The redesign of a more complex or non-geometrically similar designed product line does not allow resource sharing across sizes (models).

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1 1. DOE generated formulae for manufacturer production cost (MPC) as a function of subgroup and diameter (which DOE believes can be used as a general proxy for airflow). DOE requests comments on whether there are any other parameters, such as pressure, construction class, rating RPM, etc., which DOE should use as inputs in calculating the MPC, in addition to or instead of diameter. If so, DOE encourages stakeholders to submit data illustrating the relationship of MPC with these parameters. 2. DOE assumed that the cost to redesign multiple fan models was equal to the number of models times an estimated cost to redesign one fan model. DOE recognizes that manufacturers may be able to share resources between redesigns in the same company, or in the same product line (i.e. different diameters). If this is current practice or possible, DOE requests comments on the scenarios in which resource sharing can occur and to what extent. The fan subgroup, the construction class, material types, diameter and power are very important inputs to cost. The proposed subgroups are too broad and the cost variations within the group are substantial. Cost also depends heavily on the volume of sales and product type. The cost of redesign of a product line includes the redesign of each size in a product line (which would include varying sized, impeller width, etc.). The cost of redesign of a single geometrical similar product line includes research, testing, design & tooling. For research, resources can be shared across all sizes (models). For testing, all sizes may not need to be tested. For design and tooling all sizes require resources. The redesign of a more complex or non-geometrically similar designed product line does not allow resource sharing across sizes (models). 3. DOE estimated the cost to redesign a fan as a function of the subgroup of fan resulting from the redesign. There may be other parameters, such as the fan s diameter, RPM properties, FEI or efficiency, construction class, or the properties of the fan before it was redesigned, that DOE should take into consideration. If so, DOE requests information on which parameters should be taken into consideration and how each affects the cost to redesign a fan. Improving efficiencies on products that are approaching their maximum potential efficiency raises the cost of redesign exponentially. The different fan subgroups have different levels of efficiency potential. Agency certifications such as seismic qualification must also be considered as part of the cost of redesign.

2 4. DOE used a redesign time of 6 months per fan model in its calculation of redesign costs. DOE requests comment on this assumption and whether this time period is sufficient for prototyping and revising marketing materials. A minimum of one year is needed to redesign and bring to market an improved product. Extensive research or major tooling development would increase the time needed. Bringing a fan to market also includes cost and time associated with designing the extended product, redesign burden of products which use the fan, agency approvals and tooling, all of which further extends development time and cost. Simultaneous redesign projects will also extend the timeline. 5. DOE did not explicitly consider fan noise performance in its analyses. DOE requests comment on whether noise considerations provide barriers to increased fan efficiency. 6. DOE requests information on the number of models and number of shipments of forward curved fans. 7. DOE requests comment on its use of a database of over 2500 fan models as approximately representing all fan models in the scope of this rulemaking currently available in the United States today. Some fan applications require low noise fans which may not be available in high efficiency designs. For example, to satisfy OSHA occupational noise exposure requirements, the most efficient fan may not be acceptable in that environment. Sound considerations merit having forward curved (FC) fans as a separate subgroup. In some cases, a higher efficiency fan will require additional sound treatment, which will cause an increase in energy consumption. Most forward curved fans are sold OEM, and are reported with air handler, unitary or residential product sales, not reported to AMCA. Models are often custom designed to OEM requirements. This data base is not representative of the market. AMCA provided 1.3 million fans sold in a data base representing 46% of the American market. This data base is far more revealing than 2500 fans without sales data that defines their applied efficiency, their popularity. AMCA advises DOE to use the data provided describing the actual 2012 market and application points of sold fans.

3 8. DOE used current subgroup distributions of fan models within each fan group at each efficiency level analyzed to weight the total conversion cost per model regardless of the efficiency level or the subclass of the fan model before redesign. In other words, DOE assumed that fan model impeller distributions at a given efficiency level would not change as a result of standards. DOE requests comment on this assumption. With higher efficiency levels, fan model impeller distribution will change. Higher efficiency requirements will shift the distribution to more efficient impellers within a product group.

4 9. DOE requests comment on the inclusion of tubeaxial and vaneaxial fans into a single fan group separate from centrifugal inline and mixed flow fans. DOE requests information regarding whether these two groups of fans provide distinct utility that justifies the separation and resulting different FEIs for the same rated flow and pressure. We agree that tubeaxial and vaneaxial fans should be in a separate group from centrifugal inline and mixed flow fans. We further recommend that tubeaxial fans and vaneaxial fans should be in separate subgroups. For example, some applications require that the fan be reversible which requires a tubeaxial. Also, the tubeaxial is better suited to low pressure applications than the vaneaxial.

5 10. DOE requests comment on the cost drivers included in the engineering analysis (e.g. aerodynamic redesign, impeller type, and presence of guidevanes). 11. DOE requests information on the design and manufacturing differences between commercial and industrial fans. The presence of guide vanes, type of impeller, blade shape are all cost drivers and influence efficiency. For process fans, cost drivers affect efficiency but efficiency may not be the primary concern (e.g., shrouded vs. open radial impellers). The DOE needs to provide a definition of what it considers the difference between commercial and industrial fans in order to answer this question. We interpret them to be as follows: 12. DOE requests information on how forward curved impeller manufacturing differs from the manufacturing of other impeller types. DOE also requests comment on how other fan components differ between forward curved models and non-forward curved models, such as component materials and material gauges. 13. DOE requests comment on its MPC calculation as a function of diameter equation and multipliers. 14. DOE did not consider variable pitch blades in its analysis. DOE requests information on the effect variable-pitch blades have on efficiency in the field, the mechanism of that effect, and how testing can be conducted to capture any benefit from variable-pitch blades. Commercial tooling and production line based to minimize cost. Purchase criteria is cost first and reliability second. Industrial designed for longer life, heavier duty, often not tooled, often custom designed. Purchase criteria is more heavily weighted toward reliability. Forward curved (FC) impellers require dedicated and specialized tooling that lends itself to high volume production. Material thicknesses and weight of the impeller and other components are greater for non FC fans. Shaft and bearing sizes are greater for non-fc centrifugal fans. These differences are primarily due to increases in speed of non-fc fans. For the same duty, a non FC fan is much larger. See AMCA response to question 1. AMCA believes the DOE should add more sizes to the cost analysis, so that DOE gets a better picture of how costs varied with fan diameter. With an adjustable pitch axial fans one can always adjust the performance at a constant speed. Controllable pitch in motion fans have been largely replaced by use of a variable frequency drives. There are still certain applications (VAV applications) where the optimum solution is a controllable pitch in motion axial fan. These are applications where the system curve is significantly higher than a simple parabola at low flows (where system pressures are high at low flows).

6 15. DOE requests comment on any of the industry financials (working capital rate; net property, plant, and equipment rate; selling, general, and administrative expense rate; research and development rate; depreciation rate; capital expenditure rate, and tax rate) used in the GRIM (located in the Financials tab of the GRIM spreadsheet). AMCA cannot comment on industry financials because this information is not shared by member companies with AMCA. 16. DOE requests comment on the use of 11.4 percent as the real industry manufacturer discount rate (also referred to as the weighted average cost of capital) for commercial and industrial fan manufacturers (located in the Financials tab of the GRIM spreadsheet). 17. DOE requests comment on the use of 1.45 as a manufacturer markup (this corresponds to a 31 percent gross margin) for all fan groups and efficiency levels in the base case (located in the Markups tab of the GRIM spreadsheet). DOE requests information regarding manufacturer markups and whether they vary by fan efficiency, fan group, fan subgroup, or any other attribute. 18. DOE requests comment on both its methodology of calculating total industry capital and product conversion costs and the specific industry average per model capital and product conversion cost estimates for each fan subgroup (located in the Conversion Cost spreadsheet). AMCA cannot comment on industry financials because this information is not shared by member companies with AMCA. The fan industry is dominated by small manufacturers whose cost of and access to capital is limited relative to larger companies. AMCA cannot comment on industry financials because this information is not shared by member companies with AMCA. AMCA cannot comment on industry financials because this information is not shared by member companies with AMCA.

7 19. DOE assumed that every fan model that did not meet a candidate standard level being analyzed would be redesigned to meet that level. DOE requests comment on this assumption and on what portion of fan models that do not meet a standard level would be redesigned to meet the level as opposed to being eliminated from the American market. In many cases, a fan manufacturer will choose to use a different compliant product for the application. There are several other possible outcomes: 1. The fan model would be redesigned to meet the regulated level. 2. The fan model speed range would be reduced to meet the regulated level. 3. The motor, drive or transmission could be improved. 4. The fan model would be dropped from production and not replaced. 5. The fan company would choose to go out of business. 20. DOE seeks inputs on its characterization of market channels for the considered fan groups, particularly whether the channels include all intermediate steps, and estimated market shares of each channel. Each manufacturer will weigh these alternatives against their capital and human resource capacity, market demand, competitive response, and availability of return from competing investments inside and outside the fan industry. For example, it may benefit a company to fund a shift in production to a lower cost foreign location rather than in the redesign of non-compliant models. These are difficult decisions for any company to make they are virtually impossible to predict for the industry. There can be no doubt that all four alternatives will be made by some companies the greater the burden of regulation, the less likely investments will be made to re-design. AMCA does not have data on this question.

8 21. DOE seeks inputs and comments on the estimates of flow operating points used in the energy use analysis (expressed as a function of the flow at best efficiency point). 22. DOE seeks inputs and comments on the estimates of annual operating hours by sector and application and on the estimated distributions of fans across sectors and applications. We disagree with the use of these three points to evaluate energy savings. AMCA provided DOE with a data base of actual selections of fans representing 46% of the American market. This data shows that most fans are selected at flows greater than 115% of the flow at the best efficiency point. In other words, the selected operating points are NOT at all representative of actual market behavior. AMCA strongly encourages DOE to make use of the sales data provided to evaluate this question. AMCA does not have data on this question. 23. DOE seeks comments on its proposal to use a constant price trend for projecting future commercial and industrial fan prices. 24. DOE requests comment on whether any of the efficiency levels considered in this analysis might lead to an increase in installation, repair, and maintenance costs, and if so, data regarding the magnitude of the increased cost for each relevant efficiency level. Investment in R&D to redesign non-compliant fan models will have a significant impact on fan prices. Prices are driven by costs, the forecast of which is certainly wrong. History teaches that the actual deviation between forecast and actual cost varies over time, driven by global demand and supply for base commodities. AMCA has no suggestion to enhance the DOE projection, but suggests that a more meaningful consideration would be to evaluate different outcomes which reflect the historical range of likely outcomes. AMCA believes that increased efficiency will drive product cost higher, but AMCA does not believe that installation, repair or maintenance costs will change as fan efficiency improves. However, the substitution of fan type (such as changing from an FC to a BI fan) would have a substantial impact on product cost, installation, repair and maintenance cost, and would represent a loss of utility.

9 25. DOE seeks comments on the proposal to use a compliance year of three years after the publication of the final rule. AMCA believes that if the NODA described FEI approach results in a large number of fan models under the new rule that will require redesign, then compliance verification after 5 years is more reasonable considering many fan companies have limited access to capital and resources. 26. DOE seeks comments on the use of constant efficiency trends in the base-case and in the standards-cases. AMCA observes that the market has changed to favor more efficient drive options and arrangements, and fan selection have changed to accommodate fan capacity control. DOE did not seek comment on the following topics related to the proposed metric: Proposed use of a fan energy index (FEI). The use of a ratio in this metric is misleading to fan customers, since it carries an implication that a larger ratio is better than a smaller ratio. While it is true that the ratio represents the fan peak efficiency as compared to the baseline peak efficiency, it does not reflect nor predict energy consumed by the fan at its operating or design point. AMCA strongly recommends another metric (FER) in which a ratio refers to actual energy consumed at the design point. Two ratios in the marketplace would be confusing. AMCA also recommends use of FER at the fan s best efficiency point when the design point is not known at the time of sale (about 12% of the market s connected load).

10 Proposed use of total efficiency in the metric for all fans. Proposed use of three points to quantify fan efficiency: 100% of BEP flow 110% of BEP flow 115% of BEP flow Total efficiency is a misleading for fans that are non-ducted on their discharge. While it is true that total efficiency for a non-ducted fan is a measure of energy imparted to the air, it does not differentiate between useful energy and wasted energy, and therefor does not reflect the actual energy efficiency of the fan. If two fans are compared for a given non-ducted application, the total efficiency is not a good indicator of power consumed. This could lead to manufacturers designing fans to meet the misguided regulatory requirement instead of saving energy. The use of three points instead of a single best efficiency point is an attempt to reduce the occurrence of fan manufacturers designing fans for peak efficiency at the expense of other points on the fan curve. The use of a more complicated three-point metric is an unwelcome and un-necessary complication, since every fan design will remain responsive to the actual mix of common application points in the marketplace, where its efficiency will be most often evaluated. In a marketplace where most fan efficiency compliance judgments are made at the operating point, raising peak efficiency at the expense of efficiency at common selection points would be detrimental therefore more than one point to judge compliance of fans sold without knowledge of their application is redundant, and adds no value while increasing the cost of compliance. Many fans are designed to provide better off-peak efficiency, which requires a compromise in peak efficiency. It would be unfortunate to subject such a design to a peak-based requirement that causes its efficiency at common selection points to be compromised. Other fans are optimized to match peak efficiency to the operating point, after which the efficiency at other points should not be material to the design.

11 Proposed use of standard motor speeds in the calculation of FER for a given model. AMCA does not agree with this apparent hold over from the pump regulation. Pumps are generally run at motor synchronous speeds fans are not. Use of synchronous speeds injects an inaccurate and false assumption where an assumption is not needed or useful. A belt or VFD driven fan can be applied at any speed up to the fan maximum speed and the motor will be sized accordingly using either a 4-pole or 2-pole motor. The incidence of fans drawing 1 hp or greater operating at the motor synchronous speed with no VFD is less than 20% of the market connected load (based on the data already provided to DOE consultants), centered on material handling and process applications, or axial fans with adjustable pitch blades. AMCA recommends the regulatory application independent metric simply be applied at the maximum fan RPM. Note that the maximum speed of a direct drive fan/motor combination with no VFD is the motor synchronous speed. Likewise, the 85% of maximum speed operating point used for FER STD should simply be changed to maximum speed. Proposed comparison with AMCA FER(PBER) approach: There are two main differences between the PBER and FEI approaches. First, the two approaches use different forms for the fan efficiency equation. Second, unlike the FEI approach, the PBER approach does not prescribe particular operating conditions at which the PBER is to be evaluated in order to calculate the energy metric. This statement about the PBER approach is not true. The FER (PBER) value can be determined and evaluated at any and all points on the fan curve. When the design operating conditions are known and the fan is selected for operation at this point, the design airflow and pressure would be used for the regulation. When the design operating conditions are not known, the FER evaluation is done at the Best Efficiency Point at the maximum allowable fan RPM.

12 Proposed comparison with AMCA FER(PBER) approach: In contrast with DOE s FEI approach, DOE understands that neither of the two PBER approaches are likely to require redesign of a fan model that does not meet the PBER. Instead, the operating range of the fan model would be restricted to meet the PBER requirements. This comparison is not true. Both approaches (DOE FEI and application independent FER/PBER) establish a minimum required fan efficiency at a specific point on the fan curve at a specific speed. Both approaches will separate compliant fans from non-compliant fans. And when a fan is non-compliant, both approaches allow compliance if the maximum fan RPM is reduced. In this sense, both metrics will force the redesign or restriction of rotational speed of fans which do not meet the application independent requirement. More importantly, use of FER establishes a non-compliant range for every fan, while FEI does not. In other words, with FER, every fan will benefit from re-design to improve its compliant range, to lower the cost (price) charged the customer for a compliant fan. Under the FEI approach most fans would NOT benefit from expanded market access as a consequence of investment to improve efficiency.