[Federal Register Volume 74, Number 69 (Monday, April 13, 2009)]
[Proposed Rules]
[Pages 16920-17027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-7634]
[[Page 16919]]
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Part II
Department of Energy
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10 CFR Part 430
Energy Conservation Program: Energy Conservation Standards for General
Service Fluorescent Lamps and Incandescent Reflector Lamps; Proposed
Rule
Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 /
Proposed Rules
[[Page 16920]]
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DEPARTMENT OF ENERGY
10 CFR Part 430
[Docket Number EE-2006-STD-0131]
RIN 1904-AA92
Energy Conservation Program: Energy Conservation Standards for
General Service Fluorescent Lamps and Incandescent Reflector Lamps
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Energy Policy and Conservation Act (EPCA) prescribes
energy conservation standards for various consumer products and
commercial and industrial equipment, including general service
fluorescent lamps (GSFL) and incandescent reflector lamps (IRL), and
the statute also requires the Department of Energy (DOE) to
subsequently determine whether more stringent, amended standards for
GSFL and IRL would be technologically feasible and economically
justified, and would save a significant amount of energy. In addition,
EPCA directs DOE to consider adoption of standards for additional GSFL
not already covered by EPCA-prescribed standards. In this notice, DOE
proposes amended energy conservation standards for certain GSFL and IRL
and new energy conservation standards for certain additional GSFL not
currently covered by standards.
DATES: DOE held a public meeting on Tuesday, February 3, 2009 in
Washington, DC. DOE began accepting comments, data, and information
regarding this notice of proposed rulemaking (NOPR) at the public
meeting, and will continue to accept comments until no later than June
12, 2009. See section VIII, ``Public Participation,'' of this NOPR for
details.
ADDRESSES: The public meeting was held at the U.S. Department of
Energy, Forrestal Building, Room 1E-245, 1000 Independence Avenue, SW.,
Washington, DC 20585-0121.
Any comments submitted must identify the NOPR for Energy
Conservation Standards for Lighting Products, and provide the docket
number EE-2006-STD-0131 and/or regulatory information number (RIN)
number 1904-AA92. Comments may be submitted using any of the following
methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: [email protected]. Include the docket number EE-2006-STD-
0131and/or RIN 1904-AA92 in the subject line of the message.
Postal Mail: Ms. Brenda Edwards, U.S. Department of
Energy, Building Technologies Program, Mailstop EE-2J, 1000
Independence Avenue, SW., Washington, DC 20585-0121. Please submit one
signed paper original.
Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department
of Energy, Building Technologies Program, 950 L'Enfant Plaza, SW.,
Suite 600, Washington, DC 20024. Telephone: (202) 586-2945. Please
submit one signed paper original.
For detailed instructions on submitting comments and additional
information on the rulemaking process, see section VIII of this
document (Public Participation).
Docket: For access to the docket to read background documents or
comments received, visit the U.S. Department of Energy, Resource Room
of the Building Technologies Program, 950 L'Enfant Plaza, SW., Suite
600, Washington, DC, (202) 586-2945, between 9 a.m. and 4 p.m., Monday
through Friday, except Federal holidays. Please call Ms. Brenda Edwards
at the above telephone number for additional information regarding
visiting the Resource Room.
FOR FURTHER INFORMATION CONTACT: Ms. Linda Graves, U.S. Department of
Energy, Office of Energy Efficiency and Renewable Energy, Building
Technologies Program, EE-2J, 1000 Independence Avenue, SW., Washington,
DC 20585-0121. Telephone: (202) 586-1851. E-mail:
[email protected].
Mr. Eric Stas or Ms. Francine Pinto, U.S. Department of Energy,
Office of the General Counsel, GC-72, Forrestal Building, Mail Station
GC-72, 1000 Independence Avenue, SW., Washington, DC 20585-0121.
Telephone: (202) 586-9507. E-mail: [email protected] or
[email protected].
For information on how to submit or review public comments, contact
Ms. Brenda Edwards, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Program, EE-2J,
1000 Independence Avenue, SW., Washington, DC 20585-0121. Telephone:
(202) 586-2945. E-mail: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Summary of the Proposed Rule
II. Introduction
A. Consumer Overview
B. Authority
C. Background
1. Current Standards
2. History of Standards Rulemaking for General Service
Fluorescent Lamps, Incandescent Reflector Lamps, and General Service
Incandescent Lamps
III. Issues Affecting the Scope of This Rulemaking
A. Additional General Service Fluorescent Lamps for Which DOE is
Proposing Standards
1. Scope of EPCA Requirement that DOE Consider Standards for
Additional Lamps
2. Identification of the Additional Lamps for Which DOE Proposes
Standards
a. Coverage of T5 Lamps
b. Extension of Lamp Wattage Ranges
3. Summary GSFL Lamps to Which DOE Proposes to Extend Coverage
B. Exempted Incandescent Reflector Lamps
C. Amended Definitions
1. ``Rated Wattage''
2. ``Colored Fluorescent Lamp''
D. Off Mode and Standby Mode Energy Consumption Standards
E. Color Rendering Index Standards for General Service
Fluorescent Lamps
IV. General Discussion
A. Test Procedures
B. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
C. Energy Savings
1. Determination of Savings
2. Significance of Savings
D. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Consumers
b. Life-Cycle Costs
c. Energy Savings
d. Lessening of Utility or Performance of Products
e. Impact of Any Lessening of Competition
f. Need of the Nation to Conserve Energy
g. Other Factors
2. Rebuttable Presumption
V. Methodology and Discussion of Comments
A. Product Classes
1. General Service Fluorescent Lamps
a. T12 and T8 Lamps
b. T5 Lamps
c. Correlated Color Temperature
2. Incandescent Reflector Lamps
a. Modified-Spectrum Lamps
b. Long-Life Lamps
c. Lamp Diameter
d. Voltage
B. Screening Analysis
1. General Service Fluorescent Lamps
a. Higher-Efficiency Lamp Fill Gas Composition
b. Higher-Efficiency Phosphors
c. Glass Coating
d. Lamp Diameter
e. Multi-Photon Phosphors
2. Incandescent Reflector Lamps
C. Engineering Analysis
1. Approach
2. Representative Product Classes
3. Baseline Lamps and Systems
[[Page 16921]]
a. General Service Fluorescent Lamps
b. Incandescent Reflector Lamps
4. Lamp and Lamp-and-Ballast Designs
a. General Service Fluorescent Lamps
b. Incandescent Reflector Lamps
5. Efficiency Levels
a. General Service Fluorescent Lamps
i. Revisions to ANOPR Efficiency Levels
ii. Four-Foot T5 Miniature Bipin Efficiency Levels
b. Incandescent Reflector Lamps
6. Engineering Analysis Results
a. General Service Fluorescent Lamps
b. Incandescent Reflector Lamps
7. Scaling to Product Classes Not Analyzed
a. General Service Fluorescent Lamps
i. Correlated Color Temperature
ii. U-Shaped Lamps
b. Incandescent Reflector Lamps
i. Modified-Spectrum IRL
ii. Lamp Diameter
iii. Voltage
D. Life-Cycle Cost and Payback Period Analyses
1. Consumer Product Price
2. Sales Tax
3. Installation Costs
4. Disposal Costs
5. Annual Operating Hours
a. Sectors Analyzed
b. Regional Variation
c. Building Type
6. Product Energy Consumption Rate
7. Electricity Prices
8. Electricity Price Trends
9. Lifetime
a. Ballast Lifetime
b. Lamp Lifetime
10. Discount Rates
11. Analysis Period
12. Effective Date
13. Payback Period Inputs
14. Lamp Purchase Events
E. National Impact Analysis--National Energy Savings and Net
Present Value Analysis
1. General
a. Overview of NIA Changes in This Notice
2. Shipments Analysis
a. Lamp Inventory
b. Shipments Growth
i. Floor Space and Building Growth
ii. Lamps per Household
iii. Wider Spacing of More-Efficient Fixtures
c. Base-Case Scenarios: Emerging Technologies and Existing
Technologies
i. General Service Fluorescent Lamps
ii. Incandescent Reflector Lamps
d. Fluorescent Market Sectors Analyzed
e. GSFL Product Migration
i. Ballast Rule Effective Start Date
ii. Four-Foot Medium Bipin T12 Lamp Replacements
iii. Eight-Foot Single Pin Slimline T12 Lamp Replacements
iv. Four-Foot T5 Lamps
3. Base-Case Market-Share Matrices
a. General Service Fluorescent Lamps
b. Incandescent Reflector Lamps
4. GSFL Standards-Case Shipment Scenarios and Forecasts
a. Shift/Roll-Up Scenarios
b. Lighting Expertise Scenarios
c. Voluntary Retrofits
5. IRL-Standards-Case Shipment Scenarios and Forecasts
i. Shift/Roll-Up Scenarios
ii. Product-Substitution Scenarios
6. Other Inputs
a. Analysis Period
b. Total Installed Cost
c. Electricity Price Forecast
d. Energy Site-to-Source Conversion
e. HVAC Interaction Factor
f. Rebound Effect
g. Discount Rates
F. Consumer Subgroup Analysis
G. Manufacturer Impact Analysis
1. Overview
a. Phase 1, Industry Profile
b. Phase 2, Industry Cash-Flow Analysis
c. Phase 3, Subgroup Impact Analysis
2. Discussion of Comments
3. Government Regulatory Impact Model Analysis
4. Manufacturer Interviews
a. Key Issues
i. GSFL
ii. IRL
b. Government Regulatory Impact Model Scenarios and Key Inputs
i. GSFL Base-Case Shipment Forecast
ii. IRL Base Case Shipments Forecast
iii. GSFL Standards Case Shipments Forecast
iv. IRL Standards-Case Shipments Forecast
v. Manufacturing Production Costs
vi. Amended Energy Conservation Standards Markup Scenarios
vii. Product and Capital Conversion Costs
H. Employment Impact Analysis
I. Utility Impact Analysis
J. Environmental Analysis
VI. Analytical Results
A. Trial Standard Levels
1. General Service Fluorescent Lamps
2. Incandescent Reflector Lamps
B. Economic Justification and Energy Savings
1. Economic Impacts on Consumers
a. Life-Cycle Cost and Payback Period
i. General Service Fluorescent Lamps
ii. Incandescent Reflector Lamps
b. Consumer Subgroup Analysis
i. Low-Income Households
ii. Institutions of Religious Worship
iii. Institutions That Serve Low-Income Populations
iv. Historical Facilities
v. Consumers of T12 electronic ballasts
2. Economic Impacts on Manufacturers
a. Industry Cash-Flow Analysis Results
i. General Service Fluorescent Lamps
ii. Incandescent Reflector Lamps
b. Cumulative Regulatory Burden
c. Impacts on Employment
d. Impacts on Manufacturing Capacity
e. Impacts on Manufacturer Subgroups
3. National Impact Analysis
a. Significance of Energy Savings
b. Net Present Value
c. Impacts on Employment
4. Impact on Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need of the Nation to Conserve Energy
C. Proposed Standard
1. Overview
2. General Service Fluorescent Lamps Conclusion
a. Trial Standard Level 5
b. Trial Standard Level 4
c. Trial Standard Level 3
3. Incandescent Reflector Lamps Conclusion
a. Trial Standard Level 5
b. Trial Standard Level 4
VII. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Review Under the Information Quality Bulletin for Peer Review
VIII. Public Participation
A. Submission of Comments
B. Issues on Which DOE Seeks Comment
IX. Approval of the Office of the Secretary
Acronyms and Abbreviations
ACEEE American Council for an Energy Efficiency Economy
AEO Annual Energy Outlook
ANOPR advance notice of proposed rulemaking
ANSI American National Standards Institute
ASAP Appliance Standards Awareness Project
ASE Alliance to Save Energy
BF ballast factor
BLS Bureau of Labor Statistics
BPAR bulged parabolic aluminized reflector
BR bulged reflector (reflector lamp shape)
BT Building Technologies Program
BTU British Thermal Unit
CAIR Clean Air Interstate Act
CAMR Clean Air Mercury Rule
CBECS Commercial Buildings Energy Consumption Survey
CCT correlated color temperature
CFR Code of Federal Regulations
CFL compact fluorescent lamp
CIE International Commission on Illumination
CMH ceramic metal halide
CO2 carbon dioxide
CRI color rendering index
CSL candidate standard level
DIY do-it-yourself
DOE U.S. Department of Energy
DOJ U.S. Department of Justice
E26 Edison screw-base (incandescent lamp base type)
EERE Office of Energy Efficiency and Renewable Energy
EIA Energy Information Administration
EISA 2007 Energy Independence and Security Act of 2007
EL efficacy level
EPA Environmental Protection Agency
EPACT 1992 Energy Policy Act of 1992
EPACT 2005 Energy Policy Act of 2005
EPCA Energy Policy and Conservation Act
ER elliptical reflector (reflector lamp shape)
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FEMP Federal Energy Management Program
FR Federal Register
FTC Federal Trade Commission
GE General Electric Lighting and Industrial
GRIM Government Regulatory Impact Model
GSFL general service fluorescent lamp
GSIL general service incandescent lamp
GW gigawatt
Hg mercury
HID high-intensity discharge
HIR halogen infrared reflector
HO high output
HVAC Heating, Ventilating and Air-Conditioning
IESNA Illuminating Engineering Society of North America
ImSET Impact of Sector Energy Technologies
INPV industry net present value
I-O input-output
IPCC Intergovernmental Panel on Climate Change
IR Infrared
IRFA initial regulatory flexibility analysis
IRL incandescent reflector lamp
K degrees Kelvin
kt kilotons
LCC life-cycle cost
LED Light-Emitting Diode
LMC U.S. Lighting Market Characterization Volume I
Lm/W lumens per watt
MBP medium bipin
MECS Manufacturer Energy Consumption Survey (MECS)
MIA Manufacturer Impact Analysis
MMt million metric tons
Mt metric tons
MW megawatts
NAICS North American Industry Classification System
NCLC National Consumer Law Center
NEEP Northeast Energy Efficiency Partnership
NEMA National Electrical Manufacturers Association
NEMS National Energy Modeling System
NEMS-BT National Energy Modeling System--Building Technologies
NES national energy savings
NIA National Impact Analysis
NIST National Institute of Standards and Technology
NOPR notice of proposed rulemaking
NOX nitrogen oxides
NPCC Northwest Power and Conservation Council
NPV net present value
NRDC Natural Resources Defense Council
NVLAP National Voluntary Laboratory Accreditation Program
OEM Original Equipment Manufacturer
OIRA Office of Information and Regulatory Affairs
OMB U.S. Office of Management and Budget
PAR parabolic aluminized reflector (reflector lamp shape)
PBP payback period
PG&E Pacific Gas and Electric
quad quadrillion BTU
R reflector (reflector lamp shape)
R-CFL reflector compact fluorescent lamp
R&D research and development
RDC recessed double contact
RECS Residential Energy Consumption Survey
RIA regulatory impact analysis
RoHS Restriction on Hazardous Substances directive
SBA Small Business Administration
SCF Survey of Consumer Finances
SEC Securities and Exchange Commission
SEL spectrally-enhanced lighting
SG&A selling, general, and administrative costs
SO standard output
SO2 sulfur dioxide
SP single pin
S&P Standard & Poor's
T8, T10, T12 tubular fluorescent lamps, diameters of 1, 1.25 or 1.5
inches, respectively
TSD technical support document
TSL trial standard level
TWh terawatt-hour
UMRA Unfunded Mandates Reform Act
U.S.C. United States Code
UV ultraviolet
V volts
VHO very high output
W watts
I. Summary of the Proposed Rule
The Energy Policy and Conservation Act (EPCA or the Act) (42 U.S.C.
6291 et seq.), as amended, requires DOE to consider whether to amend
the existing energy conservation standards for GSFL and IRL, and to
also consider whether to adopt new energy conservation standards for
additional types of GSFL beyond those already covered by EPCA-
prescribed standards. (42 U.S.C. 6295(i)(3)-(5)) The Act also specifies
that any new or amended energy conservation standard DOE prescribes for
certain consumer and/or commercial products, such as GSFL and IRL,
shall be designed to ``achieve the maximum improvement in energy
efficiency * * * which the Secretary determines is technologically
feasible and economically justified.'' (42 U.S.C. 6295(o)(2)(A);
6316(a)) Furthermore, the new or amended standard must ``result in
significant conservation of energy.'' (42 U.S.C. 6295(o)(3)(B);
6316(a)) In accordance with these and other statutory provisions
discussed in this notice, DOE proposes new and amended energy
conservation standards for GSFL and IRL, as shown in Table I.1 and
Table I.2. The proposed standards would apply to all products listed in
Table I.1 and Table I.2 that are manufactured in or imported into the
United States on or after June 30, 2012.
Table I.1--Summary of the Proposed Energy Conservation Standards for General Service Fluorescent Lamps
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Percent
Correlated increase over
Lamp type color Proposed level current
temperature lm/W standards or
baseline
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4-Foot Medium Bipin............................................. <= 4,500K 84 12%
> 4,500K 78 4%
2-Foot U-Shaped................................................. <= 4,500K 78 15%/22%*
> 4,500K 73 7%/14%*
8-Foot Slimline................................................. <= 4,500K 95 19%
> 4,500K 91 14%
8-Foot High Output.............................................. <= 4,500K 88 10%
> 4,500K 84 5%
4-Foot Miniature Bipin Standard Output.......................... <= 4,500K 103 20%
> 4,500K 97 13%
4-Foot Miniature Bipin High Output.............................. <= 4,500K 89 16%
> 4,500K 85 10%
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* For these product classes, EPCA has different efficacy standards for lamps with wattages less than 35W and
greater than or equal to 35W.
[[Page 16923]]
Table I.2--Summary of the Proposed Energy Conservation Standard for IRL
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Percent
increase over
Lamp type Diameter Voltage Proposed level current
lm/W standards or
baseline
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Standard Spectrum 40W-205W......... > 2.5 inches............... >= 125 7.1P\0.27\ 69%-100%
< 125 6.2P\0.27\ 47%-75%
<= 2.5 inches.............. >= 125 6.3P\0.27\ 50%-78%
< 125 5.5P\0.27\ 31%-55%
Modified Spectrum 40W-205W......... > 2.5 inches............... >= 125 5.8P\0.27\ 38%-63%
< 125 5.0P\0.27\ 19%-41%
<= 2.5 inches.............. >= 125 5.1P\0.27\ 21%-44%
< 125 4.4P\0.27\ 7%-27%
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Note: P is equal to the rated lamp wattage, in watts.
DOE's analyses indicate that the proposed standards would save a
significant amount of energy--an estimated 3.2 to 7.3 quads (for GSFL)
and 1.3 to 2.3 quads (for IRL) of cumulative energy over 31 years
(2012-2042). The economic impacts on most GSFL and all IRL individual
and commercial consumers (i.e., the average life-cycle cost (LCC)
savings) are positive.
The cumulative national net present value (NPV) of total consumer
costs and savings of the proposed standards from 2012 to 2042 in 2007$
ranges from $3.2 billion (at a 7-percent discount rate) to $25.7
billion (at a 3-percent discount rate) for GSFL. For IRL, the NPV from
2012 to 2042 in 2007$ ranges from $3.7 billion (at a 7-percent discount
rate) to $14.0 billion (at a 3-percent discount rate). This is the
estimated total value of future operating-cost savings minus the
estimated increased product costs, discounted to 2007. DOE estimates
the GSFL industry net present value (INPV) to currently be $575-602
million in 2007$. If DOE were to adopt the proposed standards, it
expects that manufacturers may lose up to 24 percent of their INPV,
which is approximately $139 million. The NPV of the proposed standards
for GSFL consumers (at least $3.2 billion at the 7-percent discount
rate) would exceed anticipated industry losses by at least 23 times.
DOE estimates the IRL industry net present value to be $207-267 million
in 2007$. If DOE were to adopt the proposed standards, it expects that
manufacturers may lose 29-46 percent of their INPV, which is
approximately $77-94 million. The NPV of the proposed standards for IRL
consumers (at least $3.7 billion at the 7-percent discount rate) would
exceed anticipated industry losses by at least 39 times.
In addition, the proposed standards would have significant
environmental benefits. All of the energy saved would be in the form of
electricity, and DOE expects the energy savings from the proposed
standards to eliminate the need for approximately 1100 to 3400
megawatts (MW) of generating capacity for GSFL and up to 450 MW for IRL
by 2042. This would result in cumulative (undiscounted) greenhouse gas
emission reductions of 184 to 395 million metric tons (MMT) of carbon
dioxide (CO2) for GSFL and 59 to 114 MMT for IRL from 2012
to 2042. During this same period, the standard would result in power
plant emission reductions of 12 to 623 kilotons (kt) of nitrogen oxides
(NOX) for GSFL and 4 to 181 kt NOX for IRL.
Mercury (Hg) emission reductions would be up to 6.9 tons for GFSL and
up to 1.7 tons avoided for IRL.
DOE has tentatively concluded that the proposed standards represent
the maximum improvement in energy efficiency that is technologically
feasible and economically justified, and would result in significant
conservation of energy. DOE further notes that products achieving these
standard levels are already commercially available. Based upon the
rulemaking analyses culminating in this proposal, DOE found that the
benefits (energy savings, consumer LCC savings, national NPV increase,
and emission reductions) to the Nation of the proposed standards
outweigh the burdens (INPV decrease and LCC increases for some lamp
users). DOE considered higher efficacy levels (ELs) as trial standard
levels (TSLs), and is still considering them in this rulemaking;
however, DOE has tentatively concluded that the burdens of the higher
efficiency levels outweigh the benefits. Based upon consideration of
public comments and related information, DOE may adopt either higher or
lower ELs presented in this proposal or some level in between.
II. Introduction
A. Consumer Overview
EPCA currently prescribes efficacy standards for certain IRL and
GSFL. (42 U.S.C. 6295(i)(1)) DOE proposes to raise these standards and
to set efficacy standards for certain other GSFL, as shown in Table I.1
and Table I.2 above. The proposed standards would apply to products
manufactured in the United States, or imported to it, three years after
the final rule is published in the Federal Register.\1\ Table I.1 and
Table I.2 also show the percentage improvement in efficacy that each
standard level represents, relative to the current standard levels or
to products typically on the market today. The proposed standards
represent an overall improvement of approximately 4 to 22 percent and 7
to 100 percent in the efficacies of the GSFL and IRL baselines,
respectively, covered by the standards.
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\1\ The final rule is expected to be published by June 30, 2009;
therefore, the effective date would be June 30, 2012.
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DOE's analyses suggest that residential and commercial consumers
would see benefits from the proposed standards. Although DOE expects
that under the proposed standards, the purchase price of high-efficacy
GSFL would be higher (up to three times higher) than the average price
of these products today, but that the energy efficiency gains would
result in lower energy costs that more than offset such higher costs.
When the potential savings due to efficiency gains are summed over the
lifetime of the high-efficacy products, consumers would be expected to
save up to $56.60 (depending on the lamp type), on average, compared to
their expenditures on today's baseline GSFL.
The results of DOE's analyses for IRL follow a similar pattern.
Although DOE expects the purchase price of the high-efficacy IRL would
be higher (ranging from 56 to 63 percent) than the average price of
these products today, the energy efficiency gains would result in lower
energy costs that more than offset the higher costs. When these
potential
[[Page 16924]]
savings due to efficiency gains are summed over the lifetime of the
high-efficacy IRL, it is estimated that consumers would save between
$1.62 and $8.14, on average, compared to their expenditures on today's
baseline IRL.
B. Authority
Title III of EPCA sets forth a variety of provisions designed to
improve energy efficiency. Part A \2\ of Title III (42 U.S.C. 6291-
6309) established the ``Energy Conservation Program for Consumer
Products Other Than Automobiles.'' The program covers consumer products
and certain commercial products (referred to hereafter as ``covered
products''), including GSFL and IRL. (42 U.S.C. 6292(a)(14) and
6295(i)) EPCA prescribes energy conservation standards for certain GSFL
and IRL. (42 U.S.C. 6295(i)(1)) The statute further directs DOE to
determine whether the existing standards for fluorescent and
incandescent lamps should be amended and whether to adopt standards for
additional GSFL. (42 U.S.C. 6295(i)(3)-(5)) This rulemaking represents
the first round of amendments to the GSFL and IRL energy conservation
standards as directed by 42 U.S.C. 6295(i)(3).
---------------------------------------------------------------------------
\2\ This part was originally titled Part B; however, it was
redesignated Part A after Part B was repealed by Pub. L. 109-58.
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The scope of coverage for these requirements for GSFL and IRL is
dictated by EPCA's definitions of these and related terms, as explained
below. EPCA defines ``general service fluorescent lamp'' as follows: *
* * [F]luorescent lamps which can be used to satisfy the majority of
fluorescent applications, but does not include any lamp designed and
marketed for the following nongeneral lighting applications: (i)
Fluorescent lamps designed to promote plant growth. (ii) Fluorescent
lamps specifically designed for cold temperature installations. (iii)
Colored fluorescent lamps. (iv) Impact-resistant fluorescent lamps. (v)
Reflectorized or aperture lamps. (vi) Fluorescent lamps designed for
use in reprographic equipment. (vii) Lamps primarily designed to
produce radiation in the ultra-violet region of the spectrum. (viii)
Lamps with a color rendering index of 87 or greater. (42 U.S.C.
6291(30)(B))
EPCA defines ``incandescent reflector lamp'' as follows: * * * [A]
lamp in which light is produced by a filament heated to incandescence
by an electric current * * * [and] (commonly referred to as a reflector
lamp) which is not colored or designed for rough or vibration service
applications, that contains an inner reflective coating on the outer
bulb to direct the light, an R, PAR, ER, BR, BPAR, or similar bulb
shapes with E26 medium screw bases, a rated voltage or voltage range
that lies at least partially within 115 and 130 volts, a diameter which
exceeds 2.25 inches, and has a rated wattage that is 40 watts or
higher.
(42 U.S.C. 6291(30)(C), (C)(ii) and (F))
EPCA further clarifies this definition of IRL by defining the lamp
types excluded from the definition: The term ``rough service lamp''
means a lamp that--(i) has a minimum of 5 supports with filament
configurations that are C-7A, C-11, C-17, and C-22 as listed in Figure
6-12 of the 9th edition of the IESNA Lighting handbook, or similar
configurations where lead wires are not counted as supports; and (ii)
is designated and marketed specifically for `rough service'
applications, with (I) the designation appearing on the lamp packaging;
and (II) marketing materials that identify the lamp as being for rough
service. (42 U.S.C. 6291(30)(X))
The term ``vibration service lamp'' means a lamp that--(i) has
filament configurations that are C-5, C-7A, or C-9, as listed in Figure
6-12 of the 9th Edition of the IESNA Lighting Handbook or similar
configurations; (ii) has a maximum wattage of 60 watts; (iii) is sold
at retail in packages of 2 lamps or less; and (iv) is designated and
marketed specifically for vibration service or vibration-resistant
applications, with--(I) the designation appearing on the lamp
packaging; and (II) marketing materials that identify the lamp as being
vibration service only. (42 U.S.C. 6291(30)(AA))
The term ``colored incandescent lamp'' means an incandescent lamp
designated and marketed as a colored lamp that has--(i) a color
rendering index of less than 50, as determined according to the test
method given in C.I.E. publication 13.3-1995; or (ii) a correlated
color temperature of less than 2,500K, or greater than 4,600K, where
correlated temperature is computed according to the Journal of Optical
Society of America, Vol. 58, pages 1528-1595 (1986). (42 U.S.C.
6291(30)(EE)) \3\
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\3\ DOE notes that the publication year of the referenced
article in the definition of ``colored incandescent lamp,'' as
printed in section 321(a)(1)(B) of EISA, contains two typographical
errors. The citation should read as follows: Journal of Optical
Society of America, Vol. 58, pages 1528-1535 (1968).
---------------------------------------------------------------------------
The advance notice of proposed rulemaking (ANOPR) in this
proceeding (73 FR 13620, 13622, 13625, 13628-29 (March 13, 2008)), as
well as subsection II.C and section III below, provide additional
detail on the nature and statutory history of EPCA's requirements for
GSFL and IRL.
Under the Act, DOE's energy conservation program for covered
products consists essentially of four parts: (1) Testing; (2) labeling;
(3) Federal energy conservation standards, and (4) certification and
enforcement procedures. The Federal Trade Commission (FTC) is
responsible for labeling, and DOE implements the remainder of the
program. Section 323 of the Act authorizes DOE, subject to certain
criteria and conditions, to develop test procedures to measure the
energy efficiency, energy use, or estimated annual operating cost of
each covered product. (42 U.S.C. 6293) The test procedures for GSFL and
IRL appear at title 10 Code of Federal Regulations (CFR) part 430,
subpart B, appendix R.
EPCA provides criteria for prescribing new or amended energy
conservation standards for covered products. As indicated above, any
new or amended standard for a covered product under Part A must be
designed to achieve the maximum improvement in energy efficiency that
is technologically feasible and economically justified (42 U.S.C.
6295(o)(2)(A)), although EPCA precludes DOE from adopting any standard
that would not result in significant conservation of energy. (42 U.S.C.
6295(o)(3)(B)) Moreover, DOE may not prescribe a standard: (1) For
certain products, including GSFL and IRL, if no test procedure has been
established for that type (or class) of product, or (2) if DOE
determines by rule that the standard would not result in significant
conservation of energy or is not technologically feasible or
economically justified. (42 U.S.C. 6295(o)(3)) The Act also provides
that, in deciding whether a standard is economically justified, DOE
must determine whether the benefits of the standard exceed its burdens.
(42 U.S.C. 6295(o)(2)(B)(i)) DOE must do so after receiving comments on
the proposed standard and by considering, to the greatest extent
practicable, the following seven factors:
(1) The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the covered products in the type (or class) compared to any
increase in the price, initial charges, or maintenance expenses for the
covered products that are likely to result from the imposition of the
standard;
[[Page 16925]]
(3) The total projected amount of energy savings likely to result
directly from the imposition of the standard;
(4) Any lessening of the utility or the performance of the covered
products likely to result from the imposition of the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
imposition of the standard;
(6) The need for national energy conservation; and
(7) Other factors the Secretary considers relevant. (42 U.S.C.
6295(o)(2)(B)(i)(I)-(VII))
Furthermore, EPCA contains what is commonly known as an ``anti-
backsliding'' provision, which mandates that the Secretary not
prescribe any amended standard that either increases the maximum
allowable energy use or decreases the minimum required energy
efficiency of a covered product. (42 U.S.C. 6295(o)(1)) Also, the
Secretary may not prescribe an amended or new standard if interested
persons have established by a preponderance of evidence that the
standard is likely to result in the unavailability in the United States
of any covered product type (or class) with performance characteristics
(including reliability), features, sizes, capacities, and volumes that
are substantially the same as those generally available in the United
States. (42 U.S.C. 6295(o)(4))
Under 42 U.S.C. 6295(o)(2)(b)(iii), EPCA establishes a rebuttable
presumption that a standard is economically justified 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, and as applicable,
water, savings during the first year that the consumer will receive as
a result of the standard, as calculated under the applicable test
procedure. * * *''
Under 42 U.S.C. 6295(q)(1), EPCA sets forth additional requirements
applicable to promulgating a standard for a type or class of covered
product that has two or more subcategories. DOE must specify a
different standard level than that which applies generally to such type
or class of products ``for any group of covered products which have the
same function or intended use, if * * * products within such group--(A)
consume a different kind of energy from that consumed by other covered
products within such type (or class); or (B) have a capacity or other
performance-related feature which other products within such type (or
class) do not have and such feature justifies a higher or lower
standard'' than applies or will apply to the other products. Id. In
determining whether a performance-related feature justifies such a
different standard for a group of products, DOE must ``consider such
factors as the utility to the consumer of such a feature'' and other
factors DOE deems appropriate. Id. Any rule prescribing such a standard
must include an explanation of the basis on which such higher or lower
level was established. (42 U.S.C. 6295(q)(2))
Federal energy efficiency requirements generally supersede State
laws or regulations concerning energy conservation testing, labeling,
and standards. (42 U.S.C. 6297(a)-(c)) DOE can, however, grant waivers
of Federal preemption for particular State laws or regulations, in
accordance with the procedures and other provisions of section 327(d)
of the Act. (42 U.S.C. 6297(d))
C. Background
1. Current Standards
EPCA prescribes the energy conservation standards that are
currently applicable to specified types of GSFL and IRL. More
specifically, the standards set efficacy levels and color rendering
index (CRI) levels for certain GSFL, and efficacy standards for certain
IRL. (42 U.S.C. 6295(i)(1); 10 CFR 430.32(n)) These statutory standard
levels are set forth in Table II.1 and Table II.2 below.
Table II.1--EPCA Standard Levels for GSFL
----------------------------------------------------------------------------------------------------------------
Minimum
Lamp type Nominal lamp Minimum CRI average
wattage efficacy lm/W
----------------------------------------------------------------------------------------------------------------
4-Foot Medium Bipin............................................. > 35W 69 75.0
<= 35W 45 75.0
2-Foot U-Shaped................................................. > 35W 69 68.0
<= 35W 45 64.0
8-Foot Slimline................................................. > 65W 69 80.0
<= 65W 45 80.0
8-Foot High Output.............................................. > 100W 69 80.0
<= 100W 45 80.0
----------------------------------------------------------------------------------------------------------------
Table II.2--EPCA Standard Levels for IRL
------------------------------------------------------------------------
Min. avg.
Wattage efficacy lm/
W
------------------------------------------------------------------------
40-50..................................................... 10.5
51-66..................................................... 11.0
67-85..................................................... 12.5
86-115.................................................... 14.0
116-155................................................... 14.5
156-205................................................... 15.0
------------------------------------------------------------------------
2. History of Standards Rulemaking for General Service Fluorescent
Lamps, Incandescent Reflector Lamps, and General Service Incandescent
Lamps
As stated above, EPCA established energy conservation standards for
certain types of GSFL and IRL. (42 U.S.C. 6295(i)(1)) EPCA also
requires that DOE conduct two cycles of rulemakings to determine
whether to amend these standards, and that DOE initiate a rulemaking to
determine whether to adopt standards for additional types of GSFL. (42
U.S.C. 6295(i)(3)-(5)) This rulemaking addresses both the amendment of
existing GSFL and IRL standards, and the adoption of standards for
additional GSFL.
DOE initiated this rulemaking on May 31, 2006, by publishing on its
Web site its ``Rulemaking Framework Document for General Service
Fluorescent Lamps, Incandescent Reflector Lamps, and General Service
Incandescent Lamps.'' \4\ DOE also published a notice in the Federal
Register announcing the availability of the framework document
[[Page 16926]]
and a public meeting on the document, which requested public comments
on the matters raised in the framework document. 71 FR 30834 (May 31,
2006). The framework document described the procedural and analytical
approaches that DOE anticipated using to evaluate energy conservation
standards for the products covered by this rulemaking, and it
identified various issues to be resolved in conducting the rulemaking.
---------------------------------------------------------------------------
\4\ A PDF copy of the framework document published in May 2006
is available at: http://www/eere.energy.gov/buildings/appliance_standards/residential/pdfs/lamps_framework.pdf.
---------------------------------------------------------------------------
DOE held the public meeting on June 15, 2006, to present the
framework document, describe the analyses it planned to conduct during
the rulemaking, seek comments from stakeholders on these subjects, and
inform stakeholders about and facilitate their involvement in the
rulemaking. At the public meeting and during the comment period, DOE
received many comments that both addressed issues raised in the
framework document and identified additional issues relevant to this
rulemaking.
As the title of the framework document indicates, DOE initially
included general service incandescent lamps (GSIL) in this rulemaking.
This was done to address the requirement then present in section
325(i)(5) of EPCA that DOE consider energy conservation standards for
additional GSIL. (42 U.S.C. 6295(i)(5)) However, section
321(a)(3)(A)(iii) of the Energy Independence and Security Act of
2007,\5\ (EISA 2007) amended EPCA to remove this requirement, thereby
eliminating DOE's authority to regulate additional GSIL. Instead,
section 321(a)(3)(A)(ii) of EISA 2007 amended EPCA to prescribe energy
conservation standards for GSIL. Therefore, this rulemaking no longer
addresses GSIL.
---------------------------------------------------------------------------
\5\ Pub. L. 110-140 (enacted Dec. 19, 2007).
---------------------------------------------------------------------------
DOE issued the ANOPR for this rulemaking on February 21, 2008 and
published it in the Federal Register on March 13, 2008. 73 FR 13620. On
February 22, 2008, DOE posted the ANOPR, as well as the complete ANOPR
technical support document (TSD), on its Web site.\6\ The TSD includes
the results of the following DOE preliminary analyses: (1) Market and
technology assessment; (2) screening analysis; (3) engineering
analysis; (4) energy use characterization; (5) product price
determinations; (6) life-cycle cost (LCC) and pay back period (PBP)
analyses; (7) shipments analysis; and (8) national impact analysis
(NIA).
---------------------------------------------------------------------------
\6\ PDF copies of the ANOPR and ANOPR TSD published in March
2008 are available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/incandescent_lamps_anopr.html.
---------------------------------------------------------------------------
In the March 2008 ANOPR, DOE invited comment in particular on the
following issues: (1) Consideration of additional GSFL; (2) amended
definitions; (3) product classes; (4) scaling to product classes not
analyzed; (5) screening of design options; (6) lamp operating hours;
(7) energy consumption of GSFL; (8) LCC calculation; (9) installation
costs; (10) base-case market-share matrices; (11) shipment forecasts;
(12) base-case and standards-case forecasted efficiencies; (13) trial
standard levels; and (14) period for lamp production equipment
conversion. 73 FR 13620, 13686-88 (March 13, 2008).
In the ANOPR, DOE described and sought comment on the analytical
framework, models, and tools (e.g., LCC and national energy savings
(NES) spreadsheets) DOE was using to analyze the impacts of energy
conservation standards for GSFL and IRL. DOE held a public meeting in
Washington, DC, on March 10, 2008, to present the methodologies and
results for the March 2008 ANOPR analyses. At this meeting,
stakeholders recommended that DOE revise certain analyses in the energy
conservation standard ANOPR and the scope of covered products. DOE
later received written comments from the National Electrical
Manufacturers Association (NEMA). In addition, DOE received a joint
comment from several stakeholders. The Joint Comment was submitted by
the American Council for an Energy Efficient Economy (ACEEE), Alliance
to Save Energy (ASE), Appliance Standards Awareness Project (ASAP),
National Consumer Law Center, National Grid, Natural Resources Defense
Council (NRDC), Northeast Energy Efficiency Partnerships (NEEP),
Northwest Power and Conservation Council (NPCC), Pacific Gas and
Electric Company (PG&E), and Vermont Energy Investment Corporation. The
comments received since publication of the March 2008 ANOPR and during
the March 10, 2008 public meeting have contributed to DOE's proposed
resolution of the issues in this rulemaking. This NOPR quotes,
summarizes, and responds to the issues raised in these public comments.
(A parenthetical reference at the end of a quotation or paraphrase
provides the location of the item in the public record.)
Subsequent to the public meeting and at NEMA's request, DOE and
NEMA met on June 26, 2008 to discuss appropriate lumens per watt (lm/W)
standards for high correlated color temperature (CCT) fluorescent
lamps. (DOE, No. 27) \7\ NEMA subsequently submitted a written comment
documenting its presentation at this meeting (hereafter the ``June 2008
NEMA meeting''). (NEMA, No. 26) Topics covered at this meeting included
the expected market share of high-CCT fluorescent lamps, appropriate
efficacy standard scaling factors for GSFL with a CCT greater than
4,500K but less than or equal to 7,000K, and coverage of GSFL with a
CCT greater than 7,000K. See sections III.C.2, V.A.1.c, and V.C.7.a.i
of this notice for a more detailed discussion of NEMA's comments at
this meeting, as well as DOE's responses.
---------------------------------------------------------------------------
\7\ A notation in the form ``DOE, No. 27 '' identifies a written
comment that DOE has received and has included in the docket of this
rulemaking or a written docket submission. This particular notation
refers to a comment: (1) Submitted by DOE; and (2) in document
number 27 in the docket of this rulemaking.
---------------------------------------------------------------------------
III. Issues Affecting the Scope of This Rulemaking
A. Additional General Service Fluorescent Lamps for Which DOE Is
Proposing Standards
1. Scope of EPCA Requirement That DOE Consider Standards for Additional
Lamps
As discussed above, EPCA established energy conservation standards
for certain general service fluorescent lamps, (42 U.S.C. 6295(i)(1))
and directed the Secretary to ``initiate a rulemaking procedure to
determine if the standards in effect for fluorescent lamps * * * should
be amended so that they would be applicable to additional general
service fluorescent [lamps]. * * *'' (42 U.S.C. 6295(i)(5)) Thus, DOE
must consider whether to adopt energy efficacy standards for additional
GSFL beyond those already covered by the statutorily-prescribed
standards.
The March 2008 ANOPR notes that a wide variety of GSFL are not
currently covered by energy conservation standards, and they are
potential candidates for coverage under 42 U.S.C. 6295(i)(5). 73 FR
13620, 13628-29 (March 13, 2008). However, the requirement that DOE
consider additional GSFL appears to conflict with EPCA's definitions of
key terms, which it might be argued would preclude coverage of
additional GSFL. As explained below, DOE has carefully considered these
statutory provisions and is interpreting them in a manner so as to give
effect to the requirement to consider additional GSFL.
Specifically, the conflict is centered on the statutory definition
of ``general service fluorescent lamp.'' As set forth above and
repeated here for purposes of this discussion, ``general service
fluorescent lamp'' is defined in 42
[[Page 16927]]
U.S.C. 6291(30)(B) to mean: ``fluorescent lamps which can be used to
satisfy the majority of fluorescent lamp applications, but does not
include any lamp designed and marketed for the following nongeneral
lighting applications: [list of eight exclusions not relevant to the
present issue].''
As such, the term ``general service fluorescent lamp'' appears to
be defined by reference to the term ``fluorescent lamp,'' which is also
defined under the statute as follows: ``Except as provided in
subparagraph (E), the term `fluorescent lamp' means a low pressure
mercury electric-discharge source in which a fluorescing coating
transforms some of the ultraviolet energy generated by the mercury
discharge into light, including only the following: (i) Any straight-
shaped lamp (commonly referred to as 4-foot medium bi-pin lamps) with
medium bi-pin bases of nominal overall length of 48 inches and rated
wattage of 28 or more. (ii) Any U-shaped lamp (commonly referred to as
2-foot U-shaped lamps) with medium bi-pin bases of nominal overall
length between 22 and 25 inches and rated wattage of 28 or more. (iii)
Any rapid start lamp (commonly referred to as 8-foot high output lamps)
with recessed double contact bases of nominal overall length of 96
inches and 0.800 nominal amperes, as defined in ANSI C78.1-1978 and
related supplements. (iv) Any instant start lamp (commonly referred to
as 8-foot slimline lamps) with single pin bases of nominal overall
length of 96 inches and rated wattage of 52 or more, as defined in ANSI
C78.3-1978 (R1984) and related supplement ANSI C78.3a-1985.'' 42 U.S.C.
6291(30)(A) (Emphasis added).
The term ``fluorescent lamp'' is, by its terms, limited to four
enumerated types of lamps. Further, the four types of lamps set forth
in the definition of ``fluorescent lamp'' have corresponding energy
conservation standards prescribed under the statute at 42 U.S.C.
6295(i)(1)(B). Given that the statutory definition of ``fluorescent
lamp'' is limited to four specified types of lamps and that the statute
prescribes standards for those four lamps, it is not possible to give
effect to the congressional directive to consider establishing
standards for additional GSFL if the term ``general service fluorescent
lamp'' is limited by the definition of ``fluorescent lamp.''
Given this identified conflict, DOE has determined that there is an
inherent ambiguity in the statute in terms of how these provisions are
to be implemented. In order to move forward with this standards
rulemaking, DOE must resolve this legal conundrum.
Although there is no legislative history to clarify this point,
there are a number of reasons to believe that Congress did not intend
to strictly limit consideration of ``additional'' GSFL. First, Congress
adopted both the relevant statutory definitions and the ``additional''
lamps requirement as part of Energy Policy Act of 1992 (EPACT 1992;
Pub. L. 102-486). DOE does not believe Congress would intentionally
insert a legislative provision that, when read in conjunction with a
simultaneously added provision, amounts to a nullity. Second, reading
the definition to preclude consideration of additional GSFL would run
counter to the energy-saving purposes of EPCA. It is reasonable to
assume that Congress would not have intended to limit energy
conservation standards to only those technologies available in 1992,
but would instead cast a broader net that would achieve energy
efficiency improvements in lighting products incorporating newer
technologies.
Consequently, DOE interprets these statutory provisions such that,
in defining ``general service fluorescent lamp,'' Congress intended to
incorporate the term ``fluorescent lamp'' in a broader, more generic
sense. DOE understands that the industry routinely refers to
``fluorescent lamps'' as including products in addition to the four
enumerated in the statutory definition of that term. In fact, in the
March 2008 ANOPR, DOE presented its plan for including additional GSFL
for coverage, and did not receive adverse comment. Thus, DOE has
determined to read the statutory definition of ``general service
fluorescent lamp'' in this broader context.
For these reasons, and for the additional reasons set forth in the
March 2008 ANOPR,\8\ DOE views ``additional'' GSFL, as that term is
used in 42 U.S.C. 6295(i)(5), as lamps that: (1) Meet the technical
portion of the statutory definition of ``fluorescent lamp'' (i.e., a
low-pressure mercury electric-discharge source in which a fluorescing
coating transforms some of the ultraviolet energy generated by the
mercury discharge into light) (42 U.S.C. 6291(30)(A)) without
restriction to the four specified lamp types in that definition; (2)
can be used to satisfy the majority of fluorescent lighting
applications (42 U.S.C. 6291(30)(B)); (3) are not within the exclusions
from the definition of GSFL specified in 42 U.S.C. 6291(30)(B); and (4)
are ones for which EPCA does not prescribe standards. Such an
interpretation does not alter the existing statutory provision or
standards for ``fluorescent lamps,'' but it does permit DOE to give
effect to section 6295(i)(5) of EPCA by expanding the universe of GSFL
open to potential regulation. The scope of coverage reflected in this
NOPR is in keeping with the interpretation outlined above.
---------------------------------------------------------------------------
\8\ 73 FR 13620, 13629 (March 13, 2008).
---------------------------------------------------------------------------
2. Identification of the Additional Lamps for Which DOE Proposes
Standards
As set forth more fully in the March 2008 ANOPR, DOE took the
following three steps in terms of identifying additional GSFL for which
standard setting might be appropriate. DOE first conducted a
comprehensive review of the fluorescent lighting market in order to
identify particular types of lamps that meet the four criteria above to
determine the additional GSFL for which DOE would consider adopting
standards. Second, DOE examined each lamp type to determine potential
energy savings that energy conservation standards would bring for that
lamp. Third, DOE further evaluated selected lamps to determine if such
standards would be technologically feasible and economically justified.
In carrying out these steps before issuance of the March 2008 ANOPR,
DOE considered comments on these issues that it had received
previously. 73 FR 13620, 13629-30 (March 13, 2008).
In implementing the first of these three steps, DOE identified the
following categories of GSFL as meeting the four criteria for
consideration as ``additional'' GSFL under 42 U.S.C. 6295(i)(5):
4-foot, medium bipin (MBP), straight-shaped lamps, rated
wattage of < 28W;
2-foot, medium bipin, U-shaped lamps, rated wattage of <
28W;
8-foot, recessed double contact (RDC), rapid start, high
output (HO) lamps not defined in ANSI Standard C78.1-1991 \9\ or with
current other than 0.800 nominal amperes;
---------------------------------------------------------------------------
\9\ Titled ``for Fluorescent Lamps--Rapid-Start Types--
Dimensional and Electrical Characteristics.''
---------------------------------------------------------------------------
8-foot single pin (SP), instant start, slimline lamps with
a rated wattage >= 52, not defined in ANSI Standard C78.3-1991 \10\;
---------------------------------------------------------------------------
\10\ Titled ``for Fluorescent Lamps--Instant-Start and Cold-
Cathode Types--Dimensional and Electrical Characteristics.''
---------------------------------------------------------------------------
Very high output (VHO) straight-shaped lamps;
T5 \11\ miniature bipin (MiniBP) straight-shaped lamps;
---------------------------------------------------------------------------
\11\ T5, T8, T10, and T12 are nomenclature used to refer to
tubular fluorescent lamps with diameters of 0.625, 1, 1.25, and 1.5
inches, respectively.
---------------------------------------------------------------------------
Additional straight-shaped and U-shaped lamps other than
those listed
[[Page 16928]]
above (e.g., alternate lengths, diameters, or bases); and
Additional fluorescent lamps with alternate shapes (e.g.,
circline, pin-based compact fluorescent lamps (CFL)).
73 FR 13620, 13630 (March 13, 2008).
DOE then assessed the potential energy savings of standards for
these GSFL (second step) and whether candidate standards for those GSFL
would be technologically feasible and economically justified (third
step), in order to determine which GSFL to analyze in depth regarding
whether, and at what levels, standards would be warranted under the
EPCA criteria in 42 U.S.C. 6295(o). DOE's analytical process related to
these additional GSFL categories is discussed generally below.
In a review of 4-foot medium bipin lamps, DOE found that the
current market lacked any products with a rated wattage below 25W.
Therefore, in the March 2008 ANOPR, DOE preliminarily decided not to
extend coverage to 4-foot medium bipin lamps below 25W. In the
following section, DOE discusses its consideration in the March 2008
ANOPR of possibly regulating lamps with rated wattages less than 28W
and greater than or equal to 25W.
Similar to the 4-foot medium bipin lamps, in the March 2008 ANOPR,
DOE investigated the potential for regulating 2-foot U-shaped lamps
less than 28W. A review of available manufacturer catalogs found no
commercially-available products in that category. Therefore, DOE
concluded that lowering the minimum wattage threshold of 2-foot U-
shaped lamps would likely not result in substantial energy savings and
preliminarily decided not to expand coverage to these lamps.
DOE also considered whether to expand coverage to include VHO
fluorescent lamps. While VHO lamps consume large amounts of energy,
they are commonly used in outdoor applications where high-intensity
discharge (HID) lamps are rapidly gaining market share. Further
research indicated that shipments of VHO T12 lamps are declining
rapidly. Although individually these products have greater per-lamp
energy savings than high output or standard output lamps, the total
energy savings resulting from regulation would be small and would be
expected to decrease over time as these lamps disappear from the
market. Therefore, DOE preliminarily decided not to extend coverage to
VHO lamps.
In the March 2008 ANOPR, DOE also preliminarily decided not to
expand coverage to T5 fluorescent lamps. DOE's initial analysis showed
that T5 lamps currently have a relatively small share of the GSFL
market, and, therefore, have limited potential to contribute to total
energy savings. Although T5 lamps can serve as a substitute for T8 or
T12 lamps, DOE found that T5 lamps tend to have higher efficacy.
Research showed that the highest efficacy 32W 4-foot medium bipin T8
lamp is 95 lm/W, compared to 104 lm/W for a standard output 4-foot
miniature bipin T5 lamps. Thus, DOE stated that excluding T5 lamps from
this rulemaking would be unlikely to undermine any energy savings that
would result from a T12 and T8 standard, even if the standard caused
increased sales of T5 systems
Lastly, DOE preliminarily decided not to extend coverage to
fluorescent lamps that had alternate lengths, diameters, bases, or
shapes (or a combination thereof) than the lamps specifically
mentioned. DOE reasoned that the products it had already selected for
coverage represented the significant majority of the GSFL market, and,
thus, the bulk of the potential energy savings. Furthermore, DOE
tentatively concluded there was limited potential for lamps with
miscellaneous lengths and bases to grow in market share, given the
constraint of fixture lengths and socket compatibility.
After eliminating the lamps aforementioned lamps from further
consideration for the reasons cited above, DOE was left with the
following additional GSFL to consider evaluating in depth for potential
standards:
4-foot, medium bipin lamps with wattages >= 25 and < 28;
8-foot, recessed double contact (RDC), rapid start, high
output (HO) lamps not defined in ANSI Standard C78.1-1991 or with
current other than 0.800 nominal amperes;
8-foot single pin (SP), instant start, slimline lamps with
a rated wattage >= 52, not defined in ANSI Standard C78.3-1991;
73 FR 13620, 13632 (March 13, 2008).
As mentioned in the March 2008 ANOPR, DOE explored extending
coverage to 4-foot medium bipin lamps with wattages less than 28W. A
product review found that manufacturers marketed and sold 25W 4-foot
medium bipin T8 fluorescent lamps as replacements for higher wattage 4-
foot medium bipin T8 fluorescent lamps. Thus, DOE concluded that
lowering the minimum wattage threshold to include these lamps would
mitigate the risk of 25W lamps becoming a loophole and would maximize
potential energy savings. In addition, as the technology and
incremental costs associated with increased efficacy of 25W lamps are
similar to their already regulated 28W counterparts, DOE tentatively
concluded that standards for these lamps would be technologically
feasible and economically justified.
In the March 2008 ANOPR, DOE also preliminarily decided to extend
coverage to 8-foot recessed double contact, rapid start, HO lamps not
defined in ANSI Standard C78.1-1991. Due to the ampere specification in
the definition, the statutory standards covered only T12 8-foot
recessed double contact HO lamps, but none of the T8 8-foot recessed
double contact HO lamps (which usually have 0.400 nominal amperes).
Since the T8 8-foot lamps serve as substitutes for their T12
counterparts, DOE risked losing potential energy savings unless such
lamps are also covered by energy conservation standards. Consequently,
DOE preliminarily extended coverage to T8, 8-foot recessed double
contact HO lamps, thereby adding lamps previously restricted by the
0.800 nominal ampere limitation in the definition of ``general service
fluorescent lamp.''
Furthermore, DOE planned to expand coverage to 8-foot recessed
double contact, rapid start, high output fluorescent lamps not listed
in ANSI Standard C78.1-1991. DOE made this decision because the ANSI
standards referenced in DOE regulations were outdated.\12\ As new lamps
are introduced to the market, it is likely they would not be covered by
the 1991 ANSI standard and potentially even the currently most up-to-
date standard. Any of these lamps could serve as substitutes for
regulated lamps. To maximize energy savings from these standards, DOE
extended coverage to 8-foot recessed double contact, rapid start, high
output fluorescent lamps not listed in ANSI Standard C78.1-1991.
---------------------------------------------------------------------------
\12\ ANSI Standard C78.1-1991 has been updated and replaced by
ANSI Standard C78.81-2005, ``for Electric Lamps--Double Capped
Fluorescent Lamps--Electrical and Dimensional Characteristics.''
---------------------------------------------------------------------------
Because the technologies of T8, 8-foot recessed double contact HO
lamps and the 8-foot recessed double contact HO lamps not listed in the
ANSI Standard C78.1-1991 were similar to the technologies of their
already-regulated T12 counterparts, DOE tentatively concluded that
standards for these lamps would meet the statutory criterion of
technological feasibility. Preliminary analysis of these lamps in the
LCC and NIA demonstrated substantial economic savings. Therefore, DOE
tentatively concluded that energy conservation standards for these
lamps would be expected to be economically justified.
[[Page 16929]]
Similar to 8-foot recessed double contact HO lamps, in the March
2008 ANOPR, DOE considered extending coverage to 8-foot, single pin,
instant start, slimline lamps not included in ANSI Standard C78.3-1991
(which includes T8 lamps as well). DOE's preliminary analysis indicated
that regulation of these lamps has the potential to achieve substantial
energy savings. Therefore, DOE preliminarily decided to expand the
scope of energy conservation standard coverage to 8-foot single pin
slimline lamps with a rated wattage greater than or equal to 52W not
listed in ANSI Standard C78.3-1991. Since the technologies of T8, 8-
foot single pin slimline lamps and the 8-foot single pin slimline lamps
not listed in ANSI Standard C78.3-1991 are similar to the technologies
of their already-regulated counterparts, DOE tentatively concluded that
standards for these lamps would be expected to meet the statutory
criterion of technological feasibility. Analyses in the LCC and NIA
confirmed the potential for substantial economic savings associated
with regulation of these lamp types. As a result, in the March 2008
ANOPR, DOE tentatively concluded that energy conservation standards for
these lamps would be economically justified.
During and after the public meeting, DOE received numerous verbal
and written comments regarding the lamps included in or excluded from
coverage in the March 2008 ANOPR. As a general matter, commenters
supported DOE's approach for consideration of additional GSFL for
coverage by energy conservation standards. However, commenters urged
DOE to consider changes in its approach in two areas, specifically
coverage of T5 lamps and extension of lamp wattage ranges. Sections
III.A.2.a and III.A.2.b of this notice immediately below discuss the
submitted comments and DOE's responses.
a. Coverage of T5 Lamps
At the March 2008 ANOPR public meeting, NEMA announced that it was
considering supporting coverage of T5 lamps to prevent the introduction
of less-efficient T5 lamps into the market, particularly those
containing halophosphors. (Public Meeting Transcript, No. 21 at pp. 71-
72) \13\ ACEEE likewise suggested that DOE should analyze opportunities
involving regulation of T5 lamps. (Public Meeting Transcript, No. 21 at
p. 73) In its written comments, NEMA stated that it would not oppose
covering newer T5 fluorescent lamp technology (e.g., 28W 4-foot T5
lamps), but would not recommend covering older technology (i.e., T5
preheat fluorescent lamps). (NEMA, No. 22 at p. 3) In addition, the
Joint Comment stated that DOE should extend coverage to T5 lamps. These
organizations argued that if only T8 and T12 lamps are covered by the
standard, it could possibly spur market introduction of less-efficient
halophosphor T5 lamps with a lower first cost. Such a development would
increase the overall market share of T5 lamps and decrease the
potential energy savings associated with this rulemaking. (Joint
Comment, No. 23 at pp. 2-5)
---------------------------------------------------------------------------
\13\ A notation in the form ``Public Meeting Transcript, No. 21
at pp. 71-72'' identifies a written comment that DOE has received
and has included in the docket of this rulemaking. This particular
notation refers to a comment: (1) Submitted during the public
meeting on March 10-11, 2008; (2) in document number 21 in the
docket of this rulemaking; and (3) appearing on pages 71 through 72
of the transcript.
---------------------------------------------------------------------------
DOE agrees with these comments. While most T5 lamps are currently
more efficient than the T8 and T12 lamps for which they can be
substituted, excluding them from energy conservation standards could
provide an incentive for less-efficient T5 lamps to enter the market.
Such trend would result in increased market share of less-efficient
products, thereby creating the potential for significant energy savings
losses unless these lamps are regulated. Because this potential
substitution effect is a primary criterion which DOE uses to determine
coverage for additional GSFL, DOE is proposing in this NOPR to extend
coverage to T5 miniature bipin lamps.
DOE researched the market and product availability of T5 lamps and
found they exist in a variety of lengths and wattages. Standard T5
lamps include wattages ranging from 14W to 80W, and lengths ranging
from nominally 2 feet to 6 feet. DOE's research indicates that the
primary driver of T5 market share growth is substitution for currently
regulated 4-foot MBP lamps. Therefore, DOE proposes to cover only the
nominally 4-foot lengths of T5 miniature bipin lamps. DOE believes that
alternate lengths of T5 lamps are not likely to gain significant market
share as they are not easily substitutable for 4-foot MBP systems which
represent the majority of the total fluorescent market. In addition,
interviews with manufacturers and a review of product literature
indicate that standard-output (approximately 28W) and high-output
(approximately 54W) lamps are the highest volume T5 miniature bipin
lamps. In addition to the full-wattage versions of these lamps, DOE has
found that reduced-wattage versions of the standard- and high-output T5
lamp (26W and 51W respectively) are available. Therefore, in this NOPR,
DOE proposes to extend coverage to 4-foot nominal, straight-shaped, T5
miniature bipin standard output lamps with rated wattages >= 26W and to
4-foot nominal, straight-shaped, T5 miniature bipin high output lamps
with rated wattages >= 51W, as they present the greatest potential for
energy savings. DOE estimates potential energy savings from these lamps
of up to 2.05 quads over the analysis period (2012 to 2042). Because
higher-efficacy versions of some of these lamps are already present in
the market, DOE tentatively concludes that standards for these lamps
are technologically feasible.
Based on DOE's LCC and NIA analyses, coverage of the T5 lamps
discussed above would be economically justified. These analyses show
that T5 lamp coverage has the potential to achieve on average $47.03
per standard-output lamp system and $56.60 per high-output lamp system
in LCC savings. In addition, DOE's NIA indicates that regulating these
lamps could result in an NPV of up to $6.84 billion to the Nation
(discounted at 3 percent). See section VI.B.1.a.i and section VI.B.3 of
this document and chapters 8 and 11 of the TSD for more details on
these results.
b. Extension of Lamp Wattage Ranges
Regarding fluorescent lamp coverage, the Joint Comment suggested
that DOE should extend wattage ranges to cover lower-wattage products.
(Joint Comment, No. 23 at p. 4) In relevant part, section 123 of EPACT
1992 amended EPCA to establish standards for 4-foot medium bipin lamps
of 28W or more. The Joint Comment notes that since that law took
effect, ``new products continue to be introduced, and there is an
incentive to circumvent standards by producing lamps just outside of
the watt range (e.g. the current 25W residential lamp).'' Id. NEMA
commented that while current standards cover 2-foot U-shaped medium
bipin lamps greater than or equal to 28W, new products have been
introduced at 25W. (Public Meeting Transcript, No. 21 at p. 73) To
prevent this trend from continuing, the Joint Comment recommended
substantially lowering watt ranges for GSFL product classes to protect
the energy savings that would be accomplished by this rule. If niche
products exist in the new range, the Joint Comment expressed a
preference for using narrowly drawn exemptions rather than limiting the
covered watt range. (Joint Comment, No. 23 at p. 4)
[[Page 16930]]
DOE agrees with the Joint Comment regarding the appropriateness of
extending wattage ranges when commercially-available products exist. As
discussed in the March 2008 ANOPR, DOE proposed to extend coverage to
4-foot medium bipin fluorescent lamps with wattages between 25W and
28W. DOE discovered these lamps were being marketed as substitutes for
currently regulated lamps subject to the current and amended standards
(proposed in this NOPR) on 4-foot medium bipin lamps. Therefore,
consistent with that approach, in this NOPR, DOE proposes to extend
coverage to 2-foot U-shaped lamps with wattages greater than 25W.
The Joint Comment expressed concern that substitutable products
outside the range of covered wattages will emerge in other product
classes. It suggested a proactive approach of lowering the watt ranges
even further, although no products may currently exist in that range.
(Joint Comment, No. 23 at p. 4) While DOE understands the Joint
Comment's concern, DOE disagrees with this approach. DOE is required to
consider energy conservation standards that are technologically
feasible. If a lower wattage lamp does not yet exist, DOE cannot
confirm that it would be technologically feasible or economically
justified for such a lamp to meet a set energy conservation standard.
In addition, lower wattage lamps may provide different lumen outputs,
and thereby different utility. Therefore, if DOE were to include these
lamps in its coverage without determining if the set energy
conservation standard is technologically feasible, DOE could be
reducing the utility of covered product or precluding its development
entirely. Further, DOE encourages the introduction of lamps at lower
wattages. Thus, DOE will only propose to extend wattage ranges for 4-
foot medium bipin lamps and 2-foot medium bipin U-shaped lamps to the
extent specified in this NOPR.
3. Summary GSFL Lamps to Which DOE Proposes To Extend Coverage
With the exception of the above-discussed comments, DOE received no
other input related to coverage of GSFL. In addition, DOE's revised
analyses indicate that energy conservation standards for the lamps
which DOE preliminarily decided to extend coverage in the March 2008
ANOPR are still expected to be technologically feasible, economically
justified, and would result in significant energy savings. Therefore,
in summary, DOE is proposing to cover the following additional GSFL:
2-foot, medium bipin U-shaped lamps with a rated wattage
>= 25 and less than < 28;
4-foot, medium bipin lamps with a rated wattage >= 25 and
less than 28;
4-foot T5, miniature bipin, straight-shaped, standard
output lamps with rated wattage >= 26;
4-foot T5, miniature bipin, straight-shaped, high output
lamps with rated wattage >= 51;
8-foot recessed double contact, rapid start, HO lamps
other than those defined in ANSI Standard C78.1-1991;
8-foot recessed double contact, rapid start, HO lamps
(other than 0.800 nominal amperes) defined in ANSI Standard C78.1-1991;
and
8-foot single pin instant start slimline lamps, with a
rated wattage >= 52, not defined in ANSI Standard C78.3-1991.
B. Exempted Incandescent Reflector Lamps
Section 322(a)(1) of EISA 2007 amended section 321(30)(C)(ii) of
EPCA to expand the portion of the definition of ``incandescent lamp''
applicable to incandescent reflector lamps to include lamps with a
diameter between 2.25 and 2.75 inches, as well as ER, BR, BPAR, or
similar bulb shapes. (42 U.S.C. 6291(30)(C)(ii)) Furthermore, section
322(b) of EISA 2007 incorporates several new exemptions to the IRL
standards in the new section 325(i)(1)(C) of EPCA. (42 U.S.C.
6295(i)(1)(C)) These exemptions are as follows: (1) Lamps rated 50
watts or less that are ER30, BR30, BR40, or ER40; (2) lamps rated 65
watts that are BR30, BR40, or ER40 lamps; and (3) R20 incandescent
reflector lamps rated 45 watts or less.
At the ANOPR stage, DOE concluded that it does not have the
authority to set standards for these lamps, for the following reasons.
Although Congress included ER, BR, and small-diameter (less than 2.75
inches) lamps in the definition of an ``incandescent lamp,'' it
specifically exempted certain wattages and diameters from the
prescribed efficacy standards, thereby indicating Congress's intent not
to set standards for those products. Furthermore, DOE's reading of 42
U.S.C. 6295(i)(3), which directs DOE to amend the standards in
paragraph (1), led it to believe that DOE's authority to amend the
standards does not include the authority to amend the exemptions.
Specifically, under 42 U.S.C. 6295(i)(1)(C), ``Exemptions,'' the
statute refers to ``the standards specified in subparagraph (B),''
whose title is ``Minimum Standards.'' Therefore, in amending the
standards in paragraph (1), under 42 U.S.C. 6295(i)(3), DOE reasoned
that it had the authority to change the efficacy values but not the
exemptions. Accordingly, DOE conducted its ANOPR analyses under the
premise that it could not extend coverage to these statutorily-exempted
products.
The Joint Comment argued that by covering these products in EISA
2007, Congress effectively brought them into the Federal standards
program and, thus, granted DOE the authority to regulate them. The
Joint Comment recommended extending coverage to 65-watt ER and BR
lamps. In addition, it encouraged DOE to evaluate standards for ER and
BR lamps less than 65 watts and for R20 lamps less than 45 watts. The
Joint Comment further contended that by failing to extend coverage to
these lamps, DOE is not meeting its obligation to maximize energy
savings. The Joint Comment argued that the exempted lamps represent a
large, growing market share and are a substitute for products that DOE
plans to regulate. The Joint Comment stated that because 65-watt BR
lamps represent a low-cost, low-efficacy alternative to the more-
efficient products covered by the standards, continued exemptions could
decrease the potentially significant energy savings associated with the
present rulemaking. (Joint Comment, No. 23 at p. 12-14)
Accompanying the Joint Comment were two legal memoranda from the
National Consumer Law Center (NCLC), maintaining that not only does DOE
have the authority to regulate ER and BR lamps, but that DOE is
obligated to regulate them. NCLC pointed out that with the passage of
EISA 2007, Congress included BR and ER lamps that have a ``rated
wattage that is 40 watts or higher'' within the definition of
``incandescent lamp'' [EISA 2007, section 322(a), amending 42 U.S.C.
6291(30)(C)] and, thus, included these BR and ER lamps as covered
products under 42 U.S.C. 6291(2) and 6292(a)(14). NCLC further
contended that the only explanation for Congress adding ER and BR lamps
to the definition was to include them among the covered products.
(Joint Comment, No. 23 at p. 27) NCLC cited the rulemaking for
microwave and electric ovens as an example of a rulemaking in which DOE
is considering applying standards to products for which no prescriptive
efficiency standards exist. (Joint Comment, No. 23 at p. 28)
Through the initial drafting of this NOPR, DOE adhered to its
earlier conclusion that it lacked authority to consider standards for
ER, BR, and small-diameter lamps that had been
[[Page 16931]]
specifically exempted by Congress. However, after carefully considering
the testimony of the February 3, 2009 NOPR public meeting and
reexamining the ANOPR public comments on this issue, DOE reexamined its
authority under EPCA to amend standards for ER, BR, and small-diameter
lamps and has concluded that its earlier view may have been in error.
DOE is further considering if it has authority to consider energy
conservation standards for ER, BR, and small-diameter lamps for the
reasons that follow.
DOE agrees with the Joint Comment, that prior to enactment of EISA
2007 on December 19, 2007, ER, BR, and small-diameter lamps were by
definition excluded from coverage under EPCA; however, once EISA 2007
amended the definition of ``incandescent lamp,'' ER, BR, and small-
diameter lamps become products by the new definition. (Joint Comment,
No. 23 at p. 27) Congress proceeded to expressly exempt certain types
of ER, BR, and small-diameter lamps from the statutorily-set IRL
standards established by EISA 2007. However, given that these expressly
exempted lamp types constitute the overwhelming majority of the ER, BR,
and small-diameter lamps market, DOE's original construction of the
relevant statutory provisions (as expressed in the ANOPR) would have
the effect of once again moving most ER, BR, and small-diameter lamps
beyond the reach of energy conservation standards. Accordingly, DOE is
reconsidering whether, under 42 U.S.C 6295(i)(3), the directive to
amend the standards in paragraph (1) encompasses both the statutory
levels and the exemptions to those standards.
As a practical matter, if DOE does conclude that it has authority
to establish standards for ER, BR, and small-diameter lamps, it cannot
consider such lamps as part of the present rulemaking because it has
not conducted the requisite analyses to propose appropriate standard
levels. At the same time, DOE does not wish to delay the present
rulemaking (and the accompanying energy savings to the Nation) for the
sole reason of considering this subset of ER, BR, and small-diameter
lamps. The analyses to consider standards for ER, BR, and small-
diameter lamps are severable from the analyses underlying the present
rulemaking, so separate treatment would not impact the outcomes for any
of the lamp types under consideration in this NOPR. Therefore, DOE has
decided to proceed with setting energy conservation standards for the
lamps that are the subject of the present rulemaking and to commence a
separate rulemaking for ER, BR, and small-diameter lamps. DOE believes
that much of the analytical work for the current rulemaking will
benefit the ER, BR, and small diameter lamps rulemaking, thereby
permitting issuance of a new NOPR and final rule on an accelerated
basis, if it determined that it has the authority to do so.
For the purposes of the present NOPR, however, DOE notes that the
balance of this notice (analyses and related discussions) assumes that
the exempted ER, BR, and small-diameter lamps remain unregulated by
energy conservation standards. DOE acknowledges that while such an
assumption has no impact on the engineering and life-cycle cost
analyses, the regulation of these exempted IRL may affect the future
shipment of IRL and thereby the national impact and other downstream
analyses. However, DOE believes that its analysis of multiple shipment
scenarios (as discussed in section V.E.5) captures the broad range of
possible impacts were these exempted lamps to be regulated in the
future. Therefore DOE's assumption does not impact the standards
proposed in this rulemaking or DOE's reconsideration of its authority,
nor does it otherwise constrain DOE's ability to conduct further
analyses in a separate rulemaking.
C. Amended Definitions
To clarify the scope of EPCA's coverage of GSFL, IRL, and the
recently adopted standards for GSIL, DOE proposes to revise its
existing definitions of ``rated wattage'' and ``colored fluorescent
lamp.'' These definitional changes are discussed below.
1. ``Rated Wattage''
One element of EPCA's definitions for ``fluorescent lamp'' and
``incandescent reflector lamp'' is a lamp's rated wattage, which helps
delineate the lamps for which the statute sets standards. (42 U.S.C.
6291(30)(A), (C)(ii) and (F), and 6295(i)). In addition, section
321(a)(3) of EISA 2007 amended EPCA to prescribe energy conservation
standards for GSIL, requiring lamps of particular lumen outputs to have
certain maximum rated wattages. (42 U.S.C. 6295(i)) However, EPCA does
not define the term ``rated wattage.''
DOE has defined ``rated wattage'' in its regulations, but only for
4-foot medium bipin T8, T10, and T12 fluorescent lamps. 10 CFR 430.2.
This definition references ANSI Standard C78.1-1991, ``for Fluorescent
Lamps--Rapid-Start Types--Dimensional and Electrical Characteristics.''
Id. Although EPCA also uses the term ``rated wattage'' to delineate 2-
foot U-shaped lamps (42 U.S.C. 6291(30)(A)(ii)), 8-foot slimline lamps,
(42 U.S.C. 6291(30)(A)(iv)), and IRL (42 U.S.C. 6291(30)(C)), DOE has
not defined ``rated wattage'' for these lamps. In the March 2008 ANOPR,
DOE considered revising and updating the definition of ``rated
wattage'' to cite the current version of ANSI Standard C78.1-1991,
clarify and improve the definition, and apply the revised definition to
those lamps for which rated wattage is a key characteristic but is not
currently defined by DOE. In response to the March 2008 ANOPR, DOE
received one comment regarding the definition of ``rated wattage.''
NEMA commented that it agrees with DOE's revised definition. (NEMA, No.
22 at p. 4).
Therefore, DOE proposes the following definition for ``rated
wattage'':
Rated wattage means:
(1) With respect to fluorescent lamps and general service
fluorescent lamps:
(i) If the lamp is listed in ANSI C78.81-2005 or ANSI C78.901-2005,
the rated wattage of a lamp determined by the lamp designation of
Clause 11.1 of ANSI C78.81-2005 or ANSI C78.901- 2005;
(ii) If the lamp is a residential straight-shaped lamp, and not
listed in ANSI C78.81-2005, the wattage of a lamp when operated on a
reference ballast for which the lamp is designed; or
(iii) If the lamp is neither listed in one of the ANSI guides
referenced in (1)(i) nor a residential straight-shaped lamp, the
wattage of a lamp when measured according to the test procedures
outlined in Appendix R to subpart B of this part.
(2) With respect to general service incandescent lamps and
incandescent reflector lamps, the wattage measured according to the
test procedures outlined in Appendix R to subpart B of this part.
2. ``Colored Fluorescent Lamp''
Colored fluorescent lamps are excluded from EPCA's definition of
``general service fluorescent lamp.'' (42 U.S.C. 6291 (30)(B)(iii))
However, EPCA does not define the term ``colored fluorescent lamp.'' In
order to fully define the scope of EPCA's definition of GSFL, DOE
currently defines ``colored fluorescent lamp'' as follows:
``Colored fluorescent lamp'' means a fluorescent lamp designated
and marketed as a colored lamp, and with either of the following
characteristics: a CRI less than 40, as determined according to the
method given in CIE Publication 13.2 (10 CFR 430.3), or a correlated
color temperature less than 2,500K or greater than 6,600K.
[[Page 16932]]
10 CFR 430.2. Because these lamps are not GSFL under EPCA, they are not
covered by the standards applicable to GSFL.
The central element of EPCA's definition of ``general service
fluorescent lamp'' is that they are fluorescent lamps ``which can be
used to satisfy the majority of lighting applications.'' (42 U.S.C.
6291(30)(B)) The exclusions, such as the one for colored lamps, are for
lamps designed and marketed for ``non-general lighting applications.''
Id. As detailed in the March 2008 ANOPR, DOE became aware of a lamp on
the European market that meets the above definition of ``colored
fluorescent lamp'' and that is intended for general illumination
applications. 73 FR 13620, 13634 (March 13, 2008). Although DOE is
unaware of any similar general purpose fluorescent lamps being
introduced into the U.S. market, the availability of the European lamp
demonstrates the potential for DOE's definition of ``colored
fluorescent lamp'' to exclude new products with general service
applications from the definition of ``general service fluorescent
lamp,'' and thereby from the coverage of standards applicable to GSFL.
For this reason, in the March 2008 ANOPR, DOE proposed to revise its
definition of ``colored fluorescent lamp'' by adding the following
phrase after the words ``colored lamp'': ``and not designed or marketed
for general illumination applications.'' Id.
In submitted written comments on the ANOPR, NEMA agreed with the
proposed revised definition of ``colored fluorescent lamp,'' while
noting that DOE will need to give additional consideration to general
illumination fluorescent lamps with higher color temperatures. NEMA
cited an example of a lamp with a CCT of 8,000K that could be used for
both general illumination and specialty applications (NEMA, No. 22 at
p. 9). NEMA requested a meeting to discuss this matter in greater
detail, since it was performing research related to this topic. (DOE,
No. 27) This meeting is subsequently discussed in section II.C.2 of
this NOPR.
At the June 2008 NEMA meeting and in its written comments, NEMA
recommended that the range of GSFL affected by standards should be
increased to 7,000K from the current coverage, which extends to only
6,600K. NEMA believes that lamps with a CCT between 4,500K and 7,000K
are growing in popularity and, therefore, energy conservation standards
within that range are justifiable (NEMA, No. 26 at pp. 3-4).
NEMA also stated that an efficacy standard would be inappropriate
for GSFL with a CCT greater than 7,000K. Because very few GSFL with a
CCT greater than 7,000K are commercially available, NEMA argued that it
would be impossible to determine whether there would be an appropriate
efficacy standard for these lamps that would be technologically
feasible. (NEMA, No. 26 at pp. 5-6) NEMA also stated that it is
unlikely that exempting these high CCT lamps would increase their sales
after a standard, as these lamps are often too ``blue'' for typical
consumers. Therefore, NEMA urged DOE to exempt all lamps with a CCT
greater than 7,000K from energy conservation standards (NEMA, No. 26 at
pp. 3-4).
DOE considered NEMA's input and agrees that because so few of these
products with a CCT greater than 7,000K exist in the market, there is
not enough information to reliably analyze the performance of
currently-available products or the expected performance of emerging
products. Manufacturing lamps with CCTs greater than 7,000K would
likely require the use of new materials not currently utilized in
commonly sold lamps today. In addition, manufacturers may encounter
different design trade-offs when developing their products Therefore,
DOE is unable to determine whether a particular standard level would be
technologically feasible for these lamps.
DOE also agrees that it is appropriate to raise the 6,600K limit to
7,000K in the definition of ``colored fluorescent lamp.'' DOE believes
that this amendment would further the statutory objective of
maintaining the coverage of GSFL serving general application purposes
under DOE's energy conservation standards. Although lamps with CCTs
greater than 6,600K and less than 7,000K are not prevalent in the
market, DOE's research\14\ indicates that manufacturers would likely be
able to produce a lamp at 7,000K using the same materials as a 6,500K
lamp (a commonly sold lamp). In consideration of the technological
similarity between 6,500K and 7,000K lamps, DOE believes that it would
be possible to establish technologically feasible efficacy levels for
7,000K lamps.
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\14\ Ex parte communication with Edward Yandek of General
Electric Company (Dec. 8, 2008) (DOE, No. 29).
---------------------------------------------------------------------------
Therefore, DOE proposes to modify the definition of ``colored
fluorescent lamp'' so as to include lamps with CCT less than or equal
to 7,000K exclude all lamps with a CCT greater than 7,000K from energy
conservation standards. However, DOE notes that NEMA has offered to
track the sales of GSFL with a CCT greater than 7,000K in order to
determine in the future if energy conservation standards are necessary
for these products. (NEMA, No. 26 at p. 4) If these lamp sales show
significant growth, and thus the potential for significant energy
savings, DOE may consider amending the definition of ``colored
fluorescent lamp'' to provide for coverage of these lamps and setting
an appropriate energy conservation standard for them in a future
rulemaking.
As discussed in the March 2008 ANOPR, the discovery of a
fluorescent lamp in the European market with a CCT of 17,000K being
marketed for general illumination applications prompted DOE to consider
actions to prevent such lamps from becoming a potential loophole to the
GSFL energy conservation standard. However, the inherently ``blue''
color of these lamps may prevent widespread adoption as substitutes for
standard CCT lamps (e.g., 4,100K). Therefore, DOE no longer considers
these lamps to be a potential loophole to standards set forth by this
rulemaking. For this reason and because DOE is unable to determine a
technologically feasible standard for these lamps, DOE believes that
the addition of the phrase ``and not designed or marketed for general
illumination applications'' with respect lamps with a CCT greater than
7,000K is no longer necessary.
After incorporating the changes discussed above, DOE proposes the
following definition of ``colored fluorescent lamp'' for this notice:
Colored fluorescent lamp means either: (1) A fluorescent lamp
designated and marketed as a colored lamp with a CRI less than 40,
as determined according to the method set forth in CIE Publication
13.2 (10 CFR 430.3); (2) a fluorescent lamp designed and marketed as
a colored lamp with a correlated color temperature (CCT) less than
2,500K; or (3) a fluorescent lamp with a CCT greater than 7,000K.
D. Off Mode and Standby Mode Energy Consumption Standards
Section 310(3) of EISA 2007 amended EPCA to require future energy
conservation standards to address standby mode and off mode energy use.
Specifically, EPCA, as amended, now requires that, when DOE adopts
standards for a covered product after July 1, 2010, DOE must, if
justified by the criteria for adoption of standards in 42 U.S.C.
6295(o), incorporate standby mode and off mode energy use into the
standard, if feasible, or adopt a separate standard for such energy use
for that product. (42 U.S.C. 6295(gg)(3)) DOE
[[Page 16933]]
notes that although the final rule in this standards rulemaking is
scheduled for publication by June 2009 (i.e., before the statutory
deadline above), DOE nonetheless undertook a preliminary analysis of
the potential for energy savings associated with the regulation of
standby mode and off mode in covered lamps. DOE has tentatively
determined that current technologies for the GSFL and IRL that are the
subjects of this rulemaking do not use a standby mode or off mode, so a
determination of the energy consumption of such features is
inapplicable.
Given EISA 2007's definitions of ``active mode,'' ``off mode,'' and
``standby mode'' applicable to both GSFL and IRL, in order to meet the
definition of ``off-mode'' or ``standby mode,'' the lamp must not be
providing any active mode function (i.e., emit light). However, to
reach such a state, the lamp must be entirely disconnected from the
main power source (i.e., the lamp is switched off), thereby not
satisfying the requirements of operating in off mode. In addition, DOE
believes that all covered products that meet the definitions of
``general service fluorescent lamp'' and ``incandescent reflector
lamp'' are single-function products and do not offer any secondary
user-oriented or protective functions. Thus, GSFL and IRL do not
satisfy the definition for ``standby mode.'' DOE received comments from
NEMA in response to the March 2008 ANOPR supporting this
characterization of off mode and standby mode energy consumption for
these products. (NEMA, No. 22 at p. 1) Therefore, DOE maintains that it
is not feasible to incorporate off mode or standby mode energy use into
the energy conservation standards for GSFL and IRL and is not proposing
amendments to the standard to address lamp operation in such modes. The
March 2008 ANOPR provides additional details that support this
conclusion. 73 FR 13620, 13627 (March 13, 2008).
E. Color Rendering Index Standards for General Service Fluorescent
Lamps
Existing EPCA standards specify both lumens per watt and CRI levels
that products must comply with before entering the market. (42 U.S.C.
6295(i)(1)) At the public meeting and in written comments, NEMA and the
Joint Comment suggested that it may be necessary to amend the minimum
CRI requirements to prevent the possible emergence of loopholes in the
product classes structure and standards levels considered in the March
2008 ANOPR. (Public Meeting Transcript, No. 21 at pp. 82-84, 92, 94;
Joint Comment, No. 23 at p. 6; NEMA, No. 22 at p. 4-5)
However, because CRI is not a measure of energy consumption or
efficacy, but rather a measure of the color quality of the light, DOE
has concluded that it does not have the authority to change the CRI
standard, for the reasons that follow. According to 42 U.S.C. 6291(6),
``energy conservation standard'' means either: (1) A performance
standard which prescribes a minimum level of energy efficiency or a
maximum quantity of energy use; or (2) a design requirement (only for
specifically enumerated products). Although CRI is a performance
requirement, it is not an energy performance requirement within the
meaning of the term ``energy conservation standard.'' Because, in the
case of GSFL, DOE has the authority to regulate only energy
conservation standards (i.e., energy performance requirements), DOE is
not proposing to amend the existing minimum CRI requirements.
IV. General Discussion
A. Test Procedures
DOE's test procedures for fluorescent and incandescent lamps are
set forth at 10 CFR part 430, subpart B, appendix R.\15\ These test
procedures provide detailed instructions for measuring GSFL and IRL
performance, as well as performance attributes of GSIL, largely by
incorporating several industry standards. Prompted by an earlier NEMA
comment (NEMA, No. 12, pp. 2-4) at the Framework stage of the energy
conservation standards rulemaking, DOE examined these test procedures
and decided to initiate a rulemaking, in parallel with this standards
rulemaking, to revise its test procedures for GSFL, IRL, and GSIL (even
though, as explained above, GSIL are no longer part of this standards
rulemaking). These revisions consist largely of: (1) Referencing the
most current versions of several lighting industry standards
incorporated by reference; (2) adopting certain technical changes and
clarifications; (3) expanding the test procedures to accommodate new
classes of lamps subject to extended coverage by either EISA 2007 or
this energy conservation standards rulemaking; and (4) addressing
standby mode and off mode energy consumption (which were found not to
apply to GSFL and IRL), as mandated by EISA 2007.
---------------------------------------------------------------------------
\15\ ``Uniform Test Method for Measuring Average Lamp Efficiency
(LE) and Color Rendering Index (CRI) of Electric Lamps.''
---------------------------------------------------------------------------
To this end, DOE published a NOPR that proposed to update the
current test procedure's references to industry standards for
fluorescent and incandescent lamps. 73 FR 13465 (March 13, 2008) (the
test procedure NOPR). The test procedure NOPR also proposed the
following: (1) A small number of definitional and procedural
modifications to the test procedure to accommodate technological
migrations in the GSFL market and approaches DOE is considering in this
standards rulemaking (73 FR 13465, 13472-73 (March 13, 2008)); (2)
revision of the reporting requirements for GSFL, such that all covered
lamp efficacies would be reported with an accuracy to the tenths
decimal place (73 FR 13465, 13473 (March 13, 2008)); and (3) adoption
of a testing and calculation method for measuring the CCT of
fluorescent and incandescent lamps (73 FR 13465, 13473-74 (March 13,
2008)). Please see the March 2008 ANOPR (73 FR 13620, 13627-28 (March
13, 2008)) and the March 2008 test procedure NOPR (73 FR 13465, 13472-
74 (March 13, 2008)) for a detailed discussion of these proposals and
related matters.
The public meeting for the March 2008 ANOPR also served as a public
meeting to present and receive comments on the test procedure NOPR. DOE
later received written remarks from NEMA responding to the proposals
contained in the test procedure NOPR. (NEMA, No. 16) \16\ DOE is
considering these comments, and will be publishing a final rule in the
near future.
---------------------------------------------------------------------------
\16\ This written comment was submitted to the docket of the
test procedure rulemaking (Docket No. EERE-2007-BT-TP-0013; RIN
number 1904-AB72).
---------------------------------------------------------------------------
B. Technological Feasibility
1. General
In each standards rulemaking, DOE conducts a screening analysis,
which it bases on information it has gathered on all current technology
options and prototype designs that could improve the efficiency of the
product or equipment that is the subject of the rulemaking. DOE
considers a design option to be ``technologically feasible'' \17\ if it
is in the marketplace or if research has progressed to the development
of a working prototype.
---------------------------------------------------------------------------
\17\ DOE's regulations set forth the following definition of
``technological feasibility'': ``Technologies incorporated in
commercially available products or in working prototypes will be
considered technologically feasible.'' 10 CFR 430, subpart C,
appendix A, section 4(a)(4)(i).
---------------------------------------------------------------------------
In consultation with manufacturers, design engineers, and other
interested parties, DOE develops a list of design options for
consideration in the rulemaking. In the context of the present
rulemaking, when determining
[[Page 16934]]
proposed efficacy levels for GSFL, DOE only considered commercially-
available products that can meet or exceed each level. For IRL, trial
standard levels 2, 3, 4, and 5 are based on commercially-available
products. Although TSL1 is not based on product currently sold in the
marketplace, DOE has used a design option (i.e., higher-efficiency gas
fills) to model the performance of a higher-efficacy lamp that meets
TSL1. DOE received input from manufacturers during interviews to verify
that such a design option is technologically feasible. Therefore, DOE
has concluded that the all design options to achieve the proposed
efficacy levels are technologically feasible.
Once DOE has determined that particular design options are
technologically feasible, it evaluates each design option in light of
the following criteria: (1) Practicability to manufacture, install, or
service; (2) adverse impacts on product utility or availability; and
(3) adverse impacts on health or safety. Chapter 4 of the TSD
accompanying this notice contains a description of the screening
analysis for this rulemaking. Also, see section 0 of this notice for a
discussion of the design options DOE considered.
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt or to decline to adopt an amended or new
standard for a type (or class) of covered product, as part of the
rulemaking process, DOE must ``determine the maximum improvement in
energy efficiency or maximum reduction in energy use that is
technologically feasible'' for the product. (42 U.S.C. 6295(p)(1)) In
response to the ANOPR, stakeholders commented that 42 U.S.C. 6295(o)
requires that DOE evaluate the maximum technologically feasible, or
``max-tech,'' potential standard efficiency levels. They assert that
because DOE has gathered only technical information based on products
available on the market today, it may not have considered those
products that are technically feasible but not yet marketed. If such
options are available, stakeholders believe DOE should model them as
the max-tech efficiency levels. (Joint Comment, No. 23 at p. 19)
DOE researched whether any technologies could improve the efficacy
of GSFL lamps currently marketed. DOE found that higher efficacy GSFL
could be achieved but require the use of a higher efficiency fill gas
composition. More efficient fill gases often include higher molecular
weight gases (e.g., krypton) to increase ultraviolet light output, and,
thus, visible light output. However, the use of these heavier gases can
cause lamp instability, resulting in striations or flickering. Evidence
of this effect can be seen with reduced-wattage lamps, which generally
incorporate a mixture of krypton and argon gases, versus full-wattage
lamps which primarily use only argon. Reduced-wattage lamps are often
marketed with several application-limiting performance notes. For
example, NEMA stated reduced-wattage lamps can have performance issues
in low-temperature applications or when operated on rapid start or
dimming ballasts. (NEMA, No. 21 at p. 10) Therefore, DOE did not
consider efficacy levels for GSFL that would require the use of higher-
efficiency fill gases that would result in reduced utility. DOE was
unable to find any higher-efficacy prototypes or commercially-available
lamps that provide the same utility and performance required of GSFL.
Therefore, DOE has concluded that TSL5 was the maximum technologically
feasible level for GSFL.
For IRL, DOE determined that the maximum technologically feasible
efficacy level incorporates the highest technologically feasible
efficiency reflector, halogen infrared coating, and filament design.
From its research, DOE believes that the highest efficiency reflector
employs silver, a technology that DOE understands to be proprietary.
From discussions with developers of IR coating technology, DOE
understands that by modifying the coating pattern and materials used,
varying degrees of IR coating efficiencies can be achieved. Finally,
altering filament design to obtain the highest temperature filament
operation, while maintaining a lifetime similar to the baseline lamp
(3,000 hours), would result in the most efficacious filament. Combining
all three of these highest efficiency technologies simultaneously
results in the maximum technologically feasible level; however, this
level is dependent on the use of a proprietary technology (the silver
reflector). Because DOE is unaware of any alternate technology pathways
to achieve this efficacy level, DOE did not consider it in its
analysis. Instead, DOE based the highest efficacy level analyzed for
IRL on a commercially-available IRL which employs a silver reflector,
an improved (but not most efficient) IR coating, and a filament design
that results in a lifetime of 4,200 hours. Although, this commercially-
available lamp uses silver technology, DOE believes that there are
alternate pathways to achieve this level. A combination of redesigning
the filament to achieve higher temperature operation (and thus reducing
lifetime to 3,000 hours), employing other non-proprietary high-
efficiency reflectors, or applying higher-efficiency IR coatings has
the potential to result in an IRL that meets an equivalent efficacy
level. For more information regarding these technologies, see chapter 3
of the TSD. Therefore, DOE has concluded that TSL5 is the maximum
technologically feasible level for IRL that is not dependent on the use
of a proprietary technology.
Table IV.1 and Table IV.2 list the max-tech levels (TSL5 for GSFL
and TSL5 for IRL) that DOE determined for this rulemaking.\18\
---------------------------------------------------------------------------
\18\ As discussed in section V.C, due to scheduling and resource
constraints, DOE did not analyze all GSFL and IRL product classes.
Instead, DOE chose representative product classes to directly
analyze and scaled analytical results to the remaining product
classes. Table IV.1 and Table IV.2 present max-tech levels for only
analyzed product classes. Classes not analyzed include the 2-foot U-
shaped and high-CCT product classes (for GSFL) and the modified
spectrum, >= 125 volts, and <= 2.5 inches diameter product classes
(for IRL).
Table IV.1--Max-Tech Levels for GSFL
------------------------------------------------------------------------
Max-tech
Lamp type CCT efficiency lm/
W
------------------------------------------------------------------------
4-Foot Medium Bipin..................... <= 4,500K 94
8-Foot Single Pin Slimline.............. <= 4,500K 100
8-Foot RDC HO........................... <= 4,500K 95
4-Foot T5 SO............................ <= 4,500K 108
4-Foot T5 HO............................ <= 4,500K 92
------------------------------------------------------------------------
[[Page 16935]]
Table IV.2--Max-Tech Level for IRL
----------------------------------------------------------------------------------------------------------------
Max-tech
Lamp type Diameter Voltage efficiency lm/
W
----------------------------------------------------------------------------------------------------------------
Standard Spectrum............................................... > 2.5 inches < 125 6.9P\0.27\ \*\
----------------------------------------------------------------------------------------------------------------
* Where P is the rated wattage.
C. Energy Savings
1. Determination of Savings
DOE used its NIA spreadsheets to estimate energy savings from
amended standards for the lamps currently covered by standards and from
new standards for the remaining additional lamps that are the subject
of this rulemaking. (The NIA spreadsheet models are described in
section V.E of this notice and in chapter 11 of the TSD.) DOE
forecasted energy savings over the period of analysis (beginning in
2012, the year that amended standards would go into effect, and ending
in 2042) for each TSL. It quantified the energy savings attributable to
amended and new energy conservation standards (i.e., to each TSL) as
the difference in energy consumption between the standards case and the
base case. The base case represents the forecast of energy consumption
in the absence of amended and new mandatory energy conservation
standards. The base case considers market demand for more-efficient
products. For example, for both GSFL and IRL, DOE models a shift in the
base case from covered GSFL and IRL toward emerging technologies such
as light emitting diodes (LED). In addition, consistent with current
GSFL market trends, DOE models a shift from T12 lamps to higher-
efficacy T8 and T5 lamps. For IRL in the commercial sector, the base-
case shipments forecast also considers a migration from halogen IRL to
higher-efficacy halogen infrared (HIR) lamps. See section 0 of this
notice and chapter 10 of the TSD for details.
The NIA spreadsheet models calculate the energy savings in site
energy expressed in kilowatt-hours (kWh). Site energy is the energy
directly consumed at building sites by GSFL or IRL. DOE reports
national energy savings in terms of the source energy savings, which is
the savings in the energy that is used to generate and transmit the
energy consumed at the site. To convert site energy to source energy,
DOE uses annual site-to-source conversion factors based on the version
of the National Energy Modeling System (NEMS) that corresponds to
Annual Energy Outlook 2008 (AEO2008). The conversion factors vary over
time because of projected changes in the nation's portfolio of
generation sources. DOE estimated that conversion factors remain
constant at 2030 values throughout the remainder of the forecast. See
chapter 11 of the TSD for details.
2. Significance of Savings
Section 325 of EPCA prohibits DOE from adopting a standard for a
covered product if that standard would not result in ``significant''
energy savings. (42 U.S.C. 6295(o)(3)(B)) While the term
``significant'' is not defined in EPCA, the U.S. Court of Appeals, in
Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 1373
(DC Cir. 1985), indicated that Congress intended ``significant'' energy
savings in this context to be savings that were not ``genuinely
trivial.'' The energy savings for all of the TSLs considered in this
rulemaking are nontrivial, and therefore, DOE considers them
``significant'' within the meaning of section 325 of EPCA.
D. Economic Justification
1. Specific Criteria
As noted earlier, EPCA provides seven factors to be evaluated in
determining whether an energy conservation standard is economically
justified (42 U.S.C. 6295(o)(2)(B)). The following sections discuss how
DOE has addressed each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
To determine the quantitative impacts of a new or amended standard
on manufacturers, the economic impact analysis is based on an annual-
cash-flow approach. This includes both a short-term assessment--based
on the cost and capital requirements during the period between the
announcement of a regulation and the regulation's effective start
date--and a long-term assessment. The impacts analyzed include INPV
(which values the industry on the basis of expected future cash flows),
cash flows by year, changes in revenue and income, and other
appropriate measures of impact. Second, DOE analyzes and reports the
impacts on different types of manufacturers, with particular attention
to impacts on small manufacturers. Third, DOE considers the impact of
standards on domestic manufacturer employment, manufacturing capacity,
plant closures, and loss of capital investment. Finally, DOE takes into
account cumulative impacts of different DOE and other regulations on
manufacturers.
For consumers, measures of economic impact include the changes in
price, LCC, and payback period for each trial standard level. The LCC
is one of the seven factors to be considered in determining the
economic justification for a new or amended standard. (42 U.S.C.
6295(o)(2)(B)(i)(II))
b. Life-Cycle Costs
The LCC is the sum of the purchase price of a product (including
its installation) and the operating expense (including energy and
maintenance expenditures) discounted over the lifetime of the product.
For each GSFL and IRL product class, DOE calculated both LCC and LCC
savings for various efficacy levels. The LCC analysis required a
variety of inputs, such as product prices, installation labor costs,
electricity prices, annual operating hours, product energy consumption
rates, and discount rates.
To characterize variability in electricity pricing, DOE established
regional differences in electricity prices. To account for uncertainty
and variability in other inputs, such as annual operating hours and
discount rates, DOE used a distribution of values with probabilities
assigned to each value. Then for each consumer, DOE sampled the values
of these inputs from the probability distributions. The analysis
produced a range of LCCs. A distinct advantage of this approach is that
DOE can identify the percentage of consumers achieving LCC savings due
to an increased energy conservation standard, in addition to the
average LCC savings. DOE presents only average LCC savings in this
NOPR; however, additional details showing the distribution of results
can be found in chapter 8 and appendix 8B of the TSD.
In the LCC analysis, DOE also considered several events that would
prompt a consumer to purchase a lamp. For GSFL, DOE calculated LCCs for
five lamp purchasing events: (1) Lamp failure; (2) standards-induced
retrofit;
[[Page 16936]]
(3) ballast failure; (4) ballast retrofit; and (5) new construction/
renovation. For IRL, DOE calculated LCCs for the lamp failure and new
construction/renovation events, as these were the only lamp purchase
events deemed applicable to this product type. Because each event may
present the consumer with different lamp (or lamp-and-ballast) options
and economics, DOE presents the LCC results for several events for each
product class in this NOPR. DOE assumed that the consumer purchases the
product in 2012 (the effective start date of the standard). For further
detail regarding lamp purchasing events and related LCC calculations,
see section V.D and chapter 8 of the TSD.
c. Energy Savings
While significant conservation of energy is a separate statutory
requirement for adopting an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) DOE used
the NES spreadsheet results in its consideration of total projected
savings.
d. Lessening of Utility or Performance of Products
In establishing classes of products, and in evaluating design
options and the impact of potential standard levels, DOE aimed to
develop standards for GSFL and IRL that would not lessen the utility or
performance of these products. None of the considered trial standard
levels would reduce the utility or performance of the GSFL and IRL
under consideration in the rulemaking. (42 U.S.C. 6295(o)(2)(B)(i)(IV))
Since all standard levels for GSFL use full-wattage lamps, rather
than requiring a shift to higher-efficacy reduced-wattage lamps (which
may have application restrictions), no GSFL efficacy levels reduce the
utility or performance of the covered products. For IRL, for all
standard levels, there are commercially available IRL with the same
utility and performance as the baseline lamps. Therefore, DOE believes
that none of the considered trial standard levels would reduce the
utility or performance of the IRL under consideration in this
rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider any lessening of competition likely to
result from standards. It directs the Attorney General to determine the
impact, if any, of any lessening of competition likely to result from a
proposed standard and to transmit such determination to the Secretary
no later than 60 days after the publication of a proposed rule,
together with an analysis of the nature and extent of such impact. (42
U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) DOE has transmitted a copy of
today's proposed rule to the Attorney General and has requested that
the Department of Justice (DOJ) provide its determination on this
issue. DOE will address the Attorney General's determination in the
final rule.
f. Need of the Nation To Conserve Energy
The non-monetary benefits of the proposed standard are likely to be
reflected in improvements to the security and reliability of the
Nation's energy system--namely, reductions in the overall demand for
energy will result in reduced costs for maintaining the Nation's
electricity system. DOE conducts a utility impact analysis to estimate
how standards may affect the Nation's needed power generation capacity.
This analysis captures the effects of efficiency improvements on
electricity consumption by the covered products that are the subject of
this rulemaking.
The proposed standard also is likely to result in improvements to
the environment. In quantifying these improvements, DOE has defined a
range of primary energy conversion factors and associated emission
reductions based on the estimated level of power generation displaced
by energy conservation standards. DOE reports the environmental effects
from each TSL for this equipment in the environmental assessment in the
TSD. (42. U.S.C. 6295(o)(2)(B)(i)(VI) and 6316(a))
g. Other Factors
EPCA 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. (42 U.S.C. 6295(o)(2)(B)(i)(VII))
Under this provision, DOE considered subgroups of consumers that may be
adversely affected by the standards proposed in this rule.
Specifically, DOE assessed the impact of standards on low-income
consumers, institutions of religious worship, historical facilities,
and institutions that serve low-income populations. In considering
these subgroups, DOE analyzed variations on electricity prices,
operating hours, discount rates, and baseline lamps. See section 0 of
this notice for further detail.
2. Rebuttable Presumption
As set forth in section 325(o)(2)(B)(iii) of EPCA, there is a
rebuttable presumption that an energy conservation standard is
economically justified if the additional cost to the consumer of a
product that meets the standard level is less than three times the
value of the first-year energy (and, as applicable, water) savings
resulting from the standard, as calculated under the applicable DOE
test procedure. (42 U.S.C. 6295(o)(2)(B)(iii) and 42 U.S.C. 6316(e)(1))
DOE's LCC and PBP analyses generate values that calculate the payback
period for consumers of potential energy conservation standards, which
includes, but is not limited to, the three-year payback period
contemplated under the rebuttable presumption test discussed above.
However, DOE routinely conducts a full economic analysis that considers
the full range of impacts, including those to the consumer,
manufacturer, Nation, and environment, as required under 42 U.S.C.
6295(o)(2)(B)(i) and 42 U.S.C. 6316(e)(1)). The results of this
analysis serve as the basis for DOE to definitively evaluate the
economic justification for a potential standard level (thereby
supporting or rebutting the results of any preliminary determination of
economic justification). Section 0 of this notice addresses the
rebuttable-presumption payback calculation.
V. Methodology and Discussion of Comments
A. Product Classes
In general, in evaluating and establishing energy conservation
standards, DOE divides covered products into classes by the type of
energy used, capacity, or other performance-related features that
affect efficiency, and factors such as the utility of the product to
users. (42 U.S.C. 6295(q)) DOE normally establishes different energy
conservation standards for different product classes based on these
criteria.
1. General Service Fluorescent Lamps
In the March 2008 ANOPR, DOE proposed to establish product classes
for GSFL based on the following three attributes that have differential
utility and affect efficacy: (1) Physical constraints of lamps (i.e.,
lamp shape and length); (2) lumen package (i.e., standard versus high
output); and (3) correlated color temperature. 73 FR 13620, 13636
(March 13, 2008). The following sections summarize and address comments
DOE received in response to the GSFL product classes it considered for
the March 2008 ANOPR.
[[Page 16937]]
DOE received comments related to product classes on three major topics:
T12 and T8 lamps, T5 lamps, and correlated color temperature.
a. T12 and T8 Lamps
The physical constraints of the lamp relate to the shape of the
lamp (e.g., U-shaped versus linear) and the fact that these lamps could
not be substitutes for each other, unless the entire fixture is
changed. The lamp shapes provide unique utility because the shapes of
these lamps prevent them from being used as replacements, even with a
ballast replacement, in a given fixture. However, the shape and
geometry of a lamp also impact its efficacy. In the March 2008 ANOPR,
DOE acknowledged that a lamp's diameter can affect its efficacy.
However, because the utility provided to the end-user is a function of
the light output in lumens (which is comparable between T12 and T8
lamps) and not diameter of the bulb, DOE decided not to establish
separate product classes for T12 and T8 lamps.
At the public meeting and in its written comments, NEMA stated that
separate product classes might be necessary for T8 and T12 lamps. Both
NEMA and General Electric (GE) noted that DOE used the 10-percent
efficacy differential between 8-foot slimline and 8-foot high output
lamps as one reason for establishing their separate product classes.
They reasoned that because T8 lamps are at least 10 percent more
efficient that T12 lamps, DOE should also split T8 and T12 lamps into
separate classes. (Public Meeting Transcript, No. 21 at pp. 82-86;
NEMA, No. 22 at p. 5) GE emphasized that because T8 and T12 lamps
require different ballasts and because a growing number of new T8
fixtures will not fit T12 lamps, the two are not always suitable
replacements and should therefore have separate product classes. GE
also expressed concern that it would be impossible to set a single
efficacy standard using a lumen-per-watt metric that would be suitable
for both T8 and T12 lamps. (Public Meeting Transcript, No. 21 at pp.
88-89)
Conversely, the Joint Comment strongly supported combining T8 and
T12 lamps under one product class because the lamps are the same
length, use the same lamp holders, and provide the same utility (as
measured by lumen package). At the public meeting, ACEEE emphasized
that the two lamps compete directly in the marketplace because of their
similar performance features. ACEEE also expressed concern that setting
product classes based on efficacy could lead to separate standards for
any inefficient product. (ACEEE, No. 22 at p. 91) The Joint Comment
also stated that the fact that the two lamps use different ballasts is
an economic issue, not a utility issue. The Joint Comment noted that
large energy savings would be lost if DOE used separate classes because
consumers would not migrate to the more efficient T8 lamps--a factor
DOE must consider, given its obligation to set standards at the
``maximum improvement in energy efficiency'' that is ``technologically
feasible and economically justified.'' (Joint Comment, No. 23 at pp. 4-
5)
DOE research shows that T8 lamps are commonly used to replace T12
lamps; this implies that, in this case, lamp diameter does not
significantly affect lamp utility. It also illustrates that the lamps
share performance features and compete directly in the market. While
DOE recognizes that lamp diameter can affect efficacy, lamp efficacy
alone is not a criterion DOE uses to establish product classes; to
warrant a separate product class, a unique utility feature must be
present. As DOE has not identified a unique utility feature of T12
lamps, DOE has decided to combine both T8 and T12 lamps into one
product class for each lamp type. However, in response to GE's comment,
DOE recognizes that T8 and T12 lamps usually operate on different
ballasts. Thus, DOE has structured its analytical tools to consider the
impact of standards on consumers of both lamp types. That is, DOE takes
the economics of purchasing another ballast into account in its LCC and
NIA analyses.
b. T5 Lamps
The Joint Comment stated that T5 lamps (in this rulemaking,
referred to as 4-foot miniature bipin lamps) should probably be in the
same product class as T8 and T12 lamps because they compete against
them in the market. The advocates noted the existence of retrofitting
kits for installing T5 lamps into T8 and T12 fixtures, but acknowledged
T5 lamps require different lamp holders and are ``too bright to use in
direct lighting fixtures.'' The Joint Comment asked DOE to research the
pros and cons of including T5 lamps with T8 and T12 lamps. (Joint
Comment, No. 23 at p. 5)
Based on its research and consideration of the above comments, DOE
has decided to establish a separate product class for 4-foot miniature
bipin lamps because their physical constraints prevent them from being
used as direct replacements for T8 and T12 lamps in many applications.
For example, applications in which consumers cannot change the lamp
fixture (from a 4-foot MBP to a 4-foot MiniBP) may not be appropriate
for retrofitting to the 4-foot MiniBP system type. As the Joint Comment
noted, these lamps require different lamp holders (due to differences
in length and base type), and thereby qualify for a separate product
class under the previously established ``physical constraints of
lamps'' class-setting criteria.
In addition, a lamp's lumen package may result in certain
application constraints. Because 4-foot T5 MiniBP lamps have similar
total lumen output as 4-foot T8 and T12 MBP lamps over a significantly
smaller surface area, T5 lamps are often marketed as too bright for use
in direct lighting fixtures. If 4-foot T5 MiniBP lamps were regulated
in the same product class as 4-foot MBP lamps, the standard could
effectively mandate the use of T5 lamps. To prevent eliminating lamps
appropriate for direct lighting applications, DOE believes that 4-foot
miniature bipin lamps (T5 lamps) warrant a separate product class from
4-foot medium bipin lamps (primarily T8 and T12 lamps).
In researching these lamp types, DOE found that the high output
lamp is rated to emit more than one and a half times the number of
lumens as the standard output lamp, also potentially affecting utility.
In general, lamps that have high lumen output may be installed in
certain high-ceiling or outdoor installations, where large quantities
of light are needed. Lamps that have standard levels of light output
might be installed in lower-ceiling installations such as offices or
hospitals, where distance between the light source and the illuminated
surfaces is not as large. DOE also found that this significant lumen
output differential in standard output and high output T5 lamps is
accompanied by an efficacy difference. Considering the differences in
utility (light output and their applicability in direct lighting
fixtures) and efficacy, and consistent with DOE's approach in the March
2008 ANOPR, DOE is proposing separate product classes for standard
output 4-foot miniature bipin lamps and high output 4-foot miniature
bipin lamps.
c. Correlated Color Temperature
Correlated color temperature is a measure of the perceived color of
the white light emitted from a lamp, which DOE believes affects lamp
utility. Generally, as CCT increases, efficacy of the bulb decreases.
The measured efficacy of lamps with different CCT is different because
efficacy is measured in lumens per watt, and light emitted across the
visible spectrum is not given equal weighting under this metric. Lumens
are determined using the
[[Page 16938]]
human eye's sensitivity function, and due to the fact that the human
eye is less responsive to blue light, those fluorescent lamps that
shift their spectral emission profiles to contain more blue light will
have lower efficacies. In the March 2008 ANOPR, DOE established two
product classes for GSFL based on CCT: one for high-color-temperature
lamps greater than 4,500K, and another for lamps less than 4,500K.
At the public meeting and in its written comments, NEMA agreed with
DOE's decision to establish two product classes based on CCT. However,
at the public meeting NEMA noted additional divisions may be necessary
at higher CCT levels because these lamps--NEMA specifically noted an
8,000K lamp--are capturing an increasing market share of general
service applications. (Public Meeting Transcript, No. 21 at pp. 95-97)
Industrial Ecology stated that lamps around 6,500K, which were once
reserved for specialty applications, are increasingly being used in
general service applications. Industrial Ecology argued that such a
trend supports the idea of another product class above the 4,500K
division. (Public Meeting Transcript, No. 21 at pp. 97-98).
At the June 2008 NEMA meeting and in a written comment, NEMA
commented that growth in higher CCT lamps would likely come at the
5,000K level, although they would remain a relatively small portion of
the general service market for the foreseeable future. Lamps with CCTs
greater than 7,000K represent a very small portion of the general
service market because most consumers consider their light to be too
blue. Given the small market for lamps above 7,000K, NEMA stated it had
very little practical production data related to efficacies and costs.
Therefore, NEMA argued, lamps above 7,000K should be exempt from
standards, especially considering that the current energy savings
potential from their coverage is very small and unlikely to grow
anytime soon. (NEMA, No. 26 at pp. 3-4)
NEMA also commented that an equation using a continuous function
(without discontinuities) is inappropriate when developing an efficacy
standard for GSFL based on CCT. According to NEMA, practical lamp
designs used to develop higher CCT lamps--such as phosphor design,
weight and coating formulation, and coating adherence--do not provide
for a general physical equation that yields an optimum lumens-per-watt
standard. Instead, NEMA stated that successive step function factors
need to be applied as CCT continues to increase. (NEMA, No. 26 at p. 5)
The Joint Comment said that DOE should design CCT product class
divisions carefully to prevent ``gaming.'' The advocates preferred a
continuous function to multiple product class divisions because the
latter would encourage products to migrate to the lowest CCT value in
each product class. If a continuous function were not possible, the
Joint Comment strongly recommended raising the 4,500K division to
4,900K. Additionally, the Joint Comment stated, if DOE does set a
product class aimed at regulating the 8,000K lamps, the boundary should
be approximately 7,900K. (Joint Comment, No. 23 at pp. 5-6)
As noted above, DOE believes CCT affects consumer utility. For
example, a lighting designer would likely consider the bluish color of
higher color temperature lamps when specifying a luminaire for a
particular application. In addition, as NEMA stated, higher CCT lamps
are sometimes used for spectrally-enhanced lighting (SEL).\19\
Advocates of spectrally-enhanced lighting believe that lamps with a
higher CCT can help save energy and may also have health benefits.
(NEMA, No. 26 at pp. 2-3) However, DOE notes that although spectrally-
enhanced lighting has benefits, higher CCT lamps do emit a different
color light that may not be appropriate for all applications. Given the
effect on utility and the fact that lamp efficacy usually decreases
with higher color temperatures, it is appropriate to establish
different product classes based on CCT.
---------------------------------------------------------------------------
\19\ DOE has conducted several studies on SEL examining whether
a significant amount of energy can be saved by using lamps that have
less light output, but higher CCT. Lamps with higher CCT appear
brighter than those with lower CCT, so the actual light output of
higher-CCT lamps can be decreased, while maintaining equivalent
perceived brightness and visual acuity. More information on
spectrally enhanced lighting is available at: http://www1.eere.energy.gov/buildings/spectrally_enhanced.html.
---------------------------------------------------------------------------
DOE agrees that a continuous function is not possible because
increasing the CCT does not lead to proportional reductions in lumens
per watt. This occurs because design factors that do not have a linear
relationship with lumens per watt, such as rare earth phosphor mix and
reformulation, must be employed to maintain efficacy, particularly as
CCT increases.
DOE disagrees that a 4,900K division should be used rather than the
proposed 4,500K division. If DOE were to use a 4,900K division and
manufacturers introduced a 4,850K lamp to the market, it would be
subject to standards based on the performance of a 4,100k lamp, which
might be difficult to meet, as 4,100K lamps are generally more
efficacious than their higher CCT counterparts. Likewise, if DOE used a
4,200K division and manufacturers developed a 4,300K lamp for
commercial use, it would be subject to potentially lower standards
based on the performance of a 5,000k lamp. This may result in a
significant loss in potential energy savings. Instead, DOE proposes to
use a 4,500K division, which effectively represents the midpoint
between the most common commercially available ``warmer'' and
``cooler'' lamps at 4,100K and 5,000K, respectively. By establishing
the product class division at the midpoint, DOE ensures that it is
establishing a structure that will not subject lamps to inappropriately
high standards and also not result in the loss of potential energy
savings.
DOE also disagrees with the Joint Comment's argument for a third
product class division around 7,900K aimed at 8,000K lamps. As
discussed in section III.C.2, DOE is amending its definition of
``colored fluorescent lamp,'' such that these lamps above 7,000K would
be excluded from coverage by energy conservation standards. In
consideration of this exclusion, DOE feels that is unnecessary to
establish a third product class for lamps with a CCT greater than
7,900K.
2. Incandescent Reflector Lamps
In the March 2008 ANOPR, DOE considered product classes for IRL
based on the standard-spectrum and modified-spectrum of the lamp. DOE
received numerous comments regarding establishing separate product
classes for: (1) Modified-spectrum lamps; (2) long-life lamps; (3) lamp
diameter; and (4) voltage. The following sections summarize and address
these comments.
a. Modified-Spectrum Lamps
Modified-spectrum lamps provide a unique performance-related
feature to consumers, in that they offer a different spectrum of light
from the typical incandescent lamp, much like two fluorescent lamps
with different CCT values. These lamps offer the same benefits as
fluorescent lamps with ``cooler'' CCTs, in that they may ensure better
color discrimination and often appear more similar to natural daylight,
possibly resulting in psychological benefits.\20\ In addition to
providing a unique performance feature, DOE also understands that the
technologies that modify the spectral emission from these lamps also
decrease their efficacy because a portion of the light emission
[[Page 16939]]
is absorbed by the coating. NEMA and GE supported establishing separate
product classes for modified-spectrum lamps. (Public Meeting
Transcript, No. 21 at p. 105; NEMA, No. 22 at p. 6).
---------------------------------------------------------------------------
\20\ ``Full Spectrum Q&A,'' National Lighting Product
Information Program, Vol. 7 Issue 5 (March 2005). Available at:
http://www.lrc.rpi.edu/programs/nlpip/lightingAnswers/fullSpectrum.
---------------------------------------------------------------------------
However, the Joint Comment stated that separate product classes are
unnecessary because modified-spectrum products which meet all efficacy
levels DOE considered in the ANOPR already exist in the market place.
The Joint Comment further argued that additive methods, used for some
non-IRL technologies, boost particular visible wavelengths of light to
achieve a modified spectrum. These methods represent a more efficient
way to achieve a modified spectrum than subtractive methods commonly
used for IRL, which filter particular visible wavelengths of light.
Therefore, according to the Joint Comment, establishing a separate
product class could reduce energy savings because modified-spectrum
technology would be subject to a needlessly lower standard. The Joint
Comment contended that such a situation would run counter to the
rulemaking's goals. (Joint Comment, No. 23 at pp. 14-15) At the public
meeting, ACEEE and PG&E questioned whether consumers receive additional
utility from modified-spectrum lamps, and, if they do, whether it is
sufficient to warrant a separate product class. ACEEE and PG&E
suggested DOE analyze the energy savings that could be lost with a
separate product class. PG&E further noted that consumers could obtain
any additional utility that modified-spectrum lamps provide from other
available light sources. (Public Meeting Transcript, No. 21 at pp. 101-
103) PG&E commented that modified-spectrum lamps occupy significant
retail shelf space, which suggests they have a significant market
share, and therefore, present a significant energy savings opportunity.
(Public Meeting Transcript, No. 21 at p. 104)
DOE maintains that modified-spectrum lamps provide a unique
performance-related feature (a different spectrum of light from the
typical incandescent lamp) that standard spectrum lamps do not provide.
However, the coatings used for modified-spectrum IRL absorb light
output, thus reducing the lamps' efficacies. Given the reduction in
efficacy, DOE believes that some modified-spectrum lamps may not be
able to meet standards if subjected to the same levels as standard-
spectrum lamps. That, in turn, could cause the unavailability of such
products, thereby eliminating this performance-related feature from the
IRL market. DOE notes that the statute directs DOE to maintain
performance-related features for a covered product type. (42 U.S.C.
6295(o)(4))
Regarding the Joint Comment's argument that higher-efficiency,
additive technologies may be substituted for subtractive technologies
currently used in modified-spectrum IRL lamps, DOE is unaware of any
commercially-available IRL or working IRL prototype that employs these
additive technologies. Although modified-spectrum LED products may be
available, because DOE has determined that modified-spectrum lamps
provide a unique performance-related feature, it is unable to subject
them to standards that would result in the elimination of such IRL
products from the market. Thus, DOE believes it is appropriate to
establish a separate product class for modified-spectrum lamps based on
their unique performance feature and the impact of this performance
feature on product efficacy.
b. Long-Life Lamps
DOE received several comments regarding IRL with long lifetimes. At
the public meeting, NEMA commented that lamp life is a top
consideration for the lighting industry's customers, particularly large
retailers. NEMA stated in its written comments that the current long-
life lamps on the market might be jeopardized by the proposed standard
levels, which could cause manufacturers to reduce lamp life to increase
efficacy--a scenario not necessarily in the market's interest. (Public
Meeting Transcript, No. 21 at pp. 177-178; NEMA, No. 22 at p. 17)
Although NEMA did not explicitly request a separate product class, the
Joint Comment argued that DOE should not establish a separate product
class for long-life lamps, noting that other existing lamp types,
including halogen infrared reflector lamps and CFLs, could adequately
serve long-life applications. In support of their position, the
advocates stated further that Congress did not establish a separate
class for ``long life'' general service incandescent lamps. (Joint
Comment, No. 23 at p. 15)
DOE considers lifetime an economic issue rather than a utility
issue, and accounts for lifetime in its LCC and NPV calculations.
Lifetime is not considered a utility issue because it does not change
the light output of the lamp. As such, DOE did not establish a separate
product class based on lamp lifetime. For more details, see the
engineering analysis in section V.C.4.b and chapter 5 of the TSD.
c. Lamp Diameter
In its written comments, NEMA noted that smaller diameter lamps--
specifically, PAR20 lamps--are inherently less efficient than larger
diameter IRL. Manufacturing PAR20 lamps to be compliant with the same
efficacy standards as larger lamps would be very difficult. NEMA also
commented that the technology options available to larger lamps are not
necessarily applicable to PAR20 lamps. For example, the most efficient
double-ended infrared halogen burner is difficult to use in PAR20 lamps
because of mounting considerations. (NEMA, No. 22 at p. 17)
In response, DOE believes that the IRL diameter provides a distinct
utility to the consumer (such as the ability of reduced diameter lamps
to be installed in smaller fixtures) and recognizes that efficacy
declines with a smaller lamp diameter. A smaller diameter lamp has an
inherently lower optical efficiency than a larger diameter lamp given a
similar filament size. Therefore, DOE is proposing to establish
separate product classes for lamps with a diameter of 2.5 inches or
less and lamps with a diameter greater than 2.5 inches.
d. Voltage
In its written comments, NEMA mentioned that DOE's proposed product
classes and standards do not address how the market actually uses 130
volt (V) lamps, which represent a sizable portion of standard halogen
product sales. NEMA stated that customers almost always operate these
130V lamps at 120V (normal line voltage), which doubles their lifetime
but reduces their efficacy below standard levels. (NEMA, No. 22 at p.
16)
DOE agrees with NEMA and is concerned that the operation of 130V
lamps at 120V has the potential to significantly affect energy savings.
When operated under 120V conditions, lamps rated at 130V in compliance
with existing IRL efficacy standards are generally less efficacious
than lamps using equivalent technology rated at 120V. Because of this
inherent difference in efficacy, it may be less costly to manufacture a
lamp rated at 130V and tested at 130V that complies with a standard
than a similar 120V lamp complying with the same standard. For example,
if DOE were to adopt a minimum efficacy requirement that would
effectively require HIR technology for 120V lamps, due to differences
in the test procedures for lamps rated at 130V, a 130V lamp may only
need to employ an improved halogen technology, which would be
[[Page 16940]]
less costly. If DOE does not establish a separate standard for lamps
rated at 130V, more consumers may purchase 130V lamps because they are
less expensive. When consumers operate these lamps at 120V, in order to
obtain sufficient light output, they may use more energy than
standards-compliant 120V lamps. This practice would increase energy
consumption and result in lamps operating with a lower efficacy than
any cost-justified standard level. Therefore, to preserve the energy
savings intended by these standards, DOE is proposing to establish two
separate product classes: (1) Lamps with a rated voltage less than
125V, and (2) lamps with a rated voltage greater than or equal to 125V.
DOE recognizes that there are other possible approaches for
addressing this issue of the operational efficacy of 130V lamps. One
alternative approach would be that DOE could require all IRL to be
tested at 120V, the most common application voltage in the market. DOE
requests comment on this issue.
B. Screening Analysis
DOE uses the following four screening criteria to determine which
design options are unsuitable for further consideration in the
rulemaking:
(1) Technological Feasibility. DOE will consider technologies
incorporated in commercial products or in working prototypes to be
technologically feasible.
(2) Practicability to Manufacture, Install, and Service. If mass
production and reliable installation and servicing of a technology in
commercial products could be achieved on the scale necessary to serve
the relevant market at the time the standard comes into effect, then
DOE will consider that technology practicable to manufacture, install,
and service.
(3) Adverse Impacts on Product Utility or Product Availability. If
DOE determines a technology would have significant adverse impact on
the utility of the product to significant subgroups of consumers, or
would result in the unavailability of any covered product type with
performance characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as products
generally available in the United States at the time, it will not
consider this technology further.
(4) Adverse Impacts on Health or Safety. If DOE determines that a
technology will have significant adverse impacts on health or safety,
it will not consider this technology further.
10 CFR part 430, subpart C, appendix A, (4)(a)(4) and (5)(b).
Considering these criteria, DOE compiled a list of design options
in the March 2008 ANOPR that could be used to increase the efficacy of
GSFL and IRL lamps (Table V.1). 73 FR 13620, 13644 (March 13, 2008).
Table V.1--GSFL and IRL Design Options
--------------------------------------------------------------------------------------------------------------------------------------------------------
GSFL design options IRL design options
--------------------------------------------------------------------------------------------------------------------------------------------------------
Highly emissive electrode coatings Higher temperature operation.
Higher efficiency lamp fill gas composition Thinner filaments.
Higher efficiency phosphors Efficient filament coiling.
Glass coatings Efficient filament orientation.
Higher efficiency lamp diameter Higher efficiency inert fill gas.
Tungsten-halogen lamps.
Higher pressure tungsten-halogen lamps.
Infrared glass coatings.
Higher efficiency reflector coatings.
Efficient filament placement.
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE received a number of comments in response to its list of
proposed design options, as discussed below.
1. General Service Fluorescent Lamps
NEMA generally agreed with the list of design options, but
mentioned that for GSFL, further efficacy improvement will likely come
from improved system (lamp-ballast-luminaire) combinations, and urged
DOE to aim in future rulemakings to improve overall systems. (NEMA, No.
22 at p. 9; Public Meeting Transcript, No. 21 at pp. 108-109)
DOE understands that the fluorescent lamp is only one part of a
fluorescent lamp system, which also includes ballasts and fixtures.
However, DOE does not have the authority to regulate a fluorescent lamp
system. EPCA prescribes energy conservation standards for certain GSFL
(42 U.S.C. 6295(i)(1)(B)) and fluorescent lamp ballasts. (42 U.S.C.
6295(g)(7)) EPCA does not contain any standards for fluorescent lamp
systems. Since EPCA directs DOE to amend only the existing standards
for GSFL and fluorescent lamp ballasts, DOE has concluded that it does
not have the authority to set energy conservation standards for
fluorescent lamp systems. DOE believes other approaches, such as
building codes, are more appropriate for regulating a fluorescent lamp
system.
a. Higher-Efficiency Lamp Fill Gas Composition
NEMA commented that fill gas mixes are already in use in both T12
and T8 reduced-wattage energy savings lamps. NEMA stated that lamps
could be manufactured using even higher efficiency fill gas
compositions; however, the actual achieved lumen levels may be
unacceptable to the market. NEMA also commented that most manufacturers
identify several application-limiting issues for both T8 and T12
reduced-wattage energy saving lamps. (NEMA, No. 22 at pp. 7, 11-12)
DOE agrees that using fill gas composition in reduced-wattage lamps
can lead to lamps with limited utility. For example, when marketed,
many reduced wattage lamps are not recommended to be used under low
lamp ambient temperatures or in drafty locations and on dimming
ballasts. These situations could result in lamp starting or
stabilization problems, striation (alternating light and dark bands),
pulsing or a reduction in light output. Therefore, although DOE
incorporates reduced-wattage lamps into the LCC and NIA (as they are
viable and likely choices for most GSFL applications), DOE does not
consider any efficacy level that would force consumers to purchase
these lamps. See section V.C.4.a for details.
b. Higher-Efficiency Phosphors
NEMA commented that rare earth phosphors are already at nearly 100
percent quantum efficiency.\21\ While slight improvements in efficacy
are
[[Page 16941]]
possible with a thicker phosphor coating, NEMA argued that using this
option will disproportionately increase lamp costs vis-[agrave]-vis the
performance improvement. NEMA stated that the opportunities for
performance improvement using phosphors ``lie in tailoring phosphor
blends and color temperatures to optimize appropriate light sources for
specific applications.'' (NEMA, No. 22 at p. 7)
---------------------------------------------------------------------------
\21\ ``Quantum efficiency,'' in this context, is used to
quantify the percentage of ultraviolet photons absorbed by the
phosphor that are then reemitted as visible photons.
---------------------------------------------------------------------------
While DOE agrees that thicker phosphor coats may increase cost, DOE
does not consider increased costs in the screening analysis. DOE
considers potential cost increases in its economic analyses. In
addition, many higher-efficiency GSFL incorporate varying thicknesses
of rare earth phosphors, or blends of halophosphors and rare earth
phosphors. These lamps, more efficacious than their pure halophosphor
counterparts, show that using higher-efficiency phosphors is a valid
design option that meets all of the screening criteria. Therefore, DOE
believes there is room for significant efficacy improvement potential
with this design option and, thus, continued to carry it forward in its
analyses.
c. Glass Coating
NEMA commented that higher-efficiency lamps already use glass
coatings. NEMA also stated that while opportunities exist to improve
this technology, manufacturers need to balance costs and performance.
(NEMA, No. 22 at p. 7) DOE recognizes that costs may increase with this
technology option, but as stated earlier, DOE does not consider the
impacts of cost in its screening analysis. Therefore, DOE has included
glass coatings as a design option for GSFL, where prototypes or
commercially-available products exist.
d. Lamp Diameter
NEMA commented that lamp diameter is already used to optimize
luminaire optics and system efficacy, but not to improve lamp efficacy.
According to NEMA, further improvements in performance can come from
new luminaire designs based on different diameter lamps, but will be
limited by lumen packages and the distance between the light source and
the luminaire surfaces. (NEMA, No. 22 at p. 7)
In response to this comment, DOE only considered lamp diameter as a
design option in the migration from T12 to T8 lamps. DOE's research
indicates that T8 lamps are common replacements for T12 lamps. Although
the total lumen output of T8 lamps is often lower than that of T12
lamps, these differences in lumen outputs (on the order of 10 percent)
do not seem to be significant enough to affect consumer utility.
Conversely, although the total lumen output of 4-foot T5 MiniBP lamps
can be similar to 4-foot T8 MBP and 4-foot T12 MBP lamps, the lumen
output is emitted from a more concentrated light source. DOE's research
indicates that T5 lamps' higher light concentrations (and therefore
brightness) may require greater distances between the light source and
illuminated surfaces. Due to this limitation in utility, DOE did not
consider migration to a lamp diameter associated with T5 lamps to be a
design option to improve the efficacy of T8 and T12 lamps.
e. Multi-Photon Phosphors
NEMA commented that although commercial multi-photon phosphors are
theoretically possible, they have yet to be developed, despite 30 to 40
years of research. (NEMA, No. 22 at p. 7) As explained in chapter 3 of
the TSD, because multi-photon phosphors emit more than one visible
photon for each incident ultraviolet photon, a lamp would be able to
emit more light for the same amount of power, thereby increasing
efficacy. DOE agrees that this technology is not sufficiently mature as
to warrant further analysis, so DOE has screened out this technology
option in the March 2008 ANOPR.
2. Incandescent Reflector Lamps
NEMA does not believe that xenon, a higher-efficiency inert fill
gas, should be considered a design option because there is a limited
supply of this gas and prices are increasing rapidly. (NEMA, No. 22 at
p. 8; Public Meeting Transcript, No. 21 at pp. 108-109)
Although price is not considered in the screening criteria, DOE did
conduct an in-depth market assessment of the supply of xenon, and the
potential impact of xenon supply limitations on IRL standard levels.
DOE determined that although xenon is a rare gas, its supply is
sufficiently large to incorporate into all IRL and that the xenon
supply would not affect IRL product availability. A more detailed
analysis of xenon and its availability can be found in appendix 3B of
the TSD.
C. Engineering Analysis
For each product class, the engineering analysis identifies
potential, increasing efficacy levels above the level of the baseline
model. Those technologies not eliminated in the screening analysis
(design options) are inputs to this process. Design options consist of
discrete technologies (e.g., infrared reflective coatings, rare-earth
phosphor mixes). As detailed in the March 2008 ANOPR, to ensure that
efficacy levels analyzed are technologically feasible, DOE concentrated
its efforts on developing product efficacy levels associated with
``lamp designs,'' based upon commercially-available lamps that
incorporate a range of design options in the engineering analysis. 73
FR 13620, 13645 (March 13, 2008). However, when necessary, DOE
supplemented commercially available product information with an
examination of the improved performance attributable to discrete
technologies so that a substitute lamp at each efficacy level would be
available for each baseline lamp.
In energy conservation standard rulemakings for other products, DOE
often develops cost-efficiency relationships in the engineering
analysis. However, for this lamps rulemaking, DOE derived efficacy
levels in the engineering analysis and end-user prices in the product
price determination. By combining the results of the engineering
analysis and the product price determination, DOE derived typical
inputs for use in the LCC and NIA. See the chapter 7 of the TSD for
further details on the product price determination.
1. Approach
For the NOPR, DOE is using the same methodology for the engineering
analysis that was detailed in the March 2008 ANOPR. 73 FR 13620, 13645-
46 (March 13, 2008). The following is a summary of the steps taken in
the engineering analysis:
Step 1: Select Representative Product Classes
Step 2: Select Baseline Lamps
Step 3: Identify Lamp or Lamp-and-Ballast Designs
Step 4: Develop Efficiency Levels.
A more detailed discussion of the methodology DOE followed to perform
the engineering analysis can be found in the engineering analysis
chapter of the TSD (chapter 5).
2. Representative Product Classes
As discussed in section 0 of this notice, DOE proposes establishing
several product classes for GSFL and IRL. DOE proposes eight product
classes across the range of covered GSFL based on utility and
performance features, such as: (1) Physical constraints of lamps (i.e.,
lamp shape and length); (2) lumen package (i.e., standard versus high
output); and (3) correlated color temperature. For IRL, DOE proposes
eight product classes based on spectrum, lamp diameter, and rated
[[Page 16942]]
voltage. As detailed in the March 2008 ANOPR, due to scheduling and
resource constraints, DOE was not able to analyze each and every
product class. 73 FR 13620, 13646 (March 13, 2008). Instead, DOE
carefully selected certain product classes to analyze, and then scaled
its analytical findings for those representative product classes to
other product classes that were not analyzed. 73 FR 13620, 13652 (March
13, 2008). While DOE received several stakeholder comments regarding
methods of scaling to product classes not analyzed (discussed in
section V.C.7), DOE did not receive objections to the decision to scale
to certain product classes and the representative product classes
chosen in the March 2008 ANOPR.
For the NOPR, similar to its approach in the March 2008 ANOPR, DOE
continued to analyze 4-foot medium bipin, 8-foot single pin slimline,
and 8-foot recessed double-contact high output GSFL product classes
with CCTs less than or equal to 4,500K. DOE did not explicitly analyze
U-shaped lamps, but instead scaled the results of the 4-foot medium
bipin class analysis. In addition, DOE has decided to analyze 4-foot T5
miniature bipin standard output lamps and 4-foot T5 miniature bipin
high output lamps with CCTs less than or equal to 4,500K as
representative product classes.
As discussed in section A.2, DOE chose to subdivide IRL into eight
product classes with three subdivisions: (1) High versus low voltage;
(2) large versus small diameter lamps; and (3) modified spectrum versus
standard spectrum. As detailed in the March 2008 ANOPR, DOE chose to
analyze the standard-spectrum incandescent reflector product class
because standard-spectrum lamps are more common than modified-spectrum
lamps. 73 FR 13620, 13648 (March 13, 2008). After analyzing catalog
data and talking to industry experts, DOE found that lamps with a
diameter greater than 2.5 inches are more common than lamps of smaller
diameters. Lamps with voltage ratings less than 125V also are more
common than lamps with higher voltage ratings. Therefore, for the NOPR,
DOE proposes to analyze the product class characterized by standard
spectrum, voltage less than 125V, and diameter greater than 2.5 inches.
For further information on representative product classes, see chapter
5 of the TSD.
3. Baseline Lamps and Systems
Once DOE identified the representative product classes for
analysis, DOE selected the representative units for analysis (i.e.,
baseline lamps) from within each product class. These representative
units are generally what DOE believes to be the most common, least
efficacious lamps in their respective product classes. DOE chose
multiple baseline lamps because DOE found that the market for each
product class is segmented into multiple submarkets for lamps with
slightly different consumer utilities. For example, the 40W T12, 34W
T12, and 32W T8 lamps are the most common lamps in the commercial four-
foot medium bipin product class. The 34W T12 is a reduced wattage lamp
that is not as versatile as the 40W T12, however, and consumers
switching from a T12 to a T8 lamp must purchase a new ballast. Thus,
these lamps are not entirely substitutable, so DOE has chosen to
analyze them as separate baselines. DOE's selection of baseline lamps
is discussed in further detail below.
a. General Service Fluorescent Lamps
As described in the March 2008 ANOPR, DOE took a systems approach
to its GSFL analysis. 73 FR 13620, 13649 (March 13, 2008). In this
approach, DOE selected typical ballasts (which provide current to the
lamps) to pair with each baseline lamp and higher-efficacy lamp. Though
DOE did not consider the ballast as directly affecting lamp efficacy,
the ballast selection does affect the overall system efficacy (system
input power and total lumen output), thereby having a significant
impact on LCC and NIA results. For this reason, DOE considered a
variety of ballast types (e.g., electronic and magnetic) and ballast
factors in its analysis.
In the March 2008 ANOPR, DOE chose three baseline lamps for 4-foot
medium bipins less than or equal to 4,500K (installed on T8 electronic
and T12 magnetic ballasts), three baseline lamps for 8-foot single pin
slimlines less than or equal to 4,500K (installed on T8 electronic and
T12 magnetic ballasts), and two baseline lamps for 8-foot recessed
double-contact HOs less than or equal to 4,500K (installed on T8
magnetic and T12 magnetic ballasts). 73 FR 13620, 13647 (March 13,
2008). DOE did not receive any comments on baseline lamps for the
commercial and industrial sectors and thus has retained all baseline
lamps from the March 2008 ANOPR. However, as discussed below, DOE did
receive comments regarding additional sectors to analyze and the
ballast selected to pair with the 8-foot RDC HO baseline lamps. In
addition, DOE developed baseline lamp-and-ballast systems for the 4-
foot T5 MiniBP SO and HO product classes.
Regarding GSFL operating in the residential sector, several
stakeholders commented that residential T12 ballasts will continue to
be sold past 2009 and that the residential applications of these
ballasts represent a large portion of the remaining market for these
lamps. (NEMA, No. 22 at pp. 20, 25; Public Meeting Transcript, No. 21
at pp. 276-277) PG&E stated that T12 lamps on magnetic ballasts
continue to exist in the residential sector in California. (Public
Meeting Transcript, No. 21 at p. 279) The Joint Comment also stated
that residential applications need to be factored into the analysis,
but because the same lamps can be used in all sectors, a separate
analysis is not needed for the residential sector. (Joint Comment, No.
23 at p. 10)
In response, in this NOPR, DOE has analyzed GSFL in the residential
sector. In interviews with manufacturers and by reviewing manufacturer
product catalogs, DOE found that a significant portion of T12 4-foot
medium bipin lamps operate in the residential sector. DOE is
maintaining the same standards case lamps used in the commercial and
industrial sectors for 4-foot medium bipins in the residential sector
because, as the Joint Comment stated, the same lamps can be used in all
sectors. However, DOE is choosing a separate baseline lamp for the
residential 4-foot medium bipin analysis. Conversations with industry
experts and a published study prepared for PG&E \22\ have revealed that
residential consumers are more likely to buy 40W T12 lamps because 32W
T8 lamps and 34W T12 lamps are less common. Therefore, in the
residential sector, DOE is only analyzing the 40W T12 lamp as a
baseline lamp. In addition, reviewing available catalog information,
DOE has found that the most common 40W T12 lamp sold in the residential
sector is different from the 40W T12 baseline lamp presented in the
March 2008 ANOPR for the commercial and industrial sectors. 73 FR
13620, 13647 (March 13, 2008). Therefore, in the NOPR, DOE has chosen a
40W T12 baseline lamp for the residential sector that has a slightly
lower efficacy (76.8 lm/W) and shorter lifetime (15,000 hours) than the
typical 40W T12 lamp sold in the commercial sector.
---------------------------------------------------------------------------
\22\ ``Codes and Standards Enhancement (CASE) Initiative for
PY2008: Title 20 Standards Development,'' Analysis of Standards
Options for Linear Fluorescent Fixtures (Prepared for PG&E by ACEEE,
Lighting Wizards, and Energy Solutions). (Last modified May 14,
2008) Available at: http://www.energy.ca.gov/appliances/
2008rulemaking/documents/2008-05-15_workshop/other/PGE_CASE_
Study__-Linear_Fluorescent_Fixtures.pdf.
---------------------------------------------------------------------------
[[Page 16943]]
After reviewing manufacturer literature and the study prepared for
PG&E on fixtures in the residential sector,\23\ DOE found that the most
common residential sector ballast is a low-power-factor 2-lamp magnetic
T12 system with a ballast factor of 0.68. Therefore, for the NOPR, DOE
paired the baseline lamp with this ballast for the residential sector
analysis.
---------------------------------------------------------------------------
\23\ Id.
---------------------------------------------------------------------------
Because DOE has decided to cover and analyze 4-foot T5 miniature
bipin standard output and 4-foot T5 miniature bipin high output lamps
in this rulemaking (section 0 of this notice), DOE established baseline
lamps for these two product classes. NEMA and the Joint Comment both
stated that if DOE does not cover T5 lamps, then less efficient,
halophosphor T5 lamps may enter the market place. (Public Meeting
Transcript, No. 21 at pp. 71-72; Joint Comment, No. 23 at p. 3) Because
these less efficient halophosphor T5 lamps are not on the market today,
DOE developed model T5 halophosphor lamps in its engineering analysis.
To create these model T5 lamps, DOE used efficacy data from short
halophosphor fluorescent T5 lamps currently available and developed a
relationship between length and efficacy. DOE validated this
relationship by comparing it to previous industry research. DOE then
used this relationship to determine the efficacies of a halophosphor 4-
foot T5 miniature bipin standard output lamp and a halophosphor 4-foot
halophosphor T5 miniature bipin HO lamps. Specifically, the baseline 4-
foot miniature bipin standard output lamp is 28W with an efficacy of 86
lm/W and a lifetime of 20,000 hours. The baseline 4-foot miniature
bipin high output lamp is 54W with an efficacy of 77 lm/W and a
lifetime of 20,000 hours. DOE used these lamps as baseline lamps to
establish the economic impacts of a standard that would eliminate such
lamps. For more information about these and other baseline lamps, see
chapter 5 and appendix 5B of the TSD.
In its review of manufacturer literature, DOE found that a range of
ballast factors are available for the 4-foot T5 product classes, and
the most common ballast is a 2-lamp electronic ballast. DOE attempts to
compare lamp-and-ballast systems with similar light output so that
consumers switching to more efficient systems will be able to preserve
lumen output. In order for the halophosphor baseline T5 lamps to
produce light output similar to the standards-case T5 lamps, they must
be paired with the highest ballast factor ballasts available on the
market today. Therefore, in the NOPR, DOE is pairing its baseline 4-
foot T5 SO miniature bipin lamp with a 1.15 ballast factor ballast, and
its baseline 4-foot T5 miniature bipin HO lamp with a 1.0 ballast
factor ballast. For further detail on the baseline lamps and ballasts
selected for the 4-foot T5 product classes, see chapter 5 of the TSD.
DOE proposed in the March 2008 ANOPR that the most common ballast
in use for the 8-foot T12 recessed double-contact, high-output product
class is an electronic rapid-start ballast. (March 2008 ANOPR TSD
chapter 5). Several stakeholders commented at the public meeting that
the majority of 8-foot T12 high-output ballasts installed today are
magnetic. (Public Meeting Transcript, No. 21 at pp. 124-125; Public
Meeting Transcript, No. 21 at p. 126) NEMA and the Joint Comment also
commented that magnetic T12 high-output ballasts are allowed under
current regulations and, therefore, will continue to be sold past 2009.
(Joint Comment, No. 23 at p. 7; NEMA, No. 22 at p. 25) Because the
majority of the installed base is magnetic, DOE is revising its
baseline T12 high-output ballast to be magnetic for the life-cycle cost
analysis. However, DOE recognizes that historical shipments from the
2000 rulemaking on GSFL ballasts (hereafter ``2000 Ballast Rule'') (62
FR 56740 (Sept. 19, 2000)) indicate that T12 electronic high-output
ballasts are also increasingly being shipped.\24\ Therefore, in the
national impacts analysis, DOE modeled the installed base on magnetic
ballasts, and forecasted shipments of T12 high-output lamps operating
on both electronic and magnetic ballasts in the national impacts
analysis. For further detail regarding the revised baseline lamps and
systems for the 8-foot RDC HO product class, see chapter 5 of the TSD.
---------------------------------------------------------------------------
\24\ U.S. Department of Energy--Energy Efficiency and Renewable
Energy Office of Building Research and Standards, Technical Support
Document: Energy Efficiency Standards for Consumer Products:
Fluorescent Lamp Ballast Proposed Rule (Jan. 2000). Available at:
http://www1.eere.energy.gov/buildings/appliance_standards/residential/gs_fluorescent_0100_r.html.
---------------------------------------------------------------------------
DOE reviewed the remaining baseline lamp-and-ballast systems
discussed in the March 2008 ANOPR and believes they are still
appropriate, as DOE received no comments concerning these systems.
Therefore, DOE maintained the same number of lamps per system and
ballasts discussed in the March 2008 ANOPR for the 4-foot medium bipin
and 8-foot single pin slimline product classes analyzed in the
commercial and industrial sectors. 73 FR 13620, 13647 (March 13, 2008).
b. Incandescent Reflector Lamps
In the March 2008 ANOPR, DOE proposed three baseline lamps for the
IRL representative product class. 73 FR 13620, 13648 (March 13, 2008).
These baseline lamps, all parabolic reflector (PAR) halogen baseline
lamps, are regulated by EPCA and meet the EPCA standard. (42 U.S.C.
6295(i)(1)) NEMA commented that because BR lamps remain on the market
due to a Federal exemption and because they are commonly used in
consumer applications, the BR lamp should be the baseline lamp instead
of the halogen PAR. (Public Meeting Transcript, No. 21 at p. 162; NEMA,
No. 22 at pp. 10, 16, and 18) NEMA also contends that because DOE
selected halogen PAR lamps as the baseline, DOE is losing the
opportunity to show additional energy savings. (NEMA, No. 22 at p. 16)
In response, although BR lamps are a common incandescent reflector
lamp on the market today, DOE believes they should not be selected as
baseline lamps in the engineering analysis of this rulemaking for the
reasons that follow. The baseline lamp should be typical of covered
lamps within a certain product class. The most common BR lamp is the
65W BR lamp, which remains on the market due to Federal exemptions.
Because the 65W BR lamp is not covered in this rulemaking, it cannot be
a baseline lamp. In addition, consumers purchasing the 65W BR lamp
would not be affected by the amended standards proposed in this NOPR.
Therefore, DOE would not be able to demonstrate additional energy
savings for those consumers purchasing the 65W BR lamp even if it were
able to select that lamp as a baseline lamp.
Although certain BR lamps are covered in this rulemaking, DOE
predicts that the most typical lamp sold on the market in 2012 will
continue to be the halogen PAR lamp. EISA 2007 required that all non-
exempted BR lamps meet EPCA standards by January 1, 2008. Because these
lamps are similar in efficacy and price to the halogen PAR, the most
common reflector lamps meeting the EPCA standard in 2007, DOE is
continuing to choose halogen PAR lamps as the baseline lamp for the
NOPR.
NEMA commented that current PAR baseline lamps have higher efficacy
than the lamps sold in 1992 (when EPACT 1992 prescribed IRL standards),
due to optical improvements. (NEMA, No. 22 at p. 16) However, because
DOE prefers that the baseline lamp be typical of lamps sold on the
market today, DOE is maintaining the same 90W PAR baseline lamp and 75W
PAR baseline lamp used
[[Page 16944]]
in the March 2008 ANOPR. 73 FR 13620, 13648 (March 13, 2008). DOE now
believes that the 50W PAR30 baseline lamp with a lifetime of 3,000
hours and an efficacy of 11.6 lm/W presented in the March 2008 ANOPR is
not typical of lamps sold on the market today. 73 FR 13620, 13648
(March 13, 2008). Therefore, for this notice, DOE is choosing a 50W
PAR30 lamp with an efficacy of 14.2 lm/W and a lifetime of 3,000 hours.
Based on an examination of manufacturer product catalogs, DOE believes
that this lamp is a higher-volume product than the baseline lamp
presented in the March 2008 ANOPR. The lamp choice is consistent with
advice DOE received from GE to use lamps from major manufacturers in
the IRL analysis for modified-spectrum lamps. (Public Meeting
Transcript, No. 21 at p. 170) For further detail on IRL baseline lamps,
see chapter 5 of the TSD.
4. Lamp and Lamp-and-Ballast Designs
As described in the March 2008 ANOPR, in the engineering analysis,
DOE considered only ``design options''--technology options used to
improve lamp efficacy that were not eliminated in the screening
analysis. 73 FR 13620, 13644 (March 13, 2008). DOE's selection of
design options guided its selection of lamp and lamp-and-ballast
designs and efficacy levels. For example, for GSFL, DOE noted groupings
around the types of phosphor used and the wall thickness of those
phosphors. Regarding IRL, DOE identified natural ``technology-based''
divisions in the market around the type of incandescent technology
(i.e., halogen or HIR) used. DOE also identified certain technology
options and created model lamps to represent the efficacy those
technology options could achieve.
As described in the March 2008 ANOPR, DOE also accounted for lumen
output when DOE established lamp designs for its analyses. 73 FR 13620,
13648 (March 13, 2008). For the LCC analysis, DOE considered those
lamps (or lamp-and-ballast systems) that: (1) Emit lumens equal to the
lumen output of the baseline lamp or lamp-and-ballast system, or below
that lamp by no more than 10 percent; and (2) result in energy savings.
DOE took this approach in order to accurately characterize the cost-
effectiveness of a particular efficacy level if a consumer makes an
informed decision that maintains light output. However, as DOE
recognizes that all consumers may not make such decisions, lamp or
lamp-and-ballast designs that under-illuminate, over-illuminate, or do
not result in energy savings are considered in the NIA.
a. General Service Fluorescent Lamps
As described in the March 2008 ANOPR, DOE used a systems approach
for the fluorescent lamp analysis, because DOE recognizes that both
lamps and ballasts determine a system's energy use and the overall
system lumen output. 73 FR 13620, 13649 (March 13, 2008). This approach
allows DOE to select a variety of lamp-and-ballast designs that meet a
given efficacy level. Generally, DOE chose its potential design options
by selecting commercially-available fluorescent lamps at higher
efficacies than the baseline lamps. These higher efficacies are
achieved through the design options described in the screening
analysis. After selecting these higher-efficacy lamps, DOE selected
lamp-and-ballast combinations for the LCC that both save energy and
maintain comparable lumen output. For instances when the consumer is
replacing only the lamp, DOE selected a reduced-wattage, higher-
efficacy lamp for use on the existing ballast. For instances when the
consumer is replacing both the lamp and the ballast, DOE was able to
obtain energy savings and maintain comparable lumen output using a
variety of lamp-and-ballast combinations.
In the March 2008 ANOPR, DOE stated that it was not able to
identify any application restrictions on using reduced-wattage
fluorescent lamps, so therefore, DOE included reduced-wattage lamps as
design options in the ANOPR. 73 FR 13620, 13650 (March 13, 2008). NEMA
responded that most manufacturers identify several application issues
for these lamps. For example, NEMA stated that reduced-wattage T8 lamps
cannot be used with certain rapid-start circuits, at temperatures below
60 degrees Fahrenheit ([deg]F) (or 70 [deg]F for the 25W lamp), in
drafty locations, in air-handling fixtures, on low-power-factor
ballasts, on dimming ballasts, or on an inverter-operated emergency
lighting system, unless the equipment is specifically listed for use
with the reduced-wattage lamp in question. (NEMA, No. 22 at p. 10) NEMA
also stated that reduced-wattage T12 lamps cannot be used at
temperatures below 60 [deg]F, in drafty locations, on low-power-factor
ballasts, on reduced-light-output ballasts, on dimming ballasts, or on
inverter-operated emergency lighting systems unless the equipment is
specifically listed for use with the reduced-wattage lamp in question.
(NEMA, No. 22 at p. 11)
In response, DOE recognizes that reduced-wattage lamps cannot be
used in certain applications and that consumers should not be subject
to any decrease in utility and performance due to an amended energy
conservation standard. However, because consumers have the opportunity
to purchase at least one full-wattage T12 or T8 lamp at each efficacy
level, consumer utility will not be reduced by amending the existing
energy conservation standard.
There are many applications where reduced-wattage lamps are
appropriate. Therefore, DOE is modeling reduced-wattage lamps in the
engineering analysis. In the NIA, DOE did not shift all consumers to
reduced-wattage lamps in response to an energy conservation standard,
because reduced-wattage lamps cannot be used in certain applications.
Specifically, the majority of residential consumers have low-power-
factor ballasts not designed to operate 34W T12 lamps. These
assumptions are displayed in the NIA market-share matrices described in
chapter 10 of the TSD.
b. Incandescent Reflector Lamps
In the March 2008 ANOPR, DOE selected lamp designs and candidate
standard levels (CSLs) by observing natural efficacy divisions in the
marketplace that correspond to the use of technologies (e.g., halogen
capsules, HIR technology, and improved reflector coatings) to increase
lamp efficacy. 73 FR 13620, 13650 (March 13, 2008). CSL1, as set forth
in the March 2008 ANOPR, could be met with a halogen lamp using a
silverized reflector coating. CSL2 could be met with a 3,000-hour
halogen infrared (IR) lamp. CSL3 could be met with an improved 4,000-
hour halogen infrared lamp. CSL3 could also be achieved by using design
options like a silverized reflector coating with a halogen infrared
burner, or improved filament placement and higher efficiency inert fill
gases in conjunction with a halogen infrared burner.
At the public meeting and through written comments, NEMA proposed
several changes to the lamp designs and efficacy levels DOE identified
for the IRL engineering analysis. NEMA suggested that DOE should
analyze four efficacy levels, beginning with one slightly above EPCA
and ending with the max-tech candidate standard level analyzed in the
March 2008 ANOPR. (NEMA, No. 22 at p. 17) However, the efficacies of
the baseline lamps chosen in the engineering analysis are above the
lowest NEMA-proposed efficacy level. Therefore, because NEMA's lowest
proposed efficacy level would not raise the efficacies of the most
common
[[Page 16945]]
reflector lamps on the market today, DOE did not consider it in this
NOPR.
NEMA commented that DOE should also consider in its NOPR an
efficacy level that can be met with non-standard halogen or infrared
halogen lamps. (NEMA, No. 22 at p. 18) This standard level would lie
between the first efficacy level proposed by NEMA and the first
candidate standard level (CSL1) proposed by DOE in the March 2008
ANOPR. 73 FR 13620, 13651 (March 13, 2008). To model the technologies
that meet this efficacy level, DOE modeled an improved halogen lamp
that uses xenon, a higher efficiency inert fill gas.
NEMA commented that DOE should not analyze CSL1 presented in the
March 2008 ANOPR because that level is based on the silverized
reflector coating, a patented technology.\25\ (NEMA, No. 22 at pp. 16-
17; Public Meeting Transcript, No. 21 at pp. 157-158) Other
stakeholders commented that DOE should research when the patent on the
silver technology expires, because the standard does not go into effect
until 2012. (Joint Comment, No. 23 at p. 15) The Joint Comment stated
that DOE should research viable alternatives that can be used to reach
the first CSL if the silverized reflector coating is indeed patented.
(Joint Comment, No. 23 at p. 15)
---------------------------------------------------------------------------
\25\ DOE notes that it would clearly be technologically feasible
for manufacturers to adopt a product design that surpasses the
levels specified in CSL1 (e.g., using technologies that meet CSL2)
and also avoids use of the proprietary technology in question.
However, if DOE were to adopt CSL1, as presented in the March 2008
ANOPR, such manufacturers would be at a competitive disadvantage as
compared to manufacturers who are able to access the patented
technology.
---------------------------------------------------------------------------
In response to these stakeholder comments, DOE researched the
silverized reflector technology and found that the patent for that
technology expires in December 2019.\26\ Therefore, for the purpose of
this rulemaking, DOE considers the silverized reflector coating a
proprietary technology. As discussed during the Framework stage of this
rulemaking, DOE only considers proprietary designs in its engineering
analysis if there are other technology pathways to meet that efficacy
level. DOE researched possible lamp designs for the March 2008 ANOPR's
first CSL and found that a halogen lamp with a silverized reflector
coating is the only improved halogen technology that can meet the March
2008 ANOPR CSL1. However, a slightly lower level can be achieved with
an HIR lamp that has a 6,000-hour lifetime. Therefore, DOE is
considering a slightly lower level that can be met by both long-life
HIR lamp designs and silverized reflector coating lamp designs in the
NOPR. In its analysis of this level, DOE considers both lamp designs as
viable consumer options.
---------------------------------------------------------------------------
\26\ Zhao, Tianji et al., ``Protected Coating for Energy
Efficient Lamp,'' U.S. Patent 6,773,141 (August 10, 2004).
---------------------------------------------------------------------------
NEMA commented that DOE should lower CSL2, because longer life
lamps would be in jeopardy of being eliminated from the marketplace.
Because longer life products typically have lower efficacies,
manufacturers may need to reduce lamp life to meet a particular
efficacy level. (Public Meeting Transcript, No. 21 at pp. 177-178;
NEMA, No. 22 at p. 16; Joint Comment, No. 23 at p. 15) Although
increased lifetime reduces a lamp's efficacy, DOE believes that
lifetime is a consumer economic issue rather than a utility issue. In
addition, the IRL at each standard level can be manufactured with
lifetimes equal to or greater than the lifetimes of the baseline lamp.
Therefore, consumers who are purchasing the baseline lamp will continue
to be able to purchase a lamp with a similar lifetime in the standards
case. Finally, DOE has conducted an analysis to assess the impact of
standards on longer lifetime lamps. Based on this analysis, documented
in appendix 5D of the TSD, DOE is reasonably certain that even under
the highest efficacy level analyzed in this NOPR, 6,000 hour lifetime
lamps are technologically feasible. For all of these reasons, DOE
maintained the lamp designs and efficacy level for CSL2 described in
the March 2008 ANOPR.
Similar to its comments related to CSL1, NEMA commented that CSL3
is problematic because it is also based on the silverized reflector
coating, a patented technology. (NEMA, No. 22 at p. 17; Public Meeting
Transcript, No. 21 at pp. 157-158)
In its conversations with manufacturers and review of manufacturer
catalogs, DOE found that CSL3 is achievable using technologies other
than a silverized reflector coating. For example, other non-patented
types of improved reflectors and higher-efficiency IR coatings can be
used to reach this level. In fact, all major manufacturers produce two
or more lamps that exceed this level, some of which are not dependent
on the proprietary silverized reflector. Therefore, because there are
alternate technology pathways to this level, DOE maintained the March
2008 ANOPR CSL3 as efficacy level 4 in the NOPR. This efficacy level is
consistent with CSL4 proposed by NEMA in its comment. (NEMA, No. 22 at
p. 17)
Finally, DOE conducted additional market research and discovered
that IRL with efficacies significantly higher than the ANOPR CSL3 (or
NOPR EL4) are being sold by one major manufacturer. These IRL are
marketed as halogen infrared lamps with a silverized reflector,
improved IR coating, and a lifetime of 4,200 hours. Therefore, in order
to meet the requirement to analyze the highest technologically feasible
level, for the NOPR, DOE has added a fifth efficacy level (EL5) based
on these high-efficacy lamps. Although, to DOE's knowledge, there are
no commercially-available IRL that do not use the patented silverized
reflector and are equivalent in efficacy, DOE's research indicates that
that are alternate, non-proprietary technology pathways to meet this
efficacy level. In particular, DOE has extensively researched one
particular advanced IR coating technology. Through interviews with
manufacturers of this technology and through independent testing, DOE
has preliminarily concluded that by using this advanced IR coating
technology with a standard aluminum reflector, manufacturers can
produce an IRL with an efficacy that exceeds EL5. For further detail on
DOE's research on this technology, see appendix 5D of the TSD.
In summary, EL1 is based on an improved halogen lamp that uses
xenon, a higher-efficiency inert fill gas. EL2 is based on a halogen
infrared lamp with a lifetime of 6,000 hours; a halogen lamp using a
silverized reflector coating could also meet this EL. EL3 is associated
with a 3,000-hour halogen infrared lamp; this EL is more efficient than
EL2 due to higher temperature operation of the filament. EL4 is based
on a 4,000-hour improved halogen infrared lamp; improvements in the
halogen infrared lamp could be made by using a double-ended halogen
infrared burner, higher-efficiency inert fill gases, and efficient
filament orientation. EL5 is based on a 4,200-hour halogen infrared
lamps (even further improved); these further improvements include an
improved reflector, IR coating, or filament design that produces
higher-temperature operation (and may reduce lifetime to 3,000 hours).
5. Efficiency Levels
a. General Service Fluorescent Lamps
i. Revisions to ANOPR Efficiency Levels
For the March 2008 ANOPR, DOE developed CSLs for GSFL by dividing
initial lumen output by the ANSI rated wattages of commercially-
available lamps, resulting in rated lamp efficacies. In response to the
potential GSFL efficacy levels presented in the March 2008 ANOPR, NEMA
commented on several reasons why the association
[[Page 16946]]
believes that the efficacy levels need to be revised. NEMA's comments
regarding the efficacy levels considered in the March 2008 ANOPR can be
divided into five categories: (1) The appropriateness of using ANSI
rated wattages in the calculation of lumens per watt; (2) consideration
of variability in production of GSFL; (3) manufacturing process
limitations related to specialty products; (4) consideration of
adjustments to photometry calibrations; and (5) the appropriateness of
establishing efficacy levels to the nearest tenth of a lumen per watt.
(NEMA, No. 22 at p. 13-14) In consideration of the above issues, NEMA
suggested revised efficacy levels that could achieve the same results
as the efficacy levels considered in the March 2008 ANOPR.
First, in support of lowering the March 2008 ANOPR efficacy levels,
NEMA argued that ANSI rated wattages of GSFL are not necessarily
representative of long-term reference watts. NEMA further stated that
in many cases the actual lamp reference watts are greater than the ANSI
designated value. (NEMA, No. 22 at p. 14) Second, NEMA commented on
production variability and its impact on the resulting measured lamp
efficacies. NEMA stated that DOE should not use nominal catalog initial
lumen values when developing efficacy levels, as they do not reflect
statistical lot-to-lot production variation. It also argued that as
lamp lumens per watt is not a controlled process element in production
or a product rating, larger tolerances may be required. NEMA further
stated that lumens per watt is actually a calculation based on two
primary process control elements: (1) Watts and (2) lumens. When
practical production variation in lamp wattage (above ANSI-designated
values) and lamp lumens (below catalog initial lumens) combine, the
resulting variation in lumens per watt may be larger than expected.
NEMA stated that DOE's proposed efficacy levels should be lowered to
account for these tolerances. (NEMA, No. 22 at p. 14)
In consultation with the National Institute of Standards and
Technology (NIST), DOE has investigated this issue thoroughly, and DOE
agrees with NEMA on several points. By analyzing manufacturer
compliance reports (submitted to DOE for existing GSFL energy
conservation standards), DOE found that efficacies of lamps when
reported for the purpose of compliance often vary from catalog-rated
values. Specifically, DOE agrees that ANSI designated rated wattages
may not be appropriate in calculating efficacy. In fact, the test
procedures for GSFL incorporate a tolerance factor comparing measured
lamp wattage to ANSI-rated wattage. DOE acknowledges that this
tolerance factor could in fact significantly alter the measured
efficacy of the lamps from the rated efficacy. In addition, DOE agrees
that using rated lamp efficacy does not sufficiently account for lot-
to-lot production variability. For this reason, to establish revised
GSFL efficacy levels, DOE proposes to use lamp efficacy values
submitted to DOE over the past 10 years for the purpose of compliance
with existing energy conservation standards. Using compliance reports
as a basis for efficacy standards should ensure that DOE is accurately
characterizing the tested performance of GSFL, accounting for the
measured wattage effects and wattage and lumen output variability as
discussed above.
Further remarking on the effects of production variability, NEMA
argued that it is inappropriate to use a small number of test samples
to calculate a lumen-per-watt efficacy level. NEMA stated that its
suggested levels incorporate a safety factor to take into account
manufacturer process variations. (NEMA, No. 22 at p. 14) While DOE
appreciates NEMA's input, it disagrees that the sample size is
inappropriate. At NEMA's suggestion, a sample size of 21 lamps was
originally established for reporting requirements in the 1997 test
procedure rulemaking. 62 FR 29222, 29229 (May 29, 1997). The reported
efficacy values are obtained by testing at least three lamps
manufactured each month for at least 7 months out of a 12-month period.
Upon receiving NEMA's comment, DOE consulted with NIST and has
tentatively concluded that the minimum of 21 samples is sufficiently
large sample size, assuming a normal distribution. In addition, by
using the compliance report efficacies, DOE believes that it is
accounting for statistical variations due to differences in production.
The efficacy reported for compliance is related to the lower limit of
the 95-percent confidence interval. This interval represents variation
over the whole population of production, not only the sample size. 62
FR 29222, 29230 (May 29, 1997).
Third, NEMA commented that the proposed efficacy levels should be
lowered to account for realistic production and manufacturing process
limitations. NEMA argued that it may not be possible to apply the
highest efficacy levels to some specialty products because they do not
use high-speed production methods. (NEMA, No. 22 at p. 14) DOE is
unaware of specialty products that meet the definition of GSFL and
would be unable to meet the proposed standards. Therefore, DOE cannot
appropriately quantify the reduction in efficacy level necessary if
such situation in fact exists. DOE requests further comment and detail
on this topic.
Fourth, NEMA claims that because the National Voluntary Laboratory
Accreditation Program (NVLAP) has made adjustments to photometry
calibrations since 1997, the lumens for some products have actually
been reduced. These adjustments would thereby merit a reduction in
DOE's GSFL efficacy levels. (NEMA, No. 22 at p. 14) In response, DOE
consulted with NIST, which is unaware of any such adjustments in
photometry calibrations since 1997. The lumen scale has not changed
more than 0.2 percent as a result of changes to calibration systems.
Furthermore, the formula used in the compliance reports contains a 2-
percent de-rate factor to allow for testing variations. Therefore, DOE
disagrees with NEMA's assertion that the efficacy levels should be
further lowered to account for these adjustments.
Finally, NEMA maintained that if DOE uses lumens per watt as the
efficacy level measurement, then the numbers should be rounded to the
nearest whole number, rather than carried out to the tenths decimal
place. In the March 2008 ANOPR, DOE considered efficacy levels that
were specified to the nearest tenths lumen per watt. NEMA asserts that
lamp testing and production variation does not allow for establishing
minimum lumens per watt levels to the tenth place. (NEMA, No. 22 at p.
12) While DOE appreciates NEMA's comment, after consulting with NIST,
DOE disagrees that lamp production variation would prohibit the
regulation of GSFL to the nearest tenth decimal place of lumens per
watt. If DOE were able to set minimum efficacy requirements to the
nearest tenth of a decimal place, the higher-accuracy measurements and
compliance could result in increased energy savings. However, in
consideration of DOE's approach to establish efficacy levels and
conduct subsequent analyses based on certification and compliance
reports submitted by manufacturers, DOE now believes that maintaining
the current rounding procedure (i.e., to the nearest whole lumen per
watt) is more appropriate. Because manufacturer compliance reports
round numbers to the nearest lumen per watt, DOE believes that the data
would not support establishment of an energy conservation standard for
GSFL to the nearest tenth
[[Page 16947]]
of a lumen per watt. Therefore, in this NOPR, DOE is proposing to
establish efficacy levels as whole lumen per watt numbers.
DOE presents revised GSFL efficacy levels in section VI.A.1 of this
NOPR.
ii. Four-Foot T5 Miniature Bipin Efficiency Levels
Because DOE proposes to cover 4-foot T5 miniature bipin lamps and
4-foot T5 miniature bipin HO lamps, DOE developed efficacy levels for
these two product classes. In its review of manufacturer literature,
DOE identified the most common 4-foot T5 miniature bipin standard
output lamps on the market (which based on product catalogs, DOE
believes accounts for the majority of the 4-foot T5 SO market). The
first efficacy level for this product class is based on these lamps,
which use 800-series phosphors and have a rated catalog efficacy
(initial lamp lumens divided by ANSI rated wattage) of 104 lm/W. In its
research, DOE also noted higher efficacy 4-foot T5 miniature bipin
standard output lamps that use improved 800-series phosphors.
Specifically, there is a reduced-wattage (26W) 4-foot T5 miniature
bipin lamp (with a rated efficacy of 112 lm/w) and a full-wattage (28W)
lamp (with a rated efficacy of 110 lm/w). EL2, the second efficacy
level for this product class, is based on these higher-efficacy lamps.
Therefore, DOE analyzed two efficacy levels for this product class. The
first efficacy level prevents the introduction of less-efficacious
halophosphor lamps on the market, while the second efficacy level
raises the efficacy of the current highest volume 4-foot T5 miniature
bipin lamps on the market. In order to account for manufacturer
variation, DOE used the average reductions in efficacy values due to
manufacturer variation calculated for the highest efficacy 4-foot T8
medium bipin lamps, and applied those same reductions to the 4-foot
miniature bipin rated efficacy values.
For the 4-foot T5 miniature bipin HO product class, DOE found that
higher-efficacy full-wattage lamps do not exist on the market today.
DOE did identify a higher-efficacy reduced-wattage lamp for this
product class. However, because reduced-wattage lamps have a limited
utility, DOE is choosing to base its efficacy levels on full-wattage
lamps. In this way, consumers are not forced to purchase a lamp with
limited utility under energy conservation standards. Therefore, for
this product class, DOE is analyzing one efficacy level, which prevents
the introduction of less-efficacious halophosphor lamps on the market.
For more information on GSFL efficacy levels, see chapter 5 of the TSD.
b. Incandescent Reflector Lamps
As wattage increases for incandescent lamps, efficacy generally
increases. Therefore, so that the efficacy levels reflected the
performance of these lamps, DOE proposed in the ANOPR that the efficacy
requirement for IRL vary according to the following equation:
a*P0.27, where ``a'' is a constant specifying the technology
level and ``P'' is the wattage of the lamp. 73 FR 13620, 13645 (March
13, 2008). At the public meeting, NEMA commented that the smooth form
of the candidate standard levels for IRL was appropriate. (Public
Meeting Transcript, No. 21 at pp. 100-101, 156) Several other
stakeholders also commented that they support the continuous function
for IRL. These stakeholders noted that continuous functions more
closely follow theoretical equations predicting the level of efficacy
possible for any given desired level of light output and thus maximize
energy savings. (Joint Comment, No. 23 at p. 15) DOE agrees with these
comments and is proposing to maintain the continuous function for IRL
in the same equation form proposed in the ANOPR.
As described in section V.C.4.b, DOE is proposing five efficacy
levels in this NOPR. EL1 is based on an improved halogen lamp that uses
xenon, a higher-efficiency inert fill gas. EL2 is based on a halogen
infrared lamp with a lifetime of 6,000 hours. A halogen lamp using a
silverized reflector coating also meets this EL. EL3 is based on the
3,000-hour HIR lamp. EL4 is based on a 4,000-hour improved HIR lamp.
EL5 is based on a 4,200-hour improved HIR lamp.
6. Engineering Analysis Results
a. General Service Fluorescent Lamps
In chapter 5 of the March 2008 ANOPR TSD, DOE presented lifetime,
rated wattage, and rated efficacy results for all lamp-and-ballast
designs. NEMA commented that the lifetime rating for the reduced-
wattage 30W T8 lamp should be 20,000 hours instead of 18,000 hours.
(NEMA, No. 22 at p. 18) DOE reviewed catalog data and agrees that
20,000 hours is the appropriate lifetime for the 30W T8 lamp. DOE also
reviewed catalog data for other reduced-wattage lamps. DOE found
several 25W T8 lamps that were introduced on the market after it
completed the ANOPR GSFL engineering analysis. Therefore, DOE updated
the 25W T8 reduced-wattage lamp to have a slightly higher lumen output
and longer lifetime to reflect the more common 25W T8 lamps sold on the
market today.
Through interviews with lamp manufacturers, DOE found that several
of the rated wattages DOE used in its ANOPR for the 4-foot medium bipin
product class were not accurate. For the NOPR, DOE updated the rated
wattage of the nominally 40W T12 from 40 to 41 watts. DOE also updated
the rated wattage of the 30W T8, 28W T8, and 25W T8 lamp from 30 to
30.4 watts, 28 to 28.4 watts, and 25 to 26.6 watts, respectively. Due
to these updates (and because the rated wattage affects the rated lamp
efficacy), two 40W T12 lamps and the 25W T8 lamp have lower
efficiencies than as they were analyzed in the March 2008 ANOPR. For
further detail associated with these revisions, see chapter 5 of the
TSD.
In addition to updating lamp efficacy, DOE revised the 8-foot T12
high output engineering analysis to reflect the purchase of a magnetic
ballast in both the base case and standards case. As discussed in
section V.C.4.a of this notice, DOE recognizes that a typical 8-foot
T12 high output system uses a magnetic ballast. In addition, as the
2000 ballast rule does not require that these systems be electronic,
consumers will be able to purchase a magnetic 8-foot T12 high output
system in the future.
DOE also created a separate residential engineering analysis. In
this engineering analysis, DOE assumes that the most typical installed
fluorescent system in a residential household is a 40W T12 magnetic
system. However, DOE recognizes that T8 systems are gaining in market
share in the residential market. Therefore, DOE assumes that the
majority of fluorescent systems installed for new construction and
renovation in the residential sector are T8 systems. DOE discusses this
assumption further in section V.D and V.E, as it primarily affects the
LCC and NIA.
In the March 2008 ANOPR, DOE considered using two low ballast
factor (BF) ballasts for 4-foot T8s, a 0.75 BF and a 0.78 BF. ACEEE
stated that manufacturers are now selling ballasts for 4-foot T8 lamps
with a ballast factor between 0.68-0.7 and that DOE should consider
this ballast in the engineering analysis. (Public Meeting Transcript,
No. 21 at p. 262) After reviewing catalog data for fluorescent lamp
ballasts, DOE decided to add a ballast with a 0.71 BF in its
engineering analysis as a system option that attains energy savings
while maintaining light output. By including this low-BF ballast, DOE
is able to more thoroughly characterize all consumer purchase options
in the LCC and NIA.
b. Incandescent Reflector Lamps
In the March 2008 ANOPR, DOE also presented engineering analysis
results
[[Page 16948]]
for IRL. NEMA generally agreed with the efficacy values in the table.
(NEMA, No. 22 at p. 18) Thus, DOE is maintaining this approach with one
exception. Specifically, DOE is revising the efficacy values it used
for the 50W PAR30 baseline lamps and is creating several additional
model lamps for the efficacy levels not analyzed in the March 2008
ANOPR. Because the revised baseline model exhibits a slightly different
lumen package than the baseline model analyzed in the March 2008 ANOPR,
DOE has created several additional model lamps in order to match the
lumen package of the baseline lamp. For more information on the revised
baseline model, see section V.C.3.b. For more information about lamp
designs used in the IRL engineering analysis, see chapter 5 of the TSD.
7. Scaling to Product Classes Not Analyzed
As discussed above, DOE identified and selected certain product
classes as ``representative'' product classes where DOE would
concentrate its analytical effort. DOE chose these representative
product classes primarily because of their high market volumes. The
following section discusses how DOE scaled efficacy standards from
those product classes it analyzed to those it did not.
a. General Service Fluorescent Lamps
In the engineering analysis for GSFL, DOE decided not to analyze
the 2-foot U-shaped product class and the product classes with a CCT
greater than 4,500K, due to the small market share of these classes.
Instead, DOE is scaling the efficacy standards for the product classes
analyzed to these product classes. The following sections discuss DOE's
approaches to scaling to product classes not directly analyzed.
i. Correlated Color Temperature
Regarding the CCT product class division, DOE found in the March
2008 ANOPR that the reduction in efficacy between 4,100K and 6,500K
lamps was between 4 percent and 7 percent. To avoid subjecting certain
products to inappropriately high standards, DOE considered a single 7-
percent reduction (from the efficacy levels for lamps with CCT less
than or equal to 4,500K (low CCT)) for product classes greater than
4,500K (high CCT). 73 FR 13620, 13653 (March 13, 2008).
NEMA disagreed with DOE's use of a single 7-percent reduction for
all GSFL lamps with a CCT greater than 4,500K. (NEMA, No. 22 at p. 18)
NEMA submitted a written comment recommending an individualized
reduction for each efficacy level and each product class for products
with a CCT between 4,500K and 7,000K. NEMA's reductions ranged from 2.6
percent to 7.2 percent, depending on the efficacy level and product
class. (NEMA, No. 26 at pp. 4, 6-7)
The Joint Comment also disagreed with the 7-percent reduction DOE
employed. Looking at catalog data for the greater-than-4,500K product
classes, the Joint Comment noted that the reduction in efficacy when
moving from low-CCT to high-CCT lamps or from 4-foot MBP to 2-foot U-
shaped lamps varies by efficacy level. For example, at CSL1 in the 4-
foot medium bipin product class, the Joint Comment found that no
reduction in the efficacy standard was necessary because high-CCT and
2-foot U-shaped T8 lamps are able to meet that level. At CSL3, the
Joint Comment found a 5-percent reduction was appropriate; at CSL4 and
CSL5, the Joint Comment found a 3-percent reduction was appropriate.
Based on this data, the Joint Comment stated that the commenters would
accept a 5-percent reduction for both the 2-foot U-shaped and greater-
than-4,500K product classes. (Joint Comment, No. 23 at pp. 9-10)
Through an examination of the comments and a further inspection of
manufacturer catalog data, DOE now recognizes that a single efficacy
reduction of 7 percent for each efficacy level and each product class
is not always appropriate when trying to establish efficacy levels for
lamps with greater than 4,500K CCT. Therefore, for this NOPR, DOE
proposes to establish a separate scaling factor for each EL and product
class. DOE's intention in developing scaling factors for this NOPR was
to establish high-CCT efficacy levels that mimic the same technological
effects as the low-CCT efficacy levels. For example, if EL3 for the
low-CCT 4-foot MBP product class eliminates all but the highest-
efficacy, low-CCT T12 lamps, DOE established a high-CCT EL3 that
attempted to eliminate all but the highest-efficacy, high-CCT, T12
lamps as well. Because the NEMA technical committee analyzed all
efficacy levels for all product classes with a similar intention and
because DOE found that this range is consistent with the range of
reductions found in manufacturer literature, DOE proposes to adopt the
percentage reduction for each EL suggested by NEMA. In order to
establish efficacy levels for high CCT lamps, DOE then applied these
percentage reductions to the efficacy levels (discussed in
sectionV.C.5.a) for the representative product classes. For more
information on the efficacy levels for product classes with a CCT
greater than 4,500K, see chapter 5 of the TSD.
ii. U-Shaped Lamps
Regarding the 2-foot U-shaped product classes, in March 2008 ANOPR,
DOE found that when comparing catalog efficacies of 2-foot U-shaped
lamps to 4-foot MBP lamps, efficacy scaling factors varied depending on
whether one was comparing T12 lamps or T8 lamps. Specifically, DOE had
initially determined that a 3-percent reduction was appropriate for T8
lamps, and a 6-percent reduction was appropriate for T12 lamps. To
avoid subjecting certain products to inappropriately high standards,
DOE stated that it was considering to apply a single 6-percent
reduction from the five 4-foot medium bipin efficacy levels to obtain
five 2-foot U-shaped efficacy levels. 73 FR 13620, 13653 (March 13,
2008).
In response to the ANOPR, NEMA commented that only three ELs for
the 2-foot U-shaped product class were appropriate. These ELs
recommended by NEMA were based on the same technology options for the
4-foot medium bipin product class: (1) NEMA's EL1 would remove all
halophosphor T12 lamps; (2) NEMA's EL2 would remove all 700-series T12
U-lamps; and (3) NEMA's EL3 would remove all T12 U-lamps. (NEMA, No. 22
at p. 15) Each EL recommended by NEMA represented an approximately 9-
percent to 10-percent reduction from ELs in the 4-foot medium bipin
product class. As discussed above, the Joint Comment recommended that
DOE use a single 5-percent reduction when scaling from the 4-foot
medium bipin product class to the 2-foot U-shaped product class.
However, the Joint Comment also found that the reduction varied by CSL.
(Joint Comment, No. 23 at pp. 9-10)
Similar to its analysis regarding scaling to high-CCT product
classes, DOE recognizes that a single reduction in efficacy may not be
appropriate for all efficacy levels for the U-shaped product classes.
Therefore, similar to NEMA's suggestion, DOE is proposing a separate
reduction for each efficacy level based on similar technology steps
seen for the 4-foot medium bipin product class. However, after
examining commercially-available product DOE believes that five, not
three, efficacy levels are appropriate for the 2-foot U-shaped product
class. DOE assessed manufacturer catalogs containing commercially-
available U-shaped lamps to develop standard levels with a similar
technology impact at each EL as 4-foot linear medium bipin lamps. DOE
[[Page 16949]]
supplemented this analysis with compliance report data for U-shaped
lamps to verify that the established efficacy levels coincide with the
technological goals and actual performance of products on the market.
For specific scaling factors for the proposed 2-foot U-shaped efficacy
levels and a more detailed discussion of DOE's methodology, see chapter
5 of the TSD.
b. Incandescent Reflector Lamps
i. Modified-Spectrum IRL
At the ANOPR public meeting, DOE stated that the average reduction
in efficacy of modified-spectrum lamps (as compared to standard
spectrum lamps) was between 2 percent and 25 percent, with an average
reduction of 15 percent. DOE acknowledged the range of spectrum
modification and its effects on utility, and aimed to establish a
standard that would not eliminate modified-spectrum lamps. Therefore,
in the March 2008 ANOPR, DOE considered a minimum efficacy requirement
for each modified-spectrum lamp that would be dependent on the testing
of a equivalent standard-spectrum lamp. More specifically, the efficacy
requirement for the modified-spectrum lamp would be determined on a
per-lamp basis by measuring the lumen output of both the modified-
spectrum lamp and the equivalent standard-spectrum reference lamp;
manufacturers would then multiply the ratio of lumen outputs (i.e., the
lumen output of the modified-spectrum lamp divided by the lumen output
of the standard-spectrum reference lamp) by the efficacy requirement
for the standard-spectrum reference lamp to obtain the efficacy
requirement for that modified-spectrum lamp. 73 FR 13620,13653 (March
13, 2008).
GE commented that this approach may be reasonable as long as DOE
gave this reduction to true modified-spectrum lamps, rather than lamps
marketed as having modified spectrums, but which in fact do not meet
the requirements of that term. (Public Meeting Transcript, No. 21 at p.
168) NEMA commented that DOE's proposal for establishing an efficacy
standard for modified-spectrum IRL is complicated, difficult to
enforce, and non-verifiable. (NEMA, No. 22 at p. 19) In addition, NEMA
expressed concern that the responsibility of establishing the efficacy
for the equivalent standard-spectrum lamp would fall on the
manufacturer. (Public Meeting Transcript, No. 21 at pp. 100-101) Also,
the Joint Comment disagreed with an approach that would allow modified-
spectrum technologies a variable reduction in efficacy (depending on
their degree of spectrum modification and the method with which it is
reached). (Joint Comment, No. 23 at p. 16) In response to those
comments, DOE recognizes the drawbacks to the approach considered in
the ANOPR and instead in the NOPR is proposing a single efficacy
requirement (irrespective of the degree or method of spectrum
modification) for each modified-spectrum IRL product class.
GE and NEMA suggested that the 25-percent reduction for A-line
modified-spectrum lamps enacted by EISA 2007 standards for general
service incandescent lamps (GSIL) and modified-spectrum GSIL may be
appropriate for modified-spectrum IRL. (Public Meeting Transcript, No.
21 at pp. 169-170; NEMA, No. 22 at p. 19) The Joint Comment expressed
an opposing viewpoint, arguing that the 25-percent reduction specified
in EISA 2007 was based on a political compromise, not technical
research. The Joint Comment also mentions that Ecos Consulting, on
behalf of PG&E, tested a variety of modified-spectrum general service
incandescent lamps. Their researchers estimated a total light output
reduction of 11 to 18 percent due to the modified spectrum. (Joint
Comment, No. 23 at p. 16)
DOE agrees with the Joint Comment that the reduction in efficacy
for general service incandescent lamps used in EISA 2007 may not be
appropriate for IRL. Instead, DOE based its reduction for the modified-
spectrum product classes on independent testing and research of
commercially-available modified-spectrum and standard-spectrum IRL.
Several stakeholders commented that the range of lumen reduction (2
percent to 29 percent) found among commercially-available modified-
spectrum IRL may be attributable to lamps that do not meet the
statutory definition of ``modified spectrum,'' which would make the
stated average too high. (NEMA, No. 22 at p. 19; Public Meeting
Transcript, No. 21 at pp. 164-167) These stakeholders suggested that
DOE should only use lamps that meet the definition of ``modified
spectrum'' when determining an appropriate scaling factor. (Public
Meeting Transcript, No. 21 at p. 167-168) GE suggested that lamps sold
by major manufacturers will meet the statutory definition of ``modified
spectrum'' because NEMA manufacturers offered input into the
legislative process that created this definition. (Public Meeting
Transcript, No. 21 at p. 171)
In addition, the Joint Comment noted that when determining the
modified-spectrum scaling factor, DOE should base its analysis on HIR
IRL sources rather than conventional incandescent or conventional
halogen IRL. The Joint Comment further stated that the spectral
distribution of the HIR sources have reduced output in the red region
of the spectrum compared to conventional incandescent lamp. The comment
argued because this red region is the portion of the spectrum modified-
spectrum lamps are often trying to suppress, a lower and more accurate
scaling factor could be calculated by considering only HIR lamps.
(Joint Comment, No. 23 at p. 16)
DOE agrees with stakeholders regarding the need to determine
appropriate scaling factors and tested several modified-spectrum lamps
from major manufacturers to determine whether they qualify as modified
spectrum under the statutory definition. DOE only used the IRL that
qualify as modified spectrum under the statutory definition to
determine an appropriate scaling factor. In addition, DOE acknowledges
that the spectral power distributions of incandescent (non-halogen),
halogen, and HIR IRL are different over the electromagnetic spectrum.
However, DOE does not believe that the reduced light output in the red
region of the spectrum of HIR sources significantly affects the
resulting scaling factor. This high wavelength red region of the
spectrum is not weighted heavily when calculating the lumens emitted by
the lamp. Therefore, any spectral differences in the infrared regions
between the halogen IRL compared to the halogen infrared IRL would
produce only minor differences in the reduction in efficacy for
modified-spectrum lamps. Therefore, DOE tested both HIR and
conventional halogen lamps in determining an appropriate scaling factor
for modified spectrum.
However, as non-halogen (or conventional incandescent) IRL have
significantly different radiation spectra over wavelengths contributing
to the calculation of lumens (in general their light outputs are
shifted toward lower wavelengths), it is likely that the resulting
scaling factor based on these lamps would be significantly different
than for halogen sources. Because non-halogen IRL (representing the IRL
lamp types exempted from standards) are not regulated in this
rulemaking, DOE believes that it would be inappropriate to include such
lamps in its scaling factor analysis. Therefore, DOE considered only
halogen and HIR IRL for the computation of the modified-spectrum IRL
scaling factor.
[[Page 16950]]
To determine the scaling factor, DOE tested seven pairs (each pair
consisting of one standard-spectrum lamp and one lamp marketed as
modified-spectrum or a similar designation) of halogen IRL and one pair
of HIR IRL made by major manufacturers. Though many of the lamps did
not qualify as modified-spectrum under the statutory definition, for
those that did qualify, DOE determined that the difference in light
output and efficacy due to the modified-spectrum coating was 19 percent
for both the halogen and IR halogen lamps. Therefore, DOE proposes to
use a 19 percent reduction as the scaling factor for modified-spectrum
IRL. For further details on scaling to modified-spectrum lamps, see
chapter 5 and appendix 5C of the TSD.
ii. Lamp Diameter
As discussed in section V.A.2.c, in this NOPR, DOE has established
separate product classes for IRL with a diameter of 2.5 inches or less
based on their decreased efficacy associated with the unique utility
that they provide (e.g., ability of reduced diameter lamps to be
installed in smaller fixtures). NEMA commented that a percentage
reduction should be applied to the PAR30/PAR38 CSL so as not to
eliminate PAR20 lamps (with diameters of 2.5 inches) at the highest
CSLs set forth in the ANOPR. (Public Meeting Transcript, No. 21 at pp.
158-159) NEMA explained that the PAR20 lamp optical system is
inherently less efficient than the PAR30 and PAR38 optical systems. In
addition, it is difficult to implement the most efficient double-ended
HIR burner in the PAR20 lamps. Therefore, NEMA suggests a reduction in
the lumen per watt standards by 12 percent. (NEMA, No. 22 at pp. 17-18)
In the Joint Comment, stakeholders stated that they were not opposed to
a reduction in the efficacy standard as long as data supports
manufacturer claims. (Joint Comment, No. 23 at p. 15-16)
DOE understands that PAR20 lamps are inherently less efficient than
PAR30 and PAR38 lamps. To determine an appropriate scaling factor, DOE
examined the inherent efficacy differences between the PAR20 lamp and
its PAR30 or PAR38 counterpart by comparing catalog efficacy data of
each lamp type from several lamp manufacturers. In general, DOE's
analysis is consistent with NEMA's suggestion. Therefore, DOE proposes
applying a 12-percent reduction from the efficacy requirement of the
PAR30/PAR38 product class to determine the efficacy requirement for the
PAR20 product class. For further details regarding the scaling to
smaller lamp diameters, see chapter 5 of the TSD.
iii. Voltage
DOE also conducted an analysis to determine how to scale from the
less than 125 volt product class to the greater or equal to 125 volt
product class. NEMA commented that lamps rated at 130V are almost
always used by customers to achieve ``double life'' by operating them
at 120V, which results in performance below EPACT 1992 efficacy levels.
(NEMA, No. 22 at p. 16) In consideration of the different test
procedures for IRL rated at 130V than those rated at 120V, and by using
equations from the IESNA Lighting Handbook,\27\ DOE derived an efficacy
scaling factor which would result in equivalent performance of both
classes of IRL when operating under the same voltage conditions (as
NEMA suggests they most often are). DOE determined that a higher
standard for lamps equal to or greater than 125V would result in
similar technological requirements and operational efficacies for lamps
rated at all voltages. Using published manufacturer literature and the
IESNA Lighting Handbook, DOE determined that there should be a 15-
percent increase in the efficacy standard for lamps rated at 125V or
greater. See chapter 5 of the TSD for details of the results and
methodology used in the scaling analysis and other aspects of the
engineering analysis.
---------------------------------------------------------------------------
\27\ Rea, M. S., ed., The IESNA Lighting Handbook: Reference and
Application, 9th Edition. New York: Illuminating Engineering Society
of North America. IESNA (2000).
---------------------------------------------------------------------------
D. Life-Cycle Cost and Payback Period Analyses
This section describes the LCC and payback period analyses and the
spreadsheet model DOE used for analyzing the economic impacts of
possible standards on individual consumers. Details of the spreadsheet
model, and of all the inputs to the LCC and PBP analyses, are contained
in chapter 8 and appendix 8A of the TSD. DOE conducted the LCC and PBP
analyses using a spreadsheet model developed in Microsoft Excel. When
combined with Crystal Ball (a commercially-available software program),
the LCC and PBP model generates a Monte Carlo simulation \28\ to
perform the analysis by incorporating uncertainty and variability
considerations.
---------------------------------------------------------------------------
\28\ Monte Carlo simulations model uncertainty by utilizing
probability distributions instead of single values for certain
inputs and variables.
---------------------------------------------------------------------------
The LCC analysis estimates the impact of a standard on consumers by
calculating the net cost of a lamp (or lamp-and-ballast system) under a
base-case scenario (in which no new energy conservation standard is in
effect) and under a standards-case scenario (in which the proposed
energy conservation regulation is applied). As detailed in the March
2008 ANOPR, the life-cycle cost of a particular lamp design is composed
of the total installed cost (which includes manufacturer selling price,
sales taxes, distribution chain mark-ups, and any installation cost),
operating expenses (energy, repair, and maintenance costs), product
lifetime, and discount rate. 73 FR 13620, 13659 (March 13, 2008). As
noted in the March 2008 ANOPR, DOE also incorporated a residual value
calculation to account for any remaining lifetime of lamps (or
ballasts) at the end of the analysis period. 73 FR 13620, 13659 (March
13, 2008). The residual value is an estimate of the product's value to
the consumer at the end of the life-cycle cost analysis period. In
addition, this residual value must recognize that a lamp system
continues to function beyond the end of the analysis period. DOE
calculates the residual value by linearly prorating the product's
initial cost consistent with the methodology described in the Life-
Cycle Costing Manual for the Federal Energy Management Program.\29\
---------------------------------------------------------------------------
\29\ Fuller, Sieglinde K. and Stephen R. Peterson, National
Institute of Standards and Technology Handbook 135 (1996 Edition);
Life-Cycle Costing Manual for the Federal Energy Management Program
(Prepared for U. S. Department of Energy, Federal Energy Management
Program, Office of the Assistant Secretary for Conservation and
Renewable Energy) (Feb. 1996). Available at: http://fire.nist.gov/fire/firedocs/build96/PDF/b96121.pdf.
---------------------------------------------------------------------------
The payback period is the change in purchase expense due to an
increased energy conservation standard, divided by the change in annual
operating cost that results from the standard. Stated more simply, the
payback period is the time period it takes to recoup the increased
purchase cost (including installation) of a more-efficient product
through energy savings. DOE expresses this period in years.
The Joint Comment stated that given the inherent uncertainty in the
LCC methodology, DOE should recognize that LCC results within a certain
range can be considered essentially equivalent. The Joint Comment
emphasized that recognizing this uncertainty is especially important if
other aspects of the analysis (e.g., energy savings) show large
differences for standard levels with LCC results that, given
uncertainty in the analysis, are essentially the same. (Joint Comment,
No. 23 at p. 22) DOE agrees that there are inherent sources of
uncertainty in
[[Page 16951]]
the results of the LCC analysis due to the need to forecast certain
inputs (e.g., future electricity prices). In addition, DOE recognizes
that inputs such as sales tax, operating hours, and discount rates may
introduce variability in LCC results. However, as explained below,
DOE's analyses are structured so as to address such uncertainties. As
stated earlier, to properly characterize the LCC results, DOE performed
probability analyses via Monte Carlo simulations by utilizing Microsoft
Excel in combination with Crystal Ball. The Monte Carlo approach
allowed DOE to determine average LCC savings and payback periods, as
well as the proportion of lamp installations achieving LCC savings or
attaining certain payback values. To fully consider the range of LCC
results that may occur due to a standard, DOE also performed several
sensitivity analyses on inputs such as operating hours, electricity
price forecasts, and product prices. Based on these analyses, DOE
believes that it can characterize the LCC and PBP for these products
with a reasonable degree of certainty. See the TSD appendix 8B for
further details, where probable ranges of LCC results are presented.
Table V.2 summarizes the approach and data that DOE used to derive
the inputs to the LCC and PBP calculations for the March 2008 ANOPR and
the changes made for today's proposed rule. The following sections
discuss these inputs and comments DOE received regarding its
presentation of the LCC and PBP analyses in the March 2008 ANOPR, as
well as DOE's responses thereto.
Table V.2--Summary of Inputs and Key Assumptions Used in the ANOPR and
NOPR LCC Analyses
------------------------------------------------------------------------
Changes for the
Inputs March 2008 ANOPR Proposed Rule
------------------------------------------------------------------------
Consumer Product............ Applied discounts to Used same
Price....................... manufacturer methodology from
catalog (``blue- March 2008 ANOPR to
book'') pricing in derive additional
order to represent prices for new
low, medium, and lamps and ballasts
high prices for all incorporated into
lamp categories. the engineering
Discounts were also analysis.
applied to develop
a price for
ballasts.
Sales Tax................... Derived weighted- Updated the sales
average tax values tax using the
for each Census latest information
division and large from the Sales Tax
State from data Clearinghouse.\2\
provided by the
Sales Tax
Clearinghouse.\1\
Installation Cost........... Derived costs using IRL and GSFL:
the RS Means Updated lamp
Electrical Cost replacement and
Data, 2007 \3\ to lamp and ballast
obtain average replacement labor
labor times for rates from 2006$ to
installation, as 2007$.
well as labor rates GSFL: Added 2.5
for electricians minutes of
and helpers based installation time
on wage rates, to the new
benefits, and construction, major
training costs. retrofit, and
renovation events
in the commercial
and industrial
sectors to capture
the time needed to
install luminaire
disconnects.
Disposal Cost............... Not included........ GSFL: Included a
recycling cost of
10 cents per linear
foot in the
commercial and
industrial sectors.
IRL: No change.
Annual Operating Hours...... Determined operating GSFL: Added
hours by residential GSFL to
associating LCC analysis and
building-type- used methodology
specific operating developed in the
hours data with March 2008 ANOPR to
regional derive residential
distributions of operating hours for
various building GSFL based on data
types using the in the 2002 U.S.
2002 U.S. Lighting Lighting Market
Market Characterization
Characterization and the EIA's 2001
\4\ and the Energy Residential Energy
Information Consumption Survey.
Administration's IRL: Removed
(EIA) 2003 industrial sector
Commercial Building analysis due to the
Energy Consumption low prevalence of
Survey (CBECS),\5\ IRL in that sector.
2001 Residential
Energy Consumption
Survey,\6\ and 2002
Manufacturing
Energy Consumption
Survey.\7\
Product Energy Consumption Determined lamp Updated 4-foot T8
Rate. input power (or lamp-and-ballast
lamp-and-ballast system input power
system input power based on additional
for GSFL) based on published
published manufacturer
manufacturer literature.
literature. Used a Developed new
linear fit of GSFL system input powers
system power on for 8-foot T12 HO
several different systems, 4-foot T12
ballasts with residential
varying ballast systems, and 4-foot
factors in order to T5 systems.
derive GSFL system
power for all of
the ballasts used
in the analysis.
Electricity Prices.......... Price: Based on Price: Updated using
EIA's 2005 Form EIA- EIA's 2006 Form EIA
861 data. 861 data.\8\
Variability: Variability: No
Regional energy change.
prices determined
for 13 regions.
Electricity Price Trends.... Forecasted with Updated with EIA's
EIA's Annual Energy AEO2008.\10\
Outlook (AEO)
2007.\9\
Lifetime.................... Ballast lifetime Ballasts: No change
based on average in commercial and
ballast life of industrial sector.
49,054 from 2000 Developed separate
Ballast Rule.\11\ ballast lifetime
Lamp lifetime based estimate for the
on published residential sector.
manufacturer Residential GSFL: 4-
literature where foot medium bipin
available. DOE lamp lifetime is
assumed a lamp dependent on the
operating time of 3 fixture lifetime
hours per start. (i.e., the fixture
Where manufacturer reaches end of life
literature was not before the lamp
available, DOE reaches end of
derived lamp life.).
lifetimes as part Commercial and
of the engineering industrial GSFL: No
analysis. change.
IRL: No change.
[[Page 16952]]
Discount Rate............... Residential: DOE updated the
Approach based on commercial and
the finance cost of industrial discount
raising funds to rates using the
purchase lamps latest versions of
either through the the sources used in
financial cost of the March 2008
any debt incurred ANOPR.
to purchase product
or the opportunity
cost of any equity
used to purchase
equipment, based on
the Federal
Reserve's Survey of
Consumer Finances
data \12\ for 1989,
1992, 1995, 1998,
2001, and 2004.
Commercial and
industrial: Derived
discount rates
using the cost of
capital of publicly-
traded firms in the
sectors that
purchase lamps,
based on data in
the 2003 CBECS,\13\
Damodaran
Online,\14\
Ibbotson's
Associates,\15\ the
2007 Value Line
Investment
survey,\16\ Office
of Management and
Budget (OMB)
Circular No. A-
94,\17\ 2008 State
and local bond
interest rates,\18\
and the U.S. Bureau
of Economic
Analysis.\19\.
Analysis Period............. Based on the longest Commercial and
baseline lamp life industrial GSFL: No
in a product class Change.
divided by the Residential GSFL:
annual operating Analysis period is
hours of that lamp. based on the useful
lifetime of the
baseline lamp.
IRL: No Change.
Lamp Purchasing Events...... DOE assessed five GSFL: DOE assumed
events: Lamp that HO lamps used
failure, standards- magnetic ballasts
induced retrofit, in the base case.
ballast failure DOE added lamp
(GSFL only), failure, ballast
ballast retrofit failure/fixture
(GSFL only), and failure, and new
new construction/ construction events
renovation. for 4-foot medium
bipin systems in
the residential
sector, where DOE
also assumed the
usage of magnetic
ballasts in the
base case.
IRL: No change.
------------------------------------------------------------------------
\1\ The four large States are New York, California, Texas, and Florida.
\2\ Sales Tax Clearinghouse, Aggregate State Tax Rates (2008)(Last
accessed May 30, 2008). Available at: http://thestc.com/STrates.stm.
The May 30, 2008 material from this Web site is available in Docket
EE-2006-STD-0131. For more information, contact Brenda
Edwards at (202) 586-2945.
\3\ R. S. Means Company, Inc., 2007 RS Means Electrical Cost Data
(2007).
\4\ U.S. Department of Energy, Office of Energy Efficiency and Renewable
Energy, Energy Conservation Program for Consumer Products: Final
Report: U.S. Lighting Market Characterization, Volume I: National
Lighting Inventory and Energy Consumption Estimate (2002). Available
at: http://www.eere.energy.gov/buildings/info/documents/pdfs/lmc_vol1_final.pdf.
\5\ U.S. Department of Energy, Energy Information Administration,
Commercial Building Energy Consumption Survey: Micro-level data, file
2 Building Activities, Special Measures of Size, and Multi-building
Facilities (2003). Available at: http://www.eia.doe.gov/emeu/cbecs/public_use.html.
\6\ U.S. Department of Energy, Energy Information Administration,
Residential Energy Consumption Survey: File 1: Housing Unit
Characteristic (2006). Available at: http://www.eia.doe.gov/emeu/recs/recs2001/publicuse2001.html.
\7\ U.S. Department of Energy, Energy Information Administration,
Manufacturing Energy Consumption Survey, Table 1.4: Number of
Establishments by First Use of Energy for All Purposes (Fuel and
Nonfuel) (2002). Available at: http://www.eia.doe.gov/emeu/mecs/mecs2002/data02/shelltables.html.
\8\ U.S. Department of Energy, Energy Information Administration, Form
EIA-861 for 2006 (2006). Available at: http://www.eia.doe.gov/cneaf/electricity/page/eia861.html.
\9\ U.S. Department of Energy, Energy Information Administration, Annual
Energy Outlook 2007 with Projections to 2030 (Feb. 2007). Available
at: http://www.eia.doe.gov/oiaf/aeo/index.html.
\10\ U.S. Department of Energy, Energy Information Administration,
Annual Energy Outlook 2008 with Projections to 2030 (June 2008).
Available at: http://www.eia.doe.gov/oiaf/aeo/excel/aeotab_3.xls.
\11\ U.S. Department of Energy, Energy Efficiency and Renewable Energy,
Office of Building Research and Standards, Technical Support Document:
Energy Efficiency Standards for Consumer Products: Fluorescent Lamps
Ballast Final Rule (Sept. 2000). Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/gs_fluorescent_0100_r.html.
\12\ The Federal Reserve Board, Survey of Consumer Finances. Available
at: http://www.federalreserve.gov/PUBS/oss/oss2/scfindex.html.
\13\ U.S. Department of Energy, Energy Information Administration,
Commercial Building Energy Consumption Survey (2003). Available at:
http://www.eia.doe.gov/emeu/cbecs/.
\14\ Damodaran Online, The Data Page: Historical Returns on Stocks,
Bonds, and Bills--United States (2006). Available at: http://pages.stern.nyu.edu/adamodar. (Last accessed Sept. 12, 2007.) The
September 12, 2007 material from this Web site is available in Docket
EE-2006-STD-0131. For more information, contact Brenda
Edwards at (202) 586-2945.
\15\ Ibbotson's Associates, Stocks, Bonds, Bills, and Inflation,
Valuation Edition, 2001 Yearbook (2001).
\16\ Value Line, Value Line Investment Survey (2007). Available at:
http://www.valueline.com.
\17\ U.S. Office of Management and Budget, Circular No. A-94 Appendix C
(2008). Available at: http://www.whitehouse.gov/omb/circulars/a094/a94_appx-c.html.
\18\ Federal Reserve Board, Statistics: Releases and Historical Data--
Selected Interest Rates--State and Local Bonds (2008). Available at:
http://www.federalreserve.gov/releases/h15/data/Monthly/H15_SL_Y20.txt.
\19\ U.S. Department of Commerce, Bureau of Economic Analysis, Table
1.1.9 Implicit Price Deflators for Gross Domestic Product (2008).
Available at: http://www.bea.gov/national/nipaweb/SelectTable.asp?Selected=N.
1. Consumer Product Price
As in the March 2008 ANOPR, DOE used a variety of sources to
develop consumer equipment prices, including lamp and ballast prices in
manufacturers' suggested retail price lists (``blue books''), State
procurement contracts, large electrical supply distributors, hardware
and home improvement stores, Internet retailers, and other similar
sources. DOE then developed low, medium, and high prices based on its
findings.
For the NOPR, DOE added several new lamps and ballasts to its
analyses. Accordingly, DOE developed prices for 4-foot medium bipin
GSFL systems in
[[Page 16953]]
the residential sector, the 8-foot HO magnetic ballast, and
commercially-available 4-foot T5 miniature bipin standard output and
high-output lamps and ballasts using the same methodology applied in
the March 2008 ANOPR. However, not all lamps assessed for this
rulemaking are commercially available. In particular, DOE developed
model halophosphor T5 standard-output and high-output lamps as
baselines for these product classes. To establish prices for these
baseline lamps, DOE calculated the price differential between a
halophosphor 4-foot MBP lamp and the highest-efficacy 32W 4-foot MBP
lamp. DOE then used this relationship to scale prices from the
commercially-available T5 standard-output and high-output lamps to
establish the halophosphor lamp prices.
DOE also developed a model IRL for EL1 based on the incorporation
of xenon gas into the lamps. To determine the price of these lamps, DOE
interviewed manufacturers and conducted its own research on the cost of
xenon \30\ to develop a manufacturer cost increase over the baseline
lamp in a product class, and then applied a markup to represent
consumer prices. See the engineering analysis in section V.C.4.b for
further information on the model IRL lamp.
---------------------------------------------------------------------------
\30\ DOE used the information in the following article to obtain
the price of xenon: Betzendahl, Richard, ``The Rare Gets More Rare:
The Rare Gases Market Update,'' CryoGas International (June 2008)
26.
---------------------------------------------------------------------------
DOE also developed a price for the 6,000-hour HIR IRL for the NOPR.
After reviewing data in manufacturer catalogs and interviewing
manufacturers, DOE determined that the manufacturing costs for the
6,000-hour HIR lamp are the same as the manufacturing costs for the
3,000-hour HIR lamps that meet EL3. Therefore, for the NOPR, the
commoditized retail prices for the long-life HIR lamps are the same as
for the IRL that meet EL3.
Lastly, because DOE did not have manufacturer suggested retail
price list data for the EL5 (HIR Plus) IRL, DOE used prices offered by
Internet retailers to establish prices for these lamps. Specifically,
DOE calculated individual retailers' discounts on blue book prices for
EL4 (Improved HIR) lamps. DOE applied these same discounts to establish
average blue book prices for EL5 lamps across all Internet retailers
found to sell both EL4 and EL5 lamps. Using these approximate blue-book
prices, DOE then followed the same methodology applied in the March
2008 ANOPR to establish low, medium and high lamp prices.
2. Sales Tax
As in the March 2008 ANOPR, DOE obtained State and local sales tax
data from the Sales Tax Clearinghouse. (March 2008 ANOPR TSD chapter 7)
The data represented weighted averages that include county and city
rates. DOE used the data to compute population-weighted average tax
values for each Census division and four large States (New York,
California, Texas, and Florida). For the NOPR, DOE retained this
methodology and used updated sales tax data from the Sales Tax
Clearinghouse \31\ and updated population estimates from the U.S.
Census Bureau.\32\
---------------------------------------------------------------------------
\31\ Sales Tax Clearinghouse, ``Aggregate State Tax Rates''
(2007) (Last accessed May 30, 2008). Available at: http://thestc.com/STrates.stm. The May 30, 2008, material from this Web
site is available in Docket EE-2006-STD-0131. For more
information, contact Brenda Edwards at (202) 586-2945.
\32\ U.S. Census Bureau, ``Population Change: April 1, 2000 to
July 1, 2007'' (July 2007). Available at: http://www.census.gov/popest/states/files/NST-EST2007-popchg2000-2007.csv.
---------------------------------------------------------------------------
3. Installation Costs
As detailed in the ANOPR, DOE considered the total installed cost
of a lamp or lamp-and-ballast system to be the consumer product price
(including sales taxes) plus the installation cost. 73 FR 13620, 13660
(March 13, 2008). For the commercial and industrial sectors, DOE
assumed an installation cost that was the product of the average labor
rate and the time needed to install a lamp or lamp and ballast. In the
residential sector, DOE assumed that consumers must pay for the
installation of a lamp and ballast system. Therefore, the installation
cost assumed was the product of the average labor rate and the time
needed to install the lamp and ballast system. However, DOE assumed
that consumers would install their own replacement lamps and, thus,
would incur no installation cost when replacing their own lamp.
DOE received multiple comments on the average labor rates DOE used
in the March 2008 ANOPR: $65.35 per hour for an electrician and $42.40
per hour for an electrician's helper. (March 2008 ANOPR TSD chapter 8).
DOE assumed that the lamp-and-ballast hourly labor rate is 50 percent
of an electrician's rate and 50 percent of the helper's rate, for a
total labor rate of $53.88 based on ``RS Means Electrical Cost Data,
2007'' (RS Means).\33\ NEMA commented that $53.88 per hour is
approximately 10 percent lower than the current labor rate including
benefits, while the Joint Comment stated that $54 per hour for ballast
change-outs is reasonable only for residential and small commercial
customers, and is too high for large commercial customers, who will
have a full-time electrician or non-electrician maintenance person on
staff for installations. (NEMA, No. 22 at p. 22; Joint Comment, No. 23
at p. 10) ACEEE also commented that large companies may have
electricians on staff and encouraged DOE to research labor rates for
these workers. (Public Meeting Transcript, No. 21 at pp. 216-217)
---------------------------------------------------------------------------
\33\ R. S. Means Company, Inc., 2007 RS Means Electrical Cost
Data (2007).
---------------------------------------------------------------------------
DOE understands that there may be a range of labor rates in the
market for installations and also clarifies that the March 2008 ANOPR
labor rate of $53.88 per hour is for the installation of lamps and
ballasts, not only ballasts, as stated in the Joint Comment. ACEEE and
the Joint Comment requested that DOE lower the labor rate, while NEMA
commented that DOE should raise the labor rate; none of the comments
provided DOE with supporting references. DOE uses ``RS Means Electrical
Cost Data, 2007,'' because labor costs in RS Means are based on labor
union agreements and construction wages, as well as actual working
conditions in 30 major U.S. cities. Productivity data in RS Means
represents an extended period of observations. For this reason, DOE
chose to retain for the NOPR the RS Means methodology used for the
March 2008 ANOPR. Based on inflation estimates derived from consumer
price index data from the U.S. Bureau of Labor Statistics, DOE
estimated that this rate in 2007 dollars is $55.41 per hour. DOE also
updated the lamp replacement labor rate to be $15.94 per hour in 2007
dollars.
In the March 2008 ANOPR, DOE used several installation times for
lamps and ballasts in the commercial and industrial sector analyses,
such as the lower bound installation time of 30 minutes for 2-lamp 4-
foot medium bipin fixtures, and the upper bound installation time of 60
minutes for 2-lamp 8-foot recessed double contact high-output fixtures.
(March 2008 ANOPR TSD chapter 8) These times were obtained from the
2000 Ballast Rule TSD.\34\
---------------------------------------------------------------------------
\34\ U.S. Department of Energy, ``Appendix A: Engineering
Analysis Support Documentation, 2000 Ballast Rule'' (2000) (Last
accessed June 20, 2008). Available at: http://www.eere.energy.gov/buildings/appliance_standards/residential/pdfs/appendix_a.pdf.
---------------------------------------------------------------------------
DOE received several comments addressing these installation times.
GE commented that the 2005 National Electric Code requirements for
disconnecting luminaires before they are serviced for lamp or ballast
[[Page 16954]]
replacements and installing luminaire disconnects for new construction
or major retrofits will necessitate additional labor time. (Public
Meeting Transcript, No. 21 at pp. 218-219; NEMA, No. 22 at p. 22) NEMA
recommended that DOE use an installation time of approximately 2 to 3
minutes for luminaire disconnects. Industrial Ecology commented on
average installation times during the recent relamping of a school in
Atlantic City, NJ, in which an electrician changed ballasts and lamps
for 4-lamp and 2-lamp fixtures at the rate of approximately 3 fixtures
per hour. (Public Meeting Transcript, No. 21 at p. 220)
DOE agrees that extra time will be needed when a luminaire
disconnect must be installed. Because DOE has not received detailed
data on other installation times apart from the ones used in the 2000
Ballast Rule, DOE revised the ANOPR installation times specifically to
address the time added by the installation of luminaire disconnects.
For the NOPR analysis, DOE added 2.5 minutes to the ANOPR installation
times for new construction, major retrofits, and renovation, events in
which DOE assumed that a luminaire disconnect must be installed.
Additional details on installation costs are available in chapter 8 of
the NOPR TSD.
4. Disposal Costs
DOE did not consider disposal costs in the March 2008 ANOPR.
Industrial Ecology commented that recycling costs should be considered
in the LCC analysis for GSFL and that such costs range from 5 cents to
10 cents per foot. (Public Meeting Transcript, No. 21 at p. 212) In
response, DOE researched recycling costs for GSFL and found an average
cost of 10 cents per linear foot.\35\ DOE also explored the prevalence
of recycling in the commercial, industrial, and residential sectors. A
report released by the Association of Lighting and Mercury Recyclers in
2004 noted that approximately 30 percent of lamps used by businesses
and 2 percent of lamps in the residential sector are recycled
nationwide.\36\ DOE considers the 30 percent commercial and industrial
recycling rate to be significant and, thus, incorporates recycling
costs into its main analysis. DOE applied a cost of 10 cents per linear
foot in the commercial and industrial sectors every time a lamp is
replaced during the LCC analysis period. Due to discounting, the
inclusion of recycling costs affects the LCC savings of lamps with
different lifetimes than the baseline lamps that they are compared to.
The recycling cost also affects the residual value of lamps that
operate beyond the end of the analysis period. In the Monte Carlo
analysis, DOE assumes that commercial and industrial consumers pay
recycling costs in approximately 30 percent of lamp failures. DOE does
not expect the 2 percent residential recycling rate to affect the
residential sector LCC substantially, however, and thus did not apply
the recycling costs to this sector.
---------------------------------------------------------------------------
\35\ Environmental Health and Safety Online's fluorescent lights
and lighting disposal and recycling Web page--Recycling Costs.
Available at: http://www.ehso.com/fluoresc.php (Last accessed Dec.
8, 2008).
\36\ Association of Lighting and Mercury Recyclers, ``National
Mercury-Lamp Recycling Rate and Availability of Lamp Recycling
Services in the U.S.'' (Nov. 2004).
---------------------------------------------------------------------------
5. Annual Operating Hours
DOE developed annual operating hours for IRL and GSFL in the March
2008 ANOPR by combining building type-specific operating hours data in
the 2002 U.S. Lighting Market Characterization (LMC) \37\ with data in
the 2003 Commercial Building Energy Consumption Survey (CBECS),\38\ the
2001 Residential Energy Consumption Survey (RECS),\39\ and the 2002
Manufacturing Energy Consumption Survey (MECS),\40\ which describe the
probability that a particular building type exists in a particular
region. (March 2008 ANOPR TSD chapter 6) DOE received comments on three
areas related to the operating hours used for the LCC analysis: (1)
Sectors analyzed; (2) regional variations; and (3) building types.
These comments are discussed below. For further details regarding the
annual operating hours used in the analyses, see chapter 6 of the TSD.
---------------------------------------------------------------------------
\37\ U.S. Department of Energy, Office of Energy Efficiency and
Renewable Energy, ``U.S. Lighting Market Characterization. Volume I:
National Lighting Inventory and Energy Consumption Estimate
(2002).'' Available at: http://www.netl.doe.gov/ssl/PDFs/lmc_vol1_final.pdf.
\38\ U.S. Department of Energy, Energy Information Agency,
``Commercial Building Energy Consumption Survey: Micro-Level Data,
File 2 Building Activities, Special Measures of Size, and Multi-
building Facilities (2003).'' Available at: http://www.eia.doe.gov/emeu/cbecs/public_use.html.
\39\ U.S. Department of Energy, Energy Information Agency,
``Residential Energy Consumption Survey: File 1: Housing Unit
Characteristic (2006).'' Available at: http://www.eia.doe.gov/emeu/recs/recs2001/publicuse2001.html.
\40\ U.S. Department of Energy, Energy Information Agency,
``Manufacturing Energy Consumption Survey, Table 1.4: Number of
Establishments by First Use of Energy for All Purposes (Fuel and
Nonfuel) (2002).'' Available at: http://www.eia.doe.gov/emeu/mecs/mecs2002/data02/shelltables.html.
---------------------------------------------------------------------------
a. Sectors Analyzed
In the March 2008 ANOPR, DOE analyzed GSFL in the commercial and
industrial sectors; DOE did not analyze the usage of GSFL in the
residential sector because it believed it was a relatively small
portion of GSFL sales. The Joint Comment requested that DOE perform an
LCC analysis of GSFL in the residential sector, because lamps in the
residential sector are replaced infrequently due to lower operating
hours compared to the commercial and industrial sectors. (Joint
Comment, No. 23 at p. 10) Similarly, NEMA commented that DOE should
assess GSFL in the residential sector, because certain ELs may
eliminate T12 lamp types, requiring many residential consumers to
install new lamp fixtures. (NEMA, No. 22 at p. 32)
In response, DOE assessed the installed stock of lamps using the
LMC, which stated that approximately 25 percent of linear fluorescent
lamps exist in the residential sector. DOE considers this proportion to
be significant and, thus, supports the recommendation to perform a
residential LCC analysis of GSFL. DOE developed residential operating
hours for GSFL by using data in the 2002 LMC and the 2001 RECS.
However, DOE only performed an LCC analysis of 4-foot medium bipin
lamps in the residential sector, because marketing literature indicates
that 8-foot single pin slimline lamps and 8-foot recessed double
contact HO lamps are not prevalent in residential settings.
In the March 2008 ANOPR, DOE analyzed IRL in the commercial,
residential, and industrial sectors. (March 2008 ANOPR TSD chapter 6)
NEMA commented that IRL should be removed from the industrial sector
LCC analysis because they are rarely used in industrial settings. The
Joint Comment emphasized the importance of analyzing IRL in the
residential sector due to lower operating hours and higher electricity
prices for residences compared to prices in the commercial sector.
(NEMA, No. 22 at p. 20; Joint Comment, No. 23 at p. 17)
The LMC indicates that less than 1 percent of IRL were found in the
industrial sector. Based on this data, DOE agrees with both comments
and has removed IRL from the industrial sector in terms of its
analyses. Consistent with the March 2008 ANORP LCC analysis, DOE also
continued to perform a residential sector LCC analysis of IRL for the
NOPR.
b. Regional Variation
At the public meeting for the March 2008 ANOPR, the Alliance to
Save
[[Page 16955]]
Energy commented that the LMC, which DOE used during the LCC analysis,
may underestimate energy usage in the residential sector because
operating hours may vary regionally (e.g., by latitude), even for the
same building types. (Public Meeting Transcript, No. 21 at pp. 197-198)
In contrast, the Northwest Power and Conservation Council responded
that there was a variation of a tenth of an hour per day in operating
hours between a study completed in Tacoma, Washington, and a study of
California. Therefore, the Council suggested that differences in
latitude and weather do not significantly affect operating hours.
(Public Meeting Transcript, No. 21 at p. 199)
DOE found no conclusive evidence that would suggest that geographic
location has a significant impact on operating hours for a given
building type. However, DOE found evidence of regional differences in
the proportions of different building types (e.g., number of mobile
homes versus number of multi-family dwellings) as the probable source
of regional variation in operating hours.\41\ As detailed in the March
2008 ANOPR, DOE captured this regional variation by using the RECS,
CBECS, and MECS to determine the probability that a particular building
type exists in a particular region. 73 FR 13620, 13654 (March 13,
2008). For this reason, DOE has not revised its analysis for the NOPR
to specifically address latitude, weather, or other regional factors
apart from building type proportions.
---------------------------------------------------------------------------
\41\ E. Vine, D. Fielding, ``An Evaluation of Residential CFL
Hours-of-Use Methodologies and Estimates: Recommendations for
Evaluators and Program Managers,'' Energy and Buildings 38 (2006),
1388-1394.
---------------------------------------------------------------------------
c. Building Type
NEMA requested a confirmation that DOE has included retail
facilities in its consideration of operating hours, because retail
facilities have more operating hours compared to other commercial
facilities. (NEMA, No. 22 at p. 20) DOE is aware that different
commercial building types have different average operating hours and,
thus, considered a variety of commercial building types, including
retail facilities, in its analysis. Operating hours were determined
using the LMC study. DOE assessed the operating hours for retail
facilities for the March 2008 ANOPR (ANOPR chapter 6 of the TSD) and
retained the assessment of commercial retail facility operating hours
for the NOPR analysis.
6. Product Energy Consumption Rate
As in the March 2008 ANOPR, DOE determined lamp input power (or
lamp-and-ballast system input power for GSFL) based on published
manufacturer literature. (March 2008 ANOPR TSD chapter 5) For GSFL, DOE
assessed a variety of lamp-and-ballast combinations by establishing a
correlation between ballast factor and system input power. This allowed
DOE to derive GSFL system power (in watts) for all of the lamp and
ballast combinations used in the analysis. The rated system power was
then multiplied by the annual operating hours of the system to
determine the annual energy consumption. DOE retained this methodology
for this notice.
For this NOPR, DOE updated system input power ratings for certain
lamp-and-ballast combinations, and developed new system-input powers
for other lamp-and-ballast combinations not considered in the March
2008 ANOPR. Specifically, DOE obtained additional system power ratings
for 4-foot T8 ballasts from recently released manufacturer literature
and updated these system input power ratings for the NOPR. DOE also
developed new system input power ratings for magnetic residential 4-
foot T12 systems, magnetic 8-foot HO systems, 4-foot T5 miniature bipin
systems, and 4-foot T5 miniature bipin HO systems.
7. Electricity Prices
DOE determined energy prices by deriving regional average prices
for 13 geographic areas consisting of the nine U.S. Census divisions,
with four large states (New York, Florida, Texas, and California)
treated separately. The derivation of prices was based on data in EIA's
Form EIA-861. DOE received three comments on the regional electricity
prices that it used for the ANOPR LCC. PG&E commented that the
California residential electricity price of 9.9 cents per kWh (ANOPR
TSD chapter 8) was lower than what appears to be an average of 14 cents
per kWh in the State. ACEEE and the Joint Comment recommended that DOE
use EIA's publication ``Electric Power Monthly''--as a source of recent
electricity prices instead of Form EIA-861. (Public Meeting Transcript,
No. 21 at pp. 223-224; Joint Comment, No. 23 at p. 18)
In response, DOE notes that it uses Form EIA-861 for two reasons.
First, it allows for the creation of regional average electricity
prices weighted by the number of customers each electric utility
serves. DOE prefers to use customer-weighted average electricity prices
so that prices are not skewed by utilities serving small numbers of
very large electricity consumers. Electricity sales are not well
correlated with the number of consumers in the commercial sector, and
the usage of customer-weighted averages more heavily weights the
utilities that serve larger numbers of consumers. Second, ``Electric
Power Monthly'' does not report customer-weighted prices. DOE
appreciates the comments related to electricity prices, and for the
NOPR analysis, DOE updated its electricity prices by using the latest
version of Form EIA-861 (2006).\42\ DOE notes that the latest Form's
updated residential electricity price for California is 14.7 cents per
kWh which is consistent with PG&E's assessment that the average
residential electricity price in California is around 14 cents per kWh.
---------------------------------------------------------------------------
\42\ Energy Information Administration, Form EIA-861 Final Data
File for 2006 (2006) (Last accessed June 20, 2008). Available at:
http://www.eia.doe.gov/cneaf/electricity/page/eia861.html.
---------------------------------------------------------------------------
8. Electricity Price Trends
To project electricity prices to the end of the LCC analysis period
in the March 2008 ANOPR, DOE used the reference, low-economic-growth,
and high-economic-growth projections in EIA's AEO2007.\43\ 73 FR 13620,
13660 (March 13, 2008). DOE received several comments on the resulting
electricity price trends that it used in the LCC calculation. PG&E
commented that DOE's forecasted electricity prices do not increase in
real terms in the next 20 years, which the commenter argued is
unrealistic. ACEEE and the Joint Comment both stated that DOE should
use the most recent AEO forecasts along with a collection of other
electricity price forecasts. (Public Meeting Transcript, No. 21 at pp.
224-225; Joint Comment, No. 23 at p. 18)
---------------------------------------------------------------------------
\43\ U.S. Department of Energy, Energy Information
Administration, Annual Energy Outlook 2007 with Projections to 2030
(Feb. 2007). Available at: http://www.eia.doe.gov/oiaf/archive/aeo07/index.html.
---------------------------------------------------------------------------
DOE supports the suggestion that it should use the most recent
electricity price forecasts. DOE uses EIA's AEO because it is publicly
available and has been widely reviewed. The latest AEO contains a table
of comparisons to three other electricity forecasts; the only forecast
that included prices (from Global Insight, Inc.) showed electricity
prices very similar to the prices in the AEO2008 reference case. Also,
a conversion of the AEO2008 forecast into real dollars reveals that
AEO's forecasted electricity prices do increase in real terms. For
these reasons, DOE chose to continue using the AEO and
[[Page 16956]]
the reference case in AEO2008.\44\ DOE also presents LCC and PBP
results for the low-economic-growth and high-economic-growth scenarios
from AEO2008 in appendix 8B of the TSD.
---------------------------------------------------------------------------
\44\ U.S. Department of Energy, Energy Information
Administration, Annual Energy Outlook 2008 with Projections to 2030
(June 2008). Available at: http://www.eia.doe.gov/oiaf/aeo/excel/aeotab_3.xls.
---------------------------------------------------------------------------
9. Lifetime
a. Ballast Lifetime
In chapter 8 of the March 2008 ANOPR TSD, DOE stated that it used
49,054 hours as the estimated ballast lifetime based on findings in the
2000 Ballast Rule. The Joint Comment suggested three reasons why
ballast lifetimes are actually longer than the lifetime used in the
2000 Ballast Rule. The Joint Comment stated that, on average, ballasts
operate below their life rating temperature. In addition, manufacturer
estimates exceed the DOE lifetime even at rated conditions. The
commenter also argued that market data of historical shipments of
ballasts sold to new construction versus retrofit and replacement
suggest that the average ballast life is longer than suggested. The
Joint Comment contends that, in addition to considering the above
points generally, DOE should specifically study these shipments to
establish ballast lifetime. (Joint Comment, No. 23 at pp. 7-9)
Based on the Joint Comment's suggestions, DOE investigated several
different ways of measuring a ballast's useful lifetime in commercial
and residential buildings. DOE does not believe that using the rated
temperature of ballasts is an appropriate way to measure a ballast's
lifetime. For example, a building renovation or a lighting retrofit may
cause buildings or homeowners to replace a ballast before it fails. DOE
also believes that examining historical sales data of ballasts sold to
new construction versus replacement and retrofit to estimate ballast
lifetime would involve too many assumptions to provide a useful measure
of lifetime. For example, DOE would need to estimate an appropriate
distribution of ballast lifetimes in the field because ballasts are
replaced at various points in their useful life due to different
operating hours, failure rates, and time periods between initial
building construction and the first lighting retrofit.
In its investigation of ballast lifetime, DOE encountered several
studies that establish the ``measure life'' (i.e., the true service
life of a ballast in the field) of ballasts in both the commercial and
residential sectors. One study comparing the results of several
``measure life'' reports found that the average ballast lifetime after
a retrofit in the commercial sector is 13 years, and the average
ballast lifetime after new construction is 15 years.\45\ Using DOE's
estimate of 49,054 hours and average operating hours for GSFL in the
commercial sector, the lifetime of an average ballast is approximately
14.2 years. Because this lifetime is consistent with several measure
life reports, DOE maintains the same ballast lifetime of 49,054 hours
in its NOPR analysis. DOE also found in a separate measure life report
that the average fixture and ballast in the residential sector lasts
for 15 years. Therefore, in its residential sector analysis for GSFL,
DOE established 15 years as the average ballast lifetime in the
residential sector,\46\ and an average annual operating lifetime of 789
hours. The ballast's average hours of operation over its service
lifetime is therefore 11,835 hours in the residential sector.
---------------------------------------------------------------------------
\45\ GDS Associates, Inc., Engineers and Consultants, Measure
Life Report: Residential and Commercial/Industrial Lighting and HVAC
Measures (The New England State Program Working Group) (2007).
\46\ Economic Research Associates, Inc., and Quantec, LLC.,
Revised/Updated EULs Based on Retention and Persistence Studies
Results (Southern California Edison) (2005).
---------------------------------------------------------------------------
b. Lamp Lifetime
When possible, DOE used manufacturer literature to measure lamp
lifetimes, as in the March 2008 ANOPR. 73 FR 13620, 13662 (March 13,
2008). When published manufacturer literature was not available (as for
some IRL), DOE derived lamp lifetimes as part of the engineering
analysis (section V.C.4.b). DOE based its calculations of GSFL lifetime
for the base and standards cases on lamp operating times of 3 hours per
start in the March 2008 ANOPR LCC analysis. 73 FR 13620, 13662 (March
13, 2008). In comments, NEMA supported the 3 hours per start operating
time for both the base and standards cases, but also argued that while
lamps are started every 12 hours in commercial and industrial
applications, the increasing use of occupancy sensors is leading to
shorter start cycles. (NEMA, No. 22 at p. 23) DOE did not receive any
other comments about using a GSFL operating time of 3 hours per start.
Therefore, DOE retained the assumption of 3 hours per start in the NOPR
LCC analysis for both the base and standards cases. In addition, DOE
researched the impact of occupancy sensors on start cycle lengths.
However, DOE was unable to obtain significant information with which it
could quantify this effect.
As in the March 2008 ANOPR, DOE also considered in the NOPR
analysis the impact of group re-lamping practices on GSFL lifetime in
the commercial and industrial sectors. 73 FR 13620, 13662 (March 13,
2008). DOE assumed that a lamp subject to group re-lamping operates for
75 percent of its rated lifetime, an estimate obtained from the 2000
Ballast Rule.\47\ By considering lamp rated lifetimes and the
prevalence of group versus spot re-lamping practices, DOE derived an
average lifetime for a GSFL. This ranged from 91 percent of rated
lifetime for 8-foot single pin slimline lamps to 94 percent of rated
lifetime for 4-foot medium bipin lamps. See chapter 8 of the TSD for
further details.
---------------------------------------------------------------------------
\47\ U.S. Department of Energy, Office of Energy Efficiency and
Renewable Energy, ``Energy Conservation Program for Consumer
Products: Technical Support Document: Energy Efficiency Standards
for Consumer Products: Fluorescent Lamp Ballast Proposed Rule:
Appendix A'' (Jan. 2000) A-19.
---------------------------------------------------------------------------
As stated above, DOE is using 15 years as the estimated fixture and
ballast lifetime in the residential sector for purposes of its
analyses. If one calculates the lifetime of the baseline GSFL lamp in
the residential sector by dividing the life in hours by the average
operating hours of a GSFL in the residential sector (789 hours), one
finds that the baseline lamp should live for 19 years. Because the
lifetime of the baseline lamp is longer than the average lifetime of a
fixture and ballast, DOE assumes that the ballast or fixture lifetime
limits the lifetime of an average lamp in the residential sector. DOE
is aware that there are certain rooms in residential buildings where
GSFL are operated for much longer than 789 hours per year; in
particular, GSFL are operated for approximately 1,210 hours per year in
kitchens of single-family detached households. Therefore, DOE has
conducted the residential sector analysis under average operating hours
and high operating hours. Under average operating hours (789 hours per
year), DOE assumes that lamp lifetime of the baseline-case and
standards-case lamps is limited to 11,835 hours or 15 years, due to a
ballast or fixture failure. Thus, in this situation, the lamp failure
event does not occur; only the ballast failure event occurs. See
section V.D.14 for a description of lamp purchase events.
DOE recognizes that although some consumers do not experience a
lamp failure in the residential sector, consumers whose operating hours
yield a lamp lifetime that is shorter than that of the fixture or
ballast do need to replace their lamp occasionally. DOE
[[Page 16957]]
assumes the shortest lifetime of the baseline lamp, using the highest
operating hours for GSFL in the LMC of 1,210 hours per year (as in
kitchens), is approximately 12.5 years. When a baseline lamp is
replaced at 12.5 years, the fixture and ballast have another 2.5 years
of life remaining. DOE assumes that when fixtures or ballasts are
discarded, their associated lamps are also discarded at the same time.
Therefore, for GSFL in the residential sector, the longest useful life
of the baseline replacement lamp would be 2.5 years or 1,972 hours. At
the end of this lifetime, the ballast and fixture are replaced.
Therefore, for the lamp replacement event for a GSFL in the residential
sector in a high operating hours scenario (1,210 hours per year), the
lifetime of the baseline lamp is assumed to be 1,972 hours or 2.5
years, and DOE assumes that the ballast failure event does not occur.
DOE requests comment on the typical service life of a GSFL in the
residential sector.
10. Discount Rates
In the March 2008 ANOPR, DOE derived residential discount rates by
identifying all possible debt or asset classes that might be used to
purchase replacement products, including household assets that might be
affected indirectly. 73 FR 13620, 13663 (March 13, 2008). DOE estimated
the average shares of the various debt and equity classes in the
average U.S. household equity and debt portfolios using data from the
SCFs from 1989 to 2004. DOE used the mean share of each class across
the six sample years as a basis for estimating the effective financing
rate for replacement equipment. DOE estimated interest or return rates
associated with each type of equity and debt using SCF data and other
sources. The mean real effective rate across the classes of household
debt and equity, weighted by the shares of each class, is 5.6 percent.
For the commercial sector and industrial sector, DOE derived the
discount rate from the cost of capital of publicly-traded firms in the
sectors that purchase lamps. To obtain an average discount rate value
for the commercial sector, DOE used data from CBECS 2003, which
provides market-share data by type of owner. Weighting each ownership
type by its market share, DOE estimated the average discount rate for
the commercial sector to be 6.2 percent. Similarly, the industrial
sector discount rate was derived to be 7.5 percent. 73 FR 13620, 13663
(March 13, 2008).
The Joint Comment stated that, in the past, NRDC has argued that a
2 to 3 percent real discount rate should be used in the LCC. (Joint
Comment, No. 23 at p. 22) It also stated that ACEEE and others have
supported the weighted average cost of capital approach. In general,
the Joint Comment stated that if DOE continues with using the weighted
cost of capital approach, the agency should make sure its calculations
are updated, as current economic conditions will influence agency
estimates for discount rates over the analysis period. (Joint Comment,
No. 23 at p. 22) In consideration of the above comments (and absent any
evidence to the contrary), DOE agrees with ACEEE and others in the
Joint Comment that the weighted average cost of capital approach
described above is the most accurate way of establishing an appropriate
consumer discount rate for the LCC analysis. For this NOPR, DOE was not
able to use the most up-to-date information to update the residential
discount rate, because the 2007 SCF survey was not available at the
time of publication. However, because the rates for various forms of
credit carried by households in these years were established over a
range of time, DOE believes they are representative of rates that may
be in effect in 2012. DOE is not aware of any other nationally
representative data source that provides interest rates from a
statistically valid sample. Therefore, DOE continued to use the above
approach and results for today's proposed rule. According to the
Federal Reserve Board Web site, the 2007 SCF survey may be available in
the first quarter of 2009.\48\ Contingent on this data's release in a
timely manner, DOE will attempt to incorporate the 2007 SCF survey in
the final rule of this rulemaking.
---------------------------------------------------------------------------
\48\ http://www.federalreserve.gov/PUBS/oss/oss2/2007/scf2007home_modify.html.
---------------------------------------------------------------------------
Despite the limitations associated with its residential analysis,
DOE was able to update certain sources used to compute the commercial
and industrial sector discount rates. Specifically, DOE applied the
2008 Damodaran Online Data, the 2008 implicit price deflators from the
U.S. Department of Commerce, the 2007 Value Line Investment Survey
data, information from the 2008 OMB Circular No. A-94, and 2008 State
and local bond interest rates. However, DOE continued to use data from
CBECS 2003, which provides market-share data by type of owner to obtain
an average discount rate value for the commercial sector. DOE is not
aware of any other nationally representative data source that provides
market-share data by type of owner and, therefore, is continuing to use
this source of data in today's proposed rule. DOE computed the new
discount rates to be 7.0 percent in the commercial sector and 7.6
percent in the industrial sector. For further details on discount
rates, see chapter 8 and appendix 8C of the TSD.
11. Analysis Period
The analysis period is the span of time over which the LCC is
calculated. For the March 2008 ANOPR, DOE used the longest baseline
lamp life in a product class divided by the annual operating hours of
that lamp as the analysis period. 73 FR 13620, 13663 (March 13, 2008).
During Monte Carlo simulations for the LCC analysis, DOE selected the
analysis period based on the longest baseline lamp life divided by the
annual operating hours chosen by Crystal Ball. For the NOPR analysis,
DOE retained this methodology for IRL and GSFL in the commercial and
industrial sectors. However, for GSFL in the residential sector, the
analysis period is based on the useful life of the baseline lamp for a
specific event. Specifically, for the lamp replacement event, the
analysis period is 2.5 years, and for the lamp and ballast replacement
and new construction event, the analysis period is 15 years. DOE
requests comment on the analysis period used for the residential sector
analysis. See section V.D.9.a of this notice for more information on
the useful life of the baseline lamp in all residential sector purchase
events.
12. Effective Date
For purposes of DOE's analyses, the effective date is the date when
a new standard becomes operative. DOE intends to publish the final rule
for this rulemaking in June 2009. 73 FR 13620, 13663 (March 13, 2008).
In accordance with sections 325(i)(3) and (i)(5) of EPCA, the effective
date of any new or amended energy conservation standard for these lamps
shall be 3 years after the final rule is published, which would be June
2012 for this rulemaking. (42 U.S.C. 6295(i)(3) and (i)(5)) DOE
performed its LCC analysis based upon an assumption that each consumer
would purchase a new product in the year that the standard takes
effect.
13. Payback Period Inputs
The payback period (PBP) is the amount of time a consumer needs to
recover the assumed additional costs of a more-efficient product
through lower operating costs. As in the March 2008 ANOPR, DOE used a
``simple'' PBP for the NOPR, because the PBP does not take into account
other changes in operating expenses over time or the time value of
money. 73 FR 13620, 13663
[[Page 16958]]
(March 13, 2008). As inputs to the PBP analysis, DOE used the total
installed cost of the product to the consumer for each efficacy level,
as well as the first year annual operating costs for each efficacy
level. The calculation requires the same inputs as the LCC, except for
energy price trends and discount rates; only energy prices for the year
the standard takes effect (2012 in this case) are needed. 73 FR 13620,
13663 (March 13, 2008).
14. Lamp Purchase Events
In the March 2008 ANOPR, DOE described five types of events that
would prompt a consumer to purchase a lamp. 73 FR 13620, 13664 (March
13, 2008). These events are described below along with changes for the
NOPR analysis. Of particular note, DOE conducted a number of new
analyses for the NOPR which assessed lamp failure, ballast failure, and
new construction events for residential sector GSFL. In addition,
though described primarily in the context of GSFL, lamp purchase events
can be applied to IRL as well. However, considering that IRL are
generally not used with a ballast the only lamp purchase events
applicable are lamp failure (event I) and new construction and
renovation (event V).
Lamp Failure (Event I): This event reflects a scenario in
which a lamp has failed (spot relamping) or is about to fail (group re-
lamping). In the base case, identical lamps are installed as
replacements. In the standards case, the consumer installs a standards-
compliant lamp that is compatible with the existing ballast. When a
standards-compliant lamp for that ballast is not available, the
consumer purchases a new lamp and ballast. For the NOPR, DOE added a
residential sector GSFL lamp failure event.
Standards-Induced Retrofit (Event II): This event occurs
when a consumer realizes that its T12 lamp will fail in the near future
and installs a standards-compliant lamp and ballast. In the base case,
the consumer would have installed only a new lamp. This event applies
only to T12 commercial and industrial users because there are certain
lamp standard levels that a T12 cannot meet. This event does not apply
to T12 residential users because these users would not proactively
replace their T12 system before the T12 lamp fails.
Ballast Failure (Event III): In the March 2008 ANOPR, DOE
assumed that failed ballasts would be replaced with electronic ballasts
because standards set by the 2000 Ballast Rule and EPACT 2005 ban the
sale of magnetic 4-foot medium bipin and 8-foot single pin slimline
ballasts beginning in 2010. 73 FR 13620, 13664 (March 13, 2008). NEMA
commented that the 2000 Ballast Rule allows the continued sale of
residential magnetic ballasts as well as magnetic cold-temperature
ballasts, which operate a large portion of the installed base of T12
recessed double contact high-output lamps. (NEMA, No. 22 at p. 20) In
response, DOE has assumed that failed magnetic HO ballasts would be
replaced with magnetic ballasts in the base case for the NOPR analysis.
DOE also assumed that magnetic ballasts would be purchased in the event
of a ballast or fixture failure in the residential sector base case for
the NOPR analysis because residential systems are commonly T12 magnetic
systems currently. In addition, standards established in the 2000
Ballast Rule and the Energy Policy Act of 2005 (EPACT 2005, Pub. L.
109-58) will allow magnetic ballasts to continue to be sold in the
residential sector after 2010. See the engineering analysis (section
V.C) for further details.
Ballast Retrofit (Event IV): This event applies only to
T12 users because, according to industry experts, the majority of
ballast retrofits occur for consumers with T12 systems. Consumers
retrofitting their ballasts commonly do so to save energy, and T8
systems are generally more efficacious than T12 systems.
New Construction and Renovation (Event V): This event
encompasses all fixture installations where the lighting design will be
completely new or can be completely changed. The scenario applies only
to baseline lamps that are usually used in new construction and
renovation (4-foot T8 lamps, 4-foot T12 lamps in the residential
sector, 8-foot single pin slimline T8 lamps, and 8-foot recessed double
contact HO T12 lamps). For the NOPR analysis, DOE assumed that 4-foot
T8 lamps with electronic ballasts would be chosen during the new
construction and renovation event for the 4-foot T12 residential
baseline.
E. National Impact Analysis--National Energy Savings and Net Present
Value Analysis
1. General
DOE's NIA assesses the national energy savings (NES) and the
national net present value (NPV) of total customer costs and savings
that would be expected to result from new standards at specific
efficacy levels.
DOE uses the NIA spreadsheets to calculate energy savings and NPV
based on the annual energy consumption and total installed cost data
employed in the LCC analysis. DOE forecasts the energy savings, energy
cost savings, equipment costs, and NPV for each product class from 2012
through 2042. The forecasts provide annual and cumulative values for
all four output parameters. DOE also examines impact sensitivities by
analyzing various lamp shipment scenarios (such as Roll-up and Shift).
DOE develops a base-case forecast for each analyzed lamp type which
characterizes energy use and consumer costs (lamp purchase and
operation) in the absence of new or revised energy conservation
standards. To evaluate the impacts of such standards on these lamps,
DOE compares the estimated base-case projection with projections
characterizing the market if DOE did promulgate new or amended
standards (i.e., the standards case). In characterizing the base and
standards cases, DOE considers historical shipments, the mix of
efficacies sold in the absence of any new standards, and how that mix
might change over time.
Inputs and issues associated with the NIA are discussed immediately
below.
a. Overview of NIA Changes in This Notice
Based on the comments it received on the March 2008 ANOPR, DOE made
a number of changes to the NIA. Table V.3 summarizes the approach and
data DOE used to derive the inputs to the NES and NPV analyses for the
March 2008 ANOPR, as well as the changes it made for this notice.
Following the table, DOE details those inputs and the changes, and
summarizes and responds to each of the NIA-related comments it
received. See TSD chapters 10 and 11 for further details.
Table V.3--Approach and Data Used To Derive the Inputs to the National
Energy Savings and Net Present Value Analyses
------------------------------------------------------------------------
2008 ANOPR Changes for the
Inputs description proposed rule
------------------------------------------------------------------------
Shipments................... Annual shipments See Table V.4 and
from shipments Table V.5.
model.
[[Page 16959]]
Stock of lamps.............. Established based on Established based on
the projected 2011 2005 lamp stock,
lamp stock, the rather than 2011.
service life of Considered market
lamps and/or penetration of
ballasts, and the emerging
annual shipments. technologies. See
The 2011 stock is Table V.4 and Table
based on historical V.5 for additional
shipments and detail.
projected shipments
from 2006 to 2011.
(See ANOPR TSD
chapter 10,
shipments
analysis.).
Effective date of standard.. 2012................ No change.
Analysis period............. 2012 to 2042........ No change.
Unit energy consumption (kWh/ Established in the No change.
yr). energy-use
characterization,
ANOPR TSD chapter
6, by lamp or lamp-
and-ballast design
and sector.
Total installed cost........ Established in the Added costs of
product price retrofit kit and
determination, labor for replacing
ANOPR TSD chapter 7 a 8-foot SP
and the LCC slimline system
analysis, ANOPR with two 4-foot MBP
chapter 8, by lamp- systems.
and-ballast designs.
Electricity price forecast.. AEO2007 forecasts Updated for AEO2008.
(to 2030) and
extrapolation for
beyond 2030. (See
ANOPR TSD chapter
8.).
Energy site-to-source Conversion varies Conversion varies
conversion. yearly and is yearly and is now
generated by generated by DOE/
AEO2007 forecasts EIA's NEMS program
(to 2030) of (a time-series
electricity conversion factor;
generation and includes electric
electricity-related generation,
losses. Conversion transmission, and
factors for beyond distribution
2030 are losses).
extrapolated. Conversion factors
for beyond 2030 are
held constant.
HVAC interaction savings.... 6.25 percent of No change.
total energy
savings in the
commercial sector.
Rebound effect.............. 1 percent of total No change.
energy savings in
the commercial and
industrial sectors.
8.5 percent of total
energy savings in
the residential
sector.
Discount rate............... 3 and 7 percent real No change.
Present year................ Future costs and No change.
savings are
discounted to 2007.
------------------------------------------------------------------------
2. Shipments Analysis
Lamp shipments are an important input to the NIA. In the March 2008
ANOPR, DOE followed a four-step approach to forecast shipments for GSFL
and IRL. 73 FR 13620, 13668 (March 13, 2008). First, DOE used NEMA's
historical shipment data from 2001 to 2005 to estimate total historical
(NEMA members and non-NEMA members) shipments of each analyzed lamp
type in the commercial, industrial, and residential sectors. Second,
using these historical shipments, DOE linearly extrapolated shipments
to 2011. Then, based on average service lifetimes, DOE estimated a
stock of lamps in 2011 for each lamp type. Next, DOE forecasted lamp
(and ballast for GSFL) shipments from 2012 to 2042 (the NIA analysis
period) based on four market events: (1) New construction; (2) ballast
failure (GSFL only); (3) lamp replacement; and (4) standards-induced
retrofit (for the standards case). Lastly, because these shipments
depend on lamp and lamp-system properties (e.g., lifetime and lumen
output), DOE developed base-case and standards-case market-share
matrices. These matrices determine the forecasted technology mixes in
the lamp stock and shipments.
Table V.4 and Table V.5 summarize the approach and data DOE used
for GSFL and IRL, respectively, to derive the inputs to the shipments
analysis for the March 2008 ANOPR, as well as the changes DOE made for
the NOPR. A discussion of the inputs and the changes follows.
Table V.4--Approach and Data Used to Derive the Inputs to GSFL Shipments
Analysis
------------------------------------------------------------------------
2008 ANOPR Changes for the
Inputs description proposed rule
------------------------------------------------------------------------
Historical shipments........ 2001-2005 shipment Calibrated 2006-2007
data provided forecasted
publicly by NEMA. shipments based on
Assumed NEMA data confidential
represented 90 historical shipment
percent of GSFL data NEMA provided
shipments. for those years.
Lamp inventory.............. Calculated lamp Did not use linear
inventory in 2011 projections;
by linearly calculated stock in
projecting NEMA's 2005. Then used
2001-2005 growth, emerging
historical shipment technologies, and
data. Then used shipment
growth and shipment assumptions to
assumptions to establish lamp
establish lamp inventory from 2006
inventory from 2012 to 2042.
to 2042.
Growth...................... Shipment growth Based commercial and
driven by lumen residential growth
demand. Lumen on AEO2008
demand projected estimates for
from historical future floor space
CBECS commercial growth. For the
floor space growth. residential sector,
modeled variations
in number of lamps
per new home. For
the industrial
sector, projected
floor space growth
using MECS.
T5 lamps.................... Not included........ Shipments modeled by
assuming T5 lamps
used in new
construction and in
conversions from 4-
foot medium bipin,
8-foot SP slimline,
and 8-foot RDC HO.
[[Page 16960]]
T12 ballasts................ Assumed no T12 Assumed no T12
magnetic ballasts magnetic ballasts
shipped after 2009 shipped after 2010
for 8-foot SP for commercial 4-
slimline and 4-foot foot MBP and 8-foot
MBP lamps. Did not SP slimline. Also
consider T12 assumed 4-foot MBP
electronic ballasts and 8-foot SP
for 8-foot SP slimline electronic
slimline and 4-foot T12 ballasts
MBP lamps. shipped through
2042. For 8-foot
T12 RDC HO and
residential 4-foot
T12 MBP, assumed
magnetic ballasts
are shipped through
2042.
Sectors analyzed............ Commercial and Included residential
industrial. sector in analysis.
Base-case emerging None included....... Developed two base-
technologies. case scenarios, one
of which modeled
the market
penetration of LEDs
based on projected
payback period.
Market share matrices....... Developed product Revised product
distributions based distributions based
on interviews and on comments,
catalog data. subsequent
interviews, and
further catalog
research.
Standards case scenarios.... Shift and Roll-up Revised the Shift
scenarios analyzed. and Roll-up
Assumed all scenarios.
consumers will Developed a
attempt to maintain standards-case
lumen output by scenario (Market
either moving to Segment-Based
lower ballast Lighting Expertise
factors or reduced- scenario) to
wattage lamps in characterize
the standards case. consumers who,
based on lighting
expertise, will not
migrate to lower
ballast factors or
reduced-wattage
lamps to maintain
lumen output.
------------------------------------------------------------------------
Table V.5--Approach and Data Used to Derive the Inputs to IRL Shipments
Analysis
------------------------------------------------------------------------
2008 ANOPR Changes for the
Inputs description proposed rule
------------------------------------------------------------------------
Historical shipments........ 2001-2005 shipment Calibrated 2006-2007
data provided projected shipments
publicly by NEMA. based on
Assumed NEMA data confidential
represented 85 historical shipment
percent of IRL data NEMA provided
shipments. for those years.
Lamp inventory.............. Calculated stock in Did not use linear
2011 by linearly projections;
projecting NEMA's calculated stock in
2001-2005 2005. Then used
historical shipment growth and emerging
data. Then used technologies
growth assumptions assumptions to
to establish lamp establish lamp
inventory from 2012 inventory from 2006
to 2042. to 2042.
Growth...................... Shipment growth Based growth on
driven by socket AEO2008 estimates
growth. Socket for future
growth projected commercial floor
from historical space and
CBECS commercial residential
floor space and buildings.
RECS residential Also accounted for
building growth. trend of increasing
sockets per home.
Sectors analyzed............ Commercial and No change.
residential.
Base case reflector compact Assumed 0 percent Developed two base-
fluorescent lamps (R-CFL) stock penetration case scenarios
and emerging technologies. in 2012 and 50 modeling the market
percent stock penetration of LED,
penetration in 2042. CMH, and R-CFL
based on projected
payback period.
Market share matrices....... Considered mix of Revised market-share
technologies matrices to reflect
consumers select in its changes in the
the base case and scenarios analyzed
standards case, as and engineering
well as each of the analyses.
scenarios analyzed.
Standards-case scenarios.... Modeled the Roll-up Modeled both Roll-up
scenario.. and Shift
Analyzed two scenarios.
standards-case Revised BR lamp
sensitivity sensitivity
scenarios: One scenario, creating
modeling consumer two new standards-
movement to case scenarios also
exempted BR lamps accounting for
and another additional
modeling a 10 migration to R-CFL:
percent increase in ``Product
lumen output. Did Substitution'' and
not consider ``No Product
additional Substitution.''
migration to R-CFL
in the standards
case.
------------------------------------------------------------------------
a. Lamp Inventory
In the March 2008 ANOPR, DOE linearly extrapolated NEMA's
historical lamp shipments from 2005 to 2011 to establish a 2011
installed stock of GSFL and IRL using each lamp's average service
lifetime. In its written comments, NEMA argued that DOE's linear
extrapolation approach does not account for market dynamics and is
vulnerable to certain temporal biases inherent in NEMA's historical
data. For example, if a new product was introduced and rapidly gained
market share during this historical shipment period, a linear
extrapolation based on this data could exaggerate the growth rate of
this product in future years. Likewise, any new products introduced
would be excluded from the future results. For example, Philips noted
at the public meeting that because DOE extrapolated shipment data from
2001 to 2005 to establish its lamp stocks, it may have discounted
migration to T5 lamps, which have only started to grow in the last
couple of years. Thus, the commenter argued that DOE may have
overstated the 2011 stock of some types of lamps (e.g., T8 lamps),
while understating others (e.g., T5 lamps). (NEMA, No. 22 at pp. 23-25,
31; Public Meeting Transcript, No. 21 at p. 246)
On the other hand, NEMA suggested that a linear extrapolation is
sometimes appropriate for lamps with small and stable market shares,
such as 8-foot T8 recessed double contact HO lamps. However, for large
and variable product classes, NEMA urged DOE to model lamp types
against specific economic factors and technical relationships. (NEMA,
No. 22 at p. 24)
DOE agrees that a linear extrapolation may generally be too limited
in its application, and that lamp shipment forecasts from 2006 to 2011
should incorporate both market dynamics and macroeconomic factors.
Therefore, DOE is no longer using a linear extrapolation
[[Page 16961]]
from historical data. Instead, for this NOPR, DOE calculated an
installed stock of lamps in 2005 and applied growth, replacement rate,
and emerging technologies assumptions to develop shipments estimates
from 2006 to 2042. In addition, DOE received confidential shipment
information from NEMA for 2006 and 2007, and, when possible, calibrated
the shipments model to match that information. The assumptions used to
develop shipment forecasts are discussed in the following sections.
b. Shipments Growth
To develop the shipments models for both GSFL and IRL, DOE applied
several growth rate assumptions. In the March 2008 ANOPR, DOE modeled
GSFL shipments from 2012 to 2042 by projecting lumen growth based on
lumen demand serviced by each lamp type in the commercial and
industrial sectors. For IRL, DOE projected shipments through 2042 based
on growth in the number of sockets using IRL in the commercial and
residential sectors. DOE based forecasted lumen and socket growth for
GSFL and IRL on historical residential building growth from RECS and
historical commercial and industrial floor space growth from CBECS and
MECS.
DOE received a number of comments in response to its growth rate
methodology. The majority of these comments fell into three categories:
(1) The limits of basing lamp stock growth on historical floor space
growth; (2) the increasing number of lamps per household; and (3) the
wider spacing of more-efficient light fixtures. Below is a discussion
of those comments. For further details regarding GSFL and IRL growth
rate assumptions, see TSD chapter 10.
i. Floor Space and Building Growth
NEMA stated that the commercial and residential growth rates DOE
used in the March 2008 ANOPR (based on total floor space from CBECS in
RECS) have likely led to an overstatement of lamp shipments and stock,
given the deteriorating economy. (NEMA, No. 22 at pp. 23-24) DOE
understands NEMA's concerns and no longer establishes its commercial
and residential growth from historical floor space growth. Instead, for
this NOPR, DOE modeled commercial floor space and residential buildings
growth based on AEO2008, which estimates year-to-year commercial floor
space and residential building growth. Because AEO2008 takes into
account future trends in economic growth, DOE was able to incorporate
forecasts of macroeconomic conditions in its growth forecast. However,
because AEO does not provide industrial floor space forecasts, DOE used
historical MECS floor space values to establish a growth rate for the
industrial sector.
ii. Lamps per Household
The Joint Comment stated that DOE's growth forecasts omitted an
important factor driving IRL sales: a trend toward an increasing number
of recessed fixtures per home in new construction and existing home
renovation. Because this trend is excluded from DOE's analysis, which
assumed growth based on floor space growth, the Joint Comment argued
that IRL shipments are likely understated. NEMA also stated that it has
seen a trend toward increasing light points per home. To address this
development, the Joint Comment recommended DOE obtain additional data
on sales trends of these lamps and not assume recessed socket growth
was directly proportional to floor space growth. The Joint Comment,
PG&E, and ACEEE cited several studies supporting this claim. (Joint
Comment, No. 23 at p. 17; Public Meeting Transcript, No. 21 at pp. 287-
288; NEMA, No. 22 at p. 31)
DOE agrees with the Joint Comment that the increasing popularity of
recessed fixtures in new homes will drive IRL sales growth faster in
the residential sector. New homes are likely to install more IRL than
those installed in older homes, and older homes may be renovated to
include more recessed cans and, thus, more reflector lamps. Therefore,
DOE conducted an analysis that estimated the average number of recessed
cans in homes between 2005 and 2042. Using California data \49\ on
recessed cans per home broken out by home age, DOE assumed new homes
constructed after 2005 would install the same number of recessed cans
as homes constructed between 2001 and 2005. DOE also assumed that half
of the homes constructed before 2001 would be renovated by 2042 to have
an equal number of recessed cans as newly constructed homes. DOE
estimated the distribution of homes by age using U.S. Census data \50\
on new building starts in the residential sector. DOE estimated new
construction and the number of future homes constructed in each year
from AEO2008. Using this data, DOE estimated that the average number of
recessed cans per home in 2005 was 4.82, and the average number of
recessed cans per home in 2042 will be 8.52. As noted above, DOE also
agrees with NEMA that growth rates should include forecasts of economic
conditions. Therefore, to estimate the growth rate in each year, DOE
multiplied the number of recessed cans in homes by the projected stock
of homes according to AEO2008. Combining these two sources, DOE
predicts an average growth rate of sockets of 2.6 percent between 2006
and 2042, compared to the 1.6 percent DOE estimated in the March 2008
ANOPR.
---------------------------------------------------------------------------
\49\ RLW Analytics, Inc., ``California Statewide Residential
Lighting and Appliance Efficiency Saturation Survey'' (August 2005)
(Last accessed on Sept. 29, 2008). Available at: http://www.calresest.com/docs/2005CLASSREPORT.pdf.
\50\ U.S. Census Bureau, Manufacturing and Construction
Division, ``New Privately Owned Housing Unit Starts'' (2008) (Last
accessed on Sept. 29, 2008). Available at: http://www.census.gov/const/startsan.pdf.
---------------------------------------------------------------------------
DOE estimated the GSFL growth rate in the residential sector using
a methodology similar to that which it employed for IRL in the
residential sector. Instead of using the number of recessed cans per
home by home age, DOE used the number of T8 and T12 lamps by home age.
Again, DOE assumed that the same number of T8 and T12 lamps per home
would be installed in new homes as those installed between 2001 and
2005, and that half of homes built before 2001 would be renovated by
2042 to have the same number of T8 and T12 lamps as newly constructed
homes. DOE estimated that the average number of T8 and T12 lamps per
home in 2005 was 4.5, and the average number in 2042 will be 4.7.
Combining this growth estimate with AEO2008's projected growth in the
residential home stock yields an average growth rate of 1 percent
between 2006 and 2042 for GSFL in the residential sector. Compared to
IRL, the lower GSFL growth rate reflects the lower growth rate of T8
and T12 lamps per home versus recessed cans. (In the March 2008 ANOPR,
DOE did not consider the residential sector for GSFL.)
iii. Wider Spacing of More-Efficient Fixtures
In its written comments, NEMA suggested that DOE should assume a
slower growth rate in the commercial building IRL socket base to
account for wider spacing of lighting fixtures and/or greater use of
high-output systems. (NEMA, No. 22 at p. 31) While DOE appreciates
NEMA's comment, it was unable to find (and the commenter did not
provide) any information related to wider spacing between fixtures,
and, therefore, DOE did not change growth estimates to account for this
potential effect.
[[Page 16962]]
c. Base-Case Scenarios: Emerging Technologies and Existing Technologies
In the March 2008 ANOPR, DOE estimated that by 2042 R-CFL and
emerging technologies, (e.g., such as LED lamps, and ceramic metal
halide (CMH) lamps) would compose 50 percent of IRL sockets in the
installed base. 73 FR 13620, 13670 (March 13, 2008). For IRL, DOE
accounted for the impact of emerging technologies by deducting their
market share in each year over the analysis period from the installed
base of lamps, effectively reducing the size of the market affected by
the standards proposed in this rulemaking. In the March 2008 ANOPR, DOE
did not account for any penetration of emerging technologies into the
GSFL market, and requested comment on if and how it should incorporate
their effects into its analyses.
DOE received several comments on its consideration of emerging
technologies. NEMA argued that the performance improvements of CMH will
drive the technology's market penetration into the GSFL market. NEMA
also asserted that LED lamps could displace GSFL shipments to some
extent by 2042. (NEMA, No. 22 at pp. 24-26) As for emerging
technologies in the IRL market, NEMA commented that LED lamps could
also displace shipments of IRL to some extent by 2042, particularly in
the residential sector. NEMA stated that the shift from halogen IRL to
CMH is already occurring in the retail market. Industrial Ecology
stated that an integrated PAR CMH lamp would be expected to replace
other IRL PAR lamps in the commercial retail market. (NEMA, No. 22 at
pp. 24-26; Public Meeting Transcript, No. 21 at pp. 307-309) NEMA
argued that these emerging technologies will significantly affect
future lamp shipments and reduce the NPV results of standards for both
GSFL and IRL. To more accurately forecast the impact of emerging
technologies, NEMA suggested that DOE should examine historical price
and performance points of R-CFL, as well as product cycles for other
advanced technology equipment. (NEMA, No. 22 at pp. 24-26) Industrial
Ecology suggested that DOE should use semiconductor industry data to
assess the manufacturing capacity for solid state lamps. (Public
Meeting Transcript, No. 21 at p. 311-312)
DOE agrees that emerging technologies could penetrate GSFL and IRL
markets and significantly affect shipment forecasts and NIA results.
Therefore, for the NOPR, DOE has revised its analysis of emerging
technologies within the IRL market and now accounts for emerging
technologies within the GSFL market as well. These emerging
technologies already are, or eventually will likely be, significantly
more efficacious and longer lasting than the lamps they replace.
However, to calculate the energy savings and NPV benefits due to the
penetration of an emerging technology, DOE must accurately forecast the
anticipated price and performance points of the individual
technologies--a difficult and highly speculative task. Forecasts
related to emerging technologies are inherently uncertain because they
depend upon assumptions about future price, efficacy, and utility, none
of which can be verified. Therefore, for the NOPR, DOE has chosen to
analyze two base-case scenarios for both GSFL and IRL: (1) Existing
Technologies, and (2) Emerging Technologies. DOE believes evaluating
two base-case scenarios more completely characterizes the inherent
uncertainty of the market penetration of the technologies and the
consequent impact on NPV and NES. Incorporating emerging technologies
in the base case does not affect the relative benefits of each TSL and
prevents uncertain projections of market share, price, or performance
from obscuring the benefits derived from more-efficient GSFL and IRL
alone.
For these base-case scenarios, DOE estimated the market penetration
of three specific technologies into the projected installed stock: (1)
LED lamps; (2) CMH lamps; and (3) reflector CFL. In general, the
Existing Technologies scenario only considers the market penetration of
technologies that are currently readily available and have reached
maturation in terms of price and efficacy. Specifically, DOE considers
R-CFL in the Existing Technologies scenario within the IRL market. For
GSFL, no technologies other than those covered by this rulemaking were
analyzed in the Existing Technologies scenario. (DOE considers the
migration to T5 lamps, a covered product, separately, as discussed in
section V.E.2.d.)
In the Emerging Technologies scenario, DOE attempts to forecast the
market penetration of mature technologies and those technologies that
are still undergoing significant changes in price and efficacy.
Specifically, DOE considered the market penetration of R-CFL, LED
lamps, and CMH lamps in the Emerging Technologies scenario.
DOE generally followed a 5-step process for each scenario to
estimate the market penetration of the analyzed technologies and
account for their impact on NES and NPV. (Sector- and technology-
specific aspects of DOE's methodology are described below and in TSD
chapter 10.)
First, DOE developed price, performance, and efficacy forecasts for
each of the analyzed technologies. DOE's methodology in generating
these forecasts for each analyzed technology is described below.
Second, using those estimates, DOE calculated the payback period (PBP)
of each technology in the relevant sector using the difference between
its purchase price, annual electricity cost, and annual lamp
replacement cost relative to the lamp it replaces. (See TSD chapter 10
for further details.) Third, DOE used a relationship between PBP and
market penetration to predict the market penetration of each technology
in the relevant sector in every year from 2006 to 2042. Generally,
lower PBP of a given lamp technology results in a greater predicted
market penetration of that technology. DOE used a 5-year average of the
market penetrations predicted by the relationship as its final market
penetration. The 5-year average represents the time DOE assumed it
takes products with lower PBPs to penetrate the market. Fourth, when
necessary, DOE applied a scaling factor to the predicted market
penetration to account for observed market trends. Fifth, DOE reduced
the projected installed stock of covered products in each year by the
value that corresponded to the highest level of market penetration
achieved in each year by one of the analyzed technologies. Thus, the
inclusion of R-CFL and other lamps using emerging technologies in the
base case have the effect of lowering the energy savings of a potential
new standard. For those covered lamps remaining, the cost-effectiveness
of LCC savings and, thus, the relative cost effectiveness of each TSL
is not affected.
Because the lamps employing emerging technologies are beyond the
scope of the rulemaking, they are not considered design options to
improving IRL or GSFL efficacy, but rather they may substitutes for the
lamps covered in this rulemaking. In the Emerging Technologies base
case, DOE uses its prices projections effectively as inputs into its
shipments forecasts of its covered products, rather than forecasts of
shipments of lamps employing the emerging technologies themselves. In
this way, the price projections of the analyzed lamps using emerging
technologies indirectly affect the NPV of the present rulemaking,
despite not being a direct input into equipment prices. As stated
previously, to acknowledge the uncertainty of price forecasts for lamps
using emerging
[[Page 16963]]
technologies, DOE models two base-case scenarios.
i. General Service Fluorescent Lamps
For the Existing Technologies scenario, DOE believes that no mature
technologies in the current market show the potential to significantly
penetrate the GSFL market. (T5 lamps, previously considered an emerging
technology, are now a covered product class.) Therefore, for the
Existing Technologies scenario, DOE considered only the fluorescent
technologies already covered by this rulemaking. Thus, except for the
addition of T5 lamps, the Existing Technologies base case in this NOPR
is the same as the base case in the March 2008 ANOPR.
In the GSFL Emerging Technology scenario, however, DOE separately
considered the potential market penetration of two technologies: (1)
LEDs (into the commercial, residential, and industrial sectors); and
(2) CMH (into the commercial and industrial sectors).
For its analysis of LED market penetration, DOE found a
commercially-available retrofit kit that included a LED replacement for
a 4-foot medium bipin system. DOE used the retrofit kit as a current
baseline from which to project future cost, efficacy, and price points.
DOE interviewed an integrated circuit manufacturer to develop cost
estimates for LED driver circuits. For cost estimates of other
components, DOE used prices of existing LED products already on the
market, which it modified in accordance with cost data and efficacy
projections from DOE's Solid State Lighting Multi-Year Program
Plan.\51\ Lastly, using markup based on currently-available LED lamps,
DOE was able to develop price and efficacy projections for the LED
luminaire in the retrofit kit.\52\ Following the 5-step process
described above, DOE calculated a 41 percent market penetration rate of
LED lamps into the 4-foot GSFL commercial sector by 2042. DOE assumed
LED lamps penetrated only the new construction, renovation, and fixture
replacement markets because these lamps would require their own
specific fixtures. In the residential sector, the LED option did not
have a low enough payback period to result in any market penetration.
---------------------------------------------------------------------------
\51\ Multi-Year Program Plan FY'09 to FY'14: Solid-State
Lighting Research and Development (March 2008). Available at: http://www.netl.doe.gov/ssl/PDFs/SSLMYPP2008_web.pdf.
\52\ Because they are based on an existing LED retrofit kit,
DOE's projections did not consider innovations in form factor on
OLED tyechnology which could improve the possible payback period for
solid-state lighting technologies.
---------------------------------------------------------------------------
DOE also analyzed the potential penetration of CMH into the GSFL
market. DOE first estimated current CMH prices using a methodology
similar to the methodology it used to estimate GSFL and IRL prices, as
described in the product price determination. (See TSD chapter 7.)
Industry experts informed DOE that CMH efficacies and lifetimes would
increase over the next several years while prices would remain
constant. Applying these lifetime and efficacy projections DOE compared
CMH replacements to GSFL systems. As a result, DOE assumed no market
penetration of CMH because it found that T5 lamp systems (standard
output and high output) would always be less costly and more
efficacious than projected CMH replacements. Given this information,
DOE believes that it is likely that migration to CMH (from the GSFL
market) will be dominated by the migration to standard-output and high-
output T5 lamps.
ii. Incandescent Reflector Lamps
As with GSFL, DOE considered two base case scenarios for IRL:
Existing Technologies and Emerging Technologies. Because DOE believes
that R-CFL is a mature technology with relatively stable price points
and efficacies, DOE considered R-CFL penetration into the residential
market in the Existing Technologies scenario. In contrast, for the
Emerging Technologies scenario, DOE considered the market penetration
of R-CFL, LED, and CMH lamps in both the residential and commercial
sectors. DOE separately calculated the penetration of each technology
into the IRL stock by using the 5-step process described above.
For R-CFL, DOE developed price forecasts based on historical
pricing trends of CFL and R-CFL, using a methodology similar to the
methodology DOE used to estimate GSFL and IRL prices, as described in
the product price determination. (See TSD chapter 7.) DOE assumed no
future change in efficacy. Using this data, DOE found the market
penetration predicted by the PBP relationship. However, PG&E argued
that R-CFL are not always suitable substitutes for IRL because they
lack dimming capabilities and their beam width is too broad. (Public
Meeting Transcript, No. 21 at pp. 289, 321) Industrial Ecology
commented that dimmable R-CFL do in fact exist, while PG&E noted that
these lamps have little market share. (Public Meeting Transcript, No.
21 at pp. 291, 321) DOE agrees that R-CFL may not always be appropriate
substitutes for IRL, due to differences in form factor, beam spread,
color quality, size and dimming capability. DOE observed that the
actual market penetration of CFL replacements for A-line incandescent
lamps thus far has been approximately 40 percent of the penetration
predicted by the PBP-penetration relationship. Therefore, DOE applied
these same scaling-factor reductions of 40 percent and 36 percent in
calculating the market penetration of R-CFL into the IRL market for the
residential and commercial sectors, respectively.
For LED and CMH lamps in the IRL market, DOE developed price and
efficacy forecasts using a methodology similar to the one described
above for GSFL. DOE did not apply the scaling factor reduction to the
predicted LED and CMH market penetration rates that it used for the R-
CFL analysis. DOE believes the substitutability problems that arise
when R-CFL replace IRL do not apply when LED and CMH replace IRL.
By the methodology described, DOE arrived at market penetration
values (and market size reductions) for each base-case scenario. For
the Existing Technology scenario, 2042 R-CFL penetration reached 38
percent in the residential sector and 20 percent in the commercial
sector. (This was the highest market penetration because it was the
only technology analyzed for the scenario.) For the Emerging Technology
scenario, LED reached the highest market penetration of any analyzed
technology in both the residential sector and the commercial sector.
DOE's analysis found LED lamps could penetrate 40 percent and 82
percent of the IRL installed stock by 2042 in the residential and
commercial sector, respectively. DOE's results support a comment by
Industrial Ecology stating that emerging technologies will enter the
commercial market first. (Public Meeting Transcript, No. 21 at p. 308)
This effect occurs because there are higher installation and operating
costs in the commercial sector relative to the residential sector,
resulting in lower PBPs and faster migration to emerging technologies.
Again, DOE used these results to effectively reduce the size of the IRL
market for its analysis.
d. Fluorescent Market Sectors Analyzed
In the March 2008 ANOPR, DOE modeled both the commercial and
industrial market sectors to generate GSFL shipments forecasts. DOE
received several comments on its decision not to model the residential
sector.
[[Page 16964]]
GE commented that DOE should model the residential sector because
it makes substantial use of less-efficacious T12 lamps, which could be
effectively eliminated by new standards. GE estimated that by 2012,
roughly 20 percent of GSFL shipments will be T12 lamps, and more than
half of those will go to residential consumers. PG&E stated that
California codes only recently required higher-efficacy lamps in new
construction; therefore, 4-foot T12 lamps with magnetic ballasts remain
a large part of the residential installed stock. (Public Meeting
Transcript, No. 21 at pp. 276-279)
The Joint Comment asserted that a separate analysis for the
residential sector is unnecessary; however, the Joint Comment
recommended that residential applications should be accounted for in
DOE's LCC analysis based on the proportion of lamp sales, operating
hours, and electric rates. The Joint Comment stated DOE should use
caution in apportioning all sales through do-it-yourself (DIY) stores,
such as Home Depot and Lowe's, to the residential sector. (Joint
Comment, No. 23 at p. 10) PG&E and NEMA commented that approximately 20
percent of DIY business is commercial. (NEMA, No. 22 at p. 30; Public
Meeting Transcript, No. 21 at p. 290)
DOE agrees that it should model the residential sector to more
accurately capture overall consumer behavior and the market impact of
standards. DOE calculated the initial residential stock of 4-foot
medium bipin T12 lamps using the lamps sold through the DIY
distribution chain, which accounted for approximately 25 percent of
NEMA's historical shipments. Next, DOE assumed 20 percent of those DIY
sales went to small commercial consumers, with the remaining 80 percent
apportioned to the residential sector. As a result, DOE assumed 20
percent of all 4-foot medium bipin shipments went to the residential
sector and all of those were T12 lamps.
From those shipments, DOE calculated the residential installed
stock and then modeled new construction, renovation, and fixture/
ballast replacement in the same manner described in section 0. DOE
assumed that in the base case, a portion of consumers will continue to
purchase 4-foot T12 magnetic systems, while the remaining consumers
will choose to purchase higher-efficacy 4-foot T8 and 4-foot T12
electronic systems. Overall, the number of 4-foot T12 systems installed
in the residential sectors is relatively constant over the analysis
period. For more details regarding DOE's assumptions in the residential
sector, please see chapter 10 of the TSD.
e. GSFL Product Migration
DOE received many comments on its assumptions characterizing how
consumers will migrate among different GSFL products. These comments
were primarily focused on the movement away from T12 systems and the
migration toward T5 systems, topics discussed in detail below.
i. Ballast Rule Effective Start Date
NEMA commented that the 2000 Ballast Rule does not ban T12 magnetic
ballasts in the commercial sector until June 2010. This means these
ballasts will be available through the end of 2010, and not 2009 as
DOE's model had assumed, because some T12s will remain in the
distribution chain for a period of months after the rule takes effect.
Therefore, NEMA argued, DOE should expect T12 lamps to continue to be
shipped beyond 2022, the year DOE projected the lamps will phase out.
(NEMA, No. 22 at p. 25, 28) DOE agrees with NEMA that commercial sector
magnetic ballasts will continue to be available through 2010 and has
revised its model accordingly to better reflect the timing of the 2000
Ballast Rule's effective start date of amended standards. According to
the revised model, DOE estimates that the majority of banned magnetic
T12 ballasts will be eliminated from the installed stock by 2025.
However, as discussed below, the inclusion of T12 electronic ballasts
results in T12 lamps being shipped throughout the analysis period.
ii. Four-Foot Medium Bipin T12 Lamp Replacements
In the March 2008 ANOPR, DOE assumed that 100 percent of 4-foot T12
systems would be replaced by 4-foot T8 systems upon ballast failure.
This assumption was made in consideration of the 2000 Ballast Rule,
which effectively banned most 4-foot T12 medium bipin magnetic
ballasts. 10 CFR part 430.32(m)(5) DOE received several comments
related to this assumption and the implications for DOE's GSFL
shipments analysis.
Stakeholders generally agreed that DOE's base-case assumption was
too optimistic in terms of the migration from 4-foot T12 to 4-foot T8
systems. The comments provided two reasons why consumers would be
expected to maintain T12 electronic ballasts and not migrate to T8
lamps. First, because the installed stock is dominated by T12 lamps, it
is unlikely all consumers would switch to T8 lamps upon repurchase,
especially when spot re-ballasting. Some commercial sector consumers
would be expected to use another T12 lamp and ballast to maintain
visual consistency with other lamps in a room. Second, the Joint
Comment noted that residential low-power-factor ballasts are not
subject to the 2000 Ballast Rule, meaning legal ballasts compatible
with T12 lamps will continue to exist. 10 CFR part 430.32(m)(7)(iii).
Similarly, Osram Sylvania made the same point and commented that 4-foot
T12 medium bipin magnetic ballast systems are common in the residential
sector. Osram Sylvania added that some fixtures include electronic
ballasts and are marketed as being capable of operating T12 lamps,
which could perpetuate T12 usage. NEMA added that cold temperature
ballasts for 8-foot T12 RDC high output lamps are still allowed under
the rule as well. (Public Meeting Transcript, No. 21 at pp. 248-251,
276, 281; NEMA, No. at pp. 25, 28; Joint Comment, No. 23 at p. 7)
The stakeholders did differ slightly on the appropriate replacement
rates that DOE should assume. The Joint Comment recommended DOE assume
5 to 10 percent of the commercial market and a higher proportion of the
residential market will purchase T12 lamp and ballast systems upon
ballast failure, with the remainder migrating to T8 systems. (Joint
Comment, No. 23 at p. 7) GE estimated that about 20 percent of the
currently installed base of T12 lamps will be replaced by T12 lamps,
while the other 80 percent will migrate to T8 lamps. (Public Meeting
Transcript, No. 21 at pp. 250-252) NEMA suggested that DOE should
assume that in 2022, T12 lamps will compose at least 10 percent of the
4-foot lamp market, 40 percent of the 8-foot single pin slimline
market, and over 90 percent of the RDC HO market. (NEMA, No. 22 at p.
28)
After careful consideration of these comments, DOE has decided to
modify its assumption regarding the rate of migration from T12 to T8
lamps. Accordingly, DOE is using NEMA's estimates to recalibrate its
shipment forecasts. DOE now agrees that not all 4-foot T12 lamps would
be replaced by T8 systems upon ballast failure. Thus, for this NOPR,
DOE assumed 90 percent (down from 100 percent) of 4-foot T12 systems
will be replaced with T8 systems and 10 percent with T12 systems.
According to DOE's estimates in 2022, T12 lamps will comprise nearly 20
percent of the 4-foot medium bipin market, 25 percent of the 8-foot
single pin slimline market, and 93 percent of the 8-foot recessed
double contact HO market. (See TSD chapter 10.) DOE notes that these
estimates do not exactly
[[Page 16965]]
align with NEMA's suggestions, because they incorporate several other
phenomena in addition to the migration to T12 electronic systems (e.g.,
growth rate, emerging technologies, T5 penetration, 8-foot SP slimline
to 4-foot MBP conversions).
iii. Eight-Foot Single Pin Slimline T12 Lamp Replacements
For its shipments forecasts in the March 2008 ANOPR, DOE assumed
that 90 percent of the 8-foot T12 single pin systems would be replaced
with two 4-foot T8 systems, and 10 percent would be replaced by 8-foot
single pin T8 systems. In its written comments, NEMA generally agreed
with DOE's assumption but provided slightly different replacement rate:
NEMA suggested that DOE should assume 80 percent of the 8-foot T12
single pin lamps would be replaced by two 4-foot T8 lamps and 20
percent by 8-foot T8 lamps. (NEMA, No. 22 at p. 28) ACEEE and the Joint
Comment argued that DOE's assumption that 90 percent of the 8-foot
market would switch to 4-foot lamps is much too high, particularly
because the current stock is dominated by T12. The Joint Comment also
stated that DOE should include some electronic T12 system ballast
purchases, as in the case of 4-foot T12 lamps. (Public Meeting
Transcript, No. 21 at pp. 254-255; Joint Comment, No. 23 at p. 7)
Based on its consideration of the above comments, DOE revised its
estimated conversion rates for 8-foot single pin slimline systems in
this NOPR. In line with the Joint Comment and NEMA's recommendations,
DOE lowered its conversion rates to 4-foot MBP systems. In addition,
consistent with NEMA's suggestion, DOE has included a conversion to
electronic 8-foot T12 SP slimline systems. DOE now assumes 80 percent
of the 8-foot T12 single pin lamps would be replaced by two 4-foot MBP
T8 systems, with the remaining 20 percent split evenly between 8-foot
T8 and electronic 8-foot T12 SP slimline systems.
iv. Four-Foot T5 Lamps
In the March 2008 ANOPR, DOE did not analyze 4-foot miniature bipin
T5 standard output (SO) and high output (HO) lamps as covered product
classes. As discussed in section A.1.b above, for this NOPR, DOE is
proposing to cover both T5 SO and T5 HO lamps as additional, distinct
product classes. The following describes the methodology DOE used to
generate shipments of these lamps.
To establish the 2005 installed stock of T5 lamps, DOE first
estimated 2001-to-2005 shipments based on assumptions derived from its
market research and supported by manufacturer interviews. Market
literature indicated that T5 lamps represented 2 percent of the 2004
GSFL market, a figure DOE assumed for its analysis. DOE's research also
indicated that the combined market share of T5 SO and HO lamps was
growing as a percentage of the overall GSFL market. Additionally, in
interviews, manufacturers provided insight on the proportions of T5
lamp sales that are standard output and high output. Using these
assumptions, DOE generated historical shipment estimates for 2001 to
2005, which it used to calculate the initial stock of SO and HO lamps
in the same manner it does for all other GSFL product classes. Finally,
DOE received confidential aggregated (both SO and HO) T5 lamp shipment
data from NEMA for 2001 to 2007. DOE used this data to validate its
installed stock estimates.
In general, after establishing the 2005 T5 SO and HO installed
stocks, DOE modeled shipment growth based on a migration from other
product classes. For T5 SO lamps specifically, DOE's research indicated
that shipment growth of these lamps is primarily driven by a migration
from the 4-foot MBP market. In addition, because 4-foot T5 MiniBP SO
systems require a different fixture than 4-foot MBP systems, T5 systems
would be unlikely to penetrate the ballast-only replacement market.
Therefore, to establish T5 standard output shipments, DOE allotted a
portion of the 4-foot MBP fixture replacement, renovation, and new
construction markets to 4-foot T5 MiniBP systems. To do this, DOE first
calculated the size of this potential market for new T5 SO systems in
each year. DOE then determined the portion of this market that would
actually be serviced by T5 SO lamps by calculating the share that
resulted in T5 shipments consistent with 2006 and 2007 historical data.
DOE held the resulting percentage (approximately 12.5 percent) constant
throughout the analysis period. As a result of the inclusion of 4-foot
T5 MiniBP lamps eroding part of the 4-foot MBP market, estimates of
total 4-foot MBP lamp shipments are lower in the NOPR than in the
ANOPR. Using this methodology, in the base case Emerging Technologies
scenario, DOE forecasts T5 SO shipments of 15.0 million in 2008, 24.2
million in 2012, and 47.4 million in 2025 (56.2 million in 2025 in the
base-case Existing Technologies scenario).\53\
---------------------------------------------------------------------------
\53\ As discussed earlier, DOE models two base-case shipment
scenarios: Existing Technologies and Emerging Technologies. Because
the Emerging Technologies scenario models the potential substitution
of GSFL systems with lamps that incorporate emerging technologies
(such as LED), the Emerging Technologies scenario generally results
in fewer shipments of GSFL. However, based on price and technology
advancement projections, DOE estimated that these emerging
technologies will not likely significantly penetrate the GSFL market
until after 2012.
---------------------------------------------------------------------------
For T5 HO lamps, after establishing the installed stock in 2005 in
the same manner as with T5 SO lamps, DOE developed 4-foot T5 MiniBP HO
lamp shipments by modeling a migration from two different lighting
markets. Marketing literature indicated, similar to 8-foot RDC HO
systems, a large portion of 4-foot MiniBP T5 HO systems serve high-bay
(ceilings higher than 20-feet high) applications due to their highly-
concentrated light output. Historical shipment data for 8-foot RDC HO
lamps showed substantial declines in 2006 and 2007, indicating T5 HO
lamps may be rapidly displacing them. In addition, DOE's research
indicated that a significant portion of 4-foot T5 HO growth can be
attributed to a penetration into the high intensity discharge (HID)
lamp high-bay and low-bay markets. Therefore, to calculate the growth
in 4-foot MiniBP T5 HO lamp shipments, DOE assumed that these systems
were penetrating both the 8-foot RDC HO and HID markets. Similar to its
analysis for T5 SO systems, DOE established that the fixture
replacement, renovation, and new construction market segments represent
the available market for T5 HO systems. DOE obtained HID shipment data
from the 2004 HID determination,\54\ from which DOE calculated the
total lumens servicing low-bay and high-bay applications. Then,
consistent with historical T5 and 8-foot RDC HO shipments, DOE assumed
T5 HO would fully penetrate the 8-foot RDC HO new construction,
renovation, and fixture replacement markets, as well as the HID new
construction and renovation market. Using this methodology, DOE
forecasts T5 HO shipments of 14.0 million in 2008, 23.6 million in
2012, and 46.1 million in 2025.
---------------------------------------------------------------------------
\54\ U.S. Department of Energy, Office of Energy Efficiency and
Renewable Energy, ``Energy Conservation Program for Commercial and
Industrial Equipment: High-Intensity Discharge Lamps Analysis of
Potential Energy Savings'' (Dec. 2004). Available at: http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/hid_energy_savings_report.pdf.
---------------------------------------------------------------------------
For further details on shipment forecasts of 4-foot T5 lamps, see
chapter 10 of the TSD. DOE seeks public comment on its analysis of the
4-foot T5 SO and HO markets, as well as its shipment results.
[[Page 16966]]
3. Base-Case Market-Share Matrices
DOE's market-share matrices are another important input into the
shipments analysis and NIA. Within each product class, DOE considers
the mix of technologies from which consumers can choose. These choices
are represented in market-share matrices, which apportion market share
for lamp stocks (in 2012) or lamp shipments (after 2012). Because
shipments depend on lamp lifetime and system lumen output assumptions,
among other inputs, DOE allocated market shares to each of the lamp
technologies for the base case and standards case. The matrices enable
the shipment model to capture a migration to different lamps, or, for
GSFL, lamp-and-ballast designs, over time in both the base and
standards cases. Issues related to these market-share matrices are
discussed below.
a. General Service Fluorescent Lamps
A ballast factor measures the actual lumen output of a lamp-and-
ballast system relative to a reference system. A lower ballast factor
will, all else equal, lead to lower lumen output, and proportionally
less energy consumption than the reference system. ACEEE commented that
the ballast factor of 0.75 that DOE used in the market matrices is
fairly uncommon and that manufacturers are now marketing lower ballast
factors, including 0.7, 0.69, and 0.68. Therefore, ACEEE expects a
bigger jump from normal to low ballast factor than the 0.78-0.75 jump
that DOE assumes in its market-share matrices presented in the ANOPR.
The Joint Comment noted that 0.71 represents the mid-point of very low
ballast factors on the market. (Public Meeting Transcript, No. 21 at
pp. 262-263; Joint Comment, No. 21 at p. 10) Consistent with changes
incorporated in the engineering analysis, DOE incorporated a 0.71
ballast factor ballast option in the NIA. In sum, DOE attempts to match
as closely as possible the lumen output of the retiring system and the
replacement system. To the extent that a lower ballast factor can
achieve the appropriate lumen output, it is incorporated into the
technology choices facing consumers.
Regarding the base-case 4-foot T8 medium bipin market-share matrix,
Industrial Ecology commented that DOE was incorrect to assume 0 percent
market share for the 25W lamp in 2012. Because thousands of these lamps
are being sold in 2008, that estimate should be much greater than zero.
(Public Meeting Transcript, No. 21 at p. 261) The Joint Comment stated
that 30W lamps are being displaced by 25W and 28W options. Therefore,
DOE's 30W market share assumptions--4 percent in 2012 and 15 percent in
2042--are too large. The Joint Comment suggested that DOE should
substantially reduce the market share of 30W lamps and split those
sales between 25W and 28W lamps. (Joint Comment, No. 23 at p. 10)
NEMA commented on the same market-share matrix, stating that the
market share for T8 lamps in the 2042 base case should be less than 30
percent for 32W lamps and greater than 30 percent for 25W lamps, with
the rest of the market composed of 28W and 30W lamps. (NEMA, No. 22 at
p. 28)
DOE considered the submitted comments and modified its base-case 4-
foot T8 medium bipin market-share matrix accordingly. Based on a
confidential NEMA survey of market shares of 4-foot medium bipin lamps,
in 2012, DOE allocated 4 percent, 4 percent, and 2 percent of the 4-
foot T8 market share to 25W, 28W, and 30W lamps, respectively, for the
revised NOPR base-case market-share matrices. In 2042, DOE allocated 32
percent, 27 percent, and 14 percent market to 25W, 28W, and 30W lamps,
respectively. See chapter 10 of the NOPR TSD for the full market-share
matrices in 2012 and 2042.
b. Incandescent Reflector Lamps
In the March 2008 ANOPR, DOE presented market-share matrices for
both residential and commercial IRL. For the commercial sector, the
base-case IRL market-share matrix apportioned market share of the stock
to only halogen and the standard HIR (currently EL2) lamps. Although
DOE received no comments from stakeholders, DOE modified these matrices
for the NOPR to reflect changes made in the engineering analysis. For
the NOPR, the base case market-share matrix for commercial IRL now
allocates market share to all currently commercially-available lamp
technologies, including improved halogen, long-life HIR, and the
silverized reflector technology. DOE believes this revised distribution
better reflects product availability and consumer purchasing trends
because they include all covered lamp technologies currently being
sold.
4. GSFL Standards-Case Shipment Scenarios and Forecasts
In the March 2008 ANOPR, DOE modified its base-case market-share
matrices to account for two standards-case scenarios and to generate
shipment forecasts. DOE considered a Roll-up scenario and a Shift
scenario, described below. DOE also introduced voluntary standards-
induced retrofits in the standards case. DOE received several comments
on the scenarios it analyzed and its rate of voluntary retrofits. In
response to those and related comments, DOE is modifying its Shift and
Roll-up scenarios and introducing new standards-case scenarios. These
scenarios are discussed in detail below and in TSD chapter 10.
a. Shift/Roll-Up Scenarios
In the March 2008 ANOPR, DOE modeled lower-bound and upper-bound
energy conservation scenarios for the GSFL standards-case NIA to
characterize the range of energy savings that may result from
standards. 73 FR 13620, 13671 (March 13, 2008). In the standards-case
NIA for GSFL and commercial IRL, DOE first modeled a lower-bound energy
conservation scenario called the Roll-up scenario. 73 FR 13620, 13671
(March 13, 2008). This scenario assumes that consumers owning lamps or
systems that do not meet the new standards will ``roll up'' to the
lowest first-cost option available (preserving lumen output if
possible) when purchasing standards-compliant lamps. (March 2008 ANOPR
TSD chapter 9) The Roll-up scenario also assumes that consumers already
owning standards-compliant lamps or systems will continue to purchase
those lamps or systems.
DOE also modeled a Shift scenario in the March 2008 ANOPR for the
GSFL NIA, in which DOE assumed that consumers are driven by both lamps
cost and energy savings. In this case, consumers may purchase a variety
of lamps or systems that are more efficacious than their base case
systems. (73 FR 13620, 13671 (March 13, 2008); March 2008 ANOPR TSD
chapter 9) Specifically, consumers who purchase products in the base
case at above-minimum standard levels will ``shift up'' to even higher
efficacy standard levels in the Shift scenario. DOE used this scenario
to illustrate upper-bound energy savings.
The Joint Comment argued that both the Roll-up and Shift scenarios
understate standards-case energy savings, but the Roll-up scenario is
more unrealistic because standards change the relative economics of
more-efficient products. (Joint Comment, No. 23 at p. 11) In other
words, standards would eliminate the least-efficacious lamps (which
usually have the lowest first costs), thereby reducing the cost premium
of high-efficacy lamps relative to the lowest first-cost available
lamp. According to the commenter, that would encourage some consumers
to purchase lamps above the standards. The Joint Comment also argued
that new
[[Page 16967]]
standards would encourage manufacturers to promote more efficacious
products, a market dynamic not sufficiently captured by either
scenario. (Joint Comment, No. 23 at p. 11)
The Joint Comment further stated that the Shift scenario reflects a
more realistic consumer response to standards than the Roll-up
scenario. Historically, for example, some consumers have purchased
systems that are more efficacious than minimum standards. Still, the
Joint Comment argued, the Shift scenario does not fully capture the
spread of efficiencies in a standards-compliant market and fails to
characterize manufacturer efforts to hasten development of more-
efficient lamps and systems. The Joint Comment argued that DOE's
scenarios should anticipate voluntary programs and manufacturer
interest in establishing more-efficient product lines in the standards
case. (Joint Comment, No. 23 at pp. 11, 22)
Regarding the comment about the relative economics of lamp
purchases, DOE agrees that the relative first-costs change in the
standards case (i.e., the up-front cost differential between the least-
cost, standards-compliant lamp and a more-efficient lamp) is less than
in the base case. This effect is one of the reasons DOE models a Shift
scenario. Still, DOE does not believe that this effect implies that the
Shift scenario is necessarily more viable than the Roll-up scenario.
Although the relative up-front economics change between cost and
efficacy, they may not change between cost and income, meaning some
consumers--particularly those not concerned about energy savings--may
focus on the absolute costs at the time of purchase. A consumer's
lighting budget, for example, will not necessarily increase simply
because there is a smaller cost premium for a more-efficacious lamp. In
sum, DOE cannot be certain which scenario is more likely, and, thus,
continues to model both scenarios.
However, DOE agrees that revisions to the Shift scenario may better
capture the spread of efficiencies in the market. Therefore, DOE
revised its Shift scenario for the NOPR to more closely retain the
existing (baseline) efficacy distribution in the standards case. (See
TSD chapter 11 for the revised Shift scenario efficacy distribution
results.) However, as the standard becomes more stringent, DOE has
maintained its approach of incrementally accumulating market share of
the lamp stock at TSL5 and not projecting some to move beyond what now
characterizes the maximum technologically feasible standard level
(``max-tech''). It is not possible for DOE to model a spread of
efficiencies above max-tech levels. DOE has interviewed manufacturers
and concluded it cannot reasonably predict future price and performance
points of technologies yet to be developed for the market. DOE seeks
comment and supporting data on whether the Roll-up or Shift scenario is
more appropriate.
b. Lighting Expertise Scenarios
In its written comments, NEMA stated that it considers the Shift
scenario implausible because the scenario assumes consumers will
``aggressively'' migrate to lower-ballast-factor ballasts. NEMA
strongly disagreed with DOE's assumption that more-stringent efficacy
standards are significantly correlated with lower GSFL ballast factors
(particularly at CSLs 3, 4, and 5), and NEMA argued that it had seen no
direct and demonstrated causal relationship between them in its
experience. Further, NEMA argued that there is no proven correlation
between new potential GSFL standards and the future mix of ballast
factor values that will occur; therefore, NEMA reasoned that DOE should
not apply such a correlation in its standards-case market-share
matrices. NEMA also commented that new standards-compliant GSFL and
their ballasts would have to be interoperable across manufacturers and
with a wide range of existing ballasts and luminaires. Therefore, more-
stringent efficacy standards would mostly yield greater lumen output,
rather than decreasing lamp wattage. As such, NEMA argued, DOE has
overreached in building a case for standards set at higher efficacy
levels by inappropriately and arbitrarily assuming a strong correlation
between increasing efficacy and decreasing ballast factor views. (NEMA,
No. 22 at p. 26, 27)
NEMA also commented that the most direct way to use the efficacy
improvements imposed by the standards is to use fewer luminaires to
attain the same delivered light level on the work surface while
reducing the total wattage. However, NEMA maintains that this is not a
practical possibility because, even for new construction or major
renovation projects, the spacing of luminaires is dictated by a
building and ceiling system grid. Thus, there is no opportunity to take
advantage of additional lumens that might result from standards by re-
spacing existing luminaires, which must continue to operate on high-
volume ballast designs. (NEMA, No. 22 at p. 26) Based on these
arguments, NEMA strongly asserted that moving beyond CSL1 and CSL2 for
a lamp-only rulemaking is ill-advised. (NEMA, No. 22 at p. 26, 27)
DOE has carefully considered NEMA's comments on DOE's assumption of
a general trend toward lower-BF ballasts over the analysis period. In
response, DOE undertook an extensive literature review and analysis--
discussed below--to better characterize the likelihood of consumers
migrating to lower-BF ballast systems if higher efficacy standards are
required. DOE assessed the lighting expertise of groups of consumers,
described below, who make lighting purchase decisions. DOE assumes that
consumers with ``high'' lighting expertise will be sufficiently
educated about ballast factors and lamp efficacy to migrate to lower-
ballast-factor ballasts when lower wattage lamps are not available in
the standards case. That is, these consumers will seek to maintain
light output in the replacement purchase.
To analyze this issue, DOE first characterized the lighting market
supply chain in the commercial and residential sectors and identified
the decision makers within each one (e.g., contractors, homeowners).
DOE broke down each sector by the principal events that prompt lamp
purchases: (1) Ballast failure; (2) retrofit; (3) fixture replacement;
(4) renovation; and (5) new construction. DOE assigned probabilities
reflecting each decision maker's likelihood of making the lighting
purchase decision given the purchase event. For example, in purchase
events driven by new construction, DOE assumed lighting designers,
architects, and electrical engineers make 70 percent of the decisions,
owners make 20 percent, and electrical contractors make the remaining
10 percent. DOE then analyzed the likelihood of each decision maker
choosing to run a lamp on a lower BF ballast if forced by standards to
purchase a more-efficacious lamp. DOE described that likelihood with a
probability that was based on the technical expertise and motivation of
the decision maker. Within each purchase event, DOE multiplied the
likelihood of each market actor making the decision by the likelihood
of that actor choosing a lower-BF ballast. In this way, DOE derived an
estimate for the likelihood of a lower-BF ballast being selected for
each event in each sector in the standards case.
DOE assumed the commercial and industrial sectors behave similarly
with respect to ballast factor choices, and no distinction was made
between them in this analysis. Additionally, decision makers in the
large-commercial sector can be different agents making different
[[Page 16968]]
decisions than those in the small-commercial sector. In the market
segments (purchase events) where DOE found consumer behavior to be
substantially different between these subsectors, DOE weighted the
relative impact of each subsector when characterizing the overall
commercial market. Table V.6 presents the results of DOE's analysis for
the commercial and residential sectors. The values depict the
probability that lamps purchased in each event will be matched with
lower-ballast-factor ballasts, if necessary, to maintain lumen output.
For example, 78 percent of lamps purchased in new construction in the
commercial sector will be paired with lower-ballast-factor ballasts, if
no reduced-wattage lamps are available in the standards case,
Table V.6--Market Segment-Based Likelihood of High Lighting Expertise
------------------------------------------------------------------------
Probability
-------------------------------
Lamp purchase event Commercial (in Residential
percent) (in percent)
------------------------------------------------------------------------
Renovation.............................. 69 48
New Construction........................ 78 61
Retrofit................................ 92 0
Ballast Replacement..................... 8 0
Fixture Replacement..................... 34 0
------------------------------------------------------------------------
In light of NEMA's comments and DOE's analysis, DOE used these
results to add a second set of standards-case scenarios to characterize
ballast factor migration in the GSFL NIA. DOE now also analyzes a High
Lighting Expertise scenario and a Market Segment-Based Lighting
Expertise scenario. These scenarios characterize consumers' decisions
(or lack thereof) when purchasing a more-efficient lamp to either
maintain previous lumen output or accept higher lighting levels. For
its part, the High Lighting Expertise scenario uses the same
methodology as DOE used in the ANOPR. The High Lighting Expertise
scenario generally characterizes more sophisticated lighting decisions
in which consistent lighting levels and/or energy savings play a
determining role in consumer behavior. In this scenario, consumers are
more likely to choose a lower-ballast-factor ballast to pair with
higher-efficacy lamps. Conversely, in the Market Segment-Based
scenario, DOE assumed consumers often accept higher lighting levels as
a consequence of higher-efficacy lamps. As a consequence, these
consumers do not achieve the same energy savings as would be possible
by migrating to lower-ballast-factor ballasts. DOE used this analysis,
and the results shown in Table V.6, to characterize the Market Segment-
Based expertise scenario. On the other hand, in the High Lighting
Expertise scenario, DOE assumes all consumers (100 percent) migrate to
lower-ballast-factor ballasts when appropriate. Please see TSD appendix
10B for more details.
c. Voluntary Retrofits
In the March 2008 ANOPR, DOE assumed that more-stringent efficacy
standards would lead to higher T12 lamp prices, and, in turn, higher
rates of voluntary retrofits from T12 to more-efficacious T8 lamps. For
example, DOE assumed that CSL1 would drive an additional 10 percent of
the T12 market to voluntarily migrate to T8 lamps, that CSL2 would
drive an additional 20 percent, that CSL3 would drive an additional 30
percent, and so on. These commercial standards-induced retrofits
involve consumers voluntarily discarding their functioning T12
ballasts, and purchasing new T8 ballasts in the standards case. In
contrast, in the base case, these consumers would have utilized the
entirety of their T12 ballast lifetime.
At the public meeting, ACEEE agreed with DOE's assumption that
standards will accelerate voluntary retrofits, but argued that DOE's
retrofit rate was too aggressive. ACEEE specifically stated that the
50-percent retrofit rate per year at CSL5 was too high and suggested a
rate of roughly half that level. (Public Meeting Transcript, No. 21 at
p. 282) GE agreed that DOE's retrofit rates were too high, suggesting
that 10 percent at CSL1 is an appropriate starting point, but 25
percent should probably be the maximum assumed retrofit rate at CSL5.
Using those rates as the minimum and maximum, GE said DOE could scale
the rate for the other CSLs. (Public Meeting Transcript, No. 21 at pp.
282-283) In its written comments, NEMA similarly stated that DOE's
conversion rate for consumers voluntarily retrofitting from T12 to T8
systems is likely overstated. NEMA suggested that DOE should use a
voluntary retrofit rate of 20 to 25 percent for CSL5 and recommended
that other rates be adjusted based on that percentage. (NEMA, No. 22 at
p. 28)
At the public meeting, Philips also commented that it would expect
utilities to be more aggressive with their rebate programs in the
standards case than they would be in the base case. PG&E stated that
voluntary retrofits are driven by many factors, including attention to
global climate change, increased product availability, and other
factors, not necessarily utility rebate programs. (Public Meeting
Transcript, No. 21 at pp. 273-275)
DOE considered these comments and maintains that these standards-
induced retrofits are a likely phenomenon and important to model in the
NIA. DOE agrees that its initial retrofit assumptions were likely too
high, particularly for the higher efficacy levels. For the NOPR,
consistent with comments received, in the commercial sector DOE
continued to assume that EL1 would drive an additional 10 percent of
the T12 market per year to voluntary retrofit to T8 lamps. DOE also
assumed a 25-percent retrofit rate at EL4 and EL5, levels at which all
T12 lamps are effectively eliminated from the market. For TSL1, TSL2,
and TSL3, DOE changed the standards-induced retrofit rates to 10
percent, 15 percent, and 20 percent, respectively.
Similar to DOE's approach in the commercial sector, DOE also
included increased migration of residential consumers from 4-foot
medium bipin T12 systems to T8 systems. As discussed in chapter 10 of
TSD, DOE assumed in the base case that residential consumers replacing
their T12 fixture (either due to fixture failure or ballast failure)
would purchase another T12 system. In contrast, in the commercial
sector, DOE assumes 90 percent of 4-foot MBP consumer replace their T12
ballasts with T8 ballast upon fixture or ballast failure in the base
case. In addition, while in the commercial sector DOE assumed, under
amended energy conservation standards, some consumers would retrofit
their working T12 ballast systems before end of ballast life, DOE
assumed residential
[[Page 16969]]
consumers never do so. Instead, in the residential sector, DOE
incorporated an additional migration to T8 lamps only when the consumer
is confronted with a ballast or fixture failure. In such situations DOE
assumed that a certain percentage residential consumers, who in the
base case would purchase a new T12 system, would instead, in the
standards case, elect to purchase a T8 system--despite the availability
of T12 options. Specifically, based on manufacturer interviews, DOE
shifts 25 percent, 35 percent, and 65 percent of these consumers to T8
systems at TSL1, TSL2, and TSL3, respectively (thereby reflecting
increased cost of T12 lamps). At TSL4 and TSL5, all residential
consumers migrate to T8 systems because T12 lamps would be effectively
eliminated from the market.
5. IRL--Standards-Case Shipment Scenarios and Forecasts
In the March 2008 ANOPR, DOE modified its market-share matrices to
account for standards-case scenarios and generate shipment forecasts
for IRL. DOE created one main shipment scenario and two sensitivity
scenarios to characterize how IRL consumers would be expected to react
to standards in the commercial and residential sectors. The sensitivity
scenarios were called the ``65W BR Lamp Substitution'' scenario and the
``10-Percent Lumen Increase'' scenario. For all three standards-case
scenarios in these sectors, DOE assumed that consumers whose base-case
lamp purchase has an efficacy lower than that of the standard would
roll up to the least efficacious lamp design available. Any IRL
consumer whose base-case lamp purchase meets the efficacy standard
would remain unaffected.
In the main shipment scenario, DOE made two assumptions: (1)
Consumers who purchase covered IRL technology in the base case continue
to purchase covered IRL technology in the standards case (i.e., the
total number of installed covered IRL in the base case is the same as
that in the standards case throughout the analysis period); and (2) in
the standards case, consumers purchase higher-efficacy lamp designs
with equivalent lumen output as their base-case lamps.
The remaining sensitivity scenarios modeled two situations--one in
which consumers may migrate from regulated IRL toward the exempt 65W BR
lamps in the standards case (termed ``65 Watt BR lamp substitution''),
and another in which a portion of residential consumers of IRL buy a
more-efficacious lamp at the same wattage as in the base case (termed
``10-percent lumen increase''). This sensitivity scenario assumed
consumers would, on average, purchase 10 percent more lumens in the
standards case. As explained below, DOE received several comments on
the March 2008 ANOPR standards-case IRL shipments. In response to those
and related comments, DOE is modifying and introducing new standards-
case scenarios, discussed in detail below and in TSD chapter 10.
i. Shift/Roll-Up Scenarios
For commercial sector IRL, DOE chose to model a Roll-up scenario in
the March 2008 ANOPR. The Joint Comment encouraged DOE to also model a
Shift scenario for commercial IRL because of the variety of existing
and emerging efficiency options available. The Joint Comment argued a
Shift scenario would better capture both the improved cost
competitiveness of higher-efficacy options and greater manufacturer
investment in developing higher-efficacy products. (Joint Comment, No.
23 at p. 18)
DOE agrees that some commercial consumers may continue to purchase
products above the minimum standard level. Therefore, similar to the
Shift scenario in GSFL, DOE created a Shift scenario for IRL that
captures the same spread of efficiencies in the standards case as in
the base case. To model this, DOE compiled a distribution of IRL in the
commercial sector with different efficacies using the revised efficacy
standard levels for this notice. Based on this distribution, DOE then
created a Shift scenario for the NOPR IRL national impact analysis.
In the March 2008 ANOPR, DOE's residential standards-case market-
share matrix assumed that the entire residential market purchases the
least-cost standards-compliant lamp at each efficacy level. Because all
residential consumers purchase baseline lamps, the Shift and Roll-up
scenarios lead to equivalent results. For example, at CSL1, DOE assumed
the entire residential market would choose improved halogen lamps; at
CSL3, the market would choose improved HIR.
NEMA commented that residential consumers do not necessarily
purchase lamps that meet only one efficacy level. (NEMA, No. 22 at p.
31) NEMA contended that consumers could opt to buy lamps that meet a
higher CSL than the one imposed by DOE.
Based on NEMA's comment, DOE reconsidered its assumption that
consumers in the residential market purchase lamps at only the lowest
efficacy level. However, DOE believes that its assumption that
consumers buy lamps at the lowest first-cost standards-compliant
efficacy level correctly characterizes residential consumer behavior in
general. For example, although lamps using HIR technology are available
today, consumers generally do not buy them because of their high
initial cost. DOE does not believe current market behavior will
radically change under new or amended standards. Without data
suggesting otherwise, DOE believes the most appropriate forecasting
assumption should generally reflect the predominant, current consumer
behavior. Therefore, DOE maintains its assumption for the NOPR that
residential consumers would continue to purchase the lowest-first-cost,
standards-compliant lamps. For further detail regarding the Shift and
Roll-up scenarios, see chapter 10 of the TSD.
ii. Product-Substitution Scenarios
At the public meeting, ACEEE commented that the deployment of non-
IRL emerging technologies will be affected by the efficacy level that
DOE selects for this rule. (Public Meeting Transcript, No. 21 at p.
291) While DOE considered the comment, it ultimately did not model
additional movement to LED or CMH lamps in response to standards
because the efficacy and price projections for such lamps have a
significant degree of uncertainty. DOE does not wish to incorporate
that level of conjecture into the NPV calculation for this rule.
However, because DOE assumed R-CFL technology was mature, DOE did
assess additional movement from IRL to R-CFL in response to standards.
For the residential sector, DOE calculated simple payback periods
comparing R-CFL to the baseline halogen and R-CFL to the higher-
efficacy lamp designs. Using incremental market penetrations based on
the payback period calculations, DOE incorporated additional movement
to R-CFL in the residential sector standards case. In the commercial
sector, DOE assumed that all institutions wishing to convert to R-CFL,
despite its shortcomings (such as lower color quality), do so before
2012. Therefore, there is no additional movement to R-CFL in response
to standards.
DOE excluded certain IRL (particularly some BR and ER lamps, such
as 65W BR30 and ER40 lamps) from the base-case NIA in the March 2008
ANOPR because these IRL were exempted from standards by EISA 2007.
(EISA 2007 section 322(b); 42 U.S.C. 6295(i)(1)(C)) In the standards-
case sensitivity scenario, DOE modeled the movements to exempted IRL as
a reduction in the market size of covered IRL as consumers move from
covered to
[[Page 16970]]
non-covered lamps. DOE received a number of comments on its choice to
exclude exempted IRL from the base case and standards case in the NIA.
Several comments recommended that DOE should model movements to
exempt IRL in the main base-case and standards-case NIA scenarios
instead of only modeling such movements in a sensitivity scenario.
ACEEE commented that DOE needs to account for BR lamps in its analysis;
by excluding BR lamps from the base case, ACEEE argued DOE was
essentially ignoring their presence in the market. The Joint Comment
argues that 65W BR lamps should be included in the base case because
they represent a potential loophole to standards. (Public Meeting
Transcript, No. 21 at pp. 293-294, 313-314; Joint Comment, No. 23 at p.
17)
As stated above, DOE only includes products being regulated in this
rulemaking in the base-case shipment forecasts. Since this rulemaking
does not cover 65W BR lamps, DOE cannot include them in the base-case
NIA. Accordingly, DOE removed exempted IRL from the shipment data used
as inputs to the base-case NIA in the ANOPR. (March 2008 ANOPR TSD
chapter 9) For the standards-case NIA, DOE created a ``65 Watt BR lamp
substitution'' sensitivity scenario to model movements to exempted 65W
BR lamps due to the various CSLs. (March 2008 ANOPR TSD appendix 9A)
DOE included 65W BR lamps in the standards case because covered
products shift to this lamp.
DOE received a number of comments on how it modeled the shift to BR
lamps in the standards case. NEMA stressed its significance and agreed
that consumers will shift from covered to exempted BR lamps, with the
shift increasing as more-stringent standards raise product costs.
(NEMA, No. 22 at p. 27) The Joint Comment maintained that 65W BR lamps
should be included in the standards case. (Joint Comment, No. 23 at p.
17) However, some attendees of the public meeting suggested that the
shift to the 65W BR might be inappropriate because they believed that
consumers already purchase exempted BR lamps in most applications where
consumers have the option of installing either the exempted BR lamps or
higher-efficacy PAR lamps. For example, PG&E commented that the vast
majority of IRL in recessed cans are already exempted BR lamps, so it
is unlikely that consumers will switch from existing PAR lamps (which
are included in coverage) to new BR lamps in those applications. In
addition, Industrial Ecology stated that some household recessed can
fixtures are not strong enough to hold PAR lamps, which are heavier
than BR lamps. Thus, BR lamps would likely maintain their indoor
recessed can market share relative to PAR lamps. Regarding outdoor
applications in which PAR lamps are often used, Industrial Ecology also
commented that BR lamps are generally incompatible with these
application, meaning consumers would likely not migrate from PAR lamps
to exempted BR lamps for outdoor applications in response to standards.
(Public Meeting Transcript, No. 21 at pp. 319, 321)
DOE considered these comments, and agrees that PAR lamps may be
more suitable for outdoor applications than the exempted BR lamps.
However, based on residential estimates that 40 percent of all
residential IRL are PAR lamps,\55\ DOE believes that a considerable
portion of residential PAR lamps are used in non-outdoor applications
which are compatible with both PAR and the exempted BR lamps. Thus, DOE
maintains that some residential consumers would likely move to exempted
IRL under standards. For the NOPR, DOE revised its estimates of the
number of consumers that will shift to exempted IRL by calculating
incremental market penetrations for each standard level.
---------------------------------------------------------------------------
\55\ New York State Energy Research and Development Authority,
Incandescent Reflector Lamps Study of Proposed Energy Efficiency
Standards for New York State (2006). Available at: http://www.nyserda.org/publications/Report%2006-07-Complete%20report-web.pdf (Last accessed Oct. 7, 2006).
---------------------------------------------------------------------------
To better account for migration to exempted lamps, DOE has decided
to analyze a second set of standards-case scenarios for IRL in this
NOPR. DOE now analyzes scenarios called the Product Substitution and No
Product Substitution scenarios. The Product Substitution scenario
models a shift to both exempted BR lamps and to R-CFL in the standards
case. The No Product Substitution scenario does not model any
additional shift in the standards case to non-regulated reflector
technologies. For more information about the product substitution
standards case scenario, see chapter 10 of the TSD.
DOE maintains the 10-percent lumen increase sensitivity scenario
from the ANOPR, a scenario in which a portion of consumers purchase the
same wattage higher efficacy lamp in the standards case and do not save
energy. See appendix 11A for more detail on this sensitivity scenario.
6. Other Inputs
a. Analysis Period
In its written comments, NEMA stated that any market forecast, even
over a short period of time, will contain errors. NEMA argued that
forecasting market relationships over 30 years will compound any
inherent errors to the point where the estimate may no longer be
useful. For example, NEMA argued that overstating growth of lamps
covered by this standard would overstate the discounted value of
potential benefits associated with amended standards. (NEMA, No. 22 at
p. 24) DOE recognizes that forecasting over long periods of time can
lead to inaccuracies. However, due to the long lifetime of ballasts and
lamps in some sectors, the stock of these products can take decades to
turn over. Thus, DOE believes the standards impact on energy
consumption and energy savings is best quantified and evaluated over a
long period of time. Therefore, DOE has decided to maintain an analysis
period from 2012 to 2042, consistent with the shipment and national
impact analyses of other rulemakings. However, to account for the
uncertainties involved in forecasting energy savings and NPV in
general, and over long periods of time, DOE has created several base-
case and standards-case scenarios. Based on these scenarios, previously
discussed in sections V.E.2.c, V.E.4, and V.E.5, DOE believes that it
can characterize the NIA results for these products with a sufficient
degree of certainty.
b. Total Installed Cost
The total annual installed cost increase is equal to the annual
change in the per-unit total installed cost (i.e., the difference
between base case and standards case) multiplied by the shipments
forecasted in the standards case.
On this topic, GE commented that the cost of migrating from an 8-
foot lamp to a 4-foot lamp includes not only the lamp and ballast
costs, but also the cost of the retrofit kit and labor, which was not
included in DOE's ANOPR NIA. NEMA commented that the retrofits kits
would cost $45-$50, not including labor, which would take 20-25
minutes. (NEMA, No. 22 at p. 28; Public Meeting Transcript, No. 21 at
pp. 255-256) DOE agrees that the retrofit kit costs should be included
in the NIA. Therefore, DOE is including in the NIA the retrofit kit
cost of $50 per 8-foot single pin lamp that is replaced by two 4-foot
lamps. DOE is also including a total installation time of 25 minutes.
See TSD chapter 11 for further detail on retrofit kit costs.
c. Electricity Price Forecast
In the March 2008 ANOPR, DOE projected electricity prices using
EIA's AEO2007 estimates and extrapolated prices beyond 2030. In this
notice, DOE
[[Page 16971]]
updated those projections based upon AEO2008. DOE received a comment on
using electricity price forecasts other than those of AEO as
sensitivities. See section 0 above for more detail on this comment and
DOE's response.
d. Energy Site-to-Source Conversion
The site-to-source conversion factor is the multiplicative factor
DOE uses for converting site energy consumption into primary or source
energy consumption. In the March 2008 ANOPR, DOE used EIA's AEO2007
forecasts (to 2030) of electricity generation and electricity-related
losses. DOE extrapolated conversion factors beyond 2030. In this
notice, however, DOE uses annual site-to-source conversion factors
based on the version of the National Energy Modeling System (NEMS) that
corresponds to AEO2008. The conversion factors vary over time because
of projected changes in the Nation's portfolio of generation sources.
DOE estimated that conversion factors remain constant at 2030 values
throughout the remainder of the forecast.
e. HVAC Interaction Factor
In the March 2008 ANOPR, DOE assumed a 6.25 percent HVAC
interaction factor. The HVAC interaction factor measures the reduced
cooling loads and increased heating loads that result from their
interaction with more-efficacious lighting systems. For example, a 6.25
percent HVAC interaction factor means that one quad of energy savings
due to lamps standards results in 1.0625 quads of total energy savings
after the interaction with heating, ventilation, and air conditioning
systems is taken into account. At the public meeting, PG&E stated that
DOE's assumed level for this factor was too low. PG&E argued that if
the heat from these products goes directly into the building and it
takes one unit of electric energy to remove three units of heat, 6.25
percent was a very conservative number. (Public Meeting Transcript, No.
21 at pp. 333-334) Industrial Ecology agreed that 6.25 percent was on
the low end of most estimates and cited the following rule of thumb
used in the service industry: One saves a quarter of a watt in HVAC
operation for every watt one saves ceiling lighting systems. Industrial
Ecology suggested that DOE should look into other studies for more
information on the HVAC interaction factor. (Public Meeting Transcript,
No. 21 at pp. 333-334)
DOE is unaware of any other national-level studies that may be
useful in estimating the HVAC factor specific to lighting over the
entire calendar year. Therefore, DOE continues to use the study \56\
that originated from the 2000 Ballast Rule. DOE notes that it has
updated the study since its original publication and that it is a
national-level analysis covering many building types across several
climate zones.
---------------------------------------------------------------------------
\56\ U.S. Department of Energy--Energy Efficiency and Renewable
Energy Office of Building Research and Standards. Technical Support
Document: Energy Efficiency Standards for Consumer Products:
Fluorescent Lamp Ballast Proposed Rule: Appendix B. Marginal Energy
Prices and National Energy Savings. January 2000. Washington, DC.
http://www.eere.energy.gov/buildings/appliance_standards/residential/pdfs/appendix_b.pdf.
---------------------------------------------------------------------------
f. Rebound Effect
In its analyses, DOE accounted for an anticipated ``rebound
effect'' \57\ that may occur after the installation of energy efficient
lighting equipment. After consulting the literature \58\ reporting on
this effect, DOE used in the March 2008 ANOPR an 8.5-percent rebound
effect for the residential sector and a 1-percent effect in the
commercial sector, with every 100 percent increase in energy
efficiency. NEMA agreed with DOE's inclusion of the rebound effect, but
commented that more research needs to be done to characterize its
magnitude. (NEMA, No. 22 at p. 30) DOE is unaware of other data that
would affect its current rebound effect assumptions. DOE invites
additional comments on this issue and will consider incorporating any
relevant data provided.
---------------------------------------------------------------------------
\57\ Under economic theory, ``rebound effect'' refers to the
tendency of a consumer to respond to the cost savings associated
with more-efficient equipment in a manner that actually leads to
marginally greater product usage, thereby diminishing some portion
of anticipated energy savings related to improved efficiency.
\58\ Greening, L.A., D.L. Greene, and C. Difiglio, ``Energy
efficiency and consumption--the rebound effect--a survey,'' 28
Energy Policy (2000), pp. 389-401.
---------------------------------------------------------------------------
g. Discount Rates
In its analyses, DOE multiplies monetary values in future years by
a discount factor in order to determine their present value. DOE
estimated national impacts using both a 3-percent and a 7-percent real
discount rate as the average real rate of return on private investment
in the U.S. economy. The Joint Comment argued that DOE should use a 2-
percent to 3-percent real discount rate, noting other rulemakings and
extensive academic research supporting a real societal discount rate in
that range. (Joint Comment, No. 23 at p. 22) While DOE acknowledges the
comment, the Department notes that it is required to follow guidelines
on discount factors set forth by the Office of Management and Budget
(OMB). Specifically, DOE uses these discount rates in accordance with
guidance that OMB provides to Federal agencies on the development of
regulatory analysis (OMB Circular A-4 (Sept.17, 2003), particularly
section E, ``Identifying and Measuring Benefits and Costs'').
Accordingly, DOE is continuing to use 3-percent and 7-percent real
discount rates for the relevant calculations in this NOPR.
F. Consumer Subgroup Analysis
In analyzing the potential impacts of new or amended standards, DOE
evaluates the impacts on identifiable subgroups of consumers (e.g.,
low-income households or small businesses) that may be
disproportionately affected by a national standard. In the March 2008
ANOPR, DOE requested comments on subgroups that should be considered
for the NOPR analysis. 73 FR 13620, 13682 (March 13, 2008). NEMA
commented that DOE should assess the impacts of standards on low-income
consumers, as well as houses of worship, historical facilities, and
institutions that serve low-income populations. (NEMA, No. 22 at p. 32)
DOE researched the suggested subgroups using the 2001 RECS and 2003
CBECS databases and the 2002 U.S. Lighting Market Characterization. The
Residential Furnaces and Boilers NOPR,\59\ Central Air Conditioners
Supplemental Notice of Proposed Rulemaking,\60\ and Clothes Washers
Final Rule \61\ defined ``low-income consumers'' as residential
consumers with incomes at or below the poverty line, as defined by the
U.S. Census Bureau. DOE has defined ``low-income consumers'' in the
same way for this
[[Page 16972]]
rule. DOE discovered that in 2001, residential low-income consumers
faced electricity prices that were 0.1 cents per kWh lower than the
prices faced by consumers above the poverty line. Using this
information, DOE performed a subgroup analysis of low-income consumers
for the NOPR, the key findings of which are presented below and
addressed in section VI.B.1.b.
---------------------------------------------------------------------------
\59\ U.S. Department of Energy--Office of Energy Efficiency and
Renewable Energy, Technical Support Document: Energy Conservation
Program for Consumer Products: Energy Conservation Standards for
Residential Furnaces and Boilers Proposed Rule: Chapter 11 (2006).
Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/furnaces_boilers/fb_tsd_chapt11_0906.pdf (Last accessed Dec. 8, 2008).
\60\ U.S. Department of Energy--Office of Energy Efficiency and
Renewable Energy, Technical Support Document: Energy Conservation
Program for Consumer Products: Central Air Conditioners and Heat
Pumps Energy Conservation Standards Proposed Rule: Chapter 10
(2001). Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/chap10_sub-grp.pdf (Last
accessed Dec. 8, 2008).
\61\ U.S. Department of Energy--Office of Energy Efficiency and
Renewable Energy, Technical Support Document: Energy Conservation
Program for Consumer Products: Clothes Washer Energy Conservation
Standards Final Rule: Chapter 18 (2001). Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/chapter_8_consumer_analysis.pdf. (Last accessed Dec. 8,
2008).
---------------------------------------------------------------------------
DOE found that houses of worship used their lamps for fewer hours
per year than any other building type in the non-mall commercial
building sector, according to the 2003 CBECS and LMC. DOE analyzed
houses of worship using 1,705 operating hours per year for GSFL (rather
than 3,435 hours per year for an average commercial facility) and 1,609
operating hours per year for IRL (rather than 3,450 hours per year for
an average commercial facility).
DOE also found that a wide range of sites (from single buildings to
entire districts) are classified as ``historical facilities.'' Because
historical facilities serve a range of functions, DOE assumed that such
facilities also feature the same variety of operating hours,
electricity prices, and discount rates as a typical consumer. However,
DOE did find that these buildings, on average, have more T12 lamps than
the typical commercial or residential building. Therefore, in its
subgroup analysis for historical facilities, DOE concentrated on the
LCC analysis and results for those consumers with T12 fluorescent
lamps.
DOE also found a wide array of nonprofit and for-profit
organizations that serve low-income populations. Because of the large
diversity of organizations in this sector, DOE does not expect to see
operating hours, lamp types, or event response behaviors that vary
significantly from the commercial sector as a whole. However, DOE
believes that the majority of organizations serving low-income
populations are small nonprofits. For this reason, DOE chose a subgroup
scenario with a discount rate that is 3.8 percent higher than the
average discount rate for the commercial sector (for a discount rate of
10.8 percent), based on the sources used to develop the discount rate
for small business subgroups in the Ovens and Commercial Clothes
Washers NOPR analysis.\62\
---------------------------------------------------------------------------
\62\ U.S. Department of Energy--Office of Energy Efficiency and
Renewable Energy, Technical Support Document: Energy Conservation
Standards for Certain Consumer Products (Dishwashers, Dehumidifiers,
Electric and Gas Kitchen Ranges and Ovens, and Microwave Ovens) and
for Certain Commercial and Industrial Equipment (Commercial Clothes
Washers): Chapter 12 (2008). Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/home_appliances_tsd/chapter_12.pdf. (Last accessed Dec. 8,
2008).
---------------------------------------------------------------------------
Although NEMA did not request that DOE analyze consumers of T12
electronic systems, DOE decided to analyze this subgroup as well,
because consumers that already have a T12 electronic system could
potentially benefit less from standards than those consumers with
magnetic systems. Specifically, consumers that own a T12 electronic
system in the base case would need to purchase a T8 electronic system
in the case of an energy conservation standard at EL4 or EL5. Because
the T12 electronic system is more efficient than T12 magnetic systems,
consumers with electronic systems would experience lower operating cost
savings than those consumers with magnetic systems. In order to analyze
the affect on consumers of T12 electronic systems, DOE established a
new baseline electronic T12 system and modified standards-case systems
so that both light output is maintained in the case of a standard and
energy is saved. For this subgroup, DOE only analyzed the event where a
consumer purchases a T12 lamp in the baseline and a T8 lamp and ballast
system in the case of a standard at EL4 and EL5, as T12 lamps are no
longer available. All other factors of the LCC subgroup analysis
remained the same as in the primary analysis. See the NOPR TSD chapter
12 for further information on the LCC analyses for all subgroups.
G. Manufacturer Impact Analysis
1. Overview
DOE performed an MIA to estimate the financial impact of higher
energy conservation standards on GSFL and IRL manufacturers, and to
calculate the impact of such standards on domestic manufacturing
employment and capacity. The MIA has both quantitative and qualitative
aspects. The quantitative part of the MIA primarily relies on two
separate Government Regulatory Impact Models (GRIMs)--industry-cash-
flow models customized for this rulemaking. The GRIM inputs are data
characterizing the industry cost structure, shipments, and revenues.
The key output is the industry net present value. Different sets of
assumptions (scenarios) will produce different results. The qualitative
part of the MIA addresses factors such as product characteristics,
characteristics of particular firms, and market and product trends, and
it also includes an assessment of the impacts of standards on subgroups
of manufacturers. The complete MIA is outlined in chapter 13 of the
TSD.
DOE conducted the MIA in three phases. Phase 1, ``Industry
Profile,'' consisted of the preparation of an industry
characterization. Phase 2, ``Industry Cash Flow,'' focused on the
industry as a whole. In this phase, DOE used two separate GRIMs (one
for the GSFL industry and one for IRL industry) to prepare an industry
cash-flow analysis. DOE used publicly-available information developed
in Phase 1 to adapt each GRIM structure to facilitate the analysis of
amended GSFL and IRL standards. In Phase 3, ``Subgroup Impact
Analysis,'' DOE conducted interviews with manufacturers representing
the majority of domestic GSFL and IRL sales. During these interviews,
DOE discussed engineering, manufacturing, procurement, and financial
topics specific to each company, and also obtained each manufacturer's
view of the industry as a whole. The interviews provided valuable
information DOE used to evaluate the impacts of amended energy
conservation standards on manufacturer cash flows, manufacturing
capacities, and employment levels.
a. Phase 1, Industry Profile
In Phase 1 of the MIA, DOE prepared a profile of the GSFL and IRL
industries based on the market and technology assessment prepared for
this rulemaking. Before initiating the detailed impact studies, DOE
collected information on the present and past structure and market
characteristics of the GSFL and IRL industries. The information DOE
collected included market share, product shipments, markups, and cost
structure for various manufacturers. The industry profile includes
further detail on the overall market, product characteristics,
estimated manufacturer market shares, the financial situation of
manufacturers, and trends in the number of firms in the lamp industry.
The industry profiles included a top-down cost analysis of GSFL and
IRL manufacturers that DOE used to derive product costs and preliminary
financial inputs for the GRIM (e.g., revenues; material, labor,
overhead, and depreciation expenses; selling, general, and
administrative expenses (SG&A); and research and development (R&D)
expenses). DOE also used public information to further calibrate its
initial characterization of the industry, including Securities and
Exchange Commission (SEC) 10-K and 20-F reports, Standard & Poor's
(S&P) stock reports, and corporate annual reports.
[[Page 16973]]
b. Phase 2, Industry Cash-Flow Analysis
Phase 2 of the MIA focused on the financial impacts of potential
amended energy conservation standards on the industries as a whole. DOE
used the GRIMs to calculate the financial impacts of standards on
manufacturers. DOE used two separate GRIMs, one for each industry
analyzed (GSFL and IRL). In Phase 2, DOE used each GRIM to perform a
preliminary industry cash-flow analysis. In performing this analysis,
DOE used the financial values determined during Phase 1 and the
shipment scenarios used in the NIA analysis.
c. Phase 3, Subgroup Impact Analysis
Using average cost assumptions to develop an industry-cash-flow
estimate does not adequately assess differential impacts among
manufacturer subgroups. For example, small manufacturers, niche
players, or manufacturers exhibiting a cost structure that largely
differs from the industry average could be more negatively affected.
DOE used the results of the industry characterization analysis (in
Phase 1) to group manufacturers that exhibit similar characteristics.
During the ANOPR public meeting, Industrial Ecology commented that
small lamp manufacturers may be disproportionately affected by IRL and
GSFL standards. (Public Transcript, No. 21 at pp. 354-356) DOE
established two subgroups for the MIA corresponding to large and small
business manufacturers of GSFL and IRL products. For the GSFL and IRL
manufacturing industries, small businesses, as defined by the Small
Business Administration (SBA), are manufacturing enterprises with 1,000
or fewer employees. Based on identification of these two subgroups, DOE
prepared one interview guide with questions related to both GSFL and
IRL manufacturing for large and small manufacturers. DOE used the
interview guide to tailor the GRIMs to address unique financial
characteristics of manufacturers of each industry. DOE interviewed
companies from each subgroup, including subsidiaries and independent
firms and public and private corporations. The purpose of the meetings
was to develop an understanding of how manufacturer impacts vary by
TSL. During the course of the MIA, DOE interviewed manufacturers
representing the vast majority of domestic GSFL and IRL sales. Many of
these same companies also participated in interviews for the
engineering analysis. However, the MIA interviews broadened the
discussion from primarily technology-related issues to include
business-related topics. One objective was to obtain feedback from
industry on the assumptions used in the GRIM and to isolate key issues
and concerns. See chapter 13 of the TSD for details.
2. Discussion of Comments
In response to DOE's March 2008 ANOPR presentation of the steps DOE
would take during the MIA for the NOPR, DOE received several comments
related to the high price and limited availability of xenon. NEMA
commented that xenon gas was the only viable option for higher-
efficiency fill gas and cited manufacturer concerns about its limited
supply and quickly escalating prices. (NEMA, No. 22 at p. 8) NEMA also
stated that assumptions DOE uses in its analysis can become invalid
quickly, citing the price of xenon as an example of an assumption that
could seriously affect their business. (NEMA, No. 21 at p. 108-109)
During the manufacturer interviews, manufacturers contended that the
global supply of xenon was fixed and that competition with other
applications (i.e., anesthesia) has caused the price of xenon to
increase ten-fold over the last year. After receiving these comments,
DOE conducted its own research to determine if market conditions for
xenon could affect its use as a higher-efficiency fill gas.
According to DOE's research, xenon is one of three rare gases
(along with neon and krypton) produced by cryogenic air separation.
Given the low concentration of the rare gases in the air (neon 0.002
percent, krypton 0.0001 percent, and xenon 0.00001 percent),\63\ the
only cost-effective recovery options are large air-separation units.
Most worldwide supply is met by the three largest industrial gas
companies (Air Liquide, Praxair, and Linde); another major supplier is
Iceblick, a former State-controlled enterprise of the Soviet Union.
---------------------------------------------------------------------------
\63\ See http://www.airliquide.com/file/otherelement/pj/airliquide2007gb_bd_ok12439.pdf, p. 110.
---------------------------------------------------------------------------
Major applications for xenon include lighting, television flat
panel displays, the space industry (for ion engines and satellite
repositioning), medical imaging and anesthesia, and electronic chip
manufacturing. All applications are growing rapidly. Demand from the
semiconductor industry alone increased from less than 1 million liters
per year in June 2007 to almost 3 million liters per year in June 2008.
Demand for xenon has also grown significantly in the last 18 months,
greatly outpacing the 12 million liters of worldwide xenon
production.\64\ While there remain essentially inexhaustible supplies
of xenon in the atmosphere, considerable investment would be required
to expand global production substantially. Since it is impossible to
immediately increase supply to meet demand, spot prices have increased
from $3-$4 per liter to $28-$35 per liter for large cylinders.\65\
These higher prices are likely to be sustained in the near-term until
supply can meet the growing demand.
---------------------------------------------------------------------------
\64\ Betzendahl, Richard, ``The Rare Gets More Rare: The Rare
Gases Market Update'' (CryoGas International) (June 2008) 26.
\65\ Id.
---------------------------------------------------------------------------
DOE estimates that the increased demand for xenon as a result of
this rulemaking would range from 3.2 percent to 12.8 percent of current
worldwide production in the first year the rulemaking takes effect.
Over the 30-year analysis period, the increased demand for xenon could
range from 0.5 percent to 18 percent of current worldwide production,
depending on the scenario analyzed. This increased demand is expected
to have little long-term effect on the price or availability of xenon,
considering the other contributing factors. Rapid growth or decline of
existing markets or the discovery of a new application could
significantly affect the total demand for xenon, perhaps even more than
this rulemaking. Furthermore, the above numbers are based on the
current worldwide production (12 million liters) and assume no increase
in production over the analysis period. This is highly unlikely, given
that current demand substantially exceeds supply. Any future increase
in xenon production would decrease the percentages mentioned above.
Thus, DOE has tentatively concluded that the amount of xenon required
by lamp manufacturers to produce lamps that meet the proposed standards
would not significantly affect the price or availability of xenon. DOE
also conducted an LCC sensitivity analysis to determine the impact of
higher xenon prices on the consumer. For more information on the xenon
market analysis and the consumer impacts of higher xenon prices, see
appendix 3B of the TSD.
In the GSFL industry, manufacturers stated that the ``rare earth
phosphors'' are a key component of GSFL performance. During the comment
period, some manufacturers expressed concern that higher CSLs would
necessitate increasing mixes of the costly rare earth phosphors in the
lamp coating. These manufacturers stated that more stringent standards
would drive
[[Page 16974]]
up demand for (and the price of) rare earth phosphors, which already
face significant supply constraints. These manufacturers added that
continued growth in the CFL market will also capture an increasing
share of available phosphor supply in the future, potentially
increasing prices and jeopardizing the cost-effectiveness of the
standards. Depending on the lamp type, rare earth phosphors can be the
highest input cost of a GSFL.
Manufacturers also noted that higher standards could drive
manufacturing processes to China, where the vast majority of rare earth
phosphors are mined. Coupled with cheaper labor and high export
tariffs, the incentive to move production of lamps to China might prove
too great to resist. To address these concerns, DOE analyzed the rare
earth phosphor market to understand the potential impact of the
standards on supply and demand, pricing, growth, and innovation. DOE
also analyzed the impact on employment for domestic manufacturers.
Because the UV radiation emitted within the lamp by the reaction of
the electrons and mercury vapor is invisible, manufacturers must coat
the inside of the lamp's glass with powered phosphors. The phosphors
fluoresce when struck by the UV radiation and convert it into visible
light. Less-efficient, low-cost lamps only use ``halophosphors'' to
coat the lamp. Halophosphors are more abundant and much less costly
than rare earth phosphors, but are also less efficient and produce a
lower quality light. Coating a lamp with a layer of rare earth
phosphors in addition to, or in place of, halophosphors can increase
efficacy, while dramatically improving color quality and lumen
maintenance. The coating's blend of phosphors determines, in part, the
CCT and CRI of the lamp. The lamp coating of high-performance GSFL,
often called a ``triband'' or ``triphosphor'' blend, commonly includes
three key elements--terbium, europium, and yttrium. Terbium and
europium are the rarest and reflect the greatest portion of the
coating's cost.
DOE evaluated the impact of standards on the phosphor markets and
concluded that mandating TSL5 would increase the global demand and
prices of these phosphors. DOE expects 2012 terbium demand to be 31
percent greater at TSL5 in the Shift-High Consumer Expertise scenario
than it would be in the Existing Technologies base case. DOE estimates
europium demand would increase by 10 percent, while Yttrium demand
would increase marginally. These estimates reflect the upper bound of
demand increases.
Given the historically volatile prices of these phosphors and the
unpredictable future determinants of supply and demand (such as Chinese
policy, additional mining operations, and future technological
changes), DOE has not developed supply and demand curves in order to
estimate future phosphor prices. However, DOE recognizes significant
price increases are possible given the expected surge in demand,
particularly for terbium and europium. Therefore, to analyze the impact
of higher phosphor prices, DOE also conducted a sensitivity analysis to
address the potential increases in lamp prices attributable to greater
phosphor costs on the consumer. That is, DOE compares LCC savings with
current phosphor costs to LCC savings under a scenario with higher
phosphor prices. Appendix 3C shows the results of this sensitivity
analysis and the rare earth phosphor market analysis.
Additionally, DOE found several rare earth mining projects in
development around the world that have the capacity to increase rare
earth supply. If prices continue to climb, DOE expects the economics of
mining rare earths to encourage more projects, and make less-
concentrated rare earth deposits economically viable, which will
increase supply. For these reasons, DOE does not believe standards, and
their potential impact on phosphor prices, will affect product
availability.
3. Government Regulatory Impact Model Analysis
The GRIM analysis uses a standard, annual cash-flow analysis that
incorporates manufacturer prices, manufacturing costs, shipments, and
industry financial information as inputs and models changes in costs,
distribution of shipments, investments, and associated margins that
would result from new or amended regulatory conditions (in this case,
standard levels). The GRIM spreadsheet uses a number of inputs to
arrive at a series of annual cash flows, beginning with the base year
of the analysis (2007) and continuing to 2042. DOE calculated INPVs by
summing the stream of annual discounted cash flows during this period.
DOE used the GRIM to calculate cash flows using standard accounting
principles and to compare changes in INPV between a base case and
various TSLs (the standards cases). Essentially, the difference in INPV
between the base case and a standards case represents the financial
impact of the amended energy conservation standards on manufacturers.
DOE collected this information from a number of sources, including
publicly-available data and interviews with manufacturers. See chapter
13 of the TSD for details.
4. Manufacturer Interviews
As part of the MIA, DOE discussed potential impacts of amended
energy conservation standards with manufacturers responsible for the
vast majority of domestic GSFL and IRL sales. The manufacturers
interviewed produce approximately 90 percent of GSFL for sale and 85
percent of IRL for sale. These interviews were in addition to those DOE
conducted as part of the engineering analysis. The interviews provided
valuable information that DOE used to evaluate the impacts of amended
energy conservation standards on manufacturer cash flows, manufacturing
capacities, and employment levels.
a. Key Issues
i. GSFL
Rare earth phosphor availability and price--All of the GSFL
manufacturers DOE interviewed are concerned about the availability and
price of rare earth phosphors. Due to the importation of rare earth
phosphors, any increases in duties paid to producing countries, such as
China, could have significant impacts on lamp manufacturing costs. Any
increase in lamp material costs directly affects manufacturer
profitability. According to manufacturers, meeting higher energy
conservation standards for GSFL would require an increase in rare earth
phosphor content in lamp coatings. These manufacturers stated that
higher energy conservation standards would drive up demand for and
prices of rare earth phosphors, which are already in short supply. In
addition, manufacturers stated that the continued growth in the CFL
market will erode future supply, jeopardizing the cost-effectiveness of
the standards. Depending on the lamp type, rare earth phosphors can be
the highest input cost of a GSFL. Some manufacturers also noted that
higher standards could drive manufacturing processes to China, where
the vast majority of rare earth phosphors are mined. Issues with rare
earth phosphors are specifically addressed in appendix 3C of the TSD.
Reduction in product portfolio--Some manufacturers are concerned
that energy conservation standards will force manufacturers to
eliminate some product lines, shrinking their overall marketability.
According to manufacturers, the ability to survive in the industry is
related to the companies'
[[Page 16975]]
diverse product portfolios. Companies benefit from a wide range of
products and efficiencies. Depending on the characteristics of the
product, manufacturers can up-sell to products that reap higher
profits. Manufacturers are concerned that reducing the product
portfolio will reduce options for customers and, ultimately,
profitability.
Profit margin impact--All manufacturers stated that energy
conservation standards have the potential to greatly harm their
profitability. Manufacturers enjoy a higher profit margin on higher-
efficacy or premium products than lower-end or baseline products. Since
higher-efficacy or premium products tend to incorporate design options
that increase energy efficiency, a high-efficiency standard would
commoditize such products and subsequently lower the overall
manufacturer markup on shipments. Several manufacturers stated it is
very difficult to pass along cost increases to customers because of the
competitive nature of the industry. Therefore, they believe any cost
increase due to standards set by DOE would automatically lower profit
margins.
ii. IRL
Product performance issues--All manufacturers stated that
implementation of design options to meet the proposed energy
conservation standards could cause a reduction in product lifetime.
Manufacturers stated that all standard levels could be met by lamps
that combine improved technology with shorter life. In addition to this
broad possibility, manufacturers indicated that the product lifetime of
infrared lamps that meet efficacy levels prescribed by TSL3, TSL4, and
TSL5 could be lowered due to the ``hot shock'' application problem. If
infrared lamps are installed in a live fixture, sections of the lamp's
filament can fuse together, possibly decreasing the lifetime by 25 to
30 percent. Manufacturers are concerned that both the performance
issues of hot shock and shorter life could impact consumers' acceptance
of covered IRL products. Any dissatisfaction resulting lower lifetimes
of standards-compliant lamps could hasten the shift to competing
technologies, which have much longer lifetimes.
Xenon gas availability and price--According to several
manufacturers, most higher-efficacy model lamps at each TSL use xenon
to increase efficacy. While using a different fill gas does not require
significant capital investments, manufacturers stated that xenon prices
have increased as much as ten-fold in the past few years. In the short
term, global supplies of xenon are limited by existing production
capacity, so the IRL industry has to compete with other industries,
such as medical applications, that are better able to support higher
prices. For more information on DOE's analysis of this issue, see
appendix 3B of the TSD and section V.G.2 of today's notice.
Elimination of product types in the manufacturers' product
portfolio--Manufacturers are concerned that at higher efficacy levels,
all lamps will need to switch to all infrared technology, which would
significantly reduce product offerings.
Elimination of small-diameter lamps--Manufacturers are concerned
that energy conservation standards could eliminate smaller-diameter
lamps. Because of the small size, all manufacturers use a single-ended
quartz burner in lamps smaller than PAR30, limiting potential efficacy
improvements. Although DOE scales its standard to smaller-diameter
lamps and there are existing PAR20 lamps at all TSLs, manufacturers are
concerned that the improvements for small-diameter lamps at high TSLs
could be impossible or cost prohibitive. DOE addresses the issues of
small-diameter lamps in section V.C.7.b.ii of today's notice.
Competition--Manufacturers stated that some TSLs could affect
competition within the industry. For example, one manufacturer has a
patent on silverized reflectors. While DOE did not set TSLs around this
technology, this manufacturer could meet TSL2 with cheaper lamps than
its competitors. One manufacturer has a cross license on the
technology, but has not made silverized lamps recently and would incur
substantial capital and conversion costs to produce them. There are
competitive concerns at TSL4 and TSL5 as well. Two manufacturers have a
full line of products that currently meet TSL4. The third manufacturer
has some products at this level, but is concerned that it would have to
incur significantly larger capital costs at TSL4 to redesign and
manufacture different burners, which could put it at a competitive
disadvantage. Only one manufacturer currently has a full line of
products at TSL5. At TSL4 and TSL5, standards-compliant lamps could
combine HIR technology with an improved reflector, potentially putting
the company that does not have access to silverized reflectors at a
disadvantage.
Market erosion--Manufacturers stated that emerging technology is
already starting to penetrate the IRL market. A standard on IRL would
be unique because it would force investments in a market that would
shrink over the entire lifetime of the investment. Depending on market
penetration of emerging technology, these investments might never be
recouped. Also, manufacturers are concerned that a standard on IRL
could hasten the switch to emerging technology by lowering the
difference in their first cost price. If the standard did increase the
natural migration toward new technology, it would be less likely that
manufacturers would make the substantial investments to modify IRL
production equipment. Finally, manufacturers are concerned that the BR
exemptions in EISA 2007 could also erode the market: The higher the IRL
standard, the lower the relative cost of the exempted incandescent
lamps. If a lower relative cost causes a large shift to exempted
incandescent lamps, it is less likely that investments in improved
halogen lamps could be justified. To address emerging technologies and
BR exemptions issues discussed by manufacturers, DOE included several
shipment scenarios in both the NIA and the GRIM. See chapter 10 and
chapter 13 of the TSD for a discussion of the shipment scenarios used
in the respective analysis.
b. Government Regulatory Impact Model Scenarios and Key Inputs
i. GSFL Base-Case Shipment Forecast
In the GSFL GRIM, DOE estimated manufacturer revenues, based on
unit shipment forecasts and distribution by product class and efficacy.
Changes in the product mix at each standard level are a key driver of
manufacturer finances. For this analysis, the GSFL GRIM incorporated
the two base-case shipment scenarios from the NIA. In the Existing
Technologies base case shipment scenario, DOE assumed that in the base
case customers would not migrate to emerging technologies. DOE also
modeled an Emerging Technologies base-case shipment scenario. In this
scenario, GSFL shipments are eroded in the base case as more customers
purchase emerging technology rather than covered GSFL. Table V.7 and
Table V.8 show total shipments forecasted by the NIA for the 2012 and
2042 GSFL base cases. For further information on the GSFL base-case
shipment forecast, see chapter 10 of the TSD.
[[Page 16976]]
Table V.7--GSFL Emerging Technologies Base Case Total NIA-Forecasted
Shipments in 2012 and 2042
------------------------------------------------------------------------
Total industry Total industry
Product class shipments for shipments for
2012* 2042*
------------------------------------------------------------------------
4-Foot MBP.............................. 479,177,000 490,528,000
8-Foot SP Slimline...................... 22,448,000 6,873,000
8-Foot RDC HO........................... 17,654,000 2,320,000
4-Foot T5............................... 24,225,000 79,906,000
4-Foot T5 HO............................ 23,610,000 67,857,000
------------------------------------------------------------------------
* Figures rounded to the nearest thousand.
Table V.8--GSFL Existing Technologies Base Case Total NIA-Forecasted
Shipments in 2012 and 2042
------------------------------------------------------------------------
Total industry Total industry
Product class shipments for shipments for
2012* 2042*
------------------------------------------------------------------------
4-Foot MBP.............................. 479,177,000 645,323,000
8-Foot SP Slimline...................... 22,448,000 6,873,000
8-Foot RDC HO........................... 17,654,000 2,320,000
4-Foot T5............................... 24,225,000 105,863,000
4-Foot T5 HO............................ 23,610,000 67,857,000
------------------------------------------------------------------------
* Figures rounded to the nearest thousand.
ii. IRL Base Case Shipments Forecast
As with the GSFL GRIM, the IRL GRIM incorporated the two base-case
shipment scenarios from the NIA for the period of 2007 to 2042
(Existing and Emerging Technologies base cases). Table V.9 and Table
V.10 show total shipments forecasted by the NIA for the 2012 and 2042
IRL for both base cases. The tables include the base-case shipments in
2020 because the impacts under the Emerging Technologies base case are
most apparent in the years after the standard becomes effective and the
differences between the base cases are easily demonstrated in 2020. For
further information on IRL base case shipment forecast, see chapter 10
of the TSD.
Table V.9--IRL Existing Technologies Base Case Total NIA-Forecasted Shipments in 2012 and 2042
----------------------------------------------------------------------------------------------------------------
Total industry Total industry Total industry
Product class shipments in shipments in shipments in
2012* 2020* 2042*
----------------------------------------------------------------------------------------------------------------
PAR38 90W....................................................... 56,459,000 62,990,000 88,566,000
PAR38 75W....................................................... 44,065,000 49,163,000 69,124,000
PAR30 50W....................................................... 30,738,000 35,759,000 51,180,000
----------------------------------------------------------------------------------------------------------------
* Figures rounded to the nearest thousand.
Table V.10--IRL Emerging Technologies Base Case Total NIA-Forecasted Shipments in 2012 and 2042
----------------------------------------------------------------------------------------------------------------
Total industry Total industry Total industry
Product class shipments in shipments in shipments in
2012* 2020* 2042*
----------------------------------------------------------------------------------------------------------------
PAR38 90W....................................................... 52,393,000 31,654,642 52,978,000
PAR38 75W....................................................... 40,892,000 24,706,062 41,349,000
PAR30 50W....................................................... 28,417,000 17,318,155 30,058,000
----------------------------------------------------------------------------------------------------------------
* Figures rounded to the nearest thousand.
iii. GSFL Standards Case Shipments Forecast
All shipment forecasts in the GSFL GRIM are obtained from the GSFL
NIA. Consequently, the GSFL GRIM included two efficacy distribution
scenarios (shift and roll-up), and two lighting expertise scenarios
(high- and market segment-based lighting expertise). For additional
details on the various shipment scenarios, see TSD chapter 10.
iv. IRL Standards-Case Shipments Forecast
To characterize consumer behavior in the IRL standards-case GRIM,
DOE considered the four shipment scenarios found in the NIA. The IRL
GRIM considered two efficacy distributions scenarios (shift and roll-
up) and two product substitution scenarios (product substitution and no
product substitution). See chapter 10 of the TSD for additional details
on the IRL standards-case shipment scenarios.
v. Manufacturing Production Costs
DOE derived manufacturing production costs by using end-user prices
found in the NIA and discounting them using typical markups along the
retail distribution chain. To calculate manufacturer selling prices
from these end-user prices, DOE divided the medium end-user prices in
the NIA by a typical markup for retail locations that sell the covered
products. DOE calculated the markup for retail locations using the
revenues and cost of
[[Page 16977]]
goods sold from the annual reports of publicly-traded companies. To
determine manufacturer production costs from manufacturing selling
price, DOE divided manufacturing selling prices by the manufacturer
markup. The manufacturer markup was calculated with the same publicly-
available information used to calculate other GRIM financial inputs
(e.g., industry-wide tax rate and working capital). Further discussion
of how DOE calculated other GRIM financial inputs from publicly-
available information is found in chapter 13 of the TSD.
vi. Amended Energy Conservation Standards Markup Scenarios
In both the IRL and GSFL GRIM, DOE modeled a flat markup scenario.
This scenario assumed that the cost of goods sold for each lamp is
marked up by a flat percentage to cover standard SG&A expenses, R&D
expenses, and profit. To derive this percentage, DOE evaluated
publicly-available financial information for manufacturers of lighting
equipment.
For GSFL only, DOE also modeled a four-tier markup scenario. In
this scenario, DOE assumed that the markup on lamps varies by efficacy
in both the base case and the standards case. DOE learned from
manufacturers that pricing for GSFL is typically determined on the
basis of four product tiers, corresponding to different phosphor
series. During the MIA interviews, manufacturers provided information
on the range of typical efficacy levels in these four tiers and the
change in profitability for each level. DOE used this information,
retail prices derived in its product price determination, and industry
average gross margins to estimate markups for GSFL under a four-tier
pricing strategy in the base case. In the standards case, DOE modeled
the situation in which portfolio reduction squeezes the margin of
higher-efficacy products as they are ``demoted'' to lower-relative-
efficacy-tier products. This scenario is in line with information
submitted during manufacturing interviews, which responds to
manufacturers' concern that DOE standards could severely disrupt
profitability.
The four-tier markup scenario was not modeled for IRL because
markups do not increase as a function of efficacy as is the case for
GSFL. Thus, this scenario is not representative of the IRL industry.
vii. Product and Capital Conversion Costs
Energy conservation standards typically cause manufacturers to
incur one-time conversion costs to bring their production facilities
and product designs into compliance with the amended standards. For the
purpose of the MIA, DOE classified these conversion costs into two
major groups: (1) Product conversion costs; and (2) capital conversion
costs. Product conversion expenses are one-time investments in
research, development, testing, and marketing, focused on making
product designs comply with the new energy conservation standard.
Capital conversion expenditures are one-time investments in property,
plant, and equipment to adapt or change existing production facilities
so that new product designs can be fabricated and assembled.
DOE assessed the R&D expenditures manufacturers would be required
to make at each TSL. DOE obtained financial information through
manufacturer interviews and aggregated the results to mask any
proprietary or confidential information from any one manufacturer. DOE
considered a number of manufacturer responses for GSFL and IRL at each
TSL. DOE estimated the total product conversion expenses by gathering
manufacturer responses, then weighted these data by market share.
DOE also evaluated the level of capital conversion expenditures
manufacturers would incur to comply with amended energy conservation
standards. DOE used the manufacturer interviews to gather data on the
level of capital investment required at each TSL. Manufacturers
explained how different TSLs affected their ability to use existing
plants, tooling, and equipment. From the interviews, DOE was able to
estimate what portion of existing manufacturing assets would need to be
replaced and/or reconfigured, and what additional manufacturing assets
would be required to manufacture the higher-efficacy products. In most
cases, DOE projected that the proportion of existing assets that
manufacturers would have to replace would increase as standard levels
for GSFL and IRL increase. For GSFL, DOE included capital costs for the
natural market shift from T12 to T8 lamps in the base case. For IRL,
the capital conversion expenses manufacturers provided during
interviews were based on converting their manufacturing equipment to
meet the current volume of shipments. Since the shipments projected in
the NIA decrease in the base cases, DOE scaled the conversion capital
investments to account for the decline in shipments from 2008 to the
year the standard becomes effective. DOE also consulted an independent
supplier of IRL coaters to identify additional costs above TSL4 that
would be needed for manufacturers to meet TSL5.
The investment figures used in the GRIM can be found in section
VI.B.2.a of today's notice. For additional information on the estimated
product conversion and capital conversion costs, see chapter 13 of the
TSD.
H. Employment Impact Analysis
DOE considers employment impacts in the domestic economy as one
factor in selecting a proposed standard. Employment impacts include
direct and indirect impacts. Direct employment impacts are any changes
in the number of employees for manufacturers of the appliance products
that are the subject of this rulemaking, their suppliers, and related
service firms. Indirect employment impacts are employment changes in
the larger economy that occur due to the shift in expenditures and
capital investment caused by the purchase and operation of more-
efficient appliances. The MIA addresses the portion of direct
employment impacts that concern manufacturers of GSFL and IRL (see
section V.G); this section addresses indirect impacts.
Indirect employment impacts from standards consist of the net jobs
created or eliminated in the national economy, other than in the
manufacturing sector being regulated, due to: (1) Reduced spending by
end users on energy (i.e., electricity); (2) reduced spending on new
energy supply by the utility industry; (3) increased spending on the
purchase price of new products; and (4) the effects of those three
factors throughout the economy. DOE expects the net monetary savings
from standards to be redirected to other forms of economic activity.
DOE also expects these shifts in spending and economic activity to
affect the demand for labor in the short term, as explained below.
One method for assessing the possible effects on the demand for
labor of such shifts in economic activity is to compare sectoral
employment statistics developed by the Labor Department's Bureau of
Labor Statistics (BLS).\66\ BLS regularly publishes its estimates of
the number of jobs per million dollars of economic activity in
different sectors of the economy, as well as the jobs created elsewhere
in the economy by this same economic activity. Data from BLS indicate
that expenditures in the utility
[[Page 16978]]
sector generally create fewer jobs (both directly and indirectly) than
expenditures in other sectors of the economy. There are many reasons
for these differences, including differences in wages and the fact that
the utility sector is more capital intensive and less labor intensive
than other sectors. See Bureau of Economic Analysis, ``A User Handbook
for the Regional Input-Output Modeling System (RIMS II), '' Third
Edition, Washington, DC, U.S. Department of Commerce, March 1997.\67\
---------------------------------------------------------------------------
\66\ Data on industry employment, hours, labor compensation,
value of production, and the implicit price deflator for output for
these industries are available upon request by calling the Division
of Industry Productivity Studies (202-691-5618) or by sending a
request by e-mail to [email protected]. Available at: http://www.bls.gov/news.release/prin1.nr0.htm.
\67\ Available at: http://www.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf.
---------------------------------------------------------------------------
Efficiency standards have the effect of reducing consumer utility
bills. Because reduced consumer expenditures for energy likely lead to
increased expenditures in other sectors of the economy, the general
effect of efficacy standards is to shift economic activity from a less
labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and manufacturing sectors). Thus,
based on the BLS data alone, DOE believes net national employment will
increase due to shifts in economic activity resulting from standards
for GSFL and IRL.
In developing this proposed rule, DOE estimated indirect national
employment impacts using an input/output model of the U.S. economy
called ``Impact of Sector Energy Technologies'' (ImSET); ImSET is a
spreadsheet model of the U.S. economy that focuses on 188 sectors most
relevant to industrial, commercial, and residential building energy
use.\68\\\ ImSET is a special-purpose version of the ``U.S. Benchmark
National Input-Output (I-O) Model,'' which has been designed to
estimate the national employment and income effects of energy-saving
technologies deployed by DOE's Office of Energy Efficiency and
Renewable Energy. Compared with previous versions of the model used in
earlier rulemakings, this version allows for more complete and
automated analysis of the essential features of energy efficiency
investments in buildings, industry, transportation, and the electric
power sectors. The ImSET software includes a computer-based I-O model
with structural coefficients to characterize economic flows among the
188 sectors. ImSET's national economic I-O structure is based on the
1997 U.S. benchmark table (Lawson, et al., 2002),\69\ specially
aggregated to 188 sectors. DOE estimated changes in expenditures using
the NIA spreadsheet. Using ImSET, DOE then estimated the net national
indirect-employment impacts on employment in the manufacturing and
energy industries of the new efficacy standards on employment by
sector.
---------------------------------------------------------------------------
\68\ Roop, J. M., M. J. Scott, and R. W. Schultz. ImSET: Impact
of Sector Energy Technologies, PNNL-15273 (Pacific Northwest
National Laboratory) (2005).
\69\ Lawson, Ann M., Kurt S. Bersani, Mahnaz Fahim-Nader, and
Jiemin Guo, ``Benchmark Input-Output Accounts of the U.S. Economy,
1997,'' Survey of Current Business (Dec. 2002) 19-117.
---------------------------------------------------------------------------
While both ImSET and the direct use of BLS employment data suggest
the proposed standards could increase the net demand for labor in the
economy, the gains would most likely be very small relative to total
national employment. Therefore, DOE concludes only that the proposed
standards are likely to produce employment benefits that are sufficient
to fully offset, any adverse impacts on employment in the manufacturing
or energy industries related to GSFL and IRL. See the TSD chapter 15.
NEMA agreed that ImSET would be the most appropriate tool to
analyze employment impacts on a national scale. NEMA also suggested
that DOE should be mindful of changes in production technologies and
the associated flows of labor and capital across industries that could
be needed under more-stringent efficacy standards, which would not
necessarily be reflected in the ImSET I-O analysis. (NEMA, No. 22, p.
34)
In response, DOE believes that the fixed I-O matrix is generally
adequate in predicting the range of magnitude of lighting savings.
Changes in production technologies and the associated economic flows
with direct employment implications are addressed in the MIA chapter
(chapter 13) of the TSD. DOE uses the ImSET model to address indirect
employment effects of the standards. For more details on the employment
impact analysis, see TSD chapter 15.
I. Utility Impact Analysis
The utility impact analysis estimates the change in the forecasted
power generation capacity of the Nation which would be expected to
result from the adoption of new efficacy standards. This section
discusses the methodology used, the results of which can be found in
section 0. DOE used a version of EIA's National Energy Modeling System
(NEMS) for this utility impact analysis. NEMS, which is available in
the public domain, is a large, multisectoral, partial-equilibrium model
of the U.S. energy sector. EIA uses NEMS to produce its AEO, a widely-
recognized baseline energy forecast for the United States. The version
of NEMS used for appliance standards analysis is called NEMS-BT and is
primarily based on the AEO 2008 with minor modifications.\70\ The NEMS-
BT offers a sophisticated picture of the effect of standards, since it
accounts for the interactions between the various energy supply and
demand sectors and the economy as a whole.
---------------------------------------------------------------------------
\70\ The EIA approves the use of the name ``NEMS'' to describe
only an AEO version of the model without any modification to code or
data. Because the present analysis entails some minor code
modifications and runs the model under various policy scenarios that
deviate from AEO assumptions, the name ``NEMS-BT'' refers to the
model as used here. (``BT'' stands for DOE's Building Technologies
Program.) For more information on NEMS, refer to The National Energy
Modeling System: An Overview, DOE/EIA-0581 (98) (Feb. 1998)
(available at: http://tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf).
---------------------------------------------------------------------------
Specifically, NEMS-BT models certain policy scenarios, such as the
effect of reduced electricity consumption, for each trial standard
level. The analysis output provides a forecast for the needed
generation capacities at each TSL. The estimated net benefit of the
standard is the difference between the forecasted generation capacities
by NEMS-BT and the AEO2008 Reference Case.
DOE obtained the energy savings inputs for the utility impact
analysis from the NIA's electricity consumption savings. These inputs
reflect the effects on electricity of efficiency improvements due to
the deployment of GSFL and IRL. Chapter 14 of the TSD accompanying this
notice presents results of the utility impact analysis.
DOE received comments requesting that DOE report gas and
electricity price impacts, and the economic benefits of reduced need
for new electric power plants and infrastructure. The expectation is
that lower electricity demand will lead to lower prices for both
electricity and natural gas that would benefit consumers. The Joint
Comment also stated that the benefits of reduced power plant and
infrastructure costs may not be fully reflected in prices because
consumers generally pay retail rates for electricity that are based on
the average embedded cost of all the facilities used to serve them,
rather than on marginal costs. (Joint Comment, No. 23 at pp. 20-22)
DOE considered reporting gas and electricity price impacts but
found that the uncertainty of price projections, together with the
fairly small impact of the standards relative to total electricity
demand, makes these price changes highly uncertain. As a result, DOE
believes that they should not be weighed heavily in the decision
concerning the standard level. Given the current complexity of utility
regulation
[[Page 16979]]
in the United States (with significant variances among States), it does
not seem appropriate to attempt to measure impacts on infrastructure
costs and prices where there is likely to be significant overlap.
J. Environmental Analysis
DOE has prepared a draft environmental assessment (EA) pursuant to
the National Environmental Policy Act and the requirements of 42 U.S.C.
6295(o)(2)(B)(i)(VI) and 6316(a), to determine the environmental
impacts of the proposed amended standards. Specifically, DOE estimated
the reduction in power sector emissions of carbon dioxide
(CO2) using the NEMS-BT computer model. DOE calculated a
range of estimates for reduction in oxides of nitrogen (NOX)
emissions and mercury (Hg) emissions using current power sector
emission rates. However, the Environmental Assessment (see the
Environmental Assessment report of the TSD accompanying this notice)
does not include the estimated reduction in power sector impacts of
sulfur dioxide (SO2), because DOE has determined that due to
the presence of nationals caps on SO2 emissions as addressed
below, any such reduction resulting from an energy conservation
standard would not affect the overall level of SO2 emissions
in the United States.
The NEMS-BT is run similarly to the AEO2008 NEMS, except the energy
use is reduced by the amount of energy saved due to the TSLs. DOE
obtained the inputs of national energy savings from the NIA spreadsheet
model. For the Environmental Assessment, the output is the forecasted
physical emissions. The net benefit of the standard is the difference
between emissions estimated by NEMS-BT and the AEO2008 Reference Case.
The NEMS-BT tracks CO2 emissions using a detailed module
that provides results with a broad coverage of all sectors and
inclusion of interactive effects.
The Clean Air Act Amendments of 1990 set an emissions cap on
SO2 for all power generation. The attainment of this target,
however, is flexible among generators and is enforced through the use
of emissions allowances and tradable permits. Because SO2
emissions allowances have value, they will almost certainly be used by
generators, although not necessarily immediately or in the same year
with and without a standard in place. In other words, with or without a
standard, total cumulative SO2 emissions will always be at
or near the ceiling, while there may be some timing differences between
year-by-year forecast. Thus, it is unlikely that there will be an
SO2 environmental benefit from electricity savings as long
as there is enforcement of the emissions ceilings.
Although there may not be an actual reduction in SO2
emissions from electricity savings, there still may be an economic
benefit from reduced demand for SO2 emission allowances.
Electricity savings decrease the generation of SO2 emissions
from power production, which can decrease the need to purchase or
generate SO2 emissions allowance credits, and decrease the
costs of complying with regulatory caps on emissions.
Like SO2, future emissions of NOX and Hg
would have been subject to emissions caps under the Clean Air
Interstate Act (CAIR) and Clean Air Mercury Rule (CAMR). As discussed
later in section VI.B.6, these rules have been vacated by a Federal
court. But the NEMS-BT model used for today's final rule assumed that
both NOX and Hg emissions would be subject to CAIR and CAMR
emissions caps. In the case of NOX emissions, CAIR would
have permanently capped emissions in 28 eastern States and the District
of Columbia. Because the NEMS-BT modeling assumed NOX
emissions would be subject to CAIR, DOE established a range of
NOX reductions based on the use of a NOX low and
high emissions rates (in metric kilotons (kt) of NOX emitted
per terawatt-hours (TWh) of electricity generated) derived from the
AEO2008. To estimate the reduction in NOX emissions, DOE
multiplied these emission rates by the reduction in electricity
generation due to the standards considered. For mercury, because the
emissions caps specified by CAMR would have applied to the entire
country, DOE was unable to use NEMS-BT model to estimate the physical
quantity changes in mercury emissions due to energy conservation
standards. To estimate mercury emission reductions due to standards,
DOE used an Hg emission rate (in metric tons of Hg per energy produced)
based on AEO2008. Because virtually all mercury emitted from
electricity generation is from coal-fired power plants, DOE based the
emission rate on the metric tons of mercury emitted per TWh of coal-
generated electricity. To estimate the reduction in mercury emissions,
DOE multiplied the emission rate by the reduction in coal-generated
electricity associated with standards considered.
DOE received comments from stakeholders on the valuation of
CO2 emissions savings that result from standards. The Joint
Comment stated that by not placing an economic value on the benefits
from reduced CO2 emissions, DOE makes it difficult to weigh
these benefits in comparison to other benefits and costs resulting from
a given standard level. Implicitly, the Joint Comment argued that DOE
is arbitrarily valuing pollution reductions at $0. The best way to
avoid this mistake would be to estimate an economic value for pollutant
reductions. According to the Joint Comment, voluminous work, both from
academia and the business world, exists on the range of potential
carbon prices under various regulatory scenarios. (Joint Comment, No.
23 at pp. 19-20). NEMA also suggested a CBO report as a potential
starting point. (NEMA, No. 22 at p. 34) DOE has made several additions
to its monetization of environmental emissions reductions in today's
proposed rule, which are discussed in section 0, but has chosen to
continue to report these benefits separately from the net benefits of
energy savings. Nothing in EPCA, nor in the National Environmental
Policy Act, requires that the economic value of emissions reduction be
incorporated in the net present value analysis of the value of energy
savings. Unlike energy savings, the economic value of emissions
reduction is not priced in the marketplace.
VI. Analytical Results
A. Trial Standard Levels
DOE analyzed the costs and benefits of many TSLs for the GSFL and
IRL covered in today's proposed rule. Table VI.2 and Table VI.4 present
the TSLs and the corresponding product class efficiencies for GSFL and
IRL. See the engineering analysis in section V.C of this NOPR for a
more detailed discussion of the efficacy levels.
In this section, DOE is only presenting the analytical results for
the TSLs of the product classes that DOE analyzed directly (the
``representative product classes''). DOE scaled the standards for these
representative product classes to create standards for other product
classes that were not directly analyzed (such as modified-spectrum
lamps), as set forth in chapter 5 of the TSD.
The Joint Comment stated that DOE should use separate TSLs for GSFL
and IRL. The Joint Comment also stated that the sets of CSLs in the
ANOPR should be made into a single set of TSLs, without further
regrouping. (Joint Comment, No. 23 at p. 18) In the NOPR, DOE has
generally followed the methodology suggested by the Joint Comment. In
this notice, DOE did not group GSFL with IRL. For example, each GSFL
TSL reflects a set of efficacy levels across all products classes only
within GSFL. DOE believes that this approach is appropriate because
GSFL
[[Page 16980]]
and IRL, though often produced by the same manufacturers, frequently
serve different lighting applications, so energy conservation standards
for one lamp type are not likely to affect the market or energy
consumption of the other lamp type. The following sections describe the
TSLs and corresponding efficacy levels.
1. General Service Fluorescent Lamps
DOE developed product classes for GSFL based on the utility of the
covered lamps and how they are used in the market. DOE observed that 4-
foot medium bipin lamps constitute the vast majority of GSFL sales.
These lamps are followed in order of unit sales by 8-foot single pin
slimline lamps and 8-foot recessed double contact high output lamps.
Because 4-foot medium bipin, 8-foot single pin slimline, and 8-foot
recessed double contact HO lamps are the most common GSFL, DOE selected
them as representative lamps for its analysis. Lamps with a CCT greater
than 4,500K comprise a small share of the GSFL market. Therefore, DOE
chose to analyze lamps with a CCT less than or equal to 4,500K. For the
NOPR, DOE also chose to analyze 4-foot miniature bipin T5 standard
output (SO) and HO lamps with a CCT less than or equal to 4,500K. (DOE
did not analyze T5 lamps in the March 2008 ANOPR.)
The following lamps with a CCT less than 4,500K compose the five
representative product classes: (1) 4-foot medium bipin; (2) 8-foot
single pin slimline; (3) 8-foot recessed double contact HO lamps; (4)
4-foot miniature bipin T5 SO; and (5) 4-foot miniature bipin T5 HO
lamps. Standards for other product classes were established by scaling
the standards developed for these representative product classes. All
12 GSFL classes are shown in Table VI.1.
Table VI.1--GSFL Product Classes
------------------------------------------------------------------------
GSFL lamp type CCT
------------------------------------------------------------------------
4-Foot Medium Bipin.............. <= 4,500K (representative).
> 4,500K.
2-Foot U-Shaped.................. <= 4,500K.
> 4,500K.
8-Foot Single Pin Slimline....... <= 4,500K (representative).
> 4,500K.
8-Foot RDC HO.................... <= 4,500K (representative).
> 4,500K.
4-Foot T5 SO..................... <= 4,500K (representative).
> 4,500K.
4-Foot T5 HO..................... <= 4,500K (representative).
> 4,500K.
------------------------------------------------------------------------
DOE developed TSLs that generally follow a trend of increasing
efficacy by using higher-quality phosphors. The TSLs also represent a
general move from higher-wattage technologies to lower-wattage, lower-
diameter lamps with higher efficacies. Table VI.2 shows the TSLs for
GSFL. Each TSL is generally composed of the efficacy level of the same
number across all product classes. That is, TSL1 is composed of EL1 for
all classes, TSL2 is composed of EL2, etc. For T5 standard output
lamps, however, DOE selected EL1 for all TSLs except TSL5, to which DOE
assigned EL2 (the maximum technologically feasible efficacy level for
T5 SO lamps). For T5 high output lamps, DOE selected EL1 for all TSLs
because it is the maximum efficacy for this lamp type. With the
methodology, TSL5 represents all maximum technologically feasible GSFL
efficacy levels for this NOPR.
The efficacy levels for the five representative product classes are
shown in Table VI.2; Efficiency levels for all product classes in the
TSLs can be found in the NOPR TSD chapter 5. DOE analyzes systems that
meet each efficacy level in the TSLs by pairing standard and reduced-
wattage lamps featuring a variety of design options with appropriate
magnetic or electronic ballasts. As discussed in the screening analysis
(NOPR TSD chapter 4), DOE uses design options with highly emissive
electrode coatings, higher efficiency lamp fill gas composition, higher
efficiency phosphors, glass coatings, or lamp diameter to achieve
higher efficacy levels.
Table VI.2--Trial Standard Levels for GSFL--Efficiency Levels for the Five Representative GSFL Product Classes
----------------------------------------------------------------------------------------------------------------
Trial standard level (lm/w)
-----------------------------------------------------------------------------
Representative product class EPCA
standard * TSL1 TSL2 TSL3 TSL4 TSL5
----------------------------------------------------------------------------------------------------------------
4-Foot Medium Bipin, CCT <= 4,500K 75.0 78 81 84 89 94
8-Foot Single Pin Slimline, CCT <= 80.0 89 93 95 97 100
4,500K...........................
8-Foot RDC HO, CCT <= 4,500K...... 80.0 83 87 88 92 95
4-Foot Miniature Bipin T5 SO, CCT [None] 103 103 103 103 108
<= 4,500K........................
4-Foot Miniature Bipin T5 HO, CCT [None] 89 89 89 89 89
<= 4,500K........................
----------------------------------------------------------------------------------------------------------------
* 42 U.S.C. 6295(i)(1)(B). Applies to GSFL as defined by EPCA.
TSL1, which would set energy conservation standards for GSFL to EL1
for all product classes, would eliminate the 4-foot medium bipin T12
baselines, the 95W T12 8-foot recessed double contact HO baseline, and
the 75W T12 8-foot single pin slimline baseline from the market. In the
4-foot medium bipin product class, this TSL could be met either with a
40W T12 lamp using improved 700-series or 800-series phosphors, or with
a 34W T12 lamp using a 700-series phosphor. At this TSL, 4-foot medium
bipin lamps using only halophosphors would not be able to meet this
TSL. The 75W 8-foot single pin slimline T12 and 110W recessed double
contact HO lamps would need to use an 800-series rare earth phosphor to
meet TSL1. TSL1 also represents a level which would likely prevent the
commercialization of T5 lamps with halophosphor coatings while allowing
for 800-series 4-foot T5 miniature bipin and 4-foot T5 miniature bipin
HO lamps that are currently commercially available to remain on the
market.
TSL2 would set energy conservation standards for GSFL at EL2 for 4-
foot MBP, 8-foot SP slimline, and 8-foot RDC HO lamps. The 34W T12 4-
foot medium bipin lamps would likely be required to use 800-series rare
earth phosphors to meet TSL2. For 40W T12 lamps, TSL2 is expected to
require a premium 800-series rare earth phosphor and is the maximum TSL
that a 40W T12 would be able meet. In the 8-foot single pin slimline
product class, TSL2 is expected to require a premium 800-series rare
earth phosphor for the 75W T12 and is the maximum TSL that 75W T12
would likely be able to meet. This standard level would eliminate the
60W T12 baseline and require a 700-series phosphor for this lamp. In
the 8-foot recessed double contact HO product class, TSL2 would
eliminate 110W T12
[[Page 16981]]
lamps and the 95W T12 baseline and would require rare earth 700-series
phosphors for 95W T12 lamps. For T5s, TSL2 still represents the first
efficacy level, which would allow for 800-series 4-foot T5 miniature
bipin and 4-foot T5 miniature bipin HO lamps to remain on the market.
TSL3 would set energy conservation standards for GSFL at EL3 for 4-
foot MBP, 8-foot SP slimline, and 8-foot RDC HO lamps. In this product
class, the 32W T8 baseline would be eliminated from the market, and to
produce a TSL3-compliant 32W T8 lamp, manufacturers would need to use
an 800-series rare earth phosphor. The 34W T12 lamps would likely
require an improved 800-series rare earth phosphor mixture and possibly
other design options, such as a different gas fill or increased
thickness of the bulb-wall phosphor. Only reduced-wattage (34W) 4-foot
medium bipin T12 lamps are expected to meet this TSL. In the 8-foot
single pin slimline product class, TSL3 would require the use of an
800-series 60W T12 lamp. This standard level is expected to eliminate
all 75W T12 lamps and to require an improved 700-series phosphor for
the 60W T12. In the 8-foot recessed double contact HO class, TSL3
requires 95W T12 lamps to shift to 800-series rare earth phosphors.
TSL3 also represents the first efficacy level for 4-foot T5 miniature
bipin and 4-foot T5 miniature bipin HO lamps, retaining 800-series
versions of those lamps on the market.
TSL4, which would set energy conservation standards for GSFL at EL4
for 4-foot MBP, 8-foot SP slimline, and 8-foot RDC HO, would be
expected to eliminate 4,100K T12 lamps from the marketplace. TSL4 would
also be expected to raise the efficacy of all full-wattage T8 lamps
above the baselines for the aforementioned product classes. In the 4-
foot medium bipin product class, TSL4 could be met by improved 800-
series full-wattage T8 lamps, or by 800-series 30W and 25W T8 lamps.
For the 8-foot SP slimline product class, 59W T8 lamps would likely
need to use an 800-series rare earth phosphor to meet TSL4. TSL4, while
expected to eliminate 8-foot T12 RDC HO lamps from the market, would
require an improved 700-series mixture to be used in T8 lamps for this
product class. TSL4 also represents the first efficacy level for 4-foot
T5 miniature bipin and 4-foot T5 miniature bipin HO lamps, retaining
800-series T5 lamps on the market.
TSL5 represents the max-tech EL for all GSFL product classes. T12
lamps and 700-series T8 lamps are expected to not be able to meet this
level. In the 4-foot medium bipin and 8-foot single pin slimline
product class, T8 lamps would need to have a premium 800-series rare
earth phosphor coating to meet TSL5. TSL5 could also be met by the 28W
reduced-wattage 4-foot medium bipin T8 lamp and the 57W and 55W
reduced-wattage 8-foot single pin slimline T8 lamps. TSL5 would require
movement 800-series T8 lamps in the 8-foot recessed double contact HO
product class. For the 4-foot T5 MiniBP SO product class, a standard-
wattage (28W) and reduced-wattage (26W) T5 with an improved 800-series
phosphor would need to be used in order to meet TSL5. Because DOE
created only one efficacy level for the 4-foot T5 miniature bipin HO
lamps, TSL5 would set energy conservation standards for 4-foot T5
MiniBP HO lamps at EL1 and allow 800-series T5 HO lamps to remain on
the market. For more information on the TSLs for GSFL, see chapter 9 of
the TSD.
2. Incandescent Reflector Lamps
As discussed in section V.C, for IRL, DOE has established five
efficacy levels based on an equation relating efficacy (in lumens per
watt) to lamp wattage. Also discussed in section V.C, DOE has analyzed
only one representative product class and intends to scale minimum
efficacy requirements to other product classes. All IRL classes are
listed in Table VI.3. As seen in the table, DOE only directly analyzed
the standard-spectrum IRL with a diameter greater than 2.5 inches and
voltage less than 125 volts.
Table VI.3--IRL Product Classes
----------------------------------------------------------------------------------------------------------------
Lamp type Diameter Voltage
----------------------------------------------------------------------------------------------------------------
Standard Spectrum...................... > 2.5 inches.............. >= 125
> 125 (representative).
<= 2.5 inches............. >= 125.
< 125.
Modified Spectrum...................... > 2.5 inches.............. >= 125.
< 125.
<= 2.5 inches............. >= 125.
< 125.
----------------------------------------------------------------------------------------------------------------
In establishing TSLs for IRL, in this NOPR, DOE analyzes five TSLs,
each one corresponding to one efficacy level. For example, TSL1
corresponds to EL1 and TSL5 corresponds to EL5. TSL1 could be achieved
with an improved halogen lamp that uses xenon, a higher-efficiency
inert fill gas. TSL2 could be achieved with a standard halogen infrared
lamp with a lifetime of 6,000 hours or a halogen lamp with an improved
reflector, such as silver. TSL3 could be met with a 3,000-hour-lifetime
standard halogen infrared lamp. TSL4 could be met with a 4,000-hour-
lifetime improved halogen infrared lamp. Improvements in the halogen
infrared lamp may include the use of a double-ended halogen infrared
burner, higher-efficiency inert fill gas, or more-efficient filament
orientation. Finally, TSL5 could be achieved with a 4,200-hour-lifetime
halogen infrared lamp (even further improved). These further
improvements include an improved reflector, improved IR coating, or
filament design that produces higher temperature operation (and may
reduce lifetime to 3,000 hours).
The efficacy levels for the representative analyzed product class
are shown in Table VI.4 for the TSLs to which they correspond. The
efficacy levels for this representative product class were then scaled
to create the efficacy levels for the seven other IRL product classes
as described in section V.C.7.b of this notice. For more information on
efficacy standard levels for the other seven product classes, see
chapter 5 of the TSD.
[[Page 16982]]
Table VI.4--Trial Standard Levels for IRL--Efficiency Levels for the Standard Spectrum, Diameter > 2.5 Inches,
Voltage < 125 IRL Product Class
----------------------------------------------------------------------------------------------------------------
Trial standard level (lm/W)*
-----------------------------------------------------------------------------------------------------------------
EPCA standard** TSL1 TSL2 TSL3 TSL4 TSL5
----------------------------------------------------------------------------------------------------------------
10.5 (40-50 Watts)
11.0 (51-66 Watts)
12.5 (67-85 Watts) 4.6P\0.27\ 4.8P\0.27\ 5.5P\0.27\ 6.2P\0.27\ 6.9P\0.27\
14.0 (86-115 Watts)
14.5 (116-155 Watts)
15.0 (156-205 Watts)
----------------------------------------------------------------------------------------------------------------
* P is the rated wattage of the lamp.
** 42 U.S.C. 6295(i)(1)(B). Applies to IRL as defined by EPCA.
B. Economic Justification and Energy Savings
The following section discusses the results of the analyses
discussed in section 0. Section VI.C contains further discussion
regarding DOE's consideration of these results in the selection of
proposed standards levels.
1. Economic Impacts on Consumers
a. Life-Cycle Cost and Payback Period
DOE calculated the average LCC savings relative to the baseline for
each product class, as in the March 2008 ANOPR. 73 FR 13620, 13665
(March 13, 2008). A new standard would affect different lamp consumers
differently, depending on the market segment to which they belong. DOE
designs the LCC analysis around lamp purchasing events, in order to
characterize the circumstances under which consumers need to replace a
lamp. The LCC spreadsheet calculates the LCC impacts for each lamp
replacement event separately. Examining the impacts on each event
separately allows DOE to view the results of many subgroup populations
in the LCC analyses.
For the NOPR, as in the March 2008 ANOPR, DOE decided not to
aggregate the results of the various event scenarios together into a
single LCC at each efficacy level. 73 FR 13620, 13655 (March 13, 2008).
To do so would have required too many assumptions, such as the relative
occurrence of each event over time, and the market share of each lamp
in the base case and each standards case. DOE believes it is more
appropriate to incorporate assumptions about consumer decisions and
long-term market trends in the NIA, and leave the LCC as a direct head-
to-head comparison between lamp and lamp-and-ballast designs under
different events. Further, the LCC savings results help DOE estimate
consumer behavior decisions for the NIA.
DOE recognizes that the large number of LCC and PBP results can
make it difficult to draw conclusions about the cost-effectiveness of
efficacy standards. The following discussion presents salient results
from the LCC analysis. The LCC results are presented according to the
lamp purchasing events that culminate in purchase of lamp-and-ballast
designs. These results reflect a subset of all of the possible events,
although they represent the most prevalent purchasing events.\71\ The
analysis provides a range of LCC savings for each efficacy level. The
range reflects the results of multiple systems (i.e., multiple lamp-
ballast pairings) that consumers could purchase to meet an efficacy
level.
---------------------------------------------------------------------------
\71\ In many cases, DOE omitted events I(b) and IV in this
notice, because DOE believes these lamp purchase events to be
relatively less frequent. However, DOE did present all analyzed
events in chapter 8 of the TSD.
---------------------------------------------------------------------------
In addition, DOE has chosen not to present detailed PBP results by
efficacy level in this NOPR because DOE believes that LCC results are a
better measure of cost-effectiveness. However, a full set of both LCC
and PBP results for the systems DOE analyzed are available in chapter 8
and appendix 8B of the TSD. All the LCC results shown here were
generated using AEO2008 reference case electricity prices and medium-
range lamp and ballast prices.
i. General Service Fluorescent Lamps
Table VI.5 through Table VI.11 present the results for the baseline
lamps in each of the four product classes DOE analyzed (i.e., 4-foot
medium bipin, 4-foot miniature bipin SO, 4-foot miniature bipin HO, 8-
foot single pin slimline, and 8-foot recessed double contact HO). When
a standard results in ``positive LCC savings,'' the life cycle cost of
the standards-compliant lamp is less than the life cycle cost of the
baseline lamp, and the consumer benefits. When a standard results in
``negative LCC savings,'' the life cycle cost of the standards-
compliant lamp is higher than the life cycle cost of the baseline lamp,
and the consumer is adversely affected. The range of values represents
the multiple ways a consumer can meet a certain efficacy standard under
each lamp purchasing event. For example, at EL3, a consumer
retrofitting a 4-foot 34W T12 medium bipin baseline system can either
purchase a high-efficacy T12 lamp on an electronic ballast or a high-
efficacy T8 lamp on an electronic ballast. While consumers have both
choices, selecting a T8 system offers positive LCC savings.
Not all baselines have suitable replacement options for every lamp
purchasing event at every efficacy level. For instance, because DOE
assumed that consumers wish to purchase systems or lamp replacements
with a lumen output within 10 percent of their baseline system output,
in some cases, the only available replacement options produce less
light than this. Thus, the replacement options are considered
unsuitable substitutions. These cases are marked with ``LL'' (less
light) in the LCC results tables below. In some cases, when consumers
who currently own a T12 system need to replace their lamps, no T12
energy saving lamp replacements are available. In these cases, in order
to save energy, the consumers must switch to other options, such as a
T8 lamp and appropriate ballast. These cases are marked with ``NER''
(no energy-saving replacement) in tables.
Because some baseline lamps already meet higher efficacy levels
(e.g., the baseline 32W 4-foot T8 MBP lamp achieves EL2), LCC savings
at the levels below the baseline are zero. In these cases, ``BAE''
(baseline above efficacy level) is listed in the tables to indicate
that the consumer makes the same purchase decision in the standards-
case as they do in the base-case. Also, not all lamp purchase events
apply for all baseline lamps or efficacy levels. For example, DOE
assumed that the standards-induced retrofit event does not apply to the
32W T8 system, because it is already the most
[[Page 16983]]
efficacious 4-foot medium bipin GSFL system. For these events, an ``EN/
A'' (event not applicable) exists in the table. Finally, because LCC
savings are not relevant when no energy conservation standard is
established, ``N/A'' (not applicable) exists in the LCC savings column
for the baseline system.
DOE is also presenting the installed prices of the lamp-and-ballast
systems in order to compare the up-front costs that consumers must bear
when purchasing baseline or standards-case systems. The installed price
results for a lamp replacement in response to a lamp failure event
(Event IA) only include the lamp purchase price and lamps installation
costs. For 4-foot MBP, 8-foot SP slimline, and 8-foot RDC HO, at EL1
through EL3, consumers with T12 systems would have the option of
purchasing a T12 lamp in the face of a lamp failure. At EL4 and EL5,
because no T12 lamps are standard-compliant, consumers would not be
able to proceed with a lamp replacement; therefore, no installed price
increases are shown.
Instead, at EL4 and EL5, consumers with T12 lamps that either fail
at the beginning of the analysis period (Event IB: Lamp Failure, Lamp
and Ballast Replacement) or fail in the middle of the analysis period
(Event II: Standards-Induced Retrofit) would need to purchase a new
lamp-and-ballast T8 system. In these situations, the installed price in
the baseline includes the cost of purchasing replacement lamps, whereas
the installed price at EL4 and EL5 is much greater, because the
consumer would need to purchase and install a T8 lamp-and-ballast
system.
The ballast failure event (Event III) and the new construction/
renovation event (Event IV) include the purchase and installation costs
for lamps and a ballast for the baseline and standards-case systems.
This is because the occurrences of these events require the purchase of
new lamps and ballasts in all cases. Although in most cases standards-
case lamp-and-ballast systems are generally more expensive than
baseline lamp-and-ballast systems, in some cases (primarily for owners
of the T12 baseline systems purchasing a T8 system instead), the
standards-case lamp-and-ballast systems are less expensive than the
baseline systems.
Table VI.5 presents the findings of an LCC analysis on various 3-
lamp 4-foot medium bipin GSFL systems operating in the commercial
sector. The analysis period (based on the longest-lived baseline lamp's
lifetime) for this product class in the commercial sector is 5.5 years.
As seen in the table, DOE analyzes three baseline lamps: (1) 40W T12;
(2) 34W T12; and (3) 32W T8.
For the 40W T12 baseline, when commercial consumers are confronted
with a lamp failure in the base case, they purchase the 40W T12
baseline lamp as a lamp replacement on their magnetic T12 ballast. In
general, the only energy-saving lamp replacement option for this system
is a 34W T12 lamp. However, as seen in Table VI.5, the EL1 and EL2 34W
T12 lamps do not produce sufficient light compared to the baseline
lumen output. Therefore, for the purposes of the LCC analysis, DOE
assumes that at these ELs, 40W T12 consumers would purchase the EL3 34W
T12 lamp (which has sufficient lumen output) in response to a lamp
failure, and achieve positive LCC savings. Because no T12 lamps would
be standards-compliant at EL4 and EL5, consumers with T12 ballasts who
are confronted with a lamp failure beyond EL3 would be forced to
retrofit their ballasts and instead purchase a T8 system. The LCC
savings and incremental costs related to this action can be seen in
Table VI.5 under the standards induced retrofit event. At EL4 and EL5,
consumers who are forced to retrofit their ballast would achieve
positive LCC savings; however, they would also incur an incremental
installed price (baseline installed price minus standards-case
installed price) greater than $49.30 per system. In particular, 40W T12
consumers who retrofit would obtain the greatest LCC savings at EL4 and
EL5 by retrofitting to an electronically-ballasted 32W T8 system.
For the 40W T12 baseline, when commercial consumers are confronted
with a ballast failure in the base case, they purchase the 40W T12
baseline lamps and a 0.88 ballast factor electronic ballast. In order
to save energy with similar lumen output at EL1 and EL2, consumers
would purchase a higher-efficacy 40W T12 with a lower-BF ballast. As
seen in Table VI.5, these choices result in negative LCC savings.
However, under such a standard, 40W T12 consumers would be able to
achieve positive LCC savings under a ballast failure scenario by
purchasing systems at EL4 and EL5. Similar to the standards-induced
retrofit, at EL4 and EL5 consumers are forced to purchase T8 systems.
Those who purchase a 32W T8 lamp generally achieve the highest LCC
savings.
For the 34W T12 baseline, when commercial consumers are confronted
with a lamp failure in the base case, they purchase the 34W T12
baseline lamp as a lamp replacement on their magnetic T12 ballast. As
this is the lowest-wattage commercially-available T12 lamp, there are
no energy-saving lamp replacement options for this system. However, as
seen in Table VI.5 in the Event IA installed price column, consumers do
have the option to purchase a higher-efficacy 34W T12 lamps, resulting
in no energy-savings and an installed price increase ranging from $3.69
to $13.91. For the purposes of the LCC analysis, at EL1, EL2, and EL3,
DOE analyzes the economics of standards-retrofit, an energy-saving
response available to the 34W T12 consumer under a lamp failure
scenario. As seen in the table, some LCC savings results at EL1, EL2,
and EL3 are negative, representing consumers retrofitting to a 34W T12
lamp on an electronic T12 ballast or the baseline 32W T8 lamp on an
electronic T8 ballast. However, under such a standard, consumers would
also be able to achieve positive savings by purchasing EL3, EL4, and
EL5 T8 systems with either a higher-efficacy 32W T8 lamp or other
reduced-wattage lamps. Because no T12 lamps would be standards-
compliant at EL4 and EL5, consumers with T12 ballasts who are
confronted with a lamp failure at these levels would be forced to
retrofit their ballasts and instead purchase a T8 system. The
incremental installed prices associated with this forced retrofit are
greater than $51.62 per system.
For the 34W T12 baseline, when commercial consumers are confronted
with a ballast failure in the base case, they purchase the 34W T12
baseline lamps and a 0.88 ballast factor electronic ballast. In order
to save energy with similar lumen output at EL1 and EL2, consumers
would purchase a higher-efficacy 34W T12 with a lower-BF ballast. In
addition, at EL3, consumers may purchase a 34W T12 lamp with a lower-BF
ballast as well. As seen in Table VI.5, these choices result in
negative LCC savings. However, under such a standard, 34W T12 consumers
can achieve positive LCC savings under a ballast failure scenario by
purchasing systems at EL4 and EL5. Similar to the standards-induced
retrofit, at EL4 and EL5, consumers would be forced to purchase T8
systems. Those who purchase the reduced-wattage 25W and 28W T8 lamps
achieve the highest LCC savings.
For the 32W T8 baseline, commercial consumers purchase either the
32W T8 baseline lamp (under lamp failure) or the 32W T8 baseline lamp
and an electronic 0.88 BF ballast (under ballast failure). As the
efficacy of this baseline lamp exceeds EL2, no LCC results or installed
prices are presented for EL1 and EL2. In order to save energy by only
replacing the lamp, the consumer must purchase reduced wattage lamps
(these
[[Page 16984]]
only lie at EL4 and EL5). Therefore, although there are no EL3 energy-
saving lamp replacements, consumers may purchase EL4 and EL5 lamps at
this standard level. At EL4, consumers who purchase 30W T8 lamps
achieve lower LCC savings than those who purchase 25W T8 lamps. At EL5,
the only reduced-wattage lamp replacement option (the 28W T8) achieves
positive LCC savings.
When confronted with a ballast failure, consumers who would have
purchased the 32W T8 baseline system, would achieve positive LCC
savings at EL3 by purchasing higher-efficacy 32W T8 lamps on a lower-BF
ballast. At EL4, these consumers could obtain the greater LCC savings
by purchasing an electronically-ballasted 25W T8 system on a 0.88 BF
ballast. At EL5, they achieve highest savings by purchasing the 32W T8
lamp on a lower-BF ballast.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TP13AP09.000
BILLING CODE 6450-01-C
[[Page 16985]]
As discussed in section V.D, DOE performed research on the usage of
GSFL in the residential sector and found a number of variations from
the commercial sector. In particular, DOE uses separate electricity
prices (higher than commercial), operating hours (lower than
commercial), discount rates (higher than commercial), and lamp
lifetimes (higher than commercial). DOE also assumes that residential
consumers of GSFL generally install their own lamps; thus, labor costs
were modeled only for ballast replacements. DOE also uses a 40W T12
baseline lamp that has a lower efficacy, lower price, and shorter
lifetime (in hours). DOE found that the most common ballast in the
residential sector is a low-power-factor, 2-lamp magnetic rapid-start
T12 ballast with a ballast factor of 0.68. Therefore, DOE uses the
combination of the magnetic T12 ballast and two 40W T12 lamps as the
residential sector GSFL baseline lamp-and-ballast system.
Based on DOE's analysis, the average operating hours for GSFL in
the residential sector are 789 hours per year, which is lower than the
commercial sector average of 3,435 annual operating hours. This would
suggest a 19-year service life for the baseline lamp, which has a
lifetime of 15,000 hours. Based on measured-life reports, DOE uses a
15-year average ballast and fixture lifetime in the residential sector.
Under these assumptions, lamps used under average residential operating
hours would not fail before the fixture reached the end of its life;
thus, there would be no lamp-only replacements, but there would be
lamp-and-ballast replacements in the residential sector. However, with
higher operating hours, lamp service life does decrease below 15 years,
resulting in a lamp failure event prior to ballast or fixture
replacement. Because DOE believes that the lamp failure event is an
important event to analyze, DOE has presented the residential sector
LCC analysis under both average operating hours (789 hours per year)
and high operating hours (1,210 hours per year). The high operating
hours are typical of kitchens, living rooms, dining rooms, and outdoor
spaces.
Table VI.7 presents the LCC results for a 4-foot medium bipin
system operating in the residential sector under average operating
hours. As discussed earlier, under average operating hours, only the
ballast failure event (Event III) applies because the ballast and
fixture reach the end of their 15 year life before the baseline lamp
(which would otherwise have a lifetime of 19 years when operated for
789 hours per year) fails. DOE uses a 15-year analysis period, based on
the effective service life of the lamp (limited by the fixture or
ballast life). Because DOE assumes that the residential consumer
discards the lamp when replacing a ballast or fixture, DOE does not
assign any residual value to the remaining life of the lamp at the end
of the analysis period. In this event, residential consumers purchase
the 40W T12 baseline lamp with a magnetic T12 system in the base case,
and an electronic or magnetic T12 system or electronic T8 system in the
standards case.
At EL1 and EL2, although consumers may purchase an EL1 or EL2 T12
lamp with a magnetic ballast, none of these systems are both energy
saving and produce similar lumen output at the baseline system.
Therefore at EL1 and EL2, the only T12 systems analyzed are those
purchased with electronic T12 ballasts. At EL1, as seen in Table VI.6,
higher LCC savings occur for consumers purchasing 34W T12 lamps than
those purchasing 40W T12 lamps. When purchasing at EL2, consumers have
the option of either purchasing an electronically-ballasted T12 system
or a T8 system with the lowest efficacy 32W T8 lamp. LCC savings are
the least when a consumer purchases a higher-efficacy 40W T12 lamp with
an electronic T12 ballast. Consumers purchasing 32W T8 lamps on an
electronic ballast would obtain the greatest savings at EL2. At EL3, in
addition to the T8 and electronically-ballasted T12 purchase options,
consumers also can obtain energy savings and similar lumen output by
purchasing 34W T12 lamps on magnetic T12 ballasts. However, as seen in
the Table VI.6, this option results in the least savings of all ELs.
Consumers achieve higher LCC savings by purchasing EL3 32W T8 lamps
with electronic ballasts. As discussed in relation to the commercial
sector, EL4 and EL5 eliminate T12 lamps from the market and require the
purchasing of a T8 system. Those consumers who select a 32W T8 lamp on
an electronic ballast obtain the least LCC savings at EL4, while LCC
savings are greatest of all ELs when a consumer purchases an
electronically-ballasted 25W T8 system. At EL5, consumers choosing a
32W T8 system obtain lower LCC savings than those purchasing a 28W T8
system.
Table VI.6--LCC Results for a 2-Lamp Four-Foot Medium Bipin GSFL System Operating in the Residential Sector With
Average Operating Hours
----------------------------------------------------------------------------------------------------------------
LCC savings 2007$ Installed price 2007$
Baseline Efficiency level --------------------------------------------------------
Event III: Ballast failure* Event III: Ballast failure
----------------------------------------------------------------------------------------------------------------
Baseline............ N/A........................ 49.47.
EL1................. 5.87 to 9.24............... 47.22 to 54.10.
40 Watt T12 EL2................. 5.67 to 16.88.............. 48.64 to 54.29.
EL3................. 0.27 to 16.63.............. 50.71 to 57.95.
EL4................. 16.34 to 21.24............. 50.99 to 54.07.
EL5................. 17.72 to 19.66............. 51.16 to 52.03.
----------------------------------------------------------------------------------------------------------------
* Analysis period is 15 years.
N/A: Not Applicable.
In addition to conducting the LCC analysis under average operating
hours, DOE also computed residential LCC results under high operating
hours (1,210 hours per year) in order to analyze the economic impacts
of the lamp failure event (Event I). Table VI.7 presents these LCC and
installed-price results for a 2-lamp four-foot medium bipin GSFL system
under the lamp failure event and high operating hours.
As seen in Table VI.7, DOE divides the residential GSFL lamp
failure event into Events IA (Lamp Failure: Lamp Replacement) and IB
(Lamp Failure: Lamp and Ballast Replacement). Event IA, presented also
in the commercial sector analysis, models solely a lamp purchase (in
response to lamp failure) in both the base case and standards case.
[[Page 16986]]
With high operating hours, DOE calculates that the baseline lamp
initially purchased with a ballast fails after 12.5 years. Therefore, a
replacement lamp will operate for only 2.5 additional years before the
entire lamp-and-ballast system is discarded (due to either ballast
failure or fixture replacement). Therefore, for this high operating
hour scenario's lamp failure event calculation, DOE uses a 2.5 year
analysis period. Similar to the average operating hour analysis, when a
lamp-and-ballast system is discarded, DOE does not attribute any
residual value to the remaining life of the lamp.
Similar to the commercial analysis, the only viable energy-saving
lamp replacement option for the 40W T12 residential system is the 34W
T12 lamp at EL3. Thus, under a standard at either EL1 and EL2, DOE
assumes, for the purpose of the LCC analysis, that consumers would
purchase the 34W T12 lamp at EL3. DOE recognizes that not all consumers
can use a 34W T12 lamp on a residential magnetic low-power-factor
ballast because not all ballasts are designated to operate this lamp.
However, in its review of manufacturer literature, DOE identified
several low-power-factor residential magnetic ballasts designated to
operate the 34W T12 lamp. Therefore, DOE considers this to be a viable
option for some residential consumers.
However, as seen in Table VI.7, these consumers who purchase the
EL3 34W T12 lamp would encounter negative LCC savings. Although more
efficacious than the baseline, the reduced-wattage 34W T12 lamp that
meets this EL does not save sufficient energy to offset its increased
purchase price within the 2.5-year analysis period. The replacement
lamp would need to be in service for exactly 8 years or greater in
order for the energy cost savings to offset the increased purchase
price of the higher-efficacy 34W lamp.
Because no T12 lamps would be standards-compliant at EL4 and EL5,
consumers with T12 ballasts who are confronted with a lamp failure at
these levels are forced to retrofit their ballasts and instead purchase
a T8 system. The LCC savings and incremental costs related to this
action can be seen in Table VI.7 under the lamp and ballast replacement
event (Event IB). In the commercial sector, DOE presented the
standards-induced retrofit event (Event II), where consumers
proactively (before their lamp fails) retrofit their lamp and ballast
in anticipation of the inability to purchase a standards-compliant,
equal-lumen T12 replacement lamp due to standards. In contrast, for the
residential sector, DOE believes that consumers would replace their
systems only when forced by a lamp failure. Thus, instead of presenting
the standards-induced retrofit event (Event II), for the residential
sector, DOE models Event IB, where a consumer replaces a lamp-and-
ballast system in direct response to a lamp failure. At EL4 and EL5,
the available T8 system options do not save sufficient energy savings
to offset the increased purchase price of the lamp and ballast in 2.5
years, leading to negative LCC savings. In addition consumers who would
be forced to retrofit their ballast would incur an installed price
increase greater than $47.01 per system. DOE requests comment on all
inputs used in the LCC analysis for GSFL operating in the residential
sector.
Table VI.7--LCC Results for a 2-Lamp Four-Foot Medium Bipin GSFL System Operating in the Residential Sector With High Operating Hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
LCC savings 2007$ Installed price 2007$
--------------------------------------------------------------------------------------------
Baseline Efficiency level Event IA: Lamp Event IB: Lamp and Event IA: Lamp Event IB: Lamp and
replacement* ballast replacement* replacement ballast replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. N/A................... N/A.................. 3.98................. 3.98.
EL1................... LL.................... EN/A................. LL................... EN/A.
40 Watt T12 EL2................... LL.................... EN/A................. LL................... EN/A.
EL3................... -5.42................. EN/A................. 12.46................ EN/A.
EL4................... NR.................... -4.67 to -2.78....... NR................... 50.99 to 54.07.
EL5................... NR.................... -4.13 to -3.50....... NR................... 51.16 to 52.03.
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Analysis period is 2.5 years.
N/A: Not Applicable; LL: Available Options Produce Less Light; EN/A: Event Not Applicable; NR: No Replacement
Table VI.8 presents the results for an electronically-ballasted 4-
foot T5 miniature bipin standard-output, baseline system operating in
the commercial sector. Table VI.9 presents the results for an
electronically-ballasted 4-foot T5 miniature bipin high-output baseline
system operating in the industrial sector. For the standard-output
baseline, the analysis period is 5.5 years. For the high-output
baseline, the analysis period is 3.9 years. In general, positive LCC
savings exist at all of the efficacy levels analyzed. However, negative
LCC savings exist for Event I (Lamp Replacement) in the 4-foot T5
miniature bipin HO product class. Yet for the 4-foot T5 miniature bipin
standard-output product class, consumers selecting a reduced-wattage T5
achieve positive LCC savings. Event II (Standards Induced Retrofit) is
not shown because the 4-foot miniature bipin product class is composed
entirely of T5 lamps. For Event V, consumers can change the physical
layout of their system to match the mean lumen output of the baseline
system. Because the T5 baseline halophosphors have such poor lumen
maintenance compared to the 800-series T5 lamps, LCC savings for the
new construction event are high.
[[Page 16987]]
Table VI.8--LCC Results for a 2-Lamp Four-Foot Miniature Bipin Standard Output GSFL System Operating in the Commercial Sector
--------------------------------------------------------------------------------------------------------------------------------------------------------
LCC savings 2007$ Installed price 2007$
--------------------------------------------------------------------------------------------
Baseline Efficiency level Event V: New Event V: New
Event IA: Lamp construction/ Event IA: Lamp construction/
replacement* renovation* replacement renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. N/A................... N/A.................. 9.39................. 69.20.
28 Watt T5 EL1................... NER................... 42.84................ 13.15................ 72.96.
EL2................... 1.22.................. 45.27 to 47.03....... 14.86................ 74.67 to 75.16.
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Analysis period is 5.5 years.
N/A: Not Applicable; NER: No Energy-Saving Replacement.
Table VI.9--LCC Results for a 2-Lamp Four-Foot Miniature Bipin High Output GSFL System Operating in the Industrial Sector
--------------------------------------------------------------------------------------------------------------------------------------------------------
LCC savings 2007$ Installed price 2007$
--------------------------------------------------------------------------------------------
Baseline Efficiency level Event V: New Event V: New
Event IA: Lamp construction/ Event IA: Lamp construction/
replacement* renovation* replacement renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
54 Watt T5 Baseline.............. N/A................... N/A.................. 10.44................ 71.33.
EL1................... -3.42................. 55.60 to 56.60....... 19.85................ 76.36 to 80.74.
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Analysis period is 3.9 years.
N/A: Not Applicable; NER: No Energy-Saving Replacement.
Table VI.10 presents the results for an 8-foot single-pin slimline
GSFL system operating in the commercial sector. The analysis period is
4 years. For this product class, DOE analyzes three baseline lamps: (1)
75W T12; (2) 60W T12; and (3) 59W T8.
For the 75W T12 baseline, consumers confronted with a lamp failure
purchase the baseline 75W T12 for their magnetic T12 ballast in the
base case. In the face of standards, consumers could save energy by
purchasing reduced-wattage (60W) T12 lamps as replacements. The only
60W T12 lamp that produces sufficient light on the baseline ballast,
however, exists at EL3. For the purposes of the LCC analysis, DOE
assumes that at standard levels EL1 and EL2, 75W T12 consumers
confronted with a lamp failure would purchase the EL3 replacement lamp.
These consumers would achieve positive LCC savings. Note that any
standard level beyond EL3 would likely require consumers to replace
their T12 lamps and ballasts with T8 systems, since no T12 lamp
currently meets the efficacy requirements of EL4 and EL5. The LCC
savings and installed costs associated with this action are shown in
the standards induced retrofit event in Table VI.10. The EL4 lamp
available in this event does not produce sufficient light output, so
DOE assumes that at standard level EL4, 75W T12 consumers would
retrofit to the EL5 59W T8 and 0.88 ballast factor ballast. At EL4 and
EL5, 75W T12 consumers who retrofit to the EL5 T8 system achieve
positive LCC savings while incurring an incremental installed price of
$78.96 per system.
In response to a ballast failure, 75W T12 consumers can purchase
more-efficacious 75W T12 lamps and lower-ballast-factor ballasts at EL1
and EL2. These systems do not save enough energy over their lifetimes
to offset their increased installed prices, however, resulting in
negative LCC savings for consumers. The systems at EL3 and EL4 do not
produce sufficient lumen output in comparison to the baseline system,
so DOE assumes that 75W T12 consumers encountering ballast failures
would purchase the EL5 59W T8 and 0.88 ballast factor ballast at
standard levels EL3 and EL4. At standard levels EL4 and EL5, only T8
systems are available. It is possible, however, for 75W T12 consumers
to achieve positive LCC savings by purchasing the EL5 T8 system.
In response to a lamp failure, consumers of 60W T12 lamps do not
have access to any energy-saving T12 replacement lamps. At EL1,
consumers could still purchase the 60W T12 baseline lamp for their
magnetic ballast. T12 lamps that do not save energy are also available
at standard levels EL2 and EL3, with installed price increases ranging
from $4.88 to $8.30. To save energy at EL2 and EL3, consumers of 60W
T12 lamps can instead choose to retrofit to T12 or T8 systems with
electronic ballasts. 60W T12 consumers would not be able to achieve
positive LCC savings with any of the systems available for a standards-
induced retrofit at any EL, although they would save energy. Standard
levels EL4 and EL5 also force T12 lamps from the market, requiring
consumers to retrofit to T8 systems and incur installed price increases
of at least $82.08.
In response to a ballast failure, DOE assumes that 60W T12
consumers would purchase 60W T12 lamps and 0.88 ballast factor
electronic ballasts in the base case. Consumers can also purchase this
system at standard level EL1. At standard levels EL2 and EL3, consumers
could purchase more-efficacious 60W T12 lamps and lower-ballast-factor
electronic ballasts when faced with a ballast failure. Consumers cannot
save enough energy with these systems to achieve positive LCC savings,
however. Instead, they can purchase the T8 systems on electronic
ballasts available at EL4 and EL5 and achieve positive LCC savings. In
the face of standard levels EL4 and EL5, T12 systems would be
eliminated from the market. Consumers can achieve the greatest positive
LCC savings with a 57W T8 on a 0.78 ballast factor electronic ballast
at EL5, while consumers purchasing the 59W T8 on a 0.78 ballast factor
electronic ballast at EL4 achieve the least positive LCC savings.
Consumers of 59W T8 lamps can purchase the baseline 59W T8 to
install on an electronic ballast at standard levels EL1 through EL3
when faced with a lamp failure. At EL4, there are no energy-saving lamp
replacement options, so DOE assumes that
[[Page 16988]]
consumers of 59W T8 lamps would instead purchase the 57W or 55W T8
lamps that comply with EL5. Consumers purchasing these lamps achieve
positive LCC savings and incur installed price increases ranging from
$3.94 to $4.76. Those purchasing the 55W T8 achieve the greatest
positive LCC savings.
In response to a ballast failure, consumers of 59W T8 lamps can
purchase the baseline 59W T8 system at EL1 through EL3. The available
system at EL4 is a 59W T8 lamp on a 0.85 ballast factor electronic
ballast, and consumers purchasing this system would achieve negative
LCC savings. At EL5, 59W T8 consumers could purchase 59W, 57W, or 55W
T8 systems on electronic ballasts and achieve positive LCC savings.
Those purchasing the 55W T8 system would achieve the greatest positive
LCC savings, while those purchasing the 57W T8 system would achieve the
least positive LCC savings.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TP13AP09.001
Table VI.11 shows LCC results for an 8-foot recessed double-contact
GSFL system operating in the industrial sector. The analysis period for
this product class is 2.3 years. DOE analyzes 110W T12 and 95W T12
baseline lamps on magnetic ballasts.
Consumers who own 110W T12 lamps and are faced with a lamp failure
would be expected to purchase 110W T12 baseline lamps for their
magnetic ballast in the base case. The available replacement lamps at
EL1 and EL2 do not produce sufficient light output in comparison to the
baseline system, so DOE assumes that 110W T12 consumers would purchase
the reduced-wattage
[[Page 16989]]
(95W) T12 lamp options at EL3 when faced with standard levels EL1 and
EL2. Consumers could achieve positive LCC savings with these lamps
while incurring installed price increases of $12.64 or $13.27. Standard
levels EL4 and EL5 eliminate T12 lamps from the market, requiring
consumers to retrofit their systems to T8 systems in the face of a lamp
failure. The available T8 system at EL4 does not produce sufficient
light in comparison with the baseline system, so DOE assumes that at
EL4, consumers would instead purchase the 86W T8 system and 0.88
ballast factor electronic ballast at EL5. 110W T12 consumers purchasing
this system could achieve positive LCC savings while incurring an
installed price increase of $106.75.
In the face of a ballast failure, 110W T12 consumers would be
expected to purchase the 110W T12 baseline lamp and a 0.95 ballast
factor magnetic ballast in the base case. Consumers who own 110W T12
systems can purchase replacement systems that comply with EL1, EL3, or
EL5 and achieve positive LCC savings. The available systems at EL2 and
EL4 do not produce sufficient light, so DOE assumes that in the face of
standard levels EL2 or EL4, consumers would purchase systems meeting
higher standard levels. At EL1, 110W T12 consumers could purchase a
110W T12 lamp on an electronic ballast but would achieve the least
positive LCC savings. At EL3, consumers could purchase reduced-wattage
(95W) T12 lamps on a magnetic ballast or on an electronic ballast.
Consumers could achieve the most positive LCC savings of any EL by
purchasing the 86W T8 system available at EL5. Standard levels EL4 and
EL5 would eliminate T12 systems from the market, making the 86W T8
system the only available option.
When faced with a lamp failure, consumers of the 95W T12 baseline
lamp would be expected to purchase the 95W T12 baseline for their
magnetic ballast in the base case. This lamp also complies with EL1.
None of the lamps available at EL1 through EL3, when in combination
with the magnetic ballast save energy as compared to the baseline
system. However, consumers can purchase these lamps and incur installed
price increases ranging from $6.14 to $19.09. Consumers of the 95W T12
baseline lamp could instead retrofit their systems to save energy. The
EL1 system available for retrofit does not produce sufficient light
output, and consumers could not achieve positive LCC savings with any
of the system options available for retrofit at EL2 through EL5.
Furthermore, standard levels EL4 and EL5 would eliminate T12 lamps from
the market, thereby forcing consumers of the 95W T12 baseline lamp to
retrofit to T8 systems when faced with a lamp failure and incur
installed price increases ranging from $109.35 to $112.57.
When faced with a ballast failure, consumers of 95W T12 lamps could
purchase a 95W T12 baseline lamp on a magnetic ballast in the base
case. Consumers purchasing a higher efficacy 95WT12 at EL2 on an
electronic ballast achieve positive LCC savings. However, consumers
purchasing these systems at EL3, would not achieve positive LCC
savings. EL4 and EL5 would likely eliminate T12 systems from the
market, making the EL4 and EL5 86W T8 system the only available option
for consumers faced with a ballast failure. Those who purchase the 86W
T8 system at EL4 or EL5 can achieve positive LCC savings.
[[Page 16990]]
[GRAPHIC] [TIFF OMITTED] TP13AP09.002
ii. Incandescent Reflector Lamps
Table VI.12 shows the commercial and residential sector LCC results
for IRL. The results are based on the reference case AEO2008
electricity price forecast and medium-range lamp prices. The analysis
period is 3.4 years for the residential sector and 0.9 years for the
commercial sector. DOE assessed three efficacy levels for the March
2008 ANOPR. 73 FR 13620, 13666-13667 (March 13, 2008). For the NOPR,
DOE added two additional efficacy levels--one below the lowest EL
considered in the March 2008 ANOPR, and one above the highest EL
considered in the March 2008 ANOPR See the engineering analysis in
chapter 5 of the TSD or section V.C.4.b of this notice for details.
The majority of efficacy levels result in positive LCC savings in
spite of the higher installed prices of the standards-case lamps in
comparison with the baseline lamps. In general, the higher lumen
package lamps (i.e., those replacing the 90W baseline lamp) achieve
higher LCC savings that the lower lumen package lamps (i.e., those
replacing the 75W and 50W baselines). This is due to the larger energy
savings, and, thus, operating cost savings associated with higher-
wattage lamps. At EL1, in all but the residential 90W PAR38 baseline,
consumers would achieve negative LCC savings when purchasing the
improved halogen lamp. The improved halogen lamp at this efficacy level
would not save enough energy to recover its increased initial cost from
the baseline lamp. Maximum LCC savings would be achieved at EL5 for the
90W and 75W baselines when a consumer purchases an improved HIR lamp.
For the 50W baseline, both the EL4 and EL5 replacement lamps are 40W,
as this is the lowest-wattage IRL covered by standards. Therefore, EL4,
consuming the same amount of energy and with a lower lamp price, would
have higher LCC savings than EL5. In general, the lamps with the
highest LCC savings are more efficacious and have longer lifetimes than
the baseline lamps.
[[Page 16991]]
Table VI.12--LCC Results for Incandescent Reflector Lamps
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Lamp replacement/Event V: New construction and renovation
--------------------------------------------------------------------------------------------
Baseline Efficiency level LCC savings 2007$ Installed price 2007$
--------------------------------------------------------------------------------------------
Commercial * Residential * * Commercial Residential
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. N/A................... N/A.................. 6.20................. 5.13.
EL1................... -0.03................. 0.12................. 7.14................. 6.07.
90 Watt PAR38 EL2................... 3.81 to 6.04.......... 3.06 to 4.68......... 7.58 to 7.76......... 6.52 to 6.70.
EL3................... 6.19.................. 5.55................. 7.76................. 6.70.
EL4................... 8.14.................. 7.09................. 9.08................. 8.02.
EL5................... 9.41.................. 8.76................. 9.65................. 8.59.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. N/A................... N/A.................. 6.20................. 5.13.
EL1................... -0.31................. -0.18................ 7.14................. 6.07.
75 Watt PAR38 EL2................... 3.24 to 5.67.......... 2.46 to 4.30......... 7.58 to 7.76......... 6.52 to 6.70.
EL3................... 4.77.................. 4.07................. 7.76................. 6.70.
EL4................... 7.00.................. 5.90................. 9.08................. 8.02.
EL5................... 7.50.................. 6.77................. 9.65................. 8.59.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. N/A................... N/A.................. 5.59................. 4.53.
EL1................... -0.31................. -0.28................ 6.53................. 5.46.
50 Watt PAR30 EL2................... 0.04 to 2.72.......... 0.10 to 2.21......... 6.98 to 7.15......... 5.92 to 6.09.
EL3................... 0.77.................. 0.87................. 7.15................. 6.09.
EL4................... 1.95.................. 1.62................. 8.47................. 7.41.
EL5................... 1.51.................. 1.49................. 9.04................. 7.98.
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Analysis period is 0.9 years.
**Analysis period is 3.4 years.
b. Consumer Subgroup Analysis
Certain consumer subgroups may be disproportionately affected by
standards. In the March 2008 ANOPR, DOE requested comment on which
consumer subgroups should be considered as well as methods of analyzing
those subgroups. 73 FR 13620, 13682 (March 13, 2008). In response to
comments it received, DOE performed LCC subgroup analyses in this NOPR
for low-income consumers, institutions of religious worship, and
institutions that serve low-income populations. See section 0 of this
NOPR for a review of the inputs to the LCC analysis. The following
discussion presents the most significant results from the LCC subgroup
analysis.
All of the LCC results shown here were generated using AEO2008
reference case electricity prices. In addition, DOE presents subgroup
results using medium-range lamp and ballast prices, as DOE believes
that these prices represent average prices for the consumer subgroups
as well. As in the primary LCC analysis, not all baselines and lamp
purchase events have suitable replacement options at every efficacy
level. See the primary LCC analysis results in section VI.B.1.a of this
NOPR for more details on this analysis, as well as the TSD chapter 12
for a full set of LCC and PBP results for the subgroup analysis.
i. Low-Income Households
DOE conducted the low-income consumer subgroup analysis based on
the 4-foot MBP 40W baseline operating in the residential sector and IRL
operating in the residential sector. The low-income consumer subgroup
analysis is identical to the residential average consumer LCC analysis,
except that it includes slightly lower electricity prices, which DOE
determined using data in the 2001 RECS. In comparing this subgroup's
LCC results to the primary results presented in Table VI.5, Table VI.6,
and Table VI.12, positive primary LCC savings results remained positive
and negative primary LCC savings results remained negative. In general,
LCC savings for GSFL and IRL are approximately 1 to 2 percent lower for
low-income residential consumers than they are for the average consumer
in the residential sector.
ii. Institutions of Religious Worship
DOE found that institutions of religious worship have the lowest
operating hours of any non-mall commercial building. Specifically,
operating hours were 1,705 hours per year for GSFL (vs. the commercial
sector average of 3,435 hours per year) and 1,609 hours per year for
IRL (vs. the commercial sector average of 3,450 hours per year). The
LCC analysis for this subgroup is identical to the main commercial
sector LCC analysis except for the lower operating hours, resulting in
an analysis period of 11 years for 4-foot GSFL, 8 years for 8-foot
GSFL, and 1.9 years for IRL. Results are shown in Table VI.13 through
Table VI.16 of this notice.
Institutions of religious worship experience lower LCC savings than
the rest of the commercial sector, particularly for standards-induced
retrofit events. This is because the longer analysis period (due to
lower operating hours) causes operating cost savings and residual
values to be discounted more heavily than in the primary commercial LCC
analysis. In general, LCC savings that were positive for the 4-foot
medium bipin product class in the primary commercial sector analysis
remain positive for institutions of religious worship. For example, in
Event II, LCC savings for institutions of religious worship are
approximately $17 lower than savings for the rest of the commercial
sector for the 40W T12 baseline. However, LCC savings for the
standards-induced retrofit event for the 34W T12 baseline lamp and 40W
T12 baseline lamp are negative for certain T8 systems at EL4 and EL5.
In the 4-foot T5 miniature bipin product class, LCC savings for
institutions of religious worship are several dollars lower than
savings for the rest of the commercial sector. This is also true for
the 8-foot single-pin slimline product class except for the standards-
induced retrofit event, where LCC savings for such institutions are
approximately $20 lower than savings
[[Page 16992]]
for the rest of the commercial sector. DOE notes that the standards-
induced retrofit of a 75W T12 system at EL5 is not cost-effective for
religious institutions.
For IRL, LCC savings for institutions of religious worship are
generally lower by several cents compared to the rest of the commercial
sector due to the longer analysis period. LCC savings are slightly
higher, however, at EL1 for the 90W and 75W PAR38 baselines.
[GRAPHIC] [TIFF OMITTED] TP13AP09.003
[[Page 16993]]
Table VI.14--LCC Subgroup Results for a 2-Lamp Four-Foot T5 Miniature Bipin GSFL System Operating in Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
LCC savings 2007$ Installed price 2007$
--------------------------------------------------------------------------------------------
Baseline Efficiency level Event V: New Event V: New
Event IA: Lamp construction/ Event IA: Lamp construction/
replacement* renovation* replacement renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. N/A................... N/A.................. 9.39................. 69.20.
28 Watt T5 EL1................... NER................... 38.73................ 13.15................ 72.96.
EL2................... -0.08................. 39.74 to 42.31....... 14.86................ 74.67 to 75.16.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Analysis period is 11 years.
N/A: Not Applicable; NER: No Energy-Saving Replacement.
[GRAPHIC] [TIFF OMITTED] TP13AP09.004
[[Page 16994]]
Table VI.16--LCC Subgroup Results for Incandescent Reflector Lamps Operating in Institutions of Religious
Worship
----------------------------------------------------------------------------------------------------------------
Event I: Lamp replacement/Event V: New
construction and renovation *
Baseline Efficiency level -------------------------------------------------
LCC savings 2007$ Installed price 2007$
----------------------------------------------------------------------------------------------------------------
Baseline............... N/A.................... 6.20.
EL1.................... 0.00................... 7.14.
90 Watt PAR38 EL2.................... 2.97 to 5.14........... 7.58 to 7.76.
EL3.................... 5.21................... 7.76.
EL4.................... 6.87................... 9.08.
EL5.................... 8.28................... 9.65.
----------------------------------------------------------------------------------------------------------------
Baseline............... N/A.................... 6.20.
EL1.................... -0.26.................. 7.14.
75 Watt PAR38 EL2.................... 2.43 to 4.79........... 7.58 to 7.76.
EL3.................... 3.87................... 7.76.
EL4.................... 5.80................... 9.08.
EL5.................... 6.48................... 9.65.
----------------------------------------------------------------------------------------------------------------
Baseline............... N/A.................... 5.59.
EL1.................... -0.35.................. 6.53.
50 Watt PAR30 EL2.................... -0.04 to 2.55.......... 6.98 to 7.15.
EL3.................... 0.64................... 7.15.
EL4.................... 1.58................... 8.47.
EL5.................... 1.37................... 9.04.
----------------------------------------------------------------------------------------------------------------
* Analysis period is 1.9 years.
iii. Institutions That Serve Low-Income Populations
Table VI.17 through Table VI.20 show the LCC subgroup results for
institutions that serve low-income populations. DOE assumed that the
majority of these institutions are small nonprofits; thus, DOE used a
higher discount rate of 10.8 percent (versus the 7.0-percent discount
rate for the primary commercial sector analysis). All other factors of
the LCC subgroup analysis remained the same as in the primary
commercial sector analysis. As a result of the higher discount rate,
LCC savings are lower for institutions that serve low-income
populations than for the rest of the commercial sector. For Events I
and III for all analyzed GSFL product classes, savings are several
dollars lower than for the rest of the commercial sector. For Event II
for GSFL, LCC savings are approximately $10 lower than for the rest of
the commercial sector. For IRL, LCC savings are several cents lower
than for the rest of the commercial sector. Although LCC savings are
lower, positive primary LCC results remained positive for this
subgroup, while negative primary LCC results remained negative.
[[Page 16995]]
[GRAPHIC] [TIFF OMITTED] TP13AP09.005
[[Page 16996]]
Table VI.18--LCC Subgroup Results for a 2-Lamp Four-Foot Miniature Bipin GSFL System Operating in Institutions That Serve Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
LCC savings 2007$ Installed price 2007$
--------------------------------------------------------------------------------------------
Baseline Efficiency level Events V: New Events V: New
Event IA: Lamp construction/ Event IA: Lamp construction/
replacement* renovation* replacement renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. N/A................... N/A.................. 9.39................. 69.20.
28 Watt T5 EL1................... NER................... 40.41................ 13.15................ 72.96.
EL2................... 0.37.................. 41.91 to 44.24....... 14.86................ 74.67 to 75.16.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Analysis period is 5.5 years.
N/A: Not Applicable; NER: No Energy-Saving Replacement.
[GRAPHIC] [TIFF OMITTED] TP13AP09.006
[[Page 16997]]
Table VI.20--LCC Subgroup Results for Incandescent Reflector Lamps Operating in Institutions That Serve Low-
Income Populations
----------------------------------------------------------------------------------------------------------------
Event I: Lamp replacement/Event V: New
construction and renovation *
Baseline Efficiency level -------------------------------------------------
LCC savings 2007$ Installed price 2007$
----------------------------------------------------------------------------------------------------------------
Baseline............... N/A.................... 6.20.
EL1.................... -0.09.................. 7.14.
90 Watt PAR38 EL2.................... 3.84 to 6.00........... 7.58 to 7.76.
EL3.................... 6.14................... 7.76.
EL4.................... 7.97................... 9.08.
EL5.................... 9.18................... 9.65.
----------------------------------------------------------------------------------------------------------------
Baseline............... N/A.................... 6.20.
EL1.................... -0.37.................. 7.14.
75 Watt PAR38 EL2.................... 3.29 to 5.64........... 7.58 to 7.76.
EL3.................... 4.76................... 7.76.
EL4.................... 6.87................... 9.08
EL5.................... 7.34................... 9.65.
----------------------------------------------------------------------------------------------------------------
Baseline............... N/A.................... 5.59.
EL1.................... -0.33.................. 6.53.
50 Watt PAR30 EL2.................... -0.01 to 2.57.......... 6.98 to 7.15.
EL3.................... 0.69................... 7.15.
EL4.................... 1.78................... 8.47.
EL5.................... 1.34................... 9.04.
----------------------------------------------------------------------------------------------------------------
*Analysis period is 0.9 years.
iv. Historical Facilities
DOE found that historical facilities have similar operating hours,
discount rates, and electricity prices as the typical consumer,
although they do own more T12 systems. Accordingly, for this subgroup,
no separate findings are warranted. See section VI.B.1.a.i of this
notice to view the impacts on those consumers with T12 lamps.
v. Consumers of T12 Electronic Ballasts
Table VI.21 through Table VI.24 show the LCC subgroup results for
consumers of T12 electronic ballasts. Specifically, DOE analyzed the
LCC savings of a consumer that owns a T12 electronic system in the base
case. In the case of an energy conservation standard at EL4 or EL5,
this consumer would need to purchase a T8 electronic system, as T12
lamps would no longer available. DOE established a new baseline
electronic T12 system and modified standards case systems so that both
of the following conditions are met: (1) Light output is maintained in
the case of a standard; and (2) energy is saved. All other factors of
the LCC subgroup analysis remained the same as in the primary analysis.
Because electronic T12 systems are much more efficient than magnetic
T12 systems, the LCC savings for this subgroup are lower than the LCC
savings for systems in the primary analysis. For 4-foot medium bipin
lamps operating in the commercial sector, LCC savings are reduced by
approximately $20 to $30, going from positive LCC savings in the
primary analysis to negative LCC savings for this subgroup. The source
of this reduction is primarily due to the increased efficacy of the
baseline system.
Table VI.21--LCC Subgroup Results for a 3-Lamp Four-Foot Electronic Medium Bipin GSFL System Operating in the
Commercial Sector
----------------------------------------------------------------------------------------------------------------
Event II: Standards-induced retrofit (lamp &
ballast replacement)
Baseline Efficiency level -------------------------------------------------
LCC savings * 2007$ Installed price 2007$
----------------------------------------------------------------------------------------------------------------
Baseline............... N/A.................... 13.96.
EL1.................... EN/A................... EN/A.
40 Watt T12 EL2.................... EN/A................... EN/A.
EL3.................... EN/A................... EN/A.
EL4.................... -16.72 to -4.37........ 63.26 to 75.56.
EL5.................... -9.98 to -5.76......... 64.83 to 71.19.
----------------------------------------------------------------------------------------------------------------
Baseline............... N/A.................... 11.22.
EL1.................... EN/A................... EN/A.
34 Watt T12 EL2.................... EN/A................... EN/A.
EL3.................... EN/A................... EN/A.
EL4.................... -12.38 to -1.43........ 63.26 to 67.88.
EL5.................... -8.63 to -5.53......... 63.51 to 64.83.
----------------------------------------------------------------------------------------------------------------
* Analysis period is 5.5 years.
EN/A: Event Not Applicable; N/A: Not Applicable.
[[Page 16998]]
For 4-foot medium bipin lamps operating in the residential sector,
LCC savings, already negative in the primary analysis, become slightly
more negative for this subgroup. The change in the savings is not as
large in the residential sector as in the commercial sector because
consumers for this event have a shortened analysis period.
Table VI.22--LCC Subgroup Results for a 2-Lamp Four-Foot Electronic Medium Bipin GSFL System Operating in the
Residential Sector Using High Operating Hours
----------------------------------------------------------------------------------------------------------------
Event IB: Lamp & ballast replacement
Baseline Efficiency level -------------------------------------------------
LCC savings 2007$ Installed price 2007$
----------------------------------------------------------------------------------------------------------------
Baseline............... N/A.................... 3.98.
EL1.................... EN/A................... EN/A.
40 Watt T12 EL2.................... EN/A................... EN/A.
EL3.................... EN/A................... EN/A.
EL4.................... -8.35 to -6.45......... 50.99 to 54.07.
EL5.................... -7.80 to -7.18......... 51.16 to 52.03.
----------------------------------------------------------------------------------------------------------------
* Analysis period is 2.5 years.
EN/A: Event Not Applicable; N/A: Not Applicable.
For 8-foot single pin slimline lamps, LCC savings are reduced by
approximately $18 to $25. For the 75W T12 baseline, consumers
experience negative LCC savings for this subgroup as opposed to the
positive LCC savings experienced by consumers in the primary analysis.
For the 60W T12 baseline, LCC savings, already negative in the primary
analysis, become more negative for this subgroup. The source of this
reduction is primarily due to the increased efficacy of the baseline
system.
Table VI.23--LCC Subgroup Results for a 2-Lamp Eight-Foot Electronic Single-Pin Slimline GSFL System Operating
in the Commercial Sector
----------------------------------------------------------------------------------------------------------------
Event II: Standards-induced retrofit (lamp &
ballast replacement)
Baseline Efficiency level -------------------------------------------------
LCC savings* 2007$ Installed price 2007$
----------------------------------------------------------------------------------------------------------------
Baseline............... N/A.................... 16.16.
EL1.................... EN/A................... EN/A.
75 Watt T12 EL2.................... EN/A................... EN/A.
EL3.................... EN/A................... EN/A.
EL4.................... LL..................... 93.41.
EL5.................... -14.18................. 95.12.
----------------------------------------------------------------------------------------------------------------
Baseline............... N/A.................... 11.33.
EL1.................... EN/A................... EN/A.
60 Watt T12 EL2.................... EN/A................... EN/A.
EL3.................... EN/A................... EN/A.
EL4.................... -32.74................. 93.41.
EL5.................... -31.86 to -30.09....... 93.79 to 95.12.
----------------------------------------------------------------------------------------------------------------
* Analysis period is 4.0 years.
EN/A: Event Not Applicable; N/A: Not Applicable.
For 8-foot recessed double contact high output lamps, LCC savings
are reduced by approximately $10 to $15. For the 110W T12 baseline,
consumers experience negative LCC savings for this subgroup as opposed
to the positive LCC savings experienced by consumers in the primary
analysis. For the 95W T12 baseline, LCC savings, already negative in
the primary analysis, become more negative. The source of this
reduction is again primarily due to the increased efficacy of the
baseline system.
Table VI.24--LCC Subgroup Results for a 2-Lamp Eight-Foot Electronic Recessed Double-Contact High Output GSFL
System Operating in the Industrial Sector
----------------------------------------------------------------------------------------------------------------
Event II: Standards-induced retrofit (lamp &
ballast replacement)
Baseline Efficiency level -------------------------------------------------
LCC savings 2007$ Installed price 2007$
----------------------------------------------------------------------------------------------------------------
Baseline............... N/A.................... 19.74.
EL1.................... EN/A................... EN/A.
110 Watt T12 EL2.................... EN/A................... EN/A.
EL3.................... EN/A................... EN/A.
EL4.................... LL..................... 123.27 to 123.60.
EL5.................... -10.09................. 126.49.
----------------------------------------------------------------------------------------------------------------
[[Page 16999]]
Baseline............... N/A.................... 13.92.
EL1.................... EN/A................... EN/A.
95 Watt T12 EL2.................... EN/A................... EN/A.
EL3.................... EN/A................... EN/A.
EL4.................... -26.41 to -23.25....... 123.27 to 123.60.
EL5.................... -23.07................. 126.49.
----------------------------------------------------------------------------------------------------------------
* Analysis period is 2.3 years.
EN/A: Event Not Applicable; N/A: Not Applicable.
2. Economic Impacts on Manufacturers
DOE used the INPV in the MIA to compare the financial impacts of
different TSLs on GSFL and IRL manufacturers. The INPV is the sum of
all net cash flows discounted by the industry's cost of capital
(discount rate). DOE used the GRIMs to compare the INPV of the base
case (no amended energy conservation standards) to that of each TSL for
the GSFL and IRL industries. To evaluate the range of cash-flow impacts
on the industries, DOE constructed different scenarios for each
industry using different assumptions for markups and shipments that
correspond to the range of anticipated market responses. Each scenario
results in a unique set of cash flows and corresponding industry value
at each TSL. These steps allowed DOE to compare the potential impacts
on industries as a function of TSLs in the GRIMs. The difference in
INPV between the base case and the standards case is an estimate of the
economic impacts that implementing that standard level would have on
the entire industry.
a. Industry Cash-Flow Analysis Results
i. General Service Fluorescent Lamps
To assess the lower end of the range of potential impacts for the
GSFL industry, DOE considered the flat markup scenario under the
Existing Technologies base case, shipments with high lighting
expertise, and a shift in efficacy distributions. Besides the impact of
shipments on the INPV, this case assumed that manufacturers would be
able to maintain gross margins as a percentage of revenues as
production cost increases with efficacy. To assess the higher end of
the range of potential impacts for the GSFL industry, DOE considered
the scenario reflecting the four-tier markup scenario under the
Emerging Technologies base case, shipments with market-based lighting
expertise, and a rollup in efficacy distributions. Besides the impact
of shipments on the INPV, this case assumed standards would reduce
manufacturers' portfolio, thereby squeezing the margin of higher-
efficacy products as they are ``demoted'' to lower-relative-efficacy
tier products. Table VI.25 and Table VI.26 show the low end and high
end of the range of MIA results, respectively, for each TSL using the
cases described above.
Table VI.25--Manufacturer Impact Analysis for GSFL With the Flat Markup Scenario Under the Existing Technologies
Base Case--High Lighting Expertise--Shift in Efficiency Distributions
----------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case ------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
INPV......................... (2007$ 602 652 653 673 594 616
millions).
Change in INPV............... (2007$ ......... 49 50 71 -9 13
millions).
(%)............ ......... 8.18% 8.31% 11.78% -1.48% 2.21%
Amended Energy Conservation (2007$ ......... 3.3 8.8 8.8 11.6 29.6
Standards Product Conversion millions).
Expenses.
Amended Energy Conservation (2007$ ......... 38.5 60.5 104.5 181.5 181.5
Standards Capital Conversion millions).
Expenses.
Total Investment Required.... (2007$ ......... 41.8 69.3 113.3 193.1 211.1
millions).
----------------------------------------------------------------------------------------------------------------
Table VI.26--Manufacturer Impact Analysis for GSFL With the Four-Tier Markup Scenario Under the Emerging Technologies Base Case--Market Segment Lighting
Expertise--Rollup in Efficiency Distributions
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -----------------------------------------------------------
1 2 3 4 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV.......................................... (2007$ millions)................ 575 668 638 436 380 312
Change in INPV................................ (2007$ millions)................ .......... 93 63 -139 -195 -263
(%)............................. .......... 16.09% 11.02% -24.15% -33.96% -45.80%
Amended Energy Conservation Standards Product (2007$ millions)................ .......... 3.3 8.8 8.8 11.6 29.6
Conversion Expenses.
Amended Energy Conservation Standards Capital (2007$ millions)................ .......... 38.5 60.5 104.5 181.5 181.5
Conversion Expenses.
Total Investment Required..................... (2007$ millions)................ .......... 41.8 69.3 113.3 193.1 211.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 17000]]
For the GSFL MIA, margin impacts are the most significant driver of
INPV. The potential margin impacts on manufacturers are based on their
ability to maintain higher margins as standards remove efficacy as a
differentiator of premium products. The potential for standards to
disrupt the premium margins for efficacy is captured in the higher-
bound and lower-bound scenarios DOE presents. The lower-bound scenario
represents the situation where manufacturers maintain their current
``good, better, best'' marketing strategy by basing higher margins on
features other than efficacy or coming up with more-efficient products.
The large impacts on industry value in the upper-bound scenario are
caused by higher standards disrupting manufacturers' current marketing
strategy. In this scenario, manufacturers cannot maintain higher
margins when efficacy is lost as a differentiator and higher standards
lower profitability. Other drivers of INPV are less significant
because: (1) The capital costs required at each TSL are relatively
small compared to the industry revenue; and (2) shipments do not
substantially change regardless of the scenario.
DOE estimated the impacts on INPV at TSL1 to range from $49 million
to $93 million, equal to a 8.2 percent to 16.1 percent increase. At
this level, the highest impact on cash flow in the year leading up to
the standards occurs under the Emerging Technologies base case. Under
this scenario, industry cash flow decreases by approximately 37
percent, to $32 million, compared to the base-case value of $50 million
in the year leading up to the standards. Product conversion costs are
low at TSL1 because manufacturers have existing products that meet the
efficacy levels. Capital conversion costs are also low at this TSL
because a minimal amount of T12 machinery needs to be converted to meet
the growing volume of T8 production induced by standards. The necessary
conversion costs to meet TSL1 are low relative to the conversion costs
for the natural market migration from T12 to T8 lamps in the base case,
which helps to mitigate the impact of the standards-induced conversion
costs. The positive INPV predicted in the flat markup scenario is
indicative that product conversion and capital conversion outlays are
also low relative to the increase in variable production costs. Whereas
GSFL production is capital intensive, the capital requirements are a
function primarily of the tube diameter. Efficiency standards which do
not require a change in diameter will typically require a change in
phosphors which is not capital intensive. Under the tiered markup
scenario, manufacturers are left with a range of products after
standards, so they still earn higher markups on a wide variety of
premium products. In fact, the products eliminated at TSL1 are
commodity products which have a lower-than-average profit margin. Thus,
industry revenues and cash flows are not negatively affected, and
manufacturers actually benefit from the higher prices of remaining
products.
At TSL2, DOE estimated the impacts in INPV at TSL2 to range from
$50 million to $63 million, equal to a 8.3 percent to 11.0 percent
increase. At this level, the highest impact on cash flow in the year
leading up to the standards occurs under the Emerging Technologies base
case. Under this scenario, industry cash flow decreases by
approximately 60 percent, to $20 million, compared to the base-case
value of $50 million in the year leading up to the standards. Product
conversion costs are still relatively low at TSL2, because few
manufacturers will have to modify exiting products to meet this
standard level. Capital conversion costs are also low at this TSL, but
the investments required to meet TSL2 are larger than TSL1, because
more T12 machinery needs to be converted to meet the growing volume of
T8 production induced by standards. INPV is less positive at TSL2 than
at TSL1, because the higher conversion costs necessary to meet TSL2
lower the mitigating impact of the conversion costs for the natural
market migration from T12 to T8 lamps included in the base case. At
TSL2, more of the most-efficient, higher-priced T12 lamps are shifting
to less-expensive T8 lamps. INPV in the four-tier markup scenario is
also not as positive, because manufacturers have fewer premium products
and the profit margins on some more-efficient T12 products begin to
shrink. While TSL2 eliminates some of the premium T12 lamps, the T8
lamps to which consumers must migrate still earn a higher markup.
At TSL3, the impact on INPV and cash flow depends heavily on the
ability of manufacturers to differentiate products and maintain higher
margins as standards move consumers to previously premium products. DOE
estimated that the impacts on INPV at TSL3 range from approximately $71
million to -$139 million, equal to a 11.8 percent to -24.2 percent
change. At this level, the highest impact on cash flow in the year
leading up to the standards occurs under the Emerging Technologies base
case. Under this scenario, industry cash flow decreases by
approximately 100 percent, to $0 million, compared to the base-case
value of $50 million in the year leading up to the standards. At TSL3,
most manufacturers expressed concerns about the ability to maintain
production volumes of T12 and T8 lamps, because all but the most
efficient T12 lamps are eliminated. Because a large portion of existing
T12 shipments migrate to T8, manufacturers have to convert or replace a
significant portion of their T12 production lines to T8, making capital
conversion costs higher at TSL3 than at TSL1 or TSL2. Conversion costs
are also higher at TSL3, because manufacturers have to make more R&D
expenditures to offer a full line of T12 and T8 products that meet the
standard. Because TSL3 greatly accelerates the migration of T12 to T8
products, the conversion costs in the base case have a minimal effect
on offsetting INPV impacts from high standards-induced conversion costs
at TSL3 and all higher TSLs. If manufacturers can pass along the
increased production costs of more-efficient products by
differentiating the products with features such as low mercury content
and longer life, they can recoup margins, thereby mitigating some of
the impacts. If manufacturers can fully differentiate their products
and earn the same profit margins as in the base case (the lower range
of impacts), they will benefit from higher prices and INPV will be
positive at this TSL. However, if manufacturers cannot differentiate
their products and the margins on previously premium products begin to
erode with commoditization, DOE expects manufacturer margins to be
negative and the higher end of the range of negative INPV will be
reached.
At TSL4, DOE estimated the impacts on INPV range from approximately
-$9 million to -$195 million, equal to a -1.5 percent to -34.0 percent
change. At this level, the highest impact on cash flow in the year
leading up to the standards occurs under the Emerging Technologies base
case. Under this scenario, industry cash flow decreases by
approximately 171 percent, to -$36 million, compared to the base-case
value of $50 million in the year leading up to the standards. At TSL4,
there are significant conversion capital expenditures because all T12
production lines need to be converted to T8 lines; the capital
requirement for this conversion is nearly double the amount needed at
TSL3. The large capital costs make INPV negative even if manufacturers
maintain the margin on all lamps, as in the base case. Also,
manufacturers expressed concern that
[[Page 17001]]
the highest-grade phosphor mixtures would be necessary on most lamps to
meet efficiencies prescribed by TSL4. The more-efficient phosphor
blends substantially increase lamp costs, decreasing profitability if
the cost increases cannot be passed on to consumers. That is, at TSL4,
more T8 lamps that previously earned a premium are commoditized because
the standard eliminates all T12 lamps from the market, thereby
squeezing margins on all lamps and causing more negative impacts in the
four-tier markup scenario.
At TSL5, DOE estimated that the impacts on INPV range from
approximately $13 million to -$263 million, equal to a 2.2 percent to -
45.8 percent change. At this level, the highest impact on cash flow in
the year leading up to the standards occurs under the Emerging
Technologies base case. Under this scenario, industry cash flow
decreases by approximately 183 percent, to -$42 million, compared to
the base-case value of $50 million in the year leading up to the
standards. At TSL5, the necessary conversion capital is identical to
TSL4 because this TSL also requires manufacturers to convert all
existing T12 production to T8 production. These large costs make INPV
negative even if manufacturers pass along all production cost increases
to the consumer. At TSL5, all products are commoditized because all
lamps must use the most efficient phosphor coatings. There are few
options available for manufacturers to differentiate lamps at TSL5,
thereby making it more likely that manufacturers will be negatively
affected.
Based on interviews with manufacturers, DOE understands that
manufacturers are constantly forced to revise their marketing
strategies as new products are introduced and older products become
commoditized. DOE also understands that higher efficacy is not the only
feature available to differentiate premium products. Lifetime, lower
mercury content, and removing lead are all features that also
differentiate products. Therefore, DOE believes that after significant
early disruptions in pricing, over time the industry will recover the
profitability levels that existed prior to standards as manufacturers
rebalance their product mix. The net effect on INPV is uncertain but
should tend toward the midpoint of the two GRIM scenarios. DOE seeks
comment on the ability of manufacturers to maintain these margins
through the differentiation of products by other means. DOE also seeks
comment on how the ability to differentiate products might vary over
time.
ii. Incandescent Reflector Lamps
During the manufacturer interviews DOE learned that for IRL lamps,
markups do not increase as a function of efficacy (in contrast to
GSFL). Instead, manufacturers indicated that the range of potential
impacts would depend on the magnitude of the capital investments
required and the expected reduction in product sales. Thus, DOE modeled
manufacturing impacts using all IRL shipments scenarios described in
sections V.G.4.b.ii and V.G.4.b.iv. To assess the lower end of the
range of potential impacts for the IRL industry, DOE considered the
Existing Technologies base case reflecting the no product substitution
scenario with a shift in efficacy distributions. In this scenario: (1)
Manufacturers benefit from higher prices from consumers switching to
more-efficient products on their own (the shift scenario); (2) IRL
base-case shipments are not eroded due to emerging technologies; and
(3) standards-case shipments do not decrease due to substitutions of R-
CFL and exempted BR lamps for IRL. To assess the higher end of the
range of potential impacts for the IRL industry, DOE considered the
Emerging Technologies base case reflecting the product substitution
scenario with a rollup in efficacy distributions. In this scenario: (1)
IRL base-case shipments are eroded due to emerging technologies; and
(2) standards-case shipments decrease due to substitutions of R-CFL and
exempted BR lamps for IRL. Table VI.27 and Table VI.28 show the MIA
results for each TSL for IRL under the shipment scenarios which result
in the highest and lowest INPV impacts.
Table VI.27--Manufacturer Impact Analysis for IRL Under the Existing Technologies Base Case--No Product Substitution Scenario--Shift in Efficiency
Distribution
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -----------------------------------------------------------
1 2 3 4 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV.......................................... (2007$ millions)................ 267 263 215 205 190 185
Change in INPV................................ (2007$ millions)................ .......... (4) (52) (62) (77) (82)
(%)............................. .......... -1.55% -19.36% -23.06% -28.85% -30.85%
Amended Energy Conservation Standards Product (2007$ millions)................ .......... $3 $3 $2 $3 $7
Conversion Expenses.
Amended Energy Conservation Standards Capital (2007$ millions)................ .......... $31 $83 $134 $166 $185
Conversion Expenses.
Total Investment Required..................... (2007$ millions)................ .......... $35 $87 $136 $170 $192
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VI.28--Manufacturer Impact Analysis for IRL Under the Emerging Technologies Base Case--Product Substitution--Roll-Up in Efficiency Distributions
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -----------------------------------------------------------
1 2 3 4 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV.......................................... (2007$ millions)................ 207 191 149 131 112 104
Change in INPV................................ (2007$ millions)................ .......... (16) (58) (76) (94) (103)
(%)............................. .......... -7.69% -27.87% -36.85% -45.60% -49.60%
Amended Energy Conservation Standards Product (2007$ millions)................ .......... $3 $3 $2 $3 $7
Conversion Expenses.
Amended Energy Conservation Standards Capital (2007$ millions)................ .......... $31 $83 $134 $166 $185
Conversion Expenses.
[[Page 17002]]
Total Investment Required..................... (2007$ millions)................ .......... $35 $87 $136 $170 $192
--------------------------------------------------------------------------------------------------------------------------------------------------------
To meet TSL1, manufacturers must replace less-efficient fill gases
in the capsule with xenon. At TSL1, DOE estimated the impacts on INPV
to be between -$4 million and -$16 million, or a change in INPV of
between -1.6 percent and -7.7 percent. At this level, the highest
impact on cash flow in the year leading up to the standards occurs
under the Emerging Technologies base case. Under this scenario, the
industry cash flow decreases by approximately 68 percent, to $7.1
million, compared to the base case value of $22.5 million in the year
leading up to the standards. All manufacturers have a full range of
products that meet this TSL. Conversion expenses are relatively low at
this level because using xenon does not require substantial changes to
the manufacturing process. Because the lifetimes of standards-compliant
lamps do not change at TSL1, shipments in the standards cases are not
further impacted by lower shipments due to higher lamp lifetimes. In
fact, at this TSL, manufacturers benefit from the increased prices of
standards-compliant lamps. However, this positive impact on revenues is
not enough to overcome the product and capital conversion expenses,
making overall INPV negative. The greater impact on shipments in the
Emerging Technologies base case with product substitution drives INPV
more negative.
TSL2 is based on a 6,000 hour HIR lamp, but this level may also be
achieved using an improved reflector. At TSL2, the impact on INPV and
cash flow depends on a manufacturer's ability to recoup the conversion
capital and product conversion expenses and the extent to which
shipments are reduced in the base case due to emerging technologies and
in the standards case due to changes in the product mix (including lamp
lifetime). DOE estimated the impacts in INPV at TSL2 to be between -$52
million and -$58 million or a change in INPV of -19.4 percent and -27.9
percent. At this level, the highest impact on cash flow in the year
leading up to the standards occurs under the Emerging Technologies base
case. Under this scenario, the industry cash flow decreases by
approximately 172 percent, to -$16.2 million, compared to the base-case
value of $22.5 million in the year leading up to the standards. At
TSL2, there are negative impacts on manufacturers due to decreased
shipments and significant product conversion expenses. At this TSL,
conversion expenses vary greatly among manufacturers but are
significant in the aggregate due to the need to increase production of
HIR lamps or invest in improved reflector technology. Two manufacturers
have a complete line of standards-compliant lamps but must spend a
considerable amount of resources to expand production of a low-volume,
premium product for mass production. Another manufacturer must spend a
significant amount of capital to purchase the machinery to meet demand
with exclusively higher technology (infrared) lamps in addition to
replacing krypton with xenon as fill gas in the capsule. The shipment
scenarios chosen account for the range in INPV. Shipments have a
significant impact on INPV at this TSL in all cases because the
products that meet this standard have the longest lifetimes in the
standards cases, further decreasing shipments relative to the base
cases. Some manufacturers have expressed concerns about competitive
impacts at this TSL. One manufacturer has a patent on silverized
reflectors. Another manufacturer is believed to have a cross license on
the technology. Despite the large capital expense to expand this
reflector technology for all baseline lamps to meet this TSL, both
these manufacturers could capture market share by selling less-
expensive lamps based on improved reflector coating instead of HIR
technology. The other manufacturer without access to the enhanced
reflectors would have to make large expenditures on capital and product
conversion to produce lamps with a comparable efficacy, but at higher
costs.
TSL3 is based on 3,000-hour HIR technology. DOE estimated the
impacts on INPV at TSL3 to be between -$62 million and -$76 million, or
a change in INPV of between -23.1 percent and -36.9 percent. At this
level, the highest impact on cash flow in the year leading up to the
standards occurs under the Emerging Technologies base case. Under this
scenario, the industry cash flow decreases by approximately 272
percent, to-$38.6 million, compared to the base-case value of $22.5
million in the year leading up to the standards. There are significant
capital conversion costs at this TSL that make INPV negative.
Manufacturers must purchase additional infrared coaters to increase the
production of these low-volume lamps. Since current HIR production is
very small relative to standard halogen IRL, all manufacturers voiced
their concerns about meeting demand at this level. Also, since all
existing HIR capsules use xenon as the fill gas, manufactures are
concerned about the high material costs for this gas and the potential
for the price to increase over time. The high costs to convert all
lamps to HIR technology drive INPV negative and strand existing
equipment for standard halogen capsules. The range of INPV arises from
the shipment scenarios that account for different market erosion due to
emerging technology and standards inducing a switch to exempted BR
lamps and R-CFL. If manufacturer concerns about consumers switching to
exempted BR and R-CFL are realized in addition to emerging technology
eroding the IRL market, then the higher end of the range of negative
INPV will be reached.
TSL4 requires the production of an improved HIR lamp. At TSL4, DOE
estimated the impacts in INPV to be between -$77 million and -$94
million, or a change in INPV of -28.9 percent and -45.6 percent. At
this level, the highest impact on cash flow in the year leading up to
the standards occurs under the Emerging Technologies base case. Under
this scenario, the industry cash flow decreases by approximately 338
percent, to -$53.6 million, compared to the base-case value of $22.5
million in the year leading up to the standards. The significant
capital and product conversion expenses at this TSL make INPV negative.
At this TSL, all manufacturers must expand production of the more-
efficient HIR technology to meet demand of the entire market. Since
current HIR production is relatively low, these substantial costs make
INPV negative. The capital conversion expenses are large because, in
addition
[[Page 17003]]
to HIR technology, manufacturers must also use enhanced reflectors or
the most efficient burners and add xenon. Also, since all existing HIR
capsules use xenon as the fill gas, manufactures are concerned about
the high material costs for this gas and the potential for the price to
increase over time. The lifetimes of products that meet this TSL are
longer than the baseline, creating a negative impact on INPV from
shipments regardless of the shipment scenario selected. Manufacturers
also voiced concerns about competition at TSL4. Because lamps can use
an enhanced reflector with HIR to meet TSL4, manufacturers have the
same competitive concerns as at TSL2. Finally, two manufacturers
currently have a full line of lamps that meet TSL4. A third
manufacturer has some products, but would have to undertake a costly
redesign of its burners in order to sell a full line of those lamps.
TSL5 requires the production of lamps with an improved HIR coating
and an additional improvement. At TSL5, DOE estimated the impacts in
INPV to be between -$82 million and -$103 million, or a change in INPV
of between -30.9 percent and -49.6 percent. At this level, the highest
impact on cash flow in the year leading up to the standards occurs
under the Emerging Technologies base case. Under this scenario, the
industry cash flow decreases by approximately 381 percent, to -$63.1
million, compared to the base-case value of $22.5 million in the year
leading up to the standards. The impacts at TSL5 are the most severe
for manufacturers, because the capital and product conversion expenses
are greatest at this TSL. At this TSL, all manufacturers must expand
production of a lamp with multiple improvements over standard HIR
lamps. Manufacturers must use HIR technology with an improved coating
and with either enhanced reflectors or more-efficient burners. Since
even standard HIR production is currently low compared to standard
halogen, expanding the production of the most-efficient HIR technology
to meet demand of the entire market is very costly. Due to the large
conversion costs, INPV is greatly negative even if the market is not
eroded by emerging technology and customers do not substitute R-CFL and
exempted BR lamps for IRL. If manufacturers concerns about emerging
technology and substitutions for IRL are realized, DOE expects the
higher range of negative impacts to be reached (a 49.6 percent decrease
in INPV).
b. Cumulative Regulatory Burden
While any one regulation may not impose a significant burden on
manufacturers, DOE understands the combined effects of several existing
and impending regulations may have serious consequences for some
manufacturers, groups of manufacturers, or an entire industry.
Assessing the impact of a single regulation may overlook this
cumulative regulatory burden. For this reason, DOE conducts an analysis
of cumulative regulatory burden as part of its rulemakings pertaining
to appliance efficiency.
In its written comment, NEMA submitted a list of regulatory
requirements that included numerous reporting requirements, the
Restriction on Hazardous Substances directive (RoHS), and
legislatively-prescribed minimum performance requirements that
contribute to the industries' cumulative regulatory burden (NEMA, No.
22 at p 34). DOE discusses the suggested regulatory provisions
submitted by NEMA in chapter 13 of the TSD.
In addition to the energy conservation standards on GSFL and IRL
products, other regulations can significantly affect manufacturers'
financial operations. Multiple regulations affecting the same
manufacturer can quickly strain profits and possibly cause an exit from
the market. Besides the list of suggested regulatory provisions that
NEMA submitted, DOE also identified other regulations these
manufacturers are facing for other products and equipment they
manufacture within three years prior to and three years after the
effective date of the amended energy conservation standards for GSFL
and IRL.
DOE believes that the EISA 2007 requirements for GSIL could have
the greatest cumulative burden on manufacturers of GSFL and IRL. DOE
understands that manufacturers of GSFL and IRL will also incur large
capital and product conversion investments to comply with the GSIL
minimum efficacy standards. The GSIL investments will compete with IRL
and GSFL for company resources. For example, GSFL, IRL, and GSIL all
share many of the same limited engineering resources. In addition, the
capital costs to comply with EISA 2007 could potentially limit the
funding available for GSFL and IRL conversions because these
investments will compete for the same sources of capital. DOE
understands that these are important but surmountable challenges for
GSFL and IRL manufacturers.
c. Impacts on Employment
To assess the impacts of energy conservation standards on GSFL and
IRL direct manufacturing employment, DOE used the GRIM to estimate
domestic labor expenditures and employment levels. DOE used statistical
data from the U.S. Census Bureau's 2006 Annual Survey of Manufacturers
(2006 ASM), results from other analyses, and interviews with
manufacturers to estimate the inputs necessary to calculate industry-
wide labor expenditures and employment levels. In the GRIM, total labor
expenditures are a function of the labor content, the sales volume, and
the wage rate which remains fixed in real terms over time. The total
employment figures presented for the GSFL and IRL industries include
both production and non-production workers.
DOE does not believe that standards will alter the domestic
employment levels of the GSFL industry. During interviews with
manufacturers, DOE learned that GSFL are produced on high-speed, fully-
automated lines. Production workers are not involved in the physical
assembly of the final product (e.g., in inserting components,
transferring partly assembled lamps, soldering lamp bases). The
production workers counted in DOE's figure include plant workers
involved in clearing glass, overseeing a portion of the assembly line,
monitoring quality control, mixing phosphors, and moving finished
products to loading. The employment levels required for these tasks are
a function of the total volume of the facility, not the labor content
of the product mix produced by the plant. Since higher TSLs involve
using more-efficient phosphors, employment will not be impacted because
standards will not change the overall scale of the facility. DOE
estimates that there are approximately 1,806 U.S. production and non-
production workers in the GSFL industry.
Table VI.29 and Table VI.30 show the domestic employment impacts
calculated in the GRIM for the two cash flow scenarios used to bound
the range of INPV impacts. The total employment figures include both
production and non-production workers.
[[Page 17004]]
Table VI.29--Change in Average Number of Domestic Employees in the IRL Industry Under the Existing Technologies
Base Case--No Product Substitution Scenario--Shift in Efficiency Distribution
----------------------------------------------------------------------------------------------------------------
Baseline TSL1 TSL2 TSL3 TSL4 TSL5
----------------------------------------------------------------------------------------------------------------
Average Number of Domestic IRL Employees from 1,319 1,518 1,303 1,492 1,396 1,426
2012-2042....................................
Change in the Average Number of Domestic IRL ......... 199 -16 173 77 107
Employees from 2012-2042.....................
----------------------------------------------------------------------------------------------------------------
Table VI.30--Change in Average Number of Domestic Employees in the IRL Industry Under the Emerging Technologies
Base Case--Product Substitution Scenario--Roll-Up in Efficiency Distribution
----------------------------------------------------------------------------------------------------------------
Baseline TSL1 TSL2 TSL3 TSL4 TSL5
----------------------------------------------------------------------------------------------------------------
Average Number of Domestic IRL Employees from 699 783 623 724 617 621
2012-2042....................................
Change in the Average Number of Domestic IRL ......... 84 -77 24 -82 -78
Employees from 2012-2042.....................
----------------------------------------------------------------------------------------------------------------
DOE believes that amended energy conservation standards will not
significantly impact IRL direct employment. The impact that new
standards will have on employment is far less significant than the
potential impact from emerging technologies. Both scenarios show that
the absolute magnitudes of employment impacts due to standards are
small. Whether standards have a positive or negative impact on
employment is largely determined by the extent to which consumers elect
to substitute IRL with other lamp technologies (such as R-CFL or
exempted IRL) in the standards case.
The employment impacts calculated by DOE are independent of the
employment impacts from the broader U.S. economy, which are documented
in chapter 15 of the TSD accompanying this notice. The employment
conclusions also do not account for the possible relocation of domestic
jobs to lower-labor-cost countries because the potential relocation of
U.S. jobs is uncertain and highly speculative. During interviews,
manufacturers did not emphasize the risk of shifting production
facilities abroad.
d. Impacts on Manufacturing Capacity
DOE anticipates that amended energy conservation standards would
not significantly affect the production capacity of GSFL manufacturers.
For GSFL manufacturers, any necessary redesign of GSFL would not change
the fundamental assembly of the equipment because higher TSLs require
the use of more-efficient phosphor coatings, which are largely a
materials issue. Therefore, in the long-term there should be no
capacity constraints. However, higher standards would also be expected
to expedite a natural conversion of T12 shipments to T8 shipments.
Because most production lines are specific to lamp diameter, shifting
production from T12 to T8 lamps requires shutting down the line and
retooling. Based on the duration of line changes described by
manufactures, DOE believes that the conversion of machinery to T8 lamp
production could occur between the announcement date and the effective
date of the standards. In addition, manufacturers indicated it is
possible to ramp up production before shutting down a line to maintain
a constant supply of shipments during retooling.
Manufacturers are concerned that IRL standards could cause capacity
constraints if amended standards were to alter the assembly of standard
halogen burners. In particular, IRL manufacturers are concerned about
the ability to convert their equipment in time to meet an exclusively
HIR standard (TSL3, TSL4, and TSL5). Although all manufacturers DOE
interviewed produce lamps with infrared burners, the current volume of
these lamps is many times lower than the volume of standard halogen
lamps. In addition, the production of infrared capsules is much more
time consuming, requiring additional time for the coating process and
quality control due to the precision necessary for the technology to
increase efficacy. In general, the large lamp manufacturers are
concerned about their ability to increase the production volume of HIR
capsules in time to meet the standard. However, interviews with
suppliers of HIR capsules and coating decks suggest that the capacity
could be met under an HIR standard. Based on discussions with suppliers
of infrared coaters, DOE also believes that lamp manufacturers will
have enough time in between the announcement date and the effective
date of the standards to purchase and install the necessary coaters to
meet TSL3 and higher and produce all burners in their own facilities.
Independent of manufacturers' ability to install coaters to produce all
infrared burners in-house, independent suppliers of infrared capsules
suggested that they have the ability to supply a significant portion of
the market. Because manufacturers could install additional coaters,
purchase infrared burners from a supplier, and use existing excess
capacity, DOE believes IRL manufacturers will be able to maintain
production capacity levels and continue to meet market demand for all
IRL standard levels.
e. Impacts on Manufacturer Subgroups
As discussed above, using average cost assumptions to develop an
industry cash-flow estimate is inadequate for assessing differential
impacts among manufacturer subgroups. Small manufacturers, niche
players, and manufacturers exhibiting a cost structure that differs
largely from the industry average could be affected differently. DOE
used the results of the industry characterization to group
manufacturers exhibiting similar characteristics.
During its interviews, DOE did not identify any small manufacturers
of covered IRL, but DOE did identify one small manufacturer that
produces covered GSFL.\72\ This manufacturer suggested that it could be
less impacted by amended energy conservation standards on GSFL than the
large manufacturers. Unlike its larger competitors, the small
manufacturer focuses on specialty products not covered by this
rulemaking and has had
[[Page 17005]]
a better ability to pass along product cost increases. For a discussion
of the impacts on the small manufacturer, see chapter 13 of the TSD and
section 0 of today's notice.
---------------------------------------------------------------------------
\72\ DOE identified and contacted 12 businesses that could
potentially be classified as small business manufacturers of the
products that are the subject of this rulemaking. Four of those
businesses agreed to be interviewed. Of these, DOE verified that
only one of those businesses met all the criteria to be classified
as a small manufacturer of covered GSFL or IRL. For further detail
on DOE's inquiry regarding small manufacturers, please see section
VII.B on the review under the Regulatory Flexibility Act.
---------------------------------------------------------------------------
3. National Impact Analysis
a. Significance of Energy Savings
To estimate the energy savings through 2042 due to amended energy
conservation standards, DOE compared the energy consumption of the
lamps under the base case to the energy consumption of these products
under the trial standard levels. Table VI.31 and Table VI.32 show the
forecasted national energy savings (including rebound effect and HVAC
interactions where applicable) in quads (quadrillion BTU) at each TSL
for GSFL and IRL. As discussed in section V.E, DOE models two base-case
shipment scenarios and several standards-case shipment scenarios. For
each lamp type, these scenarios combined produce eight possible sets of
NES results. The tables below present the results of the two scenarios
that represent the maximum and minimum energy savings resulting from
all the scenarios analyzed.
For GSFL, DOE presents ``Existing Technologies, High Lighting
Expertise, Shift'' and ``Emerging Technologies, Market Segment-Based
Lighting Expertise, Roll-Up'' in Table VI.31 as the scenarios that
produce the maximum and minimum energy savings, respectively. Due to a
larger reduction in the installed stock of lamps affected by standards,
the Emerging Technologies base-case forecast results in lower energy
savings than the Existing Technologies base-case forecast. In addition,
due to a portion of consumers purchasing non-energy-saving, higher-
lumen-output systems, the Market Segment-Based Lighting Expertise
scenario results in lower energy savings than the High Lighting
Expertise scenario. Finally, because in the Shift scenario more
consumers move to higher-efficacy lamps than in the Roll-Up scenario,
the Shift scenario results in higher energy savings than the Roll-Up
scenario.
Table VI.31 presents total national energy savings for each TSL
(labeled as ``Total'' savings). The table also reports national energy
savings due to individually regulating each type of GSFL (presented
next to the lamp type names), assuming no amended standard on all other
lamp types. However, it is important to note that individual lamp type
energy savings (due to separate regulation) do not sum to equal total
energy savings achieved at the trial standard levels due to standards-
induced substitution effects between lamp types. Instead, these savings
are provided merely to illustrate the approximate relative energy
savings of each lamp type under a TSL. As discussed in the March 2008
ANOPR, due to their relatively small shipments-based market share, DOE
did not directly model the national impacts of 2-foot U-shaped lamps.
In the ANOPR, DOE stated that in order to develop NES and NPV for this
lamps type, it intended to scale the NIA results from other analyzed
product classes. Given the similarities in historical shipment trends
(showing a decrease in T12 lamps and an increase in T8 lamps) and in
system input power, in this NOPR, DOE has decided to scale results from
the 4-foot medium bipin product classes to approximate NES and NPV of
2-foot U-Shaped product classes. As historical shipments 4-foot medium
bipin lamps were 22 times that of 2-foot U-shaped lamp shipments, DOE
used this scaling factor to approximate the energy savings of 2-foot U-
shaped lamps.
As seen in the tables below, the highest energy savings result from
TSL 5 and from EL5 for all lamp types. In addition, DOE notes that at
EL 1 and EL 2 for 4-foot medium bipin and at EL 1, EL 2, and EL 3 for
8-foot single pin slimline and 8-foot RDC HO lamps, all energy savings
originate from shifts to higher-efficacy T12 lamps and voluntary early
retrofits to the more-efficacious T8 systems (not applicable to 8-foot
RDC HO). At these ELs, all T8 lamps are compliant and, therefore,
unaffected by standards. At TSL 3, a large increase in total energy
savings of GSFL can be observed, stemming from the conversion of all
40W, 4-foot MBP T12 lamps to 34W T12 lamps and also from 4-foot T8
lamps (the majority of the GSFL stock) being affected by the
regulations. It is also important to note that at TSL 4 and TSL 5, all
4-foot MBP, 8-foot SP slimline, and 8-foot RDC HO T12 lamp systems
would be automatically retrofitted to T8 lamp systems, because no T12
standards-compliant lamps would be available.
Table VI.31--Summary of Cumulative National Energy Savings for GSFL
------------------------------------------------------------------------
National energy savings (quad)
---------------------------------------
Emerging
TSL/EL Lamp type Existing technologies,
technologies, high market segment-
lighting based lighting
expertise, shift expertise, roll-up
------------------------------------------------------------------------
1............. 4-foot MBP...... 1.52 0.43
8-foot SP 0.10 0.08
Slimline.
8-foot RDC HO... 0.18 0.02
4-foot MiniBP SO 0.76 0.12
4-foot MiniBP HO 1.14 0.65
2-foot U-Shaped. 0.07 0.02
---------------------------------------
Total 3.77 1.32
=======================================
2............. 4-foot MBP...... 1.57 0.60
8-foot SP 0.13 0.11
Slimline.
8-foot RDC HO... 0.24 0.20
4-foot MiniBP SO 0.76 0.12
4-foot MiniBP HO 1.14 0.65
2-foot U-Shaped. 0.07 0.03
---------------------------------------
Total 3.90 1.70
=======================================
3............. 4-foot MBP...... 4.76 1.99
[[Page 17006]]
8-foot SP 0.18 0.17
Slimline.
8-foot RDC HO... 0.25 0.20
4-foot MiniBP SO 0.76 0.12
4-foot MiniBP HO 1.14 0.65
2-foot U-Shaped. 0.22 0.09
---------------------------------------
Total 7.33 3.24
=======================================
4............. 4-foot MBP...... 8.23 2.70
8-foot SP 0.38 0.23
Slimline.
8-foot RDC HO... 0.66 0.66
4-foot MiniBP SO 0.76 0.12
4-foot MiniBP HO 1.14 0.65
2-foot U-Shaped. 0.37 0.12
---------------------------------------
Total 11.64 4.49
=======================================
5............. 4-foot MBP...... 9.53 3.72
8-foot SP 0.38 0.25
Slimline.
8-foot RDC HO... 0.72 0.67
4-foot MiniBP SO 0.91 0.29
4-foot MiniBP HO 1.14 0.65
2-foot U-Shaped. 0.43 0.17
---------------------------------------
Total 13.17 5.75
------------------------------------------------------------------------
For IRL, DOE presents ``Existing Technologies, Product
Substitution, Shift'' and ``Emerging Technologies, No Product
Substitution, Roll-Up'' in Table VI.32 as the scenarios that produce
the maximum and minimum energy savings, respectively. Similar to GSFL,
the Existing Technologies base-case forecast results in higher energy
savings than the Emerging Technologies base-case forecast due to the
greater installed stock of IRL affected by standards. Also, although a
relatively small difference, the Product Substitution scenario
(including migration to both higher-efficacy R-CFL and lower-efficacy,
exempted BR lamps) results in marginally higher energy savings than the
No Product Substitution scenario. In addition, while the effect is
greater for GSFL than for IRL, the Shift scenario (only affecting
commercial consumers) also represents higher energy savings than the
Roll-Up scenario for IRL. As seen in the table below, TSL 5 achieves
maximum energy savings for both scenarios.
Table VI.32--Summary of Cumulative National Energy Savings for
Incandescent Reflector Lamps
------------------------------------------------------------------------
National energy savings (quads)
-----------------------------------
Existing Emerging
TSL technologies, technologies, no
product product
substitution, substitution,
shift roll-up
------------------------------------------------------------------------
1................................... 0.37 0.22
2................................... 1.06 0.52
3................................... 1.89 1.00
4................................... 2.32 1.25
5................................... 2.60 1.48
------------------------------------------------------------------------
b. Net Present Value
The NPV analysis is a measure of the cumulative benefit or cost of
standards to the Nation. In accordance with the OMB's guidelines on
regulatory analysis,\73\ DOE calculated NPV using both a 7-percent and
a 3-percent real discount rate. The 7-percent rate is an estimate of
the average before-tax rate of return to private capital in the U.S.
economy, and reflects the returns to real estate and small business
capital, as well as corporate capital. DOE used this discount rate to
approximate the opportunity cost of capital in the private sector,
because recent OMB analysis has found the average rate of return to
capital to be near this rate. DOE also used the 3-percent rate to
capture the potential effects of standards on private consumption
(e.g., through higher prices for equipment and the purchase of reduced
amounts of energy). This rate represents the rate at which society
discounts future consumption flows to
[[Page 17007]]
their present value. This rate can be approximated by the real rate of
return on long-term government debt (i.e., yield on Treasury notes
minus annual rate of change in the Consumer Price Index), which has
averaged about 3 percent on a pre-tax basis for the last 30 years.
---------------------------------------------------------------------------
\73\ OMB Circular A-4, section E (Sept. 17, 2003).
---------------------------------------------------------------------------
The table below shows the forecasted net present value at each
trial standard level for GSFL and IRL. Similar to the results presented
for NES, Table VI.33 DOE presents the ``Existing Technologies, High
Lighting Expertise, Shift'' scenario and the ``Emerging Technologies,
Market Segment-Based Lighting Expertise, Roll Up'' scenario as the
maximum and minimum NPVs for GSFL, respectively. In general, the NPV
results at each trial standard level are a reflection of the life-cycle
cost savings at the corresponding efficacy levels. As seen in section
VI.B.1.a.i for most lamp purchasing events and most baseline lamps,
increasing efficacy levels generally result in increased LCC savings.
Due to this general cost-effectiveness of higher-efficacy GSFL, the
Existing Technologies base-case forecast (which increases the affected
stock and shipments) and the Shift scenario (which results in the
shipment of more high-efficacy lamps) represent the high-range scenario
for NPV. The Market Segment-Based Lighting Expertise scenario models
consumers who purchase higher-first-cost lamps, but may not achieve
energy savings. As these consumers generally have overall lower NPV
(and often negative NPV) than their energy-saving counterparts, the
Market Segment-Based Lighting Expertise scenario results in lower NPV
than the High Lighting Expertise scenario.
As seen in Table VI.33, NPV generally increases with increasing
trial standard levels, consistent with the same trend in the LCC
results. For the Market Segment-Based Lighting Expertise scenario, due
to a large lack of lighting expertise in the residential sector (DOE
assumes 0 percent consumers conducting T12 fixture replacements have
high lighting expertise), the NPV from 4-foot medium bipin lamps is
negative at EL1 and EL2. At efficacy levels above EL2, 4-foot medium
bipin lamps achieve positive NPV due to the integration of more-
efficacious T8 lamps into both commercial stocks (where lighting
sophistication is higher) and residential stocks. In addition, the
Emerging Technologies, Market Segment-Based Lighting Expertise, Roll-Up
scenario shows decreased NPV from TSL4 to TSL5. This is primarily due
to the portion of consumers (without lighting expertise) that are
forced to purchase much higher cost lamps, but do not take advantage of
the energy savings they provide.
Table VI.33--Summary of Cumulative Net Present Value for GSFL
----------------------------------------------------------------------------------------------------------------
NPV (billion 2007$)
-------------------------------------------------------------------------------
Existing technologies, high lighting Emerging technologies, market segment-
TSL/EL Product class expertise, shift based lighting expertise, roll-up
-------------------------------------------------------------------------------
7% Discount 3% Discount 7% Discount 3% Discount
----------------------------------------------------------------------------------------------------------------
1............. 4-foot MBP...... 3.93 9.04 -0.01 0.73
8-foot SP 0.10 0.34 0.03 0.21
Slimline.
8-foot RDC HO... 0.35 0.60 -0.17 -0.24
4-foot MiniBP SO 1.11 2.70 0.05 0.19
4-foot MiniBP HO 1.46 3.38 0.81 1.91
2-foot U-Shaped. 0.18 0.41 0.00 0.03
-------------------------------------------------------------------------------
Total 7.12 16.46 0.71 2.82
===============================================================================
2............. 4-foot MBP...... 3.14 7.78 -0.35 0.52
8-foot SP 0.15 0.45 0.09 0.35
Slimline.
8-foot RDC HO... 0.43 0.73 0.53 0.87
4-foot MiniBP SO 1.11 2.70 0.05 0.19
4-foot MiniBP HO 1.46 3.38 0.81 1.91
2-foot U-Shaped. 0.14 0.35 -0.02 0.02
-------------------------------------------------------------------------------
Total 6.43 15.39 1.11 3.85
===============================================================================
3............. 4-foot MBP...... 7.56 17.53 1.79 5.58
8-foot SP 0.37 0.81 0.37 0.80
Slimline.
8-foot RDC HO... 0.12 0.26 0.06 0.14
4-foot MiniBP SO 1.11 2.70 0.05 0.19
4-foot MiniBP HO 1.46 3.38 0.81 1.91
2-foot U-Shaped. 0.34 0.80 0.08 0.25
-------------------------------------------------------------------------------
Total 11.09 25.67 3.23 8.98
===============================================================================
4............. 4-foot MBP...... 17.47 35.93 5.97 13.34
8-foot SP 0.87 1.89 0.38 0.97
Slimline.
8-foot RDC HO... 1.33 2.53 1.33 2.53
4-foot MiniBP SO 1.11 2.70 0.05 0.19
4-foot MiniBP HO 1.46 3.38 0.81 1.91
2-foot U-Shaped. 0.79 1.63 0.27 0.61
-------------------------------------------------------------------------------
Total 23.37 48.61 8.85 19.59
===============================================================================
5............. 4-foot MBP...... 18.37 38.56 5.53 12.80
8-foot SP 0.87 1.89 0.45 1.11
Slimline.
8-foot RDC HO... 1.38 2.62 1.28 2.46
4-foot MiniBP SO 1.45 3.46 0.23 0.69
[[Page 17008]]
4-foot MiniBP HO 1.46 3.38 0.81 1.91
2-foot U-Shaped. 0.83 1.75 0.25 0.58
-------------------------------------------------------------------------------
Total 24.49 51.90 8.54 19.53
----------------------------------------------------------------------------------------------------------------
For IRL, DOE presents the ``Existing Technologies, Product
Substitution, Shift'' and ``Emerging Technologies, No Product
Substitution, Roll-Up'' scenarios as the maximum and minimum NPVs,
respectively. As seen in Table VI.34, NPV increases with TSL,
consistent with LCC savings generally increasing with efficacy level.
In particular, for the No Product Substitution scenario, the negative
NPV at TSL1 results because the life-cycle cost savings at EL1 (the
associated EL) are primarily negative. However, as seen in the Product
Substitution scenario, TSL1 achieves positive NPV due to primarily the
increased movement to highly cost-effective R-CFLs. NPV results are the
most positive at TSL5, because the most cost-effective IRL lamp is
purchased at this TSL.
Table VI.34--Summary of Cumulative Net Present Value for Incandescent Reflector Lamps
----------------------------------------------------------------------------------------------------------------
NPV (billion 2007$)
-------------------------------------------------------------------
Existing technologies, product Emerging technologies, no
TSL substitution, shift product substitution, roll-up
-------------------------------------------------------------------
7% Discount 3% Discount 7% Discount 3% Discount
rate rate rate rate
----------------------------------------------------------------------------------------------------------------
1........................................... 0.19 0.55 -0.06 0.00
2........................................... 3.47 7.11 1.82 3.71
3........................................... 4.75 9.85 2.58 5.30
4........................................... 6.75 13.97 3.72 7.68
5........................................... 7.52 15.55 4.34 8.99
----------------------------------------------------------------------------------------------------------------
c. Impacts on Employment
In addition to considering the direct employment impacts for the
manufacturers of products covered in this rulemaking (discussed above),
DOE also develops estimates of the indirect employment impacts of
proposed standards on the economy in general. As noted previously, DOE
expects energy conservation standards for the GSFL and IRL covered by
these standards to reduce energy bills for consumers, with the
resulting net savings being redirected to other forms of economic
activity. DOE also realizes that these shifts in spending and economic
activity could affect the demand for labor. To estimate these effects,
DOE used an input/output model of the U.S. economy using BLS data (see
section V.H). See chapter 15 of the TSD accompanying this notice for
details.
This input/output model suggests the proposed standards are likely
to slightly increase the net demand for labor in the economy. Neither
the BLS data nor the input/output model DOE uses includes the quality
or wage level of the jobs. As Table VI.35 and Table VI.36 show, the net
increase in jobs due to standards for GSFL and IRL, respectively, is so
small that it would likely be imperceptible in national labor
statistics and might be offset by other, unanticipated effects on
employment.
Table VI.35--Net National Change in Indirect Employment for GSFL, Jobs
in 2042
------------------------------------------------------------------------
Net national change in jobs
(thousands)
-----------------------------------
Emerging
Trial standard level Existing technologies,
technologies, roll up, market
shift, high segment based
lighting lighting
expertise expertise
------------------------------------------------------------------------
1................................... 15.4 5.2
2................................... 15.2 5.7
3................................... 21.6 10.1
4................................... 27.6 13.3
5................................... 32.4 15.2
------------------------------------------------------------------------
[[Page 17009]]
Table VI.36--Net National Change in Indirect Employment for IRL, Jobs in
2042
------------------------------------------------------------------------
Net national change in jobs
(thousands)
-----------------------------------
Existing Emerging
Trial standard level technologies, technologies, no
product product
substitution, substitution,
shift roll up
------------------------------------------------------------------------
1................................... 1.4 0.9
2................................... 3.5 2.9
3................................... 5.8 5.2
4................................... 7.5 6.9
5................................... 8.2 7.8
------------------------------------------------------------------------
4. Impact on Utility or Performance of Products
As discussed in section IV.D.1.d of this notice, DOE concluded that
none of the efficacy levels considered in this notice would reduce the
utility or performance of the GSFL and IRL under consideration in this
rulemaking. (42 U.S.C. 6295(o)(2)(B)(i)(IV)). Furthermore,
manufacturers of these products currently offer GSFL and IRL that meet
or exceed the proposed standards.
5. Impact of Any Lessening of Competition
DOE considers any lessening of competition likely to result from
standards. The Attorney General determines the impact, if any, of any
lessening of competition likely to result from a proposed standard, and
transmits such determination to the Secretary, together with an
analysis of the nature and extent of such impact. (42 U.S.C.
6295(o)(2)(B)(i)(V) and (B)(ii)).
To assist the Attorney General in making such a determination, DOE
has provided DOJ with copies of this notice and the TSD for review. DOE
will consider DOJ's comments on the proposed rule in preparing the
final rule. In the final rule, DOE will publish the Attorney General's
written determination and respond accordingly.
6. Need of the Nation To Conserve Energy
An improvement in the energy efficiency of GSFL and IRL is likely
to improve the security of the Nation's energy system by reducing
overall demand for energy, thereby reducing the Nation's reliance on
foreign sources of energy. Reduced demand could improve the reliability
of the electricity system, particularly in the short run during peak-
load periods. As a measure of this reduced demand, DOE expects the
energy savings from the proposed standards to eliminate the need for
approximately 1100 to 3400 megawatts (MW) of generating capacity for
GFSL and up to 450 MW for IRL by 2042.
Enhanced energy efficiency also produces environmental benefits.
The expected energy savings from higher standards would reduce the
emissions of air pollutants and greenhouse gases associated with
electric energy production and may reduce the cost of maintaining
nationwide emissions standards and constraints. Table VI.37 and Table
VI.38 show cumulative CO2, NOX, and Hg emissions
reductions for GSFL and IRL by TSL over the rulemaking period.
Table VI.37--Summary of Emissions Reductions for GSFL
[Cumulative reductions for products sold from 2012 to 2042]
----------------------------------------------------------------------------------------------------------------
TSL1 TSL2 TSL3 TSL4 TSL5
----------------------------------------------------------------------------------------------------------------
Existing Technologies, Shift, High Lighting Expertise
----------------------------------------------------------------------------------------------------------------
CO2 (MMt)....................... .................. 236.4 233.7 395.2 597.7 679.7
NOX (kt)........................ low............... 14 15 25 39 43
NOX (kt)........................ high.............. 347 361 623 951 1,072
Hg (t).......................... low............... 0.0 0.0 0.0 0.0 0.0
Hg (t).......................... high.............. 4.2 3.8 6.9 7.9 9.1
----------------------------------------------------------------------------------------------------------------
Emerging Technologies, Roll Up, Market Segment Based Lighting Expertise
----------------------------------------------------------------------------------------------------------------
CO2 (MMt)....................... .................. 85.7 103.5 184.3 239.7 312.8
NOX (kt)........................ low............... 5 7 12 17 20
NOX (kt)........................ high.............. 127 167 289 407 503
Hg (t).......................... low............... 0.0 0.0 0.0 0.0 0.0
Hg (t).......................... high.............. 1.5 1.5 2.9 3.2 4.4
----------------------------------------------------------------------------------------------------------------
Table VI.38--Summary of Emissions Reductions for IRL
[Cumulative reductions for products sold from 2012 to 2042]
----------------------------------------------------------------------------------------------------------------
TSL1 TSL2 TSL3 TSL4 TSL5
----------------------------------------------------------------------------------------------------------------
Existing Technologies, Product Substitution, Shift
----------------------------------------------------------------------------------------------------------------
CO2 (MMt)....................... .................. 17.7 44.8 88.1 114.4 118.8
NOX (kt)........................ low............... 1 3 6 7 8
NOX (kt)........................ high.............. 29 78 141 181 193
[[Page 17010]]
Hg (t).......................... low............... 0.0 0.0 0.0 0.0 0.0
Hg (t).......................... high.............. 0.2 0.6 1.3 1.7 1.7
----------------------------------------------------------------------------------------------------------------
Emerging Technologies, No Product Substitution, Roll Up
----------------------------------------------------------------------------------------------------------------
CO2 (MMt)....................... .................. 10.3 25.1 46.2 58.6 79.3
NOX (kt)........................ low............... 1 2 3 4 1
NOX (kt)........................ high.............. 17 39 75 94 17
Hg (t).......................... low............... 0.0 0.0 0.0 0.0 0.0
Hg (t).......................... high.............. 0.1 0.3 0.6 0.8 1.3
----------------------------------------------------------------------------------------------------------------
MMt = million metric tons.
kt = thousand metric tons.
t = metric tons.
Note: The derivation for the emission ranges are described below.
The estimated cumulative CO2, NOX, and Hg
emissions reductions for the proposed amended energy conservation
standards range up to a maximum of 680 MMt for CO2, 1072 kt
for NOX, and 9.1 metric tons for Hg for GSFL and 119 MMt for
CO2, 193 kt for NOX and 1.7 tons for Hg for IRL
over the period from 2012 to 2042. In the Environmental Assessment (see
the Environmental Assessment report of the TSD), DOE reports estimated
annual changes in CO2, NOX, and Hg emissions
attributable to each TSL. As discussion in section V.J of this NOPR,
DOE does not report SO2 emissions reduction from power
plants because reductions from an energy conservation standard would
not affect the overall level of SO2 emissions in the United
States due to the emissions caps for SO2.
The NEMS-BT modeling assumed that NOX would be subject
to the Clean Air Interstate Rule (CAIR) issued by the U.S.
Environmental Protection Agency on March 10, 2005.\74\ 70 FR 25162 (May
12, 2005). On July 11, 2008, the U.S. Court of Appeals for the District
of Columbia Circuit (DC Circuit) issued its decision in North Carolina
v. Environmental Protection Agency,\75\ in which the court vacated the
CAIR. If left in place, the CAIR would have permanently capped
emissions of NOX in 28 eastern States and the District of
Columbia. As with the SO2 emissions cap, a cap on
NOX emissions would have meant that energy conservation
standards are not likely to have a physical effect on NOX
emissions in States covered by the CAIR caps. While the caps would have
meant that physical emissions reductions in those States would not have
resulted from the energy conservation standards that DOE is proposing
today, the standards might have produced an environmental-related
economic impact in the form of lower prices for emissions allowance
credits, if large enough. DOE notes that the estimated total reduction
in NOX emissions, including projected emissions or
corresponding allowance credits in States covered by the CAIR cap was
insignificant and too small to affect allowance prices for
NOX under the CAIR.
---------------------------------------------------------------------------
\74\ On December 23, 2008, the D.C. Circuit decided to allow
CAIR to remain in effect until it is replaced by a rule consistent
with the court's earlier opinion. North Carolina v. EPA, No. 05-
1244, 2008 WL 5335481 (DC Cir. Dec. 23, 2008). Neither the July 11,
2008 nor the December 23, 2008 decisions of the D.C. Circuit change
the standard-setting proposals reached in this rule. See http://www.epa.gov/cleanairinterstaterule.
\75\ 531 F.3d 896 (D.C. Cir. 2008).
---------------------------------------------------------------------------
Even though the DC Circuit vacated the CAIR, DOE notes that the DC
Circuit left intact EPA's 1998 NOX SIP Call rule, which
capped seasonal (summer) NOX emissions from electric
generating units and other sources in 23 jurisdictions and gave those
jurisdictions the option to participate in a cap and trade program for
those emissions. 63 FR 57356, 57359 (Oct. 27, 1998).\76\ DOE
notes that the SIP Call rule may provide a similar, although smaller in
extent, regional cap and may limit actual reduction in NOX
emissions from revised standards occurring in States participating in
the SIP Call rule. However, the possibility that the SIP Call rule may
have the same effect as CAIR is highly uncertain. Therefore, DOE
established a range of NOX reductions due to the standards
being considered in today's proposed rule. DOE's low estimate was based
on the emission rate of the cleanest new natural gas combined-cycle
power plant available for electricity generated based on the assumption
that efficiency standards would result in only the cleanest available
fossil-fueled generation being displaced. DOE used the emission rate,
specified in 0.0310 kilotons (0.0341 thousand short tons) of
NOX emitted per TWh of electricity generated, associated
with an advanced natural gas combined-cycle power plant, as specified
by NEMS-BT. To estimate the reduction in NOX emissions, DOE
multiplied this emission rate by the reduction in electricity
generation due to the amended energy conservation standards considered.
DOE's high estimate of 0.764 kilotons (0.843 thousand short tons) of
NOX per TWh was based on the use of a nationwide
NOX emission rate for all electrical generation. Use of such
an emission rate assumes that future efficiency standards would result
in displaced electrical generation mix that is equivalent to today's
mix of power plants (i.e., future power plants displaced are no cleaner
than what are being used currently to generate electricity). In
addition, under the high estimate assumption, energy conservation
standards would have little to no effect on the generation mix.
[[Page 17011]]
Based on AEO2008 for a recent year (2006) in which no regulatory or
non-regulatory measures were in effect to limit NOX
emissions, DOE multiplied this emission rate by the reduction in
electricity generation due to the standards considered. DOE is
considering whether changes are needed to its plan for addressing the
issue of NOX reduction. DOE invites public comment on how
the agency should address this issue, including how it might value
NOX emissions for States now that the CAIR has been
vacated.\77\
---------------------------------------------------------------------------
\76\ In the NOX SIP Call rule, EPA found that sources
in the District of Columbia and 22 ``upwind'' States (States) were
emitting NOX (an ozone precursor) at levels that
significantly contributed to ``downwind'' States not attaining the
ozone NAAQS or at levels that interfered with States in attainment
maintaining the ozone NAAQS. In an effort to ensure that
``downwind'' States attain or continue to attain the ozone NAAQS,
EPA established a region-wide cap for NOX emissions from
certain large combustion sources and set a NOX emissions
budget for each State. Unlike the cap that CAIR would have
established, the NOX SIP Call Rule's cap only constrains
seasonal (summer time) emissions. In order to comply with the
NOX SIP Call Rule, States could elect to participate in
the NOX Budget Trading Program. Under the NOX
Budget Trading Program, each emission source is required to have one
allowance for each ton of NOX emitted during the ozone
season. States have flexibility in how they allocate allowances
through their State Implementation Plans but States must remain
within the EPA-established budget. Emission sources are allowed to
buy, sell, and bank NOX allowances as appropriate. It
should be noted that, on April 16, 2008, EPA determined that Georgia
is no longer subject to the NOX SIP Call rule. 73 FR
21528 (April 22, 2008).
\77\ In anticipation of CAIR replacing the NOX SIP
Call Rule, many States adopted sunset provisions for their plans
implementing the NOX SIP Call Rule. The impact of the
NOX SIP Call Rule on NOX emissions will
depend, in part, on whether these implementation plans are
reinstated.
---------------------------------------------------------------------------
The range in NOX emission changes calculated under using
the low- and high-estimate scenarios are shown in Table VI.37 and Table
VI.38 by TSL. The range of total cumulative NOX emission
reductions is from 5 to 1071 kt for GSFL and 1 to 193 kt for IRL for
the range of TSLs considered. These changes in NOX emissions
are extremely small, at less than 0.1 percent of the national base-case
emissions forecast by NEMS-BT, depending on the TSL.
As noted above in section V.J, with regard to Hg emissions, DOE is
able to report an estimate of the physical quantity changes in these
emissions associated with an energy conservation standard. As opposed
to using the NEMS-BT model, DOE established a range of Hg rates to
estimate the Hg emissions that could be reduced from standards. DOE's
low estimate was based on the assumption that future standards could
displace electrical generation from natural gas-fired power plants as
the cleanest possible fossil-fueled generation displacement consistent
with the low end of range established for NOX emissions,
thereby resulting in an effective emission rate of zero. The low-end
emission rate is zero because virtually all Hg emitted from electricity
generation is from coal-fired power plants. Based on an emission rate
of zero, no emissions would be reduced from energy conservation
standards. DOE's high estimate was based on the use of a nationwide
mercury emission rate from AEO2008. Because power plant emission rates
are a function of local regulation, scrubbers, and the mercury content
of coal, it is extremely difficult to come up with a precise high-end
emission rate. Therefore, DOE believes that the most reasonable
estimate is based on the assumption that all displaced coal generation
would have been emitting at the average emission rate for coal
generation as specified by AEO2008. As noted previously, because
virtually all mercury emitted from electricity generation is from coal-
fired power plants, DOE based the emission rate on the tons of mercury
emitted per TWh of coal-generated electricity. Based on the emission
rate for a recent year (2006), DOE derived a high-end emission rate of
0.023 metric tons (0.0255 short tons) per TWh. To estimate the
reduction in mercury emissions, DOE multiplied the emission rate by the
reduction in coal-generated electricity due to the standards considered
as determined in the utility impact analysis. The estimated changes in
Hg emissions are shown in Table VI.37 for both GSFL and IRL from 2012
to 2042. The range of total Hg emission reductions is from 0 to 9.1
tons for GSFL and 0 to 1.7 tons for IRL for the range of TSLs
considered. These changes in Hg emissions are extremely small,
generally being less than 0.1 percent of the national base-case
emissions forecast by NEMS-BT, depending on the TSL.
The NEMS-BT model used for today's rulemaking could not be used to
estimate Hg emission reductions due to standards, as it assumed that Hg
emissions would be subject to EPA's Clean Air Mercury Rule \78\ (CAMR),
which would have permanently capped emissions of mercury for new and
existing coal-fired plants in all States by 2010. Similar to
SO2 and NOX, DOE assumed that under such a
system, energy conservation standards would have resulted in no
physical effect on these emissions, but might have resulted in an
environmental-related economic benefit in the form of a lower price for
emissions allowance credits, if large enough. DOE estimated that the
change in the Hg emissions from energy conservation standards would not
be large enough to influence allowance prices under CAMR.
---------------------------------------------------------------------------
\78\ 70 FR 28606 (May 18, 2005).
---------------------------------------------------------------------------
On February 8, 2008, the DC Circuit issued its decision in New
Jersey v. Environmental Protection Agency,\79\ in which the DC Circuit,
among other actions, vacated the CAMR referenced above. Accordingly,
DOE is considering whether changes are needed to its plan for
addressing the issue of mercury emissions in light of the DC Circuit's
decision. DOE invites public comment on addressing mercury emissions in
this rulemaking.
---------------------------------------------------------------------------
\79\ 517 F.3d 574 (D.C. Cir. 2008).
---------------------------------------------------------------------------
In today's proposed rule, DOE is taking into account a monetary
benefit of CO2 emission reductions associated with this
rulemaking. To put the potential monetary benefits from reduced
CO2 emissions into a form that is likely to be most useful
to decision-makers and stakeholders, DOE used the same methods used to
calculate the net present value of consumer cost savings: the estimated
year-by-year reductions in CO2 emissions were converted into
monetary values and these resulting annual values were then discounted
over the life of the affected appliances to the present using both 3
percent and 7 percent discount rates.
These estimates discussed below are based on a previous analysis
that used a range of no benefit to an average benefit value reported by
the IPCC.\80\ It is important to note that the IPCC estimate used as
the upper bound value was derived from an estimate of the mean value of
worldwide impacts from potential climate impacts caused by
CO2 emissions, and not just the effects likely to occur
within the United States. This previous analysis assumed that the
appropriate value should be restricted to a representation of those
costs/benefits likely to be experienced in the United States. DOE
expects that such domestic values would be lower than comparable global
values; however, there currently are no consensus estimates for the
U.S. benefits likely to result from CO2 emission reductions.
Because U.S.-specific estimates were not available, and DOE did not
receive any additional information that would help serve to narrow the
proposed range as a representative range for domestic U.S. benefits,
DOE believes it is appropriate to propose the global mean value as an
appropriate upper bound U.S. value for purposes of the sensitivity
analysis.
---------------------------------------------------------------------------
\80\ During the preparation of its most recent review of the
state of climate science, the Intergovernmental Panel on Climate
Change (IPCC) identified various estimates of the present value of
reducing carbon-dioxide emissions by one ton over the life that
these emissions would remain in the atmosphere. The estimates
reviewed by the IPCC spanned a range of values. In the absence of a
consensus on any single estimate of the monetary value of
CO2 emissions, DOE used the estimates identified by the
study cited in Summary for Policymakers prepared by Working Group II
of the IPCC's Fourth Assessment Report to estimate the potential
monetary value of CO2 reductions likely to result from
standards finalized in this rulemaking. According to IPCC, the mean
social cost of carbon (SCC) reported in studies published in peer-
reviewed journals was $43 per ton of carbon. This translates into
about $12 per ton of carbon dioxide. The literature review (Tol
2005) from which this mean was derived did not report the year in
which these dollars were denominated. However, we understand this
estimate was denominated in 1995 dollars. Updating that estimate to
2007 dollars yields a SCC of $15 per ton of carbon dioxide.
---------------------------------------------------------------------------
As already discussed in section V.J, DOE received a comment on the
March 2008 ANOPR in the present rulemaking for estimating the value of
CO2 emissions reductions. The Joint
[[Page 17012]]
Comment argued for assigning an economic value to CO2
emissions. DOE's approach for assigning a range to the dollars per ton
of CO2 emissions recognizes and addresses the concerns of
the Joint Comment.
The Department of Energy, together with other Federal agencies, is
currently reviewing various methodologies for estimating the monetary
value of reductions in CO2 and other greenhouse gas
emissions. This review will consider the comments on this subject that
are part of the public record for this and other rulemakings, as well
as other methodological assumptions and issues, such as whether the
appropriate values should represent domestic U.S. or global benefits
(and costs). Given the complexity of the many issues involved, this
review is ongoing. However, consistent with DOE's legal obligations,
and taking into account the uncertainty involved with this particular
issue, DOE has included in this rulemaking the values and analyses
previously conducted.
Given the uncertainty surrounding estimates of the societal cost of
carbon (SCC), DOE previously concluded that relying on any single study
may be inadvisable since its estimate of the SCC will depend on many
assumptions made by its authors. The Working Group II's contribution to
the Fourth Assessment Report of the IPCC notes that:
The large ranges of SCC are due in the large part to differences
in assumptions regarding climate sensitivity, response lags, the
treatment of risk and equity, economic and non-economic impacts, the
inclusion of potentially catastrophic losses, and discount
rates.\81\
\81\ Climate Change 2007--Impacts, Adaptation and Vulnerability.
Contribution of Working Group II to the Fourth Assessment Report of
the IPCC, 17. Available at http://www.ipcc-wg2.org (last accessed
Aug. 7, 2008).
---------------------------------------------------------------------------
Because of this uncertainty, DOE previously relied on Tol (2005),
which was presented in the IPCC's Fourth Assessment Report, and was a
comprehensive meta-analysis of estimates for the value of SCC. As a
result, DOE previously decided to rely on the Tol study reported by the
IPCC as the basis for its analysis.
DOE continues to believe that the most appropriate monetary values
for consideration in the development of efficiency standards are those
drawn from studies that attempt to estimate the present value of the
marginal economic benefits likely to result from reducing greenhouse
gas emissions, rather than estimates that are based on the market value
of emission allowances under existing cap and trade programs or
estimates that are based on the cost of reducing emissions--both of
which are largely determined by policy decisions that set the timing
and extent of emission reductions and do not necessarily reflect the
benefit of reductions. DOE also believes that the studies it relies
upon generally should be studies that were the subject of a peer review
process and were published in reputable journals.
In today's NOPR, DOE is essentially proposing to continue to use
the range of values based on the values presented in Tol (2005).
Additionally, DOE has applied an annual growth rate of 2.4% to the
value of SCC, as suggested by the IPCC Working Group II (2007, p. 822),
based on estimated increases in damages from future emissions reported
in published studies. Because the values in Tol (2005) were presented
in 1995 dollars, DOE is assigning a range for the SCC of $0 to $20
($2007) per ton of CO2 emissions.
DOE is proposing to use the median estimated social cost of
CO2 as an upper bound of the range. This value is based on
Tol (2005), which reviewed 103 estimates of the SCC from 28 published
studies, and concluded that when only peer-reviewed studies published
in recognized journals are considered, ``that climate change impacts
may be very uncertain but [it] is unlikely that the marginal damage
costs of carbon dioxide emissions exceed $50 per ton carbon [comparable
to a 2007 value of $20 per ton carbon dioxide when expressed in 2007
U.S. dollars with a 2.4% growth rate].''
In proposing a lower bound of $0 for the estimated range, DOE's
previous analysis agreed with the IPCC Working Group II (2007) report
that ``significant warming across the globe and the locations of
significant observed changes in many systems consistent with warming is
very unlikely to be due solely to natural variability of temperatures
or natural variability of the systems'' (pp. 9), and, thus, tentatively
concluded that a global value of zero for reducing emissions cannot be
justified. However, DOE previously tentatively concluded that it is
reasonable to allow for the possibility that the U.S. portion of the
global cost of carbon dioxide emissions may be quite low. In fact, some
of the studies looked at in Tol (2005) reported negative values for the
SCC. DOE assumed that it would be most appropriate to use U.S. benefit
values, and not world benefit values, in its analysis, and, further,
that U.S. domestic values will be lower than the global values. As
indicated above, DOE, together with other Federal agencies, is now
reviewing whether this previous analysis should be modified.
The resulting estimates of the potential range of net present value
benefits associated with the reduction of CO2 emissions are
reflected in Table VI.39 and Table VI.40.
Table VI.39--Preliminary Estimates of Savings From CO2 Emissions Reductions for GSFL
----------------------------------------------------------------------------------------------------------------
Value of estimated CO2 Value of estimated CO2
Estimated cumulative emission reductions emission reductions
TSL CO2 (MMt) emission (billion 2007$) at 7% (billion 2007$) at 3%
reductions discount rate discount rate
----------------------------------------------------------------------------------------------------------------
1.................................... 85.7 to 236.4.......... $0 to $1.2............. $0 to $2.5
2.................................... 103.5 to 233.7......... $0 to $1.2............. $0 to $2.5.
3.................................... 184.3 to 395.2......... $0 to $2.1............. $0 to $4.3.
4.................................... 239.7 to 597.7......... $0 to $3.5............. $0 to $6.8.
5.................................... 312.8 to 679.7......... $0 to $4.0............. $0 to $7.7.
----------------------------------------------------------------------------------------------------------------
Table VI.40--Preliminary Estimates of Savings From CO2 Emissions Reductions for IRL
----------------------------------------------------------------------------------------------------------------
Value of estimated CO2 Value of estimated CO2
Estimated cumulative emission reductions emission reductions
TSL CO2 (MMt) emission (billion 2007$) at 7% (billion 2007$) at 3%
reductions discount rate discount rate
----------------------------------------------------------------------------------------------------------------
1.................................... 10.3 to 17.7........... $0 to $0.1............. $0 to $0.2.
2.................................... 25.1 to 44.8........... $0 to $0.3............. $0 to $0.5.
[[Page 17013]]
3.................................... 46.2 to 88.1........... $0 to $0.5............. $0 to $1.0.
4.................................... 58.6 to 114.4.......... $0 to $0.6............. $0 to $1.3.
5.................................... 79.3 to 118.8.......... $0 to $0.7............. $0 to $1.3.
----------------------------------------------------------------------------------------------------------------
DOE also investigated the potential monetary impact resulting from
the impact of today's energy conservation standards on SO2,
NOX, and Hg emissions. As previously stated, DOE's initial
analysis assumed the presence of nationwide emission caps on
SO2 and Hg, and caps on NOX emissions in the 28
States covered by the CAIR caps. In the presence of these emissions
caps, DOE concluded that no physical reductions in power sector
emissions would likely occur; however, the lower generation
requirements associated with energy conservation standards could
potentially put downward pressure on the prices of emissions allowances
in cap-and-trade markets. Estimating this effect is very difficult
because of factors such as credit banking, which can change the
trajectory of prices. DOE has further concluded that the effect from
energy conservation standards on SO2 allowance prices is
likely to be negligible, based upon runs of the NEMS-BT model. See
Environmental Assessment report of the TSD for further details
regarding SO2 allowance price impacts.
As discussed earlier, with respect to NOX, the CAIR rule
had been vacated by the courts, so projected annual NOX
allowances from NEMS-BT were no longer relevant. In DOE's subsequent
analysis, NOX emissions were not controlled by a nationwide
regulatory system. For the range of NOX reduction estimates
(and Hg reduction estimates), DOE estimated the national monetized
benefits of emissions reductions from today's proposed rule based on
environmental damage estimates from the literature. Available estimates
suggest a very wide range of monetary values for NOX
emissions, ranging from $370 per ton to $3,800 per ton of
NOX from stationary sources, measured in 2001 dollars \82\
or a range of $432 per ton to $4,441 per ton in 2007 dollars. As
discussed above, DOE is considering how it should address the issue of
NOX reduction and corresponding monetary valuation. DOE
invites public comment on how the agency should address this issue.
---------------------------------------------------------------------------
\82\ Office of Management and Budget Office of Information and
Regulatory Affairs, ``2006 Report to Congress on the Costs and
Benefits of Federal Regulations and Unfunded Mandates on State,
Local, and Tribal Entities'' (2006).
---------------------------------------------------------------------------
DOE has already conducted research for today's NOPR and determined
that the basic science linking mercury emissions from power plants to
impacts on humans is considered highly uncertain. However, DOE
identified two estimates of the environmental damages of mercury based
on two estimates of the adverse impact of childhood exposure to methyl
mercury on IQ for American children, and subsequent loss of lifetime
economic productivity resulting from these IQ losses. The high-end
estimate is based on an estimate of the current aggregate cost of the
loss of IQ in American children that results from exposure to mercury
of U.S. power plant origin ($1.3 billion per year in year 2000$), which
works out to $32.6 million per ton emitted per year (2007$).\83\ The
low-end estimate was $664,000 per ton emitted in 2004$ or $729,000 per
ton in 2007$, which DOE derived from a published evaluation of mercury
control using different methods and assumptions from the first study,
but also based on the present value of the lifetime earnings of
children exposed.\84\ DOE invites public comment on how the agency
should address this issue, including how to value mercury emissions in
the absence of the CAMR. The resulting estimates of the potential range
of the present value benefits associated with the national reduction of
NOX and national reductions in Hg emissions are reflected in
Table VI.41 through Table VI.44.
---------------------------------------------------------------------------
\83\ Trasande, L., et al., ``Applying Cost Analyses to Drive
Policy that Protects Children,'' 1076 ANN. N.Y. ACAD. SCI. 911
(2006).
\84\ Ted Gayer and Robert Hahn, Designing Environmental Policy:
Lessons from the Regulation of Mercury Emissions, Regulatory
Analysis 05-01 (AEI-Brookings Joint Center for Regulatory Studies)
p. 31 (2004). A version of this paper was published in the Journal
of Regulatory Economics in 2006. The estimate was derived by back-
calculating the annual benefits per ton from the net present value
of benefits reported in the study.
Table VI.41--Preliminary Estimates of Savings From NOX Emissions Reductions for GSFL
----------------------------------------------------------------------------------------------------------------
Value of estimated NOX Value of estimated NOX
Estimated cumulative emission reductions emission reductions
TSL NOX (kt) emission (billion 2007$) at 7% (billion 2007$) at 3%
reductions discount rate discount rate
----------------------------------------------------------------------------------------------------------------
1.................................... 5.1 to 347.4........... $0.0 to $0.5........... $0.0 to $0.9.
2.................................... 6.8 to 361.1........... $0.0 to $0.5........... $0.0 to $0.9.
3.................................... 11.7 to 623.0.......... $0.0 to $0.8........... $0.0 to $1.6.
4.................................... 16.5 to 950.7.......... $0.0 to $1.3........... $0.0 to $2.6.
5.................................... 20.3 to 1071.6......... $0.0 to $1.4........... $0. to $2.8.
----------------------------------------------------------------------------------------------------------------
[[Page 17014]]
Table VI.42--Preliminary Estimates of Savings From NOX Emissions Reductions for IRL
----------------------------------------------------------------------------------------------------------------
Value of estimated NOX Value of estimated NOX
Estimated cumulative emission reductions emission reductions
TSL NOX (kt) emission (billion 2007$) at 7% (billion 2007$) at 3%
reductions discount rate discount rate
----------------------------------------------------------------------------------------------------------------
1.................................... 0.7 to 29.0............ $0 to $0.0............. $0 to $0.1.
2.................................... 1.6 to 77.6............ $0 to $0.1............. $0 to $0.2.
3.................................... 3.0 to 140.6........... $0 to $0.2............. $0 to $0.4.
4.................................... 3.8 to 180.7........... $0 to $0.2............. $0 to $0.5.
5.................................... 4.5 to 193.1........... $0 to $0.2............. $0 to $0.5.
----------------------------------------------------------------------------------------------------------------
Table VI.43--Preliminary Estimates of Savings From Hg Emissions Reductions for GSFL
----------------------------------------------------------------------------------------------------------------
Value of estimated Hg Value of estimated Hg
Estimated cumulative Hg emission reductions emission reductions
TSL (Tons) emission (million 2007$) at 7% (million 2007$) at 3%
reductions discount rate discount rate
----------------------------------------------------------------------------------------------------------------
1.................................... 0 to 4.2............... $0 to $38.............. $0 to $80.
2.................................... 0 to 3.8............... $0 to $35.............. $0 to $73.
3.................................... 0 to 6.9............... $0 to $65.............. $0 to $134.
4.................................... 0 to 7.9............... $0 to $88.............. $0 to $166.
5.................................... 0 to 9.1............... $0 to $102............. $0 to $192.
----------------------------------------------------------------------------------------------------------------
Table VI.44--Preliminary Estimates of Savings From Hg Emissions Reductions for IRL
----------------------------------------------------------------------------------------------------------------
Value of estimated Hg Value of estimated Hg
Estimated cumulative Hg emission reductions emission reductions
TSL (tons) emission (million 2007$) at 7% (million 2007$) at 3%
reductions discount rate discount rate
----------------------------------------------------------------------------------------------------------------
1.................................... 0 to 0.2............... $0 to $2............... $0 to $5.
2.................................... 0 to 0.6............... $0 to $7............... $0 to $13.
3.................................... 0 to 1.3............... $0 to $13.............. $0 to $26.
4.................................... 0 to 1.7............... $0 to $16.............. $0 to $33.
5.................................... 0 to 1.7............... $0 to $16.............. $0 to $33.
----------------------------------------------------------------------------------------------------------------
C. Proposed Standard
1. Overview
Under 42 U.S.C. 6295(o)(2)(A), EPCA requires that any new or
amended energy conservation standard for any type (or class) of covered
product shall be designed to achieve the maximum improvement in energy
efficiency that the Secretary determines is technologically feasible
and economically justified. In determining whether a standard is
economically justified, the Secretary must determine whether the
benefits of the standard exceed its burdens to the greatest extent
practicable, in light of the following seven factors:
(1) The economic impact of the standard on manufacturers and
consumers of the products or equipment subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the covered products or equipment in the type (or class)
compared to any increase in the price, initial charges, or maintenance
expenses for the covered products that are likely to result from the
imposition of the standard;
(3) The total projected amount of energy (or, as applicable, water)
savings likely to result directly from the imposition of the standard;
(4) Any lessening of the utility or the performance of the covered
products or equipment likely to result from the imposition of the
standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
imposition of the standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary considers relevant. (42 U.S.C.
6295(o)(2)(B)(i))
The new or amended standard also must ``result in significant
conservation of energy.'' (42 U.S.C. 6295(o)(3)(B))
As discussed in section 0, DOE established a separate set of TSLs
for GSFL and IRL. Therefore, DOE analyzed each lamp type (GSFL or IRL)
separately while establishing the proposed standards.
During the screening phase of this rulemaking, DOE eliminated the
maximum technologically feasible levels for GSFL that would incorporate
the use of a higher-efficiency gas fill composition than what is
currently available on the market today. DOE's research had indicated
that further usage of heavier gas fills to increase lamp efficacy
beyond GSFL TSL5 would likely result in decreased utility of the
product. Thus, DOE screened out the maximum technologically feasible
levels that would be based on these reduced-utility GSFLs. TSL5
represents the most efficient level analyzed for GSFL.
For IRL, in the engineering analysis, DOE eliminated the maximum
technologically feasible level that would require the use of a silver
reflector, which DOE understands to be a proprietary technology. DOE
does not believe there are any alternate technology pathways to this
efficacy level. Therefore, TSL5 represents the most efficient level
analyzed for IRL which does not require installation of the proprietary
silver reflector. See sections IV.B.2 and VI.A.2 of this notice for
more information on maximum technologically feasible levels and other
efficacy levels DOE analyzed.
DOE then considered the impacts of standards at each trial standard
level, beginning with the most efficient level, to determine whether
the given level was economically justified. DOE then considered less
efficient levels until it reached the highest level that is
technologically feasible and
[[Page 17015]]
economically justified and saves a significant amount of energy.
DOE discusses the benefits and/or burdens of each trial standard
level in the following sections. DOE bases its discussion on
quantitative analytical results for each trial standard level
(presented in section VI) such as national energy savings, net present
value (discounted at 7 percent and 3 percent), emissions reductions,
industry net present value, life-cycle cost, and consumers installed
price increases. In addition to providing a summary of results, DOE
discusses below the life-cycle cost and consumer installed price
increase results for each product class and baseline where appropriate.
Beyond the quantitative results, DOE also considers other burdens and
benefits that affect economic justification, including how impacts on
competition, supply constraints, and lamp input prices may affect the
economic results presented.
2. General Service Fluorescent Lamps Conclusion
a. Trial Standard Level 5
For GSFL, DOE first considered the most efficient level, TSL5,
which would save an estimated total of 5.8 to 13.2 quads of energy
through 2042--a significant amount of energy. For the Nation as a
whole, TSL5 would have a net savings of $8.5 billion to $24.5 billion
at a 7-percent discount rate. The emissions reductions at TSL5 are
estimated at 313 to 680 MMt of CO2, 20 to 1072 kt of
NOX,, up to 9 metric tons of Hg. Total generating capacity
in 2042 is estimated to decrease compared to the reference case by 1.8
to 5.4 GW under TSL5.
The impacts on manufacturers would be very significant, because
TSL5 would commoditize high-efficacy lamps and require a complete
conversion of all T12 4-foot MBP, 8-foot SP slimline, and 8-foot RDC HO
lines to T8 lines, requiring a capital investment of $181.5 million.
The projected change in industry value ranges from a decrease of $263
million to an increase of $13 million. The extent of the industry
impacts is driven primarily by the ability to maintain current gross
margins as efficient products become commoditized. Currently,
manufacturers obtain higher margins for more-efficient products so to
avoid the higher end of the anticipated impacts, they must find new
ways to differentiate GSFL to maintain full product lines. At TSL5, DOE
recognizes the risk of very large negative impacts if the high end of
the range of impacts is reached, resulting in a net loss of 46 percent
in INPV.
At TSL5, DOE projects that most GSFL consumers would experience
life-cycle cost savings. The following discussion outlines specific
impacts on the separate product classes and baseline lamps.
Table VI.5 presents the findings of an LCC analysis on various
three-lamp, 4-foot medium bipin GSFL systems operating in the
commercial sector. Regardless of the baseline lamp currently employed,
consumers have available lamp designs which result in positive LCC
savings at TSL5. At this standard level, users of 40W or 34W 4-foot MBP
T12 baseline lamps installed on a magnetic ballast who need to replace
their lamp would incur the cost of a lamp and ballast replacement
($63.51 to $71.19) because no T12 lamp currently meets the efficacy
requirements of TSL5. Comparing this cost of lamp-and-ballast
replacements to the cost of only baseline lamp replacements ($11.22 to
$13.96) results in installed price increases of $50.87 to $57.23. These
ranges in prices depend on the specific baseline lamps previously owned
by consumers and the specific combinations of lamps and ballasts they
select in the standards case. However, over the life of the lamp, these
consumers would save $15.13 to $25.26.
Table VI.6 presents LCC results for a two-lamp 4-foot MBP system
operating in the residential sector under average operating hours. The
results are presented for a system operating 40W T12 lamps with a
magnetic ballast, as this configuration is typical of the installed
base of residential GSFL systems. As discussed in section V.D, DOE
believes that the vast majority of lamps sold in the residential market
are sold with new ballasts or luminaires. At TSL5, residential
consumers are expected to purchase T8 lamps with electronic ballasts in
lieu of the T12 lamps with magnetic ballasts that they would purchase
absent standards. These consumers would see LCC savings of $17.72 to
$19.66. DOE recognizes that not all residential GSFL lamps would be
sold in conjunction with a new ballast or luminaire in the base case.
In particular, consumers with higher operating hours may need to
replace their lamp on an existing system. However, at TSL5, there are
no standards-compliant T12 replacement lamps available. As seen in
Table VI.7, the consumer economics of retrofitting a typical high-use
residential 4-foot MBP system are negative, with life-cycle cost
savings of -$3.50 to -$4.13.
With regard to 4-foot MBP consumer subgroups, all consumer
subgroups analyzed achieve similar LCC savings to the average consumer
with the exception of commercial consumers who own 40W or 34W 4-foot
MBP T12 lamps installed on electronic ballasts. These consumers, upon
lamp failure, are forced to retrofit their existing ballasts, resulting
in negative LCC savings of -$11.53 to -$5.53 (seen in Table VI.21).
Overall, based on the NIA model, DOE estimates that at TSL5 in 2012,
approximately 2 percent of 4-foot MBP shipments result in negative LCC
savings, and 9 percent of shipments are associated with the high
installed price increases due to forced retrofits.
Table VI.10 presents the findings of an LCC analysis on various
two-lamp, 8-foot SP slimline GSFL systems operating in the commercial
sector. Except for consumers who purchase reduced-wattage 60W T12 lamps
absent standards (and experience a lamp failure), all other consumers
have available lamp designs that result in positive LCC savings at
TSL5. At this standard level, users of 75W or 60W 8-foot SP slimline
T12 baseline lamps installed on a magnetic ballast who need to replace
their lamp would incur the cost of a lamp and ballast replacement
($93.79 to $95.12) because no T12 lamp currently meets the efficacy
requirements of TSL5. Comparing the cost of a lamp-and-ballast
replacement to the cost of only baseline lamp replacement ($11.33 to
$16.16) results in an installed price increase of $78.96 to $83.99. In
addition, users of 60W T12 lamps who need to replace their lamp
experience negative LCC savings of -$14.02 to -$12.26. On the other
hand, over the life of the lamp, users of 75W T12 lamps who require a
lamp replacement would save $11.45.
With regard to 8-foot SP slimline consumer subgroups, all consumer
subgroups analyzed achieve similar LCC savings to the average consumer
with the exception of consumers of T12 lamps operating in religious
institutions or users of T12 lamps installed on electronic ballasts.
These consumers, upon lamp failure, are forced to retrofit their
existing ballasts, resulting in negative LCC savings. In particular, as
seen in Table VI.15, these consumers in institutions of religious
worship (with low operating hours) experience increases in life-cycle
costs of $6.68 to $28.95. As seen in Table VI.23, consumers with T12
lamps installed on electronic ballasts experience increases in life-
cycle costs of $14.18 to $31.86. Overall, based on the NIA model, DOE
estimates that at TSL5 in 2012, approximately 24 percent of 8-foot SP
slimline shipments would result in negative LCC savings, and 65 percent
of
[[Page 17016]]
shipments would be associated with the high installed price increases
due to forced retrofits.
Table VI.11 presents the findings of an LCC analysis on various
two-lamp, 8-foot RDC HO GSFL systems operating in the industrial
sector. With the exception to consumers who purchase reduced-wattage
95W T12 lamps absent standards (and purchase a lamp in response to a
lamp failure), all other consumers have available lamp designs that
result in positive LCC savings at TSL5. At this standard level, users
of 110W or 95W 8-foot RDC HO T12 baseline lamps installed on a magnetic
ballast who need to replace their lamp would incur the cost of a lamp
and ballast replacement ($126.49), because no T12 lamp currently meets
the efficacy requirements of TSL5. Comparing the cost of a lamp-and-
ballast replacement to the cost of only baseline lamp replacement
($13.92 to $19.74) results in an installed price increase of $106.75 to
$112.57. In addition, users of 95W T12 lamps who need to replace their
lamp experience negative LCC savings of -$12.70. On the other hand,
over the life of the lamp, users of 110W T12 lamps who require a lamp
replacement would save $5.13.
With regard to 8-foot RDC HO consumer subgroups, all consumer
subgroups analyzed achieve similar LCC savings to the average consumer
except consumers who own T12 lamps installed on electronic ballasts.
These consumers, upon lamp failure, are forced to retrofit their
existing ballasts, resulting in negative LCC savings of -$10.09 to -
$23.07 (seen in Table VI.24). Overall, based on the NIA model, DOE
estimates that at TSL5 in 2012, approximately 33 percent of 8-foot RDC
HO shipments would result in negative LCC savings, and 86 percent of
shipments would be associated with the high installed price increases
due to forced retrofits.
Table VI.8 and Table VI.9 present the LCC analyses on two-lamp 4-
foot MiniBP T5 standard-output and high-output systems, respectively.
The standard-output system is modeled as operating in the commercial
sector, and the high-output system is modeled as operating in the
industrial sector. The baseline lamps for these systems are the model
28W and 54W halophosphor lamps, as discussed in section V.C.3.a. At
TSL5 (EL2 for standard output T5 lamps), all consumers of standard
output lamps have available lamp designs which result in positive LCC
savings of $1.22 (for lamp replacement) and $45.27 to $47.03 (for new
construction or renovation). At TSL5 (EL1 for high output T5 lamps),
consumers of high-output lamps who need only a lamp replacement would
experience negative LCC savings of -$3.42. However, purchasing a T5
high-output system for new construction or renovation would result in
positive LCC savings of $55.60 to $56.60.
After carefully considering the analysis and weighing the benefits
and burdens of TSL5, the Secretary has reached the following initial
conclusion: At TSL 5, the benefits of energy savings, emissions
reductions (both in physical reductions and the monetized value of
those reductions), and the positive net economic savings to the Nation
(over 30 years) would be outweighed by the economic burden on some
consumers (as indicated by the large increase in total installed cost)
and the potentially large reduction in INPV for manufacturers resulting
from large conversion costs and reduced gross margins. Specifically,
consumers who operate a 4-foot MBP, 8-foot SP slimline, or 8-foot RDC
HO T12 ballast prior to 2012 would be forced to retrofit their system
upon lamp failure, incurring an initial cost six to thirteen times that
of a simple lamp replacement. Additionally, consumers who installed T12
electronic ballasts before 2012 would bear the large increases in first
cost without benefiting from LCC savings. Consequently, the Secretary
has tentatively concluded that trial standard level 5 is not
economically justified.
b. Trial Standard Level 4
Next, DOE considered TSL 4, which would save an estimated total of
4.5 to 11.6 quads of energy through 2042, a significant amount of
energy. For the Nation as a whole, TSL4 would have a net savings of
$8.9 billion to $23.4 billion at a 7-percent discount rate. The
emissions reductions at TSL4 are estimated at 240 to 598 MMt of
CO2, 17 to 951 kt of NOX, and up to 8 metric tons
of Hg. Total generating capacity in 2042 is estimated to decrease
compared to the reference case by 1.3 to 4.3 GW under TSL4.
Similar to TSL5, the impacts on manufacturers would be very
significant because TSL4 also would commoditize most high-efficacy
lamps and require a complete conversion of all T12 4-foot MBP, 8-foot
SP slimline, and 8-foot RDC HO lines to T8 lines, a capital investment
of $181.5 million. The projected change in industry value ranges from a
decrease of $195 million to a decrease of $9 million. At TSL4, DOE
recognizes the risk of very large negative impacts if the high end of
the range of impacts is reached, resulting in a net loss of 34 percent
in INPV.
As seen in Table VI.5 through Table VI.11, at TSL4, DOE projects
that 4-foot MBP, 8-foot SP slimline, and 8-foot RDC HO consumers would
experience similar life-cycle cost savings and increases as they would
experience at TSL5. Like TSL5, consumers who own T12 ballasts prior to
2012 at TSL4 would likely experience negative economic impacts, either
through life-cycle cost increases or by large increases in total
installed cost. For 4-foot MiniBP T5 standard-output lamps, TSL4 would
require these lamps to meet EL1, resulting in positive LCC savings of
$1.22 for lamp replacement and $42.84 for new construction or
renovation (seen in Table VI.8). For 4-foot MiniBP T5 high-output
lamps, TSL4 would require the same efficacy level (EL1) as TSL5,
resulting in identical life-cycle cost impacts.
After carefully considering the analysis and weighing the benefits
and burdens of TSL4, the Secretary has reached the following initial
conclusion: At TSL4, the benefits of energy savings, emissions
reductions (both in physical reductions and the monetized value of
those reductions), and the positive net economic savings to the Nation
(over 30 years) would be outweighed by the economic burden on some
consumers (as indicated by the large increase in total installed cost)
and the potentially large reduction in INPV for manufacturers.
Specifically, consumers who operate a 4-foot MBP, 8-foot SP slimline,
or 8-foot RDC HO T12 ballast prior to 2012 would be forced to retrofit
their system upon lamp failure, incurring an initial cost six to
thirteen times that of a simple lamp replacement. Additionally,
consumers who installed T12 electronic ballasts before 2012 would bear
the large increases in first cost without benefiting from LCC savings.
Consequently, the Secretary has tentatively concluded that trial
standard level 4 is not economically justified.
c. Trial Standard Level 3
Next, DOE considered TSL3, which would save an estimated total of
3.2 to 7.3 quads of energy through 2042, a significant amount of
energy. For the Nation as a whole, TSL3 would have a net savings of
$3.2 billion to $11.1 billion at a 7-percent discount rate. The
emissions reductions at TSL3 are estimated at 184 to 395 MMt of
CO2, 12 to 623 kt of NOX, and up to 7 metric tons
of Hg. Total generating capacity in 2042 would be estimated to decrease
compared to the reference case by 1100 to 3400 megawatts under TSL3.
As opposed to TSL4 and TSL5, TSL3 does not eliminate all T12 lamps
from
[[Page 17017]]
the market. The impacts on manufacturers are less significant because
TSL3 does not require a complete conversion of all T12 4-foot MBP, 8-
foot SP slimline, and 8-foot RDC HO lines to T8 lines. Instead, the
required capital investments of $104.5 million are to account for the
likely accelerated consumer migration toward T8 lamps. The projected
change in industry value ranges from a decrease of $139 million to an
increase of $71 million. The upper range of these impacts results from
the reduced efficacy range of the product line and the corresponding
reduction in gross margins. Compared with TSL 4 and TSL 5, TSL 3
maintains a broader product line and, thus, provides manufacturers with
a greater opportunity to differentiate lamp offerings.
At TSL3, DOE projects that most GSFL consumers would experience
life-cycle cost savings. Because the minimum efficacy levels for the T5
product classes are the same for TSL3 as they are for TSL4, the life-
cycle cost impacts on these consumers are identical as well. However,
for the other GSFL product classes, the consumer economic impacts do
differ at TSL3 from TSL4 and TSL5. Because T12 lamps are still
available at this level, all consumers have viable lamp replacement
options without needing to retrofit their ballasts. As a result,
initial costs for 4-foot MBP, 8-foot SP slimline, or 8-foot RDC HO T12
lamp replacements are significantly lower than initial costs required
at TSL4 and TSL5 when consumers must purchase a new lamp and new
ballast with standards. For example, for 4-foot MBP lamps, installed
costs at TSL3 may increase by $13.91 over a baseline lamp cost of
$11.22 in the commercial sector or by $8.48 over the baseline lamp cost
of $3.98 in the residential sector.
Although incremental total installed costs are considerably reduced
in comparison to TSL4 and TSL5, some consumers would still experience
negative life-cycle cost savings at TSL3. These are many of the same
consumers that would have negative savings at TSL4 and TSL5.
Residential consumers who own T12 ballasts prior to 2012 would
experience negative LCC savings when replacing only their lamps
(approximately 2 percent of 4-foot MBP shipments in 2012). Consumers
who, absent standards, replace reduced-wattage T12 lamps on 8-foot SP
slimline systems (24 percent of 8-foot SP slimline shipments in 2012)
experience net life-cycle cost increases. Approximately 33 percent of
8-foot RDC HO shipments in 2012 (those consumers who replace reduced-
wattage T12 lamps) result in negative LCC savings. As seen in section
VI.B.1.a.i, for GSFL, often higher efficacy level lamps result in
higher (or less negative) life-cycle cost savings. At TSL3, consumers
have the option of purchasing these higher-efficacy lamps, and,
therefore, can achieve similar life-cycle cost savings as at TSL4 and
TSL5.
After considering the analysis and the benefits and burdens of
trial standard level 3, the Secretary has reached the following
tentative conclusion: Trial standard level 3 offers the maximum
improvement in energy efficiency that is technologically feasible and
economically justified, and will result in significant conservation of
energy. The Secretary has reached the initial conclusion that the
benefits of energy savings, emissions reductions (both in physical
reductions and the monetized value of those reductions), and the
positive net economic savings to the Nation would outweigh the economic
burden on some consumers (as indicated by negative life-cycle cost
savings) and the potentially large reduction in INPV for manufacturers.
TSL 3 offers almost all consumers the choice to select lamp and ballast
systems that will reduce their life-cycle costs but does not force them
to incur the increased first costs of a new ballast if they elect not
to do so. Therefore, DOE today proposes to adopt the energy
conservation standards for GSFL at trial standard level 3.
DOE will seriously consider adopting a more stringent standard
level in the final rule that would eliminate T12 lamps, as described in
discussions regarding TSL4 and TSL5. An example may be for DOE to adopt
a more stringent standard level in the final rule that, similar to TSL4
and TSL5, would eliminate T12 lamps, but allow an extended lead time
before compliance would be required. A second example may be for DOE to
adopt a more stringent standard level, while continuing to allow the
sale of specially packaged or labeled T12 lamps in the residential
sector only. DOE seeks comment on these or other possible alternative
scenarios.
3. Incandescent Reflector Lamps Conclusion
a. Trial Standard Level 5
For IRL, DOE first considered the most efficient level, TSL5, which
would save an estimated total of 1.5 to 2.6 quads of energy through
2042--a significant amount of energy. For the Nation as a whole, TSL5
would have a net savings of $4.3 billion to $7.5 billion at a 7-percent
discount rate. The emissions reductions at TSL5 are estimated at 79 to
119 MMt of CO2, 5 to 193 kt of NOX, and up to 2
metric tons of Hg. Total generating capacity in 2042 is estimated to
decrease compared to the reference case by 40 to 500 MW under TSL5. As
seen in Table VI.12, regardless of the baseline lamp purchased absent
standards, consumers have available lamp designs which result in
positive LCC savings, ranging from $1.49 to $9.41, at TSL5. The higher
savings result from consumers who purchase lamps with larger lumen
packages, while the lower savings result from consumers who purchase
lamps with smaller lumen packages.
The projected change in industry value would range from a decrease
of $82 million to $103 million, or a net loss of 31 to 50 percent in
INPV. The range in impacts is attributed in part to uncertainty
concerning the future share of emerging technologies in the IRL market,
as well as the expected migration to R-CFL and exempted IRL
technologies under standards.
DOE based TSL5 on commercially-available IRL which employ a silver
reflector, an improved IR coating, and a filament design that results
in a lifetime of 4,200 hours. To DOE's knowledge, only one manufacturer
currently sells products that meet TSL5. In addition, it is DOE's
understanding that the silver reflector is a proprietary technology
that all manufacturers may not be able to employ. However, DOE
considered TSL5 in its analysis because it believes that there are
alternate pathways to achieve this level. A combination of redesigning
the filament to achieve higher-temperature operation (and thus reducing
lifetime to 3,000 hours), employing other non-proprietary high-
efficiency reflectors, or applying higher-efficiency IR coatings has
the potential to result in an IRL that meets an equivalent efficacy
level. However, to DOE's knowledge, no prototype IRL exists that meets
this efficacy level and does not use proprietary technology. Therefore,
DOE is uncertain as to whether there are barriers to implementing these
alternate pathways. In addition, DOE is uncertain of the manufacturer
costs associated with producing such an IRL. As documented in appendix
5D of the TSD, DOE received manufacturer cost estimates from an IR
coating manufacturer. Based on these cost estimates, DOE estimated that
a medium-range end-user price for PAR 38 IRL that meet TSL5 and do not
employ the proprietary silverized reflector would be $7.91. This price,
when compared to the end-user price of the commercially-available PAR38
IRL that meet TSL5 and use the silverized
[[Page 17018]]
reflector ($8.03), would appear to be cost-competitive. However, DOE
requires verification of these cost estimates before proposing a
standard that would require this higher-efficiency IR coating
technology. If it is significantly more costly for some manufacturers
to meet this level than others, it is likely to cause a lessening of
competition and distortions in the marketplace.
After carefully considering the analysis and weighing the benefits
and burdens of TSL5, the Secretary has reached the following initial
conclusion: At TSL5, the benefits of energy savings, emissions
reductions (both in physical reductions and the monetized value of
those reductions), the positive net economic savings to the Nation
(over 30 years) would be outweighed by the large capital conversion
costs that could result in a reduction in INPV for manufacturers and
possible lessening of competition. Consequently, the Secretary has
tentatively concluded that trial standard level 5 is not economically
justified.
As discussed above, DOE is not proposing TSL5 because DOE finds
that the benefits to the Nation of TSL5 do not outweigh the costs, and,
therefore, DOE proposes that TSL5 is not economically justified. This
proposal reflects DOE's tentative conclusion that there remains too
much uncertainty regarding the ability for manufacturers to produce
lamps that meet this level. While information is available that
suggests that there are other economical pathways (without the use of
proprietary technology) to meet this efficacy level, DOE believes that
it must have a higher degree of confidence that these pathways exist
and a clearer understanding of the economic burdens (to consumers and
manufacturers) to warrant higher standards before it imposes such
requirements. DOE is soliciting public comments on these and other
issues, and will reconsider this tentative conclusion during the
development of its final rule. Specifically, DOE requests comment on
other technology pathways that may be utilized to meet TSL5, and
whether these pathways may have any adverse effects on consumer utility
or the ability for the product to be mass produced. In addition, DOE
requests comment on the manufacturer costs associated with these
pathways and resulting consumer product prices for lamps that meet this
efficacy level. Based upon the information it receives, DOE may
consider adoption of TSL5 at the final rule stage.
b. Trial Standard Level 4
DOE next considered TSL4, which would save an estimated total of
1.3 to 2.3 quads of energy through 2042--a significant amount of
energy. For the Nation as a whole, TSL4 would have a net savings of
$3.7 billion to $6.8 billion at a 7-percent discount rate. The
emissions reductions at TSL4 are estimated at 59 to 114 MMt of
CO2, 4 to181 kt of NOX, and up to 2 metric tons
of Hg. Total generating capacity in 2042 is estimated to decrease
compared to the reference case by 0 to 500 MW under TSL4. As seen in
Table VI.12, regardless of the baseline lamp currently employed,
consumers have available lamp designs which would result in positive
LCC savings, ranging from $1.62 to $8.14, at TSL4.
To DOE's knowledge, two of the three major manufacturers of IRL
currently sell a full product line (across common wattages) that meet
this standard level. In addition, it is DOE's understanding that the
third manufacturer employs a technology platform that, due to the
positioning of the filament in the HIR capsule, is inherently less
efficient. Therefore, it is likely that in order to meet TSL4, this
manufacturer would have to make considerably higher investments than
the other manufacturers, placing it at a competitive disadvantage. DOE
projects that change in industry value at TSL4 ranges from a decrease
of $77 million to $94 million, or net loss of 29 to 46 percent in INPV.
However, compared to each of the baselines, TSL4 showed significant
positive life-cycle cost savings on a national average basis and for
all consumer subgroups. In addition, TSL4 is projected to result in
significant net economic savings to the Nation.
After considering the analysis, comments on the ANOPR, and the
benefits and burdens of trial standard level 4, the Secretary has
reached the following tentative conclusion: Trial standard level 4
offers the maximum improvement in efficacy that is technologically
feasible and economically justified, and will result in significant
conservation of energy. The Secretary has reached the initial
conclusion that the benefits of energy savings, emissions reductions
(both in physical reductions and the monetized value of those
reductions), the positive net economic savings to the Nation, and
positive life-cycle cost savings would outweigh the potentially large
reduction in INPV for manufacturers. Therefore, DOE today proposes to
adopt the energy conservation standards for IRL at trial standard level
4.
VII. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866
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 (Oct. 4, 1993). Accordingly, this
action was subject to review under the Executive Order by the Office of
Information and Regulatory Affairs (OIRA) at OMB.
The Executive Order requires that each agency identify in writing
the specific market failure or other specific problem that it intends
to address that warrant new agency action, as well as assess the
significance of that problem, to enable assessment of whether any new
regulation is warranted. Executive Order 12866, Sec. 1(b)(1).
DOE's analysis for GSFL and IRL explicitly accounts for the
percentage of consumers that already purchase more-efficient products
and takes these consumers into account when determining the national
energy savings associated with various trial standard levels. The
analysis suggests that accounting for the market value of energy
savings alone (i.e., excluding any possible ``externality'' benefits
such as those noted below) would produce enough benefits to yield net
benefits across a wide array of products and circumstances. In its
ANOPR, DOE requested additional data on and suggestions for testing the
existence and extent of potential market failures to assess the
significance of these failures and, thus, the net benefits of
regulation. 73 FR 13620, 13688 (March 13, 2008) In particular, DOE
sought to verify the estimates of the percentage of consumers
purchasing efficient lighting equipment and the extent to which
consumers will continue to purchase more-efficient equipment in future
years. DOE received no such data in response to the ANOPR but continues
to request such data in today's proposed rule.
DOE believes that there is a lack of consumer information and/or
information processing capability about energy efficiency opportunities
in the lighting market. If this is the case, DOE would expect the
efficiency for lighting products to be randomly distributed across key
variables such as electricity prices and usage levels. Although DOE has
identified the percentage of consumers that already purchase more-
efficient lighting products, DOE does not correlate the consumers'
usage pattern and electricity price with the efficiency of the
purchased product. In
[[Page 17019]]
its ANOPR, DOE sought data on the correlation between the efficacy of
existing lamps, usage patterns (e.g., how many hours the product is
used), and its associated electricity price (geographic region of the
country). 73 FR 13620, 13688 (March 13, 2008) DOE received no such data
from interested parties in response to the ANOPR but continues to
request this data in today's proposed rule. DOE plans to use these data
to test the extent to which purchasers of this equipment behave as if
they are unaware of the costs associated with their energy consumption.
DOE believes several factors contribute to the lack of consumer
information for lighting products. In the residential sector, consumers
that base purchases on wattage rather than lumen output may reject
higher efficacy or energy-saving lamp designs. For example, consumers
may not recognize that a higher efficacy, reduced-wattage lamp fulfills
the same utility as a higher-wattage lamp, although both lamps may have
similar lumen outputs. For this reason, higher-efficiency products may
be unduly rejected in the marketplace. In the commercial and industrial
sectors, the complexity of GSFL systems may introduce high information
costs. GSFL systems are composed of lamps and ballasts with a multitude
of varying properties, such as lamp wattage, lumen output, lifetime,
and ballast factor. These variables impose high information costs which
may prevent purchasers from selecting the most cost-effective GSFL
system. In its ANOPR, DOE sought comment on the potential for the
Federal ENERGY STAR program to increase consumer knowledge of the
availability and benefits of energy-efficient lamps. DOE received no
data in response to the ANOPR but continues to request this data in
today's proposed rule.
A related issue is the problem of asymmetric information (one party
to a transaction has more and better information than the other) and/or
high transactions costs (costs of gathering information and effecting
exchanges of goods and services). In many instances, the party
responsible for the lamp purchase may not pay to operate it. For
example, in the commercial and industrial sectors, building owners and
developers may make purchasing decisions about lighting fixtures that
include ballasts and lamps, but tenants pay the utility bills. Although
renters often have the opportunity to purchase replacement lamps,
renters are severely limited in their choices by prior fixture and
ballast selections. The separation of fixture purchases and payment for
the operating costs imposes transaction costs on the renter. If there
were no transactions costs, building developers and owners would
install the lighting fixtures renters would choose on their own. For
example, a tenant who knowingly faces higher utility bills from low-
efficacy lighting would be willing to pay less in rent, and the
building owner would indirectly bear the higher utility cost. However,
this information is not costless, and it may not be in the interest of
the renter to take the time to develop the knowledge of the higher
operating cost of low-efficacy lighting. Similarly, it may not be in
the interest of the building owner who installs lighting systems to
convey operating cost information to the renter.
DOE did not receive any data that would enable it to conduct tests
of market failure in response to the March 2008 ANOPR. DOE would not
expect a correlation between higher rents for office space with high-
efficacy lighting systems if there were a market failure due to
asymmetric information and/or high transactions costs. If there were
symmetric information with low transaction costs, renters would be
fully knowledgeable about the lower operating costs of high-efficacy
lighting systems and would compensate owners for their reduced costs.
This proposed rulemaking is likely to yield certain external
benefits resulting from improved energy efficiency of GSFL and IRL that
are not captured by the users of such products. These benefits include
externalities related to environmental protection and energy security
which are not reflected in energy prices, such as reduced emissions of
greenhouse gases. The emissions reductions in today's proposed rule are
projected to be 184 to 395 MMt and 59 to 114 MMt of CO2 for
GSFL and IRL, respectively, and 12 to 623 kt, 4 to 181 kt of
NOX, for GSFL and IRL, respectively. In addition, today's
proposed rule is projected to result in Hg emissions reduction of up to
7 metric tons and 2 metric tons for GSFL and IRL, respectively. DOE
invites comments on the weight that DOE should place on these factors
in determining the maximum energy efficacy level at which the total
benefits are likely to exceed the total burdens resulting from an
amended standard.
As previously stated, DOE generally seeks data that might enable it
to conduct tests of market failure for products under consideration for
standard-setting. For example, given adequate data, there are ways to
test for the extent of market failure for commercial GSFL. One would
expect the owners of fluorescent lamps who also pay for their
electricity consumption to purchase more-efficient lamps compared to
owners who do not pay for their electricity usage. To test for this
form of market failure, DOE needs data on energy efficiency of such
units and whether the owner of the equipment also pays the operating
costs. DOE is also interested in other potential tests of market
failure and data that would enable such tests.
DOE conducted a regulatory impact analysis (RIA) and, under the
Executive Order, was subject to review by OIRA. DOE presented to OIRA
for review the draft proposed rule and other documents prepared for
this rulemaking, including the RIA, and has included these documents in
the rulemaking record. They are available for public review in the
Resource Room of the Building Technologies Program, 950 L'Enfant Plaza,
SW., 6th Floor, Washington, DC 20024, (202) 586-9127, between 9 a.m.
and 4 p.m., Monday through Friday, except Federal holidays.
The RIA is contained in the TSD as a separate report. The RIA
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 national economic impacts of the proposed standard.
The RIA calculates the effects of feasible policy alternatives to
energy conservation standards for GSFL and IRL and provides a
quantitative comparison of the impacts of the alternatives. DOE
identified the following major policy alternatives for achieving
increased energy efficiency in GSFL and IRL:
No new regulatory action.
Consumer rebates.
Consumer tax credits.
Manufacturer tax credits.
Voluntary energy-efficiency targets.
Bulk government purchases.
Early replacement.
The proposed energy conservation standards.
DOE evaluated each alternative's ability to achieve significant
energy savings at reasonable costs (Table VII.1 and Table VII.2) and
compared it to the effectiveness of the proposed rule. DOE analyzed
these alternatives using a series of regulatory scenarios as inputs to
the NIA spreadsheets for the two products, which it modified to allow
inputs for voluntary measures.
[[Page 17020]]
Table VII.1--GSFL National Energy Savings and Net Present Value of Non-Regulatory Alternatives Compared to the
Proposed Standards
----------------------------------------------------------------------------------------------------------------
Net present value (billion $2007)
Policy alternatives \1\ National energy ---------------------------------------
savings (quads) 7% Discount rate 3% Discount rate
----------------------------------------------------------------------------------------------------------------
No New Regulatory Action............................ 0 0 0
Consumer Rebates.................................... 1.33-1.74 1.93-2.67 4.72-6.58
Consumer Tax Credits................................ 0.63-0.83 1.13-1.33 2.47-3.17
Manufacturer Tax Credits............................ 0.35-0.44 0.68-0.73 1.49-1.64
Voluntary Energy Efficiency Targets................. 1.09-1.44 1.54-2.10 3.83-5.19
Bulk Government Purchases........................... 1.21-1.61 1.69-2.36 4.23-5.82
Proposed Standards \2\.............................. 3.15-7.12 3.15-10.75 8.73-24.87
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ NPV discounted to 2007; Non-regulatory alternatives encourage purchases of GSFL at TSL 3.
Table VII.2--IRL National Energy Savings and Net Present Value of Non-Regulatory Alternatives Compared to the
Proposed Standards
----------------------------------------------------------------------------------------------------------------
Net present value (billion $2007)
Policy alternatives \1\ National energy ---------------------------------------
savings (quads) 7% Discount rate 3% Discount rate
----------------------------------------------------------------------------------------------------------------
No New Regulatory Action............................ 0 0 0
Consumer Rebates.................................... 0.52-0.69 1.52-1.89 3.19-3.97
Consumer Tax Credits................................ 0.32-0.42 0.96-1.17 1.97-2.44
Manufacturer Tax Credits............................ 0.16-0.21 0.53-0.64 1.05-1.28
Voluntary Energy Efficiency Targets................. 0.26-0.45 0.83-1.28 1.65-2.59
Bulk Government Purchases........................... 0.04-0.24 0.23-0.72 0.32-1.33
Proposed Standards.................................. 1.25-2.21 3.72-6.00 7.68-12.45
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ NPV discounted to 2007, Non-regulatory alternatives encourage purchases of IRL at TSL 4.
The results for each scenario are reported at the TSLs proposed by
DOE in this rulemaking; they are TSL 3 for GSFL and TSL 4 for IRL. For
GSFL, the range presented results from the effects of applying the
lighting expertise scenario discussed in section V.E.4.b. The lower end
of the range represents the Emerging Technologies, market-segment based
lighting expertise scenario. In contrast, the upper end of the range
for GSFL represents the Existing Technologies, high-lighting expertise
scenario. For IRL, the range of impacts results from the two base-case
shipment scenarios analyzed in the NIA. The lower end of the range for
IRL represents the Emerging Technologies scenario, whereas the upper
end of the range represents the Existing Technologies scenario.
DOE did not analyze one of the policy alternatives (early
replacement), because, as discussed below, DOE believes that the
lifetimes of the lamps analyzed are too short for early replacement to
result in significant savings. In overview, of the other alternatives
that DOE examined, none would save as much energy nor have an NPV as
high as the proposed standards. Also, some of the alternatives would
require new enabling legislation (e.g., consumer or manufacturer tax
credits), as authority to carry out those alternatives does not
presently exist. The following paragraphs summarize each policy
alternative. Additional details can be found in the regulatory impact
analysis report of the TSD.
No New Regulatory Action. The case in which DOE takes no regulatory
action regarding GSFL and IRL is the base case (or no action) scenario.
Because this is the base case, energy savings and NPV for GSFL and IRL
are zero by definition. In this case, between 2012 and 2042, as
determined in the NIA, energy consumption for GSFL is expected to range
from 82.16 to 94.73 quads of primary energy and energy consumption for
IRL is expected to range from 5.64 to 10.52 quads of primary energy.
Consumer Rebates. Consumer rebates cover a portion of the
difference in incremental product price between products meeting
baseline efficacy levels and those meeting higher efficacy levels,
resulting in a higher percentage of consumers purchasing more efficient
models. For GSFL, DOE estimated the impact of improving the simple
payback through a rebate that paid 70 percent of the incremental
product price. DOE based the 70-percent rebate on existing utility
rebate programs for replacing a T12 lamp with a T8 lamp or upgrading an
existing T8 lamp to a more-efficacious T8 GSFL.\85\ DOE studied each
program and found that the average rebate amounted to about 70 percent
of the incremental product price for GSFL. DOE assumed that the
consumer rebate policy would reduce the incremental product price for
IRL during the analysis period by the same percentage. DOE calculated
the simple payback period of each higher efficacy lamp, both with and
without the rebate. Then by using the market penetration curves
discussed in section V.E.2.c, DOE estimated percent market adoption of
a technology as a function of technology simple payback. The difference
between the market penetration with and without the rebate was assumed
to represent the market share that would participate in a consumer
rebate program. For both GSFL and IRL, DOE assumed that the impact of
this policy would be to permanently transform the market so that the
increased market penetration seen in the first year of the program
would be maintained throughout the forecast period.
---------------------------------------------------------------------------
\85\ DOE averaged the rebates from utility programs across the
United States, including NSTAR, Pacific Gas & Electric, Xcel, Idaho
Power and Light, Duke Energy, and Alliant. (See the RIA to the TSD
for additional detail.)
---------------------------------------------------------------------------
[[Page 17021]]
At the estimated participation rates for GSFL, DOE calculated that
consumer rebates would provide between 1.33 and 1.74 quads of national
energy savings and an NPV between $1.93 and $2.67 billion (at a 7-
percent discount rate). For IRL, DOE calculated that consumer rebates
at the estimated participation rates would provide between 0.52 and
0.69 quads of national energy savings and an NPV between $1.52 and
$1.89 billion (at a 7-percent discount rate).
Although DOE estimated that consumer rebates would provide national
benefits for GSFL and IRL products, these benefits would be smaller
than the benefits resulting from the proposed energy conservation
standards. Thus, DOE rejected consumer rebates as a policy alternative
to energy conservation standards.
Consumer Tax Credits. Consumer tax credits cover a percentage of
the difference in incremental product price between products meeting
baseline efficacy levels and those with higher efficiencies. Consumer
tax credits are considered a viable non-regulatory market
transformation program, as the inclusion of Federal consumer tax
credits in EPACT 2005 for various residential appliances shows.
(section 1333 of EPACT 2005; codified at 26 U.S.C. 25C) DOE assumed a
consumer tax credit equivalent to the amount covered by rebates (i.e.,
70 percent of the difference in incremental product price between the
base case and higher-efficacy products).
DOE estimated that for both lamp types, the consumer participation
rate for tax credits would be lower than the rate of participation in
consumer rebates. Research on tax credits has shown that the time delay
to the consumer in receiving a reimbursement through a tax credit, plus
the added transaction costs in tax-return preparation, make the tax
credit incentive less effective than a rebate received at the time of
purchase. Based on previous analyses, DOE assumed that only 60 percent
as many consumers would take advantage of the tax credit as would take
advantage of a rebate. DOE assumed the impact of the policy would be to
permanently transform the market at this market penetration level.
For GSFL, at the estimated participation rate, consumer tax credits
would provide national energy savings between 0.63 and 0.83 quads and
an NPV between $1.13 and $1.33 billion (at a 7-percent discount rate).
At the estimated participation rates for IRL, consumer tax credits
would provide between 0.32 and 0.42 quads of national energy savings
and an NPV between $0.96 and $1.17 billion (at a 7-percent discount
rate). DOE estimated that while consumer tax credits would yield
national benefits for GSFL and IRL, these benefits would be much
smaller than the benefits from the proposed energy conservation
standards. Thus, DOE rejected consumer tax credits as a policy
alternative to energy conservation standards.
Manufacturer Tax Credits. Manufacturer tax credits are considered a
viable non-regulatory market transformation program, as the inclusion
of Federal tax credits in EPACT 2005 for manufacturers of residential
appliances shows. (section 1334 of EPACT 2005; codified at 26 U.S.C.
45M) Similar to consumer tax credits, manufacturer tax credits would
effectively result in lower product prices for consumers by an amount
that covered part of the incremental product price difference between
products meeting baseline efficacy levels and those meeting higher
efficacy levels. Because these tax credits would go to manufacturers
instead of consumers, fewer consumers would be affected by a
manufacturer tax credit program than by consumer tax credits.\86\ \87\
Although consumers would benefit from price reductions passed through
to them by manufacturers, approximately half the consumers who would
benefit from a consumer tax credit program would be aware of the
economic benefits of more-efficient technologies included in an
appliance manufacturer tax credit program. Therefore, DOE estimated
that the effect of a manufacturer tax credit program would be only half
of the maximum impact of a consumer tax credit program. For both GSFL
and IRL, DOE assumed that this policy would permanently transform the
market so that the increased market penetration seen in the first year
of the program would be maintained throughout the forecast period.
---------------------------------------------------------------------------
\86\ Kenneth Train, Customer Decision Study: Analysis of
Residential Customer Equipment Purchase Decisions (Prepared for
Southern California Edison by Cambridge Systematics, Pacific
Consulting Services, The Technology Applications Group, and
California Survey Research Services) (1994).
\87\ Lawrence Berkeley National Laboratory, End-Use Forecasting
Group, Analysis of Tax Credits for Efficient Equipment (1997).
Available at: http://enduse.lbl.gov/Projects/TaxCredits.html (Last
accessed April 24, 2008).
---------------------------------------------------------------------------
At the estimated participation rates for GSFL, DOE calculated that
manufacturer tax credits would provide between 0.35 and 0.44 quads of
national energy savings and an NPV between $0.68 and $0.73 billion (at
a 7-percent discount rate). For IRL, DOE estimated national energy
savings between 0.16 and 0.21 quads and an NPV between $0.53 and $0.64
billion (at a 7-percent discount rate). DOE estimated that while
manufacturer tax credits would yield national benefits for GSFL and
IRL, these benefits would be much smaller than the benefits from the
proposed energy conservation standards. Thus, DOE rejected manufacturer
tax credits as a policy alternative to energy conservation standards.
Voluntary Energy Efficiency Targets. DOE estimated the impact of a
voluntary energy efficiency program by reviewing the historical and
projected market transformation performance of past and current ENERGY
STAR programs. The Environmental Protection Agency (EPA) introduced the
Green Lights program in January of 1991. Green Lights was a voluntary
(non-regulatory) program tasked with a goal of reducing air pollution
by promoting energy-efficient lighting. Companies that elected to
participate installed energy-efficient lighting where it proved to be
cost-effective (as long as lighting quality was not diminished). In
return, the EPA provided technical assistance and public recognition.
In a similar effort, the EPA launched the ENERGY STAR program in 1992
as a voluntary labeling program to help consumers identify the most
energy-efficient products on the market. In 1995, Green Lights became a
part of the ENERGY STAR program.\88\
---------------------------------------------------------------------------
\88\ Available at: http://www.energystar.gov/index.cfm?c=about.ab_milestones.
---------------------------------------------------------------------------
In order to determine how a lighting market would respond to a
voluntary energy program, DOE analyzed the success of the Green Lights
program in the 1990s. One of the significant results of the Green
Lights program was demonstrated in its initiative to encourage
consumers to purchase higher-efficiency electronic ballasts over less-
efficient magnetic ballasts. As a result of this initiative, electronic
ballasts began to enter the market in increasing numbers. A study that
analyzed the impact of public programs on fluorescent ballast shipments
concluded that of all the electronic ballasts shipped between 1986 and
2000, 61 percent were due to this public program.\89\ DOE used data
from the US Census to calculate the percent of the market that opted to
use more efficient ballasts as a result of a voluntary program. Based
on this analysis, DOE concluded that 20 percent of the market would
shift to more-efficient products as a result of a voluntary energy
efficiency program. DOE assumed this participation rate would be the
same for
[[Page 17022]]
both GSFL and IRL. DOE also assumed that the impact of this policy
would be to permanently transform the market so that the increased
market penetration seen in the first year of the program would be
maintained throughout the forecast period.
---------------------------------------------------------------------------
\89\ Horowitz, Marvin J., ``Economic Indicators of Market
Transformation: Energy Efficient Lighting and EPA's Green Lights,''
Energy Journal, Vol. 22, No. 4, (2001) pp. 95-122.
---------------------------------------------------------------------------
For GSFL, DOE estimated that voluntary energy efficiency targets
would provide between 1.09 and 1.44 quads of national energy savings
and an NPV between $1.54 and $2.10 billion (at a 7-percent discount
rate). For IRL, DOE estimated national energy savings between 0.26 and
0.45 quads and an NPV between $0.83 and $1.28 billion (at a 7-percent
discount rate). DOE estimated that while voluntary energy-efficiency
targets would yield national benefits for GSFL and IRL, these benefits
would be much smaller than the benefits from the proposed energy
conservation standards. Thus, DOE rejected voluntary energy efficiency
targets as a policy alternative to energy conservation standards.
Early Replacement. The early replacement policy alternative
envisions a program to replace old, inefficient units with models
meeting efficacy levels higher than baseline equipment. DOE did not
model this alternative because the lifetimes of GSFL and IRL are very
short (on the order of 1 to 5 years), so the savings would not be very
great. Early replacement policies are generally beneficial for products
with long lifetimes (e.g., washers and dryers, furnaces) and that
represent a significant upfront investment, neither of which apply to
GSFL and IRL.
Bulk Government Purchases. Under this policy alternative, the
government sector would be encouraged to shift its purchases to
products that meet the target efficacy levels. DOE assumed that
Federal, State, and local government agencies would administer such a
program. DOE modeled this program by assuming an increase in the
installation of equipment meeting higher efficacy levels for those
locations where government agencies purchase or influence the purchase
of appliances.
Similar to previous analysis, DOE used floor space data from CBECS
2003 to derive the proportion of government-owned floor space to total
commercial floor space, which is 21.4 percent. DOE assumed that the
portion of government-owned floor space is proportional to the portion
of government lamp purchases. DOE then added a 1.4 percent market-pull
impact to arrive at a conservative 22.8 percent market penetration
rate.\90\ Bulk government purchases will not affect the residential
market as DOE believes that most government-owned buildings are in the
commercial sector. DOE assumed that the impact of this policy would be
to permanently transform the market so that the increased market
penetration seen in the first year of the program would be maintained
throughout the forecast period.
---------------------------------------------------------------------------
\90\ U.S. Department of Energy, Regulatory Impact Analysis:
Energy Conservation Standards for Consumer Products, Covering:
Fluorescent Lamp Ballasts (Oct. 1999). Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/regulatory_impact.pdf.
---------------------------------------------------------------------------
At the above estimated participation rates, the bulk government
purchases scenario would provide between 1.21 and 1.61 quads of
national energy savings and an NPV between $1.69 and $2.36 billion (at
a 7-percent discount rate) for GSFL, and between 0.04 and 0.24 quads of
national energy savings and an NPV between $0.23 and $0.72 billion (at
a 7-percent discount rate) for IRL. DOE estimated that while bulk
government purchases would yield national benefits for GSFL and IRL,
these benefits would be much smaller than the benefits from the
proposed energy conservation standards. Thus, DOE rejected voluntary
energy efficiency targets as a policy alternative to energy
conservation standards.
Energy Conservation Standards. As indicated in the paragraphs
above, none of the alternatives DOE examined would save as much energy
as the proposed energy conservation standards. Therefore, DOE proposes
to adopt the efficacy levels listed in section VI.C
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (IRFA) for
any rule that by law must be proposed for public comment, unless the
agency certifies that the rule, if promulgated, will not have a
significant economic impact on a substantial number of small entities.
As required by Executive Order 13272, Proper Consideration of Small
Entities in Agency Rulemaking, 67 FR 53461 (August 16, 2002), DOE
published procedures and policies on February 19, 2003, to ensure that
the potential impacts of its rules on small entities are properly
considered during the rulemaking process. 68 FR 7990. DOE has made its
procedures and policies available on the Office of the General
Counsel's Web site at http://www.gc.doe.gov.
DOE reviewed today's proposed rule under the provisions of the
Regulatory Flexibility Act and the procedures and policies published on
February 19, 2003. 68 FR 7990. A regulatory flexibility analysis
examines the impact of the rule on small entities and considers
alternative ways of reducing negative impacts. DOE identified producers
of all products covered by this rulemaking which have manufacturing
facilities located within the United States. DOE then looked at
publicly-available data and contacted manufacturers, as necessary, to
determine if they meet the Small Business Administration (SBA)
definition of a small manufacturing facility.
In the context of this rulemaking, ``small businesses,'' as defined
by the SBA, for the GSFL and IRL manufacturing industries, are
manufacturing enterprises with 1,000 employees or fewer. DOE used the
small business size standards published on March 11, 2008, as amended,
by the SBA to determine whether any small entities would be required to
comply with the rule. 61 FR 3286 (codified at 13 CFR part 121). The
size standards are listed by North American Industry Classification
System (NAICS) code and industry description. GSFL and IRL
manufacturing is classified under NAICS 335110, ``Electric Lamp Bulb
and Part Manufacturing,'' which sets a threshold of 1,000 employees or
less for an entity in this category to be considered a small business.
In overview, the GSFL and IRL industries include both domestic and
international manufacturers. The majority of covered GSFL and IRL are
manufactured by three large companies, with a small percentage of the
market being manufactured by either large or small companies that are
primarily specialized in lamps not covered by this rulemaking. Prior to
issuing this notice of proposed rulemaking, DOE interviewed one small
business affected by the rulemaking. DOE also obtained information
about small business impacts while interviewing manufacturers that
exceeded the small business size threshold of 1,000 employees.
To better assess the potential impacts of this rulemaking on small
entities, DOE proceeded to conduct a more focused inquiry, as explained
below. During its market survey, DOE created a list of every company
that manufactures covered and non-covered GSFL and IRL for sale in the
United States. DOE also asked stakeholders and industry representatives
if they were aware of any other small manufacturers. DOE then reviewed
publicly-available data and contacted companies on its list, as
necessary, to determine whether
[[Page 17023]]
they met the SBA's definition of a small business manufacturer in the
GSFL or IRL industries. In total, DOE contacted 57 companies that could
potentially be small businesses. During initial review of the 57
companies in its list, DOE either contacted or researched each company
to determine if it sold covered GSFL and IRL. Based on its research,
DOE screened out companies that did not offer lamps covered by this
rulemaking. Consequently, DOE estimated that only 12 out of 57
companies listed were potentially small business manufacturers of
covered products. DOE contacted these potential small business
manufacturers to request an interview about the possible impacts on
small business manufacturers. Of the 12 potential small business
manufacturers, four agreed to be interviewed. Based on its initial
screening and subsequent interviews, DOE identified only one company as
a small business manufacturer based on SBA's definition of a small
business manufacturer for this industry. The small business
manufacturer that DOE identified only produces covered GSFL products.
DOE found that the small manufacturer of covered GSFL shared some
of the same concerns about energy conservation standards as large
manufacturers. DOE summarized the key issues in section V.G.4.a of
today's notice. However, the small manufacturer was less concerned
about the potential of standards to severely harm its business. Because
the small manufacturer is more focused on specialty products not
covered by this rulemaking, covered GSFL represents a smaller portion
of its revenue and product portfolio. In addition, this manufacturer
stated that it is possible to pass along cost increases to consumers,
thereby limiting margin impacts due to energy conservation standards.
DOE could not use the GSFL GRIM to model the impacts of energy
conservation standards on the small business manufacturer of covered
GSFL. The GSFL GRIM models the impacts on GSFL manufacturers if
concerns about margin pressure and significant capital investments
necessitated by standards are realized. The small manufacturer did not
share these concerns, and, therefore, the GRIM model would not be
representative of the identified small business manufacturer. Like
large manufacturers, the small business manufacturer stated that more-
efficient products earn a premium; however, unlike larger
manufacturers, the small manufacturer stated that it could pass costs
along to its customers. Since the GSFL GRIM models the financial impact
of the standards commoditizing premium products, it is not
representative of the small business manufacturer because the small
business manufacturer did not share these concerns. Because of its
focus on specialized products, the small manufacturer was more
concerned about being able to offer the products to their customers
than the impact on its bottom line. For further information about the
scenarios modeled in the GRIM, see section VI.B.2.a of today's notice
and chapter 13 of the TSD.
DOE seeks further comment on how small businesses could be impacted
by standards on GSFL and IRL.
DOE reviewed the standard levels considered in today's notice of
proposed rulemaking under the provisions of the Regulatory Flexibility
Act and the procedures and policies published on February 19, 2003. On
the basis of the foregoing, DOE certifies that this proposed rule, if
promulgated, would not have a significant economic impact on a
substantial number of small entities. Accordingly, DOE has not prepared
a regulatory flexibility analysis for this rulemaking. DOE's
certification and supporting statement of factual basis will be
provided to the Chief Counsel for Advocacy of the Small Business
Administration pursuant to 5 U.S.C. 605(b).
C. Review Under the Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et
seq.), a person is not required to respond to a collection of
information by a Federal agency, including a requirement to maintain
records, unless the collection displays a valid OMB control number. (44
U.S.C. 3506(c)(1)(B)(iii)(V)) This rulemaking would impose no new
information or record keeping requirements. Accordingly, OMB clearance
is not required under the PRA.
D. Review Under the National Environmental Policy Act
DOE has prepared a draft environmental assessment (EA) of the
impacts of the proposed rule pursuant to the National Environmental
Policy Act of 1969 (42 U.S.C. 4321 et seq.), the regulations of the
Council on Environmental Quality (40 CFR Parts 1500-1508), and DOE's
regulations for compliance with the National Environmental Policy Act
(10 CFR Part 1021). This assessment includes an examination of the
potential effects of emission reductions likely to result from the rule
in the context of global climate change, as well as other types of
environmental impacts. The draft EA has been incorporated into the TSD.
Before issuing a final rule for GSFL and IRL, DOE will consider public
comments and, as appropriate, determine whether to issue a finding of
no significant impact as part of a final EA or to prepare an
environmental impact statement (EIS) for this rulemaking.
E. Review Under Executive Order 13132
Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4, 1999)
imposes certain requirements on agencies formulating and implementing
policies or regulations that preempt State law or that have Federalism
implications. Agencies are required to examine the constitutional and
statutory authority supporting any action that would limit the
policymaking discretion of the States and carefully assess the
necessity for such actions. The Executive Order also requires agencies
to have an accountable process to ensure meaningful and timely input by
State and local officials in the development of regulatory policies
that have Federalism implications. On March 14, 2000, DOE published a
statement of policy describing the intergovernmental consultation
process it will follow in the development of such regulations. 65 FR
13735. DOE has examined today's proposed rule and has determined that
it would not have a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. EPCA governs and prescribes Federal preemption of State
regulations on energy conservation for the products that are the
subject of today's proposed rule. States can petition DOE for exemption
from such preemption to the extent, and based on criteria, set forth in
EPCA. (42 U.S.C. 6297(d) and 6316(b)(2)(D)) No further action is
required by Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform'' (61 FR 4729 (Feb. 7, 1996)) imposes on
Executive agencies the general duty to adhere to the following
requirements: (1) Eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction. Section 3(b) of Executive
Order 12988 specifically requires that Executive agencies make
[[Page 17024]]
every reasonable effort to ensure that the regulation: (1) Clearly
specifies the preemptive effect, if any; (2) clearly specifies any
effect on existing Federal law or regulation; (3) provides a clear
legal standard for affected conduct while promoting simplification and
burden reduction; (4) specifies the retroactive effect, if any; (5)
adequately defines key terms; and (6) addresses other important issues
affecting clarity and general draftsmanship under any guidelines issued
by the Attorney General. Section 3(c) of Executive Order 12988 requires
Executive agencies to review regulations in light of applicable
standards in section 3(a) and section 3(b) to determine whether they
are met or it is unreasonable to meet one or more of them. DOE has
completed the required review and determined that, to the extent
permitted by law, this proposed rule meets the relevant standards of
Executive Order 12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
DOE reviewed this regulatory action under Title II of the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4) (UMRA), which requires each
Federal agency to assess the effects of Federal regulatory actions on
State, local and Tribal governments and the private sector. For a
proposed regulatory action likely to result in a rule that may cause
the expenditure by State, local, and Tribal governments, in the
aggregate, or by the private sector of $100 million or more in any one
year (adjusted for inflation), section 202 of UMRA requires an agency
to publish a written statement assessing the costs, benefits, and other
effects of the rule on the national economy. (2 U.S.C. 1532(a), (b))
The UMRA also requires a Federal agency to develop an effective process
to permit timely input by elected officers of State, local, and Tribal
governments on a proposed ``significant intergovernmental mandate,''
and requires an agency plan for giving notice and opportunity for
timely input to potentially affected small governments before
establishing any requirements that might significantly or uniquely
affect small governments. On March 18, 1997, DOE published a statement
of policy on its process for intergovernmental consultation under UMRA
(62 FR 12820) (also available at http://www.gc.doe.gov). Although
today's proposed rule does not contain a Federal intergovernmental
mandate, it may impose expenditures of $100 million or more on the
private sector.
Section 202 of UMRA authorizes an agency to respond to the content
requirements of UMRA in any other statement or analysis that
accompanies the proposed rule. 2 U.S.C. 1532(c). The content
requirements of section 202(b) of UMRA relevant to a private sector
mandate substantially overlap the economic analysis requirements that
apply under section 325(o) of EPCA and Executive Order 12866. The
SUPPLEMENTARY INFORMATION section of the notice of proposed rulemaking
and the ``Regulatory Impact Analysis'' section of the TSD for this
proposed rule respond to those requirements.
Under section 205 of UMRA, the Department is obligated to identify
and consider a reasonable number of regulatory alternatives before
promulgating a rule for which a written statement under section 202 is
required. DOE is required to select from those alternatives the most
cost-effective and least burdensome alternative that achieves the
objectives of the rule unless DOE publishes an explanation for doing
otherwise or the selection of such an alternative is inconsistent with
law. As required by 42 U.S.C. 6295(i) and (o), today's proposed rule
would establish energy conservation standards for GSFL and IRL that are
designed to achieve the maximum improvement in energy efficiency that
DOE has determined to be both technologically feasible and economically
justified. A full discussion of the alternatives considered by DOE is
presented in the ``Regulatory Impact Analysis'' section of the TSD for
today's proposed rule.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This proposed rule would not have any impact on the autonomy or
integrity of the family as an institution. Accordingly, DOE has
concluded that it is not necessary to prepare a Family Policymaking
Assessment.
I. Review Under Executive Order 12630
DOE has determined under Executive Order 12630, ``Governmental
Actions and Interference with Constitutionally Protected Property
Rights,'' 53 FR 8859 (March 18, 1988), that this regulation would not
result in any taking that would require compensation under the Fifth
Amendment to the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most
disseminations of information to the public under guidelines
established by each agency pursuant to general guidelines issued by
OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and
DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has
reviewed today's proposed rule under the OMB and DOE guidelines and has
concluded that it is consistent with applicable policies in those
guidelines.
K. Review Under Executive Order 13211
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA
at OMB, a Statement of Energy Effects for any proposed significant
energy action. A ``significant energy action'' is defined as any action
by an agency that promulgates or is expected to lead to promulgation of
a final rule, and that: (1) Is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy; or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the action and their expected
benefits on energy supply, distribution, and use.
Today's regulatory action is not a ``significant energy action''
because it would not have a significant adverse effect on the supply,
distribution, or use of energy, nor has it been designated as such by
the Administrator of OIRA. Accordingly, DOE has not prepared a
Statement of Energy Effects.
L. Review Under the Information Quality Bulletin for Peer Review
On December 16, 2004, OMB, in consultation with the Office of
Science and Technology Policy (OSTP), issued its ``Final Information
Quality Bulletin for Peer Review'' (the Bulletin). 70 FR 2664 (Jan. 14,
2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
[[Page 17025]]
disseminated by the Federal government, including influential
scientific information related to agency regulatory actions. The
purpose of the Bulletin is to enhance the quality and credibility of
the Government's scientific information. Under the Bulletin, the energy
conservation standards rulemaking analyses are ``influential scientific
information,'' which the Bulletin defines as ``scientific information
the agency reasonably can determine will have, or does have, a clear
and substantial impact on important public policies or private sector
decisions.'' 70 FR 2664, 2667 (Jan. 14, 2005).
In response to OMB's Bulletin, DOE conducted formal peer reviews of
the energy conservation standards development process and analyses, and
has prepared a Peer Review Report pertaining to the energy conservation
standards rulemaking analyses. Generation of this report involved a
rigorous, formal, and documented evaluation process using objective
criteria and qualified and independent reviewers to make a judgment as
to the technical/scientific/business merit, the actual or anticipated
results, and the productivity and management effectiveness of programs
and/or projects. The ``Energy Conservation Standards Rulemaking Peer
Review Report,'' dated February 2007, has been disseminated and is
available at: http://www.eere.energy.gov/buildings/appliance_standards/peer_review.html.
VIII. Public Participation
DOE will make the entire record of this proposed rulemaking,
including the transcript from the public meeting, available for
inspection at the U.S. Department of Energy, Resource Room of the
Building Technologies Program, 950 L'Enfant Plaza, SW., Washington, DC
20024, (202) 586-2945, between 9 a.m. and 4 p.m., Monday through
Friday, except Federal holidays. Any person may buy a copy of the
transcript from the transcribing reporter.
A. Submission of Comments
DOE began accepting comments, data, and information regarding the
proposed rule at the public meeting, and will continue to accept
comments until no later than the date provided at the beginning of this
notice of proposed rulemaking. Information submitted should be
identified by docket number EE-2006-STD-0131 and/or RIN 1904- AA92.
Comments, data, and information submitted to DOE's e-mail address for
this rulemaking should be provided in WordPerfect, Microsoft Word, PDF,
or text (ASCII) file format. Stakeholders should avoid the use of
special characters or any form of encryption and, wherever possible,
comments should carry the electronic signature of the author. Comments,
data, and information submitted to DOE via mail or hand delivery/
courier should include one signed paper original. No telefacsimiles
(faxes) will be accepted.
Pursuant to 10 CFR 1004.11, any person submitting information that
he or she believes to be confidential and exempt by law from public
disclosure should submit two copies: one copy of the document including
all the information believed to be confidential, and one copy of the
document with the information believed to be confidential deleted. DOE
will make its own determination about the confidential status of the
information and treat it according to its determination.
Factors of interest to DOE when evaluating requests to treat
submitted information as confidential include: (1) A description of the
items; (2) whether and why such items are customarily treated as
confidential within the industry; (3) whether the information is
generally known by or available from other sources; (4) whether the
information has previously been made available to others without
obligation concerning its confidentiality; (5) an explanation of the
competitive injury to the submitting person which would result from
public disclosure; (6) when such information might lose its
confidential character due to the passage of time; and (7) why
disclosure of the information would be contrary to the public interest.
B. Issues on Which DOE Seeks Comment
DOE is particularly interested in receiving comments and views of
interested parties concerning:
(1) The scope of covered products DOE considered in this
rulemaking--specifically, DOE's decision to cover 4-foot T5 miniature
bipin SO and 4-foot T5 miniature bipin HO lamps;
(2) DOE's decision to amend the definition of ``colored fluorescent
lamp'' to exclude lamps with a CCT greater than 7,000K;
(3) The appropriateness of establishing separate product classes
for IRL by lamp diameter and rated lamp voltage;
(4) The appropriateness of establishing separate product classes
for 4-foot T5 miniature bipin SO and 4-foot T5 miniature bipin HO
lamps;
(5) The added 4-foot MBP residential sector engineering analysis,
particularly the choice of the baseline system (lamp and ballast);
(6) The performance characteristics (e.g., lumen output, lifetime,
wattage) established for both GSFL and IRL model lamps DOE used in the
engineering analysis--specifically, the properties of the T5
halophosphor GSFL baseline lamps and the improved halogen IRL that uses
xenon as a fill gas (the lamp established for TSL1);
(7) The efficacy levels DOE considered for IRL, in particular the
added EL1 and EL5;
(8) The efficacy levels DOE used for each GSFL product class--
particularly, DOE's decision to use compliance report data to establish
GSFL efficacy levels;
(9) The methodology DOE used to scale efficacy levels from
representative product classes to product classes DOE did not analyze
(i.e., 2-foot U-shaped lamps and high CCT lamps for GSFL, modified
spectrum lamps, lamps with diameters less than or equal to 2.5 inches,
lamps with rated voltage greater than 125V);
(10) The choice of ballast lifetimes DOE used in the commercial,
residential, and industrial sectors and operating hours for GSFL in the
residential sector;
(11) The growth rates DOE used in the residential sector IRL and
GSFL shipments analysis, the market penetration of emerging
technologies in the IRL and GSFL shipments analysis, and the T5 lamp
shipment forecasts;
(12) Base-case market-share matrices and standards-case market-
share matrices for IRL and GSFL--particularly the percentage of GSFL
consumers with sufficient lighting expertise (i.e., those consumers who
will choose a lower-BF ballast or reduced-wattage lamp to maintain
lumen output under standards) by market segment;
(13) The methodology and inputs DOE used for the manufacturer
impact analysis--specifically, DOE's assumptions regarding markups,
capital costs, conversion costs, and stranded assets;
(14) The determination of the environmental impacts of the proposed
rule--specifically, methods for valuing the CO2,
NOX, SOX, and Hg emissions savings due to the
proposed standards;
(15) The appropriateness of trial standard levels DOE considered
for GSFL and IRL, in particular the combinations of efficacy levels of
each GSFL product class;
(16) The proposed standard levels for GSFL and IRL;
(17) Alternative scenarios for GSFL standards that could achieve
greater energy savings. One example may be for DOE to adopt a more
stringent standard level in the final rule that would eliminate T12
lamps, as described in
[[Page 17026]]
relation to TSL4 and TSL5. Another example may be for DOE to adopt a
more stringent standard level in the final rule that, similar to TSL4
and TSL5, would eliminate T12 lamps, but allow an extended lead time
before compliance would be required. A third example may be for DOE to
adopt a more stringent standard level, while continuing to allow the
sale of specially packaged or labeled T12 lamps in the residential
sector only.
(18) Other technology pathways that may be utilized to meet IRL
TSL5, whether these pathways may have any adverse effects on consumer
utility or the ability for the product to be mass-produced,
manufacturer costs associated with these pathways, and resulting
consumer product prices for lamps that meet this standard level.
IX. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this proposed
rule.
List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Imports,
Intergovernmental relations, Small businesses.
Issued in Washington, DC on March 23, 2009.
Steven G. Chalk,
Principal Deputy Assistant Secretary, Energy Efficiency and Renewable
Energy.
For the reasons stated in the preamble, DOE proposes to amend
chapter II, subchapter D, of title 10 of the 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; 28 U.S.C. 2461 note.
2. Section 430.2 is amended by revising the definition of ``colored
fluorescent lamp,'' ``fluorescent lamp,'' and ``rated wattage'' to read
as follows:
Sec. 430.2 Definitions.
* * * * *
Colored fluorescent lamp means:
(1) A fluorescent lamp designated and marketed as a colored lamp
with a CRI less than 40, as determined according to the method given in
CIE Publication 13.2 (incorporated by reference, see Sec. 430.3);
(2) A fluorescent lamp designed and marketed as a colored lamp with
a correlated color temperature (CCT) less than 2,500K; or
(3) A fluorescent lamp with a CCT greater than 7,000K.
* * * * *
Fluorescent lamp means a low pressure mercury electric-discharge
source in which a fluorescing coating transforms some of the
ultraviolet energy generated by the mercury discharge into light,
including only the following:
(1) Any straight-shaped lamp (commonly referred to as 4-foot medium
bipin lamps) with medium bipin bases of nominal overall length of 48
inches and rated wattage of 25 or more;
(2) Any U-shaped lamp (commonly referred to as 2-foot U-shaped
lamps) with medium bipin bases of nominal overall length between 22 and
25 inches and rated wattage of 25 or more;
(3) Any rapid start lamp (commonly referred to as 8-foot high
output lamps) with recessed double contact bases of nominal overall
length of 96 inches;
(4) Any instant start lamp (commonly referred to as 8-foot slimline
lamps) with single pin bases of nominal overall length of 96 inches and
rated wattage of 52 or more;
(5) Any straight-shaped lamp (commonly referred to as 4-foot
miniature bipin standard output lamps) with miniature bipin bases of
nominal length between 45 and 48 inches and rated wattage of 26 or
more; and
(6) Any straight-shaped lamp (commonly referred to 4-foot miniature
bipin high output lamps) with miniature bipin bases of nominal length
between 45 and 48 inches and rated wattage of 51 or more.
* * * * *
Rated wattage, with respect to general service fluorescent lamps,
means:
(1) If the lamp is listed in ANSI C78.81-2005 or ANSI C78.901-2005,
the rated wattage of a lamp determined by the lamp designation of
Clause 11.1 of ANSI C78.81-2005 or ANSI C78.901- 2005;
(2) If the lamp is a residential straight-shaped lamp, and not
listed in ANSI C78.81-2005, the wattage of a lamp when operated on a
reference ballast for which the lamp is designed;
(3) If the lamp is neither listed in one of the ANSI guides
referenced in (1) nor a residential straight-shaped lamp, the wattage
of a lamp when measured according to the test procedures outlined in
Appendix R to subpart B of this part; or
(4) With respect to general service incandescent lamps and
incandescent reflector lamps, the wattage measured according to the
test procedures outlined in Appendix R to subpart B of this part.
* * * * *
3. Section 430.32 is amended by revising paragraph (n) to read as
follows:
Sec. 430.32 Energy and water conservation standards and their
effective dates.
* * * * *
(n) General service fluorescent lamps and incandescent reflector
lamps. (1) Except as provided in paragraphs (n)(2) and (n)(3) of this
section, each of the following general service fluorescent lamps
manufactured after the effective dates specified in the table shall
meet or exceed the following lamp efficacy and CRI standards:
----------------------------------------------------------------------------------------------------------------
Minimum
Nominal lamp average lamp
Lamp type wattage Minimum CRI efficacy (lm/ Effective date
W)
----------------------------------------------------------------------------------------------------------------
4-foot medium bipin................ > 35W 69 75.0 Nov. 1, 1995
<= 35W 45 75.0 Nov. 1, 1995.
2-foot U-shaped.................... > 35W 69 68.0 Nov. 1, 1995.
<= 35W 45 64.0 Nov. 1, 1995.
8-foot slimline.................... > 65W 69 80.0 May 1, 1994.
<= 65W 45 80.0 May 1, 1994.
8-foot high output................. > 100W 69 80.0 May 1, 1994.
<= 100W 45 80.0 May 1, 1994.
----------------------------------------------------------------------------------------------------------------
[[Page 17027]]
(2) The standards described in paragraph (n)(1) of this section do
not apply to:
(i) Any 4-foot medium bipin lamp or 2-foot U-shaped lamp with a
rated wattage less than 28 watts;
(ii) Any 8-foot high output lamp not defined in ANSI C78.1-1978 or
related supplements, or not 0.800 nominal amperes; or
(iii) Any 8-foot slimline lamp not defined in ANSI C78.3-1978
(R1984) or related supplement ANSI C78.3a-1985.
(3) Each of the following general service fluorescent lamps
manufactured after June 30, 2012, shall meet or exceed the following
lamp efficacy standards shown in the table:
------------------------------------------------------------------------
Minimum
Correlated average lamp
Lamp type color efficacy (lm/
temperature W)
------------------------------------------------------------------------
4-foot medium bipin..................... <= 4,500K 84
> 4,500K 78
2-foot U-shaped......................... <= 4,500K 78
> 4,500K 73
8-foot slimline......................... <= 4,500K 95
> 4,500K 91
8-foot high output...................... <= 4,500K 88
> 4,500K 84
4-foot miniature bipin standard output.. <= 4,500K 103
> 4,500K 97
4-foot miniature bipin high output...... <= 4,500K 89
> 4,500K 85
------------------------------------------------------------------------
(4) Except as provided in paragraph (n)(5) of this section, each of
the following incandescent reflector lamps manufactured after November
1, 1995, shall meet or exceed the lamp efficacy standards shown in the
table:
------------------------------------------------------------------------
Minimum average
Nominal lamp wattage lamp efficacy (lm/
W)
------------------------------------------------------------------------
40-50................................................ 10.5
51-66................................................ 11.0
67-85................................................ 12.5
86-115............................................... 14.0
116-155.............................................. 14.5
156-205.............................................. 15.0
------------------------------------------------------------------------
(5) Each of the following incandescent reflector lamps manufactured
after June 30, 2012, shall meet or exceed the lamp efficacy standards
shown in the table:
----------------------------------------------------------------------------------------------------------------
Minimum
average lamp
Lamp spectrum Lamp diameter Rated voltage efficacy (lm/
W)
----------------------------------------------------------------------------------------------------------------
Standard Spectrum............................................... > 2.5= 125V 7.1P\0.27\
eq>
.............. < 125V 6.2P\0.27\
<= 2.5= 125V 6.3P\0.27\
eq>
.............. < 125V 5.5P\0.27\
Modified Spectrum............................................... > 2.5= 125V 5.8P\0.27\
eq>
.............. < 125V 5.0P\0.27\
<= 2.5= 125V 5.1P\0.27\
eq>
.............. < 125V 4.4P\0.27\
----------------------------------------------------------------------------------------------------------------
Note: P is equal to the rated lamp wattage, in watts.
(6)(i)(A) Subject to the exclusions in paragraph (6)(ii) of this
section, the standards specified in this section shall apply to ER
incandescent reflector lamps, BR incandescent reflector lamps, BPAR
incandescent reflector lamps, and similar bulb shapes on and after
January 1, 2008.
(B) Subject to the exclusions in paragraph (6)(ii) of this section,
the standards specified in this section shall apply to incandescent
reflector lamps with a diameter of more than 2.25 inches, but not more
than 2.75 inches, on and after June 15, 2008.
(ii) The standards specified in this section shall not apply to the
following types of incandescent reflector lamps:
(A) Lamps rated at 50 watts or less that are ER30, BR30, BR40, or
ER40 lamps;
(B) Lamps rated at 65 watts that are BR30, BR40, or ER40 lamps; or
(C) R20 incandescent reflector lamps rated 45 watts or less.
[FR Doc. E9-7634 Filed 4-10-09; 8:45 am]
BILLING CODE 6450-01-P