[Federal Register Volume 76, Number 69 (Monday, April 11, 2011)]
[Proposed Rules]
[Pages 20090-20178]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-7592]



[[Page 20089]]

Vol. 76

Monday,

No. 69

April 11, 2011

Part II





Department of Energy





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10 CFR Part 430



Energy Conservation Program: Energy Conservation Standards for 
Fluorescent Lamp Ballasts; Proposed Rule

  Federal Register / Vol. 76 , No. 69 / Monday, April 11, 2011 / 
Proposed Rules  

[[Page 20090]]


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DEPARTMENT OF ENERGY

10 CFR Part 430

[Docket Number EE-2007-BT-STD-0016]
RIN 1904-AB50


Energy Conservation Program: Energy Conservation Standards for 
Fluorescent Lamp Ballasts

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

ACTION: Notice of proposed rulemaking (NOPR) and public meeting.

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SUMMARY: The Energy Policy and Conservation Act (EPCA) prescribes 
energy conservation standards for various consumer products and 
commercial and industrial equipment, including fluorescent lamp 
ballasts (ballasts). EPCA also requires the U.S. Department of Energy 
(DOE) to determine if amended standards for ballasts are 
technologically feasible and economically justified, and would save a 
significant amount of energy, and to determine whether to adopt 
standards for additional ballasts not already covered by Federal 
standards. In this NOPR, DOE proposes amended energy conservation 
standards for those ballasts currently subject to standards, and new 
standards for certain ballasts not currently covered by standards. This 
NOPR also announces a public meeting to receive comment on these 
proposed standards and associated analyses and results.

DATES: DOE will hold a public meeting on May 10, 2011, from 9 a.m. to 4 
p.m., in Washington, DC. The meeting will also be broadcast as a 
webinar. See section 0, ``Public Participation,'' for webinar 
registration information, participant instructions, and information 
about the capabilities available to webinar participants.
    DOE will accept comments, data, and information regarding this 
notice of proposed rulemaking (NOPR) before and after the public 
meeting, but no later than June 10, 2011. See section 0, ``Public 
Participation,'' of this NOPR for details.

ADDRESSES: The public meeting will be held at the U.S. Department of 
Energy, Forrestal Building, Room GE-086, 1000 Independence Avenue, SW., 
Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at 
(202) 586-2945. Please note that foreign nationals visiting DOE 
Headquarters are subject to advance security screening procedures. Any 
foreign national wishing to participate in the meeting should advise 
DOE as soon as possible by contacting Ms. Brenda Edwards at (202) 586-
2945 to initiate the necessary procedures.
    Any comments submitted must identify the NOPR for Energy 
Conservation Standards for Fluorescent Lamp Ballasts and provide docket 
number EE-2007-BT-STD-0016 and/or regulatory information number (RIN) 
number 1904-AB50. Comments may be submitted using any of the following 
methods:
    1. Federal eRulemaking Portal: http://www.regulations.gov. Follow 
the instructions for submitting comments.
    2. E-mail: [email protected]. Include the docket 
number and/or RIN in the subject line of the message.
    3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building 
Technologies Program, Mailstop EE-2J, 1000 Independence Avenue, SW., 
Washington, DC 20585-0121. If possible, please submit all items on a 
CD. It is not necessary to include printed copies.
    4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of 
Energy, Building Technologies Program, 950 L'Enfant Plaza, SW., Suite 
600, Washington, DC 20024. Telephone: (202) 586-2945. If possible, 
please submit all items on a CD. It is not necessary to include printed 
copies.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
proposed rule may be submitted to Office of Energy Efficiency and 
Renewable Energy through the methods listed above and by e-mail to 
[email protected].
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see section 0 of this document 
(Public Participation).
    Docket: The docket is available for review at http://www.regulations.gov, including Federal Register notices, framework 
documents, public meeting attendee lists and transcripts, comments, and 
other supporting documents/materials. All documents in the docket are 
listed in the http://www.regulations.gov index. Not all documents 
listed in the index may be publicly available, such as information that 
is exempt from public disclosure.
    A link to the docket web page can be found at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/fluorescent_lamp_ballasts.html. This web page will contain a link to 
the docket for this notice on regulations.gov. The regulations.gov web 
page contains simple instructions on how to access all documents, 
including public comments, in the docket. See section 0 for further 
information on how to submit comments through http://www.regulations.gov.
    For further information on how to submit or review public comments 
or participate in the public meeting, contact Ms. Brenda Edwards at 
(202) 586-2945 or e-mail: [email protected].

FOR FURTHER INFORMATION CONTACT: 

Dr. Tina Kaarsberg, 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) 287-1393. E-mail: [email protected].
Ms. Elizabeth Kohl, U.S. Department of Energy, Office of the General 
Counsel, GC-71, 1000 Independence Avenue, SW., Washington, DC 20585-
0121. Telephone: (202) 586-7796. E-mail: [email protected].

SUPPLEMENTARY INFORMATION:

I. Summary of the Proposed Rule
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for Fluorescent Lamp Ballasts
    3. Compliance Date
III. Issues Affecting the Scope of This Rulemaking
    A. Additional Fluorescent Lamp Ballasts for Which DOE Is 
Proposing Standards
    1. Scope of EPCA Requirement That DOE Consider Standards for 
Additional Ballasts
    2. Identification of the Additional Ballasts for Which DOE 
Proposes Standards
    3. Summary of Fluorescent Lamp Ballasts to Which DOE Proposes To 
Extend Coverage
    B. Off Mode and Standby Mode Energy Consumption Standards
IV. General Discussion
    A. Test Procedures
    B. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    C. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    D. Economic Justification
    1. Specific Criteria
    2. Rebuttable Presumption
V. Methodology and Discussion
    A. Market and Technology Assessment
    1. General
    2. Product Classes
    3. Technology Options
    B. Screening Analysis
    C. Engineering Analysis
    1. Approach

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    2. Representative Product Classes
    3. Baseline Ballasts
    4. Selection of More Efficient Ballasts
    5. Efficiency Levels
    6. Price Analysis
    7. Results
    8. Scaling to Product Classes Not Analyzed
    D. Markups To Determine Product Price
    1. Distribution Channels
    2. Estimation of Markups
    3. Summary of Markups
    E. Energy Use Analysis
    F. Life-Cycle Cost and Payback Period Analyses
    1. Product Cost
    2. Installation Cost
    3. Annual Energy Use
    4. Energy Prices
    5. Energy Price Projections
    6. Replacement and Disposal Costs
    7. Product Lifetime
    8. Discount Rates
    9. Compliance Date of Standards
    10. Ballast Purchasing Events
    G. National Impact Analysis--National Energy Savings and Net 
Present Value Analysis
    1. Annual Energy Consumption per Unit
    2. Shipments
    3. Site-to-Source Energy Conversion
    H. Consumer Sub-Group Analysis
    I. Manufacturer Impact Analysis
    1. Overview
    2. GRIM Analysis
    3. Discussion of Comments
    4. Manufacturer Interviews
    J. Employment Impact Analysis
    K. Utility Impact Analysis
    L. Environmental Assessment
    M. Monetizing Carbon Dioxide and Other Emissions Impacts
    1. Social Cost of Carbon
    2. Valuation of Other Emissions Reductions
VI. Analytical Results
    A. Trial Standard Levels
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Consumers
    2. Economic Impacts on Manufacturers
    3. National Impact Analysis
    4. Impact on Utility or Performance of Products
    5. Impact of Any Lessening of Competition
    6. Need of the Nation To Conserve Energy
    C. Proposed Standards
    1. Trial Standard Level 3
    D. Backsliding
VII. Procedural Issues and Regulatory Review
    A. Review Under Executive Order 12866
    B. Review Under the Regulatory Flexibility Act
    1. Description and Estimated Number of Small Entities Regulated
    2. Description and Estimate of Compliance Requirements
    3. Duplication, Overlap, and Conflict With Other Rules and 
Regulations
    4. Significant Alternatives to the Proposed Rule
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Review Under the Information Quality Bulletin for Peer Review
VIII. Public Participation
    A. Attendance at Public Meeting
    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of Public Meeting
    D. Submission of Comments
    E. Issues on Which DOE Seeks Comment
IX. Approval of the Office of the Secretary

I. Summary of the Proposed Rule

    The Energy Policy and Conservation Act (42 U.S.C. 6291 et seq.; 
EPCA or the Act), as amended, requires that any new or amended energy 
conservation standard DOE prescribes for certain products, such as 
fluorescent lamp ballasts (ballasts), be designed to achieve the 
maximum improvement in energy efficiency that is technologically 
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) 
Furthermore, the new or amended standard must result in a significant 
conservation of energy. (42 U.S.C. 6295(o)(3)(B)) In accordance with 
these and other statutory provisions discussed in this notice, DOE 
proposes new and amended energy conservation standards for ballasts. 
The proposed standards are shown in Table I.1. These proposed 
standards, if adopted, would apply to all products listed in Table I.1 
and manufactured in, or imported into, the United States on or after 
June 30, 2014.

                                          Table I.1--Proposed Standards
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                                                                             Percent improvement over current
            Product class *                    Proposed standard **               standard or baseline +
----------------------------------------------------------------------------------------------------------------
IS and RS ballasts that operate:
    4-foot MBP lamps...................  1.32 * Ln (total lamp arc        1.9 to 13.4.
                                          power) + 86.11.
    8-foot slimline lamps..............
PS ballasts that operate:
    4-foot MBP lamps...................  1.79 * ln (total lamp arc        9.3 to 12.6.
                                          power) + 83.33.
    4-foot MiniBP SO lamps.............
    4-foot MiniBP HO lamps.............
IS and RS ballasts that operate 8-foot   1.49 * ln (total lamp arc        34.7.
 HO lamps.                                power) + 84.32.
PS ballasts that operate 8-foot HO       1.46 * ln (total lamp arc        32.0.
 lamps.                                   power) + 82.63.
Ballasts that operate 8-foot HO lamps    1.49 * ln (total lamp arc        31.7.
 in cold temperature outdoor signs.       power) + 81.34.
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* IS = instant start; RS = rapid start; MBP = medium bipin; PS = programmed start; SO = standard output; HO =
  high output.
** The proposed standards are based on an equation that is a function of the natural logarithm (ln) of the total
  lamp arc power operated by the ballast.
\+\ Range is applicable to the representative ballasts analyzed.

    DOE's analyses indicate that the proposed standards would save a 
significant amount of energy--an estimated 3.7-6.3 quads of cumulative 
energy over 30 years (2014 through 2043). This amount is equivalent to 
the annual energy use of approximately 18.5 million to 31.5 million 
U.S. homes.
    The cumulative national net present value (NPV) of total consumer 
costs and savings of the proposed standards for products shipped in 
2014-2043, in 2009$, ranges from $8.1 billion (at a 7-percent discount 
rate) to $24.7 billion (at a 3-percent discount rate).\1\ The NPV

[[Page 20092]]

is the estimated total value of future operating-cost savings during 
the analysis period, minus the estimated increased product costs, 
discounted to 2011. The industry net present value (INPV) is the sum of 
the discounted cash flows to the industry from the base year through 
the end of the analysis period (2014 to 2043). Using a real discount 
rate of 7.4 percent, DOE estimates that INPV for manufacturers of all 
fluorescent lamp ballasts in the base case ranges from $853 million to 
$1.24 billion in 2009$. If DOE adopts the proposed standards, it 
expects that manufacturer INPV may change from a loss of 7.7 percent to 
a loss of 34.7 percent, or approximately a loss of $95.3 million to a 
loss of $296.2 million. Using a 7-percent discount rate, the NPV of 
consumer costs and savings from today's proposed standards would amount 
to 27-119 times the total estimated industry losses. Using a 3-percent 
discount rate, the NPV would amount to 53-246 times the total estimated 
industry losses.
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    \1\ DOE uses discount rates of 7 and 3 percent based on guidance 
from the Office of Management and Budget (OMB Circular A-4, section 
E, September 17, 2003). See section IV.G for further information.
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    The projected economic impacts of the proposed standards on 
individual consumers are generally positive. For example, the estimated 
average life-cycle cost (LCC) savings are approximately $11-$25 for 2-
lamp IS and RS ballasts that operate common 4-foot T8 lamps in the 
commercial sector.\2\ When more than one baseline existed for a 
representative ballast type, DOE performed separate LCC analyses 
comparing replacement lamp-and-ballast systems to each baseline. 
Because T8 systems are generally more efficient than T12 systems, the 
incremental energy savings in a T8 baseline case are considerably lower 
than when comparing the same efficiency levels to a T12 baseline. It 
was only in these dual-baseline (i.e., T12 and T8) cases that DOE 
observed negative economic impacts at the proposed standard levels, as 
the incremental energy and operating cost savings in the T8 baseline 
cases were not sufficient to offset the increased prices of more 
efficient replacements.
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    \2\ The LCC is the total consumer expense over the life of a 
product, consisting of purchase and installation costs plus 
operating costs (expenses for energy use, maintenance and repair). 
To compute the operating costs, DOE discounts future operating costs 
to the time of purchase and sums them over the lifetime of the 
product.
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    In addition, the proposed standards would have significant 
environmental benefits. The energy saved is in the form of electricity, 
and DOE expects the energy savings from the proposed standards to 
eliminate the need for approximately 4.37-7.22 gigawatts (GW) of 
generating capacity by 2043. The savings would result in cumulative 
(undiscounted) greenhouse gas emission reductions of approximately 40-
121 million metric tons (MMt) \3\ of carbon dioxide (CO2) 
between 2014 and 2043. During this period, the proposed standards would 
result in undiscounted emissions reductions of approximately 32-44 
thousand tons of nitrogen oxides (NOX) and 0.59-1.67 tons of 
mercury (Hg).\4\ DOE estimates the net present monetary value of the 
CO2 emissions reduction is between $0.18 and $6.67 billion, 
expressed in 2009$ and discounted to 2011, based on a range of discount 
rates discussed in section 0. DOE also estimates the net present 
monetary value of the NOX emissions reduction, expressed in 
2009$ and discounted to 2011, is between $19 and $35 million at a 7-
percent discount rate, and between $42 and $65 million at a 3-percent 
discount rate.\5\
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    \3\ A metric ton is equivalent to 1.1 short tons. Results for 
NOX and Hg are presented in short tons.
    \4\ DOE calculates emissions reductions relative to the most 
recent version of the Annual Energy Outlook (AEO) Reference case 
forecast. As noted in chapter 16 of the TSD, this forecast accounts 
for regulatory emissions reductions through 2008, including the 
Clean Air Interstate Rule (CAIR, 70 FR 25162 (May 12, 2005)), but 
not the Clean Air Mercury Rule (CAMR, 70 FR 28606 (May 18, 2005)). 
Subsequent regulations, including the proposed CAIR replacement rule 
and the proposed Clean Air Transport Rule (75 FR 45210 (August 2, 
2010)), do not appear in the forecast.
    \5\ DOE is aware of multiple agency efforts to determine the 
appropriate range of values used in evaluating the potential 
economic benefits of reduced Hg emissions. DOE has decided to await 
further guidance regarding consistent valuation and reporting of Hg 
emissions before it once again monetizes Hg in its rulemakings.
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    The benefits and costs of today's proposed standards, for products 
sold in 2014-2043, can also be expressed in terms of annualized values. 
The annualized monetary values shown in Table I.2 are the sum of (1) 
the annualized national economic value, expressed in 2009$, of the 
benefits from consumer operation of products that meet the proposed 
standards (consisting primarily of operating cost savings from using 
less energy, minus increases in equipment purchase and installation 
costs, which is another way of representing consumer NPV), and (2) the 
annualized monetary value of the benefits of emission reductions, 
including CO2 emission reductions.\6\ The value of the 
CO2 reductions, otherwise known as the Social Cost of Carbon 
(SCC), is calculated using a range of values per metric ton of 
CO2 developed by a recent interagency process. The monetary 
costs and benefits of emissions reductions are reported in 2009$ to 
permit comparisons with the other costs and benefits in the same dollar 
units. The derivation of the SCC values is discussed in section 0.
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    \6\ DOE used a two-step calculation process to convert the time-
series of costs and benefits into annualized values. First, DOE 
calculated a present value in the same year used for discounting the 
NPV of total consumer costs and savings. To calculate the present 
value, DOE used discount rates of three and seven percent for all 
costs and benefits except for the value of CO2 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table I.2. From the present value, DOE then calculated the 
corresponding time-series of fixed annual payments over a 30-year 
period starting in the same year used for discounting the NPV of 
total consumer costs and savings. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined would be a steady stream of 
payments.
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    Although combining the values of operating savings and 
CO2 emission reductions provides a useful perspective, two 
issues should be considered. First, the national operating savings are 
domestic U.S. consumer monetary savings that occur as a result of 
market transactions while the value of CO2 reductions is 
based on a global value. Second, the assessments of operating cost 
savings and CO2 savings are performed with different methods 
that use quite different time frames for analysis. The national 
operating cost savings is measured for the lifetime of ballasts shipped 
between 2014 and 2043. The SCC values, on the other hand, reflect the 
present value of all future climate-related impacts resulting from the 
emission of one ton of CO2 in each year. These impacts go 
well beyond 2100.
    Using a 7-percent discount rate and the SCC value of $21.40/ton in 
2010 (in 2007$), which was derived using a 3-percent discount rate (see 
note below Table I.2), the cost of the standards proposed in today's 
rule is $276 million-437 million per year in increased equipment costs, 
while the annualized benefits are $931 million-1,359 million per year 
in reduced equipment operating costs, $44 million-111 million in 
CO2 reductions, and $1.6 million-2.8 million in reduced 
NOX emissions. In this case, the net benefit amounts to $701 
million-1,036 million per year. Using a 3-percent discount rate and the 
SCC value of $21.40/ton in 2010 (in 2007$), the cost of the standards 
proposed in today's rule is $311 million-539 million per year in 
increased equipment costs, while the benefits are $1,153 million-1,800 
million per year in reduced operating costs, $44 million-111 million in 
CO2 reductions, and $2.1 million-3.3 million in reduced 
NOX emissions. At a 3-

[[Page 20093]]

percent discount rate, the net benefit amounts to $887 million-1,376 
million per year.

    Table I.2--Annualized Benefits and Costs of Proposed Standards for Ballasts for 2014-2043 Analysis Period
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                                                                     Monetized  million 2009$/year
                                                     -----------------------------------------------------------
                                                                             Low estimate        High estimate
                                     Discount rate                             (emerging           (existing
                                                       Primary estimate   technologies, roll-    technologies,
                                                                             up  scenario)     shift  scenario)
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                                                    Benefits
----------------------------------------------------------------------------------------------------------------
Operating Cost Savings..........  7%................  1,145.............  931...............  1,359.
                                  3%................  1,477.............  1,153.............  1,800.
CO2 Reduction at $4.7/t *.......  5%................  20................  12................  28.
CO2 Reduction at $21.4/t *......  3%................  78................  44................  111.
CO2 Reduction at $35.1/t *......  2.5%..............  122...............  68................  177.
CO2 Reduction at $64.9/t *......  3%................  237...............  134...............  340.
NOX Reduction at $2,519/t *.....  7%................  2.2...............  1.6...............  2.8.
                                  3%................  2.7...............  2.1...............  3.3.
Total (Operating Cost Savings,    7% plus CO2 range.  1,167 to 1,384....  945 to 1,067......  1,389 to 1,702.
 CO2 Reduction and NOx            7%................  1,225.............  977...............  1,473.
 Reduction)[dagger].              3%................  1,557.............  1,199.............  1,915.
                                  3% plus CO2 range.  1,499 to 1,716....  1,167 to 1,289....  1,831 to 2,144.
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                                                      Costs
----------------------------------------------------------------------------------------------------------------
Incremental Product Costs.......  7%................  357...............  276...............  437.
                                  3%................  425...............  311...............  539.
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                                               Net Benefits/Costs
----------------------------------------------------------------------------------------------------------------
Total (Operating Cost Savings,    7% plus CO2 range.  810 to 1,027......  669 to 790........  952 to 1,264.
 CO2 Reduction and NOx            7%................  868...............  701...............  1,036.
 Reduction, Minus Incremental     3%................  1,131.............  887...............  1,376.
 Product Costs)[dagger].          3% plus CO2 range.  1,074 to 1,291....  856 to 977........  1,292 to 1,604.
----------------------------------------------------------------------------------------------------------------
* The CO2 values represent global monetized values (in 2007$) of the social cost of CO2 emissions in 2010 under
  several scenarios. The values of $4.7, $21.4, and $35.1 per ton are the averages of SCC distributions
  calculated using 5-percent, 3-percent, and 2.5-percent discount rates, respectively. The value of $64.9 per
  ton represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. The
  value for NOx (in 2009$) is the average of the low and high values used in DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at
  a 3-percent discount rate, which is $21.4/ton in 2010 (in 2007$). In the rows labeled as ``7% plus CO2 range''
  and ``3% plus CO2 range,'' the operating cost and NOx benefits are calculated using the labeled discount rate,
  and those values are added to the full range of CO2 values with the $4.7/ton value at the low end, and the
  $64.9/ton value at the high end.

    DOE has tentatively concluded that the proposed standards represent 
the maximum improvement in energy efficiency that is technologically 
feasible and economically justified, and would result in the 
significant conservation of energy. DOE further notes that products 
achieving these standard levels are already commercially available for 
all product classes covered by today's proposal. Ballasts are 
commercially available at the proposed standard level for all 
representative ballast types. Based on the analyses described above, 
DOE found the benefits of the proposed standards to the nation (energy 
savings, positive NPV of consumer benefits, consumer LCC savings, and 
emission reductions) outweigh the burdens (loss of INPV for 
manufacturers and LCC increases for some consumers).
    Based on consideration of the public comments DOE receives in 
response to this notice and related information collected and analyzed 
during the course of this rulemaking effort, DOE may adopt energy use 
levels presented in this notice that are either higher or lower than 
the proposed standards, or some combination of level(s) that 
incorporate the proposed standards in part.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying today's proposal as well as some of the relevant historical 
background related to the establishment of standards for fluorescent 
lamp ballasts.

A. Authority

    Title III of EPCA sets forth a variety of provisions designed to 
improve energy efficiency. Part B of Title III (42 U.S.C. 6291-6309) 
provides for the Energy Conservation Program for Consumer Products 
Other than Automobiles.\7\ EPCA covers consumer products and certain 
commercial equipment (referred to collectively hereafter as ``covered 
products''), including the types of fluorescent lamp ballasts that are 
the subject of this rulemaking.\8\ (42 U.S.C. 6292(a)(13)) EPCA 
prescribes energy conservation standards for these products (42 U.S.C.

[[Page 20094]]

6295(g)(5), (6), and (8)), and also requires that DOE conduct two 
rulemakings to determine (1) whether EPCA's original standards for 
ballasts in 42 U.S.C. 6295(g)(5) should be amended, including whether 
such standards should apply to the ballasts in 42 U.S.C. 6295(g)(6) and 
other fluorescent ballasts; and (2) whether the standards then in 
effect for ballasts should be amended, including whether such standards 
should apply to additional ballasts. (42 U.S.C. 6295(g)(7)(A)-(B)) As 
explained in further detail in section II.C, ``Background,'' this 
rulemaking is the second of the two required rulemakings. In this 
rulemaking, DOE considers whether to amend the existing standards for 
ballasts, including those in 42 U.S.C. 6295(g)(8), and also considers 
standards for additional ballasts. See section 0 for a discussion of 
additional fluorescent lamp ballasts DOE considered for coverage. In 
addition, under 42 U.S.C. 6295(m), DOE must periodically review 
established energy conservation standards for covered products.
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    \7\ This part was titled Part B in EPCA, but was subsequently 
codified as Part A in the U.S. Code for editorial reasons.
    \8\ Ballasts are used primarily in the commercial and industrial 
sectors. While Part B includes a range of consumer products that are 
used primarily in the residential sector, such as refrigerators, 
dishwashers, and clothes washers, Part B also includes several 
products used primarily in the commercial sector, including 
fluorescent lamp ballasts. (Part C of Title III--Certain Industrial 
Equipment, codified in the U.S. Code as Part A-1, concerns products 
used primarily in the commercial and industrial sectors, such as 
electric motors and pumps, commercial refrigeration equipment, and 
packaged terminal air conditioners and heat pumps.)
---------------------------------------------------------------------------

    Under EPCA, DOE's energy conservation program for covered products 
consists essentially of four parts: (1) Testing, (2) labeling, (3) the 
establishment of Federal energy conservation standards, and (4) 
certification and enforcement procedures. The Federal Trade Commission 
(FTC) is primarily responsible for labeling, and DOE implements the 
remainder of the program. EPCA authorizes DOE, subject to certain 
criteria and conditions, to develop test procedures to measure the 
energy efficiency, energy use, or estimated annual operating cost of 
each covered product. (42 U.S.C. 6293) Manufacturers of covered 
products must use the prescribed DOE test procedure as the basis for 
certifying to DOE that their products comply with the applicable energy 
conservation standards adopted under EPCA and when making 
representations to the public regarding the energy use or efficiency of 
those products. (42 U.S.C. 6293(c) and 6295(s)) Similarly, DOE must use 
these test procedures to determine whether the products comply with 
standards adopted under EPCA. Id. The test procedures for ballasts 
currently appear at title 10, Code of Federal Regulations (CFR), part 
430, subpart B, appendix Q.
    EPCA provides criteria for prescribing amended standards for 
covered products. As indicated above, any amended standard for a 
covered product must be designed to achieve the maximum improvement in 
energy efficiency that is technologically feasible and economically 
justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, EPCA precludes DOE 
from adopting any standard that would not result in a significant 
conservation of energy. (42 U.S.C. 6295(o)(3)) Moreover, DOE may not 
prescribe a standard: (1) For certain products, including ballasts, if 
no test procedure has been established for the product, or (2) if DOE 
determines by rule that the proposed standard is not technologically 
feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B)) EPCA 
also provides that, in determining whether a proposed standard is 
economically justified, DOE must determine whether the benefits of the 
standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must do 
so after receiving comments on the proposed standard, and by 
considering, to the greatest extent practicable, the following seven 
factors:
    1. The economic impact of the standard on manufacturers and 
consumers of the products subject to the standard;
    2. The savings in operating costs throughout the estimated average 
life of the covered products in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered products that are likely to result from the imposition of the 
standard;
    3. The total projected amount of energy, or as applicable, water, 
savings likely to result directly from the imposition of the standard;
    4. Any lessening of the utility or the performance of the covered 
products likely to result from the imposition of the standard;
    5. The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
imposition of the standard;
    6. The need for national energy and water conservation; and
    7. Other factors the Secretary of Energy (Secretary) considers 
relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    EPCA also contains what is known as an ``anti-backsliding'' 
provision, which prevents the Secretary from prescribing any amended 
standard that either increases the maximum allowable energy use or 
decreases the minimum required energy efficiency of a covered product. 
(42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended 
or new standard if interested persons have established by a 
preponderance of the evidence that the standard is likely to result in 
the unavailability in the United States of any covered product type (or 
class) of performance characteristics (including reliability), 
features, sizes, capacities, and volumes that are substantially the 
same as those generally available in the United States. (42 U.S.C. 
6295(o)(4))
    Further, EPCA establishes a rebuttable presumption that a standard 
is economically justified if the Secretary finds that the additional 
cost to the consumer of purchasing a product complying with an energy 
conservation standard level will be less than three times the value of 
the energy savings during the first year that the consumer will receive 
as a result of the standard, as calculated under the applicable test 
procedure. See 42 U.S.C. 6295(o)(2)(B)(iii).
    EPCA requires DOE to specify a different standard level than that 
which applies generally to a type or class of products for any group of 
covered products that have the same function or intended use if DOE 
determines that products within such group (A) consume a different kind 
of energy from that consumed by other covered products within such type 
(or class); or (B) have a capacity or other performance-related feature 
which other products within such type (or class) do not have and such 
feature justifies a higher or lower standard. (42 U.S.C. 6294(q)(1)) In 
determining whether a performance-related feature justifies a different 
standard for a group of products, DOE must consider such factors as the 
utility to the consumer of the feature and other factors DOE deems 
appropriate. Id. Any rule prescribing such a standard must include an 
explanation of the basis on which such higher or lower level was 
established. (42 U.S.C. 6295(q)(2))
    Federal energy conservation requirements generally supersede State 
laws or regulations concerning energy conservation testing, labeling, 
and standards. (42 U.S.C. 6297(a)-(c)) DOE can, however, grant waivers 
of Federal preemption for particular State laws or regulations, in 
accordance with the procedures and other provisions of section 327(d) 
of the Act. (42 U.S.C. 6297(d))
    Finally, EPCA requires that energy conservation standards address 
standby mode and off mode energy use. (42 U.S.C. 6295(gg)) 
Specifically, when DOE adopts a standard for a covered product after 
July 1, 2010, DOE must, if justified by the criteria for adoption of 
standards in 42 U.S.C. 6295(o), incorporate standby mode and off mode 
energy use into the standard, if feasible. If incorporation is not 
feasible, DOE must adopt a separate standard for such energy use for 
that product, if justified under 42 U.S.C. 6295(o). (42 U.S.C. 
6295(gg)(3)(A)-(B)) DOE has determined

[[Page 20095]]

that ballasts do not operate in an ``off mode'' as defined by EPCA (42 
U.S.C. 6291(gg)(1)(A)(ii)), and that the only ballasts that consume 
power in a ``standby mode'' as defined by EPCA (42 U.S.C. 
6291(gg)(1)(A)(iii)) are those that incorporate an electronic circuit 
enabling the ballast to communicate with and be part of a lighting 
control system. DOE's current test procedures for ballasts address such 
standby mode energy use. 74 FR 54455 (October 22, 2009); 10 CFR part 
430, subpart B, appendix Q, section 3.5. In this rulemaking, as 
discussed in section 0, DOE has not proposed amended standards for 
dimming ballasts currently covered by standards (42 U.S.C. 6295(g)(8)) 
because DOE has not found any of these covered products in the 
marketplace. As the scope of coverage does not include any additional 
dimming ballasts, this NOPR does not include energy conservation 
standards for standby mode energy use.

B. Background

1. Current Standards
    The current Federal energy conservation standards for ballasts are 
set forth in Table II.1 and Table II.2 below. The standards in Table 
II.1 were adopted in a final rule published on September 19, 2000, 65 
FR 56739, which completed the first of the two rulemakings required 
under 42 U.S.C. 6295(g)(7) to consider amending the standards for 
ballasts (hereafter referred to as the 2000 Ballast Rule). The 
standards in Table II.2 were established by amendments to EPCA in the 
Energy Policy Act of 2005 (EPACT 2005), Public Law 109-58.

                      Table II.1--Energy Conservation Standards From the 2000 Ballast Rule
----------------------------------------------------------------------------------------------------------------
                                                                                                      Ballast
                  Application for operation of                     Ballast input   Total nominal     efficacy
                                                                      voltage       lamp watts        factor
----------------------------------------------------------------------------------------------------------------
One F40T12 lamp.................................................             120              40            2.29
                                                                             277              40            2.29
Two F40T12 lamps................................................             120              80            1.17
                                                                             277              80            1.17
Two F96T12 lamps................................................             120             150            0.63
                                                                             277             150            0.63
Two F96T12HO lamps..............................................             120             220            0.39
                                                                             277             220            0.39
----------------------------------------------------------------------------------------------------------------

    10 CFR 430.32(m)(3).

                            Table II.2--Energy Conservation Standards from EPACT 2005
----------------------------------------------------------------------------------------------------------------
                                                                                                      Ballast
                  Application for operation of                     Ballast input   Total nominal     efficacy
                                                                      voltage       lamp watts        factor
----------------------------------------------------------------------------------------------------------------
One F34T12 lamp.................................................         120/277              34            2.61
Two F34T12 lamps................................................         120/277              68            1.35
Two F96T12/ES lamps.............................................         120/277             120            0.77
Two F96T12/HO/ES lamps..........................................         120/277             190            0.42
----------------------------------------------------------------------------------------------------------------

 (42 U.S.C. 6295(g)(8)(A); 10 CFR 430.32(m)(5))

    In summary, as reflected in the foregoing two tables, the ballasts 
currently regulated under EPCA consist of ballasts that are designed to 
operate:
     One and two nominally 40-watt (W) and 34W 4-foot T12 
medium bipin (MBP) lamps (F40T12 and F34T12);
     Two nominally 75W and 60W 8-foot T12 single-pin (SP) 
slimline lamps (F96T12 and F96T12/ES); and
     Two nominally 110W and 95W 8-foot T12 recessed double 
contact high output lamps (F96T12 and F96T12/ES) at nominal input 
voltages of 120 or 277 volts (V) with an input current frequency of 60 
hertz (Hz).
2. History of Standards Rulemaking for Fluorescent Lamp Ballasts
    EPCA establishes energy conservation standards for certain ballasts 
and requires that DOE conduct two cycles of rulemakings to determine 
whether to amend the standards for ballasts, including whether to adopt 
standards for additional ballasts. (42 U.S.C. 6295(g)(5)-(8)) As 
indicated above, DOE completed the first of these rulemaking cycles in 
the 2000 Ballast Rule. 65 FR 56740 (Sept. 19, 2000). In this 
rulemaking, the second rulemaking cycle required by 42 U.S.C. 
6295(g)(7), DOE considers whether to amend the existing standards for 
ballasts and whether to adopt standards for additional ballasts.
    DOE initiated this rulemaking on January 14, 2008 by publishing in 
the Federal Register a notice announcing the availability of the 
``Energy Conservation Standards Rulemaking Framework Document for 
Fluorescent Lamp Ballasts.'' (A PDF of the framework document is 
available at http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/ballast_framework_011408.pdf. In this 
notice, DOE also announced a public meeting on the framework document 
and requested public comment on the matters raised in the document. 73 
FR 3653 (Jan. 22, 2008). The framework document described the 
procedural and analytical approaches that DOE anticipated using to 
evaluate energy conservation standards for the ballasts, and identified 
various issues to be resolved in conducting this rulemaking.
    DOE held the public meeting on February 6, 2008, where it: 
presented the contents of the framework document; described the 
analyses it planned to conduct during the rulemaking; sought comments 
from interested parties on these subjects; and in general, sought to 
inform interested parties about, and facilitate their involvement in, 
the rulemaking. Interested parties at the public meeting discussed the 
active mode test procedure and several major analyses related to this 
rulemaking. At the meeting and during the period for commenting on the 
framework document, DOE received many

[[Page 20096]]

comments that helped identify and resolve issues involved in this 
rulemaking.
    DOE then gathered additional information and performed preliminary 
analyses to help develop potential energy conservation standards for 
ballasts. DOE published in the Federal Register an announcement of the 
availability of the preliminary technical support document (the 
preliminary TSD) and of another public meeting to discuss and receive 
comments on the following matters: the product classes DOE planned to 
analyze; the analytical framework, models, and tools that DOE was using 
to evaluate standards; the results of the preliminary analyses 
performed by DOE; and potential standard levels that DOE could 
consider. 75 FR 14319 (March 24, 2010) (the March 2010 notice). DOE 
also invited written comments on these subjects. Id. The preliminary 
TSD is available at http://www1.eere.energy.gov/buildings/appliance_standards/residential/fluorescent_lamp_ballasts_ecs_prelim_tsd.html. In the notice, DOE requested comment on other relevant issues 
that would affect energy conservation standards for ballasts or that 
DOE should address in this notice of proposed rulemaking (NOPR). Id. at 
14322.
    The preliminary TSD provided an overview of the activities DOE 
undertook in developing standards for ballasts, and discussed the 
comments DOE received in response to the framework document. It also 
described the analytical framework that DOE uses in this rulemaking, 
including a description of the methodology, the analytical tools, and 
the relationships among the various analyses that are part of the 
rulemaking. The preliminary TSD presented and described in detail each 
analysis DOE performed up to that point, including descriptions of 
inputs, sources, methodologies, and results. These analyses were as 
follows:
     A market and technology assessment addressed the scope of 
this rulemaking, identified the potential product classes for ballasts, 
characterized the markets for these products, and reviewed techniques 
and approaches for improving their efficiency;
     A screening analysis reviewed technology options to 
improve the efficiency of ballasts, and weighed these options against 
DOE's four prescribed screening criteria;
     An engineering analysis estimated the manufacturer selling 
prices (MSPs) associated with more energy-efficient ballasts;
     An energy use analysis estimated the annual energy use of 
ballasts;
     A markups analysis converted estimated MSPs derived from 
the engineering analysis to consumer prices;
     A life-cycle cost analysis calculated, for individual 
consumers, the discounted savings in operating costs throughout the 
estimated average life of the product, compared to any increase in 
installed costs likely to result directly from the imposition of a 
given standard;
     A payback period (PBP) analysis estimated the amount of 
time it takes individual consumers to recover the higher purchase 
expense of more energy efficient products through lower operating 
costs;
     A shipments analysis estimated shipments of ballasts over 
the time period examined in the analysis, which was used in performing 
the national impact analysis (NIA);
     A national impact analysis assessed the national energy 
savings, and the national net present value of total consumer costs and 
savings, expected to result from specific, potential energy 
conservation standards for ballasts; and
     A preliminary manufacturer impact analysis took the 
initial steps in evaluating the effects on manufacturers of new 
efficiency standards.
    The public meeting announced in the March 2010 notice took place on 
April 26, 2010. At this meeting, DOE presented the methodologies and 
results of the analyses set forth in the preliminary TSD. Interested 
parties discussed the following major issues at the public meeting: the 
pros and cons of various efficiency metrics; how test procedure 
variation might affect efficiency measurements; special requirements 
for electromagnetic interference (EMI)-sensitive environments; product 
class divisions; MSPs and overall pricing methodology; markups; the 
maximum technologically feasible ballast efficiency; cumulative 
regulatory burden; and shipments. The comments received since 
publication of the March 2010 notice, including those received at the 
April 2010 public meeting, have contributed to DOE's proposed 
resolution of the issues in this rulemaking. This NOPR responds to the 
issues raised in the comments received.
    Since the April 2010 public meeting, additional changes have been 
proposed to the active mode test procedure that have directly impacted 
this rulemaking. After reviewing comments submitted in response to the 
active mode test procedure NOPR (75 FR 14287, March 24, 2010) and 
conducting additional research, DOE issued a supplemental NOPR (SNOPR) 
proposing a lamp-based ballast efficiency metric instead of the 
resistor-based metric proposed in the NOPR. 75 FR 71570 (November 24, 
2010). DOE believes the lamp-based metric more accurately assesses the 
real-life performance of a ballast. In the SNOPR, DOE sought additional 
comment on this approach. This NOPR evaluates standards for fluorescent 
lamp ballasts in terms of the new metric proposed in the active mode 
test procedure SNOPR. Please refer to section 0 for more details.
3. Compliance Date
    EPCA contains specific guidelines regarding the compliance date for 
any standards amended by this rulemaking. EPCA requires DOE to 
determine whether to amend the standards in effect for fluorescent lamp 
ballasts and whether any amended standards should apply to additional 
ballasts. (42 U.S.C. 6295(g)(7)(B)). As stated above, the existing 
standards for ballasts are the standards established in the 2000 
Ballast Rule and the standards established through the EPCA amendments 
to EPACT 2005. EPCA specifies that any amended standards established in 
this rulemaking shall apply to products manufactured after a date that 
is five years after--(i) The effective date of the previous amendment; 
or (ii) if the previous final rule did not amend the standards, the 
earliest date by which a previous amendment could have been effective; 
except that in no case may any amended standard apply to products 
manufactured within three years after publication of the final rule 
establishing such amended standard. (42 U.S.C. 6295(g)(7)(C)). DOE is 
required by consent decree to publish any amended standards for 
ballasts by June 30, 2011.\9\ As a result, and in compliance with 42 
U.S.C. 6295(g)(7)(C), DOE expects the compliance date to be 3 years 
after the publication of any final amended standards, by June 30, 2014.
---------------------------------------------------------------------------

    \9\ Under the consolidated Consent Decree in New York v. Bodman, 
No. 05 Civ. 7807 (S.D.N.Y. filed Sept. 7, 2005) and Natural 
Resources Defense Council v. Bodman, No. 05 Civ. 7808 (S.D.N.Y. 
filed Sept. 7, 2005) the U.S. Department of Energy is required to 
publish a final rule amending energy conservation standards for 
fluorescent lamp ballasts no later than June 30, 2011.

---------------------------------------------------------------------------

[[Page 20097]]

III. Issues Affecting the Scope of This Rulemaking

A. Additional Fluorescent Lamp Ballasts for Which DOE Is Proposing 
Standards

1. Scope of EPCA Requirement That DOE Consider Standards for Additional 
Ballasts
    As discussed above, amendments to EPCA established energy 
conservation standards for certain fluorescent lamp ballasts, (42 
U.S.C. 6295(g)(5), (6), and (8)) and directed DOE to conduct two 
rulemakings to consider amending the standards. The first amendment was 
completed with the publication of the 2000 Ballast Rule. This 
rulemaking fulfills the statutory requirement to determine whether to 
amend standards a second time. EPCA specifically directs DOE, in this 
second amendment, to determine whether to amend the standards in effect 
for fluorescent lamp ballasts and whether such standards should be 
amended so that they would be applicable to additional fluorescent lamp 
ballasts. (42 U.S.C. 6295(g)(7)(B))
    The preliminary TSD notes that a wide variety of fluorescent lamp 
ballasts are not currently covered by energy conservation standards, 
and they are potential candidates for coverage under 42 U.S.C. 
6295(g)(7). DOE encountered similar circumstances in a recent 
rulemaking that amended standards for general service fluorescent and 
incandescent reflector lamps (hereafter referred to as the 2009 Lamps 
Rule).\10\ 74 FR 34080, 34087-8 (July 14, 2009). In that rule, DOE was 
also directed by EPCA to consider expanding its scope of coverage to 
include additional products: General service fluorescent lamps (GSFL). 
EPCA defines general service fluorescent lamps as fluorescent lamps 
that can satisfy the majority of fluorescent lamp applications and that 
are not designed and marketed for certain specified, non-general 
lighting applications. (42 U.S.C. 6291(30)(B)) As such, the term 
``general service fluorescent lamp'' is defined by reference to the 
term ``fluorescent lamp,'' which EPCA defines as ``a low pressure 
mercury electric-discharge source in which a fluorescing coating 
transforms some of the ultraviolet energy generated by the mercury 
discharge into light,'' and as including the four enumerated types of 
fluorescent lamps for which EPCA already prescribes standards. (42 
U.S.C. 6291(30)(A); 42 U.S.C. 6295(i)(1)(B)) To construe ``general 
service fluorescent lamp'' in 42 U.S.C. 6295(i)(5) as limited by those 
types of fluorescent lamps would mean there are no GSFL that are not 
already subject to standards, and hence, there would be no 
``additional'' GSFL for which DOE could consider standards. Such an 
interpretation would conflict with the directive in 42 U.S.C. 
6295(i)(5) that DOE consider standards for ``additional'' GSFL, thereby 
rendering that provision a nullity.
---------------------------------------------------------------------------

    \10\ Documents for the 2009 Lamps Rule are available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/incandescent_lamps.html.
---------------------------------------------------------------------------

    Therefore, DOE concluded that the term ``additional general service 
fluorescent lamps'' in 42 U.S.C. 6295(i)(5) allows DOE to set standards 
for GSFL other than the four enumerated lamp types specified in the 
EPCA definition of ``fluorescent lamp.'' As a result, the 2009 Lamps 
Rule defined ``fluorescent lamp'' to include:

    (1) Any straight-shaped lamp (commonly referred to as 4-foot 
medium bipin lamps) with medium bipin bases of nominal overall 
length of 48 inches and rated wattage of 25 or more;
    (2) Any U-shaped lamp (commonly referred to as 2-foot U-shaped 
lamps) with medium bipin bases of nominal overall length between 22 
and 25 inches and rated wattage of 25 or more;
    (3) Any rapid start lamp (commonly referred to as 8-foot high 
output lamps) with recessed double contact bases of nominal overall 
length of 96 inches;
    (4) Any instant start lamp (commonly referred to as 8-foot 
slimline lamps) with single pin bases of nominal overall length of 
96 inches and rated wattage of 52 or more;
    (5) Any straight-shaped lamp (commonly referred to as 4-foot 
miniature bipin standard output lamps) with miniature bipin bases of 
nominal overall length between 45 and 48 inches and rated wattage of 
26 or more; and
    (6) Any straight-shaped lamp (commonly referred to 4-foot 
miniature bipin high output lamps) with miniature bipin bases of 
nominal overall length between 45 and 48 inches and rated wattage of 
49 or more.

10 CFR 430.2

    In this rulemaking, DOE is directed to consider whether any amended 
standard should be applicable to additional fluorescent lamp ballasts. 
(42 U.S.C. 6295(g)(7)(B)) EPCA defines a ``fluorescent lamp ballast'' 
as ``a device which is used to start and operate fluorescent lamps by 
providing a starting voltage and current and limiting the current 
during normal operation.'' (42 U.S.C. 6291(29)(A)) For this rule, DOE 
proposes to reference the definition of fluorescent lamp adopted by the 
2009 Lamps Rule. This definition allows DOE to consider expanding 
coverage to include additional fluorescent lamp ballasts while not 
eliminating coverage of any ballasts for which standards already exist.
2. Identification of the Additional Ballasts for Which DOE Proposes 
Standards
    In considering whether to amend the standards in effect for 
fluorescent lamp ballasts so that they apply to ``additional'' 
fluorescent lamp ballasts as specified in section 325(g)(7)(B) of EPCA, 
DOE will consider all fluorescent lamp ballasts (for which standards 
are not already prescribed) that operate fluorescent lamps, as defined 
in 10 CFR 430.2. For each additional fluorescent lamp ballast, DOE 
considers potential energy savings, technological feasibility and 
economic justification when determining whether to include them in the 
scope of coverage. In its analyses, DOE assessed the potential energy 
savings from market share estimates, potential ballast designs that 
improve efficiency, and other relevant factors. For market share 
estimates, DOE used both quantitative shipment data and information 
obtained during manufacturer interviews. DOE also assessed the 
potential to achieve energy savings in certain ballasts by considering 
whether those ballasts could serve as potential substitutes for other 
regulated ballasts.
    In the preliminary TSD, DOE considered extending the scope of 
coverage to several additional ballast types including those that 
operate: Additional numbers and diameters of 4-foot MBP lamps, 
additional numbers and diameters of 8-foot high output (HO) lamps, 
additional numbers and diameters of 8-foot slimline lamps, 4-foot 
miniature bipin (miniBP) standard output (SO) lamps, 4-foot miniBP high 
output lamps, and 8-foot high output cold temperature lamps commonly 
used in outdoor signs. DOE also considered whether to extend coverage 
to dimming ballasts, but determined that those ballasts represent a 
very small portion of the overall market and are unlikely to be 
substituted for covered products due to their high first cost. The 
California investor-owned utilities (the California Utilities), and the 
Northwest Energy Efficiency Alliance (NEEA) and Northwest Power and 
Conservation Council (NPCC) agreed with the expanded scope of coverage 
presented in the preliminary TSD. In particular, the California 
Utilities commented that there is a wide range of efficiencies among 
the products included in the proposed coverage and that cost-effective 
standards will lead to significant energy savings. The National 
Electrical Manufacturers Association (NEMA) generally agreed with the 
expanded scope of coverage, but requested a specific exemption for

[[Page 20098]]

magnetic ballasts that operate in EMI-sensitive applications. (NEMA, 
No. 29 at p. 2; California Utilities, No. 30 at p. 1; NEEA and NPCC, 
No. 32 at p. 2) \11\ The sections below discuss the comments received 
in more detail.
---------------------------------------------------------------------------

    \11\ A notation in the form ``NEMA, No. 29 at p. 2'' identifies 
a written comment that DOE has received and has included in the 
docket of this rulemaking. This particular notation refers to a 
comment: (1) Submitted by NEMA; (2) in document number 29 of the 
docket, and (3) on page 2 of that document.
---------------------------------------------------------------------------

a. Dimming Ballasts
    Historically, energy conservation standards have exempted ballasts 
designed for dimming to 50 percent or less of their maximum output. (10 
CFR 430.32(m)(4, 6-7)) However, in 2010, exemptions included in EPACT 
2005 expired for dimming ballasts that operate certain reduced-wattage 
lamps. (10 CFR 430.32(m)(6-7)) DOE research has revealed no dimming 
ballasts currently on the market that operate these lamps because the 
gas composition of reduced-wattage lamps makes them undesirable for use 
in dimming applications. Additionally, dimming ballasts employ cathode 
heating to facilitate dimming and therefore operate lamps with two 
pins. Because 8-foot slimline lamps have only a single pin, these lamps 
are not suitable for use with dimming ballasts. Based on data from the 
2005 U.S. Census and interviews with manufacturers, DOE determined in 
the preliminary TSD that dimming ballasts of all types had less than 1 
percent market share. DOE also concluded that these ballasts are 
already used in energy-saving systems. After examining the potential 
for substitution from other ballast types, DOE believed there was 
little risk of dimming ballasts becoming a substitute for other covered 
ballast types. Dimming ballasts are more expensive than comparable 
fixed-light-output ballasts. Moreover, dimming ballasts require 
specialized control systems, resulting in additional up-front cost. For 
all of these reasons, DOE did not consider expanding coverage of 
dimming ballasts in the preliminary TSD.
    NEMA, the California Utilities, and the NEEA and NPCC agreed with 
the exclusion of additional dimming ballasts. (NEMA, No. 29 at p. 2; 
California Utilities, No. 30 at p. 1; NEEA and NPCC, No. 32 at p. 3) 
Philips and Osram Sylvania emphasized that dimming ballasts are part of 
high-efficiency systems that realize greater energy savings than fixed-
light-output systems. (Philips, Public Meeting Transcript, No. 34 at 
pp. 122-123; OSI, No. 34, Public Meeting Transcript, No. 34 at pp. 124-
125) The California Utilities and the NEEA and NPCC also cited the lack 
of an industry-standard test procedure as a potential barrier to 
including dimming ballasts in this rulemaking. NEMA concurred, stating 
that industry has not agreed on the appropriate dimmed level for 
evaluation and that measuring at many levels is burdensome. (California 
Utilities, No. 30 at p. 1; NEEA and NPCC, No. 32 at p. 3; NEMA, No. 29 
at p. 2)
    DOE agrees that dimming ballasts have a very small market share and 
are already used in energy-saving systems. They are unlikely to become 
a substitute for fixed-light output ballasts due to their high up-front 
cost. The lack of an industry-standardized test procedure for newer 
dimming products makes it difficult for DOE to determine whether energy 
conservation standards for additional dimming ballasts are 
technologically feasible. For these reasons, DOE is not proposing to 
expand the coverage of dimming ballasts in this NOPR. However, the 
dimming ballasts that operate the four reduced-wattage lamp 
combinations described in 10 CFR 430.32(m)(5) (EPACT 2005 standards) 
will continue to be covered by existing energy conservation standards.
b. Sign Ballasts
    Current energy conservation standards exclude ballasts designed to 
operate two F96T12HO lamps at ambient temperatures of 20 degrees 
Fahrenheit ([deg]F) or less and for use in an outdoor sign. (10 CFR 
430.32(m)) In the preliminary TSD, DOE considered whether to include 
these ballasts in the scope of coverage for this rulemaking. DOE found 
that the market share of cold temperature sign ballasts was about 1 
percent in 2005. Despite their relatively small market share, the 
energy savings potential per ballast is substantial due to their 
operation of large numbers of high output lamps. Replacing a magnetic 
with an electronic \12\ sign ballast could reduce energy consumption by 
as much as 25 percent to 35 percent. Given that sign ballasts exist at 
more than one level of efficiency, DOE has determined it is 
technologically feasible to improve the energy efficiency of sign 
ballasts. Preliminary results from the LCC and NIA analyses indicated 
that setting standards would be economically justified. For these 
reasons, DOE included them in the scope of coverage in the preliminary 
TSD.
---------------------------------------------------------------------------

    \12\ When DOE refers to an electronic ballast throughout this 
document, it is referring to a high frequency ballast as defined by 
as defined in ANSI C82.13-2002. Similarly, when DOE refers to a 
magnetic ballast, it is referring to a low frequency ballast as 
defined by the same ANSI standard.
---------------------------------------------------------------------------

    The Appliance Standards Awareness Project (ASAP) and the NEEA and 
NPCC agreed with DOE's decision to expand coverage to include cold 
temperature outdoor sign ballasts. Although these products comprise a 
relatively small percentage of overall fluorescent ballast shipments, 
the NEEA and NPCC note that these ballasts have much higher energy use 
compared to other covered ballast types due to their high system input 
power and low efficiency of present systems. (ASAP, Public Meeting 
Transcript, No. 34 at pp. 121-122; NEEA and NPCC, No. 32 at p. 3) DOE 
received no comments suggesting that DOE should not include these 
ballasts in the scope of coverage for this rulemaking. Therefore, for 
the reasons set forth above, DOE proposes to include them in the scope 
of coverage for this NOPR. Cold temperature ballasts for outdoor signs 
are typically designed to operate a range of lamp lengths and numbers 
of lamps. Based on product catalogs and conversations with 
manufacturers, DOE found that a single sign ballast can be designed to 
operate a range of loads including HO lamps between 1.5 feet and 10 
feet with one to six lamps per ballast. Because only 8-foot HO lamps 
are included in the definition of fluorescent lamp (10 CFR 430.2), DOE 
proposes to include sign ballasts that can operate 8-foot HO lamps in 
the scope of coverage.
c. T5 Ballasts
    In the preliminary TSD, DOE considered whether to expand the scope 
of coverage to include ballasts that operate standard output and high 
output 4-foot miniBP T5 lamps. The U.S. Census reports that T5 HO 
ballasts comprised about 4 percent of the ballast market in 2005. 
Shipment data are available only for T5 high output ballasts, so the 
actual market share is likely larger. T5 ballast shipments have been 
steadily increasing since the shipments were first reported in 2002. 
Furthermore, DOE research indicates that T5 high output ballasts are 
rapidly taking market share from metal halide systems used in high-bay 
industrial applications. The shipment analysis confirms that T5 SO and 
T5 HO ballasts represent a significant portion of the market. Because 
higher-efficiency versions of some of these ballasts are already 
present in the market, DOE concluded that standards to increase the 
energy efficiency of these ballasts were technologically feasible. 
Based on LCC and NIA results in the preliminary TSD, coverage of T5 
ballasts would be economically justified. For these reasons, DOE 
included T5 ballasts in the

[[Page 20099]]

scope of coverage in the preliminary TSD.
    DOE did not receive any adverse comment to its inclusion of T5 
ballasts in the scope of coverage for the preliminary TSD. Therefore, 
for the reasons stated above, DOE proposes to include them in the scope 
in this NOPR. DOE found that T5 ballasts and lamps exist in a variety 
of lengths and wattages. Although standard T5 lamps include wattages 
ranging from 14W to 80W, and lengths ranging from nominally 2 feet to 6 
feet, the primary driver of T5 ballast and lamp market share growth is 
substitution for currently regulated 4-foot T8 MBP ballasts and lamps. 
Therefore, DOE proposes to cover ballasts designed to operate nominally 
4-foot lengths of standard output and high output T5 miniBP lamps.
d. Residential Ballasts
    In the preliminary TSD, DOE considered whether to include 
residential ballasts in the scope of coverage. Residential ballasts, 
defined as ballasts that have a power factor less than 0.9 and are 
designed for use only in residential building applications, are 
currently exempt from existing energy conservation standards. Only 
magnetic residential ballast shipments are reported in the U.S. Census. 
The market for residential magnetic ballasts held steady at about 7 
percent between 1995 and 2002, and then decreased to about 1.5 percent 
in 2005. In the preliminary TSD, DOE stated its belief that the 2005 
market share and total shipments of residential ballasts was much 
higher than the 1.5 percent reported for magnetic residential ballasts 
in the U.S. census. First, many residential ballasts are manufactured 
overseas by foreign companies that do not share shipment data with the 
U.S. Census. Second, electronic ballasts are a common option for 
residential fluorescent lighting fixtures, but they were not reported 
in the Census data. Because of these omissions, DOE believes 
residential ballasts represent a more sizeable portion of the overall 
ballast market and represent significant potential energy savings.
    DOE also found that residential ballasts exist at a range of 
efficiencies. They can be magnetic or electronic and exist for both T8 
and T12 lamps. Therefore, DOE believed standards to increase the energy 
efficiency of residential ballasts were technologically feasible. 
Preliminary results in the LCC and NIA indicated that standards for 
residential ballasts were economically justified. For these reasons, 
DOE included residential ballasts in the scope of coverage in the 
preliminary TSD.
    ASAP and the NEEA and NPCC agreed with DOE's decision to expand 
coverage to include residential ballasts. The NEEA and NPCC noted that 
the residential ballast market is expected to grow substantially as 
residential lighting energy codes become more stringent. They noted 
that California, Oregon, and Washington have codes that require 
fluorescent or higher-efficacy systems. Similarly, the 2009 
International Energy Conservation Code requires that 50 percent of all 
permanently installed lighting in residences have a minimum efficacy of 
45 lumens per watt. (ASAP, Public Meeting Transcript, No. 34 at pp. 
121-122; NEEA and NPCC, No. 32 at pp. 2-3) DOE did not receive any 
adverse comments regarding coverage of residential ballasts. Therefore, 
for the reasons stated above, DOE proposes to include residential 
ballasts that operate 4-foot medium bipin or 2-foot U-shaped lamps in 
the scope of coverage for this NOPR.
e. Ballasts That Operate T8 4-Foot MBP and 2-Foot U-Shaped Lamps
    Existing energy conservation standards do not apply to ballasts 
that operate T8 lamps. In the preliminary TSD, DOE considered whether 
to extend coverage to these types of ballasts. Ballasts that operate 4-
foot T8 MBP and 2-foot T8 U-shaped lamps exhibit a range of 
efficiencies, indicating that standards to increase the energy 
efficiency of these ballasts are technologically feasible. According to 
the U.S. Census, the market share of 4-foot T8 MBP and 2-foot T8 U-
shaped ballasts represented 55 percent of shipments in 2005. In 
addition, due to existing energy conservation standards promulgated for 
T12 ballasts, shipments of T8 ballasts have been increasing. T8 
ballasts are being purchased and installed in applications previously 
popular for T12 systems. Thus, there is potential for significant 
energy savings by regulating the 4-foot T8 ballast market. Furthermore, 
preliminary results in the LCC and NIA demonstrated the potential for 
significant economic savings, indicating that standards for these 
ballasts would be economically justified. For these reasons, DOE 
included ballasts that operate 4-foot T8 MBP and 2-foot T8 U-shaped 
lamps in the scope of coverage in the preliminary TSD.
    DOE did not receive any adverse comments regarding coverage of 
these ballasts. Therefore, for the reasons stated above, DOE proposes 
to include ballasts that operate 4-foot T8 MBP and 2-foot T8 U-shaped 
lamps in the scope of coverage for this NOPR.
f. Ballasts That Operate T8 8-Foot Slimline Lamps
    Similar to ballasts that operate 4-foot T8 MBP and 2-foot T8 U-
shaped lamps, ballasts that operate 8-foot T8 slimline lamps are also 
not subject to existing energy conservation standards. According to the 
U.S. Census, 8-foot slimline T8 ballasts had about 2 percent market 
share in 2005, while 8-foot slimline T12 ballasts had about 3 percent 
market share. Although the market share for 8-foot slimline T8 ballasts 
as reported by the U.S. Census is relatively small, the 2009 Lamps Rule 
will eliminate all currently commercially available T12 lamps in 2012, 
further increasing demand for T8 lamp-and-ballast systems. In addition, 
while some 8-foot slimline T12 systems are being replaced by two 4-foot 
T8 systems, others are being replaced by 8-foot slimline T8 systems. In 
addition, given that these ballasts exist at a range of efficiencies, 
DOE believes that energy conservation standards are technologically 
feasible. Thus, DOE believes there is potential for significant energy 
savings by covering ballasts that operate 8-foot slimline T8 lamps. 
Based on DOE's preliminary LCC and NIA results for these ballasts, 
coverage of these ballasts would be economically justified. For these 
reasons, in the preliminary TSD, DOE included ballasts that operate 8-
foot SP slimline T8 lamps in the scope of coverage.
    DOE did not receive any adverse comments regarding coverage of 
these ballasts. Therefore, for the reasons stated above, DOE proposes 
to include ballasts that operate 8-foot SP slimline T8 lamps in the 
scope of coverage for this NOPR.
g. Ballasts That Operate T8 8-Foot HO Lamps
    In the preliminary TSD, DOE considered whether to cover ballasts 
designed to operate recessed double contact (RDC) HO T8 lamps. 
According to the U.S. Census, the market share of 8-foot HO (T8 and 
T12) ballasts (excluding cold temperature sign ballasts) was about 0.5 
percent in 2005. Because shipments of 8-foot RDC HO lamps are mostly 
T12 lamps, DOE believes most of the 8-foot HO ballasts currently 
shipped are T12. However, according to analysis conducted for the 2009 
Lamps Rule, most currently commercially available T12 HO lamps do not 
meet energy conservation standards that come into effect in 2012. 
Therefore, DOE believes that T8 HO ballast shipments will increase in

[[Page 20100]]

response to those standards. There is a range of efficiency levels for 
8-foot T8 HO ballasts currently in the market; therefore, energy 
conservation standards to increase the energy efficiency of these 
ballasts are technologically feasible. In addition, preliminary LCC and 
NIA results demonstrated the potential for significant economic 
savings. Based on these findings, DOE included 8-foot HO T8 ballasts in 
the scope of coverage in the preliminary TSD.
    DOE did not receive any adverse comments regarding coverage of 
these ballasts. Therefore, for the reasons stated above, DOE proposes 
to include ballasts that operate 8-foot RDC HO T8 lamps in the scope of 
coverage for this NOPR.
h. Ballasts That Operate in EMI-Sensitive Environments
    At the public meeting, Philips commented that magnetic ballasts are 
currently used in certain EMI-sensitive environments, and that the 
proposals in the preliminary TSD would not allow these types of 
ballasts to exist in the future. (Philips, Public Meeting Transcript, 
No. 34 at pp. 125-126) GE agreed with Philips and cited critical care 
suites, surgery suites, airport control towers, and nuclear medicine 
laboratories as examples of situations where ballasts that generate low 
or no EMI are needed. (GE, Public Meeting Transcript, No. 34 at p. 126) 
In written comments, NEMA stated that DOE needs to address an exemption 
for magnetic ballasts in EMI-sensitive applications and proposed that 
they should be high-performance T8 ballasts, which would be more 
expensive than electronic ballasts (NEMA, No. 29 at p. 2).
    DOE conducted research and interviews with fluorescent lamp ballast 
and fixture manufacturers to identify the following applications as 
potentially sensitive to EMI: Medical operating room telemetry or life 
support systems; airport control systems; electronic test equipment; 
radio communication devices; radio recording studios; correctional 
facilities; clean rooms; facilities with low signal-to-noise ratios; 
and aircraft hangers or other buildings with predominantly metal 
construction.
    To understand the specifications that ballast consumers require for 
different applications, DOE researched existing regulations for EMI. 
DOE identified EMI standards for general applications such as 
commercial buildings, residential buildings, naval vessels, and other 
spaces. These standards include (1) the Federal Communications 
Commission (FCC) standards in 47 CFR part 18 for conducted EMI and (2) 
Department of Defense MIL-STD-461F \13\ CE102 limits for all 
applications for conducted emissions from power leads between 10kHz and 
10MHz. Table III.1 below shows the existing FCC and military standards 
for conducted electromagnetic interference. The frequency column 
indicates the frequency of the electromagnetic interference rather than 
the frequency at which the ballast operates.
---------------------------------------------------------------------------

    \13\ Department of Defense MIL-STD-461F is available at http://www.cvel.clemson.edu/pdf/MIL-STD-461F.pdf.

                      Table III.1--Conducted EMI Requirements for Fluorescent Lamp Ballasts
----------------------------------------------------------------------------------------------------------------
                                            FCC Title 47 Part 18
                                          conducted EMI, Maximum RF
                                        line voltage measured with a     CE 102 MIL-STD 461F, limit level for
           Frequency  (MHz)               50 micro Henry ([mu]H)/50    conducted emissions for all  applications
                                             ohm line impedance                         ([mu]V)
                                           stabilization  network
                                          (LISN) micro volt ([mu]V)
----------------------------------------------------------------------------------------------------------------
Non-consumer equipment:
    0.45 to 1.6.......................                         1,000  1,000
    1.6 to 30.........................                         3,000  1,000 *Applies up to 10 MHz
Consumer equipment:
    0.45 to 2.51......................                           250  1,000
    2.51 to 3.0.......................                         3,000  1,000
    3.0 to 30.........................                           250  1,000 *Applies up to 10 MHz
----------------------------------------------------------------------------------------------------------------

    In addition to using low-frequency magnetic ballasts in fixtures, 
DOE researched other ways that fixture manufacturers can reduce EMI. It 
is possible to install an external EMI filter on the input side of the 
ballast to limit conducted EMI that escapes the ballast from continuing 
to propagate through the building wiring. In addition, a grid lens can 
be installed to cover the lamp chamber to increase the impedance to a 
specific frequency or to bring radiated EMI to ground. DOE received 
mixed feedback from manufacturers concerning whether inline filters, 
special lenses, grounding cages, fixture design, and other external 
filters would be sufficient to reduce EMI from electronic ballasts to 
acceptable levels for EMI-sensitive applications. Electronic ballasts 
typically operate at a frequency above 20 kHz, which can turn the 
fluorescent lamp arc into an emitter of high-frequency electromagnetic 
waves. The switch mode power supply within electronic ballasts can also 
radiate high-frequency electromagnetic waves. Because the intensity of 
EMI is directly proportional to its frequency, the EMI from lighting 
systems containing high-frequency electronic ballasts may penetrate 
grid lenses and may affect other equipment over a farther range than 
the EMI from magnetic ballasts.
    DOE learned from manufacturer interviews that magnetic ballasts are 
typically recommended for situations in which EMI has been or is 
expected to be a concern. These manufacturers believe the engineering 
investment to develop specialty electronic ballasts for EMI-sensitive 
applications would be burdensome and not economically justifiable given 
the very limited demand. Furthermore, manufacturers indicated 
uncertainty over the effectiveness of these measures for each 
individual application. DOE was also unable to determine whether EMI 
related issues with electronic ballasts could be eliminated with the 
methods described above. Manufacturers

[[Page 20101]]

suggested that an exemption for T8 magnetic ballasts would not 
constitute a risk for magnetic ballast substitution in current 
electronic ballast applications because magnetic ballasts are generally 
heavier, more expensive, and use more energy than electronic ballast 
alternatives. Customers generally prefer magnetic ballasts only in 
situations where EMI is a particular concern.
    Based on its analysis of EMI-sensitive ballast applications, DOE 
proposes that T8 magnetic ballasts designed and labeled for use in EMI-
sensitive environments only and shipped by the manufacturer in packages 
containing not more than 10 ballasts be exempt from the standards 
established in this NOPR. Because of the diversity in magnetic T8 
ballast applications, DOE has designed the exemption similar to the 
previous fluorescent lamp ballast exemptions for replacement ballasts. 
DOE believes the exemption is necessary because in some environments, 
EMI can pose a serious safety concern that is best mitigated with 
magnetic ballast technology. DOE does not believe magnetic ballasts 
would likely be used as substitutes in current electronic ballast 
applications due to their higher cost and weight. See appendix 5E of 
the TSD for more details.
3. Summary of Fluorescent Lamp Ballasts to Which DOE Proposes To Extend 
Coverage
    With the exception of the comments discussed above, DOE received no 
other input related to coverage of fluorescent lamp ballasts. In 
addition, DOE's revised analyses indicate that energy conservation 
standards for the ballasts to which DOE preliminarily decided to extend 
coverage in the preliminary TSD are still expected to be 
technologically feasible, economically justified, and would result in 
significant energy savings. Therefore, in summary, DOE is proposing to 
cover the following additional fluorescent lamp ballasts:
    (1) Ballasts that operate 4-foot medium bipin lamps with a rated 
wattage \14\ of 25W or more, and an input voltage at or between 120V 
and 277V;
---------------------------------------------------------------------------

    \14\ The 2009 Lamps Rule adopted a new definition for rated 
wattage that can be found in 10 CFR 430.2.
---------------------------------------------------------------------------

    (2) Ballasts that operate 2-foot medium bipin U-shaped lamps with a 
rated wattage of 25W or more, and an input voltage at or between 120V 
and 277V;
    (3) Ballasts that operate 8-foot high output lamps with an input 
voltage at or between 120V and 277V;
    (4) Ballasts that operate 8-foot slimline lamps with a rated 
wattage of 52W or more, and an input voltage at or between 120V and 
277V;
    (5) Ballasts that operate 4-foot miniature bipin standard output 
lamps with a rated wattage of 26W or more, and an input voltage at or 
between 120V and 277V;
    (6) Ballasts that operate 4-foot miniature bipin high output lamps 
with a rated wattage of 49W or more, and an input voltage at or between 
120V and 277V;
    (7) Ballasts that operate 4-foot medium bipin lamps with a rated 
wattage of 25W or more, an input voltage at or between 120V and 277V, a 
power factor of less than 0.90, and are designed and labeled for use in 
residential applications; and
    (8) Ballasts that operate 8-foot high output lamps with an input 
voltage at or between 120V and 277V, and operate at ambient 
temperatures of 20 degrees F or less and are used in outdoor signs.

B. Off Mode and Standby Mode Energy Consumption Standards

    EPCA requires energy conservation standards adopted for a covered 
product after July 1, 2010 to address standby mode and off mode energy 
use. (42 U.S.C. 6295(gg)(3)) Because DOE is required by consent decree 
to publish a final rule establishing any amended standards for 
fluorescent lamp ballasts by June 30, 2011, this rulemaking is subject 
to this requirement. DOE determined that it is not possible for the 
ballasts at issue in this rulemaking to meet the off-mode criteria 
because there is no condition in which a ballast is connected to the 
main power source and is not in a mode already accounted for in either 
active or standby mode. In the test procedure addressing standby mode 
energy consumption, DOE determined that the only ballasts that consume 
energy in standby mode are those that incorporate an electronic circuit 
that enables the ballast to communicate with and be part of a lighting 
control interface (e.g., DALI-enabled ballasts). 74 FR 54445, 54447-8 
(October 22, 2009). DOE believes that the only commercially available 
ballasts that incorporate an electronic circuit to communicate with a 
lighting control interface are dimming ballasts.
    As discussed in section 0, DOE does not propose to expand the scope 
of coverage to include additional dimming ballasts. Therefore, the only 
covered dimming ballasts are the products that operate the four 
reduced-wattage lamp combinations specified in 10 CFR 430.32(m)(5). DOE 
research has not revealed any dimming ballasts currently on the market 
that operate these lamps because the gas composition of reduced-wattage 
lamps makes them undesirable for use in dimming applications. 
Additionally, these ballasts employ cathode heating to facilitate 
dimming and therefore operate lamps with two pins. Because 8-foot 
slimline lamps have only a single pin, these lamps are not suitable for 
use with dimming ballasts. Because DOE did not discover any dimming 
products that are covered by existing standards, DOE was not able to 
characterize standby mode energy consumption. Thus, DOE is not able to 
set standards for standby mode energy consumption for these ballasts in 
accordance with 42 U.S.C. 6295(o). DOE did not receive any comments 
regarding this subject in response to the preliminary TSD. Therefore, 
for the reasons stated above, DOE does not propose to adopt provisions 
to address ballast operation in standby mode as part of the energy 
conservation standards that are the subject of this rulemaking.

IV. General Discussion

A. Test Procedures

    As noted above, DOE's current test procedures for ballasts appear 
at 10 CFR part 430, subpart B, appendix Q. DOE issued a NOPR in which 
it proposed revisions to these test procedures. 75 FR 14288 (March 24, 
2010). The principal change DOE proposed to the existing test methods, 
in an effort to reduce measurement variation, was to eliminate 
photometric measurements used to determine ballast efficacy factor 
(BEF). Instead, DOE proposed to use electrical measurements to 
determine ballast efficiency (BE), which could then be converted to BEF 
using empirically derived transfer equations. The proposed changes also 
specified that the ballast operate a resistive load rather than a lamp 
load during performance testing. No changes were proposed for the 
measurement of ballast factor (which required photometric measurements) 
for consistency with previous methods. Finally, DOE also proposed an 
update to an industry standard referenced in the existing test 
procedure. Id. at 14290, 14308. DOE also proposed to add methods for 
testing ballasts that are not currently covered by energy conservation 
standards, but that DOE is considering for standards in this 
rulemaking. Id. at 14289-91. Finally, DOE proposed provisions for 
manufacturers to report to DOE on the compliance of their ballasts with 
applicable standards. Id. at 14289, 14290, 14309.
    More recently, DOE published a supplementary NOPR in which it 
proposed revisions to its test procedures

[[Page 20102]]

for fluorescent lamp ballasts established under EPCA. 75 FR 71570 (Nov. 
24, 2010). This test procedure proposes to measure a new metric, 
ballast luminous efficiency (BLE), which more directly assesses the 
electrical losses in a ballast compared to the existing ballast 
efficacy factor (BEF) metric. Rather than testing a ballast while 
operating a resistive load, the BLE test procedure measures the 
performance of a ballast while it is operating a fluorescent lamp. DOE 
found that a resistive load can model the effective resistance of a 
lamp operated only at a particular ballast factor, requiring multiple 
ballast factor specific resistors to be specified and increasing the 
testing cost to manufacturers. In written comments in response to the 
NOPR, NEMA suggested that ballast factor be calculated using a 
combination of electrical measurements and reference lamp arc power 
values from ANSI C78.81-2010. The SNOPR proposal outlines a new method 
for determination of ballast factor which requires only electrical 
measurements.
    DOE also notes that EPCA requires DOE to amend its test procedures 
for all covered products, including those for ballasts, to include the 
measurement of standby mode and off mode energy consumption, except 
where current test procedures fully address such energy consumption or 
where an integrated or separate standard is technically infeasible. (42 
U.S.C. 6295(gg)(2)) As indicated above, ballasts do not operate in the 
off mode and DOE has already amended its test procedures for ballasts 
to address standby mode energy use. 74 FR 54445 (Oct. 22, 2009). As a 
result, DOE's current test procedure rulemaking for ballasts does not 
address standby or off mode energy use.

B. Technological Feasibility

1. General
    In each standards rulemaking, DOE conducts a screening analysis 
based on information it has gathered on all current technology options 
and prototype designs that could improve the efficiency of the products 
or equipment that are the subject of the rulemaking. As the first step 
in such analysis, DOE develops a list of design options for 
consideration in consultation with manufacturers, design engineers, and 
other interested parties. DOE then determines which of these means for 
improving efficiency are technologically feasible. DOE considers 
technologies incorporated in commercially available products or in 
working prototypes to be technologically feasible. 10 CFR part 430, 
subpart C, appendix A, section 4(a)(4)(i).
    Once DOE has determined that particular design options are 
technologically feasible, it further evaluates each of these design 
options in light of the following additional screening criteria: (1) 
Practicability to manufacture, install, or service; (2) adverse impacts 
on product utility or availability; and (3) adverse impacts on health 
or safety. Section 0 of this notice discusses the results of the 
screening analysis for ballasts, particularly the designs DOE 
considered, those it screened out, and those that are the basis for the 
trial standard levels (TSLs) in this rulemaking. For further details on 
the screening analysis for this rulemaking, see Chapter 4 of the NOPR 
TSD.
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt an amended standard for a type or class 
of covered product, it must determine the maximum improvement in energy 
efficiency or maximum reduction in energy use that is technologically 
feasible for that product. (42 U.S.C. 6295(p)(1)) Accordingly, DOE 
determined the maximum technologically feasible (``max tech'') ballast 
efficiency in the engineering analysis, using the design options 
identified in the screening analysis (see chapter 5 of the NOPR TSD).
    As a first step to identifying the maximum technologically feasible 
efficiency level, DOE conducted testing of commercially available 
ballasts. In the preliminary analysis, DOE was not able to identify 
working prototypes that had a higher efficiency than the tested 
products. Therefore, the ``max tech'' level determined for the 
preliminary analysis was based on the most efficient commercially 
available ballasts tested. DOE presented additional research in 
appendix 5D of the preliminary TSD to explore whether technologies used 
in products similar to ballasts could be used to improve the efficiency 
of ballasts currently on the market.
    DOE received several comments regarding its determination of max 
tech ballast efficiency. These comments are discussed in section 0. For 
this NOPR, DOE conducted additional analysis to determine the 
appropriate max tech levels for fluorescent lamp ballasts. Based on the 
additional testing conducted for this NOPR, DOE has determined that TSL 
3 represents the highest efficiency level that is technologically 
feasible for a sufficient diversity of products (spanning several 
ballast factors, number of lamps per ballast, and types of lamps 
operated) within each product class. Table IV.1 presents the max tech 
efficiency levels for each product class.

                       Table IV.1--Max Tech Levels
------------------------------------------------------------------------
             Product class                         Equation\*\
------------------------------------------------------------------------
IS and RS ballasts that operate........  1.32 * ln (total lamp arc
                                          power) + 86.11.
    4-foot MBP lamps...................
    8-foot slimline lamps..............
PS ballasts that operate...............  1.79 * ln (total lamp arc
                                          power) + 83.33.
    4-foot MBP lamps...................
    4-foot MiniBP SO lamps.............
    4-foot MiniBP HO lamps.............
IS and RS ballasts that operate........  1.49 * ln (total lamp arc
                                          power) + 84.32.
    8-foot HO lamps....................
PS ballasts that operate...............  1.46 * ln (total lamp arc
                                          power) + 82.63.
    8-foot HO lamps....................
Ballasts that operate..................  1.49 * ln (total lamp arc
                                          power) + 81.34.
    8-foot HO lamps in cold temperature
     outdoor signs.
------------------------------------------------------------------------
*Equation includes 0.8 percent reduction for testing variation.
------------------------------------------------------------------------


[[Page 20103]]

    Although DOE identified certain ballasts that achieved efficiencies 
higher than TSL 3, these ballasts were suitable for only a limited 
range of applications within their product class. DOE does not have 
sufficient data at this time to determine that a higher efficiency 
level is technologically feasible for the full range of ballast 
applications with alternate ballast factors, numbers of lamps, and lamp 
types. Before making this determination, DOE evaluated the possibility 
of improving the efficiency of three selected ballasts by inserting 
improved components in the place of existing components of commercially 
available ballasts. DOE's experiments with improving ballast efficiency 
through component substitution did not result in prototypes with 
improved overall ballast efficiency.
    DOE is still considering whether an efficiency level higher than 
TSL 3 is technologically feasible for a sufficient diversity of lamp 
types, ballast factors, and numbers of lamps within each product class. 
Although DOE was unable to improve the efficiency of commercially 
available ballasts, DOE recognizes that component substitution is not 
the only method available for incrementally improving ballast 
efficiency. For example, further improvements may be possible through 
the incorporation of newly designed integrated circuits into the new 
ballast designs.
    In Appendix 5F of the NOPR TSD, DOE presents additional analysis on 
the potential for an instant-start ballast efficiency level that 
exceeds TSL 3. DOE requests comments on its selection of the maximum 
technologically feasible level and whether it is technologically 
feasible to attain such higher efficiencies for the full range of 
instant start ballast applications. Specifically, DOE seeks 
quantitative information regarding the potential change in efficiency, 
the design options employed, and the associated change in cost. Any 
design option that DOE considers to improve efficiency must meet the 
four criteria outlined in the screening analysis: technological 
feasibility; practicability to manufacture, install, and service; 
adverse impacts on product or equipment utility to consumers or 
availability; and adverse impacts on health or safety. DOE also 
requests comments on any technological barriers to an improvement in 
efficiency above TSL 3 for all or certain types of ballasts.

C. Energy Savings

1. Determination of Savings
    DOE used its NIA spreadsheet to estimate energy savings from new or 
amended standards for the ballasts that are the subject of this 
rulemaking. (The NIA spreadsheet model is described in section 0 of 
this notice and in chapter 11 of the TSD.) DOE forecasted energy 
savings beginning in 2014, the year that compliance with any new and 
amended standards is proposed to be required, and ending in 2043 for 
each TSL. DOE quantified the energy savings attributable to each TSL as 
the difference in energy consumption between the standards case and the 
base case. The base case represents the forecast of energy consumption 
in the absence of new and amended mandatory efficiency standards, and 
considers market demand for higher-efficiency products. For example, 
DOE models a shift in the base case from covered fluorescent lamp 
ballasts toward emerging technologies such as light emitting diodes 
(LEDs).
    The NIA spreadsheet model calculates the electricity savings in 
``site energy'' expressed in kilowatt-hours (kWh). Site energy is the 
energy directly consumed by ballasts at the locations where they are 
used. DOE reports national energy savings on an annual basis in terms 
of the aggregated source (primary) energy savings, which is the savings 
in energy used to generate and transmit the site energy. (See NOPR TSD 
chapter 11) To convert site energy to source energy, DOE derived 
conversion factors, which change with time, from the model used to 
prepare the Energy Information Administration's (EIA's) Annual Energy 
Outlook 2010 (AEO2010).
2. Significance of Savings
    As noted above, under 42 U.S.C. 6295(o)(3)(B) DOE is prohibited 
from adopting a standard for a covered product if such standard would 
not result in ``significant'' energy savings. While the term 
``significant'' is not defined in the Act, the U.S. Court of Appeals, 
in Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 1373 
(D.C. Cir. 1985), indicated that Congress intended ``significant'' 
energy savings in this context to be savings that were not ``genuinely 
trivial.'' The energy savings for all of the TSLs considered in this 
rulemaking are nontrivial, and therefore DOE considers them 
``significant'' within the meaning of section 325 of EPCA.

D. Economic Justification

1. Specific Criteria
    As noted in section II.B, EPCA provides seven factors to be 
evaluated in determining whether a potential energy conservation 
standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)) The 
following sections discuss how DOE addresses each of those seven 
factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of a new or amended standard on 
manufacturers, DOE first determines the quantitative impacts using an 
annual cash-flow approach. This includes both a short-term assessment--
based on the cost and capital requirements during the period between 
the announcement of a regulation and when the regulation comes into 
effect--and a long-term assessment over the 30-year analysis period. 
The impacts analyzed include INPV (which values the industry based on 
of expected future cash flows), cash flows by year, changes in revenue 
and income, and other measures of impact, as appropriate. Second, DOE 
analyzes and reports the impacts on different types of manufacturers, 
including an analysis of impacts on small manufacturers. Third, DOE 
considers the impact of standards on domestic manufacturer employment 
and manufacturing capacity, as well as the potential for standards to 
result in plant closures and loss of capital investment. DOE also takes 
into account cumulative impacts of different DOE regulations and other 
regulatory requirements on manufacturers.
    For individual consumers, measures of economic impact include the 
changes in LCC and the PBP associated with new or amended standards. 
The LCC, which is separately specified as one of the seven factors to 
consider when determining the economic justification for a new or 
amended standard, (42 U.S.C. 6295(o)(2)(B)(i)(II)), is discussed in the 
following section. For consumers in the aggregate, DOE calculates the 
net present value from a national perspective of the economic impacts 
on consumers over the forecast period used in a particular rulemaking.
b. Life-Cycle Costs
    The LCC is the sum of the purchase price of a product (including 
its installation) and the operating expense (including energy and 
maintenance and repair expenditures) discounted over the lifetime of 
the product. The LCC savings for the considered efficiency levels are 
calculated relative to a base case that reflects likely trends in the 
absence of new or amended standards. The LCC analysis required a 
variety of inputs, such as product prices, product energy consumption, 
energy prices, maintenance and repair costs, product lifetime, and 
consumer discount rates. DOE assumed in its analysis that

[[Page 20104]]

consumers purchase the product in 2014.
    To account for uncertainty and variability in specific inputs, such 
as product lifetime and discount rate, DOE uses a distribution of 
values with probabilities attached to each value. A distinct advantage 
of this approach is that DOE can identify the percentage of consumers 
estimated to achieve LCC savings or experiencing an LCC increase, in 
addition to the average LCC savings associated with a particular 
standard level. In addition to identifying ranges of impacts, DOE 
evaluates the LCC impacts of potential standards on identifiable sub-
groups of consumers that may be disproportionately affected by a 
national standard.
c. Energy Savings
    While significant conservation of energy is a separate statutory 
requirement for imposing an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) DOE uses 
the NIA spreadsheet results in its consideration of total projected 
savings.
d. Lessening of Utility or Performance of Products
    In establishing classes of products, and in evaluating design 
options and the impact of potential standard levels, DOE seeks to 
develop standards that would not lessen the utility or performance of 
the products under consideration. The efficiency levels considered in 
today's NOPR will not affect any features valued by consumers, such as 
starting method, ballast factor, or cold temperature operation. 
Therefore, DOE believes that none of the TSLs presented in section 0 
would reduce the utility or performance of the ballasts considered in 
the rulemaking. (42 U.S.C. 6295(o)(2)(B)(i)(IV))
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider any lessening of competition likely to 
result from standards. It directs the Attorney General to determine the 
impact, if any, of any lessening of competition likely to result from a 
proposed standard and to transmit such determination to the Secretary, 
not later than 60 days after the publication of a proposed rule, 
together with an analysis of the nature and extent of such impact. (42 
U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) DOE has transmitted a copy of 
today's proposed rule to the Attorney General and has requested that 
the Department of Justice (DOJ) provide its determination on this 
issue. DOE will address the Attorney General's determination in any 
final rule.
f. Need of the Nation to Conserve Energy
    The non-monetary benefits of the proposed standards are likely to 
be reflected in improvements to the security and reliability of the 
nation's energy system. Reduced demand for electricity may also result 
in reduced costs for maintaining the reliability of the nation's 
electricity system. DOE conducts a utility impact analysis to estimate 
how standards may affect the Nation's needed power generation capacity.
    Energy savings from the proposed standards are also likely to 
result in environmental benefits in the form of reduced emissions of 
air pollutants and greenhouse gases (GHG) associated with energy 
production. DOE reports the environmental effects from the proposed 
standards--and from each TSL it considered for ballasts--in the 
environmental assessment contained in the NOPR TSD. DOE also reports 
estimates of the economic value of reduced emissions reductions 
resulting from the considered TSLs.
g. Other Factors
    The Act allows the Secretary of Energy to consider any other 
factors he or she deems relevant in determining whether a standard is 
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) Under this 
provision, DOE considered subgroups of consumers that may be adversely 
affected by the standards proposed in this rule. DOE specifically 
assessed the impact of standards on low-income consumers, institutions 
of religious worship, and institutions that serve low-income 
populations. In considering these subgroups, DOE analyzed variations on 
electricity prices, operating hours, discount rates, and baseline 
ballasts. See section 0 of this notice for further detail.
2. Rebuttable Presumption
    As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA provides for a 
rebuttable presumption that an energy conservation standard is 
economically justified if the additional cost to the consumer of a 
product that meets the standard is less than three times the value of 
the first-year energy (and, as applicable, water) savings resulting 
from the standard, as calculated under the applicable DOE test 
procedure. DOE's LCC and PBP analyses generate values that calculate 
the payback period for consumers of potential new and amended energy 
conservation standards. These analyses include, but are not limited to, 
the 3-year payback period contemplated under the rebuttable presumption 
test. However, DOE routinely conducts an economic analysis that 
considers the full range of impacts to the consumer, manufacturer, 
nation, and environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). 
The results of this analysis serve as the basis for DOE to evaluate 
definitively the economic justification for a potential standard level 
(thereby supporting or rebutting the results of any preliminary 
determination of economic justification). The rebuttable presumption 
payback calculation is discussed in section 0 of this NOPR.

V. Methodology and Discussion

    DOE used two spreadsheet tools to estimate the impact of today's 
proposed standards. The first spreadsheet calculates LCCs and payback 
periods of potential new energy conservation standards. The second 
provides shipments forecasts and then calculates national energy 
savings and net present value impacts of potential new energy 
conservation standards. The Department also assessed manufacturer 
impacts, largely through use of the Government Regulatory Impact Model 
(GRIM).
    Additionally, DOE estimated the impacts of energy efficiency 
standards on utilities and the environment. DOE used a version of EIA's 
National Energy Modeling System (NEMS) for the utility and 
environmental analyses. The NEMS model simulates the energy sector of 
the U.S. economy. EIA uses NEMS to prepare its Annual Energy Outlook, a 
widely known baseline energy forecast for the United States. The 
version of NEMS used for appliance standards analysis is called NEMS-
BT, and is based on the AEO2010 version with minor modifications. The 
NEMS-BT offers a sophisticated picture of the effect of standards, 
because it accounts for the interactions between the various energy 
supply and demand sectors and the economy as a whole.
    The EIA approves the use of the name ``NEMS'' to describe only an 
AEO version of the model without any modification to code or data. 
Because the present analysis entails some minor code modifications and 
runs the model under various policy scenarios that deviate from AEO 
assumptions, the name ``NEMS-BT'' refers to the model as used here. (BT 
stands for DOE's Building Technologies Program.) For more information 
on NEMS, refer to The National Energy Modeling System: An Overview, 
DOE/EIA-0581 (98) (Feb. 1998), available at: http://

[[Page 20105]]

tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf.

A. Market and Technology Assessment

1. General
    When beginning an energy conservation standards rulemaking, DOE 
develops information that provides an overall picture of the market for 
the products concerned, including the purpose of the products, the 
industry structure, and market characteristics. This activity includes 
both quantitative and qualitative assessments based on publicly 
available information. The subjects addressed in the market and 
technology assessment for this rulemaking include product classes and 
manufacturers; historical shipments; market trends; regulatory and non-
regulatory programs; and technologies or design options that could 
improve the energy efficiency of the product(s) under examination. See 
chapter 3 of the TSD for further discussion of the market and 
technology assessment.
2. Product Classes
    In evaluating and establishing energy conservation standards, DOE 
divides covered products into classes by the type of energy used, or by 
capacity or other performance-related feature that justifies a 
different standard for products having such feature. (See 42 U.S.C. 
6295(q)) In deciding whether a feature justifies a different standard, 
DOE must consider factors such as the utility of the feature to users. 
Id. DOE establishes energy conservation standards for different product 
classes based on the criteria set forth in 42 U.S.C. 6295(o).
    In the preliminary TSD, DOE evaluated the performance of a ballast 
using the BEF metric. DOE considered several potential class-setting 
factors and ultimately separated product classes based on lamp length, 
ballast factor, lumen package, maximum number of lamps operated, 
starting method, and market sector. In general, when considering the 
above characteristics, DOE identified three main factors as affecting 
consumer utility: (1) The lumen package of the lamp-and-ballast system; 
(2) the physical constraints of the lamp-and-ballast system; and (3) 
the use of the ballast in an application for which other ballasts are 
not suitable. Philips, along with the NEEA and NPCC, generally agreed 
with DOE's initial determination of the product class structure. (NEEA 
and NPCC, No. 32 at p. 3; Philips, Public Meeting Transcript, No. 34 at 
pp. 153-154)
    After the April 2010 public meeting, DOE received comments from 
interested parties that caused it to reevaluate the test method 
proposed in the active mode test procedure NOPR. As discussed in 
section 0, DOE published an SNOPR for the active mode test procedure on 
November 24, 2010. In that document, DOE proposed a lamp-based test 
procedure for measuring ballast luminous efficiency. Thus, when 
considering product classes in this NOPR, DOE evaluates potential 
class-setting factors by considering features that affect BLE instead 
of BEF.
a. Power Versus Efficiency Relationship
    As described in section 0, DOE undertook extensive testing of 
fluorescent lamp ballasts to evaluate the impact of numerous ballast 
characteristics on BLE. In its written comments on the active mode test 
procedure, NEMA suggested that a relationship existed between lamp arc 
power and BLE such that the product class structure from the 
preliminary TSD could be greatly simplified. NEMA suggested that 
instant start ballasts with input power less than or equal to 45 W, 
greater than 45 W and less than or equal to 125 W, and greater than 125 
W could be subject to standards of 85 percent, 88 percent, and 90 
percent efficiency respectively. For programmed start ballasts, NEMA 
recommended standards for the same wattage bins, but with a downward 
adjustment of 3 percent compared to the instant start values. NEMA 
provided supplementary information showing that these standard levels 
in many cases were similar to the levels proposed by DOE in the 
preliminary TSD. NEMA noted it was only sharing a methodology that 
could be employed by DOE, not making a formal proposal. (NEMA, No. 15 
at p. 9-10) \15\ NEMA had previously discussed this methodology as a 
possible approach at a meeting with DOE in April 2010, subsequent to 
the public workshop.\16\
---------------------------------------------------------------------------

    \15\ This comment is from the docket for the fluorescent lamp 
ballast active mode test procedure, which is docket number EERE-
2009-BT-TP-0016.
    \16\ A summary of the meeting is available at http://www.gc.energy.gov/documents/Ex_parte_Meeting_NEMA_05_25_2010.pdf.
---------------------------------------------------------------------------

    Although not a formal proposal for the energy conservation 
standards rulemaking, this methodology was supported by several 
manufacturers during interviews for this NOPR. Manufacturers indicated 
that ballasts that operate similar lamp powers often share similar 
topologies and component, and thus, should have similar efficiencies. 
DOE analyzed its test data to attempt to characterize a relationship 
between BLE and lamp arc power.
    It is DOE's understanding that there are both fixed and variable 
losses in any fluorescent ballast. Fixed losses consist of switching 
losses, due to components such as transistors, and fixed voltage drops 
across certain components, such as diodes. These components are 
necessary for proper ballast operation but will always contribute some 
amount to overall ballast losses. In ballasts that operate at low 
powers, fixed losses comprise a significant amount of the power lost. 
Variable losses consist primarily of resistive losses (also referred to 
as I\2\R losses) which increase as current increases. Ballasts that 
operate at higher powers also operate at a higher current and therefore 
have greater resistive losses. At a certain power level, resistive 
losses will be greater than fixed losses, as resistive losses continue 
to increase as power increases.
    Using test data, DOE empirically found a relationship between the 
BLE metric and the natural log of lamp arc power. The logarithmic 
relationship is consistent with current energy conservation standards 
for external power supplies.\17\ 42 USC 6295(u)(3)(A). In general, as 
lamp arc power increases, BLE increases as well. DOE believes this is 
because the fixed losses of a ballast become proportionally less 
significant at higher lamp arc powers. Using this relationship has 
several benefits for determining product classes compared to DOE's 
approach in the preliminary TSD. Equations allow DOE to set efficiency 
levels as a function of lamp arc power across a wide range, which 
simplifies the product class structure and the amount of scaling 
required between product classes. Furthermore, setting efficiency 
levels in this manner allows for greater flexibility regarding future 
innovation. For example, an equation would account for the introduction 
of new ballast factors. It would also not necessarily have to be 
revised if the test procedure were modified to require testing with 
reduced-wattage lamps. By contrast, other approaches could require 
separate product classes for factors that affect the total wattage 
operated by a ballast (such as lumen output, ballast factor, and number 
of lamps operated).
---------------------------------------------------------------------------

    \17\ External power supplies perform a related function to 
fluorescent lamp ballasts in that they convert AC to DC, filter 
unwanted frequencies, and can step up or down voltage.
---------------------------------------------------------------------------

    The sections below discuss specific class-setting factors 
considered in the preliminary TSD and whether product classes based on 
these factors are necessary given the power-efficiency relationship.

[[Page 20106]]

b. Starting Method
    In the preliminary TSD, DOE considered establishing separate 
product classes based on starting method. DOE found RS and PS ballasts 
to be inherently less efficient than IS ballasts because RS and PS 
ballasts provide filament power to the lamp. Although some PS ballasts 
cut out the filament power during normal operation (using the cathode 
cutout technology option discussed in chapter 3 of the NOPR TSD), the 
extra circuitry to remove this power still consumes some amount of 
power. Whereas RS and IS ballasts are commonly used as substitutes for 
each other, PS ballasts are not. Programmed start ballasts are commonly 
used in combination with occupancy sensors because of their ability to 
maintain the lifetime of the fluorescent lamp. The lifetime of a lamp 
operated on a PS ballast with occupancy sensors can be as much as three 
times longer than the lifetime of a lamp operated on an IS or RS 
ballast in the same application. Thus, DOE's research indicates that 
use of instant start ballasts with occupancy sensors can result in a 
significant reduction in lamp lifetime. Because the application in 
which they are used significantly affects lamp lifetime, programmed 
start ballasts offer the user a distinct utility. In consideration of 
their affect on both BEF and utility, DOE established separate product 
classes for programmed start ballasts in the preliminary TSD.
    Philips agreed that RS and PS ballasts would have lower BEFs than 
IS ballasts. Philips stated that cathode heating of RS and PS ballasts 
would make the lamps more efficient, which would increase ballast 
factor and therefore increase overall system efficacy, or BEF. The 
corresponding increase in ballast input power for these ballasts, 
however, would offset any overall gain in BEF. Despite this difference 
in BEF for RS and PS ballasts compared to IS ballasts, Philips did not 
think NEMA would object to the inclusion of rapid and instant start 
ballasts in the same product class. Whereas IS and RS ballasts offer 
the consumer similar utility, Philips believed PS ballasts offered 
consumers unique utility because of the application in which they are 
used. Regarding the impact of starting method on ballast efficiency, 
Philips pointed out that a metric of lamp arc power divided by ballast 
input power would consider power used to heat cathodes as losses. GE 
and Philips believed that this should be considered when defining 
product classes and setting standards. (GE, Public Meeting Transcript, 
No. 34 at p. 43; Philips, Public Meeting Transcript, No. 34 at pp. 44-
46, 71-72)
    DOE agrees with GE and Philips that cathode heating is counted as a 
loss in the BLE metric because it does not directly contribute to the 
creation of light. Thus, similar to BEF, RS and PS ballasts have lower 
BLEs than comparable IS ballasts. Because starting method affects BLE 
in the same way it affects BEF, and DOE has already established a 
unique utility associated with PS ballasts, DOE proposes to maintain 
product class divisions for starting method in this NOPR and establish 
separate product classes for programmed start ballasts and instant and 
rapid start ballasts.
c. Ballast Factor
    Ballast factor (BF) is the ratio of light output of a reference 
lamp operated by a ballast to the light output of the same lamp 
operated by a reference ballast. It is typically used to adjust the 
lumen package of a lamp-and-ballast system. The ballasts proposed for 
coverage in this rulemaking are available with a variety of ballast 
factors. In the preliminary TSD, DOE classified a low BF as less than 
or equal to 0.78, a normal BF as greater than 0.78 but less than 1.1, 
and a high BF as greater than or equal to 1.1. In its previous 
analysis, DOE found that ballasts with high or low BFs had lower BEFs 
than ballasts with a normal ballast factor. Because BF affected the 
lumen output of the lamp-and-ballast system, DOE observed that 
consumers tended to use ballasts with different ballast factors for 
different applications. DOE believed this behavior constituted a unique 
utility. Therefore, because of the impact on BEF and utility, DOE 
established separate product classes in the preliminary TSD for low, 
normal, and high ballast factor when these products existed for covered 
ballast types. In the preliminary TSD, however, DOE did not establish 
separate product classes for high, low, and normal BF for 4-foot T5 
MiniBP HO, 8-foot HO, residential, or sign ballasts because products in 
this category were predominantly offered in one ballast factor range.
    The California Utilities commented that DOE should divide 
residential ballasts into high, normal, and low BF categories because 
test results showed that residential products existed at more than one 
BF. (California Utilities, No. 30 at p. 5) Philips commented that the 
range considered for normal BF was unreasonably large. For T8 ballasts, 
industry typically considers normal BF to be from 0.85 to 1.00, whereas 
for T5 ballasts industry considers normal BF to be about 1.00. 
(Philips, Public Meeting Transcript, No. 34 at p. 136-137)
    Because DOE is evaluating a new metric for this NOPR, DOE analyzed 
the impact of ballast factor on BLE. During interviews, manufacturers 
stated that as ballast factor increases, BLE should also increase. This 
is the same observation as the one discussed in section 0, that BLE 
increases as overall lamp arc power increases, but on a smaller scale. 
As ballast factor increases, the ballast drives the lamp harder, which 
increases measured lamp arc power. Because the ballast operates at 
higher power, its fixed losses become proportionally less significant 
in comparison to lower BFs. Because BF affects the total power operated 
by a ballast, and DOE has established a relationship relating total 
lamp arc power to ballast efficiency, DOE believes the efficiency 
equation will account for any changes in BF. Thus, in this NOPR, DOE 
does not propose to establish separate product classes for high, low, 
or normal BF.
d. Lumen Package
    Lumen package refers to the quantity of light that a lamp-and-
ballast system provides to a consumer. To obtain a high lumen package, 
certain lamps are designed to operate with ballasts that run the lamps 
at high currents. For example, 8-foot HO lamps and 4-foot MiniBP HO 
lamps tend to operate at higher currents than 8-foot slimline lamps and 
4-foot MiniBP SO lamps, respectively. This difference in operating 
design increases the quantity of light per unit of lamp length. High 
output lamps generally operate at higher wattages than comparable (same 
length, diameter) standard output lamps. In the preliminary TSD, DOE 
observed that this difference in lamp wattage caused ballasts that 
operate high output lamps to have lower BEFs than ballasts that operate 
comparable standard output lamps.
    In addition, consumers tend to use systems with different lumen 
packages for different applications. For example, high-lumen-output 
systems may be installed in certain high-ceiling or outdoor 
applications where large quantities of light are needed. Alternatively, 
standard-lumen-output systems might be installed in lower-ceiling 
applications such as offices or hospitals, where the distance between 
the light source and the illuminated surface is not as large. Notable 
differences in the application of ballasts designed to operate SO lamps 
versus HO lamps indicate a difference in utility. Therefore, given the 
observed utility distinctions and notable efficiency differences, DOE 
established

[[Page 20107]]

separate product classes in the preliminary TSD for ballasts that 
operate SO lamps and ballasts that operate HO lamps.
    DOE did not receive any adverse comment to its separation of 
ballasts that operate HO lamps from those that operate SO lamps due to 
the impact of larger input powers on BEF. In this NOPR, however, DOE 
proposes standards based on the BLE metric. Therefore, DOE evaluated 
the impact of HO lamp operation versus SO lamp operation on BLE. DOE 
found that BLE is not dependent on system light output, but rather on 
the total power operated by the ballast. As HO lamps have higher rated 
powers than SO lamps, DOE believes ballasts that operate HO lamps would 
be more efficient than comparable ballasts that operate SO lamps. An 
analysis of test data generally confirmed this prediction. Therefore, 
because the power-efficiency equation accounts for HO versus SO lamp 
operation, DOE does not propose to establish separate product classes 
for ballasts that operate HO lamps, with one exception as explained in 
the following paragraph.
    DOE found that ballasts that operate 8-foot HO lamps did not follow 
the expected relationship. Compared to 8-foot slimline ballasts, DOE 
found that 8-foot HO ballasts exhibited lower BLEs although they 
operated higher lamp powers. DOE believes a separate product class is 
necessary for 8-foot HO ballasts because there is a significant change 
in lumen package accompanied by a decrease in BLE. Based on 
manufacturer interviews, DOE believes 8-foot HO ballasts may have 
different topology, or circuit design, than other ballast types (e.g. 
4-foot MBP and 8-foot slimline ballasts). Because DOE has established 
that lumen package offers a unique utility, and in this case a change 
in lumen package is accompanied by a change in BLE from what the 
efficiency equation would predict, DOE proposes to establish a separate 
product class for ballasts that operate 8-foot HO lamps. DOE requests 
comment on this decision in section 0.
e. Lamp Diameter
    Differences in lamp diameter can be accompanied by differences in 
rated lamp wattage and lumen output. In the preliminary TSD, DOE 
observed that T8 ballasts generally had higher BEFs than T12 ballasts 
due to T8 lamps having a lower rated wattage than T12 lamps. DOE noted, 
however, that T8 lamp-and-ballast systems are commonly used as 
substitutes for T12 lamp-and-ballast systems, suggesting that there was 
no unique utility associated with T12 systems. Although the lamps have 
different wattages, the two systems often have the same lamp lengths 
and bases, offer comparable lumen output, and can fit within the same 
fixtures. For these reasons, DOE included T8 and T12 ballasts in the 
same product class in the preliminary TSD.
    In contrast, DOE established separate product classes for ballasts 
that operate T5 lamps. DOE observed that 4-foot T5 ballasts generally 
had lower input powers (due to the lower wattage of the test lamp), and 
therefore higher BEFs, than comparable T8 or T12 ballasts. T5 lamp-and-
ballast systems, however, are not always interchangeable with T8 and 
T12 systems. Because T5 lamps have similar total lumen output to T8 and 
T12 lamps over a significantly smaller surface area, T5 lamp-and-
ballast systems are often marketed as too bright for use in direct 
lighting fixtures. Because of the impact on BEF and consumer utility, 
DOE established a separate product class in the preliminary TSD for 
ballasts that operate T5 lamps.
    The California Utilities and the NEEA and NPCC supported DOE's 
conclusion in the preliminary TSD to include T8 and T12 ballasts in the 
same product class based on their use as substitutes for one another. 
(California Utilities, No. 30 at p. 1; NEEA and NPCC, No. 32 at p. 3) 
However, Philips believed that because BEF includes a measure of light 
output, it should be used to compare ballasts of similar light output 
only. Philips noted that because F96T12HO/ES lamps have a 13-percent 
greater lumen output than F96T8HO lamps, ballasts that operate these 
lamps should not be subject to the same BEF standard. NEMA agreed with 
Philips and supported different BEF standards for ballasts that operate 
these lamps. However, NEMA did comment that a single ballast efficiency 
standard could be set for ballasts that operate F96T8HO and F96T12HO/ES 
lamps. (Philips, Public Meeting Transcript, No. 34 at pp. 16, 50; NEMA, 
No. 29 at p. 3, 7)
    In this NOPR, DOE considered the impact of lamp diameter on the BLE 
metric. As described above, differences in lamp diameter can be 
accompanied by differences in rated lamp wattage and lumen output. 
Because the efficiency equation sets standards specific to the total 
lamp power operated by the ballast of interest, the equation will also 
account for the impact of lamp diameter if there is an associated 
change in lamp arc power (as is the case with T8HO versus T12HO lamps). 
In addition, DOE believes that T5HO ballasts operate similar total lamp 
powers and employ similar technologies to 4-lamp 4-foot MBP PS ballasts 
that are able to meet the most efficient levels. Furthermore, 2-lamp 4-
foot MBP PS ballasts operate similar total lamp power and employ 
similar technologies to 2-lamp T5 SO ballasts that are able to meet the 
most efficient levels. Therefore, DOE does not propose to establish 
separate product classes for ballasts that have different lamp 
diameters.
f. Lamp Length
    Of the fluorescent ballasts DOE proposes to include in the scope of 
coverage, all are designed to operate lamps with lengths of 4 or 8 
feet. As lamp length increases, lamp arc power tends to increase as 
well. In the preliminary TSD, DOE observed that this increase in lamp 
power resulted in lower BEFs for ballasts that operate 8-foot lamps as 
compared to those that operate 4-foot lamps. Furthermore, DOE concluded 
that because consumers are often physically constrained by their 
building ceiling layout, systems operating 8-foot and 4-foot lamps are 
not always substitutable for each other. Given the impact on both BEF 
and utility, DOE established separate product classes in the 
preliminary TSD for ballasts that operate different lamp lengths.
    In this NOPR, DOE evaluates impacts of lamp length on BLE. Test 
data showed that ballasts that operate 8-foot slimline lamps are more 
efficient than comparable ballasts that operate the same number of 4-
foot MBP lamps due to the increased lamp wattage operated by these 
ballasts. As described in section 0, DOE has developed an efficiency 
equation for the relationship between BLE and lamp arc power, which 
accounts for differences in lamp length if there is an associated 
change in lamp arc power. Therefore, DOE does not propose to establish 
separate product classes for ballasts that operate 4-foot versus 8-foot 
lamps.
g. Number of Lamps
    Fluorescent lamp ballasts are designed to operate a certain maximum 
number of lamps. For example, ballasts designed to operate 4-foot MBP 
lamps can operate as few as one or as many as six lamps. In the 
preliminary TSD, DOE found that BEF decreased with each additional lamp 
operated because additional lamps increased the ballast's input power. 
DOE determined that the ability to operate different maximum number of 
lamps impacts utility because this capacity affects the space required 
by fixtures (a four-lamp fixture requires more physical space than one-
lamp fixture). Given the impact on both BEF and consumer utility, DOE 
established

[[Page 20108]]

separate product classes in the preliminary TSD based on the maximum 
number of lamps operated by a ballast.
    Philips agreed that based on BEF data, 1-lamp ballasts are less 
efficient than 4-lamp ballasts. (Philips, Public Meeting Transcript, 
No. 34 at pp. 137-139) In this NOPR, DOE analyzed the impact of 
operating different numbers of lamps on BLE. Test data generally showed 
that the more lamps a ballast operates the higher the BLE for that 
ballast. DOE believes this is because as a ballast operates a larger 
total lamp power, fixed losses are diluted over a greater power. DOE 
believes that this relationship is accounted for in the efficiency 
equation described in section 0, because an increase in the number of 
lamps operated is associated with an increase in total lamp arc power. 
Therefore, DOE does not propose to establish separate product classes 
for ballasts that operate different numbers of lamps.
h. Residential Ballasts
    Separate minimum power factor and electromagnetic interference 
requirements exist for residential and commercial ballasts. Residential 
ballasts have more stringent (or lower maximum allowable) EMI 
requirements than commercial ballasts; they also have less stringent 
(or lower minimum allowable) power factor requirements.\18\ In the 
preliminary TSD, DOE concluded these requirements impact utility 
because they serve distinct market sectors and applications. In 
addition, DOE believed that the differing requirements caused 
residential ballasts to have lower BEFs than commercial ballasts. For 
these reasons, in the preliminary TSD, DOE established a separate 
product class for ballasts that are designed for use in the residential 
sector.
---------------------------------------------------------------------------

    \18\ ANSI C82.77-2002 requires residential ballasts to have a 
minimum power factor of 0.5 and commercial ballasts to have a 
minimum power factor of 0.9.
---------------------------------------------------------------------------

    Philips agreed that the FCC has more stringent EMI requirements for 
residential ballasts than commercial ballasts. The NEEA and NPCC 
commented that they have not seen evidence of any impact on efficiency 
due to the FCC EMI standards. Philips disagreed, stating that the FCC 
Class B requirements necessitate a more sophisticated EMI filter that 
results in greater losses than the commercial FCC requirements. Philips 
noted, however, these losses are offset by the difference in power 
factor requirements for the two market sectors. The power losses 
associated with the high power factor requirements in the commercial 
sector are greater than the losses associated with the more stringent 
EMI requirements in the residential sector. As evidence, Philips 
indicated that compliance data from the California Energy Commission 
(CEC) database indicates that some residential ballasts have higher 
BEFs than commercial ballasts. (Philips, Public Meeting Transcript, No. 
34 at p. 134-6; NEEA and NPCC, Public Meeting Transcript, No. 34 at p. 
135)
    In this NOPR, DOE evaluated the impact of the more stringent EMI 
and less stringent power factor requirements on the BLE of residential 
ballasts. DOE tested several residential ballasts including models with 
the highest reported BLEs in the CEC database. DOE found that 
residential ballasts achieved the same efficiencies as their commercial 
counterparts. DOE believes that because these two ballast types can 
achieve the same efficiency, it is not necessary to establish a 
separate product class for residential ballasts, and therefore does not 
propose to do so in this NOPR.
i. Sign Ballasts
    Ballasts designed for use in cold temperature outdoor signs have 
slightly different characteristics than those ballasts that operate in 
the commercial sector. First, sign ballasts are designed to operate in 
cold temperature environments--as low as negative 20 degrees Fahrenheit 
(F). Second, sign ballasts are classified by the total length (in feet) 
of lamps they can operate as well as the total number of lamps. To 
operate in cold temperature environments and to be able to handle 
numerous lamp combinations, sign ballasts contain more robust 
components compared to regular 8-foot HO ballasts in the commercial 
sector. Thus, sign ballasts are inherently less efficient. In the 
preliminary TSD, DOE concluded that regular 8-foot HO ballasts cannot 
serve as substitutes for sign ballasts due to their inability to 
operate in cold temperature environments. For these reasons, DOE 
believes that cold temperature sign ballasts offer the consumer a 
distinct utility. Therefore, DOE established a separate product class 
for cold temperature sign ballasts in the preliminary TSD.
    At the public meeting, DOE received several comments regarding 
which characteristics distinguish sign ballasts from regular ballasts 
designed to operate 8-foot HO lamps. OSI stated that a ``cold 
temperature starting'' label means the ballast can start a lamp at 
temperatures typically as low as -20 degrees F. (OSI, Public Meeting 
Transcript, No. 34 at pp. 116-117) Philips stated that there are two UL 
safety ratings for outdoor environments: type 1 outdoor which requires 
a basic moisture resistant enclosure, and type 2 outdoor which requires 
a hermetic enclosure to prevent all moisture from entering the ballast. 
However, the outdoor rating is not of concern regarding efficiency. 
Instead, Philips stated that a cold-temperature sign ballast delivers 
increased ignition voltages to the lamp, resulting in more resistive 
losses in the secondary transformer. If two high output ballasts have 
the same input power but one has a higher open circuit voltage, the 
ballast with the higher open circuit voltage will generally be less 
efficient. (Philips, Public Meeting Transcript, No. 34 at pp. 118-119, 
139-140) The California Utilities, however, questioned whether cold-
temperature sign ballasts were inherently less efficient because they 
noted some regular 8-foot HO ballasts are capable of starting lamps at 
temperatures of negative 20 degrees F or lower. (California Utilities, 
No. 30 at p. 2)
    In this NOPR, DOE reviewed whether sign ballasts had different BLEs 
than regular 8-foot HO ballasts. Based on its test data, DOE found that 
sign ballasts did not achieve the expected BLE predicted by the power-
efficiency relationship. Test data indicated these ballasts were not as 
efficient as regular 8-foot HO ballasts. DOE believes this is because 
sign ballasts are generally more robust and flexible. For example, sign 
ballasts are often specified to operate multiple-lamp-length 
combinations as well as both T12HO and T8HO lamps. As a result, a sign 
ballast is not optimized for the operation of a particular lamp whereas 
a regular 8-foot HO ballast is designed specifically for a T8HO or 
T12HO lamp. Regular 8-foot HO ballasts cannot always serve as 
substitutes for sign ballasts due to their lack of moisture seals and 
the more limited load specifications. For these reasons--and the 
associated differences in BLE compared to ballasts of similar lamp arc 
power--DOE proposes to establish separate a product class for sign 
ballasts.
j. Premium Features
    During product research and manufacturer interviews, DOE found that 
several high-efficiency ballasts possess premium features such as a low 
temperature rating, type CC protection, lamp striation control, and 
small can size. Below DOE discusses each feature and considers whether 
to propose separate product classes for them.

[[Page 20109]]

Low Temperature Rating
    DOE surveyed the market and found that all ballast types covered by 
this rulemaking have cold temperature ratings. This rating was 
typically associated with high-performance products; standard-
efficiency ballasts were less likely to have this feature. Ballasts 
with low temperature ratings (-20 degrees F) can be used in 
applications such as parking garages, warehouses, and cold storage 
areas. In cold temperature environments, a fluorescent ballast must 
supply a higher starting voltage to establish the lamp arc. To create 
this higher voltage, the output transformer may have additional 
windings. In addition, components throughout the ballast must be able 
to withstand this higher voltage, even if only for a short amount of 
time. The additional windings and slightly different components may 
increase resistive losses.
    DOE conducted research to determine how this rating might impact 
BLE. DOE was unable to find pairs of the same ballasts in which one had 
a cold temperature rating and one did not. Thus, DOE looked at groups 
of ballasts that achieved the same efficiency level based on its test 
data. The data showed no clear trend of a cold temperature rating 
impacting BLE. In most cases, DOE found the most efficient ballast in a 
particular category had the lowest rated starting temperature. Thus, 
DOE believes that the rated starting temperature of a ballast does not 
substantively impact overall efficiency. Therefore, DOE does not 
propose to establish a separate product class based on this feature.
Type CC
    Arcing can occur when a lamp is not well connected to its socket or 
when it is removed from a fixture. To prevent this phenomenon, UL 1598 
requires luminaires using instant start ballasts with bipin lamp 
holders to: (1) Include ballasts identified as Type CC, or (2) be 
constructed with lampholders marked with a circle ``I.'' Ballasts 
labeled as Type CC include extra circuitry to monitor frequency and 
remove power to the lamp if any unwanted arcing is detected. Additional 
circuitry has the potential to increase resistive losses.
    A survey of the market found that ballasts with Type CC protection 
were available, although far fewer models were offered with this 
feature than without it. Analysis of catalog data found that ballasts 
with Type CC protection had slightly lower BEFs than ballasts without 
this feature. However, as UL 1598 can be met with different lampholders 
rather than adding circuitry within the ballast itself, DOE believes 
that Type CC protection does not provide a unique utility. Therefore, 
DOE does not propose to establish a separate product class for ballasts 
with a Type CC rating.
Lamp Striation Control
    Lamp striations are a series of bright and dim regions in a 
fluorescent lamp and are considered an undesirable visual effect. 
Striations are most common when ballasts operate reduced-wattage, 
energy-saving lamps due to their different fill-gas composition. To 
prevent this effect from occurring, ballasts with lamp striation 
control usually have additional circuitry, which has the potential to 
increase resistive losses.
    During manufacturer interviews, DOE learned that striation control 
is a necessary feature for ballasts that can operate reduced-wattage, 
energy-saving lamps. DOE observed that most ballasts already offer lamp 
striation control as a standard feature on both regular and high-
efficiency product lines. Test data showed that the most efficient 4-
foot MBP and 8-foot slimline ballasts already included lamp striation 
control. Thus, this feature does not prevent ballasts from reaching the 
highest efficiency levels identified by this rulemaking. Therefore, DOE 
does not propose to establish a separate product class for ballasts 
with lamp striation control.
Small Case Size
    During interviews, DOE learned that smaller fixtures can have 
reduced material costs and higher optical efficiency. Optical 
efficiency describes the percentage of light emanated from the lamps 
that exits the fixture or reaches the desired surface. Therefore, 
ballast manufacturers are beginning to offer ballasts with smaller case 
sizes than what is offered as standard in the industry. A ballast with 
a small case size may use different components due to size restraints.
    With a limited number of small case size ballasts commercially 
available, DOE is uncertain of the relationship between ballast 
enclosure size and efficiency. Furthermore, interested parties did not 
provide comments on the product class structure put forward in the 
preliminary TSD suggesting that DOE should not include ballasts of all 
enclosure sizes in the same product class. Based on this uncertainty 
and absence of contrary comments in the preliminary TSD, DOE proposes 
to include ballasts of all enclosure sizes in the same product class.
k. Summary
    In summary, after evaluating all potential class-setting factors, 
DOE decided to establish separate product classes based on starting 
method, ballasts that operate 8-foot HO lamps, and ballasts designed 
for use in cold-temperature outdoor signs. Table V.1 summarizes the 
five product classes.

        Table V.1--Fluorescent Lamp Ballast NOPR Product Classes
------------------------------------------------------------------------
                  Description                    Product class number **
------------------------------------------------------------------------
IS and RS ballasts that operate
    4-foot MBP lamps *.........................                        1
    8-foot slimline lamps
PS ballasts that operate
    4-foot MBP lamps *.........................                        2
    4-foot MiniBP SO lamps
    4-foot MiniBP HO lamps
IS and RS ballasts that operate
    8-foot HO lamps............................                        3
PS ballasts that operate
    8-foot HO lamps............................                        4
Ballasts that operate
    8-foot HO lamps in cold temperature outdoor                        5
     signs.....................................
------------------------------------------------------------------------
* Includes both commercial and residential ballasts.
** Efficiency levels for all product classes are based on an equation.


[[Page 20110]]

3. Technology Options
    In the technology assessment, DOE identifies technology options 
that appear to improve product efficiency. This assessment provides the 
technical background and structure on which DOE bases its screening and 
engineering analyses. DOE received one comment on the technology 
options identified in the preliminary TSD.
    Philips agreed that ballasts that employ integrated circuits can 
have higher efficiencies but pointed out that the integrated circuit 
itself does not provide the efficiency, but rather integrated circuits 
are required by more efficient topologies. Philips also noted that 
integrated circuits are generally used with topologies that operate 
lamps in series rather than those that operate lamps in parallel. For 
parallel lamp operation, integrated circuits may be cost prohibitive. 
(Philips, Public Meeting Transcript, No. 34 at pp. 142-143)
    In response, DOE agrees with Philips that in many cases inclusion 
of an integrated circuit does not increase efficiency on its own. DOE 
believes, however, that some integrated circuits directly influence 
BLE. For example, there is an integrated circuit that can increase 
ballast efficiency by replacing transistors in the direct current (DC) 
to alternating current (AC) inverter.\19\ Therefore, DOE proposes to 
maintain integrated circuits as a technology option in this NOPR. 
Regarding the high cost of an integrated circuit, DOE does not evaluate 
technology options based on cost. Rather, DOE calculates prices for 
each efficiency level in the engineering analysis and evaluates 
economic impacts on consumers, manufacturers, and the nation in 
subsequent analyses.
---------------------------------------------------------------------------

    \19\ International Rectifier. International Rectifier Introduces 
Robust Self-Oscillating Electronic Ballast Lighting Control IC. 
November 22, 2005. (Last accessed October 25, 2010.) http://www.irf.com/whats-new/nr051122.html
---------------------------------------------------------------------------

B. Screening Analysis

    As discussed in chapter 3 of the preliminary TSD, DOE consults with 
industry, technical experts, and other interested parties to develop a 
list of technology options for consideration. The purpose of the 
screening analysis is to determine which options to consider further 
and which to screen out. DOE uses the following four screening criteria 
to determine which design options are suitable for further 
consideration in a standards rulemaking:
    1. Technological feasibility. DOE will consider technologies 
incorporated in commercially available products or in working 
prototypes to be technologically feasible.
    2. Practicability to manufacture, install, and service. If mass 
production and reliable installation and servicing of a technology in 
commercial products could be achieved on the scale necessary to serve 
the relevant market at the time compliance with the standard is 
required, then DOE will consider that technology practicable to 
manufacture, install, and service.
    3. Adverse impacts on product utility or product availability. If 
DOE determines a technology would have significant adverse impact on 
the utility of the product to significant subgroups of consumers, or 
would result in the unavailability of any covered product type with 
performance characteristics (including reliability), features, sizes, 
capacities, and volumes that are substantially the same as products 
generally available in the United States at the time, it will not 
consider this technology further.
    4. Adverse impacts on health or safety. If DOE determines that a 
technology will have significant adverse impacts on health or safety, 
it will not consider this technology further.

10 CFR part 430, subpart C, appendix A, (4)(a)(4) and (5)(b).

    For the preliminary TSD analysis, DOE consulted with industry, 
technical experts, and other interested parties to develop a list of 
technology options for consideration. DOE identified the following 
technology options that could improve the efficiency of a ballast:

                      Table V.2--Technology Options
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                Technology option                       Description
------------------------------------------------------------------------
Electronic Ballast                                 Use an electronic
                                                    ballast design.
------------------------------------------------------------------------
Improved Components...........  Transformers.....  Use grain-oriented
                                                    silicon steel,
                                                    amorphous steel, or
                                                    laminated sheets of
                                                    amorphous steel to
                                                    reduce core losses.
                                                   Use litz wire to
                                                    reduce winding
                                                    losses.
                                Diodes...........  Use diodes with lower
                                                    losses.
                                Capacitors.......  Use capacitors with a
                                                    lower effective
                                                    series resistance.
                                Transistors......  Use transistors with
                                                    low drain-to-source
                                                    resistance.
Improved Circuit Design.......  Cathode Cutout...  Remove filament
                                                    heating after the
                                                    lamp has started.
                                Integrated         Substitute discrete
                                 Circuits.          components with an
                                                    integrated circuit.
                                Starting Method..  Use IS instead of RS
                                                    as a starting method
                                                    for lamp operation.
------------------------------------------------------------------------

    In the preliminary TSD, DOE screened out ``using laminated sheets 
of amorphous steel'' because this option increases the size and weight 
of the ballast and therefore is not ``practicable to manufacture, 
install, and service.'' Larger magnetic components could cause problems 
in installing and servicing ballasts because the ballast could be too 
large to fit in a fixture. DOE also stated that this technology option 
could have adverse impacts on consumer utility. Specifically, 
increasing the size and weight of the ballast could limit the places a 
consumer could use the ballast in a building.
    The NEEA and NPCC agreed with DOE's decision to eliminate laminated 
sheets of amorphous steel as a design option. (NEEA and NPCC, No. 32 at 
p. 4) Earthjustice commented, however, that size and weight constraints 
for ballasts needed to be defined before DOE could screen out a 
technology option based on increased size or weight. (Earthjustice, 
Public Meeting Transcript, No. 34 at p. 148) Regarding size 
constraints, the NEEA and NPCC commented that new ballasts being 
installed during retrofits are significantly smaller than older 
ballasts being removed. They believe that technology options that would 
result in small increases in ballast size are not necessarily 
problematic for retrofits because new ballasts would still fit in the 
fixtures designed for older ballasts. (NEEA and NPCC, Public Meeting 
Transcript, No. 34 at pp. 148-149) Philips disagreed with the idea that 
increasing ballast size was not

[[Page 20111]]

problematic, commenting that newer ballasts have smaller cross-sections 
than older ballasts. Smaller ballasts have allowed luminaire 
manufacturers to decrease the size and material requirements of their 
luminaires while also improving optics. (Philips, Public Meeting 
Transcript, No. 34 at pp. 149-150) Acuity Brands agreed with Philips 
that newer luminaires are designed around the smaller sizes of current 
ballasts and confirmed that the smaller designs have improved optics. 
Acuity Brands stated that a few luminaires could accommodate an 
increase in the length of the ballast, but that many luminaires are 
already designed around the smaller size of current ballasts. (Acuity 
Brands, Public Meeting Transcipt, No. 34 at p. 150)
    While older ballasts can be larger than newer ones, DOE's research 
indicates that the overall market trend is to create increasingly 
smaller ballast sizes for use in smaller and more highly optimized 
fixtures. As the trend toward smaller fixtures has existed for a number 
of years, new building designs are already incorporating smaller plenum 
spaces. Thus, an increase in the size of a ballast could affect its 
ability to be used in certain existing buildings or in new 
construction. Accordingly, DOE considers any increase in the existing 
footprint of a ballast to have adverse impacts on product utility and 
product availability.
    Based on the above discussion, DOE maintains the elimination of 
laminated sheets of amorphous steel as a design option because it fails 
to meet the screening criteria of practicality to manufacture, install, 
and service, and adverse impacts on product utility. DOE considers the 
remaining technology options as design options in the engineering 
analysis.

C. Engineering Analysis

1. Approach
    The engineering analysis develops cost-efficiency relationships to 
show the manufacturing costs of achieving increased efficiency. DOE has 
identified the following three methodologies to generate the 
manufacturing costs needed for the engineering analysis: (1) The 
design-option approach, which provides the incremental costs of adding 
to a baseline model design options that will improve its efficiency; 
(2) the efficiency-level approach, which provides the relative costs of 
achieving increases in energy efficiency levels, without regard to the 
particular design options used to achieve such increases; and (3) the 
cost-assessment (or reverse engineering) approach, which provides 
``bottom-up'' manufacturing cost assessments for achieving various 
levels of increased efficiency, based on detailed data as to costs for 
parts and material, labor, shipping/packaging, and investment for 
models that operate at particular efficiency levels.
    In the preliminary TSD, DOE determined that an efficiency level 
approach paired with reverse engineering cost estimates would yield the 
most realistic data. In this way, DOE would not rely solely on product 
lists or minimum cost data supplied by manufacturers. DOE conducted 
teardowns for unpotted ballasts and ballasts removed from a 
manufacturing facility before the potting procedure because potting (a 
tar-like fill material) inhibits visual observation of the components). 
Details of the engineering analysis are in NOPR TSD chapter 5. The 
following discussion summarizes the general steps of the engineering 
analysis:
    Determine Representative Product Classes. DOE first reviews covered 
ballasts and the associated product classes. When multiple product 
classes exist, DOE selects certain classes as ``representative'' 
primarily because of their high market volumes. DOE extrapolates the 
efficiency levels (ELs) from representative product classes to those 
product classes it does not analyze directly.
    Select Baseline Ballasts. For each representative product class, 
DOE establishes baseline ballasts. The baseline serves as a reference 
point for each product class, against which DOE measures changes 
resulting from potential amended energy conservation standards. For 
ballasts subject to existing Federal energy conservation standards, a 
baseline ballast is a commercially available ballast that just meets 
existing standards and provides basic consumer utility. If no standard 
exists for that specific ballast type, the baseline ballast represents 
the typical ballast sold within a product class with the lowest tested 
ballast efficiency. To determine energy savings and changes in price, 
DOE compares each higher energy-efficiency level with the baseline 
unit.
    DOE tested a range of ballasts from multiple manufacturers to 
identify baseline ballasts and determine their BLE. Appendix 5C of the 
NOPR TSD presents the test results. DOE selects specific 
characteristics such as starting method, ballast factor, and input 
voltage to characterize the most common ballast at the baseline level. 
DOE also selects multiple baseline ballasts in certain product classes 
to ensure consideration of different ballast types and their associated 
consumer economics.
    Select Representative Ballasts. DOE selects commercially available 
ballasts with higher BLEs as replacements for each baseline ballast in 
the representative product classes by considering the design options 
identified in the technology assessment and screening analysis (NOPR 
TSD chapter 4). In general, DOE can identify the design options 
associated with each more efficient ballast. Where design options 
cannot be identified by the product number or catalog description, DOE 
determines the design options likely to be used in the ballast to 
achieve a higher BLE based on information gathered during manufacturer 
interviews. In identifying more efficient substitutes, DOE uses a 
database of commercially available ballasts. DOE then tests these 
ballasts to establish their appropriate BLE. Appendix 5C of the NOPR 
TSD presents these test results.
    Because fluorescent lamp ballasts are designed to operate 
fluorescent lamps, DOE considers properties of the entire lamp and 
ballast system in the engineering analysis. Though ballasts are capable 
of operating several different lamp wattages, DOE chooses the most 
common fluorescent lamp used with each ballast for analysis. DOE also 
includes two substitution cases in the engineering analysis. In the 
first case, the consumer is not able to change the spacing of the 
fixture and therefore replaces one baseline ballast with a more 
efficient ballast. This generally represents the lighting retrofit 
scenario where fixture spacing is predetermined by the existing 
installation. In this case, light output is generally maintained to 
within 10 percent of the baseline system lumen output.\20\ In the 
second case, the consumer is able to change the spacing of the fixture 
and either purchases more or fewer ballasts to maintain light output. 
This represents a new construction scenario in which the consumer has 
the flexibility to assign fixture spacing based on the light output of 
the new system. In this case, DOE normalizes the light output relative 
to the baseline ballast.
---------------------------------------------------------------------------

    \20\ In some instances (e.g., when switching from T12 to T8 
ballasts), light output exceeds these limits.
---------------------------------------------------------------------------

    Determine Efficiency Levels. DOE develops ELs based on two factors: 
(1) The design options associated with the specific ballasts studied; 
and (2) the maximum technologically feasible efficiency level. As 
discussed in section 0, DOE's efficiency levels are based on

[[Page 20112]]

test data collected from products currently on the market.
    Conduct Price Analysis. DOE generated a bill of material (BOM) by 
disassembling multiple manufacturers' ballasts that spanned a range of 
efficiency levels for some of the representative ballast types. DOE 
generated BOMs for two- and four-lamp T8 MBP IS, two-lamp T8 MBP PS, 
and 2-lamp, 8-foot slimline ballasts only because these ballasts were 
not filled with potting (a tar like substance). As stated previously, 
potting obscures the identification of individual components. The BOMs 
describe the products in detail, including all manufacturing steps 
required to make and/or assemble each part. DOE then developed a cost 
model that converts the BOMs for each efficiency level into 
manufacturer production costs (MPCs). By applying derived manufacturer 
markups to the MPCs, DOE calculated the manufacturer selling prices 
\21\ and constructed industry cost-efficiency curves. In those cases 
where DOE was not able to generate a BOM for a given ballast, DOE 
estimated an MSP based on the relationship between teardown data, blue 
book prices, and manufacturer-supplied MSPs.
---------------------------------------------------------------------------

    \21\ The MSP is the price at which the manufacturer can recover 
all production and non-production costs and earn a profit. Non-
production costs include selling, general, and administration (SG&A) 
costs, the cost of research and development, and interest.
---------------------------------------------------------------------------

a. Metric
    One change to engineering approach from the preliminary TSD is the 
use of a new metric, BLE. Although DOE evaluates ballast efficiency in 
terms of the BLE metric in this NOPR, DOE received several comments 
regarding the relationship between ballast efficiency (as determined by 
the method proposed in the active mode test procedure NOPR) and ballast 
efficacy factor (BEF). OSI commented that there might be variation 
introduced into the BEF values due to the fact that it is correlated to 
BE, and both of these metrics have a distribution of error. (OSI, 
Public Meeting Transcript, No. 34 at p. 166-167) GE agreed that there 
was error in the correlation equations because a BEF for a 2-lamp 4-
foot normal BF IS ballast could be correlated back to 93 percent 
efficiency, which is higher than any efficiency measured during NEMA's 
round robin testing. (GE, Public Meeting Transcript, No. 34 at p. 171) 
The NEEA and NPCC pointed out that it is not worth discussing the 
measurement variation associated with the ballast efficiency metric if 
correlating it to BEF introduces significant error. (NEEA and NPCC, 
Public Meeting Transcript, No. 34 at pp. 167-168) On the other hand, 
Philips commented that when considering only their products, the BEFs 
determined by the correlation equations were very close to the values 
obtained during testing in their own lab. (Philips, Public Meeting 
Transcript, No. 34 at p. 168)
    DOE agrees with stakeholders that calculating BEF as a function of 
ballast efficiency could introduce error into the BEF value. In the 
separate test procedure SNOPR, however, DOE proposes to directly 
evaluate ballasts using BLE, and the measurement variation present in 
the BLE metric is significantly less than that which existed for BEF 
due to the elimination of photometric measurements. More detail 
regarding measurement variation can be found in section 0 of this 
notice or in the active mode test procedure SNOPR.
b. Test Data
    In the preliminary TSD, DOE conducted an extensive amount of 
testing in support of the active mode test procedure. DOE provided this 
data in appendix 5C. The appendix contained various ballast 
characteristics such as starting method, maximum number of lamps 
operated, ballast factor, and other relevant characteristics. It also 
contained each ballast's BEF value as measured by the existing light-
output based procedure and, for some ballasts, ballast efficiency as 
measured by the resistor-based method proposed in the active mode test 
procedure NOPR. DOE provided the raw data in the appendix so that 
interested parties could form their own conclusions regarding the two 
metrics. Throughout the rest of the chapters and appendices in the 
preliminary TSD, however, the BEF values used in the analysis were 
calculated using the correlation equations specified in the active mode 
test procedure NOPR. DOE received several comments related to the test 
data.
    The California Utilities, ASAP, and the NEEA and NPCC commented on 
the discrepancy between the tested BEF values and the values contained 
in other sources--such as product catalogs and the CEC database. The 
California Utilities cited an example of the CEC database containing 
several ballasts with a reported BEF higher than the max tech BEF for 
the relevant product class in the preliminary TSD. The NEEA and NPCC 
noted that the largest discrepancies existed for IS and RS ballasts 
that operate T12 and T8 lamps. They concluded that these differences 
are due to manufacturers overstating catalog data. The NEEA and NPCC 
believe that this practice can adversely affect a building's lighting 
systems to the extent that it may not meet code requirements. 
(California Utilities, Public Meeting Transcript, No. 34 at pp. 157-8; 
ASAP, Public Meeting Transcript, No. 34 at p. 160; NEEA and NPCC, No. 
32 at p. 2)
    DOE agrees with the above-mentioned groups that the tested BEF 
values are different than those presented in catalogs or the CEC 
database. To gather BEF values for various ballasts, DOE could have 
consulted manufacturer catalogs, the CEC database, or its own database 
of tested ballasts. It became clear during DOE's initial testing that 
manufacturers were overstating BEF values in their catalogs. Thus, DOE 
sought an alternate source of information. The CEC maintains a public 
database of BEF values submitted to show compliance with state-level 
energy conservation standards. Philips pointed out that the CEC 
database should, by definition, contain test data from certified 
laboratories whereas catalogs do not. (Philips, Public Meeting 
Transcript, No. 34 at pp. 162-163) Although the California Utilities 
pointed out that the CEC database reported higher BEFs than the max 
tech level reported in the preliminary TSD, Philips commented that the 
highest candidate standard level (CSL) in the 2-lamp 4-foot MBP IS/RS 
product class was close enough to the higher values in the CEC database 
to be within the margin of error associated with the BEF metric. 
(Philips, Public Meeting Transcript, No. 34 at pp. 158-159)
    While the CEC database represented an improvement over catalog 
data, commenters voiced concern with the information in the database. 
Philips commented that according to the CEC database, some 
manufacturers reported the same BEF for multiple ballast models. 
(Philips, Public Meeting Transcript, No. 34 at pp. 158-9) This 
indicates that all ballast models listed may not have been individually 
tested. In addition, Philips cited several other factors to consider 
when reviewing data from the CEC database, such as: Different 
manufacturers offering their most efficient ballasts at different 
efficiencies, measurement variation between testing labs; and 
measurement variation due to the test procedure itself. (Philips, 
Public Meeting Transcript, No. 34 at pp. 162-163)
    DOE agrees that because each manufacturer likely tested their 
ballasts in different labs, the CEC database does not provide the best 
comparison. It is less meaningful for DOE to compare the BEF of a 
ballast tested in lab A to the

[[Page 20113]]

BEF of a different ballast tested in lab B, as measurement variation 
will exist between the two labs. DOE also acknowledges that there will 
be additional measurement variation within a lab due to tolerances 
allowed in the BEF test procedure. Although test procedure variation 
cannot be eliminated, the lab-to-lab variation can be eliminated by 
testing all ballasts in the same lab. Thus, in the preliminary TSD and 
this NOPR, DOE chose to rely on data obtained from its own testing. DOE 
acknowledges that manufacturers may use different labs for testing and 
certification purposes. Therefore, DOE accounts for both these sources 
of variation by decreasing efficiency levels by 0.8 percent. See 
section 0 for more details.
    The California Utilities and the NEEA and NPCC noticed the 
discrepancy between DOE's test data contained in Appendix 5C and the 
values reported in chapter 5 of the preliminary TSD. They noted that 
the measured input power reported for a representative unit in the 
chapter 5 of the preliminary TSD did not match the input power listed 
in Appendix 5C for a ballast with the same BEF. In addition, all CSLs 
reported in the chapter 5 of the preliminary TSD for T5 standard output 
ballasts were lower than the BEFs reported in Appendix 5C. (California 
Utilities, No. 30 at p. 3; NEEA and NPCC, No. 32 at p. 5)
    DOE acknowledges that the BEFs are not the same. The reason for the 
differences is that the data provided in Appendix 5C included DOE's 
test results for BEF and BE. BEF was measured according to the test 
procedure outlined in 10 CFR Part 430, Subpart B, Appendix Q--a 
procedure which includes photometric measurements. Ballast efficiency 
was measured according to the resistor-based method in the active mode 
test procedure NOPR. In chapter 5 of the preliminary TSD, DOE presented 
data based on its proposed test procedure--which included measuring a 
resistor-based ballast efficiency and using a correlation equation to 
calculate BEF. Thus, the BEFs presented in chapter 5 of the preliminary 
TSD are calculated values, whereas the BEFs presented in Appendix 5C 
are actual measured values.
    DOE also received several comments regarding the ballasts it 
selected for testing. The NEEA and NPCC believed that DOE did not 
select any low- or high-BF products for testing. They therefore 
expressed concern that DOE had scaled efficiency levels to two-thirds 
of the product classes but had not obtained any test data for those 
classes. The NEEA and NPCC encouraged DOE to conduct additional testing 
to look at the relationship between low-, normal-, and high-ballast 
factor. (NEEA and NPCC, No. 32 at pp. 3, 4) For the preliminary TSD, 
DOE did measure BEF and resistor-based BE for low-, normal-, and high-
ballast factor products. As described in the active mode test procedure 
NOPR, however, DOE needed to create separate correlation equations for 
low, normal, and high BF ballasts because all testing was conducted 
with resistors corresponding to normal BF. 75 FR 14288, 14303-4 (Mar. 
24, 2010). For this NOPR, DOE continued to test low and high BF 
products in addition to those with normal BF.
    The California Utilities expressed concern that DOE's testing may 
not have captured the entire ballast market. They stated that their 
alternate sources of data indicated a larger range of BEFs than the 
range shown by the test data contained in Appendix 5C of the 
preliminary TSD. (California Utilities, Public Meeting Transcript, No. 
34 at pp. 157-158) DOE found after conducting its own testing for the 
preliminary TSD that the actual range of BEF values was much narrower 
than indicated by catalog values. DOE believes its testing accurately 
characterized the market because it selected ballasts to capture 
variations in manufacturer, standard and high-efficiency product lines, 
lamp diameter, starting method, and other relevant factors. These 
variations have also been captured in the lamp-based BE testing that 
DOE has conducted to determine efficiency levels for this NOPR.
    To ensure that DOE establishes the appropriate max tech level, the 
California Utilities recommended DOE test the ballasts with the highest 
BEF values as indicated in the CEC and CEE databases. (California 
Utilities, No. 30 at p. 2) DOE tested the most efficient (highest BEF) 
ballast in the CEC database for each representative ballast type 
identified in this NOPR. DOE did not review the CEE database as values 
submitted to this program are based on catalogs. Catalog data typically 
is not based on the DOE test procedure for every unit presented. 
Instead manufacturers often assign the same BEF to a family of products 
or approximate the BEF based on constituent measurements such as input 
power.
2. Representative Product Classes
    For the preliminary TSD, DOE was not able to analyze all 70 product 
classes. Instead, DOE selected representative product classes to 
analyze based primarily on their high market volumes, and then scaled 
its analytical findings for those representative product classes to 
other product classes that were not analyzed. In the preliminary TSD, 
DOE identified 10 product classes as representative: (1) 2-lamp 4-foot 
MBP normal-BF IS/RS ballasts in the commercial sector; (2) 4-lamp 4-
foot MBP normal-BF IS/RS ballasts in the commercial sector; (3) 2-lamp 
4-foot MBP normal-BF PS ballasts; (4) 4-lamp 4-foot MBP normal-BF PS 
ballasts; (5) 2-lamp 4-foot MiniBP SO normal-BF ballasts; (6) 2-lamp 4-
foot MiniBP HO ballasts; (7) 2-lamp 8-foot slimline normal-BF ballasts; 
(8) 2-lamp 8-foot HO IS/RS ballasts; (9) 2-lamp 4-foot MBP normal-BF 
IS/RS ballasts in the residential sector; and (10) 4-lamp sign 
ballasts. For each ballast type, DOE selected product classes with the 
highest volume of shipments to be representative. DOE analyzed at least 
one representative product class for each ballast type included in the 
scope of coverage. For the most prevalent ballast types (e.g., for 
ballasts that operate 4-foot MBP and 2-foot U-shaped lamps), DOE chose 
to analyze multiple representative product classes. While DOE received 
several stakeholder comments regarding methods of scaling (discussed in 
section 0), DOE did not receive objections to the decision to analyze 
certain product classes as representative and scale to those not 
analyzed. Thus, DOE maintains this methodology in this NOPR.
    DOE also did not receive any objections to the product classes it 
chose as representative. Due to the changes in product class structure 
discussed above, however, DOE's selection of representative classes for 
this NOPR differs from that presented in the preliminary TSD. Instead 
of 70 product classes, there are now a total of 5 classes. DOE defines 
separate product classes based on starting method (PS and IS/RS), 8-
foot HO ballasts, and sign ballasts. The first product class indicated 
in Table V.1 includes IS and RS ballasts that operate 4-foot MBP and 8-
foot slimline lamps. According to the U.S. Census, the market share of 
4-foot T8 MBP ballasts represented 55 percent of shipments in 2005. 
While this data is not segregated by starting method, based on product 
catalogs and manufacturer interviews, DOE believes that over half of 
the 4-foot MBP T8 ballast shipments are IS. In addition, the U.S. 
Census indicates that 8-foot slimline ballasts had about 5-percent 
market share in 2005. As these ballast types represent significant 
shipments relative to the overall fluorescent ballast market, DOE 
analyzes this product class as representative.
    The third product class indicated in Table V.1 includes PS ballasts 
that

[[Page 20114]]

operate 4-foot MBP, 4-foot T5 MiniBP SO, and 4-foot T5 MiniBP HO lamps. 
The U.S. Census reports that T5 ballasts comprised about 4 percent of 
the ballast market in 2005. Shipment data are available only for T5 
high output ballasts, so the actual market share is likely larger. T5 
ballast shipments have been steadily increasing since the shipments 
were first reported in 2002. Furthermore, DOE research indicates that 
T5 high output ballasts are rapidly taking market share from metal 
halide systems used in high bay industrial applications. DOE therefore 
concluded that T5 ballasts are a growing market segment of significant 
size. As mentioned above, ballasts that operate 4-foot MBP lamps 
represent a significant portion of the overall fluorescent ballast 
market. Although PS ballasts are not as popular as IS ballasts, DOE 
believes that 4-foot MBP PS ballasts represent a sizeable portion of 
the market due to the increasing use of occupancy sensors. Because of 
the large portion of ballast shipments contained within this product 
class, DOE analyzes this product class as representative.
    According to the U.S. Census, the market share of 8-foot HO (T8 and 
T12) ballasts (excluding cold temperature sign ballasts) was about 0.5 
percent in 2005. In the preliminary TSD, DOE concluded that IS and RS 
ballasts were more popular than PS ballasts. These conclusions were 
supported by product catalogs and manufacturer interviews. DOE received 
no adverse comment regarding its selection of the 2-lamp IS and RS 8-
foot HO ballast product class as representative in the preliminary TSD 
and continues to analyze IS and RS 8-foot HO ballasts as representative 
for this NOPR. DOE identified less than five 8-foot HO PS ballasts 
currently being sold by major manufacturers, limiting the potential for 
a detailed direct analysis. Instead, DOE scaled its results from the 
larger 8-foot RDC HO IS and RS product class to the PS product class as 
described in section 0.
    In the preliminary TSD, DOE analyzed 4-lamp sign ballasts, or those 
that operate a maximum of 32 feet of lamps, as the representative 
product class for that ballast type because it believed that to be the 
most common lamp-and-ballast system. DOE received no objection to its 
decision to analyze sign ballasts as a representative product class in 
the preliminary TSD and continues to analyze sign ballasts as a 
representative product class for this NOPR.
3. Baseline Ballasts
    Once DOE identified the representative product classes for 
analysis, DOE selected representative ballast types to analyze from 
within each product class. For each ballast type analyzed, DOE selected 
a baseline ballast from which to measure improvements in efficiency. 
Baseline ballasts are what DOE believes to be the most common, least 
efficacious ballasts for each representative ballast type. For ballasts 
subject to existing Federal energy conservation standards, a baseline 
ballast is a commercially available ballast that just meets existing 
standards and provides basic consumer utility. If no standard exists 
for that specific ballast type, the baseline ballast represents the 
typical ballast sold within a representative ballast type with the 
lowest tested ballast efficiency. In cases where two types of ballasts 
(each operates a different lamp diameter) are included in the same 
representative ballast type, DOE chose multiple baseline ballasts.
    DOE considered each ballast's characteristics in choosing the most 
appropriate baseline ballast for each ballast type. These 
characteristics include the ballast's starting method (e.g., rapid 
start, instant start, or programmed start), input voltage (277 V versus 
120 V), type (magnetic versus electronic), power factor (PF), total 
harmonic distortion, ballast factor, ballast luminous efficiency, and 
whether the ballast can operate at multiple voltages \22\ (universal 
voltage) or only one (dedicated voltage).
---------------------------------------------------------------------------

    \22\ Universal voltage ballasts can operate at 120V or 277V.
---------------------------------------------------------------------------

a. IS and RS Ballasts
    In this NOPR, DOE combined several product classes from the 
preliminary TSD into one product class. Thus, the IS and RS product 
class in this NOPR refers to IS and RS ballasts that operate 4-foot MBP 
and 8-foot slimline lamps. This product class contains the following 
representative product classes from the preliminary TSD: (1) 2-lamp 4-
foot MBP IS and RS normal BF; (2) 4-lamp 4-foot MBP IS and RS normal 
BF; (3) 2-lamp 8-foot slimline normal BF; and (4) 2-lamp 4-foot MBP IS 
and RS ballasts in the residential sector. DOE analyzed these classes 
in the preliminary TSD because DOE chose at least one representative 
product class for each ballast type and these classes contained the 
highest volume of shipments. In this NOPR, DOE continues to analyze 
products for each ballast type included in the proposed scope of 
coverage. DOE also continues to analyze more than one representative 
ballast type if shipments suggest that there is more than one high-
volume unit (e.g. DOE analyzes both 2- and 4-lamp 4-foot MBP ballasts). 
Thus, although several ballast types are combined within the IS and RS 
product class, DOE analyzes the following representative ballast types 
within that class: (1) Ballasts that operate two 4-foot MBP lamps; (2) 
ballasts that operate four 4-foot MBP lamps; (3) ballasts that operate 
two 8-foot slimline lamps; and (4) ballasts that operate two 4-foot MBP 
lamps in the residential sector.
Two 4-Foot MBP Lamps
    In the preliminary TSD, DOE analyzed two baselines for 2-lamp 4-
foot MBP IS and RS ballasts. Census data indicated that 2001 shipments 
of 4-foot MBP T12 ballasts represented 14 percent of all 4-foot MBP 
ballast shipments, while 4-foot MBP T8 ballasts represented 86 percent 
of all shipments for this ballast type.\23\ Therefore, DOE analyzed 
both a T12 and T8 ballast as baselines. Though the 2009 Lamps Rule will 
eliminate all currently commercially available T12 lamps as of July 
2012, DOE learned that some lamp manufacturers planned to produce a T12 
lamp that just met the 2009 Lamp Rule efficacy standards. Therefore, 
DOE included an F34T12 lamp in its analysis, assigning it performance 
parameters that would comply with the 2009 Lamps Rule. DOE analyzed 
only those T12 ballasts that operate F34T12 lamps because only the most 
efficient T12 lamps will be available when compliance with any amended 
standards established in this ballast rulemaking is required (by June 
30, 2014). For the T8 baseline, DOE analyzed only those ballasts that 
operate the F32T8 lamp because it is the most common 4-foot MBP T8 
lamp.
---------------------------------------------------------------------------

    \23\ More recent census data for ballasts are available. 
However, shipments of T12 ballasts have not been publicly released 
for all product classes after 2001. DOE used 2001 Census data when 
selecting baselines for all ballast types.
---------------------------------------------------------------------------

    The Federal minimum energy conservation standard for ballasts that 
operate two F34T12 lamps became effective for ballasts manufactured on 
or after July 1, 2009, sold by the manufacturer on or after October 1, 
2009, or incorporated into a luminaire by a luminaire manufacturer 
after July 1, 2010. (10 CFR 430.32 (m)(5)). This energy conservation 
standard now effectively allows only electronic F34T12 ballasts. 
Therefore, DOE chose an electronic model as the F34T12 baseline 
ballast. Currently there is no Federal minimum energy conservation 
standard for ballasts that operate F32T8 lamps. Therefore, in choosing 
the baseline ballast for this lamp type, DOE

[[Page 20115]]

chose the most common, least efficient ballast on the market.
    ASAP commented that because electronic T12 ballasts are more 
expensive than comparable T8 ballasts and also use a more expensive 
lamp, the market is going to shift to T8 ballasts, leading them to 
believe the T8 ballast is a more appropriate baseline. Philips agreed 
with ASAP that a T8 ballast was a more appropriate baseline because an 
electronic T8 instant start ballast is the dominant ballast sold. 
(ASAP, Public Meeting Transcript, No. 34 at p. 255; Philips, Public 
Meeting Transcript, No. 34 at p. 256) DOE agrees with Philips that, in 
recent years, T8 ballast shipments have overtaken T12 shipments. For 
this reason, DOE analyzes a T8 ballast as a baseline. DOE continues to 
analyze a T12 ballast as a baseline ballast, however, because while 
electronic T12 ballasts may have a lower shipment volume, they are the 
least efficient products available that operate two 2-foot MBP lamps.
Four 4-Foot MBP Lamps
    Although Census data indicated that both T12 and T8 ballasts 
operate 4-foot MBP lamps, DOE's research found that only T8 ballasts 
operate four lamps. Therefore, in the preliminary TSD, DOE analyzed 
only a T8 ballast as a baseline for 4-lamp 4-foot MBP IS and RS 
ballasts. Because there is no Federal energy conservation standard, DOE 
chose a baseline for this ballast type that exhibits the 
characteristics of the least efficient and most common ballast on the 
market. DOE paired this ballast with an F32T8 lamp because this lamp is 
the most common 4-foot MBP T8 lamp. DOE did not receive any adverse 
comment regarding its methodology for selecting a baseline for 4-lamp 
4-foot MBP IS and RS ballasts. Therefore, for these reasons, DOE 
maintains this methodology for this NOPR.
Two 8-Foot Slimline Lamps
    For ballasts that operate two 8-foot slimline lamps, DOE analyzed 
two baseline ballasts in the preliminary TSD. Census data indicated 
that 2001 shipments of 8-foot slimline T12 ballasts represented 
approximately 50 percent of all shipments for this ballast type, 
whereas T8 ballasts represented the remaining 50 percent.\24\ 
Therefore, DOE analyzed both a T12 and T8 ballast as baselines. The 
2009 Lamps Rule will eliminate all currently commercially available T12 
lamps as of July 2012. However, DOE learned that some lamp 
manufacturers planned to produce a T12 lamp that just meets the 2009 
Lamp Rule efficacy standards. Therefore, DOE included an F96T12/ES lamp 
in its analysis, assigning it performance parameters that would comply 
with the 2009 Lamps Rule. For the T8 baseline, DOE analyzed only those 
ballasts that operate the F96T8 lamp because this lamp is the most 
common 8-foot SP slimline T8 lamp.
---------------------------------------------------------------------------

    \24\ While more recent census data for ballasts is available, 
shipments of T12 ballasts have not been publicly released after 
2001. T12 shipments for this ballast type also include data for the 
6-foot SP slimline ballast, which DOE estimates is negligible 
compared to the 8-foot shipments.
---------------------------------------------------------------------------

    The Federal minimum energy conservation standards for ballasts that 
operate two F96T12/ES lamps became effective for ballasts manufactured 
on or after July 1, 2009. (10 CFR Part 430.32 (m)(5)). This energy 
conservation standard effectively allowed only electronic T12 products. 
Therefore, DOE chose an electronic ballast as the T12 baseline for this 
ballast type. Currently there is no Federal minimum energy conservation 
standard for ballasts that operate F96T8 lamps. Therefore, DOE analyzed 
the most common, least efficient ballast on the market as the baseline. 
DOE did not receive any adverse comment regarding this methodology and 
maintains this approach in this NOPR.
Two 4-Foot MBP Lamps, Residential Sector
    Through manufacturer interviews, DOE learned that both T12 and T8 
ballasts are popular in the residential market. Therefore, DOE analyzed 
both a T12 and T8 ballast as baselines in the preliminary TSD. 
Currently there are federal minimum energy conservation standards for 
ballasts that operate F34T12 lamps in the residential sector. These 
standards became effective for ballasts manufactured on or after July 
1, 2010 or sold by the manufacturer on or after October 1, 2010. (10 
CFR 430.32 (m)(5-6)). This energy conservation standard now effectively 
allows only electronic F34T12 residential ballasts. Therefore, DOE 
chose an electronic model as the F34T12 baseline ballast. Because no 
federal minimum energy conservation standard exists for T8 residential 
ballasts, DOE chose the most common, least efficient ballast on the 
market. DOE research discovered that most ballasts sold in the 
residential market are sold as part of a fixture. Therefore, DOE 
researched the most common fixtures sold in the residential market. DOE 
then obtained the fixtures, removed the ballast, and tested the ballast 
to determine the least efficient and most common option. DOE tested a 
range of F32T8 ballasts from multiple ballast manufacturers and in 
multiple fixtures.
    Though the 2009 Lamps Rule will eliminate all currently 
commercially available T12 lamps as of July 2012, DOE learned that some 
lamp manufacturers planned to produce a T12 lamp that just met the 2009 
Lamps Rule efficacy standards. Therefore, DOE included an F34T12 lamp 
in its analysis, assigning it performance parameters that would comply 
with the 2009 Lamps Rule. Because only the most efficient T12 lamps 
will be available when compliance with any amended standards 
established by this ballast rulemaking is required, DOE analyzed only 
those T12 ballasts that operate F34T12 lamps. For the T8 baseline, DOE 
paired its T8 baseline ballast with an F32T8 lamp because DOE believed, 
based on catalogs and feedback from manufacturers, that that was the 
most common wattage lamp at that diameter.
    DOE received several comments on its selection of a baseline in the 
residential sector. The California Utilities and the NEEA and NPCC 
believed that DOE's baseline selection underestimated the energy 
savings possible in the residential sector. They believed that the most 
common 2-lamp residential fixture had a higher ballast factor than that 
represented in the preliminary TSD. The NEEA and NPCC pointed out that 
the quality of a linear fluorescent product designed for use in a 
kitchen, utility room, or other inside space may be different than the 
quality of a shop or strip light typically used in garages. 
Furthermore, the NEEA and NPCC believed that because the residential 
market represented a frequent switching environment, programmed start 
ballasts should be considered. (California Utilities, No. 30 at p. 5; 
NEEA and NPCC, No. 32 at p. 7, 8)
    DOE appreciates the comments regarding the residential baselines 
and reexamined the selection of baseline ballasts for this NOPR. DOE 
conducted additional testing in this market and found that the least 
efficient T12 ballast had a higher ballast factor than that presented 
in the preliminary TSD. Thus, the input power for this baseline ballast 
is also higher, which results in greater energy savings. Regarding 
programmed start ballasts, DOE agrees that the residential market may 
represent a frequent switching environment. Based on catalog data and 
manufacturer interviews, however, DOE continues to believe that IS and 
RS ballasts are the most common in this market sector. Therefore, DOE 
continues to analyze residential ballasts with these starting methods 
for this NOPR.

[[Page 20116]]

b. PS Ballasts
    In this NOPR, the PS product class refers to PS ballasts that 
operate 4-foot MBP, 4-foot MiniBP SO, and 4-foot MiniBP HO lamps. The 
PS product class contains the following representative product classes 
from the preliminary TSD: (1) 2-lamp 4-foot MBP PS normal BF; (2) 4-
lamp 4-foot MBP PS normal BF; (3) 2-lamp 4-foot T5 MiniBP SO normal BF; 
and (4) 2-lamp 4-foot T5 MiniBP HO ballasts. DOE analyzed these classes 
in the preliminary TSD because DOE chose at least one representative 
product class for each ballast type and these classes contained the 
highest volume of shipments. As described in the section above, DOE 
continues to analyze products for each ballast type included in the 
proposed scope of coverage. DOE also continues to analyze more than one 
representative ballast type if shipments suggest that there is more 
than one high volume unit. Thus, although several ballast types are 
combined within the PS product class, DOE analyzes the following as 
representative ballast types within that class: (1) Ballasts that 
operate two 4-foot MBP lamps; (2) ballasts that operate four 4-foot MBP 
lamps; (3) ballasts that operate two 4-foot T5 SO lamps; and (4) 
ballasts that operate two 4-foot T5 HO lamps.
Two 4-Foot MBP Lamps and Four 4-Foot MBP Lamps
    In the preliminary TSD, DOE analyzed one baseline for both 2-lamp 
and 4-lamp 4-foot MBP PS ballasts. DOE found that no T12 ballasts 
existed with this starting method. DOE paired the T8 baseline with an 
F32T8 lamp because it is the most common 4-foot MBP T8 lamp. As there 
are currently no Federal minimum energy conservation standards for 
ballasts that operate F32T8 lamps, DOE chose the most common, least 
efficient ballast on the market to be the baseline. DOE did not receive 
any adverse comment regarding its methodology for selecting a baseline 
for 2-lamp and 4-lamp 4-foot MBP PS ballasts and maintains this 
methodology for this NOPR.
Two 4-Foot T5 SO Lamps and Two 4-Foot T5 HO Lamps
    In the preliminary TSD, DOE chose to analyze one baseline for both 
2-lamp 4-foot T5 SO and 2-lamp 4-foot T5 HO ballasts. For ballasts that 
operate standard output T5 lamps, DOE believes that F28T5 lamps 
encompass the vast majority of these lamp sales.\25\ Therefore, DOE 
chose a baseline ballast that operates two F28T5 lamps. For high output 
T5 lamps, DOE believes that F54T5HO lamps are the most common and 
therefore chose a baseline ballast that operates this lamp type.\26\ 
Currently there are no federal minimum energy conservation standards 
for either T5 ballast type. In addition, only electronic T5 ballasts 
are sold on the U.S. market. In the preliminary TSD, however, DOE 
modeled the potential substitution of less efficient T5 ballasts by 
examining the difference between magnetic and electronic ballasts. 
Inclusion of less efficient T5 ballasts in the preliminary TSD led to 
increased energy consumption in the absence of standards and to 
increased energy savings with the adoption of T5 standards. Although 
DOE did not receive any comments on this methodology, for this NOPR, 
DOE developed baseline T5 ballasts by evaluating the difference in BLE 
between the baseline and more efficient replacements for 2-lamp 4-foot 
MBP PS ballasts. Rather than assume magnetic ballasts would be the less 
efficient substitute, DOE instead approximates the less efficient 
substitute through comparison to a similar PS product that uses 
inefficient electronic ballast technology.
---------------------------------------------------------------------------

    \25\ Currently only one manufacturer sells a 4-foot MiniBP T5 
lamp that is not a F28T5. This lamp is a reduced wattage (F26T5).
    \26\ Currently only two manufacturers sell a 4-foot MiniBP T5 HO 
lamp that is not a F54T5HO. One manufacturer sells a reduced wattage 
(F51T5HO). Another manufacturer sells a F49T5HO.
---------------------------------------------------------------------------

c. 8-Foot HO Ballasts
    As described in section 0, DOE analyzed the IS and RS 8-foot HO 
product class as representative. This product class contains IS and RS 
ballasts that operate a maximum of one or two 8-foot HO lamps. In the 
preliminary TSD, DOE estimated that the majority of 8-foot HO ballasts 
are 2-lamp ballasts and therefore analyzed the two-lamp model as 
representative. DOE received no objection to its decision to analyze 2-
lamp 8-foot HO ballasts and continues to analyze these ballasts as 
representative in this NOPR.
    In the preliminary TSD, DOE analyzed two baselines for this ballast 
type. DOE believes most of the 8-foot HO ballasts currently shipped are 
T12. Though the 2009 Lamps Rule will eliminate all currently 
commercially available T12 lamps as of July 2012, DOE learned that some 
lamp manufacturers planned to produce a T12 lamp that just met the 2009 
Lamp Rule efficacy standards. Therefore, DOE included an F96T12HO/ES 
lamp in its analysis, assigning it performance parameters that would 
comply with the 2009 Lamps Rule. Therefore, DOE analyzed both T12 and 
T8 ballasts as baselines. The Federal minimum energy conservation 
standards for ballasts that operate two F96T12HO/ES lamps became 
effective for ballasts manufactured on or after July 1, 2009. 10 CFR 
Part 430.32 (m)(5). These standards did not eliminate magnetic ballasts 
from the market. Therefore, DOE chose a magnetic ballast for the T12 
baseline. Because there are currently no Federal minimum energy 
conservation standards for ballasts that operate F96T8HO lamps, DOE 
analyzed the most common, least efficient ballast on the market. For 
this T8 baseline, DOE paired the ballast with an F96T8HO lamp because 
this lamp is the most common 8-foot HO T8 lamp. DOE received no adverse 
comment regarding this methodology and continues to use the same 
approach for this NOPR.
d. Sign Ballasts
    In this NOPR, the sign ballast product class includes sign ballasts 
that operate 8-foot HO lamps. In the preliminary TSD, DOE found the 
most common lamp-and-ballast combination for this ballast type to be 
sign ballasts operating a maximum of four 8-foot HO cold temperature 
lamps. DOE received no adverse comment regarding this selection and 
continues to analyze 4-lamp sign ballasts as representative in this 
NOPR.
    In the preliminary TSD, DOE research indicated that ballasts that 
operate in outdoor signs or in other cold temperature applications are 
designed for use with T12 lamps. Therefore, DOE chose a T12 ballast as 
a baseline for this ballast type. Current Federal energy conservation 
standards cover sign ballasts that operate two F96T12HO/ES lamps. These 
standards became effective for ballasts manufactured on or after July 
1, 2010 or sold by the manufacturer on or after October 1, 2010. (10 
CFR Part 430.32 (m)(5-6)). However, DOE analyzed sign ballasts that 
operate four 8-foot HO lamps because this is the most common lamp and 
ballast combination. DOE chose the most common and least efficient 
ballast on the market to be the baseline unit. DOE paired this baseline 
ballast with an F96T12HO lamp that represented the most common cold 
temperature lamp available on the market. DOE received no adverse 
comment regarding this approach and maintains this methodology in this 
NOPR.
4. Selection of More Efficient Ballasts
    As described in the preliminary TSD, in the engineering analysis, 
DOE considered only ``design options''--

[[Page 20117]]

technology options used to improve ballast efficiency that were not 
eliminated in the screening analysis. DOE's selection of design options 
guided its selection of ballast designs and efficiency levels. For 
example, DOE noted separation in efficiencies due to electronic ballast 
design, starting method, and improved components. All more efficient 
ballast alternatives DOE identified are based on commercially available 
ballasts.
    In the preliminary TSD, for each representative product class, DOE 
surveyed and tested many of the manufacturers' product offerings to 
identify the efficiency levels corresponding to the highest number of 
models. DOE identified the most prevalent BEF values in the range of 
available products and established CSLs based on those products. To 
determine the max tech level in the preliminary TSD, DOE conducted a 
survey of the fluorescent lamp ballast market and the research fields 
that support the market. DOE found that within a given product class, 
no working prototypes existed that had a distinguishably higher BEF 
than currently available ballasts. Therefore, the highest CSL 
presented--which represented the most efficient tier of commercially 
available ballasts--was the max tech level that DOE determined for the 
preliminary TSD. DOE presented additional research in appendix 5D of 
the preliminary TSD to explore whether technologies used in products 
similar to ballasts could be used to improve the efficiency of ballasts 
currently on the market. DOE considered the use of active rectification 
(a technology used in some power supplies) and improved (lower 
electrical loss) components. Power supplies perform a similar power 
conversion function as fluorescent lamp ballasts, and improved 
components could potentially be substituted into the existing ballast 
circuit.
a. Max Tech Ballast Efficiency
    DOE received several comments regarding its determination of max 
tech ballast efficiency. GE stated the importance of looking at ballast 
efficiency and converting it to BEF rather than looking at BEF catalog 
values and calculating the ballast efficiency. GE supported this 
approach because ballast efficiency test data avoids error measurement 
associated with the BEF test procedure and is therefore more accurate. 
(GE, Public Meeting Transcript, No. 34 at pp. 165-166) DOE agrees with 
GE's suggestion to consider tested ballast efficiency rather than 
calculated ballast efficiency when determining the max tech level. As 
discussed in the active mode test procedure SNOPR, DOE proposed a lamp-
based procedure to measure ballast efficiency. 75 FR 71570, 71573 
(November 24, 2010). For this NOPR, DOE evaluates standards in terms of 
ballast efficiency, using the BLE metric.
    The California Utilities commented that in attempting to identify 
the max tech level commercially available, DOE should not limit itself 
to evaluating ballasts from the four major manufacturers. (California 
Utilities, Public Meeting Transcript, No. 34 at pp. 171-172) DOE agrees 
with the California Utilities that all manufacturers should be 
considered when identifying the max tech level. DOE reviewed the 
California Energy Commission's (CEC's) ballast database to identify the 
most efficient ballast in terms of BEF (because ballast efficiency data 
was not provided in the database) for each analyzed ballast type. DOE 
then tested those ballasts to ensure that it considered the most 
efficient products regardless of manufacturer.
    DOE received several comments supporting DOE's conclusion from the 
preliminary TSD that commercially available ballasts are also the 
maximum technologically feasible. NEMA and Philips commented that 
premium products are approaching the point of diminishing returns. 
Furthermore, Philips believes that the premium products of all 
manufacturers are very close to max tech. In support of this point, 
Philips stated that fixed-output fluorescent ballasts are a mature 
technology and that the state-of-the-art product on the market today 
represents a high-performance, cost-effective product. Philips would 
prefer regulations that existing high-performance products can meet. If 
DOE were to set a standard at an efficiency higher than that achievable 
by commercially available products, Philips stated that engineering 
resources would be pulled from developing areas like control systems, 
solid-state lighting and new light sources. (Philips, Public Meeting 
Transcript, No. 34 at pp. 144-145, 155-156, 163; NEMA, No. 29 at p. 17)
    In addition to commenting that DOE should not set a standard that 
would require a redesign of existing products, Philips commented that 
all major manufacturers are concentrating their resources on lighting 
controls. Philips cited the New York Times building as an example in 
which lighting controls contributed to energy savings of 60 percent. 
Philips stated DOE should not require manufacturers to redesign 
existing ballasts to pursue efficiency gains of 1 or 2 percent when 
they can dedicate resources to lighting controls, which have the 
potential to achieve 30 percent-60 percent energy savings. (Philips, 
Public Meeting Transcript, No. 34 at p. 156)
    In contrast to the manufacturers, the California Utilities and the 
NEEA and NPCC commented that DOE should further consider the technology 
options described in Appendix 5D of the preliminary TSD. They commented 
that the technologies DOE identified to improve efficiency, such as 
improved components and active rectification, have been employed in 
other electronic products similar to ballasts, including power 
supplies. They believe that both active rectification and Schottky 
diodes could be incorporated into fluorescent ballasts and could 
generate savings in the range DOE estimated, or greater. They also 
believe active rectification may be becoming more common in inexpensive 
consumer products. Additionally, the California Utilities pointed out 
that savings of 1 to 2 percent are significant when considering that 
for many ballast types, the efficiency savings identified by DOE are 
about 2 to 7 percent. They suggested that DOE conduct research with 
manufacturers of power supplies incorporating active rectification, 
because cost and efficiency estimates for power supplies may be 
applicable to electronic ballasts as well. (California Utilities, No. 
30 at p. 2; NEEA and NPCC, No. 32 at p. 4)
    Osram Sylvania and NEMA stated that active rectification could 
potentially achieve energy savings of about one percent, depending on 
the line voltage and power levels of the ballast. Lower input voltage 
ballasts have higher currents, which can result in potentially higher 
energy savings due to active rectification. Because DOE's active mode 
test procedure proposes testing ballasts at 277 volts (and most 
commercial ballasts operate at 277V), the full one percent energy 
savings will not be realized for most ballasts covered by this 
rulemaking. NEMA and Philips stated that the industry is not currently 
using active rectification because it would be prohibitively more 
expensive than passive rectification. Furthermore, energy savings in 
one- or two-lamp ballasts have not been proven. (NEMA, No. 29 at p. 16; 
OSI, Public Meeting Transcript, No. 34 at p. 141; Philips, Public 
Meeting Transcript, No. 34 at pp. 144-145)
    DOE also believed that the efficiency of commercially available 
ballasts could be improved by substituting more efficient components, 
in addition to active rectification. NEMA had several comments 
regarding the more efficient components identified by DOE in Appendix 
5D. Philips commented that

[[Page 20118]]

Schottky diodes do not exist in the voltage ranges that are required 
for the input stage as these components tend to be low voltage devices. 
Osram Sylvania and NEMA commented that using silicon carbide Schottky 
diodes for the input rectifier stage would be about 10 times more 
expensive than the existing components. Using them in other parts of 
the circuit, such as the power factor correction stage, could save some 
power, but these components are much better suited to ballasts with 
power levels of 250 W or higher. As the majority of fluorescent 
ballasts are around 120 W or below, existing designs do not employ 
these components. (Philips, Public Meeting Transcript, No. 34 at p. 
142; OSI, Public Meeting Transcript, No. 34 at p. 141; NEMA, No. 29 at 
p. 16)
    Osram Sylvania, Philips, and NEMA commented that the improved 
transformer core materials cited by DOE in Appendix 5D are typically 
used in magnetic ballasts. These technologies are being phased out or 
are not in use in most newer ballast designs. The ferrite material used 
in transformers and other magnetic components present in electronic 
ballasts is appropriate for the ballasts' 45 kilohertz (kHz) operating 
frequency. If the operating frequency were above 500 kHz, a higher 
quality core material may increase ballast performance. Similarly, litz 
wire is used with magnetic components when the frequency is high enough 
to justify it. (OSI, Public Meeting Transcript, No. 34 at pp. 141-142; 
Philips, Public Meeting Transcript, No. 34 at pp. 146-147; NEMA, No. 29 
at pp. 16-17)
    NEMA also provided feedback on the use of more efficient 
transistors and capacitors. NEMA commented that transistors have both 
conductive and switching losses. Minimizing one type of losses may 
increase the other so the appropriate balance must be considered when 
selecting these components. Regarding capacitors, NEMA commented that 
electrolytic capacitors offer the best value when high storage 
capability is needed. The losses due to effective series resistance are 
minimal in these components and are related to ripple current. (NEMA, 
No. 29 at p. 17)
    DOE appreciates manufacturers' comments regarding the potential 
energy savings due to lighting controls and agrees that adding controls 
to a lamp-and-ballast system significantly increases the potential 
energy savings of the system. EPCA requires DOE to conduct this 
rulemaking to determine whether to amend the existing standards for 
ballasts and set standards for additional ballasts. Any new or amended 
standards established by DOE must achieve the maximum improvement in 
energy efficiency that is technologically feasible and economically 
justified. DOE also appreciates the above comments on active 
rectification and improved components as a means of increasing ballast 
efficiency. In this NOPR, DOE determined the maximum technologically 
feasible efficiency level to be the highest efficiency level that is 
technologically feasible for a sufficient diversity of products 
(spanning several ballast factors, number of lamps per ballast, and 
types of lamps operated) within each product class. DOE's max tech 
efficiency levels are supported by a significant amount of DOE test 
data. All representative ballast types have products commercially 
available at the max tech ELs for their respective product classes.
    Before making this determination, DOE evaluated the possibility of 
improving the efficiency of three selected ballasts by inserting 
improved components in the place of existing components of commercially 
available ballasts. DOE's experiments with improving ballast efficiency 
through component substitution did not result in prototypes with 
improved overall ballast efficiency. However, DOE recognizes that 
component substitution is not the only method available for 
incrementally improving ballast efficiency. For example, further 
improvements may be possible through the incorporation of newly 
designed integrated circuits into the new ballast designs. Therefore, 
DOE is still considering whether an efficiency level higher than TSL 3 
is technologically feasible for a sufficient diversity of lamp types, 
ballast factors, and numbers of lamps within each product class. In 
Appendix 5F of the NOPR TSD, DOE presents additional analysis on the 
potential for an instant-start ballast efficiency level that exceeds 
TSL 3. DOE requests comments in section 0 on its selection of the 
maximum technologically feasible level and whether it is 
technologically feasible to attain higher efficiencies for the full 
range of instant start ballast applications.
b. Lumen Output
    In the preliminary TSD, DOE based its engineering analysis on two 
substitution cases. In the first case, the consumer is not able to 
change the spacing of fixtures and therefore replaces one baseline 
ballast with a more efficient ballast. In this case, light output is 
maintained to within 10 percent of the light output of the baseline 
system, when possible. In the second case, the consumer is able to 
change the spacing of the fixture. To show how energy savings would 
change due to this change in fixture spacing, DOE provided a normalized 
system input power.
    DOE received several comments regarding lumen output and the two 
analyzed substitution cases. When consumers are not able to change 
fixture spacing, the California Utilities and the NEEA and NPCC believe 
that DOE incorrectly assumed that standards-case replacements will not 
always maintain the baseline light level. In some cases, both the light 
output and system wattage increased at higher CSLs. The California 
Utilities believed this was highly unlikely for two reasons: (1) 
Higher-BEF replacements that also have high ballast factors can be 
redesigned to maintain efficiency at lower ballast factors and (2) 
lighting retrofits allow consumers to maintain lumen output at desired 
levels. Although the products may not exist in today's market, the 
California Utilities and the NEEA and NPCC assert that manufacturers 
will be able to provide similar-BEF products that will not require 
significant increases in ballast factor. In addition, the California 
Utilities believe that consumers can change several factors to maintain 
lumen output: Manufacturer, ballast factor, number of lamps, type of 
lamp, and fixture reflector. The NEEA and NPCC suggested that because 
it is possible to maintain light output during ballast replacement, DOE 
should simplify the analysis by analyzing normalized system input power 
in all cases. (California Utilities, No. 30 at pp. 3-5; NEEA and NPCC, 
No. 32 at pp. 6-7) Philips disagreed that light output could be 
maintained in all substitution cases. They specifically cited the 
residential sector as an example of a market in which luminaire spacing 
could not be changed and consumers would simply have more light output 
when installing a more efficient system. (Philips, Public Meeting 
Transcript, No. 34 at p. 227)
    DOE appreciates these comments but believes, based on its test 
data, that light output is not always maintained when directly 
replacing a baseline system with a more efficient one. Although DOE 
acknowledges that ballast factors may be modified in the future to 
better maintain light output of popular lamp-and-ballast systems, DOE 
relied on current product offerings when selecting units for this 
analysis, and believes that two substitution cases do in fact exist. 
For this NOPR, DOE maintained this methodology for the LCC analysis, 
which it believes reflects anticipated product offerings facing the 
individual consumer in the near term (see section

[[Page 20119]]

0 below). However, DOE used normalized system input power in the NIA to 
reflect the ballast technology options and system configurations that 
could be available to consumers over the 30-year analysis period, as 
well as increase the simplicity and transparency of its NIA spreadsheet 
model (see section 0 below).
c. Other Regulations
    In the preliminary TSD, NEMA commented that several possible 
upcoming regulations would affect the engineering and LCC analysis for 
fluorescent lamp ballasts. Specifically, NEMA was concerned about four 
possible regulations: Safety requirements for system interconnects, 
safety requirements for lamp end-of-life (EOL) protection, 
electromagnetic field requirements, and hazardous material regulation. 
NEMA stated that these potential requirements could result in lower 
ballast efficiency and affect payback calculations. (NEMA, No. 11 at p. 
6; NEMA, Public Meeting Transcript, No. 9 at pp. 133-134) DOE agreed 
that the above requirements could affect ballast efficiency, cost, or 
both. DOE requested information on the quantitative impacts of these 
requirements so that it could modify ballast efficiency or cost if 
these regulations were to become final prior to publication of the 
final rule.
    Philips commented that the International Electrotechnical 
Commission (IEC) recently adopted requirements for end-of-life (EOL) 
circuitry for ballasts operating T8 lamps. Previously, the IEC required 
this circuitry only for ballasts that operate T5 or smaller diameter 
lamps. If CSA and UL adopted this requirement, as they adopted the 
requirement for T5 and smaller diameter lamps, U.S. companies would 
have started redesigning their products to accommodate it. The 
additional control circuitry required to implement an EOL regulation 
would decrease ballast efficiency. Ballasts that operate one or two 
lamps would notice a greater decrease than ballasts that operate three 
or four lamps because the fixed losses would be smaller relative to the 
total output power. (Philips, Public Meeting Transcript, No. 34 at pp. 
185-186; NEMA, No. 29 at p. 10)
    DOE appreciates the comments regarding EOL circuitry and 
acknowledges that the additional circuitry will likely decrease 
efficiency. During interviews, manufacturers noted that T8 lamps in the 
U.S. are different than the T8 lamps used in Europe. For this reason, 
manufacturers believe it is unlikely that EOL requirements will be 
adopted in the U.S. If such requirements are adopted in advance of the 
publication of the final rule, DOE will consider them in its analysis.
    Another regulation that could potentially affect ballasts is the 
adoption of hazardous substance regulation in the U.S. The European 
Union Directive on the restriction of the use of certain hazardous 
substances in electrical and electronic equipment 2002/95/EC, usually 
referred to as the Restriction of Hazardous Substances Directive or 
RoHS, restricts the use of six hazardous materials (lead, mercury, 
hexavalent chromium, cadmium, polybrominated biphenyls, and 
polybrominated diphenyl ethers) in the manufacture of various types of 
electronic and electrical equipment, including fluorescent lamp 
ballasts. RoHS has been in force since July 2006. If these restrictions 
were adopted in the U.S., Philips commented that complying with RoHS 
would increase capital and component costs. (Philips, Public Meeting 
Transcript, No. 34 at pp. 186-187)
    DOE appreciates Philips' comments. During interviews, some 
manufacturers confirmed that they already comply with RoHS as part of a 
proactive effort coordinated by NEMA. For these manufacturers, no 
adjustments to ballast efficiency and price would be necessary if 
hazardous material regulation were adopted prior to publication of the 
final rule for this rulemaking. Other manufacturers stated that if all 
of their products did not already comply, full compliance was expected 
by the time they would need to comply with any amended ballast 
standards. If RoHS regulations are adopted, DOE will consider whether 
any adjustments to its analysis are warranted.
    OSI commented that stricter EMI requirements might affect ballast 
efficiency but did not provide any quantitative data regarding the 
impacts of stricter EMI requirements on efficiency or cost. (OSI, 
Public Meeting Transcript, No. 34 at p. 188) DOE conducted significant 
research regarding EMI emitted by fluorescent lamp ballasts, as 
discussed in section 0. DOE found that most manufacturers have not 
altered internal ballast designs to meet the strict standards required 
by a few special applications. Rather, luminaire manufacturers have 
employed magnetic ballasts or electronic ones in combination with an 
external EMI filter and modified fixture. Therefore, DOE has not been 
able to quantify impacts of more stringent EMI standards on ballast 
efficiency or price. If the U.S. adopts stricter EMI standards, DOE 
will consider whether adjustments to its analysis are warranted for the 
final rule.
5. Efficiency Levels
a. Preliminary TSD Approach
    In the preliminary TSD, DOE surveyed and tested many of the 
manufacturers' product offerings to identify the efficiency levels 
corresponding to the highest number of models. DOE identified the most 
prevalent BEF values in the range of available products and established 
CSLs based on those products. Because the baseline ballasts had 
different BEF values and represented various design options, in some 
product classes CSLs affected only one of the two baseline ballasts. 
For example, CSL1 may have required a more efficient T12 ballast than 
the baseline T12 ballast, but not have required a ballast more 
efficient than the T8 baseline. However, the full range of CSLs 
ultimately specified requirements that were above the BEF values of all 
the baseline ballasts sold, and therefore affected all baseline 
ballasts. The highest CSL presented, which represents the most 
efficient tier of commercially available ballasts, was also the max 
tech level that DOE determined for the preliminary TSD.
b. NOPR Approach
    Based on comments and feedback received during manufacturer 
interviews, DOE sought to determine whether developing an equation that 
relates total lamp arc power to BLE could be an effective means of 
setting energy conservation standards for fluorescent lamp ballasts. As 
discussed in section 0, DOE tested many different types of ballasts 
from various manufacturers. DOE conducted extensive testing of the 
representative ballast types as well as certain ballasts with different 
numbers of lamps, starting methods, and ballast factor permutations. 
After compiling the test data, DOE plotted BLE versus total lamp arc 
power for both standard- and high-efficiency product lines from 
multiple manufacturers. Though each product line was slightly 
different, DOE observed the expected positive sloping curve whose slope 
decreased with increasing total lamp arc power. DOE also observed 
distinct groupings when comparing a single manufacturer's high and 
standard-efficiency product families.
    After developing several regression lines, DOE found that a 
logarithmic relationship best modeled the observed trend between total 
lamp arc power and BLE. A logarithmic relationship has a positive slope 
that is largest (steepest) at low lamp arc power levels and has a 
decreasing slope with increasing lamp power. Furthermore, the use of a 
natural

[[Page 20120]]

logarithm to relate total lamp arc power to BLE is consistent with 
current energy conservation standards for external power supplies, 
which also use an equation to define efficiency as a function of output 
power.
    Next, DOE plotted curves that aligned with certain key divisions in 
product offerings. Using an equation of the form:

BLE = coefficient * ln (total lamp arc power) + constant

DOE adjusted the coefficient and constant to delineate different 
efficiency levels. In general, DOE found that ballasts that generate a 
total lamp arc power of 50 W or less had a greater range of efficiency 
than ballasts that operated a total lamp arc power of 50 W or more. DOE 
also found that the more efficient ballast product lines generally had 
a reduced (flatter) slope than the standard-efficiency products. To 
reflect this observation, DOE decreased the coefficient of the more 
efficient EL equations and increased the coefficient of the less 
efficient EL equations. Based on analysis of test data for 
representative ballast types, DOE identified certain natural divisions 
in BLE and generated curves that corresponded to these divisions. The 
equations presented in the following sections also reflect a 0.8 
percent reduction to account for lab-to-lab variation and the 
compliance requirements. This reduction is discussed in more detail in 
section 0.
i. IS and RS Ballasts
    DOE developed three efficiency levels for the IS and RS product 
class. DOE found commercially available ballasts for all representative 
ballast types in these product classes. The least efficient level (EL1) 
takes the form:

BLE = 2.98 * ln(total lamp arc power) + 72.61

While the least efficient 2-lamp MBP T8 electronic ballasts (commercial 
and residential) would meet this level, 2-lamp T12 MBP electronic 
ballasts would not. The least efficient 4-lamp MBP and 2-lamp T12 
slimline ballasts already meet EL1. Next, EL2 takes the form:

BLE = 2.48 * ln(total lamp arc power) + 79.16

The least efficient universal voltage 4-foot MBP T8 and 8-foot T8 
slimline ballasts would meet this level. The least efficient universal 
voltage 2-lamp MBP T8 ballast (in the commercial sector) also meets 
EL2. Finally, EL3 takes the form:

BLE = 1.32 * ln(total lamp arc power) + 86.11

EL3 represents a level met by high efficiency 4-foot MBP T8 (commercial 
and residential) and 8-foot T8 slimline ballasts.
ii. PS Ballasts
    For the PS product class, DOE developed three efficiency levels. 
The least efficient level (EL1) takes the form:

BLE = 2.48 * ln(total lamp arc power) + 77.87

After plotting the test data, DOE observed three distinct efficiency 
levels in addition to a baseline level. The least efficient T5 standard 
and high output ballasts (as calculated by section 0) and the least 
efficient 4-foot MBP ballasts (those that had BLEs between 82 and 86 
percent) would not meet this EL. DOE did not identify any 2-lamp 4-foot 
MBP PS ballasts at the efficiency level represented by EL1, but did 
identify ballasts of this type at higher efficiency levels. Next, EL2 
took the form:

BLE = 2.48 * ln(total lamp arc power) + 78.86

EL2 represents high efficiency 4-foot MBP, T5 SO, and T5 HO ballasts. 
DOE did not identify any 4-lamp, 4-foot MBP PS ballasts at the 
efficiency level represented by EL2, but did identify ballasts of this 
type at the highest efficiency level. Finally, DOE developed EL3, which 
took the form:

BLE = 1.79 * ln(total lamp arc power) + 83.33

EL3 is designed to represent the most efficient PS ballasts tested by 
DOE. The single most efficient 2-lamp T5 standard output, 2-lamp T5 
high output, 2-lamp MBP PS and 4-lamp MBP PS ballasts tested meet this 
level.
iii. 8-foot HO Ballasts
    For the 8-foot HO IS and RS product class, DOE developed three 
efficiency levels. For this product class, DOE tested ballasts that 
operate two lamps, the most popular lamp-and-ballast combination. 
Because the resulting test data did not provide a sufficient range in 
total lamp arc power for DOE to develop EL equations directly using the 
same methodology as for the IS and RS, PS, and sign ballast product 
classes, DOE used the shape of the curves developed for the sign 
ballast product class. For EL1, EL2, and EL3, DOE used the coefficient 
of the sign ballast EL1 equation. One- and 2-lamp sign ballasts operate 
similar lamp powers as regular 8-foot HO ballasts and use the same 
starting methods (IS and RS). Based on the similarity in lamp power and 
starting method, DOE believes the coefficient of the equation that 
represents the most efficient IS electronic sign ballasts is a 
reasonable approximation of the coefficient for 8-foot HO ballasts. EL1 
took the form:

BLE = 1.49 * ln(total lamp arc power) + 72.22

The least efficient T12 electronic ballasts meet EL1. EL2 took the 
form:

BLE = 1.49 * ln(total lamp arc power) + 83.33

EL2 is met with T8 electronic HO ballasts and represents a division in 
efficiency between the most efficient T12 electronic ballasts and the 
high-efficiency T8 electronic ballast. Finally, DOE developed EL3, a 
standard level that represents the most efficient 2-lamp, 8-foot HO 
ballast tested by DOE. EL3 took the form:

BLE = 1.49 * ln(total lamp arc power) + 84.32
iv. Sign Ballasts
    For the sign ballast product class, DOE identified one efficiency 
level. The sign ballast market is primarily comprised of magnetic and 
electronic ballasts that operate T12 HO lamps. DOE tested sign ballasts 
that operate up to one, two, three, four, or six 8-foot T12 HO lamps. 
The test data showed that sign ballasts exist at two levels of 
efficiency. Therefore, DOE analyzed a baseline and one efficiency level 
above that baseline. Using its test data, DOE developed an equation for 
EL1 that was met by the most efficient 4-lamp sign ballast 
(representative ballast type) and the corresponding 1-lamp sign 
ballast. This EL represents an electronic sign ballast efficiency level 
and the most efficient sign ballast tested for the representative 
ballast type. EL1 took the form:

BLE = 1.49 * ln(total lamp arc power) + 81.34
c. Measurement Variation and Compliance
    In the preliminary TSD, DOE calculated the average ballast 
efficiency for a sample size of three ballasts. DOE then used this 
average value to represent the efficiency of a model when analyzing 
data to determine efficiency levels. DOE received several comments 
regarding this approach. Regarding sample size, Philips stated that a 
sample size of three is not statistically significant, especially when 
ballasts are purchased from one location and may all have the same date 
code. The California Utilities encouraged DOE to increase the sample 
size of tested models. Philips commented that although a larger sample 
size is necessary to obtain a statistically significant average, 
testing a large number of ballasts would be highly burdensome. 
(Philips, Public Meeting Transcript, No. 34 at pp. 176-178, 180-181; 
California Utilities, No. 30 at p. 2)

[[Page 20121]]

    In this NOPR, DOE modified its approach to testing in light of 
these comments. For the representative ballast types analyzed in this 
NOPR, DOE tested five samples of each model number and used the average 
to represent the overall efficiency of the model. For non-
representative ballast types, DOE maintained its approach from the 
preliminary TSD to use the average of three samples. DOE believes that 
testing five ballasts for its representative product classes improves 
the reliability of the efficiency calculated for the representative 
ballast types.
    DOE received several comments regarding its specification of 
efficiency levels using the ballast's average efficiency. Earthjustice 
noted that in the preliminary TSD, DOE did not follow the compliance 
testing requirements when it determined efficiency levels. Philips 
commented that DOE cannot use average values to specify an efficiency 
level and then require that 95 percent of products meet that level. 
When determining an efficiency level, Philips also encouraged DOE to 
consider measurement error. Because of measurement error inherent in 
the test procedure, Philips believed it was inappropriate for DOE to 
require all manufacturers to meet the highest claimed tested value when 
setting standards. Products that do not meet that highest measurement 
value are not necessarily out of compliance, but rather may be within 
the test procedure's range of accuracy. Philips encouraged DOE to 
adjust efficiency levels such that high-efficiency products would 
comply with the level even with the expected measurement variation. 
(Earthjustice, Public Meeting Transcript, No. 34 at p. 177; Philips, 
Public Meeting Transcript, No. 34 at pp. 173-174, 176, 177-178)
    DOE acknowledges that compliance requirements and measurement 
variation affect reported efficiency. The current and proposed active 
mode test procedure requires manufacturers to report the lower of 
either the sample average or the value calculated by an equation 
intended to account for small sample sizes. DOE's analysis of its own 
test data showed that it was more likely that manufacturers would be 
reporting the result of the compliance equation, as this proved to be 
the lower of the two values. Thus, DOE calculated how much lower the 
value determined by the compliance equation was compared to the sample 
mean and reduced the efficiency levels, based on average BLEs, by this 
value.
    Furthermore, DOE also agrees with manufacturers that measurement 
variation should be considered when determining efficiency levels. DOE 
tested ballasts at more than one lab and found that tested efficiencies 
for the ballast models sent to the independent lab were slightly lower 
than the values measured at the main test facility. Therefore, DOE 
evaluated the data to determine the average variation between the 
independent facilities.
    Combined with the adjustment for using the compliance equation, DOE 
calculated that a 0.8 percent reduction was necessary. The 0.8 percent 
reduction corresponds to a 0.6 percent average difference in efficiency 
between data collected at the two laboratories used by DOE, and a 
reported value that is on average 0.2 percent less than the average of 
the samples included in testing. Therefore, in this NOPR, DOE adjusts 
the efficiency levels, which are based on average ballast efficiency 
data, downward by 0.8 percent to account for compliance requirements 
and lab-to-lab measurement variation.
6. Price Analysis
    In the preliminary TSD, developing the manufacturer selling price 
for different fluorescent lamp ballasts involved two main inputs, a 
teardown analysis to develop the manufacturer production costs and a 
markup analysis to arrive at the MSP.
    DOE summed the cost of direct materials, labor, and overhead costs 
used to manufacture a product to calculate the MPC.\27\ Direct material 
costs represent the direct purchase price of components (resistors, 
connecting wires, etc.). DOE estimated the manufacturer overhead from a 
representative electronic fabrication company's U.S. Securities and 
Exchange Commission (SEC) 10-k's aggregated confidential manufacturer 
selling prices. DOE believed that the teardown prices reflected the 
long term average and were independent of long term commodity prices. 
For more detail, see chapter 5 and appendix 5A of the preliminary TSD.
---------------------------------------------------------------------------

    \27\ When viewed from the company-wide perspective, the sum of 
all material, labor, and overhead costs equals the company's sales 
cost, also referred to as the cost of goods sold (COGS).
---------------------------------------------------------------------------

    DOE selected ballasts for the teardown analysis to estimate 
manufacturer production costs. DOE mapped out a matrix of product 
specifications and selected ballasts so that comparisons could be made 
among ballasts that differed by only one characteristic (such as 
starting method or input voltage). Ballasts are described by a long 
list of specifications, so DOE concentrated on those that were expected 
to have the greatest impact on efficiency--high versus regular 
advertised efficiency, maximum number of lamps driven, starting method, 
and universal versus single input voltage. DOE conducted teardown 
analyses on 13 ballasts. When possible, in the preliminary TSD, DOE 
assigned the MPC from the teardown directly to the CSL.
    DOE notes that it was able to select only unpotted ballasts for the 
teardown analysis. As explained previously, some ballast manufacturers 
add potting, a type of black pitch, to the ballast enclosure to improve 
durability and manage heat distribution. Because the sticky potting 
inhibits visual observation of the components, DOE was unable to 
reverse engineer potted ballasts through a teardown analysis.
    To estimate MPCs for ballasts that were not submitted for 
teardowns, DOE used online ballast supplier pricing to develop ratios 
relating online prices to teardown-sourced MPCs. After developing a 
ratio specific to each manufacturer, DOE then estimated the MPC for a 
particular CSL. DOE identified ballasts from multiple manufacturers 
that just meet the CSL and then marked down the online prices to the 
MPC using the manufacturer-specific MPC ratio. DOE averaged the MPCs 
for all the ballasts just meeting the CSL to calculate the MPC.
    The last step in determining preliminary TSD manufacturer selling 
prices was developing markups to scale the MPCs assigned to each CSL to 
MSPs. DOE relied on income statements found in 10-K reports from 
publicly owned ballast manufacturing companies. Using multi-year 
average financial data, DOE used the ratio of net sales to cost of 
goods sold to mark up the MPC to the MSP.
    NEMA and Philips commented that a teardown analysis is an 
unreliable way to develop manufacturer production costs. They stated 
that it is difficult even for a ballast manufacturer to determine 
prices of competitors' ballasts using this method. As an example, 
Philips and NEMA pointed out that DOE's teardown analysis determined 
that the most efficient ballast was cheaper than a less efficient 
ballast. NEMA strongly disagreed with DOE's conclusion. At the public 
meeting, Philips stated that NEMA was attempting to provide industry-
average incremental MPC values for all efficiency levels. (NEMA, Public 
Meeting Transcript, No. 34 at p. 17; Philips, Public Meeting 
Transcript, No. 34 at pp. 183-184, 204; NEMA, No. 29 at p. 19) ASAP 
commented that it is valuable to have industry provide that kind of 
pricing information, but

[[Page 20122]]

encouraged DOE to continue with a teardown approach as well. (ASAP, 
Public Meeting Transcript No. 34 at pp. 184-185) Regarding scaling from 
retail prices to MSP, the NEEA and the NPCC agreed that DOE's scaling 
methods to determine MSPs are valid (NEEA and NPCC, No. 32 at p. 6). 
OSI agreed, citing an example that a T12 electronic ballast (price 
determined using retail scaling method) is generally more expensive 
than a T8 electronic ballast (OSI, No. 34 at p. 254).
    DOE agrees that a teardown analysis may be sensitive to the dynamic 
nature of the electrical component market, but believes the teardown 
results should still be used considering limited pricing information is 
publicly available. In the NOPR, DOE amended its teardown approach such 
that incremental differences between two efficiency levels were based 
on increments between single manufacturers' ballasts rather than basing 
prices directly from teardowns of different manufacturers. DOE notes 
that the industry was unable to provide average incremental MPC values. 
Instead, some manufacturers provided confidential data on an individual 
basis.
    For the NOPR, DOE developed prices using three main inputs. The 
first input was teardown data from the preliminary TSD. DOE compared 
teardown-sourced MSPs from the same manufacturer to establish 
incremental costs between ELs for a representative ballast type. The 
second input was blue book prices from manufacturer price lists. DOE 
estimated MSPs from these blue-book prices by using manufacturer-
specific ratios between blue book prices and teardown- or aggregated 
manufacturer-sourced MSPs. The third input was confidential 
manufacturer-supplied MSPs and incremental MPC values. DOE aggregated 
these inputs to establish MSPs for efficiency levels of representative 
ballast types for which all data were available. DOE used ratios of 
online supplier retail prices to scale to ELs where both teardown and 
blue book prices were unavailable. In general, DOE used a combination 
of the teardown- and blue book-sourced prices throughout the analysis 
and used the aggregated manufacturer-supplied MSPs for normalization 
and comparison purposes.
    For the teardown-sourced prices, DOE used the teardown data 
generated during the preliminary TSD. As discussed in section 0, DOE 
revised the manufacturer markup (used to convert MPC to MSP) from 1.5 
to 1.4 based on inputs from manufacturer interviews. As a result, the 
teardown-sourced MSPs decreased slightly from the values presented in 
the preliminary TSD. In the preliminary TSD, DOE used the teardown-
sourced MSP that corresponded directly to the representative ballast at 
each efficiency level. DOE noticed, however, that teardowns of ballasts 
from different manufacturers sometimes resulted in different MSPs, 
although they had approximately the same measured BLE. DOE believed 
this could potentially be due to differences in the brand of component 
used in the ballasts. As a result, DOE normalized the teardown-sourced 
MSPs so that the incremental difference between ELs would be less 
impacted by differences in component prices from one manufacturer to 
another. Using this technique, DOE assigned teardown-sourced MSPs to 
efficiency levels at which a ballast was torn down.
    For the blue book-sourced MSPs, DOE developed manufacturer-specific 
discount ratios between blue book prices and either teardown-sourced 
MSPs or aggregated manufacturer-supplied MSPs. If teardown-sourced MSPs 
were available, DOE used these values to create discount ratios; 
otherwise, DOE used an aggregated manufacturer-supplied MSP. When a 
blue book value was not available from any manufacturer for a 
particular EL, DOE used a retail price scaling technique. DOE scaled 
the blue book-sourced price of an adjacent efficiency level using a 
ratio of retail prices (from a single online supplier) between ballasts 
in the adjacent EL and the EL without a blue book-sourced price. For 
example, if a blue book value was not available for EL2, a ratio of 
retail prices between EL2 and EL3 could be used to scale the blue book-
sourced MSP from EL3 to EL2.
    In the NOPR, DOE assigned MSPs to efficiency levels for 
representative ballast types according to the following methodology. 
For representative ballast type ELs with teardown-sourced MSPs, DOE 
averaged the teardown-sourced MSP with the blue book-sourced MSP. For 
the representative ballast type efficiency levels without teardown-
sourced MSPs, DOE used the blue-book sourced MSP directly. For the two 
theoretical inefficient T5 baselines, neither a teardown- nor blue 
book-sourced MSP was available. As discussed in section 0, DOE 
established T5 standard output and high output baselines to model the 
situation in which inefficient T5 ballast entered the market in future 
years. To establish a price for the T5 standard output baseline, DOE 
scaled the EL1 blue book-sourced MSP using the ratio of the baseline 
and EL2 blue book-sourced MSPs for the 2-lamp, 4-foot MBP PS 
representative ballast type. To establish a price for the T5 high 
output baseline, DOE scaled the EL1 blue book-sourced MSP using the 
ratio of the baseline and EL1 blue book-sourced MSPs for the 4-lamp, 4-
foot MBP PS representative ballast type. More detail on this 
methodology is provided in chapter 5 of the NOPR TSD.
    In the preliminary TSD, DOE mentioned several possible regulations 
that could affect the price of fluorescent ballasts. NEMA expressed 
concern that safety requirements for system interconnects and safety 
requirements for lamp end-of-life protection could result in lower 
ballast efficiency and affect payback calculations. NEMA also commented 
that current internationally accepted EMI levels may be modified, which 
could lower the efficiency of commercially available ballasts. NEMA 
identified a final issue concerning hazardous material regulations that 
may be implemented which would affect component availability and raise 
the cost of ballasts. The NEEA and NPCC believe that the costs of the 
EOL and EMI features are very small or non-existent once they are 
engineered into most or all products (NEEA and NPCC, No. 32 at p. 6). 
They also believe the lead-free solder would affect ballasts of 
different efficiency levels equally and should therefore be ignored 
from the purposes of this rulemaking (NEEA and NPCC, No. 32 at p. 6). 
DOE appreciates these comments. Because none of these potential 
regulations have been promulgated, however, DOE has not included the 
effect of these potential regulations on ballast price or efficiency in 
this rulemaking. DOE will consider making changes to its analysis for 
the final rule if any of these potential regulations are adopted.
7. Results
    In this NOPR, DOE changed its methodology from that presented in 
the preliminary TSD. DOE proposes to set standards in terms of an 
equation that relates total lamp arc power to BLE. For both the IS and 
RS product class and PS product class, DOE developed three efficiency 
levels and analyzed four representative ballast types. For the 8-foot 
HO IS and RS product class, DOE developed three efficiency levels and 
analyzed one representative ballast type. Finally, for sign ballasts, 
DOE developed one efficiency level and analyzed one representative 
ballast type. For each EL of each representative ballast type, DOE 
specified characteristics of a representative unit at that level and 
calculated an MSP. These values were used in the LCC, NIA, and

[[Page 20123]]

MIA analyses to model the impact of setting standards on consumers, the 
nation, and manufacturers, respectively. The table below summarizes the 
efficiency levels developed by DOE for each representative product 
class based on average tested BLE and total lamp arc power values. The 
efficiency level equations presented in Table V.3 incorporate the 0.8 
percent reduction for lab to lab testing variation and compliance 
requirements and are the equations used to establish energy 
conservation standards for fluorescent lamp ballasts.

    Table V.3--NOPR Efficiency Levels for Representative Product Classes With 0.8 Percent Variation Reduction
----------------------------------------------------------------------------------------------------------------
   Representative product class      Efficiency level                              BLE
----------------------------------------------------------------------------------------------------------------
IS and RS ballasts that operate..  EL1                  2.98 * n(total lamp arc power) + 72.61.
    4-foot MBP lamps.............  EL2                  2.48 * n(total lamp arc power) + 79.16.
    8-foot slimline lamps........  EL3                  1.32 * n(total lamp arc power) + 86.11.
----------------------------------------------------------------------------------------------------------------
PS ballasts that operate.........  EL1                  2.48 * n(total lamp arc power) + 77.87.
    4-foot MBP lamps.............  EL2                  2.48 * n(total lamp arc power) + 78.86.
    4-foot MiniBP SO lamps.......  EL3                  1.79 * n(total lamp arc power) + 83.33.
    4-foot MiniBP HO lamps         ...................  ........................................................
----------------------------------------------------------------------------------------------------------------
IS and RS ballasts that operate 8- EL1                  1.49 * n(total lamp arc power) + 72.22.
 foot HO lamps.
                                   EL2                  1.49 * n(total lamp arc power) + 83.33.
                                   EL3                  1.49 * n(total lamp arc power) + 84.32.
----------------------------------------------------------------------------------------------------------------
Ballasts that operate 8-foot HO    EL1                  1.49 * n(total lamp arc power) + 81.34.
 lamps in cold temperature
 outdoor signs.
----------------------------------------------------------------------------------------------------------------

8. Scaling to Product Classes Not Analyzed
    As discussed above, DOE identified and selected certain product 
classes as ``representative'' product classes where DOE would 
concentrate its analytical effort. DOE chose these representative 
product classes and the representative units within them primarily 
because of their high market volumes. The following section discusses 
how DOE scaled efficiency standards from those product classes it 
analyzed to those it did not.
    In the preliminary TSD, DOE created scaling relationships for 
number of lamps, starting method, and ballast factor. DOE used 
extensive test data obtained for ballasts that operate 4-foot MBP lamps 
and developed equations relating total rated lamp power to BEF for each 
ballast type. DOE identified a reduction to apply to the BEF of an IS 
ballast to calculate the BEF of a comparable programmed start ballast. 
DOE also determined a relationship between ballasts with low, normal, 
and high ballast factor. Both high and low BF ballasts were found to 
have, on average, lower BEFs than comparable normal BF ballasts. 
Therefore, DOE applied a discount factor to calculate the appropriate 
BEFs for ballasts with low and high ballast factors. When applying this 
scaling methodology, DOE first scaled by number of lamps, then starting 
method, and finally ballast factor. DOE received several comments on 
its scaling methodology and results presented in the preliminary TSD.
    Philips stated that DOE's scaling techniques were valid based on an 
analysis using data contained in the CEC's ballast database. (Philips, 
Public Meeting Transcript, No. 34 at pp. 17, 155) As discussed in the 
paragraphs that follow, however, manufacturers recommended adjustments 
to bring the scaled results more in line with actual data.
    For number of lamps, Philips requested a greater allowance for one-
lamp ballasts because the difference between one- and two-lamp ballasts 
was greater than indicated by DOE's scaling. Philips found the average 
BEF of one-lamp ballasts to be 3.5 percent lower than that of 
comparable two-lamp ballasts. Philips also commented that they found 
ballasts that operate four lamps to be about two percent more efficient 
than those that operate two lamps. In contrast, the NEEA and NPCC found 
that DOE's scaling factors for number of lamps seemed valid because 
there seems to be a strong correlation between BEF and lamp power. 
(Philips, Public Meeting Transcript, No. 34 at pp. 17, 103-104, 137-
139; NEEA and NPCC, No. 32 at p. 5)
    DOE also received several comments related to its ballast factor 
scaling techniques. Philips commented that high-BF ballasts do not 
necessarily have lower BEFs than normal-BF ballasts, and tend to be 
more efficient. Philips believes that DOE's results indicating that 
normal-BF ballasts have the highest BEF may be due to DOE's measurement 
procedures using the same resistors for low-, normal-, and high-BF 
ballasts. Philips also commented that low-BF ballasts do have lower BEF 
than normal-BF ballasts and that they may seek a larger reduction for 
those ballasts than that applied in the preliminary TSD. Based on the 
data in the CEC database, Philips concluded that a low-BF ballast is 
about one percent less efficient than a normal-BF ballast, whereas a 
high-BF ballast is about one percent more efficient than a normal-BF 
ballast. (Philips, Public Meeting Transcript, No. 34 at pp. 17-18, 103-
104, 137) The California Utilities also noted that, based on the data 
provided in Appendix 5C, DOE's scaling factors did not accurately 
capture the relationship between BF and BEF. The NEEA and NPCC agreed, 
noting that while DOE used a very consistent set of scaling factors to 
scale the test results from normal ballast factor products to low- and 
high-ballast factor products, the test data was not nearly as 
consistent as the scaling factors. They did not believe that high 
ballast factor ballasts necessarily had lower BEFs than normal ballast 
factor products. The NEEA and NPCC believed DOE should proceed in a way 
that eliminates the need to use scaling factors to determine baseline 
models and efficiency levels for the low- and high-BF products. For 
example, if efficiency increased with ballast factor, it would be 
reasonable to set standards as a function of ballast factor, similar to 
the way refrigeration products are regulated in terms of refrigerated 
volume. (California Utilities, No. 30 at p. 3; NEEA and NPCC, No. 32 at 
pp. 3, 5)
    Regarding starting method, GE commented that DOE's scaling yields 
slightly higher efficiency ratings for some programmed start ballasts

[[Page 20124]]

compared to instant start ballasts, which is not consistent with what 
is found in the industry. Philips' analysis found that the scaling 
factor for programmed start should be 3 percent relative to instant 
start ballasts instead of the 2.2 percent calculated by DOE. The NEEA 
and NPCP suggested that DOE re-verify its scaling factor for starting 
method in light of the differences between DOE's scaling factors and 
those found by Philips. (GE, Public Meeting Transcript, No. 34 at pp. 
25-26; Philips, Public Meeting Transcript, No. 34 at p. 190; NEEA and 
NPCC, No. 32 at p. 6)
    As discussed in section 0, DOE found that BLE could be modeled as a 
function of total lamp arc power. In this NOPR, DOE proposes to set 
standards in terms of an equation that assigns a BLE value based on the 
total rated lamp power operated by the ballast. This equation 
eliminates the need for scaling relationships based on number of lamps 
and ballast factor that were necessary in the preliminary TSD. A 
scaling factor was still necessary for starting method, as described 
below.
    Although DOE set efficiency levels for some PS ballasts directly, 
DOE did not analyze 8-foot HO PS ballasts directly. Thus, it was 
necessary to develop a scaling relationship for this starting method. 
To do so, DOE compared 4-foot MBP IS ballasts to their PS counterparts. 
DOE found the average reduction in BLE to be 2 percent. Thus, DOE 
proposes to apply this scaling factor to the efficiency levels for 8-
foot HO IS ballasts to determine the appropriate values for programmed 
start products.

D. Markups To Determine Product Price

    By applying markups to the MSPs estimated in the engineering 
analysis, DOE estimated the amounts consumers would pay for baseline 
and more efficient products. At each step in the distribution channel, 
companies mark up the price of the product to cover business costs and 
profit margin. Identifying the appropriate markups and ultimately 
determining consumer product price depend on the type of distribution 
channels through which the product moves from manufacturer to consumer.
1. Distribution Channels
    Before it could develop markups, DOE needed to identify 
distribution channels (i.e., how the products are distributed from the 
manufacturer to the end user) for the ballast designs addressed in this 
rulemaking. Most ballasts used in commercial and industrial 
applications pass through one of two types of distribution channels--an 
original equipment manufacturer (OEM) channel and a wholesaler channel. 
The OEM distribution channel applies to ballasts installed in fixtures. 
In this distribution channel, the ballast passes from the manufacturer 
to a fixture OEM who in turn sells it to an electrical wholesaler 
(i.e., distributor); from the wholesaler it passes to a contractor, and 
finally to the end user. The wholesaler distribution channel applies to 
ballasts not installed in fixtures (e.g., replacement ballasts). In 
this distribution channel, the ballast passes from the manufacturer to 
an electrical wholesaler, then to a contractor, and finally to the end 
user.
    The NEEA and NPCC asked why DOE had not considered a distribution 
channel for residential ballasts in its preliminary TSD. (NEEA and 
NPCC, Public Meeting Transcript, No. 12 at p. 225; NEEA and NPCC, No. 
32 at p. 8) The NEEA and NPCC and Philips noted that end users of 
residential ballasts would typically purchase an entire new fixture 
rather than replace a ballast in an existing fixture; GE questioned 
this generalization. (NEEA and NPCC, Public Meeting Transcript, No. 22 
at pp. 225-226; Philips, Public Meeting Transcript, No. 7 at p. 258; 
GE, Public Meeting Transcript, No. 16 at p. 259) DOE agreed that a 
separate distribution channel is applicable for residential ballasts, 
and included it in the revised markups analysis. Because DOE could not 
obtain retailer sales data detailing the breakdown between fixture 
ballasts and replacement ballasts, however, DOE assumed for the markups 
analysis that the manufacturer sells the residential ballast to a 
fixture OEM who in turn sells it in a fixture to a home improvement 
retailer, where it is purchased by the end user.
2. Estimation of Markups
    Publicly-owned companies must disclose financial information 
regularly through filings with the U.S. Securities and Exchange 
Commission (SEC). Filed annually, SEC form 10-K provides a 
comprehensive overview of the company's business and financial 
conditions. To estimate OEM, wholesaler, and retailer markups, DOE used 
financial data from 10-K reports from publicly owned lighting fixture 
manufacturers, electrical wholesalers, and home improvement retailers.
    DOE's markup analysis developed both baseline and incremental 
markups to transform the ballast MSP into an end user equipment price. 
DOE used the baseline markups to determine the price of baseline 
designs. Incremental markups are coefficients that relate the change in 
the MSP of higher-efficiency designs to the change in the OEM, 
wholesaler, and retailer sales prices. These markups refer to higher-
efficiency designs sold under market conditions with new energy 
conservation standards. The calculated average baseline markups for 
fixture OEM companies, electrical wholesalers, and home improvement 
retailers were 1.50, 1.23, and 1.51, respectively. The average 
incremental markups for OEMs, wholesalers, and home improvement 
retailers were 1.17, 1.05, and 1.15, respectively.
    Several commenters expressed concern that markups based on 
companies' overall financial data might not represent actual markups 
for ballasts. (Osram Sylvania, Public Meeting Transcript, No. 2 at p. 
205; NEEA and NPCC, No. 32 at p. 6; NEMA, No. 29 at pp. 12-13) In 
contrast, ASAP supported DOE's markups estimation method, citing the 
public availability of SEC data. (ASAP, No. 2 at p. 207) While 
recognizing that SEC form 10-K data is not product-specific, DOE 
assumes that actual product markups are generally business-sensitive. 
DOE contacted the National Association of Electrical Distributors 
(NAED) and received feedback from two NAED member companies, both 
confirming that DOE's calculated wholesaler markups were consistent 
with their actual ballast markups. With assistance from NEMA, DOE 
sought a similar evaluation of ballast markups from several 
representative fixture OEMs, but did not receive feedback in time for 
publication of the proposed rule. DOE will consider any data received 
in response to this NOPR in developing markups for the final rule.
    To estimate markups for residential ballast designs, DOE requested 
financial data for representative home improvement retailers. The NEEA 
and NPCC commented that Home Depot and Lowe's together account for a 
significant portion of the home improvement retail market. (NEEA and 
NPCC, Public Meeting Transcript, No. 12 at p. 225) Philips corroborated 
this point. (Philips, Public Meeting Transcript, No. 7 at p. 258) DOE 
contacted Home Depot and Lowe's regarding price markups for fluorescent 
lighting products, but both organizations declined to comment, citing 
competition concerns. Consequently, DOE based its retailer markups on 
financial data from 10-K reports.
    For ballasts used in commercial and industrial applications, DOE 
adjusted the calculated average baseline and incremental markups to 
reflect estimated proportions of ballasts sold through the OEM and 
wholesaler distribution channels. DOE assumed ballasts in the fixture 
OEM channel

[[Page 20125]]

represent 63 percent of the market and ballasts in the wholesaler 
channel represent 37 percent. These percentages are from chapter 3 
(engineering analysis) of the final TSD for the 2000 Ballast Rule and 
were based on a comment submitted by NEMA for that rulemaking. DOE then 
multiplied the resulting weighted average markups by a contractor 
markup of 1.13 (also from the 2000 Ballast Rule, and used in the 2009 
Lamps Rule) and sales tax to develop total weighted baseline and 
incremental markups, which reflect all individual markups incurred in 
the ballast distribution channels. For residential ballasts, DOE 
assumed that end users purchased ballasts--already installed in 
fixtures--directly from home improvement retailers with no contractor 
involvement or markup. DOE used OEM and retailer markups and sales tax 
to calculate total baseline and incremental markups for residential 
ballasts.
    The sales tax represents state and local sales taxes applied to the 
end user equipment price. DOE derived state and local taxes from data 
provided by the Sales Tax Clearinghouse.\28\ These data represent 
weighted averages that include state, county and city rates. DOE then 
derived population-weighted average tax values for each census division 
and large State, and then derived U.S. average tax values using a 
population-weighted average of the census division and large State 
values. This approach provided a national average tax rate of 7.25 
percent.
---------------------------------------------------------------------------

    \28\ The Sales Tax Clearinghouse. Available at https://thestc.com/STRates.stm. (Last accessed July 20, 2010.)
---------------------------------------------------------------------------

3. Summary of Markups
    Table V.4 summarizes the markups at each stage in the distribution 
channel and the overall baseline and incremental markups, and sales 
taxes, for each of the three identified channels. For commercial and 
industrial ballasts, weighting the markups in each channel by the share 
of shipments in that channel yields an average overall baseline markup 
of 1.96 and an average overall incremental markup of 1.41. For 
residential ballasts, DOE calculated an overall baseline markup of 2.43 
and an overall incremental markup of 1.43.

                           Table V.4--Summary of Ballast Distribution Channel Markups
----------------------------------------------------------------------------------------------------------------
                                          Commercial/industrial ballasts                 Residential ballasts
                             -----------------------------------------------------------------------------------
                              OEM distribution (ballasts    Wholesaler distribution      Retailer distribution
             VI.                     in fixtures)               (ballasts only)         (ballasts in fixtures)
                             -----------------------------------------------------------------------------------
                                Baseline     Incremental    Baseline     Incremental    Baseline     Incremental
----------------------------------------------------------------------------------------------------------------
Fixture OEM.................          1.50          1.17  ............  ............          1.50          1.17
Electrical Wholesaler                 1.23          1.05          1.23          1.05  ............  ............
 (Distributor)..............
Home Improvement Retailer...  ............  ............  ............  ............          1.51          1.15
Contractor or Installer.....          1.13          1.13          1.13          1.13  ............  ............
----------------------------------------------------------------------------------------------------------------
Sales Tax...................             1.07
                                         1.07
                                         1.07
----------------------------------------------------------------------------------------------------------------
Overall.....................          2.24          1.48          1.49          1.27          2.43          1.43
----------------------------------------------------------------------------------------------------------------
Assumed Market Percentage...              63
                                          37
                                          100
----------------------------------------------------------------------------------------------------------------
Overall (Weighted)..........        1.96 (Baseline)
                                  1.41 (Incremental)              2.43          1.43
----------------------------------------------------------------------------------------------------------------

    Using these markups, DOE generated ballast end user prices for each 
efficiency level it considered, assuming that each level represents a 
new minimum efficiency standard. Chapter 7 of the TSD provides 
additional detail on the markups analysis.

A. Energy Use Analysis

    For the energy use analysis, DOE estimated the energy use of 
ballasts in the field (i.e., as they are actually used by consumers). 
The energy use analysis provided the basis for other DOE analyses, 
particularly assessments of the energy savings and the savings in 
consumer operating costs that could result from DOE's adoption of new 
and amended standard levels.
    To develop annual energy use estimates, DOE multiplied annual usage 
(in hours per year) by the lamp-and-ballast system input power (in 
watts). DOE characterized representative lamp-and-ballast systems in 
the engineering analysis, which provided measured and normalized system 
input power ratings (the latter used to compare baseline- and 
standards-case systems on an equal light-output basis). To characterize 
the country's average use of lamp-and-ballast systems for a typical 
year, DOE developed annual operating hour distributions by sector, 
using data published in the U.S. Lighting Market Characterization: 
Volume I (LMC),\29\ the Commercial Building Energy Consumption Survey 
(CBECS),\30\ the Manufacturer Energy Consumption Survey (MECS),\31\ and 
the Residential Energy Consumption Survey (RECS).\32\ DOE assumed, 
based on its market and technology assessment, that PS ballasts 
operating 4-foot MBP T8 lamps in the commercial sector were operated on 
occupancy sensors. Based on its survey of available literature, DOE 
assumed that occupancy sensors would result, on average, in a 30-
percent reduction in annual operating hours.
---------------------------------------------------------------------------

    \29\ U.S. Department of Energy, Office of Energy Efficiency and 
Renewable Energy. U.S. Lighting Market Characterization. Volume I: 
National Lighting Inventory and Energy Consumption Estimate. 2002. 
Available at http://apps1.eere.energy.gov/buildings/publications/pdfs/corporate/lmc_vol1.pdf.
    \30\ U.S. Department of Energy, Energy Information Agency. 
Commercial Building Energy Consumption Survey: Micro-Level Data, 
File 2 Building Activities, Special Measures of Size, and Multi-
building Facilities. 2003. Available at http://www.eia.doe.gov/emeu/cbecs/public_use.html.
    \31\ U.S. Department of Energy, Energy Information Agency. 
Manufacturing Energy Consumption Survey, Table 1.4: Number of 
Establishments Using Energy Consumed for All Purpose. 2006. 
Available at http://www.eia.doe.gov/emeu/mecs/mecs2006/2006tables.html.
    \32\ U.S. Department of Energy, Energy Information Agency. 
Residential Energy Consumption Survey: File 1: Housing Unit 
Characteristics. 2005. Available at http://www.eia.doe.gov/emeu/recs/recspubuse05/pubuse05.html.
---------------------------------------------------------------------------

    The NEEA and NPCC generally approved of DOE's analysis of lighting 
end-use profiles and the resulting annual operating hour estimates. 
(NEEA and NPCC, No. 32 at p. 7) NEMA agreed, but asked if the 
commercial average operating hours accounted for retailers

[[Page 20126]]

with longer or continuous daily operations. (NEMA, No. 29 at p. 11) As 
noted in the LMC final report, some expected data points are lost in 
the averaging process. For example, 24-hour retailers are outweighed in 
the commercial sector by the volume of office and retail space that 
does not operate 24 hours per day. For the proposed rule, DOE retained 
its approach for estimating average sector operating hours, the values 
for which changed slightly based on updated census data inputs.
    Based on a range of published estimates, DOE assumed energy savings 
of 30 percent for lamp-and-ballast systems using occupancy sensors in 
the commercial sector. To account for these energy savings, DOE reduced 
average operating hours for analyzed PS ballast systems by 30 percent. 
Lutron's literature review indicated savings from 17 percent-60 
percent, and they agreed that 30 percent was a reasonable average 
value. (Lutron, Public Meeting Transcript, No. 4 at p. 206) While 
noting that the use of occupancy sensors is not limited to the 
commercial sector, NEMA agreed with DOE's assumption that PS ballasts 
were used with occupancy sensors and commented that DOE's 30-percent 
savings estimate was conservative. (NEMA, No. 29 at p. 12) DOE agrees 
that occupancy sensor use is not limited to the commercial sector, but 
notes that the analyzed PS ballast designs (which operate 4-foot MBP T8 
lamps) are intended primarily for commercial applications. The analyzed 
ballasts for 4-foot MiniBP T5 lamps (SO and HO) are also PS designs; 
however, unlike T8 systems, PS ballast design is intrinsic to T5 
systems and not conditioned on occupancy sensor use. Therefore, DOE did 
not assume operating hour reductions for T5 SO (commercial sector) and 
T5 HO (industrial sector) lamp-and-ballast systems in its energy use 
analysis.
    Chapter 6 of the TSD provides a more detailed description of DOE's 
energy use analysis for ballasts.

B. Life-Cycle Cost and Payback Period Analyses

    DOE conducted LCC and PBP analyses to evaluate the economic impacts 
of potential energy conservation standards for ballasts on individual 
consumers. The LCC is the total consumer expense over the life of a 
product, consisting of purchase and installation costs and operating 
costs (expenses for energy use, maintenance, and repair). To compute 
the operating costs, DOE discounted future operating costs to the time 
of purchase and summed them over the lifetime of the product. The PBP 
is the estimated amount of time (in years) it takes consumers to 
recover the increased purchase cost (including installation) of a more 
efficient product through lower operating costs. DOE calculates the PBP 
by dividing the change in purchase cost (normally higher) by the change 
in average annual operating cost (normally lower) that results from the 
more efficient standard.
    For any given efficiency or energy use level, DOE measures the PBP 
and the change in LCC relative to an estimated base-case product 
efficiency or energy use level. The base-case estimate reflects the 
market without new or amended mandatory energy conservation standards, 
including the market for products that exceed the current energy 
conservation standards.
    Inputs to the calculation of total installed cost include the cost 
of the product--which includes MSPs, distribution channel markups, and 
sales taxes--and installation costs. Inputs to the calculation of 
operating expenses include annual energy consumption, energy prices and 
price projections, repair and maintenance costs, product lifetimes, 
discount rates, and the year that proposed standards take effect. To 
account for uncertainty and variability, DOE created value 
distributions for selected inputs, including: operating hours, 
electricity prices, discount rates and sales tax rates, and disposal 
costs. For example, DOE created a probability distribution of annual 
energy consumption in its energy use analysis, based in part on a range 
of annual operating hours. The operating hour distributions capture 
variation across census divisions and large States, building types, and 
lamp-and-ballast systems for three sectors (commercial, industrial, and 
residential). In contrast, ballast MSPs were specific to the 
representative ballast designs evaluated in DOE's engineering analysis; 
and price markups were based on limited publicly available financial 
data. Consequently, DOE used discrete values instead of distributions 
for these inputs.
    The computer model DOE uses to calculate the LCC and PBP, which 
incorporates Crystal Ball (a commercially available software program), 
relies on a Monte Carlo simulation to incorporate uncertainty and 
variability into the analysis. The Monte Carlo simulations randomly 
sample input values from the probability distributions and ballast user 
samples, performing more than 10,000 iterations per simulation run. The 
NOPR TSD chapter 8 and its appendices provide details on the 
spreadsheet model and of all the inputs to the LCC and PBP analyses.
    Table V.5 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations for the preliminary TSD as well 
as the changes made for today's NOPR. The subsections that follow 
discuss the initial inputs and DOE's changes to them. In addition, as 
noted in section 0 ``Issues on Which DOE Seeks Comment'', DOE seeks 
comment on the appropriateness of including T12 ballasts in the 
baseline analysis for life cycle costs.

                  Table V.5--Summary of Inputs and Key Assumptions in the LCC and PBP Analyses*
----------------------------------------------------------------------------------------------------------------
               Inputs                           Preliminary TSD                 Changes for the proposed rule
----------------------------------------------------------------------------------------------------------------
Product Cost.......................  Derived by multiplying ballast MSPs    No change.
                                      by distribution channel markups and
                                      sales tax.
Installation Cost..................  Derived costs using estimated labor    Updated labor rates from 2008$ to
                                      times, and applicable labor rates      2009$.
                                      from RS Means Electrical Cost Data
                                      (2007) and U.S. Bureau of Labor
                                      Statistics.
Annual Energy Use..................  Determined operating hours by          Used the most recent available
                                      associating building type-specific     versions of building energy
                                      operating hours with regional          consumption survey data: LMC
                                      distributions of various building      (2002), CBECS (2003), MECS (2006),
                                      types using lighting market and        and RECS (2005).
                                      building energy consumption survey
                                      data (see section 0 above).
Energy Prices......................  Electricity: Based on EIA's Form 861   Electricity: Updated using Form 826
                                      data for 2007.                         data for 2009.
                                     Variability: Regional energy prices    Variability: Energy prices
                                      determined for 13 regions.             determined at state level.

[[Page 20127]]

 
Energy Price Projections...........  Forecasted using Annual Energy         Forecasts updated using AEO2010.
                                      Outlook 2009 AEO2009.
Replacement and Disposal Costs.....  Commercial/Industrial: Included labor  Updated labor rates from 2008$ to
                                      and materials costs for lamp           2009$.
                                      replacement, and disposal costs for   Variability: Assumed commercial and
                                      failed lamps.                          industrial consumers pay recycling
                                     Residential: Included only materials    costs in approximately 30 percent
                                      cost for lamps, with no lamp           of lamp failures and 5 percent of
                                      disposal costs.                        ballast failures.
Product Lifetime...................  Ballasts: Lifetime based on average    No change.
                                      lifetimes from the 2000 Ballast Rule
                                      (and used in the 2009 Lamps Rule).
                                     Lamps: assumed as 91 percent-94
                                      percent of rated life, to account
                                      for lamp type and relamping
                                      practices.
Discount Rates.....................  Commercial/Industrial: Estimated cost  Variability: Developed a
                                      of capital to affected firms and       distribution of discount rates for
                                      industries; developed weighted         each end-use sector.
                                      average of the cost to the company
                                      of equity and debt financing.
                                     Residential: Estimated by examining
                                      all possible debt or asset classes
                                      that might be used to purchase
                                      ballasts.
Compliance Date of Standards.......  2014.................................  No change.
Ballast Purchasing Events..........  Assessed two events: Ballast failure   No change.
                                      and new construction/renovation.
----------------------------------------------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided in the sections following the table or in
  chapter 8 of the NOPR TSD.

1. Product Cost
    To calculate consumer product costs, DOE multiplied the MSPs 
developed in the engineering analysis by the distribution channel 
markups described above (along with sales taxes). DOE used different 
markups for baseline products and higher-efficiency products, because 
the markups estimated for incremental costs differ from those estimated 
for baseline models. In response to comments on the preliminary TSD, 
DOE's revised analysis included a distribution channel with 
corresponding markups for residential ballasts.
    On February 22, 2011, DOE published a Notice of Data Availability 
(NODA, 76 FR 9696) stating that DOE may consider improving regulatory 
analysis by addressing equipment price trends. Consistent with the 
NODA, DOE examined historical producer price indices (PPI) for 
fluorescent ballasts and found both positive and negative real price 
trends depending on the specific time period examined. Therefore, in 
the absence of a definitive trend, DOE assumes in its price forecasts 
for this NOPR that the real prices of fluorescent ballasts are constant 
in time and that fluorescent ballast prices will trend the same way as 
prices in the economy as a whole. DOE is aware that there have been 
significant changes in both the regulatory environment and mix of 
fluorescent ballast technologies during this period that create 
analytical challenges for estimating longer-term product price trends 
from the product-specific PPI data. DOE performed price trends 
sensitivity calculations to examine the dependence of the analysis 
results on different analytical assumptions. A more detailed discussion 
of price trend modeling and calculations is provided in Appendix 8A of 
the TSD. DOE invites comment on methods to improve its equipment price 
forecasting for fluorescent lamp ballasts beyond the assumption of 
constant real prices, as well as any data supporting alternate methods.
2. Installation Cost
    The installation cost is the total cost to the consumer to install 
the equipment, excluding the marked-up consumer product price. 
Installation costs include labor, overhead, and any miscellaneous 
materials and parts. As detailed in the preliminary TSD, DOE considered 
the total installed cost of a lamp-and-ballast system to be the 
consumer product price (including sales taxes) plus the installation 
cost. DOE applied installation costs to lamp-and-ballast systems 
installed in the commercial and industrial sectors, treating an 
installation cost as the product of the average labor rate and the time 
needed for installation. Using the same approach, DOE assumed that 
residential consumers must pay for the installation of a fixture 
containing a lamp-and-ballast system, and calculated installation price 
in the same manner.
3. Annual Energy Use
    As discussed above, DOE estimated the annual energy use of 
representative lamp-and-ballast systems using system input power 
ratings and sector operating hours. The annual energy use inputs to the 
LCC and PBP analyses are based on average annual operating hours, 
whereas the Monte Carlo simulation draws on a distribution of annual 
operating hours to determine annual energy use.
4. Energy Prices
    For the LCC and PBP, DOE derived average energy prices for 13 U.S. 
geographic areas consisting of the nine census divisions, with four 
large States (New York, Florida, Texas, and California) treated 
separately. For census divisions containing one of these large States, 
DOE calculated the regional average excluding the data for the large 
State. The derivation of prices was based on data from EIA Form 861, 
``Annual Electric Power Industry Database,'' and EIA Form 826, 
``Monthly Electric Utility Sales and Revenue Data.''
5. Energy Price Projections
    To estimate the trends in energy prices for the preliminary TSD, 
DOE used the price forecasts in AEO2009. To arrive at prices in future 
years, DOE multiplied current average prices by the forecast of annual 
average price changes in AEO2009. Because AEO2009 forecasts prices to 
2035, DOE followed past EIA guidelines and used the average rate of 
change from 2020 to 2035 to estimate the price trend for electricity 
after 2035. For today's proposed rule, DOE used the same approach, but 
updated its energy price

[[Page 20128]]

forecasts using AEO2010. DOE intends to update its energy price 
forecasts for the final rule based on the latest available AEO. In 
addition, the spreadsheet tools that DOE used to conduct the LCC and 
PBP analyses allow users to select price forecasts from AEO's low-
growth, high-growth, and reference case scenarios to estimate the 
sensitivity of the LCC and PBP to different energy price forecasts.
    The California Utilities commented that DOE should address the 
time-dependent value of energy to account for the potentially higher 
value of energy savings that occur during peak demand periods. 
(California Utilities, No. 30 at p. 5) DOE acknowledges that using peak 
and off-peak electricity prices in estimating the value of energy 
savings is consistent with using marginal electricity prices to assign 
value to energy savings, with the assumption that standards reduce 
energy consumption at the margin. A 1999 DOE report presents a 
procedure for deriving marginal prices for rulemaking and compares 
resulting marginal prices to average prices in the commercial and 
residential sectors.\33\ Even though the variation in differences 
between marginal and average prices was high (from -85 percent to 51 
percent), marginal prices were lower than average prices by 5.2 percent 
on average; the median value for the difference was 3.3 percent. For 
the proposed rule, DOE's analytical tools allow users to select between 
the low, high, and reference case scenario AEO. DOE believes this 
approach captures variation in energy prices (and in the value of 
energy savings) within a range similar to the difference between 
marginal and average prices.
---------------------------------------------------------------------------

    \33\ U.S. Department of Energy, Office of Energy Efficiency and 
Renewable Energy. Marginal Energy Prices Report. July 1999. 
Available at http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/marg_eprice_0799.pdf.
---------------------------------------------------------------------------

6. Replacement and Disposal Costs
    In its preliminary TSD, DOE addressed lamp replacements occurring 
within the analysis period as part of operating costs for considered 
lamp-and-ballast system designs. Replacement costs in the commercial 
and industrial sectors included the labor and materials costs 
associated with replacing a lamp at the end of its lifetime, discounted 
to $2011. For the residential sector, DOE assumed that consumers would 
install their own replacement lamps and incur no related labor costs.
    Some consumers recycle failed lamps and ballasts, thus incurring a 
disposal cost. In its research, DOE found average disposal costs of 10 
cents per linear foot for GSFL and $3.50 for each ballast.\34\ A 2004 
report by the Association of Lighting and Mercury Recyclers noted that 
approximately 30 percent of lamps used by businesses and 2 percent of 
lamps in the residential sector are recycled nationwide.\35\ Consistent 
with the 2009 Lamps Rule, DOE considered the 30-percent lamp-recycling 
rate to be significant and incorporated lamp disposal costs into the 
LCC analysis for commercial and industrial consumers. DOE was not able 
to obtain ballast recycling rate data, but assumed that higher disposal 
costs would largely discourage voluntary ballast recycling by 
commercial and industrial consumers, and did not include ballast 
disposal costs in the LCC analysis. Given the very low (2 percent) 
estimated lamp recycling rate in the residential sector, DOE assumed 
that residential consumers would be even less likely to voluntarily 
incur the higher disposal costs for ballasts. Therefore, DOE excluded 
the disposal costs for lamps or ballasts from the LCC analysis for 
residential ballast designs.
---------------------------------------------------------------------------

    \34\ Environmental Health and Safety Online's fluorescent lights 
and lighting disposal and recycling Web page--Recycling Costs. 
Available at http://www.ehso.com/fluoresc.php. (Last accessed Sept. 
26, 2010.)
    \35\ Association of Lighting and Mercury Recyclers, ``National 
Mercury-Lamp Recycling Rate and Availability of Lamp Recycling 
Services in the U.S.'' Nov. 2004.
---------------------------------------------------------------------------

    DOE received no comments on the preliminary TSD concerning these 
assumed recycling rates, disposal costs, and their application in the 
LCC analysis. The Monte Carlo simulation for the proposed rule allowed 
DOE to examine variability in recycling practices; consequently, DOE 
assumed that commercial and industrial consumers pay recycling costs in 
5 percent of ballast failures--as well as the 30 percent of lamp 
failures assumed in the LCC analysis. As in the LCC analysis, DOE 
assumed that residential lamp and ballast disposal rates were 
insignificant, and excluded the related disposal costs from the Monte 
Carlo simulation for residential ballast designs.
7. Product Lifetime
    Chapter 8 of the preliminary TSD detailed DOE's basis for average 
ballast lifetimes, which were based on assumptions used in the 2000 
Ballast Rule and the 2009 Lamps Rule. For ballasts in the commercial 
and industrial sectors, DOE used an average ballast lifetime of 49,054 
hours that, when combined the respective average annual operating 
hours, yielded average ballast lifetimes of approximately 13 years and 
10 years, respectively. Consistent with the 2000 Ballast Rule and the 
2009 Lamps Rule, DOE assumed an average ballast lifetime of 
approximately 15 years in the residential sector, which corresponds 
with 11,835 hours total on an assumed 789 hours per year operating 
schedule. To account for a range of group and spot relamping practices, 
DOE assumed that lamps operated, on average, for 91 percent-94 percent 
of rated life, depending on lamp type.
    DOE received several general comments on ballast design and 
lifetime. Philips and NEMA noted that lead-free solder used per RoHS 
directives could affect ballast lifetime, but that its effects on 
reliability were still largely unknown. (Philips, Public Meeting 
Transcript, No. 8 at p. 187; NEMA, No. 29 at p. 14) Philips agreed with 
DOE's assumption that lifetime would not increase with more efficient 
ballast designs, based in part on the trend toward smaller luminaires 
and higher operating temperatures. (Philips, Public Meeting Transcript, 
No. 18 at pp. 231-232) In contrast, the NEEA and NPCC saw no reason to 
assume that ballast lifetime would be affected by luminaire or ballast 
enclosure size, but conceded that related ballast failure data is 
limited. (NEEA and NPCC, No. 32 at p. 8) There was general agreement 
that ballast lifetime can vary widely and encompasses both physical 
failure and economic lifetime (e.g., replacement of functioning 
ballasts due to retrofits). (NEMA, Public Meeting Transcript, No. 20 at 
pp. 244-246; NEEA and NPCC, No. 32 at p. 8) However, NEMA agreed with 
DOE's assumed average ballast lifetimes of 10-15 years used in the LCC 
analysis. (NEMA, No. 29 at p. 14)
    Based on comments received to date, DOE believes that its assumed 
average ballast lifetimes are appropriate and applied these lifetimes 
in the LCC analysis for today's proposed rule. DOE also agrees that 
ballast lifetimes can vary due to both physical failure and economic 
factors (e.g., early replacements due to retrofits). Consequently, DOE 
accounted for variability in lifetime in LCC and PBP via the Monte 
Carlo simulation, and in the shipments and NIA analyses by assuming a 
Weibull distribution for lifetimes to accommodate failures and 
replacement.
8. Discount Rates
    The discount rate is the rate at which future expenditures are 
discounted to estimate their present value. In its preliminary TSD, DOE 
derived separate discount rates for commercial,

[[Page 20129]]

industrial, and residential consumers. For commercial and industrial 
consumers, DOE estimated the cost of capital to affected firms and 
industries, from which it developed a weighted average of the cost to 
the company of equity and debt financing. DOE estimated the discount 
rate for residential consumers by looking across all possible debt or 
asset classes that might be used to purchase ballasts. For the proposed 
rule, DOE also developed a distribution of discount rates for each end-
use sector from which the Monte Carlo simulation samples.
    For the industrial and commercial sectors, DOE assembled data on 
debt interest rates and the cost of equity capital for representative 
firms that use ballasts. DOE determined a distribution of the weighted-
average cost of capital for each class of potential owners using data 
from the Damodaran online financial database.\36\ DOE used the same 
distribution of discount rates for the commercial and industrial 
sectors. The average discount rates in DOE's analysis, weighted by the 
shares of each rate value in the sectoral distributions, are 6.86 
percent for commercial end users and 7.15 percent for industrial end 
users.
---------------------------------------------------------------------------

    \36\ The data are available at http://pages.stern.nyu.edu/
~adamodar.
---------------------------------------------------------------------------

    For the residential sector, DOE assembled a distribution of 
interest or return rates on various equity investments and debt types 
from a variety of financial sources, including the Federal Reserve 
Board's ``Survey of Consumer Finances'' (SCF) in 1989, 1992, 1995, 
1998, 2001, and 2004. DOE added 2007 SCF data for today's proposed rule 
and assigned weights in the distribution based on the shares of each 
financial instrument in household financial holdings according to SCF 
data. The weighted-average discount rate for residential product owners 
is 5.55 percent.
    In response to the preliminary LCC analysis, NEMA commented that 
DOE should examine the effects of applying higher discount rates to the 
value of projected energy savings, contending that consumers will 
discount future benefits heavily and place greater emphasis on a 
product's first cost. (NEMA, Public Meeting Transcript, No. 2 at p. 
251) DOE believes that its weighted-average discount rates are 
representative and appropriate for the LCC analysis because they are 
grounded in a vetted, transparent methodology and publicly-available 
financial data. DOE lacks a defensible basis for estimating a 
representative, individual discount rate, which would vary 
significantly by company and product type. However, DOE also considered 
a distribution of discount rates (lower and higher than the average) in 
its Monte Carlo simulation for today's proposed rule.
9. Compliance Date of Standards
    The compliance date is the date when a covered product is required 
to meet a new or amended standard. EPCA requires that any amended 
standards established in this rule apply to products manufactured after 
a date that is five years after--(i) the effective date of the previous 
amendment; or (ii) if the previous final rule did not amend the 
standards, the earliest date by which a previous amendment could have 
been effective; except that in no case may any amended standard apply 
to products manufactured within three years after publication of the 
final rule establishing such amended standard. (42 U.S.C. 
6295(g)(7)(C)). DOE is required by consent decree to publish any 
amended standards for ballasts by June 30, 2011. As a result, and in 
compliance with 42 U.S.C. 6295(g)(7)(C), DOE expects the compliance 
date to be three years after the publication of any final amended 
standards, by June 30, 2014. DOE received no comments on its expected 
effective date of June 2014 and calculated the LCC for all end users as 
if each one would purchase a new ballast in the year compliance with 
the standard is required.
10. Ballast Purchasing Events
    DOE designed the LCC and PBP analyses for this rulemaking around 
scenarios where consumers need to purchase a ballast. Each of these 
events may give the consumer a different set of ballast or lamp-and-
ballast designs and, therefore, a different set of LCC savings for a 
certain efficiency level. The two scenarios were (1) ballast failure 
and (2) new construction/renovation. In the ballast failure scenario, 
DOE assumed that the consumer would generally select a standards-
compliant lamp-and-ballast combination such that the system light 
output never drops below 10 percent of the baseline system. For new 
construction/renovation, DOE assumed that consumers were not 
constrained by existing fixture layouts, and could design a new 
installation that matched the overall light output of a base-case 
system, independent of individual system light output. DOE used rated 
system input power to calculate annual energy use for the ballast 
failure scenario. For new construction/renovation, DOE used normalized 
system input power, adjusted to yield equivalent light output from both 
the base-case and substitute systems.
    The California Utilities stated that failure replacements were rare 
and commented that DOE should include a separate ballast purchasing 
event for retrofits in its LCC analysis, as the California Utilities 
consider that the more common purchasing event. (California Utilities, 
No. 30 at p. 4) In its review of available studies and EIA data, DOE 
found that predicted retrofit rates for the nation were comparatively 
low (i.e., less than 5 percent). DOE assumes that retrofit rates in 
areas with utility incentive programs would typically be higher; 
however, DOE could not substantiate extending these higher retrofit 
rates to all consumers and therefore did not consider a separate 
retrofit scenario in its LCC analysis.
    As discussed in section 0 above, the California Utilities and the 
NEEA and NPCC and the California Utilities believe that DOE was 
incorrect in assuming consumers would not be able to normalize 
individual system light output in a ballast failure replacement 
scenario. Both sets of commenters contended that ballast designs will 
be available that maintain efficiency across different ballast factors 
and system light outputs. The California Utilities also noted that 
users can also maintain system light output by adjusting the number of 
lamps, lamp type, or fixture reflectors. To simplify the analysis, the 
NEEA and NPCC suggested that DOE should analyze normalized system input 
power in all scenarios. (California Utilities, No. 30 at pp. 3-5; NEEA 
and NPCC, No. 32 at pp. 6-7) Philips disagreed that light output could 
be maintained in all substitution cases. (Philips, Public Meeting 
Transcript, No. 34 at p. 227)
    For this NOPR, DOE maintained the input power distinction (i.e., 
rated versus normalized) for purchasing scenarios in the LCC analysis, 
which it believes reflects product offerings facing the individual 
consumer in the near term (i.e., 2014). With the exception of system 
input power, the ballast failure and new construction/renovation 
scenarios differ only slightly, with the latter scenario requiring an 
additional 2.5 minutes of labor for installing a luminaire disconnect. 
The results for the new construction/renovation scenario could, 
therefore, be considered similar to a ballast failure replacement 
scenario based on normalized system input power. For the proposed rule, 
DOE used normalized system input power only in the NIA, for reasons 
discussed in section 0 below.

[[Page 20130]]

C. National Impact Analysis--National Energy Savings and Net Present 
Value Analysis

    DOE's NIA assessed the national energy savings (NES) and the 
national net present value (NPV) of total consumer costs and savings 
that they would be expect to result from new or amended standards at 
specific efficiency levels. (``Consumer'' in this context refers to 
consumers of the regulated product.)
    DOE used an MS Excel spreadsheet model to calculate the energy 
savings and the national consumer costs and savings from each TSL. In 
addition, the TSD and other documentation that DOE provides during the 
rulemaking help explain the models and how to use them, allowing 
interested parties to review DOE's analyses by changing various input 
quantities within the spreadsheet.
    DOE used the NIA spreadsheet to calculate the NES and NPV, based on 
the annual energy consumption and total installed cost data from the 
energy use and LCC analyses. DOE forecasted the energy savings, energy 
cost savings, product costs, and NPV of consumer benefits for each 
product class for products sold from 2014 through 2043. The forecasts 
provided annual and cumulative values for all four output parameters. 
DOE examines sensitivities in the NIA by analyzing different efficiency 
scenarios, such as Roll-up and Shift.
    DOE evaluated the impacts of new and amended standards for ballasts 
by comparing base-case projections with standards-case projections. The 
base-case projections characterize energy use and consumer costs for 
each product class in the absence of new or amended energy conservation 
standards. DOE compared these projections with projections 
characterizing the market for each product class if DOE adopted new or 
amended standards at specific energy efficiency levels (i.e., the TSLs 
or standards cases) for that class. In characterizing the base and 
standards cases, DOE considers historical shipments, the mix of 
efficiencies sold in the absence of new standards, and how that mix may 
change over time. Additional information about the NIA spreadsheet is 
in NOPR TSD chapter 11.
    Table V.6 summarizes the approach and data DOE used to derive the 
inputs to the NES and NPV analyses for the preliminary TSD, as well as 
the changes to the analyses for the proposed rule. A discussion of 
selected inputs and changes follows. See chapter 11 of the NOPR TSD for 
further details.

    Table V.6--Approach and Data Used for National Energy Savings and
                   Consumer Net Present Value Analyses
------------------------------------------------------------------------
                                                       Changes for the
           Inputs                Preliminary TSD        proposed rule
------------------------------------------------------------------------
Shipments...................  Derived annual        See Table V.7.
                               shipments from
                               shipments model.
Compliance Date of Standard.  2014................  No change.
Annual Energy Consumption     Established in the    Energy use
 per Unit.                     energy use            characterization
                               characterization      updated using most
                               (preliminary TSD      recent available
                               chapter 6).           inputs; based
                                                     annual unit energy
                                                     consumption on
                                                     normalized system
                                                     input power.
Rebound Effect..............  1 percent in          No change.
                               commercial and
                               industrial sectors,
                               8.5 percent in
                               residential sector.
Electricity Price Forecast..  AEO2008.............  AEO2010.
Energy Site-to-Source         Used average          Used marginal
 Conversion Factor.            conversion factors    conversion factors
                               based on AEO2008.     generated by NEMS-
                                                     BT; factors held
                                                     constant after
                                                     2035.
Discount Rate...............  3% and 7% real......  No change.
Present Year................  2009................  2011.
------------------------------------------------------------------------

1. Annual Energy Consumption per Unit
    As discussed in section 0 above, the California Utilities and the 
NEEA and NPCC suggested that both individual ballast failure 
replacements and system installations for new construction/renovation 
could be normalized for light output at any given efficiency level. 
This could be accomplished through foreseeable ballast design options 
and/or lighting system modifications (e.g., number of lamps, lamp type, 
or fixture reflector). NEEA and NPCC contended that DOE could then 
simplify its analyses by applying normalized system input power 
throughout. (California Utilities, No. 30 at pp. 3-5; NEEA and NPCC, 
No. 32 at pp. 6-7)
    In its preliminary analysis, DOE used both rated and normalized 
system input power in determining the annual unit energy consumption 
for the NIA. As in the LCC analysis, ballast shipments for failure 
replacements were assigned rated system input power, and this 
assumption was applied across the entire 30-year analysis period. DOE 
agrees that the lighting system modifications noted by the California 
Utilities can have the practical effect of normalizing light output for 
individual replacement systems. Therefore, DOE believes that normalized 
system input power provides a reasonable basis for estimating future 
energy savings.
    For the proposed rule, DOE revised the shipments and NIA 
spreadsheet models to reflect the revised product class structure, and 
provide increased flexibility and transparency for the spreadsheet 
user. Using only normalized system input power also simplified the 
accounting functions within the NIA model, compared to the combined 
(rated and normalized input power) approach used in the preliminary 
analysis.
    DOE also examined the relative effects of applying normalized 
versus rated input power in determining energy savings. Normalizing the 
input power of replacement systems typically reduces the differences in 
input power between the baseline system and replacement systems; 
consequently, DOE found that normalized values resulted in lower energy 
savings estimates than those based on rated input power. However, DOE 
believes that the differences in estimated NES between a normalized-
only and combined approach would be minor, particularly compared to the 
range of NES bounded by DOE's two ballast shipment scenarios (existing 
and emerging technologies, discussed in section 0 below).
    In summary, DOE believes that its revised NIA using normalized 
system input power produces a range of estimated NES that captures the

[[Page 20131]]

potential--and significant--energy savings for ballasts.
2. Shipments
    Product shipments are an important component of any estimate of the 
future impact of a standard. Using a three-step process, DOE developed 
the shipments portion of the NIA spreadsheet, a model that uses 
historical data as a basis for projecting future ballast shipments. 
First, DOE used 1990-2005 shipment data from the U.S. Census Bureau to 
estimate the total historical shipments for each ballast type analyzed. 
Second, DOE calculated an installed stock for each ballast type based 
on an assumed service lifetime distribution. Third, by modeling ballast 
market segments (i.e., purchasing events) and applying growth rate, 
lifetime distribution, and emerging technologies penetration rate 
assumptions, DOE developed annual shipment projections for the analysis 
period 2014-2043. In projecting ballast shipments, DOE accounted for 
two market segments: (1) Replacement of failed equipment and (2) 
retrofits/renovation and new construction. Table V.7 summarizes the 
approach and data DOE used to derive the inputs to the shipments 
analysis for the preliminary TSD and the changes DOE made for today's 
proposed rule. A discussion of these inputs and changes follows. For 
details on the shipments analysis, see chapter 10 of the NOPR TSD.

      Table V.7--Approach and Data Used for the Shipments Analysis
------------------------------------------------------------------------
                                                       Changes for the
           Inputs                Preliminary TSD        proposed rule
------------------------------------------------------------------------
Historical Shipments........  Used historical       Used same historical
                               shipments for 1990-   data and changed
                               2005 to develop       lifetime
                               shipments and stock   distribution and
                               projections for the   growth assumptions,
                               analysis period;      mitigating
                               growth pattern        oscillations in
                               exhibited             shipment
                               oscillations in       projections.
                               shipments
                               projections for
                               some ballast types.
Ballast Stock...............  Based projections on  No change for
                               the shipments that    projection
                               survive up to a       methodology;
                               given date; assumed   assumed Weibull
                               simplified lifetime   lifetime
                               distribution.         distribution.
Growth......................  Assumed the same      Updated using 2010
                               growth rate for       AEO projections for
                               commercial/           floorspace growth.
                               industrial and
                               residential
                               floorspace.
Base Case Scenarios.........  Analyzed both         No change.
                               existing technology
                               and emerging
                               technology
                               scenarios.
Standards Case Scenarios....  Analyzed Shift and    No change.
                               Roll-up scenarios
                               based on both
                               existing and
                               emerging technology
                               cases.
------------------------------------------------------------------------

a. Historical Shipments
    For the preliminary TSD, DOE used U.S. Census Bureau Current 
Industrial Reports (CIR) to estimate historical shipments for affected 
ballast designs. The census CIR data cover the period 1990-2005 and 
contain NEMA shipments for individual ballast designs (e.g., 2-lamp 
F96T8), as well as aggregated shipments for multiple designs to prevent 
disclosing data for individual companies. For some ballast designs, the 
CIR withheld shipments data entirely to avoid disclosing data for 
individual companies.
    For CIR reporting years for which specific shipments data were 
aggregated or unavailable, DOE estimated historical shipments using 
trends within the available data and/or market trends identified in 
ballast manufacturer interviews, the 2009 Lamps Rule, and the 2000 
Ballast Rule. DOE then increased these estimates to account for the 
volume of ballasts that non-NEMA companies import or manufacture. To 
validate its estimation methods for the preliminary TSD, DOE requested 
historical ballast and residential fixture shipments from NEMA, but was 
unable to obtain these data due to confidentiality concerns of some 
affected manufacturers.
    In their comments on the preliminary shipments analysis, the NEEA 
and NPCC noted that census CIR data are incomplete, do not address non-
NEMA shipments, and should not be relied on if their deficiencies 
cannot be remedied. (NEEA and NPCC, No. 32 at p. 10) NEMA agreed in 
general with DOE's modeled shipment trends in the preliminary TSD. 
(NEMA, No. 29 at p. 15) DOE acknowledges the shortcomings of CIR data, 
which are truncated at 2005 (the U.S. Census Bureau discontinued 
ballast CIR reports in 2006), but believes that census data are the 
only practical basis for estimating shipments because actual shipments 
data are either withheld by manufacturers due to confidentiality 
concerns or not retained in company records, as discussed below. DOE 
also notes that it accounted for imports and other non-NEMA 
manufacturers in its preliminary historical shipments analysis, and 
provides additional discussion in chapter 10 of the NOPR TSD.
    To validate its NOPR analysis, DOE again requested historical 
ballast shipment data from NEMA, but was informed that neither NEMA nor 
its member companies typically retain data of the vintage in question 
(1990-2005). Where possible, DOE refined its historical shipment 
estimates with additional data collected in manufacturer interviews 
during the NOPR analysis. Based on review of available data and NEMA's 
general validation of the preliminary shipments model, DOE concludes 
that census data remain the most reasonable basis for estimating 
historical ballast shipments, and retains this approach for today's 
proposed rulemaking.
b. Ballast Stock Projections
    In its preliminary shipments analysis, DOE calculated the installed 
ballast stock using historical shipments estimated from U.S. Census 
Bureau CIR data (1990-2005) and projected shipments for future years. 
DOE typically estimates the installed stock during the analysis period 
by taking ballast shipments and calculating how many will survive up to 
a given year based on a lifetime distribution for each ballast type. 
The estimated historical shipments for electronic ballasts exhibited 
striking growth in 1990-2005, a trend not consistent with a mature 
market. For the preliminary TSD, DOE reasoned that this significant 
growth in shipments did not translate to equivalent growth in ballast 
stock, assuming instead a 2-percent annual growth rate in shipments for 
new construction and attributing the additional shipments to retrofits.
    NEMA, as well as the NEEA and NPCC, questioned attributing the

[[Page 20132]]

historical growth in electronic ballast shipments to retrofits, rather 
than of absolute growth in ballast stock. (NEMA, Public Meeting 
Transcript, No. 7 at p. 248; NEEA and NPCC, No. 32 at p. 9) NEMA 
contended that strong growth in non-residential construction explained 
a larger share of new ballast demand than assumed by DOE. (NEMA, Public 
Meeting Transcript, No. 14 at p. 248) Philips noted that DOE did not 
account for a corresponding decline in shipments of magnetic ballasts 
during the period 1990-2005. (Philips, Public Meeting Transcript, No. 6 
and No. 15 at p. 244) However, commenters also acknowledged the 
continuing influence of retrofits driven by utility incentive programs 
and new lighting technologies. (NEEA and NPCC, Public Meeting 
Transcript, No. 20 at pp. 246-247; NEMA, Public Meeting Transcript, No. 
11 at p. 248)
    In its revised analysis, DOE examined census data for ballast 
shipments and confirmed that magnetic ballast shipments declined 
significantly in 1990-2005, corresponding with the increase in 
electronic ballast shipments during the same period. These trends 
suggest that electronic ballasts (e.g., for 4-foot MBP T8 systems) were 
eroding shipments of magnetic ballasts (e.g., for 4-foot MBP T12 
systems) for retrofits and new construction. Available data do not 
support NEMA's claim of strong non-residential construction growth in 
1990-2005; according to EIA estimates (e.g., in AEO1996 and AEO2000), 
commercial floorspace growth averaged approximately 1.35 percent 
annually during this period. A recent DOE lighting report suggests that 
replacements of failed lighting equipment and lighting retrofits 
contribute more to shipments than new construction.\37\ Based on 
available information, DOE maintains that the growth rate for 
historical ballast stock was less than the growth rate for historical 
shipments of electronic ballasts, which instead reflected a market 
transition from magnetic to electronic ballasts.
---------------------------------------------------------------------------

    \37\ U.S. Department of Energy, Office of Energy Efficiency and 
Renewable Energy. Energy Savings Potential of Solid-State Lighting 
in General Illumination Applications, 2010 to 2030. February 2010. 
Available at http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_energy-savings-report_10-30.pdf.
---------------------------------------------------------------------------

c. Projected Shipments
    By modeling ballast market segments and applying lifetime 
distribution, growth and emerging technologies penetration rate 
assumptions, and efficiency scenarios, DOE developed annual shipment 
projections for the analysis period (2014-2043). DOE could not obtain 
historical ballast shipments data from NEMA to validate its preliminary 
or NOPR analyses; however, NEMA agreed with DOE's preliminary TSD 
shipment trends and emerging technology forecasts in general. (NEMA, 
No. 29 at p. 2; NEMA No. 29 at p. 15) The subsections below address the 
lifetime, emerging technology, market trend, and efficiency scenario 
issues that DOE considered in its shipments analysis for the proposed 
rule.
i. Shipment Patterns and Ballast Lifetime Assumptions
    Estimated historical shipments varied from year to year and, when 
combined with preliminary assumptions for ballast lifetimes, lifetime 
distributions and floorspace growth, produced periodic oscillations in 
shipment projections for some ballast types (e.g., ballasts operating 
4-foot MBP T8 lamps). For the preliminary TSD, DOE assumed that ballast 
lifetimes were distributed across the last 3 years of the average 
physical lifetime for each analyzed ballast type.
    DOE received multiple comments regarding the oscillations in its 
preliminary shipment projections and its underlying assumptions about 
average ballast lifetimes and lifetime distributions. NEMA commented 
that the oscillations were too pronounced to be attributed to 
historical market trends or ballast performance. (NEMA, Public Meeting 
Transcript, No. 18 at pp. 248-249) The NEEA and NPCC agreed with NEMA 
that the oscillations were not realistic and suggested that the 
shipment patterns might stem from DOE's narrow assumed lifetime 
distributions. (NEEA and NPCC, No. 32 at p. 8) NEMA agreed with DOE's 
assumed average physical lifetimes for ballasts, but other commenters 
noted that ballast lifetime distributions should encompass ``economic 
lifetime'' (e.g., retrofits of functioning ballasts) as well as 
physical lifetime (e.g., replacement of failed ballasts). (NEMA, No. 29 
at p. 14; Philips, Public Meeting Transcript, No. 25 at pp. 245-246; 
NEEA and NPCC, No. 32 at p. 9)
    DOE agrees that its preliminary ballast shipment projections did 
not account for a sufficient range of economic and physical lifetimes. 
In its revised shipment analysis, DOE retained the original average 
physical lifetimes and used Weibull distributions for ballast lifetimes 
to better accommodate failures and retrofits. In combination with DOE's 
revised growth assumptions, the expanded lifetime distributions largely 
eliminated the pronounced shipment oscillations seen for some ballast 
types in the preliminary TSD.
ii. Emerging Technology Shipment Forecasts
    In its preliminary TSD, DOE modeled the impacts of emerging solid-
state lighting (SSL) technologies on shipments of analyzed ballasts 
used in the commercial sector (e.g., ballasts operating 4-foot MBP T8 
lamps). Philips commented that some projections showed SSL technologies 
capturing as much as 50 percent of the lighting market within 10 years. 
(Philips, Public Meeting Transcript, No. 22 at pp. 18-19) NEMA agreed 
with the overall trends in DOE's emerging technology shipment forecasts 
(excluding oscillations); however, Philips noted that DOE had not 
included sign ballasts in the same forecasts. (NEMA, No. 29 at p. 2; 
Philips, Public Meeting Transcript, No. 24 at pp. 234-235) While 
acknowledging some SSL market penetration, the NEEA and NPCC contended 
that fluorescent technologies would retain a large share of the signage 
market, particularly in backlighting applications. (NEEA and NPCC, No. 
32 at p. 3)
    For its revised shipments analysis, DOE retained its original 
emerging technology assumptions, with SSL penetration increasing to a 
maximum of 40 percent by 2028, resulting in decreased shipments for 
affected ballast types. DOE added sign ballasts to its revised emerging 
technology shipment forecasts, but agrees that SSL will have only 
limited penetration of backlit signage applications that currently use 
linear fluorescent sources based on DOE's previous research of SSL 
niche applications, which indicated that SSL is viable for neon and 
channel letter signage but is not yet suitable for fluorescent 
backlighting applications. Consequently, DOE assumed lower SSL 
penetration for sign ballast shipments, increasing to a maximum of 20 
percent by 2028.
iii. Anticipated Market Trends
    DOE also received comments about anticipated market trends for the 
period 2014-2043, addressing utility incentive programs, ballast 
replacement options, and new construction and renovation. NEEA and NPCC 
observed that utility incentive programs have driven lighting retrofits 
for many years and suggested that this trend would continue as more 
locations adopted incentive programs. (NEEA and NPCC, No. 32 at p. 9) 
NEEA and NPCC also commented that (1) new commercial construction will 
remain depressed but will be accompanied by an upsurge in major 
renovation and

[[Page 20133]]

lighting retrofits, and (2) overall ballast shipments may hold steady, 
exclusive of emerging technology penetration. (NEEA and NPCC, No. 32 at 
p. 10) At the same time, NEEA and NPCC were concerned that DOE lacked 
adequate market data to apportion ballast shipments between failure 
replacements and retrofits/new construction; further, they suggested 
that DOE should eliminate these distinctions if they have significant 
effects on selection of TSLs or final standards. (NEEA and NPCC, No. 32 
at p. 7) However, NEMA supported DOE's assumption that replacements 
would dominate future shipments of these ballasts, contending that the 
majority of building owners that already use T8 fluorescent systems 
would not retrofit their fixtures. (NEMA, Public Meeting Transcript, 
No. 10 at p. 250) The NEEA and NPCC believed that the market for 
ballasts in the residential sector would grow substantially as 
residential energy codes became more stringent and contended that DOE 
underestimated the associated savings potential for this product class. 
(NEEA and NPCC, No. 32 at pp. 2-3)
    DOE agrees that retrofits (incentive-induced, efficiency-induced, 
or both) will continue to contribute to future ballast shipments. For 
owners of existing improved lighting systems (e.g., 4-foot MBP T8, 
commercial sector), DOE agrees that these consumers will be less likely 
to retrofit their systems than to replace failed ballasts in kind 
because incremental efficiency gains would not justify the expense of 
system retrofits. DOE's research of available economic data also 
indicates that new commercial construction will remain relatively flat 
during the period 2014-2043. DOE agrees that residential energy codes 
will drive the market toward higher efficacy lighting systems, such as 
fluorescent; however, DOE believes that the related market growth will 
be greater for CFL-based fixtures than for 4-foot MBP fluorescent 
systems. DOE's review of available residential fixture surveys confirms 
that linear fluorescent fixtures are typically relegated to utility 
room, laundry, and some kitchen applications. Recent California 
tracking reports for residential lamps no longer address linear 
fluorescent lamps, given the dramatically increased adoption of screw- 
base CFLs, and a comparison of residential lighting data for 2005 \38\ 
and 2009 \39\ shows no significantly increased penetration for linear 
fluorescent systems. Viewing these trends in combination, DOE believes 
it has a reasonable basis for the market segments underlying its 
shipment projections (i.e., replacements of failed ballasts, retrofits, 
and new construction), and believes that these trends will contribute 
to modest future growth in ballast shipments and stock (exclusive of 
SSL penetration).
---------------------------------------------------------------------------

    \38\ RLW Analytics, ``2005 California statewide residential 
lighting and appliance efficiency saturation study, Final Report.'' 
August 2005. Available at: http://www.calmac.org/.
    \39\ Abstract for ongoing KEMA California residential lighting 
inventory and metering study available at: http://www.cee1.org/eval/db_pdf/1268.pdf.
---------------------------------------------------------------------------

iv. Efficiency Scenarios
    Several of the inputs for determining NES (e.g., the annual energy 
consumption per unit) and NPV (e.g., the total annual installed cost 
and the total annual operating cost savings) depend on product 
efficiency. For the preliminary analysis, DOE developed two shipment 
efficiency scenarios: ``Roll-up'' and ``Shift.'' The Roll-up scenario 
represents a standards case in which all product efficiencies in the 
base case that do not meet the standard would roll up to meet the new 
standard level. Consumers in the base case who purchase ballasts above 
the standard level are not affected as they are assumed to continue to 
purchase the same base-case ballast or lamp-and-ballast system. The 
Roll-up scenario characterizes consumers primarily driven by the first-
cost of the analyzed products.
    In contrast, the Shift scenario models a standards case in which 
the standard affects all base-case consumer purchases (regardless of 
whether their base-case efficiency is below the standard). In this 
scenario, any consumer may purchase a more efficient ballast, 
preserving the same relationship to the baseline ballast efficiency. 
For example, if a consumer purchased a ballast one efficiency level 
above the baseline, he would do the same after a standard is imposed. 
For this rulemaking, DOE assumed product efficiencies in the base case 
that do not meet the standard would roll up to meet the new standard 
level, as in a roll-up scenario. However, product efficiencies at or 
above the new standard level would shift to higher efficiency levels. 
As the standard level increases, market share incrementally accumulates 
at the highest standard level because it represents max tech (i.e., 
moving beyond this efficiency level is not achievable with today's 
technology).
    DOE received no comments to the preliminary TSD regarding its Roll-
up and Shift efficiency scenarios, and retained this approach for the 
proposed rule shipments analysis.
3. Site-to-Source Energy Conversion
    To estimate the national energy savings expected from appliance 
standards, DOE uses a multiplicative factor to convert site energy 
consumption (at the home or commercial building) into primary or source 
energy consumption (the energy required to convert and deliver the site 
energy). These conversion factors account for the energy used at power 
plants to generate electricity and losses in transmission and 
distribution, as well as for natural gas losses from pipeline leakage 
and energy used for pumping. For electricity, the conversion factors 
vary over time due to projected changes in generation sources (i.e., 
the types of power plants projected to provide electricity to the 
country). The factors that DOE developed are marginal values, which 
represent the response of the system to an incremental decrease in 
consumption associated with appliance standards.
    In the ballasts preliminary analysis, DOE used annual site-to-
source conversion factors based on the version of NEMS that corresponds 
to AEO2009. For today's NOPR, DOE updated its conversion factors based 
on the NEMS that corresponds to AEO2010, which provides energy 
forecasts through 2035. For 2036-2043, DOE used conversion factors that 
remain constant at the 2035 values.
    Section 1802 of the Energy Policy Act of 2005 (EPACT 2005) directed 
DOE to contract a study with the National Academy of Science (NAS) to 
examine whether the goals of energy efficiency standards are best 
served by measurement of energy consumed, and efficiency improvements, 
at the actual point of use or through the use of the full fuel cycle, 
beginning at the source of energy production. (Pub. L. 109-58 (Aug. 8, 
2005)) NAS appointed a committee on ``Point-of-Use and Full-Fuel-Cycle 
Measurement Approaches to Energy Efficiency Standards'' to conduct the 
study, which was completed in May 2009. The NAS committee defined full-
fuel-cycle (FFC) energy consumption as including, in addition to site 
energy use, the following: Energy consumed in the extraction, 
processing, and transport of primary fuels such as coal, oil, and 
natural gas; energy losses in thermal combustion in power generation 
plants; and energy losses in transmission and distribution to homes and 
commercial buildings.\40\
---------------------------------------------------------------------------

    \40\ The National Academies, Board on Energy and Environmental 
Systems, Letter to Dr. John Mizroch, Acting Assistant Secretary, 
U.S. DOE, Office of EERE from James W. Dally, Chair, Committee on 
Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy 
Efficiency Standards, May 15, 2009.

---------------------------------------------------------------------------

[[Page 20134]]

    In evaluating the merits of using point-of-use and FFC measures, 
the NAS committee noted that DOE uses what the committee referred to as 
``extended site'' energy consumption to assess the impact of energy use 
on the economy, energy security, and environmental quality. The 
extended site measure of energy consumption includes the energy 
consumed during the generation, transmission, and distribution of 
electricity; unlike the FFC measure, however, it does not include the 
energy consumed in extracting, processing, and transporting primary 
fuels. A majority of the NAS committee concluded that extended site 
energy consumption understates the total energy consumed to make an 
appliance operational at the site. As a result, the NAS committee 
recommended that DOE consider shifting its analytical approach over 
time to use a FFC measure of energy consumption when assessing national 
and environmental impacts, especially with respect to the calculation 
of GHG emissions. The NAS committee also recommended that DOE provide 
more comprehensive information to the public through labels and other 
means, such as an enhanced Web site. For those appliances that use 
multiple fuels (e.g., water heaters), the NAS committee indicated that 
measuring FFC energy consumption would provide a more complete picture 
of energy consumption and would allow comparisons across many different 
appliances as well as an improved assessment of impacts.
    In response to the NAS recommendations, DOE issued, on August 20, 
2010, a Notice of Proposed Policy proposing to incorporate an FFC 
analysis into the methods it uses to estimate the likely impacts of 
energy conservation standards on energy use and emissions. 
Specifically, DOE proposed to use FFC measures of energy and GHG 
emissions, rather than the primary (extended site) energy measures it 
currently uses. Additionally, DOE proposed to work collaboratively with 
the Federal Trade Commission (FTC) to make FFC energy and GHG emissions 
data publicly available, which would enable consumers to make cross-
class comparisons. On October 7, 2010, DOE held an informal public 
meeting to discuss and receive comments on its planned approach. The 
Notice, a transcript of the public meeting and all public comments 
received by DOE are available at http://www.regulations.gov/search/Regs/home.html#docketDetail?R=EERE-2010-BT-NOA-0028. Following the 
close of the public comment period, DOE intends to develop a final 
policy statement on these subjects and then take steps to implement 
that policy in rulemakings and other activities.

D. Consumer Sub-Group Analysis

    In analyzing the potential impact of new or amended standards on 
consumers, DOE evaluates the impact on identifiable sub-groups of 
consumers (e.g., low-income households) that a national standard may 
disproportionately affect. DOE received no comments regarding specific 
sub-groups and, therefore, evaluated the same sub-groups addressed in 
the 2009 Lamps Rule, assuming that consumers using GSFL would share 
similar characteristics with ballast consumers. Specifically, DOE 
evaluated the following consumer sub-groups for the proposed rule: Low-
income households; institutions of religious worship; and institutions 
that serve low-income populations (e.g., small nonprofits).
    The NOPR TSD chapter 12 presents the consumer subgroup analysis.

E. Manufacturer Impact Analysis

1. Overview
    DOE performed a manufacturer impact analysis (MIA) to estimate the 
financial impact of new and amended energy conservation standards on 
manufacturers of ballasts, and to calculate the impact of such 
standards on employment and manufacturing capacity. The MIA has both 
quantitative and qualitative aspects. The quantitative part of the MIA 
primarily relies on the GRIM, an industry cash-flow model using inputs 
specific to this rulemaking. The key GRIM inputs are data on the 
industry cost structure, product costs, shipments, and assumptions 
about markups and conversion expenditures. The key output is the 
industry net present value (INPV). Different sets of shipment and 
markup assumptions (scenarios) will produce different results. The 
qualitative part of the MIA addresses factors such as product 
characteristics, characteristics of and impacts on particular sub-
groups of firms, as well as important market and product trends. 
Chapter 13 of the NOPR TSD outlines the complete MIA.
    DOE conducted the MIA for this rulemaking in three phases. In Phase 
1, Industry Profile, DOE prepared an industry characterization. Phase 
2, Industry Cash Flow, focused on the financial aspects of the industry 
as a whole. In this phase, DOE used the GRIM to prepare an industry 
cash-flow analysis based on publicly available information gathered in 
Phase 1. This information enabled DOE to adapt the GRIM structure to 
analyze the impact of new and amended standards on ballast 
manufacturers specifically. In Phase 3, Sub-Group Impact Analysis, the 
Department conducted structured, detailed interviews with a 
representative cross-section of manufacturers that represent more than 
90 percent of domestic ballast sales. During these interviews, DOE 
discussed engineering, manufacturing, procurement, and financial topics 
specific to each company, and obtained each manufacturer's view of the 
industry as a whole. The interviews provided valuable information that 
the Department used to evaluate the impacts of new and amended 
standards on manufacturers' cash flows, manufacturing capacities, and 
employment levels. Each of these phases is discussed in further detail 
below.
a. Phase 1: Industry Profile
    In Phase 1 of the MIA, DOE prepared a profile of the ballast 
industry based on the market and technology assessment prepared for 
this rulemaking. Before initiating the detailed impact studies, DOE 
collected information on the present and past structure and market 
characteristics of the industry. This information included market share 
data, product shipments, manufacturer markups, and the cost structure 
for various manufacturers. The industry profile includes: (1) Further 
detail on the overall market and product characteristics; (2) estimated 
manufacturer market shares; (3) financial parameters such as net plant, 
property, and equipment; selling, general, and administrative (SG&A) 
expenses; cost of goods sold; and other parameters; and (4) trends in 
the ballast market, including the number of firms, technology, sourcing 
decisions, and pricing.
    The industry profile included a top-down cost analysis of ballast 
manufacturers that DOE used to derive preliminary financial inputs for 
the GRIM (e.g., revenues; material, labor, overhead, and depreciation 
expenses; SG&A expenses; and research and development (R&D) expenses). 
DOE also used public sources of information to further calibrate its 
initial characterization of the industry, including Security and 
Exchange Commission 10-K filings (available at http://www.sec.gov), 
Standard & Poor's stock reports (available at http://www2.standardandpoors.com), and corporate annual reports. DOE

[[Page 20135]]

supplemented this public information with data released by privately 
held companies.
b. Phase 2: Industry Cash-Flow Analysis
    Phase 2 of the MIA focused on the financial impacts of the 
potential new and amended energy conservation standards on the industry 
as a whole. New or amended energy conservation standards can affect 
manufacturer cash flow in three distinct ways: (1) By creating a need 
for increased investment, (2) by raising production costs per unit, and 
(3) by altering revenue due to higher per-unit prices and possible 
changes in sales volumes. To quantify these impacts, in Phase 2 DOE 
used the GRIM to perform a preliminary cash-flow analysis of the 
ballast industry. In performing this analysis, DOE used the financial 
values determined during Phase 1 and the shipment scenarios used in the 
NIA.
c. Phase 3: Sub-Group Impact Analysis
    In Phase 3, DOE conducted interviews with manufacturers and refined 
its preliminary cash-flow analysis. Many of the manufacturers 
interviewed also participated in interviews for the engineering 
analysis. As indicated above, the MIA interviews broadened the 
discussion from primarily technology-related issues to include 
business-related topics. One key objective for DOE was to obtain 
feedback from the industry on the assumptions used in the GRIM and to 
isolate key issues and concerns. See section 0 for a description of the 
key issues manufacturers raised during the interviews.
    Using average cost assumptions to develop an industry cash-flow 
estimate does not adequately assess differential impacts of new or 
amended standards among manufacturer sub-groups. For example, small 
manufacturers, niche manufacturers, or manufacturers exhibiting a cost 
structure that largely differs from the industry average could be more 
negatively affected. To address this possible impact, DOE used the 
results of the industry characterization analysis in Phase 1 to group 
manufacturers that exhibit similar production and cost structure 
characteristics. Furthermore, interview discussions that focused on 
financial topics specific to each manufacturer allowed DOE to gauge the 
potential for differential impacts on any sub-groups of manufacturers.
    DOE identified two sub-groups for a separate impact analysis--small 
manufacturers and sign ballast manufacturers. For its small business 
manufacturer sub-group analysis DOE used the small business size 
standards published by the Small Business Administration (SBA) to 
determine whether a company is considered a small business 65 FR 30836, 
30848 (May 15, 2000), as amended at 65 FR 53533, 53544 (Sept. 5, 2000) 
and codified at 13 CFR part 121. To be categorized as a small business, 
a fluorescent lamp ballast manufacturer and its affiliates may employ a 
maximum of 750 employees. The 750-employee threshold includes all 
employees in a business's parent company and any other subsidiaries. 
Based upon this classification, DOE identified at least ten small 
fluorescent lamp ballast manufacturers that qualify as small businesses 
per the applicable SBA definition.
    DOE investigated sign ballast manufacturers as a second sub-group. 
Unlike the traditional fluorescent lamp ballast market, which is 
dominated by four large manufacturers with high-volume product lines, 
the sign ballast market is significantly more fragmented, with many 
small manufacturers providing products in low volumes to distinct 
markets. The fluorescent lamp ballast sub-groups are discussed in 
chapter 13 of the TSD and in section 0 of today's notice, and small 
business impacts are analyzed in section VII.B.
2. GRIM Analysis
    DOE uses the GRIM to quantify the changes in cash flow that result 
in a higher or lower industry value. The GRIM analysis uses a standard, 
annual cash-flow analysis that incorporates manufacturer costs, 
markups, shipments, and industry financial information as inputs, and 
models changes in costs, investments, and manufacturer margins that 
would result from new and amended energy conservation standards. The 
GRIM spreadsheet uses the inputs to arrive at a series of annual cash 
flows, beginning with the base year of the analysis, 2011, and 
continuing to 2043. DOE calculated INPVs by summing the stream of 
annual discounted cash flows during this period. For ballasts, DOE uses 
a real discount rate of 7.4 percent for all products. DOE's discount 
rate estimate was derived from industry financials then modified 
according to feedback during manufacturer interviews.
    The GRIM calculates cash flows using standard accounting principles 
and compares changes in INPV between a base case and various TSLs (the 
standards cases). The difference in INPV between the base case and a 
standards case represents the financial impact of the amended standard 
on manufacturers. As discussed previously, DOE collected this 
information on the critical GRIM inputs from a number of sources, 
including publicly available data and interviews with a number of 
manufacturers (described in the next section). The GRIM results are 
shown in section 0. Additional details about the GRIM can be found in 
chapter 13 of the TSD.
    DOE typically presents its estimates of industry impacts by groups 
of the major product types served by the same manufacturers. In the 
fluorescent lamp ballast industry, four major manufacturers sell the 
vast majority of shipments in nearly all product classes, with the 
exception of sign ballasts, although some major manufacturers sell into 
that market as well. As such, DOE decided to present the GRIM results 
for all four analyzed product classes in one product grouping. The 
impacts on sign ballast manufacturers are broken out separately as a 
sub-group analysis in section 0.
a. GRIM Key Inputs
i. Manufacturer Production Costs
    Manufacturing a higher-efficiency product is typically more 
expensive than manufacturing a baseline product due to the use of more 
complex components, which are more costly than baseline components. The 
changes in the MPCs of the analyzed products can affect the revenues, 
gross margins, and cash flow of the industry, making these product cost 
data key GRIM inputs for DOE's analysis.
    To calculate MPCs at each EL, DOE followed a two-step process. 
First, DOE derived MSPs for each analyzed product and efficiency level 
from blue book, online retail, and teardown-sourced prices as described 
in section 0 above. Next, DOE discounted these MSPs by the manufacturer 
markup to arrive at the MPCs. For all product classes, DOE used a 1.4 
manufacturer markup based on manufacturer feedback. DOE also used 
confidential information from manufacturer interviews to verify its MPC 
estimates. In addition, DOE used teardown cost data to disaggregate the 
MPCs into material, labor, and overhead costs.
ii. Base-Case Shipments Forecast
    The GRIM estimates manufacturer revenues based on total unit 
shipment forecasts and the distribution of these values by efficiency 
level. Changes in sales volumes and efficiency mix over time can 
significantly affect manufacturer finances. For this analysis, the GRIM 
uses the NIA's annual shipment forecasts from 2011 to 2043, the end of 
the analysis period. In the

[[Page 20136]]

shipments analysis, DOE also estimated the distribution of efficiencies 
in the base case for all product classes. See chapter 10 of the TSD for 
additional details.
iii. Product and Capital Conversion Costs
    New and amended energy conservation standards will cause 
manufacturers to incur conversion costs to bring their production 
facilities and product designs into compliance. For the MIA, DOE 
classified these conversion costs into two major groups: (1) Product 
conversion costs and (2) capital conversion costs. Product conversion 
costs are investments in research, development, testing, marketing, and 
other non-capitalized costs necessary to make product designs comply 
with the new or amended energy conservation standard. Capital 
conversion costs are investments in property, plant, and equipment 
necessary to adapt or change existing production facilities such that 
new product designs can be fabricated and assembled.
    DOE's interviews with manufacturers revealed that the majority of 
the conversion costs manufacturers expect to incur at various TSLs 
derive from the need to develop new and improved circuit designs, 
rather than the purchase of new capital equipment. Due to the flexible 
nature of most ballast production equipment, manufacturers do not 
expect new or amended standards to strand a significant share of their 
production assets. As opposed to other more capital-intensive appliance 
industries, much of the cash outlay required to achieve higher 
efficiency levels would be expensed through research and development, 
engineering, and testing efforts.
    DOE based its estimates of the product conversion costs that would 
be required to meet each TSL on information obtained from manufacturer 
interviews, the engineering analysis, the NIA shipment analysis, and 
market information about the number of models and stock-keeping units 
(SKUs) each major manufacturer supports. DOE estimated the product 
development costs manufacturers would incur for each model that would 
need to be converted in response to new or amended energy conservation 
standards based on the necessary engineering and testing resources 
required to redesign each model. The R&D resources required to reach 
the efficiency levels represented at each TSL varied according to 
whether models could be converted based on minor upgrades, redesigns 
based on existing topologies, or full redesigns. In addition to per-
model R&D costs, DOE considered testing and validation costs for every 
SKU, which included internal testing, UL testing, additional 
certifications, pilot runs, and product training. DOE then multiplied 
these per-model and per-SKU estimates by the total number of ballast 
models and SKUs offered based on information from manufacturer catalogs 
and interviews to calculate the total potential costs each manufacturer 
could incur to redesign its products. Next, to assign these costs to 
particular representative product classes, DOE multiplied this total 
for each manufacturer by the percentage of models in each product class 
based on the NIA shipment analysis and manufacturer feedback. Lastly, 
to consider the models manufacturers offered that already met 
efficiency levels above baseline, DOE multiplied the total costs for 
each product class by the percentage of models DOE determined would 
need to be redesigned at each efficiency level based on data from the 
engineering analysis and manufacturer catalogs.
    This methodology derived total product conversion cost estimates 
for most product classes and efficiency levels. For residential 
ballasts, DOE assumed a smaller redesign cost per model. According to 
manufacturer interviews, the residential ballast market does not 
support manufacturer attempts to differentiate through better designs, 
product variation, or additional value-added features. As such, 
suppliers, often Asian manufacturers selling directly to fixture 
manufacturers, make little attempt to compete on anything other than 
price. Interviews suggested suppliers would leverage R&D invested in 
the larger, more valuable commercial market, making minor design 
adjustments to meet minimum requirements of the residential market. For 
sign ballasts, DOE determined the number of magnetic models on the 
market based on manufacturer catalogs and estimated testing and 
redesign costs for each of these models. DOE's estimates of the product 
conversion costs for fluorescent lamp ballasts addressed in this 
rulemaking can be found in section 0, below and in chapter 13 of the 
NOPR TSD.
    As discussed above, DOE also estimated the capital conversion costs 
manufacturers would incur to comply with potential amended energy 
conservation standards represented by each TSL. During interviews, DOE 
asked manufacturers to estimate the capital expenditures required to 
expand the production of higher-efficiency products. These estimates 
included the required tooling and plant changes that would be necessary 
if product lines meeting the potential required efficiency level did 
not currently exist. Estimates for capital conversion costs varied 
greatly from manufacturer to manufacturer, as manufacturers anticipated 
different paths to compliance based on the modernity, flexibility, and 
level of automation of the equipment already existing in their 
factories. However, all manufacturers DOE interviewed indicated that 
capital costs would be relatively moderate compared to the required 
engineering effort. The modular nature of ballast production and the 
flexibility of the necessary production capital allows for significant 
equipment sharing across product lines. Based on interviews, DOE 
assumed that for most manufacturers, design changes would require 
moderate product conversion costs but would not require significant 
changes to existing production lines and equipment. It is therefore 
unlikely that most manufacturers would require high levels of capital 
expenditures compared to ordinary capital additions or existing net 
plants, property, and equipment (PPE).
    To calculate its estimates of capital conversion costs, DOE 
aggregated its estimated capital costs for the major players in the 
industry rather than scaled up a ``typical'' manufacturer's expected 
conversion costs. Two considerations drove this choice in methodology. 
First, manufacturer feedback varied widely, making it impossible to 
characterize a ``typical'' manufacturer for conversion cost purposes. 
Second, the expected costs often depended upon the timing of the 
manufacturers' last redesign efforts and its strategy regarding the 
capital intensity of their plants and sourcing decisions. DOE estimated 
that some manufacturers would incur very minor capital expenditures per 
product class for testing equipment, even at max tech levels, as their 
factories' capital equipment would not require significant modification 
to produce higher-efficiency ballasts. For other manufacturers, DOE 
assumed greater investments would be necessary to upgrade lines for 
each product class with new wave solder equipment, reflow solder 
systems and surface mount device placement machines. The placement 
machines become increasingly important as ballasts become more complex 
with additional circuitry and components. DOE estimates capital 
conversion costs would rise most rapidly at high-efficiency levels not 
only because of the

[[Page 20137]]

new production and testing equipment described above but also because 
manufacturers would need to expand capacity to account for lower 
throughput on high-efficiency lines.
    For residential ballasts, DOE assumed the same magnitude of 
conversion costs as for commercial ballasts of the same starting 
method. While residential ballasts are generally not produced by the 
major four manufacturers, the Asian manufacturers who source them to 
domestic companies would be required to make similar modifications to 
their production lines in response to standards. For sign ballasts, DOE 
was unable to interview a representative sample of the industry. 
However, DOE recognizes that magnetic ballast lines have more capital 
exposure to changes in efficiency standards than electronic lines due 
to the change in technology. Because several manufacturers produce 
magnetic sign ballasts, DOE assumed new lines would be needed to 
convert magnetic products to electronic ballasts and scaled these line 
costs to the entire sign ballast market for this product class.
    Finally, DOE estimated industry capital conversion costs for all 
analyzed product classes other than residential ballasts and sign 
ballasts by extrapolating the interviewed manufacturers' costs for each 
product class to account for the companies that DOE did not interview. 
DOE's estimates of the capital conversion costs for fluorescent lamp 
ballasts can be found in section 0, below and in chapter 13 of the NOPR 
TSD.
b. GRIM Scenarios
i. Shipment Scenarios
    In the NIA, DOE modeled a roll-up and a shift scenario to represent 
two possible standards case efficiency distributions for the years 
beginning 2014, the year that compliance with revised standards is 
proposed to be required, through 2043. The GRIM uses each of these 
forecasts as alternative scenarios. The roll-up scenario represents the 
case in which all shipments in the base case that do not meet the new 
standard roll up to meet the new standard level. Consumers in the base 
case who purchase ballasts above the standard level are not affected as 
they are assumed to continue to purchase the same base-case ballast or 
lamp-and-ballast system in the standards case. In contrast, in a shift 
scenario, DOE assumes that any consumer may purchase a more efficient 
ballast. The shift scenario models a standards case in which all base-
case consumer purchases are affected by the standard (regardless of 
whether their base-case efficiency is below the standard). As the 
standard level increases, market share migrates to, and accumulates at, 
the highest efficiency level because it represents ``max tech'' for 
each representative ballast type (i.e., moving beyond it is impossible 
given available technology options). See chapter 10 of the NOPR TSD for 
more information on the ballasts standards-case shipment scenarios.
ii. Technology Scenarios
    Each shipment scenario (roll-up and shift) described above is 
modeled in combination with the existing and emerging technologies base 
case shipment scenarios, resulting in four sets of shipments. The GRIM 
uses each set of shipment results to separately model impacts on INPV. 
In the existing technologies scenario, no technologies outside of those 
covered by this rulemaking were analyzed for market penetration. 
However, DOE recognizes that rapidly emerging new lighting technologies 
could penetrate the fluorescent lighting market and significantly 
affect ballast shipment forecasts. Therefore, in the emerging 
technologies scenario, DOE calculated the market penetration of light 
emitting diode (LED) and ceramic metal halide (CMH) systems annually 
through 2043, assessing each sector separately. DOE decreased the 
analyzed market size in each year in each sector by the amount that 
corresponded to the highest level of market penetration achieved by LED 
or CMH systems. The assumptions and methodology that drive these 
scenarios and the details specific to each are described in chapter 10 
of the NOPR TSD.
iii. Markup Scenarios
    As discussed above, manufacturer selling prices include direct 
manufacturing production costs (i.e., labor, material, and overhead 
estimated in DOE's MPCs) and all non-production costs (i.e., SG&A, R&D, 
and interest), along with profit. To calculate the MSPs in the GRIM, 
DOE applied markups to the MPCs estimated in the engineering analysis 
for each product class and efficiency level. Modifying these markups in 
the standards case yields different sets of impacts on manufacturers. 
For the MIA, DOE modeled two standards-case markup scenarios to 
represent the uncertainty regarding the potential impacts on prices and 
profitability for manufacturers following the implementation of amended 
energy conservation standards: (1) A preservation of operating profit 
markup scenario, and (2) a two-tier markup scenario. These scenarios 
lead to different markups values, which, when applied to the inputted 
MPCs, result in varying revenue and cash flow impacts.
    DOE implemented the preservation of operating profit markup 
scenario because manufacturers stated that they do not expect to be 
able to markup the full cost of production given the highly competitive 
market, in the standards case. The preservation of operating profit 
markup scenario assumes that manufacturers are able to maintain only 
the base-case total operating profit in absolute dollars in the 
standards case, despite higher product costs and investment. The base-
case total operating profit is derived from marking up the cost of 
goods sold for each product by a flat percentage (the baseline markup, 
discussed in chapter 5 of the NOPR TSD) to cover standard SG&A 
expenses, R&D expenses, and profit. To derive this percentage, DOE 
evaluated publicly available financial information for manufacturers of 
ballasts. DOE also requested feedback on this value during manufacturer 
interviews. DOE adjusted the manufacturer markups in the GRIM at each 
TSL to yield approximately the same earnings before interest and taxes 
in the standards case in the year after the compliance date of the 
amended standards as in the base case. DOE assumed that the industry-
wide impacts would occur under the new minimum efficiency levels. DOE 
altered the markups only for the minimally compliant products in this 
scenario, with margin impacts not occurring for products that already 
exceed the amended energy conservation standard. The preservation of 
operating profit markup scenario represents the upper bound of industry 
profitability following amended energy conservation standards. Under 
this scenario, while manufacturers are not able to yield additional 
operating profit from higher production costs and the investments 
required to comply with the amended energy conservation standard, they 
are able to maintain the same operating profit in the standards case as 
was earned in the base case.
    DOE also modeled a lower bound profitability scenario. During 
interviews, multiple manufacturers stated that they offer two tiers of 
product lines that are differentiated, in part, by efficiency level. 
The higher-efficiency tier typically earns a premium over the baseline 
efficiency tier. Several manufacturers suggested that the premium 
currently earned by the higher-efficiency tier would erode under new or 
amended standards due to the

[[Page 20138]]

disappearance of the baseline efficiency tier, which would 
significantly harm profitability. Because of this pricing dynamic 
described by manufacturers and because of the pressure from luminaire 
manufacturers to commoditize the baseline efficiency tier, DOE also 
modeled a two-tier markup scenario. In this scenario, DOE assumed that 
the markup on fluorescent lamp ballasts varies according to two 
efficiency tiers in both the base case and the standards case. During 
the MIA interviews, manufacturers provided information on the range of 
typical efficiency levels in those two tiers and the change in 
profitability at each level. DOE used this information, retail prices 
derived in its product price determination, and industry average gross 
margins to estimate markups for fluorescent lamp ballasts under a two-
tier pricing strategy in the base case. In the standards case, DOE 
modeled the situation in which portfolio reduction squeezes the margin 
of higher-efficiency products as they become the new baseline, 
presumably high-volume products. This scenario is consistent with 
information submitted during manufacturing interviews and responds to 
manufacturers' concern that DOE standards could severely disrupt 
profitability.
3. Discussion of Comments
    During the April 2010 public meeting, interested parties commented 
on the assumptions and results of the preliminary TSD. Oral and written 
comments discussed several topics, including conversion costs, impact 
on competition, potential benefits to ballast manufacturers, and 
manufacturer information. DOE addresses these comments below.
a. Conversion Costs
    Several manufacturers expressed concerns about the capital and 
product conversion costs that would be necessary to meet particular 
efficiency levels. Philips stated that improvements would yield only 
minor efficiency gains, but may require redesigning entire product 
lines. As such, the manufacturer questioned whether the potential 
returns merited these large investments in time and resources. Philips 
noted that this phenomenon of diminishing returns is particularly true 
for those efficiency levels DOE identified as max tech. (Philips, 
Public Meeting Transcript, No. 12 at p. 155-156)
    In this NOPR, DOE estimates the capital and product conversion 
costs required to meet all TSLs, including the max tech level. These 
conversion costs are a key input into the GRIM and directly impact the 
change in INPV (which is outputted from the model) due to standards. 
DOE conducts the manufacturing impact analysis, including the 
calculation of conversion costs, regardless of the energy savings that 
result from a given TSL. When determining which TSL to propose, DOE 
weighs the benefits, such as energy savings, against the burdens, such 
as loss of INPV, to determine the highest TSL that is both 
technologically feasible and economically justified.
    Philips and NEMA also expressed concern that the investments made 
to meet new or amended energy conservation standards may never be 
recouped because of potential changes to the lighting market landscape. 
Philips stated that the industry is transitioning from traditional 
fixed light output lighting to alternatives such as control systems and 
solid-state lighting, so the opportunity for investment payback will be 
severely diminished. (Philips, Public Meeting Transcript, No. 12 at p. 
274-275) NEMA similarly stated that the additional cost required to 
meet max tech standard levels would be a burden for manufacturers 
without subsequent benefit because the demand for fixed output ballasts 
is expected to significantly decline in the future. (NEMA, No. 29 at p. 
17-18)
    As stated in section 0 above, DOE recognizes that rapidly emerging 
new lighting technologies, such as LEDs, could penetrate the 
fluorescent lighting market and significantly affect ballast shipment 
forecasts. Therefore, DOE modeled an emerging technologies scenario in 
its shipments analysis. DOE input this scenario into the GRIM to 
demonstrate the impact that reduced demand could have on fluorescent 
lamp ballast manufacturers. The INPV results presented under the 
emerging technologies scenario show the impacts of the capital and 
product conversion costs required to meet each TSL under the base-case 
assumption that emerging lighting technologies will penetrate the 
ballast market. The INPV results for the existing and emerging 
technologies scenarios are shown in section 0, and more information on 
the methodology behind these scenarios can be found in chapter 10 of 
the NOPR TSD.
    NEMA was also concerned about the conversion costs required for a 
particular product class. NEMA noted that for 8-foot HO lamps product 
offerings are limited and the power levels involved can make 
development of a reliable product more time-consuming than the other 
product categories considered. (NEMA, No. 29 at p. 7) DOE takes 
development time into account in its product conversion cost estimates. 
The increased development time for 8-foot HO lamps is reflected through 
higher estimated R&D costs due to the need to put more resources toward 
product design for a longer period of time.
b. Impact on Competition
    NEMA stated that adoption of NEMA Premium levels for national 
requirements could impose a disproportionate burden on companies that 
do not currently have product lines compliant with the NEMA Premium 
program, which could unfairly impact the competitive nature of the 
marketplace. (NEMA, No. 29 at p. 4) Similarly, NEMA stated that 
adoption of the max tech levels in the preliminary analysis could 
impose a disproportionate burden on companies that do not currently 
have product lines utilizing the latest technology from the major 
manufacturers. (NEMA, No. 29 at p. 6)
    According to a NEMA Premium publication \41\ that lists qualifying 
electronic ballast models, at least fourteen ballast manufacturers 
already have product lines compliant with the NEMA Premium program. 
These manufacturers represent both large manufacturers, with over 90 
percent of fluorescent lamp ballast market share, and smaller, niche 
manufacturers. While DOE will solicit the views of the Attorney General 
on impacts of these proposed standards as required by EPCA, DOE does 
not believe at this time that setting standards at NEMA Premium levels 
would unfairly impact competition in the ballast market because a large 
quantity and variety of manufacturers already offer NEMA Premium 
models. DOE agrees, however, that adoption of max tech levels presented 
in the preliminary analysis could impose a disproportionate burden on 
smaller manufacturers. During manufacturer interviews, DOE questioned 
whether any firms held intellectual property that gave them a 
competitive advantage. DOE did not learn of any technologies that some 
manufacturers employ that enable them to meet max tech levels that 
other manufacturers cannot. However, DOE believes that smaller 
manufacturers may not be able to redesign all of their product 
offerings within the 3-year compliance period because of limited R&D 
resources and low shipment volumes over which to spread out conversion 
costs. See the Regulatory

[[Page 20139]]

Flexibility Analysis in section 0 for a full discussion on DOE's 
assessment of potential impacts on small manufacturers.
---------------------------------------------------------------------------

    \41\ http://www.nema.org/gov/energy/efficiency/upload/nema_premium_electronic_ballast_program.pdf.
---------------------------------------------------------------------------

c. Potential Benefits to Ballast Manufacturers
    Earthjustice stated that if DOE concludes that amended standards 
for fluorescent lamp ballasts would result in a market shift to other 
lighting products such as LEDs, DOE must take into account any positive 
impacts of that market shift on fluorescent lamp ballast manufacturers 
who also produce those substitute technologies. Earthjustice further 
commented that EPCA requires DOE to consider positive impacts (due to 
revenues from substitute products) in addition to any negative impacts 
from new or amended standards because DOE must consider the impact on 
the entire company rather than only the ballasts division. 
(Earthjustice, No. 31 at p. 1-2)
    DOE does believe that there is potential for the market to 
increasingly migrate from traditional fixed light output fluorescent 
lamp ballasts to alternate technologies such as LEDs. For this reason, 
DOE models the emerging technologies shipment scenario as described in 
section 0 above and in chapter 10 of the NOPR TSD. This market shift to 
emerging technologies occurs in the base case. That is, the shift is 
not standards-induced. DOE excludes the revenue from substitute 
technologies earned by manufacturers who produce ballasts in the GRIM 
since the revenue stream would be present in both the base case and the 
standards case, resulting in no impact on the change in INPV.
4. Manufacturer Interviews
    DOE interviewed manufacturers representing more than 90 percent of 
fluorescent lamp ballast sales. These interviews were in addition to 
those DOE conducted as part of the engineering analysis. The 
information gathered during these interviews enabled DOE to tailor the 
GRIM to reflect the unique financial characteristics of the ballasts 
industry. All interviews provided information that DOE used to evaluate 
the impacts of potential new and amended energy conservation standards 
on manufacturer cash flows, manufacturing capacities, and employment 
levels. Appendix 13A of the NOPR TSD contains the interview guides DOE 
used to conduct the MIA interviews.
    During the manufacturer interviews, DOE asked manufacturers to 
describe their major concerns about this rulemaking. The following 
sections describe the most significant issues identified by 
manufacturers. DOE also includes additional concerns in chapter 13 of 
the TSD.
a. Component Shortage
    An ongoing shortage of electronic components critical to the 
production of ballasts remains a key concern for all ballast 
manufacturers. Because the shortage is particularly acute for those 
components critical to high efficiency ballasts, new and amended 
standards could exacerbate the market situation, according to 
manufacturers.
    During the recent economic downturn, component suppliers 
significantly scaled back production. When demand recovered as the 
recession ended, electronics suppliers lacked the capacity to meet 
demand beginning in the fall of 2009. Since then, component suppliers 
have been reluctant to invest in additional capacity because of 
concerns that the downturn has not actually ended. Additionally, 
component manufacturers have seen customers place duplicate orders with 
several suppliers (only to later cancel the orders with all but one 
supplier), a practice that has reinforced supplier skepticism over 
market demand. Electrolytic capacitors and transistors, which are 
produced almost entirely in Asia, are key examples of ballast 
components in relatively short supply. The fact that these components 
are shared among many electronics industries has exacerbated the 
problem for the ballast industry. Manufacturers of more expensive 
electronic applications, such as televisions and cell phones, can more 
easily absorb what for them are relatively smaller cost increases. In 
turn, these other industries can afford to pay more and receive 
priority over the ballast industry.
    As a result, manufacturers have faced longer lead times and higher 
rush-order charges to fill their own customers' orders. Manufacturers 
predicted the component shortage will last at least into 2011 and were 
concerned that energy conservation standards for fluorescent lamp 
ballasts would exacerbate the ongoing component shortage.
b. Market Erosion
    Manufacturers stated that emerging technologies are penetrating the 
fluorescent lamp ballasts market. Several manufacturers worried that 
new and amended energy conservation standards for ballasts would force 
them to invest in a shrinking market. Depending on the pace of market 
penetration of emerging technologies--such as LEDs--these investments 
might never be recouped. Also, manufacturers were concerned that new 
and amended standards on ballasts could hasten the switch to emerging 
technologies by lowering the difference in their first-cost price. If 
the standard did increase the natural migration toward new technology, 
manufacturers said they would be less likely to make the substantial 
investments to modify ballasts production equipment for some of their 
product lines. (To address emerging technologies issues discussed by 
manufacturers, DOE included several shipment scenarios in both the NIA 
and the GRIM. See chapter 10 and chapter 13 of the NOPR TSD for a 
discussion of the shipment scenarios used in the respective analyses.)
c. Opportunity Cost of Investments
    Manufacturers also stated that the financial burden of developing 
products to meet amended energy conservation standards has an 
opportunity cost due to the limited pool of capital and R&D dollars. 
Currently, manufacturers are reinvesting a significant share of the 
cash flow from fluorescent lamp ballast operations into emerging 
technologies such as LEDs and control systems. Any investments incurred 
to meet amended ballast standards would therefore reflect foregone 
investments in these emerging technologies, which the industry believes 
offer both better prospects for market growth and greater potential for 
energy savings than traditional fixed-light-output fluorescent lamp 
ballasts. Compared to these emerging technologies, manufacturers stated 
that they have little room for efficiency improvements within their 
ballast product lines.
d. Maintaining Product Tiers
    Several manufacturers stated that they would not want standards to 
be so stringent that they eliminate the ability to carry two efficiency 
tiers within a product class. Most manufacturers--and all major 
manufacturers--currently offer both standard-efficiency and high-
efficiency product lines. The standard-efficiency product lines are 
typically lower cost and lower margin. These high-volume products 
provide economies of scale and, by establishing a market presence and 
brand, enhance manufacturers' ability to enter the more profitable 
retrofit and aftermarket sales. Meanwhile, the high-efficiency product 
lines allow manufacturers to bundle other features within these 
products, which allows them to command a better margin. Utility rebates 
and other similar programs also play a large role in driving the 
purchase of higher efficiency ballasts.

[[Page 20140]]

    If DOE set standards that did not leave room for a high-efficiency 
product to differentiate itself from a baseline product, manufacturers 
believe the new standard would commoditize these now-premium products. 
In turn, prices of the high-efficiency ballasts would fall to the level 
of what were formerly the lower-tier products, harming manufacturer 
profitability. Utility companies and other programs would have little 
incentive to offer rebates for these former upper-tier products, which 
would then be baseline units. Without rebate incentives, sales to the 
energy retrofit market could decrease greatly due to cost, which would 
diminish the potential for energy savings due to the standard.
e. Adequate Compliance Periods
    A number of manufacturers expressed concern about the timing 
between the announcement of the standard and the compliance date of the 
standard. Manufacturers stated that they need adequate time to develop 
products that meet the amended efficiency standards. Without enough 
development time, manufacturers may not have the resources to redesign 
and test all of their product lines before the required compliance 
date, which could result in lost sales opportunities in the market.

F. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a proposed standard. Employment impacts consist of 
direct and indirect impacts. Direct employment impacts are any changes 
in the number of employees working for manufacturers of the appliance 
products that are the subject of this rulemaking, their suppliers, and 
related service firms. Indirect employment impacts are changes in 
employment within the larger economy that occur due to the shift in 
expenditures and capital investment caused by the purchase and 
operation of more efficient appliances. The MIA addresses the direct 
employment impacts that concern ballast manufacturers in section 0.
    The indirect employment impacts of standards consist of the net 
jobs created or eliminated in the national economy, outside of the 
manufacturing sector being regulated, due to: (1) Reduced spending on 
energy by end users; (2) reduced spending on new energy supplies by the 
utility industry; (3) increased spending on new products to which the 
new standards apply; and (4) the effects of those three factors 
throughout the economy. DOE expects the net monetary savings from 
standards to be redirected to other forms of economic activity, and 
expects these shifts in spending and economic activity to affect the 
demand for labor in the short term, as explained below.
    One method for assessing the possible effects of such shifts in 
economic activity on the demand for labor is to compare sector 
employment statistics developed by the Labor Department's Bureau of 
Labor Statistics (BLS). (Data on industry employment, hours, labor 
compensation, value of production, and the implicit price deflator for 
output for these industries are available upon request by calling the 
Division of Industry Productivity Studies (202-691-5618) or by sending 
a request by e-mail to [email protected]. These data are also available 
at http://www.bls.gov/news.release/prin1.nr0.htm.) The BLS regularly 
publishes its estimates of the number of jobs per million dollars of 
economic activity in different sectors of the economy, as well as the 
jobs created elsewhere in the economy by this same economic activity. 
Data from BLS indicate that expenditures in the utility sector 
generally create fewer jobs (both directly and indirectly) than 
expenditures in other sectors of the economy. There are many reasons 
for these differences, including wage differences and the fact that the 
utility sector is more capital intensive and less labor intensive than 
other sectors. See Bureau of Economic Analysis, Regional Multipliers: A 
User Handbook for the Regional Input-Output Modeling System (RIMS II), 
Washington, DC, U.S. Department of Commerce, 1992.
    Energy conservation standards have the effect of reducing consumer 
utility bills. Because reduced consumer expenditures for energy likely 
lead to increased expenditures in other sectors of the economy, the 
general effect of efficiency standards is to shift economic activity 
from a less labor-intensive sector (i.e., the utility sector) to more 
labor-intensive sectors (e.g., the retail and manufacturing sectors). 
Thus, based on the BLS data alone, the Department believes net national 
employment will increase due to shifts in economic activity resulting 
from new and amended standards for ballasts.
    In developing today's proposed standards, DOE estimated indirect 
national employment impacts using an input/output model of the U.S. 
economy called Impact of Sector Energy Technologies (ImSET). ImSET is a 
spreadsheet model of the U.S. economy that focuses on 188 sectors most 
relevant to industrial, commercial, and residential building energy 
use. (Roop, J. M., M. J. Scott, and R. W. Schultz, ImSET: Impact of 
Sector Energy Technologies (PNNL-15273 Pacific Northwest National 
Laboratory) (2005). Available at http://www.pnl.gov/main/publications/external/technical_reports/PNNL-15273.pdf.) ImSET is a special purpose 
version of the ``U.S. Benchmark National Input-Output'' (I-O) model, 
designed to estimate the national employment and income effects of 
energy-saving technologies. The ImSET software includes a computer-
based I-O model with structural coefficients to characterize economic 
flows among the 188 sectors. ImSET's national economic I-O structure is 
based on a 1997 U.S. benchmark table (Lawson, Ann M., Kurt S. Bersani, 
Mahnaz Fahim-Nader, and Jiemin Guo, ``Benchmark Input-Output Accounts 
of the U.S. Economy, 1997,'' Survey of Current Business (Dec. 2002) pp. 
19-117), specially aggregated to the 188 sectors. DOE estimated changes 
in expenditures using the NIA spreadsheet. Using ImSET, DOE estimated 
the net national, indirect-employment impacts on employment by sector 
of potential new efficiency standards for ballasts. For more details on 
the employment impact analysis, see NOPR TSD chapter 15.

G. Utility Impact Analysis

    The utility impact analysis estimates the effects of the adopting 
new or amended standards on the utility industry. For this analysis, 
DOE used the NEMS-BT model to generate forecasts of electricity 
consumption, electricity generation by plant type, and electric 
generating capacity by plant type that would result from each TSL. DOE 
conducted the impact analysis as a scenario that departed from the 
latest AEO reference case. In other words, the estimated impacts of a 
standard are the differences between values forecasted by NEMS-BT and 
the values in the AEO2010 reference case.
    Chapter 14 of the TSD accompanying this notice presents results of 
the utility impact analysis.

H. Environmental Assessment

    Pursuant to the National Environmental Policy Act of 1969 and the 
requirements of 42 U.S.C. 6295(o)(2)(B)(i)(VI) and 6316(a), DOE has 
prepared a draft environmental assessment (EA) of the impacts of the 
potential standards for the fluorescent lamp ballasts in today's 
proposed rule, which it has included as chapter 16 of the NOPR TSD.
    In the EA, DOE estimated the reduction in power sector emissions of 
carbon dioxide (CO2), nitrogen oxides (NOX), and 
mercury (Hg) using the NEMS-BT computer model. In the EA, NEMS-BT is 
run similarly to the AEO NEMS, except that ballast energy use is

[[Page 20141]]

reduced by the amount of energy saved (by fuel type) due to each TSL. 
The inputs of national energy savings come from the NIA spreadsheet 
model, while the output is the forecasted physical emissions. The net 
benefit of each TSL in today's proposed rule is the difference between 
the forecasted emissions estimated by NEMS-BT at each TSL and the AEO 
2010 Reference Case. NEMS-BT tracks CO2 emissions using a 
detailed module that provides results with broad coverage of all 
sectors and inclusion of interactive effects. For today's NOPR, DOE 
used the AEO2010. For the final rule, DOE intends to revise the 
emissions analysis using the most current version of NEMS.
    SO2 emissions from affected electric generating units 
(EGUs) are subject to nationwide and regional emissions cap-and-trade 
programs, and DOE has preliminarily determined that these programs 
create uncertainty about the potential amended standards' impact on 
SO2 emissions. Title IV of the Clean Air Act sets an annual 
emissions cap on SO2 for affected EGUs in the 48 contiguous 
States and the District of Columbia (DC). SO2 emissions from 
28 eastern states and D.C. are also limited under the Clean Air 
Interstate Rule (CAIR; 70 FR 25162 (May 12, 2005)), which created an 
allowance-based trading program. Although CAIR has been remanded to EPA 
by the U.S. Court of Appeals for the District of Columbia Circuit (D.C. 
Circuit), see North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008), it 
remains in effect temporarily, consistent with the D.C. Circuit's 
earlier opinion in North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 
2008). On July 6, 2010, EPA issued the Transport Rule proposal, a 
replacement for CAIR, which would limit emissions from EGUs in 32 
states, potentially through the interstate trading of allowances, among 
other options. 75 FR 45210 (Aug. 2, 2010).
    The attainment of emissions caps is typically flexible among EGUs 
and is enforced through the use of emissions allowances and tradable 
permits. Under existing EPA regulations, and under the Transport Rule 
if it is finalized, any excess SO2 emissions allowances 
resulting from the lower electricity demand caused by the imposition of 
an efficiency standard could be used to permit offsetting increases in 
SO2 emissions by any regulated EGU. However, if the amended 
standards resulted in a permanent increase in the quantity of unused 
emissions allowances, there would be an overall reduction in 
SO2 emissions from the standards. While there remains some 
uncertainty about the ultimate effects of efficiency standards on 
SO2 emissions covered by the existing cap-and-trade system, 
the NEMS-BT modeling system that DOE uses to forecast emissions 
reductions currently indicates that no physical reductions in power 
sector emissions would occur for SO2.
    A cap on NOX emissions, affecting electric generating 
units in the CAIR region, means that the energy conservation standards 
for ballasts may have little or no physical effect on NOX 
emissions in the 28 eastern States and the DC covered by CAIR or any 
States covered by the proposed Transport Rule if the Transport Rule if 
finalized. The proposed standards would, however, reduce NOX 
emissions in those 22 states not affected by the CAIR. As a result, DOE 
used NEMS-BT to forecast emission reductions from the standards 
considered for today's NOPR.
    Similar to emissions of SO2 and NOX, future 
emissions of Hg would have been subject to emissions caps. In May 2005, 
EPA issued the Clean Air Mercury Rule (CAMR). 70 FR 28606 (May 18, 
2005). CAMR would have permanently capped emissions of mercury for new 
and existing coal-fired power plants in all states by 2010. However, on 
February 8, 2008, the D.C. Circuit issued a decision in New Jersey v. 
Environmental Protection Agency, 517 F.3d 574 (D.C. Cir. 2008), in 
which it vacated CAMR. EPA has decided to develop emissions standards 
for power plants under Section 112 of the Clean Air Act, consistent 
with the DC Circuit's opinion on CAMR. See http://www.epa.gov/air/mercuryrule/pdfs/certpetition_withdrawal.pdf. Pending EPA's 
forthcoming revisions to the rule, DOE is excluding CAMR from its 
environmental assessment. In the absence of CAMR, a DOE standard would 
likely reduce Hg emissions and DOE used NEMS-BT to estimate these 
reductions. However, DOE continues to review the impact of rules that 
reduce energy consumption on Hg emissions, and may revise its 
assessment of Hg emission reductions in future rulemakings.

I. Monetizing Carbon Dioxide and Other Emissions Impacts

    As part of the development of this proposed rule, DOE considered 
the estimated monetary benefits likely to result from the reduced 
emissions of CO2 and NOX that are expected to 
result from each of the TSLs considered. In order to make this 
calculation similar to the calculation of the NPV of consumer benefit, 
DOE considered the reduced emissions expected to result over the 
lifetime of products shipped in the forecast period for each TSL. This 
section summarizes the basis for the monetary values used for each of 
these emissions and presents the values considered in this rulemaking.
    For today's NOPR, DOE is relying on a set of values for the social 
cost of carbon (SCC) that was developed by an interagency process. A 
summary of the basis for these values is provided below, and a more 
detailed description of the methodologies used is provided as an 
appendix to chapter 16 of the TSD.
1. Social Cost of Carbon
    Under section 1(b) of Executive Order 12866, agencies must, to the 
extent permitted by law, ``assess both the costs and the benefits of 
the intended regulation and, recognizing that some costs and benefits 
are difficult to quantify, propose or adopt a regulation only upon a 
reasoned determination that the benefits of the intended regulation 
justify its costs.'' The purpose of the SCC estimates presented here is 
to allow agencies to incorporate the monetized social benefits of 
reducing CO2 emissions into cost-benefit analyses of 
regulatory actions that have small, or ``marginal,'' impacts on 
cumulative global emissions. The estimates are presented with an 
acknowledgement of the many uncertainties involved and with a clear 
understanding that they should be updated over time to reflect 
increasing knowledge of the science and economics of climate impacts.
    As part of the interagency process that developed these SCC 
estimates, technical experts from numerous agencies met on a regular 
basis to consider public comments, explore the technical literature in 
relevant fields, and discuss key model inputs and assumptions. The main 
objective of this process was to develop a range of SCC values using a 
defensible set of input assumptions grounded in the existing scientific 
and economic literatures. In this way, key uncertainties and model 
differences transparently and consistently inform the range of SCC 
estimates used in the rulemaking process.
a. Monetizing Carbon Dioxide Emissions
    The SCC is an estimate of the monetized damages associated with an 
incremental increase in carbon emissions in a given year. It is 
intended to include (but is not limited to) changes in net agricultural 
productivity, human health, property damages from increased flood risk, 
and the value of ecosystem services. Estimates of the SCC are provided 
in dollars per metric ton of carbon dioxide.
    When attempting to assess the incremental economic impacts of 
carbon dioxide emissions, the analyst faces a

[[Page 20142]]

number of serious challenges. A recent report from the National 
Research Council \42\ points out that any assessment will suffer from 
uncertainty, speculation, and lack of information about (1) Future 
emissions of greenhouse gases, (2) the effects of past and future 
emissions on the climate system, (3) the impact of changes in climate 
on the physical and biological environment, and (4) the translation of 
these environmental impacts into economic damages. As a result, any 
effort to quantify and monetize the harms associated with climate 
change will raise serious questions of science, economics, and ethics 
and should be viewed as provisional.
---------------------------------------------------------------------------

    \42\ National Research Council. Hidden Costs of Energy: Unpriced 
Consequences of Energy Production and Use. National Academies Press: 
Washington, DC (2009).
---------------------------------------------------------------------------

    Despite the serious limits of both quantification and monetization, 
SCC estimates can be useful in estimating the social benefits of 
reducing carbon dioxide emissions. Consistent with the directive in 
Executive Order 12866 quoted above, the purpose of the SCC estimates 
presented here is to make it possible for Federal agencies to 
incorporate the social benefits from reducing carbon dioxide emissions 
into cost-benefit analyses of regulatory actions that have small, or 
``marginal,'' impacts on cumulative global emissions. Most Federal 
regulatory actions can be expected to have marginal impacts on global 
emissions.
    For such policies, the agency can estimate the benefits from 
reduced (or costs from increased) emissions in any future year by 
multiplying the change in emissions in that year by the SCC value 
appropriate for that year. The net present value of the benefits can 
then be calculated by multiplying each of these future benefits by an 
appropriate discount factor and summing across all affected years. This 
approach assumes that the marginal damages from increased emissions are 
constant for small departures from the baseline emissions path, an 
approximation that is reasonable for policies that have effects on 
emissions that are small relative to cumulative global carbon dioxide 
emissions. For policies that have a large (non-marginal) impact on 
global cumulative emissions, there is a separate question of whether 
the SCC is an appropriate tool for calculating the benefits of reduced 
emissions. This concern is not applicable to this notice, and DOE does 
not attempt to answer that question here.
    At the time of the preparation of this notice, the most recent 
interagency estimates of the potential global benefits resulting from 
reduced CO2 emissions in 2010, expressed in 2009$, were 
$4.9, $22.1, $36.3, and $67.1 per metric ton avoided. For emissions 
reductions that occur in later years, these values grow in real terms 
over time. Additionally, the interagency group determined that a range 
of values from 7 percent to 23 percent should be used to adjust the 
global SCC to calculate domestic effects,\43\ although preference is 
given to consideration of the global benefits of reducing 
CO2 emissions.
---------------------------------------------------------------------------

    \43\ It is recognized that this calculation for domestic values 
is approximate, provisional, and highly speculative. There is no a 
priori reason why domestic benefits should be a constant fraction of 
net global damages over time.
---------------------------------------------------------------------------

    It is important to emphasize that the interagency process is 
committed to updating these estimates as the science and economic 
understanding of climate change and its impacts on society improves 
over time. Specifically, the interagency group has set a preliminary 
goal of revisiting the SCC values within 2 years or at such time as 
substantially updated models become available, and to continue to 
support research in this area. In the meantime, the interagency group 
will continue to explore the issues raised by this analysis and 
consider public comments as part of the ongoing interagency process.
b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    To date, economic analyses for Federal regulations have used a wide 
range of values to estimate the benefits associated with reducing 
carbon dioxide emissions. In the final model year 2011 CAFE rule, the 
U.S. Department of Transportation (DOT) used both a ``domestic'' SCC 
value of $2 per ton of CO2 and a ``global'' SCC value of $33 
per ton of CO2 for 2007 emission reductions (in 2007$), 
increasing both values at 2.4 percent per year.\44\ DOT also included a 
sensitivity analysis at $80 per ton of CO2. See Average Fuel 
Economy Standards Passenger Cars and Light Trucks Model Year 2011, 74 
FR 14196 (March 30, 2009) (Final Rule); Final Environmental Impact 
Statement Corporate Average Fuel Economy Standards, Passenger Cars and 
Light Trucks, Model Years 2011-2015 at 3-90 (Oct. 2008) (Available at: 
http://www.nhtsa.gov/fuel-economy). A domestic SCC value is meant to 
reflect the value of damages in the United States resulting from a unit 
change in carbon dioxide emissions, while a global SCC value is meant 
to reflect the value of damages worldwide.
---------------------------------------------------------------------------

    \44\ Throughout this section, references to tons of 
CO2 refer to metric tons.
---------------------------------------------------------------------------

    A 2008 regulation proposed by DOT assumed a domestic SCC value of 
$7 per ton of CO2 (in 2006$) for 2011 emission reductions 
(with a range of $0-$14 for sensitivity analysis), also increasing at 
2.4 percent per year. See Average Fuel Economy Standards, Passenger 
Cars and Light Trucks, Model Years 2011-2015, 73 FR 24352 (May 2, 2008) 
(Proposed Rule); Draft Environmental Impact Statement Corporate Average 
Fuel Economy Standards, Passenger Cars and Light Trucks, Model Years 
2011-2015 at 3-58 (June 2008) (Available at: http://www.nhtsa.gov/fuel-economy). A regulation for packaged terminal air conditioners and 
packaged terminal heat pumps finalized by DOE in October of 2008 used a 
domestic SCC range of $0 to $20 per ton CO2 for 2007 
emission reductions (in 2007$). 73 FR 58772, 58814 (Oct. 7, 2008) In 
addition, EPA's 2008 Advance Notice of Proposed Rulemaking for 
Greenhouse Gases identified what it described as ``very preliminary'' 
SCC estimates subject to revision. See Regulating Greenhouse Gas 
Emissions Under the Clean Air Act, 73 FR 44354 (July 30, 2008). EPA's 
global mean values were $68 and $40 per ton CO2 for discount 
rates of approximately 2 percent and 3 percent, respectively (in 2006$ 
for 2007 emissions).
    In 2009, an interagency process was initiated to offer a 
preliminary assessment of how best to quantify the benefits from 
reducing carbon dioxide emissions. To ensure consistency in how 
benefits are evaluated across agencies, the Administration sought to 
develop a transparent and defensible method, specifically designed for 
the rulemaking process, to quantify avoided climate change damages from 
reduced CO2 emissions. The interagency group did not 
undertake any original analysis. Instead, it combined SCC estimates 
from the existing literature to use as interim values until a more 
comprehensive analysis could be conducted. The outcome of the 
preliminary assessment by the interagency group was a set of five 
interim values: global SCC estimates for 2007 (in 2006$) of $55, $33, 
$19, $10, and $5 per ton of CO2. These interim values 
represent the first sustained interagency effort within the U.S. 
government to develop an SCC for use in regulatory analysis. The 
results of this preliminary effort were presented in several proposed 
and final rules and were offered for public comment in connection with 
proposed rules, including the joint EPA-DOT fuel economy and 
CO2 tailpipe emission proposed rules.

[[Page 20143]]

c. Current Approach and Key Assumptions
    Since the release of the interim values, the interagency group 
reconvened on a regular basis to generate improved SCC estimates, which 
were considered for this proposed rule. Specifically, the group 
considered public comments and further explored the technical 
literature in relevant fields. The interagency group relied on three 
integrated assessment models (IAMs) commonly used to estimate the SCC: 
The FUND, DICE, and PAGE models.\45\ These models are frequently cited 
in the peer-reviewed literature and were used in the last assessment of 
the Intergovernmental Panel on Climate Change. Each model was given 
equal weight in the SCC values that were developed.
---------------------------------------------------------------------------

    \45\ The models are described in appendix 16-A of the TSD.
---------------------------------------------------------------------------

    Each model takes a slightly different approach to model how changes 
in emissions result in changes in economic damages. A key objective of 
the interagency process was to enable a consistent exploration of the 
three models while respecting the different approaches to quantifying 
damages taken by the key modelers in the field. An extensive review of 
the literature was conducted to select three sets of input parameters 
for these models: climate sensitivity, socio-economic and emissions 
trajectories, and discount rates. A probability distribution for 
climate sensitivity was specified as an input into all three models. In 
addition, the interagency group used a range of scenarios for the 
socio-economic parameters and a range of values for the discount rate. 
All other model features were left unchanged, relying on the model 
developers' best estimates and judgments.
    The interagency group selected four SCC values for use in 
regulatory analyses. Three values are based on the average SCC from 
three integrated assessment models, at discount rates of 2.5, 3, and 5 
percent. The fourth value, which represents the 95th percentile SCC 
estimate across all three models at a 3-percent discount rate, is 
included to represent higher-than-expected impacts from temperature 
change further out in the tails of the SCC distribution. For emissions 
(or emission reductions) that occur in later years, these values grow 
in real terms over time, as depicted in Table V.8.

  Table V.8--Social Cost of CO2, 2010-2050 (in 2007 Dollars per Metric
                                  Ton)
------------------------------------------------------------------------
                                                   Discount rate
                                         -------------------------------
                  VII.                                     2.5%     3%
                                          5% Avg  3% Avg    Avg    95th
------------------------------------------------------------------------
2010....................................     4.7    21.4    35.1    64.9
2015....................................     5.7    23.8    38.4    72.8
2020....................................     6.8    26.3    41.7    80.7
2025....................................     8.2    29.6    45.9    90.4
2030....................................     9.7    32.8    50.0   100.0
2035....................................    11.2    36.0    54.2   109.7
2040....................................    12.7    39.2    58.4   119.3
2045....................................    14.2    42.1    61.7   127.8
2050....................................    15.7    44.9    65.0   136.2
------------------------------------------------------------------------

    It is important to recognize that a number of key uncertainties 
remain, and that current SCC estimates should be treated as provisional 
and revisable since they will evolve with improved scientific and 
economic understanding. The interagency group also recognizes that the 
existing models are imperfect and incomplete. The National Research 
Council report mentioned above points out that there is tension between 
the goal of producing quantified estimates of the economic damages from 
an incremental ton of carbon and the limits of existing efforts to 
model these effects. There are a number of concerns and problems that 
should be addressed by the research community, including research 
programs housed in many of the Federal agencies participating in the 
interagency process to estimate the SCC.
    DOE recognizes the uncertainties embedded in the estimates of the 
SCC used for cost-benefit analyses. As such, DOE and others in the U.S. 
Government intend to periodically review and reconsider those estimates 
to reflect increasing knowledge of the science and economics of climate 
impacts, as well as improvements in modeling. In this context, 
statements recognizing the limitations of the analysis and calling for 
further research take on exceptional significance.
    In summary, in considering the potential global benefits resulting 
from reduced CO2 emissions, DOE used the most recent values 
identified by the interagency process, adjusted to 2009$ using the GDP 
price deflator values for 2008 and 2009. For each of the four cases 
specified, the values used for emissions in 2010 were $4.9, $22.1, 
$36.3, and $67.1 per metric ton avoided (values expressed in 
2009$).\46\ To monetize the CO2 emissions reductions 
expected to result from amended standards for ballasts, DOE used the 
values identified in Table A1 of the ``Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order 12866,'' which is 
reprinted in appendix 16-A of the NOPR TSD, appropriately adjusted to 
2009$. To calculate a present value of the stream of monetary values, 
DOE discounted the values in each of the four cases using the specific 
discount rate that had been used to obtain the SCC values in each case.
---------------------------------------------------------------------------

    \46\ Table A1 presents SCC values through 2050. For DOE's 
calculation, it derived values after 2050 using the 3-percent per 
year escalation rate used by the interagency group.
---------------------------------------------------------------------------

1. Valuation of Other Emissions Reductions
    DOE investigated the potential monetary benefit of reduced 
NOX emissions from the TSLs it considered. As noted above, 
new or amended energy conservation standards would reduce 
NOX emissions in those 22 states that are not affected by 
the CAIR. DOE estimated the monetized value of NOX emissions 
reductions resulting from each of the TSLs considered for today's NOPR 
based on environmental damage estimates found in the relevant 
scientific literature. Available estimates suggest a very wide range of 
monetary values, ranging from $370 per ton to $3,800 per ton of 
NOX from stationary sources, measured in 2001$ (equivalent 
to a range of $447 to $4,591 per ton in 2009$).\47\ In accordance with 
OMB guidance, DOE conducted two calculations of the monetary benefits 
derived using each of the economic values used for NOX, one 
using a real discount rate of 3 percent and another using a real 
discount rate of 7 percent.\48\
---------------------------------------------------------------------------

    \47\ For additional information, refer to U.S. Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
2006 Report to Congress on the Costs and Benefits of Federal 
Regulations and Unfunded Mandates on State, Local, and Tribal 
Entities, Washington, DC.
    \48\ OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003).
---------------------------------------------------------------------------

    DOE is aware of multiple agency efforts to determine the 
appropriate range of values used in evaluating the potential economic 
benefits of reduced Hg emissions. DOE has decided to await further 
guidance regarding consistent valuation and reporting of Hg emissions 
before it once again monetizes Hg emissions in its rulemakings.
    Commenting on the preliminary TSD, NEEA and NPCC supported DOE 
monetizing emissions reductions, but urged that the monetary values be 
accounted for in the NIA, and not used only as a qualitative decision 
factor. (NEEA and NPCC, No. 32 at p. 11) In contrast, NEMA advocated 
keeping the environmental assessment and NIA separate, citing the 
ranges of emission dollar values and other uncertainties in DOE's 
emissions monetization

[[Page 20144]]

approach. (NEMA, No. 29 at p. 18) In the NIA, DOE estimates the 
national net present value of total consumer costs and savings that 
would be expected to result from new or amended standards at specific 
efficiency levels. Separately, DOE considers the estimated monetary 
benefits likely to result from the reduced emissions of CO2 
and other pollutants that are expected to result from each of the 
considered TSLs. The NPV of the monetized benefits associated with 
emissions reductions can be viewed as a complement to the NPV of the 
consumer savings calculated for each TSL considered in this rulemaking. 
In section 0 of today's NOPR, DOE presents the NPV values that result 
from adding the estimates of the potential economic benefits resulting 
from reduced CO2 and NOX emissions in each of 
four valuation scenarios to the NPV of consumer savings calculated for 
each TSL considered in this rulemaking, at both a 7-percent and 3-
percent discount rate.

VIII. Analytical Results

A. Trial Standard Levels

    DOE analyzed the benefits and burdens of a number of TSLs for the 
ballasts that are the subject of today's proposed rule. Table VIII.1 
presents the trial standard levels and the corresponding product class 
efficiency levels. See the engineering analysis in section 0 of this 
NOPR for a more detailed discussion of the efficiency levels.
    In this section, DOE presents the analytical results for the TSLs 
of the product classes that DOE analyzed directly (the ``representative 
product classes''). DOE scaled the standards for these representative 
product classes to create standards for other product classes that were 
not directly analyzed (programmed start ballasts that operate 8-foot HO 
lamps), as set forth in chapter 5 of the TSD.

                                       Table VIII.1--Trial Standard Levels
----------------------------------------------------------------------------------------------------------------
     Representative product class                TSL 1                    TSL 2                    TSL 3
----------------------------------------------------------------------------------------------------------------
IS and RS ballasts that operate:
    4-foot MBP lamps, 8-foot slimline   EL1                      EL2                      EL3
     lamps.
PS ballasts that operate:
    4-foot MBP lamps, 4-foot MiniBP SO  EL1                      EL2                      EL3
     lamps, 4-foot MiniBP HO lamps.
IS and RS ballasts that operate 8-foot  EL1                      EL2                      EL3
 HO lamps.
Ballasts that operate 8-foot HO lamps   EL1                      EL1                      EL1
 in cold temperature outdoor signs.
----------------------------------------------------------------------------------------------------------------

    TSL 1, which would set energy conservation standards at EL1 for all 
product classes, would eliminate currently available 2-lamp MBP T12 RS 
(commercial and residential), low-efficiency 2-lamp 4-foot MBP T8 PS, 
magnetic 8-foot HO, and magnetic sign ballasts. TSL 1 would require IS 
and RS 2-lamp MBP ballasts that operate T8 lamps. TSL 1 does not impact 
8-foot slimline or 4-lamp MBP IS and RS ballasts. TSL 1 also prevents 
the baseline inefficient T5 standard and high output ballasts from 
becoming prevalent in future years. For the reasons explained in 
section 0, sign ballasts have only one EL, so TSL 1 represents the max 
tech level for the sign ballast representative product class. TSL 2 and 
TSL 3 also require EL1 for sign ballasts.
    TSL 2 would set energy conservation standards at EL2 for the IS and 
RS, PS, and 8-foot HO IS and RS product classes. This level would 
eliminate standard-efficiency, dedicated voltage 2-lamp MBP T8 IS 
ballasts (commercial and residential), but can be met with standard-
efficiency universal input voltage 2-lamp MBP T8 IS ballasts commercial 
ballasts and high-efficiency dedicated input voltage 2-lamp MBP T8 IS 
residential ballasts. TSL 2 eliminates the least efficient T12 2-lamp 
slimline ballasts, and is just met by the least efficient T8 8-foot 
slimline ballasts. TSL 2 does not affect 4-lamp MBP T8 IS ballasts. For 
PS ballasts, high-efficiency 4-foot MBP and high-efficiency T5 standard 
and high output ballasts are required at TSL 2. This TSL would 
eliminate the least efficient currently available standard and high 
output T5 ballasts. TSL 2 for the 8-foot HO IS and RS product class 
results in the elimination of current T12 electronic ballasts, but can 
be met with T8 electronic ballasts. All three of these ELs represent 
the elimination of the least efficient T8 electronic ballasts.
    TSL 3 would set energy conservation standards at EL3 for the IS and 
RS, PS, and 8-foot HO IS and RS product class. TSL 3 represents the 
highest EL analyzed in all representative product classes and is the 
max tech TSL. Ballasts that meet TSL 3 represent the most efficient 
models tested by DOE in their respective representative product 
classes.

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
    Consumers affected by new or amended standards usually experience 
higher purchase prices and lower operating costs. Generally, these 
impacts on individual consumers are best captured by changes in LCCs 
and by the payback period. Therefore, DOE calculated the LCC and PBP 
analyses for the potential standard levels considered in this 
rulemaking. DOE's LCC and PBP analyses provide key outputs for each 
TSL, which are reported by product class in Table VIII.2-Table VIII.15 
below. Each table includes the average total LCC and the average LCC 
savings, as well as the fraction of product consumers for which the LCC 
will either decrease (net benefit), or increase (net cost) relative to 
the base-case forecast. The last outputs in the tables are the median 
PBPs for the consumer that is purchasing a design compliant with the 
TSL. Negative PBP values indicate standards that reduce both operating 
costs and installed costs. Entries of ``N/A'' indicate standard levels 
that do not reduce operating costs; which prevents the consumer from 
recovering the increased purchase cost. This occurred with residential 
ballasts operating 4-foot MBP lamps (T8 baseline), where the system 
input power ratings for the standards-case replacements were greater 
than that for the baseline system. As discussed in section 0 above, the 
replacement systems use more energy but produce more light with greater 
efficiency than the baseline T8 system.
    The results for each TSL are relative to the energy use 
distribution in the base case (no amended standards), based on energy 
consumption under conditions of actual product use. The rebuttable 
presumption PBP is based on test values under conditions prescribed by 
the DOE test procedure, as required by EPCA. (42 U.S.C. 
6295(o)(2)(B)(iii))

[[Page 20145]]



           Table VIII.2--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Commercial, T12 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience        period *
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        64.63       234.65       299.28  ...........  ...........  ...........  ...........
1...................................  1......................        55.91       225.82       281.73        17.54          0.0        100.0        -8.99
2...................................  2......................        58.58       215.70       274.27        25.00          0.0        100.0        -2.88
3...................................  3......................        59.16       197.70       256.87        42.41          0.0        100.0        -1.35
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        67.02       234.65       301.66  ...........  ...........  ...........  ...........
1...................................  1......................        58.30       199.89       258.19        43.47          0.0        100.0        -2.29
2...................................  2......................        60.97       191.12       252.09        49.58          0.0        100.0        -1.27
3...................................  3......................        61.55       187.43       248.98        52.68          0.0        100.0        -1.06
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.


           Table VIII.3--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Commercial, T8 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience        period *
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        55.08       225.82       280.90  ...........  ...........  ...........  ...........
2...................................  2......................        57.74       215.70       273.44         7.46          0.0        100.0         2.43
3...................................  3......................        58.33       197.70       256.03        24.87          0.0        100.0         1.07
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        57.47       225.82       283.29  ...........  ...........  ...........  ...........
2...................................  2......................        60.13       215.79       275.92         7.37          0.0        100.0         2.46
3...................................  3......................        60.72       211.57       272.28        11.00          0.0        100.0         2.11
--------------------------------------------------------------------------------------------------------------------------------------------------------


          Table VIII.4--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Residential, T12 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience        period *
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        52.99        67.73       120.72  ...........  ...........  ...........  ...........
1...................................  1......................        45.02        56.40       101.42        19.29          0.0        100.0        -7.60
2, 3................................  3......................        46.24        57.30       103.53        17.18          0.0        100.0        -6.99
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        55.38        67.73       123.10  ...........  ...........  ...........  ...........
1...................................  1......................        47.41        56.00       103.40        19.70          0.0        100.0        -7.34
2, 3................................  3......................        48.63        53.54       102.16        20.94          0.0        100.0        -5.14
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.


[[Page 20146]]


           Table VIII.5--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Residential, T8 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience        period *
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        44.11        56.40       100.51  ...........  ...........  ...........  ...........
2, 3................................  3......................        45.33        57.30       102.63        -2.11        100.0          0.0          N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        46.50        56.40       102.90  ...........  ...........  ...........  ...........
2, 3................................  3......................        47.72        53.93       101.65         1.26         10.6         89.4         5.37
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Entries of ``N/A'' indicate standard levels that do not reduce operating costs.


                        Table VIII.6--Product Class 1--IS and RS Ballasts That Operate Four 4-Foot MBP Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience         period
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............        76.77       407.73       484.49  ...........  ...........  ...........  ...........
3...................................  3......................        79.33       398.46       477.79         6.70          0.0        100.0         2.56
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............        79.16       407.73       486.88  ...........  ...........  ...........  ...........
3...................................  3......................        81.72       402.21       483.94         2.95          0.7         99.3         4.31
--------------------------------------------------------------------------------------------------------------------------------------------------------


              Table VIII.7--Product Class 1--IS and RS Ballasts That Operate Two 8-Foot Slimline Lamps (T12 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience        period *
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        90.06       434.50       524.56  ...........  ...........  ...........  ...........
2...................................  2......................        89.34       413.71       503.05        21.50          0.0        100.0        -0.31
3...................................  3......................        89.68       401.02       490.69        33.86          0.0        100.0        -0.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        92.45       434.50       526.94  ...........  ...........  ...........  ...........
2...................................  2......................        91.73       420.63       512.37        14.58          0.0        100.0        -0.47
3...................................  3......................        92.07       414.38       506.45        20.50          0.0        100.0        -0.17
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.


[[Page 20147]]


               Table VIII.8--Product Class 1--IS and RS Ballasts That Operate Two 8-Foot Slimline Lamps (T8 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience         period
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............        90.03       413.71       503.74  ...........  ...........  ...........  ...........
3...................................  3......................        90.37       401.02       491.38        12.36          0.0        100.0         0.24
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............        92.42       413.71       506.13  ...........  ...........  ...........  ...........
3...................................  3......................        92.75       407.57       500.33         5.80          0.0        100.0         0.50
--------------------------------------------------------------------------------------------------------------------------------------------------------


                            Table VIII.9--Product Class 2--PS Ballasts That Operate Two 4-Foot MBP Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience         period
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        57.92       202.24       260.16  ...........  ...........  ...........  ...........
1, 2................................  2......................        59.17       188.88       248.04        12.12          0.0        100.0         1.07
3...................................  3......................        59.60       186.40       246.00        14.17          0.0        100.0         1.22
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        60.31       202.24       262.55  ...........  ...........  ...........  ...........
1, 2................................  2......................        61.55       188.79       250.34        12.21          0.0        100.0         1.06
3...................................  3......................        61.99       186.62       248.60        13.95          0.0        100.0         1.23
--------------------------------------------------------------------------------------------------------------------------------------------------------


                           Table VIII.10--Product Class 2--PS Ballasts That Operate Four 4-Foot MBP Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience         period
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        75.31       372.68       448.00  ...........  ...........  ...........  ...........
1...................................  1......................        79.20       368.71       447.92         0.08         71.7         28.3        11.27
2, 3................................  3......................        81.28       359.20       440.48         7.52          1.3         98.7         5.09
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        77.70       372.68       450.39  ...........  ...........  ...........  ...........
1...................................  1......................        81.59       340.40       421.99        28.39          0.0        100.0         1.39
2, 3................................  3......................        83.67       332.50       416.17        34.22          0.0        100.0         1.71
--------------------------------------------------------------------------------------------------------------------------------------------------------


                        Table VIII.11--Product Class 2--PS Ballasts That Operate Two 4-Foot MiniBP SO Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience         period
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        63.45       252.21       315.66  ...........  ...........  ...........  ...........

[[Page 20148]]

 
1...................................  1......................        63.55       238.21       301.76        13.90          0.0        100.0         0.06
2...................................  2......................        65.04       228.05       293.09        22.57          0.0        100.0         0.61
3...................................  3......................        69.84       243.99       313.83         1.83         39.1         60.9         7.19
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        65.84       252.21       318.05  ...........  ...........  ...........  ...........
1...................................  1......................        65.94       238.21       304.15        13.90          0.0        100.0         0.06
2...................................  2......................        67.43       236.07       303.50        14.55          0.0        100.0         0.91
3...................................  3......................        72.23       230.07       302.30        15.75          0.0        100.0         2.67
--------------------------------------------------------------------------------------------------------------------------------------------------------


                        Table VIII.12--Product Class 2--PS Ballasts That Operate Two 4-Foot MiniBP HO Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience         period
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        63.55       338.93       402.49  ...........  ...........  ...........  ...........
1...................................  1......................        67.70       315.58       383.28        19.21          0.0        100.0         1.28
2...................................  2......................        70.65       310.87       381.52        20.96          0.0        100.0         1.82
3...................................  3......................        73.52       308.29       381.81        20.68          0.0        100.0         2.34
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        65.94       338.93       404.88  ...........  ...........  ...........  ...........
1...................................  1......................        70.08       315.58       385.67        19.21          0.0        100.0         1.28
2...................................  2......................        73.04       312.98       386.02        18.85          0.0        100.0         1.97
3...................................  3......................        75.91       310.04       385.95        18.92          0.0        100.0         2.48
--------------------------------------------------------------------------------------------------------------------------------------------------------


                 Table VIII.13--Product Class 3--IS and RS Ballasts That Operate Two 8-Foot HO Lamps (T12 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience        period *
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............       116.92       619.03       735.95  ...........  ...........  ...........  ...........
1...................................  1......................       111.77       554.36       666.13        69.82          0.0        100.0        -0.57
2...................................  2......................        96.97       404.53       501.51       234.45          0.0        100.0        -0.67
3...................................  3......................       101.02       398.16       499.18       236.77          0.0        100.0        -0.52
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............       119.31       619.03       738.34  ...........  ...........  ...........  ...........
1...................................  1......................       114.15       574.24       688.39        49.95          0.0        100.0        -0.83
2...................................  2......................        99.36       499.29       598.65       139.69          0.0        100.0        -1.21
3...................................  3......................       103.41       494.49       597.89       140.45          0.0        100.0        -0.93
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.


[[Page 20149]]


                 Table VIII.14--Product Class 3--IS and RS Ballasts That Operate Two 8-Foot HO Lamps (T8 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience        period *
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............        94.07       404.53       498.61  ...........  ...........  ...........  ...........
3...................................  3......................        98.12       398.16       496.28         2.33         13.2         86.8         4.57
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............        96.46       404.53       501.00  ...........  ...........  ...........  ...........
3...................................  3......................       100.51       400.71       501.22        -0.22         70.4         29.6         7.62
--------------------------------------------------------------------------------------------------------------------------------------------------------


            Table VIII.15--Product Class 5--Ballasts That Operate Four 8-Foot HO Lamps in Cold Temperature Outdoor Signs: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience        period *
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............       163.93     1,403.06     1,566.99  ...........  ...........  ...........  ...........
1, 2, 3.............................  1......................       157.45     1,019.63     1,177.07       389.91          0.0        100.0        -0.16
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............       166.32     1,403.06     1,569.38  ...........  ...........  ...........  ...........
1, 2, 3.............................  1......................       159.84     1,177.81     1,337.64       231.73          0.0        100.0        -0.27
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.

b. Consumer Sub-Group Analysis
    Using the LCC spreadsheet model, DOE determined the impact of the 
trial standard levels on the following consumer sub-groups: Low-income 
consumers, institutions of religious worship, and institutions that 
serve low-income populations. Representative ballast designs used in 
the industrial sector (e.g., ballasts operating HO lamps) are not 
typically used by the identified sub-groups, and were not included in 
the sub-group analysis. Similarly, DOE assumed that low-income 
consumers use residential ballasts only, and did not include commercial 
ballast designs in the LCC analysis for this sub-group. DOE assumed 
that institutions of religious worship and institutions that serve low-
income populations use commercial ballasts only, and did not include 
residential ballast designs in their sub-group analysis.
    To reflect conditions faced by the identified subgroups, DOE 
adjusted particular inputs to the LCC model. For low-income consumers, 
DOE adjusted electricity prices to represent rates paid by consumers 
living below the poverty line. DOE assumed that institutions of 
religious worship have lower annual operating hours than the commercial 
sector average used in the main LCC analysis. For institutions serving 
low-income populations, DOE assumed that the majority of these 
institutions are small nonprofits, and used a higher discount rate of 
10.7 percent (versus 6.9 percent for the main commercial sector 
analysis).
    Table VIII.16 through Table VIII.25 below show the LCC impacts and 
payback periods for identified sub-groups that purchase ballasts. 
Negative PBP values indicate standards that reduce operating costs and 
installed costs. Entries of ``N/A'' indicate standard levels that do 
not reduce operating costs. In general, the average LCC savings for the 
identified sub-groups at the considered efficiency levels are not 
significantly different from the average for all consumers.

[[Page 20150]]



     Table VIII.16--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Commercial, T12 Baseline): LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience        period *
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        64.63       185.70       250.33  ...........  ...........  ...........  ...........
1...................................  1......................        55.91       178.85       234.76        15.57          0.0        100.0       -15.61
2...................................  2......................        58.58       170.82       229.40        20.93          0.0        100.0        -5.00
3...................................  3......................        59.16       156.54       215.71        34.62          0.0        100.0        -2.35
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        67.02       185.70       252.72  ...........  ...........  ...........  ...........
1...................................  1......................        58.30       158.28       216.58        36.14          0.0        100.0        -3.98
2...................................  2......................        60.97       151.32       212.29        40.43          0.0        100.0        -2.21
3...................................  3......................        61.55       148.39       209.95        42.77          0.0        100.0        -1.84
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        64.63       198.59       263.22  ...........  ...........  ...........  ...........
1...................................  1......................        55.91       191.11       247.02        16.20          0.0        100.0        -8.99
2...................................  2......................        58.58       182.54       241.12        22.10          0.0        100.0        -2.88
3...................................  3......................        59.16       167.32       226.48        36.74          0.0        100.0        -1.35
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        67.02       198.59       265.61  ...........  ...........  ...........  ...........
1...................................  1......................        58.30       169.17       227.47        38.14          0.0        100.0        -2.29
2...................................  2......................        60.97       161.75       222.71        42.90          0.0        100.0        -1.27
3...................................  3......................        61.55       158.63       220.18        45.43          0.0        100.0        -1.06
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.


      Table VIII.17--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Commercial, T8 Baseline): LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience        period *
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        55.08       178.85       233.93  ...........  ...........  ...........  ...........
2...................................  2......................        57.74       170.82       228.56         5.37          0.1         99.9         4.23
3...................................  3......................        58.33       156.54       214.87        19.06          0.0        100.0         1.86
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        57.47       178.85       236.32  ...........  ...........  ...........  ...........
2...................................  2......................        60.13       170.89       231.02         5.29          0.1         99.9         4.27
3...................................  3......................        60.72       167.54       228.26         8.06          0.0        100.0         3.66
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        55.08       191.11       246.19  ...........  ...........  ...........  ...........
2...................................  2......................        57.74       182.54       240.29         5.90          0.0        100.0         2.43
3...................................  3......................        58.33       167.32       225.64        20.54          0.0        100.0         1.07
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 20151]]

 
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        57.47       191.11       248.58  ...........  ...........  ...........  ...........
2...................................  2......................        60.13       182.62       242.75         5.82          0.0        100.0         2.46
3...................................  3......................        60.72       179.05       239.77         8.81          0.0        100.0         2.11
--------------------------------------------------------------------------------------------------------------------------------------------------------


     Table VIII.18--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Residential, T12 Baseline): LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience        period *
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Sub-Group: Low-Income Consumers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        52.99        67.85       120.84  ...........  ...........  ...........  ...........
1...................................  1......................        45.02        56.51       101.53        19.31          0.0        100.0        -7.60
2, 3................................  3......................        46.24        57.41       103.64        17.20          0.0        100.0        -6.99
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        55.38        67.85       123.23  ...........  ...........  ...........  ...........
1...................................  1......................        47.41        56.10       103.51        19.72          0.0        100.0        -7.43
2, 3................................  3......................        48.63        53.64       102.27        20.96          0.0        100.0        -5.14
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.


     Table VIII.19--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Residential, T8 Baseline): LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience        period *
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Sub-Group: Low-Income Consumers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        44.11        56.51       100.62  ...........  ...........  ...........  ...........
2, 3................................  3......................        45.33        57.41       102.74        -2.12        100.0          0.0          N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        46.50        56.51       103.01  ...........  ...........  ...........  ...........
2, 3................................  3......................        47.72        54.03       101.75         1.26         10.6         89.4         5.37
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Entries of ``N/A'' indicate standard levels that do not reduce operating costs.


[[Page 20152]]


        Table VIII.20--Product Class 1--IS and RS Ballasts That Operate Four 4-Foot MBP Lamps: LCC and PBP Results: LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience        period *
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............        76.77       323.00       399.77  ...........  ...........  ...........  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
3...................................  3......................        79.33       315.65       394.98         4.78          0.3         99.7         4.45
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............        79.16       323.00       402.16  ...........  ...........  ...........  ...........
3...................................  3......................        81.72       318.63       400.35         1.81         13.7         86.3         7.48
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............        76.77       345.04       421.81  ...........  ...........  ...........  ...........
3...................................  3......................        79.33       337.21       416.54         5.27          0.0        100.0         2.56
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............        79.16       345.04       424.20  ...........  ...........  ...........  ...........
3...................................  3......................        81.72       340.38       422.10         2.10          6.7         93.3         4.31
--------------------------------------------------------------------------------------------------------------------------------------------------------


         Table VIII.21--Product Class 1--IS and RS Ballasts That Operate Two 8-Foot Slimline Lamps (T12 Baseline): LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience        period *
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        90.06       343.91       433.97  ...........  ...........  ...........  ...........
2...................................  2......................        89.34       327.51       416.86        17.12          0.0        100.0        -0.55
3...................................  3......................        89.68       317.44       407.12        26.85          0.0        100.0        -0.18
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        92.45       343.91       436.36  ...........  ...........  ...........  ...........
2...................................  2......................        91.73       333.01       424.74        11.68          0.0        100.0        -0.81
3...................................  3......................        92.07       328.05       420.11        16.25          0.0        100.0        -0.30
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        90.06       367.73       457.79  ...........  ...........  ...........  ...........
2...................................  2......................        89.34       350.13       439.48        18.31          0.0        100.0        -0.31
3...................................  3......................        89.68       339.39       429.07        28.72          0.0        100.0        -0.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............        92.45       367.73       460.18  ...........  ...........  ...........  ...........
2...................................  2......................        91.73       355.99       447.72        12.45          0.0        100.0        -0.47
3...................................  3......................        92.07       350.70       442.77        17.41          0.0        100.0        -0.17
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.


[[Page 20153]]


         Table VIII.22--Product Class 1--IS and RS Ballasts That Operate Two 8-Foot Slimline Lamps (T8 Baseline): LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience         period
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............        90.03       327.51       417.55  ...........  ...........  ...........  ...........
3...................................  3......................        90.03       317.44       407.81         9.74          0.0        100.0         0.42
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............        92.42       327.51       419.93  ...........  ...........  ...........  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
3...................................  3......................        92.75       322.64       415.40         4.54          0.0        100.0         0.88
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............        90.03       350.13       440.16  ...........  ...........  ...........  ...........
3...................................  3......................        90.37       339.39       429.76        10.41          0.0        100.0         0.24
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............        92.42       350.13       442.55  ...........  ...........  ...........  ...........
3...................................  3......................        92.75       344.94       437.69         4.86          0.0        100.0         0.50
--------------------------------------------------------------------------------------------------------------------------------------------------------


                      Table VIII.23--Product Class 2--PS Ballasts That Operate Two 4-Foot MBP Lamps: LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience         period
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        57.92       147.32       205.24  ...........  ...........  ...........  ...........
1, 2................................  2......................        59.17       137.56       196.73         8.51          0.0        100.0         1.85
3...................................  3......................        59.60       135.76       195.35         9.89          0.0        100.0         2.11
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        60.31       147.32       207.63  ...........  ...........  ...........  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  2......................        61.55       137.50       199.05         8.58          0.0        100.0         1.84
3...................................  3......................        61.99       135.91       197.90         9.73          0.0        100.0         2.14
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        57.92       161.44       219.37  ...........  ...........  ...........  ...........
1, 2................................  2......................        59.17       150.78       209.94         9.42          0.0        100.0         1.07
3...................................  3......................        59.60       148.80       208.40        10.97          0.0        100.0         1.22
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        60.31       161.44       221.76  ...........  ...........  ...........  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  2......................        61.55       150.71       212.26         9.49          0.0        100.0         1.06
3...................................  3......................        61.99       148.97       210.96        10.79          0.0        100.0         1.23
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 20154]]


                      Table VIII.24--Product Class 2--PS Ballasts That Operate Four 4-Foot MBP Lamps: LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience         period
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        75.31       271.57       346.88  ...........  ...........  ...........  ...........
1...................................  1......................        79.20       268.67       347.87        -0.99         94.4          5.6        19.57
2, 3................................  3......................        81.28       261.72       343.01         3.88         22.4         77.6         8.84
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        77.70       271.57       349.27  ...........  ...........  ...........  ...........
1...................................  1......................        81.59       248.00       329.60        19.67          0.0        100.0         2.41
2, 3................................  3......................        83.67       242.23       325.91        23.36          0.0        100.0         2.97
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        75.31       297.48       372.80  ...........  ...........  ...........  ...........
1...................................  1......................        79.20       294.31       373.52        -0.72         89.3         10.7        11.27
2, 3................................  3......................        81.28       286.72       368.00         4.79         11.2         88.8         5.09
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        77.70       297.48       375.18  ...........  ...........  ...........  ...........
1...................................  1......................        81.59       271.72       353.31        21.87          0.0        100.0         1.39
2, 3................................  3......................        83.67       265.41       349.08        26.10          0.0        100.0         1.71
--------------------------------------------------------------------------------------------------------------------------------------------------------


                   Table VIII.25--Product Class 2--PS Ballasts That Operate Two 4-Foot MiniBP SO Lamps: LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2009$                 Life-cycle cost savings
                                                              ------------------------------------------------------------------------------    Median
                                                                                                                     Percent of consumers      payback
        Trial standard level              Efficiency level      Installed    Discounted                 Average         that experience         period
                                                                   cost      operating       LCC        savings   --------------------------    years
                                                                                cost                     2009$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        63.45       199.70       263.15  ...........  ...........  ...........  ...........
1...................................  1......................        63.55       188.59       252.15        11.01          0.0        100.0         0.11
2...................................  2......................        65.04       180.53       245.58        17.57          0.0        100.0         1.06
3...................................  3......................        69.84       193.18       263.02         0.13         72.9         27.1        12.49
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        65.84       199.70       265.54  ...........  ...........  ...........  ...........
1...................................  1......................        65.94       188.59       254.53        11.01          0.0        100.0         0.11
2...................................  2......................        67.43       186.89       254.33        11.21          0.0        100.0         1.58
3...................................  3......................        72.23       182.14       254.37        11.17          0.5         99.5         4.64
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        63.45       213.44       276.90  ...........  ...........  ...........  ...........
1...................................  1......................        63.55       201.60       265.15        11.75          0.0        100.0         0.06
2...................................  2......................        65.04       193.00       258.05        18.85          0.0        100.0         0.61
3...................................  3......................        69.84       206.49       276.33         0.57         67.0         33.0         7.19
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............        65.84       213.44       279.29  ...........  ...........  ...........  ...........
1...................................  1......................        65.94       201.60       267.54        11.75          0.0        100.0         0.06

[[Page 20155]]

 
2...................................  2......................        67.43       199.79       267.22        12.07          0.0        100.0         0.91
3...................................  3......................        72.23       194.72       266.94        12.34          0.0        100.0         2.67
--------------------------------------------------------------------------------------------------------------------------------------------------------

c. Rebuttable Presumption Payback
    As discussed above, EPCA provides a rebuttable presumption that an 
energy conservation standard is economically justified if the increased 
purchase cost for a product that meets the standard is less than three 
times the value of the first-year energy savings resulting from the 
standard. DOE's LCC and PBP analyses generate values that calculate the 
payback period for consumers of potential energy conservation 
standards, which includes, but is not limited to, the 3-year payback 
period contemplated under the rebuttable presumption test discussed 
above. However, DOE routinely conducts a full economic analysis that 
considers the full range of impacts--including those on consumers, 
manufacturers, the nation, and the environment--as required under 42 
U.S.C. 6295(o)(2)(B)(i).
    In the present case, DOE calculated a rebuttable presumption 
payback period for each TSL. Rather than using distributions for input 
values, DOE used discrete values and, as required by EPCA, based the 
calculation on the assumptions in the DOE test procedures for ballasts. 
As a result, DOE calculated a single rebuttable presumption payback 
value, rather than a distribution of payback periods, for each TSL. 
Table VIII.26 shows the rebuttable presumption payback periods that are 
less than 3 years. Negative PBP values indicate standards that reduce 
operating costs and installed costs.
    While DOE examined the rebuttable-presumption criterion, it 
considered whether the standard levels considered for today's rule are 
economically justified through a more detailed analysis of the economic 
impacts of these levels pursuant to 42 U.S.C. 6295(o)(2)(B)(i). The 
results of this analysis serve as the basis for DOE to evaluate the 
economic justification for a potential standard level definitively 
(thereby supporting or rebutting the results of any preliminary 
determination of economic justification).

          Table VIII.26--Ballast Efficiency Levels With Rebuttable Payback Period Less Than Three Years
----------------------------------------------------------------------------------------------------------------
                                                                                  Mean payback period * years
                                                                             -----------------------------------
         IX. Product class              X. Ballast type      XI. Efficiency                       Event II: New
                                                                  level           Event I:        construction/
                                                                                 Replacement       renovation
----------------------------------------------------------------------------------------------------------------
1..................................  IS and RS ballasts that operate:
                                        Two 4-foot MBP                     1             -8.99             -2.29
                                         lamps
                                         (commercial, T12
                                         baseline).
                                                                           2             -2.88             -1.27
                                                                           3             -1.35             -1.06
                                        Two 4-foot MBP                     2              2.43              2.46
                                         lamps
                                         (commercial, T8
                                         baseline).
                                                                           3              1.07              2.11
                                        Two 4-foot MBP                     1             -7.60             -7.34
                                         lamps
                                         (residential, T12
                                         baseline).
                                                                        2, 3             -6.99             -5.14
                                        Four 4-foot MBP                    3              2.56  ................
                                         lamps.
                                        Two 8-foot                         2             -0.31             -0.47
                                         slimline lamps
                                         (T12 baseline).
                                                                           3             -0.10             -0.17
                                        Two 8-foot                         3              0.24              0.50
                                         slimline lamps
                                         (T8 baseline).
----------------------------------------------------------------------------------------------------------------
2..................................  PS ballasts that operate:
                                        Two 4-foot MBP                  1, 2              1.07              1.06
                                         lamps.
                                                                           3              1.22              1.23
                                        Four 4-foot MBP                    1  ................              1.39
                                         lamps.
                                                                           3  ................              1.71
                                        Two 4-foot MiniBP                  1              0.06              0.06
                                         SO lamps.
                                                                           2              0.61              0.91
                                                                           3  ................              2.67
                                        Two 4-foot MiniBP                  1              1.28              1.28
                                         HO lamps.
                                                                           2              1.82              1.97
                                                                           3              2.34              2.48
----------------------------------------------------------------------------------------------------------------
3..................................  IS and RS ballasts that operate:
                                        Two 8-foot HO                      1             -0.57             -0.83
                                         lamps (T12
                                         baseline).
                                                                           2             -0.67             -1.21

[[Page 20156]]

 
                                                                           3             -0.52             -0.93
----------------------------------------------------------------------------------------------------------------
5..................................  Ballasts that operate:
                                        Four 8-foot HO               1, 2, 3             -0.16             -0.27
                                         lamps in cold
                                         temperature
                                         outdoor signs.
----------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.

1. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of amended energy 
conservation standards on manufacturers of fluorescent lamp ballasts. 
The section below describes the expected impacts on manufacturers at 
each TSL. Chapter 13 of the TSD explains the analysis in further 
detail.
    The tables below depict the financial impacts (represented by 
changes in INPV) of amended energy standards on manufacturers as well 
as the conversion costs that DOE estimates manufacturers would incur at 
each TSL. DOE shows the results for all product classes in one group, 
as most product classes are generally made by the same manufacturers. 
DOE breaks out results for the sign ballast manufacturer sub-group in 
section 0 below. To evaluate the range of cash flow impacts on the 
ballast industry, DOE modeled eight different scenarios using different 
assumptions for markups, shipments, and technologies that correspond to 
the range of anticipated market responses to new and amended standards. 
Each scenario results in a unique set of cash flows and corresponding 
industry value at each TSL. Two of these scenarios are presented below, 
corresponding to the bounds of a range of market responses that DOE 
anticipates could occur in the standards case. In the following 
discussion, the INPV results refer to the difference in industry value 
between the base case and the standards case that result from the sum 
of discounted cash flows from the base year (2011) through the end of 
the analysis period. The results also discuss the difference in cash 
flow between the base case and the standards case in the year before 
the compliance date for new and amended energy conservation standards. 
This figure represents how large the required conversion costs are 
relative to the cash flow generated by the industry in the absence of 
new and amended energy conservation standards. In the engineering 
analysis, DOE presents its findings of the common technology options 
that achieve the efficiencies for each of the representative product 
classes. To refer to the description of technology options and the 
required efficiencies at each TSL, see section 0 of today's notice.
a. Industry Cash-Flow Analysis Results
    The set of results below shows two tables of INPV impacts: The 
first table reflects the lower (less severe) bound of impacts and the 
second represents the upper bound. To assess the lower end of the range 
of potential impacts, DOE modeled the preservation of operating profit 
markup scenario. As discussed in section 0, the preservation of 
operating profit markup scenario assumes that in the standards case, 
manufacturers would be able to earn the same operating margin in 
absolute dollars in the standards case as in the base case. In general, 
the larger the product price increases, the less likely manufacturers 
are to preserve the cash flow from operations calculated in this 
scenario because it is less likely that manufacturers would be able to 
markup these larger cost increases to the same degree.
    DOE also incorporated the existing technologies scenario and the 
shift shipment scenario to assess the lower bound of impacts. Under the 
existing technologies scenario, base-case shipments of fluorescent lamp 
ballasts are not impacted by any emerging technologies that could 
potentially penetrate the market over the analysis period. Under the 
shift shipment scenario, all base-case consumer purchases are affected 
by the standard (regardless of whether their base-case efficiency is 
below the standard) as consumers may seek to shift to a higher 
efficiency level. Of all the scenario combinations analyzed in the MIA, 
conditions for generating cash flow are greatest under the preservation 
of operating profit markup, existing technologies, and shift shipment 
scenarios--the annual shipment volume, efficiency mix, and the ability 
to preserve operating margins is greatest. Thus, this scenario set 
yields the greatest modeled industry profitability.
    Through its discussions with manufacturers, DOE found that many 
manufacturers typically offer two tiers of product lines differentiated 
by efficiency level, with the higher efficiency tier earning a premium 
over the baseline efficiency tier. Several manufacturers expected that 
the premium currently earned by the higher efficiency tier would erode 
under new or amended standards due to the disappearance of the baseline 
efficiency tier. The market effect would be to commoditize the higher 
tier product line (the new baseline in the standards case), which would 
significantly harm profitability. Therefore, to assess the higher (more 
severe) end of the range of potential impacts, DOE modeled a two-tier 
markup scenario in which higher energy conservation standards result in 
lower manufacturer markups for products that earn a premium in the base 
case. In this scenario, DOE assumed that the markup on fluorescent lamp 
ballasts varies according to two efficiency tiers in both the base case 
and the standards case. In the standards case, DOE modeled the 
situation in which portfolio reduction squeezes the margin of higher-
efficiency products as they become lower-relative-efficiency-tier 
products. This commoditization would occur for several reasons. The 
large fixture manufacturers have substantial purchasing power due to 
the share of the market they represent (approximately two-thirds of the 
ballast market) and the high-volume orders placed by the largest 
fixture OEMs. Ballast manufacturers must compete aggressively for this 
business, not simply because of the volume of sales, but also because 
of the need to keep factories utilized and achieve economies of scale. 
By manufacturing in high volumes, ballast manufacturers can drive down 
fixed costs per unit, as they

[[Page 20157]]

spread overhead over more volume. Manufacturers can also lower variable 
costs per unit. Large volumes allow manufacturers to order from their 
component suppliers in large quantities, enabling better purchasing 
terms, thereby reducing per unit costs.
    Price is often the primary rationale in purchasing decisions for 
fixture manufacturers, so ballast manufacturers face intense pressure 
to make their baseline models as cost-competitive as possible, even if 
the baseline model was once a premium model. To meet the needs of these 
price-driven customers by reducing costs, ballast manufacturers may 
have to remove features in the new baseline models that had commanded a 
price premium when bundled with high-efficiency. Without being able to 
use these extra features as a selling point, margins could decrease 
even further. As a result, ballast manufacturers would earn the same 
markup on these new high-volume baseline models as they did on their 
lower efficiency, former baseline models. This scenario represents the 
upper end (more severe) of the range of potential impacts on 
manufacturers because units that commanded a higher markup under the 
base case earn a lower markup under the standards case.
    DOE also incorporated the emerging technologies scenario and the 
roll-up shipment scenario to assess the upper bound of impacts. Under 
the emerging technologies scenario fluorescent lamp ballasts lose 
market share to emerging technologies such as LEDs over the analysis 
period. Under the roll-up shipment scenario, no consumer purchases 
beyond those that do not meet the new standard level are affected by 
the standard, so premium pricing tiers are not continually maintained. 
Thus, under the two-tier markup scenario, emerging technologies 
scenario, and roll-up shipment scenario, the quantity of annual 
shipments is lowest and manufacturers have the least ability to pass on 
costs to consumers.

   Table VIII.27--Manufacturer Impact Analysis for Fluorescent Lamp Ballasts--Preservation of Operating Profit
                           Markup, Existing Technologies, and Shift Shipment Scenario
----------------------------------------------------------------------------------------------------------------
                                                                                    Trial standard level
                XII.                           Units           Base case  --------------------------------------
                                                                                1            2            3
----------------------------------------------------------------------------------------------------------------
INPV................................  (2009$ millions)......        1,241        1,221        1,189        1,145
Change in INPV......................  (2009$ millions)......  ...........       (19.4)       (51.6)       (95.3)
                                      (%)...................  ...........        -1.6%        -4.2%        -7.7%
Product Conversion Costs............  (2009$ millions)......  ...........            5           24           57
Capital Conversion Costs............  (2009$ millions)......  ...........           11           25           34
Total Conversion Costs..............  (2009$ millions)......  ...........           17           49           91
----------------------------------------------------------------------------------------------------------------


      Table VIII.28--Manufacturer Impact Analysis for Fluorescent Lamp Ballasts--Two-Tier Markup, Emerging
                                   Technologies, and Roll-Up Shipment Scenario
----------------------------------------------------------------------------------------------------------------
                                                                                    Trial standard level
                XIII.                          Units           Base case  --------------------------------------
                                                                                1            2            3
----------------------------------------------------------------------------------------------------------------
INPV................................  (2009$ millions)......          853          740          635          557
Change in INPV......................  (2009$ millions)......  ...........      (112.7)      (217.9)      (296.2)
                                      (%)...................  ...........       -13.2%       -25.5%       -34.7%
Product Conversion Costs............  (2009$ millions)......  ...........            5           24           57
Capital Conversion Costs............  (2009$ millions)......  ...........           11           25           34
Total Conversion Costs..............  (2009$ millions)......  ...........           17           49           91
----------------------------------------------------------------------------------------------------------------

    TSL 1 represents EL1 for all four representative product classes. 
At TSL 1, DOE estimates impacts on INPV to range from -$19.4 million to 
-$112.7 million, or a change in INPV of -1.6 percent to -13.2 percent. 
At this proposed level, industry free cash flow is estimated to 
decrease by approximately 11.9 percent to $43.8 million, compared to 
the base-case value of $49.7 million in the year leading up to the 
proposed energy conservation standards.
    The INPV impacts at TSL 1 are relatively minor, in part because the 
vast majority of shipments already meet EL1. DOE estimates that in 
2014, the year in which compliance with any new and amended standards 
is proposed to be required, 98 percent of product class 1 shipments, 69 
percent of product class 2 shipments, 88 percent of product class 3 
shipments, and 64 percent of product class 5 shipments would meet EL1 
or higher in the base case. The majority of shipments that are at 
baseline efficiency levels and would need to be converted at TSL 1 are 
2-lamp, 4-foot MBP IS/RS residential ballasts in product class 1, 2-
lamp and 4-lamp, 4ft MBP PS ballasts in product class 4, and 4-lamp 
sign ballasts in product class 5.
    Because most fluorescent lamp ballast shipments already meet the 
efficiency levels analyzed at TSL 1, DOE expects conversion costs to be 
small compared to the industry value. DOE estimates product conversion 
costs of $5 million due to the research, development, testing, and 
certification costs needed to upgrade product lines that do not meet 
TSL 1. For capital conversion costs, DOE estimates $11 million for the 
industry, largely driven by the cost of converting all magnetic sign 
ballast production lines to electronic sign ballast production lines.
    Under the preservation of operating profit markup scenario, impacts 
on manufacturers are marginally negative because while manufacturers 
earn the same operating profit as is earned in the base case for 2015 
(the year following the compliance date of amended standards), they are 
faced with $17 million in conversion costs. INPV impacts on 
manufacturers are not as significant under this scenario as in other 
scenarios because despite most shipments already meeting TSL 1, the 
shift shipment scenario moves products beyond the eliminated baseline 
to higher-price (and higher gross profit) levels. This results in a 
shipment-weighted average MPC increase of 7.8 percent applied to a 
growing market

[[Page 20158]]

over the analysis period. While total shipments increase under both 
technology scenarios, shipments under the existing technologies 
scenario are 216 percent greater than shipments under the emerging 
technologies scenario by the end of the analysis period. At TSL 1, the 
moderate price increase applied to a large quantity of shipments 
lessens the impact of the minor conversion costs estimated at TSL 1, 
resulting in slightly negative impacts at TSL 1 under the preservation 
of operating profit markup scenario.
    Under the two-tier markup scenario, manufacturers are not able to 
fully pass on additional costs to consumers and are not guaranteed 
base-case operating profit levels. Rather, products that once earned a 
higher-than-average markup at EL1 become commoditized once baseline 
products are eliminated at TSL 1. Thus, the average markup drops below 
the base-case average markup (which is equal to the flat manufacturer 
markup of 1.4). There is a slight increase in shipment-weighted average 
MPC (less than 1 percent) under the roll-up scenario, but this increase 
is much smaller than under the shift scenario because shipments above 
the baseline do not move to higher efficiencies with greater costs. 
This MPC increase is outweighed by a lower average markup of 1.38 and 
$17 million in conversion costs, resulting in more negative impacts at 
TSL 1 under the two-tier markup scenario. These impacts increase on a 
percentage basis under the emerging technologies scenario relative to 
the existing technologies scenario because the base-case INPV against 
which changes are compared is 31 percent lower.
    TSL 2 represents EL1 for product class 5 (4-lamp sign ballasts). 
For product classes 1 (4-foot MBP IS/RS and 8-foot SP Slimline), 2 (4-
foot MBP PS, 4-foot T5 MiniBP SO, and 4-foot T5 MiniBP HO),and 3 (2-
lamp 8-foot HO), TSL 2 represents EL2. At TSL 2, DOE estimates impacts 
on INPV to range from -$51.6 million to -$217.9 million, or a change in 
INPV of -4.2 percent to -25.5 percent. At this proposed level, industry 
free cash flow is estimated to decrease by approximately 32.9 percent 
to $33.3 million, compared to the base-case value of $49.7 million in 
the year leading up to the proposed energy conservation standards.
    Because product class 5 remains at EL1 at TSL 2, the additional 
impacts at TSL 2 relative to TSL 1 result from increasing product 
classes 1, 2, and 3 to EL2. At TSL 2, DOE estimates that 40 percent of 
product class 1 shipments, 13 percent of product class 2 shipments, and 
27 percent of product class 3 shipments would meet EL2 or higher in the 
base case. Since product class 3 represents only 0.1 percent of the 
fluorescent lamp ballast market, the vast majority of impacts at TSL 2 
relative to TSL 1 result from changes in product classes 1 and 2.
    At TSL 2, conversion costs nearly triple compared to TSL 1 but 
remain small compared to the industry value. Product conversion costs 
increase to $24 million due to the increase in the number of product 
lines within product classes 1 and 2 that would need to be redesigned 
at TSL 2. Capital conversion costs grow to $25 million at TSL 2 because 
manufacturers would need to invest in additional testing equipment and 
convert some production lines.
    Under the preservation of operating profit markup scenario, INPV 
impacts are negative because manufacturers are not able to fully pass 
on higher product costs to consumers. The shipment-weighted average MPC 
increases by 11.1 percent compared to the baseline MPC, but this 
increase does not generate enough cash flow to outweigh the $49 million 
in conversion costs at TSL 2, resulting in a -4.2 percent change in 
INPV at TSL 2 compared to the base case.
    Under the two-tier markup scenario, more products are commoditized 
to a lower markup at TSL 2. The impact of this lower average markup of 
1.36 outweighs the impact of a 10.3 percent increase in shipment-
weighted average MPC, resulting in a negative change in INPV at TSL 2. 
The $49 million in conversion costs further erodes profitability, and 
the lower base case INPV against which the change in INPV is compared 
under the emerging technologies scenario increases impacts on a 
percentage basis.
    TSL 3 represents EL1 for product class 5 and EL3 for product 
classes 1, 2, and 3. At TSL 3, DOE estimates impacts on INPV to range 
from -$95.3 million to -$296.2 million, or a change in INPV of -7.7 
percent to -34.7 percent. At this proposed level, industry free cash 
flow is estimated to decrease by approximately 57.4 percent to $21.2 
million, compared to the base-case value of $49.7 million in the year 
leading up to the proposed energy conservation standards.
    Because product class 5 remains at EL1 at TSL 3, the additional 
impacts at TSL 3 relative to TSL 2 result from increasing product 
classes 1, 2, and 3 to EL3. At TSL 3, DOE estimates that only 20 
percent of product class 1 shipments, 5 percent of product class 2 
shipments, and 2 percent of product class 3 shipments would meet the 
efficiency levels proposed by TSL 3 or higher in the base case.
    At TSL 3, conversion costs nearly double again compared to TSL 2. 
Product conversion costs increase to $57 million because a far greater 
number of product lines within product classes 1, 2, and 3 would need 
to be redesigned at TSL 3. Capital conversion costs rise to $34 million 
at TSL 3 because manufacturers would need to invest in equipment such 
as surface-mount device placement machinery and solder machines to 
convert production lines for the manufacturing of more efficient 
ballast designs.
    Under the preservation of operating profit markup, existing 
technologies, and shift shipment scenarios, INPV decreases by 7.7 
percent at TSL 3 compared to the base case, which is nearly double the 
percentage impact at TSL 2. The shipment-weighted average MPC increases 
by 19.5 percent, but manufacturers are not able to pass on the full 
amount of these higher costs to consumers. This MPC increase is 
outweighed by the $91 million in conversion costs at TSL 3.
    Under the two-tier markup scenario, at TSL 3, products are 
commoditized to a lower markup to an even greater extent. The impact of 
this lower average markup of 1.34 outweighs the impact of a 19.3 
percent increase in shipment-weighted average MPC, resulting in a 
negative change in INPV at TSL 3 compared to TSL 2. Profitability is 
further impacted by the $91 million in conversion costs and the lower 
base-case INPV over which change in INPV is compared under the emerging 
technologies scenario.
a. Impacts on Employment
    DOE typically presents modeled quantitative estimates of the 
potential changes in production employment that could result following 
amended energy conservation standards. However, for this rulemaking, 
DOE determined that none of the major manufacturers, which compose more 
than 90 percent of the market, have domestic fluorescent lamp ballast 
production. Although a few niche manufacturers have relatively limited 
domestic production, based on interviews, DOE believes there are very 
few domestic production employees in the United States Because many 
niche manufacturers did not respond to interview requests, DOE is 
unable to fully quantify domestic production employment. Therefore, 
while DOE qualitatively discusses potential employment impacts below, 
DOE did not model direct employment impacts explicitly because the 
results would not be meaningful given the very low

[[Page 20159]]

number of domestic production employees.
    Based on interviews, DOE believes that direct employment impacts of 
relatively significant magnitude would only occur in the event that one 
or more businesses chose to exit the market due to new standards. 
Discussions with manufacturers indicated that, at the highest 
efficiency level (TSL 3), some small manufacturers will be faced with 
the decision to make the investments necessary to remain in the market 
based on their current technical capabilities. In general, however, DOE 
believes that TSL 3, the level proposed in today's notice, will not 
have significant adverse impacts on employment because achieving these 
levels is within the expertise of most manufacturers, including small 
manufacturers, due to the lack of intellectual property restrictions 
and similarity of products among manufacturers.
    In summary, however, given the low number of production employees 
and the unlikelihood that manufacturers would exit the market at the 
efficiency levels proposed in today's notice, DOE does not expect a 
significant impact on direct employment following new and amended 
energy conservation standards.
    DOE notes that the employment impacts discussed here are 
independent of the employment impacts from the broader U.S. economy, 
which are documented in chapter 15, Employment Impact Analysis, of the 
NOPR TSD.
b. Impacts on Manufacturing Capacity
    Manufacturers stated that new and amended energy conservation 
standards could harm manufacturing capacity due to the current 
component shortage discussed in section 0 above. Manufacturers 
presently are struggling to produce enough fluorescent lamp ballasts to 
meet demand because of a worldwide shortage of electrical components. 
The components most affected by this shortage are high-efficiency 
parts, for which demand would increase even further following new and 
amended conservation standards. The increased demand could exacerbate 
the component shortage, thereby impacting manufacturing capacity in the 
near term. While DOE recognizes that the component shortage is 
currently a significant issue for manufacturers, DOE believes it is a 
relatively short term phenomenon to which component suppliers will 
ultimately adjust. According to manufacturers, suppliers have the 
ability to ramp up production to meet ballast component demand by the 
compliance date of potential new standards, but those suppliers have 
hesitated to invest in additional capacity due to economic uncertainty 
and skepticism about the sustainability of demand. The state of the 
macroeconomic environment through 2014 will likely impact the duration 
of the component shortage. However, potential mandatory standards could 
create more certainty for suppliers about the eventual demand for these 
components. Additionally, the components at issue are not new 
technologies; rather, they have simply not historically been demanded 
in large quantities by ballast manufacturers.
c. Impacts on Sub-Groups of Manufacturers
    As discussed in section 0, using average cost assumptions to 
develop an industry cash-flow estimate is inadequate to assess 
differential impacts among manufacturer sub-groups. DOE used the 
results of the industry characterization to group ballast manufacturers 
exhibiting similar characteristics. DOE identified two sub-groups that 
would experience differential impacts: Small manufacturers and sign 
ballast manufacturers. For a discussion of the impacts on the small 
manufacturer sub-group, see the Regulatory Flexibility Analysis in 
section 0 and chapter 13 of the NOPR TSD.
    DOE is not presenting results under the two-tier markup scenario 
for sign ballasts because it did not observe this two-tier effect in 
the sign ballast market. Electronic ballasts at EL1 neither command a 
higher price nor a higher markup in the base case. Additionally, roll-
up and shift scenarios do not have separate impacts for sign ballasts 
because there are no higher ELs above the new baseline to which 
products could potentially shift in the standards case. As such, the 
tables below present the cash-flow analysis results under the 
preservation of operating profit markup and roll-up shipment scenarios 
with existing or emerging technologies for sign ballast manufacturers.

Table VIII.29--Manufacturer Impact Analysis for Sign Ballasts--Preservation of Operating Profit Markup, Existing
                                   Technologies, and Roll-up Shipment Scenario
----------------------------------------------------------------------------------------------------------------
                                                                                    Trial standard level
                XIV.                           Units           Base case  --------------------------------------
                                                                                1            2            3
----------------------------------------------------------------------------------------------------------------
INPV................................  (2009$ millions)......          142          138          138          138
Change in INPV......................  (2009$ millions)......  ...........        (4.2)        (4.2)        (4.2)
                                      (%)...................  ...........        -2.9%        -2.9%        -2.9%
Product Conversion Costs............  (2009$ millions)......  ...........            2            2            2
Capital Conversion Costs............  (2009$ millions)......  ...........            6            6            6
Total Conversion Costs..............  (2009$ millions)......  ...........            8            8            8
----------------------------------------------------------------------------------------------------------------


Table VIII.30--Manufacturer Impact Analysis for Sign Ballasts--Preservation of Operating Profit Markup, Emerging
                                   Technologies, and Roll-up Shipment Scenario
----------------------------------------------------------------------------------------------------------------
                                                                                    Trial standard level
                 XV.                           Units           Base case  --------------------------------------
                                                                                1            2            3
----------------------------------------------------------------------------------------------------------------
INPV................................  (2009$ millions)......          116          111          111          111
Change in INPV......................  (2009$ millions)......  ...........        (5.1)        (5.1)        (5.1)
                                      (%)...................  ...........        -4.4%        -4.4%       -4.4%.
Product Conversion Costs............  (2009$ millions)......  ...........            2            2            2
Capital Conversion Costs............  (2009$ millions)......  ...........            6            6            6

[[Page 20160]]

 
Total Conversion Costs..............  (2009$ millions)......  ...........            8            8            8
----------------------------------------------------------------------------------------------------------------

    For sign ballasts (product class 5), DOE analyzed only one 
efficiency level; thus, the results are the same at each TSL. TSLs 1 
through 3 represent EL1 for product class 5. At TSLs 1 through 3, DOE 
estimates impacts on INPV to range from -$4.2 million to -$5.1 million, 
or a change in INPV of -2.9 percent to -4.4 percent. At these proposed 
levels, industry free cash flow is estimated to decrease by 
approximately 38.4 percent to $4.9 million, compared to the base-case 
value of $7.9 million in the year leading up to the proposed energy 
conservation standards.
    As shown by the results, DOE expects sign ballast manufacturers to 
face small negative impacts under TSLs 1 through 3. DOE estimates that 
64 percent of product class 5 shipments would meet EL1 in the base 
case. This means that many manufacturers already produce electronic 
sign ballasts, which is the design option represented by EL1. However, 
many other manufacturers produce only magnetic T12 sign ballasts and 
therefore would face significant capital exposure moving from magnetic 
to electronic to meet TSLs 1 through 3. For that reason, DOE estimates 
relatively high capital conversion costs of $6 million for sign ballast 
manufacturers. Product redesign and testing costs are expected to total 
$2 million for sign ballasts.
    Unlike most product classes, sign ballasts are expected to decrease 
rather than increase in price moving from baseline to EL1 by a 
shipment-weighted average decrease in MPC of 4.5 percent. This is 
because electronic ballasts are a cheaper alternative to magnetic 
ballasts, even though the industry has not fully moved toward 
electronic production yet. During interviews, manufacturers stated that 
consumers were reluctant to convert to electronic ballasts although 
there were no technical barriers to doing so. Under the preservation of 
operating profit markup scenario, however, manufacturers are able to 
maintain the base-case operating profit for the year following the 
compliance date of amended standards despite lower production costs, so 
the average markup increases slightly to 1.41 to account for the 
decrease in MPC. Despite this markup increase, revenue is lower at TSLs 
1 through 3 than in the base case because of the lower average unit 
price, and the $8 million in conversion costs increases the negative 
impact. When the preservation of operating profit markup is combined 
with the existing technologies scenario rather than the emerging 
technologies scenario, the impact of this maximized revenue per unit is 
greatest because it is applied to a larger total quantity of shipments.
a. Cumulative Regulatory Burden
    While any one regulation may not impose a significant burden on 
manufacturers, the combined effects of recent or impending regulations 
may have serious consequences for some manufacturers, groups of 
manufacturers, or an entire industry. Assessing the impact of a single 
regulation may overlook this cumulative regulatory burden. In addition 
to energy conservation standards, other regulations can significantly 
affect manufacturers' financial operations. Multiple regulations 
affecting the same manufacturer can strain profits and lead companies 
to abandon product lines or markets with lower expected future returns 
than competing products. For these reasons, DOE conducts an analysis of 
cumulative regulatory burden as part of its rulemakings pertaining to 
appliance efficiency.
    During previous stages of this rulemaking DOE identified a number 
of requirements, in addition to amended energy conservation standards 
for ballasts, that manufacturers of these products will face for 
products and equipment they manufacture within approximately 3 years 
prior to and 3 years after the anticipated compliance date of the 
amended standards. The following section briefly addresses comments DOE 
received with respect to cumulative regulatory burden and summarizes 
other key related concerns that manufacturers raised during interviews.
    NEMA stated that the effects of most safety, electromagnetic 
interference (EMI), and toxic materials regulations are the same on all 
ballast manufacturers. (NEMA, No. 29 at p. 9) DOE agrees that all 
ballast manufacturers are subject to the same requirements as described 
in this section and in chapter 13 of the NOPR TSD. Small manufacturers 
may be impacted differentially and are therefore analyzed as a 
manufacturer sub-group in section 0.
    NEMA also stated that regulatory actions generally limit 
competitiveness and force ballast manufacturers to add cost to their 
base designs to comply with the regulatory requirements. (NEMA, No. 29 
at p. 9) DOE asked manufacturers to quantify impacts of regulatory 
actions where possible, and in the engineering analysis, DOE modified 
the ballast efficiency, cost, or both at each analyzed efficiency level 
according to the impacts of these regulations. These specific 
regulatory actions and DOE's treatment of their impacts are discussed 
below and in section 0.
    NEMA further suggested that regulatory pressure on traditional 
ballasts takes investments away from efforts to further develop dimming 
ballasts and their related controls. (NEMA, No. 29 at p. 12) DOE 
recognizes that there is an opportunity cost associated with any 
investment, and this opportunity cost is reflected in the discount rate 
used in the GRIM. In deciding which TSL to propose, DOE weighs the 
potential benefits of new and amended energy conservation standards 
against the potential burdens, including the impact on manufacturers, 
to determine which TSL is technologically feasible and economically 
justified.
    Several manufacturers expressed concern during interviews about the 
overall volume of DOE energy conservation standards with which they 
must comply. Most fluorescent lamp ballast manufacturers also make a 
full range of lighting products and share engineering and other 
resources with these other internal manufacturing divisions for 
different products (including certification testing for regulatory 
compliance). For example, DOE amended standards in 2009 for general 
service fluorescent lamps and incandescent reflector lamps for which 
compliance will be required in 2012. Manufacturers were concerned that 
the other products facing new or amended energy conservation standards 
would compete for the same engineering and financial resources.

[[Page 20161]]

    DOE takes into account the cost of compliance with other published 
Federal energy conservation standards, such as those established in the 
2009 lamps rule, in weighing the benefits and burdens of today's 
proposed rulemaking. These costs and the extent to which they could be 
incurred by fluorescent lamp ballast manufacturers are provided in 
chapter 13 of the NOPR TSD. DOE does not include the impacts of 
standards that have not yet been finalized because any impacts would be 
speculative.
    Several manufacturers noted the safety requirements ballast 
manufacturers must meet. NEMA described the need to add a line voltage 
disconnect to certain lighting systems and the need to use UL Type CC 
rated (anti-arcing) ballasts or high temperature circle ``I'' rated 
lampholders in OEM fixtures and UL-marked retrofit kits. The Type CC 
rating requires control circuitry to implement, and these circuits will 
consume system power, which decreases overall ballast electrical 
efficiency. (NEMA, No. 29 at p. 9) DOE appreciates this information on 
safety requirements, but DOE has not adjusted its engineering analysis 
according to these potential impacts. The burden for line voltage 
disconnect requirements falls solely on luminaire manufacturers rather 
than on ballast manufacturers. For anti-arcing protection, most fixture 
manufacturers comply with UL 1598 by using circle ``I'' lampholders. 
Fixture manufacturers can also comply by purchasing premium Type CC 
rated ballasts, which are often bundled with high-efficiency to command 
a higher markup. Because providing Type CC ballasts to fixture 
manufacturers is not required, DOE does not believe UL 1598 warrants 
adjustment of the TSLs proposed in today's notice. See section 0 in the 
engineering analysis for more information on Type CC protection. 
Further detail on UL 1598 and the burden it imposes is provided in 
chapter 13 of the NOPR TSD.
    Manufacturers also discussed requirements regarding EMI. Currently, 
ballasts are tested only for conducted emissions under FCC Part 18, 
which is not as rigorous as the CISPR 15 requirements effective in 
Europe. The burden of proof for existing EMI tests rests with the 
luminaire manufacturers. (NEMA, No. 29 at p. 10) Manufacturers noted 
that they could be required to comply with the model European EMI 
regulation in the future, which would result in design changes that 
could decrease efficiency. (NEMA, No. 29 at p. 10; OSI, Public Meeting 
Transcript, No. 12 at p. 188) DOE has not adjusted its estimates for 
ballast efficiency or price because NEMA's comment refers to potential 
EMI regulations, but DOE will consider adjusting its analysis for the 
final rule if these regulations are required prior to issuance of the 
final rule.
    Manufacturers also stated that lamp end-of-life (EOL) requirements 
are a regulatory burden. T5 ballasts are required to have EOL 
protection systems that detect characteristic electrical signals of a 
lamp in distress and activate control functions in the ballast to limit 
energy supplied to the lamp. Compliance with EOL requirements has added 
cost and design complexity to these systems. (NEMA, No. 29 at p. 9-10) 
In the future, T8 and T12 ballasts could also require EOL protection, 
which could add cost and decrease efficiency. (NEMA, No. 29 at p. 10; 
Philips, Public Meeting Transcript, No. 12 at p. 185-186) DOE agrees 
that EOL requirements have affected the cost and design of T5 ballasts, 
but because all T5 ballasts on the market, including those selected as 
representative ballast types for DOE's engineering analysis, already 
include these EOL protection systems, the effects of this requirement 
are already taken into account. As stated in section 0, DOE does not 
expect EOL protection to be required for T8 and T12 ballasts in the 
United States as required in Europe due to significant differences 
between the lamps used in the United States and Europe. If EOL 
requirements change prior to the issuance of the final rule, DOE will 
consider adjusting its analysis.
    Manufacturers also expressed concern about the increasing 
stringency of international energy efficiency standards and materials 
requirements. Compliance with many regulations such as the Restriction 
of Hazardous Substances (RoHS) directive in Europe on the use of lead-
based solder and other toxic materials is currently optional but could 
become a requirement in the future. Compliance with toxic material 
regulations could result in cost increases, component shortages, and 
product quality concerns. (NEMA, No. 29 at p. 10, 13; Philips, Public 
Meeting Transcript, No. 12 at p. 186-188; GE, Public Meeting 
Transcript, No. 12 at p. 243-244) As described in section 0, DOE does 
not believe any adjustment to ballast price or efficiency is necessary 
to comply with toxic material regulations because compliance is 
optional, but DOE will consider adjusting its analysis for the final 
rule if these regulations are required prior to issuance of the final 
rule.
    DOE discusses these and other requirements, and includes the full 
details of the cumulative regulatory burden analysis, in chapter 13 of 
the NOPR TSD.
2. National Impact Analysis
a. Significance of Energy Savings
    To estimate the energy savings through 2043 attributable to 
potential standards for ballasts, DOE compared the energy consumption 
of these products under the base case to their anticipated energy 
consumption under each TSL. The table below presents DOE's forecasts of 
the national energy savings for each TSL, calculated using the AEO2010 
energy price forecast. This table presents the results of the two 
scenarios that represent the maximum and minimum energy savings 
resulting from all the scenarios analyzed. Chapter 11 of the NOPR TSD 
describes these estimates in more detail.

              Table VIII.31--Summary of Cumulative National Energy Savings for Ballasts (2014-2043)
----------------------------------------------------------------------------------------------------------------
                                                                          National energy savings quads
                                                               -------------------------------------------------
     XVI. Trial standard level        XVII. Product class and                                       Emerging
                                           ballast type          Existing technologies, shift    technologies,
                                                                                                    roll-up
----------------------------------------------------------------------------------------------------------------
1.................................  1--IS and RS ballasts that  .............................  .................
                                     operate:                                         1.42               0.002
                                    Two 4-foot MBP lamps
                                     (commercial).
                                       Two 4-foot MBP lamps                           0.22               0.01
                                        (residential).
                                       Four 4-foot MBP lamps..                        0                  0
                                       Two 8-foot slimline                            0                  0
                                        lamps.
                                    2--PS ballasts that         .............................  .................
                                     operate:                                         0.19               0.09
                                    Two 4-foot MBP lamps......

[[Page 20162]]

 
                                       Four 4-foot MBP lamps..                        0.45               0.22
                                       Two 4-foot MiniBP SO                           0.37               0.18
                                        lamps.
                                       Two 4-foot MiniBP HO                           0.20               0.19
                                        lamps.
                                    3--IS and RS ballasts that
                                     operate:
                                       Two 8-foot HO lamps....                        0.0003             0.0003
                                    5--Ballasts that operate:
                                       Four 8-foot HO lamps in                        0.90               0.68
                                        cold temperature
                                        outdoor signs.
                                                               -------------------------------------------------
                                         Total................                        3.74               1.38
----------------------------------------------------------------------------------------------------------------
2.................................  1--IS and RS ballasts that  .............................  .................
                                     operate:                                         1.42               0.68
                                    Two 4-foot MBP lamps
                                     (commercial).
                                       Two 4-foot MBP lamps                           0.23               0.21
                                        (residential).
                                       Four 4-foot MBP lamps..                        0                  0
                                       Two 8-foot slimline                            0.02               0.001
                                        lamps.
                                    2--PS ballasts that         .............................  .................
                                     operate:                                         0.19               0.09
                                    Two 4-foot MBP lamps......
                                       Four 4-foot MBP lamps..                        0.55               0.29
                                       Two 4-foot MiniBP SO                           0.72               0.32
                                        lamps.
                                       Two 4-foot MiniBP HO                           0.36               0.32
                                        lamps.
                                    3--IS and RS ballasts that
                                     operate:.
                                       Two 8-foot HO lamps....                        0.0003             0.0002
                                    5--Ballasts that operate:
                                       Four 8-foot HO lamps in                        0.90               0.68
                                        cold temperature
                                        outdoor signs.
                                                               -------------------------------------------------
                                         Total................                        4.39               2.59
----------------------------------------------------------------------------------------------------------------
3.................................  1--IS and RS ballasts that  .............................  .................
                                     operate:                                         1.97               1.02
                                    Two 4-foot MBP lamps
                                     (commercial).
                                       Two 4-foot MBP lamps                           0.23               0.21
                                        (residential).
                                       Four 4-foot MBP lamps..                        0.32               0.17
                                       Two 8-foot slimline                            0.02               0.02
                                        lamps.
                                    2--PS ballasts that
                                     operate:
                                       Two 4-foot MBP lamps...                        0.22               0.11
                                       Four 4-foot MBP lamps..                        0.55               0.29
                                       Two 4-foot MiniBP SO                           1.52               0.71
                                        lamps.
                                       Two 4-foot MiniBP HO                           0.52               0.49
                                        lamps.
                                    3--IS and RS ballasts that  .............................  .................
                                     operate:                                         0.0006             0.0005
                                    Two 8-foot HO lamps.......
                                    5--Ballasts that operate:
                                       Four 8-foot HO lamps in                        0.90               0.68
                                        cold temperature
                                        outdoor signs.
                                                               -------------------------------------------------
                                         Total................                        6.25               3.70
----------------------------------------------------------------------------------------------------------------

a. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV to the nation of the total costs 
and savings for consumers that would result from particular standard 
levels for ballasts. In accordance with the OMB's guidelines on 
regulatory analysis (OMB Circular A-4, section E, September 17, 2003), 
DOE calculated NPV using both a 7-percent and a 3-percent real discount 
rate. The 7-percent rate is an estimate of the average before-tax rate 
of return to private capital in the U.S. economy, and reflects the 
returns to real estate and small business capital as well as corporate 
capital. DOE used this discount rate to approximate the opportunity 
cost of capital in the private sector, because recent OMB analysis has 
found the average rate of return to capital to be near this rate. In 
addition, DOE used the 3-percent rate to capture the potential effects 
of standards on private consumption (e.g., through higher prices for 
products and the purchase of reduced amounts of energy). This rate 
represents the rate at which society discounts future consumption flows 
to their present value. This rate can be approximated by the real rate 
of return on long-term government debt (i.e., yield on Treasury notes 
minus annual rate of change in the Consumer Price Index), which has 
averaged about 3 percent on a pre-tax basis for the last 30 years.
    The table below shows the consumer NPV results for each TSL DOE 
considered for ballasts, using both a 7-percent and a 3-percent 
discount rate. Similar to the results presented for NES, this table 
presents the results of the two scenarios that represent the maximum 
and minimum NPV resulting from all the scenarios analyzed. See chapter 
11 of the NOPR TSD for more detailed NPV results.

[[Page 20163]]



                                     Table VIII.32--Summary of Cumulative Net Present Value for Ballasts (2014-2043)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Net present value (billion 2009$)
                                                                                         ---------------------------------------------------------------
                                                                                           Existing technologies, shift   Emerging technologies, roll-up
          XVIII. Trial standard level              XIX. Product class and ballast type   ---------------------------------------------------------------
                                                                                             7 Percent       3 Percent       7 Percent       3 Percent
                                                                                           discount rate   discount rate   discount rate   discount rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..............................................  1--IS and RS ballasts that operate:
                                                    Two 4-foot MBP lamps (commercial)...            3.11            6.82           0.004           0.006
                                                    Two 4-foot MBP lamps (residential)..            0.44            0.97           0.15            0.24
                                                    Four 4-foot MBP lamps...............            0               0              0               0
                                                    Two 8-foot slimline lamps...........            0               0              0               0
                                                 2--PS ballasts that operate:
                                                    Two 4-foot MBP lamps................            0.48            0.93           0.27            0.50
                                                    Four 4-foot MBP lamps...............            0.97            2.10           0.58            1.16
                                                    Two 4-foot MiniBP SO lamps..........            0.88            1.95           0.56            1.08
                                                    Two 4-foot MiniBP HO lamps..........            0.32            0.66           0.32            0.66
                                                 3--IS and RS ballasts that operate:
                                                    Two 8-foot HO lamps.................            0.02            0.03           0.001           0.001
                                                 5--Ballasts that operate:
                                                    Four 8-foot HO lamps in cold                    2.72            5.12           2.33            4.27
                                                     temperature outdoor signs.
                                                                                         ---------------------------------------------------------------
                                                    Total...............................            8.93           18.58           4.21            7.91
--------------------------------------------------------------------------------------------------------------------------------------------------------
2..............................................  1--IS and RS ballasts that operate:
                                                    Two 4-foot MBP lamps (commercial)...            3.11            6.82           1.79            3.65
                                                    Two 4-foot MBP lamps (residential)..            0.45            0.98           0.45            0.98
                                                    Four 4-foot MBP lamps...............            0               0              0               0
                                                    Two 8-foot slimline lamps...........            0.06            0.11           0.01            0.01
                                                 2--PS ballasts that operate:
                                                    Two 4-foot MBP lamps................            0.48            0.93           0.27            0.50
                                                    Four 4-foot MBP lamps...............            1.15            2.50           0.71            1.45
                                                    Two 4-foot MiniBP SO lamps..........            1.06            2.50           0.67            1.38
                                                    Two 4-foot MiniBP HO lamps..........            0.26            0.60           0.26            0.59
                                                 3--IS and RS ballasts that operate:
                                                    Two 8-foot HO lamps.................            0.03            0.04           0.03            0.04
                                                 5--Ballasts that operate:                ..............
                                                    Four 8-foot HO lamps in cold                    2.72            5.12           2.33            4.27
                                                     temperature outdoor signs.
                                                                                         ---------------------------------------------------------------
                                                    Total...............................            9.31           19.62           6.51           12.88
                                                                                         ---------------------------------------------------------------
3..............................................  1--IS and RS ballasts that operate:
                                                    Two 4-foot MBP lamps (commercial)...            4.52            9.84           2.84            5.73
                                                    Two 4-foot MBP lamps (residential)..            0.45            0.98           0.45            0.98
                                                    Four 4-foot MBP lamps...............            0.44            1.02           0.28            0.62
                                                    Two 8-foot slimline lamps...........            0.06            0.12           0.06            0.12
                                                 2--PS ballasts that operate:
                                                    Two 4-foot MBP lamps................            0.53            1.04           0.31            0.58
                                                    Four 4-foot MBP lamps...............            1.15            2.50           0.71            1.45
                                                    Two 4-foot MiniBP SO lamps..........            1.31            3.42           0.88            2.07
                                                    Two 4-foot MiniBP HO lamps..........            0.25            0.63           0.25            0.63
                                                 3--IS and RS ballasts that operate:
                                                    Two 8-foot HO lamps.................            0.03            0.04           0.03            0.04
                                                 5--Ballasts that operate:                ..............  ..............  ..............  ..............
                                                    Four 8-foot HO lamps in cold                    2.72            5.12           2.33            4.27
                                                     temperature outdoor signs.
                                                                                         ---------------------------------------------------------------
                                                      Total.............................           11.43           24.71           8.13           16.49
--------------------------------------------------------------------------------------------------------------------------------------------------------

a. Impacts on Employment
    DOE develops estimates of the indirect employment impacts of 
potential standards on the economy in general. As discussed above, DOE 
expects energy conservation standards for ballasts to reduce energy 
bills for ballast customers and the resulting net savings to be 
redirected to other forms of economic activity. These shifts in 
spending and economic activity could affect the demand for labor. As 
described in section 0 above, DOE used an input/output model of the 
U.S. economy to estimate these effects.
    The input/output model suggests that today's proposed standards are 
likely to increase the net demand for labor in the economy. However, 
the gains would most likely be very small relative to total national 
employment, and neither the BLS data nor the input/output model DOE 
uses includes the quality or wage level of the jobs. As discussed in 
section 0 above, the major manufacturers interviewed for this 
rulemaking indicate they have no domestic ballast production. DOE

[[Page 20164]]

believes, therefore, that new and amended standards for ballasts will 
not have a significant impact on the limited number of production 
workers directly employed by ballast manufacturers in the U.S.
    Table VIII.33 presents the estimated net indirect employment 
impacts from the TSLs that DOE considered in this rulemaking. See NOPR 
TSD chapter 15 for more detailed results.

              Table VIII.33--Net Change in Jobs From Indirect Employment Effects Under Ballast TSLs
----------------------------------------------------------------------------------------------------------------
                                                                                  Net national change in jobs
                                                                                          (thousands)
                                                                  XXI. Trial -----------------------------------
                    XX. Analysis period year                       standard       Existing          Emerging
                                                                    level       technologies,     technologies,
                                                                                    shift            roll-up
----------------------------------------------------------------------------------------------------------------
2020...........................................................            1             12.64              3.67
                                                                           2              2.89              2.59
                                                                           3              3.63              3.31
----------------------------------------------------------------------------------------------------------------
2043...........................................................            1            123.75             31.79
                                                                           2             63.21             37.07
                                                                           3             89.47             51.06
----------------------------------------------------------------------------------------------------------------

1. Impact on Utility or Performance of Products
    As presented in section 0 of this notice, DOE concluded that none 
of the TSLs considered in this notice would reduce the utility or 
performance of the products under consideration in this rulemaking. 
Furthermore, manufacturers of these products currently offer ballasts 
that meet or exceed the proposed standards. (42 U.S.C. 
6295(o)(2)(B)(i)(IV))
2. Impact of Any Lessening of Competition
    DOE has also considered any lessening of competition that is likely 
to result from new and amended standards. The Attorney General 
determines the impact, if any, of any lessening of competition likely 
to result from a proposed standard, and transmits such determination to 
the Secretary, together with an analysis of the nature and extent of 
such impact. (42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii))
    To assist the Attorney General in making such determination, DOE 
has provided DOJ with copies of this notice and the TSD for review. DOE 
will consider DOJ's comments on the proposed rule in preparing the 
final rule, and DOE will publish and respond to DOJ's comments in that 
document.
3. Need of the Nation To Conserve Energy
    An improvement in the energy efficiency of the products subject to 
today's rule is likely to improve the security of the nation's energy 
system by reducing overall demand for energy. Reduced electricity 
demand may also improve the reliability of the electricity system. As a 
measure of this reduced demand, Table VIII.34 presents the estimated 
reduction in generating capacity in 2043 for the TSLs that DOE 
considered in this rulemaking.

 Table VIII.34--Reduction in Electric Generating Capacity in 2043 Under
                              Ballast TSLs
------------------------------------------------------------------------
                                       Reduction in electric generating
                                             capacity (gigawatts)
                                     -----------------------------------
     XXII. Trial standard level           Existing          Emerging
                                        technologies,     technologies,
                                            shift            roll-up
------------------------------------------------------------------------
1...................................              4.17              1.51
2...................................              5.20              2.99
3...................................              7.22              4.37
------------------------------------------------------------------------

    Energy savings from amended standards for ballasts could also 
produce environmental benefits in the form of reduced emissions of air 
pollutants and greenhouse gases associated with electricity production. 
Table VIII.35 provides DOE's estimate of cumulative CO2, 
NOX, and Hg emissions reductions projected to result from 
the TSLs considered in this rulemaking. DOE reports annual 
CO2, NOX, and Hg emissions reductions for each 
TSL in the environmental assessment in chapter 16 of the NOPR TSD.

                    Table VIII.35--Summary of Emissions Reduction Estimated for Ballast TSLs
                                       [Cumulative for 2014 through 2043]
----------------------------------------------------------------------------------------------------------------
                                                               Cumulative reduction in emissions (2014 through
                                                                                    2043)
                                                           -----------------------------------------------------
                                                              Existing technologies,     Emerging technologies,
                XXIII. Trial standard level                           shift                     roll-up
                                                           -----------------------------------------------------
                                                              CO2                        CO2
                                                              MMt    NOX  kt   Hg  t     MMt    NOX  kt   Hg  t
----------------------------------------------------------------------------------------------------------------
1.........................................................       70       26     0.96       14       11     0.20
2.........................................................       87       32     1.20       27       22     0.40

[[Page 20165]]

 
3.........................................................      121       44     1.67       40       32     0.59
----------------------------------------------------------------------------------------------------------------

    As discussed in section 0, DOE did not report sulfur dioxide 
(SO2) emissions reductions from power plants because there 
is uncertainty about the effect of energy conservation standards on the 
overall level of SO2 emissions in the United States due to 
SO2 emissions caps. DOE also did not include NOX 
emissions reduction from power plants in States subject to CAIR because 
an energy conservation standard would not affect the overall level of 
NOX emissions in those States due to the emissions caps 
mandated by CAIR.
    As part the analysis for this proposed rule, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
and NOX that DOE estimated for each of the TSLs considered. 
As discussed in section 0, DOE used values for the SCC developed by an 
interagency process. The four values for CO2 emissions 
reductions resulting from that process (expressed in 2007$) are $4.7/
ton (the average value from a distribution that uses a 5-percent 
discount rate), $21.4/ton (the average value from a distribution that 
uses a 3-percent discount rate), $35.1/ton (the average value from a 
distribution that uses a 2.5-percent discount rate), and $64.9/ton (the 
95th-percentile value from a distribution that uses a 3-percent 
discount rate). These values correspond to the value of emission 
reductions in 2010; the values for later years are higher due to 
increasing damages as the magnitude of climate change increases. For 
each TSL, DOE calculated the global present values of CO2 
emissions reductions, using the same discount rate as was used in the 
studies upon which the dollar-per-ton values are based. DOE calculated 
domestic values as a range from 7 percent to 23 percent of the global 
values.
    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other GHG emissions to changes in 
the future global climate and the potential resulting damages to the 
world economy continues to evolve rapidly. Thus, any value placed in 
this rulemaking on reducing CO2 emissions is subject to 
change. DOE, together with other Federal agencies, will continue to 
review various methodologies for estimating the monetary value of 
reductions in CO2 and other GHG emissions. This ongoing 
review will consider the comments on this subject that are part of the 
public record for this and other rulemakings, as well as other 
methodological assumptions and issues. However, consistent with DOE's 
legal obligations, and taking into account the uncertainty involved 
with this particular issue, DOE has included in this NOPR the most 
recent values and analyses resulting from the ongoing interagency 
review process.
    DOE also estimated a range for the cumulative monetary value of the 
economic benefits associated with NOX and Hg emissions 
reductions anticipated to result from amended ballast standards. 
Estimated monetary benefits for CO2, NOX and Hg 
emission reductions are detailed in chapter 16 of the NOPR TSD.
    The NPV of the monetized benefits associated with emissions 
reductions can be viewed as a complement to the NPV of the consumer 
savings calculated for each TSL considered in this rulemaking. Table 
VIII.36 shows an example of the calculation of the combined NPV 
including benefits from emissions reductions for the case of TSL 3 for 
ballasts. The CO2 values used in the table correspond to the 
four scenarios for the valuation of CO2 emission reductions 
presented in section 0.

 Table VIII.36--Adding Net Present Value of Consumer Savings To Present
Value of Monetized Benefits From CO2 and NOX Emissions Reductions at TSL
              3 for Ballasts (Existing Technologies, Shift)
------------------------------------------------------------------------
                                       Present value
              Category                 million 2009$   Discount rate (%)
------------------------------------------------------------------------
                                Benefits
------------------------------------------------------------------------
Operating Cost Savings.............            16,858                7
                                               35,284                3
CO2 Reduction Monetized Value (at                 429                5
 $4.7/Metric Ton)*.................
CO2 Reduction Monetized Value (at               2,185                3
 $21.4/Metric Ton)*................
CO2 Reduction Monetized Value (at               3,699                2.5
 $35.1/Metric Ton)*................
CO2 Reduction Monetized Value (at               6,668                3
 $64.9/Metric Ton)*................
NOX Reduction Monetized Value (at                  35                7
 $2,519/Ton)*......................
                                                   65                3
Total Monetary Benefits **.........            19,078                7
                                               37,534                3
------------------------------------------------------------------------
                                  Costs
------------------------------------------------------------------------
Total Incremental Installed Costs..             5,425                7
                                               10,573                3
------------------------------------------------------------------------

[[Page 20166]]

 
                           Net Benefits/Costs
------------------------------------------------------------------------
Including CO2 and NOX**............            13,653                7
                                               26,961                3
------------------------------------------------------------------------
* These values represent global values (in 2007$) of the social cost of
  CO2 emissions in 2010 under several scenarios. The values of $4.7,
  $21.4, and $35.1 per ton are the averages of SCC distributions
  calculated using 5 percent, 3 percent, and 2.5 percent discount rates,
  respectively. The value of $64.9 per ton represents the 95th
  percentile of the SCC distribution calculated using a 3 percent
  discount rate. See section 0 for details.
** Total Monetary Benefits for both the 3 percent and 7 percent cases
  utilize the central estimate of social cost of CO2 emissions
  calculated at a 3 percent discount rate (averaged across three IAMs),
  which is equal to $21.4/ton in 2010 (in 2007$).

    Although adding the value of consumer savings to the values of 
emission reductions provides a valuable perspective, the following 
should be considered: (1) The national consumer savings are domestic 
U.S. consumer monetary savings found in market transactions, while the 
values of emissions reductions are based on estimates of marginal 
social costs, which, in the case of CO2, are based on a 
global value; and (2) the assessments of consumer savings and emission-
related benefits are performed with different computer models, leading 
to different timeframes for analysis. For ballasts, the present value 
of national consumer savings is measured for the period in which units 
shipped (2014-2043) continue to operate. However, the time frames of 
the benefits associated with the emission reductions differ. For 
example, the value of CO2 emissions reductions reflects the 
present value of all future climate-related impacts due to emitting a 
ton of CO2 in that year, out to 2300.
    Chapter 16 of the NOPR TSD presents calculations of the combined 
NPV including benefits from emissions reductions for each TSL.

A. Proposed Standards

    DOE recognizes that when it considers proposed standards, it is 
subject to the EPCA requirement that any new or amended energy 
conservation standard for any type (or class) of covered product be 
designed to achieve the maximum improvement in energy efficiency that 
the Secretary determines is technologically feasible and economically 
justified. (42 U.S.C. 6295(o)(2)(A)) In determining whether a standard 
is economically justified, the Secretary must determine whether the 
benefits of the standard exceed its burdens to the greatest extent 
practicable, in light of the seven statutory factors discussed 
previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or amended standard 
must also result in a significant conservation of energy. (42 U.S.C. 
6295(o)(3)(B))
    DOE considered the impacts of standards at each trial standard 
level, beginning with the maximum technologically feasible level, to 
determine whether that level met the evaluation criteria. If the max 
tech level was not justified, DOE then considered the next most 
efficient level and undertook the same evaluation until it reached the 
highest efficiency level that is both technologically feasible and 
economically justified and saves a significant amount of energy.
    DOE discusses the benefits and/or burdens of each trial standard 
level in the following sections. DOE bases its discussion on 
quantitative analytical results for each trial standard level 
(presented in section 0) such as national energy savings, net present 
value (discounted at 7 and 3 percent), emissions reductions, industry 
net present value, life-cycle cost, and consumers' installed price 
increases. Beyond the quantitative results, DOE also considers other 
burdens and benefits that affect economic justification, including how 
technological feasibility, manufacturer costs, and impacts on 
competition may affect the economic results presented.
    To aid the reader as DOE discusses the benefits and burdens of each 
trial standard level, DOE has included tables below that present a 
summary of the results of DOE's quantitative analysis for each TSL. In 
addition to the quantitative results presented in the tables, DOE also 
considers other burdens and benefits that affect economic 
justification. Section 0 presents the estimated impacts of each TSL for 
these subgroups.

                                 Table VIII.37--Summary of Results for Ballasts
                                         [Existing Technologies, Shift]
----------------------------------------------------------------------------------------------------------------
            Category                        TSL 1                      TSL 2                      TSL 3
----------------------------------------------------------------------------------------------------------------
National Energy Savings (quads).  3.74.....................  4.39.....................  6.25.
----------------------------------------------------------------------------------------------------------------
                                    NPV of Consumer Benefits (2009$ billion)
----------------------------------------------------------------------------------------------------------------
3% discount rate................  18.58....................  19.62....................  24.71.
7% discount rate................  8.93.....................  9.31.....................  11.43.
----------------------------------------------------------------------------------------------------------------
                                                Industry Impacts
----------------------------------------------------------------------------------------------------------------
Industry NPV (2009$ million)....  1,221....................  1,189....................  1,145.
Industry NPV (% change).........  -1.6%....................  -4.2%....................  -7.7%.
----------------------------------------------------------------------------------------------------------------

[[Page 20167]]

 
                                         Cumulative Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (MMt).......................  70.......................  87.......................  121.
NOX (kt)........................  26.......................  32.......................  44.
Hg (t)..........................  0.96.....................  1.20.....................  1.67.
----------------------------------------------------------------------------------------------------------------
                                     Value of Cumulative Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (2009$ billion) *...........  0.25 to 3.85.............  0.31 to 4.80.............  0.43 to 6.67.
NOX--3% discount rate (2009$      37.......................  47.......................  65.
 million).
NOX--7% discount rate (2009$      20.......................  25.......................  35.
 million).
----------------------------------------------------------------------------------------------------------------
                                 Mean LCC Savings (replacement event) ** (2009$)
----------------------------------------------------------------------------------------------------------------
Product Class 1
IS and RS ballasts that operate:
    Two 4-foot MBP lamps          17.54 to 19.29...........  -2.11 to 25.00...........  -2.11 to 42.41.
     (commercial).
    Two 4-foot MBP lamps
     (residential).
    Four 4-foot MBP lamps.......
    Two 8-foot slimline lamps...
Product Class 2
PS ballasts that operate:
    Two 4-foot MBP lamps........  0.08 to 19.21............  7.52 to 22.57............  1.83 to 20.68.
    Four 4-foot MBP lamps.......
    Two 4-foot MiniBP SO lamps..
    Two 4-foot MiniBP HO lamps..
Product Class 3
Ballasts that operate:
    Two 8-foot HO lamps.........  69.82....................  234.45...................  2.33 to 236.77.
Product Class 5
Ballasts that operate:
    Four 8-foot HO lamps in cold- 389.91...................  389.91...................  389.91.
     temperature outdoor signs.
----------------------------------------------------------------------------------------------------------------
                                   Median PBP (replacement event) *** (years)
----------------------------------------------------------------------------------------------------------------
Product Class 1.................  -8.99 to -7.60...........  -6.99 to N/A.............  -6.99 to N/A.
Product Class 2.................  0.06 to 11.27............  0.61 to 5.09.............  1.22 to 7.19.
Product Class 3.................  -0.57....................  -0.67....................  -0.52 to 4.57.
Product Class 5.................  -0.16....................  -0.16....................  -0.16.
----------------------------------------------------------------------------------------------------------------
              Distribution of Consumer LCC Impacts (see Table VIII.16 through Table VIII.25 above)
----------------------------------------------------------------------------------------------------------------
Generation Capacity Reduction     4.17.....................  5.20.....................  7.22.
 (GW) [dagger].
----------------------------------------------------------------------------------------------------------------
                                               Employment Impacts
----------------------------------------------------------------------------------------------------------------
Indirect Domestic Jobs            123.75...................  63.21....................  89.47.
 (thousands) [dagger].
----------------------------------------------------------------------------------------------------------------
* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2
  emissions.
** For LCCs, a negative value means an increase in LCC by the amount indicated.
*** For PBPs, negative values indicate standards that reduce operating costs and installed costs; ``N/A''
  indicates standard levels that do not reduce operating costs.
[dagger] Changes in 2043.


                                 Table VIII.38--Summary of Results for Ballasts
                                        [Emerging Technologies, Roll-up]
----------------------------------------------------------------------------------------------------------------
            Category                        TSL 1                      TSL 2                      TSL 3
----------------------------------------------------------------------------------------------------------------
National Energy Savings (quads).  1.38.....................  2.59.....................  3.70.
----------------------------------------------------------------------------------------------------------------
                                    NPV of Consumer Benefits (2009$ billion)
----------------------------------------------------------------------------------------------------------------
3% discount rate................  7.91.....................  12.88....................  16.49.
7% discount rate................  4.21.....................  6.51.....................  8.13.
----------------------------------------------------------------------------------------------------------------
                                                Industry Impacts
----------------------------------------------------------------------------------------------------------------
Industry NPV (2009$ million)....  740......................  635......................  557.
Industry NPV (% change).........  -13.2%...................  -25.5%...................  -34.7%.
----------------------------------------------------------------------------------------------------------------

[[Page 20168]]

 
                                         Cumulative Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (MMt).......................  14.......................  27.......................  40.
NOX (kt)........................  11.......................  22.......................  32.
Hg (t)..........................  0.20.....................  0.40.....................  0.59.
----------------------------------------------------------------------------------------------------------------
                                     Value of Cumulative Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (2009$ billion) *...........  0.06 to 0.90.............  0.13 to 1.79.............  0.18 to 2.62.
NOX--3% discount rate (2009$      14.......................  29.......................  42.
 million).
NOX--7% discount rate (2009$      7........................  13.......................  19.
 million).
----------------------------------------------------------------------------------------------------------------
                                 Mean LCC Savings (replacement event) ** (2009$)
----------------------------------------------------------------------------------------------------------------
Product Class 1
IS and RS ballasts that operate:
    Two 4-foot MBP lamps          17.54 to 19.29...........  -2.11 to 25.00...........  -2.11 to 42.41.
     (commercial).
    Two 4-foot MBP lamps
     (residential).
    Four 4-foot MBP lamps.......
    Two 8-foot slimline lamps...
Product Class 2
PS ballasts that operate:
    Two 4-foot MBP lamps........  0.08 to 19.21............  7.52 to 22.57............  1.83 to 20.68.
    Four 4-foot MBP lamps.......
    Two 4-foot MiniBP SO lamps..
    Two 4-foot MiniBP HO lamps..
Product Class 3
Ballasts that operate:
    Two 8-foot HO lamps.........  69.82....................  234.45...................  2.33 to 236.77.
Product Class 5
Ballasts that operate:
    Four 8-foot HO lamps in cold- 389.91...................  389.91...................  389.91.
     temperature outdoor signs.
----------------------------------------------------------------------------------------------------------------
                                   Median PBP (replacement event) *** (years)
----------------------------------------------------------------------------------------------------------------
Product Class 1.................  -8.99 to -7.60...........  -6.99 to N/A.............  -6.99 to N/A.
Product Class 2.................  0.06 to 11.27............  0.61 to 5.09.............  1.22 to 7.19.
Product Class 3.................  -0.57....................  -0.67....................  -0.52 to 4.57.
Product Class 5.................  -0.16....................  -0.16....................  -0.16.
----------------------------------------------------------------------------------------------------------------
              Distribution of Consumer LCC Impacts (see Table VIII.16 through Table VIII.25 above)
----------------------------------------------------------------------------------------------------------------
Generation Capacity Reduction     1.51.....................  2.99.....................  4.37.
 (GW)[dagger].
----------------------------------------------------------------------------------------------------------------
                                               Employment Impacts
----------------------------------------------------------------------------------------------------------------
Indirect Domestic Jobs            31.79....................  37.07....................  51.06.
 (thousands)[dagger].
----------------------------------------------------------------------------------------------------------------
* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2
  emissions.
** For LCCs, a negative value means an increase in LCC by the amount indicated.
*** For PBPs, negative values indicate standards that reduce operating costs and installed costs; ``N/A''
  indicates standard levels that do not reduce operating costs.
[dagger] Changes in 2043.

    As discussed in previous DOE standards rulemakings and a recent 
Notice of Data Availability (76 FR 9696, Feb. 22, 2011), DOE also notes 
that the economics literature provides a wide-ranging discussion of how 
consumers trade off upfront costs and energy savings in the absence of 
government intervention. Much of this literature attempts to explain 
why consumers appear to undervalue energy efficiency improvements. This 
undervaluation suggests that regulation that promotes energy efficiency 
can produce significant net private gains (as well as producing social 
gains by, for example, reducing pollution). There is evidence that 
consumers undervalue future energy savings as a result of (1) a lack of 
information, (2) a lack of sufficient savings to warrant delaying or 
altering purchases (e.g., an inefficient ventilation fan in a new 
building or the delayed replacement of a water pump), (3) inconsistent 
(e.g., excessive short-term) weighting of future energy cost savings 
relative to available returns on other investments, (4) computational 
or other difficulties associated with the evaluation of relevant 
tradeoffs, and (5) a divergence in incentives (e.g., renter versus 
owner; builder vs. purchaser). Other literature indicates that with 
less than perfect foresight and a high degree of uncertainty about the 
future, consumers may trade off these types of investments at a higher 
than expected rate between current consumption and uncertain future 
energy cost savings. In the abstract, it may be difficult to say how a 
welfare gain from correcting under-investment compares in magnitude to 
the potential welfare losses associated with no longer purchasing a 
machine or switching to an

[[Page 20169]]

imperfect substitute, both of which still exist in this framework.
    Other literature indicates that with less than perfect foresight 
and uncertainty about the future, consumers may trade off these types 
of investments at a higher than expected rate between current 
consumption and uncertain future energy cost savings. Some studies 
suggest that this seeming undervaluation may be explained in certain 
circumstances by differences between tested and actual energy savings, 
or by uncertainty and irreversibility of energy investments.
    The mix of evidence in the empirical literature suggests that if 
feasible, analysis of regulations mandating energy efficiency 
improvements should explore the potential for both welfare gains and 
losses and move toward fuller economic framework where all relevant 
changes can be quantified.\49\ While DOE is not prepared at present to 
provide a fuller quantifiable framework for this discussion, DOE seeks 
comments on how to assess these possibilities.\50\
---------------------------------------------------------------------------

    \49\ A good review of the literature related to this issue can 
be found in Gillingham, K., R. Newell, K. Palmer. (2009). ``Energy 
Efficiency Economics and Policy,'' Annual Review of Resource 
Economics, 1: 597-619; and Tietenberg, T. (2009). ``Energy 
Efficiency Policy: Pipe Dream or Pipeline to the Future?'' Review of 
Environmental Economics and Policy. Vol. 3, No. 2: 304-320.
    \50\ A draft paper, ``Notes on the Economics of Household Energy 
Consumption and Technology Choice,'' proposes a broad theoretical 
framework on which an empirical model might be based and is posted 
on the DOE Web site along with this notice at http://www.eere.energy.gov/buildings/appliance_standards.
---------------------------------------------------------------------------

1. Trial Standard Level 3
    DOE first considered the most efficient level, TSL 3, which would 
save an estimated total of 3.7 to 6.3 quads of energy through 2043--a 
significant amount of energy. For the nation as a whole, TSL 3 would 
have a net savings of $8.1 billion-$11.4 billion at a 7-percent 
discount rate, and $16.5 billion-24.7 billion at a 3-percent discount 
rate. The emissions reductions at TSL 3 are estimated at 40-121 MMt of 
CO2, 32-44 kilotons (kt) of NOX, and 0.59-1.67 
tons of Hg. Total generating capacity in 2043 is estimated to decrease 
compared to the reference case by 4.37-7.22 gigawatts under TSL 3. As 
seen in section 0, for almost all representative ballast types, 
consumers have available ballast designs which result in positive LCC 
savings, ranging from $1.83-$389.91, at TSL 3. The consumers that 
experience negative LCC savings at TSL 3 are those that currently have 
a 2-lamp 8-foot HO T8 ballast (for the new construction/renovation 
event only) or a 2-lamp 4-foot MBP T8 ballast in the residential sector 
(for the replacement event only). The projected change in industry 
value would range from a decrease of $95.3 million to a decrease of 
$296.2 million, or a net loss of 7.7 percent to a net loss of 34.7 
percent in INPV.
    DOE based TSL 3 on the most efficient commercially available 
products for each representative ballast type analyzed. This TSL 
represents the highest efficiency level that is technologically 
feasible for a sufficient diversity of products (spanning several 
ballast factors, number of lamps per ballast, and types of lamps 
operated) within each product class. Although consumers that currently 
have a 2-lamp 8-foot HO T8 ballast or a 2-lamp 4-foot MBP T8 ballast in 
the residential sector experience negative LCC savings of -$0.22 and -
$2.11 respectively, overall LCC savings for consumers of these ballast 
types are positive.
    After considering the analysis, comments on the preliminary 
analysis, and the benefits and burdens of TSL 3, the Secretary has 
reached the following tentative conclusion: TSL 3 offers the maximum 
improvement in efficiency that is technologically feasible and 
economically justified, and will result in significant conservation of 
energy. The Secretary has reached the initial conclusion that the 
benefits of energy savings, emissions reductions (both in physical 
reductions and the monetized value of those reductions), the positive 
net economic savings to the nation, and positive life-cycle cost 
savings would outweigh the potentially large reduction in INPV for 
manufacturers and increased LCC for a small subset of consumers. 
Therefore, DOE today proposes to adopt the energy conservation 
standards for ballasts at TSL 3. DOE seeks comment on its proposal of 
TSL 3. DOE will consider the comments and information received in 
determining the final energy conservation standards.

B. Backsliding

    As discussed in section 0, EPCA contains what is commonly known as 
an ``anti-backsliding'' provision, which mandates that the Secretary 
not prescribe any amended standard that either increases the maximum 
allowable energy use or decreases the minimum required energy 
efficiency of a covered product. (42 U.S.C. 6295(o)(1)) Because DOE is 
evaluating amended standards in terms of ballast luminous efficiency, 
DOE converted the existing BEF standards to BLE to verify that the 
proposed standards did not constitute backsliding. The following 
describes how DOE completed this comparison.
    Ballast efficacy factor is defined as ballast factor divided by 
input power times 100. Ballast factor, in turn, is currently defined as 
the test system light output divided by a reference system light 
output. As mentioned in section 0, the active mode test procedure SNOPR 
proposed a new method for calculating ballast factor. 75 FR 71570, 
71577-8 (November 24, 2010). The new methodology entails measuring the 
lamp arc power of the test system and dividing it by the lamp arc power 
of the reference system. Because this new method calculates a ballast 
factor equivalent to the existing method, DOE believes this definition 
can be incorporated into the equation for BEF. After this substitution, 
BEF can be converted to BLE by dividing by 100 and multiplying by the 
appropriate reference arc power. Table VIII.39 below contains the 
existing standard in terms of BEF, the existing standard in terms of 
BLE, and the proposed standard in terms of BLE.

                     Table VIII.39--Existing Federal BEF Standards and the Corresponding BLE
----------------------------------------------------------------------------------------------------------------
                                                                                  Equivalent BLE       Proposed
                  Application for operation of                        BEF    ------------------------     BLE
                                                                   standard    Low freq    High freq  standard *
----------------------------------------------------------------------------------------------------------------
One F40T12 lamp.................................................        2.29        80.4        83.2        89.9
Two F40T12 lamps................................................        1.17        82.1        85.0        91.0
Two F96T12 lamps................................................        0.63        85.1        89.7        92.2
Two F96T12/HO lamps.............................................        0.39        74.4        78.0        90.4
One F34T12 lamp.................................................        2.61        75.2        77.8        89.4
Two F34T12 lamps................................................        1.35        77.8        80.5        90.6
Two F96T12/ES lamps.............................................        0.77        83.9        88.4        91.8

[[Page 20170]]

 
Two F96T12/HO/ES lamps..........................................        0.42        68.0        71.3        90.1
----------------------------------------------------------------------------------------------------------------
* For ballast types that could be in more than one product class, this table presents the lowest standard the
  ballast would be required to meet. For example, 8-foot HO ballasts can have a PS starting method in addition
  to IS or RS. Therefore, DOE presents the standard for the PS product class as it is the lowest. The proposed
  BLE standard includes a 0.8 percent reduction for lab to lab variation and compliance requirements.

    As seen in the table above, the standards proposed in this NOPR are 
higher than the existing standards, regardless of low or high frequency 
operation. As such, the proposed standards do not decrease the minimum 
required energy efficiency of the covered products and therefore do not 
violate the anti-backsliding provision in EPCA.

XXIV. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

    Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify 
the problem that it intends to address, including, where applicable, 
the failures of private markets or public institutions that warrant new 
agency action, as well as to assess the significance of that problem. 
The problems that today's standards address are as follows:
    (1) There is a lack of consumer information and/or information 
processing capability about energy efficiency opportunities in the 
lighting market.
    (2) There is asymmetric information (one party to a transaction has 
more and better information than the other) and/or high transactions 
costs (costs of gathering information and effecting exchanges of goods 
and services).
    (3) There are external benefits resulting from improved energy 
efficiency of ballasts that are not captured by the users of such 
equipment. These benefits include externalities related to 
environmental protection and energy security that are not reflected in 
energy prices, such as reduced emissions of greenhouse gases.
    In addition, DOE has determined that today's regulatory action is 
an ``economically significant regulatory action'' under section 3(f)(1) 
of Executive Order 12866. Accordingly, section 6(a)(3) of the Executive 
Order requires that DOE prepare a regulatory impact analysis (RIA) on 
today's rule and that the Office of Information and Regulatory Affairs 
(OIRA) in the Office of Management and Budget (OMB) review this rule. 
DOE presented to OIRA for review the draft rule and other documents 
prepared for this rulemaking, including the RIA, and has included these 
documents in the rulemaking record. The assessments prepared pursuant 
to Executive Order 12866 can be found in the technical support document 
(Chapter 17) for this rulemaking. They are available for public review 
in the Resource Room of DOE's Building Technologies Program, 950 
L'Enfant Plaza, SW., Suite 600, Washington, DC 20024, (202) 586-2945, 
between 9 a.m. and 4 p.m., Monday through Friday, except Federal 
holidays.
    DOE has also reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011 (76 FR 3281, Jan. 21, 2011). EO 13563 
is supplemental to and reaffirms the principles, structures, and 
definitions governing regulatory review established in Executive Order 
12866. To the extent permitted by law, agencies are required by these 
Executive Orders to, among other things: (1) Propose or adopt a 
regulation only upon a reasoned determination that its benefits justify 
its costs (recognizing that some benefits and costs are difficult to 
quantify); (2) tailor regulations to impose the least burden on 
society, consistent with obtaining regulatory objectives, taking into 
account, among other things, and to the extent practicable, the costs 
of cumulative regulations; (3) select, in choosing among alternative 
regulatory approaches, those approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages; distributive impacts; and equity); (4) to the 
extent feasible, specify performance objectives, rather than specifying 
the behavior or manner of compliance that regulated entities must 
adopt; and (5) identify and assess available alternatives to direct 
regulation, including providing economic incentives to encourage the 
desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public. For the 
reasons stated in the preamble, DOE believes that today's proposed rule 
is consistent with these principles.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (IRFA) for 
any rule that by law must be proposed for public comment, unless the 
agency certifies that the rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
As required by Executive Order 13272, ``Proper Consideration of Small 
Entities in Agency Rulemaking,'' 67 FR 53461 (August 16, 2002), DOE 
published procedures and policies on February 19, 2003, to ensure that 
the potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of the General 
Counsel's Web site (http://www.gc.doe.gov). DOE reviewed the potential 
standard levels considered in today's NOPR under the provisions of the 
Regulatory Flexibility Act and the procedures and policies published on 
February 19, 2003.
    As a result of this review, DOE has prepared an IRFA for 
fluorescent lamp ballasts, a copy of which DOE will transmit to the 
Chief Counsel for Advocacy of the SBA for review under 5 U.S.C. 605(b). 
As presented and discussed below, the IFRA describes potential impacts 
on small ballast manufacturers associated with the required capital and 
product conversion costs at each TSL and discusses alternatives that 
could minimize these impacts.
    A statement of the reasons for the proposed rule, and the 
objectives of, and legal basis for, the proposed rule, are set forth 
elsewhere in the preamble and not repeated here.
1. Description and Estimated Number of Small Entities Regulated
a. Methodology for Estimating the Number of Small Entities
    For manufacturers of fluorescent lamp ballasts, the Small Business

[[Page 20171]]

Administration (SBA) has set a size threshold, which defines those 
entities classified as ``small businesses'' for the purposes of the 
statute. DOE used the SBA's small business size standards to determine 
whether any small entities would be subject to the requirements of the 
rule. 65 FR 30836, 30850 (May 15, 2000), as amended at 65 FR 53533, 
53545 (Sept. 5, 2000) and codified at 13 CFR part 121.The size 
standards are listed by North American Industry Classification System 
(NAICS) code and industry description and are available at http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf. Fluorescent lamp ballast manufacturing is classified 
under NAICS 335311, ``Power, Distribution and Specialty Transformer 
Manufacturing.'' The SBA sets a threshold of 750 employees or less for 
an entity to be considered as a small business for this category.
    To estimate the number of companies that could be small business 
manufacturers of products covered by this rulemaking, DOE conducted a 
market survey using all available public information to identify 
potential small manufacturers. DOE's research involved industry trade 
association membership directories (including NEMA), product databases 
(e.g., CEC and CEE databases), individual company Web sites, and market 
research tools (e.g., Dun and Bradstreet reports) to create a list of 
every company that manufactures or sells fluorescent lamp ballasts 
covered by this rulemaking. DOE also asked stakeholders and industry 
representatives if they were aware of any other small manufacturers 
during manufacturer interviews and at previous DOE public meetings. DOE 
contacted select companies on its list, as necessary, to determine 
whether they met the SBA's definition of a small business manufacturer 
of covered fluorescent lamp ballasts. DOE screened out companies that 
did not offer products covered by this rulemaking, did not meet the 
definition of a ``small business,'' or are foreign owned and operated.
    DOE initially identified at least 54 potential manufacturers of 
fluorescent lamp ballasts sold in the U.S. DOE reviewed publically 
available information on these 54 potential manufacturers and 
determined 30 were large manufacturers, manufacturers that are foreign 
owned and operated or did not manufacture ballasts covered by this 
rulemaking. DOE then attempted to contact the remaining 24 companies 
that were potential small business manufacturers. Though many companies 
were unresponsive, DOE was able to determine that approximately 10 meet 
the SBA's definition of a small business and likely manufacture 
ballasts covered by this rulemaking.
b. Manufacturer Participation
    Before issuing this NOPR, DOE attempted to contact the small 
business manufacturers of fluorescent lamp ballasts it had identified. 
Two of the small businesses consented to being interviewed during the 
MIA interviews, and DOE received feedback from one additional small 
business through a survey response. DOE also obtained information about 
small business impacts while interviewing large manufacturers.
c. Fluorescent Lamp Ballast Industry Structure
    Four major manufacturers with non-domestic production supply the 
vast majority of the marketplace. None of the four major manufacturers 
is considered a small business. The remaining market share is held by 
foreign manufacturers and several smaller domestic companies with 
relatively negligible market share. Even for these U.S.-operated firms, 
most production is outsourced to overseas vendors or captive overseas 
manufacturing facilities. Some very limited production takes place in 
the United States--mostly magnetic ballasts for specialty applications. 
DOE is unaware of any fluorescent lamp ballast companies, small or 
large, that produce only domestically. See chapter 3 of the TSD for 
further details on the fluorescent lamp ballast market.
d. Comparison Between Large and Small Entities
    The four large manufacturers typically offer a much wider range of 
designs of covered ballasts than small manufacturers. Ballasts can be 
designed, or optimized, to operate different lamp lengths and numbers 
of lamps under various start methods, often in combination with various 
additional features. Large manufacturers typically offer many SKUs per 
product line to meet this wide range of potential specifications. 
Generally, one product family shares some fundamental characteristic 
(i.e., lamp diameter, number of lamps, etc.) and hosts a large number 
of SKUs that are manufactured with minor variations on the same product 
line. Some product lines, such as the 4-foot MBP IS ballast, are 
manufactured in high volumes, while other products may be produced in 
much lower volumes but can help manufacturers meet their customers' 
specific needs and provide higher margin opportunities. For their part, 
small manufacturers generally do not have the volume to support as wide 
a range of products.
    Beyond variations in ballast types and features, the large 
manufacturers also offer multiple tiers of efficiency, typically 
including a baseline efficiency product and a high-efficiency product 
within the same family. On the other hand, some small manufacturers 
frequently only offer one efficiency level in a given product class to 
reduce the number of SKUs and parts they must maintain. This strategy 
is important to small-scale manufacturers because many product 
development costs (e.g., testing, certification, and marketing) are 
relatively fixed per product line.
    Small manufacturers are able to compete in the fluorescent lamp 
ballast industry despite the dominance of the four major manufacturers 
due, in large part, to the fragmented nature of the fixture industry. 
The largest four fixture manufacturers compose about 60 percent of the 
industry, while as many as 200 smaller fixture manufacturers hold the 
remaining share. Many small ballast manufacturers have developed 
relationships with these small fixture manufacturers, whose production 
volumes may not be attractive to the larger players. The same structure 
applies to the electrical distributor market--while small ballast 
manufacturers often cannot compete for the business of the largest 
distributors, they are able to successfully target small distributors, 
often on a regional basis.
    Lastly, like the major manufacturers, small manufacturers usually 
offer products in addition to those fluorescent lamp ballasts covered 
by this rulemaking, such as additional dimming ballasts, LED drivers, 
and compact fluorescent ballasts.
2. Description and Estimate of Compliance Requirements
    At TSL 3, the level proposed in today's notice, DOE estimates 
capital conversion costs of $0.3 million and product conversion costs 
of $1.3 million for a typical small manufacturer, compared to capital 
and product conversion costs of $7.6 million and $12.7 million, 
respectively, for a typical large manufacturer. These costs and their 
impacts are described in detail below.
a. Capital Conversion Costs
    Those small manufacturers DOE interviewed did not expect increased 
capital conversion costs to be a major concern because most of them 
source all or the majority of their products from Asia. Those that 
source their products would likely not make the direct capital

[[Page 20172]]

investments themselves. Small manufacturers experience the impact of 
sourcing their products through a higher cost of goods sold, and thus a 
lower operating margin, as compared to large manufacturers. The capital 
costs estimated are largely associated with those small manufacturers 
producing magnetic ballasts. DOE estimates capital costs of 
approximately $340,000 for a typical small manufacturer at TSL 3, based 
on the cost of converting magnetic production lines, such as sign 
ballasts, to electronic production lines.
    Another challenge facing the industry is the component shortage 
discussed in the section 0. As with large manufacturers, the component 
shortage is a significant issue for small manufacturers, but some small 
manufacturers stated that the shortage does not differentially impact 
them. At times, they actually can obtain components more easily than 
large manufacturers: because their volumes are lower, they generally 
pay higher prices for parts than their larger competitors, which 
incentivizes suppliers to fill small manufacturers' orders relatively 
quickly. The lower-volume orders also allow small manufacturers to 
piggyback off the orders for certain components that are used 
throughout the consumer electronics industry.
b. Product Conversion Costs
    While capital conversion costs were not a large concern to the 
small manufacturers DOE interviewed, product conversion costs could 
adversely impact small manufacturers at TSL 3, the level proposed in 
today's notice. To estimate the differential impacts of the proposed 
standard on small manufacturers, DOE compared their cost of compliance 
with that of the major manufacturers. First, DOE examined the number of 
basic models and SKUs available from each manufacturer to determine an 
estimate for overall compliance costs. The number of basic models and 
SKUs attributed to each manufacturer is based on information obtained 
during manufacturer interviews and an examination of the different 
models advertised by each on company Web sites. DOE assumed that the 
product conversion costs required to redesign basic models and test and 
certify all SKUs to meet the standard levels presented in today's 
notice would be lower per model and per SKU for small manufacturers, as 
detailed below. (A full description of DOE's methodology for developing 
product conversion costs is found in section 0 above and in chapter 13 
of the NOPR TSD.) The table below compares the estimated product 
conversion costs of a typical small manufacturer as a percentage of 
annual R&D expense to those of a typical large manufacturer.

                   Table XXIV.1--Comparison of a Typical Small and Large Manufacturer's Product Conversion Costs to Annual R&D Expense
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Large manufacturer                          Small manufacturer
                                                                 ---------------------------------------------------------------------------------------
                                                                   Product conversion    Product conversion    Product conversion    Product conversion
                              XXV.                                 costs for a typical       costs as a        costs for a typical       costs as a
                                                                   large manufacturer   percentage of annual   small manufacturer   percentage of annual
                                                                    (2009$ millions)       R&D expense (%)      (2009$ millions)       R&D expense (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................................                 $0.00                     0                 $0.00                     0
TSL 1...........................................................                  1.48                    17                  0.15                    39
TSL 2...........................................................                 10.19                   116                  1.05                   269
TSL 3...........................................................                 12.73                   145                  1.31                   336
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Based on discussions with manufacturers, DOE estimated that the 
cost to fully redesign every ballast model for large manufacturers is 
approximately $120,000 per model and the cost to test and certify every 
SKU is approximately $20,000 per SKU. A typical major manufacturer 
offers approximately 80 basic covered models and 300 SKUs. Based on 
DOE's GRIM analysis, a typical major manufacturer has an annual R&D 
expense of $8.6 million. Because not all products would need to be 
redesigned at TSL 3, DOE estimates $12.7 million in product conversion 
costs for a typical major manufacturer at TSL 3 (compared to $15.5 
million if all products had to be fully redesigned), which represents 
145 percent of its annual R&D expense. This means that a typical major 
manufacturer could redesign its products in under a year and a half if 
it were to devote its entire R&D budget for fluorescent lamp ballasts 
to product redesign and could retain the engineering resources.
    On the other hand, DOE's research indicated that a typical small 
manufacturer offers approximately 50 basic covered models and 100 SKUs. 
However, based on manufacturer interviews, DOE does not believe that 
small manufacturers would incur the same level of costs per model and 
SKU as large manufacturers. Small manufacturers would not be as likely 
to redesign models in-house as large manufacturers. Instead, they would 
source and rebrand products from the Asian manufacturers who supply 
their ballasts. As a result, DOE assumed a lower R&D investment, in 
absolute dollars, per model. Because this design is effectively 
sourced, DOE believes smaller manufacturers would face a higher level 
of cost of goods sold (i.e. a higher MPC). Therefore, in a competitive 
environment, small manufacturers would earn a lower markup than their 
larger peers and consequently operate at lower margins. Small 
manufacturers would also have to test and certify every SKU they offer, 
but they would not conduct the same extent of pilot runs and internal 
testing as large manufacturers because less production takes place in 
internal factories. As such, DOE estimates that their testing and 
certification costs are expected to be $10,000 per SKU for UL and other 
certifications. Thus, the product conversion costs for a typical small 
manufacturer could total $1.6 million, but because not all products 
would need to be fully redesigned at TSL 3, DOE estimates product 
conversion costs of $1.3 million at TSL 3. Based on scaling GRIM 
results to an average small-manufacturer market share of 1.0 percent, 
DOE assumed that a small manufacturer has an annual R&D expense of $0.4 
million, so the estimated product conversion costs at TSL 3 would 
represent 336 percent of its annual R&D expense. This means that a 
typical small manufacturer could redesign its products in a little over 
the three year compliance period if it were to devote its entire R&D 
budget for fluorescent lamp ballasts to product redesign and could 
retain the engineering resources.

[[Page 20173]]

a. Summary of Compliance Impacts
    Although the conversion costs required can be considered 
substantial for all companies, the impacts could be relatively greater 
for a typical small manufacturer because of much lower production 
volumes and the relatively fixed nature of the R&D resources required 
per model. The table below compares the total conversion costs of a 
typical small manufacturer as a percentage of annual revenue and 
earnings before taxes and interest (EBIT) to those of a typical large 
manufacturer.

                 Table XXIV.2--Comparison of a Typical Small and Large Manufacturer's Total Conversion Costs to Annual Revenue and EBIT
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Large manufacturer                                    Small manufacturer
                                             -----------------------------------------------------------------------------------------------------------
                                              Total conversion  Total conversion                    Total conversion  Total conversion
                    XXVI.                        costs for a       costs as a     Total conversion     costs for a       costs as a     Total conversion
                                                typical large     percentage of      costs as a       typical small     percentage of      costs as a
                                                 mfr. (2009$     annual revenue     percentage of      mfr. (2009$     annual revenue     percentage of
                                                  millions)            (%)        annual EBIT  (%)      millions)            (%)        annual EBIT  (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline....................................             $0.00                 0                 0             $0.00                 0                 0
TSL 1.......................................              4.06                 2                21              0.27                 3                38
TSL 2.......................................             15.85                 7                81              1.30                12               184
TSL 3.......................................             20.33                 9               104              1.65                16               233
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As seen in the table above, the impacts for a typical small 
manufacturer are relatively greater than for a large manufacturer at 
TSL 3. Total conversion costs represent 233 percent of annual EBIT for 
a typical small manufacturer compared to 104 percent of annual EBIT for 
a typical large manufacturer. DOE believes these estimates reflect a 
worst-case scenario because they assume small manufacturers would 
redesign all proprietary models immediately, and not take advantage of 
the industry's supply chain dynamics or take other steps to mitigate 
the impacts. However, DOE anticipates that small manufacturers would 
take several steps to mitigate the costs required to meet new and 
amended energy conservation standards.
    At TSL 3, it is more likely that ballast manufacturers may 
temporarily reduce the number of SKUs they offer as in-house designs to 
keep their product conversion costs at manageable levels in the year 
preceding the compliance date. As noted above, the typical small 
manufacturer business model is not predicated on the supply of a wide 
range of models and specifications. They frequently either focus on a 
few niche markets or on customers seeking only basic, low-cost 
solutions. They therefore can satisfy the needs of their customers with 
a smaller product portfolio than large manufacturers who often compete 
on brand reputation and the ability to offer a full product offering. 
As such, DOE believes that under the proposed standards small 
businesses would likely selectively upgrade existing product lines to 
offer products that are in high demand or offer strategic advantage. 
Small manufacturers could then spread out further investments over a 
longer time period by upgrading some product lines prior to the 
compliance date while sourcing others until resources allow--and the 
market supports--in-house design. Furthermore, while the initial 
redesign costs are relatively large, the estimates assume small 
manufacturers would bring compliant designs to market in concert with 
large manufacturers. In reality, there is a possibility some small 
manufacturers would conserve resources by selectively upgrading certain 
products until new baseline designs become commonplace to the point 
where their in-house development is less resource-intensive. The 
commonality of many consumer electronics components, designs, and 
products fosters considerable sharing of experience throughout the 
electronics supply chain, particularly when unrestricted by proprietary 
technologies. DOE did not find any intellectual property restrictions 
that would prevent small manufacturers from achieving the technologies 
necessary to meet today's proposed levels.
    DOE seeks comment on the potential impacts of amended standards on 
the small fluorescent lamp ballast manufacturers. (See Issue 0 under 
``Issues on Which DOE Seeks Comment'' in section 0 of this NOPR.)
1. Duplication, Overlap, and Conflict With Other Rules and Regulations
    DOE is not aware of any rules or regulations that duplicate, 
overlap, or conflict with the rule being considered today.
2. Significant Alternatives to the Proposed Rule
    The Manufacturer Impact Analysis discussion in Section VI.B.2 
analyzes impacts on small businesses that would result from the other 
TSLs DOE considered. Though TSLs lower than the proposed TSLs are 
expected to reduce the impacts on small entities, DOE is required by 
EPCA to establish standards that achieve the maximum improvement in 
energy efficiency that are technically feasible and economically 
justified, and result in a significant conservation of energy. As 
discussed in Section VI.C, DOE has weighed the costs and benefits of 
the TSLs considered in today's proposed rule and rejected the lower 
TSLs based on the criteria set forth in EPCA and set forth in Section 
II.A.
    In addition to the other TSLs being considered, the NOPR TSD 
includes a regulatory impact analysis in chapter 17. For fluorescent 
lamp ballasts, this report discusses the following policy alternatives: 
(1) No standard, (2) consumer rebates, (3) consumer tax credits, (4) 
manufacturer tax credits, and (5) early replacement. DOE does not 
intend to consider these alternatives further because they are either 
not feasible to implement, or not expected to result in energy savings 
as large as those that would be achieved by the standard levels under 
consideration.
    DOE continues to seek input from businesses that would be affected 
by this rulemaking and will consider comments received in the 
development of any final rule.

B. Review Under the Paperwork Reduction Act

    Manufacturers of fluorescent lamp ballasts must certify to DOE that 
their product complies with any applicable energy conservation 
standard. In certifying compliance, manufacturers must test their 
product according to the DOE test procedure for fluorescent lamp 
ballasts, including any amendments adopted for that test procedure. DOE 
has

[[Page 20174]]

proposed regulations for the certification and recordkeeping 
requirements for all covered consumer products and commercial 
equipment, including ballasts. 75 FR 56796 (Sept. 16, 2010). The 
collection-of-information requirement for the certification and 
recordkeeping is subject to review and approval by OMB under the 
Paperwork Reduction Act (PRA). This requirement has been submitted to 
OMB for approval. Public reporting burden for the certification is 
estimated to average 20 hours per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    Public comment is sought regarding: whether this proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information shall 
have practical utility; the accuracy of the burden estimate; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways to minimize the burden of the collection of 
information, including through the use of automated collection 
techniques or other forms of information technology. Send comments on 
these or any other aspects of the collection of information to Dr. Tina 
Kaarsberg (see ADDRESSES) and by e-mail to [email protected].
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

C. Review Under the National Environmental Policy Act of 1969

    DOE has prepared a draft environmental assessment (EA) of the 
impacts of the proposed rule pursuant to the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321 et seq.), the regulations of the 
Council on Environmental Quality (40 CFR parts 1500-1508), and DOE's 
regulations for compliance with the National Environmental Policy Act 
of 1969 (10 CFR part 1021). This assessment includes an examination of 
the potential effects of emission reductions likely to result from the 
rule in the context of global climate change, as well as other types of 
environmental impacts. The draft EA has been incorporated into the NOPR 
TSD as chapter 16. Before issuing a final rule for fluorescent lamp 
ballasts, DOE will consider public comments and, as appropriate, 
determine whether to issue a finding of no significant impact (FONSI) 
as part of a final EA or to prepare an environmental impact statement 
(EIS) for this rulemaking.

D. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 10, 
1999) imposes certain requirements on agencies formulating and 
implementing policies or regulations that preempt State law or that 
have federalism implications. The Executive Order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive Order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR 13735. EPCA governs and 
prescribes Federal preemption of State regulations as to energy 
conservation for the products that are the subject of today's proposed 
rule. States can petition DOE for exemption from such preemption to the 
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) No 
further action is required by Executive Order 13132.

E. 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,'' imposes on Federal 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. 61 FR 
4729 (Feb. 7, 1996). 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.

F. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, section 201 (codified at 2 U.S.C. 
1531). For a proposed regulatory action likely to result in a rule that 
may cause the expenditure by State, local, and Tribal governments, in 
the aggregate, or by the private sector of $100 million or more in any 
one year (adjusted annually for inflation), section 202 of UMRA 
requires a Federal agency to publish a written statement that estimates 
the resulting costs, benefits, and other effects on the national 
economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal 
agency to develop an effective process to permit timely input by 
elected officers of State, local, and Tribal governments on a proposed 
``significant intergovernmental mandate,'' and requires an agency plan 
for giving notice and opportunity for timely input to potentially 
affected small governments before establishing any requirements that 
might significantly or uniquely affect small governments. On March 18, 
1997, DOE published a statement of policy on its process for 
intergovernmental consultation under UMRA. 62 FR 12820; also available 
at http://www.gc.doe.gov.
    Although today's proposed rule does not contain a Federal 
intergovernmental mandate, it may impose expenditures of $100 million 
or more on the private sector. Specifically, the proposed rule will 
likely result in a final rule that could impose expenditures of $100 
million or more. Such expenditures may include (1) investment in 
research and development and in capital expenditures by fluorescent 
lamp ballast manufacturers in the years between the final rule and the 
compliance date for the new standard, and (2) incremental additional 
expenditures by consumers to purchase higher-efficiency ballasts, 
starting in 2014.
    Section 202 of UMRA authorizes an agency to respond to the content

[[Page 20175]]

requirements of UMRA in any other statement or analysis that 
accompanies the proposed rule. 2 U.S.C. 1532(c). The content 
requirements of section 202(b) of UMRA relevant to a private sector 
mandate substantially overlap the economic analysis requirements that 
apply under section 325(o) of EPCA and Executive Order 12866. The 
SUPPLEMENTARY INFORMATION section of the notice of proposed rulemaking 
and the ``Regulatory Impact Analysis'' section of the TSD for this 
proposed rule respond to those requirements.
    Under section 205 of UMRA, the Department is obligated to identify 
and consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required. 2 U.S.C. 1535(a). DOE is required to select from those 
alternatives the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule unless DOE publishes an 
explanation for doing otherwise or the selection of such an alternative 
is inconsistent with law. As required by 42 U.S.C. 6295(h) and (o), 
6313(e), and 6316(a), today's proposed rule would establish energy 
conservation standards for fluorescent lamp ballasts that are designed 
to achieve the maximum improvement in energy efficiency that DOE has 
determined to be both technologically feasible and economically 
justified. A full discussion of the alternatives considered by DOE is 
presented in the ``Regulatory Impact Analysis'' section of the TSD for 
today's proposed rule.

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

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
This rule would not have any impact on the autonomy or integrity of the 
family as an institution. Accordingly, DOE has concluded that it is not 
necessary to prepare a Family Policymaking Assessment.

H. Review Under Executive Order 12630

    DOE has determined, under Executive Order 12630, ``Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights'' 53 FR 8859 (March 18, 1988), that this regulation would not 
result in any takings that might require compensation under the Fifth 
Amendment to the U.S. Constitution.

I. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516, note) provides for agencies to review most 
disseminations of information to the public under guidelines 
established by each agency pursuant to general guidelines issued by 
OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and 
DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has 
reviewed today's NOPR under the OMB and DOE guidelines and has 
concluded that it is consistent with applicable policies in those 
guidelines.

J. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' 66 FR 28355 
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA 
at OMB, a Statement of Energy Effects for any proposed significant 
energy action. A ``significant energy action'' is defined as any action 
by an agency that promulgates or is expected to lead to promulgation of 
a final rule, and that (1) Is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use.
    DOE has tentatively concluded that today's regulatory action, which 
sets forth energy conservation standards for fluorescent lamp ballasts, 
is not a significant energy action because the proposed standards are 
not likely to have a significant adverse effect on the supply, 
distribution, or use of energy, nor has it been designated as such by 
the Administrator at OIRA. Accordingly, DOE has not prepared a 
Statement of Energy Effects on the proposed rule.

K. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology (OSTP), issued its Final Information Quality 
Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 2005). 
The Bulletin establishes that certain scientific information shall be 
peer reviewed by qualified specialists before it is disseminated by the 
Federal Government, including influential scientific information 
related to agency regulatory actions. The purpose of the bulletin is to 
enhance the quality and credibility of the Government's scientific 
information. Under the Bulletin, the energy conservation standards 
rulemaking analyses are ``influential scientific information,'' which 
the Bulletin defines as ``scientific information the agency reasonably 
can determine will have or does have a clear and substantial impact on 
important public policies or private sector decisions.'' 70 FR 2667.
    In response to OMB's Bulletin, DOE conducted formal in-progress 
peer reviews of the energy conservation standards development process 
and analyses and has prepared a Peer Review Report pertaining to the 
energy conservation standards rulemaking analyses. Generation of this 
report involved a rigorous, formal, and documented evaluation using 
objective criteria and qualified and independent reviewers to make a 
judgment as to the technical/scientific/business merit, the actual or 
anticipated results, and the productivity and management effectiveness 
of programs and/or projects. The ``Energy Conservation Standards 
Rulemaking Peer Review Report'' dated February 2007 has been 
disseminated and is available at the following Web site: http://www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.

XXVII. Public Participation

A. Attendance at Public Meeting

    The time, date and location of the public meeting are listed in the 
DATES and ADDRESSES sections at the beginning of this document. If you 
plan to attend the public meeting, please notify Ms. Brenda Edwards at 
(202) 586-2945 or [email protected]. As explained in the 
ADDRESSES section, foreign nationals visiting DOE Headquarters are 
subject to advance security screening procedures.
    In addition, you can attend the public meeting via webinar. Webinar 
registration information, participant instructions, and information 
about the capabilities available to webinar participants will be 
published on DOE's Web site (http://www1.eere.energy.gov/buildings/appliance_standards/residential/fluorescent_lamp_ballasts.html). 
Participants are responsible for ensuring

[[Page 20176]]

their systems are compatible with the webinar software.

B. Procedure for Submitting Prepared General Statements for 
Distribution

    Any person who has plans to present a prepared general statement 
may request that copies of his or her statement be made available at 
the public meeting. Such persons may submit requests, along with an 
advance electronic copy of their statement in PDF (preferred), 
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to 
the appropriate address shown in the ADDRESSES section at the beginning 
of this NOPR. The request and advance copy of statements must be 
received at least one week before the public meeting and may be e-
mailed, hand-delivered, or sent by mail. DOE prefers to receive 
requests and advance copies via e-mail. Please include a telephone 
number to enable DOE staff to make a follow-up contact, if needed.

C. Conduct of Public Meeting

    DOE will designate a DOE official to preside at the public meeting 
and may also use a professional facilitator to aid discussion. The 
meeting will not be a judicial or evidentiary-type public hearing, but 
DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 
6306). A court reporter will be present to record the proceedings and 
prepare a transcript. DOE reserves the right to schedule the order of 
presentations and to establish the procedures governing the conduct of 
the public meeting. After the public meeting, interested parties may 
submit further comments on the proceedings as well as on any aspect of 
the rulemaking until the end of the comment period.
    The public meeting will be conducted in an informal, conference 
style. DOE will present summaries of comments received before the 
public meeting, allow time for prepared general statements by 
participants, and encourage all interested parties to share their views 
on issues affecting this rulemaking. Each participant will be allowed 
to make a general statement (within time limits determined by DOE), 
before the discussion of specific topics. DOE will permit, as time 
permits, other participants to comment briefly on any general 
statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly and comment on 
statements made by others. Participants should be prepared to answer 
questions by DOE and by other participants concerning these issues. DOE 
representatives may also ask questions of participants concerning other 
matters relevant to this rulemaking. The official conducting the public 
meeting will accept additional comments or questions from those 
attending, as time permits. The presiding official will announce any 
further procedural rules or modification of the above procedures that 
may be needed for the proper conduct of the public meeting.
    A transcript of the public meeting will be included in the docket, 
which can be viewed as described in the Docket section at the beginning 
of this notice. In addition, any person may buy a copy of the 
transcript from the transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule before or after the public meeting, but no later than the 
date provided in the DATES section at the beginning of this proposed 
rule. Interested parties may submit comments using any of the methods 
described in the ADDRESSES section at the beginning of this notice.
    Submitting comments via regulations.gov. The regulations.gov Web 
page will require you to provide your name and contact information. 
Your contact information will be viewable to DOE Building Technologies 
staff only. Your contact information will not be publicly viewable 
except for your first and last names, organization name (if any), and 
submitter representative name (if any). If your comment is not 
processed properly because of technical difficulties, DOE will use this 
information to contact you. If DOE cannot read your comment due to 
technical difficulties and cannot contact you for clarification, DOE 
may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment or in any documents attached to your comment. 
Any information that you do not want to be publicly viewable should not 
be included in your comment, nor in any document attached to your 
comment. Persons viewing comments will see only first and last names, 
organization names, correspondence containing comments, and any 
documents submitted with the comments.
    Do not submit to regulations.gov information for which disclosure 
is restricted by statute, such as trade secrets and commercial or 
financial information (hereinafter referred to as Confidential Business 
Information (CBI)). Comments submitted through regulations.gov cannot 
be claimed as CBI. Comments received through the Web site will waive 
any CBI claims for the information submitted. For information on 
submitting CBI, see the Confidential Business Information section.
    DOE processes submissions made through regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via e-mail, hand delivery, or mail. Comments 
and documents submitted via e-mail, hand delivery, or mail also will be 
posted to regulations.gov. If you do not want your personal contact 
information to be publicly viewable, do not include it in your comment 
or any accompanying documents. Instead, provide your contact 
information on a cover letter. Include your first and last names, e-
mail address, telephone number, and optional mailing address. The cover 
letter will not be publicly viewable as long as it does not include any 
comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. E-mail submissions are 
preferred. If you submit via mail or hand delivery, please provide all 
items on a CD, if feasible. It is not necessary to submit printed 
copies. No facsimiles (faxes) will be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, written in English and are free of any defects or 
viruses. Documents should not contain special characters or any form of 
encryption and, if possible, they should carry the electronic signature 
of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. 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 via 
e-mail, postal mail, or hand delivery two well-marked copies: one copy 
of the document marked confidential including all the

[[Page 20177]]

information believed to be confidential, and one copy of the document 
marked non-confidential with the information believed to be 
confidential deleted. Submit these documents via e-mail or on a CD, if 
feasible. DOE will make its own determination about the confidential 
status of the information and treat it according to its determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include: (1) A description of the 
items; (2) whether and why such items are customarily treated as 
confidential within the industry; (3) whether the information is 
generally known by or available from other sources; (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality; (5) an explanation of the 
competitive injury to the submitting person which would result from 
public disclosure; (6) when such information might lose its 
confidential character due to the passage of time; and (7) why 
disclosure of the information would be contrary to the public interest.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).

E. Issues on Which DOE Seeks Comment

    The Department is particularly interested in receiving comments and 
views of interested parties concerning:
    (1) The appropriateness of creating an exemption for T8 magnetic 
ballasts as a solution to the problems caused by excessive EMI from 
electronic ballasts in EMI sensitive environments;
    (2) The appropriateness of establishing efficiency standards using 
an equation dependent on lamp-arc power;
    (3) The appropriateness of combining several product classes from 
the preliminary TSD. In particular, DOE requests feedback on the 
decision to include several IS and RS ballasts (IS and RS ballasts that 
operate 4-foot MBP and 8-foot slimline lamps) and PS ballasts in the 
same product class (PS ballasts that operate 4-foot MBP and 4-foot T5 
lamps);
    (4) The appropriateness of including residential ballasts in the 
same product class as those that operate in the commercial sector;
    (5) The appropriateness of establishing a separate product class 
for ballasts that operate 8-foot HO lamps;
    (6) The methodology DOE used to calculate manufacturer selling 
prices;
    (7) The efficiency levels DOE considered for fluorescent ballasts, 
in particular the efficiency level identified for sign ballasts.
    (8) The selection of the maximum technologically feasible level and 
whether it is technologically feasible to attain such higher 
efficiencies for the full range of instant start ballast applications. 
Specifically, DOE seeks quantitative information regarding the 
potential change in efficiency, the design options employed, and the 
associated change in cost. Any design option that DOE considers to 
improve efficiency must meet the four criteria outlined in the 
screening analysis: technological feasibility; practicability to 
manufacture, install, and service; adverse impacts on product or 
equipment utility to consumers or availability; and adverse impacts on 
health or safety. DOE also requests comments on any technological 
barriers to an improvement in efficiency above TSL 3 for all or certain 
types of ballasts.
    (9) Typical markups, as well as ballast pricing data, that it could 
use to verify the price markups it developed for the proposed rule;
    (10) The appropriateness of including T12 ballasts in the baseline 
analysis for life cycle costs.
    (11) The magnitude and timing of its forecasted ballast shipment 
trends (e.g., rising and declining shipments, plateaus, etc.) as well 
as the impacts of current regulatory initiatives on future ballast 
shipments;
    (12) The methodology and inputs DOE used for the manufacturer 
impact analysis--specifically, DOE's assumptions regarding markups, 
capital costs, and conversion costs;
    (13) The potential impacts of amended standards on the small 
fluorescent lamp ballast manufacturers.
    (14) The appropriateness of the TSLs DOE considered for fluorescent 
ballasts, in particular the combinations of efficiency levels for each 
product class;
    (15) The proposed standard level for fluorescent ballasts;
    (16) Potential approaches to maximize energy savings while 
mitigating impacts to certain fluorescent ballast consumer subgroups;

XXVIII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of today's 
proposed rule.

List of Subjects in 10 CFR Part 430

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Imports, 
Intergovernmental relations, Small businesses.

    Issued in Washington, DC, on March 24, 2011.
Henry Kelly,
Acting Assistant Secretary, Energy Efficiency and Renewable Energy.
    For the reasons set forth in the preamble, DOE proposes to amend 
chapter II, subchapter D, of title 10 of the Code of Federal 
Regulations, as set forth below:

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

    1. The authority citation for part 430 continues to read as 
follows:

    Authority:  42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.

    2. Section 430.2 is amended by adding the definition of ``Ballast 
luminous efficiency'' in alphabetical order to read as follows:


Sec.  430.2  Definitions.

* * * * *
    Ballast luminous efficiency means the total fluorescent lamp arc 
power divided by the fluorescent lamp ballast input power multiplied by 
the appropriate frequency adjustment factor.
* * * * *
    3. Section 430.32 is amended by:
    a. Revising paragraph (m)(1) introductory text.
    b. Adding paragraphs (m)(8), (m)(9), and m(10).
    These revisions and additions read as follows:


Sec.  430.32  Energy and water conservation standards and their 
effective dates.

* * * * *
    (m)(1) Fluorescent lamp ballasts (other than specialty application 
mercury vapor lamp ballasts). Except as provided in paragraphs (m)(2), 
(m)(3), (m)(4), (m)(5), (m)(6), (m)(7), (m)(8), (m)(9), and (m)(10) of 
this section, each fluorescent lamp ballast--
* * * * *
    (8) Except as provided in paragraph (m)(9) of this section, each 
fluorescent lamp ballast--
    (i) Manufactured on or after [date 3 years after publication of the 
Fluorescent Lamp--Ballast Energy Conservation Standard final rule];
    (ii) Designed--
    (A) To operate at nominal input voltages of 120 or 277 volts;
    (B) To operate with an input current frequency of 60 Hertz; and
    (C) For use in connection with fluorescent lamps (as defined in 
Sec.  430.2)

[[Page 20178]]

    (iii) Shall have--
    (A) A power factor of 0.9 or greater except for those ballasts 
defined in paragraph (m)(8)(iii)(B) of this section;
    (B) A power factor of 0.5 or greater for residential ballasts, 
which meet FCC consumer limits as set forth in 47 CFR part 18 and are 
designed and labeled for use only in residential applications;
    (C) A ballast luminous efficiency of not less than the following:

----------------------------------------------------------------------------------------------------------------
                Description                         Shall have a minimum ballast luminous efficiency of--
----------------------------------------------------------------------------------------------------------------
Instant start and rapid start ballasts that
 are designed to operate:
    4-foot linear or 2-foot U-shaped medium  1.32 * ln (total lamp arc power) + 86.11.
     bipin lamps.
    8-foot slimline lamps..................
Programmed start ballasts that are designed
 to operate:
    4-foot linear or 2-foot U-shaped medium  1.79 * ln (total lamp arc power) + 83.33.
     bipin lamps.
    4-foot miniature bipin standard output
     lamps.
    4-foot miniature bipin high output
     lamps.
Instant start and rapid start ballasts that
 are designed to operate:
    8-foot HO lamps........................  1.49 * ln (total lamp arc power) + 84.32.
Programmed start ballasts that are designed
 to operate:
    8-foot HO lamps........................  1.46 * ln (total lamp arc power) + 82.63.
Ballasts that are designed to operate:
    8-foot high output lamps at ambient      1.49 * ln (total lamp arc power) + 81.34.
     temperatures of -20 [deg]F or less
     that are used in outdoor signs.
----------------------------------------------------------------------------------------------------------------

     (9) The standards described in paragraph (m)(8) of this section do 
not apply to:
    (i) A ballast that is designed for dimming to 50 percent or less of 
the maximum output of the ballast except for those specified in m(10); 
and
    (ii) A low frequency ballast that:
    (A) Is designed to operate T8 diameter lamps;
    (B) Is designed and labeled for use in EMI-sensitive environments 
only;
    (C) Is shipped by the manufacturer in packages containing not more 
than 10 ballasts.
    (10) Each fluorescent lamp ballast--
    (i) Manufactured on or after [Date 3 Years after publication of the 
Fluorescent Lamp Ballast Energy Conservation Standard final rule];
    (ii) Designed--
    (A) To operate at nominal input voltages of 120 or 277 volts;
    (B) To operate with an input current frequency of 60 Hertz; and
    (C) For use in connection with fluorescent lamps (as defined in 
Sec.  430.2);
    (D) For dimming to 50 percent or less of the maximum output of the 
ballast
    (iii) Shall have--
    (A) A power factor of 0.9 or greater except for those ballasts 
defined in paragraph (m)(8)(iii)(B) of this section;
    (B) A power factor of 0.5 or greater for residential ballasts, 
which meet FCC Part B consumer limits and are designed and labeled for 
use only in residential applications;
    (C) A ballast luminous efficiency of not less than the following:

----------------------------------------------------------------------------------------------------------------
                                                                                            Ballast luminous
                                                                                               efficiency
                                                                Ballast       Total    -------------------------
                Designed for the operation of                    input       nominal        Low          High
                                                                voltage     lamp watts   frequency    frequency
                                                                                          ballasts     ballasts
----------------------------------------------------------------------------------------------------------------
One F34T12 lamp.............................................      120/277           34         75.2         77.8
Two F34T12 lamps............................................      120/277           68         77.8         80.5
Two F96T12/ES lamps.........................................      120/277          120         83.9         88.4
Two F96T12HO/ES lamps.......................................      120/277          190         68.0         71.3
----------------------------------------------------------------------------------------------------------------

* * * * *
[FR Doc. 2011-7592 Filed 4-8-11; 8:45 am]
BILLING CODE 6450-01-P