECPA establishes
energy performance requirements for Federally owned residential and
commercial buildings, based on the IECC and Standard 90.1,
respectively. The statutory authority for this rule is an amendment to
the existing requirements for Federal buildings, as established by
Section 305 of the ECPA, and it does not change the reference code in
question. In fact, under ECPA, minimum standards, including the
reference code (IECC or Standard 90.1), must be satisfied, and then in
addition the fossil fuel reduction targets must be applied and adhered
to by the building design. DOE does, however, generally encourage the
use of updated and advanced building energy codes, innovative codes,
and standards, which achieve increased levels of energy efficiency,
thereby decreasing fossil fuel use in accordance with the objectives of
EISA and this rule.
3. Shift Adjustment Multiplier
In the 2022 SNOPR, because many types of Federal buildings are
operated for longer hours than typical for private sector buildings
covered in CBECS and RECS, DOE introduced a shift adjustment
multiplier. 87 FR 78382, 78391. In addition, DOE notes that hours of
operation are already considered in tools such as ENERGY STAR Portfolio
Manager, which agencies must use as part of their building benchmarking
activities. 42 U.S.C. 8253(f)(8). A building's hours of operation are
also implicit in any whole building simulation done on a building
design, with longer hours of operation typically leading to higher
energy usage.
The shift multiplier \15\ in this final rule is based on analysis
by Oak Ridge National Laboratory and was originally developed for
ASHRAE Standard 100-2018. It is expressed in ``number of operating
shifts,'' as opposed to actual hours of operation. Shift multipliers
vary by building type. For example, for government offices, operating
the building for two shifts does not increase the energy usage, but
operating the building for three shifts increases the energy use by a
multiplier of 1.4. Because residential buildings by their very nature
are already considered to be 24-hour operation, the final rule only
applies the shift multiplier to Federal commercial buildings regulated
under 10 CFR part 433.
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\15\ Sharp, Terry, ORNL/TM-2014/215, Derivation of Building
Energy Use Intensity Targets for ASHRAE Standard 100, August 31,
2011; <a href="https://info.ornl.gov/sites/publications/files/Pub49965.pdf">https://info.ornl.gov/sites/publications/files/Pub49965.pdf</a>.
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4. Compliance Date
The final rule provides individual fossil fuel generated energy
consumption phase down targets (mandated by EISA) that apply to EISA-
subject buildings depending on whether the design for construction or
major renovations began in FY 2024, FY 2025 to FY 2029, or during or
after FY 2030. The date after which all EISA-subject buildings that
have not yet begun design for construction must comply with this final
rule is one year after is published in the Federal Register.
For buildings for which design for construction or whole building
renovation began in FY 2024 or during the FY 2025 to FY 2029 range,
phase down target tables of the maximum allowable on-site fossil fuel-
generated energy consumption (expressed in both kBtu per ft\2\ and
Scope 1 GHG emissions in CO<INF>2</INF>e per ft\2\) by building type
and climate zone are provided in Appendix A of 10 CFR parts 433 and
435, subpart B. The values in the tables come from DOE's EIA CBECS (for
commercial buildings) and RECS (for multi-family high-rise and low-rise
residential buildings), both of which are converted from site energy
consumption to kBtu and Scope 1 GHG emissions in CO<INF>2</INF>e. For
EISA-subject buildings for which design for construction or whole
building renovation begins in FY 2030 or later, the fossil fuel-
generated energy consumption of the building must be zero for all
building types and climate zones, based on the calculation established
in the regulations.
DOE received comments regarding the compliance dates proposed in
the 2022 SNOPR. Washington Gas Light Company (WGL) noted that the rule
is overdue and that the directive in Section 433 of EISA assumed that
DOE would promulgate energy efficiency performance standards to meet
the emission reduction targets in December 2008. WGL, Doc. No. 101, pg.
6. WGL expressed concern that the standards proposed in the 2022 SNOPR
``sets up an unrealistic expectation that [F]ederal agencies can
achieve a sharp reduction in onsite fossil fuel energy consumption in
less than 7 years.'' Id.
In response WGL's comment, DOE is issuing this final rule to meet
its statutory obligations under EISA and cannot change the clearly
delineated dates for fossil fuel consumption reductions. The
performance standards in this final rule will enable Federal agencies
to meet the reduction targets established in EISA. Furthermore, DOE
notes that the final rule does not require all Federal buildings to
meet the performance standards. These requirements only apply to
certain new Federal buildings or Federal buildings undergoing major
renovations. Thus, if an existing Federal building is not being
renovated, then the performance standards do not apply. Also, as
discussed below, DOE is confident that
[[Page 35395]]
as a practical matter, agencies can meet the requirements of the final
rule.
In addition, if Federal agencies (other than GSA) are unable to
meet the energy performance standards adopted by this final rule, they
may petition DOE to adjust the applicable standard. 42 U.S.C.
6834(a)(3)(D)(i)(II). DOE may adjust the applicable standard if it
believes that it is technically impracticable for the agency to meet
the energy performance standards.
The Alliance to Save Energy (ASE) stated that DOE should finalize
this rule only when DOE feels that agencies can meet the requirements
in the rule, especially for the requirements in year 2030 and beyond.
ASE, Doc. No. 76, pg. 1. Others, such as ACEEE et al. stated that the
final rule is overdue, and that DOE should require compliance as soon
as possible.
In response to these comments, DOE believes that agencies can meet
the requirements of this revised final rule, especially considering the
focus on on-site fossil fuel usage, and the widespread availability of
electrified appliances (such as heat pumps and electrified cooking
equipment) that can completely substitute for fossil fuel-generated
energy consumption on-site. The ENERGY STAR program provides extensive
details and lists of commercially available electric appliances and
equipment, including air source heat pumps that can be found at <a href="https://www.energystar.gov/products/air_source_heat_pumps">https://www.energystar.gov/products/air_source_heat_pumps</a>, commercial heat
pump and VRF equipment that can be found at <a href="https://www.energystar.gov/products/heating_cooling/light_commercial_heating_cooling/light_commercial_hvac_key_product_criteria">https://www.energystar.gov/products/heating_cooling/light_commercial_heating_cooling/light_commercial_hvac_key_product_criteria</a>, and electric cooking
products that can be found at <a href="https://www.energystar.gov/products/electric_cooking_products">https://www.energystar.gov/products/electric_cooking_products</a>. These technologies have now become far more
well known and commercially available than they were at the time
Congress adopted the requirements in EISA. It is also worth noting that
the rule's requirements apply at the design for construction stage,
when an agency has the maximum flexibility to develop a design for a
new building that will meet the standards, or has the flexibility to
select an approach to a major renovation that will meet the more
limited requirements that apply to major renovations. Not only are the
standards in the final rule required by the statute, they are also
reasonable and achievable, given the point in the design and
construction process when the standards become applicable and the real
world options now available for agency compliance.
C. Petitions for Downward Adjustment
Under section 433 of EISA, agencies other than GSA may petition DOE
for an adjustment to the fossil fuel-generated energy performance
standard with respect to a specific building if meeting the requirement
is technically impracticable in light of the agency's functional needs
for the building. 42 U.S.C. 6834(a)(3)(D)(i)(II). As proposed in the
2022 SNOPR, the final rule allows GSA tenant agencies that have
significant control over building design to petition DOE. This rule
specifies the information petitioning agencies must provide when
requesting a downward adjustment. Specifically, as proposed in the 2022
SNOPR, the final rule requires petitioning agencies to describe the
building and associated components and equipment; explain why
compliance with the requirements is technically impracticable
considering the functional needs of the building; demonstrate that all
cost-effective energy efficiency and on-site renewable energy measures
were included in the building design; provide the largest feasible
reduction in fossil fuel-generated energy consumption that can
reasonably be achieved; and discuss measures that were evaluated but
rejected.
When filing petitions for downward adjustment related to new
construction, Federal agencies must include the maximum applicable
allowable fossil fuel-generated energy consumption for the proposed
building, the requested alternative allowable fossil fuel-generated
energy consumption for the building, the estimated fossil fuel-
generated energy consumption of the proposed building, the total
estimated project cost, and a description of the building and the
building energy systems. A description of the building includes, but is
not limited to, location, use type, floor area, stories, expected
number of occupants and occupant schedule, functional needs of the
building, and any other information the agency deems pertinent. Federal
agencies must describe the HVAC systems and service water heating
system, as well as the loads in the building, including any specialized
process, specialized research loads, electric vehicle charging
stations, alternatively fueled vehicle fueling stations, emergency
backup generators and other energy consuming systems or components.
This information will provide DOE the necessary information to review
petitions, and help agencies address key questions and options during
the design process.
This final rule adopts the standard and requires information for
downward adjustment related to major renovations. For major renovations
that are whole building renovations, a downward adjustment would be
provided at a level equal to the energy efficiency level that would be
achieved were the proposed building designed to meet the baseline
energy efficiency standard applicable to new construction in 10 CFR
parts 433 or 435. For whole building renovations, Federal agencies must
provide the same information that is required for new construction. DOE
believes the cost of processing the petitions will be de minimis, as
DOE already works extensively with Federal agencies on energy-
efficiency and decarbonization efforts.
For major renovations that are limited to system or component level
retrofits, DOE will provide downward adjustments at a level equal to
the energy efficiency level that would be achieved through the use of
commercially available systems and/or components by using ENERGY STAR
or FEMP designated products. Unlike the required standard, however, the
ENERGY STAR or FEMP designated products are not required to be electric
or non-fossil fuel based. A major renovation that is limited to a
single system or multiple systems could receive a downward adjustment
equal to the energy efficiency level that would be achieved through the
use of the same ENERGY STAR or FEMP designated products as required for
component renovations and through use of the system level requirements
for renovations found in the baseline energy efficiency standards in 10
CFR part 433 (Standard 90.1-2019) or 10 CFR part 435 (2021 IECC).
DOE received a comment that supported the changes made to the
petition requirements proposed in the 2022 SNOPR from the American
Council for an Energy-Efficient Economy (ACEEE), Earthjustice, Rewiring
America, RMI, and Sierra Club. They stated that requiring Federal
agencies to submit the information proposed in the 2022 SNOPR ``will
help ensure the petition process meets EISA requirements.'' ACEEE et
al., Doc. No. 126, pg. 3.
However, other commenters expressed concern with the required
information Federal agencies must file with their petitions. CHP
Alliance stated that the rule proposed in the 2022 SNOPR is flawed
because the new building baseline energy efficiency standard for major
renovation is based on replacing all equipment included in the
renovation with ENERGY STAR or
[[Page 35396]]
FEMP designated products. CHP Alliance, Doc. No. 104, pg. 6. CHP
Alliance noted that this requirement excludes CHP systems from being
both an onsite power and heating/cooling source option for major
renovations because neither ENERGY STAR nor FEMP have products
designated for CHP systems. Id. CHP Alliance urged DOE to eliminate
this requirement or immediately designate CHP systems that use
renewable fuels or non-fossil fuels as products which Federal agencies
can use. Id.
DOE requires the use of FEMP and ENERGY STAR designated products
when such designations are available as specified in 10 CFR part 436
subpart C because when setting efficiency requirements, both FEMP and
ENERGY STAR have integrated life-cycle cost effectiveness into their
guiding principles that demonstrate compliance with 10 CFR part 436
subpart A. As such, Federal buyers can have confidence that required
products have both good energy performance and a total cost of
ownership that is equal to or less than products below set
efficiencies.
Although there are no such FEMP or ENERGY STAR designated products
for CHP systems, this does not preclude an agency from utilizing such
systems. If an agency determines that it would like to utilize a CHP
system in an EISA-subject building, it may do so but must ensure that
the fossil fuel utilization of the system complies with the energy
performance standard. This can be done by utilizing renewable, non-
fossil fuel based fuels and is discussed in more detail in section
III.A.3.b. Defining Technical Impracticability.
In the 2022 SNOPR, DOE proposed that a ``technical
impracticability'' exists when achieving the fossil fuel-generated
energy consumption targets would:
(1) not be feasible from an engineering design or execution
standpoint due to existing physical or site constraints that prohibit
modification or addition of elements or spaces; (2) significantly
obstruct building operations and the functional needs of a building,
specifically for industrial process loads, critical national security
functions, mission critical information systems as defined in NIST SP
800-60 Vol. 2 Rev. 1, and research operations; or (3) significantly
degrade energy resiliency and energy security of building operations as
defined in 10 U.S.C. 101(e)(6) and 10 U.S.C. 101(e)(7) respectively.
87 FR 78382, 78421 and 78430. Upon determination that complying
with these standards is technically impracticable, the building is
still required to reduce fossil fuel consumption to the maximum extent
practicable. Technical impracticability may include technology
availability and cost considerations but may not be based solely on
cost considerations.
In response to the 2022 SNOPR, DOE received one comment on this
topic that claimed that the definition of ``technical
impracticability'' is too ambiguous and could lead to agencies taking
advantage of loopholes. Doc. No. 79, pg. 4. DOE notes that Congress
directed DOE to base its petition adjudication decisions on agency
determinations of technical impracticability. Due to the range of
issues and challenges related to technical impracticability that could
be faced by agencies, DOE will review each petition on a case-by-case
basis and make the ultimate determination as to whether meeting the
applicable standard is technically impracticable for that building and
project. DOE may also provide further guidance on this topic via an
implementation guidance.
1. DOE Review of Petitions
In the 2022 SNOPR, DOE proposed that the Director of FEMP will
review the petitions for downward adjustment and make a best effort to
return the complete petition within 45 calendar days of submittal. 87
FR 78382, 78397. DOE stated that it would review petitions in a timely
manner and if the petitioning agency has demonstrated the need for a
downward adjustment per the previous discussion, DOE will concur with
the agency's conclusion and notify the agency in writing. Id. If DOE
does not concur, it would forward its reasons to the petitioning
agency.
In this final rule, DOE is modifying the proposed timing. DOE will
make a best effort to notify an agency within 30 calendar days of
submittal whether a petition is approved or rejected. However, the
timeframe does not apply to incomplete petitions, which may result in
delays. Complete petitions are described in the regulatory text at the
end of this final rulemaking notice, specifically sections Sec.
433.202 and Sec. 435.202. DOE recognizes that agencies want assurance
that DOE will respond to petitions in a timely manner in order to avoid
project delays. If DOE rejects the petition, it will include its
reasons for doing so in its response to the agency.
Additionally, in the 2022 SNOPR, for new construction or major
renovations of the whole building, DOE proposed that DOE could
establish an adjusted value of on-site fossil fuel-generated energy
consumption standard, other than the adjusted value requested in a
petition. 87 FR 78382, 78424. DOE is finalizing this provision. If DOE
finds that the petition does not support the requested adjusted value
but that the statutorily required level was nonetheless technically
impracticable, DOE can establish a new adjusted value. 87 FR 78382,
78424. DOE intends this provision to provide flexibility in the
petition process and reduce the need for agencies to resubmit petitions
in the instance of a rejection. In addition, this provision will likely
reduce the likelihood of an agency disagreeing with the result of its
petition request, as it will be an active participant in an exchange of
information with DOE.
2. Making Petitions for Downward Adjustment Public
Throughout this rulemaking proceeding, DOE received comments urging
DOE to make petitions for downward adjustment publicly available. In
the 2022 SNOPR, DOE stated that it will publish any petitions that are
filed, deemed complete, and screened for national security reasons for
downward adjustment that are received (subject to potential filtering
for national security reasons) to the DOE website. 87 FR 78382, 78396.
ACEEE et al. supports making petitions for downward adjustments and DOE
responses subject to public scrutiny. ACEEE et al., Doc. No. 126, pg.
3-4. However, ACEEE noted that the 2022 SNOPR did not propose
regulatory text requiring such public scrutiny and urged DOE to include
such language in the final rule.
DOE opts not to include regulatory language requiring it to make
petitions public. DOE notes there is nothing in the statutory text that
requires the information be made publicly available. In addition, there
are instances where information included with the petitions for
downward adjustment cannot be made public (e.g., information with
national security implications). However, DOE acknowledges the
importance of transparency and will make its best effort to publish any
petitions for downward adjustment that are filed, deemed complete, and
screened for national security concerns.
3. Bundling Petitions
DOE will allow agencies to bundle petitions for new buildings or
whole renovations to buildings that are the same design, have the same
set of reduction targets, and would require similar measures to reduce
fossil fuel-generated energy consumption. The bundled petitions must
clearly state any differences between the buildings and explain why the
differences do not warrant the submission of separate
[[Page 35397]]
evaluations. For component-level major renovations, DOE will allow
bundling petitions that are of the same component and building type.
DOE will provide more specific details on the bundling process and
criteria in the accompanying implementation guidance.
4. GSA Tenant Agencies
ECPA, as amended, precludes GSA from petitioning DOE for a downward
adjustment of the applicable percentage reduction requirement. 42
U.S.C. 6834(a)(3)(D)(i)(II). In the 2022 SNOPR, DOE noted although ECPA
prohibits GSA from petitioning DOE for a downward adjustment, it makes
no reference to GSA tenant agencies. 87 FR 78382, 78396. DOE stated
that allowing GSA tenant agencies to submit a petition for downward
adjustment will provide an option for some buildings for which the
required fossil fuel-generated energy consumptions reductions may be
technically impracticable in light of the building's functional needs,
but for which GSA may not submit a petition. Id. In the 2022 SNOPR, DOE
proposed that for construction of a new Federal building or major
renovations of a federal building, if a GSA tenant agency is providing
substantive and significant design criteria in the design process, the
tenant agency may petition DOE for a downward adjustment of the
applicable percentage reduction requirements. Id.
DOE received one comment on this topic in response to the 2022
SNOPR. ACEEE et al. commented that DOE may not allow GSA tenant
agencies to petition for downward adjustments because ECPA specifically
excludes GSA from the downward adjustment petition process. ACEEE et
al., Doc. No. 126, pg. 4. They stated that allowing GSA tenant agencies
to petition DOE for downward adjustment would expand the number of
buildings eligible for such adjustments in a manner that directly
contravenes the ECPA. Id.
DOE reiterates that although the statute prohibits GSA from
petitioning DOE for a downward adjustment, it makes no reference to GSA
tenant agencies. The statute allows for an ``agency'' to petition for a
downward adjustment. The term ``Federal agency'' means any department,
agency, corporation, or other entity or instrumentality of the
executive branch of the Federal Government, including the United States
Postal Service, the Federal National Mortgage Association, and the
Federal Home Loan Mortgage Corporation. 42 U.S.C. 6832(5). As the ACEEE
notes, the statute only prohibits GSA from submitting a petition. Thus,
in cases in which the GSA tenant agency exercises significant control
of design choices in the building, and GSA does not, it makes little
sense to prohibit the GSA tenant agency from petitioning for a downward
adjustment if such a prohibition is not required by statute. Moreover,
these petitions are still subject to the same criteria and review
process as other petitions, including that meeting the requirement
would be technically impracticable, which is defined as achieving the
fossil fuel-based energy consumption targets would (1) not be feasible
from an engineering design or execution standpoint due to existing
physical or site constraints that prohibit modification or addition of
elements or spaces; (2) significantly obstruct building operations and
the functional needs of a building, specifically for industrial process
loads, critical national security functions, mission critical
information systems as defined in NIST SP 800-60 Vol. 2 Rev. 1, and
research operations; or (3) significantly degrade energy resiliency and
energy security of building operations as defined in 10 U.S.C.
101(e)(6) and 10 U.S.C. 101(e)(7) respectively. DOE does not expect
that GSA tenant agencies would commonly be able to make such showings
for the more generic types of buildings typical of GSA's holdings.
Rather, DOE expects this petition process to be applied in the rare
situations where building design needs specific to a GSA tenant
agency's unique situation make application of the percentage reduction
requirements technically impracticable.
5. Petitions Submitted by the Department of Defense
DOE also considered whether it should have a separate petition
process for Department of Defense or other agency projects that serve
critical national security functions whereby classified or sensitive
information can be withheld, and such petitions will not be subject to
public disclosure.
Two commenters stated that DOE should not have a separate petition
process for buildings serving national security functions. An
individual commenter argued that instead of exempting buildings with
national security risks, the Federal government must navigate and
balance these national security challenges with policies to reduce
fossil fuel-generated energy consumption. Doc. No. 81, pg. 2.
Similarly, ACEEE et al. commented that buildings serving national
security functions must be subject to the same petition review process
and policies as other Federal buildings. ACEEE et al., Doc. No. 126,
pg. 5.
DOE agrees that there will be no blanket exemptions for national
security sites. Section 433(a) of EISA does not provide an exemption
from the standard for national security. For some buildings, it may be
technically impracticable to achieve the consumption targets so the
petition process may be appropriate.\16\ Each agency must provide a
petition if they believe their facility cannot meet the statutory
requirements due to technical impracticability. DOE intends to review
all petitions using the same process. DOE believes the petition process
will sufficiently vet buildings and agencies' proposed reasoning as to
why achieving the reductions will be technically impracticable.
---------------------------------------------------------------------------
\16\ The definition of ``technical impracticability'' in this
rule is defined as achieving the fossil fuel-based energy
consumption targets would (1) not be feasible from an engineering
design or execution standpoint due to existing physical or site
constraints that prohibit modification or addition of elements or
spaces; (2) significantly obstruct building operations and the
functional needs of a building, specifically for industrial process
loads, critical national security functions, mission critical
information systems as defined in NIST SP 800-60 Vol. 2 Rev. 1, and
research operations; or (3) significantly degrade energy resiliency
and energy security of building operations.
---------------------------------------------------------------------------
In addition, DOE is sensitive to classification issues and will
work with agencies to ensure that sensitive information is treated
appropriately. DOE also recognizes that agencies may need flexibility
in defining what buildings or projects serve critical national security
functions, and that a pending petition may delay projects that serve
critical national security functions. DOE intends to work closely with
agencies pertaining to petitions for projects with critical national
security functions as part of its implementation guidance following
publication of the rule.
D. Definitions
The final rule adds definitions for ``construction cost,'' ``design
for renovation,'' ``EISA-subject building or project,'' ``Federal
building,'' ``Fiscal year (FY),'' ``Fossil fuel-generated energy
consumption,'' ``Major renovation,'' ``Major renovation cost,'' ``Major
renovation of all Scope 1 fossil fuel-using systems,'' ``Major
renovation of a Scope 1 fossil fuel-using building system or
component,'' ``Multi-family high-rise residential building,'' ``Shift
adjustment multiplier,'' and ``Technical impracticability,'' and it
revises the definition for ``proposed building'' to 10 CFR 433.2 and 10
CFR 435.2. Any comments relating to specific definitions have been
previously discussed in Section III. In addition to
[[Page 35398]]
the substantive edits to the definitions of ``construction cost,''
``fossil fuel-generated energy consumption,'' and ``major renovation
cost,'' discussed previously, DOE also makes minor revisions to the
definitions of ``EISA-subject building or project,'' ``Federal
building,'' ``fiscal year (FY),'' ``major renovation,'' and ``technical
impracticability'' to remove unnecessary language or to provide
clarification. These minor revisions do not change the nature of the
definitions proposed in the 2022 SNOPR.
IV. Additional Issues Raised by Commenters
A. Authority
AGA argued in its comments that DOE's authority to promulgate
performance standards to reduce emissions from fossil fuel-generated
energy consumption expired in December 2008.\17\ AGA noted that section
433 of EISA directs DOE to establish by rule revised Federal building
energy efficiency performance standards for both new Federal buildings
and for Federal buildings undergoing major renovations, ``[n]ot later
than 1 year after December 19, 2008.'' AGA, Doc. No. 100, pg. 4.
Because ``agencies may act only when and how Congress lets them [,]''
AGA asserted that DOE's authority to establish these standards has
lapsed. Id., pg. 5 (citing Cent. United Life Ins. Co. v. Burwell, 827
F.3d 70, 73 (D.C. Cir. 2016)). However, the Supreme Court of the United
States has routinely held that unless a statute specifies a consequence
for noncompliance with a statutory deadline, an agency's obligation
does not disappear when a statutory deadline passes. United States v.
James Daniel Good Real Prop., 510 U.S. 43, 63 (1993); see Barnhart v.
Peabody Coal Co., 537 U.S. 149, 159 (2003); Regions Hosp. v. Shalala,
522 U.S. 448, 459 n.3 (1998). The EISA does not specify any consequence
for noncompliance with its deadlines.
---------------------------------------------------------------------------
\17\ AGA, Doc. No. 100, pg. 4. NPGA supported AGA comments with
respect to ``the questionable foundation on which this rulemaking
was proposed.'' NPGA, Doc. No. 90, pg. 7.
---------------------------------------------------------------------------
B. APA Concerns
Two commenters raised procedural concerns related to the 2022
SNOPR. First, APGA expressed concern that stakeholders were deprived
from meaningfully commenting on the 2022 SNOPR. APGA, Doc. No. 102, pg.
9. APGA argued that interested parties needed additional time to review
the 2022 SNOPR because the rule proposed marked a significant departure
from the previous proposed rules. Id. In addition, APGA stated that DOE
failed to provide a timely copy of the transcript of the January 5,
2023, public meeting, and, as a result, stakeholders that were not able
to attend the meeting were unable to review the relevant docket
materials. Id.
DOE notes that it granted the requests from stakeholders for a 30-
day extension of the public comment period. 88 FR 12267. As a result,
interested parties had 90 days to review the 2022 SNOPR. Multiple
parties used this period as an opportunity to file revised comments.
See e.g., ASHRAE, Doc. Nos. 96 and 113, Business Council for
Sustainable Energy, Doc. Nos. 87 and 115, and joint comments from local
officials, Doc. Nos. 94 and 125.
In addition, a copy of the transcript of the January 5, 2023,
public meeting is on the docket web page for this rulemaking. Although
the transcript was posted after the initial 60-day comment period
closed, it was available when DOE re-opened the comment period for an
additional 30 days, providing sufficient time for parties to review and
comment on that material in the docket.
V. Methodology, Analytical Results, and Conclusion
This final rule implements fossil fuel reduction targets
established under EISA, which will begin to reduce GHG emissions in the
near term and prepare Federal buildings for a clean energy future. By
ensuring that Federal buildings are designed--either from the ground
up, or when being renovated--to reduce fossil fuel use, the rule
ensures that long-term, as the electric grid integrates more carbon
free energies, emissions will be reduced. DOE recognizes that
exchanging on-site fossil fuel generated energy for increased reliance
on the electric grid, which may still be generating energy with fossil
fuels, will not in every application lead to an immediate reduction in
emissions of GHGs and SO<INF>2</INF> and in some cases could result in
some increase in energy costs. This is explored in more detail in
Chapter 1, Section 1.8 of the technical support document by examining
the overall sensitivity of the rule to future grid cleaning scenarios.
However, agencies must make decisions for the long-term, making capital
investments today which will have lasting impacts well into the future,
resulting in net benefits over the time and the life of the asset. Net
benefits will increase significantly as the grid incorporates cleaner
sources of electricity, as illustrated by the supporting technical
analysis. In addition, DOE expects emerging and improving technological
advancements in electric equipment, such as heat pumps, will lead to
additional and dramatic site energy savings, further improving the
emissions and cost savings cases for this rule.
A. Cost-Effectiveness
DOE conducted an Environmental Assessment (EA) for this final
rulemaking.\18\ In addition, DOE referenced a previous technical
analysis conducted by the DOE Building Energy Codes Program that
evaluated the energy and cost savings impacts, as well as cost
effectiveness, of Standard 90.1-2019.\19\ As described in the EA, DOE
identified a rate of new Federal commercial construction of 13.3
million square feet per year, with a distribution of building types as
shown in Table V-1. Starting in 2030, section 205(c)(ii) of Executive
Order 14057, ``Catalyzing Clean Energy Industries and Jobs Through
Federal Sustainability'' (December 8, 2021), requires agencies to
``design new construction and modernization projects greater than
25,000 gross square feet to be net-zero emissions by 2030.'' This
effectively reduces the impact of this rule to apply to new
construction and major renovation projects that fall above the cost
threshold but are also below 25,000 gross square feet. For the year
2030 and beyond, DOE estimated new Federal commercial and multi-family
high-rise residential building construction volume will be 2.2 million
square feet per year, with a distribution of building types as shown in
Table V-2. The distribution of building types is based on an extraction
of the latest 10 years of new construction data entered into the
Federal Real Property Portfolio Management System (``FRPP MS'') that
meets the required cost threshold of the final rule for cases both
before and after the 25,000 Sf minimum triggering E.O. 14057
compliance.\20\
---------------------------------------------------------------------------
\18\ The Environmental Assessment (EA) (DOE/EA-2165) is
entitled, ``Environmental Assessment for Final Rule, 10 CFR part
433, `Energy Efficiency Standards for New Federal Commercial and
Multi-Family High-Rise Residential Buildings' Baseline Standards
Update.'' The EA may be found in the docket for this rulemaking and
at <a href="http://www.energy.gov/node/472482">www.energy.gov/node/472482</a>.
\19\ See DOE's analysis of the cost savings of the 2016 and 2019
ASHRAE 90.1 Standards at <a href="http://www.energycodes.gov/sites/default/files/2020-07/90.1-2016_National_Cost-Effectiveness.pdf">www.energycodes.gov/sites/default/files/2020-07/90.1-2016_National_Cost-Effectiveness.pdf</a> and
<a href="http://www.energycodes.gov/sites/default/files/2021-07/90.1-2019_National_Cost-Effectiveness.pdf">www.energycodes.gov/sites/default/files/2021-07/90.1-2019_National_Cost-Effectiveness.pdf</a>, respectively.
\20\ See <a href="http://www.realpropertyprofile.gov/FRPPMS/FRPP_Login">www.realpropertyprofile.gov/FRPPMS/FRPP_Login</a>.
---------------------------------------------------------------------------
Additionally, DOE identified an estimated rate of Federal major
renovation projects that would be influenced by this rule. To do so,
DOE utilized data from the Federal
[[Page 35399]]
Compliance Tracking System (``CTS'') where agencies report data on
building efficiency improvement projects. The data from CTS was queried
to include only those projects that would meet the cost threshold and
have impacts on site fossil fuel energy consumption. As not all
agencies are compliant in reporting data into CTS, results were scaled
up to account for agencies out of compliance. As CTS does not supply
data on the types of buildings for the reported projects, the
distribution of eligible Federal buildings for a renovation that would
meet the cost threshold was applied to the estimated total project
square footage. DOE identified an estimated rate of new Federal major
renovation construction of 1.36 million square feet per year with a
distribution of building types as shown in Table V-1. As noted above,
Executive Order 14057 effectively reduces the impact of this rule to
apply only to new construction and major renovation projects that fall
above the cost threshold but are also below 25,000 gross square feet.
Taking this into account for the year 2030 and beyond, the estimated
new Federal commercial and multi-family high-rise residential building
major renovation construction volume per year will be 0.4 million
square feet per year, with a distribution of building types as shown in
Table V-1 and Table V-2 of this document.
These tables also show the prototype buildings incorporated into
simulations that are used to estimate energy use in each building type.
DOE derived these prototype buildings from 16 building types in 17
climate zones \21\ using its Commercial Prototype Building models.\22\
Of the 16 prototype buildings, DOE developed costs for 6 prototype
buildings that represent the majority of the building types used by
Federal agencies to determine the cost effectiveness of Standard 90.1-
2016 and Standard 90.1-2019.\23\ DOE then extracted the cost-
effectiveness information for those prototype buildings and weighted
those values as appropriate to obtain an average cost effectiveness
value for building types found in the Federal commercial sector.
---------------------------------------------------------------------------
\21\ Briggs, R.S., R.G. Lucas, and Z.T. Taylor. 2003. ``Climate
classification for building energy codes and standards: Part 1--
Development Process.'' ASHRAE Transactions 109(1): 109:121. American
Society of Heating, Refrigerating and Air-Conditioning Engineers.
Atlanta, Georgia.
\22\ DOE's prototype buildings are described at
<a href="http://www.energycodes.gov/prototype-building-models">www.energycodes.gov/prototype-building-models</a>.
\23\ See DOE's technical support document chapter 1 for more
information on DOE's analysis of building prototypes.
Table V-1--New Federal Commercial and High-Rise Multi-Family Construction Volume by Building Type for Buildings
Constructed in Years 2025-2029
----------------------------------------------------------------------------------------------------------------
Fraction of
Federal
Building type construction Assumed BECP prototypes Assumed BECP prototypes
volume (by floor for energy savings for cost effectiveness
area) (%)
----------------------------------------------------------------------------------------------------------------
Office................................. 17.77 Small Office, Medium Small Office, Large
Office, Large Office. Office.
Dormitories and Barracks............... 14.57 Small Hotel, Mid-rise Small Hotel, Mid-rise
Apartment, High-rise Apartment.
Apartment.
School................................. 15.65 Secondary School......... Primary School.
Service................................ 15.16 Stand-alone Retail, Non- Stand-alone Retail.
refrigerated Warehouse.
Other Institutional Uses............... 5.76 None *................... None.
Hospital............................... 7.80 Hospital................. Small Office, Large
Office.
Warehouses............................. 2.95 Non-Refrigerated None.
Warehouse.
Laboratories........................... 4.24 Medium Office, Hospital.. Small Office, Large
Office.
All Other.............................. 2.74 None..................... None.
Outpatient Healthcare Facility......... 5.00 Outpatient Healthcare.... Small Office.
Industrial............................. 1.63 None..................... None.
Child Care Center...................... 0.89 Primary School........... Primary School.
Communications Systems................. 1.42 None..................... None.
Prisons and Detention Centers.......... 0.18 None..................... None.
Family Housing......................... 1.06 Mid-rise Apartment....... Mid-rise Apartment.
Navigation and Traffic Aids............ 0.53 None..................... None.
Land Port of Entry..................... 0.68 Non-refrigerated None.
Warehouse.
Border/Inspection Station.............. 0.64 Small Office, Non- Small Office.
refrigerated Warehouse.
Facility Security...................... 0.25 Small Office............. Small Office.
Data Centers........................... 0.34 None..................... None.
Museum................................. 0.74 None..................... None.
Comfort Station/Restrooms.............. 0.01 Non-refrigerated None.
Warehouse.
Public Facing Facility................. 0.02 Stand-alone Retail....... Stand-alone Retail.
Aviation Security Related.............. 0.00 Small Office............. Small Office.
Post Office............................ 0.00 Stand-alone Retail....... Stand-alone Retail.
----------------------------------------------------------------------------------------------------------------
* Note that energy savings and cost-effectiveness mapping are not available for a number of Federal building
types, with ``other institutional uses,'' warehouses, and ``all other'' being the largest Federal building
types with no reliable mapping. As described in this section, DOE considered energy savings and costs for
these unmapped Federal building types to be equivalent to the weighted energy savings and cost for the mapped
Federal building types.
[[Page 35400]]
Table V-2--New Federal Commercial and High-Rise Multi-Family Construction Volume by Building Type for Buildings
Constructed in Years 2030-2054
----------------------------------------------------------------------------------------------------------------
Fraction of
Federal
Building type construction Assumed BECP prototypes Assumed BECP prototypes
volume (by floor for energy savings for cost effectiveness
area) (%)
----------------------------------------------------------------------------------------------------------------
Office................................. 14.24 Small Office, Medium Small Office, Large
Office. Office.
Dormitories and Barracks............... 4.02 Small Hotel, Mid-rise Small Hotel, Mid-rise
Apartment, High-rise Apartment.
Apartment.
School................................. 10.88 Secondary School......... Primary School.
Service................................ 18.34 Stand-alone Retail, Non- Stand-alone Retail.
refrigerated Warehouse.
Other Institutional Uses............... 12.63 None *................... None.
Hospital............................... 2.97 Hospital................. Small Office, Large
Office.
Warehouses............................. 6.88 Non-Refrigerated None.
Warehouse.
Laboratories........................... 4.37 Medium Office, Hospital.. Small Office, Large
Office.
All Other.............................. 5.58 None..................... None.
Outpatient Healthcare Facility......... 7.66 Outpatient Healthcare.... Small Office.
Industrial............................. 2.05 None..................... None.
Child Care Center...................... 2.67 Primary School........... Primary School.
Communications Systems................. 0.87 None..................... None.
Prisons and Detention Centers.......... 0.26 None..................... None.
Family Housing......................... 1.49 Mid-rise Apartment....... Mid-rise Apartment.
Navigation and Traffic Aids............ 1.95 None..................... None.
Land Port of Entry..................... 0.99 Non-refrigerated None.
Warehouse.
Border/Inspection Station.............. 0.36 Small Office, Non- Small Office.
refrigerated Warehouse.
Facility Security...................... 1.36 Small Office............. Small Office.
Data Centers........................... 0.19 None..................... None.
Museum................................. 0.10 None..................... None.
Comfort Station/Restrooms.............. 0.03 Non-refrigerated None.
Warehouse.
Public Facing Facility................. 0.09 Stand-alone Retail....... Stand-alone Retail.
Aviation Security Related.............. 0.00 Small Office............. Small Office.
Post Office............................ 0.00 Stand-alone Retail....... Stand-alone Retail.
----------------------------------------------------------------------------------------------------------------
* Note that energy savings and cost-effectiveness mapping are not available for a number of Federal building
types, with other institutional uses, warehouses, and all other being the largest Federal building types with
no reliable mapping. As described in this section, DOE considered energy savings and costs for these unmapped
Federal building types to be equivalent to the weighted energy savings and cost for the mapped Federal
building types.
DOE has determined estimated incremental construction first cost
information for the building types and climate zones analyzed for
buildings compliant with this final rule (compliant buildings) versus
Standard 90.1-2019 (see Table V-3).\24\
---------------------------------------------------------------------------
\24\ Note that the values in Table V-3 have been adjusted to
reflect 2022$ from the table that appears in DOE's determination of
energy savings for Standard 90.1-2019, which were in 2020$. This
adjustment was made using the GDP deflator value to correct for
inflation between 2020 and 2022. Organization for Economic Co-
operation and Development, GDP Implicit Price Deflator in United
States, retrieved from FRED, Federal Reserve Bank of St. Louis;
<a href="http://fred.stlouisfed.org/series/USAGDPDEFAISMEI">fred.stlouisfed.org/series/USAGDPDEFAISMEI</a>. These values have also
been adjusted to reflect the same underlying economic assumptions as
the 2019 version, and sales tax has also been removed.
Table V-3--Incremental Construction First Cost (2022$) for Compliant Building Design Under the Final Rule vs.
Standard 90.1-2019
----------------------------------------------------------------------------------------------------------------
ASHRAE Climate Zone *
Prototype Value ----------------------------------------------------------------
2A 3A 3B 4A 5A
----------------------------------------------------------------------------------------------------------------
Small Office................. First Cost...... $673 $584 $515 $1,666 $641
/ft\2\.......... 0.12 0.11 0.09 0.30 0.12
Large Office................. First Cost...... 261,781 268,194 196,408 354,808 223,553
/ft\2\.......... 0.52 0.54 0.39 0.71 0.45
Stand-alone Retail........... First Cost...... 19,608 20,240 19,740 21,563 19,363
/ft\2\.......... 0.79 0.82 0.80 0.87 0.78
Primary School............... First Cost...... (126,946) (121,994) (116,139) (94,722) (122,894)
/ft\2\.......... (1.72) (1.65) (1.57) (1.28) (1.66)
Small Hotel.................. First Cost...... (104,866) (104,624) (104,396) (101,194) (103,044)
/ft\2\.......... (2.43) (2.42) (2.42) (2.34) (2.38)
Mid-rise Apartment........... First Cost...... (18,343) (17,490) (18,113) (12,445) (25,126)
/ft\2\.......... (0.54) (0.52) (0.54) (0.37) (0.74)
----------------------------------------------------------------------------------------------------------------
* Negative costs (shown in parentheses) indicate a reduction in cost due to changes in the code, usually due to
reduced HVAC capital cost and reduction of venting required for on-site combustion.
[[Page 35401]]
DOE used data from Table V-3 to calculate preliminary values for
overall estimated incremental first cost of construction for Federal
commercial and high-rise, multi-family residential buildings. DOE
calculated the incremental first cost of the Federal building types
based on the DOE cost prototypes shown in the far-right column of Table
V-1 of this document. DOE then calculated the weighted average
incremental cost for mapped Federal building types based on their
corresponding prototypes, which represent an estimated 79.3 percent of
new Federal construction. This weighted incremental cost was assigned
to un-mapped Federal building types, and a total weighted incremental
cost was calculated by multiplying the incremental cost for each
Federal building type by the fraction of Federal construction shown in
Table V-1.
The estimated national incremental first cost for building types
was developed by multiplying the average (across climate zones)
incremental first cost of the prototypes Standard 90.1 cost-
effectiveness analysis by the fraction of the Federal sector
construction volume shown in Table V-1, and then multiplying that by
the total estimate of Federal new construction floorspace.\25\ DOE
estimates that total first cost outlays for new Federal buildings will
be less under compliant designs than under Standard 90.1-2019,
primarily due to lower HVAC equipment costs for some building types
(see Table V-3). The decrease in capital cost is primarily driven by
lower equipment cost as well as the avoidance of gas infrastructure
costs, which can include gas lines and venting. See Chapter 1, section
3 of DOE's technical support document for more information. The
resulting total incremental first cost estimate is a savings of $8.44
million per year. The average first cost decrease is $1.82 per square
foot. These first cost decreases are a result of the lower capital
costs of the assumed electric equipment types as dictated in the ASHRAE
and IECC energy codes (as mandated in 10 CFR part 433 and 10 CFR part
435 and are the baseline for this modified building efficiency
standard). Minimally compliant electric equipment was assumed in the
proposed case as hitting the ``30% better'' (than baseline) performance
goal as generally required by regulation, but include a cost
effectiveness caveat that can reduce the goal down to minimal
compliance. As can be seen in Table V-4,\26\ most building types are
projected to switch their space heating systems from a fossil fuel
burning system over to an electric resistance-based system.
---------------------------------------------------------------------------
\25\ For the Federal office building, the small and large office
prototype first costs were averaged. For the Federal education
building, the primary school prototype first cost was used. For the
Federal dormitories/barracks building type, the small hotel and mid-
rise apartment prototype first costs were averaged.
\26\ See Chapter 1 of DOE's technical support document
supporting this rulemaking for more information.
Table V-4--Breakdown of Proposed Heating System by Building Prototype
--------------------------------------------------------------------------------------------------------------------------------------------------------
Yearly Yearly
constructed constructed Baseline gas Proposed electric unit
Building prototype SF--Post 2030 SF--Pre 2030 unit efficiency Space heat notes
(%) (%) efficiency
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small Office........................... 12.8 14.8 0.81 99% Electric Boilers...... Convert using AFUE for gas furnace
and AFUE Estimate for Electric
Furnace.
Medium Office.......................... 2.6 5.5 0.79 99% Electric Furnaces..... Convert using pre 1/1/2023 Et
estimated Et for Furnaces assuming
0.75 casing loss.
Large Office........................... 0.0 2.3 0.82 99% Electric Boilers...... Convert using Et Estimate for
boilers.
Stand-Alone Retail..................... 13.2 8.8 0.79 1.76 COP RTU Heat Pump.... Convert using national weight heat
pump efficiency from office
analysis.
Primary School......................... 3.8 1.0 0.81 99% \1/4\ Furnaces, \3/4\ \1/4\ Furnaces, \3/4\ boilers.
boilers. Convert both to electric
equivalents.
Secondary School....................... 15.5 18.1 0.82 99% Electric Boilers...... Convert using Et Estimate for
boilers.
Outpatient Health Care................. 10.9 5.8 0.82 99% Electric Boilers...... Convert using Et Estimate for
boilers.
Hospital............................... 8.9 12.7 0.82 99% Electric Boilers...... Convert using Et Estimate for
boilers.
Small Hotel............................ 0.4 1.2 0.81 99% Electric Furnaces..... Convert using AFUE for Gas and AFUE
Estimate for Electric.
Warehouse.............................. 24.4 13.1 0.79 99% Electric Furnaces..... Note Model uses a 0.8 gas AFUE for
office space, but 0.7925 for Fine
storage and unit heater.
Mid-Rise Apartment..................... 4.7 8.7 0.81 2.4 COP Residential Heat Convert using AFUE Estimate to
Pump. residential HSPF.
High-Rise Apartment.................... 2.7 8.2 0.82 99% Electric Boilers...... Convert using Et Estimate for
boilers.
--------------------------------------------------------------------------------------------------------------------------------------------------------
An estimated 17.7 percent of the projects would utilize heat pumps
in their proposed ``all electric'' case (those that map to Stand Alone
Retail and Mid-Rise Apartment prototype models) with assumed efficiency
performance metrics as noted. Service hot water systems (when not
already specified as an electric system per the 10 CFR parts 433 and
435 requirements) are similarly assumed to be minimally compliant
electric resistance systems with 99-percent efficiencies. Cooking
systems, where present, are assumed to switch from 40-percent efficient
gas systems to 70-percent standard efficiency electric systems.
It should be noted that in all cases higher efficiency electric
equipment is available on the market, but the statutory authority of
this rule is limited to total building reduction targets and does not
specify specific equipment types or efficiency levels. An agency is
free to design a project per their own site, cost, and usage specific
needs, while complying with applicable efficiency targets. As such, the
analysis presented in this final rule intends to capture the base-level
compliance cases only. DOE encourages agencies to carefully consider
and select higher efficiency equipment (such as even higher efficiency
heat pumps and/or more widespread adoption) to the greatest extent
possible, given project-specific needs and constraints. Higher
efficiency equipment can often provide projects with a lifecycle cost
effective solution that saves even more energy and emissions
(potentially with higher up-front capital costs) than agencies would
achieve through just base compliance with this rule.
DOE also analyzed the relative impact of the final rule on the
first cost of newly constructed Federal buildings as
[[Page 35402]]
a percentage of the overall annual cost of newly constructed Federal
commercial and high-rise buildings. In order to estimate the total cost
of construction for new Federal buildings, DOE obtained estimated
construction costs for new Federal commercial and high-rise multifamily
buildings from RS Means (2020) \27\ for the six building types analyzed
in DOE's cost-effectiveness report. These new construction costs were
weighted by the percent of Federal floorspace to develop an estimated
average cost of a new Federal building of $198 per square foot, as
shown in Table V-5. This average construction cost may be multiplied by
the overall total of 19.54 million square feet of new Federal
construction per year used in this rulemaking to estimate the annual
total cost of all new Federal commercial and high-rise multi-family
construction, which is $3.86 billion. As previously noted, first cost
savings associated with this rulemaking are estimated at $8.62 million
per year, indicating a potential cost reduction in new Federal
construction costs of 0.223 percent ($8.62 million divided by $3.86
billion).
---------------------------------------------------------------------------
\27\ RS Means. 2020. RS Means Building Construction Cost Data,
78th Ed. Construction Publishers & Consultants. Norwell, MA.
Table V-5--First Cost of Typical New Federal Building in $/ft\2\
----------------------------------------------------------------------------------------------------------------
Weighted
Federal building type Weight (%) First cost * cost
----------------------------------------------------------------------------------------------------------------
Office............................................................. 20.74 $210 $43.51
Barracks and Dormitories........................................... 14.85 217 32.18
School............................................................. 14.33 225 32.25
Service............................................................ 13.31 116 15.44
Hospital........................................................... 5.57 200 11.14
Laboratories....................................................... 4.37 200 8.73
Outpatient Healthcare Facility..................................... 3.35 220 7.38
Child Care Center.................................................. 1.18 225 2.67
Family Housing >3 Stories.......................................... 0.68 218 1.48
Border/Inspection Station.......................................... 0.49 220 1.07
Facility Security.................................................. 0.31 220 0.69
Aviation Security Related.......................................... 0.01 220 0.02
Public Facing Facility............................................. 0.05 116 0.06
Post Office........................................................ 0.01 116 0.01
Remaining Federal Stock............................................ 20.75 198 41.00
Federal Average.................................................... 100.00 198 197.62
----------------------------------------------------------------------------------------------------------------
* All building first cost data from RS Means 2020.
DOE determined that the total incremental first cost estimate for
Federal buildings (as mapped to the prototype buildings in Table V-1)
is a savings of $149.2 million (at a 3-percent discount rate) and a
savings of $91.5 million (based on a 7-percent discount rate), with an
average first cost decrease of $1.07 per square foot (at a 3-percent
discount rate) and $0.66 per square foot (at a 3-percent discount
rate).
For annualized energy cost savings, DOE used a similar approach to
that used for incremental first cost. That is, DOE developed the
national annualized energy cost savings \28\ for building types by
multiplying the average (across climate zones) energy cost savings
(determined from the same Standard 90.1 cost-effectiveness analysis) by
the fraction of the Federal sector construction volume shown in Table
V-1, and then multiplying that by the total estimate of Federal new
construction floorspace.\29\ DOE notes that it used the best publicly-
available data in its analysis, but data about the location of future
new construction or major renovations in the Federal sector are
limited. Table V-6 shows the estimated annual energy cost savings by
prototype buildings for a compliant building compared to buildings
meeting only Standard 90.1-2019. This comparison shows projected
increases in energy costs across the board because despite the
increases in equipment efficiency and overall site energy savings, the
projected difference between the cost of fossil fuels (primarily
natural gas) and purchased electricity, when evaluated at a national
level, are too high for the improvements to overcome. EIA's Annual
Energy Outlook for 2023 (AEO 2023) \30\ outlook rate projections
indicate that for the same amount of site energy consumed, electricity
is about 3.68 times more expensive than natural gas. This number is
projected to gradually fall over time to 3.34 times more expensive by
the year 2050.
---------------------------------------------------------------------------
\28\ The energy costs used were the national average energy
costs used by ASHRAE in the development of Standard 90.1-2019. To
quote the cost-effectiveness analysis report ``Energy rates used to
calculate the energy costs from the modeled energy usage were $0.98/
therm for fossil fuel and $0.1063/kWh for electricity. These rates
were used for the Standard 90.1-2019 energy analysis and derived
from the EIA data. These were the values approved by the SSPC 90.1
for cost-effectiveness for the evaluation of individual addenda
during the development of Standard 90.1-2019.''
\29\ For the Federal office building, the small and large office
prototype LCCs were weighted by estimated fraction of small and
large offices observed in the FRPP MS database over the past 10
years of construction. For the Federal education building, the
primary school prototype LCC was used. For the Federal dorm/barracks
building type, the small office, small hotel, and mid-rise apartment
prototype LCCs were averaged.
\30\ DOE--U.S. Department of Energy. 2022. Annual Energy Outlook
2023 with Projections to 2050. Washington, DC. Available at
<a href="http://www.eia.gov/outlooks/aeo/">www.eia.gov/outlooks/aeo/</a>.
---------------------------------------------------------------------------
As it did for the incremental cost analysis, DOE adjusted the 2019
energy cost savings analysis to use the same underlying economic
assumptions for its analysis of compliant building designs, including
fuel prices, fuel price escalations, labor and material costs, and the
removal of sales tax. The resulting total annualized energy cost
impacts for the affected buildings' 14.7 million square feet of annual
construction for years 2025-2029 and 2.6 million square feet of annual
construction for years 2030-2054 was estimated to be an additional cost
of $11.05 million per year (at a 3-percent discount rate) and $8.43
million per year (at a 7-percent discount rate). The annualized energy
cost impacts were estimated to be an additional $2.38 per square foot
(at a 3-percent discount rate) and an additional $1.82 per square foot
(at a 7-percent discount rate). The annual energy cost impacts are
estimated for one year of Federal commercial and high-rise multi-family
[[Page 35403]]
residential construction, and those impacts accumulate over the
evaluation period.
Table V-6--Annualized Energy Costs (2022$) for Compliant Building Design vs. Standard 90.1-2019
----------------------------------------------------------------------------------------------------------------
Annualized energy cost savings Annualized energy cost savings
Total (M$2022) intensity (M$2022/SF)
Building prototype prototype -------------------------------------------------------------------
usage (%) 3% Discount 7% Discount 3% Discount 7% Discount
rate rate rate rate
----------------------------------------------------------------------------------------------------------------
Small Office................... 14.78 ($1.63) ($1.25) ($0.35) ($0.27)
Medium Office.................. 5.53 (0.61) (0.47) (0.13) (0.10)
Large Office................... 2.26 (0.25) (0.19) (0.05) (0.04)
Stand-Alone Retail............. 8.76 (0.97) (0.74) (0.21) (0.16)
Strip Mall..................... 0.00 0.00 0.00 0.00 0.00
Primary School................. 1.02 (0.11) (0.09) (0.02) (0.02)
Secondary School............... 18.06 (2.00) (1.52) (0.43) (0.33)
Outpatient Health Care......... 5.76 (0.64) (0.49) (0.14) (0.10)
Hospital....................... 12.68 (1.40) (1.07) (0.30) (0.23)
Small Hotel.................... 1.18 (0.13) (0.10) (0.03) (0.02)
Large Hotel.................... 0.00 0.00 0.00 0.00 0.00
Quick-service Restaurant....... 0.00 0.00 0.00 0.00 0.00
Full-service Restaurant........ 0.00 0.00 0.00 0.00 0.00
Mid-Rise Apartment............. 8.95 (0.99) (0.75) (0.21) (0.16)
High-Rise Apartment............ 7.90 (0.87) (0.67) (0.19) (0.14)
Non-Refrigerated Warehouse..... 13.12 (1.45) (1.11) (0.31) (0.24)
--------------------------------------------------------------------------------
Total...................... 100.00 (11.05) (8.43) (2.38) (1.82)
----------------------------------------------------------------------------------------------------------------
Note: Negative numbers (shown in parentheses) represent an increased cost.
For LCC net savings, DOE used a similar approach to that used for
incremental first cost and first year energy cost savings. That is, DOE
developed the national annual LCC net savings \31\ for the entire rule
by multiplying the average (across climate zones) LCC net savings
(determined from the same Standard 90.1 cost-effectiveness analysis) by
the fraction of the Federal sector construction volume shown in Table
V-1, and then multiplying that result by the total estimate of Federal
new construction floorspace.\32\ DOE only used the climate zones per
table V-3 to help further estimate first cost of equipment given
variances in equipment type requirements per building type per climate
zone. Table V-7 shows annual LCC net savings by prototype buildings for
the compliant buildings compared to buildings meeting only Standard
90.1-2019. As DOE did for the incremental cost analysis, DOE adjusted
the 2019 LCC analysis to use the same underlying economic assumptions
as the compliant buildings, including fuel prices, fuel price
escalations, labor and material costs, and the removal of sales tax.
The resulting total LCC net savings for 14.7 million square feet of
annual construction for years 2025-2029 and 2.6 million square feet of
annual construction for years 2030-2054 was estimated to be a cost of
$54.87 million (at a 3-percent discount rate) and a savings of $0.089
million (based on a 7 percent discount rate). The average LCC net
impacts in year 1 was estimated to be a cost o- $2.97 million (at a 3
percent discount rate) and a savings of $0.01 million (based on a 7-
percent discount rate. The annual LCC savings are for one year of
Federal commercial and high-rise multi-family residential construction,
and those savings would accumulate over the LCC evaluation period. For
the purpose of this analysis, DOE relied on a 30-year period.\33\
---------------------------------------------------------------------------
\31\ The energy costs used were the national average energy
costs used by ASHRAE in the development of Standard 90.1-2019. To
quote the cost-effectiveness analysis report ``Energy rates used to
calculate the energy costs from the modeled energy usage were $0.98/
therm for fossil fuel and $0.1063/kWh for electricity. These rates
were used for the Standard 90.1-2019 energy analysis and derived
from the EIA data. These were the values approved by the SSPC 90.1
for cost-effectiveness for the evaluation of individual addenda
during the development of Standard 90.1-2019.''
\32\ For the Federal office building, the small and large office
prototype LCCs were weighted by estimated fraction of small and
large offices observed in the FRPP MS database over the past 10
years of construction. For the Federal education building, the
primary school prototype LCC was used. For the Federal dorm/barracks
building type, the small office, small hotel, and mid-rise apartment
prototype LCCs were averaged.
\33\ Lavappa, P and J Kneifel. 2021. Energy Price Indices and
Discount Factors for Life-Cycle Cost Analysis-2021 Annual Supplement
to NIST Handbook 135.
Table V-7--Annual Net Life-Cycle Cost (LCC) (2022$) for Compliant Building Design vs. Standard
90.1-2019
----------------------------------------------------------------------------------------------------------------
Cumulative LCC cost savings, Annualized LCC cost savings,
Total (M$2022) annualized (M$2022)
Building prototype prototype -------------------------------------------------------------------
usage 3% Discount 7% Discount 3% Discount 7% Discount
rate rate rate rate
----------------------------------------------------------------------------------------------------------------
Small Office................... 14.78 ($8.11) $0.013 ($0.44) $0.0015
Medium Office.................. 5.53 (3.03) 0.005 (0.16) 0.0006
Large Office................... 2.26 (1.24) 0.002 (0.07) 0.0002
Stand-Alone Retail............. 8.76 (4.81) 0.008 (0.26) 0.0009
[[Page 35404]]
Strip Mall..................... 0.00 0.00 0.000 0.00 0.0000
Primary School................. 1.02 (0.56) 0.001 (0.03) 0.0001
Secondary School............... 18.06 (9.91) 0.016 (0.54) 0.0018
Outpatient Health Care......... 5.76 (3.16) 0.005 (0.17) 0.0006
Hospital....................... 12.68 (6.96) 0.011 (0.38) 0.0013
Small Hotel.................... 1.18 (0.65) 0.001 (0.04) 0.0001
Large Hotel.................... 0.00 0.00 0.000 0.00 0.0000
Quick-service Restaurant....... 0.00 0.00 0.000 0.00 0.0000
Full-service Restaurant........ 0.00 0.00 0.000 0.00 0.0000
Mid-Rise Apartment............. 8.95 (4.91) 0.008 (0.27) 0.0009
High-Rise Apartment............ 7.90 (4.33) 0.007 (0.23) 0.0008
Non-Refrigerated Warehouse..... 13.12 (7.20) 0.012 (0.39) 0.0013
--------------------------------------------------------------------------------
Total...................... 100.00 (54.87) 0.089 (2.97) 0.0100
----------------------------------------------------------------------------------------------------------------
Note: Negative numbers (shown in parentheses) represent an increased cost or disbenefit.
DOE calculated the net present value (``NPV'') of the change in
equipment cost and reduced operating cost associated with the
difference between the compliant case and Standard 90.1-2019. The NPV
is the value in the present of a time-series of costs and savings,
equal to the present value of savings in operating cost minus the
present value of the increased total equipment cost.
DOE determined the total increased equipment cost for each year of
the analysis period (2024-2053) using the incremental construction cost
described previously. DOE determined the present value of operating
cost savings for each year from the beginning of the analysis period to
the year when all Federal buildings constructed by 2054 have been
retired, assuming a 30-year lifetime of the building.
The average annual operating cost includes the costs for energy,
repair, or replacement of building components (e.g., heating and
cooling equipment, lighting, and envelope measures), and maintenance of
the building. DOE determined the per-unit annual increase in operating
cost based on the differences in energy costs plus replacement and
maintenance cost savings, which were calculated in the underlying cost-
effectiveness analysis by DOE's Building Energy Codes Program. While
DOE used the methodology and prices described above to calculate first
year energy cost savings and LCC net savings, for the NPV calculations,
DOE determined the per-unit annual savings in operating cost by
multiplying the per square foot annual electricity and natural gas
savings in energy consumption by the appropriate energy price from AEO
2023. DOE forecasted energy prices based on projected average annual
price changes in AEO 2023 to develop the operating cost savings through
the analysis period.
DOE uses national discount rates to calculate national NPV. DOE
estimated NPV using both a 3-percent and a 7-percent real discount
rate, in accordance with the Office of Management and Budget's guidance
to Federal agencies on the development of regulatory analysis,
particularly section E therein: Identifying and Measuring Benefits and
Costs.\34\ The NPV is the sum over time of the discounted net savings.
---------------------------------------------------------------------------
\34\ U.S. Office of Management and Budget, Circular A-4:
Regulatory Analysis (Sept. 17, 2003) (Available at:
<a href="http://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf">www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf</a> (Last accessed Oct. 23, 2023).
---------------------------------------------------------------------------
The present value of increased equipment costs is the annual total
cost increase in each year (the difference between the final rule and
Standard 90.1-2019), discounted to the present, and summed throughout
the analysis period (2024 through 2053) plus 30-year lifetime. Because
new construction is held constant through the analysis period, the
installed cost is constant.
The present value of savings in operating cost is the annual
savings in operating cost (the difference between final rule and
Standard 90.1-2019), discounted to the present and summed through the
analysis period (2024 through 2053) plus 30-year lifetime. Savings are
decreases in operating cost associated with the higher energy
efficiency associated with buildings designed to the final rule
compared to Standard 90.1-2019. Total annual savings in operating cost
are the savings per square foot multiplied by the number of square feet
that survive in a particular year through the lifetime of the buildings
constructed in the last year of the analysis period.
B. Emissions Analysis
The emissions analysis consists of two components. The first
component estimates the effect of potential Federal building energy
standards on power sector and site (where applicable) combustion
emissions of CO<INF>2</INF>, NO<INF>X</INF>, SO<INF>2</INF>, and Hg.
The second component estimates the impacts of potential Federal
building energy standards on emissions of two additional greenhouse
gases, CH<INF>4</INF> and N<INF>2</INF>O, as well as the changes to
emissions of other gases due to ``upstream'' activities in the fuel
production chain. These upstream activities comprise extraction,
processing, and transporting fuels to the site of combustion.
The analysis of electric power sector emissions of CO<INF>2</INF>,
NO<INF>X</INF>, SO<INF>2</INF>, and Hg uses emissions factors intended
to represent the marginal impacts of the change in electricity
consumption associated with Federal building energy standards. The
methodology is based on results published for the AEO 2023, including a
set of side cases that implement a variety of efficiency-related
policies. The analysis presented in this notice uses projections from
AEO 2023. Power sector emissions of CH<INF>4</INF> and N<INF>2</INF>O
[[Page 35405]]
from fuel combustion are estimated using Emission Factors for
Greenhouse Gas Inventories published by the Environmental Protection
Agency (``EPA'').\35\
---------------------------------------------------------------------------
\35\ Available at <a href="http://www.epa.gov/sites/production/files/2023-04/documents/emission-factors_apr2023.pdf">www.epa.gov/sites/production/files/2023-04/documents/emission-factors_apr2023.pdf</a> (last accessed July 12,
2023).
---------------------------------------------------------------------------
To demonstrate this final rule's effects under the Biden-
Administration clean-electricity goals, DOE analyzed an additional case
where the future grid emission factors were assumed to follow a ``100%
reduction by 2035'' (100 by 2035) profile as utilized in the National
Renewable Energy Lab's 100% Clean Electricity by 2035 Study and as
defined in NREL's ``Cambium 2022 Scenario Descriptions and
Documentation'' report \36\ detailed in the accompanying TSD for this
final rule. This case represents a change in national electricity
generation that assumes national power sector CO<INF>2</INF> emissions
reach 100-percent below 2005 levels by 2035. This more aggressive case
results in the final rule producing immediate decreases in
CO<INF>2</INF>e gas emissions on a yearly basis (starting in the first
analysis year of 2025). Details of this analysis can be found in
Chapter 1 of the TSD for this final rule.
---------------------------------------------------------------------------
\36\ Available at <a href="http://www.nrel.gov/analysis/100-percent-clean-electricity-by-2035-study.html">www.nrel.gov/analysis/100-percent-clean-electricity-by-2035-study.html</a> (last accessed January 19, 2024).
---------------------------------------------------------------------------
Until 2030, the on-site operation of construction subject to this
final rule allows combustion of fossil fuels and results in emissions
of CO<INF>2</INF>, NO<INF>X</INF>, SO<INF>2</INF>, CH<INF>4</INF>, and
N<INF>2</INF>O where these products are used. Site emissions of these
gases were estimated using Emission Factors for Greenhouse Gas
Inventories and, for NO<INF>X</INF> and SO<INF>2</INF> emissions
intensity factors from an EPA publication.\37\
---------------------------------------------------------------------------
\37\ U.S. Environmental Protection Agency. External Combustion
Sources. In Compilation of Air Pollutant Emission Factors. AP-42.
Fifth Edition. Volume I: Stationary Point and Area Sources. Chapter
1. Available at <a href="http://www.epa.gov/air-emissions-factors-and-quantification/ap-42-compilation-air-emissions-factors">www.epa.gov/air-emissions-factors-and-quantification/ap-42-compilation-air-emissions-factors</a> (last
accessed April 15, 2022).
---------------------------------------------------------------------------
Full fuel cycle upstream emissions, which include emissions from
fuel combustion during extraction, processing, and transportation of
fuels, and ``fugitive'' emissions (direct leakage to the atmosphere) of
CH<INF>4</INF> and CO<INF>2</INF>, are estimated based on the
methodology described in Chapter 1 of the TSD.
The emissions intensity factors are expressed in terms of physical
units per MWh or MMBtu of site energy savings. For power sector
emissions, specific emissions intensity factors are calculated by
sector and end use. Total emissions changes are estimated using the
energy savings calculated in the national impact analysis with energy
savings derived from a load shifting modeling analysis of the Standard
90.1-2019 prototype models.
1. Air Quality Regulations Incorporated in DOE's Analysis
DOE's analysis for the electric power sector reflects the AEO,
which incorporates the projected impacts of existing air quality
regulations on emissions. AEO 2023 reflects, to the extent possible,
laws and regulations adopted through mid-November 2022, including the
emissions control programs discussed in the following paragraphs and
the Inflation Reduction Act.\38\
---------------------------------------------------------------------------
\38\ For further information, see the Assumptions to AEO 2023
report that sets forth the major assumptions used to generate the
projections in the Annual Energy Outlook. Available at <a href="http://www.eia.gov/outlooks/aeo/assumptions/">www.eia.gov/outlooks/aeo/assumptions/</a>.
---------------------------------------------------------------------------
SO<INF>2</INF> emissions from affected electric generating units
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions
cap on SO<INF>2</INF> for affected EGUs in the 48 contiguous States and
the District of Columbia (``D.C.''). 42 U.S.C. 7651 et seq.
SO<INF>2</INF> emissions from numerous States in the eastern half of
the United States are also limited under the Cross-State Air Pollution
Rule (``CSAPR''). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these
States to reduce certain emissions, including annual SO<INF>2</INF>
emissions, and went into effect as of January 1, 2015. The AEO 2023
incorporates implementation of CSAPR, including the update to the CSAPR
ozone season program emission budgets and target dates issued in 2016.
81 FR 74504 (Oct. 26, 2016). Compliance with CSAPR is flexible among
EGUs and is enforced through the use of tradable emissions allowances.
Under existing EPA regulations, for states subject to SO<INF>2</INF>
emissions limits under CSAPR, any excess SO<INF>2</INF> emissions
allowances resulting from the lower electricity demand caused by the
adoption of an efficiency standard could be used to permit offsetting
increases in SO<INF>2</INF> emissions by another regulated EGU.
However, beginning in 2016, SO<INF>2</INF> emissions began to fall
as a result of the Mercury and Air Toxics Standards (``MATS'') for
power plants. 77 FR 9304 (Feb. 16, 2012). The final MATS rule
establishes power plant emission standards for mercury, acid gases, and
non-mercury metallic toxic pollutants. Because of the emissions
reductions under the MATS, it is unlikely that excess SO<INF>2</INF>
emissions allowances resulting from the lower electricity demand would
be needed or used to permit offsetting increases in SO<INF>2</INF>
emissions by another regulated EGU. DOE estimated SO<INF>2</INF>
emissions impacts using emissions factors based on AEO 2023.
CSAPR also established limits on NO<INF>X</INF> emissions for
numerous States in the eastern half of the United States. Federal
building energy standards would have little effect on NO<INF>X</INF>
emissions in those States covered by CSAPR emissions limits if excess
NO<INF>X</INF> emissions allowances resulting from the lower
electricity demand could be used to permit offsetting increases in
NO<INF>X</INF> emissions from other EGUs. In such case, NO<INF>X</INF>
emissions would remain near the limit even if electricity generation
goes down. Depending on the configuration of the power sector in the
different regions and the need for allowances, however, NO<INF>X</INF>
emissions might not remain at the limit in the case of lower
electricity demand. That would mean that Federal building energy
standards might reduce NO<INF>X</INF> emissions in covered States.
Despite this possibility, DOE has chosen to be conservative in its
analysis and has maintained the assumption that Federal building energy
standards will not reduce NO<INF>X</INF> emissions in States covered by
CSAPR. Federal building energy standards would be expected to reduce
NO<INF>X</INF> emissions in the States not covered by CSAPR. DOE used
AEO 2023 data to derive NO<INF>X</INF> emissions factors for the group
of States not covered by CSAPR.
The MATS limit mercury emissions from power plants, but they do not
include emissions caps and, as such, DOE's Federal building energy
standards would be expected to slightly reduce Hg emissions. DOE
estimated mercury emissions reduction using emissions factors based on
AEO 2023, which incorporates the MATS.
C. Monetizing Emissions Impacts
As part of the development of this final rule, for the purpose of
complying with the requirements of Executive Order 12866, DOE
considered the estimated monetary benefits from the reduced emissions
of CO<INF>2</INF>, CH<INF>4</INF>, N<INF>2</INF>O, NO<INF>X</INF>, and
SO<INF>2</INF> that are expected to result from the energy performance
standards considered. This section summarizes the basis for the values
used for monetizing the emissions benefits and presents the values
considered in this final rule.
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
Interagency Working Group on the Social Cost of
[[Page 35406]]
Greenhouse Gases (``IWG'') (``February 2021 SC-GHG TSD'').
1. Monetization of Greenhouse Gas Emissions
DOE estimates the monetized benefits of the reductions in emissions
of CO<INF>2</INF>, CH<INF>4</INF>, and N<INF>2</INF>O by using a
measure of the social cost (``SC'') of each pollutant (e.g., SC-
CO<INF>2</INF>). These estimates represent the monetary value of the
net harm to society associated with a marginal increase in emissions of
these pollutants in a given year, or the benefit of avoiding that
increase. These estimates are intended to include (but are not limited
to) climate-change-related changes in net agricultural productivity,
human health, property damages from increased flood risk, disruption of
energy systems, risk of conflict, environmental migration, and the
value of ecosystem services.
DOE exercises its own judgment in presenting monetized climate
benefits as directed by applicable Executive orders, and DOE would
reach the same conclusion presented in this rule in the absence of the
social cost of greenhouse gases. That is, the social costs of
greenhouse gases, whether measured using the February 2021 interim
estimates presented by the Interagency Working Group on the Social Cost
of Greenhouse Gases or by another means, did not affect the rule
ultimately finalized by DOE because section 433 of EISA specifically
directs DOE to establish regulations that require certain new Federal
buildings and Federal buildings undergoing major renovations to reduce
their on-site fossil fuel-generated energy consumption by specific
amounts and by specific dates; that is, the achievable emissions
reductions, and their monetized benefits, would not have changed the
energy-consumption reductions required by this rule.
DOE estimated the global social benefits of CO<INF>2</INF>,
CH<INF>4</INF>, and N<INF>2</INF>O reductions using SC-GHG values that
were based on the interim values presented in the February 2021 SC-GHG
TSD. The SC-GHG is the monetary value of the net harm to society
associated with a marginal increase in emissions in a given year, or
the benefit of avoiding that increase. In principle, the SC-GHG
includes the value of all climate change impacts, including (but not
limited to) changes in net agricultural productivity, human health
effects, property damage from increased flood risk and natural
disasters, disruption of energy systems, risk of conflict,
environmental migration, and the value of ecosystem services. The SC-
GHG therefore, reflects the societal value of reducing emissions of the
gas in question by one metric ton. The SC-GHG is the theoretically
appropriate value to use in conducting benefit-cost analyses of
policies that affect CO<INF>2</INF>, N<INF>2</INF>O and CH<INF>4</INF>
emissions. As a member of the IWG involved in the development of the
February 2021 SC-GHG TSD, DOE agreed that the interim SC-GHG estimates
represent the most appropriate estimate of the SC-GHG until revised
estimates were developed reflecting the latest, peer-reviewed science.
See 87 FR 78382, 78406-78408 for discussion of the development and
details of the IWG SC-GHG estimates.
There are a number of limitations and uncertainties associated with
the SC-GHG estimates. First, the current scientific and economic
understanding of discounting approaches suggests discount rates
appropriate for intergenerational analysis in the context of climate
change are likely to be less than 3-percent, near 2-percent or lower.
Second, the IAMs used to produce these interim estimates do not include
all of the important physical, ecological, and economic impacts of
climate change recognized in the climate change literature and the
science underlying their ``damage functions''--i.e., the core parts of
the IAMs that map global mean temperature changes and other physical
impacts of climate change into economic (both market and nonmarket)
damages--lags behind the most recent research. For example, limitations
include the incomplete treatment of catastrophic and non-catastrophic
impacts in the integrated assessment models, their incomplete treatment
of adaptation and technological change, the incomplete way in which
inter-regional and intersectoral linkages are modeled, uncertainty in
the extrapolation of damages to high temperatures, and inadequate
representation of the relationship between the discount rate and
uncertainty in economic growth over long time horizons. Likewise, the
socioeconomic and emissions scenarios used as inputs to the models do
not reflect new information from the last decade of scenario generation
or the full range of projections. The modeling limitations do not all
work in the same direction in terms of their influence on the SC-
CO<INF>2</INF> estimates. However, as discussed in the February 2021
TSD, the IWG has recommended that, taken together, the limitations
suggest that the interim SC-GHG estimates used in this rule likely
underestimate the damages from GHG emissions. DOE concurs with this
assessment.
DOE's derivations of the SC-GHGs (i.e., SC-CO<INF>2,</INF> SC-
N<INF>2</INF>O, and SC-CH<INF>4</INF>) values used for this rule are
discussed in the following sections, and the results of DOE's analyses
estimating the benefits and disbenefits of the changes in emissions of
these pollutants are presented in section VI.A. of this document.
a. Social Cost of Carbon
The SC-CO<INF>2</INF> values used for this rule were based on the
values developed for the February 2021 SC-GHG TSD, which are shown in
Table V-8 in five-year increments from 2020 to 2050. The set of annual
values that DOE used, which was adapted from estimates published by
EPA,\39\ is presented in the final rule TSD. These estimates are based
on methods, assumptions, and parameters identical to the estimates
published by the IWG, which were based on EPA modeling, and include
values for 2051 to 2070. DOE expects additional climate benefits to
accrue for products still operating after 2070, but a lack of available
SC-CO<INF>2</INF> estimates for emissions years beyond 2070 prevents
DOE from monetizing these potential benefits in this analysis.
---------------------------------------------------------------------------
\39\ See EPA, Revised 2023 and Later Model Year Light-Duty
Vehicle GHG Emissions Standards: Regulatory Impact Analysis,
Washington, DC, December 2021. Available at <a href="http://nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1013ORN.pdf">nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1013ORN.pdf</a> (last accessed February 21, 2023).
Table V-8--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050 (2020$ per Metric Ton CO2)
----------------------------------------------------------------------------------------------------------------
Discount rate
---------------------------------------------------------
Year 5% 3% 2.5% 3%
---------------------------------------------------------
Average Average Average 95th percentile
----------------------------------------------------------------------------------------------------------------
2020.................................................. 14 51 76 152
2025.................................................. 17 56 83 169
[[Page 35407]]
2030.................................................. 19 62 89 187
2035.................................................. 22 67 96 206
2040.................................................. 25 73 103 225
2045.................................................. 28 79 110 242
2050.................................................. 32 85 116 260
----------------------------------------------------------------------------------------------------------------
DOE multiplied the CO<INF>2</INF> emissions reduction estimated for
each year by the SC-CO<INF>2</INF> value for that year in each of the
four cases. DOE adjusted the values to 2022$ using the implicit price
deflator for gross domestic product (``GDP'') from the Bureau of
Economic Analysis. To calculate a present value of the stream of
monetary values, DOE discounted the values in each of the four cases
using the specific discount rate that had been used to obtain the SC-
CO<INF>2</INF> values in each case.
b. Social Cost of Methane and Nitrous Oxide
The SC-CH<INF>4</INF> and SC-N<INF>2</INF>O values used for this
rule were based on the values developed for the February 2021 SC-GHG
TSD. Table V-9 shows the updated sets of SC-CH<INF>4</INF> and SC-
N<INF>2</INF>O estimates from the latest interagency update in 5-year
increments from 2020 to 2050. The full set of annual values used is
presented in the final rule TSD. To capture the uncertainties involved
in regulatory impact analysis, DOE has determined it is appropriate to
include all four sets of SC-CH<INF>4</INF> and SC-N<INF>2</INF>O
values, as recommended by the IWG. DOE derived values after 2050 using
the approach described above for the SC-CO<INF>2</INF>.
Table V-9--Annual SC-CH4 and SC-N2O Values From 2021 Interagency Update, 2020-2050 (2020$ per Metric Ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
SC-CH4 Discount rate and statistic SC-N2O Discount rate and statistic
-------------------------------------------------------------------------------------------------------------------
Year 5% 3% 2.5% 3% 5% 3% 2.5% 3%
-------------------------------------------------------------------------------------------------------------------
Average Average Average 95th percentile Average Average Average 95th percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020................................ 670 1500 2000 3900 5800 18000 27000 48000
2025................................ 800 1700 2200 4500 6800 21000 30000 54000
2030................................ 940 2000 2500 5200 7800 23000 33000 60000
2035................................ 1100 2200 2800 6000 9000 25000 36000 67000
2040................................ 1300 2500 3100 6700 10000 28000 39000 74000
2045................................ 1500 2800 3500 7500 12000 30000 42000 81000
2050................................ 1700 3100 3800 8200 13000 33000 45000 88000
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE multiplied the CH<INF>4</INF> and N<INF>2</INF>O emissions
change estimated for each year by the SC-CH<INF>4</INF> and SC-
N<INF>2</INF>O estimates for that year in each of the cases. DOE
adjusted the values to 2022$ using the implicit price deflator for GDP
from the Bureau of Economic Analysis. To calculate a present value of
the stream of monetary values, DOE discounted the values in each of the
cases using the specific discount rate that had been used to obtain the
SC-CH<INF>4</INF> and SC-N<INF>2</INF>O estimates in each case.
c. Sensitivity Analysis Using Updated 2023 SC-GHG Estimates
In December 2023, EPA issued a new set of SC-GHG estimates (2023
SC-GHG) in connection with a final rulemaking under the Clean Air
Act.\40\ These estimates incorporate recent research and address
recommendations of the National Academies (2017) and comments from a
2023 external peer review of the accompanying technical report. For
this rulemaking, DOE used these updated 2023 SC-GHG values to conduct a
sensitivity analysis of the value of GHG emissions reductions
associated with alternative standards for energy standards for Federal
buildings. This sensitivity analysis provides an expanded range of
potential climate benefits associated with energy standards for Federal
buildings. The final year of EPA's new 2023 SCGHG estimates is 2080;
therefore, DOE did not monetize the climate benefits of GHG emissions
reductions occurring after 2080. The overall climate benefits are
greater when using the higher, updated 2023 SC-GHG estimates, compared
to the climate benefits using the older IWG SC-GHG estimates. The
results of the sensitivity analysis are presented in appendix 2A of the
final rule TSD.
---------------------------------------------------------------------------
\40\ See <a href="http://www.epa.gov/environmental-economics/scghg">www.epa.gov/environmental-economics/scghg</a>.
---------------------------------------------------------------------------
2. Monetization of Other Emissions Impacts
For the final rule, DOE estimated the monetized value of
NO<INF>X</INF> and SO<INF>2</INF> emissions changes from electricity
generation using benefit-per-ton estimates for that sector from the
EPA's Benefits Mapping and Analysis Program.\41\ DOE used EPA's values
for PM<INF>2.5</INF>-related benefits associated with NO<INF>X</INF>
and SO<INF>2</INF> and for ozone-related benefits associated with
NO<INF>X</INF> for 2025, 2030, and 2040, calculated with 3-percent and
7-percent discount rates.
[[Page 35408]]
DOE used linear interpolation to define values for the years not given
in the 2025 to 2040 period; for years beyond 2050 the values are held
constant (rather than extrapolated) to be conservative. DOE combined
the EPA regional benefit-per-ton estimates with regional information on
electricity consumption and emissions from AEO 2023 to define weighted-
average national values for NO<INF>X</INF> and SO<INF>2</INF>.
---------------------------------------------------------------------------
\41\ U.S. Environmental Protection Agency. Estimating the
Benefit per Ton of Reducing Directly-Emitted PM<INF>2.5</INF>,
PM<INF>2.5</INF> Precursors and Ozone Precursors from 21 Sectors.
Available at <a href="http://www.epa.gov/benmap/estimating-benefit-ton-reducing-directly-emitted-pm25-pm25-precursors-andand-ozone-precursors">www.epa.gov/benmap/estimating-benefit-ton-reducing-directly-emitted-pm25-pm25-precursors-andand-ozone-precursors</a>.
---------------------------------------------------------------------------
DOE also estimated the monetized value of NO<INF>X</INF> and
SO<INF>2</INF> emissions changes from site use of natural gas in
buildings impacted by this rule using benefit-per-ton estimates from
the EPA's Benefits Mapping and Analysis Program. Although none of the
sectors covered by EPA refers specifically to residential and
commercial buildings, the sector called ``area sources'' would be a
reasonable proxy for Federal buildings.\42\ The EPA document provides
high and low estimates for 2025 and 2030 at 3- and 7-percent discount
rates.\43\ DOE used the same linear interpolation and extrapolation as
it did with the values for electricity generation.
---------------------------------------------------------------------------
\42\ ``Area sources'' represents all emission sources for which
states do not have exact (point) locations in their emissions
inventories. Because exact locations would tend to be associated
with larger sources, ``area sources'' would be fairly representative
of small dispersed sources like homes, businesses and office
buildings.
\43\ ``Area sources'' are a category in the 2018 document from
EPA, but are not used in the 2021 document cited previously. See:
<a href="http://www.epa.gov/sites/default/files/2018-02/documents/sourceapportionmentbpttsd_2018.pdf">www.epa.gov/sites/default/files/2018-02/documents/sourceapportionmentbpttsd_2018.pdf</a>.
---------------------------------------------------------------------------
DOE multiplied the emissions changes (in tons) in each year by the
associated $/ton values, and then discounted each series using discount
rates of 3 percent and 7 percent as appropriate.
D. Public Comment
DOE received several comments in response to the 2014 and 2022
SNOPRs relating to methodology. These comments covered potential
exclusions for thermal and electrical energy storage systems, basing
this rule on an agency portfolio (as opposed to on a building-by-
building basis), potential credits for nuclear and hydropower
electricity, and suggesting a need to rewrite the main equation in the
rule.
In response to the comments about the role of energy storage
systems in limiting fossil fuel generated energy consumption from
purchased electricity, DOE's decision in the final rule to focus only
on on-site combustion of fossil fuels makes discussion of electrical
energy storage irrelevant. For example, if an agency chooses to burn
fossil fuels to store heat in a thermal energy storage system, that
fossil fuel use would be counted as part of the consumption of the
building. DOE also notes that this rule applies to individual buildings
based on statutory requirements, so DOE cannot change this rule to a
portfolio approach.
DOE also notes that credits for nuclear and hydropower electricity
are no longer relevant to this final rule and that the governing
equation in this final rule has been extensively rewritten and
simplified in accordance with the change of scope to focus on only on-
site fossil fuel use.
E. Conclusion
Table V-10 provides DOE's estimate of cumulative emissions changes
expected to result from this rulemaking. DOE recognizes exchanging on-
site fossil fuel generated energy for reliance on the electric grid,
which may still be generating energy with fossil fuels, does not
necessarily lead to an immediate reduction in emissions of GHGs and
SO<INF>2</INF> in all cases. In some areas, there will likely be an
immediate reduction in GHG emissions, while in other areas, emissions
will fall over time as the amount of clean energy on the grid
increases. By ensuring that Federal buildings are designed--either from
the ground up, or when being renovated--to reduce fossil fuel use, the
rule ensures that long-term, as the grid integrates more renewable
energies, emissions will be reduced.
Table V-10--Cumulative Physical Emissions Changes in 2025-2084
------------------------------------------------------------------------
Pollutant Total
------------------------------------------------------------------------
Primary (plant) Emissions Changes
------------------------------------------------------------------------
CO2 (million metric tons)............................... 0.7
Hg (tons)............................................... -0.0028
NOX (thousand tons)..................................... 1.1
SO2 (thousand tons)..................................... -0.4
CH4 (thousand tons)..................................... -0.1
N2O (thousand tons)..................................... -0.01
------------------------------------------------------------------------
Upstream Emissions Changes
------------------------------------------------------------------------
CO2 (million metric tons)............................... 0.1
Hg (tons)............................................... -0.00001
NOX (thousand tons)..................................... 2.3
SO2 (thousand tons)..................................... -0.01
CH4 (thousand tons)..................................... 15.8
N2O (thousand tons)..................................... -0.0001
------------------------------------------------------------------------
Total Emissions Changes
------------------------------------------------------------------------
CO2 (million metric tons)............................... 0.9
Hg (tons)............................................... -0.003
NOX (thousand tons)..................................... 3.3
SO2 (thousand tons)..................................... -0.4
CH4 (thousand tons)..................................... 15.8
N2O (thousand tons)..................................... -0.009
------------------------------------------------------------------------
Negative values refer to an increase in emissions.
Numbers may not sum due to rounding.
[[Page 35409]]
Table V-11 presents the present value of monetized climate
disbenefits associated with the CO<INF>2</INF> emissions changes using
the full set of SC-CO<INF>2</INF> estimates described previously.
Table V-11--Present Value of Monetized Climate Benefits From Changes in CO2 Emissions for Construction Impacts
2025-2054 With a 30-Year Lifetime
----------------------------------------------------------------------------------------------------------------
SC-CO2 Case
-------------------------------------------------------
Discount rate and statistics
-------------------------------------------------------
5% 3% 2.5% 3%
-------------------------------------------------------
95th
Average Average Average percentile
----------------------------------------------------------------------------------------------------------------
Million 2022$
----------------------------------------------------------------------------------------------------------------
Total................................................... 7.0 31.6 50.1 95.7
----------------------------------------------------------------------------------------------------------------
Note: Climate benefits and disbenefits associated with CO2 emissions changes occur over 2025-2070. DOE expects
additional climate impacts to accrue from CO2 emissions changes post 2070, but a lack of available SC-CO2
estimates for years beyond 2070 prevents DOE from monetizing these additional impacts in this analysis.
Table V-12 present
[…truncated; see source link]Indexed from Federal Register on May 1, 2024.
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