[Federal Register Volume 60, Number 139 (Thursday, July 20, 1995)]
[Proposed Rules]
[Pages 37388-37416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17625]
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DEPARTMENT OF ENERGY
Office of Energy Efficiency and Renewable Energy
10 CFR Part 430
[Docket No. EE-RM-93-801]
Energy Conservation Program for Consumer Products: Proposed
Rulemaking Regarding Energy Conservation Standards for Refrigerators,
Refrigerator-Freezers, and Freezers
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy (DOE).
ACTION: Notice of Proposed Rulemaking and Public Hearing.
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SUMMARY: The purpose of this notice of proposed rulemaking (NOPR) is to
provide interested persons an opportunity to comment on this proposal
amending the energy conservation standards for refrigerators,
refrigerator-freezers, and freezers, and to invite interested persons
to participate in the appliance energy conservation standards
rulemaking process.
DATES: Written comments on the proposed rule must be received by the
Department by October 3, 1995. The Department requests 10 copies of the
written comments and, if possible, a computer disk.
Oral views, data, and arguments may be presented at the public
hearing to be held in Washington, DC, on September 12 and 13, 1995.
Requests to speak at
[[Page 37389]]
the hearing must be received by the Department by 4 p.m., August 25,
1995. Ten copies of statements to be given at the public hearing must
be received by the Department by 4 p.m., September 1, 1995.
The hearing will begin at 9:30 a.m., on September 12 and 13, 1995,
and will be held at the U.S. Department of Energy, Forrestal Building,
Room 1E-245, 1000 Independence Avenue, SW., Washington, DC 20585. The
length of each presentation is limited to 20 minutes.
ADDRESSES: Written comments, oral statements, requests to speak at the
hearing and requests for speaker lists are to be submitted to:
Refrigerator Rulemaking (Docket No. EE-RM-93-801), U.S. Department of
Energy, Office of Codes and Standards, Appliance Division, EE-431, 1000
Independence Avenue, SW., Rm 1J-018, Washington, DC 20585, (202) 586-
7574.
Copies of the Technical Support Document: Energy Efficiency
Standards for Consumer Products: Refrigerators, Refrigerator-Freezers,
and Freezers (TSD) may be obtained from: U.S. Department of Energy,
Office of Codes and Standards, Appliance Division, EE-431, 1000
Independence Avenue, S.W., Rm 1J-018, Washington, D.C. 20585. (202)
586-9127.
Copies of the TSD, transcript of the public hearing and public
comments received may be read at the DOE Freedom of Information Reading
Room, U.S. Department of Energy, Forrestal Building, Room 1E-190, 1000
Independence Avenue, SW., Washington, DC 20585, (202) 586-6020 between
the hours of 9 a.m. and 4 p.m., Monday through Friday, except Federal
holidays. For more information concerning public participation in this
rulemaking proceeding see Section VI, ``Public Comment Procedures,'' of
this NOPR.
FOR FURTHER INFORMATION CONTACT:
Edward O. Pollock Jr., U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Forrestal Building, Mail Station EE-
431, 1000 Independence Avenue, SW., Washington, DC 20585, (202) 586-
5778.
Eugene Margolis, Esq., U.S. Department of Energy, Office of General
Counsel, Forrestal Building, Mail Station GC-72, 1000 Independence
Avenue, SW., Washington, DC 20585, (202) 586-9507.
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Authority
B. Background
II. General Discussion
A. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
B. Economic Justification
1. Economic Impact on Manufacturers and Consumers
2. Life-cycle Costs
3. Energy Savings
a. Determination of Savings
b. Significance of Savings
4. Lessening of Utility or Performance of Products
5. Impact of Lessening of Competition
6. Need of The Nation to Conserve Energy
7. Other Factors
C. Rebuttable Presumption
III. Discussion of Comments
A. General Analytical Comments
1. Discount Rates
a. Consumer Discount Rates
b. Manufacturer Discount Rate
c. Social Discount Rate
2. Appliance Lifetimes
3. Methodology
a. Lawrence Berkeley Laboratory Residential Energy Model
b. Lawrence Berkeley Laboratory Manufacturer Impact Model/
Government Impact Model
c. Demand Functions
d. Data Sources
4. Cost Pass-Through
5. Small Firms
6. Multiple Standards
7. External Costs and Benefits
8. Manufacturability
B. Product Specific Comments
1. Classes
a. Compacts
b. HCFC-Free
2. Design Options
3. Other Comments
a. Uncertainty Inherent in Data
b. Simulation Model
c. CFC Phaseout
4. Standards Proposed in the Joint Comments
(Table 1: Standards Proposed in the Joint Comments)
a. Full Sized Refrigerator-Freezers
b. Compact Refrigerator, Refrigerator-Freezers, and Freezers
c. Household Freezers
d. Manual/Partial Defrost Refrigerators and Refrigerator-
Freezers
e. Non-HCFC Products
IV. Analysis
A. Engineering-Technical Issues
1. Efficiency Levels Analyzed
(Table 2: Annual Energy Usage for Refrigerators,
Refrigerator-Freezers, and Freezers at Maximum Technologically
Feasible Levels and Table 3: Standard Levels Analyzed for
Refrigerators, Refrigerator-Freezers, and Freezers--Annual Energy
Use (kwh/yr))
2. Payback Period
(Table 4: Payback Periods of Design Options (Years) for
Representative Class of Refrigerator-Freezer)
3. Significance of Energy Savings
B. Economic Justification
1. Economic Impact on Manufacturers and Consumers
2. Life-cycle Cost and Net Present Value (NPV)
3. Energy Savings
4. Lessening of Utility or Performance of Products
5. Impact of Lessening of Competition
6. Need of the Nation to Save Energy
C. Conclusion
1. Product Classes
a. Compact Refrigerators, Refrigerator-Freezers and Freezers
b. HCFC-Free Refrigerators, Refrigerator-Freezers and
Freezers
2. Standards
a. Standards Level 4
b. Standards Level 3
c. Standards Level 2
d. Standards Level 1
3. Effective Dates
V. Environmental, Regulatory Impact, Takings Assessment, Federalism
and Regulatory Flexibility Reviews
A. Environmental Review
B. Regulatory Planning and Review
C. Regulatory Flexibility Review Act
D. Federalism Review
E. ``Takings'' Assessment Review
F. Paperwork Reduction Act Review
VI. Public Comment Procedures
A. Participation in Rulemaking
B. Written Comment Procedures
C. Public Hearing
1. Procedure for Submitting Requests to Speak
2. Conduct of Hearing
D. Issues for Comment
Appendices
I. Acronyms and Abbreviations
I. Introduction
A. Authority
Part B of Title III of the Energy Policy and Conservation Act
(EPCA), Pub. L. 94-163, as amended by the National Energy Conservation
Policy Act (NECPA), Pub. L. 95-619, by the National Appliance Energy
Conservation Act (NAECA), Pub. L. 100-12, by the National Appliance
Energy Conservation Amendments of 1988, Pub. L. 100-357, and by the
Energy Policy Act of 1992, Pub. L. 102-486,1 created the Energy
Conservation Program for Consumer Products other than Automobiles. The
consumer products subject to this program are called ``covered
products.'' The residential covered products are: Refrigerators,
refrigerator-freezers and freezers; dishwashers; clothes dryers; water
heaters; central air conditioners
[[Page 37390]]
and central air-conditioning heat pumps; furnaces; direct heating
equipment; television sets; kitchen ranges and ovens; clothes washers;
room air conditioners; and pool heaters. The Act specifies that other
consumer products may be classified as covered products by the
Secretary of Energy. To date, the Secretary has not so classified any
additional products.
\1\ Part B of Title III of the Energy Policy and Conservation
Act, as amended by the National Energy Conservation Policy Act, the
National Appliance Energy Conservation Act, the National Appliance
Energy Conservation Amendments of 1988 and the Energy Policy Act of
1992, is referred to in this notice as the ``Act.'' Part B of Title
III is codified at 42 U.S.C. 6291 et seq. Part B of Title III of the
Energy Policy and Conservation Act, as amended by the National
Energy Conservation Policy Act only, is referred to in this notice
as the National Energy Conservation Policy Act.
DOE published a final rule amending standards established by NAECA
for refrigerators, refrigerator-freezers, and freezers (refrigerator
products) on November 17, 1989 (hereinafter, referred to as the 1989
Final Rule). 54 FR 47916. The Act directs DOE to review the 1989 Final
Rule for possible amendment and to issue final rules based on that
review no later than November 17, 1994.
B. Background
As directed by the Act, DOE published an Advance Notice of Proposed
Rulemaking (hereinafter referred to as the 1993 Advance Notice)
proposing standards for refrigerator products, as well as other
products, on September 8, 1993. 58 FR 47326. The 1993 Advance Notice
presented the product classes that DOE planned to analyze, and provided
a detailed discussion of the analytical methodology and models that the
Department expected to use in doing the analysis to support this
rulemaking. The Department invited comments and data on the accuracy
and feasibility of the planned methodology and encouraged interested
persons to recommend improvements or alternatives to the approach taken
by DOE. The original comment period on the 1993 Advance Notice was
extended to February 7, 1994, in response to a request from the Gas
Appliance Manufacturers Association (GAMA), the Air-Conditioning and
Refrigeration Institute (ARI), and the Association of Home Appliance
Manufacturers (AHAM). 58 FR 59418 (November 9, 1993).
This NOPR addresses only the refrigerator products covered by the
1993 Advance Notice. The 1989 Final Rule divided the refrigerator
products into 10 classes based on various characteristics (e.g.,
freezer location). This NOPR proposes new classes for eight different
compact refrigerator configurations and 18 new classes for those
refrigerator products which are free of HCFCs. A complete list of the
proposed classes and the proposed standards for each class is found in
the table at the end of this NOPR.
The comments to the 1993 Advance Notice are addressed in Section
III below. The last comment to be received was the ``Joint Comments of
the Association of Home Appliance Manufacturers, the Natural Resources
Defense Council, the American Council for an Energy Efficient Economy,
the New York State Energy Office, the California Energy Commission,
Pacific Gas and Electric, and Southern California Edison Relating to
Energy Conservation Standards for Refrigerator/Freezers.'' (Hereinafter
referred to as the ``Joint Comments.'') 2 This group of
refrigerator manufacturers, electric utilities, and energy conservation
advocates, acting on its own initiative, negotiated intensively for 2
years to develop a common recommendation for an energy conservation
standard that meets the NAECA requirements for refrigerators,
refrigerator-freezers and freezers. Although DOE neither organized nor
was a member of the group, DOE responded to group requests to send DOE
staff observers to some meetings and to make available its contractors
to perform data processing. Without prior commitment to accept the
negotiated conclusions, the Department has been receptive to this group
effort to reach agreement among representatives of industry, consumers
and environmentalists. The resulting joint comments have been very
valuable to the Department's review of this issue. The Joint Comments
contains important data and analyses for the Department to consider,
and realistic recommendations.
\2\ The Department considered the Joint Comments to supersede
earlier comments by the listed parties regarding issues subsequently
discussed in the Joint Comments.
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II. General Discussion
A. Technological Feasibility
1. General. For those products and classes of products discussed in
today's NOPR, DOE believes that the efficiency levels analyzed, while
not necessarily being realized in current production, are
technologically possible. The technological feasibility of the design
options is addressed in the product-specific discussion. The criteria
used by the Department for evaluating design options for technological
feasibility are that the design options are already in use by the
industry, or that research has progressed to the likely development of
a prototype.
a. Maximum Technologically Feasible Levels. The Act requires the
Department, in considering any new or amended standard, to consider the
standard that is ``designed to achieve the maximum improvement in
energy efficiency which the Secretary determines is technologically
feasible and economically justified.'' EPCA, section 325(o)(2)(A), 42
U.S.C. 6295(o)(2)(A). Accordingly, for each class of product under
consideration in this rulemaking, a maximum technologically feasible
design option (``max tech'') was identified. The max tech level is one
that can be achieved by the addition of energy conserving design
options to the baseline units.3 DOE believes that in identifying
the max tech level a unit can be assembled, but not necessarily
manufactured, by the effective date of the amended standards. The
ability to manufacture is considered under the economic justification
analysis. For example, in the 1989 Final Rule, DOE concluded that
evacuated panels for refrigerators were a technically feasible design
option because refrigerators had been produced on a limited scale with
this technology. However, DOE concluded that this technology was not
economically justified because the chemical industry probably could not
provide sufficient quantities of the necessary raw materials by the
effective date of the standard.
\3\ The baseline unit is the most commonly used combination of
engineering design options which are found in appliances that meet
the existing standards.
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The max tech levels were derived by adding energy-conserving
engineering design options for each of the respective classes in order
of decreasing consumer payback. A brief discussion of the max tech
level for each class analyzed is found in the ``Analysis'' section of
this NOPR. A complete discussion of each max tech level, and the design
options included in each, is found in the Engineering Analysis. (See
TSD, Chapter 3.)
B. Economic Justification
The Act provides seven factors to be evaluated in determining
whether a conservation standard is economically justified. EPCA,
section 325(o)(2)(B)(i), 42 U.S.C. 6295(o)(2)(B)(i).
1. Economic Impact on Manufacturers and Consumers. The engineering
analysis identified options for improvement in efficiency along with
the associated costs to manufacturers for each class of product. For
each design option, these costs constitute the increased per-unit cost
to manufacturers to achieve the indicated energy efficiency levels.
Manufacturer, wholesaler, and retailer markups will result in a
consumer purchase price higher than the manufacturer cost.
To assess the likely impacts of standards on manufacturers, and to
determine the effects of standards on different-sized firms, the
Department used a computer model that simulates
[[Page 37391]]
hypothetical firms in the industry under consideration. This model, the
Manufacturer Analysis Model (MAM), is explained in the TSD. (See TSD,
Appendix C.) The Manufacturer Analysis Model consists of version 1.2,
dated March 1, 1993, of the Government Regulatory Impact Model (GRIM)
which has been integrated into the earlier Lawrence Berkeley Laboratory
(LBL) Manufacturer Impact Model (LBL-MIM). The GRIM model was developed
by Arthur D. Little Consulting Company (ADL) under contract to AHAM,
GAMA, and ARI. It provides a broad array of outputs, including
shipments, price, revenue, net income, and short- and long-run returns
on equity. An ``Output Table'' lists values for all these outputs in
the base case and in each of the standards cases under consideration.
It also gives a range for each of these estimates. The base case
represents the forecasts of outputs without new or amended standards. A
``Sensitivity Chart'' (TSD, Appendix C) shows how returns on equity
would be affected by a change in any one of the nine control variables
of the model.
For consumers, measures of economic impact are the changes in
purchase price and annual energy expense. The purchase price and energy
expense, i.e., life-cycle cost, of each standard level are presented in
Chapter 4 of the TSD. Under section 325 of EPCA, the life-cycle cost
analysis is a separate factor to be considered in determining economic
justification.
2. Life-cycle Costs. One measure of the effect of proposed
standards on consumers is the change in operating expense and purchase
price resulting from the new standards. For the average consumer, this
is quantified by the difference in the life-cycle costs between the
base and standards cases for the refrigerator classes analyzed. The
life-cycle cost is the sum of the purchase price and the operating
expense, including installation and maintenance expenditures,
discounted over the lifetime of the appliance.
The life-cycle cost was calculated for the range of efficiencies in
the Engineering Analysis for each class in the year standards are
imposed, using a real consumer discount rate of 6 percent. The purchase
price is based on the factory costs in the Engineering Analysis and
includes a factory markup plus a distributor and retailer markup.
Energy price forecasts are taken from the 1994 Annual Energy Outlook of
the Energy Information Administration. (DOE/EIA-0383(94)). In the
analysis for the final rule, energy price forecasts included in the
most recent Annual Energy Outlook will be used. Appliance usage inputs
are taken from the relevant test procedures.
3. Energy Savings. The Act requires DOE to consider the total
projected energy savings that result from revised standards. The
Department used the LBL Residential Energy Model (LBL-REM) results in
its consideration of total projected savings. The savings for
refrigerators, refrigerator-freezers and freezers are provided in the
``Analysis'' section of this NOPR, supra.
a. Determination of Savings. The Department forecasts energy
consumption by using the LBL-REM, which forecasts energy consumption
over the period of analysis for candidate standards and the base case.
The Department quantified the energy savings that would be attributable
to a standard as the difference in energy consumption between the
candidate standard and the base case.
The Lawrence Berkeley Laboratory Residential Energy Model was used
by DOE in previous standards rulemakings. (See TSD, Appendix B for a
detailed discussion of the LBL-REM.) The LBL-REM contains algorithms to
project average efficiencies, usage behavior, and market shares for
each product. Long-term market share elasticities have been assumed
with respect to equipment price, operating expense, and income. The
effects of standards are expected to be lower operating expense and
increased equipment price. The percentage changes in these quantities
and the elasticities are used to determine changes in sales volumes
resulting from standards. Higher equipment prices will decrease, and
lower operating expenses will increase sales volumes. The net result
depends on the standard level selected and its associated equipment
prices and operating expenses.
The Lawrence Berkeley Laboratory Residential Energy Model is used
to project energy use over the relevant periods for refrigerator
products with and without amended standards. The Department estimated
the projected energy savings during the period 1998-2030 4, by
comparing the energy consumption projections at alternative standard
levels against the projections at current standards which is the base
case. The energy saved is expressed in quads, i.e., quadrillions of
British thermal units (Btu), and exajoules (EJ). With respect to
electricity, the savings are quads of source or primary energy, which
is the energy necessary to generate and transmit electricity. From data
that remain rather constant over the years, the amount of electrical
energy consumed at the site is less than one-third of the amount of
source energy required to generate and transmit the electrical energy
to the site.5
\4\ The Lawrence Berkeley Laboratory Residential Energy Model
was programmed to analyze a single standard level or alternate
standard levels over the entire period. That is, the fact that a
standard might be revised during subsequent rulemakings was not
considered by the model. The Department believes that it is not
possible to predict what result such reviews may have, and therefore
it would be speculative to model any particular result. Therefore,
for purposes of this rulemaking, each standard level that was
analyzed was projected to have been in place from the time of
implementation to the year 2030.
\5\ Energy Information Administration, Electric Power Annual
1987, Tables 25 and 82, DOE/EIA-0348(87), 1987.
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The Lawrence Berkeley Laboratory Residential Energy Model
projections are dependent on many assumptions. Among the most important
are the responsiveness of household appliance purchasers to changes in
residential energy prices and consumer income, future energy prices,
future levels of housing construction, and options that exist for
improving the energy efficiency of appliances.
b. Significance of Savings. Under section 325(o)(3)(B) of the Act,
42 U.S.C. 6295(o)(3)(B), the Department is prohibited from adopting a
standard for a product if that standard would not result in
``significant conservation of energy.'' While the term ``significant''
is not defined in the Act, the U.S. Court of Appeals concluded that
Congress intended the word ``significant'' to mean ``non-trivial.''
Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 1373
(D.C. Cir. 1985).
4. Lessening of Utility or Performance of Products. In establishing
classes of products and design options, the Department tried to
eliminate any degradation of utility or performance in the products
under consideration in this rulemaking. That is, to the extent that
comments or research showed that a product included a utility or
performance-related feature that affected energy efficiency, a separate
class with a different efficiency standard was created for that
product. In this way, the Department attempted to minimize any
lessening of utility or performance resulting from amended standards.
5. Impact of Lessening of Competition. The Act directs the
Department to consider any lessening of competition that is likely to
result from the standards. It further directs the Attorney General to
gauge the impact, if any, of any lessening of competition.
To assist the Attorney General in making such a determination, the
Department studied the affected appliance industries to determine their
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existing concentrations, levels of competitiveness, and financial
performances. This information will be sent to the Attorney General.
(See TSD, Chapter 6.) The Department also will give the Attorney
General copies of this NOPR and the TSD for review.
6. Need of the Nation to Conserve Energy. The estimated energy
security and environmental effects from each standard level for each
class is reported under this factor in the Product Specific Discussion
(Section IV. B. 6) of this NOPR.
7. Other Factors. This provision allows the Secretary of Energy, in
determining whether a standard is economically justified, to consider
any other factors that the Secretary deems to be relevant.
Each efficiency level was evaluated according to the economic
justification factors specified in the Act to determine economic
justification. The Department rejected energy conservation standards
for which the burdens outweighed the benefits (e.g., savings in
operating costs were outweighed by significant increases in first costs
and substantially adverse effects on manufacturers' returns on equity).
C. Rebuttable Presumption
Section 325(o)(2)(B)(iii) of EPCA, 42 U.S.C. 6925 (o)(2)(B)(iii),
states:
If the Secretary finds that the additional cost to the consumer
of purchasing a product complying with an energy conservation
standard level will be less than three times the value of the energy
savings during the first year that the consumer will receive as a
result of the standard, as calculated under the applicable test
procedure, there shall be a rebuttable presumption that such
standard level is economically justified. A determination by the
Secretary that such criterion is not met shall not be taken into
consideration in the Secretary's determination of whether a standard
is economically justified.
If the increase in initial price of an appliance due to a
conservation standard would repay itself to the consumer in energy
savings in less than 3 years, then it is presumed that such standard is
economically justified.6 This presumption of economic
justification can be rebutted upon a proper showing.
\6\ For this calculation, the Department calculated cost-of-
operation based on the DOE test procedures. Therefore, the consumer
is assumed to be an ``average'' consumer as defined by the DOE test
procedures. Consumers that use the products less than the test
procedure assumes will experience a longer payback while those that
use them more than the test procedure assumes will have a shorter
payback.
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III. Discussion of Comments
The Department received 49 written comments in response to the 1993
Advance Notice.7 This section addresses the general analytical
issues raised by the comments, and then addresses the product-specific
issues.
\7\ Comments on the ANOPR have been assigned docket numbers and
have been numbered consecutively.
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A. General Analytical Comments
1. Discount Rates. The proposals of the Department concerning the
appropriate discount rates to use in the analysis of the standards drew
more comments than any other issue.
In view of the apparent differences in the cost of financing,
average rate of return on investments and the time value of money among
various categories of consumers, and between consumers, manufacturers
and society as a whole, the Department proposed to use different
discount rates for the consumer life-cycle cost analysis, the
manufacturer impact analysis, and net national benefits calculation,
with sensitivity analyses designed to describe the range of impact.
Based on the comments received, the Department has made some
modifications in this proposal, but has retained the specification of
different discount rates for different types of impact analyses and the
use of sensitivity analyses.
a. Consumer Discount Rate. In the 1989 Final Rule, DOE used a 7
percent discount rate, based on the range of real financing rates
experienced by consumers. At the time, rates ranged from less than 1
percent to slightly more than 15 percent. DOE selected 7 percent
because it was near the midpoint of the potential consumer discount
rates.
In its comments on the Advance Notice of Proposed Rulemaking on
Energy Conservation Standards for Nine Products (55 FR 39624, 39631,
September 28, 1990), Whirlpool Corporation (Whirlpool) offered
estimates of the percentages of appliance purchasers that used
different types of financing: 40 percent of retail purchasers pay in
cash; 35 percent use credit cards; 25 percent use retailer loans. These
figures excluded new home construction, which accounts for
approximately 25 percent of Whirlpool's total sales. (Whirlpool, No. 31
at 1-2).
These percentage shares were used to weight the different real
finance rates experienced by consumers: Just over 3 percent for
appliances purchased as part of a new home (whose finance rate is a
tax-deductible mortgage interest rate), to slightly less than 1 percent
for cash purchases, to more than 15 percent for credit card purchases.
As a result, the weighted-average, real finance rate experienced by
consumers was estimated to be 6 percent. In the 1993 Advance Notice to
this proposed rulemaking, the Department stated that it believed that
the average consumer rate was between 4 and 10 percent and that it
intended to perform sensitivity analyses using this range. DOE
specifically solicited comments on a range of issues concerning
consumer discount rates: Including the usefulness of the Whirlpool
data, the methods used to finance retail purchases, the possible use of
data on rates of return required by consumers, the possible use of data
on the implicit discount rates revealed by consumer purchasing
decisions, and the extent to which the special requirements of low-
income consumers should be taken into account.
The American Council for an Energy Efficient Economy (ACEEE)
supported this weighted-average approach using the Whirlpool data.
However, ACEEE and the Natural Resources Defense Council (NRDC) both
stated that consumer discount rates based upon how appliances are
actually purchased may represent constrained choices or choices of
convenience; for example, consumers who pay off credit card balances
early, or default on their payments, are not counted correctly. (ACEEE,
No. 50 at 1, 2 and NRDC, No. 18 at 24).
The American Council for an Energy Efficient Economy also stated
that higher discount rates should not be used for low-income
households. Low-income households are particularly prone to market
failures (e.g., many low-income households live in rental housing where
landlords purchase the refrigerator-freezers, and tenants pay the
operating costs) but receive benefits equal to those for all other
households from higher standards. (ACEEE, No. 50 at 1, 2).
The Edison Electric Institute (EEI) argued that implicit discount
rates estimated through an examination of actual consumer purchases of
appliances and related consumer equipment is the most appropriate basis
for the consumer discount rate used under this program. (EEI, No. 35 at
4). On the other hand, NRDC and ACEEE supported the Department proposal
not to use implicit discount rates in the analysis of the cost-
effectiveness of potential minimum efficiency standards. (ACEEE, No. 50
at 1,2, and NRDC, No. 8 at 24).
DOE has further investigated various indicators of the opportunity
costs that consumers purchasing appliances might experience. For
example, the average real rate of return on residential property during
the 1980s varied
[[Page 37393]]
between 3.6 and 4.5 percent annually. The annual real rate of return
(nonfinancial) on corporate stocks during this period varied from 5.9
to 8.8 percent, but was generally less than this for nearly all other
forms of investment readily available to consumers. DOE believes such
opportunity costs are relevant indicators of the appropriate discount
rates for consumers with significant personal savings or investments.
For consumers with little or no personal savings, DOE believes that
the costs of credit-card financing and the willingness of consumers to
forego current consumption in favor of future savings should be taken
into account. According to the data derived from a 1992 Survey of
Consumer Finances performed by the National Opinion Research Center for
the Federal Reserve Bank, 30 percent of all U.S. households have less
than $500 in savings, checking and money market accounts, or have no
such account. Also, according to the survey, 13 percent of all U.S.
households have a net worth of less than $1000. These two survey
results suggest that many households may be forced, because of their
financial circumstances, to finance any increased appliance costs
resulting from efficiency standards through credit cards or other high
interest sources of financing, or by reducing (or postponing) their
current consumption of goods and services. Limited empirical research
8 suggests that low-income households exhibit higher-than-average
discount rates (i.e., required rates of return or time values of money)
across all of their time-sensitive decisions, including (but not
limited to) their appliance purchases. Real credit-card financing rates
remain above 10 percent for most consumers.
\8\ Train, Kenneth, Discount Rates in Consumers' Energy-Related
Decisions: A Review of the Literature; Energy, December 1985.
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The Department continues to believe that appropriately weighted,
real financing rates are a useful indicator of consumer discount rates,
although it recognizes that there are considerable limitations to the
data concerning consumer financing provided by Whirlpool.
Regarding implicit discount rates, various studies have shown that
they range from as low as 3 percent to as high as 100 percent (or more)
for certain appliances. However, because implicit discount rates are
based on actual consumer purchase behavior, they also reflect the
extent to which there are market failures, such as inadequate
information, conflicting owner/renter incentives, and second party
(builder/contractor) purchases that inhibit consumers from making
energy efficiency investments they would otherwise consider to be
worthwhile. One major reason Federal appliance efficiency standards
were originally established was to overcome these market failures
regarding investment in energy efficiency.
For these reasons, DOE does not believe unadjusted (i.e., not
corrected for potential biases) discount rates derived from actual
consumer behavior should be used in evaluating the economic impact of
proposed standards on consumers. DOE believes the intent of the
legislation that established the appliance standards program is to
achieve energy savings which are being foregone because of market
failures that hinder or discourage consumer investments in energy
efficiency. This conclusion is supported by the findings of the
District Court in Natural Resources Defense Council v. Herrington, 768
F. 2d 1355, 1406-07 (D.C. Cir. 1985), where the court stated that ``the
entire point of a mandatory program was to change consumer behavior''
and ``the fact that consumers demand short payback periods was itself a
major cause of the market failure that Congress hoped to correct.''
Based on the comments received and the further investigation of
issues raised in the Notice of Proposed Rulemaking on Energy
Conservation Standards for Eight Products (59 FR 10464, 10532, March 4,
1994), the Department has concluded that a 6 percent discount rate is
an appropriate mid-range estimate of the ranges of real financing
rates, opportunity costs and time values of money experienced or
exhibited by residential consumers. However, because of the
considerable variability among different categories of consumers, the
Department intends to place increased emphasis on assessing the
sensitivity of the life-cycle cost analyses to the use of low (2
percent) and high (15 percent) discount rates.
b. Manufacturer Discount Rate. The real discount rate used to
assess the impacts of the proposed refrigerator standards on
manufacturers is 12 percent. It is the discount rate used to calculate
the net present value of the series of estimated net cash flows
expected to be experienced by industry, as calculated by the GRIM
module of the MAM.
The Manufacturer Analysis Model also uses a ``market discount
rate'' for forecasting the impact of standards on future appliance
sales, as distinct from the 12 percent rate used to calculate industry
net present values. This implicit market rate is a higher rate derived
from empirical analysis of historical efficiency choice decisions, and
is used as an indicator of the extent to which consumers implicitly
value operating costs compared with first costs.
c. Social Discount Rate. In identifying a discount rate that is
appropriate for use in calculating benefits to the Nation as a whole,
the Department considered the opportunity costs of devoting more
economic resources to the production and purchase of more energy-
efficient appliances and fewer national resources to other types of
investment. Since differentiating among specific classes of consumers
or businesses is not necessary, the Department considered a broad
measure of the average rates of return earned by economic investment
throughout the U.S. to be an appropriate basis for the social discount
rate.
Using this approach, the Office of Management and Budget (OMB)
prepared a Background on OMB's Discount Rate Guidance in November of
1992, containing an analysis of the average annual real rate of return
earned on investments made since 1960 in nonfinancial corporations,
noncorporate farm and nonfarm proprietorships, and owner-occupied
housing in the U.S. The results of this analysis showed that since
1980, the annual real rate of return for these categories of
investments averaged slightly more than 7 percent, ranging from a low
of about 4 percent for owner-occupied housing (which represented about
43 percent of total capital assets in 1991 of about $15 trillion) to a
high of about 9 percent on noncorporate farm and nonfarm capital (which
represented about 23 percent of the total). Between 1960 and 1980, the
average real rate of return on capital was higher, averaging about 8.5
percent in the 1970s and about 11.2 percent in the 1960s. Because of
this analysis, OMB chose to designate 7 percent as the social discount
rate specified in revisions to OMB Circular A-94 issued on November 10,
1992, 57 FR 53519.
Because the Department believes the methods and data used by OMB to
develop this guidance are appropriate bases for a social discount rate,
the 1993 Advance Notice to this proposed rule said that it was the
intent of the Department to use 7 percent as the discount rate in the
calculation of the net national benefits and costs of the proposed
standards.
The New York State Energy Office (NYSEO) stated that the average
rate of 7 percent for the societal perspective is too high and
suggested an average rate of 3 to 4 percent real, based upon current
30-year U.S. Treasury bond interest rates. (NYSEO, No. 26 at 17-19).
[[Page 37394]]
The Natural Resources Defense Council stated that, in principle,
societal discount rates should be lower than consumer discount rates,
but that it cannot quantify the difference. It also stated real
discount rates should be based upon long-term (hundred-year) averages,
which are in the range of 0 to 5 percent. (NRDC, No. 18 at 11).
Because the proposed appliance efficiency standards will primarily
affect private, rather than public, investment, the Department
continues to believe that using the average real rate of return on
private investment as the basis for the social discount rate is most
appropriate. If the primary impact of the standards were on Federal or
other public expenditures, DOE agrees that real interest rates on long
term government securities would likely be a better basis.
The Department disagrees with the contention that the average
social discount rate should necessarily be lower than the average
consumer discount rates, although it agrees that social rates are often
lower than those experienced by many consumers and businesses. The
increased risk faced by individual consumers or businesses is one
reason many believe social discount rates should be lower. The
Department believes that taking into account such variation in risk in
determining the appropriate social, consumer, or other discount rate is
inappropriate.
For these reasons, DOE proposes to continue to use a 7 percent
social discount rate in national net present value calculations. The
Department has performed sensitivity analyses at 4 and 10 percent and
finds that while the social discount rate used has a significant impact
on the estimated national net present value, there are only small
differences in the national net present value for each of the trial
standard levels being considered at any one of the three social
discount rates evaluated.
2. Appliance Lifetimes. Three comments discussed product lifetimes.
Maytag stated that the lifetime for refrigerator products should be 15
years, based on a National Family Opinion survey of first owners
carried out by AHAM. (Maytag, Transcript at 328). AHAM provided a
survey showing that lifetimes of refrigerator products at replacement
are shorter than previously assumed by the Department. (AHAM, No. 17 at
32). NRDC believes that savings should be estimated throughout the
lifetime of the appliance, not over the period that the first owner
keeps the appliance. (NRDC, No. 18 at 40).
The Act provides that the savings should be estimated throughout
the average lifetime of the appliance, not the time the first owner
keeps the appliance. EPCA, section 325(o)(2)(B)(i)(II), 42 U.S.C.
6295(o)(2)(B)(i)(II). The Department decided to retain the 19-year
baseline for refrigerators and refrigerator-freezers, based on its
study of saturations and purchases of new household refrigerators and
refrigerator-freezers. The 19-year lifetime of refrigerator-freezers is
consistent with observed purchases in the marketplace since 1980. For
compacts, the Department is using the industry-supplied value of 11
years since no other data are available.
3. Methodology.
a. Lawrence Berkeley Laboratory Residential Energy Model. The
Association of Home Appliance Manufacturers criticized the LBL-REM as
theoretical and based upon obsolete (1970s) data. It further stated no
model does an adequate job of forecasting the price-volume effects
leading to a payback analysis. In particular, AHAM commented that
demand in the current LBL-REM refrigerator products equations does not
appear to drop fast enough with increasing prices to meet the test of
real world experience and therefore LBL-REM should not be used to
compute demand functions. It commented that more accurate results are
generated by recent empirical data rather than by theories about the
effects of regulations on demand. (AHAM, No. 17 at 22).
The Department believes that individual manufacturers observe
greater price sensitivity because they are analyzing shifts among
manufacturers, rather than a response of the entire market (total
national sales) to a market-wide price change due to standards. The
forecasting methodology used in LBL-REM has been validated by
comparison with historical shipments over the 1981-1993 time period.
b. Lawrence Berkeley Laboratory Manufacturer Impact Model/
Government Regulatory Impact Model. Most of the comments recommended
that the Department adopt the GRIM cash-flow model. A comparison of
GRIM and LBL-MIM, using LBL-MIM price and quantity data, has been
conducted by DOE, and the results show that differences between these
two models are small enough to be inconsequential in almost all cases.
GRIM has been incorporated into LBL-MIM to calculate the impact of
standards on industry net present values.
Arthur D. Little, Inc. submitted comments for three major industry
trade associations: AHAM, ARI, and GAMA. Arthur D. Little, Inc. stated
``there is no generally acceptable approach for forecasting annual
shipments and prices of products using quantitative models.'' Further,
ADL said that forecasting the annual shipments and prices of products
is a difficult task, but there are basic principles for addressing the
issue. (ADL, No. 19 at 3).
In order to be useful, models analyzing industry impacts must
forecast shipments and prices. While ADL may not consider any of these
approaches generally acceptable, DOE is in favor of using a
quantitative method rather than a subjective approach.
c. Demand Functions. Arthur D. Little, Inc. commented that the
Department analyses use demand functions limited to consumer demand as
a function of price, payback period, and consumer income, while
omitting nonfinancial considerations (such as utility to consumers).
(ADL, No. 19 at 3).
The Department assumes there is no difference in consumer utility
between the various design options used to meet different trial
standards levels. This is intentional because the Act does not allow
the setting of a standard that diminishes consumer utility. EPCA,
section 325(o)(2)(B)(i)(IV), 42 U.S.C. 6295(o)(2)(B)(i)(IV). It is an
issue analyzed and initially determined by the engineering analysis
before its consideration as part of a standard level. This issue is
further addressed in the discussion of the various design options
considered found later in this NOPR.
d. Data Sources. Arthur D. Little, Inc. commented that the
empirical data relating to price and consumer demand (i.e., price
elasticities of demand) were estimated in the 1970s, before ``major
changes in the actual marketplace'' and, therefore, are not reliable.
(ADL, No. 19 at 4). The Association of Home Appliance Manufacturers
stated that DOE should develop an acceptable approach to demand
elasticity because ``neither LBL-REM nor LBL-MIM are acceptable as
predictors of volume and price elasticities.'' (AHAM, No. 17 at 35).
The Lawrence Berkeley Laboratory Residential Energy Model is not a
source of volume or price elasticity. The elasticities used in the LBL-
MIM were originally estimated by the LBL-REM based on data and results
estimated in the 1970s by Oak Ridge National Laboratory (ORNL).\9\ They
have been subsequently revised based on historical shipments or other
relevant information where available. DOE agrees that it
[[Page 37395]]
would be useful to have updated data for estimating elasticities and
any other information which explains major changes in the marketplace.
DOE notes that GRIM does not use such elasticities. The Department
encourages AHAM, ADL, or other parties to provide evidence about
whether the elasticities used in the analysis are reasonable, and how
they may obtain more accurate elasticities.
\9\ The original Oak Ridge National Laboratory data is
documented in Consumer Products Efficiency Standards Economic
Analysis Document, U.S. Department of Energy, DOE/CE-0029, March
1982.
---------------------------------------------------------------------------
4. Cost Pass-Through. Several comments, including ADL, AHAM, Amana
Corporation (Amana), and General Electric Appliances (GEA), raise
issues regarding cost pass-through and the relationship between cost
and price. According to ADL, manufacturers have not passed through a
significant portion of their costs as evidenced by the Consumer and
Producer Price Indices, which show that prices have risen by less than
the increase in costs. This means that firms have reduced operating
costs rather than increase costs to consumers. Therefore any model that
assumes or concludes that firms can pass on costs with any reasonable
probability is ``not acceptable and inconsistent with observed
behavior.'' (ADL, No. 19 at 4-5).
The Gas Appliance Manufacturers Association stated that DOE should
not assume that all equipment cost increases can be passed through to
the consumer, partly as a result of the option of deferring purchases
and repairing existing equipment. (GAMA. No. 28 at 3).
The Association of Home Appliance Manufacturers noted that
historically the price of appliances has risen much more slowly than
the price of some production inputs. They concluded that this
observation shows an inability of firms to pass on cost increases.
(AHAM, No. 17 at 6).
The relevant issue regarding cost pass-through is how appliance
prices have risen relative to the increased costs of all manufacturer
inputs. A more plausible explanation of why passing on their costs has
been increasingly difficult for firms is because of the rise of
monopsony power on the purchasing side of the market as AHAM has noted
in earlier comments.\10\ The growth of large and sophisticated
``power'' retailers that have significant and increasing power in the
marketplace has resulted in increased downward price pressure on
manufacturers.
\10\ See Written Comments of the AHAM to the DOE on Energy
Conservation Program for Consumer Products: ANOPR on Energy
Conservation Standards for Room Air Conditioners and Kitchen Ranges
and Ovens, Docket No. CE-RM-90-201, dated December 12, 1990, by the
AHAM, pp. 67-68; and Statement of the AHAM to the DOE on the NOPR on
Energy Efficiency Standards for Dishwashers, Clothes Washers, and
Clothes Dryers, CE-RM-88-101, also by AHAM, dated October 10, 1989.
---------------------------------------------------------------------------
5. Small Firms. Several commenters stated that DOE needs to be
concerned about the impacts of standards on small manufacturers.
General Electric Appliances wrote that an analysis using an ``average''
firm may not show the impacts of standards on small firms or on
industry concentration. (GEA, No. 39 at 21).
PVI Industries commented that ``a smaller company, with lower
volume, may be affected very differently from a larger, higher volume
producer. In particular, the smaller company can probably implement
significant design changes more quickly and at much lower cost because
of lower volume production and less automation. Therefore, the GRIM
model may not suitably reflect the financial impact of a change across
the broad spectrum of appliance manufacturers.'' (PVI Industries, No.
43 at 1).
The Department is interested in the impact of standards on the
different types of firms in the industry. The Department is aware that
the compact refrigerator industry has cost functions that are much
different than the full-size product manufacturers, and partly for this
reason, DOE is proposing less stringent standards for compact
refrigerator products than for full-sized refrigerator products.
6. Multiple Standards. Three comments, from AHAM, Amana, and GEA,
raised the issue of the cumulative costs of multiple regulations.
(AHAM, No. 17 at 7, Amana, No. 21 at 2, and GEA, No. 39 at 3). They
stated that the Department needs to consider and analyze the cumulative
costs of multiple regulations on industry. Some of these costs include
chlorofluorocarbon (CFC) phaseout, successive efficiency standards, and
demands on human and financial resources. General Electric Appliances
suggested the use of the GRIM because it includes a module that
analyzes the cumulative effects of multiple regulations. (GEA, No. 39
at 21-2).
The Department has considered the impact of costs due to
regulations concerning the phaseout of CFC and HCFC materials. The
Manufacturer Analysis Model is designed to analyze the impact of
standards on industry profitability for an individual appliance. To
date, this has involved treating each manufacturer of a subject product
as a separate company. Recognizing, however, that many manufacturers
produce more than one appliance type subject to appliance standards and
the companies have limited resources, the Department is presently
seeking approaches to account for the cumulative effects on a multi-
product company of the appliance conservation standards that it
promulgates, and requests comments in this regard. Such an analysis
will require both a manageable analytical method and relevant cost
data.
7. External Costs and Benefits. A number of comments on the ANOPR
urged the Department to consider external costs and benefits in its
economic analyses of the efficiency standards proposed in this NOPR.
(ACEEE, No. 50 at 2; Gas Research Institute (GRI), No.10 in Appendix H
at 6; NRDC, No. 18 at 28; Pacific Gas and Electric, No. 22 at 2; NYSEO,
No. 26 at 7; NWPPC, No. 30 at 4; AGA, No. 32 at 3). However, several
other commenters argued against the inclusion of externalities in the
economic analysis. (Tampa Electric Co. (TECo.), No. 3 at 3; Cleveland
Electric Illuminating Co., No. 7 at 1; ARI, No. 31 at 6; Electricity
Consumers Resource Council (ELCON), No. 33 at Attachment 1; EEI, No. 35
at 2; GAMA, No. 27 at 24; National Rural Electric Cooperative
Association (NRECA), No. 42 at 2, 3).
The Department recognizes that the inclusion of monetized
externality cost estimates in the evaluation of standards is a complex
and controversial question. In a Supplemental Advance Notice of
Proposed Rulemaking Regarding Energy Conservation Standards for Three
Types of Consumer Products, (59 FR 51140, October 7, 1994), the
Department solicited public comment on whether a sound analytical basis
exists for estimating the monetary value of environmental and energy
security externalities. Because the Department has yet to identify a
sound analytical basis for estimating the monetary value of
environmental or energy security externalities, it is not proposing to
use such estimated monetary values in this rulemaking. However, as in
previous efficiency standards rulemakings, the Department has estimated
the likely effects of the proposed standards on certain categories of
emissions and on oil use, and has considered these effects in reaching
a decision about whether the benefits of the proposed standards exceed
their burdens.
8. Manufacturability. General Electric Appliances believes that the
Department needs to incorporate an evaluation of manufacturability as
an essential aspect of the technical feasibility determination. (GEA,
No. 39 at 13). Maytag proposed that the Department recognize that
manufacturability and technological feasibility are inextricably
[[Page 37396]]
linked, that a new operating definition of max tech should be
developed, and that the process should consider patent restrictions,
toxicity, functional viability, verifiability, and reliability.
(Maytag, Transcript at 317-19).
The Department believes that the max tech level should reflect a
product that is capable of being assembled, but not necessarily mass
produced, by the effective date of the amended standards. (This issue
is discussed in more detail in the section on Maximum Technologically
Feasible Levels, II.A.2.)
B. Product-Specific Comments
1. Classes.
a. Compacts. The current energy efficiency standards specify
standards for seven classes of refrigerators and refrigerator-freezers
and three classes of freezers. The classes are based on various
characteristics of the products such as type of defrost, location of
the freezer and whether the unit has through-the-door features. No
consideration was given to dividing the refrigerator products in
different classes based on size. The Joint Comments proposed
establishing separate classes for compact refrigerator products which
would include all products less than 7.75 cubic feet (Federal Trade
Commission (FTC)/AHAM rated volume) and 36 inches or less in height.
The marketplace and industry recognize products meeting these criteria
as a separate niche with special engineering and investment
constraints. Much smaller, privately-held, family-owned, single-product
companies are typical in this market. Economies of scale for these
companies are much different from those of the full-size product
manufacturers. Also, there are far fewer design options available to
improve the performance of the compact refrigerator products. (Joint
Comments, No. 49 at 15).
The Department has decided to adopt additional classes for compact
refrigerator products because they have added consumer utility (ability
to fit in small spaces), and because there are fewer energy
conservation design options available for compacts. The additional
compact classes are Nos. 11-18 in the ``Product Classes and Effective
Dates'' Table found at the end of this NOPR.
b. HCFC-Free. The Joint Comments also proposed additional classes
for HCFC-free refrigerator products, both full-size and compact. The
Joint Comments stated that treatment of HCFCs becomes a significant
issue in the design of these standards because implementation of the
new energy standards will occur less than five years before regulations
promulgated by the Environmental Protection Agency (EPA), making HCFC-
141b unavailable, become effective January 1, 2003. There is also
concern that the date for phaseout of HCFC-141b may be moved up.
Current data from Europe, Japan, and the U.S., provided by the Joint
Comments, support approximately a 10 percent energy penalty in the
shift from HCFC-141b to proposed hydrofluorocarbon and hydrocarbon
substitutes. New technologies may be developed to reduce or eliminate
the energy penalty, but it is impossible to forecast with certainty
whether they will be commercially available by 2003. The Joint Comments
proposed that new classes be established for any product employing non-
ozone-depleting foam blowing agent which EPA approves under the Safe
Alternatives Program of the Clean Air Act, or which uses blends or
mixtures of less than 10 percent HCFC. (Joint Comments, No. 49 at 21).
The Environmental Protection Agency stated that, given the lack of
a technology equal or better than HCFC-141b in terms of energy and
ozone-depletion, EPA does not plan to phase out HCFC-141b any earlier
than 2003. (EPA, No. 34 at 9). The Environmental Protection Agency also
submitted a report entitled, ``Zero Ozone Depleting Blowing Agents for
Use in Polyurethane-based Foam Insulations,'' which found that the high
density, molded foam produced with the fluorinated ether, E245, has a
thermal conductivity similar to that of CFC-11. (EPA, No. 34, Appendix
8 at 4). The report also states that the major problem with E245 is
that it is not commercially available, and toxicity tests must still be
conducted. (EPA, No. 34 at Appendix 8, p. 7).
The Department has considered all the viewpoints expressed
concerning the impact of HCFC-141b phaseout on this rulemaking. The
thermal conductivity of HCFC-141b product substitutes that may become
available in the future is difficult to project. The following
summarizes what is presently known about four potential substitutes:
HFC-356 foam has a thermal conductivity of 0.126 Btu-in/
hr-ft2- deg.F (18.2mW/m-K), which is about 4 percent higher than
the 0.121 Btu-in/hr-ft2- deg.F (17.4 mW/m-K) conductivity of foams
using CFC-11 11. HFC-356 has the advantage of being less
aggressive toward liner materials than CFC-11. Toxicity testing is
incomplete.
\11\ E. Ball and W. Lamberts. ``HFC-356, a Zero Ozone Depletion
Potential (ODP) Blowing Agent Candidate for North American Appliance
Foam Formulations,'' Proceedings of Polyurethanes World Congress
1993, Vancouver, Canada, October 1993, pp. 10-13.
---------------------------------------------------------------------------
The fluorinated ether E245 is nonflammable and may serve
as a near drop-in replacement for CFC-11 and HCFC-141b. Foams using
E245 as a blowing agent have been reported to have a thermal
conductivity at 32 deg.F (0 deg.C) of 0.126 Btu-in/hr-ft\2\- deg.F
(25mW/m-K) 12. It is not commercially available and will need to
undergo toxicity testing.
\12\ E. Blevins et al., ``Zero Ozone Depleting Blowing Agents
for Use in Polyurethane Based Foam Insulations.'' EPA, No. 34,
Appendix 8.
---------------------------------------------------------------------------
Cyclopentane has about a 10 percent higher thermal
conductivity than CFC-11 blown foam. The conductivity could be lowered
by about 5 percent with the addition of small amounts of
perfluoralcanes (PFAs) 13. Although pentanes are being used in
Europe, the flammability of cyclopentane concerns U.S. manufacturers.
\13\ U. Wenning. ``Hydrocarbons as PU Blowing Agents in Domestic
Appliances'', Proceedings of 1993 International CFC and Halon
Alternatives Conference,'' Washington, DC, 1993, pp 317-325.
---------------------------------------------------------------------------
HFC-365 and a blend of H-365 and HFC-134a have been tested
as blowing agents and found to produce foams with similar thermal
conductivities to CFC-11 14. As has occurred for HCFC-141b, DOE
expects that the thermal conductivities of these new foams will improve
as more experience is gained with their use in different formulations.
In the analyses for these proposed standards, it was assumed that the
thermal conductivity remained constant at 1993 values.
\14\ J. Murphy et al., ``HFC-365 as a Zero ODP Blowing Agent for
Foams,'' Proceedings of 1993 International CFC and Halon Conference,
Washington, DC, October, 1993, pp 346-355.
---------------------------------------------------------------------------
Based on the uncertainty of the availability of HCFC-141b
replacements with equivalent thermal properties, the Department has
decided to develop new product classes for products that do not use
HCFC-141b or other HCFCs in the foam insulation.
2. Design Options. In the 1993 Advance Notice the Department
requested comments on 30 design options it proposed evaluating for
potential improvement of the refrigerator products. The comments
received on each design option are discussed below. (Through the
process of providing technical support for the informal negotiations of
the Joint Comments parties, the Department was able to gain a better
understanding of the issues relating to use of each of the design
options considered. This has greatly improved the Department's ability
to estimate the efficiency
[[Page 37397]]
improvements that will result from incorporation of the design
options.)
Increased Cabinet Insulation Thickness. Increasing the wall
thickness has been identified as the option providing the greatest
energy savings. According to the industry participants as stated in the
Joint Comments, an increase in external dimensions on refrigerator-
freezers of as little as a \1/2\ inch can eliminate as much as 20 to 30
percent of a marketplace available for that particular product. If the
external dimensions are maintained and the wall thickness increase is
made to the inside of a cabinet, the interior volume of the cabinet is
reduced. Smaller capacity products carry a lower price with less
margin. The smaller volume cabinet will also have to meet a more
restrictive energy standard. Finally, this design may sacrifice
important utility of the product in violation of the mandates of NAECA.
(Joint Comments, No. 49 at 7).
The non-industry participants in the Joint Comments agreed with
industry position that the max tech level based on increasing both wall
and door thickness by 1 inch--a 2-044h increase in side-to-side
dimensions of the refrigerator--would have a significant impact on some
products, because there are not sufficient alternative design options
available to manufacturers should they find it necessary not to produce
products with larger exterior dimensions (products that could not fit
through doors in existing buildings if enlarged). (Joint Comments, No.
49 at 10).
The Joint Comments state that increased wall and door thickness has
a more severe impact on compact refrigerators than it does on full-size
products. Marketing of compacts does not allow for an increase in wall
thickness since most products are designed for niche applications with
no room for expansion of the cabinet size. Any increase in wall
thickness would compromise the utility of the product by decreasing the
usable interior volume for a product that already has limited
applications in the marketplace. A similar problem applies to
insulation increases in top and bottom panels; this space constraint is
recognized in the new definition of the compact class as limited to
models below 36 inches in height. (Joint Comments, No. 49 at 16).
Sub-Zero stated pursuant to its definition of built-in compact
refrigerators, the available depth is restricted to 24 inches and the
width to 24, 30, 36 or 48 inches. (Sub-Zero, No. 37 at 2). U-Line
stated that the consumer uses of undercounter refrigerators and
freezers will not permit increased exterior cabinet dimensions;
exterior cabinet dimensions cannot exceed 24 inches in depth and width
and 34 inches in height. Shipping costs would increase $3 per unit for
a 1 inch increase in cabinet width. Decreasing internal volume would
reduce consumer utility and require retooling. (U-Line, No. 11 at 1,
2).
The Joint Comments also state that the impact of increased wall
thickness is as much a concern for household freezers as it is for
household refrigerator-freezers. One basic problem is getting the
larger, thicker-walled unit through doorways and stairwells. Another
problem is that because the freezer market is declining, introduction
of designs which are unacceptable to some consumers is even more
troublesome. The Joint Comments state that increased wall and door
thicknesses are not options that can be used to increase energy
performance for household freezers. One freezer manufacturer presented
information regarding how it had been forced to reduce its wall
thickness by one-half inch to improve the marketability of the product.
(Joint Comments, No. 49 at 18).
The Environmental Protection Agency has conducted a market survey
that indicated consumers strongly preferred the double-insulated, or
thick-walled, refrigerator when they are presented with economic
information and labeling which highlights the environmental benefits.
(EPA, No.34 at 9-10).
The Department agrees that there are problems associated with
increasing the wall thickness for some classes of refrigerator
products. If the increase is external, some of the larger models will
not be able to pass through doorways or fit into the space found in
many kitchens. The Department also recognizes that if the external
dimensions are not changed, an increase of only one-half inch in wall
thickness will decrease the internal volume of a typical refrigerator
by about 10 percent. The Department has considered these factors in
determining the proposed standards. However, the Department has
determined that in some cases increases of less than one inch in the
insulation thickness is acceptable.
Improved Foam Insulation for Cabinet or Door. Whirlpool stated that
the CFC-11 blown foam that it has used typically has had a k-factor of
approximately 0.125 Btu-in/hr-ft\2\ deg.F, and it generally has been
made with about 12 percent CFC-11 in the foam. The company said it was
possible to improve the k-factor by increasing the amount of CFC-11,
reducing cell size and increasing density, which required an increase
in cost and in investment in some new equipment. However, none of the
available replacements for CFC-11 has characteristics that match those
of CFC-11. (Whirlpool, No. 36 at 4).
Sub-Zero stated it uses a froth-foam system that typically has
higher k-values than high-pressure systems, but it would require a very
large capital expenditure for the company to switch to a high-pressure
system. Sub-Zero also commented that there is a lesser chance of
incorporating micro-cell insulation with a froth system. (Sub-Zero, No.
37 at 4). U-Line stated that most exotic foam technologies (such as
micro-cell) require high-pressure impingement foaming equipment; it
uses froth-foaming equipment which would be expensive to replace with
high-pressure systems. (U-Line, No. 11 at 2). General Electric
Appliances stated that insulation efficiency suffers from replacement
of CFC-11 foam by HCFC-141b foam, and that for it to switch from HCFC-
blown foams is feasible, but such a transition would result in foams
with poorer insulation value. (GEA, No. 39 at 4).
The Department did not find any experimental data to support this
option. The Department does not believe that any technology that would
improve the insulation properties of HCFC-141b blown foams beyond that
of the present CFC-11 blown foam would be available in time to be
considered in this rulemaking. Therefore, improvements in foam
insulation were not considered in this analysis.
Evacuated Insulation Panels. The Joint Comments, commenting on
vacuum panels, stated: ``Vacuum panel technologies have progressed
since the last refrigerator rulemaking. The appliance industry probably
will introduce limited vacuum panel designs over the next five to ten
years. Issues of concern are manufacturability, availability,
reliability and in-product performance. It is still too early in the
development of this technology to apply it as a reliable design option
in the production of a 1998 compliant product. Several major issues
remain unresolved.
`` Vacuum panels must be used in concert with foam
insulation (polyurethane foam is the mechanical support for the
cabinet).
`` Wire harnesses, drain tubes, shelf anchors, etc., are
[placed] between the cabinet shell and inner liner making 100 percent
coverage of vacuum panels impossible. Fifty to sixty percent is about
maximum and for freezers would be even less.
`` Vacuum panels are 6 to 10 times heavier than foam.
Panels in doors may compromise Underwriters Laboratories (UL) tip-over
requirements. The shipping weight of a typical cabinet
[[Page 37398]]
with vacuum panels would increase by about 50 pounds.
`` Polyurethane foam averages about 15 cents per board
foot. Powder-filled panels are $2.50 to $3.50 per board foot and fiber-
filled panels range from $5.00 to $7.50 per board foot. An average
refrigerator-freezer has about 114 board feet of surface area, of which
approximately 35 board feet would be vacuum panels.
`` Worldwide production capability for all types of vacuum
panels is between 3 to 5 million board feet per year. Full
implementation of vacuum panels in the U.S. alone would require more
than 400 million board feet of panels.
`` Product-life performance characteristics (15 to 20
years) are being observed, but industry continues to work toward a
vacuum panel product that maintains reliability over the life of the
refrigerator.'' (Joint Comments, No. 49 at 7-8).
The Environmental Protection Agency sponsored a study to estimate
the cost of producing vacuum panels at a new plant designed to produce
enough vacuum insulation panels for 300,000 refrigerator-freezers per
year. It determined that the variable cost for a 21 cubic foot
refrigerator-freezer is about $1.40 per board foot, and the investment
cost is about $0.55 per board foot. (EPA, No. 34, Appendix 5 at 54-58).
After feasibility is established and funding is obtained, it would take
about 2 \1/2\ years to begin production. (EPA, No. 34, Appendix 5 at
56-59). The energy savings estimated by simulation analyses averaged
about 16 percent for top-mounted refrigerator-freezers. (EPA, No. 34,
Appendix 5 at 73).
Based on the information cited above, the Department has concluded
that production capability will be insufficient in 1998 for vacuum
panel insulation to be considered as a design option for all classes of
refrigerator products. However, the Department believes that for some
classes of refrigerator products, vacuum panels may be the most
attractive option available to meet the proposed standards.
Gas-Filled Panels. Whirlpool stated there is a low probability
that this technology will be viable for use on products built in 1998.
It is not aware of any situation in which gas-filled panels have been
successfully demonstrated in a refrigerator. A major problem with
application in a refrigerator is the lack of sufficient structural
integrity of the resulting product. Whirlpool recommended that this
option not be considered. (Whirlpool, No. 36 at 5). U-Line commented
that gas-filled panels are not a feasible technology. (U-Line, No. 11
at 3).
General Electric Appliances stated that the gas-filled panels
developed at the LBL are even less promising than vacuum insulation
panels. Insulation values are only about R13/inch even with the most
insulating gas, krypton. This is only about 60 percent of the value of
powder vacuum panels. At the same time, gas panels are projected to
exceed vacuum panels in cost. Even if gas panels had comparable
performance and cost characteristics, they would require enormous
investment expenditures to be incorporated into current refrigerator
designs. At present, virtually all mass-produced refrigerators are
designed using the liner, foam insulation, and exterior metal case as
integrated elements of the cabinet structure. General Electric
Appliances also stated that gas panels have absolutely no structural
capability and would require the development of a fundamentally
different cabinet design concept to achieve adequate structural
integrity. Unlike other design options, where the option is designed to
fit the refrigerator, gas panels would require the refrigerator to be
completely redesigned to accommodate this option. Finally, the cost to
the industry would be enormous and, given the comparatively
unattractive efficiencies offered, unjustified. (GEA, No. 39 at 6).
The Department concurs that gas-filled panels lack structural
integrity and have low resistivity compared to evacuated panels and
therefore has not considered them in this NOPR.
Improved Gaskets. Whirlpool stated that much work has been done in
attempting to improve the performance characteristics of refrigerator
door gaskets. However, there is a tradeoff between the thermal
performance of a gasket and the forces required to open or close the
door. This makes it extremely difficult to improve on current designs.
While savings on the order of 1 percent may be achieved on some models,
Whirlpool stated this design option may not be available for all
products, and, therefore, should not be recommended as a viable design
option. (Whirlpool, No. 36 at 5). U-Line stated that because many
manufacturers redesigned gaskets prior to 1993, any additional
enhancements would provide diminished returns. (U-Line, No. 11 at 3).
The Environmental Protection Agency submitted a report, ``Finite
Element Analysis of Heat Transfer Through the Gasket Region of
Refrigerators-Freezers,'' evaluating means of improving a 1991 model
refrigerator, that described theoretical modeling and experimental
research on gasket heat loads. (EPA, No. 34, Appendix 6). The report
concluded that replacing about half of either the metal door flange or
cabinet flange with plastic can reduce the heat flow through the gasket
region by 25 percent. (EPA, No.34, Appendix 6 at 28). The report
concluded that for one refrigerator-freezer, a 30 percent heat flux
reduction for the gasket region led to a measured 7 to 8 percent energy
use reduction, whereas for a second refrigerator-freezer, a 22 percent
heat flux reduction led to a measured 4 to 5 percent energy use
reduction. (EPA, No. 34, Appendix 6 at 26-28).
AHAM provided the Department with estimates of energy savings and
the costs of improved gaskets from a number of its member
manufacturers. These values ranged from less than 1 percent to nearly 3
percent energy savings depending on the size and configuration of the
refrigerator product.
The Department has decided to use the industry supplied data in the
engineering analysis for each class of refrigerator. (See TSD, Chapter
3.) The higher EPA energy savings estimates were based on a
refrigerator that met the 1990 standards whereas the Department's
analysis is based on models which meet the 1991 standards.
Double Door Gaskets. Whirlpool stated that this option involves the
same tradeoff between thermal performance and door opening and closing
forces discussed under ``improved gaskets,'' see above. The company
does not recommend this as a viable design option. (Whirlpool, No. 36
at 5). General Electric Appliances agreed with Whirlpool's comments.
(GEA, No. 39 at 6-7). U-Line stated that cabinet icing and other
potential field service-related issues have precluded their application
to compact refrigerators and freezers. (U-Line, No 11 at 3).
The Department's analysis indicates that a significant amount of
heat leakage (from the outside) into a refrigerator occurs across the
door gasket. Decreasing this leakage could result in significant energy
savings. This could be achieved by either improving the gaskets or
using double-door gaskets. The cost of a double-door gasket is more
than the cost to improve the single gasket to achieve the same amount
of savings. The Department has, therefore, decided not to consider this
option but instead to consider improved gaskets, as discussed, supra.
Reduced Heat Load for Through-the-Door Features. Whirlpool stated
that there is some potential for energy savings in this area through
improvements in insulation around the
[[Page 37399]]
dispenser. However, the amount of savings is limited. It believes that
an appropriate allowance for ``through-the-door features'' with
improved insulation is approximately 70 kWh/year. (Whirlpool, No. 36 at
5). U-Line stated that compact refrigerator products do not employ
through-the-door features. (U-Line, No. 11 at 3). General Electric
Appliances stated that it had already made incremental design changes
on some 1993 models to reduce the heat leakage of through-the-door
features. (GEA, No. 39 at 7). These consisted of using polyurethane
(vs. expanded bead polystyrene) insulation and totally redesigning the
dispenser assembly. While some additional, marginal energy reductions
are possible, GEA stated that if it extended these design changes to
the full dispenser model line, further significant energy savings
beyond this do not seem likely with current technology. No toxicity/
safety or reliability problems exist with these changes. General
Electric Appliances stated that these design changes could be
introduced to the full line relatively quickly (i.e., from between 6
months and 2 years). (GEA, No. 39 at 7).
AHAM provided estimates of the energy savings from reducing the
heat load for through-the-door features and the associated costs based
on a survey of its members. These are the values that have been used in
the analysis.
Reduction in Energy Used for Anti-Sweat Heaters. Whirlpool stated
that most manufacturers utilize the minimum-needed energy within the
cabinet for the anti-sweat heaters. Therefore, there is little
opportunity to improve this option. (Whirlpool, No. 36 at 5). General
Electric Appliances stated that required wattage for most anti-sweat
heaters already has been reduced to save energy on 1993 models,
variable-watt density heaters are already being used, and reducing the
wattage further is expected to result in poor anti-sweat performance
and reduced consumer satisfaction. (GEA, No. 39 at 7).
Based on the data supplied by manufacturers through AHAM, DOE
decided not to use this option in its analyses because most models of
refrigerator-freezers already employ condenser hot gas or liquid line
to minimize the use of electric anti-sweat heat. Compacts and freezers,
in general, do not use anti-sweat heat.
Substitution of Condenser Hot Gas for Electric Anti-Sweat Heat.
Whirlpool stated this option already has been exercised by most
manufacturers. (Whirlpool, No. 36 at 5). Sub-Zero stated the company
already employs this option. (Sub-Zero, No. 37 at 5). U-Line stated
that with the exception of some compact freezers, anti-sweat heaters
are not employed in the designs of compact/undercounter refrigerator-
freezers. (U-Line, No. 11 at 3). General Electric Appliances stated
that it already uses condenser gas loops everywhere practicable. (GEA,
No. 39 at 7).
After reviewing the data received from the manufacturers, the
Department has concluded that this option already has been exercised by
most of the manufacturers of refrigerator products and, therefore, this
design option was not included in the engineering analysis for this
rulemaking.
Reduction in Energy Used for Auto-Defrost Heater. Whirlpool stated
that there are no significant savings available in this area because
this energy is required to remove frost and prevent buildup of ice.
Also, any savings would be redundant with savings from the use of
adaptive defrost. The company, therefore, does not recommend this
option. (Whirlpool, No. 36 at 5). U-Line stated that with the exception
of some compact freezers, this design does not apply to the compact/
undercounter refrigerator products. (U-Line, No. 11 at 4). General
Electric Appliances stated that little significant energy savings are
possible using this option; solenoid actuated dampers that attempt to
retain heat in the evaporator compartment do not significantly reduce
heater ``on'' times. (GEA, No. 39 at 7). Designs which attempt to
transfer heat more directly to the evaporator, and thus less to the air
are theoretically attractive but have achieved only minimal savings in
practice while increasing the likelihood of evaporator ice-balling.
Further reducing the temperature at which the thermostat turns the
heater off would result in poor defrost performance and increased
service calls. General Electric Appliances stated the basic defrost
heater system must be very robust or severe reliability problems can
occur. (GEA, No. 39 at 7).
The Department, after reviewing available data, concluded that most
manufacturers already have reduced significantly the electric heat for
automatic defrost in order to comply with the 1993 Standards, and there
is little opportunity to save additional energy by exercising this
option. The only exception is the side-by-side refrigerator-freezer
without through-the-door features, where the baseline model has a
higher defrost energy use than other models, and the Department
included this option in the engineering analyses for that class.
Substitution of Condenser Hot Gas for Electric Auto Defrost Heat.
Whirlpool stated it had explored this option in some depth in the
1970s. It was not successful in developing a system that would perform
well and be reliable. Also, any savings that might be achieved would be
redundant with savings from the use of adaptive defrost. The company
believes adaptive defrost is the preferred alternative for saving
defrost energy. Thus, it does not recommend substitution of condenser
hot gas for electric auto defrost heat. (Whirlpool, No. 36 at 6). U-
Line stated it is not aware of any compact/undercounter refrigerator-
freezers that employ electric auto-defrost heaters. (U-Line, No. 11 at
4). General Electric Appliances believes this method of defrost is more
complicated, more expensive and less reliable than its current designs.
(GEA, No. 39 at 8).
The defrost system increases the energy usage of a system in two
ways: the electric heater directly affects the electricity use and the
heat of defrost increases the heat load inside the refrigerator, which
to be rejected requires compressor work. One method of saving energy
would be to do away with the electric heaters by substituting condenser
hot gas in its place. The other method would be to better control the
time and amount of defrost heat by using adaptive defrost. The
Department did not find any data to demonstrate the condenser hot gas
method to be more cost-effective than adaptive defrost, which is a
well-developed and accepted technology. Thus, the condenser hot gas
method of defrost was not considered in the engineering analysis for
this rulemaking.
Adaptive Defrost Systems. Whirlpool stated this is a viable option
for most of its products and produces energy savings on the order of 3
percent. (Whirlpool, No. 36 at 6). U-Line stated that it employs timers
to initiate defrost, and it is unlikely that adaptive and demand
defrost systems would significantly reduce energy consumption. (U-Line,
No. 11 at 4).
The energy savings and associated costs of replacing the present
defrost system with the adaptive defrost system have been provided to
the Department by AHAM and its members. (See design option comments,
supra). These are the values that have been used in the analysis.
Compacts, in general, do not use electric heaters for initiation of
auto defrost.
Improved Compressor Efficiency. Whirlpool expects to see further
improvements in compressor efficiency prior to 1998. (Whirlpool, No. 36
at 6). However, the degree of improvement is uncertain at this time.
Although compressor efficiencies as high as 5.8 EER have been
projected, Whirlpool stated that any design changes made to
[[Page 37400]]
improve efficiency often have negative impacts on reliability. It
believes the risk of failure has increased with the introduction of a
new refrigerant and a new lubricant. Therefore, it believes a
conservative estimate should be used for future compressor
efficiencies. (Whirlpool, No. 36 at 6). Sub-Zero is concerned that
efficiencies of small-capacity compressors may not improve in time for
future standards. (Sub-Zero, Transcript at 427). It is concerned
particularly with the changeover to HFC-134a and the timing of
compressor efficiency improvements for small-capacity compressors.
(Sub-Zero, Transcript at 426). U-Line stated that compressor EERs of
5.5 are not realistic at low capacities. It expects 3.6 EER for HFC-
134a at 200 Btu/hr. Furthermore, due to their low production volumes,
manufacturing units with low capacities is a low priority for
compressor manufacturers. (U-Line, No. 11 at 4). Maytag stated there
are patent restrictions on linear motors that protect their use.
(Maytag, No. 20 at 6). Additionally, Maytag said there is not enough
time for proper reliability testing and implementation of linear motor
compressors for the January 1998 standards date. (Maytag, No. 20 at 5).
The Environmental Protection Agency submitted a report that found
efficiency levels of 5.0 EER can be obtained at the low end of the
capacity range of 200-600 Btu/hr with an increased cost to refrigerator
manufacturers of $10-20. (EPA, No. 34 at Appendix 4, ``State of the Art
Survey of Hermetic Compressor Technology Applicable to Domestic
Refrigerator-Freezers,'' at 7-1). The Environmental Protection Agency
also stated that for compressor capacity of 750 Btu/hr and above, an
EER level of 6.5 is technically feasible with an incremental increase
in manufacturer costs of about $15. (EPA, No. 34, at Appendix 3,
``State of the Art Survey of Motor Technology Applicable to Hermetic
Compressors for Domestic Refrigerator-Freezers,'' at i).
The Joint Comments stated that with improvements in foam insulation
and gaskets in freezers, the compressor size needed to maintain freezer
food quality is smaller than used in previous years. These smaller
compressors have lower EERs than used in DOE's max tech analysis.
Freezer manufacturers and compressor suppliers indicated that an
improvement of approximately 7 percent in EER can be expected between
1994 and 1998. (Joint Comments, No. 49 at 19).
The Department has obtained data on efficiency and costs of HFC-
134a compressors from three compressor manufacturers, from AHAM and its
members, and from other sources (e.g., company literature from
Sunpower, Inc. and EPA reports, referenced above). The Department
expects future efficiencies of small-capacity compressors will continue
to be lower than those of larger-capacity compressors and has reflected
that in its analyses of refrigerator products. (See TSD, Chapter 3).
Two-compressor system. Whirlpool stated a two-compressor system
requires the use of two smaller capacity compressors, thus inherently
it will be less efficient than the one larger capacity compressor used
in current refrigerators. One of these smaller compressors would be
operating under more efficient conditions due to the raised evaporator
temperature for the circuit cooling the refrigerator compartment.
Whirlpool stated all indications are that the decrease in compressor
EER from two smaller compressors offsets the increased efficiency in
one portion of the sealed system due to increased evaporator
temperature. In addition, any increase in refrigerator efficiency
inherently involves several other negative factors. They are
significant increases in product cost, increases in service incidence
rates due to the use of more components, reduction of useful volume of
the refrigerator due to a larger machine compartment for two
compressors, and potential for increased sound level when both
compressors are running. Whirlpool does not recommend this option.
(Whirlpool, No. 36 at 6).
Sub-Zero stated that although it presently uses a two-compressor
system, the efficiency gain from the higher evaporator temperature in
the fresh-food section is offset by the lower compressor efficiency for
the smaller capacity compressor. (Sub-Zero, No. 37 at 6). U-Line stated
that two-compressor systems are not practicable for compact/
undercounter refrigerator-freezers. (U-Line, No. 11 at 4).
The Department agrees that a two-compressor system requires a
larger, more efficient compressor to be replaced by two smaller, less
efficient compressors. Some of the gain from improving the
thermodynamics of the system will be offset by the decrease in the
compressor efficiencies. While it has been shown that the two-
compressor system could save some energy in the older less efficient
refrigerators, the Department is not aware of any experimental data
that demonstrate energy savings from this option for refrigerators in
the efficiency ranges being considered in this rulemaking. For this
reason, this option has not been included in the engineering analysis.
Variable-Speed Compressor. Whirlpool stated that the key to the
effectiveness of this type of compressor is the development of highly
efficient, cost-effective, and reliable drive systems (motor plus power
electronics) for the compressor. It said development to date for drive
systems sized for refrigerators has not been able to achieve the
efficiency levels required to make this concept viable. Once these
drive systems are available, there are then several other issues to be
addressed. For example, design changes will have to be made to the
compressor valves and bearings for good performance at a range of
speeds; compressor reliability will have to be ensured through
extensive life testing at a variety of speeds; sound tests will have to
be performed on the finished refrigerator under all speeds foreseen to
make sure that no resonances (which cause sound problems) are present;
and, there will have to be an understanding of the relationship between
any projected energy savings from this feature and the amount of
savings found in actual field usage conditions. Whirlpool stated that
the availability of this option in 1998 should not be assumed.
(Whirlpool, No. 36 at 7). U-Line stated that this option is not
feasible for compacts. (U-Line, No. 11 at 5). General Electric
Appliances stated its experiments indicate the energy savings are small
and the costs are large; it halted development when they found there
would be an unfavorable cost-performance ratio coupled with significant
noise problems. (GEA, No. 39 at 8).
The Department concurs that this technology has not been developed
to the point where it will be ready for incorporation into
refrigerators by the effective date of this rulemaking. This option is
not included in the analysis.
Improved Fan Motor Efficiency. Whirlpool commented that there is
significant uncertainty concerning the newer ``permanent magnet''
motors. They have not yet been produced in adequate volume in the
design required for refrigerators. The bearing systems must be made
quieter and must be tested for reliability. Whirlpool stated there is a
significant risk that these very high efficiency motors will not be
available by 1998. If they are not, then savings would be less, because
permanent split capacitor (PSC) motors would be the best available.
Whirlpool argued that the DOE should ``count on'' the PSC fan motors
and not count on permanent magnet motors as a viable design option.
(Whirlpool, No. 36 at 7). The Association of Home Appliances
[[Page 37401]]
Manufacturers stated the cost estimated by LBL for electronically
commutated motors is about 40 to 60 percent less than estimates
provided to it by suppliers. (AHAM, No. 17, Attachment 17 at 2).
Sub-Zero stated that it expects efficiencies of evaporator and
condenser fan motors to improve. (Sub-Zero, Transcript at 427). U-Line
stated that some improvement in the fan motor still may exist. (U-Line,
No. 11 at 5). General Electric Appliances said it is pursuing various
options with both evaporator and condenser fan motors and that
reliability and testing of these components are fairly well understood.
(GEA, No. 39 at 8).
The Department obtained cost and efficiency data from three
manufacturers of evaporator and condenser fan motors. Averages of these
data were used in the analyses performed by the Department. The cost
estimates obtained by the Department are for quantities equal to the
present volumes of fan motors being purchased by refrigerator-freezer
manufacturers. The Technical Support Document (Chapter 3) provides
details on these data for the various product classes.
Improved Fan Efficiency. Whirlpool stated that potential savings
through this option are very limited. Fan motor size is governed not
only by the operating load on the fan, but also by the need to ensure
starting under all anticipated voltage and temperature conditions.
Whirlpool said that most of the potential for fan energy savings lies
in the fan motors themselves. (Whirlpool, No. 36 at 7). U-Line stated
that where fan motors and blades are employed, optimization does
provide opportunity for energy improvement. (U-Line, No. 11 at 5).
General Electric Appliances stated it found energy savings benefits for
condenser fans are marginal and that an energy savings of approximately
4 kWh/yr are available from evaporator fan redesign. (GEA, No. 39 at
8).
The energy savings from improved condenser and evaporator fans and
the associated costs have been provided to the Department by AHAM and
its members. These figures have been used in the analysis for the full-
sized refrigerator products. Because most of the compacts employ
natural convection and do not use fans, this option is not included in
the analysis for compacts.
Variable-Speed Fans. Whirlpool stated that with a single-speed
compressor, the rate of heat transfer for either the evaporator or
condenser does not vary appreciably with changes in either ambient
temperature or control setting because the compressor operates at only
one speed. The compressor has a longer duty-cycle as either the ambient
temperature goes up or the control setting is lowered. In order for the
variable-speed fan feature to reduce energy consumption, it must allow
the refrigerator to attain a more optimal air flow condition for a
particular set of circumstances. The optimal air-flow condition is a
trade off--reduced heat transfer versus reduced fan use. Because the
heat transfer rate with single-speed compressors does not vary
appreciably, Whirlpool stated there is little potential for energy
reduction due to variable fan speed with a single-speed compressor. In
addition, it stated there are concerns about excessive costs for the
motors and required electronic controls, and the reliability of both
the mechanical (bearing) and electrical (windings and controls)
systems. Whirlpool argued that variable-speed fans should not be
counted on to save energy. (Whirlpool, No. 36 at 7). U-Line stated this
option is considered infeasible by the compact/undercounter AHAM
subcommittee. (U-Line, No. 11 at 5).
General Electric Appliances said fan energy consumption reductions
achieve false savings to the extent that a change in fan speed and
airflow adversely affects energy performance elsewhere within the
refrigerator system. General Electric Appliances found from a recent
internal study that a 25 percent reduction in evaporator fan power
input for its 24 cubic foot side-by-side product (with an ECM fan
motor) lowered the evaporator saturation temperature, lowered system
capacity, increased compressor run-time, and increased overall energy
consumption. General Electric Appliances also said that while
increasing fan speed enhances heat exchanger performance, it also
increases gasket heat leakage which, in turn, requires more fan motor
input power. Additionally, GEA said noise from higher fan speeds is
becoming such a significant issue with consumers that noise attenuation
costs must be factored into this cost-performance assessment. (GEA, No.
39 at 8-9).
Based on the comments provided, the Department has decided this
option should not be included in the analysis.
Hybrid Evaporator. Whirlpool commented that it has no experience
with ``hybrid evaporators.'' (Whirlpool, No. 36 at 8). U-Line stated
the evaporator may offer potential for energy improvement by enhancing
air to refrigerant heat exchange. (U-Line, No. 11 at 5). General
Electric Appliances understands this option to be a two-stage dual
evaporator system. (GEA, No. 39 at 9).
A hybrid evaporator employs two evaporators, one for the freezer
and the other for the fresh-food section.The Department did not include
this option in the analysis because the data available showed little
energy savings using this technology.
Other Refrigeration Cycles. Whirlpool commented that it worked
cooperatively with a major university in a development program for the
Lorenz cycle for more than 2 years. During that period, a number of
prototype systems were built and tested in its labs. While some energy
savings were measured, it was unable to consistently demonstrate
substantial savings using this technology. For products tested, the
maximum savings achieved was about 8 percent. Because the second
evaporator required for such systems reduces the storage volume by
approximately \1/2\ cubic foot, the net savings were something less
than 8 percent. Because of the difficulty in obtaining reproducible
results and the relatively small savings achieved, Whirlpool found this
not to be a viable technology. (Whirlpool, No. 36 at 8). U-Line stated
that other refrigeration cycles do not offer a feasible alternate
technology. (U-Line, No. 11 at 6). Maytag stated thermo-acoustic
refrigeration system prototypes are not available. (Maytag, No. 20 at
6). General Electric Appliances stated it has undertaken studies of
various refrigeration cycles (Brayton, gas absorption, thermoelectric,
magneto-caloric, and thermoacoustic) to compare their energy savings
potentials against enhanced Rankine cycle designs. Of the alternative
cycles studied, only the Stirling presented a credible opportunity for
competitive efficiencies. (GEA, No. 39 at 9-11). The company undertook
development of Stirling cycles in concert with Sunpower, Inc. General
Electric Appliances confirmed that the Stirling cycle could perform on
a par with the Rankine cycle currently being used, but it did not
present any material improvement. In addition, GEA said the problems
and costs associated with developing a completely new cycle design,
versus upgrading existing cycle technology, argued against pursuing the
Stirling cycle. (GEA, No. 39 at 9).
Except for the Lorenz cycle, the Department is not aware of any
prototypes using alternative refrigeration cycles. In the case of the
Lorenz cycle, the reports of energy savings vary considerably. Although
this option has a significant potential for future energy savings, this
technology is not developed well enough at this time to be considered
an option for 1998 refrigerator-freezers.
[[Page 37402]]
Two-Stage Two-Evaporator System. Whirlpool commented it understands
this concept to be one whereby there is an evaporator in each
compartment with refrigerant passing through both evaporators
simultaneously. The two different temperature (and thus pressure)
levels for the two evaporators require two compressors in order to
attain any efficiency improvements. Therefore, the negative effects
highlighted under two-compressor systems apply: Lower EER, service
incidence rate increases, very significant increases in product cost,
space concerns, and increased sound level. In addition, Whirlpool is
concerned about the ability of the two-compartment control scheme in
this concept to handle changes in relative heat loads between the two
compartments. These changes can occur when the door is opened in one
compartment only, or when warm food is added to one compartment only.
Whirlpool also is concerned about the loss of the ability to provide
independent temperature adjustment in each compartment. Whirlpool
recommends against the use of this option. (Whirlpool, No. 36 at 8). U-
Line stated that two-evaporator systems are not practicable for
compact/undercounter refrigerator-freezers. (U-Line, No. 11 at 5).
Due to the inability of the Department to find usable performance
data for this type of system, this option has not been included in the
engineering analysis.
Improved Heat Exchangers. Whirlpool believes there may be some
savings yet available with improved heat exchangers. Adding surface
area is generally difficult. For the condenser, space is limited and
densely finned surfaces do not have good lint-handling characteristics.
For the evaporator, simply making it larger detracts from product
volume, and increasing fin density can negatively impact frost handling
characteristics, causing poor performance in humid climates.
(Whirlpool, No. 36 at 8). U-Line stated that effectiveness improvements
are expected to be in the range of only 1 to 2 percent. (U-Line, No. 11
at 6). General Electric Appliances stated evaporator improvements have
reached the point of diminishing returns, and condenser improvement
benefits can be achieved but cost/performance tradeoffs will limit
opportunities to less than that which theory predicts. (GEA, No. 39 at
11). AHAM stated LBL should account for the fact that increasing the
evaporator size results in a loss of internal volume; this results in a
decrease in both the energy standard and the marketing utility of the
refrigerator. (AHAM, No. 17, Attachment 17 at 2).
The energy savings from improving the heat exchange in the
evaporator and condenser and the associated costs have been agreed upon
by AHAM and its members and provided to the Department. These are the
values that have been used in the engineering analysis. (See TSD,
Chapter 3). Increasing the evaporator heat exchange effectiveness might
increase evaporator area (although not necessarily) and therefore,
decrease internal volume very slightly. This slight decrease, a maximum
of 0.15 cubic feet (4.25L), would not be large
enough to noticeably impact consumer utility.
Alternative Refrigerants. Whirlpool stated there are no pure
refrigerants that demonstrate an efficiency improvement over HFC-134a
and are ready for application development work on refrigerators. If
such a candidate does appear, there is a long testing process before
production. This testing includes toxicity testing, chemical
compatibility testing, reliability testing and safety. Whirlpool
believes this option should not be considered. (Whirlpool, No. 36 at
8). U-Line stated it is unlikely that refrigerants not yet identified
could be commercially available in time to become a realistic part of
the solution. (U-Line, No. 11 at 6). General Electric Appliances said
HFC-134a is the refrigerant of choice and the flammability of HFC-152a
makes it undesirable. (GEA, No. 39 at 11). It also said that
hydrocarbon refrigerants are being used in Europe in cold wall
evaporators only and use of those designs in the U.S. would require a
total redesign of the refrigerator and would reduce consumer utility.
(GEA, No. 39 at 12).
With the phaseout of CFC-12, HFC-134a appears to be the accepted
refrigerant replacement in the U.S. There are other promising
refrigerants under development but none of the replacements that are
without problems such as toxicity or flammability have been proven to
perform better than HFC-134a . Therefore, the Department has assumed
that HFC-134a will be used as the refrigerant for 1998 refrigerators.
Improved Expansion Valve. Whirlpool stated expansion valves are not
generally used in refrigerators because capillary tubes yield better
performance. The company's studies show no savings from expansion
valves. It does not recommend this option. (Whirlpool, No. 36 at 9). U-
Line stated improved expansion valves offer no improvement over
properly balanced refrigeration systems using conventional capillary
tubes. (U-Line, No. 11 at 6). General Electric Appliances stated this
is a viable option but will require considerable time (3-5 years) to
optimize. It said reliability will be lower than that of the current
capillary design, and the cost will be higher. It believes improvement
may be limited to electronic units. (GEA, No. 39 at 12). AHAM stated
the improved expansion valve should be eliminated if its savings are
reflected in the fluid control valve option. (AHAM, No. 17, Attachment
17 at 3).
Because the Department was not able to find any data demonstrating
that thermostatic or electronic expansion valves will save energy in
refrigerators, this option has not been included in the analysis.
Fluid Control Valves. Whirlpool stated these devices provide
significant savings when used with rotary compressors, which are
designed with the compressor shell maintained at the condensing
pressure. Whirlpool said they do not yield significant savings when
used with reciprocating compressors, which operate with the compressor
shell at the evaporator pressure. To Whirlpool's knowledge, no rotary
compressors have passed reliability tests using HFC-134a and new
lubricants. The company believes this design option should be dropped.
(Whirlpool, No. 36 at 9). U-Line stated the application of fluid
control valves in reciprocating compressors requires use of a high
starting torque compressor (capacitor start motor) and that the energy
savings, although potentially significant, may not be economically
justified. (U-Line, No. 11 at 6). General Electric Appliances said this
option carries the greatest benefit for high-side compressors, but they
are no longer used in the U.S. This option has extremely limited value
(2 to 3 percent energy reduction) when applied to the high-efficiency
low-side compressors currently in use. The value of this option will
continue to decrease as cycling losses are further reduced through
other means. This type of design change could be put into production
relatively quickly (1 to 2 years) once the reliability of the valve is
confirmed. However, confidence in the valve must be high as its failure
can result in a total loss of refrigeration. (GEA, No. 39 at 12).
Based upon the comments above and research data received from Oak
Ridge National Laboratory 15 that fluid control valves do not save
energy when used with reciprocating compressors, and since most of the
manufacturers use reciprocating compressors, the
[[Page 37403]]
Department has decided not to include this option in the analysis.
\15\ Letter from J.R. Sand of Oak Ridge National Laboratory
dated March 16, 1994.
---------------------------------------------------------------------------
Location of Compressors. Whirlpool stated that for refrigerators
with ``forced air hi-side'' design (which is the most common design
used in the industry), there is no thermodynamic reason to expect
energy savings from a change in location of the compressor and
condenser. Such a change is also likely to decrease utility of the
product by reducing the storage volume available at a convenient height
off the floor. Whirlpool does not recommend this option. (Whirlpool,
No. 36 at 9). Sub-Zero stated that it already mounts the compressors at
the top of the unit; this allows easier servicing and theoretically
should reduce the temperature differential. (Sub-Zero, No. 37 at 6). U-
Line stated there are not many opportunities to relocate compressors
and condensers for compact/under counter products. (U-Line, No. 11 at
7).
General Electric Appliances stated that the benefit of removing the
evaporator fan from the refrigerated space diminishes as fan
efficiencies improve. The feasibility of this option in large-scale
production is questionable due to the need to seal the shaft without
significantly increasing the frictional losses. Moisture migration, ice
formation, and noise transfer to the cabinet are additional concerns.
Moving the high-side components to the top of the refrigerator has
marginal cabinet heat leakage benefits, but would require a fundamental
redesign of the cabinet structure. Moving the high-side components
would require the refrigerator to be completely redesigned to
accommodate the option. It likely would require enhanced structural
rigidity and deliberate means, such as low-placed weights, to prevent
tip-overs. General Electric Appliances concluded that, absent a total
restructuring of the production line, or creation of new production
capacity, the cost of introducing this design option is prohibitive.
(GEA, No. 39 at 12-13).
The Department could find no data that showed that relocation of
the compressor would save energy. After consideration of the comments
discussed above, the Department has decided that even if there are
small energy savings from this option, these savings would be
insignificant compared to the costs of redesigning and manufacturing a
refrigerator with the compressor on top. Therefore, this option has not
been included in the engineering analysis.
Use of Natural Convection. Whirlpool stated this option is
counterproductive for larger products (above about 14 cubic feet) since
the wattage of condenser fan motors has been reduced substantially in
recent years. It does not recommend this option. (Whirlpool, No. 36 at
9). U-Line stated that except for frost-free models, all compact/
undercounter refrigerator-freezers use natural convection evaporators.
Those units using forced air condenser systems are designed for built-
in or recessed installations. (U-Line, No. 11 at 7).
Based on the comments discussed above, the Department has concluded
that the industry is already using this option where it is practical
and so has not included it in the engineering analysis.
Electrohydrodynamic Enhancement of Heat Exchangers. Whirlpool
considers this to be a technology that is impractical, unsafe, and
expensive to implement in products. It does not recommend this option.
(Whirlpool, No. 36 at 9). U-Line stated that the compact/undercounter
AHAM subcommittee does not consider this option feasible. (U-Line, No.
11 at 7). Maytag stated that prototypes are not available for
electrohydrodynamically enhanced evaporators or condensers. (Maytag,
No. 20 at 6). General Electric Appliances stated this may be an
inexpensive approach to obtaining marginal energy savings; however, the
continuous use of an extremely high voltage field presents safety risks
that simply are not acceptable, even if they could be addressed to some
degree at a reasonable cost. (GEA, No. 39 at 13).
This concept has only been demonstrated in a laboratory, and no
prototypes using this technology have been built. Since there is no
cost or performance data for this design option in refrigerators, the
Department has decided that this option is not well enough developed
for consideration in this rulemaking.
Voltage Control Device. Whirlpool stated it has conducted tests on
these devices and found that they save no energy on products which are
designed to meet existing energy standards. It does not recommend this
option. (Whirlpool, No. 36 at 9). U-Line stated these devices have not
demonstrated measurable reductions in energy use when applied to
refrigerators and freezers. (U-Line, No. 11 at 7). General Electric
Appliances stated its testing indicates current high-efficiency
compressors do not exhibit energy savings when used with devices that
reduce line voltage and/or change phase angles. (GEA, No. 39 at 13).
Based upon data supplied to the Department,16 the Department
believes this option does not offer any potential for energy savings
for new refrigerators and freezers.
\16\ Admiral Refrigerator Test Report for the Admiral Company;
Izagulrre, F. L., Senior Engineer, International Technical Services,
Inc., August 25, 1993.
---------------------------------------------------------------------------
(3) Other Comments.
a. Uncertainty Inherent in Data. The Joint Comments formulated a
number of different approaches for quantifying the uncertainty and
variance inherent in estimated energy savings and costs for individual
design options. It said the basis for quantifying uncertainty lies not
only in the estimates of energy savings and costs reasonable in the
1998 time frame, but also in the different economies of scales
available to companies in the refrigerator-freezer industry. The impact
of design options and associated costs affect these companies' products
differently. (Joint Comments, No. 49 at 8).
An example from one of the uncertainty analyses demonstrates the
variance in unit cost impacts on top-mounted nondispenser automatic-
defrost refrigerators. In this example, for a trial standard energy
consumption 30 percent below the 1993 level, the increase in
manufacturing unit costs runs from approximately $65 up to $145,
depending on the specific energy saving options used. (Joint Comments,
No. 49 at 8).
The Department is aware there are uncertainties in the estimated
costs and energy savings of the various design options. Additionally,
the Department recognizes other uncertainties that affect the
feasibility of design options, including reliability, performance, and
safety. The Department has asked manufacturers to supply the data
needed to address the issue of the impact of uncertainties on life-
cycle cost and payback periods. The Department has considered the
uncertainties in costs and energy savings in developing the proposed
standards for this rulemaking. The Department has also considered
design feasibility and marketing utility uncertainties.
b. Simulation Model. The Joint Comments were critical of the
accuracy of the ERA model, which calculates refrigerator energy use.
The industry members of the Joint Comments assessed the accuracy of the
ERA model in two phases. The first phase was to use current technology
and currently available products to determine the accuracy of the ERA
estimates versus actual energy data from refrigerator-freezers. The
second phase of this assessment was to determine how the ERA model
handles nonconventional technologies, e.g., those technologies
[[Page 37404]]
not currently in production. (Joint Comments, No. 49 at 5)
The industry members of the Joint Comments constructed 100 ERA
input files on products ranging from compact refrigerator-freezers and
freezers to full-size automatic defrost refrigerator-freezers. The
standard uncertainty of the ERA model using this input data was
approximately 19 percent. The Joint Comments argued this accuracy level
makes the ERA useful to examine engineering assessments of energy
savings options, but not a sufficient tool to determine multi-million
dollar rulemaking impacts. (Joint Comments, No. 49 at 5)
AHAM also had Dr. Clark Bullard at the Air Conditioning and
Refrigeration Center of the University of Illinois conduct an
evaluation of the ERA model. (AHAM, Transcript at 296). This analysis
of the ERA model focused on the ability of the model to properly
evaluate nonconventional technologies which have yet to be built into
full-size refrigerator-freezers and tested or are not yet currently in
production. Dr. Bullard's final report noted that many of these design
options as modeled by the ERA had errors between 50-75 percent compared
to laboratory measurements of these technologies. (Joint Comments, 49
at 6).
The Environmental Protection Agency submitted the User's Manual for
the EPA Refrigerator Analysis Program. (EPA, No. 34, Appendix 2). The
EPA also submitted a rebuttal statement, ``Response to Report by Clark
Bullard Associates Accuracy Analysis of the ADL/EPA Refrigerator
Analysis (ERA) Model.'' (EPA, No. 34, Appendix 7). One of the EPA
comments is that Dr. Bullard's analysis was based on an older version
of ERA, which preceded the ``official'' release of Version 1.0. Version
1.0, which DOE used for its analysis, addressed the concerns about the
model raised by Dr. Bullard. (EPA, No. 34, Appendix 7, cover letter).
The Department has reviewed the reports by Dr. Bullard and by the
EPA concerning the ERA model. In performing the engineering analyses,
the Department selected actual refrigerator models to use for each
baseline case. The measured energy use for each of these baseline
models (supplied by AHAM and its members) was used to calibrate the
model for each class of refrigerator product evaluated. To account for
changes in performance due to the use of HFC-134a, the Department used
HFC-134a compressor maps in modeling each refrigerator class. For those
design options included in the cost-efficiency analyses but not
directly modeled with ERA, such as gasket improvements and vacuum panel
insulation, DOE energy-efficiency improvement estimates were based on
measured data or other methods of calculating the energy savings. (See
discussions of individual design options.) In summary, the Department
has utilized measured data rather than theoretical predictions whenever
data has been available.
c. CFC Phaseout. AHAM stated the costs of CFC elimination are not
included in the analysis. The effect of CFC elimination must first be
taken into account before proceeding with implementing options to meet
various standard levels above the 1993 energy standard. (AHAM, No. 17,
Attachment 17 at 3).
The Department has accounted for the costs of CFC phaseout by
increasing the cost of the baseline units. The manufacturer's costs
associated with the phaseout of CFC are accounted for in the
manufacturer impact analysis. (See discussion under ``baselines,''
below.)
4. Standards Proposed in the Joint Comments. The standards shown in
Table 1, with accompanying discussions, were proposed in the Joint
Comments. (Joint Comments, No. 49 at 14-27).
Table 1.--Standards Proposed in the Joint Comments
------------------------------------------------------------------------
HCFC-containing
Product class product HCFC-free product
------------------------------------------------------------------------
i. Automatic Defrost
Refrigerator-Freezers (excludes
compact refrigerator-freezers):
1. Top-mounted freezer without
through-the-door ice service. 9.80AV+276.0 10.78AV+303.6
2. Top-mounted freezer with
through-the-door ice service. 10.20AV+356.0 11.22AV+391.6
3. Side-mounted freezer
without through-the-door ice
service...................... 4.91AV+507.5 5.40AV+558.3
4. Side-mounted freezer with
through-the-door ice service. 10.10AV+406.0 11.11AV+446.6
5. Bottom-mounted freezer
without through-the-door ice
service...................... 4.60AV+459.0 5.06AV+504.9
ii. Compact Refrigerator-
Freezers (AHAM/FTC volume less
than 7.75 cubic feet and less
than 36 inches in height):
1. Manual defrost refrigerator-
freezer...................... 10.70AV+299.0 11.77AV+328.9
2. Partial automatic defrost
refrigerator-freezer......... 7.00AV+398.0 7.70AV+437.8
3. Top-mounted freezer
automatic defrost
refrigerator-freezer......... 12.70AV+355.0 13.97AV+390.5
4. Side-mounted freezer
automatic defrost
refrigerator-freezer......... 7.60AV+501.0 8.36AV+551.1
5. Bottom-mounted freezer
automatic defrost
refrigerator-freezer......... 13.10AV+367.0 14.41AV+403.7
6. Upright freezer automatic
defrost...................... 11.40AV+391.0 12.54AV+430.1
7. Upright freezer manual
defrost...................... 9.78AV+250.8 10.76AV+275.9
8. Chest freezer manual
defrost...................... 10.45AV+152.0 11.50AV+167.2
iii. Freezers (excludes compact
freezers):
1. Upright automatic defrost.. 12.43AV+326.1 13.67AV+358.7
2. Upright manual defrost..... 7.55AV+258.3 8.31AV+284.1
3. Chest freezer manual
defrost...................... 9.88AV+143.7 10.87AV+158.1
iv. Manual and partial defrost
refrigerator-freezers (excludes
compact refrigerator-freezers):
1. Manual defrost............. 8.82AV+248.4 9.70AV+273.2
2. Partial automatic defrost.. 8.82AV+248.4 9.70AV+273.2
------------------------------------------------------------------------
AV=Total adjusted volume, expressed in ft 3.
a. Full Sized Refrigerator-Freezers. The proposed standards ``are
based on a negotiated approach to identifying the maximum level of
efficiency that is technologically feasible and economically justified.
A negotiated approach may provide slightly different results from those
achieved by conventional rulemaking because this NAECA criterion can be
satisfied in a more flexible way, providing greater overall energy
savings for a given level of impacts.'' (Joint Comments, No. 49 at 14).
That flexibility permitted the participants, for the first time, to
[[Page 37405]]
address both the cumulative economic impact of individual design
options, and the varying severity of that impact upon different product
classes and manufacturers. The negotiation process allowed for a
cumulative assessment of impact, adjustments among various product
standard levels, and better balance of the economic impact among
manufacturers. The Joint Comments stated that * * *
``Impacts on manufacturers are different for different product
classes. For product classes representing discretionary purchases, such
as some compact refrigerators and most freezers, cost increases due to
standards may result in much greater reductions in sales compared to
the refrigerator-freezer classes, whose purchase is essentially
necessary when a new house is constructed or when an existing product
fails. Some design options with perceived consumer or marketing
disadvantages, such as increasing wall thickness, are more troublesome
for these more discretionary classes of products.
``The consumer cost-effectiveness of increasing levels of energy
efficiency, as well as the impact of these levels on manufacturers,
also depends on the scale on which the product is produced. For those
products with the highest production volumes, capital cost increases
can be amortized over a larger number of units, resulting in fewer
impacts. In contrast, for products with smallest sales volumes capital
cost increases will be spread over fewer models and will have a larger
impact on product cost. These effects will operate differently for
different manufacturers, depending on the mix of their sales.'' (Joint
Comments, No. 49 at 14).
As a result, the Joint Comments final agreement ``concentrates the
largest energy savings on the five automatic defrost categories
(refrigerator-freezers with: top-mounted freezer non-dispenser, top-
mounted freezer dispenser (ice and/or water), side-mounted freezer non-
dispenser, side-mounted freezer dispenser, and bottom-mounted freezer)
with the very largest percentage reduction in the two classes with the
highest sales volumes. These five classes represent more than two-
thirds of the total energy consumed by all refrigerators/freezers.
These five product classes represent 85 percent of the total energy
savings generated from the (proposed) standards.
``The parties agreed that in the interest of conserving engineering
and capital resources while maximizing energy savings, the greatest
changes in design should be concentrated on the largest two product
classes of the five automatic defrost refrigerator-freezer classes--top
mounted, non-dispenser, and side by side with dispensers--and not other
refrigerator-freezers, freezers or compacts.'' (Joint Comments, No. 49
at 14).
``Dispensers for ice and/or water through the door affect the
performance of top-mounted freezer models in which the dispenser is
normally in the fresh food door and side-mounted freezer models in
which the dispenser is normally in the freezer door, in significantly
different ways. Because of this difference, the energy consumption of a
side-mounted freezer dispenser can be higher than a top-mounted freezer
dispenser. This is due to the greater amount of heat transferred
through a freezer door dispenser.'' (Joint Comments, No. 49 at 15).
``Most manufacturers do not build all product classes or all sizes
within a product class. This fact emphasizes the need to maximize the
total energy savings while considering the resultant economic impacts
to each company.'' (Joint Comments, No. 49 at 15).
The Department estimated both the long term and short term return
on investment (ROI) for a typical small and a typical large company for
each energy efficiency trial standard level considered and found that
this evaluation tends to support the Joint Comments position that
requiring the largest improvement in energy savings for the largest
selling classes of products will maximize the energy savings.
b. Compact Refrigerators, Refrigerator-Freezers, and Freezers. This
new set of classes (Nos. 11-18) includes all refrigerator products less
than 7.75 cubic feet and 36 inches or less in height. The total energy
consumption of all compact refrigerator products in the U.S. is less
than 2.6 percent of the total energy consumed by all sizes of
refrigerator products.
The only design options for compact refrigerator-freezers that were
identified by industry as feasible from a design and marketing aspect
were: improved gaskets, improved compressor efficiency and improved fan
motor efficiency. Compact refrigerator manufacturers indicated that the
other design options have extremely low design feasibility or marketing
utility when applied to their products (not buildable or not saleable).
The Joint Comments stated ``The five compact refrigerator/freezer
manufacturers supplying data for life cycle cost and payback analysis
identified a ``max tech'' limitation to their products of approximately
15 percent below 1993 levels. This level did not take into account
economic justification (consumer and manufacturer) or safe harbor
issues.'' (Joint Comments, No. 49 at 16). This assessment took into
account the following:
`` High efficiency compressors of 5.5 Energy Efficiency
Ratio (EER) are not realistic for compact refrigerator/freezers. Low
capacity compressors available for compact refrigerator/freezers in the
1998 time frame are expected to have efficiencies of approximately 3.6
EER.
`` Most compact refrigerator-freezer manufacturers are
small companies with limited research and development funding and
capital resources.
`` High efficiency foams require high pressure impingement
systems that are only economically viable for very large manufacturers.
Most compact manufacturers use what is known as an auto froth foaming
system (low pressure) that cannot produce high efficiency foam
insulation. Non-CFC auto froth formulations are also limited to
moderately energy efficient replacements.
`` In most cases, compact refrigerator/freezers and
freezers do not employ fan motors, mullions, auto-defrost or through-
the-door features. As a result, design strategies which relate to these
components or technologies are not available for improvement.
`` The need for high efficiency components by compact
refrigerator/freezer and freezer manufacturers carries a low priority
with component suppliers. Motor and compressor manufacturers apply
their engineering resources to larger volume manufacturers leaving the
low volume niche type compact products to the tail end of their design
cycles. For example, there are compact manufacturers that still have
not been provided with sample non-CFC-12 compressors that provide
acceptable energy efficiency for household appliance applications.''
(Joint Comments, No. 49 at 16, 17).
``Because of the special design constraints and limited number of
options applicable to compact refrigerator-freezers and freezers, it
was difficult to develop life-cycle cost analyses that reflected the
real marketing situation for these products. An LBL assessment using
inputs from AHAM compact manufacturers showed that an energy savings
level of 2 to 3 percent below the 1993 standards would result in a
minimum five-year payback for consumers. This assessment did not take
into consideration unique marketing restrictions of individual compact
refrigerator-freezer and freezer manufacturers.'' (Joint Comments, No.
49 at 17).
[[Page 37406]]
In an effort to balance the economic impact on the compact product
manufacturers and the consumers benefit from improvements in energy
efficiency in these products, the Joint Comments proposed an energy
level approximately 5 percent below the 1993 standards for all eight
compact type refrigerator-freezers and freezers. (Joint Comments, No.
49 at 17).
The Department agrees with the Joint Comments statement that there
are fewer design options available for improving the energy efficiency
of compact refrigerator products. The Department also recognizes that
there is relatively little opportunity for energy savings from the
compact classes, given that they consume only 2.6 percent of total
energy used by residential refrigerator products. Therefore, the
Department has analyzed compact refrigerators, freezers, and
refrigerator-freezers separately and is proposing separate energy
efficiency standards for the compact refrigerator products.
c. Household Freezers. The Joint Comments stated ``The category of
household freezers includes three product classes defined as: chest
freezers with manual defrost; vertical freezers with manual defrost;
and vertical freezers with automatic defrost. As a group, the freezer
product classes have technical and marketing constraints unique to
their individual markets. These design constraints are amplified by the
fact that the 1993 NAECA energy efficiency standards imposed an
additional 14% stricter target on household freezers than refrigerator/
freezers. Energy efficiency gains on household freezers out pace those
for any other appliance standard in the U.S. Some parties believe that
as a direct partial consequence of the 1993 NAECA standards, three
companies terminated production of these products.'' (Joint Comments,
No. 49 at 18).
``The number of energy saving options applicable to household
freezers is almost as limited as those for compact refrigerator/
freezers. The options applied by LBL in its ``max tech'' analysis
included increased wall and door thicknesses, higher EER compressors,
improved gaskets, and enhanced performance of evaporator and condenser
coils. In the automatic defrost vertical freezer product class,
adaptive defrost and more efficient motors are applied. These latter
options are not used on manual models.'' (Joint Comments, No. 49 at
18).
The Joint Comments stated the CFC replacement issue has been
especially difficult to resolve on freezer products. The preferred
refrigerant replacement, HFC-134a, ``has an additional 3 to 4 percent
energy penalty inherent in its performance at temperatures necessary
for household freezer products as compared to refrigerator-freezers.''
(Joint Comments, No. 49 at 19). ``The most common replacement for CFC-
11 in the blowing agent for foam insulation is hydrochlorofluorocarbon
(HCFC)-141b. Since this chemical is basically in a liquid phase while
exposed to temperatures produced in household freezers, the liquid
thermal conductivity is especially important in its performance as an
energy efficient CFC-11 replacement. As applied to household freezers,
however, this particular CFC-11 replacement carries an approximate 5 to
6 percent energy penalty when applied to household freezers.'' (Joint
Comments, No. 49 at 19).
``Freezers are an optional commodity in a typical U.S. household.
They are basically sold in the replacement market, and due to the price
sensitivity of this market, there is a reduced opportunity to pass
through costs of energy improvements to the consumers. Thus, if
regulatory induced costs cannot be passed on, the product line becomes
relatively unprofitable.'' (Joint Comments, No. 49 at 19)
After carefully reviewing the feasibility and energy efficiency
options in the max tech analysis, and considering inputs from
refrigerator manufacturers and compressor manufacturers, the Joint
Comments proposed standards levels for freezer products. The proposal
is based on most of the design options identified by DOE in the 1993
Advance Notice, but with the more conservative industry estimates of
energy savings. (Joint Comments, No. 49 at 20).
The statements made by the Joint Comments concerning freezers
support the Department's analysis.
d. Manual and Partial Defrost Refrigerators and Refrigerator-
Freezers. The Joint Comments stated: ``There are only a few models with
a small market niche in this declining product category. The percentage
of U.S. sales in these product classes is 1.7 percent and falling. Data
and analysis on elementary engineering and economic issues are
difficult to obtain. However, non-industry participants felt that it is
important to recommend a relatively stringent U.S. standard on this
product class because of the potential impact on similar products
produced in or for less-developed countries.'' (Joint Comments, No. 49
at 20). The Joint Comments believe it is likely these less-developed
countries will adopt similar standards. Because of the limited
availability of data and the small market, the Joint Comments proposed
an energy consumption standard for manual and partial defrost
refrigerator-freezers that is 10 percent lower than they proposed for
Class 3 refrigerator-freezers (automatic defrost with top-mounted
refrigerator-freezer without through-the-door ice service). (Joint
Comments, No 49 at 20).
``The energy consumption differential between automatic defrost and
non-automatic defrost units has been declining over time, and is
expected to decline further as adaptive defrost options become
incorporated into the automatic defrosting systems. The standards
proposal is based on a judgment of all the participants that a 10%
energy consumption difference for a given adjusted volume accounts for
the relatively irreducible minimum change in energy consumption
relating to a member's decision not to use automatic defrost.'' (Joint
Comments, No. 49 at 20).
An analysis of the energy savings options available for the manual
and partial defrost refrigerators and refrigerator-freezers by the
Department supports the level of standards proposed by the Joint
Comments parties. However, the concern raised by Joint Comments parties
regarding the potential impact on similar products produced in or for
less-developed countries was not considered by DOE.
e. Non-HCFC Products. The Joint Comments propose establishing
separate classes for refrigerator products which do not use HCFCs.
``These non-HCFC classes would permit 10% greater energy use than the
comparable HCFC-using classes to provide industry with a known,
feasible way of meeting the standards before 2003.'' (Joint Comments,
No. 49 at 21). The Joint Comments parties recommended that less
stringent standards, which would expire 6 years after their effective
date, be established for the HCFC-free refrigerator classes. It is
anticipated that alternative design options will be available by this
time. (Joint Comments, No. 49 at 21).
The Joint Comments recommended that the following conditions apply
to the standards for the HCFC-free classes:
``(1) 18 months prior to the total phaseout by EPA of HCFC-141b in
January 1, 2003, to wit, July 1, 2001;
``(2) 18 months prior to any earlier phaseout date or restriction
on use of HCFC's in refrigerator-freezer foam set by EPA; or
``(3) After the granting of a petition by DOE which demonstrates
that HCFC-141b is in very short supply or economically infeasible to
use due to,
[[Page 37407]]
for example, chemical supplier announcements or other actions affecting
supply or use.
``After the 1998 effective date of the basic standards and before
the effective date of the non-HCFC standard as stated in (1)-(3) above,
each manufacturer may annually produce non-HCFC units subject to the
alternative standard for up to 5% of its total production or for 10,000
units, whichever is less. This allowance to apply the non-HCFC standard
to a small number of units allows manufacturers the ability for field
testing with real consumers under actual commercial conditions which
will be necessary in the case of the advanced technology which will be
required to meet the 1998 standards.'' (Joint Comments, No. 49 at 21).
As discussed earlier, because of the uncertainty of the
availability of HCFC-141b replacements with equivalent thermal
properties, the Department has decided to develop new product classes
for products that do not use HCFC-141b or other HCFCs in the foam
insulation. However, the timetable for adoption of HCFC-free standards
proposed by the Joint Comments differs from that proposed by DOE in
this NOPR.
IV. Analysis
A. Engineering--Technical Issues
1. Efficiency Levels Analyzed
The Department conducted engineering analysis of those classes of
refrigerator products for which performance and cost data could be
obtained. The classes analyzed were: Top-mounted refrigerator-freezer
with auto defrost, top-mounted refrigerator-freezer with auto defrost
and through-the-door features, side-by-side refrigerator-freezer with
auto defrost, side-by-side refrigerator-freezer with auto defrost and
through-the-door features, bottom-mounted refrigerator-freezer with
auto defrost, upright freezer with auto defrost, upright freezer manual
defrost, chest freezer manual defrost and compact refrigerator-freezer
manual defrost. Data was collected by surveys of the industry,
extensive literature review and discussions with experts. This
information was used as the basis for determining the improvement in
performance and the manufacturer cost for each design option added to
the baseline unit. The engineering analysis determined the annual
energy use, life cycle costs and pay back periods for each combination
of design options. Proposed standards for classes which could not be
analyzed, due to the lack of data, have been based on the percentage in
performance improvement over current standards determined for a similar
class that was analyzed. (See TSD, Chapter 3).
The combination of design options which results in the most
performance improvement technologically feasible is call the ``max
tech'' design level. Table 2 presents the max tech performance levels
expressed as annual energy use for all analyzed classes of refrigerator
products.
Table 2.--Annual Energy Usage for Refrigerators, Refrigerator-Freezers,
and Freezers at Maximum Technologically Feasible Levels
------------------------------------------------------------------------
Annual
energy
Product class use (kWh/
yr)
------------------------------------------------------------------------
Refrigerator-Freezers:
Top Mounted Auto Defrost................................... 422
Top Mounted Auto Defrost with Through-the-Door Feature..... 517
Side-by-Side Auto Defrost.................................. 502
Side-by-Side Auto Defrost with Through-the-Door Feature.... 516
Bottom Mounted Auto Defrost................................ 444
Freezers:
Upright Auto Defrost....................................... 484
Upright Manual Defrost..................................... 278
Chest Manual Defrost....................................... 284
Compacts: Manual Defrost Refrigerator-Freezer................ 260
------------------------------------------------------------------------
The Department selected the max tech level and three other levels
from the engineering analysis for further examination. Table 3 presents
the four efficiency levels selected for analysis for the nine classes
of refrigerator products analyzed Level 4 corresponds to the highest
efficiency level, max tech, considered in the engineering analysis.
Table 3.--Standard Levels Analyzed for Refrigerators, Refrigerator-Freezers, and Freezers--Annual Energy Use
(kWh/yr)
----------------------------------------------------------------------------------------------------------------
Product class Baseline Level 1 Level 2 Level 3 Level 4
----------------------------------------------------------------------------------------------------------------
Refrigerator-Freezers:
Top Mounted Auto
Defrost............ 397 + 14.2 AV
(397 + 0.50 av) 275 + 9.8 AV
(275 + 0.35 av) 270 + 9.7 AV
(270 + 0.34 av) 260 + 9.3 AV
(260 + 0.33 av) 239 + 8.5 AV
(239 + 0.30 av)
Top Mounted Auto
Defrost with
Through the Door
Feature............ 462 + 13.0 AV
(462 + 0.46 av) 362 + 10.2 AV
(362 + 0.36 av) 330 + 9.3 AV
(330 + 0.32 av) 321 + 9.03 AV
(321 + 0.32 av) 300 + 8.5 AV
(300 + 0.30 av)
Side-by-Side Auto
Defrost............ 609 + 5.8 AV
(609 + 0.20 av) 514 + 4.9 AV
(514 + 0.17 av) 429 + 4.1 AV
(429 + 0.14 av) 415 + 4.0 AV
(415 + 0.14 av) 402 + 3.8 AV
(402 + 0.14 av)
Side-by-Side Auto
Defrost with
Through the Door
Feature............ 484 + 12.1 AV
(484 + 0.43 av) 405 + 10.1 AV
(405 + 0.36 av) 353 + 8.8 AV
(353 + 0.31 av) 336 + 8.4 AV
(336 + 0.30 av) 312 + 7.8 AV
(312 + 0.27 av)
Bottom Mounted Auto
Defrost............ 579 + 5.6 AV
(579 + 0.29 av) 476 + 4.6 AV
(476 + 0.16 av) 419 + 4.1 AV
(419 + 0.14 av) 393 + 3.8 AV
(393 + 0.13 av) 359 + 3.5 AV
(359 + 0.12 av)
Freezers:
Upright Auto Defrost 399 + 14.2 AV
(399 + 0.50 av) 349 + 12.4 AV
(349 + 0.44 av) 321 + 11.4 AV
(321 + 0.40 av) 288 + 10.3 AV
(288 + 0.36 av) 254 + 9.1 AV
(254 + 0.32 av)
Upright Manual
Defrost............ 275 + 8.6 AV
(275 + 0.30 av) 241 + 7.6 AV
(241 + 0.27 av) 187 + 5.8 AV
(187 + 0.21 av) 172 + 5.4 AV
(172 + 0.19 av) 158 + 5.0 AV
(158 + 0.17 av)
Chest Manual Defrost 170 + 11.8 AV
(170 + 0.42 av) 142 + 9.9 AV
(142 + 0.35 av) 117 + 8.1 AV
(117 + 0.29 av) 111 + 7.7 AV
(111 + 0.27 av) 102 + 7.1 AV
(102 + 0.25 av)
Compacts:
Manual Defrost
Refrigerator-
Freezer............ 292 + 13.8 AV
(292 + 0.48 av) 286 + 13.5 AV
(286 + 0.48 av) 280 + 13.2 AV
(280 + 0.47 av) 274 + 13.0 AV
(274 + 0.46 av) 274 + 13.0 AV
(274 + 0.46 av)
----------------------------------------------------------------------------------------------------------------
AV = Total adjusted volume, expressed in ft\3\
(av = Total adjusted volume, expressed in Liters)
[[Page 37408]]
Rather than presenting the results for all classes of refrigerator
products in today's NOPR, the Department selected a representative
class of refrigerator-freezer, and is presenting the results only for
that class. The results for the other classes can be found in the TSD
in the same sections as those referenced for the representative class.
The representative class for refrigerator products is a top mounted
automatic defrost refrigerator-freezer, which accounts for more than 50
percent of the sales of all refrigerator-freezer products. For this
representative class, trial standard level 1 accomplishes its
efficiency improvements from the baseline by increased insulation,
improved compressor efficiency, reduced condenser and evaporator motor
power, reduced gasket heat leak, and improvements in evaporator fan
efficiency; level 2 adds additional insulation and increased evaporator
area; level 3 adds increased condenser area and adaptive defrost, and
level 4 adds vacuum panels on the walls and doors. Similar design
options are used to achieve the above efficiencies for the other
classes and are found tabulated in Section 3.3 of the TSD.
2. Payback Period. Table 4 presents the payback periods for the
efficiency levels analyzed for the representative class of the product.
Payback for all classes of refrigerator products may be found in Tables
4.12 to 4.36 of the TSD.
Table 4.--Payback Periods of Design Options (Years) For Representative
Class of Refrigerator-Freezers
------------------------------------------------------------------------
Payback
Standard level period
------------------------------------------------------------------------
1............................................................ 3.7
2............................................................ 3.9
3............................................................ 4.5
4............................................................ 6.2
------------------------------------------------------------------------
3. Significance of Energy Savings. To estimate the energy savings
by the year 2030 due to revised standards, the energy consumption of
refrigerator products under the base case is compared to the energy
consumption of products complying with the candidate standard levels.
For the candidate energy conservation standards, the REM projects that
over the period 1998-2030, the following energy savings would result
for all classes of the product:
Level 1--7.12 Quads (7.51 EJ)
Level 2--9.05 Quads (9.55 EJ)
Level 3--10.26 Quads (10.82 EJ)
Level 4--12.05 Quads (12.71 EJ)
The Department finds that each of the increased standards levels
considered above would result in a significant conservation of energy.
B. Economic Justification
1. Economic Impact on Manufacturers and Consumers. The
manufacturers' cost increase per unit over the base case to meet the
efficiency of level 1 is $40.81; to meet level 2, 3, and 4, the
manufacturers' cost increases are $43.92, $54.33, and $86.15,
respectively. (See TSD, Table 3.5.)
At those levels of efficiency, the projected consumer price
increases are $69.22 for level 1 and $74.32, $92.56, and $146.02 for
standard levels 2 through 4, respectively. (See TSD, Table 4.1.)
The per-unit reduction in annual cost of operation (energy expense)
at level 1 is $19.06 for the representative class; standard level 2
would reduce energy expenses by $19.70; standard level 3 by $21.32; and
standard level 4 by $24.55. (See TSD, Table 4.1.)
The Lawrence Berkeley Laboratory Manufacturer Impact Model results
for all classes of refrigerator products show that revised standards
would cause a prototypical manufacturer to have fairly large reductions
in short-run return on equity (ROE) from the 7.3 percent return in the
base case. Standard levels 1 through 4 for refrigerator-freezers are
projected to produce short-run ROEs of 7.0 percent, 6.2 percent, 5.8
percent, and 7.1 percent, respectively. Similarly, revised standards
have only a small effect on the prototypical manufacturer's long run
ROE of 7.3 in the base case. Standard levels 1 through 4 for
refrigerator-freezers are projected to produce long-run ROEs of 7.4
percent, 7.2 percent, 7.2 percent, and 7.7 percent, respectively. (See
TSD, Tables 6.4 and 6.8.)
Most financial data of the type needed to characterize the
prototypical manufacturer are generally not available because most
manufacturing firms are subsidiaries or divisions of larger parent
companies. Hence, DOE assumes that the prototypical firm has largely
the same financial characteristics (e.g., debt-equity ratio, interest
rate on debt, etc.) as parent firms. Financial data for the parent
firms are based on publicly available sources such as Securities and
Exchange Commission 10K reports and company annual reports.
2. Life-Cycle Cost and Net Present Value (NPV). A life-cycle cost
is calculated for a unit meeting each of the candidate standard levels.
For the representative class, life-cycle costs at all standard levels
are less than the baseline unit. Of the four candidate standard levels,
a unit meeting level 2 has the lowest consumer life-cycle cost. (See
TSD, Figure 4.1.)
At each candidate standard level, the Department determines the
average change in life-cycle costs by considering only those consumers
who are being forced by the standard to move from a lower efficiency
unit to one which just meets the standard level being considered and
assuming that consumers who would purchase units at or above this
level, even without a standard, would not be affected. This is done by
assuming in the base case a distribution of purchases of units meeting
the respective efficiencies of each standard level. The base case
distribution is based on the distribution of current sales as a
function of efficiency. As each standard level is examined, the change
in life-cycle cost reported is the average change only for affected
consumers. Under this scenario, standard level 1 would cause reductions
in life-cycle cost for the average affected consumer of $143.36 for the
representative class of refrigerator products; standard level 2 would
reduce average life-cycle costs by $145.46; standard level 3, by
$145.24; and standard level 4, by $127.81. These life-cycle cost
reductions indicate that no standard level would cause any economic
burden on the average consumer. (See TSD, Table 4.1.) The Department
notes that standard levels 3 and 4 are beyond the minimum life-cycle
point which, if adopted, could require some consumers, who would have
otherwise purchased refrigerators having the characteristics of
standard level 2, to experience higher life cycle costs.
The net present value analysis, a measure of the net savings to
society, indicates that for all classes of refrigerator products,
standard level 1 would produce a NPV of $7.66 billion to consumers. The
corresponding net present values for standard levels 2-4 are $8.19
billion, $8.26 billion, and $7.78 billion, respectively. (See TSD,
Table 5.20.)
Even though the life cycle cost and net present value analyses
indicate that the proposed standards would result in substantial net
benefits for consumers, as well as the nation as a whole, the
Department is concerned about whether there might be adverse effects of
the proposed standards on identifiable groups of consumers. Because the
proposed standard level is below the level that is estimated to result
in minimum life-cycle cost (level 2), it would not preclude
manufacturers from producing refrigerators (or consumers from
purchasing) refrigerators with even lower life-cycle costs. This
assumes that
[[Page 37409]]
the affected consumers experienced discount rates, energy prices and
usage patterns similar to those assumed in the DOE analysis. However,
because DOE believes that significant numbers of refrigerator users are
likely to experience discount rates and energy prices that differ from
the average rates and prices used in DOE's basic analysis, DOE
performed additional sensitivity analyses using lower and higher
consumer discount rates (2 and 15 percent), and lower and higher energy
prices. These sensitivity analyses indicated that these variations in
discount rates and energy prices did not change the Department's
conclusion that the proposed standards would result in significant net
benefits and had little or no impact on the relative merits of the
different standard levels analyzed. DOE believes that there is little
variation in the usage patterns of refrigerators, and therefore did not
perform sensitivity analyses on this factor. The Department invites
comments on whether the proposed standard would have any significant
adverse effect on any identifiable group of consumers.
3. Energy Savings. As indicated above, DOE concludes that
standards, at each candidate standard level, will result in significant
savings of electricity consumption by refrigerator products.
4. Lessening of Utility or Performance of Products. As indicated
above, DOE established classes of products in order to assure that the
standards analyzed would not lessen the existing utility or performance
of refrigerator products.
5. Impact of Lessening of Competition. The determination of this
factor must be made by the Attorney General.
6. Need of the Nation to Save Energy. In addition to the reasons
for saving energy recognized when Congress established the appliance
standards program, there is an extraordinary need to save energy to
reduce damage to the environment. Refrigerator products use electricity
directly. In 1993, 1.74 quads (1.84 EJ) were used by refrigerator
products nationally. Improving the energy efficiency of these products
will reduce future electricity demands and thereby decrease air
pollution. (See TSD, Environmental Assessment.)
As a result of the national cap on emissions of sulfur dioxide,
together with a credit and trading system, established by the Clean Air
Act Amendments of 1990, the proposed refrigerator standards are
unlikely to have any significant effect on actual emissions of sulfur
dioxide. However, because the proposed standards will reduce overall
electricity demand, they will also enable electric utilities and other
covered sources of sulfur dioxide to spend less on sulfur dioxide
emission controls. This savings will be reflected in the marginal costs
experienced by utilities, but may not be fully reflected in the average
rates charged consumers. Because there may be some marginal benefit
associated with the avoidance of sulfur dioxide emission control costs,
DOE has continued to estimate the tons of sulfur dioxide emissions
represented by the reductions in electricity demand likely to result
from the standards. For all classes of refrigerator products at
standard level 1, over the years 1998 to 2030, the total estimated
sulfur oxide emissions (listed in equivalent weight of sulfur dioxide
(SO2)) affected would be 1017 kt (1120 thousand short tons).
During this time period, the peak annual SO2 emissions affected
would be 0.7 percent of the U.S. total. For standard levels 2-4, the
emissions affected are estimated to be 1292 kt (1424 thousand short
tons); 1465 kt (1615 thousand short tons); and 1720 kt (1896 thousand
short tons), respectively. The highest peak annual amount of emissions
affected at these levels is estimated to be 1.20 percent.
Standards are expected to result in some decreases in nitrogen
dioxide (NO2) emissions, although here too the Clean Air Act
Amendments established new requirements that may lead to regional caps
(and floors) on emissions of NO2 in certain nonattainment areas.
These new requirements could, in turn, reduce or eliminate the impact
of the proposed refrigerator standards on NO2 emissions in these
areas. It should also be noted that while the proposed refrigerator
standards are likely to result in significant reductions of NO2
emissions in areas of the country that are already in compliance with
national ambient air quality standards for NO2, the benefits of
such reductions are likely to be very small or insignificant compared
to those resulting from reductions in nonattainment areas. For standard
level 1, over the years 1998 to 2030, the total estimated NO2
reduction would be 966 kt (1065 thousand short tons), assuming that
there are no regional caps/floors on NO2 emissions. During this
time period, the peak annual reduction of NO2 emissions that are
expected to be emitted by power plants in the U.S. is 0.70 percent. For
standard levels 2-4, the reductions are 1228 kt (1353 thousand short
tons); 1393 kt (1535 thousand short tons); and 1635 kt (1802 thousand
short tons), respectively. The highest peak annual reduction of these
levels is 1.20 percent.
Another consequence of the standards will be the reduction of
carbon dioxide (CO2) emissions. For standard level 1, over the
years 1998 to 2030, the total estimated CO2 reduction would be 540
Mt (595 million short tons). During this time period, the peak annual
reduction of CO2 emissions that are expected to be emitted by
power plants in the U.S. is 0.70 percent. For standard levels 2-4, the
reductions are 686 Mt (756 million short tons); 778 Mt (858 million
short tons); and 914 Mt (1007 million short tons), respectively. The
highest peak annual reduction of these levels is 1.20 percent.
C. Conclusion
The Joint Comments made a valuable contribution to the development
of the energy conservation standards proposed in this NOPR. The
Department found the recommendations in the Joint Comments to be
reasonable and based on reliable data. The Department reached its
conclusions after carefully considering the Joint Comments and all
other comments received.
With this NOPR the Department is proposing new product classes for
compact refrigerator products and for HCFC-free refrigerator products.
Based on an analysis of the alternatives, the Department concludes that
standard level 1 for classes of refrigerator products achieves the
maximum improvement in energy efficiency that is both technologically
feasible and economically justified.
1. Product Classes. The Department proposes to add new product
classes in two categories.
a. Compact Refrigerators, Refrigerators-Freezers and Freezers. The
Department proposes that new product classes be established for compact
refrigerator products. The Department recommends a new set of product
classes which includes all products less than 7.75 cubic feet (FTC/AHAM
rated volume) and 36 inches or less in height. The total energy
consumption of all compact refrigerator products in the U.S. is less
than 2.6 percent of the total energy consumed by all refrigerator
products. There are only three or four energy savings options expected
to be available for these products by 1998. Because of small production
volumes, the impact on these manufacturers is also relatively severe.
Furthermore, a 5-year payback is required to recoup the cost of
improvement in efficiency at levels only 2 to 3 percent below the 1993
levels.
b. HCFC-Free Refrigerators, Refrigerator-Freezers, and Freezers.
The Department proposes the addition of classes for HCFC-free
refrigerator products. For the purposes of this rulemaking, a HCFC-free
refrigerator product is defined as a product which
[[Page 37410]]
contains 10 percent or less by mass hydrochlorofluorocarbon in the
blowing agent portion of the foam insulation. According to section
325(o)(2)(B) of the Act, the Department must consider a number of
concerns when determining whether the benefits of a standard exceed its
burdens. The Department believes that by establishing separate classes
for HCFC-free products, industry will be encouraged to develop products
which are environmentally benign.
For the HCFC-free full sized refrigerator products, the Department
recommends standards which would permit 10 percent greater energy use
than the comparable HCFC-using classes. The 10 percent relaxation for
HCFC-free classes, however, does not apply to the compact classes,
because this would result in standards that are less stringent than
those standards now in effect. This is prohibited by section 325(o)(1)
of the Act. Instead, for the compact classes, the HCFC-free standards
are proposed to be identical to the 1993 standards.
2. Standards. Section 325(o)(2)(A) of the Act specifies that the
Department must consider, for amended standards, those standards that
``achieve the maximum improvement in energy efficiency * * * which the
Secretary determines is technologically feasible and economically
justified.''
a. Standard Level 4. The Department first considered the max tech
level of efficiency, i.e., standard level 4 for amended refrigerator,
refrigerator-freezer, and freezer standards. Standard level 4, max
tech, would save the most energy: 10.0 quads (10.55 EJ) for
refrigerators (including refrigerator-freezers) and 2.0 quads (2.11 EJ)
for freezers between 1998 and 2030. In order to meet this standard, the
Department assumes that all refrigerator products would incorporate
vacuum panel insulation. The use of vacuum panel insulation accounts
for 30 percent of total energy savings, with increasing wall thickness
as the only alternative. Vacuum panel technology has progressed, but it
is not ready to be applied as a reliable design option in the
production of a 1998 compliant product. There are concerns about
manufacturability, availability, reliability, and performance. Vacuum
panels are 6 to 10 times heavier than foam. The increase in door weight
may cause the appliance to tip over when the door is opened. Also,
current production capability for vacuum panels is far too small for
the projected demand. A 1-inch increase in wall and door thickness (a
2-inch increase in the side-to-side dimension) is not a viable option.
Too many products are already constrained by the need to fit into
existing spaces and through doors and passages. Decreasing interior
volume would sacrifice product utility. In addition, because standard
level 4 is beyond the minimum life cycle point, there are likely to be
some consumers who would experience net life-cycle cost increases
compared to the units they would have otherwise purchased. Based upon a
consideration of the above, the Department therefore concludes that the
burdens of standard level 4 for refrigerators, refrigerator-freezers
and freezers outweigh the benefits, and rejects the standard level.
b. Standards Level 3. This standard level is projected to save 8.6
quads ( 9.1 EJ) of energy for refrigerators and refrigerator-freezers
and 1.7 quads (1.8 EJ) for freezers. While this level does not use
vacuum panels, for most of the classes about 40 percent of the energy
savings, compared to the base case, is obtained by increasing the
insulation values. As indicated in the comments, there is general
agreement that an increase in the wall thickness is not acceptable for
many of the larger models in each class. This level has a payback
periods as high as 25.5 years (much longer than the product life) and
reduces refrigerator manufacturer short-run ROE from 7.3 percent to 5.8
percent, a reduction of 20 percent. For freezer manufacturers, short-
run ROE drops from 7.3 percent to 4.7 percent, a reduction of more than
35 percent. Based on a consideration of the above, the Department
concludes that the burdens of standard level 3 for refrigerators,
refrigerator-freezers and freezers outweigh the benefits, and rejects
the standard level.
c. Standard Level 2. This standard level is projected to save 7.8
quads (8.2 EJ) of energy for refrigerators and refrigerator-freezers,
and 1.3 quads (1.4 EJ) for freezers. The payback at this level may be
as long as 19.0 years, the expected life of the product. The initial
burden on the manufacturers is also unacceptably high; short-run ROE
for both refrigerators and freezers decreases from 7.3 percent to 6.2
percent, a reduction of 16 percent. Based on a consideration of the
above, the Department concludes that the burdens of standard level 2
for refrigerators, refrigerator-freezers and freezers outweigh the
benefits, and rejects the standard level.
d. Standard Level 1. During the period 1998-2030, the savings at
this level are calculated to be 7.13 quads (7.5 EJ) of primary energy.
In addition, the standard could have a positive effect on the
environment by reducing the emissions of SO2 by up to 1017 kt
(1120 short tons) or by as much as 0.7 percent by the year 2030.
Furthermore, the standard will reduce emissions of CO2 by 540 Mt
(595 million tons), or as much as 0.7 percent, over the forecast
period.
The technologies that are necessary to meet this standard level 1
are presently available. The Department finds the level to be
economically justified. The consumer payback of this standard level is
3.7 years for the representative class and no more than 9.2 years for
any class. This standard is at or near the lowest life-cycle cost for
all classes and is expected to result in a reduction in life-cycle cost
of approximately $143 for the representative class. The proposed
standard is also unlikely to affect adversely any identifiable group of
consumers. Additionally, the standard is expected to have essentially
no impact on the prototypical manufacturer's ROE of 7.3 percent.
The Department concludes that standard level 1 for refrigerator
products saves a significant amount of energy and is technologically
feasible and economically justified. The level 1 standards correspond
closely to the standards proposed by the Joint Comments. (The Joint
Comments standards will result in slightly more energy savings.) The
Department proposes to amend the existing standards for refrigerator
products to correspond to the standards agreed to by the Joint Comment
parties. As discussed in the previous section, the Department agrees
with the Joint Comment recommendation to relax the standards for full-
sized HCFC-free classes of refrigerator products by 10 percent for a
period of 9 years after publication of the final rule, but is proposing
that the standards for the HCFC-free compact classes during the same
period be the equivalent to the 1993 standards.
3. Effective Dates. The effective date of standards for the full-
size refrigerator products (Classes 1-10 in the ``Product Classes and
Effective Date Table'') is 3 years after publication of the final rule.
The compact refrigerator product classes, Nos. 11-18, would also have
an effective date of 3 years after publication of the final rule.
The HCFC-free refrigerators, listed in Product Classes 19-36, have
more complex effective dates. The effective date for the HCFC-free
standards will be the same date as for the other classes of products--3
years after the publication of the final rule. The effective date
proposed for the HCFC-free classes is 3 years earlier than the
suggestion in the Joint Comments, because section 325(o)(1) of the Act
specifically prohibits the Secretary from specifying
[[Page 37411]]
standards which would permit an increase in the energy used by a
covered product. The impact on energy savings of the earlier effective
date for HCFC-free product standards is not large: compared to
introducing HCFC-free classes in 2001, the 1998 introduction carries an
energy penalty of less than 0.1 quad over the period 1998-2030. The
earlier effective date may have a countervailing environmental benefit
by encouraging earlier use of HCFC substitutes.
The standards for the HCFC-free classes of products will be raised
to a standard level equal to that for comparable HCFC-using classes
effective 9 years after publication of the final rule for this
rulemaking. At this time it is anticipated that alternative design
options without HCFCs will permit efficiency improvements. The
Department is seeking comments concerning requirements for HCFC-free
products.
V. Environmental, Regulatory Impact, Takings Assessment, Federalism,
and Regulatory Flexibility Reviews
A. Environmental Review
The Draft Environmental Assessment for Proposed Energy Conservation
Standards for Refrigerators, Refrigerator-Freezers, and Freezers was
prepared pursuant to the National Environmental Policy Act of 1969
(NEPA) (42 U.S.C. 4321 et seq.), regulations of the Council on
Environmental Quality (40 CFR parts 1500-1508), the Department
regulations for compliance with NEPA (10 CFR part 1021) and the
Secretarial Policy on the National Environmental Policy Act (June
1994). Section V.B.2. of the Secretarial Policy requires that the
Department provide an opportunity for interested parties to review
environmental assessments prior to the Department's formal approval of
such assessments.
In accordance with the Secretarial Policy, the Department seeks
comments on the Draft Environmental Assessment, which is printed within
the TSD accompanying this proposed rulemaking.
B. Regulatory Planning and Review
Today's regulatory action has been determined to be an
``economically significant regulatory action'' under Executive Order
12866, ``Regulatory Planning and Review.'' (58 FR 51735, October 4,
1993). Accordingly, today's action was subject to review under the
Executive Order by the Office of Information and Regulatory Affairs
(OIRA).
There were no substantive changes between the draft submitted to
OIRA and today's action. The draft and other documents submitted to
OIRA for review have been made a part of the rulemaking record and are
available for public review in the Department Freedom of Information
Reading Room, 1000 Independence Avenue, SW, Washington, DC 20585,
between the hours of 9 a.m. and 4 p.m., Monday through Friday,
telephone (202) 586-6020.
The following summary of the Regulatory Analysis focuses on the
major alternatives considered in arriving at the proposed approach to
improving the energy efficiency of consumer products. The reader is
referred to the complete draft ``Regulatory Impact Analysis,'' which is
contained in the TSD, available as indicated at the beginning of this
NOPR. It consists of: (1) A statement of the problem addressed by this
regulation, and the mandate for government action; (2) a description
and analysis of the feasible policy alternatives to this regulation;
(3) a quantitative comparison of the impacts of the alternatives; and
(4) the economic impact of the proposed standard.
DOE identified the following six major policy alternatives for
achieving consumer product energy efficiency. These alternatives
include:
No New Regulatory Action
Informational Action
--Product labeling
--Consumer education
Prescriptive Standards
Financial Incentives
--Tax credits
--Rebates
Voluntary Energy Efficiency Targets
The Proposed Approach (Performance Standards)
Each alternative has been evaluated in terms of its ability to
achieve significant energy savings at reasonable costs, and has been
compared to the effectiveness of the proposed rule.
If no new regulatory action were taken, then no new standards would
be implemented for these products. This is essentially the ``base
case'' for each appliance. In this case, between the years 1998 and
2030 there would be expected energy use of 45.54 quads (48.05 EJ) of
primary energy, with no energy savings and a zero net present value.
Several alternatives to the base case can be grouped under the
heading of informational action. They include consumer product labeling
and DOE public education and information programs. Both of these
alternatives are already mandated by, and being implemented under the
Act. One base case alternative would be to estimate the energy
conservation potential of enhancing these programs. To model this
possibility, the Department assumed that market discount rates would be
lowered by 5 percent for purchasers of refrigerator products. This
resulted in energy savings equal to 0.05 quads (0.05 EJ), with expected
consumption equal to 45.5 quads (48 EJ). The net present value is
estimated to be $0.08 billion.
Another method of setting standards would entail requiring that
certain design options be used on each product, i.e., for DOE to
prescribe technology standards. For these products, prescriptive
standards are assumed to be implemented as standards at one level below
the performance standards. The lower standards level entails slightly
smaller expenditures for tooling and purchased parts. Consequently, the
economic impacts that are expected before the implementation date
should be slightly smaller for prescriptive standards. This resulted in
energy consumption, between 1998 and 2030, of 39.27 quads (41.43 EJ),
and savings of 5.76 quads (6.62 EJ). The net present value, in 1990
dollars, was $7.26 billion.
Various financial incentive alternatives were tested. These
included tax credits and rebates to consumers, as well as tax credits
to manufacturers. The tax credits to consumers were assumed to be 15
percent of the increased expense for higher energy-efficiency features
of these appliances, while the rebates were assumed to be 15 percent of
the increase in equipment prices. The tax credits to consumers showed a
change from the base case, saving 0.07 quads (0.07 EJ) with a net
present value of $0.19 billion. Consumer rebates showed slightly higher
energy savings; they would save 0.07 quads (0.08 EJ) with a net present
value of $0.23 billion.
Another financial incentive that was considered was a tax credit to
manufacturers for the production of energy-efficient models of these
appliances. In this scenario, an investment tax credit of 20 percent
was assumed. The tax credits to manufacturers had no effect; the energy
consumption estimates are 45.54 quads (48.05 EJ) with no energy savings
and a zero net present value.
The impact of this scenario produces no savings because the
investment tax credit was applicable only to the tooling and machinery
costs of the firms. The firms' fixed costs and most of the design
improvements that would likely be adopted to manufacture more efficient
versions of these products would involve purchased parts. Expenses for
[[Page 37412]]
purchased parts would not be eligible for an investment tax credit.
Two scenarios of voluntary energy-efficiency targets were examined.
In the first one, the proposed energy conservation standards were
assumed to be voluntarily adopted by all the relevant manufacturers in
5 years. In the second scenario, the proposed standards were assumed to
be adopted in 10 years. In these scenarios, voluntary improvements
having a 5-year delay, compared to implementation of mandatory
standards, would result in energy consumption by these appliances of
39.78 quads (41.97 EJ), energy savings of 5.76 quads (6.08 EJ), and a
net present value of $6.07 billion; voluntary improvements having a 10-
year delay would result in 41.22 quads (43.40 EJ) of energy being
consumed, 4.42 quads (4.56 EJ) being saved, and a net present value of
$4.33 billion. These scenarios assume that there would be universal
voluntary adoption of the energy conservation standards by these
appliance manufacturers, an assumption for which there is no reasonable
assurance.
Lastly, all of these alternatives must be gauged against the
performance standards that are being proposed in this NOPR. Such
performance standards would result in energy consumption of
refrigerator products to total an estimated 38.42 quads (40.53 EJ) of
primary energy over the 1998-2030 time period. Savings would be 7.12
quads (7.52 EJ), and the net present value would be an expected $8.19
billion. As indicated in the paragraphs above, none of the alternatives
that were examined for these products saved as much energy as the
proposed rule. Also, most of the alternatives would require that
enabling legislation be enacted, since authority to carry out those
alternatives does not presently exist.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires an
assessment of the impact of regulations on small businesses. Small
businesses are defined as those firms within an industry that are
privately owned and less dominant in the market.
The refrigerator products industry is characterized by two firms
accounting for nearly 60 percent of sales. The five largest
manufacturers account for 97 percent of sales. Smaller businesses and
firms, which make primarily compact refrigerator products, share the
remaining 3 percent of the market.
In this industry, average cost has an inverse relationship to firm
size. The industry has economies of scale, and large firms (to the
extent that their facilities are up-to-date) have lower average costs
than small firms. This fact, coupled with increasing competitiveness of
the national market, probably accounts for the continuing consolidation
that has been occurring for several decades. The fact that the
consolidation has been producing larger firms strongly corroborates the
finding that large firms have a cost advantage.
A principal implication of consolidation is that the smaller of the
firms will be, on average, in more danger of failing. Any decrease in
average profitability is more likely to mean the difference between
success and failure for a smaller firm.
While some small firms have more energy efficient models than
larger firms, and while some have more models of average efficiency,
the impact of higher efficiency standards on small firms is likely to
be mixed. If standards are technologically difficult to meet, however,
they may hurt selected smaller firms the most, because smaller firms
have less sophisticated research and development capabilities. The
Department has taken this into consideration in this rulemaking and
this is one of the reasons the Department is proposing standards for
the compact refrigerator products that are less stringent than those
for full size refrigerator products.
In view of the foregoing, the Department has determined and hereby
certifies pursuant to section 605(b) of the Regulatory Flexibility Act
that, for this particular industry, the proposed standard levels in
today's Proposed Rule will not ``have a significant economic impact on
a substantial number of small entities,'' and it is not necessary to
prepare a regulatory flexibility analysis.
D. Federalism Review
Executive Order 12612 (52 FR 41685, October 30, 1987) requires that
regulations or rules be reviewed for any substantial direct effects on
states, on the relationship between the Federal Government and the
states, or on the distribution of power among various levels of
government. If there are sufficient substantial direct effects, the
Executive Order requires the preparation of a Federalism assessment to
be used in decisions by senior policy makers in promulgating or
implementing the regulation.
The Department has identified a substantial direct effect that
today's proposed rule might have on state governments. It would preempt
any State regulations imposing energy efficiency standards for
refrigerator products. However, DOE has concluded that such effect is
not sufficient to warrant preparation of a Federalism assessment. The
Department knows of no such state regulations. Moreover, if any such
state regulations are adopted, the Act provides for subsequent state
petitions for exemption. If DOE receives such a petition, it will then
be appropriate to consider preparing a Federalism assessment.
E. ``Takings'' Assessment Review
It has been determined pursuant to Executive Order 12630 (53 FR
8859, March 18, 1988) that this regulation would not result in any
takings which might require compensation under the Fifth Amendment to
the U.S. Constitution.
F. Paperwork Reduction Act Review
No new information or record keeping requirements are imposed by
this rulemaking. Accordingly, no OMB clearance is required under the
Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
VI. Public Comment Procedures
A. Participation in Rulemaking
DOE encourages the maximum level of public participation possible
in this rulemaking. Individual consumers, representatives of consumer
groups, associations, states or other governmental entities, utilities,
retailers, distributors, manufacturers, and others are urged to submit
written comments on the proposal. The Department also encourages
interested persons to participate in the public hearing to be held in
Washington, D.C., at the time and place indicated at the beginning of
this NOPR.
The DOE has established a comment period of 75 days following
publication of this NOPR for persons to comment on this proposal. All
public comments received and the transcript of the public hearing will
be available for review in the DOE Freedom of Information Reading Room.
B. Written Comment Procedures
Interested persons are invited to participate in this proceeding by
submitting written data, views or arguments with respect to the
subjects set forth in this NOPR. Instructions for submitting written
comments are set forth at the beginning of this NOPR and below.
Comments should be labeled both on the envelope and on the
documents, ``Refrigerator Rulemaking (Docket No. EE-RM-93-801),'' and
must be received by the date specified at the beginning of this NOPR.
Ten copies are requested to be submitted. Additionally, the Department
would appreciate an
[[Page 37413]]
electronic copy of the comments to the extent possible. The Department
is currently using WordPerfect TM 5.1. All comments received by
the date specified at the beginning of this NOPR and other relevant
information will be considered by DOE before final action is taken on
the proposed regulation.
All written comments received on the proposed rule will be
available for public inspection at the Freedom of Information Reading
Room, as provided at the beginning of this NOPR.
Pursuant to the provisions of 10 CFR 1004.11, any person submitting
information or data that is believed to be confidential and exempt by
law from public disclosure should submit 1 complete copy of the
document and 10 copies, if possible, from which the information
believed to be confidential has been deleted. DOE will make its own
determination with regard to the confidential status of the information
or data and treat it according to its determination.
Factors of interest to DOE, when evaluating requests to treat
information as confidential, include: (1) A description of the item;
(2) an indication as to whether and why such items of information have
been treated by the submitting party as confidential, and whether and
why such items are customarily treated as confidential within the
industry; (3) whether the information is generally known or available
from other sources; (4) whether the information has previously been
available to others without obligation concerning its confidentiality;
(5) an explanation of the competitive injury to the submitting person
that would result from public disclosure; (6) an indication as to when
such information might lose its confidential character due to the
passage of time; and (7) whether disclosure of the information would be
in the public interest.
C. Public Hearing
1. Procedure for Submitting Requests to Speak. The time and place
of the public hearing are indicated at the beginning of this NOPR. DOE
invites any person who has an interest in these proceedings, or who is
a representative of a group or class of persons having an interest, to
make a written request for an opportunity to make an oral presentation
at the public hearing. Such requests should be labeled both on the
letter and the envelope, ``Refrigerator Rulemaking (Docket No. EE-RM-
93-801),'' and should be sent to the address, and must be received by
the time specified, at the beginning of this NOPR. Requests may be
hand-delivered or telephoned into such addresses between the hours of
8:30 a.m. and 4:30 p.m., Monday through Friday, except Federal
holidays.
The person making the request should briefly describe the interest
group or class of persons that has such an interest, and give a
telephone number where he or she may be contacted. Each person selected
to be heard will be notified by DOE as to the time they will be
speaking.
Each person selected to be heard is requested to submit an advance
copy of his or her statement prior to the hearing as indicated at the
beginning of this NOPR. In the event any person wishing to testify
cannot meet this requirement, that person may make alternative
arrangements with the Office of Hearings and Dockets in advance by so
indicating in the letter requesting to make an oral presentation.
2. Conduct of Hearing. DOE reserves the right to select the persons
to be heard at the hearing, to schedule the respective presentations,
and to establish the procedures governing the conduct of the hearing.
The length of each presentation is limited to 20 minutes.
A DOE official will be designated to preside at the hearing. The
hearing will not be a judicial or an evidentiary-type hearing, but will
be conducted in accordance with 5 U.S.C. 533 and section 336 of the
Act. At the conclusion of all initial oral statements at each day of
the hearing, each person who has made an oral statement will be given
the opportunity to make a rebuttal statement, subject to time
limitations. The rebuttal statement will be given in the order in which
the initial statements were made. The official conducting the hearing
will accept additional comments or questions from those attending, as
time permits. Any questions to be asked of a person making a statement
at the hearing must be submitted to the presiding official in writing.
The presiding official will determine whether the question is relevant,
and whether time limitations permit it to be presented for an answer.
Further questioning will be permitted by the presiding official.
The presiding official will afford any interested person an opportunity
to question, other interested persons who made oral presentations, as
well as employees of the U.S. Government who have made written or oral
presentations with respect to disputed issues of material fact,
relating to the proposed rule. This opportunity will be afforded after
any rebuttal statements, to the extent that the presiding official
determines that such questioning is likely to result in a more timely
and effective resolution of disputed issues of material fact. If the
time provided is insufficient or inconvenient, DOE will consider
affording an additional opportunity for questioning at a mutually
convenient time. Persons interested in making use of this opportunity
must submit their request to the presiding official no later than
shortly after the completion of any rebuttal statements and be prepared
to state specific justification, including why the issue is one of
disputed fact and how the proposed questions would expedite their
resolution.
Any further procedural rules regarding proper conduct of the
hearing will be announced by the presiding official.
A transcript of the hearing will be made, and the entire record of
this rulemaking, including the transcript, will be retained by DOE and
made available for inspection at the DOE Freedom of Information Reading
Room as provided at the beginning of this NOPR. Any person may purchase
a copy of the transcript from the transcribing reporter.
D. Issues for Comment
Comments may address any issue related to this proposed rule. As
discussed above in today's NOPR, DOE has identified a number of issues
where comments are specifically requested. These issues include, but
are not limited to, the following:
The baseline units and the base cases;
Any likely adverse affects of the standards on
identifiable groups of consumers;
Market share elasticities;
Usage elasticities;
The characterization of prototypical firms for the
manufacturer impact analysis;
Efficiency forecasts for these products;
Any lessening of product utility resulting from the
incorporation of the design options identified, including but not
limited to the addition of insulation;
The effects of standards on manufacturers' incentives to
develop innovative products and product features;
Any uncertainties in modeling, especially with regard to
product usage (e.g., changes in usage rates as shown by survey data or
changes in usage of features);
Lifetimes of appliances; and
Maintenance costs and failure rates of appliances and
components.
[[Page 37414]]
Appendices
I. Acronyms and Abbreviations
As a convenience to the reader, the following list of acronyms and
abbreviations is provided. Their application is limited to the preamble
of this NOPR on Energy Conservation Standards for Refrigerators.
ACEEE American Council for an Energy Efficient Economy
ADL Arthur D. Little, Inc.
AHAM Association of Home Appliance Manufacturers
Amana Amana Corporation
ANOPR Advance Notice of Proposed Rulemaking
ARI Air-Conditioning and Refrigeration Institute
CEC California Energy Commission
CFC chlorofluorocarbon
EEI Edison Electric Institute
EER Energy Efficiency Ratio
ELCON Electricity Consumers Resource Council
EPA Environmental Protection Agency
EPCA Energy Policy and Conservation Act
ERA EPA Refrigerator Analysis
FTC Federal Trade Commission
GAMA Gas Appliance Manufacturers Association
GEA General Electric Appliances
GRI Gas Research Institute
GRIM Government Regulatory Impact Model
HCFC hydrochlorofluorocarbon
LBL Lawrence Berkeley Laboratory
LBL/MAM Lawrence Berkeley Laboratory Manufacturer Analysis Model
LBL/MIM Lawrence Berkeley Laboratory Manufacturer Impact Model
LBL/REM Lawrence Berkeley Laboratory Residential Energy Model
max tech maximum technologically feasible
NAECA National Appliance Energy Conservation
NECPA National Energy Conservation Policy Act
NEPA National Energy Policy Act
NOPR Notice of Proposed Rulemaking
NRDC National Resources Defense Council
NRECA National Rural Electric Cooperative Association
NWPPC Northwest Power Planning Commission
NYSEO New York State Energy Office
OMB Office of Management and Budget
ORNL Oak Ridge National Laboratory
OIRA Office of Information and Regulatory Affairs
PG&E Pacific Gas and Electric
SoCal Southern California Edison
TECo. Tampa Electric Co.
UL Underwriters Laboratories
List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Energy conservation,
Household appliances.
Issued in Washington, DC, July 12, 1995.
Christine A. Ervin,
Assistant Secretary, Energy Efficiency and Renewable Energy.
In consideration of the foregoing, it is proposed to amend part 430
of chapter II of title 10, Code of Federal Regulations, as set forth
below.
PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS
1. The authority citation for part 430 continues to read as
follows:
Authority: 42 U.S.C. 6291-6309.
2. Section 430.2 Definitions is amended by adding the following
definitions:
* * * * *
Compact refrigerator/refrigerator-freezer/freezer means any
refrigerator, refrigerator-freezer or freezer with total volume less
than 7.75 cubic feet (220 liters) (rated volume as determined in
Appendix A1 and B1 of subpart B of this part) and 36 inches (0.91
meters) or less in height.
* * * * *
HCFC-free means any product which contains 10 percent or less by
mass hydrochlorofluorocarbon in the blowing agent portion of the foam
insulation used in the product.
* * * * *
3. Section 430.32 is amended by revising paragraph (a) to read as
follows:
Sec. 430.32 Energy conservation standards and effective dates.
The energy conservation standards for the covered product classes
are:
(a) Refrigerators/refrigerator-freezers/freezers. These standards
do not apply to refrigerators and refrigerator-freezers with total
refrigerated volume exceeding 39 cubic feet (1104 liters) or freezers
with total refrigerated volume exceeding 30 cubic feet (850 liters).
(1) Refrigerators/refrigerator-freezers/freezers which contain
HCFCs
------------------------------------------------------------------------
Energy standards equations (Kwh/yr)
effective dates
---------------------------------------
Product class 3 years after
Jan. 1, 1993 publication of
final rule
------------------------------------------------------------------------
1. Refrigerators and
Refrigerator-freezers with
manual defrost................. 13.5AV + 299
0.48av + 299 8.82AV + 248.4
0.31av + 248.4
2. Refrigerator-Freezer--partial
automatic defrost.............. 10.4AV + 398
0.37av + 398 8.82AV + 248.4
0.31av + 248.4
3. Refrigerator-Freezers--
automatic defrost with top-
mounted freezer without through-
the-door ice service and all
Refrigerators--automatic
defrost and: All-refrigerators
with automatic defrost......... 16.0AV + 355
0.57av + 355 9.80AV + 276.0
0.35av + 276.0
4. Refrigerator-Freezers--
automatic defrost with side-
mounted freezer without through-
the-door ice service........... 11.8AV + 501
0.42av + 501 4.91AV + 507.5
0.17av + 507.5
5. Refrigerator-Freezers--
automatic defrost with bottom-
mounted freezer without through-
the-door ice service........... 16.5AV + 367
0.58av + 367 4.60AV + 459.0
0.16av + 459.0
6. Refrigerator-Freezers--
automatic defrost with top-
mounted freezer with through-
the-door ice service........... 17.6AV + 391
0.62av + 391 10.20AV + 356.0
0.36av + 356.0
7. Refrigerator-Freezers--
automatic defrost with side-
mounted freezer with through-
the-door ice service........... 16.3AV + 527
0.58av + 527 10.10AV + 406.0
0.36av + 406.0
[[Page 37415]]
8. Upright Freezers with Manual
Defrost........................ 10.3AV + 264
0.36av + 264 7.55AV + 258.3
0.27av + 258.3
9. Upright Freezers with
Automatic Defrost.............. 14.9AV + 391
0.53av + 391 12.43AV + 326.1
0.44av + 326.1
10. Chest Freezers and all other
Freezers except Compact
Freezers....................... 11.0AV + 160
0.39av + 160 9.88AV + 143.7
0.35av + 143.7
11. Compact Refrigerators and
Refrigerator-Freezers with
Manual Defrost................. 13.5AV + 299
0.48av + 299 10.70AV + 299.0
0.38av + 299.0
12. Compact Refrigerator-
Freezer--partial automatic
defrost........................ 10.4AV + 398
0.37av + 398 7.00AV + 38.0
0.25av + 398.0
13. Compact Refrigerator-
Freezers--automatic defrost
with top-mounted freezer and
compact all-refrigerators--
automatic defrost.............. 16.0AV + 355
0.57av + 355 12.70AV + 355.0
0.45av + 355.0
14. Compact Refrigerator-
Freezers--automatic defrost
with side-mounted freezer...... 11.8AV + 501
0.42av + 501 7.60AV + 501.0
0.27av + 501.0
15. Compact Refrigerator-
Freezers--automatic defrost
with bottom-mounted freezer.... 16.5AV + 367
0.58av + 367 13.10AV + 367.0
0.46av + 367.0
16. Compact Upright Freezers
with Manual Defrost............ 10.3AV + 264
0.36av + 264 9.78AV + 250.8
0.35av + 250.8
17. Compact Upright Freezers
with Automatic Defrost......... 14.9AV + 391
0.53av + 391 11.40AV + 391.0
0.40av + 391.0
18. Compact Chest Freezers...... 11.0AV + 160
0.39av + 160 10.45AV + 152.0
0.37av + 152.0
------------------------------------------------------------------------
(2) HCFC-free refrigerators/refrigerator-freezers/freezers
----------------------------------------------------------------------------------------------------------------
Energy standards equations (Kwh/yr) effective dates
-----------------------------------------------------------
Product class 3 years after 9 years after
Jan. 1, 1993 publication of publication of
final rule final rule
----------------------------------------------------------------------------------------------------------------
19. HCFC-Free Refrigerators and Refrigerator-
Freezers with Manual Defrost....................... 13.5AV + 299
0.48av + 299 9.70AV + 273.2
0.34av + 273.2 8.82AV + 248.4
0.31av + 248.4
20. HCFC-Free Refrigerator-Freezer--partial
automatic defrost.................................. 10.4AV + 398
0.37av + 398 9.70AV + 273.2
0.34av + 273.2 8.82AV + 248.4
0.31av + 248.4
21. HCFC-Free Refrigerator-Freezers--automatic
defrost with top-mounted freezer without through-
the-door ice service and: HCFC-Free all-
refrigerators--automatic defrost................... 16.0AV + 355
0.57av + 355 10.78AV + 303.6
0.38av + 303.6 9.80AV + 276.0
0.35av + 276.0
22. HCFC-Free Refrigerator-Freezers--automatic
defrost with side-mounted freezer without through-
the-door ice service............................... 11.8AV + 501
0.42av + 501 5.40AV + 558.3
0.19av + 558.3 4.91AV + 507.5
0.17av + 507.5
23. HCFC-Free Refrigerator-Freezers--automatic
defrost with bottom-mounted freezer without through-
the-door ice service............................... 16.5AV + 367
0.58av + 367 5.06AV + 504.9
0.18av + 504.9 4.60AV + 459.0
0.16av + 459.0
24. HCFC-Free Refrigerator-Freezers--automatic
defrost with top-mounted freezer with through-the-
door ice service................................... 17.6AV + 391
0.62av + 391 11.22AV + 391.6
0.40av + 391.6 10.20AV + 356.0
0.36av + 356.0
25. HCFC-Free Refrigerator-Freezers--automatic
defrost with side-mounted freezer with through-the-
door ice service................................... 16.3AV + 527
0.58av + 527 11.11AV + 446.6
0.39av + 446.6 10.10AV + 406.0
0.36av + 406.0
26. HCFC-Free Upright Freezers with Manual Defrost.. 10.3AV + 264
0.36av + 264 8.31AV + 284.1
0.29av + 284.1 7.55AV + 258.3
0.27av + 258.3
27. HCFC-Free Upright Freezers with Automatic
Defrost............................................ 14.9AV + 391
0.53av + 391 13.67AV + 358.7
0.48av + 358.7 12.43AV + 326.1
0.44av + 326.1
28. HCFC-Free Chest Freezers and All Other Freezers
Except Compact Freezers............................ 11.0AV + 160
0.39av + 160 10.87AV + 158.1
0.38av + 158.1 9.88AV + 143.7
0.35av + 143.7
29. HCFC-Free Compact Refrigerators and Refrigerator-
Freezers with Manual Defrost....................... 13.5AV + 299
0.48av + 299 13.5AV + 299.0
0.48av + 299.0 10.70AV + 299.0
0.38av + 299.0
30. HCFC-Free Compact Refrigerator-Freezer--partial
automatic defrost.................................. 10.4AV + 398
0.37av + 398 10.4AV + 398.0
0.37av + 398.0 7.00AV + 398.0
0.25av + 398.0
[[Page 37416]]
31. HCFC-Free Compact Refrigerator-Freezers--
automatic defrost with top-mounted freezer and:
HCFC-free compact all-refrigerators--automatic
defrost............................................ 16.0AV + 355
0.57av + 355 16.0AV + 355.0
0.57av + 355.0 12.70AV + 355.0
0.45av + 355.0
32. HCFC-Free Compact Refrigerator-Freezers--
automatic defrost with side-mounted freezer........ 11.8AV + 501
0.42av + 501 11.8AV + 501.0
0.42av + 501.0 7.60AV + 501.0
0.27av + 501.0
33. HCFC-Free Compact Refrigerator-Freezers--
automatic defrost with bottom-mounted freezer...... 16.5AV + 367
0.58av + 367 16.5AV + 367.0
0.58av + 367.0 13.10AV + 367.0
0.46av + 367.0
34. HCFC-Free Compact Upright Freezers with: Manual
defrost............................................ 10.3AV + 264
0.36av + 264 10.3AV + 264.0
0.36av + 264 9.780AV + 250.8
0.350av + 250.8
35. HCFC-Free Compact Upright Freezers with:
Automatic defrost.................................. 14.9AV + 391
0.53av + 391 14.9AV + 391.0
0.53av + 391.0 11.40AV + 391.0
0.40av + 391.0
36. HCFC-Free Compact Chest Freezers................ 11.0AV + 160.0
0.39av + 160 011.0AV + 160.0
0.39av + 160.0 10.45AV + 152.0
0.37av + 152.0
----------------------------------------------------------------------------------------------------------------
AV = Total adjusted volume, expressed in ft\3\ as determined in Appendices A1 and B1 of Subpart B of this Part.
av = Total adjusted volume, expressed in Liters.
* * * * *
[FR Doc. 95-17625 Filed 7-19-95; 8:45 am]
BILLING CODE 6450-01-P
