[Federal Register Volume 76, Number 41 (Wednesday, March 2, 2011)]
[Proposed Rules]
[Pages 11396-11399]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-4607]


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DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket No. EERE-2010-BT-STD-0048]
RIN 1904-AC04


Energy Conservation Standards for Distribution Transformers: 
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 U.S. Department of Energy (DOE or Department) will hold a 
public meeting to discuss and receive comments on the following issues: 
The equipment classes DOE plans to analyze for the purpose of 
considering the amendment of energy conservation standards for 
distribution transformers; the analytical framework, models, and tools 
DOE is using to evaluate standards for this type of equipment; the 
results of preliminary analyses performed by DOE for this equipment; 
and potential energy conservation standard levels derived from these 
analyses that DOE could consider for this equipment. DOE also 
encourages interested parties to submit written comments on these 
subjects. To inform stakeholders and facilitate the public meeting and 
comment process, DOE has prepared an agenda, a preliminary technical 
support document (TSD), and briefing materials, which are available at: 
http://www.eere.energy.gov/buildings/appliance_standards/commercial/distribution_transformers.html.

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DATES: The Department will hold a public meeting on Tuesday, April 5, 
2011, 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., Tuesday, March 29, 2011. Written comments are welcome, 
especially following the public meeting, and should be submitted by 
April 18, 2011.

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 the notice 
title, the Notice of Public Meeting (NOPM) for Energy Conservation 
Standards for Distribution Transformers, and provide the docket number 
EERE-2010-BT-STD-0048 and/or regulatory information number (RIN) 1904-
AC04. Comments may be submitted using any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected]. 
Include EERE-2010-BT-STD-0048 and/or RIN 1904-AC04 in the subject line 
of the message.
     Mail: Ms. Brenda Edwards, U.S. Department of Energy, 
Building Technologies Program, Mailstop EE-2J, Public Meeting for 
Distribution Transformers, EERE-2010-BT-STD-0048 and/or RIN 1904-AC04, 
1000 Independence Avenue, SW., Washington, DC 20585-0121. Phone: (202) 
586-2945. Please submit one signed paper original.
     Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department 
of Energy, Building Technologies Program, 6th Floor, 950 L'Enfant 
Plaza, SW., Washington, DC 20024. Phone: (202) 586-2945. Please submit 
one signed paper original.
    Instructions: All submissions received must include the agency name 
and docket number or RIN for this proposed rulemaking.
    Docket: For access to the docket to read background documents, a 
copy of the transcript of the public meeting, or comments received, go 
to the U.S. Department of Energy, 6th Floor, 950 L'Enfant Plaza, SW., 
Washington, DC 20024, between 9 a.m. and 4 p.m., Monday through Friday, 
except Federal holidays. Please call Ms. Brenda Edwards for additional 
information regarding visiting the Resource Room.

FOR FURTHER INFORMATION CONTACT: Mr. Jim Raba, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Program, EE-2J, 1000 Independence Avenue, SW., Washington, 
DC 20585-0121. Telephone: (202) 586-8654. E-mail: [email protected].
    Ms. Jennifer Tiedeman, U.S. Department of Energy, Office of the 
General Counsel, GC-71, 1000 Independence Avenue, SW., Washington, DC 
20585. Telephone: (202) 287-6111. E-mail: 
mailto:[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Statutory Authority
II. History of Standards Rulemaking for Distribution Transformers
    A. Background
    B. Current Rulemaking Process
III. Summary of the Analyses Performed by the U.S. Department of 
Energy
    A. Engineering Analysis
    B. Markups to Determine Equipment Prices
    C. Energy Use Analysis
    D. Life-Cycle Cost and Payback Period Analyses
    E. National Impact Analysis

I. Statutory Authority

    Title III, Part C of the Energy Policy and Conservation Act of 1975 
(EPCA), Public Law 94-163 (42 U.S.C. 6311-6317, as codified), added by 
Public Law 95-619, Title IV, Sec.  441(a), established the Energy 
Conservation Program for Certain Industrial Equipment, a program 
covering distribution transformers, the focus of this notice.\1\ EPCA, 
as amended by the Energy Policy Act of 1992, Public Law 102-486, 
directs the U.S. Department of Energy (DOE or the Department) to 
prescribe energy conservation standards for those distribution 
transformers for which the Secretary of Energy (Secretary) determines 
that standards ``would be technologically feasible and economically 
justified, and would result in significant energy savings.'' (42 U.S.C. 
6317(a)) As discussed below in section II.A, DOE issued a final rule 
that prescribed standards for distribution transformers. 72 FR 58190 
(October 12, 2007) (the 2007 final rule); see 10 CFR 431.196(b)-(c).
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    \1\ For editorial reasons, upon codification in the U.S. Code, 
Part C was re-designated Part A-1.
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    Following the 2007 final rule, several interested parties filed 
petitions alleging that DOE's environmental assessment, conducted for 
the rulemaking, failed to address employment impacts, the value of 
reduced carbon dioxide emissions, and impacts on the price of energy, 
as required by the National Environmental Policy Act of 1969. Under the 
terms of a settlement agreement dated July 10, 2009, DOE is required to 
review the standards for liquid-immersed and medium-voltage dry-type 
(MVDT) distribution transformers and publish, no later than October 1, 
2011, in the Federal Register either a determination that standards for 
these products do not need to be amended, or a notice of proposed 
rulemaking including any new proposed standards for these products. If 
it is determined that an amendment to the standards is warranted, DOE 
is required to publish a final rule in the Federal Register no later 
than October 1, 2012.
    Before DOE amends any standard for distribution transformers, 
however, it must first solicit comments on a proposed standard. 
Moreover, DOE will design each standard for this equipment 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(a) 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 
customers of equipment subject to the standard;
    2. The savings in operating costs throughout the estimated 
average life of the covered equipment in the type (or class) 
compared to any increase in the price, initial charges, or 
maintenance expenses for the covered equipment 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 equipment likely to result from the imposition of the 
standard;
    5. The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
imposition of the standard;
    6. The need for national energy conservation; and
    7. Other factors the Secretary considers relevant.


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(42 U.S.C. 6295(o)(2)(B)(i) and 6316(a))

    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. With 
this notice, DOE is announcing the availability of the preliminary 
technical support document (preliminary (TSD)), which details the 
preliminary analyses and summarizes 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.

II. History of Standards Rulemaking for Distribution Transformers

    The following sections provide a brief summary of DOE's rulemaking 
activities for distribution transformer energy conservation standards.

A. Background

    DOE published a final rule in October 2007 that established energy 
conservation standards for liquid-immersed and MVDT distribution 
transformers. 72 FR 58190 (October 12, 2007); see 10 CFR 431.196(b)-
(c). During the course of that rulemaking, the Energy Policy Act of 
2005 (EPACT 2005), Public Law 109-58, amended EPCA to set standards for 
low-voltage dry-type (LVDT) distribution transformers. (EPACT 2005, 
Section 135(c); codified at 42 U.S.C. 6295(y)) Consequently, DOE 
removed these transformers from the scope of that rulemaking. 72 FR at 
58191 (October 12, 2007).
    After publication of the 2007 final rule, certain parties filed 
petitions for review in the United States Courts of Appeals for the 
Second and Ninth Circuits, challenging the final rule, and several 
additional parties were permitted to intervene in support of these 
petitions. (All of these parties are referred to below collectively as 
``petitioners.'') The petitioners alleged that, in developing energy 
conservation standards for distribution transformers, DOE did not 
comply with certain applicable provisions of EPCA and of the National 
Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq. DOE and 
the petitioners subsequently entered into a settlement agreement to 
resolve that litigation. The settlement agreement outlined an expedited 
timeline for the Department to determine whether to amend the energy 
conservation standards for liquid-immersed and MVDT distribution 
transformers. Under the terms of the settlement agreement, DOE must 
publish by October 1, 2011 either a determination that the standards 
for these distribution transformers do not need to be amended or a 
notice of public rulemaking (NOPR) that includes any new proposed 
standards and that meets all applicable requirements of EPCA and NEPA. 
If DOE finds that amended standards are warranted, DOE must publish a 
final rule containing such amended standards by October 1, 2012. This 
notice is the Department's first step in satisfying the requirements of 
the settlement agreement.

B. Current Rulemaking Process

    DOE is initiating this rulemaking at the preliminary analysis stage 
rather than the framework document stage. In considering new or amended 
standards for a given product or type of equipment, DOE's historic 
practice, generally, is to publish a framework document as the first 
step in the rulemaking process, and to subsequently issue a preliminary 
TSD that contains the Department's preliminary analyses as to potential 
standards. The framework document generally advises interested parties 
of the analytical methods, data sources, and key assumptions DOE plans 
to use in considering the adoption of standards for the product or 
equipment type. Typically the document does not contain any analysis of 
the data.
    On November 16, 2010, DOE announced a number of steps meant to 
streamline its regulatory process. Among these measures was the concept 
that, in appropriate circumstances, DOE might forego certain 
preliminary stages of the rulemaking process and gather data in more 
efficient ways. Because the previous rulemaking to develop standards 
for distribution transformers was completed in 2007, DOE has a set of 
methodologies, data sources and assumptions that have recently been 
vetted and revised according to public comments that the Department can 
use to perform the analyses needed for this rulemaking. Therefore, 
while DOE will conduct the analyses referenced by the petitioners' 
complaint and required by EPCA and NEPA according to standard practices 
for energy conservation standard rulemakings, DOE is not issuing a 
framework document for this rulemaking. Rather, DOE is initiating this 
rulemaking at the preliminary analysis stage and has prepared a 
preliminary TSD about which it is requesting comment.
    At present, DOE plans to examine in this rulemaking amended 
standards for LVDT distribution transformers, as well as amended 
standards for liquid-immersed and MVDT transformers. DOE is not 
required to consider LVDT distribution transformers as part of the 
settlement agreement. As such, DOE may subsequently opt to conduct a 
separate rulemaking for LVDT transformers with a different timeline. 
However, the preliminary analysis considers LVDT distribution 
transformers along with liquid-immersed and MVDT distribution 
transformers.

III. Summary of the Analyses Performed by the U.S. Department of Energy

    For each type of equipment under consideration in this rulemaking, 
DOE conducted in-depth technical analyses in the following areas: (1) 
Engineering, (2) markups to determine equipment price, (3) energy use, 
(4) life-cycle cost (LCC) and payback period (PBP) analyses, and (5) 
national impact analysis (NIA). The preliminary TSD presents the 
methodology and results of each of these analyses. It 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 aforementioned analyses or are preliminary analyses that will be 
expanded upon for the NOPR. 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 completed preliminary 
work on the manufacturer impact analysis (MIA) and identified the 
methods to be used for the LCC subgroup analysis, the environmental 
assessment, the employment impact analysis, the regulatory impact 
analysis, and the utility impact analysis. DOE will expand on these 
analyses in the NOPR. In conducting these analyses, DOE will 
specifically consider employment impacts, the value of reduced carbon 
dioxide emissions, impacts on the price of energy, and cumulative 
climate change impacts, which were the focus of the petitioners' 
complaint from the previous rulemaking.

A. Engineering Analysis

    The engineering analysis establishes the relationship between the 
cost and efficiency of the equipment DOE is evaluating. This 
relationship serves as the basis for cost-benefit calculations for 
individual customers, manufacturers, and the nation. The engineering 
analysis identifies representative baseline

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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 
equipment currently offered for sale. The baseline model in each 
equipment class represents the characteristics of the least efficient 
equipment in that class and, for equipment already subject to energy 
conservation standards, usually is a model that just meets the current 
standard. Chapter 5 of the preliminary TSD discusses the engineering 
analysis.

B. Markups To Determine Equipment Prices

    DOE derives customer prices for equipment from data on manufacturer 
costs, manufacturer markups, retailer markups, distributor markups, and 
sales taxes. In deriving these markups, DOE has determined (1) The 
distribution channels for equipment sales; (2) the markup associated 
with each party in the distribution chain; and (3) the existence and 
magnitude of differences between markups for baseline equipment 
(baseline markups) and for more efficient equipment (incremental 
markups). DOE calculates both overall baseline and overall incremental 
markups based on the equipment markups at each step in the distribution 
chain. 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. Chapter 6 of the preliminary TSD discusses estimating markups.

C. Energy Use Analysis

    The energy use analysis provides estimates of the annual energy 
consumption of distribution transformers. DOE uses these values in the 
LCC and PBP analyses and in the NIA. DOE developed energy consumption 
estimates for all equipment analyzed in the engineering analysis and 
for those non-analyzed equipment classes included in the NIA. Chapter 7 
of the preliminary TSD discusses the energy use analysis.

D. Life-Cycle Cost and Payback Period Analyses

    The LCC and PBP analyses determine the economic impact of potential 
standards on individual customers. The LCC is the total customer 
expense for equipment over the life of the equipment. The LCC analysis 
compares the LCCs of equipment designed to meet possible energy 
conservation standards with the LCCs of the equipment likely to be 
installed in the absence of amended standards. DOE determines LCCs by 
considering (1) Total or incremental 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 equipment (energy use and maintenance); (3) expected 
equipment lifetime; and (4) a discount rate that reflects the real 
consumer cost of capital and puts the LCC in present-value terms. The 
PBP is the number of years needed to recover the increase in purchase 
price (including installation cost) of more efficient equipment through 
savings in the operating cost of the equipment. It is the quotient of 
the change in total installed cost due to increased efficiency divided 
by the change in annual operating cost from increased efficiency. 
Chapter 8 of the preliminary TSD discusses the LCC and PBP analyses.

E. National Impact Analysis

    The NIA estimates the national energy savings (NES) and the net 
present value (NPV) of total customer costs and savings expected to 
result from amended standards at specific efficiency levels. DOE 
calculated NES and NPV for each candidate standard level as the 
difference between a base case forecast (without amended standards) and 
the standards case forecast (with standards at that particular level). 
Cumulative energy savings are the sum of the annual NES determined over 
a specified analysis 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, 
estimated equipment lifetimes, and estimates of changes in shipments in 
response to changes in equipment costs due to standards. Chapter 10 of 
the preliminary TSD discusses 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. The final rule 
will contain the final analysis results.
    The Department 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. The Department is also interested in 
receiving views concerning other relevant issues that participants 
believe would affect energy conservation standards for this equipment 
or that DOE should address in the NOPR.
    Furthermore, the Department invites all interested parties, 
regardless of whether they participate in the public meeting, to submit 
in writing by April 18, 2011, comments and information on matters 
addressed in the preliminary TSD and on other matters relevant to 
consideration of standards for distribution transformers.
    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, the Department will consider all 
comments and additional information that it obtains from interested 
parties or through further analyses. Afterwards, the Department will 
publish either a determination that the standards for distribution 
transformers need not be amended or a NOPR proposing to amend those 
standards. Any NOPR will include proposed energy conservation standards 
for the equipment covered by this 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 February 23, 2011.
Cathy Zoi,
Assistant Secretary, Energy Efficiency and Renewable Energy.
[FR Doc. 2011-4607 Filed 3-1-11; 8:45 am]
BILLING CODE 6450-01-P