u.s. department of energy public meeting on …...5 public meeting on 6 energy conservation...

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OLENDER REPORTING, INC.

1100 Connecticut Avenue NW, #810, Washington, DC 20036

Washington: 202-898-1108 • Baltimore: 410-752-3376

Toll Free: 888-445-3376

U.S. Department of Energy 1

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Public Meeting on 5

Energy Conservation Standards for 6

Commercial Heating and Test Procedures for ASHRAE 7

Equipment, Certain Industrial Equipment 8

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1:02 to 2:01 p.m. 11

Friday, February 6, 2015 12

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U.S. Department of Energy 14

Room 8E-089 15

1000 Independence Avenue, S.W. 16

Washington, D.C. 20585 17

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Moderator: 1

DOUG BROOKMAN, Public Solutions 2

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DOE Staff: 4

JOHN CYMBALSKY, Program Manager, 5

Appliance Standards 6

RONALD MAJETTE, Project Lead 7

ERIC STAS, Office of General Counsel 8

ASHLEY ARMSTRONG 9

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Attendees: 11

PAUL L. DOPPEL, Mitsubishi Electric 12

DICK LORD, Carrier Corporation. 13

NICK MISLAK, Air Conditioning, Heating, 14

and Refrigeration Institute 15

LOUIS STARR, NEEA 16

MARSHALL HUNT, Pacific Gas and Electric Company 17

RACHEL FEINSTEIN, Hearth, Patio, and Barbecue 18

Association 19

AMY SHEPHERD, Air Conditioning, Heating, 20

and Refrigeration Institute 21

RANDY PALM, Allied Air 22

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Attendees: (continued) 1

DAVE WINNINGHAM, Allied Air 2

STEVE ROSENSTOCK, Edison Electric Institute 3

JOANNA MAUER, Appliance Standards Awareness 4

Project 5

LAURA G. PETRILLO-GROH, AHRI 6

ANIRUDDH ROY, Goodman Manufacturing 7

ROBERT WHITWELL, Carrier Corporation 8

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Consultants: 10

ED CUBERO, Lawrence Berkeley National 11

Laboratory 12

SEAN FALTERMEIER, Navigant 13

GREG ROSENQUIST, Lawrence Berkeley National 14

Laboratory 15

CHRIS LAU, Navigant 16

ALISON WILLIAMS, Lawrence Berkeley National 17

Laboratory 18

SCOTT MORRIS, Pacific Northwest National 19

Laboratory 20

COLLIN WEBER, Navigant 21

XING XU, Navigant 22

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Also Present: 1

SARAH MEDEPALLI, ICF International 2

GLENN HARRISON, Attorney, Department of Justice 3

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C O N T E N T S 1

PAGE 2

Introduction and Overview, Determination 3

of Scope 12 4

Test Procedures 15 5

Market Assessment; Engineering 17 6

Markups; Energy Use; Life-Cycle Cost and 7

Payback Period Analysis 34 8

Shipments; National Impact Analysis 55 9

Emissions and Utility Impact Analyses 63 10

Closing Remarks 64 11

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P R O C E E D I N G S 1

MR. BROOKMAN: Let's start then, if you 2

would, please. Good afternoon. This is the 3

Energy Conservation Standards Notice of Proposed 4

Rulemaking meeting regarding Energy Conservation 5

Standards and Test Procedures for ASHRAE 6

Equipment, Certain Industrial Equipment. 7

Today is February 6th, 2015, here in the 8

Forrestal Building, Washington, D.C. 9

Welcome to all. My name is Doug 10

Brookman, Public Solutions, Baltimore. Good to 11

see you here. 12

We are going to start with welcoming 13

remarks from Ashley Armstrong. 14

MS. ARMSTRONG: I'd just like to welcome 15

everyone to our public meeting on the test 16

procedures -- or the test procedure and the 17

energy conservation standards for certain 18

equipment in ASHRAE Standard 90.1. 19

Obviously, the point of this meeting is 20

to gather feedback on what DOE has put out in its 21

proposed rule. So we strongly encourage you to 22

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speak up whenever you have a comment or question 1

about either our analysis or our regulatory 2

proposal, and we appreciate you all coming here 3

on this Friday afternoon in chilly Washington, 4

D.C. 5

MR. BROOKMAN: Thank you. 6

We always start with introductions, and 7

we will start to my immediate left. You can get 8

used to turning the microphone both on and off, 9

and name and organizational affiliation. 10

MR. WHITWELL: So I'm Bob Whitwell. I'm 11

with Carrier Corporation. 12

MR. LORD: Dick Lord with Carrier. 13

MR. PETRILLO-GROH: Laura Petrillo-Groh, 14

Air Conditioning, Heating, and Refrigeration 15

Institute. 16

MR. DOPPEL: Paul Doppel, Mitsubishi 17

Electric. 18

MR. STARR: Louis Starr, Northwest Energy 19

Efficiency Alliance. 20

MR. HUNT: Marshall Hunt, Pacific Gas and 21

Electric Company and the California IOUs. 22

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MR. PALM: Randy Palm, Allied Air. 1

MR. BROOKMAN: Oh, we missed someone. 2

MS. FEINSTEIN: Rachel Feinstein, Hearth, 3

Patio, and Barbecue Association. 4

MR. BROOKMAN: Thank you, Rachel. 5

Randy? 6

MR. WINNINGHAM: Dave Winningham, Allied 7

Air. 8

MR. ROSENSTOCK: Steve Rosenstock, Edison 9

Electric Institute. 10

MS. MAUER: Joanna Mauer, Appliance 11

Standards Awareness Project. 12

MR. CYMBALSKY: John Cymbalsky, DOE. 13

MR. XU: Xing Xu, Navigant. 14

MR. FALTERMEIER: Sean Faltermeier, 15

Navigant. 16

MR. CUBERO: Ed Cubero, Lawrence Berkeley 17

National Laboratory. 18

MS. WILLIAMS: Alison Williams, LBNL. 19

MR. BROOKMAN: Please. 20

MR. MEDEPALLI: Sarah Medepalli, ICF 21

International. 22

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MR. BROOKMAN: Would you introduce 1

yourself. 2

MR. HARRISON: My name is Glenn Harrison. 3

I'm an attorney with the Department of Justice. 4


MR. LAU: Chris Lau, Navigant. 6

MR. WEBER: Collin Webber, also with 7

Navigant. 8

MR. ROSENQUIST: Greg Rosenquist, LBNL. 9

MR. BROOKMAN: Welcome again to all of 10

you. Glad you could make it this afternoon. 11

All of you have seen the packet of 12

information, wherein the content for this meeting 13

is displayed. 14

We are going to start off with 15

introductions and overviews and determination of 16

scope. We will go from there directly into a 17

presentation and discussion on test procedures. 18

Following that, market assessment and 19

engineering; and moving directly, markups, energy 20

use, life-cycle cost and payback period analysis; 21

then shipments, national impact analysis; then 22

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emissions and utility impact analyses; and then 1

followed by closing remarks at the end of the 2

day. 3

We will take a break midafternoon, as 4

required around about 2:30, 2:45, somewhere in 5

there. 6

I would ask for your consideration. Most 7

of you are very familiar with the way these 8

meetings typically go. If you would speak one at 9

a time. Each time you speak, say your name for 10

the record. There will be a complete transcript 11

of this meeting made available, and be concise to 12

share the airtime. If you'd turn your cell 13

phones on silent mode and limit sidebar 14

conversations. You've already gotten used to 15

turning the microphones on and off. 16

Webinar participants, we welcome you. 17

The Department of Energy is trying to make these 18

meetings totally accessible to everyone via the 19

Web. Please turn your phones on mute. Raise 20

your hand to be recognized to speak, and we ought 21

to be able to have you be a part of this 22

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conversation here in the room. 1

And that is the bulk of the overview 2

material, except to say the Department strongly 3

encourages everyone, including everyone who is 4

joining us via the Web, to submit their written 5

comments. The written comments are very, very 6

important for the resolution and ongoing work in 7

these rulemaking matters. 8

Do you wish to do the purpose of the 9

public meeting slide? 10

MS. ARMSTRONG: Sure. I can do that. 11

So I will go back one, because I was just 12

moving right along quickly. 13

So I think everyone knows we are here 14

today to present the Department's proposal with 15

respect to certain ASHRAE equipment in 90.1. 16

Obviously, we invite you to make comment, as I 17

said at the outset, and invite participation 18

whenever possible. 19

As Dave noted in this morning's meeting, 20

we do have a few issues box that we have 21

specifically highlighted throughout the 22

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presentation. Those are the areas that, 1

obviously, the Department is specifically seeking 2

comment. They correspond with some of the issues 3

we teed up with comment. 4

That being said, we welcome you to 5

interject at any time in the presentation and 6

bring up any questions or issues or comments that 7

you may have, so please feel free. 8

And now if anybody would like to make 9

opening remarks, please feel free to do so. 10

MR. BROOKMAN: Summary remarks here at 11

the outset? 12

[No audible response.] 13

MR. BROOKMAN: Nothing at this time. 14

Okay. Well, then let's go into the 15

content 16

MS. ARMSTRONG: Okay. I'm going to go 17

fairly quickly through most of this stuff. Feel 18

free to slow me down, though, if we have 19

questions about a specific area or we'd like to 20

make comments about it. 21

So, obviously, this is our statutory 22

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trigger and why we are all here today. ASHRAE 1

acted in 90.1-2013 and increased the stringency 2

for certain types of what DOE calls ASHRAE 3

equipment. 4

EPCA directs DOE then to review what 5

ASHRAE has done, and we must amend the standards 6

at the new ASHRAE levels, unless DOE can combine 7

-- unless clear and convincing evidence supports 8

a determination that adoption of a more stringent 9

standard would be those three things. 10

ASHRAE 90.1-2013 was officially released 11

on October 9th, 2013, hereby bringing us to this 12

NOPR. 13

So the next slide just gives you an 14

overview of what's in scope in the rulemaking and 15

what’s our proposed action. So for oil-fired 16

storage water heaters, we are adopting -- we 17

propose to adopt ASHRAE for small three-phased 18

air-cooled air conditioners, both single-package 19

and single-package and split-system heat pumps, 20

less than 65,000 in cooling capacity, we propose 21

to adopt ASHRAE. 22

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For water-source heat pumps, we are 1

proposing to adopt ASHRAE. For package terminal 2

air conditioners and for single-package vertical 3

units, both air conditioners and heat pumps, we 4

are investigating those in separate rulemaking 5

dockets, as we're going further analysis on the 6

evaluation of those. 7

So this is where we are in terms of 8

what's in for this rulemaking, and the ones where 9

it says they're in further analysis in a separate 10

docket, it will not be the subject of today's 11

proceeding. 12

So this just provides an overview of why 13

we propose to adopt ASHRAE for the three -- what 14

I would call -- categories of equipment that were 15

in the NOPR. One is for oil-fired storage water 16

heaters. You can see that the energy savings 17

estimated in the notice of date of availability, 18

we found to be de minimis, so we proposed to 19

adopt the ASHRAE levels. 20

For three-phased air-cooled air 21

conditioners and heat pumps less than 65,000, we 22

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found that there was lack of clear and convincing 1

evidence justifying higher standards, and then 2

for water-source heat pumps, we determined 3

tentatively, at least in the proposal, that there 4

was a lack of clear and convincing evidence to 5

justify higher standards, primarily due to a 6

variety of different things, but mainly has to do 7

with some data uncertainties in the analysis 8

we've done, and we will get through that a little 9

bit later as we walk through our specific 10

analysis. 11

So I am going to hit really quick on the 12

test procedure update we're doing in this 13

proposal. EPCA requires the DOE to amend any 14

test procedures for ASHRAE products to the latest 15

versions that are reflected in 90.1. 16

When we did the review, as you know, we 17

have been updating test procedures quite a bit as 18

of late to try to do some revisions and catch up 19

to industry standards, at least in our 20

rulemakings. 21

The one we found in 90.1 that is an 22

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ASHRAE product that we had not yet evaluated for 1

adoption is for gas-fired warm-air furnaces. So, 2

in this rule, we propose to update to the latest 3

industry standard versions. 4

When we did a comparison between our 5

current methods as well as those in this new 6

version, we found that the methods were the same. 7

So DOE does not expect any of the ratings to 8

change as a result of this proposal, but we did 9

want to harmonize with the latest industry 10

versions to make sure we keep up. 11

So that's it for the test procedure 12

section. I don't know if anyone has any specific 13

comments on our proposal to update with the 14

latest version for warm-air furnaces or not, but 15

if not, we will move on. Do you generally agree 16

with that? 17

MR. BROOKMAN: I see some heads nodding. 18

It would be nice to get some verbal comment on 19

the record. 20

Laura. 21

MS. PETRILLO-GROH: Laura Petrillo-Groh, 22

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AHRI. 1

We strongly support DOE, DOE's actions, 2

proposed action. 3


MS. ARMSTRONG: Just generally, right? 5

MS. PETRILLO-GROH: Always. 6

[Laughter.] 7

MR. WINNINGHAM: This is Dave Winningham 8

from Allied Air, and we support DOE's actions in 9

regard to this. 10

MR. BROOKMAN: And maybe we can just -- 11

no. It's good to get verbal confirmation. 12

MS. ARMSTRONG: I am going to pass it over 13

to Xing, and Xing is going to talk about what we 14

did specifically in our analysis of the two areas 15

where we actually did a cost-benefit analysis. 16

MR. XU: All right. Thanks, everyone. 17

My name is Xing Xu, and today, I am going to talk 18

about the market assessment and engineering 19

analysis for the three-phase CAC equipment. 20

So this slide outlines the ASHRAE 21

rulemaking process. I'm pretty sure that 22

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everyone is quite familiar with this process. 1

So for this analysis, DOE started by 2

publishing a NODA, and the current phase is the 3

NOPR analysis. So DOE started by the market 4

assessment and engineering analysis and followed 5

by a markup analysis, and together with the 6

energy use analysis, DOE developed the life-cycle 7

cost and payback period analysis. And also, with 8

the shipment data, DOE further analyzed the 9

national impact analysis followed by the emission 10

impact, monetization and the utility impact 11

analysis. 12

So the following sections include 13

analysis for two types of equipment. Three-phase 14

air-cooled commercial air conditioning and 15

heating equipment with a capacity less than 16

65,000 Btu per hour as well as the water-source 17

heat pumps. 18

So I am going to start with the 19

three-phase CAC analysis. 20

Equipment classes for the three-phase CAC 21

equipment, the current federal standards do not 22

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differentiate between the split- and 1

single-package equipment for the three-phase CAC 2

equipment. 3

And ASHRAE 90.1-2013 divides the small 4

three-phase commercial heating and cooling 5

equipment into four subcategories, based on the 6

functionality and the configuration. 7

So, in this rulemaking, DOE proposes to 8

amend the equipment classes and also to adopt 9

this in the equipment classes for the three-phase 10

analysis. Basically, we are looking at the 11

split-system air conditioner and heat pump and 12

single-package air conditioners and heat pumps, 13

less than 65,000 Btu per hour. 14

So for the engineering analysis, the 15

purpose is to characterize the relationship 16

between the manufacturing cost and energy 17

efficiency. 18

So to conduct the engineering analysis, 19

DOE started by developing the baseline for each 20

equipment class, and then DOE developed the 21

efficiency levels that span the full range from 22

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the baseline all the way to the max tech for each 1

equipment class, and then we conducted physical 2

and catalog teardowns and conducted the cost 3

modeling for units at each efficiency level that 4

we determined. 5

Then by combining efficiency levels as 6

well as the cost we developed, we created the 7

cost-efficiency curves for each equipment class. 8

So baseline and max-tech efficiency 9

levels for the three-phase equipment, in this 10

analysis, DOE used ASHRAE 90.1-2013 as the 11

baseline efficiency levels for the four equipment 12

classes, and as you can see from the table below, 13

the split AC, the baseline is 13, while the three 14

remaining equipment classes, they all start with 15

14 SEER. 16

HSPF for the split-system heat pump is 17

8.2, and for single-package heat pump, it starts 18

with 8.0. 19

And then DOE established the incremental 20

efficiency levels based on review from the AHRI 21

database manufacturing catalogs and the other 22

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available information. 1

And the max-tech efficiency levels were 2

determined by the market research for the AHRI 3

database as of November 2013. 4

MR. BROOKMAN: Louis. 5

MR. STARR: Louis with NEEA. 6

On the baseline using the ASHRAE standard 7

2013 as the baseline, is that representing that 8

the current market standards of the equipment is 9

at that level, or will that be at that level at 10

2019? Where is the baseline drawn at, and what 11

is the assumption about the equipment? 12

MR. XU: In this analysis, DOE looked at 13

the AHRI directory, and so we plotted the 14

different product class, the different equipment 15

classes, and a look at the efficiency levels, so 16

we still considered the ASHRAE standard at 2013 17

levels for each equipment class. They are still 18

representative of the current market, so that is 19

why we are using that as a baseline. 20

MS. ARMSTRONG: So, to clarify, it is not 21

necessarily a market baseline, but we have to 22

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adopt ASHRAE. We can't do anything less than 1

ASHRAE. So we start our analysis with the ASHRAE 2

90.1 being the baseline, because really we are 3

trying to evaluate whether we should go beyond 4

ASHRAE. By law, the ASHRAE becomes a default. 5

MR. BROOKMAN: Dick. 6

MR. LORD: Dick Lord with Carrier. 7

One thing to clarify is it says 2013, but 8

it is really effective January 1, 2015. It is 9

one of those delayed implementation dates. 10

MR. STARR: 2016, right? 11

MR. LORD: 2015 for this product. 12

MR. BROOKMAN: Bob? 13

MR. WHITWELL: Yeah. I just wanted to 14

clarify for Louis also that at least as of 15

November 2013, most of the market for 16

single-package air conditioner and heat pump, for 17

example, were 13. 18

MR. BROOKMAN: Marshall? 19

MR. HUNT: Hi. This is Marshall Hunt, 20

California Utilities. 21

I am very concerned we don't have EER 22

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anywhere here, and we also don't have this level 1

at the level that required for residential 2

equipment, and this equipment's near cousin is 3

residential. 4

In the commercial setting, this is going 5

to use a lot more energy, so I am very surprised 6

that we don't have SEER 14 for split system, and 7

we also don't have EER listed. So we will 8

continue to be very concerned about that peak 9

demand. 10


Additional comments here? 12


MR. BROOKMAN: Okay. 14

MR. XU: All right. So this slide 15

summarizes the incremental efficiency levels for 16

the four equipment classes that we looked at. As 17

you can see, in addition to the ASHRAE baseline, 18

DOE analyzed additional six efficiency levels, 19

and we have listed the efficiency level zero for 20

the split AC because there is only -- only for 21

the split AC, we have the 14 SEER. 22

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And then for the max tech for split AC 1

and single-package AC, it goes to 19 SEER, and 2

for the split heat pump and single-package heat 3

pump, the max tech we identified were 18. The 4

HSPF listed in the tables here, this was based on 5

the correlation between SEER and HSPF from the 6

single-phase product back to the 2011 direct 7

final rule. 8

So manufacturer cost model, the 9

manufacturer cost model was developed as part of 10

the reverse engineering approach, and DOE started 11

this analysis by selecting representative units, 12

and then we conducted physical teardowns to 13

generate the bill of materials, and from the bill 14

of materials, we have the purchased parts as well 15

as the raw materials that need to go through a 16

different fabrication process. So we considered 17

those manufacturing processes to develop the 18

manufacturing cost. 19

So in the case that a physical teardown 20

is not feasible, DOE conducted catalog teardowns 21

which means that it is based on manufacturer 22

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literature. We collected information such as 1

compressors and heat exchangers and data analysis 2

as similar fashion for the physical teardowns to 3

develop the cost. 4

In this analysis, we considered 3-ton 5

units as the representative capacity. 6

Also, during the market research, we 7

noticed that the three-phase equipment and the 8

single-phase products, there are a lot of 9

similarities between the two. So the majority of 10

the cost models were essentially based on the 11

single-phase products. 12

So if we don't have any questions, I am 13

going to pass it on to Sean for the water-source 14

heat pumps. 15

MR. FALTERMEIER: All right. My name is 16

Sean Faltermeier. I'm with Navigant Consulting. 17

I will be discussing the market assessment and 18

engineering analysis conducted for the second 19

type of equipment we will be looking at, 20

water-source heat pumps. 21

First, we will look at the definitions 22

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and nomenclature. In Standard 90.1-2013, ASHRAE 1

changed the name of the equipment type from 2

"water-source" to "water-to-air, water-loop" heat 3

pumps. DOE is proposing to change its name to 4

match this change in ASHRAE, calling the 5

equipment class "water-source (water-to-air, 6

water-loop) heat pumps." 7

ASHRAE also changed the heating mode 8

efficiency metric from just COP to COPH, and DOE 9

has tentatively decided not to adopt this 10

editorial change, which it deemed only clarifying 11

the difference between COP for refrigeration and 12

heat pumps. 13

Also, because there is currently no 14

definition for water-source heat pumps in the 15

U.S. Code or Code of Federal Regulations, DOE is 16

proposing the following definition, which is 17

largely adopted from that in the ASHRAE handbook. 18

DOE seeks comment on this proposed 19

definition for water-source heat pumps. 20

Comments? 21

MR. BROOKMAN: I see no comments here. 22

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Yes, please. Paul. 1

MR. DOPPEL: So this would not include 2

the water-source heat pumps that are part of the 3

VRF systems? 4

MS. ARMSTRONG: This is Ashley from DOE. 5

That's correct. They're separate. 6

MR. DOPPEL: Thank you. 7

MS. ARMSTRONG: Are you sure you don't 8

want to take an earlier flight? 9

[Laughter.] 10

MR. DOPPEL: That was my one question. 11

I'm ready to go. 12

[Laughter.] 13

MR. BROOKMAN: Okay. So nothing 14

additional here? 15



MR. FALTERMEIER: Moving on, to begin the 18

market assessment, DOE looked at the market for 19

all units falling into the equipment classes 20

under review. The equipment classes used are 21

those defined in ASHRAE 90.1-2013, which are the 22

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same as currently used in the federal standards. 1

There are three equipment categories for 2

water-source heat pumps separated by cooling 3

capacity, as you can see in the table here, less 4

than 17,000 Btu per hour, between 17,000 and 5

65,000 Btu per hour, and between 65,000 and 6

135,000 Btu per hour. 7

DOE obtained all its equipment and market 8

data from the AHRI-certified product database as 9

of November 2013. 10

More details and results from the market 11

assessment can be found in Chapter 2 of the NOPR 12

TSD. 13

Next, we will get into the engineering 14

analysis for water-source heat pumps. As Xing 15

described for central air conditioners, the goal 16

of the engineering analysis is to develop 17

efficiency levels for each equipment class and 18

then manufacturer production cost estimates for 19

each of these efficiency levels. 20

DOE selected efficiency levels based on 21

the range of efficiencies represented in the AHRI 22

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database for water-source heat pumps. Again, as 1

Ashley clarified, the ASHRAE levels we used as 2

the baseline because these levels must be 3

accepted by rule in EPCA. 4

These efficiency levels are selected for 5

each equipment class based on the metric EER, as 6

the standard for COP was not changed. 7

Beyond the ASHRAE baseline, five 8

additional -- 9

MR. BROOKMAN: Hold on one second. 10

MR. HUNT: Marshall Hunt, PG&E. 11

I am very concerned to know whether you 12

looked at the sisters and brothers of these 13

units. That's the ground-source heat pumps, 14

either closed loop or open loops. Mechanically, 15

they are extremely similar, have extremely 16

similar parts in them. 17

Yes, three-phase, single-phase is 18

different, and yet we see better, much better 19

performance in that market. That market has to 20

have a unit -- this is geothermal -- that goes 21

over a much broader range of temperatures, and 22

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these operate in a much narrower range and can be 1

optimized. 2

I hoped that you looked at those as a 3

similar market. Did you? 4

MR. FALTERMEIER: We looked at those 5

units, but EPCA excludes ground-source and 6

ground-water units from its definition of 7

water-source heat pumps. 8

MR. HUNT: I am not worried about EPCA 9

here. I'm worried about the engineering side of 10

it. In other words, I can buy a ground-source 11

heat pump right now and hook it up to a building 12

water loop, and it would work fine. And that 13

industry has done a fantastic job of efficiency, 14

and it really should be looked at. 15

MR. FALTERMEIER: We did look at those 16

units, and actually, the majority of units that 17

are used or the majority of models rated for 18

ground-loop and ground-water application are 19

actually also rated for water-loop application 20

and therefore would be considered under this 21

rule. 22

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MR. HUNT: I'd like to look at that 1

further. Thank you. 2

MR. BROOKMAN: Additional thoughts on 3

this? 4



MR. FALTERMEIER: Next, manufacturing 7

production cost or MPC estimates were developed 8

using a manufacturing cost model, as Xing 9

described for central air conditioners. However, 10

for water-source heat pumps, instead of using a 11

cost model based upon physically torn-down 12

water-source heat pumps, the cost model from 13

previously torn-down commercial heating and 14

cooling equipment with similar components was 15

adapted for water-source heat pumps, using a 16

catalog data cost analysis approach. 17

To adapt the cost model, published 18

water-source heat pump catalog data along with 19

dimensions, weights, component details, and other 20

specifications were input into the model. 21

DOE conducted these catalog teardowns in 22

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which all the data that could be found for a unit 1

was input into the cost model for over 60 units, 2

spanning the range of equipment classes and 3

efficiency levels. 4

With all of this data, the cost model 5

output MPC estimates for each efficiency level. 6

More details on the methodology and results from 7

this analysis can be found in Chapter 3 of the 8

NOPR TSD. 9

MR. BROOKMAN: Yes, Louis. 10

MR. STARR: Louis Starr, NEEA. 11

Actually, I just had one last question on 12

the last slide. The higher efficiency levels 13

would kind of tie into the question Marshall was 14

asking. Is some of the equipment that are 15

ground-source heat pumps going to be reflected in 16

some of these higher efficiency levels? Would 17

that be an accurate statement? 18

MR. FALTERMEIER: Only those units that 19

are also rated for water-loop application. 20

MR. STARR: Okay. All right. Thanks. 21

MR. BROOKMAN: Bob? 22

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MR. WHITWELL: Yes. so one thing to look 1

at when you look at the ground-source versus the 2

other water-source heat pump, it is a different 3

test procedure, different test standard, with 4

different conditions, and so that drives at least 5

part of the difference in the efficiency level. 6


MR. LORD: [Speaking off mic.] 8

MR. BROOKMAN: Thanks, Dick. 9

Okay. 10

MR. CYMBALSKY: Dick, can you just repeat 11

that for the record? 12

MR. BROOKMAN: Yeah. 13

MR. LORD: Yeah, sure. So sorry about 14

that. Dick Lord with Carrier. 15

I just said, what Bob was saying, there's 16

two different test standards, and when you do 17

ground-source, it's rated a different condenser 18

water temperature, so it tends to make the 19

efficiency levels higher. 20


MR. FALTERMEIER: Okay. That's it for 22

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Toll Free: 888-445-3376

the engineering analysis. 1

I will pass it on to Ed to discuss the 2

markups analysis. 3


MR. CUBERO: I am Ed Cubero, and I will 5

be talking about the markups, energy use, and the 6

life-cycle cost model. 7

I am going to begin to talk about the 8

markups analysis. The purpose of the markups 9

analysis is to determine the customer price based 10

on the manufacturer's production cost for 11

baseline and higher efficiency equipment, and in 12

order to do this, we have to determine the 13

distribution channel that that equipment takes. 14

There will be four distribution channels 15

in this rulemaking, two for new construction and 16

two for replacements, and if you see the 17

percentages in the --, in the consumer box there, 18

that represents the amount of shipments that goes 19

through each distribution channel. 20

Now, in order to determine the markup, we 21

have to determine the expenses and profits at 22

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Toll Free: 888-445-3376

each level. So, for manufacturers, we look at 1

10K reports. For wholesalers, we look at the 2

HARDI Profit Report. For mechanical contractors, 3

we look at the ACCA financial reports and Census 4

data. For general contractors, census data, and 5

for sales taxes, we use the sales tax 6

clearinghouse. 7

There are two types of markups we use, 8

baseline markups, which relate the manufacturer's 9

production cost to the customer purchase price 10

for baseline equipment, and then incremental 11

markups which relate the increase in manufacturer 12

production cost to the increase in customer 13

purchase price for higher efficiency equipment. 14

And the table below represents the markups at 15

different levels in the distribution chain, and 16

the bottom row shows the overall markups we used 17

in our analysis. 18

MR. BROOKMAN: Let's just pause there for 19

a second. Take a peek at that. Any comments on 20

what's listed there? 21


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MR. CUBERO: Okay. Moving on to the 2

energy use analysis. 3

So the purpose here is to determine the 4

unit energy consumption for the equipment at the 5

considered efficiency levels in order to find the 6

annual costs and savings, which are then inputs 7

for the life-cycle cost and payback period model. 8

The method we use here was to use 9

previous DOE reports. We used the 2011 Direct 10

Final Rule for residential central air 11

conditioners as well as the 2000 Screening 12

Analysis for EPACT-covered Equipment. 13

We also adjusted the UECs to account for 14

improvements in buildings over time, and we 15

incorporated variability into the analysis using 16

estimates of full-load equivalent operating hours 17

by building type and by census division. 18

In order to find our base UECs for 19

cooling for three-phase air conditioners and heat 20

pumps, we took the same UECs directly from the 21

2011 Direct Final Rule for residential central 22

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air conditioners, using the portion of those 1

products that were sold to the commercial market. 2

For heating, we determined from the 2011 3

analysis that UEC did not scale with HSPF, with 4

an increase in HSPF. Therefore, we did not 5

include heating in our analysis. 6

For water-source heat pumps, the cooling 7

unit energy consumption came from the 2000 8

Screening Analysis where we were given national 9

full-load equivalent operating data and input 10

capacities. By multiplying the two, we got a 11

national UEC. 12

And on the heating side, we estimated the 13

UECs using data from the Commercial Building 14

Energy Consumption Survey for air source heat 15

pumps, and also because the data from the 2000 16

Screening Analysis was a little old, we use 17

scaling factors from the National Energy Modeling 18

System to account for improvements in the 19

building shell over time. 20

Finally, to incorporate variability into 21

the analysis, we developed distributions of our 22

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Toll Free: 888-445-3376

equipment by building type and by census 1

division. Then we scaled the national UECs by 2

the FLEOH data we had from the 2000 Screening 3

Analysis. 4

MR. HUNT: This is Marshall Hunt. 5

Oh, go ahead, Joanna. 6

MS. MAUER: Joanna Mauer. 7

On the heating for the three-phase 8

central AC and heat pump, I guess I'm having 9

trouble understanding why increasing HSPF -- 10

wouldn't it result in heating energy savings? 11

MR. CUBERO: There is a table in Chapter 12

4 of the TSD, which shows the heat savings were 13

quite small as HSPF increased, but I'm not sure. 14

MS. WILLIAMS: This is Alison. 15

Yeah. It was based on building 16

simulations of equipment in commercial buildings, 17

and the heating UECs were around 500, and they 18

sort of did this with -- 19

[Laughter.] 20

MS. WILLIAMS: Sorry for those who can't 21

see me. 22

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[Laughter.] 1

MS. WILLIAMS: They didn't just go up 2

with HSPF. They kind of dipped. 3

MR. BROOKMAN: They kind of went up and 4

down and all around. 5

MS. WILLIAMS: Yeah. 6

And so our understanding of it was, 7

personally because of the HSPF rating being 8

designed for residential situations and that this 9

is commercial equipment, that it's unclear that 10

putting -- as the simulation shows, that you 11

really actually got much heating energy savings 12

from increasing the HSPF. They are primarily 13

designing for the cooling side, but we certainly 14

do request comment on that. We are requesting 15

comment on the NODA, and we did not receive -- or 16

we received some comments that supported this, 17

but we didn't receive any other data. 18

MR. BROOKMAN: Alison, would you state 19

specifically what you wanted comment on? 20

MS. WILLIAMS: Just if people have 21

concerns about our conclusion that increasing 22

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HSPF for this equipment would not result in 1

energy savings, we would welcome data to 2

demonstrate why that is not the case. 3


Yes, Marshall. 5

MR. HUNT: Marshall Hunt, PG&E. 6

So I think I just heard that heating 7

analysis was done for commercial buildings; is 8

that correct? 9

MR. CUBERO: Yeah. For -- 10

MR. HUNT: Correct. 11

And yet the cooling analysis was done for 12

residential. 13

MR. CUBERO: Oh, sorry. 14

MR. HUNT: Is that correct? 15

MR. CUBERO: Are you talking about 16

water-source heat pumps? 17

MR. HUNT: No, three-phase. 18

MR. CUBERO: No, they're both from -- 19

that's from the residential analysis. 20

MR. HUNT: Cooling is from residential? 21

MR. CUBERO: Yeah. 2011 Direct Final 22

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Rule for residential. 1

MS. WILLIAMS: For residential used in 2

commercial applications. 3

MR. HUNT: What was the simulation? What 4

was the building you worked with? 5


I don't have the specifics in front of me 7

because the simulations were done for the 2011 8

DFR, and so I would have to go back and look at 9

that last TSD to remind myself what exactly they 10

modeled, but they were modeling the single-phase 11

equipment in specific commercial applications. 12

MR. CUBERO: And I believe we asked for 13

comment in the NODA period, and everyone said 14

that -- most of the comments came back said that 15

the single-phase UECs for commercial applications 16

were relevant. 17


MR. STARR: So kind of talking -- or 19

going back to what Alison was talking about, 20

typically in the smaller commercial buildings, 21

they tend to be a little more envelope-dominated, 22

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Toll Free: 888-445-3376

more so than the commercial ones. 1

You tend to be affected by the weather a 2

little more, and so as you increased your heating 3

demand, it would seem that you would see -- or if 4

you increased the efficiency of your heating 5

side, you would see that in energy savings. 6

In the typical -- in the larger 7

commercial office, that would be less the case. 8

So I don't know. I guess we will have to look at 9

the models and things, but just as a rule of 10

thumb -- 11

Maybe Dick had some thoughts. 12

MR. BROOKMAN: Yeah. Dick, please. 13

MR. LORD: In the models that PNNL 14

generated that DOE funded, commercial small 15

office buildings do not look like residential. 16

Changeover temperatures are down at 40, 50 17

degrees. Residential is up to 60, 65. So they 18

have a lot of internal plug loads that tend to 19

still make them a cooling-dominated building. 20

MR. STARR: They have typically more 21

envelope loads, right, than your bigger 22

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Toll Free: 888-445-3376

commercial office spaces. 1

MR. LORD: Yeah. If you look at like a 2

large office, a large office may have a 3

changeover temperature down at zero degrees. A 4

small office may be up at 40, 50 degrees. 5

MR. STARR: Okay. 6

MR. LORD: But it's still much, much 7

different than a residential building. 8

MR. STARR: So there ends up not being 9

that much in the way of heating going on, even in 10

the small commercial buildings? 11

MR. LORD: The other thing to keep in 12

mind, commercial buildings are occupied in the 13

day, unoccupied in the evening, which is usually 14

when you have a lot of your heating. 15

MR. STARR: Okay. 16

MR. BROOKMAN: Yes. Joanna. 17

MS. MAUER: And then I had one question 18

on the cooling side, and I understand that the 19

energy values come from the previous 2011 20

analysis. 21

If I am remembering correctly, the energy 22

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Toll Free: 888-445-3376

savings are smaller than what we would expect, 1

just looking at ratios of SEER values. For 2

example, going from SEER 13 to SEER 14 for the 3

split-system AC, just looking at SEER values, we 4

might expect a 7 percent savings, whereas I think 5

the savings are more like 3 percent. 6

I was just wondering if there was kind of 7

a high-level explanation for why the savings are 8

lower than -- 9

MR. CUBERO: I'm not sure. 10

Alison, do you? 11


I probably don't have the explanation you 13

are really looking for, but we did notice that, 14

certainly, when we reviewed the results of the 15

2011 analysis, they weren't scaling in proportion 16

to SEER. 17

As we said, there are commercial building 18

simulations, and that is what came out of -- 19

Hey. 20

MR. ROSENQUIST: Hi. Greg Rosenquist 21

here. 22

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Toll Free: 888-445-3376

It is due to the ventilation requirements 1

for office buildings, so -- and that fan energy 2

doesn't change from efficiency level to 3

efficiency level. 4

MR. BROOKMAN: Thank you, Greg. I note 5

that a few of your industry friends are nodding 6

their heads in agreement. 7

Steve Rosenstock. 8

MR. ROSENSTOCK: Steve Rosenstock, EEI. 9

There might be a little bit of building 10

demographics here, too, especially northern 11

climates are more likely to be fossil 12

fuel-heated, so it's a smaller base to begin 13

with, possibly. So that might also have 14

something to do with it. 15

MR. BROOKMAN: Okay. Thank you. 16

I guess we are going to move on then. 17

MR. CUBERO: Now we will talk about the 18

life-cycle cost and payback period analysis. 19

So the purpose here is to provide an 20

economic evaluation from the consumer's 21

perspective of the purchase of higher efficiency 22

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Toll Free: 888-445-3376

equipment, and the life-cycle cost is the total 1

consumer cost over the life of the equipment. 2

The payback period is the time required to 3

recover the increased purchase price through 4

operating cost savings. 5

And the method, we used a Monte Carlo 6

simulation, so we ran the LCC model through 7

10,000 different iterations, and then we took the 8

average of those to calculate our LCC savings. 9

The first input we looked at was total 10

installed cost. Total installed cost, the sum of 11

the equipment price and the installation cost. 12

The equipment price came from the markups 13

analysis. DOE also looks at producer price index 14

to determine price trends over time. 15

We looked at two PPI series here. The 16

first was for commercial unitary air 17

conditioners, the second was for refrigeration 18

and heating equipment, and there was no 19

discernible upward or downward trend, so we 20

maintained constant real prices to project our 21

future equipment price. 22

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Toll Free: 888-445-3376

The installation costs represent labor 1

and materials that are required to install the 2

equipment. These costs came directly from RS 3

Means for the appropriate equipment, and 4

installation costs do scale with larger, with 5

higher efficiency equipment. As the weight 6

increases of higher efficiency equipment, the 7

installation cost will scale proportionally. 8

Second, I will talk about annual 9

operating costs. So there are three annual 10

operating costs. The first is annual energy 11

costs, then maintenance costs and repair costs. 12

The annual energy costs are calculated by 13

taking the energy use, annual energy use, and 14

multiplying it by the electricity price. Our 15

electricity prices were by Census Division, and 16

they were taken from tariff data, which has been 17

processed into commercial building marginal and 18

average prices. 19

In order to project future electricity 20

prices, we used the Annual Energy Outlook from 21

2014. 22

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Toll Free: 888-445-3376

The maintenance costs represent labor and 1

materials required to maintain the equipment. 2

These came directly from RS Means, and they don't 3

increase with the efficiency of equipment. 4

And finally, repair costs are associated 5

with repairing or replacing components that have 6

failed, and the materials portion of the repair 7

costs were scaled with the equipment weight, so 8

they grow by efficiency level. And in order to 9

make the repair cost into an annual value, DOE 10

assumed the repair would happen in year 10, and 11

we took the present value of that number and 12

divided it over the equipment lifetime. 13

For both maintenance and repair cost, we 14

didn't have any RS Means available for 15

water-source heat pumps, so we used the data for 16

air-source heat pumps, assuming that was 17

representative of water-source heat pumps. 18

So next, looking at the equipment 19

lifetime, lifetime is defined as the age when the 20

equipment is retired from service. We used a 21

survival function in the form of a Weibull 22

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Toll Free: 888-445-3376

distribution, which is from the 2011 Direct Final 1

Rule of residential air conditioners, and we came 2

up with median values for three-phase central air 3

conditioners and water-source heat pumps of 17.7 4

years and 14.6 years for three-phase central heat 5

pumps. 6

And we also applied discount rates to the 7

future operating expenses to bring them back to 8

the year of purchase, which in this case would be 9

2020, the compliance year. These are estimated 10

as the weighted average cost of capital for the 11

types of firms who have this type of equipment. 12

For three-phase central air conditioners 13

and heat pumps, we assumed it was the small 14

office and small retail market, and for 15

water-source heat pumps, we assumed office -- the 16

office market, public market, lodging, property 17

owners, and medical services. And our 18

information came from Damodaran Online. 19


MR. STARR: Louis with NEEA. 21

So on the survival function, it seems 22

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Toll Free: 888-445-3376

like since it's commercial equipment, it's 1

generally built a little better, so it seems like 2

the lifetime -- so the residential ones you're 3

pulling of 17.6 -- 17.7, 14.6, it seems like the 4

commercial ones would have perhaps greater life. 5

MR. CUBERO: That was actually one of the 6

comments we were going to ask. The box is coming 7

up. 8

MR. STARR: Looks like -- 9

MR. LORD: Yeah. I mean, they are 10

typically designed the same, same basic process. 11

The residential is probably higher tooled than 12

the commercial, so we typically use a 15-year 13

design life. 14

That's what we do for all the ASHRAE 15

analysis, and that's what we design to. We 16

sometimes miss, and they go 17 years. 17

[Laughter.] 18

MR. STARR: Aren't the commercial 19

products more durable, though, than -- 20

MR. LORD: No. No different components. 21

No thicker steel. No. 22

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Toll Free: 888-445-3376

MR. WINNINGHAM: This is Dave from Allied 1

Air, and I would concur with Dick. 2

In a lot of cases, there may be some 3

special three-phase products. The majority of 4

these are residential-type products with 5

components changed out for a three-phased 6

application. 7

MR. LORD: To add things like economizers 8

and features like that. That's what we do. 9

MR. BROOKMAN: Okay. Thank you. 10

Helpful. 11

Yes, please. 12

MR. ROY: Hi. Aniruddh Roy with Goodman. 13

I might be getting ahead of myself here, but I am 14

just looking at the TSD Chapter 6 life-cycle cost 15

and payback period. There is a table in there 16

which talks about the simple payback period years 17

for split-system ACs, less than 65,000 18

three-phase, and the simple payback is 68 years 19

at EL zero. 20

And over here, it seems like you are 21

looking at a medium lifetime of 17.7 years, so 22

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Toll Free: 888-445-3376

that's about four times that life, that equipment 1

life that it's operating at. 2

Also, my question is -- I wanted to make 3

that one point, and the other one is that you are 4

talking about, in this Slide 33 -- actually, the 5

previous slide -- repair costs assumed to take 6

place every 10 years. So did you account for 7

that seven times over when you did the analysis? 8

MR. CUBERO: The simple payback is just 9

the LCC savings divided by the equipment -- the 10

change in equipment price between efficiency 11

levels. It is undiscounted. 12

Yeah. So there's very little LCC savings 13

because there's very little electricity savings, 14

so it's just that that sort of payback is going 15

to be a lot longer. 16

When we run the LCC model, we only run it 17

through one lifetime, so it's not -- yeah. We're 18

not assuming there's four lifetimes of equipment 19

in a 68-year payback period. 20

MR. BROOKMAN: So, correspondently, you 21

wouldn't have the repair costs. 22

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Toll Free: 888-445-3376

MR. CUBERO: What was that? 1

MR. BROOKMAN: Nothing. 2

[Laughter.] 3

MR. BROOKMAN: Okay. Additional 4

thoughts? Comments? 5


MR. CUBERO: Okay. So, finally, we have 7

a base-case efficiency distribution. So this 8

defines the percentage of products that are being 9

sold at each efficiency level, and we base this 10

on the AHRI-certified directory, on model 11

availability in that directory, and we also 12

assumed a trend of 1 SEER every 35 years, so we 13

take the base-case efficiency distribution this 14

year and apply it to 2020 by applying that trend 15

of meeting in the absence of a standard, the 16

efficiency will improve by 1 SEER every 35 years. 17

And these are two requests for comment. 18

The first was about the use of RS Means for 19

maintenance, repair, and installation costs, and 20

if not appropriate, if there is more data, we 21

would be happy to look at it. And the second was 22

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Toll Free: 888-445-3376

for lifetimes and if the use of the Weibull 1

distribution was appropriate. 2

Finally, since there are seven different 3

product types, rather than having seven slides, 4

just to give you an example of what the results 5

look like for three-phase single-package air 6

conditioners, we start with the ASHRAE baseline, 7

and five efficiency levels above that, and all 8

the life-cycle savings are compared to the ASHRAE 9

baseline. 10

Question? 11

MR. BROOKMAN: Yes, please. Steve. 12

MR. ROSENSTOCK: Steve Rosenstock, Edison 13

Electric Institute. 14

Percent of customers. Is that percent of 15

customers with higher life-cycle cost rather than 16

new cost? I'm not sure what new means in that 17

perspective. 18

MR. CYMBALSKY: It's supposed to be net. 19

MR. ROSENSTOCK: With net cost? Okay. 20

Thank you. 21

MR. BROOKMAN: This table is 22

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illustrative. Any questions, comments on the 1

foregoing slide, and particularly the comment 2

boxes that are there, does anybody wish to 3

comment on those? 4



MS. WILLIAMS: Okay. So I am going to 7

talk about the shipments and national impact 8

analysis. 9

The shipments is to -- I feel like I'm 10

repeating myself from this morning. The purpose 11

of the shipments analysis, this is to estimate 12

shipments over the 30-year period. We are using 13

this as an input to the national impact analysis. 14

We are using whatever available sources 15

we could find for the initial shipments and then 16

using other data, such as U.S. Census and AEO 17

floor space to project. 18

I am going to start with the three-phase 19

CAC and CHP equipment. The data we had available 20

to start with for the initial was 1999 estimates 21

from the 2000 Screening Analysis. We requested 22

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Toll Free: 888-445-3376

other data in the NODA and didn't get any, so 1

that's what we started with. 2

We used Census data from 1999 to 2010 to 3

scale the 1999 data forward. We can't use Census 4

data alone because it includes both single-phase 5

and three-phase shipments, so that's why we just 6

used it as a scaling factor. 7

We made some changes from the NODA in 8

this analysis. Part of the problem was that our 9

data ends in 2010 because that Census data is no 10

longer available, and we weren't sure what would 11

happen as a result of this recession and what 12

would occur in the future. 13

So we looked at some AHRI shipments data, 14

which isn't specifically for three-phase CAC, to 15

see what the market did over the last couple of 16

years, and we found that there was a decline 17

through 2010, and then starting in 2011, it 18

started to rebound. So we used the AHRI data to 19

adjust our shipments from 2010 to 2011, and 20

starting in 2011, we had AEO 2014 floor space 21

data available that we used to project the 22

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Toll Free: 888-445-3376

shipments. And that's about a 1 percent annual 1

growth rate that we're using into the future. 2

On the water-source heat pumps side, we 3

used U.S. Census data completely. We had several 4

available years. We used the 1999 to 2010 5

segment to project shipments past 2010, and 6

that's for all water-source heat pumps. We used 7

the allocation between equipment classes that was 8

found in the 2000 Screening Analysis to 9

disaggregate those, and that's the extent of that 10

analysis. 11

So these are just the resulting trends 12

that you will see here for both the three-phase 13

CAC and water-source heat pump. We are using the 14

same shipments in both the base case the 15

standards cases, and so that's what our issue box 16

is here, just requesting comment on that. 17

MR. BROOKMAN: Steve Rosenstock. 18


I guess I am kind of struck. I look on 20

Slide 40 for the three-phase CAC and CHP, and I 21

see either flat or declining sales based on all 22

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the data that you have, and now you're showing 1

increasing sales. I know you're relying on 2

different data, but I just -- I'm just surprised 3

that you're showing any increase overall. 4

I can see flat, but the history that you 5

show is shown declining. So I guess I am a 6

little -- 7

MS. WILLIAMS: Sure. And we used -- in 8

the NODA, we used these trends, and some were 9

declining, and some were increasing, and I think 10

we switched to constant for one because we 11

weren't sure. So that's why we reviewed the AHRI 12

data, and we felt that it did clearly demonstrate 13

that there was a turnaround in 2011, and we would 14

expect the market to increase, which is why you 15

see that 1 percent annual growth rate. 16

However, obviously, we welcome actual 17

shipments data for this equipment, which we don't 18

have right now. 19

[Laughter.] 20

MR. ROSENSTOCK: This is Steve 21

Rosenstock, EEI. 22

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Toll Free: 888-445-3376

I am looking at Slide 40. Aren't these 1

actual data points? 2

MS. WILLIAMS: Okay. So -- wait. Slide 3

what? 4

MR. BROOKMAN: 40. 5

MR. ROSENSTOCK: The one you're on right 6

now, that one. 7

MS. WILLIAMS: Okay. That is the 1999 8

data scaled with Census data, and so the issue 9

with the Census data is this is not strictly for 10

this equipment class. So we're using it as a 11

scaling factor, but it's not specific to this 12

class. 13

So the only data we have exactly for this 14

is literally from 1999. 15


So everything since then is just total -- 17

MS. WILLIAMS: Yeah. 18

MR. ROSENSTOCK: Wow! Okay. 19

MS. WILLIAMS: I mean, we're using what 20

we have to do the best we can, and unless we get 21

actual industry data for that specific equipment 22

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class, this is currently the best we can do. 1

MR. BROOKMAN: Louis Starr. 2

MR. ROSENSTOCK: Thank you. 3

MR. STARR: So I guess, essentially, 4

you're assuming a 1 percent increase in shipments 5

for the next 30 years. 6

I am kind of trying to understand. The 7

building stock is becoming more, right? Is it at 8

that same level? It almost seems like they have 9

to put equipment in building, right? So is it 10

just going to be 1 percent, or is it -- I mean, 11

it seems like it almost might be with the 12

proportion to the increase in building 13

population. 14

MS. WILLIAMS: Right. So this is 15

proportional. We are scaling with the AEO 2014 16

floor space forecast for the sectors that we're 17

looking at here, so that's what it is. 18

MR. STARR: Well, that seems reasonable 19

to me. 20

MS. WILLIAMS: Okay. 21

[Laughter.] 22

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Toll Free: 888-445-3376

MS. WILLIAMS: All right. So I am going 1

to move on to the national impact analysis. We 2

determined the national energy savings and 3

customer national net present value resulting 4

from potential amended standards. 5

We do this using a time series of energy 6

and economic impacts. We, of course, used the 7

shipments model to find out what the stock is, 8

and we're aggregating those costs and energy use 9

per unit in any given year and reporting the 10

estimates as change in consumer national net 11

present value. 12

We do, of course, use discount rates to 13

account for the time-value of money. 14

What you saw this morning, for those who 15

were here, we take the LCC analysis results and 16

other inputs along with the shipments model and 17

put them into the NIA model to get these energy 18

savings and economic impact outputs. 19

They are for 30 years of equipment 20

shipped, and so the energy savings and economic 21

impacts continue for the lifetime of all the 22

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equipment shipped in the 30-year period. 1

As you can see here, that 30-year period 2

does depend on equipment class. 3

This is a summary of the inputs to the 4

NIA. Again, most of these are taken directly 5

from the LCC outputs. We have total installed 6

costs, which does vary as a function of 7

efficiency level. Maintenance costs do not vary 8

as a function of efficiency level, but repair 9

costs do. 10

The energy use was from the energy use 11

analysis and the LCC. 12

The base-case efficiencies, as Ed 13

mentioned, were derived from the AHRI directory, 14

and then we used the base-case growth rate of 1 15

EER every 35 years -- sorry -- 1 SEER -- well, 16

it's both, SEER for three-phase AC and EER for 17

water-source heat pump. 18

In the standards-case projected 19

efficiencies, we did do a roll-up scenario, so at 20

the year of compliance, all the equipment that 21

would be below the standard level, we assumed 22

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would roll up to meet the standard level. In the 1

equipment above, that would not be affected, and 2

then we used that same growth rate in efficiency. 3

We're using EIA AEO 2014 forecasts for 4

energy prices. We are accounting for full 5

fuel-cycle energy savings. We used 7 percent and 6

3 percent real discount rates, and we are 7

discounting to 2014. 8

These are a couple requests for comments 9

on whether we would expect a rebound effect and 10

on our base-case efficiency trend use. 11


MS. WILLIAMS: Seeing none, I will just 13

move on to the results. As you can see here, we 14

have these summarized for each set of equipment, 15

three-phase CAC and heat pumps as well as 16

water-source heat pumps at an aggregate level. 17

Okay. Moving on to the emissions 18

analysis; we do an emissions analysis where we 19

estimate the emissions reductions resulting from 20

those energy savings. We are using AEO 2014 to 21

derive the emissions factors. 22

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We then use the interagency social cost 1

of carbon values to monetize those factors for 2

CO2. You can see those estimates for 2013 here. 3

We also monetized NOx emissions. 4

Finally, we do a utility impact analysis 5

to estimate changes in installed capacity and 6

generation resulting from the amended standards. 7

This is done using the National Energy Modeling 8

System, and these outputs are all available in 9

the TSD. 10

And that's it. 11

MR. BROOKMAN: So then closing remarks, 12

final comments related to this proceeding. 13

Yes, Laura. 14

MS. PETRILLO-GROH: This is Laura 15

Petrillo-Groh from AHRI. 16

We strongly support the DOE adopting 17

ASHRAE levels and in our general support of 18

ASHRAE 90.1 process. 19

Thank you. 20

MR. BROOKMAN: Thanks. That's helpful. 21

Appreciate that. 22

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Marshall? 1

MR. HUNT: California IOUs, Marshall 2

Hunt. 3

I reserve the right to ask for higher 4

levels of efficiency. I have got to look at it 5

further. I am somewhat concerned about such a 6

negative analysis happening. 7

Thank you. 8

MR. BROOKMAN: Okay. Steve? 9


I'm also -- I will say that the ASHRAE 11

process works, and it will lead to energy savings 12

very quickly, and I think I appreciate the 13

analysis here. 14

I do have to say in terms of the energy 15

savings, when I saw all of the -- how do I say 16

it? -- the estimations of the shipments, I'm a 17

little worried that higher shipments do lead to 18

higher estimated savings at all efficiency 19

levels. 20

So I remain a little concerned about the 21

estimated savings, just because I didn't see any 22

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data that shows the significant increases. 1

I know floor space increases, but there's 2

lots of choices that people have in terms of 3

heating and cooling their building, so I always 4

get concerned when these shipments just seem to 5

be so against the data that's being shown or the 6

estimates that were shown that are so opposite of 7

the estimates shown that you see these higher 8

efficiency levels, look at all these higher 9

savings. Well, if the shipments are a lot lower 10

than what you thought, then those savings don't 11

exist. 12

Thank you. 13

MR. BROOKMAN: Joanna. 14

MS. MAUER: Joanna Mauer. 15

So for water-source heat pumps, I believe 16

the bulk of the energy savings at higher 17

efficiency levels are in the 17,000 to 65,000 18

Btu-per-hour equipment class, and DOE's analysis 19

shows that higher levels for that category are 20

cost effective. So we'd encourage DOE to 21

consider setting higher levels for that one 22

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category of water-source heat pumps that could 1

achieve significant, additional energy savings. 2


Yes, Aniruddh. 4

MR. ROY: A question on Slide 10. This 5

may have been addressed already. It says in the 6

first bullet that de minimis is 0.001 to 0.002 7

quads. Is there a specific definition? 8

And this question is for either Ashley or 9

John. Is there a specific definition for -- or 10

Eric. Is there a specific definition for de 11

minimis in the statute? Because I know for 12

significant energy savings, there is no 13

definition, and so it is left up to DOE to decide 14

what's significant and what's not. 15

MR. STAS: Eric Stas, DOE. 16

No, there is on definition of de minimis 17

in the statute. 18

MR. ROY: Okay. So that was basically 19

DOE's determination in the slide that that level 20

was de minimis? 21

MR. STAS: Right. They are just giving 22

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you an example in this particular case of what it 1

is. 2

MR. ROY: Right. Thank you. 3

And -- sorry, Eric. One more question. 4

Is there a threshold for which -- I guess a point 5

beyond which you would consider it not to be de 6

minimis? 7

MR. STAS: Eric Stas, DOE. 8

I think it's fair to say, we've taken 9

this on a case-by-case basis, and we have the 10

public comments, so -- and you all aren't bashful 11

telling us what you think, so -- 12

MR. ROY: Right. Okay. Thank you. 13

MR. BROOKMAN: Any additional questions 14

or comments? We are moving towards closure here 15

and taking any additional final comments. 16

So I think that that is it. I will turn 17

it back to Ashley for closing remarks. 18

MS. ARMSTRONG: Okay. So I'd just like 19

to thank everyone for coming today. Obviously, 20

we went through the slides on a fairly high 21

level, and we have provided all our documentation 22

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and additional support underlying the proposal 1

and the actual documents that are on their 2

website and our docket. 3

We welcome you to comment on all aspects 4

of that, and obviously, we appreciate the 5

comments you made today. 6

So just to note, the comment period 7

closes on March 25th -- March 24th, and please 8

submit comments, because we always welcome those. 9

But thank you for coming, and safe travels home 10

on Friday. 11

[Whereupon, at 2:02 p.m., the public 12

hearing concluded.] 13

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CERTIFICATE OF NOTARY PUBLIC 22

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1 I, Brian Knieser, Notary Public in and

2 for the District of Columbia, the officer before

3 whom the foregoing testimony was taken, do hereby

4 certify that the testimony which appears in the

s foregoing transcript was taken by me and

6 thereafter reduced to typewriting under my

7 direction; that said testimony is a true record

s of the testimony given; that I am neither counsel

9 for, related to, nor employed by any of the

10 parties to the action in which this testimony is

11 taken; and, further, that I am not a relative or

12 employee of any of the parties hereto, nor

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BRIAN KNIESER

Notary Public in and for

The District of Columbia

Commission Expires: 03.14.2019

OLENDER REPORTING, INC. 1100 Connecticut Avenue NW, #810, Washington, DC 20036

Washington: 202-898-1108 • Baltimore: 410-752-3376 Toll Free: 888-445-3376

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