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Rule2024-23907

Energy Conservation Program: Energy Conservation Standards for Consumer Furnace Fans

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Published

October 18, 2024

Effective

November 18, 2024

Issuing agencies

Energy Department

Abstract

The Energy Policy and Conservation Act, as amended ("EPCA"), prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including consumer furnace fans. EPCA also requires the U.S. Department of Energy ("DOE") to periodically review its existing standards to determine whether more-stringent, amended standards would be technologically feasible and economically justified, and would result in significant energy savings. In this final determination, DOE has determined the energy conservation standards for consumer furnace fans do not need to be amended.

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[Federal Register Volume 89, Number 202 (Friday, October 18, 2024)]
[Rules and Regulations]
[Pages 83990-84026]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-23907]

[[Page 83989]]

Vol. 89

Friday,

No. 202

October 18, 2024

Part III

Department of Energy

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10 CFR Part 430

Energy Conservation Program: Energy Conservation Standards for Consumer
Furnace Fans; Final Rule

Federal Register / Vol. 89 , No. 202 / Friday, October 18, 2024 /
Rules and Regulations

[[Page 83990]]

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DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2021-BT-STD-0029]
RIN 1904-AE64

Energy Conservation Program: Energy Conservation Standards for
Consumer Furnace Fans

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

ACTION: Final determination.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''),
prescribes energy conservation standards for various consumer products
and certain commercial and industrial equipment, including consumer
furnace fans. EPCA also requires the U.S. Department of Energy
(``DOE'') to periodically review its existing standards to determine
whether more-stringent, amended standards would be technologically
feasible and economically justified, and would result in significant
energy savings. In this final determination, DOE has determined the
energy conservation standards for consumer furnace fans do not need to
be amended.

DATES: The effective date of this final determination is November 18,
2024.

ADDRESSES: The docket for this activity, which includes Federal
Register notices, public meeting attendee lists and transcripts,
comments, and other supporting documents/materials, is available for
review at <a href="http://www.regulations.gov">www.regulations.gov</a>. All documents in the docket are listed
in the <a href="http://www.regulations.gov">www.regulations.gov</a> index. However, not all documents listed in
the index may be publicly available, such as information that is exempt
from public disclosure.
The docket web page can be found at <a href="http://www.regulations.gov/docket/EERE-2021-BT-STD-0029">www.regulations.gov/docket/EERE-2021-BT-STD-0029</a>. The docket web page contains instructions on how
to access all documents, including public comments, in the docket.

FOR FURTHER INFORMATION CONTACT:
Ms. Julia Hegarty, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Office, EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone:
(240) 597-6737 Email: <a href="/cdn-cgi/l/email-protection#83c2f3f3efeae2ede0e6d0f7e2ede7e2f1e7f0bfe2a3ebf1e6e5be" mailto:Questions@ee.doe.gov">[email&#160;protected]</a>">ApplianceStandards<a href="/cdn-cgi/l/email-protection#84d5f1e1f7f0edebeaf7c4e1e1aae0ebe1aae3ebf2">[email&#160;protected]</a></a>.
Mr. Eric Stas, U.S. Department of Energy, Office of the General
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121.
Telephone: (202) 586-4798. Email: <a href="/cdn-cgi/l/email-protection#6421160d074a37100517240c154a000b014a030b12">[email&#160;protected]</a>.
For further information on how to review the docket, contact the
Appliance and Equipment Standards Program staff at (202) 287-1445 or by
email: <a href="/cdn-cgi/l/email-protection#24655454484d454a47417750454a40455640571845044c56414219" mailto:Questions@ee.doe.gov">[email&#160;protected]</a>">ApplianceStandards<a href="/cdn-cgi/l/email-protection#6c3d19091f180503021f2c090942080309420b031a">[email&#160;protected]</a></a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Final Determination
II. Introduction
A. Authority
B. Background
1. Current Standards
2. Current Rulemaking History
III. General Discussion and Rationale
A. General Comments
B. Product Classes and Scope of Coverage
C. Test Procedure
D. Technological Feasibility
1. General Considerations
2. Maximum Technologically Feasible Levels
E. Energy Savings
1. Determination of Savings
2. Significance of Savings
F. Cost-Effectiveness
G. Further Considerations
1. Economic Impact on Manufacturers and Consumers
2. Savings in Operating Costs Compared To Increase in Price
3. Energy Savings
4. Lessening of Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need for National Energy Conservation
7. Other Factors
IV. Methodology and Discussion of Related Comments
A. Market and Technology Assessment
1. Product Classes and Scope of Coverage
2. Technology Options
3. Impact From Other Rulemakings
4. Screening Analysis
a. Screened-Out Technologies
b. Remaining Technologies
B. Engineering and Cost Analysis
1. Efficiency Analysis
a. Baseline Efficiency
b. Intermediate Efficiency Levels
c. Maximum Technology (``Max-Tech'') Efficiency Levels
d. Summary of Efficiency Levels Analyzed
2. Cost Analysis
a. Teardown Analysis
b. Cost Estimation Method
3. Cost-Efficiency Results
C. Markups Analysis
D. Energy Use Analysis
E. Life-Cycle Cost and Payback Period Analysis
1. Product Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Maintenance and Repair Costs
6. Product Lifetime
7. Discount Rates
8. Energy-Efficiency Distribution in the No-New-Standards Case
9. Payback Period Analysis
F. Shipments Analysis
G. National Impact Analysis
1. Product Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
H. Other Factors Related to Backward-Inclined Impellers
V. Analytical Results and Conclusions
A. Economic Impacts on Individual Consumers
B. National Impact Analysis
1. National Energy Savings
2. Net Present Value of Consumer Costs and Benefits
C. Final Determination
1. BPM Motor With Backward-Inclined Impellers
2. BPM Motors With Forward-Inclined Impellers
3. Summary
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 of 1995
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. Review Under the Information Quality Bulletin for Peer Review
M. Congressional Notification
VII. Approval of the Office of the Secretary

I. Synopsis of the Final Determination

The Energy Policy and Conservation Act, Public Law 94-163, as
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency
of a number of consumer products and certain industrial equipment. (42
U.S.C. 6291-6317, as codified) Title III, Part B \2\ of EPCA
established the Energy Conservation Program for Consumer Products Other
Than Automobiles. (42 U.S.C. 6291-6309) These products include consumer
furnace fans, the subject of this final determination. (42 U.S.C.
6295(f)(4)(D))
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\1\ All references to EPCA in this document refer to the statute
as amended through the Energy Act of 2020, Public Law 116-260 (Dec.
27, 2020), which reflects the last statutory amendments that impact
Parts A and A-1 of EPCA.
\2\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated Part A.
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Pursuant to EPCA, DOE is required to review its existing energy
conservation standards for covered consumer products no later than six
years after issuance of any final rule establishing or amending a
standard. (42 U.S.C. 6295(m)(1)) Pursuant to that statutory provision,
DOE must publish either a

[[Page 83991]]

notification of determination that standards for the product do not
need to be amended, or a notice of proposed rulemaking (``NOPR'')
including new proposed energy conservation standards (proceeding to a
final rule, as appropriate). (Id.) DOE has conducted this review of the
energy conservation standards for consumer furnace fans under EPCA's
six-year-lookback authority described herein.
For this final determination, DOE analyzed consumer furnace fans
subject to energy conservation standards specified in the Code of
Federal Regulations (``CFR'') at 10 CFR 430.32(y). DOE first analyzed
the technological feasibility of more energy-efficient consumer furnace
fans. For those consumer furnace fans for which DOE determined higher
standards to be technologically feasible, DOE evaluated whether higher
standards would be cost-effective for consumers by conducting life-
cycle cost (``LCC'') and payback period (``PBP'') analyses. In
addition, DOE estimated energy savings that would result from potential
energy conservation standards by conducting a national impact analysis
(``NIA''), in which it estimated the net present value (``NPV'') of the
total costs and benefits experienced by consumers.
Based on the results of the analyses, summarized in section V of
this document, DOE has determined that the current standards for
consumer furnace fans do not need to be amended and is issuing this
final determination accordingly.

II. Introduction

The following sections briefly discuss the statutory authority
underlying this final determination, as well as some of the historical
background relevant to the establishment of energy conservation
standards for consumer furnace fans.

A. Authority

Among other things, EPCA authorizes DOE to regulate the energy
efficiency of a number of consumer products and certain industrial
equipment. (42 U.S.C. 6291-6317, as codified) Title III, Part B \3\ of
EPCA established the Energy Conservation Program for Consumer Products
Other Than Automobiles. These products include consumer furnace fans,
the subject of this document. (42 U.S.C. 6295(f)(4)(D)) Specifically,
EPCA authorized DOE to establish energy conservation standards for
electricity used for the purpose of circulating air through ductwork.
(Id.)
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\3\ As noted previously, for editorial reasons, upon
codification in the U.S. Code, Part B was redesignated Part A.
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The energy conservation program under EPCA consists essentially of
four parts: (1) testing; (2) labeling; (3) the establishment of Federal
energy conservation standards, and (4) certification and enforcement
procedures. Relevant provisions of EPCA specifically include
definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293),
labeling provisions (42 U.S.C. 6294), energy conservation standards (42
U.S.C. 6295), and the authority to require information and reports from
manufacturers (42 U.S.C. 6296).
Federal energy efficiency requirements for covered products
established under EPCA generally supersede State laws and regulations
concerning energy conservation testing, labeling, and standards. (42
U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal
preemption in limited circumstances for particular State laws or
regulations, in accordance with the procedures and other provisions set
forth under EPCA. (42 U.S.C. 6297(d))
Subject to certain criteria and conditions, DOE is required to
develop test procedures to measure the energy efficiency, energy use,
or estimated annual operating cost of each covered product. (42 U.S.C.
6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered products
must use the prescribed DOE test procedure as the basis for certifying
to DOE that their product complies with the applicable energy
conservation standards and as the basis for any representations
regarding the energy use or energy efficiency of the product. (42
U.S.C. 6293(c) and 42 U.S.C. 6295(s)) Similarly, DOE must use these
test procedures to evaluate whether a basic model complies with the
applicable energy conservation standard(s). (42 U.S.C. 6295(s)) The DOE
test procedures for consumer furnace fans appear at title 10 CFR part
430, subpart B, appendix AA.
As noted previously, not later than six years after the issuance of
any final rule establishing or amending a standard, DOE must publish
either a notice of proposed determination (``NOPD'') that standards for
the product do not need to be amended, or a NOPR including new proposed
energy conservation standards (proceeding to a final rule, as
appropriate). (42 U.S.C. 6295(m)(1) and (3)) EPCA further provides
that, not later than three years the issuance of a final determination
not to amend standards, DOE must publish either a notification of
determination that standards for the product do not need to be amended,
or a NOPR including new proposed energy conservation standards
(proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(3)(B))
DOE must make the analysis on which a NOPD or NOPR is based publicly
available and provide an opportunity for written comment. (42 U.S.C.
6295(m)(2))
A determination that amended standards are not needed must be based
on consideration of whether amended standards will result in
significant conservation of energy, are technologically feasible, and
are cost-effective. (42 U.S.C. 6295(m)(1)(A) and 42 U.S.C. 6295(n)(2))
Additionally, any new or amended energy conservation standard
prescribed by the Secretary for any type (or class) of covered product
shall be designed to achieve the maximum improvement in energy
efficiency which the Secretary determines is technologically feasible
and economically justified. (42 U.S.C. 6295(o)(2)(A)) Among the factors
DOE considers in evaluating whether a proposed standard level is
economically justified includes whether the proposed standard at that
level is cost-effective, as defined under 42 U.S.C.
6295(o)(2)(B)(i)(II). Under 42 U.S.C. 6295(o)(2)(B)(i)(II), an
evaluation of cost-effectiveness requires DOE to consider savings in
operating costs throughout the estimated average life of the covered
products in the type (or class) compared to any increase in the price,
initial charges, or maintenance expenses for the covered products that
are likely to result from the standard. (42 U.S.C. 6295(n)(2) and 42
U.S.C. 6295(o)(2)(B)(i)(II))
Finally, pursuant to the amendments to EPCA contained in the Energy
Independence and Security Act of 2007 (``EISA 2007''), Public Law 110-
140, any final rule for new or amended energy conservation standards
promulgated after July 1, 2010, is required to address standby mode and
off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE
adopts a standard for a covered product after that date, it must, if
justified by the criteria for adoption of standards under EPCA (42
U.S.C. 6295(o)), incorporate standby mode and off mode energy use into
a single standard, or, if that is not feasible, adopt a separate
standard for such energy use for that product. (42 U.S.C.
6295(gg)(3)(A)-(B)) However, in a test procedure final rule for furnace
fans published in the Federal Register on January 3, 2014, DOE has
previously determined that there is no need to address standby mode and
off mode energy use in the standards for consumer furnace fans, as the
standby

[[Page 83992]]

mode and off mode energy use associated with furnace fans is accounted
for by the standards and test procedures for the products in which
furnace fans are used (i.e., consumer furnaces and consumer central air
conditioners and heat pumps). 79 FR 500, 504-505. DOE maintained the
same approach in the most recent amended test procedure for consumer
furnace fans, which was published in the Federal Register on April 12,
2024 (``April 2024 TP Final Rule''; 89 FR 25780, 25782) and continues
to do so here for the reasons previously stated.
DOE is publishing this final determination pursuant to the six-
year-lookback review requirement in EPCA.

B. Background

1. Current Standards
DOE most recently completed a review of the subject consumer
furnace fans standards in a final rule published in the Federal
Register on July 3, 2014 (``July 2014 Final Rule''), through which DOE
prescribed the current energy conservation standards for consumer
furnace fans manufactured on and after July 3, 2019. 79 FR 38130. These
standards are set forth in DOE's regulations at 10 CFR 430.32(y) and
are shown in Table II.1.

Table II.1--Federal Energy Conservation Standards for Consumer Furnace Fans
----------------------------------------------------------------------------------------------------------------
Furnace fan product class * Fan energy rating ** (watts/1,000 cubic feet per minute (``cfm''))
----------------------------------------------------------------------------------------------------------------
Non-Weatherized, Non-Condensing Gas (``NWG- FER = 0.044 * Qmax + 182.
NC'').
Non-Weatherized, Condensing Gas (``NWG- FER = 0.044 * Qmax + 195.
C'').
Weatherized, Non-Condensing Gas (``WG- FER = 0.044 * Qmax + 199.
NC'').
Non-Weatherized, Non-Condensing Oil FER = 0.071 * Qmax + 382.
Furnace Fan (``NWO-NC'').
Non-Weatherized Electric Furnace/Modular FER = 0.044 * Qmax + 165.
Blower Fan (``NWEF/NWMB'').
Mobile Home Non-Weatherized, Non- FER = 0.071 * Qmax + 222.
Condensing Gas Furnace Fan (``MH-NWG-
NC'').
Mobile Home Non-Weatherized, Condensing FER = 0.071 * Qmax + 240.
Gas Furnace Fan (``MH-NWG-C'').
Mobile Home Electric Furnace/Modular FER = 0.044 * Qmax + 101.
Blower Fan (``MH-EF/MB'').
Mobile Home Non-Weatherized Oil Furnace Reserved.
Fan (``MH-NWO'').
Mobile Home Weatherized Gas Furnace Fan Reserved.
(``MH-WG'').
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* Furnace fans incorporated into hydronic air handlers, small-duct high-velocity (``SDHV'') modular blowers,
SDHV electric furnaces, and central air conditioners/heat pump indoor units are not subject to the standards
listed in this table. See section IV.A.1 of this document for further discussion.
** Qmax is the airflow, in cfm, at the maximum airflow-control setting measured using the final DOE test
procedure at 10 CFR part 430, subpart B, appendix AA.

2. Current Rulemaking History
DOE established energy conservation standards at 10 CFR 430.32(y)
for furnace fans through the July 2014 Final Rule. 79 FR 38130. As
discussed in section II.A of this document, EPCA authorized DOE to
establish energy conservation standards for electricity used for the
purpose of circulating air through ductwork. (42 U.S.C. 6295(f)(4)(D))
While the statutory language allows for regulation of the electricity
use of any electrically-powered device applied to residential central
heating, ventilation, and air conditioning (``HVAC'') systems for the
purpose of circulating air through ductwork, in the July 2014 Final
Rule, DOE established standards only for certain furnace fans used in
furnaces and modular blowers. 79 FR 38130, 38146 (July 3, 2014).
Compliance with the prescribed standards established for consumer
furnace fans in the July 2014 Final Rule was required as of July 3,
2019. DOE's energy conservation standards for furnace fans use the fan
energy rating (``FER'') metric, which is the ratio of the electrical
energy consumption to airflow, expressed as watts per 1,000 cubic feet
per minute of airflow (``W/1,000 cfm''). 10 CFR 430.32(y). In
evaluating whether amended standards for furnace fans are warranted,
DOE used the test procedure for determining FER which is established at
10 CFR part 430, subpart B, appendix AA, ``Uniform Test Method for
Measuring the Energy Consumption of Furnace Fans'' (``appendix AA'').
In parallel to this rulemaking, DOE conducted a test procedure
rulemaking that considered whether amendments were warranted for the
current test procedure for furnace fans. On May 13, 2022, DOE published
in the Federal Register a NOPR concerning the test procedure for
furnace fans (``May 2022 TP NOPR''). 87 FR 29576. Subsequently, DOE
published the April 2024 TP Final Rule. 89 FR 25780.
In support of the present review of the consumer furnace fans
energy conservation standards, DOE published a request for information
(``RFI'') in the Federal Register, which identified various issues on
which DOE sought comment to inform its determination of whether the
standards need to be amended, on November 23, 2021 (``November 2021
RFI''). 86 FR 66465. The following year, on November 1, 2022, DOE
published a notice of availability of the preliminary technical support
document (``November 2022 Preliminary Analysis'') and the accompanying
preliminary technical support document (``November 2022 Preliminary
Analysis TSD'') in the Federal Register. 87 FR 65687. In the November
2022 Preliminary Analysis, DOE assessed potential amended standard
levels for consumer furnace fans.
On September 20, 2022, a consent decree was issued for NRDC et al.
v. DOE and New York et al. v. DOE that mandated that a final agency
action pertaining to energy conservation standards (i.e., a final rule
amending energy conservation standards or a final determination not to
amend standards) must be issued by October 31, 2024.
On October 6, 2023, DOE published a NOPD (``October 2023 NOPD'') in
the Federal Register, which tentatively determined that the current
standards for consumer furnace fans do not need to be amended. 88 FR
69826.
DOE received comments in response to the October 2023 NOPD from the
interested parties listed in Table II.2.

[[Page 83993]]

Table II.2--List of Commenters With Written Submissions in Response to the October 2023 NOPD
----------------------------------------------------------------------------------------------------------------
Comment No. in
Commenter(s) Abbreviation the docket Commenter type
----------------------------------------------------------------------------------------------------------------
Air-Conditioning, Heating, & AHRI............................ 32 Manufacturer Trade
Refrigeration Institute. Association.
Appliance Standards Awareness Joint Advocates................. 31 Efficiency Advocacy
Project, American Council for an Organization.
Energy-Efficient Economy, National
Consumer Law Center, Natural
Resources Defense Council, New York
State Energy Research and
Development Authority.
Lennox International................. Lennox.......................... 30 Manufacturer.
Michael Ravnitzky.................... Ravnitzky....................... 29 Individual.
----------------------------------------------------------------------------------------------------------------

A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\4\
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\4\ The parenthetical reference provides a reference for
information located in the docket. (Docket No. EERE-2021-BT-STD-
0029, 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).
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III. General Discussion and Rationale

DOE developed this final determination after a review of the market
for the subject consumer furnace fans. DOE also considered comments,
data, and information from interested parties that represent a variety
of interests. This final determination addresses issues raised by these
commenters.

A. General Comments

This section summarizes general comments received from interested
parties regarding rulemaking timing and process, as well as general
recommendations on the standard levels.
In response to the October 2023 NOPD, AHRI commented that it agrees
with DOE's proposed determination, stating that it is reasonable and
appropriate and that the energy conservation standards for consumer
furnace fans do not need to be amended at this time. (AHRI, No. 32 at
p. 1) Lennox commented that the October 2023 NOPD indicates that more-
stringent consumer furnace fan efficiency levels would cause most
consumers to suffer net costs, and it supports DOE's determination to
not amend furnace fan standards at this time. (Lennox, No. 30 at pp. 1-
3) Ravnitzky supported DOE's proposed determination, stating that the
``cost-benefit analysis does not always demonstrate clear utility.''
Ravnitzky stated that DOE's analysis, which integrates durability and
reliability design objectives, ensures that the standards developed are
both functional and advantageous. (Ravnitzky, No. 29 at p. 1) Ravnitzky
commented that furnace fans are used for air circulation both when the
furnace or air conditioner is operating and during its inactive cycle,
and that DOE's acknowledgement of furnace fan operation in both cycles
is important to establish feasible and relevant standards. (Id.)
Conversely, the Joint Advocates commented that DOE should adopt
standards that effectively require brushless permanent magnet (``BPM'')
motors for all product classes (including oil and mobile home gas
furnaces). (Joint Advocates, No. 31 at pp. 1-2) The Joint Advocates
commented that, because DOE's analysis shows about 90 percent of mobile
home gas furnaces achieve an efficiency level that assumes EL 1 (i.e.,
a BPM motor), the availability of those products would likely not be
affected by an amended standard. (Joint Advocates, No. 31 at pp. 1-2)
As part of the rulemaking process, DOE carefully considers the
benefits and burdens of potential amended standards to determine
whether the potential amended standards are the maximum standard levels
that are technologically feasible and economically justified and would
conserve a significant amount of energy, as required by EPCA (see 42
U.S.C. 6295(o)(2)(A) and (3)(B)). Given the small role of NWO-NC, MH-
NWG-NC, MH-NWG-C, and MH-NWO in the overall furnace market, the
declining shipments for the affected product classes, and the number of
products that incorporate a BPM motor today, DOE concludes that the
energy savings potential from this design option is limited. Further,
DOE has concerns about availability of products if standards are
amended. If any products lines are required to be updated, that may
lead to manufacturers to choose to leave the market, thereby
potentially impacting consumers if the market becomes more
concentrated. This topic is discussed further in section IV of this
document, which outlines DOE's approach to analyzing potential amended
standard levels, and section V of this document, which includes a
discussion of market considerations, as well as a detailed explanation
of DOE's weighing of the benefits and burdens and the rationale for
proposing not to amend standards for consumer furnace fans.
Ravnitzky recommended that DOE should mandate that manufacturers
disclose the relative energy efficiency of the fans used in air
handlers and air conditioners. The commenter stated that implementing
an easily comparable metric/rating would allow consumers to make more
energy-conscious decisions and encourage manufacturers to innovate
their products. Ravnitzky further stated that, by mandating this
information, DOE could create a market environment in which energy
efficiency is a top consideration for product development and consumer
purchasing. (Ravnitzky, No. 29 at p. 1) Further, Ravnitzky commented
that DOE should establish a periodic review process to assess the
standards' real-world performance and impact, evaluating the longevity,
consumer satisfaction, and environmental benefits of the established
standards in order to guarantee that standards adapt to technological
advancements and market trends. (Id. at pp. 1-2) Finally, Ravnitzky
commented that DOE should develop partnerships with industry experts
and consumer advocacy groups to create refined and impactful energy
conservation measures. (Id. at p. 2)
In response, DOE notes that the electrical energy consumption of
fans used in HVAC products such as air handlers and air conditioners
are accounted for by the seasonal energy efficiency ratio 2 (``SEER2'')
and heating seasonal performance factor 2 (``HSPF2'') metrics measured
by the test procedure for central air conditioners (``CACs'') and heat
pumps at 10 CFR part 430, subpart B, appendix M1 (``Appendix M1'').
These products are rated using a different metric than that used for
furnace fans, as they have different functionalities and cannot not be
directly compared. With regard to Ravnitzky's suggestion that DOE
establish a collaborative, periodic review process, DOE notes that, as
outlined in section II.A of this

[[Page 83994]]

document, DOE is required to review its existing energy conservation
standards for covered consumer products no later than six years after
issuance of any final rule establishing or amending a standard (42
U.S.C. 6295(m)(1)) or three years after a determination that standards
for the product do not need to be amended. (42 U.S.C. 6295(m)(3)(B)) In
these reviews, DOE assesses factors including the economic impact of
standards on consumers and national energy savings to capture the real-
world impacts of amended standards. As a part of this process, DOE
regularly engages with industry stakeholders through manufacturer
interviews, public meetings/webinars, and written comments.

B. Product Classes and Scope of Coverage

When evaluating and establishing energy conservation standards, DOE
divides covered products into product classes by the type of energy
used or by capacity or other performance-related features that justify
differing standards. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider
factors such as the utility of the feature to the consumer and other
factors DOE determines are appropriate. (42 U.S.C. 6295(q)) The scope
of coverage and product classes for this final determination are
discussed in further detail in section IV.A.1 of this document. This
final determination covers those consumer products that meet the
definition of a ``furnace fan'' as codified at 10 CFR 430.2. That
provision states that a ``furnace fan'' is defined as an electrically-
powered device used in a consumer product for the purpose of
circulating air through ductwork. Id.
DOE did not receive any comments on product classes and scope of
coverage in response to the October 2023 NOPD. Consequently, DOE is
maintaining the same approach for the final determination.

C. Test Procedure

EPCA sets forth generally applicable criteria and procedures for
DOE's adoption and amendment of test procedures. (42 U.S.C. 6293)
Manufacturers of covered products must use these test procedures to
quantify the efficiency of their product and as the basis for
certifying to DOE that their product complies with the applicable
energy conservation standards and as the basis for any representations
regarding the energy use or energy efficiency of the product. (42
U.S.C. 6295(s) and 42 U.S.C. 6293(c)) Similarly, DOE must use these
test procedures to evaluate whether a basic model complies with the
applicable energy conservation standard(s) pursuant to EPCA. (42 U.S.C.
6295(s); 10 CFR 429.110(e))
The current test procedure for consumer furnace fans is codified at
10 CFR part 430, subpart B, appendix AA, Uniform Test Method for
Measuring the Energy Consumption of Furnace Fans. Appendix AA includes
provisions for determining the FER, the metric on which current
standards are based (see 10 CFR 430.32(y)). DOE most recently updated
appendix AA on April 12, 2024, when DOE published the April 2024 TP
Final Rule in the Federal Register. 89 FR 25780. The April 2024 TP
Final Rule adopted the following changes:
(1) Specify testing instructions for furnace fans incapable of
operating at the required external static pressure (``ESP'');
(2) Incorporate by reference the most recent versions of industry
standards, ASHRAE 103-2017 and ASHRAE 37-2009 (RA 2019), in 10 CFR
430.3;
(3) Incorporate by reference chapter 1 of the 2021 ASHRAE Handbook;
(4) Define ``dual-fuel furnace fans'' and exclude them from the
scope of appendix AA;
(5) Change the term ``default airflow control settings'' to
``specified airflow control settings'';
(6) Make clarifications to nomenclature, correct the value of the
conversion factor from watts to British Thermal Units per hour (``Btu/
h''), and correct the units of specific volume of dry air;
(7) Revise the ambient temperature conditions allowed during
testing to between 65 degrees Fahrenheit (``[deg]F'') and 85 [deg]F for
all units (both condensing and non-condensing);
(8) Assign an allowable range of relative humidity during testing
to be between 20 percent and 80 percent; and
(9) Require that the power measurements be determined as an average
over the last 30 seconds of each steady-state period at intervals of no
less than 1 per second, rather than taken as a single point
measurement.
Id. at 89 FR 25780, 25783 (April 12, 2024).
DOE did not receive any comments on the furnace fans test procedure
in response to the October 2023 NOPD.

D. Technological Feasibility

1. General Considerations
As discussed, a determination that amended energy conservation
standards are not needed must be based on consideration of whether
amended standards would result in significant conservation of energy,
are technologically feasible, and are cost-effective. (42 U.S.C.
6295(m)(1)(A) and 42 U.S.C. 6295(n)(2))
To determine whether potential amended standards would be
technologically feasible, DOE first develops a list of all known
technologies and design options that could improve the efficiency of
products that are the subject of the determination. DOE considers
technologies incorporated in commercially-available products or in
working prototypes to be ``technologically feasible.'' 10 CFR part 430,
subpart C, appendix A, sections 6(b)(3)(i) and 7(b)(1). Section IV.A.2
of this document discusses the technology options identified and
considered by DOE for this analysis for consumer furnace fans.
After DOE has determined which, if any, technologies and design
options are technologically feasible, it further evaluates each
technology and design option in light of the following additional
screening criteria: (1) practicability to manufacture, install, and
service; (2) adverse impacts on product utility or availability; (3)
adverse impacts on health or safety; and (4) unique-pathway proprietary
technologies. 10 CFR part 430, subpart C, appendix A, sections
6(b)(3)(ii)-(v) and 7(b)(2)-(5). Those technology options that are
``screened out'' based on these criteria are not considered further.
Those technology and design options that are not screened out are
considered as the basis for higher efficiency levels that DOE could
consider for potential amended standards. Section IV.A.4 of this
document discusses the results of the screening analysis conducted for
this final determination.
2. Maximum Technologically Feasible Levels
EPCA requires that for any proposed rule that prescribes an amended
or new energy conservation standard or prescribes no amendment or no
new standard for a type (or class) of covered product, DOE must
determine the maximum improvement in energy efficiency or maximum
reduction in energy use that is technologically feasible for each type
(or class) of covered products. (42 U.S.C. 6295(p)(1)) Accordingly, in
the engineering analysis, DOE identifies the maximum technologically
feasible efficiency level currently available on the market for
consumer furnace fans. DOE also defines such ``max-tech'' efficiency
level, representing the maximum

[[Page 83995]]

theoretical efficiency that can be achieved through the application of
all available technology options retained from the screening
analysis.\5\ In many cases, the max-tech efficiency level is not
commercially available because it is not currently economically
feasible. The max-tech levels that DOE determined for this analysis are
described in section IV.B.1.c of this final determination.
---------------------------------------------------------------------------

\5\ In applying these design options, DOE would only include
those that are compatible with each other that when combined, would
represent the theoretical maximum possible efficiency.
---------------------------------------------------------------------------

E. Energy Savings

1. Determination of Savings
For each efficiency level (``EL'') evaluated, DOE projects
anticipated energy savings from application of the EL to the consumer
furnace fan products purchased during the 30-year period that begins in
the assumed year of compliance with potential amended standards (2030-
2059).\6\ The savings are measured over the entire lifetime of products
purchased during the 30-year analysis period. DOE quantifies the energy
savings attributable to each EL as the difference in energy consumption
between each standards case and the no-new-standards case. The no-new-
standards case represents a projection of energy consumption that
reflects how the market for such products would likely evolve in the
absence of amended energy conservation standards.
---------------------------------------------------------------------------

\6\ DOE also presents a sensitivity analysis that considers
impacts for products shipped in a nine-year period.
---------------------------------------------------------------------------

DOE uses its NIA spreadsheet models to estimate national energy
savings (``NES'') from potential amended standards for the products
analyzed. The NIA spreadsheet model (described in section IV.G of this
document) calculates energy savings in terms of site energy, which is
the energy directly consumed by the products at the locations where
they are used. For electricity, DOE reports NES in terms of primary
energy savings, which is the savings in the energy that is used to
generate and transmit the site electricity. For natural gas, the
primary energy savings are considered to be equal to the site energy
savings. DOE also calculates NES in terms of full-fuel-cycle (``FFC'')
energy savings. The FFC metric includes the energy consumed in
extracting, processing, and transporting primary fuels (i.e., coal,
natural gas, petroleum fuels), and, thus, presents a more complete
picture of the impacts of energy conservation standards.\7\ DOE's
approach is based on the calculation of an FFC multiplier for each of
the energy types used by covered products. Section IV.G.2 of this
document provides more information on FFC energy savings.
---------------------------------------------------------------------------

\7\ The FFC metric is discussed in DOE's statement of policy and
notice of policy amendment. 76 FR 51281 (August 18, 2011), as
amended at 77 FR 49701 (August 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
As discussed, a determination that amended standards are not needed
must be based on consideration of whether amended standards will result
in significant conservation of energy, among other factors. (42 U.S.C.
6295(m)(1)(A) and 42 U.S.C. 6295(n)(2))
The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking.\8\ For
example, for some covered products, most of the energy consumption
occurs during periods of peak energy demand. The impacts of these
products on the energy infrastructure can be more pronounced than the
impacts of products with relatively constant demand. Accordingly, DOE
evaluates the significance of energy savings on a case-by-case basis.
The significance of energy savings is further discussed in section
V.B.1 of this final determination.
---------------------------------------------------------------------------

\8\ The numeric threshold for determining the significance of
energy savings established in a final rule published in the Federal
Register on February 14, 2020 (85 FR 8626, 8670) was subsequently
eliminated in a final rule published in the Federal Register on
December 13, 2021 (86 FR 70892).
---------------------------------------------------------------------------

F. Cost-Effectiveness

As discussed, a determination that amended standards are not needed
must be based on consideration of whether amended standards would be
cost-effective, among other factors. (42 U.S.C. 6295(m)(1)(A) and 42
U.S.C. 6295(n)(2))
In evaluating cost-effectiveness, EPCA requires DOE to consider
savings in operating costs throughout the estimated average life of the
covered product in the type (or class) compared to any increase in the
price, initial charges, or maintenance expenses for the covered product
that are likely to result from the standard. (42 U.S.C. 6295(n)(2)(c)
and 42 U.S.C. 6295(o)(2)(B)(i)(II)) Cost-effectiveness is also one of
the factors that DOE considers under 42 U.S.C. 6295(o)(2)(B) in
determining whether new or amended standards are economically
justified. (42 U.S.C. 6295(o)(2)(B)(i)(II))
In determining cost-effectiveness of potential amended standards
for covered products, DOE generally conducts LCC and PBP analyses that
estimate the costs and benefits to users from potential standards.
Section IV.E of this document provides more information on the LCC and
PBP analyses conducted for this final determination. To further inform
DOE's consideration of the cost-effectiveness of potential amended
standards, DOE considered the NPV of total costs and benefits estimated
as part of the NIA. The inputs for determining the NPV of the total
costs and benefits experienced by consumers are: (1) total annual
installed cost, (2) total annual operating costs (energy costs and
repair and maintenance costs), and (3) a discount factor to calculate
the present value of costs and savings. The results of this analysis
are discussed in section V.C.3 of this document.

G. Further Considerations

In determining whether a potential, more-stringent standard is
economically justified, DOE must determine whether the benefits of the
standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make
this determination after receiving comments on the proposed standard,
and by considering, to the greatest extent practicable, the following
seven statutory factors:
(1) The economic impact of the standard on manufacturers and
consumers of the product subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the covered product in the type (or class) compared to any
increase in the price, initial charges for, or maintenance expenses of
the covered product that are likely to result from the standard;
(3) The total projected amount of energy (or as applicable, water)
savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the covered
product likely to result from the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary considers relevant.
(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
The following sections discuss how DOE has addressed each of these
seven factors in this final determination.
1. Economic Impact on Manufacturers and Consumers
In determining the impacts of a potential new or amended standard
on manufacturers, DOE conducts a manufacturing impact analysis
(``MIA''). DOE first uses an annual cash-flow approach to determine the
quantitative impacts. This step includes both a short-

[[Page 83996]]

term assessment--based on the cost and capital requirements during the
period between when a regulation is issued and when entities must
comply with the regulation--and a long-term assessment over a 30-year
period. The industry-wide impacts analyzed include: (1) industry net
present value, which values the industry on the basis of expected
future cash flows; (2) cash flows by year; (3) changes in revenue and
income; and (4) other measures of impact, as appropriate. Since DOE has
determined not to amend the standards for consumer furnace fans, this
final determination will have no cash-flow impacts on manufacturers.
Accordingly, DOE did not conduct an MIA for this final determination.
For individual consumers, measures of economic impact include the
changes in LCC and PBP associated with new or amended standards. These
measures are discussed further in the following section. For consumers
in the aggregate, DOE also calculates the national NPV of the consumer
costs and benefits expected to result from particular standards. DOE
also evaluates the impacts of potential standards on identifiable
subgroups of consumers that may be affected disproportionately by a
standard. Since DOE has determined not to amend the standards for
consumer furnace fans, this final determination will have no
disproportionate impact on identifiable subgroups of consumers.
Accordingly, DOE did not conduct a subgroup analysis for this final
determination.
2. Savings in Operating Costs Compared To Increase in Price
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered products
that are likely to result from a standard. (42 U.S.C. 6295(m)(1); 42
U.S.C. 6295(n)(2), and 42 U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts
this comparison in its LCC and PBP analyses.
For its LCC and PBP analyses, DOE assumes that consumers will
purchase the covered product in the first year of compliance with new
or amended standards. The LCC savings for the considered efficiency
levels are calculated relative to the case that reflects projected
market trends in the absence of new or amended standards. DOE's LCC and
PBP analyses is discussed in further detail in section IV.E of this
document.
3. Energy Savings
EPCA requires DOE, in determining the economic justification of an
amended standard, to consider the total projected energy savings that
are expected to result directly from the standard. (42 U.S.C.
6295(o)(2)(B)(i)(III))
As discussed in section IV.G of this document, DOE uses the NIA
spreadsheet models to project national energy savings that are expected
to result directly from an amended standard.
4. Lessening of Utility or Performance of Products
In establishing product classes and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered product. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Since DOE has
determined not to amend the standards for consumer furnace fans, this
final determination will not impact the utility of such products.
5. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from a standard. (42 U.S.C. 6295(o)(2)(B)(i)(V)) Since
DOE has determined not to amend the standards for consumer furnace
fans, DOE did not transmit a copy of its determination to the Attorney
General for anti-competitive review.
6. Need for National Energy Conservation
DOE also considers the need for national energy conservation in
determining whether a new or amended standard is economically
justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy savings from the
standards are likely to provide improvements to the security and
reliability of the Nation's energy system. Reductions in the demand for
electricity also may result in reduced costs for maintaining the
reliability of the Nation's electricity system. DOE generally conducts
a utility impact analysis to estimate how standards may affect the
Nation's needed power generation capacity. However, since DOE has
determined not to amend the standards for consumer furnace fans, DOE
did not conduct this analysis.
DOE maintains that environmental and public health benefits
associated with the more efficient use of energy are important to take
into account when considering the need for national energy
conservation. Amended standards are likely to result in environmental
benefits in the form of reduced emissions of air pollutants and
greenhouse gases associated with energy production and use. DOE
generally conducts an emissions analysis to estimate how amended
standards may affect these emissions. DOE also generally estimates the
economic value of emissions reductions resulting from an amended
standard. However, since DOE has determined not to amend the standards
for consumer furnace fans, DOE did not conduct this analysis.
7. Other Factors
In determining whether an energy conservation standard is
economically justified, DOE may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To
the extent DOE identifies any relevant information regarding economic
justification that does not fit into the other categories described
previously, DOE could consider such information under ``other
factors.''

IV. Methodology and Discussion of Related Comments

The following sections of this document address each key component
of the analyses DOE has performed for this final determination with
respect to consumer furnace fans. Comments received from interested
parties are addressed in each relevant section.

A. Market and Technology Assessment

DOE develops information in the market and technology assessment
that provides an overall picture of the market for the products
concerned, including the purpose of the products, the industry
structure, manufacturers, market characteristics, and technologies used
in the products. This activity includes both quantitative and
qualitative assessments, based primarily on publicly-available
information. The subjects addressed in the market and technology
assessment for this final determination include: (1) identification of
the scope and product classes, (2) manufacturers and industry
structure, (3) existing efficiency programs, (4) shipments information,
(5) market and industry trends, and (6) technologies or design options
for improving efficiency of consumer furnace fans. The key findings of
DOE's market assessment are summarized in the following sections.
1. Product Classes and Scope of Coverage
In the October 2023 NOPD, DOE evaluated products within the same
scope as those products for which DOE initially established energy
conservation

[[Page 83997]]

standards in the July 2014 Final Rule. 88 FR 69826, 69832 (Oct. 6,
2023). In this final determination, DOE is maintaining the scope of
coverage as presented in the October 2023 NOPD. Products evaluated in
this final determination include:
<bullet> Furnace fans used in weatherized and non-weatherized gas
furnaces, oil furnaces, and electric furnaces; and
<bullet> Modular blowers
Consistent with the approach taken in the July 2014 Final Rule,
products not addressed in this rulemaking include:
<bullet> Furnace fans used in other products, such as split-system
CACs and heat pump indoor units, through-the-wall indoor units, small-
duct high-velocity indoor units, energy recovery ventilators, heat
recovery ventilators, draft inducer fans, exhaust fans, and hydronic
air handlers; and
<bullet> Fans used in any non-ducted products, such as whole-house
ventilation systems without ductwork, CAC condensing unit fans, room
fans, and furnace draft inducer fans (because these products do not
circulate air through ductwork).
DOE has previously determined that the DOE test procedure for
furnace fans is not currently equipped to address fans contained in
CACs, heat pumps, or other products. 79 FR 38130, 38149 (July 3, 2014).
As mentioned in section III.A of this document, DOE has previously
determined that SEER2 and HSPF2 capture a representative measure of CAC
and heat pump performance, including fan energy consumption, during
heating and cooling operations, and that the test method for
determining these metrics is provided in appendix M1. (See, for
example, discussion of appendix M1 amendments at 82 FR 1426, 1446-1460
(Jan. 5, 2017)) Therefore, DOE has not established standards covering
such products. (42 U.S.C. 6295(o)(3)) Additionally, any products that
are non-ducted or that do not move air through ductwork (e.g., draft
inducer fans) would not meet the definition of a furnace fan and are,
therefore, out of scope of the existing regulations.
When evaluating and establishing or amending energy conservation
standards, DOE may establish separate standards for a group of covered
products (i.e., establish a separate product class) if DOE determines
that separate standards are justified based on the type of energy used,
or if DOE determines that the product has a capacity or other
performance-related feature which other products within such type (or
class) do not have and such feature justifies a different standard. (42
U.S.C. 6295(q)) In making a determination whether a performance-related
feature justifies a different standard, DOE considers such factors as
the utility of the feature to the consumer and other factors DOE
determines are appropriate. (Id.)
In its regulations at 10 CFR 430.32(y), DOE currently categorizes
furnace fans into 10 product classes, as presented in Table IV.1. In
the proposed determination, DOE maintained these 10 classes, with the
exception of a change to the mobile home non-weatherized oil furnace
fan (``MH-NWO'') class discussed later in this section. 88 FR 69826,
69833 (Oct. 6, 2023).

Table IV.1--Current Consumer Furnace Fan Product Classes
------------------------------------------------------------------------
Product class
-------------------------------------------------------------------------
Non-Weatherized, Non-Condensing Gas Furnace Fan (``NWG-NC'').
Non-Weatherized, Condensing Gas Furnace Fan (``NWG-C'').
Weatherized Non-Condensing Gas Furnace Fan (``WG-NC'').
Non-Weatherized, Non-Condensing Oil Furnace Fan (``NWO-NC'').
Non-Weatherized Electric Furnace/Modular Blower Fan (``NWEF/NWMB'').
Mobile Home Non-Weatherized, Non-condensing Gas Furnace Fan (``MH-NWG-
NC'').
Mobile Home Non-Weatherized, Condensing Gas Furnace Fan (``MH-NWG-C'').
Mobile Home Electric Furnace/Modular Blower Fan (``MH-EF/MB'').
Mobile Home Non-Weatherized Oil Furnace Fan (``MH-NWO'').*
Mobile Home Weatherized Gas Furnace Fan (``MH-WG'').*
------------------------------------------------------------------------
* DOE created the MH-NWO and MH-MG product classes in the July 2014
Final Rule, but these classes do not currently have energy
conservation standards.

As directed by EPCA and as previously noted, DOE must specify a
different standard level for a type or class of products that has the
same function or intended use if DOE determines that products within
such group: (A) consume a different kind of energy from that consumed
by other covered products within such type (or class), or (B) have a
capacity or other performance-related feature that other products
within such type (or class) do not have and such feature justifies a
higher or lower standard. (42 U.S.C. 6295(q)(1)) As shown in Table
IV.1, there are four determinants of product class for consumer furnace
fans: (1) whether the associated furnace is non-weatherized or
weatherized; (2) whether the associated furnace uses condensing or non-
condensing technology; (3) whether or not the associated furnace is
designed for use in a mobile home, and (4) the type of fuel used by the
associated furnace. DOE's adoption of product classes for condensing
and non-condensing furnace fans is discussed in the July 3, 2014
Furnace Fans ECS Final Rule and the December 18, 2023 Furnaces ECS
Final Rule published in the Federal Register at 79 FR 38130, 38149-
38150 and 88 FR 87502, 87537, respectively.
In the July 2014 Final Rule, DOE created product classes for MH-NWO
furnace fans and MH-WG furnace fans, but DOE did not analyze or
prescribe standards for either product class because of the lack of
available data for those product classes. 79 FR 38130, 38150 (July 3,
2014). DOE is not aware of any products that would be considered MH-WG
furnace fans at this time. However, DOE has become aware of a limited
number of MH-NWO furnace fans that have been introduced to the market.
The MH-NWO furnace fans that DOE identified are all used in non-
condensing furnaces, so DOE analyzed a subset of the previously
established but unanalyzed class--mobile home non-weatherized, oil,
non-condensing (``MH-NWO-NC'') furnace fans. As DOE is not aware of any
condensing MH-NWO products, DOE did not analyze them for this final
determination analysis and instead focused on MH-NWO-NC furnace fans.
In this final determination, DOE maintained the product classes
considered in the October 2023 NOPD, including consideration of only
non-condensing MH-NWO products. DOE did not consider condensing MH-NWO
or MH-WG products because, as noted in the previous paragraph, DOE has
not

[[Page 83998]]

found any such products available on the market. Further, as discussed
in the October 2023 NOPD, DOE concluded that it would be premature to
analyze energy conservation standards for NWO-C and WG-C furnace fans
at this time as DOE is only aware of a very small number of products on
the market. 88 FR 69826, 69833. (Oct. 6, 2023) Therefore, DOE did not
analyze the NWO-C and WG-C product classes for this final
determination. DOE considered the product classes shown in the
following list in its analysis:

(1) NWG-NC
(2) NWG-C
(3) MH-NWG-NC
(4) MH-NWG-C
(5) MH-EF/MB
(6) NWO-NC
(7) WG-NC
(8) NWEF/NWMB
(9) MH-NWO-NC

In the case where a covered product has numerous product classes,
DOE identifies and selects certain product classes as most
representative and concentrates its analytical effort on those classes.
2. Technology Options
DOE develops information in the technology assessment that
characterizes the technologies and design options that manufacturers
may use to attain higher-efficiency performance.
In the October 2023 NOPD, DOE identified several technology options
that would be expected to improve the efficiency of consumer furnace
fans, in terms of FER as measured by the DOE test procedure. 88 FR
69826, 69833 (Oct. 6, 2023). To develop a list of technology options,
DOE identified possible technology options for improving furnace fan
efficiency and examined the most common efficiency-improving
technologies used in consumer furnace fans today. These technology
options provide insight into the technological improvements typically
used to increase the energy efficiency of consumer furnace fans.
For this final determination, DOE has reviewed the consumer furnace
fans market and confirmed that the technology options identified in the
October 2023 NOPD continue to reflect the market. The identified
technology options are shown in Table IV.2.

Table IV.2--List of Technology Options Considered for This Final Determination
----------------------------------------------------------------------------------------------------------------
Technology option Description
----------------------------------------------------------------------------------------------------------------
Housing design modifications................................ Optimizing the shape and orientation of the
housing of a furnace fan can improve fan
efficiency. This can be accomplished by: (1)
optimizing the shape of the inlet cone, (2)
optimizing the fan housing shape, (3) optimizing
the motor mount and the motor location, (4)
minimizing the gaps between the impeller and the
inlet cone, and (5) optimizing cut-off location
and the manufacturing tolerances.
Multi-stage heating components and controls................. Multi-stage or modulating heating allows furnaces
to meet heating load requirements more precisely
and can run at a low output when less heat is
required. Due to the cubic relationship between
fan input power and airflow, operating at the
reduced airflow-control setting may reduce
overall fan electrical energy consumption for
heating despite the extended hours.
Airflow path design......................................... Modifications to the design and configuration of
elements in the airflow path, such as the heat
exchanger, could reduce internal static pressure.
Reduced internal static pressure levels result in
lower expected energy consumption levels.
Constant-torque BPM (``CT-BPM'') and constant-airflow BPM Furnace fan manufacturers typically use either a
(``CA-BPM'') motors. permanent split capacitor (``PSC'') motor or a
more efficient BPM motor. PSC motors are a type
of induction motor where the stator is an
electromagnet that consists of electrical wire
windings, and BPM motors are three-phase
permanent magnet motors.
Inverter controls for PSC motors............................ Using an inverter, the incoming alternating
current (``AC'') is converted to DC current by a
rectifier and then back to AC current at a
specific frequency. The output AC current is used
to drive the motor, the operating speed of which
depends on the frequency of the AC current. This
allows PSC motors with inverter controls to
better match demand.
Higher-efficiency fan blades................................ Furnace fans typically use an impeller to move air
through ductwork. Energy savings may be possible
by using backward-inclined impellers. These
impellers incorporate backward-facing inclined
blades that are generally wider in the airflow
direction across the blade as compared with
forward-curved impellers.
----------------------------------------------------------------------------------------------------------------

In response to the October 2023 NOPD, the Joint Advocates stated
that more-efficient BPM motors are a technology option that can be used
to improve FER but were not considered as an efficiency level in DOE's
analysis. (Joint Advocates, No. 31 at p. 3) Lennox commented that the
feasible technologies available for furnace fans considered by the NOPD
have not changed since the last furnace fan standards rulemaking in
2014, which adopted the current standards that took effect in 2019.
(Lennox, No. 30 at pp. 1-3)
In response, DOE notes that BPM motor manufacturers do not
currently disclose the efficiency of their motors. Further, as
discussed in the October 2023 NOPD, DOE is not aware of any data
showing the relationship between improved BPM motor efficiency and FER
ratings. In the October 2023 NOPD, DOE requested data regarding this
relationship and stated that it may include efficiency levels
corresponding to the use of more-efficient BPM motors in a future
analysis, but DOE did not include this additional efficiency level in
the October 2023 analysis, due to the lack of data. 88 FR 69826, 69840
(Oct. 6, 2023). For this final determination, although DOE did continue
to analyze use of BPM motors, DOE similarly did not include an analysis
of more-efficient BPM motors as a technology option, due to lack of
data about BPM motors that are more efficient than those analyzed by
DOE. DOE's analysis of BPM motors as a technology for improving FER
ratings is discussed further in section IV.B.1 of this document.
3. Impact From Other Rulemakings
In response to the October 2023 NOPD, Lennox commented that the
significant cumulative regulatory burden on furnace manufacturers
furthers the case that adopting a ``no-new-standard'' for furnace fans
is warranted. The commenter added that there are a variety of Federal
and State regulations being implemented that impact furnace
manufacturers, including the EPA Technology Transition Final Rule to
lower global warming potential (``GWP'') refrigerants,

[[Page 83999]]

EPA Refrigerant Management NOPR, DOE energy conservation standards
(``ECS'') Furnace Standards rulemaking, National and Regional Cold
Climate Heat Pump Specifications, DOE ECS for Three-Phase Central Air
Conditioners and Heat Pumps below 65,000 Btu/h, DOE Test Procedure for
Variable Refrigerant Flow (``VRF'') Systems, DOE Walk-in Cooler and
Freezer Test Procedure, and DOE Walk-in Cooler and Freezer ECS NOPR.
(Lennox, No. 30 at p. 3) Lennox emphasized that Federal and State
refrigerant regulations are consuming nearly all of manufacturers'
testing, laboratory, and product development resources. (Id.) AHRI
commented that the furnace industry will be significantly impacted by
the amended energy conservation standards for non-weatherized gas-fired
furnaces, and DOE should consider this burden when assessing the
manufacturer impact on this rule.\9\ (AHRI, No. 32 at pp. 1-2) The
commenter further stated that the U.S. Consumer Product Safety
Commission (``CPSC'') published a NOPR in the Federal Register on
October 25, 2023, in which it proposed to require that all consumer
gas-fired furnaces and boilers must continuously monitor the production
of carbon monoxide (``CO'') during the combustion process and modulate
or shut down the furnace at certain carbon monoxide levels (see 88 FR
73272). AHRI commented that CPSC's proposal would have a significant
impact on the furnace industry, and DOE should consider CPSC's proposal
when assessing manufacturer impacts of this current rulemaking. (Id. at
p. 2)
---------------------------------------------------------------------------

\9\ At the time of AHRI's comment, DOE had issued a pre-
publication copy of the final rule amending the standards for
consumer non-weatherized gas furnaces and mobile home gas furnaces.
That final rule was ultimately published in the Federal Register on
December 18, 2023. 88 FR 87502.
---------------------------------------------------------------------------

In response, DOE notes that the Department is not amending the
energy conservation standards for consumer furnace fans, and,
therefore, it does not expect this rulemaking to contribute to the
cumulative regulatory burden of manufacturers.
4. Screening Analysis
As discussed, DOE conducts a screening analysis to evaluate whether
to further consider each identified technology and design option. DOE
uses the following five screening criteria to determine which
technology options are suitable for further consideration in an energy
conservation standards rulemaking:
(1) Technological feasibility. Technologies that are not
incorporated in commercially-available products or in commercially-
viable, existing prototypes will not be considered further.
(2) Practicability to manufacture, install, and service. If it is
determined that mass production of a technology in commercially-
available products and reliable installation and servicing of the
technology could not be achieved on the scale necessary to serve the
relevant market at the time of the projected compliance date of the
standard, then that technology will not be considered further.
(3) Impacts on product utility. If a technology is determined to
have a significant adverse impact on the utility of the product to
subgroups of consumers or results in the unavailability of any covered
product type with performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as products generally available in the United States at the time,
it will not be considered further.
(4) Safety of technologies. If it is determined that a technology
would have significant adverse impacts on health or safety, it will not
be considered further.
(5) Unique-pathway proprietary technologies. If a technology has
proprietary protection and represents a unique pathway to achieving a
given efficiency level, it will not be considered further, due to the
potential for monopolistic concerns.
See 10 CFR part 430, subpart C, appendix A, sections 6(a)(3)(iii)
and 7(b).
If DOE determines that a technology fails to meet one or more of
these listed criteria, it is excluded from further consideration in the
engineering analysis. The following sections include comments from
interested parties pertinent to the screening analysis and DOE's
evaluation of each technology option against the screening analysis
criteria.
a. Screened-Out Technologies
In the October 2023 NOPD, DOE tentatively screened out housing
design modifications and changes to airflow path designs from its
analysis. 88 FR 69826, 69835-69836 (Oct. 6, 2023). As discussed in
section IV.A.2 of this document, airflow path and fan housing
improvements can improve furnace fan efficiencies. However, as
initially discussed in chapter 4 of the November 2022 Preliminary
Analysis TSD, DOE does not have data to quantify the impact of housing
design modifications or airflow path design on FER. Additionally, DOE
has found that the housing design modifications and airflow path design
can impact the performance of the furnace efficiency as measured in
AFUE. Although housing design modifications and changes to the airflow
path design have the potential to reduce FER, DOE currently lacks the
data necessary to conclude that these options will not reduce utility
to consumers (e.g., by reducing the AFUE), and, therefore, the
Department has continued to screen out these technologies for this
analysis. DOE did not receive any comments on the screening of these
technologies in response to the October 2023 NOPD.
Based on DOE's research, DOE screened out the technology options on
the basis of each of the screening criteria shown in Table IV.3 from
further consideration as options to improve the FER (as measured by the
DOE test procedure) of consumer furnace fans. The reasons for exclusion
associated with each technology are marked in the table with an ``X.''

Table IV.3--Technology Options Screened Out
--------------------------------------------------------------------------------------------------------------------------------------------------------
Screening criteria (X = basis for screening out)
--------------------------------------------------------------------------------------------
Practicability to Impacts on
Technology option Technological install, product utility Adverse impacts Unique-pathway
feasibility manufacture, and or product on health or proprietary
service availability safety technologies
--------------------------------------------------------------------------------------------------------------------------------------------------------
Housing Design Modifications............................... .............. .................... X ................. ................
Airflow Path Design........................................ .............. .................... X ................. ................
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 84000]]

b. Remaining Technologies
After a thorough review of each technology, DOE concludes that all
of the remaining identified technologies not ``screened out'' meet all
of the screening criteria. In summary, DOE retained (i.e., did not
screen out) the technology options listed below:
<bullet> Multi-stage heating components and controls;
<bullet> High-efficiency fan motors;
<bullet> Inverter controls for PSC motors, and
<bullet> Higher-efficiency fan blades.
DOE determined that these technology options are technologically
feasible because they are being used or have previously been used in
commercially-available products or working prototypes. DOE also finds
that all of the remaining technology options meet the other screening
criteria (i.e., practicable to manufacture/install/service; do not
result in adverse impacts on product utility, product availability,
health, or safety; and do not utilize unique-pathway proprietary
technologies). DOE considers these remaining technology options as the
basis for higher efficiency levels that DOE could consider for
potential amended standards.
In response to the October 2023 NOPD, Lennox commented that
backward-inclined impellers do not guarantee efficiency improvements
for furnace fans. The commenter stated that there is a limited number
of backward-inclined impellers on the market and expressed concern
about the feasibility of implementing this technology option across all
input capacities and cabinet sizes, which could lead to the
unavailability of certain furnace product sizes. Consequently, Lennox
recommended that this technology should not form the basis for more-
stringent furnace fan standards. (Lennox, No. 30 at p. 2)
As discussed in the October 2023 NOPD, even if there are only a
limited number of commercially-available product designs that
incorporate backward-inclined impellers, they are sufficient to
demonstrate technological feasibility, as required by EPCA and
clarified in DOE's regulations at 10 CFR part 430, subpart C, appendix
A, section 7(b)(1). 88 FR 69826, 69836 (Oct. 6, 2023). Further, DOE is
aware of backward-inclined impellers that have been safely and reliably
implemented in consumer furnace fan models currently available on the
market and that reduce the FER of those units. Thus, DOE finds that
backward-inclined impellers pass the screening analysis and
consequently are suitable for further consideration. However, DOE
acknowledges that there may be additional challenges associated with
backward-inclined impellers, and these issues are discussed further in
section IV.H of this document.

B. Engineering and Cost Analysis

The purpose of the engineering analysis is to establish the
relationship between the efficiency and manufacturer production cost
(``MPC'') of the subject product (i.e., consumer furnace fans). There
are two elements to consider in the engineering analysis: (1) the
selection of efficiency levels to analyze (i.e., the ``efficiency
analysis''), and (2) the determination of product cost at each
efficiency level (i.e., the ``cost analysis''). In determining the
performance of higher-efficiency products, DOE considers those
technologies and design option combinations not eliminated by the
screening analysis. For each product class, DOE estimates the baseline
cost, as well as the incremental cost for the product at efficiency
levels above the baseline. The output of the engineering analysis is a
set of cost-efficiency ``curves'' that are used in downstream analyses
(i.e., the LCC and PBP analyses and the NIA).
DOE recently conducted an engineering analysis to determine the
cost-efficiency relationship for furnace fans for the October 2023
NOPD. 88 FR 69826, 69837-69849 (Oct. 6, 2023). For this final
determination, DOE reviewed market data collected as part of the market
and technology assessment (see section IV.A of this document) and has
determined that consumer furnace fan efficiencies have not changed
substantially since the October 2023 NOPD analysis. Thus, as discussed
in section IV.B.1 of this document, DOE maintained the efficiency
levels from the October 2023 NOPD in the final determination analysis.
Additionally, DOE examined its most recent inputs to its manufacturing
cost analysis (e.g., raw material prices, component prices, labor
rates) and found that, while underlying manufacturing costs inputs have
increased, the resulting manufacturing cost increases would be nearly
proportional at each efficiency level. In other words, the incremental
increase in cost to achieve each efficiency level would be
approximately the same as was presented in the October 2023 NOPD
analysis. Because incremental cost increases at efficiency levels above
the baseline would not change significantly, DOE concludes that an
updated cost analysis would not impact the results of this final
determination. Therefore, as discussed in sections IV.B.2 and IV.B.3 of
this document, DOE used the same cost analysis methodology as the
October 2023 NOPD, and the resulting cost-efficiency relationships used
for this final determination are the same as the October 2023 NOPD.
Further information on this analytical methodology is presented in the
following subsections.
1. Efficiency Analysis
DOE typically uses one of two approaches to develop energy
efficiency levels for the engineering analysis: (1) relying on observed
efficiency levels in the market (i.e., the efficiency-level approach),
or (2) determining the incremental efficiency improvements associated
with incorporating specific design options to a baseline model (i.e.,
the design-option approach). Using the efficiency-level approach, the
efficiency levels established for the analysis are determined based on
the market distribution of existing products (in other words, based on
the range of efficiencies and efficiency-level ``clusters'' that
already exist on the market). Using the design-option approach, the
efficiency levels established for the analysis are determined through
detailed engineering calculations and/or computer simulations of the
efficiency improvements from implementing specific design options that
have been identified in the technology assessment. DOE may also rely on
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended
using the design-option approach to interpolate to define ``gap fill''
levels (to bridge large gaps between other identified efficiency
levels) and/or to extrapolate to the ``max-tech'' level (particularly
in cases where the ``max-tech'' level exceeds the maximum efficiency
level currently available on the market).
Although FER data exist in DOE's Compliance Certification Database
(``CCD'') for furnace fans currently subject to efficiency standards,
DOE has determined through testing that for many furnace fan models,
the rated FER values may not be representative of the model's actual
performance. During confidential manufacturer interviews, several
manufacturers confirmed that they rate the FER of their furnace fan
products conservatively. Therefore, an efficiency-level approach was
not possible because the FER ratings of products currently available
are largely not representative of their actual performance. Thus, DOE
chose a design-option approach to identify efficiency

[[Page 84001]]

levels for the analysis in this final determination.
a. Baseline Efficiency
For each product class, DOE generally selects a baseline model as a
reference point for each class, and measures anticipated changes to the
product resulting from potential energy conservation standards against
the baseline model. The baseline model in each product class represents
the characteristics of products typical of that class (e.g., capacity,
physical size). Generally, a baseline model is one that just meets
current energy conservation standards, or, if no standards are in
place, the baseline is typically the most-common or least-efficient
unit on the market. For consumer furnace fans, the energy conservation
standard sets a maximum energy usage requirement, and, therefore, a
baseline furnace fan's rated FER is just below or at the maximum FER
threshold.
DOE used baseline units for comparison in several analyses,
including the engineering analysis, LCC analysis, PBP analysis, and
NIA. To determine energy savings that will result from an amended
energy conservation standard, DOE compared energy use at each of the
higher efficiency levels to the energy consumption of the baseline
unit. Similarly, to determine the changes in price to the consumer that
will result from an amended energy conservation standard, DOE compared
the prices of baseline units to the prices of units at each higher
efficiency level.
The identification of baseline units requires establishing the
baseline efficiency level. In cases where there is an existing
standard, DOE defines ``baseline units'' as units with efficiencies
equal to the current Federal energy conservation standards. For the MH-
NWO-NC furnace fan product class, which does not currently have energy
conservation standards, DOE developed the baseline equation by
modifying the current energy conservation standards for the NWO-NC
product class to account for the lower ESP experienced by mobile home
units compared to other units. Specifically, DOE multiplied the y-
intercept (382) by 0.75, which was the conversion factor determined in
the analysis for the July 2014 Final Rule that was previously used to
calculate the MH-NWG-NC baseline based on the NWG-NC baseline.\10\
---------------------------------------------------------------------------

\10\ Chapter 5 of the TSD accompanying the July 2014 Final Rule
includes additional details about how this conversion factor was
calculated. See docket no. EERE-2010-BT-STD-0011.
---------------------------------------------------------------------------

In the October 2023 NOPD, DOE used the current energy conservation
standards for consumer furnace fans and the developed equation for MH-
NWO-NC furnace fans, presented in Table IV.4, as the baseline FER
efficiency level for each consumer furnace fan product class, along
with the typical characteristics of a baseline unit.

Table IV.4--Baseline Efficiency Levels and Associated Design Options for Each Product Class
----------------------------------------------------------------------------------------------------------------
Product class Maximum FER Design option
----------------------------------------------------------------------------------------------------------------
Non-weatherized, non-condensing gas 0.044 * QMax + 182........................ BPM motor w/forward-
furnace fan. inclined impeller.
Non-weatherized, condensing gas furnace 0.044 * QMax + 195........................ BPM motor w/forward-
fan. inclined impeller.
Weatherized, non-condensing gas furnace 0.044 * QMax + 199........................ BPM motor w/forward-
fan. inclined impeller.
Non-weatherized, non-condensing oil 0.071 * QMax + 382........................ Improved PSC motor w/
furnace fan. forward-inclined
impeller.
Non-weatherized electric furnace fan/ 0.044 * QMax + 165........................ BPM motor w/forward-
modular blower fan. inclined impeller.
Manufactured home, non-weatherized, non- 0.071 * QMax + 222........................ Improved PSC motor w/
condensing gas furnace fan. forward-inclined
impeller.
Manufactured home, non-weatherized, 0.071 * QMax + 240........................ Improved PSC motor w/
condensing gas furnace fan. forward-inclined
impeller.
Manufactured home, non-weatherized 0.044 * QMax + 101........................ BPM motor w/forward-
electric furnace fan/modular blower fan. inclined impeller.
Manufactured home, non-weatherized, non- 0.071 * QMax + 287........................ Improved PSC motor w/
condensing oil furnace fan. forward-inclined
impeller.
----------------------------------------------------------------------------------------------------------------

Products in the NWG-NC, NWG-C, WG-NC, NWEF/NWMB, and MH-EF/MB
product classes are currently subject to the standards set in the July
2014 Final Rule, in which the efficiency levels adopted were understood
at that time to reflect models with CT-BPM motors and multi-stage
operation. Products in the NWO-NC and MH-NWG-NC product classes are
currently subject to standards set in the July 2014 Final Rule, in
which the efficiency levels adopted were understood to correspond to
the performance associated with models including improved PSC motors
and single-stage operation. Baseline products in the MH-NWO-NC product
class were also found to correspond to performance associated with
models including improved PSC motors and single-stage operation, based
on DOE's market findings for mobile home oil-fired units certified in
DOE's CCD for consumer furnaces.
Many furnaces include multi-stage or modulating heating controls.
However, based on current furnace fan market data, as well as feedback
received during manufacturer interviews, it is unclear if these
features impact furnace fan efficiency as measured by FER (see section
IV.A.2 of this document). Therefore, DOE did not include the costs of
multi-stage or modulating heating controls in the baseline design
(i.e., DOE's MPC estimates reflect single-stage units). However, DOE
did develop separate cost values for multi-stage or modulating heating
controls that can be applied to the above costs to represent the
addition of multi-stage or modulating heating controls (see section
IV.B.2.b of this document). These additional cost values are used in
DOE's LCC and PBP analyses in order to represent typical furnace fan
cost distributions.
In addition, the baseline motor technology is either BPM or PSC,
depending on the product class. Manufacturers may choose a CA-BPM motor
instead of a CT-BPM, despite its relatively higher cost, to add
comfort-related benefits to their product. This additional comfort may
be marketed as a premium feature. Therefore, DOE included the cost of a
CT-BPM motor in the MPCs for furnace fans with BPM motors. DOE also
developed cost values to represent the cost increase for CA-BPM motors
relative to CT-BPM motors (see section IV.B.2.b of this document).
These values were applied in the LCC

[[Page 84002]]

analysis to represent the distribution of BPM blower motor technologies
expected on the market because, although DOE is not differentiating
between CA-BPM motors and CT-BPM motors in terms of furnace fan
efficiency, manufacturers and consumers may consider CA-BPM motors to
be a premium feature that may offer comfort-related consumer benefits.
In developing the cost-efficiency relationship, teardowns of
baseline units were used as a reference point for determining the cost-
efficiency relationship of units with lower (more efficient) FERs. DOE
compared the design features incorporated into products at the baseline
efficiency to the features of units with higher energy efficiencies in
order to determine the changes in manufacturing, installation, and
operating costs that occur as FER decreases.
DOE did not receive comments in response to the baseline efficiency
levels used in the October 2023 NOPD. Therefore, for this final
determination, DOE used the baseline efficiency levels as presented in
the October 2023 NOPD.
b. Intermediate Efficiency Levels
As noted, EPCA requires that any new or amended energy conservation
standard be designed to achieve the maximum improvement in energy
efficiency that is technologically feasible and economically justified.
(42 U.S.C. 6295(o)(2)(A))
In the October 2023 NOPD, DOE analyzed intermediate efficiency
levels for NWO-NC, MH-NWG-NC, MH-NWG-C, and MH-NWO-NC classes of
consumer furnace fans. 88 FR 69826, 69840 (Oct. 6, 2023). As discussed
in section IV.B.1.c of this document, DOE did not identify any
efficiency levels between baseline and max-tech for the NWG-NC, NWG-C,
WG-NC, NWEF/NWMB, and MH-EF/MB classes. The intermediate efficiency
levels identified are representative of efficiency levels where major
technological changes occur (i.e., replacing PSC motors with BPM
motors). As discussed in section IV.B.1.a of this document, DOE has
found that CT-BPM motors and CA-BPM motors have comparable impacts on
FER ratings, and DOE has, therefore, only analyzed a single efficiency
level reflecting the implementation of BPM motors. In the 2014 Final
Rule (79 FR 38130, 38159), DOE used the assumption of a 12-percent
reduction in FER for improved PSC motors and a 46-percent reduction in
FER for models with a CT-BPM and multi-staging from the baseline to
calculate a 39-percent reduction in FER from improved PSC (the current
baseline) to CT-BPM with multi-staging. The 39-percent reduction in FER
is implemented into the current analysis to represent the reduction in
FER from improved PSC to a model with a CT-BPM (regardless of staging)
because DOE decided not to include staging as a technology option that
improves FER.
In commenting on the October 2023 NOPD, the Joint Advocates
recommended that DOE gather additional information about BPM motor
efficiency and analyze an efficiency level with improved (i.e., higher-
efficiency) BPM motors. The Joint Advocates commented that, based on
conversations with motor manufacturers, more-efficient BPM motors exist
in the furnace fan market and would improve furnace fan efficiency.
(Joint Advocates, No. 31 at p. 3)
In response, as discussed in section IV.A.2 of this document, DOE
does not currently have the data necessary to determine the
relationship between improved BPM motor efficiency and furnace fan
efficiency. Therefore, although DOE continued to analyze BPM motors as
a technology that improves FER, the Department did not analyze an
efficiency level based on improved BPM motor efficiency (relative to
the BPM motor efficiency identified in the October 2023 NOPD) for this
final determination.
c. Maximum Technology (``Max-Tech'') Efficiency Levels
As part of its analysis, DOE identifies the ``maximum available''
efficiency level, representing the highest-efficiency unit currently
available on the market. DOE also defines a ``max-tech'' efficiency
level, representing the maximum theoretical efficiency that can be
achieved through the application of all available technology options
retained from the screening analysis. In many cases, the max-tech
efficiency level is not commercially available because it is not
currently economically feasible.
In the October 2023 NOPD, DOE identified the max-tech design for
all consumer furnace fan product types as incorporating a BPM motor and
a backward-inclined impeller. 88 FR 69826, 69840 (Oct. 6, 2023). BPM
motors are described in sections IV.B.1.a and IV.B.1.b of this
document. For furnace fan models that use PSC motors, BPM motors can
offer an improvement in efficiency and reduce FER. Backward-inclined
impellers, in comparison to forward-inclined impellers (which are used
in the majority of furnace fans on the market), have been found to have
a higher efficiency under certain operating conditions. DOE has used
the same assumptions about the percent reduction in FER associated with
implementing backward-inclined impellers as in the July 2014 Final Rule
(i.e., a 10-percent reduction in FER compared to models that include
forward-inclined impellers). 79 FR 38130, 38159 (July 3, 2014).
In response to the October 2023 NOPD, the Joint Advocates
encouraged DOE to investigate the most efficient furnace fans currently
available on the market that exceed DOE's max-tech level. The
commenters argued that there are many furnace fan models across a range
of airflows in the major product classes that are more efficient than
EL 1. The Joint Advocates added that there are many NWG-C furnace fans
in the CCD that exceed the max-tech level by more than 10 percent and
do not appear to use backward-inclined impeller technology. The Joint
Advocates further stated it is unlikely that the CCD overstates the
efficiencies of these fans, as they are often rated conservatively.
(Joint Advocates, No. 31 at p. 2)
In response, DOE assessed the furnace fan entries in the CCD that
are rated at a lower FER than would be required by the max-tech
efficiency level and found that these fans used a variety of motor
technologies, staging technologies, and controls. DOE was unable to
identify a design option that captured the technologies used in these
units to develop an additional efficiency level. DOE notes that
technologies such as housing design modifications and airflow design
paths could allow the identified furnace fans to achieve FER ratings
below those prescribed by the max-tech efficiency levels. However, as
discussed in section IV.A.4 of this document, these technology options
were screened out due to adverse impacts on product utility. Therefore,
for this final determination, DOE concludes that the max-tech
efficiency levels, as presented in the October 2023 NOPD, accurately
reflect the maximum possible efficiency levels using the technology
options remaining after the screening analysis.
d. Summary of Efficiency Levels Analyzed
The FER efficiency levels and associated technologies expected to
be used to increase energy efficiency above the baseline levels for
each class of consumer furnace fans are presented in Table IV.5 through
Table IV.13, respectively.

[[Page 84003]]

Table IV.5--Efficiency Levels and Technologies Used at Each Efficiency Level for NWG-NC Fans
----------------------------------------------------------------------------------------------------------------
Description of Percentage
EL FER equation technologies typically reduction in FER
incorporated from baseline
----------------------------------------------------------------------------------------------------------------
0--Baseline........................... 0.044 * QMax + 182....... BPM motor w/forward- N/A
curved impeller.
1--Max-tech........................... 0.04 * QMax + 164........ BPM motor w/backward- 10
inclined impeller.
----------------------------------------------------------------------------------------------------------------

Table IV.6--Efficiency Levels and Technologies Used at Each Efficiency Level for NWG-C Fans
----------------------------------------------------------------------------------------------------------------
Description of Percentage
EL FER equation technologies typically reduction in FER
incorporated from baseline
----------------------------------------------------------------------------------------------------------------
0--Baseline........................... 0.044 * QMax + 195....... BPM motor w/forward- N/A
curved impeller.
1--Max-tech........................... 0.04 * QMax + 176........ BPM motor w/backward- 10
inclined impeller.
----------------------------------------------------------------------------------------------------------------

Table IV.7--Efficiency Levels and Technologies Used at Each Efficiency Level for WG-NC Fans
----------------------------------------------------------------------------------------------------------------
Description of Percentage
EL FER equation technologies typically reduction in FER
incorporated from baseline
----------------------------------------------------------------------------------------------------------------
0--Baseline........................... 0.044 * QMax + 199....... BPM motor w/forward- N/A
curved impeller.
1--Max-tech........................... 0.04 * QMax + 179........ BPM motor w/backward- 10
inclined impeller.
----------------------------------------------------------------------------------------------------------------

Table IV.8--Efficiency Levels and Technologies Used at Each Efficiency Level for NWEF/NWMB Fans
----------------------------------------------------------------------------------------------------------------
Description of Percentage
EL FER equation technologies typically reduction in FER
incorporated from baseline
----------------------------------------------------------------------------------------------------------------
0--Baseline........................... 0.044 * QMax + 165....... BPM motor w/forward- N/A
curved impeller.
1--Max-tech........................... 0.04 * QMax + 149........ BPM motor w/backward- 10
inclined impeller.
----------------------------------------------------------------------------------------------------------------

Table IV.9--Efficiency Levels and Technologies Used at Each Efficiency Level for MH-EF/MB Fans
----------------------------------------------------------------------------------------------------------------
Description of Percentage
EL FER equation technologies typically reduction in FER
incorporated from baseline
----------------------------------------------------------------------------------------------------------------
0--Baseline........................... 0.044 * QMax + 101....... BPM motor w/forward- N/A
curved impeller.
1--Max-tech........................... 0.04 * QMax + 91......... BPM motor w/backward- 10
inclined impeller.
----------------------------------------------------------------------------------------------------------------

Table IV.10--Efficiency Levels and Technologies Used at Each Efficiency Level for MH-NWG-NC Fans
----------------------------------------------------------------------------------------------------------------
Description of Percentage
EL FER equation technologies typically reduction in FER
incorporated from baseline
----------------------------------------------------------------------------------------------------------------
0--Baseline........................... 0.071 * QMax + 222....... Improved PSC motor....... N/A
1..................................... 0.044 * QMax + 137....... BPM motor w/forward- 39
curved impeller.
2--Max-tech........................... 0.04 * QMax + 123........ BPM motor w/backward- 45
inclined impeller.
----------------------------------------------------------------------------------------------------------------

Table IV.11--Efficiency Levels and Technologies Used at Each Efficiency Level for MH-NWG-C Fans
----------------------------------------------------------------------------------------------------------------
Description of Percentage
EL FER equation technologies typically reduction in FER
incorporated from baseline
----------------------------------------------------------------------------------------------------------------
0--Baseline........................... 0.071 * QMax + 240....... Improved PSC motor....... N/A
1..................................... 0.044 * QMax + 148....... BPM motor w/forward- 39
curved impeller.
2--Max-tech........................... 0.04 * QMax + 133........ BPM motor w/backward- 45
inclined impeller.
----------------------------------------------------------------------------------------------------------------

[[Page 84004]]

Table IV.12--Efficiency Levels and Technologies Used at Each Efficiency Level for NWO-NC Fans
----------------------------------------------------------------------------------------------------------------
Description of Percentage
EL FER equation technologies typically reduction in FER
incorporated from baseline
----------------------------------------------------------------------------------------------------------------
0--Baseline........................... 0.071 * QMax + 382....... Improved PSC motor....... N/A
1..................................... 0.044 * QMax + 236....... BPM motor w/forward- 39
curved impeller.
2--Max-tech........................... 0.04 * QMax + 212........ BPM motor w/backward- 45
inclined impeller.
----------------------------------------------------------------------------------------------------------------

Table IV.13--Efficiency Levels and Technologies Used at Each Efficiency Level MH-NWO-NC Fans
----------------------------------------------------------------------------------------------------------------
Description of Percentage
EL FER equation technologies typically reduction in FER
incorporated from baseline
----------------------------------------------------------------------------------------------------------------
0--Baseline........................... 0.071 * QMax + 287....... Improved PSC motor....... N/A
1..................................... 0.044 * QMax + 176....... BPM motor w/forward- 39
curved impeller.
2--Max-tech........................... 0.04 * QMax + 158........ BPM motor w/backward- 45
inclined impeller.
----------------------------------------------------------------------------------------------------------------

2. Cost Analysis
The cost analysis portion of the engineering analysis is conducted
using one or a combination of cost approaches. The selection of cost
approach depends on a suite of factors, including the availability and
reliability of public information, characteristics of the regulated
product, and the availability and timeliness of purchasing the product
on the market. The cost approaches generally used by DOE are summarized
as follows:
[ballot] Physical teardowns: Under this approach, DOE physically
dismantles commercially-available products, component-by-component, to
develop a detailed bill of materials for the products.
[ballot] Catalog teardowns: In lieu of physically deconstructing
products, DOE identifies each component using parts diagrams (available
from manufacturer websites or appliance repair websites, for example)
to develop the bill of materials for the product.
[ballot] Price surveys: If neither a physical nor catalog teardown
is feasible (e.g., for tightly integrated products such as fluorescent
lamps, which are infeasible to disassemble and for which parts diagrams
are unavailable), cost-prohibitive, or otherwise impractical (e.g.,
large commercial boilers), DOE conducts price surveys using publicly-
available pricing data published on major online retailer websites and/
or by soliciting prices from distributors and other commercial
channels.
In the October 2023 NOPD, DOE conducted the cost analysis using a
combination of physical and catalog teardowns to assess how
manufacturing costs change with increased product efficiency. 88 FR
69826, 69844 (Oct. 6, 2023). DOE estimated the MPC associated with each
efficiency level to characterize the cost-efficiency relationship of
improving consumer furnace fan performance. The MPC estimates are not
for the entire HVAC product. Because consumer furnace fans are a
component of the HVAC product into which they are integrated, the MPC
estimates include costs only for the components of the HVAC product
that impact FER. Id.
Products were selected for physical teardown analysis that have
characteristics of typical products on the market near a representative
input capacity of 80,000 Btu/h for the NWG-NC, NWG-C, WG-NC, NWEF/NWMB,
MH-NWG-NC, MH-NWG-C, MH-EF/MB, and MH-WG product classes and 105,000
Btu/h for the NWO-NC and MH-NWO-NC product classes (determined based on
market data and discussions with manufacturers). Selections spanned a
range of FER efficiency levels and designs and included most
manufacturers. The resulting bill of materials provides the basis for
the MPC estimates for products at various efficiency levels spanning
the full range of efficiencies from the baseline to max-tech.
To account for manufacturers' non-production costs and profit
margin, DOE applies a non-production cost multiplier (the manufacturer
markup) to the MPC. The resulting manufacturer selling price (``MSP'')
is the price at which the manufacturer distributes a unit into
commerce. DOE developed an average manufacturer markup by examining the
annual Securities and Exchange Commission (``SEC'') 10-K reports filed
by publicly-traded manufacturers primarily engaged in HVAC
manufacturing and whose combined product range includes consumer
furnace fans. DOE refined its understanding of manufacturer markups by
using information obtained during manufacturer interviews. The
manufacturer markups were used to convert the MPCs into MSPs. Further
information on this analytical methodology is presented in the
following subsections.
a. Teardown Analysis
For the October 2023 NOPD, to assemble bills of materials
(``BOMs'') and to calculate manufacturing costs for the different
components in consumer furnace fans, multiple units were disassembled
into their base components, and DOE estimated the materials, processes,
and labor required to manufacture each individual component, a process
referred to as a ``physical teardown.'' Using the data gathered from
the physical teardowns, each component was characterized according to
its weight, dimensions, material, quantity, and the manufacturing
processes used to fabricate and assemble it.
For supplementary catalog teardowns, product data were gathered,
such as dimensions, weight, and design features from publicly-available
information such as manufacturer catalogs. Such ``virtual teardowns''
allowed DOE to estimate the major physical differences between a
product that was physically disassembled and a similar product that was
not. For this final determination, data from a total of 61 physical and
virtual teardowns of consumer furnace fans were used to calculate
industry MPCs in the engineering analysis.
The models selected for teardown in each product class represented
manufacturers with large market shares in the product classes for which
their teardown units are categorized. Whenever possible, DOE examined
multiple models from a given manufacturer that capture different design
options and used them as direct points of comparison. DOE examined

[[Page 84005]]

products with PSC, CT-BPM, and CA-BPM indoor blower motors, as well as
products using single-stage, two-stage, and modulating combustion
systems. As further discussed in section IV.B.2.b of this document,
cost values were developed for some of these technologies to estimate
the manufacturing cost of changing designs from one technology to
another (i.e., using a CA-BPM instead of a CT-BPM, or two-stage
combustion instead of single-stage combustion).
As described in Chapter 5 of the November 2022 Preliminary Analysis
TSD, DOE found that MPC did not differ significantly across product
classes at a given efficiency level and given production volume because
manufacturers use similar components. Therefore, in this analysis, DOE
used teardowns of non-weatherized gas and mobile home gas furnaces to
represent all high-volume product classes, including NWG-NC, NWG-C, WG-
NC, NWEF/NWMB, and MH-EF/MB, while teardowns of non-weatherized oil
units were used for the analysis of the NWO-NC and MH-NWO-NC product
classes.
b. Cost Estimation Method
For the October 2023 NOPD, the costs of individual models were
estimated using the content of the BOMs (i.e., relating to materials,
fabrication, labor, and all other aspects that make up a production
facility) to generate MPCs. The resulting MPCs include costs such as
overhead and depreciation, in addition to materials and labor costs.
DOE collected information on labor rates, tooling costs, raw material
prices, and other factors to use as inputs into the cost estimates. For
purchased parts, DOE estimates the purchase price based on volume-
variable price quotations and detailed discussions with manufacturers
and component suppliers. Furnace fans are a component of HVAC products
that include other products not associated with the cost and/or
efficiency of the furnace fan. Therefore, DOE focused its engineering
analysis on the components that compose the furnace fan assembly,
including:
<bullet> Fan motor and integrated controls (as applicable);
<bullet> HVAC product control boards;
<bullet> Impellers;
<bullet> Single-staging or multi-staging components and controls;
<bullet> Fan housing, and
<bullet> Components used to direct or guide airflow.
For purchased parts, DOE estimated the purchase prices paid to the
original equipment manufacturers (``OEMs'') of these parts based on
discussions with manufacturers during confidential interviews. Whenever
possible, DOE obtained price quotes directly from the component
suppliers used by furnace fan manufacturers whose products were
examined in the engineering analysis. DOE determined that the
components in Table IV.14 are generally purchased from outside
suppliers.

Table IV.14--Purchased Furnace Fan Components
------------------------------------------------------------------------
Assembly Purchased sub-assemblies or components
------------------------------------------------------------------------
Fan assembly................. Fan motor.
Motor capacitor (when applicable).
Impeller.
Controls..................... Primary control board (``PCB'').
Multi-staging components (when
applicable).
------------------------------------------------------------------------

For parts fabricated in-house, the costs of underlying ``raw''
materials are determined based on manufacturer interviews, quotes from
suppliers, and secondary research. Past results are updated
periodically and/or inflated to present-day prices using indices from
resources such as MEPS International,\11\ PolymerUpdate,\12\ the U.S.
Geological Survey (``USGS''),\13\ and the U.S. Bureau of Labor
Statistics (``BLS'').\14\ The prices of the underlying raw metals
(e.g., tube, sheet metal) are estimated on the basis of five-year
averages spanning from 2018 through 2022 to smooth out spikes in
demand. For non-metal raw material prices (e.g., plastic resins,
insulation materials), DOE used prices based on current market data,
rather than a five-year average, because non-metal raw materials
typically do not experience the same level of price volatility as metal
raw materials.
---------------------------------------------------------------------------

\11\ For more information on MEPS International, please visit
<a href="http://www.mepsinternational.com/gb/en">www.mepsinternational.com/gb/en</a> (last accessed March 25, 2024).
\12\ For more information on PolymerUpdate, please visit
<a href="http://www.polymerupdate.com">www.polymerupdate.com</a> (last accessed March 25, 2024).
\13\ For more information on USGS metal price statistics, please
visit <a href="http://www.usgs.gov/centers/national-minerals-information-center/commodity-statistics-and-information">www.usgs.gov/centers/national-minerals-information-center/commodity-statistics-and-information</a> (last accessed March 25, 2024).
\14\ For more information on the BLS producer price indices,
please visit <a href="http://www.bls.gov/ppi/">www.bls.gov/ppi/</a> (last accessed March 25, 2024).
---------------------------------------------------------------------------

Certain factory parameters--such as fabrication rates, labor rates,
and wages--also affect the cost of each unit produced. DOE factory
parameter assumptions were based on internal expertise and manufacturer
feedback. Table IV.15 lists the factory parameter assumptions used for
both high-volume and low-volume manufacturers. For the engineering
analysis, these factory parameters, including production volume, are
the same at every efficiency level. The production volume used at each
efficiency level corresponds with the average production volume per
manufacturer, if 100 percent of all units manufactured were at that
efficiency level. These assumptions are generalized to represent
typical production and are not intended to model a specific factory.
For the NWG-NC, NWG-C, WG-NC, NWEF/NWMB, MH-NWG-NC, MH-NWG-C, and MH-
EF/MB product classes, high production volume parameters were assumed
due to these classes having generally high production volumes or using
enough of the same major components as other high production volume
classes. For NWO-NC and MH-NWO product classes, low production
parameters were assumed.

Table IV.15--Factory Parameter Assumptions
----------------------------------------------------------------------------------------------------------------
Parameter High-volume furnace fan estimate Low-volume furnace fan estimate
----------------------------------------------------------------------------------------------------------------
Actual Annual Production Volume 1,500,000............................ 5,000.
(units/year).

[[Page 84006]]

Purchased Parts Volume............. 500,000 units/year................... 5,000 units/year.
Workdays Per Year (days)........... 250.................................. 250.
Assembly Shifts Per Day (shifts)... 2.................................... 1.
Fabrication Shifts Per Day (shifts) 2.................................... 2.
Fabrication Labor Wages ($/h)...... 16................................... 16.
Assembly Labor Wages ($/h)......... 16................................... 16.
Length of Shift (hr)............... 8.................................... 8.
Average Equipment Installation Cost 10%.................................. 10%.
(% of purchase price).
Fringe Benefits Ratio.............. 50%.................................. 50%.
Indirect to Direct Labor Ratio..... 33%.................................. 33%.
Average Scrap Recovery Value....... 30%.................................. 30%.
Worker Downtime.................... 10%.................................. 10%.
Building Life (in years)........... 25................................... 25.
Burdened Assembly Labor Wage ($/h). 24................................... 24.
Burdened Fabrication Labor Wage ($/ 24................................... 24.
h).
Supervisor Span (workers/ 25................................... 25.
supervisor).
Supervisor Wage Premium (over 30%.................................. 30%.
fabrication and assembly wage).
----------------------------------------------------------------------------------------------------------------

Constant-Airflow BPM Blower Motor Cost Value
As discussed in section IV.B.1.a of this document, for the NWG-NC,
NWG-C, WG-NC, NWEF/NWMB, and MH-WF/MB product classes, the current
baseline motor technology is a BPM motor, and specifically a CT-BPM
motor. DOE's research suggests that the predominant BPM indoor blower
motors sold on the market today are either a constant-torque or a
constant-airflow design. Both types of motors rely on electronic
variable-speed motor systems that are typically mounted in an external
chassis to the back of the motor. CA-BPM motors utilize feedback
control to adjust torque based on ESP in order to maintain a desired
airflow. This differentiates them from CT-BPM motors that will maintain
torque and likely decrease airflow output in environments with high
ESPs. Additionally, CA-BPM motors use feedback control to vary their
output to maintain pre-programmed airflows. DOE has found that there
are no significant differences in measured FER performance between
furnace fans using CA-BPM and CT-BPM motors; however, CA-BPM motors are
sometimes chosen for other benefits, such as increased consumer
comfort. CA-BPM fan motors typically cost more than CT-BPM motors while
not improving FER. Therefore, as discussed in section IV.B.1.a of this
document, DOE considered the baseline design to include CT-BPM motors
for the NWG-NC, NWG-C, WG-NC, NWEF/NWMB, and MH-EF/MB classes. However,
to better represent costs to consumers, DOE has developed cost values
for CA-BPMs that are applied in the LCC analysis to a portion of
furnace fan installations. Table IV.16 shows the cost difference
between CT-BPM and CA-BPM motors for high-volume and low-volume product
classes.

Table IV.16--Incremental Cost Difference for BPM Motors
------------------------------------------------------------------------
Incremental cost increase
Product class for CT-BPM to CA-BPM (2022$)
------------------------------------------------------------------------
NWG-C, NWG-NC, WG-NC, NWEF/NWMB, MH-NWG- $28.07
NC, MH-NWG-C, and MH-EF/MB...............
NWO-NC, MH-NWO-NC......................... 83.67
------------------------------------------------------------------------

Multi-Stage Furnace
As discussed in section IV.A.2 of this document, DOE has identified
a number of furnace fans in two-stage and modulating furnaces that are
rated at the same relative FER as single-stage furnaces. DOE has
determined that consumers choose to purchase multi-stage products for
the additional thermal comfort offered by furnaces with multiple stages
of heating output. During teardowns, DOE examined multi-stage furnace
designs to analyze the production cost differential for manufacturers
to switch from single-stage to two-stage or modulating combustion. DOE
determined a market-share weighted-average marginal cost increase of
$21.07 for the NWG-C, NWG-NC, WG-NC, NWEF/NWMB, MH-NWG-NC, MH-NWG-C,
and MH-EF/MB classes to change a furnace from a single-stage to a two-
stage design. DOE determined that oil units with multi-staging were
rare and, thus, not representative of the market, so DOE did not
analyze the cost increase of multi-stage burners for the NWO-NC and MH-
NWO-NC product classes. Where applicable, the additional cost to change
to a two-stage furnace includes the added cost of a two-stage gas
valve, a two-speed inducer assembly, an additional pressure switch, and
additional controls and wiring. As with the blower motor costs
discussed previously, the additional cost of a multi-stage burner is
accounted for in the LCC analysis based on the market penetration of
such designs for furnaces.
Scaling to Alternative Input Capacities
For the October 2023 NOPD, DOE also developed equations to scale
the MPC results at the representative capacity to the full range of
input capacities available on the market for each motor type. DOE
performed regression analyses on the discrete MPCs for each teardown
and their respective input capacities--which spanned a range of
capacities and airflows and encompassed a range of motor sizes--to
generate an equation for each motor technology that reflects the
relationship between these parameters. These

[[Page 84007]]

parameters were derived separately for high-volume (NWG-C, NWG-NC, MH-
NWG-NC, MH-NWG-C, and WG-NC) and low-volume (NWO-NC and MH-NWO-NC)
product classes. These equations, which are presented in Table IV.17,
are used in the LCC analysis (see section IV.E of this document) to
analyze the impacts on furnace fans over the full range of input
capacities. To estimate the MPC at a given input, first the appropriate
adder is calculated using the equation and then the result added to or
subtracted from (as applicable) the MPC at the representative input
capacity.

Table IV.17--Equations for Scaling MPCs to Additional Input Capacities
----------------------------------------------------------------------------------------------------------------
Input Capacity MPC Scaling Equation: MPC Change = Slope * (Input Capacity (kBtu/h)-Representative Capacity (kBtu/
h))
-----------------------------------------------------------------------------------------------------------------
NWGF-C, NWGF-NC, MH-NWGF-
NC, MH-NWGF-C, WGF-NC NWOF-NC and MH-
NWOF-NC
----------------------------------------------------------------------------------------------------------------
Motor technology................................................ Slope Slope
PSC............................................................. 0.0650 0.7031
Constant-torque BPM............................................. 0.1395 0.6272
Constant-airflow BPM............................................ 0.1603 1.0069
----------------------------------------------------------------------------------------------------------------

Backward-Inclined Impellers
For the max-tech efficiency levels, in the October 2023 NOPD, DOE
estimated the cost to manufacture a backward-inclined impeller by using
manufacturer feedback along with photographs and specifications found
in research reports to determine cost model inputs to estimate the MPCs
of the backward-inclined impeller. 88 FR 69826, 69847 (Oct. 6, 2023).
These costs were scaled to different capacities by evaluating the
impact of the backward-inclined impeller on the overall furnace system,
depending on the average cabinet width at that capacity. DOE estimated
the manufacturing cost of implementing a backward-inclined impeller and
compared it to the average cost of using the forward-inclined impellers
that are ubiquitous in furnace fans currently on the market to
determine the incremental increase in MPC associated with implementing
backward-inclined impellers as compared to forward-inclined impellers.
The cost increases for backward-inclined impellers at each capacity
were applied at the max-tech level to estimate the MPCs and are
outlined in Table IV.18.

Table IV.18--Backward-Inclined Impeller MPC Increases
------------------------------------------------------------------------
Input capacity (kBtu/h) High volume (2022$) Low volume (2022$)
------------------------------------------------------------------------
40 28.60 34.15
60 34.93 41.71
80 37.21 44.43
100 55.18 65.89
120 59.09 70.56
------------------------------------------------------------------------

3. Cost-Efficiency Results
The results of the October 2023 NOPD engineering analysis are the
MPCs for each furnace fan product class analyzed at each FER efficiency
level (and associated design option), resulting in a cost-efficiency
relationship. The cost-efficiency results are shown in tabular form in
Table IV.19 through Table IV.21 in the form of efficiency versus MPC.
(Q<INF>Max</INF> is the airflow, in cfm, at the maximum airflow-control
setting measured using the DOE test procedure.) As described in section
IV.B.2.b of this document, the MPC presented is not for the entire HVAC
product, because furnace fans are a component of the HVAC product in
which they are integrated.
As discussed in section IV.B.2.b of this document, separate cost
values were developed for constant-airflow BPM motors and multi-staging
because these premium design elements could add comfort or provide
other benefits but were not incorporated as design options into
efficiency levels for furnace fans used in this analysis.
DOE used the cost-efficiency curves from the engineering analysis
as an input to the LCC analysis to determine the added price of the
more-efficient furnace fan components in HVAC equipment sold to the
customer (see section IV.E of this document).

Table IV.19--Cost-Efficiency Results by Product Class--NWG-NC, NWG-C,
WGF-NC, NWEF/NWMB, and MH-EF/MB
------------------------------------------------------------------------
Efficiency level
---------------------------------------
Design option
---------------------------------------
Baseline EL 1
---------------------------------------
BPM motor +
BPM motor backward-inclined
impeller
------------------------------------------------------------------------
MPC............................. $108.06........... $136.13.
---------------------------------------
Product class................... Maximum allowable FER equation
---------------------------------------

[[Page 84008]]

NWG-NC.......................... 0.044 * QMax + 182 0.04 * QMax + 164.
NWG-C........................... 0.044 * QMax + 195 0.04 * QMax + 176.
WG-NC........................... 0.044 * QMax + 199 0.04 * QMax + 179.
NWEF/NWMB....................... 0.044 * QMax + 165 0.04 * QMax + 149.
MH-EF/MB........................ 0.044 * QMax + 101 0.04 * QMax + 91.
------------------------------------------------------------------------

Table IV.20--Cost-Efficiency Results by Product Class--MH-NWG-NC and MH-NWG-C
----------------------------------------------------------------------------------------------------------------
Efficiency level
--------------------------------------------------------------------------
Design option
--------------------------------------------------------------------------
Baseline EL 1 EL 2
--------------------------------------------------------------------------
BPM motor + backward-
Improved PSC BPM motor inclined impeller
----------------------------------------------------------------------------------------------------------------
MPC.................................. $82.39................. $108.06................ $136.13.
--------------------------------------------------------------------------
Product class........................ Maximum allowable FER equation
--------------------------------------------------------------------------
MH-NWG-NC............................ 0.071 * QMax + 222..... 0.044 * QMax + 137..... 0.04 * QMax + 123.
MH-NWG-C............................. 0.071 * QMax + 240..... 0.044 * QMax + 148..... 0.04 * QMax + 133.
----------------------------------------------------------------------------------------------------------------

Table IV.21--Cost-Efficiency Results by Product Class--NWO-NC and MH-NWO-NC
----------------------------------------------------------------------------------------------------------------
Efficiency level
--------------------------------------------------------------------------
Design option
--------------------------------------------------------------------------
Baseline EL 1 EL 2
--------------------------------------------------------------------------
BPM motor + backward-
Improved PSC BPM motor inclined impeller
----------------------------------------------------------------------------------------------------------------
MPC.................................. $195.61................ $216.95................ $300.62.
--------------------------------------------------------------------------
Product Class........................ Maximum allowable FER equation
--------------------------------------------------------------------------
NWO-NC............................... 0.071 * QMax + 382..... 0.044 * QMax + 236..... 0.04 * QMax + 212.
MH-NWO-NC............................ 0.071 * QMax + 287..... 0.044 * QMax + 176..... 0.04 * QMax + 158.
----------------------------------------------------------------------------------------------------------------

In commenting on the October 2023 NOPD, Lennox stated that
equipment costs have increased since the most recent furnace fans
standards went into effect in 2019. (Lennox, No. 30 at pp. 1-3) The
commenter argued that consumers are struggling to afford new furnace
equipment due to inflation and supply-chain issues. Lennox stated that
this makes increasing furnace fan costs through standards particularly
ill-advised, and Lennox supported the NOPD's conclusion that amended
standards are not appropriate. (Id.)
In response, DOE notes that changes in equipment costs have been
taken into account in the engineering analysis for this final
determination. As discussed in section IV.B.2.b of this document, DOE
gathered price quotations for purchased parts from major suppliers at
different production volumes during manufacturer interviews that were
conducted after the standards went into effect in 2019. For parts
produced in-house, metal raw material prices are estimated on the basis
of five-year averages, spanning from 2018 through 2022, which includes
changes since the 2019 standards went into effect. These material costs
are captured in the cost-efficiency results and, in turn, are reflected
in the LCC and PBP analyses, which are outlined in section IV.E of this
document.
In this final determination DOE maintained the same cost analysis
as that used for the October 2023 NOPD. As a result, the cost-
efficiency relationships used for this final determination are the same
as those presented in the October 2023 NOPD.

C. Markups Analysis

The markups analysis develops appropriate markups (e.g.,
distributor markups, retailer markups, contractor markups) in the
distribution chain and sales taxes to convert the MSP estimates derived
in the engineering analysis to consumer prices, which are then used in
the LCC and PBP analyses. At each step in the distribution channel,
companies mark up the price of the product to cover business costs and
profit margin.
As part of the analysis, DOE identifies key market participants and
distribution

[[Page 84009]]

channels. As in the October 2023 NOPD, DOE used the same distribution
channels for furnace fans as it used for furnaces in the recent energy
conservation standards rulemaking for those products. DOE believes that
this is an appropriate approach because the vast majority of the
furnace fans covered in this rulemaking are a component of a furnace.
DOE has concluded that there is insufficient evidence of a replacement
market for furnace fans to establish a separate distribution channel on
that basis.
DOE developed baseline and incremental markups for each actor in
the distribution chain. Baseline markups are applied to the price of
products with baseline efficiency, while incremental markups are
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The incremental
markup is typically less than the baseline markup and is designed to
maintain similar per-unit operating profit before and after new or
amended standards.\15\
---------------------------------------------------------------------------

\15\ Because the projected price of standards-compliant products
is typically higher than the price of baseline products, using the
same markup for the incremental cost and the baseline cost would
result in higher per-unit operating profit. While such an outcome is
possible, DOE maintains that in markets that are reasonably
competitive it is unlikely that standards would lead to a
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------

To estimate average baseline and incremental markups, DOE relied on
several sources, including: (1) the HARDI 2013 Profit Report (i.e., for
wholesalers), and (2) U.S. Census Bureau 2017 Economic Census data on
the residential and commercial building construction industry (i.e.,
for general contractors, mechanical contractors, and mobile home
manufacturers). In addition, DOE used the 2005 Air Conditioning
Contractors of America's (``ACCA's'') financial analysis on the
heating, ventilation, air-conditioning, and refrigeration contracting
industry to disaggregate the mechanical contractor markups into
replacement and new construction markets. DOE also used various sources
for the derivation of the mobile home dealer markups (see chapter 6 of
the November 2022 Preliminary Analysis TSD).
DOE derived State and local taxes from data provided by the Sales
Tax Clearinghouse.\16\ These data represent weighted averages that
include county and city rates. DOE applied the State sales taxes to
match the State-level markups for wholesalers and mechanical and
general contractors.
---------------------------------------------------------------------------

\16\ Sales Tax Clearinghouse, Inc., State Sales Tax Rates Along
With Combined Average City and County Rates (Jan. 4, 2023)
(Available at: <a href="http://www.thestc.com/STrates.stm">www.thestc.com/STrates.stm</a>) (last accessed June 28,
2024).
---------------------------------------------------------------------------

DOE did not receive comments regarding markups in response to the
October 2023 NOPD. Chapter 6 of the November 2022 Preliminary Analysis
TSD provides details on DOE's development of markups for consumer
furnace fans.

D. Energy Use Analysis

The purpose of the energy use analysis is to determine the annual
energy consumption of consumer furnace fans at different efficiencies
in representative U.S. homes and commercial buildings, and to assess
the energy savings potential of increased consumer furnace fan
efficiency. The energy use analysis estimates the range of energy use
of the subject products in the field (i.e., as the products are
actually used by consumers). The energy use analysis provides the basis
for other analyses DOE performed, particularly assessments of the
potential energy savings and the savings in consumer operating costs
that could result from adoption of amended or new standards.
For the October 2023 NOPD, DOE primarily used data from the U.S.
Energy Information Administration's (``EIA's'') 2015 Residential Energy
Consumption Survey (``RECS 2015'') to establish a reasonable range of
energy consumption for consumer furnace fans. RECS 2015 is a national
sample survey of housing units that collects statistical information on
the consumption of and expenditures for energy in housing units, along
with data on energy-related characteristics of the housing units and
occupants. RECS 2015 has a sample size of 5,686 housing units and was
constructed by EIA to be a national representation of the household
population in the United States. DOE also considered the use of
consumer furnace fans in commercial applications, based on
characteristics from EIA's most recent 2012 Commercial Building Energy
Consumption Survey (``CBECS 2012'') for a subset of building types that
use consumer furnace fans covered by a potential standard. DOE utilized
additional data sources to refine the development of a representative
population of buildings for each furnace fan product class, as detailed
in chapter 7 of the November 2022 Preliminary Analysis TSD.
EIA recently published the microdata for the 2020 edition of
RECS.\17\ To assess the impact of using RECS 2020, DOE compared the LCC
consumer sample in the July 2022 Furnace NOPR, which used RECS 2015, to
the consumer sample used in the December 2023 Furnace Final Rule
consumer sample, which used RECS 2020. DOE assumed that changes in
annual energy heating use between the two RECS editions serves as a
reasonable proxy for the relative change in consumer furnace fans
energy use. As can be seen by comparing Table 7.4.1 of the TSD for the
July 2022 Furnace NOPR and Table 7.4.1 of the TSD for the December 2023
Furnace final rule, the estimated average annual energy consumption by
region and efficiency level is similar between the two versions of RECS
for households with furnaces, with RECS 2020 showing slightly lower
energy consumption. Given the correlation in usage between furnaces and
furnace fans and given that the estimated furnace energy use declines
when updating to RECS 2020, updating the consumer sample to RECS 2020
would not alter the conclusions of this final determination. Therefore,
DOE continued to use RECS 2015 as the basis for its consumer sample, as
was done in the October 2023 NOPD.
---------------------------------------------------------------------------

\17\ Energy Information Administration (EIA), 2020 Residential
Energy Consumption Survey (RECS) (Available at: <a href="http://www.eia.gov/consumption/residential/data/2020/index.php/">www.eia.gov/consumption/residential/data/2020/index.php/</a>) (last accessed June
11, 2024).
---------------------------------------------------------------------------

DOE notes that commercial installations of consumer furnace fans
account for approximately five percent or less of total installations,
as shown in Table 6.2.1 of the November 2022 Preliminary Analysis TSD.
Given the relatively small number of installations in the commercial
sector relative to the residential sector, changes between CBECS 2012
and 2018 would not significantly impact overall analytical conclusions.
Therefore, for this final determination, DOE continued to use CBECS
2012 as the basis of its consumer sample, as was done in October 2023
NOPD.
In calculating the energy consumption of furnace fans, DOE adjusted
the energy use from RECS 2015 and CBECS 2012 to normalize for year-to-
year variation in weather. This was accomplished by adjusting the RECS
2015 household and CBECS 2012 building energy consumption values based
on 10-year average heating degree day (``HDD'') and average cooling
degree day (``CDD'') data for each geographical region. DOE also
accounted for the change in building shell characteristics by applying
the building shell efficiency index and projected trend in the HDD and
CDD in EIA's Annual Energy Outlook 2023 (``AEO 2023'').
As in the October 2023 NOPD, DOE's analysis takes into account ACCA

[[Page 84010]]

Manuals J, S, and D methods to size every household and building in the
sample. DOE first uses Manual J to estimate the house or building
design heating load in order to determine the blower requirements for
the assigned heating and cooling equipment. DOE's analysis considers
that typically the furnace fan is sized based on the maximum cooling
capacity required. The heating and cooling furnace fan speed setting is
then varied to match the recommended/required airflow performance and
takes into account differences in the ductwork system curve in the
field.
DOE did not receive comments regarding energy use in response to
the October 2023 NOPD. Chapter 7 of the November 2022 Preliminary
Analysis TSD provides details on DOE's energy use analysis for consumer
furnace fans.

E. Life-Cycle Cost and Payback Period Analysis

DOE conducts LCC and PBP analyses to evaluate the economic impacts
on individual consumers of potential amended energy conservation
standards for consumer furnace fans. The effect of new or amended
energy conservation standards on individual consumers usually involves
a reduction in operating cost and an increase in purchase cost. DOE
typically uses the following two metrics to measure consumer impacts:
[ballot] Life-Cycle Cost (``LCC'') is the total consumer expense of
operating the product over the lifetime of that product, consisting of
total installed cost (which includes manufacturer selling price,
distribution chain markups, sales tax, and installation costs) plus
operating costs (e.g., expenses for energy use, maintenance, and
repair). To compute the operating costs, DOE discounts future operating
costs to the time of purchase and sums them over the lifetime of the
product.
[ballot] Payback Period (``PBP'') is the estimated amount of time
(in years) it takes consumers to recover the increased purchase cost
(including installation) of a more-efficient product through lower
operating costs. DOE calculates the PBP by dividing the change in
purchase cost at higher efficiency levels by the change in annual
operating cost for the year that amended or new standards are assumed
to take effect.
For any given efficiency level, DOE measures the change in LCC
relative to the LCC in the no-new-standards case, which reflects the
estimated efficiency distribution of the product in the absence of new
or amended energy conservation standards. In contrast, the PBP for a
given efficiency level is measured relative to the baseline product.
For each considered efficiency level in each product class, DOE
calculated the LCC and PBP for a nationally representative set of
housing units and, where appropriate, commercial buildings. As stated
previously, DOE developed household and commercial building samples
from RECS 2015 and CBECS 2012, respectively. For each sample household
or commercial building, DOE determined the energy consumption for the
consumer furnace fans and the appropriate energy price. By developing a
representative sample of households and commercial buildings, the
analysis captured the variability in energy consumption and energy
prices associated with the use of consumer furnace fans.
Inputs to the LCC calculation include the installed cost to the
consumer, operating expenses, the lifetime of the product, and a
discount rate. Inputs to the calculation of total installed cost
include the cost of the product--which includes MPCs, manufacturer
markups, retailer and distributor markups, and sales taxes (where
applicable)--and installation costs. Inputs to the calculation of
operating expenses include annual energy consumption, energy prices and
price projections, repair and maintenance costs, product lifetimes, and
discount rates. Inputs to the PBP calculation include the installed
cost to the consumer and first-year operating expenses. DOE created
distributions of values for installation cost, repair and maintenance,
product lifetime, discount rates, and sales taxes, with probabilities
attached to each value, to account for their uncertainty and
variability.
The computer model DOE uses to calculate the LCC relies on a Monte
Carlo simulation to incorporate uncertainty and variability into the
analysis. The Monte Carlo simulations randomly sample input values from
the probability distributions and product user samples. For this
proceeding, the Monte Carlo approach is implemented in Microsoft Excel
together with the Crystal BallTM add-on.\18\ The model
calculated the LCC for products at each efficiency level for 10,000
consumers per simulation run. The analytical results include a
distribution of 10,000 data points showing the range of LCC savings for
a given efficiency level relative to the no-new-standards case
efficiency distribution. In performing an iteration of the Monte Carlo
simulation for a given consumer, product efficiency is chosen based on
its probability. If the chosen product efficiency is greater than or
equal to the efficiency of the standard level under consideration, the
LCC calculation reveals that a consumer is not impacted by the standard
level. By accounting for consumers who are already projected to
purchase more-efficient products than the baseline in a given case, DOE
avoids overstating the potential benefits from increasing product
efficiency.
---------------------------------------------------------------------------

\18\ Crystal Ball\TM\ is a commercially-available software tool
to facilitate the creation of these types of models by generating
probability distributions and summarizing results within Excel
(Available at: <a href="http://www.oracle.com/technetwork/middleware/crystalball/overview/index.html">www.oracle.com/technetwork/middleware/crystalball/overview/index.html</a>) (last accessed June 11, 2024).
---------------------------------------------------------------------------

DOE calculated the LCC and PBP for consumers of consumer furnace
fans as if each were to purchase a new product in the expected first
year of required compliance with new or amended standards. For purposes
of this final determination, DOE used 2030 as the first year of
compliance with any amended standards.
Table IV.22 summarizes the approach and data DOE used to derive
inputs to the LCC and PBP analysis. The subsections that follow provide
further discussion. Details of the spreadsheet model, and how all
inputs to the LCC and PBP analyses are applied, are contained in
chapter 8 of the November 2022 Preliminary Analysis TSD and its
appendices.

Table IV.22--Summary of Inputs and Methods for the LCC and PBP Analyses *
----------------------------------------------------------------------------------------------------------------
Inputs Source/method
----------------------------------------------------------------------------------------------------------------
Product Cost................................................ Derived from the manufacturer production cost
(``MPC'') for furnace fans at different heating
input capacities for each efficiency level (from
the engineering analysis). The MPCs are then
multiplied by the various market participant
markups (e.g., manufacturer, wholesaler, and
plumbing contractor) for each distribution
channel and sales taxes derived for each State
and the District of Columbia.

[[Page 84011]]

Installation Costs.......................................... Varies by efficiency level and individual house/
building characteristic. Material and labor costs
are derived for each State and the District of
Columbia mainly using RSMeans Residential Cost
Data 2023. Overhead and profits are included in
the RSMeans data. Probability distributions are
derived for various installation cost input
parameters.
Annual Energy Use........................................... Derived mainly by using the heating energy use
data for each housing unit and building from the
Energy Information Administration's (``EIA's'')
2015 Residential Energy Consumption Survey
(``RECS 2015'') and EIA's 2012 Commercial
Buildings Energy Consumption Survey (``CBECS
2012''), together with consumer furnace fans test
procedure calculation methodologies used to
determine the annual energy consumption
associated with the considered standard levels.
Probability distributions are derived for various
input parameters.
Energy Prices............................................... Calculated monthly marginal average electricity,
natural gas or liquefied petroleum gas (``LPG''),
and fuel oil prices in each of the 50 U.S. States
and District of Columbia, using EIA historical
data and billing data for each RECS 2015 housing
unit and CBECS 2012 building.
Energy Price Trends......................................... Residential and commercial prices were escalated
by using EIA's Annual Energy Outlook 2023 (AEO
2023) forecasts to estimate future energy prices.
Escalation was performed at the Census Division
level.
Repair and Maintenance Costs................................ Estimated the costs associated with preventive
maintenance (e.g., checking furnace fan) and
repair (e.g., replacing motor) based on data from
a variety of published sources, including RSMeans
2023 Facilities Maintenance and Repair Data. It
is assumed that maintenance and repair costs vary
by efficiency level, and probability
distributions are derived for various input
parameters.
Product Lifetime............................................ Used Weibull probability distribution of lifetimes
developed for consumer furnace fans based on
various survey and shipments data.
Discount Rates.............................................. Probability distributions by income bins are
derived for residential discount rates based on
the Federal Reserve Board's Survey of Consumer
Finances from 1995 to 2019 and various interest
rate sources. Probability distributions for
commercial discount rates for various building
activities (e.g., office) are derived using
multiple interest rate sources. See section
IV.E.7 of this document.
Compliance Date............................................. 2030 (five years after expected publication of the
final rule).
----------------------------------------------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided in the sections following the table or in
chapter 8 of the November 2022 Preliminary Analysis TSD. Energy price trends, product lifetimes, and discount
rates are not used for the PBP calculation.

1. Product Cost
To calculate consumer product costs, DOE multiplied the MPCs
developed in the engineering analysis by the markups described
previously (along with sales taxes). DOE used different markups for
baseline products and higher-efficiency products, because DOE applies
an incremental markup to the increase in MSP associated with higher-
efficiency products.
For the October 2023 NOPD, DOE assumed no price trend for consumer
furnace fans due to uncertainty in future commodity prices. DOE did not
receive comment on this assumption and maintains the same approach for
this final determination.
See chapter 8 of the November 2022 Preliminary Analysis TSD for
details.
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the product. Because consumer
furnace fans are installed in furnaces in the factory, there is
generally no additional installation cost in the home. However,
consumer furnace fans that employ a constant-airflow BPM design may
require additional installation costs. DOE assumed that all constant-
airflow BPM furnace fan installations will require extra labor at
startup to check and adjust airflow.
As in the October 2023 NOPD, DOE estimated the installation costs
at each considered efficiency level using a variety of sources,
including RSMeans data, manufacturer literature, and information from
an expert consultant report. DOE's analysis of installation costs
accounted for regional differences in labor costs. For a detailed
discussion of the development of installation costs, see appendix 8C of
the November 2022 Preliminary Analysis TSD.
3. Annual Energy Consumption
For each sampled household or commercial building, DOE determined
the energy consumption for a consumer furnace fan at different
efficiency levels using the approach described previously in section
IV.D of this document.
4. Energy Prices
Energy bills to consumers typically include fixed costs (i.e.,
costs that do not depend on consumption) and costs that depend on the
level of consumption. To estimate the impact of standards on consumer
operating costs, DOE calculated average energy prices, which represent
the typical cost for a consumer to use energy, including fixed costs,
and marginal energy prices, which represent the energy price consumers
would pay for reduced consumption. In other words, a marginal energy
price reflects the cost or benefit of adding or subtracting one
additional unit of energy consumption. Because marginal price more
accurately captures the incremental savings associated with a change in
energy use from higher efficiency, it provides a better representation
of incremental change in consumer costs than average electricity
prices. DOE applied average natural gas and electricity prices for the
energy use of the product purchased in the no-new-standards case, and
marginal prices for the incremental change in energy use associated
with the other efficiency levels considered.
For the October 2023 NOPD, DOE derived average monthly marginal
residential and commercial electricity, natural gas, LPG, and fuel oil
prices for each State using data from EIA.19 20 21 DOE
calculated marginal monthly regional energy prices by: (1) first
estimating an average annual price for each region; (2) multiplying by
monthly energy price factors; and (3) multiplying by seasonal marginal
price factors for electricity, natural gas, and LPG. The

[[Page 84012]]

analysis used 2022 data for residential and commercial natural gas and
electricity prices and 2021 data for LPG and fuel oil prices. Further
details may be found in chapter 8 of the Preliminary Analysis TSD.
---------------------------------------------------------------------------

\19\ EIA, Form EIA-861M (formerly EIA-826) detailed data (2022)
(Available at: <a href="http://www.eia.gov/electricity/data/eia861m/">www.eia.gov/electricity/data/eia861m/</a>) (last accessed
June 28, 2024).
\20\ EIA, Natural Gas Navigator (2022) (Available at:
<a href="http://www.eia.gov/naturalgas/data.php">www.eia.gov/naturalgas/data.php</a>) (last accessed June 11, 2024).
\21\ EIA, 2021 State Energy Data System (SEDS) (2021) (Available
at: <a href="http://www.eia.gov/state/seds/">www.eia.gov/state/seds/</a>) (last accessed June 11, 2024).
---------------------------------------------------------------------------

For the October 2023 NOPD, DOE compared marginal price factors
developed by DOE from the EIA data to develop seasonal marginal price
factors for 23 gas tariffs provided by the Gas Technology Institute for
the 2016 residential boilers energy conservation standards
rulemaking.\22\ DOE found that the winter price factors used by DOE are
generally comparable to those computed from the tariff data, indicating
that DOE's marginal price estimates are reasonable at average usage
levels. The summer price factors are also generally comparable. Of the
23 tariffs analyzed, eight have multiple tiers, and of these eight, six
have ascending rates and two have descending rates. The tariff-based
marginal factors use an average of the two tiers as the commodity
price. A full tariff-based analysis would require information about the
household's total baseline gas usage (to establish which tier the
consumer is in), and a weight factor for each tariff that determines
how many customers are served by that utility on that tariff. These
data are generally not available in the public domain. DOE's use of EIA
State-level data effectively averages overall consumer sales in each
State, and so incorporates information from all utilities. DOE's
approach is, therefore, more representative of a large group of
consumers with diverse baseline gas usage levels than an approach that
uses only tariffs.
---------------------------------------------------------------------------

\22\ The Gas Technology Institute provided a reference located
in the docket of DOE's 2016 rulemaking to develop energy
conservation standards for residential boilers. (Docket No. EERE-
2012-BT-STD-0047-0068) (Available at: <a href="http://www.regulations.gov/document/EERE-2012-BT-STD-0047-0068">www.regulations.gov/document/EERE-2012-BT-STD-0047-0068</a>) (last accessed June 28, 2024).
---------------------------------------------------------------------------

DOE notes that within a State, there could be significant variation
in the marginal price factors, including differences between rural and
urban rates. To take this into account, DOE developed marginal price
factors for each individual household using RECS 2015 billing data.
These data are then normalized to match the average State marginal
price factors, which are equivalent to a consumption-weighted average
marginal price across all households in the State. For more details on
the comparative analysis and updated marginal price analysis, see
appendix 8D of the November 2022 Preliminary Analysis TSD.
To estimate energy prices in future years, DOE multiplied the 2022
energy prices by the projection of annual average price changes for
each of the nine Census Divisions from the Reference case in AEO 2023,
which has an end year of 2050.\23\ To estimate price trends after 2050,
DOE used the average annual rate of change in prices from 2046 through
2050.
---------------------------------------------------------------------------

\23\ EIA, Annual Energy Outlook 2023 with Projections to 2050,
Washington, DC (Available at: <a href="http://www.eia.gov/forecasts/aeo/">www.eia.gov/forecasts/aeo/</a>) (last
accessed June 11, 2024).
---------------------------------------------------------------------------

To assess the impact of updated energy price estimates, DOE
compared the energy price estimates in 2030 from the October 2023 NOPD
to the projected estimates using updated EIA energy price data from
2023. The results of this comparison are presented in Table IV.23.

Table IV.23--Summary of Energy Price Comparison of 2023 EIA Data
Relative to November 2023 NOPD
------------------------------------------------------------------------
Percentage
Energy type change in 2030
energy price
------------------------------------------------------------------------
Electricity........................................... -20
Natural Gas........................................... 1
LPG................................................... 1
Fuel Oil.............................................. -16
------------------------------------------------------------------------

Based upon this review, DOE has determined that energy prices have
either not changed significantly, as in the case of natural gas and
LPG, or have decreased, as in the case of electricity and fuel oil,
relative to the energy prices used in the October 2023 NOPD.
Consequently, updating energy prices would either have no impact on
analytical results or decrease operating cost savings, thereby further
justifying DOE's decision to not amend the existing energy conservation
standards for consumer furnace fans. DOE did not receive comments
regarding energy prices in response to the October 2023 NOPD. As a
result, DOE has continued to use the energy prices from the October
2023 NOPD in this determination.
5. Maintenance and Repair Costs
The maintenance cost is the routine cost to the consumer of
maintaining product operation. The regular furnace maintenance
generally includes checking the furnace fan. As in the October 2023
NOPD, DOE assumes for this analysis that this maintenance cost is the
same at all efficiency levels.
The repair cost is the cost to the consumer for replacing or
repairing components in the consumer furnace fan that have failed. For
the October 2023 NOPR, DOE included motor replacement as a repair cost
for a fraction of furnace fans. To estimate rates of motor failure, DOE
developed a distribution of fan motor lifetime (expressed in operating
hours) by motor size using data from DOE's analysis for the March 9,
2010 Small Electric Motors Final Rule and manufacturer literature. (75
FR 10874) DOE then paired these data with the calculated number of
annual operating hours for each sample furnace fan. Motor costs were
based on costs developed in the engineering analysis and the
replacement markups developed in the markup analysis. DOE assumed that
the motor cost does not apply if motor failure occurs during the
furnace warranty period (assumed to be at least one year, and five or
more years for a fraction of installations).
For the October 2023 NOPD, the repair costs (including labor hours,
component costs, and frequency) at each considered efficiency level
were derived based on RSMeans data,\24\ manufacturer literature, and a
report from the Gas Research Institute.\25\ DOE accounted for regional
differences in labor costs. DOE did not receive comments related to its
repair cost assumptions, and accordingly, the Department has maintained
the same costs as used in the October 2023 NOPD for this final
determination.
---------------------------------------------------------------------------

\24\ RSMeans Company Inc., RS Means Facilities Maintenance &
Repair Cost Data (2021) (Available at: <a href="http://www.rsmeans.com/">www.rsmeans.com/</a>) (last
accessed June 1, 2024).
\25\ Jakob, F.E., et al., Assessment of Technology for Improving
the Efficiency of Residential Gas Furnaces and Boilers, Volume I and
II--Appendices (September 1994), Gas Research Institute, Report No.
GRI-94/0175 (Available at: www.gti.energy/software-and-reports/)
(last accessed Feb. 15, 2022).
---------------------------------------------------------------------------

For a detailed discussion of the development of maintenance and
repair costs, see appendix 8E of the November 2022 Preliminary Analysis
TSD.
6. Product Lifetime
Product lifetime is the age at which an appliance is retired from
service. Furnace fan lifetimes are considered equivalent to furnace
lifetimes, so DOE modeled furnace fan lifetime based on estimated
furnace lifetimes. Because product lifetime varies, DOE uses a lifetime
distribution to characterize the probability that a product will be
retired from service at a given age. DOE conducted an extensive
literature review and took into account published studies. Because the
basis for the estimates in the literature was uncertain, DOE developed
a method using national survey data, along with shipment data, to
estimate the distribution of consumer furnace lifetimes in the field.

[[Page 84013]]

DOE assumed that the probability function for the annual survival
of consumer furnaces would take the form of a Weibull distribution. For
the October 2023 NOPD, DOE derived the Weibull distribution parameters
by using stock and age data on consumer furnaces from the U.S. Census's
biennial American Housing Survey (``AHS'') from 1974-2019 \26\ and
EIA's RECS 1990, 1993, 2001, 2005, 2009, and 2015.\27\ DOE used the
results from the 2022 American Home Comfort Survey (``AHCS'') to
estimate the national average lifetime of 21.4 years.\28\ DOE also
determined the average lifetime for different regions: 22.5 years for
the North region and 20.2 years for rest of the country. These results
were used to scale the average lifetime for these regions.
---------------------------------------------------------------------------

\26\ U.S. Census Bureau: Housing and Household Economic
Statistics Division, American Housing Survey, Multiple Years (1974,
1975, 1976, 1977, 1978, 1979, 1980, 1981, 1983, 1985, 1987, 1989,
1991, 1993, 1995, 1997, 1999, 2001, 2003, 2005, 2007, 2009, 2011,
2013, 2015, 2017, 2019, and 2021) (Available at: <a href="http://www.census.gov/programs-surveys/ahs.html">www.census.gov/programs-surveys/ahs.html</a>) (last accessed June 28, 2024).
\27\ U.S. Department of Energy: Energy Information
Administration, Residential Energy Consumption Survey (``RECS''),
Multiple Years (1990, 1993, 1997, 2001, 2005, 2009, and 2015)
(Available at: <a href="http://www.eia.gov/consumption/residential/">www.eia.gov/consumption/residential/</a>) (last accessed
June 28, 2024).
\28\ Decision Analysts, 2022 American Home Comfort Study (2022)
Arlington, Texas (Available at: <a href="http://www.decisionanalyst.com/syndicated/homecomfort/">www.decisionanalyst.com/syndicated/homecomfort/</a>) (last accessed August 26, 2024).
---------------------------------------------------------------------------

DOE did not receive any comments on the lifetime distributions used
in the October 2023 NOPD. As consumer furnace fans, and the furnaces in
which they reside, have not changed significantly since the October
2023 NOPD, DOE has maintained the same lifetime distribution in this
final determination.
7. Discount Rates
In the calculation of LCC, DOE applies discount rates appropriate
to estimate the present value of future expenditures and savings. DOE
estimated a distribution of discount rates for consumer furnace fans
based on the opportunity cost of funds. DOE estimates discount rates
separately for residential and commercial end users.
For residential end users, DOE applies weighted-average discount
rates calculated from consumer debt and asset data, rather than
marginal or implicit discount rates.\29\ The LCC analysis estimates net
present value over the lifetime of the product, so the appropriate
discount rate will reflect the general opportunity cost of household
funds, taking this time scale into account. Given the long time horizon
modeled in the LCC analysis, the application of a marginal interest
rate associated with an initial source of funds is inaccurate.
Regardless of the method of purchase, consumers are expected to
continue to rebalance their debt and asset holdings over the LCC
analysis period, based on the restrictions consumers face in their debt
payment requirements and the relative size of the interest rates
available on debts and assets.
---------------------------------------------------------------------------

\29\ The implicit discount rate is inferred from a consumer
purchase decision between two otherwise identical goods with
different first cost and operating cost. It is the interest rate
that equates the increment of first cost to the difference in net
present value of lifetime operating cost, incorporating the
influence of several factors: transaction costs, risk premiums and
response to uncertainty, time preferences, and interest rates at
which a consumer is able to borrow or lend. The implicit discount
rate is not appropriate for the LCC analysis because it reflects a
range of factors that influence consumer purchase decisions, rather
than the opportunity cost of the funds that are used in purchases.
---------------------------------------------------------------------------

To establish residential discount rates for the LCC analysis, DOE
identified all relevant household debt or asset classes in order to
approximate a consumer's opportunity cost of funds related to appliance
energy cost savings. It estimated the average percentage shares of the
various types of debt and equity by household income group using data
from the Federal Reserve Board's triennial Survey of Consumer Finances
\30\ (``SCF''). Using the SCF and other sources, DOE developed a
distribution of rates for each type of debt and asset by income group
to represent the rates that may apply in the year in which amended
standards would take effect. DOE assigned each sample household a
specific discount rate drawn from one of the distributions. The average
rate across all types of household debt and equity and income groups,
weighted by the shares of each type, is 4.1 percent.
---------------------------------------------------------------------------

\30\ U.S. Board of Governors of the Federal Reserve System,
Survey of Consumer Finances, 1995, 1998, 2001, 2004, 2007, 2010,
2013, 2016, and 2019 (Available at: <a href="http://www.federalreserve.gov/econresdata/scf/scfindex.htm">www.federalreserve.gov/econresdata/scf/scfindex.htm</a>) (last accessed April 26, 2024).
---------------------------------------------------------------------------

To establish commercial discount rates for commercial end users in
the small fraction of consumer furnace fans in commercial buildings,
DOE estimated the weighted-average cost of capital using data from
Damodaran Online.\31\ The weighted-average cost of capital is commonly
used to estimate the present value of cash flows to be derived from a
typical company project or investment. Most companies use both debt and
equity capital to fund investments, so their cost of capital is the
weighted average of the cost to the firm of equity and debt financing.
DOE estimated the cost of equity using the capital asset pricing model,
which assumes that the cost of equity for a particular company is
proportional to the systematic risk faced by that company. The average
rate for consumer furnace fans used in commercial applications in this
analysis, across all business activity, is 7.2 percent. DOE did not
receive comments regarding discount rates in response to the October
2023 NOPD.
---------------------------------------------------------------------------

\31\ Damodaran, A. Data Page: Historical Returns on Stocks,
Bonds and Bills-United States (2023) (Available at:
pages.stern.nyu.edu/~adamodar/) (Last accessed June 1, 2024).
---------------------------------------------------------------------------

See chapter 8 of the November 2022 Preliminary Analysis TSD for
further details on the development of consumer and commercial discount
rates.
8. Energy-Efficiency Distribution in the No-New-Standards Case
To accurately estimate the share of consumers that would be
affected by a potential energy conservation standard at a particular
efficiency level, DOE's LCC analysis considered the projected
distribution (i.e., market shares) of product efficiencies under the
no-new-standards case (i.e., the case without amended or new energy
conservation standards) in the compliance year (2030). This approach
reflects the fact that some consumers may purchase products with
efficiencies greater than the baseline levels, even in the absence of
new or amended standards.
For consumer furnace fans, DOE does not have any shipments data by
efficiency after the 2019 furnace fan standards became effective. Due
to the lack of available shipments data, DOE used DOE's CCD for furnace
fans and furnaces as a proxy to develop an efficiency distribution
based on available models.
DOE did not receive additional data or comments on estimated market
shares in the no-new-standard case in response to the October 2023
NOPD. Accordingly, DOE continued to use estimates from the October 2023
NOPD for this final determination.
Table IV.24 shows the resulting market shares by efficiency level.
For a detailed discussion of the development of no-new-standards case
distributions based on models, see appendix 7F of the November 2022
Preliminary Analysis TSD.

[[Page 84014]]

Table IV.24--No-New-Standards Case Energy Efficiency Distributions in 2030 for Consumer Furnace Fans
----------------------------------------------------------------------------------------------------------------
No-new- Efficiency level (%)
Product class EL standards ---------------------
case (%) 1 2
----------------------------------------------------------------------------------------------------------------
Non-Weatherized, Non-Condensing Gas Furnace Fan.................... 0 100 ......... .........
1 .......... 100 .........
NonWeatherized, Condensing Gas Furnace Fan......................... 0 100 ......... .........
1 .......... 100 .........
Weatherized NonCondensing Gas Furnace Fan.......................... 0 100 ......... .........
1 .......... 100 .........
NonWeatherized, NonCondensing Oil Furnace Fan...................... 0 46 ......... .........
1 54 100 .........
2 .......... ......... 100
NonWeatherized Electric Furnace/Modular Blower Fan................. 0 100 ......... .........
1 .......... 100 .........
Mobile Home NonWeatherized, NonCondensing Gas Furnace Fan.......... 0 11 ......... .........
1 89 100 .........
2 .......... ......... 100
Mobile Home NonWeatherized, Condensing Gas Furnace Fan............. 0 8 ......... .........
1 92 100 .........
2 .......... ......... 100
Mobile Home NonWeatherized Oil Furnace Fan......................... 0 90 ......... .........
1 10 100 .........
2 .......... ......... 100
Mobile Home Electric Furnace/Modular Blower Fan.................... 0 100 ......... .........
1 .......... 100 .........
----------------------------------------------------------------------------------------------------------------

The LCC Monte Carlo simulations draw from the efficiency
distributions and assign an efficiency to the consumer furnace fans
purchased by each sample household or commercial business in the no-
new-standards case. The resulting percentage shares within the sample
match the market shares in the efficiency distributions.
9. Payback Period Analysis
The payback period is the amount of time (expressed in years) it
takes the consumer to recover the additional installed cost of more-
efficient products, compared to baseline products, through energy cost
savings. Payback periods that exceed the life of the product mean that
the increased total installed cost is not recovered in reduced
operating expenses.
The inputs to the PBP calculation for each efficiency level are the
change in total installed cost of the product and the change in the
first-year annual operating expenditures relative to the baseline. DOE
refers to this as a ``simple PBP'' because it does not consider changes
over time in operating cost savings. The PBP calculation uses the same
inputs as the LCC analysis when deriving first-year operating costs,
except that discount rates are not needed. DOE did not receive comments
regarding the payback period methodology in response to the October
2023 NOPD.

F. Shipments Analysis

DOE uses projections of annual product shipments to calculate the
national impacts of potential amended or new energy conservation
standards on energy use, NPV, and future manufacturer cash flows.\32\
The shipments model takes an accounting approach, tracking market
shares of each product class and the vintage of units in the stock.
Stock accounting uses product shipments as inputs to estimate the age
distribution of in-service product stocks for all years. The age
distribution of in-service product stocks is a key input to
calculations of both the NES and NPV, because operating costs for any
year depend on the age distribution of the stock.
---------------------------------------------------------------------------

\32\ DOE uses data on manufacturer shipments as a proxy for
national sales, as aggregate data on sales are lacking. In general,
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------

DOE developed shipment projections based on historical data and an
analysis of key market drivers for each product. The vast majority of
furnace fans are shipped installed in furnaces, so DOE estimated
furnace fan shipments by projecting furnace shipments in three market
segments: (1) replacements, (2) new housing, and (3) new owners in
buildings that did not previously have a central furnace.
To project furnace replacement shipments, DOE developed retirement
functions for furnaces from the lifetime estimates and applied them to
the existing products in the housing stock. The existing stock of
products is tracked by vintage and developed from historical shipments
data. The shipments analysis uses a distribution of furnace lifetimes
to estimate furnace replacement shipments. In addition, DOE adjusted
replacement shipments by taking into account demolitions, using the
estimated changes to the housing stock from AEO 2023.
DOE assembled historical shipments data for consumer furnaces from
Appliance Magazine from 1954-2012,\33\ AHRI from 1996-2022,\34\ HARDI
from 2013-2022,\35\ and BRG from 2007-2022.\36\ DOE also used the 1992
and 1994-2003 shipments data by State provided by AHRI \37\ and 2004-
2009 and 2010-2015 shipments data by the North region and the rest of
country

[[Page 84015]]

provided by AHRI,\38\ as well as HARDI shipments data that is
disaggregated by region and most States to disaggregate shipments by
region. DOE also used CBECS 2012 data and BRG shipments data to
estimate the commercial fraction of shipments. Disaggregated shipments
for mobile home gas furnaces (``MHGFs'') are not available, so DOE
disaggregated MHGF shipments from the total by using a combination of
data from the U.S. Census,39 40 AHS,\41\ RECS,\42\ and a
2014 MHGF shipments estimate by Mortex.\43\
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\33\ Appliance Magazine, Appliance Historical Statistical
Review: 1954-2012 (2014).
\34\ Air-Conditioning, Heating, & Refrigeration Institute
(``AHRI''), Furnace Historical Shipments Data (1996-2022) (Available
at: <a href="http://www.ahrinet.org/analytics/statistics/historical-data/furnaces-historical-data">www.ahrinet.org/analytics/statistics/historical-data/furnaces-historical-data</a>) (last accessed June 28, 2024).
\35\ Heating, Air-conditioning and Refrigeration Distributors
International (``HARDI''), Gas Furnace Shipments Data from 2013-2022
(Provided to Lawrence Berkeley National Laboratory).
\36\ BRG Building Solutions, The North American Heating &
Cooling Product Markets (Available at: <a href="http://www.brgbuildingsolutions.com/solutions/market-reports/">www.brgbuildingsolutions.com/solutions/market-reports/</a>) (last accessed June 28, 2024).
\37\ AHRI (formerly Gas Appliance Manufacturers Association
(``GAMA'')), Updated Shipments Data for Residential Furnaces and
Boilers (April 25, 2005) (Available at: <a href="http://www.regulations.gov/document/EERE-2006-STD-0102-0138">www.regulations.gov/document/EERE-2006-STD-0102-0138</a>) (last accessed June 28, 2024).
\38\ AHRI, Non-Condensing and Condensing Regional Gas Furnace
Shipments for 2004-2009 and 2010-2015 Data Provided to DOE
contractors (July 20, 2010 and November 26, 2016).
\39\ U.S. Census Bureau, Manufactured Homes Survey: Annual
Shipments to States from 1994-2022 (Available at: <a href="http://www.census.gov/data/tables/time-series/econ/mhs/latest-data.html">www.census.gov/data/tables/time-series/econ/mhs/latest-data.html</a>) (last accessed
June 28, 2024).
\40\ U.S. Census Bureau, Manufactured Homes Survey: Historical
Annual Placements by State from 1980-2013 (Available at:
<a href="http://www.census.gov/data/tables/time-series/econ/mhs/historical-annual-placements.html">www.census.gov/data/tables/time-series/econ/mhs/historical-annual-placements.html</a>) (last accessed June 28, 2024).
\41\ U.S. Census Bureau--Housing and Household Economic
Statistics Division, American Housing Survey, multiple years from
1973-2021 (Available at: <a href="http://www.census.gov/programs-surveys/ahs/data.html">www.census.gov/programs-surveys/ahs/data.html</a>) (last accessed June 28, 2024).
\42\ EIA, Residential Energy Consumption Survey (RECS), multiple
years from 1979-2015 (Available at: <a href="http://www.eia.gov/consumption/residential/">www.eia.gov/consumption/residential/</a>) (last accessed June 28, 2024).
\43\ Mortex estimated that the total number of MHGFs
manufactured in 2014 was about 54,000, and about two-thirds were
sold to the replacement market. Mortex also stated that MHGF sales
have not been growing. (Mortex, No. 157 at p. 3) (Available at:
<a href="http://www.regulations.gov/document/EERE-2014-BT-STD-0031-0157">www.regulations.gov/document/EERE-2014-BT-STD-0031-0157</a>) (last
accessed June 28, 2024).
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To project shipments to the new housing market, DOE utilized a
projection of new housing construction and historic saturation rates of
various furnaces in new housing. DOE used the AEO 2023 housing starts
and commercial building floor space projections and data from the U.S.
Census Bureau's Characteristics of New Housing,44 45 Home
Innovation Research Labs Annual Builder Practices Survey,\46\ RECS
2015, AHS 2021, and CBECS 2012 to estimate new construction
saturations. DOE also estimated future furnace saturation rates in new
single-family housing based on a weighted average of values from the
U.S. Census Bureau's Characteristics of New Housing from 1999 through
2022, and for multi-family buildings using data from the Census
Bureau's Characteristics of New Housing (Multi-Family Units) from 1973
through 2022.\47\
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\44\ U.S. Census, Characteristics of New Housing from 1999-2022
(Available at: <a href="http://www.census.gov/construction/chars/">www.census.gov/construction/chars/</a>) (last accessed
June 1, 2023).
\45\ U.S. Census, Characteristics of New Housing (Multi-Family
Units) from 1973-2022 (Available at: <a href="http://www.census.gov/construction/chars/mfu.html">www.census.gov/construction/chars/mfu.html</a>) (last accessed June 1, 2023).
\46\ Home Innovation Research Labs (independent subsidiary of
the National Association of Home Builders (NAHB), Annual Builder
Practices Survey (2015-2019) (Available at: <a href="http://www.homeinnovation.com/trends_and_reports/data/new_construction">www.homeinnovation.com/trends_and_reports/data/new_construction</a>) (last accessed June 28,
2024).
\47\ U.S. Census Bureau, Characteristics of New Housing
(Available at: <a href="http://www.census.gov/construction/chars/">www.census.gov/construction/chars/</a>) (last accessed
June 28, 2024).
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To project shipments to the new-owner market, DOE estimated the new
owners based on the residual shipments from the calculated replacement
and new construction shipments compared to historical shipments over
five years (2018-2022). DOE compared this with data from Decision
Analyst's 2002 to 2022 AHCS,\48\ 2023 BRG data,\49\ and AHRI's
estimated shipments in 2000,\50\ which showed similar historical
fractions of new owners. DOE assumed that the new-owner fraction would
be the 10-year average (2013-2022) in 2030 and then decrease to zero by
the end of the analysis period (2059).
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\48\ Decision Analyst, 2002, 2004, 2006, 2008, 2010, 2013, 2016,
2019, and 2022 American Home Comfort Study (Available at:
<a href="http://www.decisionanalyst.com/syndicated/homecomfort/">www.decisionanalyst.com/syndicated/homecomfort/</a>) (last accessed June
28, 2024).
\49\ BRG data (Available at: <a href="http://www.brgbuildingsolutions.com/">www.brgbuildingsolutions.com/</a>)
(last accessed June 28, 2024).
\50\ AHRI (formerly GAMA), Furnace and Boiler Shipments data
provided to DOE for Furnace and Boiler ANOPR (Jan. 23, 2002).
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DOE did not receive comments on the shipments methodology in
response to the October 2023 NOPD. DOE notes that although there may be
additional historical data available for 2023, including an additional
year of historical data would have a minimal impact to projected
shipments over the shipments analysis period (2030-2059). Additionally,
the October 2023 NOPD relied on AEO 2023, which remains the most recent
available edition for AEO for many key inputs for future product
demand. For these reasons, DOE continued to use shipments from the
October 2023 NOPD for this final determination.

G. National Impact Analysis

The NIA assesses the NES and the NPV fro

[…truncated; see source link]

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