[Federal Register Volume 73, Number 250 (Tuesday, December 30, 2008)]
[Proposed Rules]
[Pages 79723-79726]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-30985]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 73, No. 250 / Tuesday, December 30, 2008 / 
Proposed Rules  

[[Page 79723]]



DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket No. EERE-2007-BT-STD-0007]
RIN 1904-AB70


Energy Conservation Standards for Small Electric Motors: Public 
Meeting and Availability of the Preliminary Technical Support Document

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

ACTION: Notice of public meeting and availability of preliminary 
technical support document.

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SUMMARY: The Department of Energy (DOE) will hold an informal public 
meeting to discuss and receive comments on the equipment classes that 
DOE plans to analyze for purposes of establishing energy conservation 
standards for small electric motors; the analytical framework, models, 
and tools that DOE is using to evaluate standards for these products; 
the results of preliminary analyses performed by DOE for these 
products; and potential energy conservation standard levels derived 
from these analyses that DOE could consider for these products. Also, 
DOE encourages written comments on these subjects. To inform 
stakeholders and facilitate this process, DOE has prepared an agenda, a 
preliminary Technical Support Document (preliminary TSD), and briefing 
materials, which are available at: http://www1.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.html.

DATES: DOE will hold a public meeting on Friday, January 30, 2009, from 
9 a.m. to 5 p.m. in Washington, DC. Any person requesting to speak at 
the public meeting should submit such request, along with an electronic 
copy of the statement to be given at the public meeting, before 4 p.m., 
Friday, January 23, 2009. Written comments are welcome, especially 
following the public meeting, and should be submitted March 2, 2009.

ADDRESSES: The public meeting will be held at the U.S. Department of 
Energy, Forrestal Building, Room 1E-245, 1000 Independence Avenue, SW., 
Washington, DC 20585-0121. Please note that foreign nationals 
participating in the public meeting are subject to advance security 
screening procedures. If a foreign national wishes to participate in 
the public meeting, please inform DOE of this fact as soon as possible 
by contacting Ms. Brenda Edwards at (202) 586-2945 so that the 
necessary procedures can be completed. Interested persons may submit 
comments, identified by docket number EERE-2007-BT-STD-0007, by any of 
the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected]. Include EERE-2007-BT-STD-0007 in the subject 
line of the message.
     Postal Mail: Ms. Brenda Edwards, U.S. Department of 
Energy, Building Technologies Program, Mailstop EE-2J, Public Meeting 
for Small Electric Motors, EERE-2007-BT-STD-0007, 1000 Independence 
Avenue, SW., Washington, DC 20585-0121. Telephone (202) 586-2945. 
Please submit one signed paper original.
     Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department 
of Energy, Building Technologies Program, Sixth Floor, 950 L'Enfant 
Plaza, SW., Washington, DC 20024. Telephone (202) 586-2945. Please 
submit one signed paper original.
    Instructions: All submissions received must include the agency name 
and docket number.
    Docket: For access to the docket to read background documents or a 
copy of the transcript of the public meeting or comments received, go 
to the U.S. Department of Energy, Sixth Floor, 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. Please call Ms. Brenda Edwards 
at (202) 586-2945 for additional information regarding visiting the 
Resource Room.

FOR FURTHER INFORMATION CONTACT: Direct requests for additional 
information to Mr. James Raba, U.S. Department of Energy, Office of 
Energy Efficiency and Renewable Energy, Building Technologies, EE-2J, 
1000 Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-
8654. E-mail: [email protected]. In the Office of General Counsel, 
contact Mr. Michael Kido, U.S. Department of Energy, Office of General 
Counsel, GC-72, 1000 Independence Avenue, SW., Washington, DC 20585, 
(202) 586-8145. E-mail: [email protected].

SUPPLEMENTARY INFORMATION: 

A. Statutory Authority

    Part A of Title III of the Energy Policy and Conservation Act (42 
U.S.C. 6291 et seq.) (EPCA) established the Energy Conservation Program 
for Consumer Products Other than Automobiles. Amendments expanded Title 
III of EPCA to include certain commercial and industrial equipment, 
including small electric motors. (42 U.S.C. 6311 et seq.) In 
particular, the Energy Policy Act of 1992, Public Law 102-486 (EPACT 
1992) amended EPCA to direct DOE to prescribe energy conservation 
standards for those small electric motors for which the Secretary 
determines that standards ``would be technologically feasible and 
economically justified, and would result in significant energy 
savings.'' (42 U.S.C. 6317(b)(1)).
    Before DOE prescribes any standard for small electric motors, 
however, it must first solicit comments on a proposed standard. 
Moreover, DOE will design each standard for these products to: (1) 
Achieve the maximum improvement in energy efficiency that is 
technologically feasible and economically justified, and (2) result in 
significant conservation of energy. (42 U.S.C. 6295(o)(2)(A) and 
(o)(3), 42 U.S.C. 6316(a), and 42 U.S.C. 6317(b)(1) and (c)). To 
determine whether a proposed standard is economically justified, DOE 
must, after receiving comments on the proposed standard, determine 
whether the benefits of the standard exceed its burdens to the greatest 
extent practicable, weighing the following seven factors:
    1. The economic impact of the standard on manufacturers and 
consumers of 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

[[Page 79724]]

which are likely to result from the imposition of the standard;
    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 [of Energy] considers relevant. (42 
U.S.C. 6295(o)(2)(B)(i)).
    Prior to proposing a standard, DOE typically seeks public input on 
the analytical framework, models, and tools that will be used to 
evaluate standards; the results of preliminary analyses; and potential 
energy conservation standard levels derived from these analyses. DOE is 
publishing this document to announce the availability of the 
preliminary technical support document (preliminary TSD), which detail 
the preliminary analyses, discuss the comments on the Framework 
document, and summarize the preliminary results. In addition, DOE is 
announcing a public meeting to solicit feedback from interested parties 
on its analytical framework, models, and preliminary results.

B. History of Standards Rulemaking for Small Electric Motors

1. Background

    As indicated above, EPACT 1992 amended EPCA to specifically address 
standards for small electric motors. The amendment requires DOE to 
prescribe test procedures and then standards for those small electric 
motors for which DOE has determined that standards would be 
technologically feasible and economically justified and would result in 
significant energy savings. (42 U.S.C. 6317(b)(1)). Pursuant to this 
provision, on July 10, 2006, the Secretary of Energy issued the 
following determination:

    Based on its analysis of the information now available, the 
Department [of Energy] has determined that energy conservation 
standards for certain small electric motors appear to be 
technologically feasible and economically justified, and are likely 
to result in significant energy savings. Consequently, the 
Department [of Energy] will initiate the development of energy 
efficiency test procedures and standards for certain small electric 
motors.

71 FR 38799 and 38807 (July 10, 2006).
    In its determination analysis, DOE uses the phrase ``certain small 
electric motors'' to show where DOE is referring to motors for which it 
has made a positive determination. In this way, DOE is establishing 
that the Secretary of Energy has determined that energy conservation 
standards appear to be justified for capacitor-start and polyphase 
small electric motors.
    The Secretary's determination was based in part on DOE's draft 
report, ``Analysis of Energy Conservation Standards for Small Electric 
Motors,'' which estimated the likely range of energy savings and 
economic benefits that would result from energy conservation standards 
for small electric motors. DOE made this report available for comment 
in June 2003 at http://www.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.html.

2. Current Rulemaking Process

    As a result of the Secretary's positive determination, DOE prepared 
and published a notice announcing the availability of the framework 
document, ``Energy Conservation Standards Rulemaking Framework Document 
for Small Electric Motors,'' and a public meeting to discuss the 
proposed analytical framework for the rulemaking. 72 FR 44990 (August 
10, 2007). DOE also posted the framework document on its Web site 
describing the procedural and analytical approaches DOE anticipated 
using to evaluate the establishment of energy conservation standards 
for small electric motors. This document is available at http://www.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/small_motors_framework_073007.pdf. DOE held a public meeting on 
September 13, 2007, to describe the various rulemaking analyses DOE 
would conduct, such as the engineering analysis, the life-cycle cost 
(LCC) and payback period (PBP) analyses, and the national impact 
analysis (NIA); the methods for conducting them; and the relationship 
among the various analyses. Manufacturers, trade associations, and 
environmental advocates attended the meeting. The participants 
discussed eight major issues: The scope of covered small electric 
motors, definitions, test procedures, horsepower and kilowatt 
equivalency, DOE's engineering analysis, life-cycle costs, efficiency 
levels, and energy savings.
    DOE developed two economic spreadsheets for analyzing the economic 
impacts of standard levels-one that calculates LCC and PBP, and one 
that calculates national impacts.\1\ DOE prepared an LCC and PBP 
spreadsheet that calculates results for each of the representative 
units analyzed. The spreadsheet includes product efficiency data that 
allows users to determine LCC savings and PBPs based on average values. 
The spreadsheets also can be combined with Crystal Ball (a commercially 
available software program) to generate a Monte Carlo simulation, which 
incorporates uncertainty and variability considerations. The second 
economic spreadsheet, the national impact analysis spreadsheet, 
calculates the impacts of candidate standard levels on shipments and 
the national energy savings (NES) and net present value (NPV) at 
various standard levels. There is one national impact analysis 
spreadsheet for all small electric motors. DOE has posted all of these 
economic spreadsheets on its Web site for review and comment by 
interested parties.
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    \1\ For the notice of proposed rulemaking, DOE will also develop 
an economic spreadsheet that will evaluate the financial impacts on 
small electric motors that may result from a standard level.
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    Comments received since publication of the framework document have 
helped DOE identify and resolve issues involved in the preliminary 
analyses. Chapter 2 of the preliminary TSD, available at the Web link 
provided in the SUMMARY section of this notice, summarizes and 
addresses the comments received in response to the framework document.

C. Summary of the Analyses Performed by DOE

    For small electric motors currently under consideration, DOE 
conducted in-depth technical analyses in the following areas: (1) 
Engineering, (2) energy-use characterization, (3) markups to determine 
product price, (4) life-cycle cost (LCC) and payback period (PBP) 
analyses, and (5) national impact analysis (NIA). These analyses 
resulted in a preliminary TSD that presents the methodology and results 
of each of these analyses. The preliminary TSD is available at the Web 
address given in the SUMMARY section of this notice. The analyses are 
described in more detail below.
    DOE also conducted several other analyses that either support the 
five major analyses or are preliminary analyses that will be expanded 
in the notice of proposed rulemaking (NOPR).\2\

[[Page 79725]]

These analyses include the market and technology assessment, the 
screening analysis, which contributes to the engineering analysis, and 
the shipments analysis, which contributes to the NIA. In addition to 
these analyses, DOE has begun some preliminary work on the manufacturer 
impact analysis and identified the methods to be used for the LCC 
subgroup analysis, the environmental assessment, the employment 
analysis, the regulatory impact analysis, and the utility impact 
analysis. DOE will expand on these analyses in the NOPR.
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    \2\ For past rulemakings under EPCA section 325, DOE was 
required to issue an Advanced Notice of Proposed Rulemaking (ANOPR) 
following publication of the framework document. The Energy 
Independence and Security Act of 2007 (EISA 2007) eliminated the 
requirement that DOE issue an ANOPR as part of the standards 
rulemaking process; see EISA 2007, at sec. 307. Given EISA 2007's 
revisions to EPCA, DOE is now using an alternative process to 
provide the same information and ability for public comment as the 
ANOPR, but without publication of analyses in the Federal Register.
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1. Engineering Analysis

    The engineering analysis establishes the relationship between the 
manufacturer selling price and efficiency of a product DOE is 
evaluating for energy conservation standards. This relationship serves 
as the basis for cost-benefit calculations for individual consumers, 
manufacturers, and the Nation. The engineering analysis identifies 
representative baseline equipment, which is the starting point for 
analyzing technologies that provide energy efficiency improvements. 
Baseline equipment refers to a model or models having features and 
technologies typically found in that equipment currently offered for 
sale, in this case, small electric motors. The baseline model in each 
equipment class represents the characteristics of certain small 
electric motors in that class. After identifying the baseline models, 
DOE estimated manufacturer selling prices by using a consistent 
methodology and pricing scheme including material and labor costs and 
manufacturer's markups. In this way, DOE developed these so-called 
``manufacturer selling prices'' for the baseline and more efficient 
motor designs. Later, in its Markups to Determine Installed Price 
analysis, DOE converts these manufacturer selling prices into installed 
prices. In the preliminary TSD, section 2.4 of chapter 2 and chapter 5 
each provide detail on the engineering analysis and the derivation of 
the manufacturer selling prices.

2. Energy Use Characterization

    The energy use characterization provides estimates of annual energy 
consumption for small electric motors, which DOE uses in the LCC and 
PBP analyses and the NIA. DOE developed energy consumption estimates 
for all of the equipment classes analyzed in the engineering analysis, 
as the basis for its energy use estimates. In the preliminary TSD, 
section 2.5 of chapter 2 and chapter 7 each provide detail on the 
energy use characterization.

3. Markups To Determine Installed Price

    DOE derives the installed prices for products based on manufacturer 
markups, retailer markups, distributor markups, contractor markups, 
builder markups, and sales taxes. In deriving these markups, DOE has 
determined the distribution channels for product sales, the markup 
associated with each party in the distribution channels, and the 
existence and magnitude of differences between markups for baseline 
products (baseline markups) and for more-efficient products 
(incremental markups). DOE calculates both overall baseline and overall 
incremental markups based on the product markups at each step in the 
distribution channel. The overall incremental markup relates the change 
in the manufacturer sales price of higher-efficiency models (the 
incremental cost increase) to the change in the retailer or distributor 
sales price. In the preliminary TSD, section 2.6 of chapter 2 and 
chapter 6 each provide detail on the estimation of markups.

4. Life-Cycle Cost and Payback Period Analyses

    The LCC and PBP analyses determine the economic impact of potential 
standards on individual consumers. The LCC is the total consumer 
expense for a product over the life of the product. The LCC analysis 
compares the LCCs of products designed to meet possible energy 
conservation standards with the LCCs of the products likely to be 
installed in the absence of standards. DOE determines LCCs by 
considering (1) Total installed cost to the purchaser (which consists 
of manufacturer selling price, sales taxes, distribution chain markups, 
and installation cost); (2) the operating expenses of the products 
(energy use and maintenance); (3) product lifetime; and (4) a discount 
rate that reflects the real consumer cost of capital and puts the LCC 
in present-value terms. The PBP represents the number of years needed 
to recover the increase in purchase price (including installation cost) 
of more efficient products through savings in the operating cost of the 
product. It is the change in total installed cost due to increased 
efficiency divided by the change in annual operating cost from 
increased efficiency. In the preliminary TSD, section 2.7 of chapter 2 
and chapter 8 each provide detail on the LCC and PBP analyses.

5. National Impact Analysis

    The NIA estimates the NES and the NPV of total consumer costs and 
savings expected to result from new standards at specific efficiency 
levels (referred to as candidate standard levels). DOE calculated NES 
and NPV for each level for each candidate standard for small electric 
motors as the difference between a base-case forecast (without new 
standards) and the standards case forecast (with standards). DOE 
determined national annual energy consumption by multiplying the number 
of units in use (by vintage) by the average unit energy consumption 
(also by vintage). Cumulative energy savings are the sum of the annual 
NES determined over a specified time period. The national NPV is the 
sum over time of the discounted net savings each year, which consists 
of the difference between total operating cost savings and increases in 
total installed costs. Critical inputs to this analysis include 
shipments projections, retirement rates (based on estimated product 
lifetimes), and estimates of changes in shipments and retirement rates 
in response to changes in product costs due to standards. In the 
preliminary TSD, section 2.9 of chapter 2 and chapter 10 each provide 
detail on the NIA.
    DOE consulted with interested parties as part of its process for 
conducting all of the analyses and invites further input from the 
public on these topics. The preliminary analytical results are subject 
to revision following review and input from the public. A complete and 
revised TSD will be made available upon issuance of a NOPR. The final 
rule will contain the final analysis results and be accompanied by a 
final rule TSD.
    DOE encourages those who wish to participate in the public meeting 
to obtain the preliminary TSD and to be prepared to discuss its 
contents. A copy of the preliminary TSD is available at the Web address 
given in the SUMMARY section of this notice. However, public meeting 
participants need not limit their comments to the topics identified in 
the preliminary TSD. DOE is also interested in receiving views 
concerning other relevant issues that participants believe would affect 
energy conservation standards for these products or that DOE should 
address in the NOPR.
    Furthermore, DOE welcomes all interested parties, whether or not 
they participate in the public meeting, to submit in writing by March 
2, 2009, comments and information on matters addressed in the 
preliminary TSD and on other matters relevant to

[[Page 79726]]

consideration of standards for small electric motors.
    The public meeting will be conducted in an informal, conference 
style. A court reporter will be present to record the minutes of the 
meeting. There shall be no discussion of proprietary information, costs 
or prices, market shares, or other commercial matters regulated by 
United States antitrust laws.
    After the public meeting and the expiration of the period for 
submitting written statements, DOE will consider all comments and 
additional information that is obtained from interested parties or 
through further analyses, and it will prepare a NOPR. The NOPR will 
include proposed energy conservation standards for the products covered 
by the rulemaking, and members of the public will be given an 
opportunity to submit written and oral comments on the proposed 
standards.

    Issued in Washington, DC, on December 19, 2008.
John F. Mizroch,
Acting Assistant Secretary, Energy Efficiency and Renewable Energy.
 [FR Doc. E8-30985 Filed 12-29-08; 8:45 am]
BILLING CODE 6450-01-P