[Federal Register Volume 64, Number 134 (Wednesday, July 14, 1999)]
[Proposed Rules]
[Pages 37905-37911]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17786]


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DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy

10 CFR Part 474

[Docket No. EE-RM-99-PEF]
[RIN: 1904-AA40]


Electric and Hybrid Vehicle Research, Development, and 
Demonstration Program; Petroleum-Equivalent Fuel Economy Calculation

AGENCY: Department of Energy.

ACTION: Notice of Proposed Rulemaking and Withdrawal of Previous Notice 
of Proposed Rulemaking.

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SUMMARY: In response to public comments, the Department of Energy (DOE) 
revises its proposal to amend its regulations on electric and hybrid 
vehicles to provide a petroleum-equivalency factor (PEF) and procedures 
for calculating the petroleum-equivalent fuel economy of electric 
vehicles. The petroleum-equivalent fuel economy values of an automobile 
manufacturer's electric vehicles may then be included in the 
calculation of that manufacturer's corporate average fuel economy 
(CAFE) according to regulations prescribed by the Environmental 
Protection Agency and the Department of Transportation.

DATES: To ensure your comments are considered, we must receive 7 copies 
of your comments on or before September 13, 1999.
    You may present oral views, data, and arguments at the public 
hearing which will be held in Washington, DC, on Tuesday, August 17, 
1999 beginning at 9:30 a.m. If you would like to speak at this hearing, 
contact Ms. Andi Kasarsky, (202) 586-3012, by Friday, August 13, 1999. 
In addition, you may request an opportunity to speak at the hearing 
itself. Each oral presentation is limited to 10 minutes. The hearing 
will last as long as there are persons requesting an opportunity to 
speak. The notice of proposed rulemaking published in the Federal 
Register on February 4, 1994 (59 FR 5336) is withdrawn as of July 14, 
1999.

ADDRESSES: Send written comments to: Mr. Rogelio Sullivan, U.S. 
Department of Energy, EE-32, Docket No. EE-RM-99-PEF, 1000 Independence 
Avenue, SW, Washington, DC 20585. Questions concerning submitting 
written comments should be addressed to Ms. Andi Kasarsky, (202) 586-
3012. We will hold a public hearing at the following address: U.S. 
Department of Energy, Room 1E-245, 1000 Independence Avenue, SW, 
Washington, DC. Please bring seven copies of the prepared oral 
statement to the hearing.
    You may read and copy written comments received, a copy of the 
public hearing transcript, technical reference materials mentioned in 
this notice, and any other docket material received as a result of this 
notice at the DOE Freedom of Information Reading Room. The current 
docket material will be filed under ``EE-RM-99-PEF.'' Copies of the 
hearing transcript and written comments received regarding the February 
4, 1994 proposed rule are filed under Docket No.
    EE-RM-94-101. Earlier materials related to the calculation of the 
PEF are contained in Docket No. EE-RM-93-301 and are also available at 
the DOE Freedom of Information Reading Room, room 1E-190, (202) 586-
3142, between the hours of 9:00 a.m.-4:00 p.m., Monday through Friday 
except Federal holidays.
    For more information concerning public participation in this 
rulemaking proceeding, see section III of this notice of proposed 
rulemaking (Opportunities for Public Comment).

FOR FURTHER INFORMATION CONTACT:

Mr. Rogelio Sullivan, U.S. Department of Energy, Office of 
Transportation Technologies, Office of Advanced Automotive 
Technologies, EE-32, 1000 Independence Avenue SW, Washington, DC 20585, 
(202) 586-8042
Mr. Eugene Margolis, U.S. Department of Energy, Office of General 
Counsel, GC-72, 1000 Independence Avenue SW, Washington, DC 20585, 
(202) 586-9526

SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion
    A. Requirements of the Motor Vehicle Information and Cost 
Savings Act, as amended
    B. PEF Development Process
    C. Test Procedures
    D. Calculation Procedures
    1. General Form of the PEF Equation
    2. Gasoline-Equivalent Energy Content of Electricity Factor
    3. ``Fuel Content'' Factor
    4. Petroleum-Fueled Accessory Factor
    5. Driving Pattern Factor
    6. Use of the PEF
    7. Sample Calculations
III. Opportunities for Public Comment
    A. Participation in Rulemaking
    B. Written Comment Procedures
    C. Public Hearing
    1. Request to Speak Procedures
    2. Conduct of the Hearing
IV. Procedural Requirements
    A. Environmental Protection Agency Review
    B. National Environmental Policy Act Review
    C. Regulatory Review
    D. Regulatory Flexibility Act
    E. Federalism Review
    F. ``Takings'' Assessment Review
    G. Review Under Executive Order 12988
    H. Review Under the Unfunded Mandates Reform Act of 1995
    I. Review Under the Treasury and General Government 
Appropriations Act, 1999

[[Page 37906]]

I. Background

    In an effort to conserve energy through improvements in the energy 
efficiency of motor vehicles, Congress passed the Energy Policy and 
Conservation Act (Pub. L. 94-163) in 1975. Title III of the Energy 
Policy and Conservation Act amended the Motor Vehicle Information and 
Cost Savings Act by mandating fuel economy standards for automobiles 
produced in, or imported into, the United States. (The Act's provisions 
appeared initially in the United States Code at 15 U.S.C. 1901 et seq. 
In 1994, Pub. L. 103-272 codified the Act's provisions in Title 49, 
U.S.C., Subtitle VI, Part C.) This statute, as amended, requires that 
every manufacturer or importer meet a corporate average fuel economy 
standard for the fleet of vehicles produced or imported in any model 
year. Although electric vehicles are included under the definition of 
the term ``automobile'' in the Motor Vehicle Information and Cost 
Savings Act, they do not consume ``fuel'' as defined in the Act. 
Therefore, calculation of an electric vehicle manufacturer's corporate 
average fuel economy is impossible without a petroleum equivalency 
value.
    On January 7, 1980, the President signed the Chrysler Corporation 
Loan Guarantee Act of 1979 (Pub. L. 96-185). Section 18 of the Chrysler 
Corporation Loan Guarantee Act of 1979 added a new paragraph (2) to 
section 13(c) of the Electric and Hybrid Vehicle Research, Development, 
and Demonstration Act of 1976 (Pub. L. 94-413). Part of the new section 
13(c) added subsection (a)(3) to section 503 of the Motor Vehicle 
Information and Cost Savings Act. That subsection, which has been 
codified at 49 U.S.C. 32904(a)(2), directs the Secretary of Energy to 
determine petroleum-equivalent fuel economy values for various classes 
of electric vehicles. The intent of the legislation is to provide an 
incentive for vehicle manufacturers to produce electric vehicles by 
including the expected high equivalent fuel economy of these vehicles 
in their corporate average fuel economy calculation. This will help to 
accelerate the early commercialization of electric vehicles.
    Section 18 of the Chrysler Corporation Loan Guarantee Act of 1979 
further amended the Electric and Hybrid Vehicle Research, Development 
and Demonstration Act of 1976 by adding a new paragraph (3) to section 
13(c) which directed the Secretary of Energy, in consultation with the 
Secretary of Transportation and the Administrator of the Environmental 
Protection Agency, to conduct a seven-year evaluation program of the 
inclusion of electric vehicles in the calculation of average fuel 
economy. In May 1980, as required by section 503(a)(3) of the Motor 
Vehicle Information and Cost Savings Act, DOE proposed a method of 
calculating the petroleum-equivalent fuel economy of electric vehicles. 
The rule was finalized in April 1981 (46 FR 22753). The seven-year 
evaluation program was completed and the calculation of the annual 
petroleum equivalency factors was not extended past 1987.
    DOE published a proposed rule for a permanent PEF for use in 
calculating petroleum-equivalent fuel economy values on February 4, 
1994, (59 FR 5336) and obtained oral and written comments from 
interested parties. Following consideration of the reviewers' comments, 
DOE's own internal re-examination of the assumptions underlying the 
proposed rule, and existing regulations for other classes of 
alternative fuel vehicles, DOE decided to modify the approach proposed 
in 1994 with several changes. DOE believes that the approach presented 
today is simpler, more consistent with the regulatory treatment of 
other alternative fuel vehicles, and better embodies the Congressional 
intent.
    Administrative responsibilities for the corporate average fuel 
economy program are assigned to the Department of Transportation and 
the Environmental Protection Agency under the Motor Vehicle Information 
and Cost Savings Act. The Secretary of Transportation is responsible 
for prescribing the corporate average fuel economy standard and 
enforcing the penalties for failure to meet these standards. The 
Administrator of the Environmental Protection Agency is responsible for 
calculating a manufacturer's corporate average fuel economy value. DOE 
is responsible for developing and promulgating the petroleum 
equivalency factor, the key component in the calculation of petroleum-
equivalent fuel economy values for electric vehicles.

II. Discussion

A. Requirements of the Motor Vehicle Information and Cost Savings Act, 
as Amended

    Section 503(a)(3) of the Motor Vehicle Information and Cost Savings 
Act (49 U.S.C. 32904(a)(2)) requires DOE to determine the petroleum-
equivalent fuel economy values for electric vehicles, taking into 
account the following parameters:
    (i) The approximate electric energy efficiency of the vehicles 
considering the vehicle type, mission, and weight;
    (ii) The national average electricity generation and transmission 
efficiencies;
    (iii) The need of the Nation to conserve all forms of energy, and 
the relative scarcity and value to the Nation of all fuel used to 
generate electricity; and
    (iv) The specific driving patterns of electric vehicles as compared 
with those of petroleum-fueled vehicles.
    Section 503(a)(3) also provides for revision of such values if 
necessary.

B. PEF Development Process

    When DOE published a proposed rule for a permanent PEF in 1994, 
many of the comments criticized one of the key factors of the proposed 
PEF: An intermediate factor that used a complex approach to quantify 
the relative scarcity and value of all fuels used to generate 
electricity in the U.S., which was referred to as the ``scarcity 
factor.'' This proposed scarcity factor was based on estimates of the 
U.S. share of world reserves of fossil fuels and estimated rates of 
depletion of world reserves. In general, the criticisms of this 
approach were more ``philosophical'' than specific. The comments, 
however, led DOE to reexamine the issue in greater detail. DOE 
concluded that faulty assumptions and calculations were present in some 
of the steps in the development of the scarcity factor.
    For example, the number of years until exhaustion of fossil fuel 
reserves was estimated by using forecast energy consumption growth 
rates to estimate the length of time needed to deplete the Energy 
Information Administration-reported ``proved reserves'' of each fuel. 
This is misleading because ``proved reserves'' are defined based on 
current economic and technical conditions, and have in fact been 
observed to grow over time. In a subsequent step, the calculation 
summed the years-to-depletion values for each individual fuel into a 
total years-to-depletion value. This too, is misleading because once 
the least-abundant fuel is totally consumed, energy needs will have to 
be met by increasing the consumption rates of the remaining fuels. In 
addition, since the scarcity of nuclear and renewable fuels could not 
be determined by this method (because their ``reserves'' are 
essentially unlimited), arbitrary scarcity values were assigned to 
these fuels. Several other questionable mathematical operations were 
subsequently performed during the calculation of the scarcity factor. 
DOE therefore decided to

[[Page 37907]]

replace the scarcity factor rather than attempt to refine it.
    DOE then considered alternative approaches to the determination of 
suitable factors for quantifying scarcity and value. These included 
both modifications of the reserves-based approach, as well as market 
price (of the fuels used to generate electricity) approaches. DOE 
determined, however, that such approaches were highly sensitive to the 
assumptions used, and that many possible assumptions were contradictory 
or highly subjective. Other approaches evaluated included: Factoring in 
the national average price of electricity; quantifying and comparing 
the total fuel cycle greenhouse gas emissions from petroleum, and those 
of electricity generating fuels; and applying an arbitrary scaling 
factor to the electricity to gasoline conversion. Upon careful 
examination, each of these approaches was found to have shortcomings of 
a technical or policy nature, or internal inconsistencies.
    In light of the number of criticisms related to the scarcity 
factor, DOE elected to perform an additional search of the literature 
regarding reserves of the fuels used to generate electricity. This 
research led to a very significant conclusion: Although reserves of all 
fossil fuels are obviously finite, fuels used to produce electricity 
are in fact widely available from diverse sources at relatively low 
prices. DOE carefully considered the scarcity of these fuels, as 
required by Congress, but determined that the fuels used to produce 
electricity, including renewables, are quite abundant rather than 
scarce. Thus, scarcity does not appear to be a concern, and should not 
be a guiding factor in the rulemaking at this time.
    DOE then examined existing law (49 U.S.C. 32905 (a) and (c)) that 
specifies procedures for determining the petroleum-equivalent fuel 
economy of other types of alternative fuel vehicles. 49 U.S.C. 32905 
(a) states that ``the fuel economy measured for [post-1992 dedicated 
alternative fuel vehicles] shall be based on the fuel content of the 
alternative fuel used to operate the automobile. A gallon of liquid 
alternative fuel used to operate a dedicated automobile is deemed to 
contain 0.15 gallon of fuel.'' Two of the most common liquid 
alternative fuels are M85 (85 percent methanol and 15 percent unleaded 
gasoline by volume) and E85 (85 percent ethanol and 15 percent unleaded 
gasoline by volume). The petroleum equivalent fuel economy of E85 and 
M85 powered vehicles is then determined by dividing the measured fuel 
economy value by 0.15.
    Section 32905(c) extends this approach to gaseous fueled vehicles, 
stating that ``[the fuel economy of dedicated gaseous fueled vehicles 
shall be based on the fuel content of the gaseous fuel used to operate 
the automobile. One hundred cubic feet of natural gas is deemed to 
contain 0.823 gallon equivalent of natural gas. . . . A gallon 
equivalent of gaseous fuel is deemed to have a fuel content of 0.15 
gallon of fuel.'' Since gaseous fueled vehicles do not store their fuel 
in liquid form, a conversion factor must be applied to express the 
volume of gas consumed as an equivalent liquid volume of gasoline. This 
factor is based on the volume of natural gas that contains the same 
chemical energy as a gallon of gasoline. To determine the petroleum-
equivalent fuel economy of a gaseous fueled vehicle, the vehicle's 
gaseous fuel consumption is measured directly (for example, in units of 
miles per 100 standard cubic feet of gas), and then the conversion 
factor of 0.823 gasoline-equivalent gallons per 100 standard cubic feet 
of natural gas is applied. Finally, the result is divided by 0.15 to 
obtain the petroleum equivalent fuel economy.
    Unlike the case of M85 and E85 powered vehicles, the factor of 0.15 
serves a different function in the case of gaseous fueled vehicles, 
since natural gas contains no gasoline whatsoever. The true energy 
efficiency of both liquid and gaseous fueled alternative fuel vehicles 
is intentionally and substantially overstated by the methods specified 
in 49 U.S.C. 32905, since only 15 percent of their actual energy 
consumption is accounted for in determining their petroleum-equivalent 
fuel economy. The use of the 0.15 factor for both types of vehicles 
provides a similar regulatory treatment to both types of alternative 
fuel vehicles.
    DOE proposes to use an approach similar to that in 49 U.S.C. 32905 
for calculating petroleum-equivalent fuel economy values for electric 
vehicles. DOE proposes to adopt the 0.15 factor to be applied in a 
manner similar to that prescribed for natural gas vehicles. This 
approach has the following advantages:
    (i) It is consistent with existing regulatory and statutory 
procedures for other types of alternative fuel vehicles,
    (ii) It provides a similar treatment to manufacturers of all types 
of alternative fuel vehicles, including electric vehicles,
    (iii) It is relatively simple and straightforward to apply, 
compared to other approaches considered.

C. Test Procedures

    The Environmental Protection Agency is responsible for specifying 
the test procedures and calculations used to derive the fuel economy 
values to be used in all CAFE determinations. The energy efficiency 
values used in CAFE calculations are determined using the test cycles 
commonly referred to as the ``city'' and ``highway'' test cycles 
described in the Environmental Protection Agency's regulations at 40 
CFR Parts 86 and 600. The number of replications of these driving 
cycles needed to adequately determine the energy efficiency of each 
vehicle will depend upon the type of storage devices (e.g., lead-acid 
batteries).
    The electrical systems of each vehicle may require special tools 
and/or measuring equipment to satisfactorily measure the energy 
consumed during testing. The Environmental Protection Agency has 
promulgated the ``Special Test Procedures'' provisions of 40 CFR 
86.090-27 to accommodate any such special needs.

D. Calculation Procedures

    The proposed PEF is conceptually based on the previously described 
regulatory approach at 49 U.S.C. 32905 (c) for determining the 
petroleum-equivalent fuel economy of gaseous fueled vehicles. The 
proposed PEF converts the measured electrical energy consumption of an 
electric vehicle into a raw gasoline-equivalent fuel economy value, and 
then divides this value by 0.15 to arrive at a final petroleum-
equivalent fuel economy value which may then be included in the 
calculation of the vehicle manufacturer's corporate average fuel 
economy. Two additional factors are present in the equation, but these 
will normally have a value of unity and thus will not influence the 
value of the PEF in most cases. The terms comprising the PEF and the 
procedure for applying the PEF are described in greater detail below.
1. General Form of the PEF Equation
    The general form of the PEF equation is:
PEF = Eg * 1/0.15 * AF * DPF

Where:

Eg=Gasoline-equivalent energy content of electricity factor
1/0.15=``Fuel content'' factor
AF=Petroleum-fueled accessory factor
DPF=Driving pattern factor

    The development of these factors is described below.
2. Gasoline-Equivalent Energy Content of Electricity Factor
    When comparing the fuel economy of two gasoline vehicles to one 
another, it

[[Page 37908]]

is sufficient to measure the quantity of fuel consumed and the distance 
each vehicle can travel on that fuel. Since the same fuel is used to 
power both vehicles, useful comparisons of the relative energy 
efficiency of the two vehicles can be made without considering the 
efficiency of the process of getting the fuel to the vehicles.
    When comparing gasoline vehicles with electric vehicles, however, 
it is essential to consider the efficiency of the respective 
``upstream'' processes in the two fuel cycles. A full description of 
the differences in the processes is beyond the scope of this 
rulemaking, but the critical difference is that a gasoline vehicle 
burns its fuel on-board the vehicle, and an electric vehicle burns its 
fuel (the majority of electricity in the U.S. is generated at fossil 
fuel burning powerplants) off-board the vehicle. In both cases, the 
burning of fuels to produce work is the least efficient step of the 
respective energy cycles. If one considers only the energy supplied as 
gasoline to the gasoline vehicle (from refueling), or as electricity to 
the electric vehicle (from recharging), then this inefficient step is 
counted against the gasoline vehicle but not against the electric 
vehicle. The result is that the fuel economy of the electric vehicle 
will be substantially overstated.
    For these reasons, the PEF includes a term for expressing the 
relative energy efficiency of the full energy cycles of gasoline and 
electricity. This term, the gasoline-equivalent energy content of 
electricity factor, abbreviated as Eg, is defined as:
[GRAPHIC] [TIFF OMITTED] TP14JY99.000

Where:

Tg=U.S. average fossil-fuel electricity generation 
efficiency = 0.328
Tt=U.S. average electricity transmission efficiency = 0.924
Tp=Petroleum refining and distribution efficiency = 0.830
C=Watt-hours of energy per gallon of gasoline conversion factor=33,440 
Wh/gal
[GRAPHIC] [TIFF OMITTED] TP14JY99.001

Note that Tg and Tt are included in order to 
satisfy a requirement from Congress (49 U.S.C. 32904(a)(2)(B)) as well 
as for the technical reasons given above.
    The derivation of these values is straightforward but lengthy and 
is therefore not discussed in this notice. Details on the assumptions, 
calculations, and data sources (primarily monthly and annual 
statistical reports from the Energy Information Administration) used to 
derive these values are described in materials contained in Docket No. 
EE-RM-99-PEF which may be reviewed at the DOE Freedom of Information 
Reading Room, at the address and times stated in the ADDRESSES section 
of this notice of proposed rulemaking.
3. ``Fuel Content'' Factor
    The fuel content factor has a value of 1/0.15 and is included in 
the PEF for the reasons described in section II.B and summarized as 
follows:
    (i) Consistency with existing regulatory and statutory procedures,
    (ii) Provision of similar treatment to manufacturers of all types 
of alternative fuel vehicles,
    (iii) Simplicity and directness.
    The fuel content factor value of 1/0.15 is equivalent to a multiple 
of 6.67.
4. Petroleum-Fueled Accessory Factor
    Some electric vehicles, particularly those that may be operated in 
colder climates, may be equipped with auxiliary petroleum-fueled cabin 
heater/defroster systems. DOE considered the possible use of such 
petroleum-fueled accessories in the PEF calculations by incorporating 
an Accessory Factor (AF). This factor has been assigned a usage factor 
that reduces the PEF by approximately ten percent per accessory, and it 
is assumed that no vehicle will ever be equipped with more than two 
such accessories. The majority of electric vehicles are expected to 
have no petroleum-fueled accessories installed. This results in 3 
possible accessory factor values:

------------------------------------------------------------------------
                                                             Accessory
         Number of petroleum-fueled accessories             factor (AF)
------------------------------------------------------------------------
0.......................................................            1.00
1.......................................................            0.90
2.......................................................            0.81
------------------------------------------------------------------------

    DOE recognizes that this is a crude accounting of the impact of the 
petroleum-fueled accessories. However, because this approach penalizes 
electric vehicles equipped with petroleum-fueled accessories, it 
provides an incentive for manufacturers to develop vehicles with more-
desirable all-electric climate control systems.
    Interested persons should also be aware that the definition of an 
electric vehicle (Zero Emission Vehicle) codified in 40 CFR Part 
88.104(g) places certain restrictions on the fuel, operation, and 
emissions from fuel fired heaters. The definition of ``electric 
vehicle'' in section 474.2 of this part incorporates these 
restrictions.
5. Driving Pattern Factor
    One of the factors that DOE must consider in determining petroleum-
equivalent fuel economy values for electric vehicles is the relative 
driving patterns of electric and petroleum-fueled vehicles (49 U.S.C. 
32904(a)(1)(B)(iv)). The purpose of the driving pattern factor (DPF) is 
to recognize the fact that electric vehicles may be used differently 
than gasoline vehicles, primarily due to their shorter range and longer 
``refueling'' times. However, existing EPA regulations do not make 
driving-pattern-based adjustments to the fuel economy of various 
classes of gasoline vehicles when calculating a manufacturer's CAFE, 
even though gasoline-powered vehicles are also used in a large variety 
of different ways. Therefore, DOE proposes that for now the DPF be 
assigned a value of unity (1.00). The driving pattern factor term would 
be retained in the PEF equation, however,

[[Page 37909]]

to allow this value to be adjusted if doing so is warranted in the 
future.
6. Use of the PEF
    The value of the PEF is equal to the product of the values of the 
gasoline-equivalent energy content of electricity (Eg), the 
fuel content factor of 1/0.15, the petroleum-fueled accessory factor 
(AF), and the driving pattern factor (DPF):

PEF=Eg * 1/0.15 * AF * DPF substituting values,
PEF=(12,211 Wh/gal)* 1/0.15 * (1.00 or 0.90 or 0.81) * (1.00)

or,

PEF=81,407 Wh/gal  (zero petroleum-fueled accessories)
PEF=73,266 Wh/gal  (one petroleum-fueled accessory)
PEF=65,940 Wh/gal  (two petroleum-fueled accessories)

    Dividing the PEF by the combined (city and highway) energy 
consumption of an electric vehicle yields the petroleum-equivalent fuel 
economy of that electric vehicle in miles per gallon:

mpg=PEF (Wh/gal)  combined [electrical] energy consumption (Wh/
mile)

Care should be taken to distinguish the assigned petroleum-equivalent 
fuel economy value from the actual energy-equivalent fuel economy.
7. Sample Calculations
    DOE includes sample calculations of the petroleum-equivalent fuel 
economy of hypothetical electric vehicles in the Appendix of this 
proposed rule. DOE intends to include these sample calculations as an 
Appendix to 10 CFR Part 474.

III. Opportunities for Public Comment

A. Participation in Rulemaking

    The Department encourages public participation in this rulemaking. 
Individual vehicle manufacturers, fuel producers and providers, trade 
groups, associations, vehicle owners and operators, States or other 
governmental entities, and other affected or interested parties are 
urged to submit written comments on the proposal.
    The Department has established a period of 60 days following 
publication of this notice for persons to comment on this notice of 
proposed rulemaking. You may review all public comments and other 
docket material in the DOE Freedom of Information Reading Room at the 
address shown at the beginning of this notice. The materials will be 
filed under docket number EE-RM-99-PEF.

B. Written Comment Procedures

    Interested persons and organizations are invited to participate in 
this rulemaking by submitting data, views, or comments with respect to 
the proposed rulemaking. Please provide seven copies of your comments 
to the address indicated in the ADDRESSES section of this notice. 
Please include the designation ``Inclusion of Electric Vehicles in 
Corporate Average Fuel Economy Calculation--Notice of Proposed 
Rulemaking'' (Docket No. EE-RM-99-PEF) on the outside of the envelope 
and on individual documents submitted. DOE will consider all timely-
submitted comments and other relevant information before issuing a 
final rule.
    If you are submitting information you believe to be confidential 
and that may be exempt by law from public disclosure, you should submit 
one complete copy along with three copies from which you have removed 
the confidential information. DOE will make its own determination 
regarding any claim that information submitted be exempt from public 
disclosure. Our procedures regarding confidential information are in 10 
CFR Part 1004.11.

C. Public Hearing

1. Request To Speak Procedures
    The time and place of the public hearing are indicated in the DATES 
and ADDRESSES sections of this notice. The Department invites any 
person or organization having an interest in the proposed rulemaking to 
request to make an oral presentation. Your request should be directed 
to DOE at the address indicated in the ADDRESSES section of this 
notice. You should bring seven copies of your statement to the hearing. 
In the event that you cannot provide seven copies, contact Ms. Kasarsky 
at the number indicated in the ADDRESSES section in advance of the 
hearing to make alternative arrangements.
2. Conduct of the Hearing
    DOE will designate an official to preside at the hearing. This will 
not be an evidentiary or judicial-type hearing but will be conducted in 
accordance with 5 U.S.C. 553 and section 501 of the Department of 
Energy Organization Act, 42 U.S.C. 7191. Only those conducting the 
hearing may ask questions. At the conclusion of all initial oral 
statements, each person who has made an oral statement will be given 
the opportunity, if he or she so desires, to make a rebuttal or 
clarifying statement. The statements will be given in the order in 
which the initial statements were made and will be subject to time 
limitations.
    DOE will prepare a transcript of the hearing. DOE will retain the 
transcript and other records of this rulemaking and make them available 
for public inspection at the DOE Freedom of Information Reading Room as 
provided at the beginning of this notice. Any person may purchase a 
copy of the transcript from the transcribing reporter.
    The presiding officer will announce any further procedural rules 
needed for the proper conduct of the hearing.

IV. Procedural Requirements

A. Environmental Protection Agency Review

    Pursuant to section 7(a) of the Federal Energy Administration Act 
of 1974 (15 U.S.C. 766(a)), DOE submitted a copy of this notice to the 
Administrator of the Environmental Protection Agency for the 
Administrator's concurrence. The Administrator has concurred.

B. National Environmental Policy Act Review

    This rulemaking has been reviewed in accordance with the 
requirements of the DOE National Environmental Policy Act Final Rule as 
published in 10 CFR Part 1021. This rulemaking amends 10 CFR Part 474 
so that electric vehicles receive similar treatment to what Congress 
has required for other alternative fuel vehicles under 49 U.S.C. 32905. 
The Department has determined that this rule is covered by Categorical 
Exclusion in paragraph A5 to subpart D, 10 CFR Part 1021 (rulemaking, 
interpreting or amending an existing regulation, no change in 
environmental effect). Accordingly, neither an Environmental Assessment 
or an Environmental Impact Statement is required.

C. Regulatory Review

    Today's proposed rule has been determined not to be a ``significant 
regulatory action,'' as defined in section 3(f) of Executive Order 
12866, ``Regulatory Planning and Review.'' 58 FR 51735 (October 4, 
1993). Accordingly, this action was not subject to review under the 
Executive Order by the Office of Information and Regulatory Affairs in 
the Office of Management and Budget.

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612) requires that an 
agency prepare an initial regulatory flexibility analysis to be 
published at the time the proposed rule is published. This requirement 
(which appears in section 603) does not apply if the agency certifies 
that the rule will not, if promulgated, have a ``significant economic 
impact on a substantial number of small entities.''
    DOE certifies that this action will not have a significant economic 
impact on

[[Page 37910]]

a substantial number of small entities. It is directed at vehicle 
manufacturers that will be concerned with a mix of petroleum and 
electric fueled vehicles in their annual production. None of these 
manufacturers is a small entity.

E. Federalism Review

    Executive Order 12612 (52 FR 41685, October 30, 1987) requires that 
regulations or rules be reviewed for any substantial direct effects on 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among 
various levels of government. If there are sufficient substantial 
direct effects, then Executive Order 12612 requires preparation of a 
federalism assessment to be used in all decisions involved in 
promulgating such a regulation or rule.
    This action and 10 CFR Part 474 serve only to provide a method of 
interpreting 40 CFR Part 600 (Fuel Economy of Motor Vehicles) for 
electric vehicles. The action does not involve any substantial direct 
effects on States or other considerations stated in Executive Order 
12612. Hence, no federalism assessment is required.

F. ``Takings'' Assessment Review

    It has been determined that pursuant to Executive Order 12630 (52 
FR 8859, March 18, 1988), this proposed regulation, if adopted, would 
not result in any takings which might require compensation under the 
Fifth Amendment to the United States Constitution.

G. 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 (February 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. With regard to the review 
required by section 3(a), section 3(b) of Executive Order 12988 
specifically requires that Executive agencies make 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.

H. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) requires each Federal agency to prepare a written assessment of the 
effects of any Federal mandate in a proposed or final agency rule that 
may result in the expenditure by State, local, and tribal governments, 
in the aggregate, or by the private sector, of $100 million in any one 
year. The Act 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 to timely input to potentially affected small governments 
before establishing any requirements that might significantly or 
uniquely affect small governments. The proposed rule published today 
does not contain any Federal mandate, so these requirements do not 
apply.

I. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. No. 105-277) requires Federal agencies to issue a 
Family Policymaking Assessment for any proposed rule or policy that may 
affect family well-being. Today's proposal 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.
    The notice of proposed rulemaking published in the Federal Register 
on February 4, 1994 (59 FR 5336) is withdrawn as of July 14, 1999.

List of Subjects in 10 CFR Part 474

    Electric power, Energy conservation, Motor vehicles, Research.

    Issued in Washington, DC, on June 10, 1999.
Dan W. Reicher,
Assistant Secretary, Energy Efficiency and Renewable Energy.

    For the reasons set forth in the preamble, DOE proposes to revise 
Part 474 of Chapter II of Title 10 of the Code of Federal Regulations 
as set forth below:

PART 474--ELECTRIC AND HYBRID VEHICLE RESEARCH, DEVELOPMENT, AND 
DEMONSTRATION PROGRAM; PETROLEUM-EQUIVALENT FUEL ECONOMY 
CALCULATION

Sec.
474.1  Purpose and scope.
474.2  Definitions.
474.3  Petroleum-equivalent fuel economy calculation.
474.4  Test procedures.
474.5  Review and update.

Appendix to Part 474--Sample Petroleum-Equivalent Fuel Economy 
Calculations

    Authority: 49 U.S.C. 32901 et seq.


Sec. 474.1  Purpose and scope.

    This part contains procedures for calculating a value for the 
petroleum-equivalent fuel economy of electric vehicles, as required by 
49 U.S.C. 32904(a)(2). The petroleum-equivalent fuel economy value is 
intended to be used by the Environmental Protection Agency in 
calculating corporate average fuel economy values pursuant to 
regulations at 40 CFR Part 600--Fuel Economy of Motor Vehicles.


Sec. 474.2  Definitions.

    For the purposes of this part, the term:
    Combined energy consumption value means the weighted average of the 
Urban Dynamometer Driving Schedule and the Highway Fuel Economy Driving 
Schedule energy consumption values (weighted 55% / 45%, respectively), 
as determined by the Environmental Protection Agency in accordance with 
40 CFR Parts 86 and 600.
    Electric vehicle means a vehicle that is powered by an electric 
motor drawing current from rechargeable storage batteries or other 
portable electrical energy storage devices, provided that:
    (1) Recharge energy must be drawn from a source off the vehicle, 
such as residential electric service; and
    (2) The vehicle must comply with all provisions of the Zero 
Emission Vehicle definition found in 40 CFR 88.104(g).
    Highway Fuel Economy Driving Schedule energy consumption value 
means the average number of watt-hours of electrical energy required 
for an electric vehicle to travel one mile of the Highway Fuel Economy 
Driving Schedule, as determined by the Environmental Protection Agency.

[[Page 37911]]

    Petroleum equivalency factor means the value specified in section 
474.3(b), which incorporates the parameters listed in 49 U.S.C. 
32904(a)(2)(B) and is used to calculate petroleum-equivalent fuel 
economy.
    Petroleum-equivalent fuel economy means the value, expressed in 
miles per gallon, that is calculated for an electric vehicle in 
accordance with Sec. 474.3(a), and reported to the Administrator of the 
Environmental Protection Agency for use in determining the vehicle 
manufacturer's corporate average fuel economy.
    Petroleum-powered accessory means a vehicle accessory (e.g., a 
cabin heater, defroster, and/or air conditioner) that:
    (1) Uses gasoline or diesel fuel as its primary energy source; and
    (2) Meets the requirements for fuel, operation, and emissions in 40 
CFR 88.104(g).
    Urban Dynamometer Driving Schedule energy consumption value means 
the average number of watt-hours of electrical energy required for an 
electric vehicle to travel one mile of the Urban Dynamometer Driving 
Schedule, as determined by the Environmental Protection Agency.


Sec. 474.3  Petroleum-equivalent fuel economy calculation.

    (a) The petroleum-equivalent fuel economy for an electric vehicle 
is calculated as follows:
    (1) Determine the electric vehicle's Urban Dynamometer Driving 
Schedule energy consumption value and the Highway Fuel Economy Driving 
Schedule energy consumption value in units of watt-hours per mile;
    (2) Average the Urban Dynamometer Driving Schedule energy 
consumption value and the Highway Fuel Economy Driving Schedule energy 
consumption value using a weighting of 55% urban/45% highway to 
determine the combined energy consumption value of the electric vehicle 
in units of watt-hours per mile; and
    (3) Calculate the petroleum-equivalent fuel economy by dividing the 
appropriate petroleum equivalency factor for the number of petroleum-
powered accessories installed (see paragraph (b) of this section) by 
the combined energy consumption value, and round to the nearest 0.01 
miles per gallon.
    (b) The petroleum-equivalency factors for electric vehicles are as 
follows:
    (1) If the electric vehicle does not have any petroleum-powered 
accessories installed, the value of the petroleum equivalency factor is 
81,407 watt-hours per gallon.
    (2) If the electric vehicle has one petroleum-powered accessory 
installed, the value of the petroleum equivalency factor is 73,266 
watt-hours per gallon.
    (3) If the electric vehicle has two petroleum-powered accessories 
installed, the value of the petroleum equivalency factor is 65,940 
watt-hours per gallon.


Sec. 474.4  Test procedures.

    (a) The electric vehicle energy consumption values used in the 
calculation of petroleum-equivalent fuel economy under Sec. 474.3 will 
be determined by the Environmental Protection Agency using the Highway 
Fuel Economy Driving Schedule and Urban Dynamometer Driving Schedule 
test cycles at 40 CFR parts 86 and 600.
    (b) The ``Special Test Procedures'' provisions of 40 CFR 86.090-27 
may be used to accommodate any special test procedures required for 
testing the energy consumption of electric vehicles.


Sec. 474.5  Review and update.

    The Department will review this part [five years after the date of 
publication as a final rule] to determine whether any updates and/or 
revisions are necessary. The Department will publish the results of 
this review in the Federal Register.

Appendix to Part 474--Sample Petroleum-Equivalent Fuel Economy 
Calculations

Example 1:

    An electric vehicle is tested in accordance with Environmental 
Protection Agency procedures and is found to have an Urban 
Dynamometer Driving Schedule energy consumption value of 265 watt-
hours per mile and a Highway Fuel Economy Driving Schedule energy 
consumption value of 220 watt-hours per mile. The vehicle is not 
equipped with any petroleum-powered accessories. The combined 
electrical energy consumption value is determined by averaging the 
Urban Dynamometer Driving Schedule energy consumption value and the 
Highway Fuel Economy Driving Schedule energy consumption value using 
weighting factors of 55% urban, and 45% highway:

Combined electrical energy consumption value = (0.55 * urban) + 
(0.45 * highway) = (0.55 * 265) + (0.45 * 220) = 244.75 Wh/mile

    Since the vehicle does not have any petroleum-powered 
accessories installed, the value of the petroleum equivalency factor 
is 81,407 watt-hours per gallon, and the petroleum-equivalent fuel 
economy is:

(81,407 Wh/gal)  (244.75 Wh/mile) = 332.61 mpg

Example 2:

    The vehicle from Example 1 is equipped with an optional diesel-
fired cabin heater/defroster. For the purposes of this example, it 
is assumed that the electrical efficiency of the vehicle is 
unaffected.
    Since the vehicle has one petroleum-powered accessory installed, 
the value of the petroleum equivalency factor is 73,266 watt-hours 
per gallon, and the petroleum-equivalent fuel economy is:

(73,266 Wh/gal)  (244.75 Wh/mile) = 299.35 mpg

[FR Doc. 99-17786 Filed 7-13-99; 8:45 am]
BILLING CODE 6450-01-P