[Federal Register Volume 72, Number 27 (Friday, February 9, 2007)]
[Proposed Rules]
[Pages 6186-6190]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-2168]


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DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy

10 CFR Part 431

[Docket Number: EE-RM/STD-00-550]
RIN 1904-AB08


Energy Conservation Program for Commercial Equipment: 
Distribution Transformers Energy Conservation Standards

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy.

ACTION: Notice of data availability and request for comments.

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SUMMARY: The Department of Energy (DOE) issued a notice of proposed 
rulemaking (NOPR) for liquid-immersed and medium-voltage, dry-type 
distribution transformers under the Energy Policy and Conservation Act 
(EPCA). In response to this notice, stakeholders commented that DOE's 
standard may prevent or render impractical the replacement of 
distribution transformers in certain space-constrained (e.g., vault) 
installations. Some stakeholders suggested that DOE's analysis of the 
benefits and burdens of the proposed standard should take into 
consideration the potential impacts of replacing transformers in space-
constrained vaults. In the Notice of Proposed Rulemaking (NOPR), DOE 
factored weight-dependent installation costs in the analysis, but did 
not specifically address potential costs related to transformers 
installed in vaults. In today's notice, DOE requests comment on 
inclusion of potential costs related to size constraints of 
transformers installed in vaults. DOE also is considering an additional 
option for the final efficiency levels for liquid-immersed distribution 
transformers and by this notice invites public comment on this 
additional option.

DATES: DOE will accept written comments, data, and information in 
response to this notice, but no later than March 12, 2007. See section 
VI, ``Public Participation,'' of this notice for details.

ADDRESSES: Any comments submitted must identify the Notice of Data 
Availability for Distribution Transformers Energy Conservation 
Standards, and provide the docket number EE-RM/STD-00-550 and/or 
Regulatory Information Number (RIN) 1904-AB08. Comments may be 
submitted using any of the following methods:

[[Page 6187]]

    1. Federal eRulemaking Portal: http://www.regulations.gov. Follow 
the instructions for submitting comments.
    2. E-mail: [email protected]. Include 
the docket number EE-RM/STD-00-550 and/or RIN 1904-AB08 in the subject 
line of the message.
    3. Mail: Ms. Brenda Edwards-Jones, U.S. Department of Energy, 
Building Technologies Program, Mailstop EE-2J, 1000 Independence 
Avenue, SW., Washington, DC 20585-0121. Please submit one signed 
original paper copy.
    4. Hand Delivery/Courier: Ms. Brenda Edwards-Jones, U.S. Department 
of Energy, Building Technologies Program, Room 1J-018, 1000 
Independence Avenue, SW., Washington, DC 20585. Telephone: (202) 586-
2945. Please submit one signed original paper copy.
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see section VI. 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, Forrestal 
Building, Room 1J-018 (Resource Room of the Building Technologies 
Program), 1000 Independence Avenue, SW., Washington, DC, (202) 586-
2945, between 9 a.m. and 4 p.m., Monday through Friday, except Federal 
holidays. Please call Ms. Brenda Edwards-Jones at the above telephone 
number for additional information regarding visiting the Resource Room. 
Please note: DOE's Freedom of Information Reading Room (formerly Room 
1E-190 at the Forrestal Building) is no longer housing rulemaking 
materials.

FOR FURTHER INFORMATION CONTACT: Antonio Bouza, Project Manager, Energy 
Conservation Standards for Distribution Transformers, U.S. Department 
of Energy, Building Technologies Program, Mailstop EE-2J, 1000 
Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-4563, e-
mail: [email protected].
    Francine Pinto, Esq. or Chris Calamita, Esq., U.S. Department of 
Energy, Office of General Counsel, Mailstop GC-72, 1000 Independence 
Avenue, SW., Washington, DC 20585, (202) 586-7432, e-mail: 
[email protected]. or 
[email protected].

SUPPLEMENTARY INFORMATION: 

I. Introduction
II. Transformer Size Issues
    A. DOE's Treatment of Size Issues in the NOPR Analysis
    B. Summary of Comments on Size Issues for Vault Transformers
    C. Size Constraints in DOE's NOPR Analysis
III. DOE's Proposed Revisions to Estimating Size Burdens
    A. Vault Transformer Subgroup Analysis
    B. Addressing Size Constraints for Vault Transformers
    C. Potential Approaches for Estimating the Cost Impacts of 
Satisfying Constraints Without Vault Modifications
    D. Potential Approaches for Estimating the Cost Impacts of 
Satisfying Constraints With Vault Modifications
IV. Summary of Size Issue
V. Consideration of Final Efficiency Levels
VI. Public Participation
    A. Submission of Comments
    B. Issues on Which DOE Seeks Comment

I. Introduction

    Part C of Title III of EPCA authorizes DOE to establish energy 
conservation standards for distributions transformers for which DOE 
determines that energy conservation standards would be technologically 
feasible and economically justified, and would result in significant 
energy savings. (42 U.S.C. 6317(a).) Pursuant to EPCA, DOE published a 
NOPR for liquid-immersed and medium-voltage, dry-type distribution 
transformers on August 4, 2006. 71 FR 44356. Together with the NOPR, 
DOE published a technical support document (TSD) that details each 
analysis DOE conducted for the rulemaking, providing specific 
information on its methodology and results. These documents are 
available at the following DOE Web site: http://www.eere.energy.gov/buildings/appliance_standards/commercial/distribution_transformers.html. DOE subsequently held a public meeting on September 
27, 2006, and invited comments from stakeholders until October 18, 
2006.
    Some stakeholders commented that DOE had not properly considered 
potentially significant economic impacts of the minimum efficiency 
standard on space-constrained vault transformer installations. Vault 
transformers are distribution transformers that are used in underground 
distribution networks, where the transformers are installed below 
ground level. Often found in urban areas, these transformers are 
installed inside a concrete vault that is open at the top, which can be 
very expensive to replace or expand. As transformers are manufactured 
to be more energy efficient, they tend to increase in size. For this 
reason, stakeholders expressed concern that DOE's mandatory standard 
may not allow for practical replacement of transformers in certain 
existing space constrained installations.
    In the analysis for the NOPR, DOE considered potential weight-
dependent costs for installation, but DOE did not factor potential 
space-constraint costs of vault transformers in its analysis. DOE 
acknowledges the concern with space-constrained installations, and in 
this notice outlines for stakeholder comment analytical approaches that 
take into consideration potential costs related to distribution 
transformers installed in vaults.
    This notice presents analytical approaches DOE is considering for 
addressing stakeholder concern on the space-constrained vault 
transformer issue. DOE invites stakeholders to comment on these 
approaches, or to propose alternatives to DOE.

II. Transformer Size Issues

A. DOE's Treatment of Size Issues in the NOPR Analysis

    In the life-cycle cost (LCC) spreadsheets DOE published with the 
NOPR, DOE provided external dimensions and weight information for each 
of the distribution transformer designs it considered in its analysis. 
For distribution transformers, size is very closely correlated with 
weight, and DOE developed weight-dependent installation costs for 
transformers using scaling relationships developed from RS Means 
installation cost data (see TSD, Chapter 7).
    Although DOE's LCC spreadsheets contained external dimensional 
information for each transformer in the design database, DOE's NOPR did 
not report transformer size as a function of trial standard level 
(TSL). For today's notice, DOE calculated the volumes of those 
transformers selected by the LCC spreadsheets, as a function of TSL, 
for the two design lines (DLs) for which transformer vault constraints 
are most likely to be an issue: DL4 and DL5.\1\ Tables II.1 and II.2 
provide the average volume distributions for DL4 and DL5, respectively. 
For these tables, DOE sorted the transformers from the smallest to the 
largest volume for the distribution of transformers purchased at each 
standard level. DOE then calculated the minimum volume, the maximum 
volume, and the transformer volume at the 10th, 25th, 50th, 75th,

[[Page 6188]]

and 90th percentiles. These distributions illustrate the degree to 
which average transformer volumes of selected designs in the NOPR LCC 
analysis varied by TSL.
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    \1\ DL4 includes 15-500 kilovolt-ampere (kVA) liquid-immersed, 
three-phase transformers, and is represented in the LCC analysis by 
a 150 kVA transformer. DL5 includes 750-2500 kVA liquid-immersed, 
three-phase transformers, and is represented in the LCC analysis by 
a 1500 kVA transformer.

           Table II.1.--Transformer Volume in Cubic Feet, NOPR LCC Results for Design Line 4 (150 kVA)
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        Design line 4          Base case     TSL 1       TSL 2       TSL 3       TSL 4       TSL 5       TSL 6
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Minimum.....................       61.11       63.89       66.55       66.41       66.41       80.24       87.50
10th percentile.............       62.50       66.41       69.01       69.01       69.01       80.24       87.50
25th percentile.............       64.93       67.71       69.36       70.54       70.54       80.24       87.50
50th percentile.............       69.01       71.61       75.14       75.87       75.87       81.60       87.50
75th percentile.............       75.87       76.16       78.88       81.60       81.60       86.11       88.89
90th percentile.............       81.94       81.94       81.94       85.68       85.68       87.04       88.89
Maximum.....................       90.28       90.28       91.67       91.67       91.67       91.67       90.74
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          Table II.2.--Transformer Volume in Cubic Feet, NOPR LCC Results for Design Line 5 (1500 kVA)
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        Design line 5          Base case     TSL 1       TSL 2       TSL 3       TSL 4       TSL 5       TSL 6
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Minimum.....................      202.22      223.81      222.96      229.93      233.41      247.35      247.35
10th percentile.............      215.91      227.99      233.41      233.41      236.90      250.83      250.83
25th percentile.............      226.45      233.41      236.90      233.41      236.90      257.80      257.80
50th percentile.............      236.90      236.90      240.38      240.38      240.38      257.80      257.80
75th percentile.............      240.38      240.38      241.03      243.87      247.35      257.80      257.80
90th percentile.............      250.83      250.83      250.83      250.83      250.83      257.80      257.80
Maximum.....................      261.28      261.28      261.28      261.28      261.28      257.80      257.80
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    Relative to the base case for DL4, the increase in volume of the 
smallest transformer (i.e., ``minimum'') is nine percent or less for 
TSL4 and lower, while the largest transformer (i.e., ``maximum'') has 
an increase in volume relative to the base case of two percent or less 
for TSL4 and lower.
    Relative to the base case for DL5, the increase in volume of the 
smallest transformer is 16 percent or less for TSL4 and lower, while 
the largest transformer has no increase in volume.

B. Summary of Comments on Size Issues for Vault Transformers

    DOE received comments on both size and weight issues from 
stakeholders during both the advance notice of proposed rulemaking 
(ANOPR) and NOPR phases of the rulemaking. In the NOPR, DOE requested 
comment on ``whether the Department should include space occupancy 
costs in the cost of transformers as a means of accounting for space 
constraints.'' 71 FR 44407. In response to this request, commenters 
provided feedback both during the public meeting and in their written 
comments.
    HVOLT commented that it endorsed the concept of using space 
occupancy costs in the evaluation of the impacts of space-constrained 
utility transformers. (Public Meeting Transcript, No. 108.6 at p. 129) 
The American Council for an Energy Efficient Economy (ACEEE) 
recommended that DOE calculate what ``the average cost of a vault 
modification is times the percentage of applications that will 
trigger.'' (Public Meeting Transcript, No. 108.6 at p. 130) The Edison 
Electric Institute (EEI) commented that space occupancy costs should be 
included but that such costs may be difficult to estimate and may range 
from 10 percent of the cost of a transformer to 100 percent of the 
transformer cost. (Public Meeting Transcript, No. 108.6 at p. 129-130)
    In written comments after the NOPR public meeting, ACEEE commented 
that vault transformer costs should be treated using methods similar to 
the methods DOE used for distribution transformer pole costs in the 
NOPR analysis. (ACEEE, No. 127 at p. 6) EEI, in its written comments, 
emphasized the importance of the potential costs for vault transformers 
since this effect could create serious service reliability issues for 
some utilities. (EEI, No. 137 at p. 3)
    In its comments and submissions in response to the ANOPR, EEI 
provided limited data on potential costs that could be applicable to 
vault transformers. (EEI, No. 63 at pp. 20-62) In its submission, EEI 
provided a survey in which it asked its members, as well as members of 
the American Public Power Association (APPA) and the National Rural 
Electric Cooperative Association (NRECA), the following question: ``For 
currently existing pad-mount units in urban areas that need to be 
replaced, what kind of impact would a 10%, 25%, or 50% size increase 
have on the installed costs?'' EEI received nine responses from its 
members, eight responses from APPA members, and one response from an 
NRECA member. EEI packaged all these responses and provided them to the 
DOE as one comment. Of these responses, a few were directly relevant to 
vault transformers, with most responses noting some impact but not 
quantifying the size of the impacts. EEI member 6 commented 
that ``Should the transformer pad or vault lid require replacement in 
order to fit the larger transformer, then additional costs ranging from 
$500 to $1,500 will apply.'' (EEI, No. 63 at p. 36) At the high end of 
cost estimates, APPA member 5 commented that ``size would be 
an issue if we had to change out units to larger. Cost per location can 
cost approx. $15k.'' (EEI, No. 63 at p. 42) Other EEI, APPA, or NRECA 
members did not provide specific estimates for relocation, vault 
replacement, or vault modification costs for vault transformers.

C. Size Constraints in DOE's NOPR Analysis

    While DOE did include size-dependent installation costs for 
distribution transformers in its analysis (see NOPR TSD, Chapter 7), it 
did not include the additional space-constraint costs that may be borne 
by vault transformers. Since stakeholders presented this issue as a 
substantial concern in their comments on the NOPR, and since DOE agrees 
that it did not include these costs in the NOPR analysis, DOE intends 
to consider these costs in its analysis for the final rule.

[[Page 6189]]

III. DOE's Proposed Revisions to Estimating Size Burdens

A. Vault Transformer Subgroup Analysis

    In response to the stakeholder comments summarized above, DOE 
intends to conduct a subgroup sensitivity analysis of vault 
transformers to estimate space-constraint costs for the final rule. 
This issue is primarily of concern for liquid-immersed, three-phase 
distribution transformers, as this type of transformer is most often 
used in vault applications. Therefore DOE intends to conduct its 
sensitivity analysis on its two design lines that represent three-phase 
liquid-immersed distribution transformers, DL4 and DL5.
    Information provided by Howard Industries suggests that less than 
0.5 percent of transformers are used in submersible or vault 
applications. (Howard Industries, No. 143 at p.5) Taking that estimate 
of 0.5 percent of all liquid-immersed transformers are vault 
transformers, and assuming they are all large, three-phase units such 
as those in DL5, the percentage of vault transformers could account for 
a sizeable portion of total DL5 sales--perhaps as high as 25 percent. 
If the estimate of 0.5 percent of all liquid-immersed shipments were 
instead assumed to all be smaller three-phase transformers (i.e., DL4), 
the fraction of DL4 transformers affected by such space constraints is 
likely to be less than a few percent. Stakeholders are invited to 
comment on the proportion of distribution transformers sold that are 
installed in underground vaults, particularly with respect to the 
liquid-immersed, three-phase design lines, DL4 and DL5.

B. Addressing Size Constraints for Vault Transformers

    DOE recognizes that, where vault dimensional constraints are an 
issue, transformer customers have several options available to them, 
including:
    1. Rewinding or refurbishing the existing transformer,
    2. Purchasing a lower-kVA transformer and subjecting it to higher 
loading (or re-routing part of the load served),
    3. Purchasing a transformer--constructed of higher-performing core 
steel and/or other materials--that is standards-compliant without being 
significantly larger (with added cost),
    4. Rebuilding or expanding the existing vault, or
    5. Petitioning DOE for waiver from energy conservation standard 
requirements.
    DOE expects that the first two options, if available, would be 
cheaper than purchasing a new transformer. DOE therefore proposes to 
focus its analysis of the LCC impacts from dimensionally constrained 
vault transformers on the third and fourth options as part of an LCC 
subgroup analysis published with the final rule.

C. Potential Approaches for Estimating the Cost Impacts of Satisfying 
Constraints Without Vault Modifications

    Considering option 3 from the above list, DOE could estimate the 
cost of purchasing a transformer of the same size, but constructed of 
higher-performing materials, such as better grades of core steel or 
copper conductor, by performing a size-constrained LCC calculation for 
both DL4 and DL5. In this calculation, DOE could assume the standards-
compliant transformer in the LCC calculation was constrained at certain 
sizes, e.g., at the 25th and 50th percentiles of the distribution 
transformer volumes in the base case.
    As a function of standard level, DOE could then run the LCC 
spreadsheets and calculate the LCC of the space-constrained 
transformers (at prescribed dimensional percentiles), and compare those 
values to the LCC from the unconstrained transformer analysis. The 
difference in LCC between the two cases would quantify the impact of 
satisfying the space constraint with better materials as a function of 
efficiency level for that subgroup of dimensionally constrained vault 
transformers.

D. Potential Approaches for Estimating the Cost Impacts of Satisfying 
Constraints With Vault Modifications

    Considering option 4 from the above list, DOE could add an 
additional size-dependent installation cost to the transformers 
included in the LCC subgroup analysis for vault transformers to account 
for a relatively high underground vault-space cost. DOE invites 
additional stakeholder input or data on what would be reasonable fixed 
and variable costs (e.g., per cubic foot) for DL4 and DL5. For this 
option, DOE would apply the vault replacement costs (with both a fixed 
and variable cost) when a transformer exceeds the median volume of the 
transformers in the base case. Given a review of cost estimation data 
for utility vault reconstruction, the Department currently estimates a 
fixed cost for vault replacement of $1740 per vault and a variable cost 
of $26 per cubic foot of transformer. Vault replacement may be required 
for the higher TSLs (TSL5 and above for both DL4 and DL5). In its 
standard LCC calculation, DOE based transformer selection on the 
manufacturer selling price. For this calculation, however, DOE proposes 
to assume that the customer choice of transformer design is based on 
total installed cost because customers are likely to be conscious of 
space constraint costs.

IV. Summary of Size Issue

    DOE intends to consider space-constrained vault transformers as 
part of the LCC subgroup analysis for the final rule. DOE seeks comment 
from stakeholders on the proportion of distribution transformers sold 
which are installed in underground vaults, particularly with respect to 
the liquid-immersed, three-phase design lines, DL4 and DL5.
    In this notice, DOE outlines different approaches as to how it 
might account for those additional installation costs. DOE requests 
that stakeholders review these approaches and provide comment on the 
methodology and inputs. DOE intends to use the same LCC spreadsheet 
tools for estimating LCC impacts on vault transformers, with minor 
modifications, as it used to analyze the other LCC subgroups in the 
NOPR (see NOPR TSD, Chapter 11).

V. Consideration of Final Efficiency Levels

    DOE notes that in the NOPR, the proposed final standard for liquid-
immersed distribution transformers was based on the efficiency levels 
presented in TSL 2. 71 FR 44407. While the proposed standard was based 
on TSL 2, DOE-evaluated efficiency levels associated with a series of 
TSLs. Analysis of the other TSLs indicated that some of the efficiency 
levels set forth in TSL 3 and TSL 4 may be justifiable for specific 
liquid-immersed distribution transformer designs and capacities. (See 
Table IV.4 in 71 FR 44378 and Tables EA.3 through EA.10 in pages EA.6 
through EA.13 of the Environmental Assessment Report published with the 
NOPR TSD) Referencing this analysis, some commenters suggested that DOE 
establish a final standard that incorporates higher efficiency levels 
from other TSLs, which preliminarily appeared to comply with the 
requirements of EPCA.
    Based on the comments received to date, DOE is inclined to consider 
a final standard that is based on efficiency levels from TSL 2 and/or 3 
for three-phase, liquid-immersed, distribution transformers and 
efficiency levels from TSL 2, 3, and/or 4 for single-phase liquid-
immersed, distribution transformers. Today's notice provides

[[Page 6190]]

stakeholders an opportunity to comment on this potential consideration.

VI. Public Participation

A. Submission of Comments

    DOE will accept comments, data, and information regarding this 
notice no later than the date provided at the beginning of this notice. 
Comments, data, and information submitted to the Department'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 include the electronic signature of 
the author. Absent an electronic signature, comments submitted 
electronically must be followed and authenticated by submitting a 
signed original paper document to the address provided at the beginning 
of this notice. Comments, data, and information submitted to the 
Department via mail or hand delivery/courier should include one signed 
original paper copy. No telefacsimiles (faxes) will be accepted.
    According 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 or available from public 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) a date after which such information might no 
longer be considered confidential; 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 proportion of distribution transformers sold that are 
installed in underground vaults, particularly with respect to the 
liquid-immersed, three-phase design lines, DL4 and DL5,
    (2) The assumption that typical space-constrained vault 
transformers will be restricted to a volume that is approximately the 
median size of baseline transformers, and
    (3) The approaches proposed in this notice to account for LCC 
impacts on space-constrained vault transformers, including the 
methodology and inputs.
    (4) The possibility of having a liquid-immersed standard level that 
is based on efficiency levels from TSL 2 and/or 3 for three-phase and 
TSL 2, 3, and/or 4 for single-phase.

    Issued in Washington, DC, on February 2, 2007.
Alexander A. Karsner
Assistant Secretary, Energy Efficiency and Renewable Energy.
[FR Doc. E7-2168 Filed 2-8-07; 8:45 am]
BILLING CODE 6450-01-P