[Federal Register Volume 76, Number 219 (Monday, November 14, 2011)]
[Rules and Regulations]
[Pages 70548-70629]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-28451]



[[Page 70547]]

Vol. 76

Monday,

No. 219

November 14, 2011

Part II





Department of Energy





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10 CFR Part 430





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

  Federal Register / Vol. 76, No. 219 / Monday, November 14, 2011 / 
Rules and Regulations  

[[Page 70548]]


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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: Final rule.

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SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as 
amended, prescribes energy conservation standards for various consumer 
products and certain commercial and industrial equipment, including 
fluorescent lamp ballasts. EPCA also requires the U.S. Department of 
Energy (DOE) to determine whether any new or amended standards would be 
technologically feasible and economically justified, and would save a 
significant amount of energy. In this final rule, DOE adopts new and 
amended federal energy conservation standards for fluorescent lamp 
ballasts. It has determined that the new and amended energy 
conservation standards for these products would result in significant 
conservation of energy, and are technologically feasible and 
economically justified.

DATES: The effective date of this rule is January 13, 2012. Compliance 
with the new and amended standards established for fluorescent lamp 
ballasts in today's final rule is required as of November 14, 2014.

ADDRESSES: The docket for this rulemaking 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. However, 
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. The regulations.gov page contains 
instructions on how to access all documents, including public comments, 
in the docket.
    For further information on how to review the docket, contact Ms. 
Brenda Edwards at (202) 586-2945 or by email: 
[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. Email: [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. Email: [email protected].

SUPPLEMENTARY INFORMATION:

I. Summary of the Final Rule
    A. Benefits and Costs to Consumers
    B. Impact on Manufacturers
    C. National Benefits
    D. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Ballast Efficacy Factor Standards
    2. History of Standards Rulemaking for Fluorescent Lamp Ballasts
III. Issues Affecting the Scope of This Rulemaking
    A. Additional Fluorescent Lamp Ballasts for Which DOE Is 
Adopting Standards
    1. Scope of EPCA Requirement That DOE Consider Standards for 
Additional Ballasts
    2. Identification of the Additional Ballasts for Which DOE 
Establishes Standards
    3. Summary of Fluorescent Lamp Ballasts to Which DOE Extends 
Coverage
    B. Off Mode and Standby Mode Energy Consumption Standards
IV. General Discussion
    A. Test Procedures
    1. Background
    2. Transfer Function
    3. Reference Lamp
    4. Total Lamp Arc Power
    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. Product Classes
    1. Residential Ballasts
    2. Sign Ballasts
    3. Starting Method
    4. 8-Foot HO
    5. Summary
    B. Engineering Analysis
    1. NOPR Approach
    2. Available Test Data
    3. NEMA-Provided and DOE BLE Data Comparison
    4. Accounting for Variation and Compliance Certification 
Requirements
    5. Efficiency Levels
    6. Representative Units
    7. Scaling to Product Classes Not Analyzed
    8. Manufacturer Selling Prices
    9. Results
    C. Markups To Determine Product Price
    1. Distribution Channels
    2. Estimation of Markups
    3. Summary of Markups
    D. Energy Use Analysis
    E. 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
    F. National Impact Analysis-National Energy Savings and Net 
Present Value Analysis
    1. Shipments
    2. Site-to-Source Energy Conversion
    G. Consumer Sub-Group Analysis
    H. Manufacturer Impact Analysis
    1. Product and Capital Conversion Costs
    2. Markup Scenarios
    3. Other Key GRIM Inputs
    4. Other Comments From Interested Parties
    5. Manufacturer Interviews
    6. Sub-Group Impact Analysis
    I. Employment Impact Analysis
    J. Utility Impact Analysis
    K. Environmental Assessment
    L. Monetizing Carbon Dioxide and Other Emissions Impacts
    1. Social Cost of Carbon
    2. Valuation of Other Emissions Reductions
VI. Other Issues for Discussion
    A. Proposed Standard Levels in April 2011 NOPR
    B. Universal Versus Dedicated Input Voltage
    C. Implementation of Adopted Standard Levels
VII. Analytical Results and Conclusions
    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. Conclusions
    1. Trial Standard Level 3B
    2. Trial Standard Level 3A
    D. Backsliding
VIII. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    1. Statement of the Need for, and Objectives of, the Rule
    2. Summary of and Responses to the Significant Issues Raised by 
the Public Comments, and a Statement of Any Changes Made as a Result 
of Such Comments

[[Page 70549]]

    3. Description and Estimated Number of Small Entities Regulated
    4. Description and Estimate of Compliance Requirements
    5. Steps Taken To Minimize Impacts on Small Entities and Reasons 
Why Other Significant Alternatives to Today's Final Rule Were 
Rejected.
    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
    M. Congressional Notification
IX. Approval of the Office of the Secretary

I. Summary of the Final Rule

    Title III, Part B\1\ of the Energy Policy and Conservation Act of 
1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as 
codified), established the Energy Conservation Program for Consumer 
Products Other Than Automobiles. Pursuant to EPCA, any new or amended 
energy conservation standard that DOE prescribes for certain products, 
such as fluorescent lamp ballasts (ballasts), shall 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 adopts new and amended energy conservation standards for 
ballasts. The new and amended standards, which are based on ballast 
luminous efficiency (BLE), the ratio of total lamp arc power to ballast 
input power as defined in Appendix Q1 of title 10 of the Code of 
Federal Regulations (CFR), part 430, are shown in Table I.1. These new 
and amended standards apply to all products listed in Table I.1 and 
manufactured in, or imported into, the United States on or after the 
compliance date specified in the DATES section.
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    \1\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated Part A.

             Table I.1--New and Amended Energy Conservation Standards for Fluorescent Lamp Ballasts
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  Fluorescent lamp ballasts * shall have a ballast luminous efficiency no less than A/(1 + B *       Percent
                total lamp arc power[caret]-C) where A, B, and C are as follow:                    improvement
------------------------------------------------------------------------------------------------   over current
                                                                                                   standard or
                Product Class                        A                B                C           baseline **
----------------------------------------------------------------------------------------------------------------
Instant start and rapid start ballasts (not             0.993             0.27             0.25              5.7
 classified as residential) that are
 designed to operate........................
    4-foot medium bipin lamps
    2-foot U-shaped lamps
    8-foot slimline lamps
Programmed start ballasts (not classified as            0.993             0.51             0.37             10.8
 residential) that are designed to operate..
    4-foot medium bipin lamps
    2-foot U-shaped lamps
    4-foot miniature bipin standard output
     lamps
    4-foot miniature bipin high output lamps
Instant start and rapid start ballasts (not             0.993             0.38             0.25             26.5
 classified as sign ballasts) that are
 designed to operate 8-foot high output
 lamps......................................
Programmed start ballasts (not classified as            0.973             0.70             0.37             26.2
 sign ballasts) that are designed to operate
 8-foot high output lamps...................
Sign ballasts that operate 8-foot high                  0.993             0.47             0.25             15.1
 output lamps...............................
Instant start and rapid start residential               0.993             0.41             0.25              7.2
 ballasts that operate......................
    4-foot medium bipin lamps
    2-foot U-shaped lamps
    8-foot slimline lamps
Programmed start residential ballasts that              0.973             0.71             0.37              5.8
 are designed to operate....................
    4-foot medium bipin lamps
    2-foot U-shaped lamps
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* Fluorescent ballasts that are exempt from these standards are listed in section III.A.3.
** Percent improvement is applicable to the average of ballasts directly analyzed.

A. Benefits and Costs to Consumers

    Table I.2 presents DOE's evaluation of the economic impacts of 
today's standards on consumers of ballasts for the product classes 
analyzed as representative (see section V.B.6), as measured by the 
average life-cycle cost (LCC) savings and the median payback period 
(PBP). The average LCC savings are positive for all product classes. 
For example, the estimated average LCC savings are $37-$40 for 2-lamp 
instant start (IS) and rapid start (RS) ballasts that operate 4-foot T8 
\2\ lamps in the commercial sector. When there was more than one 
baseline 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 and have 
lower overall LCCs than T12 systems, the LCC savings relative to the T8 
baseline are lower than when comparing the same efficiency levels to a 
T12 baseline. At the adopted standard levels, however, LCC savings are 
positive for all replacement events and baselines analyzed.
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    \2\ A lamp description in the form ``T8'' refers to a lamp that 
(1) is tubular (linear) and (2) has a diameter of 8 eighths of an 
inch (1 inch).

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                        Table I.2--Impacts of Today's Standards on Consumers of Ballasts
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            Product Class *                 Average LCC savings (2010$)        Median payback  period (years) *
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IS and RS ballasts (not classified as
 residential) that operate:
    4-foot MBP lamps (T12 baseline)...  $37 to $40.........................  -1.2 to -1.3.
    4-foot MBP lamps (T8 baseline)....  $3 to $8...........................  2.7 to 4.4.
    8-foot slimline lamps (T12          $22 to $33.........................  0.1.
     baseline).
    8-foot slimline lamps (T8           $5 to $7...........................  0.5 to 0.6.
     baseline).
PS ballasts (not classified as
 residential) that operate:
    4-foot MBP lamps..................  $6 to $35..........................  1.3 to 6.0.
    4-foot MiniBP SO lamps............  $10 to $19.........................  2.4 to 3.8.
    4-foot MiniBP HO lamps............  $26 to $28.........................  2.0 to 2.1.
IS and RS ballasts (not classified as
 sign ballasts) that operate:
    8-foot HO lamps (T12 baseline)....  $134 to $230.......................  -0.7 to -1.3.
Sign ballasts that operate:
    8-foot HO lamps...................  $251 to $403.......................  -0.2 to -0.3.
IS and RS residential ballasts that
 operate:
    4-foot MBP lamps..................  $15 to $21.........................  -5.5 to -9.5.
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*IS = instant start; RS = rapid start; MBP = medium bipin; MiniBP = miniature bipin; PS = programmed start;
SO = standard output; HO = high output.
**Negative PBP values indicate standards that reduce operating costs and installed costs.

B. Impact on Manufacturers

    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 \3\ 
percent, DOE estimates that the INPV for manufacturers of ballasts in 
the base case ranges from $733 million to $1.22 billion in 2010 dollars 
(2010$). Under today's standards, DOE expects that ballast 
manufacturers may lose up to 36.7 percent of their INPV, which is 
approximately $268.6 million. Based on DOE's interviews with the 
manufacturers of ballasts, however, DOE does not expect any plant 
closings or significant employment loss. See section VII.B.2.b and 
VIII.B.3.b for additional discussion on this topic.
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    \3\ For ballasts, DOE uses a real discount rate of 7.4 percent. 
DOE's discount rate estimate was derived from industry financials 
then modified according to feedback during manufacturer interviews.
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C. National Benefits

    DOE's analyses indicate that today's ballast standards would save a 
significant amount of energy over 30 years (2014-2043)--an estimated 
2.7-5.6 quadrillion British thermal units (quads) of cumulative energy. 
This amount is equivalent to the annual energy use of 14 million to 28 
million U.S. homes.\4\
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    \4\ This estimate is based on the energy use of homes in 2008, 
which is the most recent data available. See Rosenfeld, Arthur H. 
and Satish Kumar. Tables to Convert Energy or CO2 (saved or used) to 
Familiar Equivalents--Cars, Homes, or Power Plants (US Average Data 
for 2005). May 2008. http://www.energy.ca.gov/commissioners/rosenfeld_docs/EquivalenceMatrix2008.doc
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    The cumulative national net present value (NPV) of total consumer 
costs and savings of today's ballast standards in 2010$ ranges from 
$6.7 billion (at a 7-percent discount rate) to $21.6 billion (at a 3-
percent discount rate). This NPV expresses the estimated total value of 
future operating-cost savings less the estimated increased product 
costs for products purchased in 2014-2043, discounted to 2011.
    In addition, today's ballast standards would have significant 
environmental benefits. The energy savings would result in cumulative 
greenhouse gas emission reductions of 27-106 million metric tons (Mt) 
of carbon dioxide (CO2) from 2014 through 2043. During this 
period, the standards would also result in emissions reductions \5\ of 
22-39 thousand tons of nitrogen oxides (NOX) and 0.40-1.47 
tons of mercury (Hg).\6\
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    \5\ DOE calculates emissions reductions relative to the most 
recent version of the Annual Energy Outlook (AEO) Reference case 
forecast. As noted in TSD chapter 16, 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 currently proposed CAIR 
replacement rule, the Clean Air Transport Rule (75 FR 45210 (Aug. 2, 
2010)), do not appear in the forecast.
    \6\ Results for NOX and Hg are presented in short 
tons. One short ton equals 2000 lbs.
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    The value of the CO2 reductions is calculated using a 
range of values per metric ton of CO2 (otherwise known as 
the Social Cost of Carbon, or SCC) developed by a recent interagency 
process. The derivation of the SCC values is discussed in section V.L. 
DOE estimates that the net present monetary value of the CO2 
emissions reductions is between $0.26 and $3.94 billion, expressed in 
2010$ and discounted to 2011. DOE also estimates that the net present 
monetary value of the NOX emissions reductions, expressed in 
2010$ and discounted to 2011, is $3.91 to $40.2 million at a 7-percent 
discount rate, and $7.67 to $78.8 million at a 3-percent discount 
rate.\7\
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    \7\ 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 reductions in 
its rulemakings.
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    Table I.3 summarizes the national economic costs and benefits 
expected to result from today's standards for fluorescent lamp 
ballasts.

[[Page 70551]]



      Table I.3--Summary of National Economic Benefits and Costs of
         Fluorescent Lamp Ballast Energy Conservation Standards
------------------------------------------------------------------------
                                        Present value     Discount rate
              Category                  Billion 2010$       (percent)
------------------------------------------------------------------------
                                Benefits
------------------------------------------------------------------------
Operating Cost Savings..............              12.0                 7
                                                  24.1                 3
CO2 Reduction Monetized Value (at                 0.26                 5
 $4.9/t) *..........................
CO2 Reduction Monetized Value (at                 1.29                 3
 $22.3/t) *.........................
CO2 Reduction Monetized Value (at                 2.16               2.5
 $36.5/t) *.........................
CO2 Reduction Monetized Value (at                 3.94                 3
 $67.6/t) *.........................
NOX Reduction Monetized Value (at                0.004                 7
 $450/ton) *........................
                                                  0.01                 3
NOX Reduction Monetized Value (at                 0.04                 7
 $4,623/ton) *......................
                                                  0.08                 3
Total Benefits[dagger]..............              13.3                 7
                                                  25.4                 3
------------------------------------------------------------------------
                                  Costs
------------------------------------------------------------------------
Incremental Installed Costs.........              3.68                 7
                                                  6.91                 3
------------------------------------------------------------------------
                              Net Benefits
------------------------------------------------------------------------
Including CO2 and NOX[dagger].......              9.62                 7
                                                  18.5                 3
------------------------------------------------------------------------
* The CO2 values represent global monetized values of the SCC in 2010
  under several scenarios. The values of $4.9, $22.3, and $36.5 per
  metric ton (t) are the averages of SCC distributions calculated using
  5%, 3%, and 2.5% discount rates, respectively. The value of $67.6/t
  represents the 95th percentile of the SCC distribution calculated
  using a 3% discount rate.
[dagger] Total Benefits for both the 3% and 7% cases are derived using
  the SCC value calculated at a 3% discount rate, and the average of the
  low and high NOX values used in DOE's analysis.

    The benefits and costs of today's standards, for products sold in 
2014-2043, can also be expressed in terms of annualized values. The 
annualized monetary values are the sum of (1) the annualized national 
economic value, expressed in 2010$, of the benefits from operating the 
product (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, plus (2) the 
annualized monetary value of the benefits of emission reductions, 
including CO2 emission reductions.\8\
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    \8\ 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 2011, the year used for discounting 
the NPV of total consumer costs and savings, for the time-series of 
costs and benefits using 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.3. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period (2014 through 2043) that 
yields the same present value. This payment includes benefits to 
consumers which accrue after 2043 from the ballasts purchased from 
2014 to 2043. Costs incurred by manufacturers, some of which may be 
incurred prior to 2014 in preparation for the rule, are not directly 
included, but are indirectly included as part of incremental product 
costs. 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 is a steady stream of payments.
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    Although adding the value of consumer savings to the values of 
emission reductions provides a valuable perspective, two issues should 
be considered. First, the national operating cost savings are domestic 
U.S. consumer monetary savings that occur as a result of market 
transactions, while the value of CO2 emissions reductions is 
based on a global value. Second, the assessments of operating cost 
savings and CO2 savings are performed with different methods 
that use different time frames for analysis. The national operating 
cost savings are measured for the lifetime of ballasts shipped in 2014-
2043. The SCC values, alternatively, reflect the present value of all 
future climate-related impacts resulting from the emission of one 
metric ton of CO2 in each year, with impacts continuing well 
beyond 2100.
    Estimates of annualized benefits and costs of today's standards are 
shown in Table I.4. (The following monetary values are expressed in 
2010$.) The results under the primary estimate are as follows. Using a 
7-percent discount rate for benefits and costs other than 
CO2 reduction, for which DOE used a 3-percent discount rate 
along with the SCC series corresponding to a value of $22.3/ton in 
2010, the cost of the standards in today's rule is $363 million per 
year in increased equipment costs, while the benefits are $1.2 billion 
per year in reduced equipment operating costs, $92 million in 
CO2 reductions, and $2.2 million in reduced NOX 
emissions. In this case, the net benefit amounts to $920 million per 
year. Using a 3-percent discount rate for all benefits and costs and 
the SCC series corresponding to a value of $22.3/ton in 2010, the cost 
of the standards in today's rule is $385 million per year in increased 
equipment costs, while the benefits are $1.3 billion per year in 
reduced operating costs, $92 million in CO2 reductions, and 
$2.4 million in reduced NOX emissions. In this case, the net 
benefit amounts to $1.1 billion per year.

[[Page 70552]]



      Table I.4--Annualized Benefits and Costs of New and Amended Standards for Ballasts Sold in 2014-2043*
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                                                                     Monetized  million 2010$/year
                                                     -----------------------------------------------------------
                                                                             Low estimate        High estimate
                                     Discount rate                             (emerging           (existing
                                                       Primary estimate   technologies, roll-    technologies,
                                                                             up  scenario)      shift scenario)
----------------------------------------------------------------------------------------------------------------
                                                    Benefits
----------------------------------------------------------------------------------------------------------------
Operating Cost Savings..........  7%................  1,189.............  886...............  1,492.
                                  3%................  1,344.............  934...............  1,754.
CO2 Reduction at $4.9/t**.......  5%................  20................  9.................  30.
CO2 Reduction at $22.3/t**......  3%................  92................  41................  143.
CO2 Reduction at $36.5/t**......  2.5%..............  151...............  66................  237.
CO2 Reduction at $67.6/t**......  3%................  280...............  124...............  435.
NOX Reduction at $2,537/t**.....  7%................  2.2...............  1.3...............  3.0.
                                  3%................  2.4...............  1.6...............  3.2.
Total (Operating Cost Savings,    7% plus CO2 range.  1,211 to 1,471....  896 to 1,011......  1,525 to 1,930.
 CO2 Reduction and NOX
 Reduction)[dagger].
                                  7%................  1,283.............  928...............  1,637.
                                  3%................  1,438.............  976...............  1,900.
                                  3% plus CO2 range.  1,366 to 1,626....  945 to 1,059......  1,788 to 2,193.
----------------------------------------------------------------------------------------------------------------
                                                      Costs
----------------------------------------------------------------------------------------------------------------
Incremental Product Costs.......  7%................  363...............  227...............  498.
                                  3%................  385...............  218...............  553.
----------------------------------------------------------------------------------------------------------------
                                               Net Benefits/Costs
----------------------------------------------------------------------------------------------------------------
Total (Operating Cost Savings,    7% plus CO2 range.  848 to 1,108......  669 to 784........  1,027 to 1,432.
 CO2 Reduction and NOX
 Reduction, Minus Incremental
 Product Costs)[dagger].
                                  7%................  920...............  700...............  1,139.
                                  3%................  1,053.............  758...............  1,347.
                                  3% plus CO2 range.  981 to 1,241......  727 to 842........  1,235 to 1,640.
----------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with fluorescent lamp ballasts shipped
  between 2014 and 2043. These results include benefits to consumers which accrue after 2043 from the ballasts
  purchased from 2014 to 2043. Costs incurred by manufacturers, some of which may be incurred prior to 2014 in
  preparation for the rule, are not directly included, but are indirectly included as part of incremental
  product costs. The Primary, Low Benefits, and High Benefits Estimates utilize forecasts of energy prices and
  housing starts from the AEO2010 Reference case, with the Low and High Estimates based on forecasted ballast
  shipments in the Emerging Technologies, Roll-up and Existing Technologies, Shift scenarios, respectively. In
  addition, all estimates use incremental product costs that reflect constant prices (no learning rate) for
  product prices. The different techniques used to evaluate projected price trends for each estimate are
  discussed in section V.E.1.
** The CO2 values represent global monetized values (in 2010$) of the social cost of CO2 emissions in 2010 under
  several scenarios. The values of $4.9, $22.3, and $36.5 per metric ton are the averages of SCC distributions
  calculated using 5-percent, 3-percent, and 2.5-percent discount rates, respectively. The value of $67.6/t
  represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. The value
  for NOX (in 2010$) 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 $22.3/t in 2010 (in 2010$). 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.

D. Conclusion

    Based on the analyses culminating in this final rule, DOE found the 
benefits to the nation of the standards (energy savings, consumer LCC 
savings, positive NPV of consumer benefit, and emission reductions) 
outweigh the costs (loss of INPV). DOE has concluded that the standards 
in today's final rule represent the maximum improvement in energy 
efficiency that is technologically feasible and economically justified, 
and would result in significant conservation of energy. DOE further 
notes that in all product classes, ballasts achieving the standard 
levels are already commercially available.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying today's final rule, as well as some of the historical 
background related to the establishment of standards for ballasts.

A. Authority

    Title III, Part B of the Energy Policy and Conservation Act of 
1975, Public Law 94-163 (42 U.S.C. 6291-6309, as codified) established 
the Energy Conservation Program for Consumer Products Other Than 
Automobiles,\9\ a program covering most major household appliances 
(collectively referred to as ``covered products''), which includes the 
types of ballasts that are the subject of this final rule. (42 U.S.C. 
6292(a)(13)) EPCA prescribed energy conservation standards for these 
products (42 U.S.C. 6295(g)(5), (6), and (8)), and directed DOE to 
conduct two cycles of rulemakings to determine whether to amend these 
standards. (42 U.S.C. 6295(g)(7))
---------------------------------------------------------------------------

    \9\ For editorial reasons, upon codification in the U.S. Code 
(U.S.C.), Part B was redesignated Part A.
---------------------------------------------------------------------------

    Pursuant to 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

[[Page 70553]]

implements the remainder of the program. Subject to certain criteria 
and conditions, DOE is required 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 pursuant to EPCA. Id. The DOE test procedures for 
ballasts currently appear at 10 CFR part 430, subpart B, appendices Q 
and Q1. Compliance with the ballast efficacy factor energy conservation 
standards, required until the compliance date specified in the DATES 
section, is determined according to appendix Q. Compliance with the BLE 
standards adopted in this rule must be determined according to appendix 
Q1. The procedures in appendix Q1 were established by the ballast 
active mode test procedure final rule. 76 FR 25211 (May 4, 2011).
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered products. As indicated in the beginning 
of section I, any new or 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, DOE may not adopt any standard that would 
not result in the 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 new or 
amended standard is not technologically feasible or economically 
justified. (42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a new or 
amended 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 make this determination 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 (the Secretary) considers 
relevant.

(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))

    EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing 
any new or 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 a new or amended standard if interested parties have 
established by a preponderance of the evidence that the standard is 
likely to result in the unavailability in the United States in 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, as codified, 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).
    Additionally, 42 U.S.C. 6295(q)(1) specifies requirements when 
promulgating a standard for a type or class of covered product that has 
two or more subcategories. DOE must specify a different standard level 
than that which applies generally to such type or class of products for 
any group of covered products which have the same function or intended 
use if 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. Id. 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 such a 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 may, however, grant waivers 
of Federal preemption for particular State laws or regulations, in 
accordance with the procedures and other provisions set forth under 42 
U.S.C. 6297(d).
    Pursuant to the amendments contained in section 310(3) of the 
Energy Independence and Security Act of 2007 (EISA 2007), any final 
rule for new or amended energy conservation standards promulgated after 
July 1, 2010, is required to address standby mode and off mode energy 
use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE adopts a standard 
for a covered product after that date, it must, if justified by the 
criteria for adoption of standards under EPCA (42 U.S.C. 6295(o)), 
incorporate standby mode and off mode energy use into the standard or, 
if that is not feasible, adopt a separate standard for such energy use 
for that product. (42 U.S.C. 6295(gg)(3)(A)-(B)) DOE has determined 
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 test procedures for ballasts address such standby 
mode energy use. 74 FR 54455 (October 22, 2009) and 76 FR 25211 (May 4, 
2011); 10 CFR part 430, subpart B, appendix Q, section 3.2 and appendix 
Q1, section 3. DOE did not adopt standards for standby mode energy use, 
however, because DOE did not find any covered ballasts capable of 
operating in this

[[Page 70554]]

mode in its search of the marketplace. Therefore, this final rule does 
not include energy conservation standards for standby mode energy use. 
See section III.B for more detail.
    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 explicitly reaffirms the principles, structures, 
and definitions governing regulatory review established in Executive 
Order 12866. To the extent permitted by law, agencies are required by 
Executive Order 13563 to: (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.
    DOE emphasizes as well that Executive Order 13563 requires agencies 
``to use the best available techniques to quantify anticipated present 
and future benefits and costs as accurately as possible.'' In its 
guidance, the Office of Information and Regulatory Affairs has 
emphasized that such techniques may include ``identifying changing 
future compliance costs that might result from technological innovation 
or anticipated behavioral changes.'' For the reasons stated in the 
preamble, DOE concludes that today's final rule is consistent with 
these principles, including the requirement that, to the extent 
permitted by law, benefits justify costs and that net benefits are 
maximized. Consistent with EO 13563, and the range of impacts analyzed 
in this final rule, the energy efficiency standards adopted herein by 
DOE achieve maximum net benefits.

B. Background

1. Ballast Efficacy Factor Standards
    The Federal energy conservation standards for ballasts expressed in 
terms of ballast efficacy factor are set forth in Table II.1 and Table 
II.2. The standards in Table II.1 were adopted in a final rule 
published on September 19, 2000, 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). 65 FR 56739. The standards in Table II.2 were established by 
amendments to EPCA in the Energy Policy Act of 2005 (EPAct 2005), Pub. 
L. 109-58.

                      Table II.1--Energy Conservation Standards From the 2000 Ballast Rule
----------------------------------------------------------------------------------------------------------------
                                                              Ballast input     Total nominal   Ballast efficacy
              Application for operation of *                     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
----------------------------------------------------------------------------------------------------------------
* F40T12, F96T12, and F96T12HO are defined in Appendix Q to Subpart B of Part 430.

10 CFR 430.32(m)(3).

                            Table II.2--Energy Conservation Standards From EPAct 2005
----------------------------------------------------------------------------------------------------------------
                                                              Ballast input     Total nominal   Ballast efficacy
              Application for operation of *                     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 F96T12HO/ES lamps.....................................           120/277               190              0.42
----------------------------------------------------------------------------------------------------------------
* F34T12, F96T12/ES, and F96T12HO/ES are defined in Appendix Q to Subpart B of Part 430.

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

    In summary, as reflected in the previous 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 \10\ and F34T12);
---------------------------------------------------------------------------

    \10\ A notation in the form ``F40T12'' identifies a lamp type. 
This particular notation refers to a lamp that: (1) Is fluorescent; 
(2) has a nominal wattage of 40 W; (3) is linear (tubular); and (4) 
has a diameter of 12 eighths of an inch.
---------------------------------------------------------------------------

     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 (F96T12HO and F96T12HO/ES) at nominal input 
voltages of 120 or 277 volts (V) with an input current frequency of 60 
hertz (Hz).

[[Page 70555]]

    In addition, several ballasts are exempt from standards. These 
exemptions consist of ballasts designed to operate those lamps listed 
in Table II.1 that:
     Are designed for dimming to 50 percent or less of its 
maximum output;
     Are designed for use with two F96T12 high output (HO) 
lamps at ambient temperatures of -20 degrees Fahrenheit (F) or less and 
for use in an outdoor sign; or
     Have a power factor of less than 0.90 and are designed and 
labeled for use only in residential building applications.
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 rulemaking to determine 
whether to amend the standards for these ballasts, including whether to 
adopt standards for additional ballasts. (42 U.S.C. 6295(g)(5)-(8)) As 
indicated in section II.B.1, DOE completed the first of these 
rulemaking cycles by publishing 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 is amending the existing 
standards for ballasts and adopting 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 that 
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 feedback 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 (TSD) and of 
another public meeting to discuss and receive comments on the following 
matters: Product classes; 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) (hereafter 
referred to as 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 
also requested comment on other relevant issues that would affect 
energy conservation standards for fluorescent lamp ballasts or that DOE 
should address in the notice of proposed rulemaking (NOPR). Id. at 
14322.
    The public meeting announced in the March 2010 notice took place on 
April 26, 2010. At that 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 
efficiency metric; how test procedure variation might affect efficiency 
measurements; requirements for ballasts in environments that are 
sensitive to electromagnetic interference (EMI); product classes; 
manufacturer selling prices (MSPs) and overall pricing methodology; 
markups; the maximum technologically feasible ballast efficiency; 
cumulative regulatory burden; and shipments. DOE considered the 
comments received since publication of the March 2010 notice, including 
those received at the April 2010 public meeting, in the development of 
the NOPR.
    In April 2011, DOE proposed new and amended energy conservation 
standards for fluorescent lamp ballasts. In conjunction with the NOPR, 
DOE also published on its Web site the complete TSD for the proposed 
rule, which incorporated the analyses DOE conducted and technical 
documentation for each analysis. The TSD included the engineering 
analysis spreadsheets, the LCC spreadsheet, the national impact 
analysis spreadsheet, and the manufacturer impact analysis (MIA) 
spreadsheet--all of which are available on DOE's Web site.\11\ The 
proposed standards were as shown in Table II.3. 76 FR 20090, 20091 
(April 11, 2011).
---------------------------------------------------------------------------

    \11\ The Web site address for all the spreadsheets developed for 
this rulemaking proceeding are available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/fluorescent_ballasts_nopr_analytical_tools.html.

  Table II.3--Energy Conservation Standards Proposed in the April 2011
                                  NOPR
------------------------------------------------------------------------
             Product class                    Proposed BLE standard
------------------------------------------------------------------------
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 8-foot   1.49 * ln(total lamp arc power)
 HO lamps.                                + 84.32.
PS ballasts that operate 8-foot HO       1.46 * ln(total lamp arc power)
 lamps.                                   + 82.63.
Ballasts that operate 8-foot HO lamps    1.49 * ln(total lamp arc power)
 designed for cold temperature outdoor    + 81.34.
 signs.
------------------------------------------------------------------------


[[Page 70556]]

    In the NOPR, DOE invited comment in particular on the following 
issues: (1) The exemption for T8 magnetic \12\ ballasts in EMI-
sensitive environments; (2) the appropriateness of establishing 
efficiency standards using an equation dependent on lamp-arc power; (3) 
the inclusion of several different ballast types in the same product 
class; (4) the methodology used to calculate manufacturer selling 
prices; (5) the efficiency levels considered; (6) the maximum 
technologically feasible level; (7) markups; (8) the inclusion T12 
ballasts in the baseline analysis for life cycle costs; (9) the 
magnitude and timing of forecasted shipments; (10) the methodology and 
inputs DOE used for the manufacturer impact analysis--specifically, 
DOE's assumptions regarding markups, capital costs, and conversion 
costs; (12) the potential impacts of amended standards on small 
fluorescent lamp ballast manufacturers; (13) the trial standard levels 
(TSLs) considered; (14) the proposed standard level; and (15) potential 
approaches to maximize energy savings while mitigating impacts to 
certain fluorescent ballast consumer subgroups. 76 FR 20090, 20177 
(April 11, 2011).
---------------------------------------------------------------------------

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

    DOE held a public meeting on May 10, 2011, to hear oral comments on 
and solicit information relevant to the proposed rule (hereafter the 
May 2011 public meeting). At this meeting, the National Electrical 
Manufacturers Association (NEMA) presented test data that they found 
inconsistent with the data collected by DOE and that could affect the 
standards established in the final rule. In general, NEMA's ballast 
luminous efficiency values appeared to be lower than those obtained by 
DOE. NEMA and other stakeholders agreed that there were discrepancies 
between the two data sets and emphasized the importance of identifying 
the source of the differences. In addition, DOE received comments on 
the methodology used to account for compliance certification 
requirements, design variation, and lab-to-lab variation and on the 
appropriate shape of DOE's proposed efficiency level curves.
    In light of these discrepancies, DOE published a notice of data 
availability (NODA) on August 24, 2011 to: (1) Announce the 
availability of additional test data collected by DOE and the data 
submitted by NEMA; (2) address the differences between test data 
obtained by DOE and test data submitted by NEMA; (3) describe the 
methodological changes DOE was considering for the final rule based on 
the additional data; (4) present efficiency levels developed using the 
revised methodology and all available test data; and (5) request public 
comment on these analyses.\13\
---------------------------------------------------------------------------

    \13\ The August 2011 NODA and accompanying data are available 
here: http://www1.eere.energy.gov/buildings/appliance_standards/residential/notice_of_data_availability.html.
---------------------------------------------------------------------------

    DOE considered the comments received in response to both the April 
2011 NOPR and the August 2011 NODA when developing this final rule, and 
responds to these comments in the following sections.

III. Issues Affecting the Scope of This Rulemaking

A. Additional Fluorescent Lamp Ballasts for Which DOE is Adopting 
Standards

1. Scope of EPCA Requirement That DOE Consider Standards for Additional 
Ballasts
    As discussed in section II.A, amendments to EPCA established energy 
conservation standards for certain fluorescent lamp ballasts 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 April 2011 NOPR notes that a wide variety of fluorescent lamp 
ballasts are not currently covered by energy conservation standards, 
and thus 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).\14\ 74 FR 34080, 34087-8 (July 14, 2009). In that rule, DOE was 
directed by EPCA to consider expanding its scope of coverage to include 
additional general service fluorescent lamps (GSFL). EPCA defines GSFLs 
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 to those 
types of fluorescent lamps would mean there are no GSFLs that are not 
already subject to standards, and hence, there would be no 
``additional'' GSFLs 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'' GSFLs, 
thereby nullifying that provision.
---------------------------------------------------------------------------

    \14\ 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 GSFLs 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, a 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, a 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 and a nominal overall 
length of 96 inches;
    (4) Any instant start lamp (commonly referred to as 8-foot slimline 
lamps) with single pin bases, a 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, a 
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, a nominal overall 
length between 45 and 48 inches, and rated wattage of 49 or more.


[[Page 70557]]


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 
referenced 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 Establishes 
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 considered 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 
considered 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 April 2011 NOPR, DOE proposed extending coverage to several 
additional ballast types including those that operate: Additional 
numbers and diameters of 4-foot MBP lamps, 8-foot HO lamps, and 8-foot 
slimline lamps; 4-foot miniature bipin (MiniBP) standard output (SO) 
lamps; 4-foot MiniBP HO lamps; and 8-foot HO cold temperature lamps 
commonly used in outdoor signs. DOE did not propose to extend coverage 
to additional dimming ballasts or T8 magnetic ballasts that operate in 
EMI-sensitive environments, provided that these magnetic ballasts were 
designed and labeled for use in EMI-sensitive environments only and 
shipped by the manufacturer in packages of 10 or fewer ballasts.
    The Northwest Energy Efficiency Alliance (NEEA) and the Northwest 
Power and Conservation Council (NPCC), the Northeast Energy Efficiency 
Partnerships (NEEP), the Appliance Standards Awareness Project (ASAP), 
and in a joint comment, ASAP, the Alliance to Save Energy, the American 
Council for an Energy-Efficient Economy, the National Consumer Law 
Center, and the National Resources Defense Council (hereafter the 
``Joint Comment'') supported the proposed scope of coverage. ASAP and 
the Joint Comment stated that the expanded scope contributes 
significantly to the forecasted energy savings for this rulemaking. 
(NEEA and NPCC, No. 44 at p. 2 \15\; NEEP, No. 49 at p. 2; ASAP, Public 
Meeting Transcript, No. 43 at pp. 80-2; Joint Comment, No. 46 at p. 2) 
DOE also received several comments regarding the proposed exemption for 
T8 magnetic ballasts that operate in EMI-sensitive environments, 
coverage of residential ballasts, and additional comments recommending 
further exemptions. These comments are discussed in further detail in 
the following sections.
---------------------------------------------------------------------------

    \15\ A notation in the form ``NEEA and NPCC, No. 44 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 NEEA and NPCC; (2) in document number 44 
of the docket; and (3) on page 2 of that document.
---------------------------------------------------------------------------

a. Ballasts That Operate in Environments Sensitive to Electromagnetic 
Interference
    DOE received comments at the April 2010 public meeting that 
standards could eliminate magnetic ballasts that are currently used in 
certain EMI-sensitive environments. 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 hangars or 
other buildings with predominantly metal construction.\16\ 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.
---------------------------------------------------------------------------

    \16\ This list is not all inclusive.
---------------------------------------------------------------------------

    Although there are several methods to reduce electromagnetic 
interference, available data do not indicate that EMI-related issues 
with electronic ballasts can be eliminated such that there are no 
longer safety concerns. For this reason, in the April 2011 NOPR DOE 
proposed an exemption for T8 magnetic ballasts designed and labeled for 
use in EMI-sensitive environments only and shipped by the manufacturer 
in packages containing 10 or fewer ballasts. DOE believed the exemption 
was necessary because in some environments, EMI could pose a serious 
safety concern that is best mitigated with magnetic ballast technology. 
DOE did not believe magnetic ballasts would likely be used as 
substitutes in current electronic ballast applications due to their 
higher cost and weight. 76 FR 20090, 20100-1 (April 11, 2011).
    NEEA and NPCC, NEMA, and ASAP supported the exemption for magnetic 
ballasts in EMI-sensitive locations. (NEEA and NPCC, No. 44 at p. 2; 
NEMA, Public Meeting Transcript, No. 43 at p. 70; NEMA, No. 47 at pp. 
2-3; ASAP, Public Meeting Transcript, No. 43 at pp. 80-2) ASAP and NEEA 
and NPCC suggested requiring the description ``designed, labeled, and 
marketed for use in EMI-sensitive applications'' to limit the 
possibility of exempted ballasts being sold in other applications. 
Philips commented that they are unsure how manufacturers would be able 
to control the marketing through distributors to the proper market. 
ASAP and NEEA and NPCC acknowledged that although manufacturers cannot 
control distribution, they can control how they market their products. 
(ASAP, Public Meeting Transcript, No. 43 at pp. 80-82; Philips, Public 
Meeting Transcript, No. 43 at p. 82; NEEA and NPCC, No. 44 at p. 2)
    DOE did not receive any adverse comment regarding the exemption for 
T8 magnetic ballasts in EMI-sensitive applications and therefore, for 
the reasons discussed above, maintains this exemption in the final 
rule. DOE agrees with ASAP and NEEA and NPCC that this exemption should 
be designed such that, to the greatest extent possible, it does not 
become a pathway to circumvent compliance with standards adopted by 
this rulemaking. Therefore, DOE has modified the description of the 
exemption to cover ballasts ``designed, labeled, and marketed for use 
in EMI-sensitive applications.'' See appendix 5E of the TSD for more 
details on EMI-sensitive applications.
b. Ballasts That Operate in the Residential Sector
    Radionic disagreed with DOE's decision to cover residential 
ballasts and stated that new residential models

[[Page 70558]]

developed to meet standards are likely to have a high initial cost. 
Because residential consumers are sensitive to first cost, Radionic 
stated that consumers will choose less expensive and less efficient 
technologies, thereby potentially decreasing energy savings. (Radionic, 
No. 36 at p. 1)
    As discussed in the April 2011 NOPR, DOE believes that residential 
ballasts represent a sizeable portion of the overall ballast market and 
represent significant potential energy savings. DOE agrees with 
comments received in response to the preliminary TSD, stating that 
demand for residential fluorescent ballasts will likely grow 
substantially as residential building codes become more stringent. For 
example, California, Oregon, and Washington have codes that require 
fluorescent or higher-efficacy systems in homes. 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. 76 FR 20090, 20099 (April 11, 2011). DOE projects 
that increased lighting efficacy requirements will drive consumers to 
continue to purchase fluorescent systems despite incremental increases 
in first cost. Furthermore, DOE notes that consumers are already 
purchasing higher efficiency fluorescent ballasts despite their higher 
initial first cost relative to other lighting technologies. As 
discussed in section V.A.1 and section V.B.5.g, standards for 
residential ballasts save significant amounts of energy, and are 
technologically feasible and economically justified. Therefore, DOE 
includes residential ballasts in the scope of coverage for this final 
rule.
c. Ballasts That Operate Below Minimum ANSI Current Levels
    At the May 2011 public meeting, the General Electric Company (GE) 
commented that DOE's efficiency levels for programmed start (PS) 
ballasts assumed high efficiency filament cut-out at all arc powers. GE 
stated, however, that some low ballast factor (BF) PS ballasts operate 
at currents below minimum American National Standards Institute (ANSI) 
levels for T8 and T12 lamps and thus require filament heating to 
maintain lamp life. GE and NEMA noted that these ballasts would be 
unable to meet BLE requirements proposed in the April 2011 NOPR due to 
cathode heating, but would offer energy savings due to their relatively 
low power levels and use in conjunction with occupancy sensors. Thus, 
GE requested that these low BF ballasts be exempt from standards. (GE, 
Public Meeting Transcript, No. 43 at pp. 236, 238; NEMA, No. 47 at p. 
6)
    NEEA and NPCC recognized the operating limitations presented by 
these ballasts, but expressed concern over the lack of information 
about their fraction of shipments, the markets where they are most 
commonly sold, and their cost relative to other, more common ballast 
types designed to operate the same type and number of lamps. 
Specifically, NEEA and NPCC commented that these ballasts might be the 
kind of currently exempted product provided to the residential market, 
and that their continuing exemption could result in an increase in 
sales and accompanying loss in energy savings. (NEEA and NPCC, No. 44 
at p. 4) The Joint Comment also highlighted the possibility of an 
increase in the use of these low BF ballasts in all applications if 
they were exempt from standards. They stated that the current small 
market share did not mean that shipments would not increase 
substantially in response to an exemption, thereby decreasing the 
potential energy savings due to the standards adopted by the 
rulemaking. (Joint Comment, No. 46 at pp. 2, 3)
    DOE reviewed ANSI C78.81-2010 \17\ and determined that ballasts 
designed to operate 4-foot MBP T8 lamps are required to use some level 
of cathode heating when operating lamps at currents less than 155 
milliamperes (mA). Through testing, DOE learned the BF of these 
ballasts was similar to or less than 0.7. This low BF (which affects 
light output) is a unique utility that might be removed from the market 
if these ballasts were held to the established standard level. DOE 
analyzed test data for 4-foot MBP T8 programmed start ballasts with 
average currents less than 155 mA to determine if there was a trend 
between low current and low efficiency. DOE determined that as current 
decreased, the BLE also decreased. DOE concluded that none of the PS 
ballasts tested with an average current of less than 140 mA were able 
to meet the max tech efficiency levels analyzed in the PS product 
class. Therefore, DOE is exempting these PS low-current ballasts from 
the standards adopted in this final rule.
---------------------------------------------------------------------------

    \17\ American National Standard for Electric Lamps--Double-
Capped Fluorescent Lamps--Dimensional and Electrical 
Characteristics, Approved January 14, 2010.
---------------------------------------------------------------------------

    DOE does not believe that an exemption for these ballasts will lead 
to an increase in their use because when current is reduced, light 
output is also reduced. Consumers have light output requirements and 
would not consider a ballast that does not meet such a requirement to 
be an adequate substitute. Reduced light output could also require 
additional lighting fixtures to be purchased in order to meet expected 
lighting levels. It is unlikely, however, that consumers would purchase 
additional fixtures due to high first cost. As a result, DOE 
establishes an exemption for these PS, low-current ballasts. DOE has 
determined that the threshold for the exemption will be set at the 
current levels indicated in its testing, 140 mA for 4-foot MBP 
ballasts.
d. Other Exemptions
    Radionic commented that DOE should consider exempting outdoor 
ballasts, cold weather ballasts, ``all ballasts for less than 30 
watts'', ballasts that have a normal power factor \18\ (a power factor 
equal to or greater than 0.6 and less than 0.9), and ballasts that are 
produced in small quantities for special applications. (Radionic, No. 
36 at p. 1)
---------------------------------------------------------------------------

    \18\ As defined by ANSI C82.13-2002, the power factor is 
calculated by determining the ratio of the input power to the 
apparent power. The input power is measured with a wattmeter, and 
the apparent power is the ballast input voltage multiplied by the 
ballast input current. For more information, see chapter 3 of the 
TSD.
---------------------------------------------------------------------------

    DOE notes that several of the ballasts mentioned by Radionic are 
already subject to standards. For example, because outdoor and cold 
weather ballasts, apart from sign ballasts, are already covered by 
current standards, DOE cannot exempt them from standards in this 
rulemaking due to anti-backsliding statutory provisions (discussed in 
section II.A). Similarly, DOE interpreted ``all ballasts for less than 
30 watts'' as ballasts that operate total lamp arc powers less than 30 
W. Some of these ballasts (such as ballasts that operate F34T12 lamps) 
are covered by current standards and cannot be exempted in this 
rulemaking. In general, DOE specifies efficiency levels using a power 
law equation that assigns BLE values as a function of total lamp arc 
power. In other words, the equation takes lower lamp arc power into 
account when assigning appropriate standard levels. Even though they 
operate lower wattage lamps, these ballasts still demonstrate 
significant potential energy savings and DOE test data shows they are 
capable of meeting the standard levels adopted by this final rule. 
Therefore, DOE will not exempt ballasts that operate total lamp arc 
powers less than 30 W in this final rule.
    Ballasts with a normal power factor are classified as residential 
ballasts. DOE continues to cover residential ballasts as discussed in 
section III.A.2.b. For residential ballasts, as well as all other types 
listed above, Radionic did

[[Page 70559]]

not provide DOE with any specific information regarding ballasts 
produced in small quantities for special applications, or specific data 
indicating that these ballasts would be unable to meet any standards. 
DOE has looked at the market and has not identified any applications, 
other than those already defined, in which ballasts are unable to meet 
standards and would require an exemption. For all of the ballast types 
Radionic listed, DOE has determined that the adopted standard levels 
are technologically feasible and economically justified.
3. Summary of Fluorescent Lamp Ballasts To Which DOE Extends Coverage
    With the exception of the comments discussed previously in this 
section, 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 for which DOE proposed coverage 
in the April 2011 NOPR are still technologically feasible, economically 
justified, and would result in significant energy savings. Therefore, 
in summary, this final rule extends coverage to the following 
fluorescent lamp ballasts:
    (1) Ballasts that operate 4-foot medium bipin lamps with a rated 
wattage \19\ of 25W or more, and an input voltage at or between 120V 
and 277V;
---------------------------------------------------------------------------

    \19\ 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, have an enclosure with an 
Underwriters Laboratories (UL) Type 2 rating, and are designed, 
labeled, and marketed for use in outdoor signs.\20\

    \20\ In the April 2011 NOPR, these ballasts were described as 
``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.'' For the reasons stated in section 0, DOE uses this revised 
description for the final rule.
---------------------------------------------------------------------------

The following ballasts are exempt from coverage:

    (1) Additional dimming ballasts;
    (2) Low frequency T8 ballasts that are designed, labeled, and 
marketed for use in EMI-sensitive environments and sold in packages of 
10 or fewer;
    (3) PS ballasts that operate 4-foot MBP T8 lamps and deliver on 
average less than 140mA to each lamp.

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 October 28, 2011,\21\ this rulemaking is 
required to consider standby mode and off mode energy use. DOE 
determined that it is not possible for the ballasts at issue in this 
final rule 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 
already in a mode 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., digitally addressable lighting interface (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.
---------------------------------------------------------------------------

    \21\ 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), as amended, the U.S. Department of Energy is 
required to publish, as that term is defined in the consent decree, 
a final rule amending energy conservation standards for fluorescent 
lamp ballasts no later than October 28, 2011.
---------------------------------------------------------------------------

    As discussed in the April 2011 NOPR, DOE did not expand the scope 
of coverage to include additional dimming ballasts. Therefore, the only 
covered dimming ballasts are the four products specified in 10 CFR 
430.32(m)(5) that operate reduced-wattage lamps. DOE research has not 
identified any dimming ballasts currently on the market that operate 
these lamps because the fill gas composition of reduced-wattage lamps 
makes them undesirable for use in dimming applications. Because DOE is 
not aware of any other dimming products that are covered by existing 
standards, DOE was unable to characterize standby mode energy 
consumption. Therefore, DOE does not 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

1. Background
    As noted previously, manufacturers must use the test procedures for 
ballasts at 10 CFR part 430, subpart B, appendix Q to determine 
compliance with the currently applicable ballast efficacy factor 
standards. On March 24, 2010, DOE issued a NOPR in which it proposed 
revisions to these test procedures. 75 FR 14288. The principal change 
DOE proposed to the existing test methods was, in an effort to reduce 
measurement variation, 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 specified that the ballast operate a 
resistive load rather than a lamp load during performance testing. For 
consistency with previous methods, no changes were proposed for the 
measurement of BF (which required photometric measurements). The 
preliminary TSD for this rulemaking considered standards in terms of 
BEF, as determined by the methods proposed in the active mode test 
procedure NOPR.
    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). The new 
metric, BLE, was equal to the total lamp arc power divided by ballast 
input power. DOE believed this

[[Page 70560]]

lamp-based metric more accurately assessed the real-life performance of 
a ballast and also reduced measurement variation relative to the 
existing test procedure for BEF. DOE also proposed a method for 
calculating the BF of a ballast by dividing the measured lamp arc power 
on the test ballast by the measured lamp arc power on a reference 
ballast. In cases where reference ballast operating conditions were 
unavailable, the SNOPR provided a reference lamp power (specific to the 
ballast type) from an ANSI standard or from empirical results. The 
April 2011 NOPR for the standards rulemaking used the BLE procedures 
specified in the test procedure SNOPR to propose energy conservation 
standards.
    The final rule for the active mode test procedure, which was 
published in the Federal Register on May 4, 2011, adopted the BLE 
metric proposed in the SNOPR with a few modifications. 76 FR 25211. To 
account for the increase in lamp efficacy associated with high-
frequency lamp operation versus low-frequency, DOE had proposed an 
adjustment to the BLE of low-frequency systems. DOE had proposed that 
low-frequency BLE be multiplied by 0.9 to account for the approximately 
10 percent increase in lighting efficacy associated with high-frequency 
lamp operation. For the final rule, DOE assigned specific lamp 
operating frequency adjustment factors for each ballast type 
considered. The adjustment factors more accurately approximated the 
increase in lighting efficacy associated with high-frequency lamp 
operation. In addition, in the final rule, DOE did not adopt a BF 
measurement procedure because BF was no longer used to define product 
classes for energy conservation standards.
    This final rule for energy conservation standards evaluates 
standards for ballasts in terms of the BLE metric adopted in the active 
mode test procedure. Appendix Q1 of 10 CFR part 430 Subpart B will be 
used to evaluate compliance with the standards adopted in this final 
rule. 76 FR 25211, 25213 (May 4, 2011)
    DOE received comments in response to the April 2011 NOPR regarding 
the new fluorescent ballast testing procedure and BLE metric. Several 
stakeholders expressed support for the BLE metric. The Pacific Gas and 
Electric Company, Southern California Edison, the Southern California 
Gas Company, and San Diego Gas and Electric (hereafter the ``CA 
Utilities'') commented that the new BLE metric is an improvement over 
the existing BEF metric because it allows for efficiency comparison 
across a wider range of ballasts. (CA Utilities, No. 45 at p. 1) NEEP 
and CA Utilities stated that the new BLE metric successfully simplifies 
testing requirements and enables the vast consolidation of product 
classes, which will make the compliance and enforcement processes 
easier. (NEEP, No. 92 at p. 3; CA Utilities, No. 45 at pp. 1-2) CA 
Utilities also approved of the new test procedure, commenting that they 
support the use of lamps to measure lamp arc power instead of sets of 
resistor banks designed to simulate lamps. CA Utilities stated that 
actual lamps, which have varying impedance based on power, more 
accurately represent real world loads on ballasts. They added that 
maintaining different sets of resistor banks at every ballast factor 
would have increased the testing burden for manufacturers. (CA 
Utilities, No. 45 at p. 2)
    DOE also received several comments requesting clarification on the 
new test procedure. These comments are discussed in the following 
sections.
2. Transfer Function
    GE asked if DOE would be creating transfer functions, similar to 
those proposed in the active mode test procedure NOPR, to convert BLE 
to BEF for marketing purposes. GE noted that as BEF will continue to be 
more relevant for consumers using lumens and system watts, 
manufacturers will continue to publish those numbers even though they 
will not test the ballasts with that metric. (GE, Public Meeting 
Transcript, No. 43 at p. 237) As discussed in section VII.D, to verify 
that no backsliding had occurred, DOE developed a method to convert BEF 
to BLE in order to compare current and newly adopted standards. 
However, DOE requires manufacturers to certify compliance in terms of 
the BLE metric only and therefore does not provide a transfer function 
for converting BLE to BEF for marketing purposes.
3. Reference Lamp
    GE noted that it is not always clear what lamp should be used when 
testing a ballast and requested clarification on this matter. (GE, 
Public Meeting Transcript, No. 43 at pp. 236-7) DOE notes that Table A 
in the ballast test procedure, Appendix Q1 of 10 CFR part 430 Subpart 
B, provides the appropriate lamp wattage, diameter and base to use in 
testing for each covered ballast type. For example, the first row of 
Table A shows that ballasts ``that operate straight-shaped lamps 
(commonly referred to as 4-foot medium bipin lamps) with medium bipin 
bases and a nominal overall length of 48 inches'' should be tested with 
32W T8 MBP lamps.
4. Total Lamp Arc Power
    The People's Republic of China (P.R. China) noted that in the April 
2011 NOPR, the term ``total lamp arc power'' was not well-defined. They 
noted that ANSI C78.81-2010 specifies ``arc wattage'' for various 
fluorescent tube lamps but does not define ``total lamp arc power.'' 
Furthermore, while the test procedure SNOPR included a definition for 
``total lamp arc power,'' it also included a table that listed a low 
and/or high frequency ``reference lamp arc power'' for each covered 
ballast type. 75 FR 71570, 71592 (November 24, 2010). P.R. China 
indicated that these terms caused confusion regarding the appropriate 
value to be used when calculating the efficiency standard. Therefore, 
they suggested DOE clarify the specific value of ``total lamp arc 
power'' and use consistent terminology to avoid confusion. (P.R. China, 
No. 51 at p. 3-4)
    CA Utilities and NEEA and NPCC agreed that it was unclear which arc 
power should be used to calculate the applicable BLE standard. CA 
Utilities recommended that DOE require manufacturers to use the average 
lamp arc power of the tested sample to determine the BLE for a given 
model. (CA Utilities, No. 58 at p. 4; NEEA and NPCC, No. 59 at p. 3)
    DOE notes that reference lamp arc power refers to the arc wattage 
listed in ANSI C78.81-2010 and, as shown in that standard, can vary 
depending on whether the reference ballast operates at low or high 
frequency settings.\22\ These values were provided in the test 
procedure SNOPR for the purposes of calculating ballast factor. 
However, because the test procedure final rule did not adopt a 
procedure for calculating ballast factor, reference lamp arc powers are 
no longer relevant. Total lamp arc power is a measured, not listed, 
value and is evaluated according to the recently adopted test 
procedure.
---------------------------------------------------------------------------

    \22\ The test procedure defines a low frequency ballast as a 
fluorescent lamp ballast that operates at a supply frequency of 50 
to 60 Hz and operates the lamp at the same frequency as the supply. 
The test procedure incorporates the ANSI C82.13 definition of high 
frequency ballast as a device which operates at a supply frequency 
of 50 or 60 Hz and operates the lamp at frequencies greater than 10 
kHz.
---------------------------------------------------------------------------

    DOE also notes that 10 CFR 429.26 does not currently reflect the 
new ballast luminous efficiency metric. DOE plans to consider 
certification procedures in upcoming rulemakings related to compliance 
certification and enforcement.\23\ For this final rule, DOE

[[Page 70561]]

computed the reported ballast luminous efficiency and total lamp arc 
power assuming the ballast basic models would be certified in the 
following manner. To certify compliance, manufacturers would calculate 
the total lamp arc power and BLE for each sample tested according to 10 
CFR 430, Subpart B, Appendix Q1. They would then average the total lamp 
arc power of each sample and input that average into the appropriate 
energy conservation standard efficiency level. The output of that 
equation dictates the minimum BLE that the reported BLE for each basic 
model must meet or exceed. To calculate the reported BLE for each basic 
model, manufacturers would follow the provisions laid out in 10 CFR 
429.26(a)(2)(ii).
---------------------------------------------------------------------------

    \23\ Details on certification and enforcement procedures can be 
found at: www1.eere.energy.gov/buildings/appliance_standards/certification_enforcement.html.
---------------------------------------------------------------------------

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 
that are the subject of the rulemaking. As the first step in such 
analysis, DOE develops a list of technology 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 430, subpart 
C, appendix A, section 4(a)(4)(i).
    Once DOE has determined that particular technology options are 
technologically feasible, it further evaluates each of them 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. 
For further details on the screening analysis for this rulemaking, see 
chapter 4 of the final rule TSD.
2. Maximum Technologically Feasible Levels
    When DOE considers 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 final rule 
TSD).
    As a first step to identifying the max tech efficiency level, DOE 
conducted testing of commercially available ballasts. DOE was unable to 
identify working prototypes that had a higher efficiency than the 
tested products. Therefore, DOE has determined that TSL 3B, which is 
based on the most efficient commercially available ballasts tested, 
represents the highest efficiency level that is technologically 
feasible for a sufficient diversity of commercially available products 
(spanning several ballast factors, number of lamps per ballast, and 
types of lamps operated) within each product class. The max tech 
efficiency levels require the use of electronic ballasts with improved 
components (such as high efficiency transformers, diodes, capacitors, 
and transistors). The max tech levels also require IS instead of RS 
ballasts, or some form of cathode cut-out technology for PS ballasts. 
Table IV.1 presents the max tech levels for each product class.

                                           Table IV.1--Max Tech Levels
----------------------------------------------------------------------------------------------------------------
                BLE = A/(1 + B * total lamp arc power [caret]-C) where A, B, and C are as follows
-----------------------------------------------------------------------------------------------------------------
                        Product class                                 A                B                C
----------------------------------------------------------------------------------------------------------------
IS and RS ballasts (not classified as residential) that                  0.993             0.27             0.25
 operate.....................................................
    4-foot MBP lamps
    2-foot U-shaped lamps
    8-foot slimline lamps
PS ballasts (not classified as residential) that operate.....            0.993             0.51             0.37
    4-foot MBP lamps
    2-foot U-shaped lamps
    4-foot MiniBP SO lamps
    4-foot MiniBP HO lamps
IS and RS ballasts (not classified as sign ballasts) that                0.993             0.28             0.25
 operate 8-foot HO lamps.....................................
PS ballasts (not classified as sign ballasts) that operate 8-            0.973             0.52             0.37
 foot HO lamps...............................................
Sign ballasts that operate 8-foot HO lamps...................            0.993             0.47             0.25
IS and RS residential ballasts that operate..................            0.993             0.29             0.25
    4-foot MBP lamps
    2-foot U-shaped lamps
    8-foot slimline lamps
PS residential ballasts that operate:........................            0.973             0.50             0.37
    4-foot MBP lamps
    2-foot U-shaped lamps
----------------------------------------------------------------------------------------------------------------

C. Energy Savings

1. Determination of Savings
    DOE used its national impact analysis (NIA) spreadsheet to estimate 
energy savings from new or amended standards for the ballasts that are 
the subject of this final rule. (The NIA spreadsheet model is described 
in section V.F of this final rule and in chapter 11 of the final rule 
TSD.) DOE forecasted energy savings for each TSL, beginning in 2014, 
the year that compliance with the new and amended standards is 
required, and ending in 2043. 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

[[Page 70562]]

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 final 
rule TSD chapter 11.) To convert site energy to source (also known as 
primary) energy, DOE derived time-dependent conversion factors from the 
model used to prepare the Energy Information Administration's (EIA's) 
Annual Energy Outlook 2010 (AEO2010).
2. Significance of Savings
    As noted in section I, 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 (DC 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 final rule 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.A, 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 requires 
compliance--and a long-term assessment over the 30-year analysis 
period. The impacts analyzed include INPV (which values the industry 
based on 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 related DOE 
regulations and other regulatory requirements on manufacturers.
    For individual consumers, measures of economic impact include the 
changes in LCC and the payback period 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 NPV 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, 
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 requires a 
variety of inputs, such as product prices, product energy consumption, 
energy prices, maintenance and repair costs, product lifetime, and 
consumer discount rates. DOE assumes in its analysis that 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 
this final rule will not affect any features valued by consumers, such 
as starting method, ballast factor, or cold temperature operation. 
Therefore, none of the TSLs presented in section VII.A would reduce the 
utility or performance of the ballasts that are the subject of this 
final rule. (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 
standards and to transmit this 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 this impact. (42 U.S.C. 
6295(o)(2)(B)(i)(V) and (B)(ii)) To assist the Attorney General in 
making this determination, DOE transmitted a copy of the April 2011 
NOPR and TSD to the Attorney General for review. The Attorney General's 
response is discussed in section VII.B.5, and is reprinted at the end 
of this rule.
f. Need of the Nation To Conserve Energy
    The non-monetary benefits of the standards in this final rule 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

[[Page 70563]]

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 standards in this final rule 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 new 
and amended standards--and from each TSL it considered for ballasts--in 
the environmental assessment contained in chapter 16 of the final rule 
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 considers subgroups of consumers that may be adversely 
affected by the standards established in this rule. DOE specifically 
assesses the impact of standards on low-income consumers, institutions 
of religious worship, and institutions that serve low-income 
populations. In considering these subgroups, DOE analyzes variations on 
electricity prices, operating hours, discount rates, and baseline 
ballasts. See section V.G 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 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 VII.B.1.c.

V. Methodology and Discussion

    DOE used three spreadsheets to estimate the impact of the adopted 
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 NPV 
impacts of new energy conservation standards. Through the third, the 
Government Regulatory Impact Model (GRIM), DOE assesses manufacturer 
impacts.
    Additionally, DOE uses a version of EIA's National Energy Modeling 
System (NEMS) to estimate the impacts of energy efficiency standards on 
electric utilities and the environment. The NEMS model simulates the 
energy sector of the U.S. economy. The version of NEMS used for 
appliance standards analysis is called NEMS-BT, and is based on the 
AEO2010 version of NEMS with minor modifications. The NEMS-BT accounts 
for the interactions between the various energy supply and demand 
sectors and the economy as a whole.\24\
---------------------------------------------------------------------------

    \24\ 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: tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf.
---------------------------------------------------------------------------

    As a basis for this final rule, DOE has continued to use the 
spreadsheets and approaches explained in the April 2011 NOPR. DOE used 
the same general methodology as applied in the NOPR, but revised some 
of the assumptions and inputs for the final rule in response to public 
comments. The following sections discuss these revisions.

A. 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).
    For the April 2011 NOPR, DOE undertook extensive testing of 
fluorescent lamp ballasts to evaluate the impact of numerous ballast 
characteristics on BLE. Using this test data, DOE empirically found a 
relationship between the BLE metric and lamp arc power. In general, as 
lamp arc power increases, BLE increases as well. DOE believes this 
association is due to the fixed losses of a ballast becoming 
proportionally less significant at higher lamp arc powers. This 
relationship allowed DOE to set efficiency levels as a function of 
total lamp arc power across a wide range of power levels, which 
simplified the product class structure and the amount of scaling 
required among product classes. In addition, setting efficiency levels 
with an equation allows for easier adaption of standards to future 
innovations. For example, an equation could 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, toward which manufacturers have commented 
the market is moving. NEMA agreed that an efficiency standard using 
pure electrical measurements on a ballast operating a lamp load is 
appropriate provided the equation accounts for different operating 
characteristics of the various ballast types that are grouped into each 
product class. (NEMA, No. 47 at p. 3) NEMA's specific comments 
regarding the appropriate grouping of various ballast types are 
discussed later in this section.
    After considering several potential class-setting factors, DOE 
proposed in the April 2011 NOPR to separate product classes based on 
starting method (instant start and rapid start versus programmed 
start), ballasts that operate 8-foot HO lamps, and ballasts that 
operate 8-foot HO lamps in cold-temperature outdoor signs. DOE noted 
that for each of those three ballast types, a difference in utility was 
accompanied by a difference in the BLE predicted by the power-
efficiency relationship. These three distinctions resulted in five 
product classes for: IS/RS ballasts that operate 4-foot MBP and 8-foot 
slimline lamps; PS ballasts that operate 4-foot MBP, T5 SO, and T5 HO 
lamps, IS/RS ballasts that operate 8-foot HO lamps, PS ballast that 
operate 8-foot HO lamps, and ballasts that operate 8-foot HO lamps in 
cold temperature outdoor signs.

[[Page 70564]]

    ASAP and CA Utilities commented that the reduction from the 70 
product classes considered in the preliminary analysis to the five 
product classes proposed in the NOPR provides a simpler standard and 
thus facilitates compliance and enforcement. (ASAP, Public Meeting 
Transcript, No. 43 at p. 80; CA Utilities, No. 45 at pp. 1-2) In 
addition, DOE received several comments related to the inclusion of 
residential and commercial ballasts in a single product class, the 
definition of the sign ballast product class, the grouping of ballasts 
with different starting methods, and the potential for additional 
subclasses within the 8-foot HO product class. These comments are 
discussed in the following sections.
1. Residential Ballasts
    Separate minimum power factor and electromagnetic interference 
requirements exist for residential and commercial ballasts. 
Specifically, 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.\25\ Based on these differing requirements, in the April 
2011 NOPR, DOE concluded that residential ballasts offer a unique 
utility in that they serve distinct market sectors and applications. 
However, because the April 2011 NOPR test data indicated residential 
ballasts could achieve similar levels of efficiency as commercial 
ballasts at the highest standard levels analyzed, DOE did not propose a 
separate product class for residential ballasts. In response to the 
April 2011 NOPR, DOE received several comments regarding this 
conclusion.
---------------------------------------------------------------------------

    \25\ 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.
---------------------------------------------------------------------------

    CA Utilities agreed with DOE's proposal that a separate product 
class is not necessary for residential ballasts because no specific 
characteristic affects efficiency. They stated that residential 
ballasts are not subject to more stringent FCC standards for EMI 
because these standards only apply to devices operating at frequencies 
greater than 30 megahertz (MHz). Thus, CA Utilities emphasized that 
starting method is more relevant to the efficiency of the ballast than 
the distinction of residential or commercial. (CA Utilities, No. 58 at 
p. 4; CA Utilities, No. 45 at p. 7) NEMA disagreed, commenting that not 
only are residential ballasts subject to more stringent standards for 
EMI, but that this requirement decreases ballast efficiency. NEMA and 
Universal added that while they support the inclusion of residential 
ballasts in this rulemaking, they oppose the inclusion of residential 
ballasts in the same product class as commercial ballasts, given their 
different efficiencies and application requirements. (NEMA, No. 47 at 
p. 4; Universal, Public Meeting Transcript, No. 43 at pp. 76-7)
    Current regulatory requirements subject residential ballasts to 
more stringent conducted EMI requirements than commercial ballasts. In 
particular, DOE notes that separate FCC standards exist for both 
radiated and conducted EMI emissions. The 30 MHz standards cited by CA 
Utilities correspond to radiated EMI emissions frequencies, not to 
ballast operating frequencies. Devices that operate at frequencies less 
than 1.705 MHz, such as fluorescent lamp ballasts, are not required to 
measure radiated emissions that exist at frequencies above 30 MHz; 
therefore, radiated EMI standards do not apply to fluorescent lamp 
ballasts. Ballasts with conducted EMI emissions in the frequency range 
of 0.45 to 30 MHz, however, must comply with FCC standards for 
conducted EMI. The conducted EMI requirements are applicable to all 
fluorescent lamp ballasts, but are more stringent for residential 
ballasts, necessitating added interference filtration in order to 
comply.
    CA Utilities also commented that although residential ballasts are 
subject to a lower minimum power factor requirement, they do not 
necessarily have low power factors; in fact, ballasts with either high 
or low power factors can be installed in the residential sector. CA 
Utilities concluded that therefore, many high-efficiency commercial 
ballasts available on the market today can be used in the residential 
sector without issue. (CA Utilities, No. 45 at pp. 6-7) Philips agreed 
that ballasts with high power factors can be installed in the 
residential sector, noting that the ENERGY STAR program for residential 
fixtures may soon require some level of power factor correction. 
Philips commented that increased power factor correction actually 
reduces the efficiency of residential ballasts because the losses 
associated with meeting FCC Class B requirements become more 
significant when including power factor correction. (Philips, Public 
Meeting Transcript, No. 43 at pp. 77-9)
    Acuity Brands added that a residential ballast that achieves the 
same efficiency as the most efficient commercial product would be 50 
percent more expensive because of the FCC EMI requirements. (Acuity 
Brands, Public Meeting Transcript, No. 43 at p. 79) NEMA pointed out 
that that a higher price could influence consumers to migrate from 
fluorescent luminaires to lower efficiency incandescent or halogen 
fixtures. (NEMA, No. 47 at p. 4) Edison Electric Institute (EEI) also 
expressed concern regarding the prices of residential ballasts, stating 
that a separate product class for residential ballasts is needed to 
improve economics for residential and low-income consumers. (EEI, No. 
48 at p. 2)
    DOE agrees that high power factor ballasts, similar to the power 
factors possessed by commercial products, can be installed in the 
residential sector. However, the addition of a power factor correction 
stage to a ballast circuit substantially increases the amount of 
electromagnetic interference due to the presence of high speed 
switches. Therefore, to meet the FCC requirements for residential 
products, commercial ballasts would require a more significant EMI 
filter and thus incur additional power losses.
    As stated previously, DOE determined in the April 2011 NOPR that 
despite the differences in power factor and EMI requirements between 
residential and commercial 2-lamp 4-foot MBP IS/RS ballasts, both 
ballast types could reach achieve similar levels of efficiency at the 
highest levels analyzed. Based on the similarity in efficiency, DOE 
included both ballast types in the same product class. Since 
publication of the April 2011 NOPR, however, DOE has obtained 
additional test data for residential ballasts that indicate a separate 
product class for residential ballasts is warranted. Specifically, DOE 
tested 4-lamp residential ballasts and was unable to confirm that it 
was technologically feasible for 4-lamp residential ballasts to meet 
the commercial ballast efficiency levels. Thus, in the August 2011 
NODA, DOE considered establishing a separate product class for 
residential ballasts. Because DOE proposed extending coverage to 
residential ballasts with both IS/RS and PS starting methods, DOE 
considered two new product classes: (1) IS/RS ballasts that operate 4-
foot MBP lamps in the residential sector and (2) PS ballasts that 
operate 4-foot MBP lamps in the residential sector. A separate product 
class for residential ballasts would allow DOE to adopt separate 
standard levels for these products based on their associated consumer 
economics.
    In response to the August 2011 NODA, the CA Utilities, NEEA and 
NPCC, and ASAP, the American Council for an Energy-Efficient Economy, 
and the Natural Resources Defense Council, in a second Joint

[[Page 70565]]

Comment, disagreed with the establishment of a separate product class 
for residential ballasts because residential ballasts can meet the same 
efficiency levels as commercial ballasts. The second Joint Comment 
added that although the data indicates that 4-lamp residential ballasts 
cannot achieve the same efficiency as their commercial counterparts, 
DOE should not establish a separate product class for this reason. They 
argued that 2-lamp ballasts are far more common in the residential 
sector than 4-lamp ballasts, which are often installed in commercial 
buildings. (CA Utilities, No. 58 at p. 4; NEEA and NPCC, No. 59 at p. 
3; Second Joint Comment, No. 57 at p. 1-2)
    In addition, the second Joint Comment, CA Utilities, and NEEA and 
NPCC stated that even if there were a difference in efficiency, DOE has 
not demonstrated that residential ballasts provide a unique consumer 
utility. (Second Joint Comment, No. 57 at pp. 1-2; CA Utilities, No. 58 
at p. 4; NEEA and NPCC, No. 59 at p. 3) These interested parties stated 
that residential ballasts are not subject to more stringent FCC 
requirements for electromagnetic interference. CA Utilities added that 
even if they were, EMI filters are available and they do not believe 
these components affect efficiency. These interested parties also 
reiterated previous comments that, while residential ballasts have 
lower minimum power factor requirements, this did not prevent high 
power factor ballasts from being installed in this market sector. The 
second Joint Comment, CA Utilities, and NEEA and NPCC concluded that 
commercial ballasts could be used in the residential sector without 
issue.
    DOE notes that both 2-lamp ballasts and 4-lamp ballasts are used in 
the residential sector. In addition, while 2-lamp ballasts may be more 
popular in the residential sector, ballasts that operate different 
numbers of lamps, such as the 4-lamp ballasts described by the second 
Joint Comment above, provide a unique utility, as explained in the 
following paragraph. EPCA requires DOE to consider any lessening of the 
utility or the performance of the covered products likely to result 
from the imposition of a standard. 42 U.S.C. 6295(o)(2)(B)(i)(IV). EPCA 
also prohibits DOE from establishing standards that are likely to 
result in the unavailability of performance characteristics, features, 
sizes, capacities and volumes that are substantially the same as those 
generally available in the United States when the standard is 
established. 42 U.S.C. 6295(o)(4). EPCA further requires DOE to 
prescribe a lower energy efficiency level for product classes in which 
the products have a performance-related feature, considering the 
utility of that feature to consumers and other factors, that justifies 
a lower efficiency level. 42 U.S.C. 6295(q). Available data indicates 
that these products cannot achieve the same efficiencies as their 
commercial counterparts and that, therefore, a separate product class 
and efficiency standard is warranted.
    DOE disagrees with the assertion that commercial ballasts can be 
used as substitutes for residential products. Although both ballasts 
can have high power factors, residential ballasts are subject to more 
stringent FCC standards for conducted EMI emissions. DOE agrees that 
EMI can be mitigated by the addition of a filter, but disputes the CA 
Utilities' claim that the filter does not affect efficiency. If a 
residential ballast were designed to have a high power factor, the 
addition of a power factor correction stage would increase the amount 
of conducted emissions. Thus, the residential ballast must possess a 
stronger EMI filter to comply with FCC requirements. DOE notes that 
only one T8 residential ballast in the data set had a power factor 
greater than 0.9, and this model did not meet the most efficient EL 
considered for the residential product class. For these reasons, DOE 
concludes that residential ballasts are less efficient than commercial 
ballasts and also offer unique consumer utility. Therefore, as stated 
above, DOE has established a separate product class for these products 
in this final rule.
    DOE also received comments regarding the types of ballasts that 
should be included in the residential product class. NEMA suggested 
that the residential ballast product class include ballasts that 
operate 8-foot slimline lamps in addition to ballasts that operate 4-
foot MBP lamps. (NEMA, No. 47 at p. 6) In its search of the market, DOE 
discovered a small number of 8-foot slimline ballasts in product 
catalogs that are intended for use in the residential sector. DOE also 
noted that residential ballasts that are designed to operate 4-foot MBP 
lamps can also operate 2-foot U-shaped lamps. As described above, DOE 
finds that residential ballasts cannot achieve the same efficiency 
levels as commercial ballasts and that they offer the consumer unique 
utility. Therefore, DOE has modified the description of the residential 
product class to include: (1) IS/RS ballasts that operate 4-foot MBP, 
2-foot U-shaped, and 8-foot slimline lamps in the residential sector 
and (2) PS ballasts that operate 4-foot MBP and 2-foot U-shaped lamps 
in the residential sector.\26\
---------------------------------------------------------------------------

    \26\ PS ballasts are not used in combination with 8-foot 
slimline lamps because the base of these lamps only has a single pin 
rather than the two required for electrode heating.
---------------------------------------------------------------------------

2. Sign Ballasts
    In the April 2011 NOPR, DOE proposed establishing a separate 
product class for ballasts that operate 8-foot HO lamps in cold 
temperature outdoor signs. This proposal was based on their unique 
utility and associated decrease in efficiency relative to standard 8-
foot HO ballasts. Sign ballasts operate outdoors in wet and cold 
temperature environments and have highly flexible lamp pairing 
possibilities, both in terms of varied individual lamp lengths and 
different total lamp length (sum of the length of all lamps operated by 
the ballast). In response to the April 2011 NOPR, DOE received comments 
that the proposed sign ballast product class description was not 
sufficient.
    ASAP encouraged DOE to ensure that the definition of the sign 
ballast product class is sufficiently narrow. (ASAP, No. 46 at p. 2) CA 
Utilities commented that DOE should reevaluate the defining 
characteristics of sign ballasts because it does not seem to accurately 
capture the products for which it was intended. In particular, CA 
Utilities and ASAP cited the description ``ballasts that operate 8-foot 
HO lamps'' as problematic because it could leave out sign ballasts that 
are designed for other lamp lengths. (CA Utilities, No. 45 at p. 7; 
ASAP, No. 46 at p. 2)
    DOE agrees that sign ballasts capable of operating other lamp 
lengths, in addition to 8-foot lamps, should be included in the sign 
ballast product class. However, DOE does not agree that ballasts 
designed to operate solely these alternate lamps, other than 8-foot HO 
lamps, should be considered in the sign ballast product class or scope 
of coverage. In determining the scope of fluorescent ballasts covered 
by this rulemaking, DOE's research indicated that the vast majority of 
sign ballasts are capable of operating 8-foot HO lamps, in addition to 
other lamp lengths. Because sign ballasts that cannot operate 8-foot HO 
lamps were so rare, there was insufficient available data to analyze 
the efficiency potential of these ballasts. DOE does not include those 
ballasts that cannot operate 8-foot HO lamps in the sign ballast 
product class. DOE defined the added scope of sign ballasts based on 
their operation of 8-foot HO lamps and assessed the BLE of sign 
ballasts based on their performance when

[[Page 70566]]

operating 8-foot HO lamps. Therefore, if the sign ballast cannot 
operate an 8-foot HO lamp, DOE did not include it in the scope of 
coverage of this rulemaking.\27\
---------------------------------------------------------------------------

    \27\ For these same reasons, the test procedure in Subpart B of 
10 CFR Part 430 Appendix Q1 specifies that a sign ballast must be 
tested with the maximum number of 8-foot HO (either T8 or T12) lamps 
it is designed to operate.
---------------------------------------------------------------------------

    CA Utilities also commented that it is not clear in the NOPR 
whether the usage of the phrase ``cold temperature'' in the product 
class description is a key factor in the definition of sign ballasts. 
They pointed out that some standard commercial ballasts and NEMA 
Premium products are rated for negative 20 degree F temperatures. (CA 
Utilities, Public Meeting Transcript, No. 43 at pp. 83-5) ASAP and the 
CA Utilities encouraged DOE to define the sign ballast product class in 
a way that does not reference cold temperature operation because it is 
not unique to these products. If the definition does not include better 
identifying characteristics, the CA Utilities expressed concern that 
sign ballasts that are not designed for cold temperature environments 
might be exempt from standards (ASAP, Public Meeting Transcript, No. 43 
at p. 87; CA Utilities, Public Meeting Transcript, No. 43 at pp. 89-90) 
CA Utilities concluded that DOE must ensure that products not intended 
to provide the specific utility of outdoor sign ballasts cannot be 
construed as outdoor sign ballasts, and that products which are 
intended to provide this utility are covered by the standards. (CA 
Utilities, No. 45 at p. 7) Universal explained that cold temperature 
does have an effect on efficiency and is one of several characteristics 
that would separate a sign ballast application from another 
application. GE also noted that more energy is required to strike at a 
cold temperature with a longer lamp and it becomes more difficult for a 
system to start as lamp length increases and as temperature decreases. 
(Universal, Public Meeting Transcript, No. 43 at pp. 84-5; GE, Public 
Meeting Transcript, No. 43 at pp. 86-7, 89)
    Available data support the CA Utilities assertion that cold 
temperature is not a key factor in the description of sign ballasts. 
Although sign ballasts are rated to operate in cold temperature 
environments, often down to -20 degrees Fahrenheit, DOE surveyed the 
market and found that all ballast types covered by this rulemaking have 
product offerings that include cold temperature ratings, including 8-
foot HO ballasts designed and marketed for traditional non-outdoor sign 
applications. While a cold-temperature rating may affect efficiency, 
DOE found that these cold temperature rated non-sign ballasts were 
among the most efficient ballasts of their respective types. Therefore, 
DOE agrees that the cold-temperature rating is not a descriptor 
specific to ballasts intended to be used in outdoor signs.
    Several manufacturers described alternative characteristics for 
defining the sign ballast product class. Universal and Osram Sylvania 
(OSI) commented that a sign ballast has a much longer striking 
distance, which requires a much higher open circuit voltage. GE added 
that striking distance and open circuit voltage add to efficiency 
losses. (Universal, Public Meeting Transcript, No. 43 at pp. 84-5; OSI, 
Public Meeting Transcript, No. 43 at p. 87; GE, Public Meeting 
Transcript, No. 43 at pp. 86-7, 89) However, Philips pointed out that 
IS ballasts are not as affected by wiring distances. (Philips, Public 
Meeting Transcript, No. 43 at pp. 88-9) Philips also stated that 
outdoor sign ballasts have a different weather rating than traditional 
ballasts. (Philips, Public Meeting Transcript, No. 43 at pp. 88-9) GE 
added that many manufacturers design to higher transient ratings for 
protection of the ballast in its outdoor application. (GE, Public 
Meeting Transcript, No. 43 at pp. 86-7, 89)
    In DOE's assessment of the market, electronic sign ballasts use the 
IS starting method and therefore may not be as affected by wiring 
distances and increased open circuit voltage as RS ballasts. DOE also 
examined the available product literature to see if the increased 
wiring distances led to a significant difference in open circuit 
voltage. Higher open circuit voltages can require different components 
capable of withstanding those high voltages. These components may have 
decreased losses due to their more rugged build. If open circuit 
voltage were significantly different for sign ballasts, DOE could use 
that voltage to define the sign ballast product class. However, because 
open circuit voltage information is not readily available in product 
specification sheets, DOE could not further specify the sign ballast 
product class using open circuit voltage. DOE agrees with GE that 
higher transient ratings might lead to increased ballast losses, but 
was unable to determine a typical transient rating specific to sign 
ballasts from product literature.
    Through a review of product datasheets, DOE did find that sign 
ballasts have a UL Type 2 rating for the enclosure whereas regular 8-
foot HO ballasts are rated for UL Type 1. Type 2 enclosures are 
moisture resistant and have a rust resistant coating so that the 
ballast can be used in plastic sign applications without a separate 
metal enclosure.\28\ Because the UL Type 2 enclosure rating 
distinguishes currently commercially available sign ballasts from 
regular ballasts that operate 8-foot HO lamps, DOE will use this 
enclosure rating as a distinction in defining the sign ballast product 
class.
---------------------------------------------------------------------------

    \28\ Universal Lighting Technologies Inc. The Sign Ballast 
Today. 2010. www.signasign.com/news/signindustry.html.
---------------------------------------------------------------------------

    ASAP suggested that the phrase ``designed and marketed'' should be 
added to the product class description for sign ballasts. ASAP also 
commented that sign ballasts should be labeled with the designation 
``for use only in outdoor signs.'' (ASAP, No. 46 at pp. 2-3) DOE agrees 
with ASAP that these types of descriptors should be added to strengthen 
the product class description. Therefore, DOE has modified the 
description of these products to include ``designed, labeled, and 
marketed for use in outdoor signs.''
    In summary, in this final rule, DOE adopted the description 
``ballasts with a UL Type 2 rating designed, labeled, and marketed for 
use in outdoor signs that operate 8-foot HO lamps'' to define the sign 
ballast product class. DOE finds that this description is the most 
specific definition that can be accurately applied to all sign 
ballasts. While redesign of traditional 8-foot HO ballasts to meet the 
definition of the sign ballast product class is possible, DOE believes 
this to be an unlikely scenario due to the added cost of manufacturing 
the UL Type 2 enclosure and resulting increased price to the end-user. 
Customers currently purchasing traditional 8-foot HO systems would 
likely not tolerate a price increase resulting from added features that 
are not necessary for traditional applications.
3. Starting Method
    In the April 2011 NOPR, based on DOE's determination that IS and RS 
ballasts provide the same utility to the consumer, DOE proposed to 
include both of these starting methods in one product class. DOE 
proposed a separate product class for PS ballasts because these 
ballasts were less efficient yet increased lamp lifetime in frequent 
on/off cycling applications. NEMA commented that lower performance RS 
ballasts should be grouped with PS ballasts instead of IS, citing their 
similarity in applications and operating characteristics. (NEMA, No. 47 
at p. 3, 6)
    DOE acknowledges that ballasts have different operating 
characteristics based on starting method. For example, IS ballasts are 
more efficient than RS and

[[Page 70567]]

PS ballasts because the latter contain extra components and use extra 
power to provide filament heating to the lamp, thereby increasing the 
lamp's lifetime. In the BLE metric, such cathode heating is counted as 
a loss because it does not directly contribute to the creation of 
light. Therefore, RS and PS ballasts will have lower BLEs than 
comparable IS ballasts. DOE confirmed that RS and IS ballasts were 
commonly used as substitutes for each other, indicating consumers find 
no added benefit or utility associated with RS relative to IS. Both RS 
and PS ballasts use cathode heating; however, only PS ballasts limit 
the voltage across the lamp tube to prevent glow discharge during the 
initial cathode heating. This prevention of glow discharge also 
increases lamp lifetime in frequent on/off cycling applications. DOE 
found PS ballasts were commonly used in conjunction with occupancy 
sensors (a frequent on/off cycling application). DOE determined that 
because of their ability to limit voltage, PS ballasts offer the user a 
distinct utility. As a result of this unique utility and the difference 
in efficiency associated with these ballasts, DOE decided to establish 
separate product classes for programmed start ballasts.
4. 8-Foot HO
    In the April 2011 NOPR, DOE included ballasts that operate all 
types of 8-foot HO lamps in one product class. NEMA commented that 
separate product classes should be established for ballasts that 
operate 8-foot HO T8 lamps and those that operate 8-foot HO T12 lamps. 
NEMA indicated that 8-foot T8 HO ballasts are typically electronic. 
(NEMA, No. 47 at p. 5) Though T8 electronic ballasts are more efficient 
than T12 magnetic and electronic ballasts, DOE found the two ballast 
types were commonly used as replacements and identified no added 
utility associated with 8-foot T8 electronic or 8-foot T12 ballasts. 
Therefore, neither lamp diameter nor electronic versus magnetic ballast 
type justifies the creation of different product classes for 8-foot HO 
ballasts.
5. Summary
    After evaluating potential class-setting factors, DOE has 
established separate product classes for programmed start ballasts, 
residential ballasts, ballasts that operate 8-foot HO lamps, and sign 
ballasts. Table V.1 summarizes the seven product classes.

           Table V.1--Fluorescent Lamp Ballast Product Classes
------------------------------------------------------------------------
                     Description                       Product class No.
------------------------------------------------------------------------
IS and RS ballasts (not classified as residential)                     1
 that operate:.......................................
    4-foot MBP lamps
    2-foot U-shaped lamps
    8-foot slimline lamps
PS ballasts (not classified as residential) that                       2
 operate:............................................
    4-foot MBP lamps
    2-foot U-shaped lamps
    4-foot MiniBP SO lamps
    4-foot MiniBP HO lamps
IS and RS ballasts (not classified as sign ballasts)                   3
 that operate 8-foot HO lamps........................
PS ballasts (not classified as sign ballasts) that                     4
 operate 8-foot HO lamps.............................
Sign ballasts that operate 8-foot HO lamps...........                  5
IS and RS residential ballasts that operate..........                  6
    4-foot MBP lamps
    2-foot U-shaped lamps
    8-foot slimline lamps
PS residential ballasts that operate:................
    4-foot MBP lamps
    2-foot U-shaped lamps                                              7
------------------------------------------------------------------------

B. Engineering Analysis

1. NOPR Approach
    The engineering analysis develops cost-efficiency relationships to 
show the manufacturing costs of achieving increased efficiency. In the 
April 2011 NOPR, DOE used the following methodology to conduct its 
engineering analysis.
    Determine Representative Product Classes and Representative Ballast 
Types. When multiple product classes exist, DOE selects certain classes 
as ``representative'' to concentrate analytical effort. The 
representative product classes represent the most commonly sold 
ballasts and the majority of the ballast shipment volume. In the April 
2011 NOPR, DOE analyzed four of the then five total product classes as 
representative. These included, 1) IS/RS ballasts that operate 4-foot 
MBP and 8-foot slimline lamps; 2) PS ballasts that operate 4-foot MBP 
lamps, 4-foot MiniBP SO lamps, and 4-foot MiniBP HO lamps; 3) IS/RS 
ballasts that operate 8-foot HO lamps; 4) and ballasts that operate 8-
foot HO lamps in cold temperature outdoor signs. DOE did not directly 
analyze PS ballasts that operate 8-foot HO lamps due to their 
relatively low market share.
    Within each representative product class, DOE selected at least one 
representative ballast type for each lamp type. For the IS/RS product 
class, DOE analyzed ballasts that operate: Two 4-foot MBP lamps; (2) 
four 4-foot MBP lamps; two 8-foot slimline lamps; and two 4-foot MBP 
lamps in the residential sector. For the PS product class, DOE analyzed 
ballasts that operate: (1) Two 4-foot T5 SO lamps; two 4-foot T5 HO; 
two 4-foot MBP lamps; and four 4-foot MBP lamps. For the 8-foot HO IS/
RS product class, DOE analyzed 2-lamp ballasts as the representative 
ballast type, whereas for the sign ballast product class DOE analyzed 
4-lamp ballasts as representative. DOE limited its representative 
ballast types to include only those ballasts that exhibit a normal 
ballast factor \29\, as this BF is most common.
---------------------------------------------------------------------------

    \29\ DOE defines low ballast factor as being less than or equal 
to 0.78, normal ballast factor as being greater than 0.78 but less 
than 1.10, and high ballast factor as being greater than or equal to 
1.10.
---------------------------------------------------------------------------

    Collecting and Analyzing Test Data. DOE then tested a range of 
ballasts from multiple manufacturers including extensive testing of the 
representative ballast types. DOE attempted to test

[[Page 70568]]

five \30\ samples for ballasts included in the representative ballast 
type categories (purchased over two years) and three samples for non-
representative ballast types. DOE conducted testing at two laboratories 
or ``labs,'' one primary lab where the majority of testing occurred and 
another lab to analyze possible lab-to-lab variation. DOE conducted 
this testing in accordance with the lamp-based ballast luminous 
efficiency procedure in Appendix Q1 of 10 CFR 430.
---------------------------------------------------------------------------

    \30\ Because certain models were placed on backorder due to 
limited supply/production, only about 60 percent of representative 
ballast types in the April 2011 NOPR were tested with five or more 
samples.
---------------------------------------------------------------------------

    Determine Efficiency Levels. Next, using the test data, DOE 
empirically found a relationship between BLE and the natural logarithm 
or ``log'' of total lamp arc power. In general, as total lamp arc power 
increased, BLE increased as well. DOE's hypothesis was that this 
behavior was due to the fixed losses of a ballast becoming 
proportionally less significant at higher arc powers. DOE established 
efficiency levels as a natural logarithmic function of total lamp arc 
power based on this power-efficiency relationship.
    After compiling the test data, DOE plotted BLE versus total lamp 
arc power for both standard and high efficiency product lines from 
multiple manufacturers. Based on analysis of test data for 
representative ballast types, DOE identified certain natural divisions 
in BLE. DOE then adjusted the coefficient and constant of the 
logarithmic power-efficiency equation to create efficiency levels that 
corresponded to these divisions. DOE 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. In the 
April 2011 NOPR, DOE established three efficiency levels for each 
product class except for sign ballasts, for which it developed one 
efficiency level above the baseline level.
    In developing the max tech level, DOE found that no working 
prototypes existed that had a distinguishably higher BLE than currently 
available ballasts. Therefore, DOE established TSL3 as the highest 
level at which a sufficient diversity of products (spanning several 
ballast factors, number of lamps per ballast, and types of lamps 
operated) was commercially available.
    In the April 2011 NOPR, DOE noted that compliance certification 
requirements could affect the reported efficiency. The 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 compliance equation result, as it would be the lower of the two 
values. Thus, DOE calculated the average difference between the output 
of the compliance equation and the sample mean to be 0.2 percent and 
reduced the efficiency levels, based on average BLEs, by this value.
    DOE also considered lab-to-lab variation when determining 
efficiency levels in the April 2011 NOPR. While DOE tested a large 
number of ballasts at one primary lab, DOE also tested a subset of 
those ballasts at a second lab to determine the magnitude of any 
variation. DOE found that tested efficiencies for the ballast models 
sent to the second lab were slightly lower (by 0.6 percent on average) 
than the values measured at the main test facility. DOE then applied 
this additional 0.6 reduction to the efficiency levels, which were 
based on the primary lab's test data.
    Select Baseline and More Efficient Ballasts. For each 
representative ballast type, DOE established baseline ballasts to serve 
as reference points against which DOE measures changes from potential 
amended energy conservation standards. Generally, a baseline ballast is 
a commercially available ballast that just meets existing Federal 
energy conservation standards and provides basic consumer utility. If 
no standard exists for that specific ballast, the baseline ballast 
represents the most common ballast sold within a representative ballast 
type with the lowest ballast luminous efficiency. DOE selected specific 
characteristics such as starting method, BF, and input voltage to 
characterize the most common ballast. DOE also selected multiple 
baseline ballasts for some representative ballast types to ensure 
consideration of varied consumer economics. Because fluorescent lamp 
ballasts are designed to operate fluorescent lamps, DOE also considered 
properties of the entire lamp-and-ballast system. Though ballasts are 
capable of operating several different lamp wattages, in the April 2011 
NOPR, DOE chose the fluorescent lamp most commonly used with each 
ballast for analysis.
    DOE selected commercially available ballasts with higher BLEs as 
replacements for each baseline ballast by considering the design 
options identified in the technology assessment and screening analysis 
(see chapter 4 of the NOPR TSD). DOE also included two substitution 
cases in the engineering analysis. In the first substitution 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.\31\ In the second substitution case, the 
consumer is able to change the spacing of the fixture and purchases 
either 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.
---------------------------------------------------------------------------

    \31\ In some instances (e.g., when switching from T12 to T8 
ballasts), light output exceeds these limits.
---------------------------------------------------------------------------

    Conduct Price Analysis. In the April 2011 NOPR, DOE developed 
ballast manufacturer selling prices using three main inputs: (1) 
Teardown data; (2) manufacturer price lists (blue books); and (3) 
confidential manufacturer-supplied MSPs and incremental MPC values. In 
general, DOE used a combination of information from teardowns and 
manufacturer price lists throughout the analysis and used the 
aggregated manufacturer-supplied MSPs for comparison purposes. DOE used 
ratios of online supplier retail prices to scale to ELs where data from 
both teardowns and manufacturer price lists were unavailable.
    Scaling to Non-Representative Product Classes. DOE scales ELs from 
representative product classes to those product classes it did not 
analyze directly. In the NOPR analysis, DOE applied a two percent 
reduction to the efficiency levels for the 8-foot HO IS/RS 
representative product class to determine efficiency levels for the 8-
foot HO PS product class.
    Comments Received. In response to the April 2011 NOPR and 
subsequent NODA, DOE received comments on the available data, 
methodology, engineering results, and efficiency levels. All of these 
comments are discussed in further detail in the following sections.

[[Page 70569]]

2. Available Test Data
    For the April 2011 NOPR, DOE tested more than 450 ballasts to 
develop proposed energy conservation standards. At the time the NOPR 
was published, DOE posted test data to its public Web site as Appendix 
5C of the TSD. Appendix 5C contained a listing of all ballast models 
tested at DOE's primary lab for the April 2011 NOPR, including 
identifying characteristics such as lamp type operated, number of lamps 
operated, starting method, ballast factor, input voltage, and catalog 
performance value. For each ballast model, DOE also reported average 
\32\ tested values for input power, total lamp arc power, and BLE.\33\
---------------------------------------------------------------------------

    \32\ The average across several samples for each model number.
    \33\ DOE obtained these values in accordance with the active 
mode test procedure in Appendix Q1 of 10 CFR 430.
---------------------------------------------------------------------------

    At the May 2011 public meeting, NEMA presented data collected from 
several manufacturers.\34\ NEMA's data included average BLE test 
results from three manufacturers that were subsequently reduced by 0.8 
percent to account for compliance certification requirements. Attendees 
of the public meeting noted that the BLE values of the most efficient 
ballast models tested by NEMA appeared to be less than the most 
efficient ballast models tested by DOE. NEMA also noted that about 60 
percent of DOE's test data represented ballast models with less than 
four tested samples, which is not consistent with the minimum number of 
samples required to demonstrate compliance with DOE's standards. The CA 
Utilities stated that if possible, DOE should conduct testing of four 
or more samples to more accurately reflect the testing process that 
must be completed by manufacturers for certification purposes. (NEMA, 
No. 52 at p. 9; CA Utilities, No. 45 at p. 3)
---------------------------------------------------------------------------

    \34\ These test results were contained in a Power Point 
presentation that was subsequently posted to the public meeting Web 
site at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/fluorescent_ballasts_nopr_public_meeting.html.
---------------------------------------------------------------------------

    Following the May 2011 public meeting, DOE posted to the public 
meeting Web site a more comprehensive set of test data used to develop 
the April 2011 NOPR, which specified ballasts by serial numbers, added 
round robin test results, and included results for each sample tested, 
rather than the average across several samples for each model number. 
DOE also purchased and tested more than 120 additional ballasts to 
increase tested models' sample size to a minimum of four samples 
consistent with compliance certification requirements in 10 CFR 429.26. 
Furthermore, DOE tested additional ballast models, particularly for 
sign ballasts and residential ballasts, to gain more market information 
about these products. All available test data--the NEMA-provided data, 
the data utilized for the April 2011 NOPR, and the results of 
additional testing conducted after publication of the April 2011 NOPR--
were posted on DOE's Web site in conjunction with the publication of 
the August 2011 NODA.\35\
---------------------------------------------------------------------------

    \35\ The August 2011 NODA and accompanying data are available 
here: www1.eere.energy.gov/buildings/appliance_standards/residential/notice_of_data_availability.html.
---------------------------------------------------------------------------

3. NEMA-Provided and DOE BLE Data Comparison
    As described in the previous section, at the May 2011 public 
meeting, NEMA members presented test results for the highest efficiency 
NEMA Premium products. NEMA emphasized that its results represented 
only high efficiency products, which generally exceeded NEMA Premium 
efficiency requirements. Therefore the comparisons did not include 
hundreds of products in lower-efficiency product lines that would be 
eliminated at the proposed standard level. NEMA compared its results to 
TSL3, the proposed standard level in the April 2011 NOPR. Based on its 
data and analysis, NEMA determined that 88 percent of its highest 
efficiency products failed to meet the proposed standard level. NEMA 
added that these IS and PS ballasts are likely 80 to 85 percent of the 
total market. NEMA concluded that the implementation of the proposed 
standards would cause a catastrophic ballast shortage in the market. 
(NEMA, Public Meeting Transcript, No. 43 at pp. 25-7; NEMA, No. 98 at 
pp. 2, 6)
    A comparison of DOE and NEMA data sets showed that BLE values 
reported by NEMA were consistently lower than those reported by DOE. 
For example, NEMA noted that its data showed no ballast with a BLE 
higher than 91 percent at 50 watts, while DOE's data showed a BLE as 
high as 94 percent at the same wattage. NEMA also found that the 
variation between samples of each ballast model was much smaller within 
manufacturer-provided data than within DOE's data. NEMA underscored the 
significance of its data, stating that it would submit data derived 
using these same methods to demonstrate compliance with new standards. 
(NEMA, Public Meeting Transcript, No. 43 at pp. 47-8, 50, 99; NEMA, No. 
98 at p. 6)
    Earthjustice, Northwest Energy Efficiency Alliance (NEEA), ASAP, 
NEEP, and the CA Utilities emphasized the importance of determining the 
cause of the differences between DOE and NEMA test data. (Earthjustice, 
Public Meeting Transcript, No. 43 at p. 66; NEEA, Public Meeting 
Transcript, No. 43 at pp. 120-1; ASAP, Public Meeting Transcript, No. 
43 at pp. 46-7; NEEP, No. 49 at pp. 1, 2; CA Utilities, Public Meeting 
Transcript, No. 43 at p. 62; CA Utilities, No. 45 at p. 2) NEEA noted 
that the source of the discrepancy between DOE and NEMA data should be 
determined before any efficiency levels are fit to either data set. 
(NEEA, Public Meeting Transcript, No. 43 at pp. 138-9) Acuity Brands 
suggested DOE divide its test data according to manufacturer and 
compare it with the test data from the individual manufacturers 
obtained under non-disclosure agreements. (Acuity Brands, Public 
Meeting Transcript, No. 43 at p. 149)
    ASAP suggested DOE continue to use its own data for the final rule 
analysis and any supplemental data provided by manufacturers should be 
assessed in its raw form to ensure comparability with DOE data. (ASAP, 
No. 46 at p. 1) CA Utilities also advised DOE to continue to use its 
own test results for the final rule unless it determined a specific 
fault with the testing process of the labs used by DOE. (CA Utilities, 
No. 45 at p. 4)
    Following the May 2011 public meeting, under non-disclosure 
agreements, several manufacturers provided the model numbers and 
efficiencies for the ballasts included in NEMA's data set. Upon 
receiving this information, DOE conducted a comparative analysis 
between NEMA data and DOE's independently tested data. DOE published 
the results of its analysis in the August 2011 NODA. DOE concluded that 
its data collection methods were consistent with Appendix Q1 of 10 CFR 
430 and that, after removing NEMA's reduction factor as discussed in 
section V.B.3.a, the remaining differences between the two data sets 
arise primarily from normal measurement variation. Subsequent comments 
received on the NODA reaffirmed DOE's conclusions. Therefore, for this 
final rule, DOE continued to use its own data and utilized NEMA-
provided data for comparison. The sections below detail DOE's 
comparative analysis and discuss several comments by interested parties 
suggesting possible sources of differences between the two datasets.
a. NEMA Reduction Factor
    As described above, the data contained in NEMA's presentation at

[[Page 70570]]

the May 2011 public meeting represented the mean of four or five 
samples decreased by 0.8 percent to account for compliance 
certification requirements. To calculate this 0.8 reduction factor, 
NEMA referred DOE to an analysis NEMA submitted in a comment in 
response to the preliminary TSD. In that analysis, NEMA calculated the 
0.8 percent reduction factor based on application of the certification 
equation described in 10 CFR 429.26. NEMA assumed that each sample 
set's three standard deviation spread was equal to five percent of the 
mean efficiency (2.5 percent for design variation and 2.5 percent for 
measurement variation). NEMA then calculated a mean efficiency 
adjustment factor (from sample sizes of four and five) by inserting 
this standard deviation into the certification equation. This 
adjustment factor represented NEMA's estimate of the percent difference 
between the sample mean and the value NEMA anticipated reporting to DOE 
for certification. CA Utilities commented that NEMA's reduction of its 
test results by 0.8 percent may have been a misinterpretation of the 
test procedure and could have caused the discrepancy between DOE's and 
NEMA's BLEs. (CA Utilities, No. 45 at p. 2) ASAP agreed that DOE should 
not directly compare its data to NEMA's reduced points. (ASAP, No. 46 
at p. 1)
    In the August 2011 NODA, DOE stated that to understand potential 
discrepancies between NEMA and DOE's test data, it was necessary to 
ensure that similar calculation methodologies had been undertaken for 
the two data sets. Therefore, for the purpose of comparing the 
efficiency data, DOE removed the 0.8 percent reduction factor from 
NEMA's presented ballast efficiencies, resulting in values that 
represented mean tested efficiencies. DOE compared these efficiency 
values to DOE's mean tested efficiencies presented in the April 2011 
NOPR.
b. Arc Power Versus Rated Power
    Due to the relationship between total lamp arc power and ballast 
efficiency, in the April 2011 NOPR, DOE proposed establishing 
efficiency levels as logarithmic equations dependent on total lamp arc 
power. When NEMA plotted their test data against the DOE proposed 
efficiency levels, however, NEMA paired their ballast efficiency test 
data with approximated arc powers rather than measured arc powers. CA 
Utilities and NEEA and NPCC noted that NEMA appeared to list a batch of 
products all at the same ``rated power,'' and compared the performance 
of all of those products against the same BLE standard. They stated 
that their understanding was that standards are to be calculated based 
on the measured lamp arc power specific to each ballast, not the rated 
lamp power. (NEEA and NPCC, No. 44 at p. 5; CA Utilities, No. 45 at pp. 
2-3)
    DOE agrees that total lamp arc power, measured in accordance with 
the active mode test procedure, should be used when comparing 
manufacturer-provided data to DOE's efficiency levels. In the August 
2011 NODA, DOE noted that the lamp arc power associated with a 
particular ballast in NEMA's data was an approximation rather than a 
test result. DOE found NEMA's approximation to be higher than typical 
test results in DOE's data set, with differences as high as 27.6 
percent. As this discrepancy could potentially cause NEMA's test data 
to appear to have artificially lower efficiencies relative to DOE's 
efficiency levels, DOE revised NEMA's approximate lamp arc powers using 
ANSI reference lamp arc powers to calculate total expected lamp arc 
power. 76 FR 52892, 52895-6 (August 24, 2011). These lamp arc powers 
better aligned with expected total lamp arc powers for similar ballast 
types. DOE used these calculated powers when comparing the efficiency 
levels to the manufacturer-provided data as discussed in section V.B.5.
c. Test Procedure and Lab Accreditation
    NEMA commented that the difference between the data it collected 
and DOE's results may be due to DOE's labs not having proper 
accreditation. NEMA stated that all of the labs used for its testing 
were certified according to ANSI C82.11-2002 and DOE should only test 
in similarly certified labs. NEMA specifically noted that it did not 
believe the Lighting Research Center (LRC) was ANSI C82.11-2002 
certified. (NEMA, Public Meeting Transcript, No. 43 at pp. 30, 116) GE 
emphasized that labs should be accredited in accordance with ISO 17025, 
which is a definition of laboratory performance and accreditation for 
test equipment and test engineers using that equipment. (GE, Public 
Meeting Transcript, No. 43 at p. 116) Similarly, CA Utilities suggested 
that the difference between NEMA's and DOE's test results could be 
because the BLE test procedure is new and may require clarification. 
(CA Utilities, No. 45 at p. 2)
    DOE notes that 10 CFR 430.25 requires testing of fluorescent lamp 
ballasts to be performed in accordance with Appendix Q1 of 10 CFR part 
430 Subpart B by test laboratories accredited by National Volunteer 
Laboratory Accreditation Program (NVLAP) or a NVLAP-recognized 
organization, Underwriter Laboratories, or Council of Canada in 
accordance with ISO 17025. 76 FR 25211, 25219 (May 4, 2011). ISO 17025 
is an international standard that outlines general requirements for the 
competence of testing and calibration laboratories. NVLAP operates an 
accreditation system that requires applicant laboratories to be 
assessed against all ISO 17025 requirements.
    As described in the August 2011 NODA, DOE contacted both test 
laboratories utilized for DOE testing and verified each is properly 
accredited and that all testing was conducted in accordance with the 
active mode test procedure in Appendix Q1. CA Utilities stated that 
this action greatly improved the overall credibility of DOE's dataset. 
(CA Utilities, No. 58 at pp. 1-2) Given the verification of data 
collection methods, DOE continues to use its own data in this final 
rule.
d. Sample Size
    NEMA also commented that the number of samples tested for several 
ballast models was too small, potentially resulting in test data 
unrepresentative of the mean efficiencies of the ballast model's 
population. They pointed out that about 60 percent of DOE's test data 
represented an average efficiency calculated with fewer than four 
samples, which is less than the minimum number of samples required to 
demonstrate compliance with DOE's standards. (NEMA, No. 52 at p. 9) CA 
Utilities also stated that if possible, DOE should conduct testing of 
four or more samples to more accurately reflect the testing process 
that must be completed by manufacturers for compliance. (CA Utilities, 
No. 45 at p. 3)
    Since the publication of the April 2011 NOPR, DOE has conducted 
additional testing to increase the sample size of selected ballast 
models. More than 90 percent of tested ballast models now have a 
minimum of four samples. Only in those cases where models have been 
discontinued or were unavailable for purchase was DOE unable to test a 
minimum of four samples. DOE posted a complete set of test data on its 
Web site at the time the August 2011 NODA was published.
    CA Utilities and NEEA and NPCC commended DOE for conducting 
additional testing to increase the sample size to a minimum of four 
ballast samples, consistent with the certification requirements in 10 
CFR 429.26. NEEA and NPCC stated that the additional testing conducted 
improved the dataset's accuracy and credibility,

[[Page 70571]]

which contributed to the development of appropriate standard levels. 
(CA Utilities, No. 58 at p. 2; NEEA and NPCC, No. 59 at p. 2) DOE 
discusses how it utilized all available data in sections V.B.4 and 
V.B.5.
e. Measured Versus Calculated BLE
    In response to the April 2011 NOPR, NEMA commented that it found 
several samples of DOE test data in which the measured BLE reported in 
appendix 5C of the NOPR TSD was not consistent with the BLE calculated 
by NEMA. Though some of the differences were small, NEMA provided 
examples of four ballast models with differences up to 8 percent. 
(NEMA, Public Meeting Transcript, No. 43 at pp. 28-9) DOE addressed 
these discrepancies in the August 2011 NODA.
    For the small discrepancies identified by NEMA, DOE noted that the 
information provided by NEMA was consistent with calculating the BLE 
values by dividing the average arc power of all samples by the average 
input power of all samples. This method is not consistent with the 
active mode test procedure. In contrast, DOE's average BLE reported in 
appendix 5C of the TSD was determined, as required in the test 
procedure, by averaging the BLE of each individual sample. Based on 
DOE's analysis, this difference in methodology accounts for the small 
discrepancies observed between the values reported in appendix 5C and 
those calculated by NEMA.
    DOE also worked to resolve the large differences cited by NEMA. DOE 
identified six samples with measured-versus-calculated BLE differences 
ranging from 7.8 to 8.0 percentage points, which included the specific 
examples cited by NEMA. These six samples were all magnetic ballasts; 
in accordance with the active mode test procedure (see Table A, 
Appendix Q1 of 10 CFR part 430 Subpart B), DOE calculated BLE for these 
samples by reducing the measured ballast efficiency (total lamp arc 
power divided by ballast input power) by a frequency adjustment factor 
(1.00 for high-frequency ballasts and values ranging from 0.93 to 0.95 
for low-frequency ballasts). These larger discrepancies are consistent 
with NEMA not including this adjustment factor in its calculation of 
BLE. Thus, given the above explanation and the absence of any 
additional comments regarding this subject, DOE's measured BLE values 
are correctly calculated and consistent with the active mode test 
procedure.
f. Ballast Factor
    NEMA also identified differences in appendix 5C of the NOPR TSD 
between catalog and tested values for ballast factor, in some cases as 
large as 10 or 15 percent. NEMA reported that based on its own tests, 
it would expect the average difference between catalog BF and tested BF 
to be 1.5 percent. (NEMA, Public Meeting Transcript, No. 43 at pp. 27-
8) DOE acknowledges that there might be differences between ballast 
factor values reported in catalogs and DOE's test data. Catalogs 
generally report ballast factor using the procedure in Appendix Q of 10 
CFR part 430 subpart B, which requires photometric measurements. DOE 
calculated ballast factor in the April 2011 NOPR using electrical 
measurements by measuring the lamp arc power for the test ballast and 
dividing it by the reference lamp arc power as specified by ANSI 
standards. Available information suggests that manufacturing variation, 
coupled with application of a different test procedure to determine BF, 
accounts for the difference between catalog BF and DOE measured BF. 
Because DOE did not establish product classes or standards using BF and 
the active mode test procedure final rule did not adopt a new method 
for its calculation, however, ballast factor is not relevant to this 
rulemaking.
g. Variation Within DOE's Data
    Stakeholders also questioned the variation present within DOE's 
data and offered several suggestions on how to measure variation within 
the test results. Lutron and NEMA suggested DOE perform a gauge 
repeatability and reproducibility (R&R) analysis, a recognized 
technique to reconcile differences among measurements. (Lutron, Public 
Meeting Transcript, No. 43 at pp. 118-9; NEMA, Public Meeting 
Transcript, No. 43 at p. 121) Philips suggested that DOE look at the 
variation among each unit and among each lab, and then use the total 
variation to conduct a 3-sigma \36\ analysis. Philips noted, however, 
that three samples is not a very statistically large sample size in 
examining this kind of variation. (Philips, Public Meeting Transcript, 
No. 43 at p. 113)
---------------------------------------------------------------------------

    \36\ 3-sigma is a statistical calculation that refers to data 
within three standard deviations from a mean. It is based on the 
rule that for a normal distribution, nearly all values lie within 
three standard deviations of the mean.
---------------------------------------------------------------------------

    As described in the previous sections, DOE evaluated several 
factors to verify the integrity of its data. DOE has confirmed that 
testing was conducted in accordance with the active mode test procedure 
and that its calculations of BLE are accurate. Furthermore, additional 
testing has increased sample size such that it is consistent with 
compliance certification requirements. After accounting for the above 
items, DOE believes that variation in its data reflects expected 
measurement, design, and lab-to-lab variation. DOE addresses these 
sources of variation in the following sections.
4. Accounting for Variation and Compliance Certification Requirements
    In the April 2011 NOPR, DOE accounted for lab-to-lab variation and 
compliance certification requirements by calculating reduction factors 
for each and adjusting the efficiency levels accordingly. DOE 
calculated a 0.6 percent reduction factor for lab-to-lab variation by 
comparing the data from the primary laboratory, which conducted the 
majority of DOE's testing, with data from its secondary laboratory, 
which tested a limited number of identical samples. DOE applied the 0.6 
percent lab-to-lab variation reduction to the efficiency curves so that 
the standard level could, on average, be met by ballasts tested at the 
less efficient lab. To account for certification requirements, DOE 
calculated the difference between the output of the compliance 
certification equation in 10 CFR 429.26 and the sample mean of DOE's 
test data to be 0.2 percent. As DOE's certification requirements at 10 
CFR 429.26 require manufacturers to report the lower of these two 
values, DOE reduced the efficiency levels, based on average BLEs, by 
this value.
    OSI and Lutron Electronics Co., Inc. (Lutron) commented that in 
addition to lab-to-lab variation, both design and measurement variation 
need to be taken into account when setting a standard to make sure that 
the average of different tested samples will meet the minimum BLE 
requirements. OSI commented that design tolerances exist because 
different components are used in different production runs. OSI 
estimated this variation to be about two percent. (OSI, Public Meeting 
Transcript, No. 43 at pp. 137-8, 152; Lutron, Public Meeting 
Transcript, No. 43 at pp. 151-2)
    NEMA submitted analyses in response to the NOPR recommending 
modifications to DOE's methodology of accounting for certification 
requirements and variation. NEMA's first analysis used an assumed 
design variation and measurement variation (each 2.5 percent) in the 
compliance certification equation to adjust each ballast efficiency 
data point. After analyzing the more detailed set of data posted after 
the May 2011 public meeting, NEMA submitted a similar analysis but used 
an assumed design variation and a calculated measurement variation. 
NEMA then suggested that

[[Page 70572]]

DOE base its efficiency levels on the adjusted data points rather than 
mean BLE values. Specifically, NEMA determined the mean BLE for each 
ballast model by averaging all tested values of that particular model. 
NEMA then calculated the maximum measurement variation across labs for 
each category of fluorescent lamp ballast (e.g., 4-foot MBP, 4-foot 
MiniBP, or 8-foot high output). NEMA added this highest calculated 
measurement variation for each ballast type to a 2.5 percent assumed 
design tolerance to characterize the total variation. NEMA then entered 
these variations into the compliance equation to calculate a reduction 
factor based on sample size of each tested model. NEMA commented that 
DOE should make similar allowances in the standard levels to account 
for the variation present in DOE's own data. (NEMA, No. 52 at pp. 8-10)
    The CA Utilities also conducted an analysis using the data DOE 
provided following the May 2011 public meeting. They agreed with NEMA 
that compliance certification requirements should be considered when 
assessing whether products will meet each standard level. However, they 
pointed out that NEMA had employed methods to characterize the 
certification procedures that were not consistent with the requirements 
specified in 10 CFR 429.26. Instead, the CA Utilities used individual 
samples of DOE's efficiency data to calculate both the sample mean and 
the value determined by the compliance certification equation in 10 CFR 
429.26. Then, as directed by the compliance certification regulations, 
they represented the reported efficiency as the lower of the two 
values. They suggested that DOE base its efficiency levels on these 
reported values. (CA Utilities, No. 45 at pp. 3, 4-5)
    Consistent with the April 2011 NOPR, DOE recognizes the importance 
of considering the variation present in the test data when developing 
efficiency levels. DOE acknowledges that due to design and measurement 
variation, the reported value for compliance certification may deviate 
from the sample mean and this difference must be accounted for. As 
described in the following sections, DOE has modified its approach to 
account for variation and compliance certification procedures based on 
the comments provided.
a. Design Variation and Compliance Certification Requirements
    As stated earlier, 10 CFR 429.26 requires manufacturers to test a 
minimum of four fluorescent lamp ballasts and report the lower of 
either the mean efficiency of the samples or the output of a compliance 
certification equation based on the lower 99 percent confidence limit 
of the sample. The lower 99 percent confidence limit equation requires 
a calculation of the standard deviation of the sample set to account 
for measurement variation. Because over 90 percent of ballast models 
tested by DOE include samples obtained during two different years, the 
standard deviation for these models also incorporates design variation 
that is present in the sample set.
    Both NEMA and the CA Utilities had previously commented that, in 
order to develop efficiency levels, DOE should adjust its mean 
efficiency data points to represent values similar to those 
manufacturers would report to DOE for compliance certification. 
However, their approaches differed in how they computed the standard 
deviation input for the compliance certification equation. The CA 
Utilities calculated the standard deviation among all samples of a 
particular ballast model tested at a single lab. NEMA, however, 
calculated the standard deviation by assuming a 2.5 percent design 
variation and then adding an additional factor based on DOE's lab-to-
lab test data for each ballast category.
    In the August 2011 NODA, DOE disagreed with NEMA's method of 
applying the compliance certification requirements. First, the 
compliance requirements direct manufacturers to calculate the standard 
deviation of the tested sample, rather than an assumed population 
standard deviation. Second, in practice, this calculation would likely 
not include data from more than one lab unless manufacturers chose to 
test their samples of a single ballast model at more than one location. 
DOE agreed that lab-to-lab variation was important, but considered 
accounting for it as a separate adjustment to efficiency levels as 
discussed below in section V.B.4.b.
    The CA Utilities evaluated both the sample mean and compliance 
equation for each ballast model and compared the lower of the two, the 
reported value, to the standard level. DOE believed the CA Utilities' 
approach for accounting for compliance certification requirements was 
consistent with the procedures laid out in 10 CFR 429.26 and therefore, 
in the August 2011 NODA, considered using this methodology for the 
final rule. To facilitate this approach, as discussed earlier, DOE 
conducted additional testing after publication of the NOPR to increase 
the sample size of several ballast models in accordance with compliance 
certification requirements. To account for these requirements, DOE 
calculated a new data set that represented the reported value for all 
ballast models. DOE used these reported values to develop the 
efficiency levels described in the August 2011 NODA.
    CA Utilities and NEEA and NPCC supported DOE's methodology of 
accounting for certification requirements when setting standard levels. 
They stated that the use of reported values accounts for design 
variation within a product line and measurement variation among 
multiple test runs within a single lab. These organizations also 
commented that this approach is more accurate than DOE's previous 
proposal to apply a 0.2 percent reduction to all efficiency levels. (CA 
Utilities, No. 58 at p. 2; NEEA and NPCC, No. 59 at p. 2)
    NEMA, however, disagreed with the methodology presented in the 
August 2011 NODA. Specifically, NEMA claimed that the correction factor 
they calculated is essential to account for manufacturing and component 
variance. NEMA commented that because DOE's samples were acquired when 
market demand was low, the manufacturing variation present in DOE's 
test data was not representative of typical variation. They reasoned 
that manufacturers could be more selective when purchasing components 
for products manufactured during that time period. Under normal market 
conditions, manufacturers compete for the same component supply and 
often obtain parts that vary in quality and cost. NEMA commented that 
DOE should have tested a statistically representative sample set for 
each model (i.e., a larger sampling from multiple productions lots, 
assembled over time) and that, absent this, DOE should have used a 
statistically derived method for determining an appropriate reduction 
rather than empirical data. (NEMA, No. 56 at pp. 2, 4)
    As described previously, DOE believes that NEMA's recommended 0.8 
percent reduction does not reflect appropriate certification 
procedures. As stated in 10 CFR 429.26, manufacturers are required to 
evaluate the certification equation using the standard deviation of the 
samples tested, not the expected variation in the population. 
Furthermore, NEMA included lab-to-lab variation when calculating its 
reduction factor. This calculation would likely not include data from 
more than one lab, however, unless manufacturers chose to test their 
samples of a single ballast model at more than one location. In 
addition, NEMA utilized a normal distribution critical value for the 
99th percentile rather than the specified

[[Page 70573]]

t-statistic for the 99th percentile in evaluating the compliance 
equation.\37\
---------------------------------------------------------------------------

    \37\ The compliance equation found in 10 CFR 429.26 requires the 
use of a t-statistic, to calculate the reported value. NEMA used a 
different statistical distribution, the standard normal 
distribution, in the calculation of its reduction factor.
---------------------------------------------------------------------------

    As explained in the preceding paragraphs, DOE considered both 
design variation and certification requirements when developing 
efficiency levels using the methodology presented in the August 2011 
NODA. DOE purchased samples over several years, encompassing more than 
one production lot. While NEMA states that DOE purchased samples at a 
time when manufacturers could easily obtain the most efficient 
components, DOE also purchased ballasts (for the purpose of increasing 
sample size) during years in which interviewed manufacturers stated 
that they faced component shortages. Furthermore, consistent with 10 
CFR 429.26, over 90 percent of models tested had a sample size of 4 or 
more. For these reasons, DOE continues to use the methodology described 
in the August 2011 NODA in this final rule.
    NEMA commented that half of all borderline but compliant products 
will fail to meet the standard if an adjustment factor is calculated 
using average empirical data, such as DOE's method described above. 
(NEMA, No. 56 at p. 2) DOE notes that the certification requirements do 
not mandate that every sample tested must meet or exceed the standard 
level, rather they require that the average of the tested samples meet 
or exceed the standard. A compliant product may still have samples that 
test below the standard, provided that the average BLE meets or exceeds 
the level adopted in this final rule. NEMA's concern may be regarding a 
situation where all ballast samples are selected from a production run 
in which lower-quality components cause all samples to test at the 
lower end of the expected range attributable to design variation. 
However, there is no requirement that all samples be selected from the 
same production run. In fact, 10 CFR 429.26 states that samples should 
be randomly chosen. Manufacturers can also choose to test more than the 
minimum number of samples to address concerns about a borderline 
product.
b. Lab-to-Lab Variation
    As described in section V.B.1, DOE accounted for lab-to-lab 
variation in the April 2011 NOPR by comparing data from two different 
labs and calculating a 0.6 percent reduction factor to apply to 
efficiency levels. NEMA noted that DOE's data showed significant 
variation between labs and stressed the importance of accurately 
quantifying this variation. (NEMA, Public Meeting Transcript, No. 43 at 
pp. 140-1) NEMA pointed out that DOE typically only used one lab to 
make measurements rather than validating variation using multiple labs. 
(NEMA, No. 52 at p. 7) Philips suggested that, after evaluating data 
among multiple labs, DOE should apply a reduction representative of the 
maximum variation present in the data rather than average variation. 
(Philips, Public Meeting Transcript, No. 43 at p. 113-5)
    In the August 2011 NODA, DOE considered revising its methodology to 
account for lab-to-lab variation. DOE received test data from NEMA 
following the May 2011 public meeting and also received test data from 
NEMA-member manufacturers. The information from manufacturers allowed 
DOE to match NEMA test data with the same ballast models tested at 
DOE's primary and secondary labs. Using the model-specific test data 
supplied by manufacturers (representative of three different 
manufacturer labs) and DOE's BLE data (representative of the two labs 
used by DOE), DOE determined that on average, the BLE test data from 
DOE's primary lab was 0.7 percent more efficient than the average test 
lab. DOE attributed this offset to systematic lab-to-lab variation and 
therefore considered reducing the efficiency levels by 0.7 percent so 
that they are representative of ballasts tested at the average test 
lab. This approach was slightly different than that taken in the April 
2011 NOPR, which applied a 0.6 percent reduction to efficiency levels, 
representing the average offset between DOE's primary lab and the least 
efficient lab (in that case, DOE's secondary lab). DOE believed that 
adjusting efficiency levels so that they represent the average test lab 
better characterized the mean performance of products currently being 
sold.
    CA Utilities, NEEA, and NPCC commented that DOE should not use 
NEMA's data to calculate lab-to-lab variation. CA Utilities stated that 
because NEMA provided an approximation for arc power instead of 
measured arc power, their data is not useful for assessing lab-to-lab 
variation. They suggested DOE use its own data from the primary and 
secondary test labs to quantify this type of variation. (CA Utilities, 
No. 58 at p. 2; NEEA and NPCC, No. 59 at p. 2)
    DOE believes that NEMA's data reflects correct application of the 
active mode test procedure, given confidential data received from 
individual manufacturers and NEMA's description of testing provided 
during the public meeting. (NEMA, Public Meeting Transcript, No. 43 at 
p. 51) Although interested parties expressed concern that NEMA did not 
provide the measured lamp arc power for each model, DOE notes that its 
approach for calculating lab-to-lab variation does not incorporate 
measured lamp arc power. Rather, DOE directly compares the BLE for a 
given ballast model to the BLE provided by NEMA for the same model. 
Although some stakeholders suggested that DOE only utilize its own 
results, DOE believes it should incorporate all available data. By 
doing so, the number of labs included in the calculation increases from 
two to five and the number of models available for comparison between 
labs increases as well. Therefore, DOE maintains the methodology 
described in the August 2011 NODA for this final rule.
5. Efficiency Levels
a. Curve Shape
    As described in section V.B.1, DOE concluded in the April 2011 NOPR 
that a logarithmic relationship best modeled the observed trend between 
total lamp arc power and BLE and therefore proposed efficiency levels 
using this equation form. Several manufacturers commented that, based 
on the test data they collected, the shape of the proposed efficiency 
levels was not a good fit for all commercially available products. GE 
commented that it found larger discrepancies between its test data and 
minimum BLE requirements for ballasts with lower input power than 
higher input power. GE reported that none of its ballasts met the 
proposed standard efficiency in the low power range. (GE, Public 
Meeting Transcript, No. 43 at p. 58) NEMA also noted that at 
approximately 80 W and below, very few manufacturers had products 
meeting the programmed start minimum BLE requirements. (NEMA, Public 
Meeting Transcript, No. 43 at pp. 66-7; NEMA, No. 47 at p. 6) NEMA 
suggested an alternative equation in which they increased the natural 
log constant and decreased the additive constant to increase the 
curvature of the proposed standard and better fit the dataset. (NEMA, 
Public Meeting Transcript, No. 43 at p. 59) NEMA also recommended 
breaking up the power ranges into separate product classes to have the 
formulas fit the test data better and suggested a breaking point 
somewhere in the 50 to 100W range. (NEMA, Public Meeting Transcript, 
No. 43 at pp. 75-6)
    Acuity Brands expressed concern that DOE was not considering can 
size when

[[Page 70574]]

determining what types of ballasts met proposed standards. NEMA 
reported that consumer demand has moved the ballast market into smaller 
can sizes, specifically to A- and N-cans, from F-cans. NEMA stated that 
three representative ballast types in A-cans currently make up 80 
percent of the total U.S. market, and the market is in the process of 
migrating to even smaller N-cans. NEMA explained that smaller ballasts 
enable reduced fixture size and plenum height in buildings. Not only is 
this convention in accordance with green building practices, but 
smaller can sizes allow for a reduction of gas and waste, and a 10 to 
15 percent reduction of steel in the manufacturing process. NEMA and 
Acuity Brands added that the smaller can sizes also increase the 
photometric efficiency of the fixture by two to six percent (for 
fixtures housing an A-can compared to an F-can). The small can allows 
better optical control and fuller use of the reflector as the thinner 
ballast housing blocks less light than larger cans. The smaller 
ballasts are also easier to access in the event that the ballast needs 
replacing. The limited space constrains the technology and components 
used, however, limiting possible efficiency gains. NEMA argued that, 
given the size of A- and N-cans, industry is currently developing the 
highest practical efficiency with NEMA Premium products. NEMA 
emphasized that while ballasts in the larger F-can can have higher 
efficiencies, consumer demand and fixture design makes moving to larger 
cans unsustainable. Acuity Brands asserted that if standard levels 
eliminate the smaller can sizes, DOE must, in its analysis, account for 
the additional costs of fixture redesign, engineering time, and 
incremental transportation costs. (NEMA, Public Meeting Transcript, No. 
43 at pp. 32-3, 35-7; Acuity Brands, Public Meeting Transcript, No. 43 
at pp. 99-100, 107-9, 171-2)
    CA Utilities and NEEA and NPCC commented that lower standards are 
not needed to accommodate ballasts of the smallest can size, and CA 
Utilities noted that they were not aware of any unique utility provided 
by N-cans. CA Utilities also stated that NEMA had not presented data 
demonstrating that N-cans are less efficient than A-cans or that 
smaller can size can reduce the use of steel. (CA Utilities, No. 45 at 
p. 6) NEEA and NPCC strongly urged the Department to proceed with the 
proposed standards unless conclusive data is presented on these issues 
that would suggest a different standard is warranted. (NEEA and NPCC, 
No. 44 at p. 8-9)
    Upon analysis, NEMA's test data showed a larger efficiency decrease 
at lower wattages than DOE's data indicated. Although DOE and NEMA 
generally tested the same types of ballasts, NEMA tested more 
permutations of ballast factor and number of lamps for each product 
line, particularly at lower wattages. For example, NEMA's data 
contained BLE values for 1-lamp 4-foot MBP ballasts with both low and 
high ballast factors, whereas DOE's data included 1-lamp 4-foot MBP 
ballasts with only normal ballast factors. For these reasons, in the 
August 2011 NODA, DOE considered changing the contour of the efficiency 
levels to better fit all of the available data. DOE acknowledges that 
industry is migrating to smaller can sizes, and the methodology 
described below allows ballasts with small can sizes to remain on the 
market.
    Stakeholders had provided comments on a potential new equation form 
during the May 2011 public meeting, when DOE presented a power law 
equation fit to the data provided by NEMA. Several manufacturers 
commented that upon initial review, the new power law equation appeared 
to be a better fit to the NEMA data. (Philips, Public Meeting 
Transcript, No. 43 at pp. 136-7, NEMA, No. 47 at p. 3 OSI, Public 
Meeting Transcript, No. 43 at pp. 137-8) NEMA further stated that the 
logarithmic equation in the April 2011 NOPR was more stringent at lower 
wattages relative to higher wattages. A lower wattage ballast's 
efficiency is more affected by fixed losses than a higher wattage 
ballast. The new power law equation seemed to accommodate this 
difference in efficiency (NEMA, No. 47 at p. 11)
    NEEA and NPCC supported the use of a logarithmic equation dependent 
on lamp arc power and based on the data presented by DOE in the April 
2011 NOPR. However, NEEA and NPCC noted that the NEMA data does have a 
different shape and could be better fit by the power law equation 
presented during the May 2011 NOPR public meeting. The CA Utilities 
agreed, stating that the data supported the new curve shape. (NEEA and 
NPCC, No. 44 at p. 4-6; CA Utilities, No. 45 at p. 5-6)
    Based on an application of several equation forms for efficiency 
levels, DOE concluded in the August 2011 NODA that a power law equation 
fit both the NEMA data and DOE data better than the logarithmic 
relationship proposed in the April 2011 NOPR. A power law equation 
takes the form:
[GRAPHIC] [TIFF OMITTED] TR14NO11.000

Where: power = average total lamp arc power.
    The exponent ``C'' determines the shape of the equation. Because 
NEMA's test data included a greater number of low wattage ballasts, DOE 
determined the exponent ``C'' by fitting a power law regression to 
NEMA's data. For the IS/RS product class (product class 1 in Table 
V.1), DOE found the exponent ``C'' to be 0.25. The exponent 0.25 is 
also a quantity used in relating power to relative losses (analog of 
efficiency) for distribution transformers, and fluorescent lamp 
ballasts similarly employ transformers and inductors. The PS NEMA data, 
however, yielded a different exponent for ballasts that use the PS 
starting method. PS ballasts have proportionately higher fixed losses 
due to internal control circuitry and heating of lamp electrodes 
(cathode heating). As such losses are a larger proportion of total 
losses at lower powers, the PS product classes have a steeper slope 
across the range of wattages corresponding to a larger exponent ``C'' 
of 0.37.
    Once the exponents were established for the two starting method 
categories, DOE fit the power law equation to the reported value data 
(calculated in accordance with 10 CFR 429.26 as discussed in section 
V.B.4) by adjusting the coefficient ``B'' to delineate among criteria 
such as different product lines, lines, ballasts that operate different 
lamp types, and other clusters in efficiency data. The most efficient 
(maximum technologically feasible) ELs approximate the April 2011 NOPR 
proposals for the highest wattages, but better follow product line 
efficiency trends at lower wattages. DOE confirmed the impacts of 
efficiency levels considered in the August 2011 NODA by comparing the 
levels to both DOE's and NEMA's data.
    In subsequent comments, NEMA supported the use of a power law 
equation to develop efficiency levels.

[[Page 70575]]

(NEMA, No. 56 at p. 3) DOE received no adverse comment regarding this 
approach, and therefore maintains the use of this equation form for the 
final rule.
b. Max Tech Ballast Efficiency
    As described in the April 2011 NOPR and appendix 5D of the NOPR 
TSD, DOE was not able to identify any working prototypes with 
efficiencies higher than those of commercially-available ballasts. DOE 
therefore established the maximum technologically feasible efficiency 
level as the highest level that is technologically feasible for a 
sufficient diversity of commercially available products (spanning 
several ballast factors, number of lamps per ballast, and types of 
lamps operated) within each product class.
    NEEA and NPCC agreed that no additional information suggests that 
higher efficiency levels exist above the most efficient levels analyzed 
for each product class in the April 2011 NOPR. (NEEA and NPCC, No. 44 
at p. 6) NEMA reiterated this point by commenting that there were no 
improvements possible over the level of efficiency proposed by DOE in 
the April 2011 NOPR. NEMA stated that electronic ballasts perform 
functions that require some fixed level of power consumption including: 
Switching losses related to power conversion from AC to DC and back to 
AC, cathode preheating, striation control, and end of life protection. 
NEMA commented that using lower loss switches would increase cost 
dramatically, and that lower loss magnetic components would necessitate 
an overall increase in ballast size, which the market would not accept. 
(NEMA, No. 47 at pp. 6-7)
    The CA Utilities, NEEA and NPCC, and the second Joint Comment 
commented that the max tech levels could be more stringent for higher 
wattage ballasts such as those that operate four 4-foot MBP lamps. They 
noted that among the 4-lamp 4-foot MBP IS/RS ballasts tested by DOE, a 
high percentage met the max tech level, and there was typically a 
greater range of efficiency among those ballasts that met the standard. 
(CA Utilities, No. 45 at p. 5-6; Second Joint Comment, No. 57 at p. 1; 
CA Utilities, No. 58 at p. 3; NEEA and NPCC, No. 59 at p. 2)
    DOE determined the max tech level for today's final rule to be the 
highest level that is technologically feasible for a sufficient 
diversity of lamp types, ballast factors, and numbers of lamps, 
regardless of manufacturer. DOE developed EL3 for the IS/RS product 
class in accordance with this criteria. For some ballast types in this 
class, there is only one product available at the max tech level and 
therefore raising this level would remove these products from the 
marketplace. Therefore, DOE has concluded that EL3 represents the 
highest level for the IS/RS product class that is technologically 
feasible for a sufficient diversity of products and maintains this 
level for the final rule. The following sections describe the impact of 
each efficiency level in more detail.
c. IS and RS Ballasts
    DOE developed three efficiency levels for the IS/RS product class. 
The least efficient level (EL1) was designed to eliminate 4-foot MBP 
T12 ballasts while allowing 4-foot MBP T8 and 8-foot slimline ballasts 
to comply with energy conservation standards. EL2 corresponds to a 
level which allows the highest-efficiency product lines from each of 
the four major ballast manufacturers to comply. DOE defines a full 
product line as spanning a sufficient diversity of products (spanning 
several ballast factors, numbers of lamps per ballast, and types of 
lamps operated). EL3 is the maximum technologically feasible level and 
allows nearly two manufacturer product lines comply.
d. PS Ballasts
    DOE developed three efficiency levels for the PS product class 
(product class number 2 in Table V.1). The least efficient level (EL1) 
was designed to eliminate the least efficient 4-foot MBP, 4-foot T5 
standard output, and 4-foot T5 high output PS ballasts. This also 
corresponds to a level at which each of the four major fluorescent lamp 
ballast manufacturers maintain a diversity of products. EL2 allows full 
product lines from two major manufacturers. Finally, EL3, the maximum 
technologically feasible level, was designed to represent the most 
efficient PS ballasts tested by DOE. EL3 is the highest level that 
allows one full line of products to meet standards, regardless of 
manufacturer.
e. Eight-Foot HO Ballasts
    For the 8-foot HO IS/RS product class (product class 3 in Table 
V.1), DOE developed three efficiency levels. For this product class, 
DOE tested ballasts that operate two lamps, the most common lamp-and-
ballast combination. EL1 was designed to just allow the least efficient 
T12 electronic ballasts, eliminating magnetic ballasts. EL2 allows the 
least efficient T8 ballast tested and eliminates the vast majority of 
T12 electronic ballasts. Finally, EL3 was designed to just allow the 
most efficient T8 ballast tested by DOE.
f. Sign Ballasts
    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. EL1 was designed to allow a full line of 
electronic sign ballasts, including ballasts that operate up to six 8-
foot HO lamps.
g. Residential Ballasts
    In the April 2011 NOPR, DOE had proposed that both residential and 
commercial ballasts could achieve similar levels of efficiency at the 
highest levels analyzed. Based on the similarity in efficiency, DOE 
included both ballast types in the same product class. However, for the 
final rule, DOE conducted additional testing which indicates that 4-
lamp residential ballasts are not able to achieve the same levels as 
commercial ballasts. Therefore, DOE has established a separate product 
class for residential ballasts and adjusted the efficiency levels for 
these ballasts to reflect the new data. EL1 was designed to just allow 
the least efficient T8 MBP ballasts, eliminating T12 residential 
ballasts. EL2, the maximum technologically feasible level, is the 
highest level that allows a full range of T8 products (including both 
two- and four-lamp ballasts) to comply.
6. Representative Units
a. Baseline Ballasts
    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 most common 
ballast sold within a representative ballast type with the lowest 
tested ballast luminous efficiency. In cases where two types of 
ballasts (each operating a different lamp diameter) are included in the 
same representative ballast type, DOE chose multiple baseline ballasts.
    NEMA commented that magnetic ballasts should not be used as 
baselines. (NEMA, Public Meeting Transcript, No. 43 at pp. 38-9). DOE 
notes that while magnetic ballasts are not appropriate

[[Page 70576]]

baselines for the majority of ballast types, for certain ballast types 
they represent the most common, least efficient ballasts that meet 
existing energy conservation standards. For example, as most magnetic 
4-foot MBP and 8-foot slimline ballasts do not meet the BEF standards 
set forth by the 2000 Ballast Rule and EPACT 2005, DOE chose electronic 
baselines for these ballast types. DOE used a magnetic ballast as a 
baseline for 8-foot HO ballasts, however, because a T12 magnetic 
ballast represents the least efficient ballast that meets existing 
energy conservation standards.
    Consistent with projections that a significant portion of 8-foot HO 
ballasts sold in 2014 (the compliance year of the new and amended 
standards in this final rule) will be electronic T8HO ballasts, DOE 
analyzes a T8 electronic ballast as a second baseline for this ballast 
type. DOE also used a magnetic ballast as a baseline for sign ballasts, 
which is typical of the least efficient products that are commercially 
available. In addition, according to DOE's shipment estimates, magnetic 
ballasts constitute a significant portion of the sign ballast market. 
For these reasons, DOE continues to analyze both electronic and 
magnetic baselines for the 8-foot HO and sign representative ballast 
types in this final rule.
    While NEAA and NPCC supported the use of T12 ballasts as an 
analytical baseline, EEI reasoned that due to the 2009 Lamps Rule, only 
T8 lamps will be able to comply with the new lamp efficacy standards. 
Therefore, T8 lamp-and-ballast systems will be the baseline (in terms 
of product availability) for all consumers as of July 2012. (NEEA and 
NPCC, No. 44 at p. 6; EEI, No. 48 at p. 2)
    DOE has concluded that both T8 and T12 ballasts are appropriate 
baselines. Although many T12 lamps will not meet the standards adopted 
in the 2009 Lamps Rule, several manufacturers have already introduced 
T12 lamp models that are not covered by these standards. Therefore, DOE 
projects that T12 products will be offered in 2014, the compliance year 
for this rulemaking. For example, DOE projects that in 2014 shipments 
(in the base case with existing technologies), while T8 ballasts will 
have a 78 percent market share, T12 ballasts will still have a market 
share of 4 percent of covered shipments, or about 5.3 million 
ballasts.\38\ Thus, DOE continues to use T12 ballasts as baselines in 
this final rule.
---------------------------------------------------------------------------

    \38\ T5 ballasts comprise the remaining market share.
---------------------------------------------------------------------------

b. Representative Units
    DOE then selected representative units at each efficiency level 
with higher BLEs as replacements for each baseline ballast. 
Representative units are typically ballasts that just meet the EL 
requirements based on the representative units' lamp arc power. Because 
DOE revised the shape of the efficiency levels, it also reevaluated its 
selection of representative units. DOE selected three new 
representative units based on the revised EL requirements. The revised 
representative units included the EL3 units for 2-lamp 4-foot MBP and 
2-lamp 8-foot slimline ballasts in the IS/RS product class, and the EL2 
unit for 2-lamp 4-foot MBP ballasts in the residential IS/RS product 
class. See chapter 5 of the TSD for more details.
c. Reduced Wattage Lamps
    In the April 2011 NOPR, DOE paired each ballast with a 
representative lamp type to develop system input power and lumen output 
characteristics for use in the LCC and NIA. Based on the active mode 
test procedure for fluorescent lamp ballasts, DOE used full wattage 
lamps for T8 and T5 ballasts and reduced wattage lamps for T12 
ballasts. For example, for ballasts that operate 4-foot MBP lamps, DOE 
paired an F32T8 lamp with T8 ballasts and an F34T12 lamp with T12 
ballasts. NEMA commented that due to the prevalence of energy-saving 
lamps in the market today, the standard 32 watt lamp is not an 
appropriate selection for the 4-foot MBP T8 system. (NEMA, Public 
Meeting Transcript, No. 43 at pp. 38-9)
    DOE agrees that all ballasts do not operate full-wattage lamps and 
thus revised the engineering analysis to incorporate the distribution 
of full- and reduced-wattage lamps on the market. In the 2009 Lamps 
Rule, DOE estimated the distribution of lamps by wattage that would be 
compliant with the 2012 energy conservation standards. For this final 
rule, DOE used those distributions to develop weighted-average lamp 
wattages (e.g., a rated wattage of 30.8 W for 4-foot MBP T8 lamps) to 
pair with T8 and T5 ballasts. In addition, DOE also updated the ballast 
luminous efficiency, system input power, system lumen output, lamp 
lifetime, and lamp price to reflect the distribution of lamp wattages. 
See chapter 5 of the final rule TSD for additional details.
7. Scaling to Product Classes Not Analyzed
    In the April 2011 NOPR, DOE did not analyze 8-foot HO PS ballasts 
directly. Thus, it developed 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 from IS to PS to 
be 2 percent and therefore applied this reduction to the efficiency 
levels for the 8-foot HO IS/RS product class.
    P.R. China found this approach potentially lacking scientific basis 
and suggested DOE provide a more detailed explanation of its 
methodology. (P.R. China, No. 51 at p. 4) As discussed in section 
V.B.6, 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. DOE then scaled from these representative classes to 
those not directly analyzed. In the NOPR, DOE calculated a 2 percent 
reduction factor to scale between IS/RS and PS product classes. This 
factor was determined by comparing pairs of ballasts in which the only 
characteristic that differed was starting method. Absent new 
information, DOE continues to use the 2 percent reduction factor. 
However, because DOE has established different efficiency level shapes 
for the IS/RS versus PS product classes, DOE has revised its 
methodology for scaling an IS/RS efficiency level to a PS efficiency 
level in this final rule.
    To establish residential PS and 8-foot HO PS efficiency levels, DOE 
input the arc power of the representative unit at each EL into the IS/
RS efficiency level equation to calculate the minimum required BLE. DOE 
then fit an efficiency level with a PS exponent (the exponent ``C'' is 
0.37 for PS ballasts) such that it passed through the minimum required 
BLE by adjusting the coefficient ``B''. Then, DOE applied the 2 percent 
reduction factor to the overall equation to account for the expected 
difference in efficiency between IS and PS ballasts. Because multiple 
representative ballast types existed in the same product class, DOE 
sought to match the stringency of the PS curve to the IS curve at the 
highest arc power within that product class.
8. Manufacturer Selling Prices
    DOE received comments on the process used to develop manufacturer 
selling prices (MSPs). NEMA commented that published blue book values 
account for only a small fraction of market prices and are skewed to be 
higher relative to the rest of the market. (NEMA, No. 47 at p. 7) DOE 
recognizes that blue book values are often significantly higher than 
MSPs and therefore used teardown data and

[[Page 70577]]

confidential manufacturer-supplied MSPs in combination with blue book 
values to determine more accurate MSPs. DOE determined these MSP values 
by applying manufacturer-specific ratios between blue book prices and 
teardown- or aggregated manufacturer-sourced MSPs to blue book prices. 
By applying the manufacturer-specific ratios, the blue book price was 
reduced to reflect more realistic MSPs.
    NEMA also commented that they do not think the price analysis 
method employed by DOE in the April 2011 NOPR accurately accounts for 
manufacturing variances among companies and circuit topology. In 
particular, NEMA disagreed with DOE's determination that higher 
efficiency ballasts were less expensive to manufacture than normal 
efficiency ballasts. (NEMA, No. 47 at p. 5) Based on DOE's assessment, 
certain higher efficiency ballasts are less expensive than lower 
efficiency ballasts. DOE notes that these trends are consistent with 
confidential manufacturer cost data received during interviews. Several 
low efficiency ballasts are magnetic ballasts, which are comprised of 
materials different from electronic ballasts. The difference in 
materials, such as the use of larger amounts of electrical steel and 
copper or aluminum windings in magnetic ballasts, would account for the 
higher cost. Similarly, DOE found some electronic T12 ballasts to carry 
a higher MSP than a more efficient T8 electronic ballast. Though these 
electronic ballasts utilize similar components, the low demand for T12 
ballasts reduces the potential for high-volume discounts leading to a 
higher MSP relative to the T8 ballast.
    NEMA questioned DOE's statement in the April 2011 NOPR that 
teardown prices are independent of long term commodity prices. (NEMA, 
No. 47 at p. 7) DOE acknowledges that a teardown analysis may be 
sensitive to the dynamic nature of the electrical component market, but 
continues to use the teardown results given that limited pricing 
information is publicly available. In the April 2011 NOPR, DOE amended 
its teardown approach such that incremental differences between two 
efficiency levels were based on pricing differences between single 
manufacturers' ballasts rather than basing prices directly from 
teardowns of different manufacturers. DOE notes that the industry did 
not provide average incremental MPC values. Instead, some manufacturers 
provided confidential data on an individual basis. DOE has not 
identified any new information that would affect its conclusion in the 
April 2011 NOPR, and therefore maintains this approach for the final 
rule.
9. Results
    In this final rule, DOE establishes efficiency levels in terms of a 
power law equation that relates total lamp arc power to BLE. When 
developing efficiency level equations, DOE plotted the reported value 
for each ballast model to account for certification requirements. DOE 
then applied a reduction factor to the efficiency level equations based 
on an analysis of lab-to-lab variation. Table V.2 summarizes the 
efficiency levels developed by DOE for each product class. Costs 
associated with ballasts that meet these efficiency levels are 
presented in chapter 5 of the TSD.

                         Table V.2--Efficiency Levels for Representative Product Classes
----------------------------------------------------------------------------------------------------------------
                  BLE = A/(1+B*total lamp arc power[caret]-C) where A, B, and C are as follows:
-----------------------------------------------------------------------------------------------------------------
                                                                  Efficiency
                  Representative product class                       level         A           B           C
----------------------------------------------------------------------------------------------------------------
IS and RS ballasts (not classified as residential) that operate.       EL 1                    0.46
    4-foot MBP lamps                                                   EL 2       0.993        0.31        0.25
    2-foot U-shaped lamps                                              EL 3                    0.27
    8-foot slimline lamps
PS ballasts (not classified as residential) that operate........       EL 1                    0.60
    4-foot MBP lamps                                                   EL 2       0.993        0.55        0.37
    2-foot U-shaped lamps                                              EL 3                    0.51
    4-foot MiniBP SO lamps
    4-foot MiniBP HO lamps
IS and RS ballasts (not classified as sign ballasts) that              EL 1                    1.01
 operate 8-foot HO lamps........................................
                                                                       EL 2       0.993        0.38        0.25
                                                                       EL 3                    0.28
Sign ballasts that operate 8-foot HO lamps......................       EL 1       0.993        0.47        0.25
IS and RS residential ballasts that operate.....................       EL 1                    0.41
    4-foot MBP lamps                                                   EL 2       0.993        0.29        0.25
    2-foot U-shaped lamps
    8-foot slimline lamps
----------------------------------------------------------------------------------------------------------------


                             Table V.3--Efficiency Levels for Scaled Product Classes
----------------------------------------------------------------------------------------------------------------
                BLE = A/(1 + B * total lamp arc power[caret]-C) where A, B, and C are as follows:
-----------------------------------------------------------------------------------------------------------------
                                                                  Efficiency
                      Scaled product class                           level         A           B           C
----------------------------------------------------------------------------------------------------------------
PS ballasts (not classified as sign ballasts) that operate 8-          EL 1                    1.86
 foot HO lamps..................................................
                                                                       EL 2       0.973        0.70        0.37
                                                                       EL 3                    0.52
PS residential ballast that operate.............................       EL 1                    0.71
    4-foot MBP lamps                                                   EL 2       0.973        0.50        0.37
    2-foot U-shaped lamps
----------------------------------------------------------------------------------------------------------------


[[Page 70578]]

C. 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 
maintain a 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.
    In response to the April 2011 NOPR, DOE received no comments 
regarding its markups analysis, and therefore retained this approach 
for this final rule. DOE's markups analysis method and results are 
discussed in the following sections.
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 
final rule. 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 shipped in fixtures. 
In this distribution channel, the ballast passes from the manufacturer 
to a fixture OEM which 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 shipped 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.
    DOE assumed a separate home improvement retailer distribution 
channel for residential ballasts, because DOE could not obtain retail 
sales data detailing the breakdown between fixture ballasts and 
replacement ballasts, 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 product 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 and amended 
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.
    While recognizing that SEC form 10-K data is not product-specific, 
actual product markups are generally business-sensitive. For this rule, 
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 markups for commercial and industrial ballast 
designs. DOE also contacted Home Depot and Lowe's regarding price 
markups for residential fluorescent lighting products, but both 
organizations declined to comment, citing competition concerns. 
Consequently, DOE based its estimated markups for commercial, 
industrial and residential ballast designs 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 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. 
For the current ballast rulemaking, neither NEMA nor other interested 
parties provided updated estimates of distribution channel proportions, 
or offered adverse comment regarding DOE's assumed proportions.
    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. DOE has not identified a more 
recent estimate for contractor markups, and did not receive related 
data or estimates from interested parties in response to the ballasts 
preliminary TSD or April 2011 NOPR. 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.\39\ These data represent 
weighted averages that include state, county and city rates. DOE then 
derived population-weighted average tax values for each census

[[Page 70579]]

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.
---------------------------------------------------------------------------

    \39\ The Sales Tax Clearinghouse. Available at https://thestc.com/STRates.stm. (Last accessed May 16, 2011.)
---------------------------------------------------------------------------

3. Summary of Markups

                                               Table V.4--Summary of Ballast Distribution Channel Markups
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Commercial/industrial ballasts                          Residential ballasts
                                                   -----------------------------------------------------------------------------------------------------
                                                       OEM distribution (ballasts          Wholesaler distribution       Retailer distribution (ballasts
                                                          shipped in fixtures)           (individual ballasts only)           shipped in fixtures)
                                                   -----------------------------------------------------------------------------------------------------
                                                        Baseline       Incremental        Baseline       Incremental        Baseline       Incremental
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fixture OEM.......................................             1.50             1.17  ...............  ...............             1.50             1.17
Electrical Wholesaler (Distributor)...............             1.23             1.05             1.23             1.05  ...............  ...............
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
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In response to the April 2011 NOPR, NEMA said it disagreed with 
DOE's incremental markups for OEMs, contractors and home improvement 
retailers, citing current economic conditions, price compression and 
commodity fluctuations. NEMA did not provide details about or suggested 
revisions to incremental markups. (NEMA, No. 47 at p. 7) DOE was not 
able to obtain confidential pricing and markups data from OEMs and home 
improvement retailers to validate its estimated baseline and 
incremental markups. Absent representative markups data, DOE retained 
its previously-vetted approach using SEC form 10-K financial reports to 
estimate markups for OEMs and home improvement retailers. Similarly, no 
new data to support different contractor markups were available, so DOE 
retained its NOPR markups for this final rule.
    Using these markups, DOE generated ballast end user prices for each 
efficiency level it considered. Chapter 7 of the final rule TSD 
provides additional detail on the markups analysis.

D. 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 in 
commercial, industrial and residential applications). 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),\40\ the Commercial Building Energy Consumption Survey 
(CBECS),\41\ the Manufacturer Energy Consumption Survey (MECS),\42\ and 
the Residential Energy Consumption Survey (RECS).\43\ 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.
---------------------------------------------------------------------------

    \40\ 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.
    \41\ U.S. Department of Energy, Energy Information 
Administration. 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.
    \42\ U.S. Department of Energy, Energy Information 
Administration. 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.
    \43\ U.S. Department of Energy, Energy Information 
Administration. Residential Energy Consumption Survey: File 1: 
Housing Unit Characteristics. 2005. Available at http://www.eia.doe.gov/emeu/recs/recspubuse05/pubuse05.html.
---------------------------------------------------------------------------

    DOE received no comments on the April 2011 NOPR regarding the 
energy use analysis for ballasts and retains this approach for today's 
final rule. Chapter 6 of the final rule TSD provides a more detailed 
description of DOE's energy use analysis.

E. 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. For any given efficiency level, DOE measures the PBP and the 
change in LCC relative to an estimated baseline product efficiency 
level. The LCC is the total consumer expense over the life of a 
product, consisting of purchase, installation, 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

[[Page 70580]]

change in purchase cost (normally higher) by the change in average 
annual operating cost (normally lower) that results from the more 
efficient standard.
    Inputs to the calculation of total installed costs 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 compliance with new and amended 
standards is required. To account for uncertainty and variability, DOE 
created probability distributions for inputs such as 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). Because 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, 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 probability distributions of these values, 
performing more than 10,000 iterations per simulation run. The final 
rule TSD chapter 8 and its appendices provide details on the 
spreadsheet model and all 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 April 2011 NOPR as well 
as the changes made for this final rule. The subsections that follow 
discuss the model inputs and DOE's changes to them.

                 Table V.5--Summary of Inputs and Key Assumptions in the LCC and PBP Analyses *
----------------------------------------------------------------------------------------------------------------
               Inputs                                 NOPR                       Changes for the final 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 2009$ to
                                       times, and applicable labor rates     2010$.
                                       from RS Means Electrical Cost Data
                                       (2007) and U.S. Bureau of Labor
                                       Statistics.
Annual Energy Use...................  Determined operating hours by         No change (newer data unavailable).
                                       associating building type-specific
                                       operating hours with regional
                                       distributions of various building
                                       types using lighting market and
                                       building energy consumption survey
                                       data: LMC (2002), CBECS (2003),
                                       MECS (2006), and RECS (2005) \44\
                                       (see section V.D).
Energy Prices.......................  Electricity: Based on EIA's Form 826  No change.
                                       data for 2010.
                                      Variability: Energy prices
                                       determined at state level..
Energy Price Projections............  Forecasted using Annual Energy        No change.\45\
                                       Outlook 2010 (AEO2010).
Replacement and Disposal Costs......  Commercial/Industrial: Included       Updated labor rates from 2009$ to
                                       labor and materials costs for lamp    2010$.
                                       replacement, and disposal costs for
                                       failed lamps.
                                      Residential: Included only materials
                                       cost for lamps, with no lamp
                                       disposal costs..
                                      Variability: Assumed commercial and
                                       industrial consumers pay recycling
                                       costs in approximately 30 percent
                                       of lamp failures and 5 percent of
                                       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      No change.
                                       cost of capital to affected firms
                                       and industries; developed weighted
                                       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.
                                      Variability: Developed a
                                       distribution of discount rates for
                                       each end-use sector..
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 final rule TSD.

1. Product Cost
    To calculate consumer product costs, DOE multiplied the MSPs 
developed in the engineering analysis by the distribution channel 
markups described in section V.C.1 (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.
---------------------------------------------------------------------------

    \44\ RECS was updated in 2009, but these updates did not address 
lighting usage; therefore, DOE used RECS 2005 data for this final 
rule.
    \45\ DOE continues to use AEO2010 in its final rule analyses. 
The comment period on DOE's NODA, discussed previously, closed on 
September 14, 2011, and DOE is required by consent decree to publish 
the final amended standards for fluorescent lamp ballasts by October 
28, 2011. (State of New York, et al. v. Bodman et al., 05 Civ. 7807 
(LAP) and Natural Resources Defense Council, et al. v. Bodman, et 
al., 05 Civ. 7808 (LAP) (Nov. 3, 2006), as amended on June 20, 
2011.) The additional time required for DOE to consider the comments 
and information submitted by interested parties did not allow 
sufficient time for DOE to update the final rule analyses using 
AEO2011. DOE has determined, however, that the AEO2011 30-year 
annual growth rates for energy consumption (electric power) and 
electricity generating capacity are almost identical to those in 
AEO2010. The forecasted near-term electricity prices in AEO2010 are 
slightly higher than in AEO2011, and would produce slightly shorter 
payback periods. However, these payback periods and other LCC and 
NIA results are not expected to vary significantly using AEO2010 and 
AEO2011.
---------------------------------------------------------------------------

    DOE received comments on the April 2011 NOPR questioning its 
product cost assumptions for residential ballasts. NEEA and NPCC noted 
that residential consumers would more likely replace an entire 
fluorescent lamp fixture upon ballast failure, and that these fixtures

[[Page 70581]]

would be less expensive than DOE's estimated ballast prices. (NEEA, 
Public Meeting Transcript, No. 43 at pp. 169-170; NPCC, Public Meeting 
Transcript, No. 43 at pp. 163-164; NEEA and NPCC, No. 44 at p. 6) DOE 
notes that fluorescent fixture and ballast price are highly variable, 
but maintains that its estimated residential ballast prices (approx. 
$10-12) are comparable with those for inexpensive fixtures (e.g., shop 
lights) that residential consumers might replace upon ballast failure. 
DOE also notes that fixture price data that correspond with individual 
ballast efficiency levels are not readily available. Therefore, DOE 
retained its residential ballast product cost approach for this final 
rule.
    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 product and equipment price trends. DOE notes 
that learning curve analysis characterizes the reduction in production 
cost mainly associated with labor-based performance improvement and 
higher investment in new capital equipment at the microeconomic level. 
Experience curve analysis tends to focus more on entire industries and 
aggregates over various casual factors at the macroeconomic level: 
``Experience curve'' and ``progress function'' typically represent 
generalizations of the learning concept to encompass behavior of all 
inputs to production and cost (i.e., labor, capital, and materials).'' 
The economic literature often uses these two terms interchangeably. The 
term ``learning'' is used here to broadly cover these general 
macroeconomic concepts.
    Consistent with the February 2011 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 
assumed in its price forecasts for the 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 and controls 
technologies 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.
    DOE received no comments on the April 2011 NOPR regarding its 
ballast price trend basis. For this final rule, DOE also considered 
adjusting ballast prices using forecasted price indices (called 
deflators) used by EIA to develop the AEO. When adjusted for inflation, 
the deflator-based price indices decline from 100 in 2010 to 
approximately 54 in 2043. The effect is diminished significantly when 
discounting is taken into account. Deflator-based net present value 
(NPV) results from the national impacts analysis (NIA) were 
approximately 9 percent higher than NPV values based on constant real 
prices for ballasts. Given this minor difference in estimated NPV, and 
that DOE did not receive negative comments on its constant real price 
basis in the NOPR, DOE retained its constant real price approach for 
this final rule. A more detailed discussion of price trend modeling and 
calculations is provided in Appendix 8B of the final rule TSD.
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 final rule 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. DOE received no comments on the April 2011 NOPR 
concerning its installation costs for the LCC analysis, and retained 
this approach for this final rule.
3. Annual Energy Use
    As discussed in section V.D, 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 weighted 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 2010 EIA Form 
826, ``Monthly Electric Utility Sales and Revenue Data.'' DOE received 
no comments on the April 2011 NOPR concerning its derivation of energy 
prices for the LCC analysis and retained this approach for this final 
rule.
5. Energy Price Projections
    To estimate the trends in energy prices, DOE used the price 
forecasts in AEO2010. To arrive at prices in future years, DOE 
multiplied current average prices by the forecast of annual average 
price changes in AEO2010. Because AEO2010 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 from 2035 to 
2043. In addition, the spreadsheets 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. DOE 
received no specific comments on the April 2011 NOPR concerning its 
energy price forecasting method for the LCC analysis and retained this 
approach for this final rule.
6. Replacement and Disposal Costs
    In the April 2011 NOPR, 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 projected 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. For the 2009 Lamps Rule, DOE found average recycling 
costs of 10 cents per linear foot for GSFL and $3.50 for each ballast. 
DOE surveyed current online recycling cost data for this rulemaking, 
and determined that its 2009 recycling cost estimates were still

[[Page 70582]]

valid. 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.\46\ Consistent with the 2009 Lamps Rule, DOE 
considered the 30-percent lamp-recycling rate to be significant and 
incorporated lamp recycling costs into the LCC analysis for commercial 
and industrial consumers. DOE was unable to obtain reliable ballast 
recycling rate data, but projected that the likely higher ballast 
recycling costs would largely discourage voluntary ballast recycling by 
commercial and industrial consumers. DOE therefore did not include 
ballast recycling costs in the LCC analysis. Given the 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 recycling costs for ballasts. Therefore, DOE excluded 
the recycling costs for lamps or ballasts from the LCC analysis for 
residential ballast designs.
---------------------------------------------------------------------------

    \46\ 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 April 2011 NOPR concerning these 
assumed recycling rates and costs, and retained this approach in the 
final rule LCC analysis. The Monte Carlo simulation for the final 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 final rule TSD details DOE's basis for its 
calculation of average ballast lifetimes. DOE used assumptions from the 
2000 Ballast Rule and the 2009 Lamps Rule. DOE explicitly sought 
comment on these assumptions but received no additional information 
upon which to base changes to them in today's final 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 and 10 years in the commercial and industrial sectors, 
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 relamping practices (e.g., group and spot relamping, where 
lamps are replaced preemptively or after failure, respectively), DOE 
assumed that lamps operated, on average, for 91-94 percent of rated 
life, depending on lamp type.
    DOE also assumed that ballast lifetimes can vary due to both 
physical failure and economic factors (e.g., early replacements due to 
retrofits). DOE accounted for variability in lifetime in LCC and PBP 
via the Monte Carlo simulation (using repeated random sampling), and in 
the shipments and NIA analyses by assuming a Weibull distribution for 
lifetimes that represents failures and replacements. DOE received no 
adverse comments on the April 2011 NOPR concerning its product lifetime 
assumptions and retained this approach for this final rule.
8. Discount Rates
    The discount rate is the rate at which future expenditures are 
discounted to estimate their present value. In the April 2011 NOPR, DOE 
estimated separate discount rates for commercial, industrial, and 
residential consumers. For both the proposed and final rules, 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.\47\ DOE used the same 
distribution of discount rates for the commercial and industrial 
sectors. The average discount rates, weighted by the shares of each 
rate value in the sectoral distributions, are 6.9 percent for 
commercial end users and 7.2 percent for industrial end users.
---------------------------------------------------------------------------

    \47\ The data are available at http://pages.stern.nyu.edu/
~adamodar.
---------------------------------------------------------------------------

    For the residential sector, DOE assembled a distribution of 
interest or return rates from sources including the Federal Reserve 
Board's ``Survey of Consumer Finances'' (SCF) in 1989, 1992, 1995, 
1998, 2001, 2004 and 2007. DOE 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 estimated to be 5.6 percent.
    DOE received no comments on the April 2011 NOPR concerning its 
estimated discount rates for the LCC analysis and retained this 
approach for this final rule.
9. Compliance Date of Standards
    The compliance date is when a covered product is required to meet a 
new or amended standard. EPCA requires that any new or 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 a 2006 consent decree, as amended, 
to publish any amended standards for ballasts by October 28, 2011.\48\ 
In accordance with 42 U.S.C. 6295(g)(7)(C), the compliance date is 
three years after the publication of any final new and amended 
standards. DOE 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.
---------------------------------------------------------------------------

    \48\ State of New York, et al. v. Bodman et al., 05 Civ. 7807 
(LAP) and Natural Resources Defense Council, et al. v. Bodman, et 
al., 05 Civ. 7808 (LAP) (Nov. 3, 2006), as amended on June 20, 2011.
---------------------------------------------------------------------------

10. Ballast Purchasing Events
    DOE based the LCC and PBP analyses for this rulemaking on scenarios 
where consumers must purchase a ballast. Each of these purchasing 
events may involve 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 are (1) ballast failure and (2) new 
construction/renovation. In the ballast failure scenario, DOE assumed 
that the consumer of the failed ballast would replace it with a 
standards-compliant lamp-and-ballast combination such that the system 
light output never drops more than 10 percent below that of the 
baseline system. For the ballast failure scenario, DOE used rated 
system input power to calculate annual energy use. For new 
construction/renovation, DOE assumed that consumers may design a new 
installation that matches the

[[Page 70583]]

overall light output of the base-case system. DOE used normalized 
system input power, adjusted to yield equivalent light output from both 
the baseline and substitute new construction/renovation systems.
    DOE received no comments on the April 2011 NOPR concerning its 
assumed ballast purchasing events for the LCC analysis and retained 
this approach for this final rule.

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

    DOE's NIA assessed the national energy savings (NES) and the NPV of 
total consumer costs and savings that would be expect from new or 
amended standards at specific efficiency levels. (``Consumer'' in this 
context refers to users of the regulated product.)
    DOE used a spreadsheet model to calculate the energy savings and 
the national consumer costs and savings for each TSL. The TSD and other 
documentation for the rulemaking 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 these four output parameters. 
DOE examines sensitivities in the NIA by analyzing different efficiency 
scenarios, such as Roll-up and Shift.
    DOE evaluated the national 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 considered 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 final rule 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 April 2011 NOPR, as well as 
the changes to the analyses for the final rule. A discussion of 
selected inputs and changes follows. See chapter 11 of the final rule 
TSD for further details.

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

1. Shipments
    Product shipments are an important input to any estimate of the 
future impact of a standard. To develop the shipments portion of the 
NIA spreadsheet, DOE used a three-step process to: (1) Estimate 
historical shipments; (2) calculate installed ballast stock; and (3) 
develop annual shipment projections for the analysis period 2014-2043. 
Table V.7 summarizes the approach and data DOE used to derive the 
inputs to the shipments analysis for the April 2011 NOPR and the 
changes DOE made for today's final rule. A discussion of these inputs 
and changes follows. For details on the shipments analysis, see chapter 
10 of the final rule TSD.

                          Table V.7--Approach and Data Used for the Shipments Analysis
----------------------------------------------------------------------------------------------------------------
                  Inputs                               NOPR                    Changes for the final rule
----------------------------------------------------------------------------------------------------------------
Historical Shipments.....................  Used historical shipments    No change.
                                            for 1990-2005 to develop
                                            shipments and stock
                                            projections for the
                                            analysis period; changed
                                            lifetime distribution and
                                            growth assumptions,
                                            mitigating oscillations in
                                            shipment projections.
Ballast Stock............................  Based projections on the     No change.
                                            shipments that survive up
                                            to a given date; assumed
                                            Weibull lifetime
                                            distribution.
Growth...................................  Used 2010 AEO projections    Revised growth rate for residential
                                            for floorspace growth.       sector.

[[Page 70584]]

 
Base Case Scenarios......................  Analyzed both existing       Added dimming ballast penetration rate
                                            technology and emerging      to the emerging technology scenario;
                                            technology scenarios.        revised efficiency apportionments for
                                                                         commercial sector ballasts operating 4-
                                                                         foot MBP lamps.
Standards Case Scenarios.................  Analyzed Shift and Roll-up   No change.
                                            scenarios based on both
                                            existing and emerging
                                            technology cases.
----------------------------------------------------------------------------------------------------------------

a. Historical Shipments
    For the April 2011 NOPR, DOE used U.S. Census Bureau Current 
Industrial Reports (CIR) to estimate historical (1990-2005) shipments 
for each representative ballast type. The census CIR data cover 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 lower-volume ballast designs, the CIR 
withheld shipments data to avoid disclosing individual company data.
    For CIR reporting years for which specific shipments data are too 
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 adjusted these estimates to account for the 
volume of ballasts that non-NEMA companies import or manufacture. DOE 
received no comments on the April 2011 NOPR regarding historical 
ballast shipments data and estimates. DOE also found no historical 
ballast shipment data to validate its NOPR shipments analysis because 
neither NEMA nor its member companies typically retain data of the 
vintage in question (1990-2005). DOE therefore concluded that census 
data remain the best available data for estimating historical ballast 
shipments and retained its approach for this final rule.
b. Ballast Stock Projections
    In its shipments analysis for the April 2011 NOPR, 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 estimated the installed stock during the analysis 
period by calculating how many ballasts will survive up to a given year 
based on a Weibull lifetime distribution for each ballast type. DOE 
received no comments on the April 2011 NOPR regarding its ballast stock 
projection method and retained this approach for this final rule.
c. Projected Shipments
    By modeling ballast market segments (i.e., purchasing events) 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). The 
following subsections address the lifetime, base-case market share 
apportionment, emerging technology, market trend, and efficiency 
scenario issues that DOE considered in its shipments analysis for the 
final rule.
i. Ballast Lifetime Assumptions
    In its shipments analysis for the April 2011 NOPR, DOE retained the 
average ballast physical lifetimes used in its preliminary analysis, 
and combined them with Weibull distributions for lifetimes to model 
ballast failures and retrofits. DOE received no comments on the April 
2011 NOPR regarding its assumed average ballast lifetimes and lifetime 
distributions and retained this approach for this final rule.
ii. Base-Case Market Share Apportionments
    When choosing lighting systems, consumers consider attributes such 
as lifetime, efficiency, price, lumen output, rated wattage, and total 
system power. Therefore, within each product class, DOE developed 
efficiency level market share apportionments to account for the mix of 
system attributes that consumers select in the base case. These market 
share apportionments were used to estimate base case historical 
shipments and installed stock for each ballast design.
    DOE was not able to obtain detailed historical ballast shipment 
data to develop percentage market shares for the analyzed ballast 
designs. Based on initial manufacturer interviews, however, DOE was 
able to develop a general assumed market-share apportionment using 
shipments of electronic ballasts for 4-foot T8 MBP systems. DOE then 
applied this general apportionment to each product class in the base 
case, assigning 69 percent of shipments to the baseline ballast design, 
and dividing the remaining 31 percent of shipments among the higher 
efficiency designs.
    For the April 2011 NOPR, DOE received several comments regarding 
base case market share apportionments and their effects on estimated 
energy savings and economic benefits. Universal questioned DOE 
assigning a majority market share to baseline ballast designs, noting 
at least 80 percent of NEMA manufacturers' current ballast shipments 
are classified as NEMA Premium. (Universal, Public Meeting Transcript, 
No. 43 at p. 38; NEMA, No. 56 at p. 4) Philips and Universal further 
contended that DOE's baseline apportionments--including magnetic 
ballast designs--effectively underestimated the efficiency of the 
installed ballast stock and overestimated the resulting energy savings 
and economic benefits of the proposed efficiency standards. (Philips, 
Public Meeting Transcript, No. 43 at p. 64; Universal, Public Meeting 
Transcript, No. 43 at p. 38)
    DOE agrees that the ballast market is shifting to higher efficiency 
designs, but notes that its baseline representative ballasts (excluding 
ballasts operating two 8-foot T12 lamps, and four-lamp sign ballasts) 
are electronic designs. Therefore, less-efficient magnetic baseline 
designs did not have a significant effect on DOE's NIA results. 
However, DOE reviewed the prevalence of NEMA Premium products in its 
tested ballasts (including baseline products), and adjusted the market 
share apportionments of higher efficiency level ballasts in the IS and 
RS, and PS product classes accordingly. DOE could not verify NEMA's 
estimated 80 percent market share for higher efficiency designs. Based 
on its review,

[[Page 70585]]

however, DOE assigned a 64-percent market share to the higher 
efficiency level designs and a 36-percent market share to baseline 
ballast designs in these product classes in the base case for the final 
rule shipments analysis.
iii. Emerging Technologies Shipment Forecasts
    In its previous analyses, DOE modeled separate existing and 
emerging technologies shipment scenarios to characterize the 
uncertainty in ballast market penetration by emerging solid-state 
lighting (SSL) technologies. The existing technologies scenario 
generally considers only the market penetration of technologies that 
are mature in terms of price and efficiency, largely excluding SSL. In 
the emerging technologies scenario, the shipments and installed stock 
of ballasts (e.g., ballasts operating 4-foot MBP T8 lamps) decrease due 
to significant replacement by SSL. This scenario effectively lowers the 
energy savings of new fluorescent lamp ballast standards. DOE 
acknowledges both scenarios and the likelihood that actual results will 
fall between them by presenting the two scenarios' energy savings and 
economic effects as a range.
    Consistent with the 2009 Lamps Rule and its current research, DOE 
assumed no SSL penetration for residential linear fluorescent 
applications. DOE stated in the April 2011 NOPR that residential energy 
codes will drive the market toward higher efficacy lighting systems, 
but that the related market growth will be greater for compact 
fluorescent lamp (CFL)-based fixtures than for 4-foot MBP fluorescent 
systems. As discussed in DOE's SSL Multi Year Program Plan (updated May 
2011), the vast majority of residential sockets are dedicated to 
incandescent lamps, for which screw-base compact fluorescent and SSL 
lamps are direct replacements.\49\ DOE's review of available 
residential fixture surveys confirms that linear fluorescent fixtures 
are typically relegated to utility room, laundry, and some kitchen 
applications. A comparison of recent California residential lighting 
data for 2005 and 2009 shows no significantly increased installation of 
linear fluorescent systems, and DOE believes that residential consumers 
will continue to opt for lower-first-cost fluorescent systems rather 
than installing more expensive SSL replacements for linear fluorescent 
lamps and fixtures. DOE received no adverse comments to the April 2011 
NOPR for not including SSL penetration in its residential ballast 
shipments. Given the limited residential applications for linear 
fluorescent systems, DOE retained this approach for this final rule.
---------------------------------------------------------------------------

    \49\ U.S. Department of Energy--Office of Energy Efficiency and 
Renewable Energy. Solid-State Lighting Research and Development: 
Multi Year Program Plan. March 2011 (Updated May 2011). Washington, 
DC Available at http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_mypp2011_web.pdf.
---------------------------------------------------------------------------

    For the April 2011 NOPR, DOE received comments regarding how 
regulations requiring use of dimming ballasts could affect future 
shipments of fixed-output ballasts. Commenters referenced proposed 
regulations in California that would require controllable ballasts in 
non-residential applications. (ASAP, Public Meeting Transcript, No. 43 
at p. 209; Lutron, Public Meeting Transcript, No. 43 at pp. 207-208; 
Philips, Public Meeting Transcript, No. 43 at p. 179) Philips further 
suggested that SSL and dimming ballasts in combination could largely 
eliminate the fixed-output ballast market by 2040. (Philips, Public 
Meeting Transcript, No. 43 at p. 187)
    As part of its 2013 Title 24 updates (effective in 2014), the state 
of California is considering mandatory requirements for controllable 
light sources that could require dimming ballasts for non-residential 
linear fluorescent systems.\50\ These proposed changes to Title 24 
would build upon existing requirements for stepped lighting controls, 
requiring significantly increased granularity of control at the 
individual fixture level. It is uncertain, however, whether these 
proposed changes to Title 24 will be enacted. It is also not certain 
that other building standards, such as the American Society of Heating, 
Refrigerating and Air-Conditioning Engineers standard 90.1 (ASHRAE 
90.1), would adopt the ballast controllability requirements being 
considered in California. DOE projects that a significant number of 
fluorescent lighting installations where dimming is not practical or 
possible (such as spaces without daylighting, or where occupancy/
vacancy sensing can extinguish lighting) will remain, thus maintaining 
demand for fixed-output ballasts.
---------------------------------------------------------------------------

    \50\ California Energy Commission's 2013 Building Energy 
Efficiency Standards Rulemaking Web page. Available at http://www.energy.ca.gov/title24/2013standards/prerulemaking/. (Last 
accessed May 27, 2011.)
---------------------------------------------------------------------------

    In its comments to the April 2011 NOPR, NEMA generally affirmed 
DOE's shipment projections, but asserted that DOE underestimated the 
current and future penetration of SSL in the emerging technologies 
scenario. (NEMA, No. 47 at pp. 8-9) NEEA stated that the emerging 
technologies forecast is the more likely of DOE's two shipment 
scenarios, and that DOE should increase the penetration of SSL and 
controllable lighting to lower the projected shipments of fixed-output 
ballasts. (NEEA and NPCC, No. 44 at p. 7)
    As described previously in this section, DOE developed existing and 
emerging technologies shipment scenarios to investigate uncertainties 
in ballast market penetration by other technologies. Although dimming 
ballasts are an existing technology, DOE considered them an ``emerging 
application'' for fluorescent lighting applications and included 
dimming ballasts with SSL products in its emerging technologies 
shipments scenario for this final rule. As discussed in chapter 10 of 
the final rule TSD, because SSL penetration has increased since the 
inception of this rulemaking, DOE increased its estimated penetration 
rate earlier in the shipments analysis period. DOE also increased the 
maximum penetration of 40.6 percent (for SSL in the April 2011 NOPR) to 
a maximum penetration of 75 percent (for SSL and dimming ballasts 
combined). This increased penetration resulted in decreased shipments 
for affected ballast types for the lower boundary, base case shipments 
scenario.
iv. Anticipated Market Trends
    DOE received comments on the April 2011 NOPR regarding its shipment 
projections for residential ballasts. NEEA and NPCC questioned whether 
DOE overestimated residential ballast shipments, based on the 
commenters' understanding of ballast lifetimes and new construction 
growth rates. (NEEA, Public Meeting Transcript, No. 43 at pp. 194-195; 
NPCC, Public Meeting Transcript, No. 43 at p. 195) DOE calculates 
shipments of ballasts due to new construction, retrofits and 
replacements for failed ballasts. After reviewing its assumptions for 
these three purchasing events, DOE adjusted its estimated shipments 
downward by approximately 30 percent for the final rule shipments 
analysis. See chapter 10 of the final rule TSD for additional details.
v. 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 April 2011 NOPR, DOE used two shipment efficiency 
scenarios: ``Roll-up'' and ``Shift.'' The Roll-up scenario is 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.

[[Page 70586]]

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, that consumer would do the same 
after a standard is imposed. In this scenario, 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 on the April 2011 NOPR regarding its Roll-
up and Shift efficiency scenarios and retained this approach for the 
final rule shipments analysis.
2. 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. For electricity, the conversion factors vary over time 
due to projected changes in generation sources (i.e., the power plant 
types 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.
    For the April 2011 NOPR, DOE used annual site-to-source conversion 
factors based on the version of 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 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 (August 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 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.\51\
---------------------------------------------------------------------------

    \51\ The National Academies, Board on Energy and Environmental 
Systems, Letter to Dr. John Mizroch, Acting Assistant Secretary, 
U.S. DOE, Office of Energy Efficiency and Renewable Energy from 
James W. Dally, Chair, Committee on Point-of-Use and Full-Fuel-Cycle 
Measurement Approaches to Energy Efficiency Standards, May 15, 2009.
---------------------------------------------------------------------------

    In evaluating the merits of using point-of-use and full-fuel-cycle 
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 but, unlike the full-fuel-cycle measure, 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 full-fuel-cycle measure of energy consumption when 
assessing national and environmental impacts, especially with respect 
to the calculation of greenhouse gas 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 full-fuel-cycle energy 
consumption would provide a more complete picture of energy consumed 
and permit 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 a full-fuel 
cycle 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 full-fuel-cycle (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 FTC to make FFC energy and GHG emissions data 
available to the public to 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 issued a final policy statement on these 
subjects and will take steps to begin implementing that policy in 
future rulemakings and other activities. 76 FR 51281 (August 18, 2011). 
The Statement of Policy is available at: http://www.gpo.gov/fdsys/pkg/FR-2011-08-18/pdf/2011-21078.pdf.

G. 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 April 2011 NOPR: 
low-income households; institutions of religious worship; and 
institutions that serve low-income populations (e.g., small 
nonprofits). DOE received no comments on the April 2011 NOPR regarding 
its choice of consumer sub-groups, and retained this approach for this 
final rule. The final rule TSD chapter 12 presents the consumer 
subgroup analysis.

[[Page 70587]]

H. Manufacturer Impact Analysis

    DOE performed an 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 INPV. DOE used the GRIM to 
calculate cash flows using standard accounting principles and to 
compare changes in INPV between a base case and various TSLs (the 
standards cases). The difference in INPV between the base and standards 
cases represents the financial impact of the new and amended standards 
on manufacturers. 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, and important market 
and product trends. DOE outlined its complete methodology for the MIA 
in the NOPR. 76 FR 20090, 20134 (April 11, 2011). Chapter 13 of the TSD 
outlines the complete MIA.
1. 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. For the final rule, 
DOE converted the NOPR product and capital conversion costs to 2010$ 
from 2009$ using the producer price index (PPI) for the relevant 
industry. The PPI is disaggregated into each North American Industry 
Classification System (NAICS) code. For fluorescent lamp ballasts, DOE 
updated the conversion costs using the specific PPI index under NAICS 
code 335311--``Electric power and specialty transformer manufacturing'' 
and series ID PCU3353113353115--``Fluorescent lamp ballasts.'' DOE's 
estimates of the product and capital conversion costs for fluorescent 
lamp ballasts can be found in section VII.B.2.a, of today's final rule 
and in chapter 13 of the TSD.
a. Product 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.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. This 
methodology, described in full in the April 2011 NOPR (76 FR 20090, 
20136 (April 11, 2011)), centers on an assessment of the number of 
models and SKUs manufacturers will need to upgrade to meet new and 
amended standards. DOE applied a per-model and per-SKU cost to every 
product currently offered by manufacturers that does not meet the 
analyzed standard levels.
    Several stakeholders questioned this methodology, arguing that 
DOE's assumption that manufacturers would upgrade all models that do 
not currently meet existing standards leads to overstated conversion 
cost estimates. In reality, manufacturers would not upgrade non-
compliant models in product categories where they already offer similar 
compliant models. (NEEA and NPCC, No. 44 at pp. 7-8; CA Utilities, No. 
45 at pp. 7-8) Similarly, NEEA and NPCC stated that manufacturers may 
not upgrade all non-compliant product lines as they shift resources 
away from fluorescent lighting toward emerging technologies such as 
solid-state lighting. (NEEA and NPCC, No. 44 at p. 8)
    In contrast, manufacturers argued that full product line upgrades 
would be necessary to compete. GE explained that manufacturers must 
upgrade non-compliant models even in categories in which compliant 
models currently exist because today's high efficiency products 
generally bundle additional premium features at a higher cost. These 
premium features, such as Type CC protection, cold temperature rating, 
case size, and lamp striation control, are detailed in the April 2011 
NOPR. 76 FR 20090, 20108-9 (April 11, 2011). To remain competitive, 
manufacturers would need to offer compliant products stripped of these 
premium features to the cost-conscious OEM channels. (GE, Public 
Meeting Transcript, No. 43 at p. 217) Philips emphasized that 
manufacturers cannot simply ignore the ballast market by choosing not 
to make the necessary investments to meet today's standards because it 
represents an important part of the lighting business. (Philips, Public 
Meeting Transcript, No. 43 at pp. 213-4)
    Although DOE's max tech efficiency levels do not preclude ballasts 
with premium features, DOE agrees that competition in the OEM channel 
would force manufacturers to offer a low-cost product at the new 
baseline standard level. The large fixture manufacturers that compose 
the OEM channel are price-sensitive, and their large orders afford them 
substantial buying power. Their business is valuable to the ballast 
industry because the manufacturers rely on these high-volume orders to 
improve plant utilization and lower fixed costs per unit for all 
models. As such, DOE does not predict that large ballast manufacturers 
can afford to ignore the demand for these commoditized \52\ products. 
DOE also finds it unreasonable to assume that manufacturers would 
forego investment in the ballast market due to a shifting focus on 
emerging technologies because ballast sales currently generate 
significant revenue for these companies. For these reasons, DOE has not 
adjusted its methodology for determining the number of models that 
would need to be upgraded in response to standards.
---------------------------------------------------------------------------

    \52\ In this final rule, we define `commoditized' to mean that a 
large number of products are produced by many manufacturers, such 
that the products are differentiated only by price.
---------------------------------------------------------------------------

b. Capital Conversion Costs
    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. 
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 costs. 76 FR 
20090, 20136 (April 11, 2011).
2. Markup Scenarios
    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

[[Page 70588]]

different markups values, which, when applied to the inputted MPCs, 
result in varying revenue and cash flow impacts.
    The preservation of operating profit markup scenario assumes that 
manufacturers are able to maintain the base-case total operating profit 
in absolute dollars in the standards case, despite higher product costs 
and investment. 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 new and amended standards as in the base case. 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 new and amended energy conservation 
standard, they are able to maintain the same operating profit in the 
standards case as in the base case.
    DOE also modeled a lower bound profitability scenario with the 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. DOE used information from 
MIA interviews 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. 76 FR 20090, 20137 (April 11, 2011).
3. Other Key GRIM Inputs
    Key inputs to the GRIM characterize the fluorescent lamp ballast 
industry cost structure, investments, shipments, and markups. For 
today's final rule, DOE made several updates to the GRIM to reflect 
changes in these inputs. These updates do not represent changes in 
methodology from the April 2011 NOPR. Specifically, DOE incorporated 
changes made in the engineering analysis and NIA, including updates to 
the MPCs, shipment forecasts, and shipment efficiency distributions. 
These updated inputs affected the values calculated for the conversion 
costs and markups described above, as well as the INPV results 
presented in section VII.B.2.
4. Other Comments From Interested Parties
    The following section discusses a number of other comments DOE 
received on the April 2011 NOPR MIA methodology.
a. Fixture Redesigns for Ballast Can Size Changes
    Several interested parties commented that new and amended standards 
could drive larger ballast designs, which would result in product 
redesign and tooling costs for fixture manufacturers because fixtures 
are built for a particular ballast can size. NEMA stated that 
increasing efficiency by employing additional circuitry to reduce 
variation would drive larger case sizes. (NEMA, No 47 at p. 9) At the 
same time, the market has trended over time toward the use of smaller 
can sizes (from the standard can to the A-can and, most recently, from 
the A-can to the N-can). Larger can sizes would reverse this trend and 
cost fixture manufacturers tens of millions of dollars each, according 
to NEMA and Acuity Brands. Accordingly, these fixture redesign costs 
should be included in DOE's analysis. (NEMA, Public Meeting Transcript, 
No. 43 at pp. 33-4, 36-7; Acuity Brands, Public Meeting Transcript, No. 
43 at pp. 171-2)
    DOE recognizes that the fluorescent lamp ballast market has trended 
over time toward the use of smaller can sizes. For today's final rule, 
as discussed in section V.B.5.a, DOE is not analyzing any efficiency 
levels that would eliminate manufacturers' ability to meet standard 
levels with the smaller N-cans. DOE has accounted for sources of 
variation and compliance certification requirements, as described in 
section V.B.4, and does not project that ballasts will grow in size in 
response to standards. As such, fixture manufacturers will not incur 
product redesign and tooling costs to accommodate larger ballasts.
b. Potential Benefits to Ballast Manufacturers
    ASAP noted that energy conservation standards for fluorescent lamp 
ballasts could accelerate the adoption of emerging technologies. 
Because ballast manufacturers often also offer these emerging 
technologies and can typically command higher margins on these emerging 
technology products, ballast manufacturers could be less affected by 
standards than estimated by DOE. (ASAP, Public Meeting Transcript, No. 
43 at pp. 209-11)
    As addressed in response to comments in the April 2011 NOPR (76 FR 
20090, 20138 (April 11, 2011)), the potential exists for the market to 
increasingly migrate from traditional fixed light output fluorescent 
lamp ballasts to alternate technologies such as LEDs and dimming 
ballasts. DOE therefore models the emerging technologies shipment 
scenario as described in section V.F.1.c and in chapter 10 of the 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 because the revenue stream would be present in 
both the base case and the standards case, resulting in no impact on 
the change in INPV.
c. Opportunity Cost of Investments
    NEMA and Philips stated that the TSL proposed in the April 2011 
NOPR (76 FR 20090, 20166-9 (April 11, 2011)) would have a high 
opportunity cost due to the limited capital for investment and R&D. Any 
investments incurred to meet amended ballast standards would reflect 
foregone investments in emerging technologies such as solid state 
lighting and controls, and reduced wattage lamp and ballast systems, 
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. (Philips, Public Meeting 
Transcript, No. 43 at pp. 212-3; NEMA, Public Meeting Transcript, No. 
43 at pp. 40-1; NEMA, No. 47 at pp. 9, 11) Specifically, NEMA argued 
that the investments necessary to meet new and amended ballast 
standards would be better spent developing new technologies that can 
save far more energy than the 2 to 3 percent additional energy savings 
this standard would generate. (NEMA, No. 52 at p. 10) NEMA also stated 
that the proposed rule provided no clear incentive for manufacturers to 
comply with standards by making already highly efficient products even 
more efficient. (NEMA, No. 47 at p. 9)
    DOE recognizes that there is an opportunity cost associated with 
any investment, and agrees that manufacturers would need to spend 
capital to meet today's standard that they would not have to spend in 
the base case. As a result, manufacturers must determine the extent to 
which they will balance investment in the traditional ballast market 
with that in emerging technologies or other ventures. DOE includes the 
product and capital conversion costs necessary to meet today's standard 
in its analysis.

[[Page 70589]]

d. Component Availability
    OSI stated that there are currently long lead times for many 
electronic components. As DOE standards push the fluorescent lamp 
ballast industry to higher efficiency components, manufacturers will 
have limited choices in what components they are able to receive from 
suppliers, causing longer product lead times and decreased product 
availability. (OSI, Public Meeting Transcript, No. 43 at p. 65)
    DOE recognized this component shortage in the April 2011 NOPR (76 
FR 20090, 20139 (April 11, 2011)), but DOE projects limited component 
availability to be a relatively short term phenomenon arising from the 
capacity reduction that occurred in the recent recession and that 
component suppliers will ultimately adjust. DOE addresses this issue 
again in full in section VII.B.2.c of today's notice.
e. Impact on Competition
    NEMA stated that manufacturers may lose their ability to 
differentiate their products because they will need to remove premium 
features to meet price pressure and proposed standard levels. This 
would force all manufacturers to offer the same basic product. NEMA 
states that DOE should ensure that manufacturers are able to offer 
products above the standard in order to differentiate themselves. 
(NEMA, No. 47 at p. 9) NEEP, while agreeing that high efficiency 
ballasts may be commoditized by this standard, states that 
manufacturers will retain opportunities for differentiation by focusing 
on dimming ballasts and controls. (NEEP, No. 49 at pp. 3-4)
    DOE agrees that ballast manufacturers may not be able to maintain 
today's margins after standards become effective, particularly in the 
short run, as demonstrated by the markup scenarios described in section 
V.H.2. DOE disagrees, however, that manufacturers will no longer be 
able to differentiate themselves. For some minimally compliant 
products, DOE agrees with manufacturers that price competition will 
play a large role in the market, as is currently the case. 
Manufacturers may continue to differentiate in domains other than 
price, including premium features such as Type CC protection, cold 
temperature rating, case size, and lamp striation control. Because of 
this effort to differentiate, as discussed in the section V.H.1, DOE 
included costs associated with upgrading non-compliant products, even 
when a compliant product already exists in the category. Therefore, DOE 
believes NEMA's concerns are accounted for in DOE's analysis.
    NEMA stated that manufacturers may not be able to complete the 
redesigns needed to meet the max tech levels proposed in the April 2011 
NOPR (76 FR 20090 (April 11, 2011)). (NEMA, No. 47 at p. 9) NEEP, 
however, believes that by setting efficiency levels such that a select 
subset of existing NEMA Premium ballasts qualify at today's standard 
levels, the market would not be faced with a shortage of qualifying 
products and major shift in R&D resources. (NEEP, No. 49 at p. 2)
    At TSL 3A, the level promulgated in today's final rule, DOE 
projects that 38 percent of shipments already meet the standard. The 
reconciliation of the DOE and NEMA test data and the substantial share 
of shipments at the proposed level indicate that the industry will be 
able to meet market demand by the compliance date.
5. 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. DOE outlined 
the key issues for the rulemaking for manufacturers in the NOPR. 76 FR 
20090, 20139-40 (April 11, 2011). DOE considered the information 
received during these interviews in the development of the NOPR and 
this final rule.
6. Sub-Group Impact Analysis
    During the NOPR phase, DOE identified two sub-groups for a separate 
impact analysis--small manufacturers and sign ballast manufacturers. 
DOE describes the impacts on small manufacturers in section VIII.B and 
the impacts on sign ballast manufacturers in section VII.B.2.d.

I. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a 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. The MIA addresses the direct employment impacts that 
concern ballast manufacturers in section VII.B.2.b. 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 products, and are addressed in 
this section.
    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.
    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 email 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, DOE's analysis shows that net 
national employment

[[Page 70590]]

will increase due to shifts in economic activity resulting from new and 
amended standards for ballasts.
    In developing today's adopted standards, DOE estimated indirect 
national employment impacts using an input-output (I-O) model of the 
U.S. economy called Impact of Sector Energy Technologies (ImSET), 
version 3.1.1. ImSET is a spreadsheet model of the U.S. economy that 
focuses on 187 sectors most relevant to industrial, commercial, and 
residential building energy use. (Roop, J.M., M.J. Scott, and R.W. 
Schultz, ImSET 3.1: Impact of Sector Energy Technologies (PNNL-18412 
Pacific Northwest National Laboratory) (2009). Available at http://www.pnl.gov/main/publications/external/technical_reports/PNNL-18412.pdf.) ImSET is a special purpose version of the ``U.S. Benchmark 
National Input-Output'' 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 187 sectors. 
ImSET's national economic I-O structure is based on a 2002 U.S. 
benchmark table (Stewart, R.L., J.B. Stone, and M.L. Streitwieser, 
``U.S. Benchmark Input-Output Accounts, 2002,'' Survey of Current 
Business (Oct. 2007)), specially aggregated to the 187 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 the trial standard levels for ballasts.
    DOE notes that ImSET is not a general equilibrium forecasting 
model, and understands the uncertainties involved in projecting 
employment impacts, especially changes in the later years of the 
analysis.\4\ Because ImSET does not incorporate price changes, the 
employment effects predicted by ImSET may over-estimate actual job 
impacts over the long run for this rule. Because ImSET predicts small 
job impacts resulting from this rule, regardless of these 
uncertainties, the actual job impacts are likely to be negligible in 
the overall economy. DOE may consider the use of other modeling 
approaches for examining long run employment impacts.
    DOE also notes that the employment impacts estimated with ImSET for 
the entire economy differ from the employment impacts in the lighting 
manufacturing sector estimated in Chapter 13 using the Government 
Regulatory Impact Model (GRIM). The methodologies used and the sectors 
analyzed in the ImSET and GRIM models are different.
    DOE received two comments on the April 2011 NOPR, inquiring whether 
DOE's employment analysis accounted for effects on ballast manufacturer 
employment, and if sector-specific results could be extracted from the 
ImSET model output. (Acuity Brands, Public Meeting Transcript, No. 43 
at p. 229; Philips, Public Meeting Transcript, No. 43 at p. 227.) As 
discussed previously in this section, DOE's employment analysis models 
national effects on indirect employment (excluding ballast 
manufacturers) due to shifts in expenditures and capital investment 
caused by the purchase and operation of more efficient appliances. As 
previously noted, the MIA addresses direct employment impacts on 
ballast manufacturers in section VII.B.2.b.
    DOE notes that the indirect employment numbers generated by ImSET 
are an estimate of the job impacts of the projected national energy and 
cost savings resulting from new or amended standards. These calculated 
impacts assume that the 187 sectors in the ImSET model are unchanged 
from the time that the I-O parameters were estimated (last updated in 
2008 using year 2002 Economic Census data). As noted in the ImSET 
documentation, actual job creation will depend on future labor market 
supply conditions and macroeconomic policy.
    DOE reviewed current ImSET sectoral details and identified one 
economic sector that corresponds with lighting product manufacturers, 
excluding lamp bulb and related parts (sector S111, Lighting Fixture 
Manufacturing). While this sector could encompass some ballast 
manufacturers, DOE notes that it is not exclusively representative of 
ballasts. Further, while ImSET can produce gross product impacts (in 
dollars) by sector, it does not produce sector-specific employment 
figures. Rather, ImSET characterizes economic flows among and 
interactions between 187 sectors in the model. Producing sector-
specific employment figures would require DOE to artificially constrain 
its ImSET input data, which could reduce the meaningfulness of the 
results. DOE therefore did not calculate sector S111 employment 
figures, and retained its NOPR employment analysis approach for this 
final rule.
    For more details on the employment impact analysis, see chapter 15 
of the final rule TSD.

J. Utility Impact Analysis

    The utility impact analysis includes estimates of 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 
electricity generating capacity by plant type that would result from 
each TSL. The estimated impacts of a standard are estimated to be the 
differences between values forecasted by NEMS-BT and the values in the 
AEO2010 reference case.
    In response to the April 2011 NOPR, NEEA, NPCC and NEEP commented 
that DOE did not consider the avoided costs of power plant construction 
corresponding to the avoided generation capacity from new or amended 
standards. By NEEA and NPCC's estimates, the present value cost of new 
generation capacity to supply the cumulative energy savings at TSL 3 
would nearly equal DOE's cumulative NPV at TSL 3 (which excludes 
avoided power plant and infrastructure construction). NEEA and NPCC 
further suggested that DOE examine the difference in the value of total 
electricity sales between the NEMS-BT reference case and standards 
level cases, which could serve as a proxy for the economic value of the 
standard level to all electricity consumers. (NPCC, Public Meeting 
Transcript, No. 43 at p. 223; NEEA and NPCC, No. 44 at pp. 9-10) NEEP 
also commented that decreased demand is shown to drive energy prices 
down, benefiting consumers in general. (NEEP, No. 49 at p. 4)
    DOE acknowledges that the aggregate economic benefits from avoided 
construction of new generating capacity and infrastructure are 
potentially large. However, there may be negative effects on some of 
the actors involved in electricity supply, particularly power plant 
providers and fuel suppliers. There is also uncertainty about the 
extent to which the benefits for electricity users from reduced 
electricity prices would be a transfer from actors involved in 
electricity supply to electricity consumers. DOE also takes under 
advisement the guidance provided by the Office of Management and Budget 
(OMB) to Federal agencies on identifying and measuring benefits and 
costs in its regulatory analyses (OMB Circular A-4, section E, 
September 17, 2003). Specifically, at page 38, Circular A-4 instructs 
that transfers should be excluded from the estimates of the benefits 
and costs of a regulation. DOE applied this approach for the utility 
impact analysis in the April 2011 NOPR, as well as in this final rule.
    DOE is continuing to investigate the extent to which projected 
changes in electricity prices that result from standards represent a 
net economic gain

[[Page 70591]]

to the nation. In response to the comments discussed in this section, 
DOE included the estimated effects of adopted standards on electricity 
prices and the cumulative NPV of resulting savings in electricity 
expenditures in the TSD. DOE also included in the TSD representative 
costs of avoided electricity generation capacity by fuel type, although 
these costs are provided for illustrative purposes only. For more 
details on the utility impact analysis, see chapter 14 of the final 
rule TSD.

K. Environmental Assessment

    Pursuant to the National Environmental Policy Act of 1969 and the 
requirements of DOE Order 451.1B: NEPA Compliance Program, DOE has 
prepared an environmental assessment (EA) of the impacts of the new and 
amended standards for ballasts in this final rule, which it has 
included as chapter 16 of the final rule TSD. DOE found that the 
environmental effects associated with the standards for ballasts were 
not significant. Therefore, DOE is issuing a Finding of No Significant 
Impact (FONSI), pursuant to NEPA, the regulations of the Council on 
Environmental Quality (40 CFR parts 1500-1508), and DOE's regulations 
for compliance with NEPA (10 CFR part 1021). The FONSI is available in 
the docket for this rulemaking.
    In the EA, DOE estimated the reduction in power sector emissions of 
CO2, NOX, and 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 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 final rule is the 
difference between the forecasted emissions estimated by NEMS-BT at 
each TSL and the AEO2010 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.
    Sulfur dioxide (SO2) emissions from affected electricity 
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 DC 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 was 
remanded to the Environmental Protection Agency (EPA) by the U.S. Court 
of Appeals for the District of Columbia Circuit (DC Circuit) (see North 
Carolina v. EPA, 550 F.3d 1176 (DC Cir. 2008)), it remained in effect 
temporarily, consistent with the DC Circuit's earlier opinion in North 
Carolina v. EPA, 531 F.3d 896 (DC Cir. 2008). On July 6, 2010, EPA 
issued the Transport Rule proposal, a replacement for CAIR (75 FR 45210 
(Aug. 2, 2010)), and on July 6, 2011 EPA issued the final Transport 
Rule, entitled the Cross-State Air Pollution Rule. 76 FR 48208 (August 
8, 2011). (http://www.epa.gov/crossstaterule/). Because the AEO2010 
NEMS used for today's final rule assumes the implementation of CAIR, 
DOE has not been able to take into account the effects of the Transport 
Rule for this rulemaking.\53\
---------------------------------------------------------------------------

    \53\ DOE notes that future iterations of the NEMS-BT model will 
ncorporate any changes necessitated by issuance of the Transport 
Rule.
---------------------------------------------------------------------------

    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, 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 new and 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.
    As discussed above, the AEO2010 NEMS used for today's final rule 
assumes the implementation of CAIR, which established a cap on 
NOX emissions in 28 eastern states and the District of 
Columbia. With CAIR in effect, the energy conservation standards for 
ballasts are expected to have little or no physical effect on 
NOX emissions in those states covered by CAIR, for the same 
reasons that they may have little effect on SO2 emissions. 
However, the adopted standards would be expected to reduce 
NOX emissions in the 22 states not affected by CAIR. For 
these 22 states, DOE used the NEMS-BT to estimate NOX 
emissions reductions from the standards considered in today's final 
rule.
    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 Hg for new and 
existing coal-fired power plants in all states by 2010. However, on 
February 8, 2008, the DC Circuit issued a decision in New Jersey v. 
Environmental Protection Agency, 517 F.3d 574 (DC 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.

L. Monetizing Carbon Dioxide and Other Emissions Impacts

    As part of the development of this final 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 final rule, DOE is relying on a set of values for the 
SCC that was developed by an interagency process. A summary of the 
basis for these values is provided in the following sections, and a 
more detailed description of the methodologies used is provided as an 
appendix to chapter 17 of the final rule 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

[[Page 70592]]

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 CO2.
    When attempting to assess the incremental economic impacts of 
CO2 emissions, the analyst faces a number of serious 
challenges. A recent report from the National Research Council \54\ 
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.
---------------------------------------------------------------------------

    \54\ 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 CO2 emissions. Consistent with the directive in 
Executive Order 12866 quoted previously in this section, the purpose of 
the SCC estimates presented here is to make it possible for Federal 
agencies to incorporate the social benefits from reducing 
CO2 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 CO2 
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 2010$, were 
$4.9, $22.3, $36.5, and $67.6 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,\55\ although preference is 
given to consideration of the global benefits of reducing 
CO2 emissions.
---------------------------------------------------------------------------

    \55\ 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 
CO2 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.\56\ 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 CO2 emissions, while a global SCC value is meant 
to reflect the value of damages worldwide.
---------------------------------------------------------------------------

    \56\ 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

[[Page 70593]]

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 on Regulating Greenhouse Gas Emissions Under the 
Clean Air Act identified what it described as ``very preliminary'' SCC 
estimates subject to revision. 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 CO2 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.
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 final 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 commonly used to estimate the SCC: the FUND, DICE, 
and PAGE models.\57\ 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.
---------------------------------------------------------------------------

    \57\ The models are described in appendix 16-A of the final rule 
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
                             -------------------------------------------
                                5% Avg     3% Avg    2.5% Avg   3% 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. As the National Research 
Council report mentioned in section V.L.1.a points out, 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

[[Page 70594]]

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 2010$ using the GDP 
price deflator. For each of the four cases specified, the values used 
for emissions 2010 were $4.9, $22.3, $36.5, and $67.6 per metric ton 
avoided (values expressed in 2010$).\58\ To monetize the CO2 
emissions reductions expected to result from new and 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 17A of the final rule 
TSD, appropriately adjusted to 2010$. 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.
---------------------------------------------------------------------------

    \58\ 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.
---------------------------------------------------------------------------

2. Valuation of Other Emissions Reductions
    DOE investigated the potential monetary benefit of reduced 
NOX emissions from the TSLs it considered. As noted in the 
previous section, DOE has taken into account how 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 
the standard levels considered for today's final rule 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 
$450 to $4,623 per ton in 2010$).\59\ In accordance with guidance from 
the U.S. Office of Management and Budget (OMB), 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.\60\
---------------------------------------------------------------------------

    \59\ 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.
    \60\ 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.

VI. Other Issues for Discussion

A. Proposed Standard Levels in April 2011 NOPR

    In the April 2011 NOPR, DOE proposed to adopt the max tech level, 
which represented the highest level that was technologically feasible 
for a sufficient diversity of products (spanning several ballast 
factors, numbers of lamps per ballast, and types of lamps operated). 
DOE received several comments supporting the proposed standard levels. 
NEEP commented that assuming the test data discrepancy between DOE's 
and NEMA's data is resolved, the proposed standards would greatly 
benefit the Northeast region of the United States where energy prices 
are typically higher than the rest of the country, increasing the 
magnitude of life cycle cost savings for those consumers. They also 
observed that locking in strong efficiency levels for ballasts would 
complement the strong fluorescent lamp standards that are set to take 
effect on July 14, 2012. NEEP added that the NOPR proposal would help 
the Northeast region meet its energy savings and emission reduction 
goals including those set forward in Massachusetts' Global Warming 
Solutions Act of 2008. (NEEP, No. 49 at pp. 2-4)
    EEI also supported the proposed standards and agreed they would be 
cost effective for the vast majority of commercial consumers based on 
the analysis and data put forward in the April 2011 NOPR. (EEI, No. 48 
at p. 1)
    In addition to the above feedback, DOE also received several 
comments that disagreed with the proposed standard levels. These 
comments are discussed in more detail in the following paragraphs.
    NEMA disagreed with DOE's proposal to adopt the max tech efficiency 
levels. NEMA stated that, even when using DOE data, very few products 
met the proposed minimum BLE requirements. For example, only one 
residential, T5SO, and T5HO ballast met DOE's proposed standard levels. 
NEMA commented that the DOE is therefore using only one product to 
develop a rule. (NEMA, Public Meeting Transcript, No. 43 at p. 29-32) 
NEMA analyzed its own dataset and suggested an alternative level that 
allowed the majority of manufacturers' NEMA Premium products, which 
represent their most efficient product offerings. NEMA noted that 
although it is not shown in the submitted data, several products they 
manufacture are not NEMA Premium products and therefore would not meet 
their proposal. At a minimum, NEMA requested that two manufacturers' 
complete product lines be able to meet the standard levels. NEMA also 
added that they would support a proposal that does not create limited 
availability, disruption in the market, or extreme R&D redesign costs. 
(NEMA, Public Meeting Transcript, No. 43 at p. 41-5; NEMA, No. 47 at p. 
6)
    ASAP disagreed with NEMA's recommendation that all manufacturers' 
high efficiency products should meet the highest level. ASAP noted that 
based on the DOE data, there were two products that were compliant in 
each class. ASAP therefore approved of DOE's decision to adopt the max 
tech level. (ASAP, Public Meeting Transcript, No. 43 at p. 50-1; ASAP, 
No. 46 at p. 1) NEEP agreed and supported the result that only a subset 
of NEMA Premium products met the proposed standard. (NEEP, No. 49 at p. 
1-2) CA Utilities also agreed that all products with a NEMA Premium 
designation should not meet the proposed standard because NEMA Premium 
covers a range of efficiency with some ballasts only meeting TSL1 or 
TSL2 as analyzed in the April 2011 NOPR. They noted that they reviewed 
the data and found that there is at least one product for each specific 
utility that meets the standard, though all manufacturers may not have 
an offering for each utility. (CA Utilities, Public Meeting Transcript, 
No. 43 at p. 62-3; CA Utilities, No. 45 at p. 4; CA Utilities, No. 58 
at p. 3)
    In response to the August 2011 NODA, NEMA recommended adopting 
lower efficiency levels for several of the product classes. NEMA 
recommended adopting EL2 instead of EL3 for the IS/RS and PS product 
classes because the incremental cost of product redesign at EL3 is not 
outweighed by the incremental energy savings between EL2 and EL3. NEMA 
added that at EL2, manufacturers would focus on retiring non-compliant 
products and improving existing product lines rather than redesigning a 
large number of models. (NEMA, No. 56 at p. 3)
    For the same reasons, NEMA recommended adopting EL2 for the 8-foot 
HO IS/RS product class. They noted

[[Page 70595]]

that the energy savings at EL2 are similar to those achieved at EL3 
(the level proposed in the April 2011 NOPR), but EL3 imposes much 
greater costs on manufacturers. (NEMA, No. 56 at p. 3)
    Finally, NEMA recommended EL1 as the standard level for residential 
ballasts because linear fluorescent technology is more efficient and 
cost-effective than other traditional technologies and therefore it 
does not make sense to increase the cost burden on this price-sensitive 
market. (NEMA, No. 47 at p. 4; NEMA, No. 56 at p. 3) EEI also commented 
on residential ballasts, stating that although they generally agreed 
with the proposed standard levels, they were concerned about the 
impacts of the standards on some residential consumers. EEI noted that 
according to the NOPR proposal, relative to the T8 baseline, 100 
percent of consumers have increased life-cycle costs. 76 FR 20090, 
20146 (April 11, 2011). (EEI, No. 48 at p. 2)
    DOE determines efficiency levels as described in section V.B.5, and 
then assesses the impacts, including those on manufacturers and 
industry competition. DOE acknowledges that conversion costs increase 
at higher efficiency levels, but also notes that higher levels result 
in increased energy savings and NPV for the nation and increased LCC 
savings for consumers. Although each efficiency level may not allow a 
full product line from every manufacturer, DOE has concluded that, for 
the levels it is adopting in this final rule, the benefits outweigh the 
burdens. See section VII.C.2 for more details.

B. Universal Versus Dedicated Input Voltage

    NEMA also expressed concern that the proposed standards may 
eliminate universal voltage ballasts from the market. NEMA commented 
that although dedicated voltage ballasts are more efficient, consumers 
demand universal voltage instead of dedicated voltage products. NEMA 
stated that manufacturers may need to shift back to the more efficient 
dedicated voltage products to meet the proposed standards. This shift 
away from universal voltage would go against industry and consumer 
demand. (NEMA, Public Meeting Transcript, No. 43 at p. 36) NEEA and 
NPCC commented that their data assessment strongly suggested ballast 
efficiency does not vary consistently by input voltage, and that 
universal voltage ballasts can be as efficient as, or more efficient 
than, fixed input voltage ballasts in any individual product class and 
utility category. (NEEA and NPCC, No. 44 at p. 3) CA Utilities also 
stated that based on experience and review of DOE's test data, they 
found no indication that universal voltage ballasts are consistently 
less efficient than dedicated voltage ballasts and that therefore 
universal and dedicated voltage ballasts should be held to the same 
standard levels. (NEMA, No. 56 at p. 3; CA Utilities, No. 45 at p. 6)
    DOE agrees with the CA Utilities that test data shows universal 
voltage ballasts to be as efficient or more efficient than dedicated 
input voltage ballasts. DOE also recognizes that there is significant 
market demand for universal voltage fluorescent lamp ballasts. In both 
the April 2011 NOPR and this final rule, DOE's max tech efficiency 
levels are met by universal voltage ballasts. For the IS/RS product 
class, 80 percent (37 out of 46) of ballasts that meet the proposed 
standard are universal voltage ballasts; for the PS product class, over 
95 percent (20 out of 21) are universal voltage ballasts. Therefore, 
DOE does not believe the final rule prohibits the manufacture and sale 
of universal voltage products.

C. Implementation of Adopted Standard Levels

    In the April 2011 NOPR, DOE proposed that standards for all covered 
ballasts require compliance three years following publication of the 
final rule in the Federal Register. P.R. China noted that, for several 
product classes, DOE proposed increasing efficiency requirements by a 
large percentage and that adapting to the proposed standards could 
create a large burden on manufacturers. P.R. China suggested that DOE 
gradually phase in standards, transitioning from the lowest considered 
efficiency level through the higher efficiency levels to reach the 
proposed standard. P.R. China stated that this approach is 
internationally accepted and would ease the initial burden placed on 
manufacturers. (P.R. China, No. 51 at p. 3)
    DOE acknowledges that for certain ballast types the standards 
adopted represent a large increase in efficiency relative to existing 
standards or the analyzed baseline. However, as described in section 
VII.C.2, DOE analyzed the burden on manufacturers pursuant to 42 U.S.C. 
6295(o) and determined that it was outweighed by the benefits of the 
rule to consumers and the nation.

VII. Analytical Results and Conclusions

A. Trial Standard Levels

    DOE analyzed the benefits and burdens of the TSLs developed for 
today's final rule. Table VII.1 presents the trial standard levels and 
the corresponding product class efficiency levels for all product 
classes. See the engineering analysis in section V.B.5 of this final 
rule for a more detailed discussion of the efficiency levels.

                                       Table VII.1--Trial Standard Levels
----------------------------------------------------------------------------------------------------------------
                            Product class                               TSL 1      TSL 2      TSL 3A     TSL 3B
----------------------------------------------------------------------------------------------------------------
IS and RS ballasts (not classified as residential) that operate.....        EL1        EL2        EL3        EL3
    4-foot MBP lamps
    2-foot U-shaped lamps
    8-foot slimline lamps
PS ballasts (not classified as residential) that operate............        EL1        EL2        EL3        EL3
    4-foot MBP lamps
    2-foot U-shaped lamps
    4-foot MiniBP SO lamps
    4-foot MiniBP HO lamps
IS and RS ballasts (not classified as sign ballasts) that operate: 8-       EL1        EL2        EL2        EL3
 foot HO lamps......................................................
PS ballasts (not classified as sign ballasts) that operate: 8-foot          EL1        EL2        EL2        EL3
 HO lamps...........................................................
Sign ballasts that operate: 8-foot HO lamps.........................        EL1        EL1        EL1        EL1
IS and RS residential ballasts that operate.........................        EL1        EL1        EL1        EL2
    4-foot MBP lamps
    2-foot U-shaped lamps
    8-foot slimline lamps
PS residential ballasts that operate................................        EL1        EL1        EL1        EL2

[[Page 70596]]

 
    4-foot MBP lamps
    2-foot U-shaped lamps
----------------------------------------------------------------------------------------------------------------

    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 (the 8-foot HO PS and residential PS product 
classes), as set forth in chapter 5 of the final rule TSD.
    TSL 1, which would set energy conservation standards at EL1 for all 
product classes, would eliminate the majority of currently available 4-
foot MBP T12 RS (commercial and residential), low-efficiency 4-foot MBP 
T8 PS, magnetic 8-foot HO, and magnetic sign ballasts. Based on these 
impacts, TSL 1 would likely cause a migration from 4-foot MBP T12 RS 
ballasts (both commercial and residential) to 4-foot MBP T8 IS 
ballasts. TSL 1 also prevents inefficient T5 standard output and high 
output ballasts from becoming prevalent in future years. DOE would not 
anticipate any impact of TSL 1 on consumers of 8-foot slimline 
ballasts.
    TSL 2 would establish energy conservation standards at EL2 for the 
IS/RS, PS, and 8-foot HO IS/RS product classes. This level would likely 
eliminate low efficiency two-lamp 4-foot MBP T8 IS commercial ballasts 
and the least efficient T12 8-foot slimline ballasts, causing a 
migration toward high efficiency two lamp 4-foot MBP T8 IS ballasts and 
8-foot T8 slimline ballasts. DOE does not anticipate any impact of TSL 
2 on four-lamp 4-foot MBP T8 IS ballast consumers. For PS ballasts, 
high-efficiency 4-foot MBP T8 ballasts and high-efficiency T5 standard 
output and high output ballasts are required at TSL 2. For the 8-foot 
HO IS/RS product class, this level would likely result in the 
elimination of the majority of current T12 electronic ballasts, but can 
be met with T8 electronic ballasts. As with TSL 1, TSL 2 would continue 
to use EL1 for the residential IS/RS product class, eliminating 
currently available 4-foot MBP T12 RS ballasts, but allowing higher 
efficiency T8 residential ballasts. In addition, the sign ballast 
efficiency level remains unchanged from TSL1.
    TSL 3A would establish energy conservation standards at the maximum 
technologically feasible level for all product classes except for 
residential and 8-foot HO IS/RS product classes. As with TSL 2, the 8-
foot HO IS/RS product class at TSL 3A results in the elimination of 
current T12 electronic ballasts, but can be met with T8 electronic 
ballasts. Consistent with TSLs 1 and 2, TSL 3A also requires EL1 for 
the residential IS/RS product class. This TSL represents the most 
stringent efficiency requirements where a positive LCC savings for each 
representative product class is maintained.
    TSL 3B represents the maximum technologically feasible level for 
all product classes. This level would establish energy conservation 
standards at EL1 for sign ballasts, EL2 for residential IS/RS product 
classes, and EL3 for the commercial IS/RS and PS, and 8-foot HO IS/RS 
product classes. TSL 3B represents the highest EL analyzed in all 
representative product classes and is the max tech TSL. Ballasts that 
meet TSL 3B 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 
effects on individual consumers are best summarized by changes in LCCs 
and by the payback period. DOE calculated the LCC and PBP values for 
the potential standard levels considered in this rulemaking to provide 
key inputs for each TSL. These values are reported by product class in 
Table VII.12 through Table VII.15. 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 baseline case. In limited cases, 
a more efficient (i.e., higher BLE) ballast will have a higher total 
LCC and lower LCC savings than a less efficient ballast (e.g., EL3 
versus EL2 in Table VII.9). This is because the higher-EL ballast has a 
higher BF and system input power, resulting in higher operating costs 
than for the lower-EL ballast. The last column in each table contains 
the median PBPs for the consumer purchasing a design compliant with the 
TSL. Negative PBP values indicate a reduction of both operating costs 
and installed costs (i.e., there is no purchase price increment for the 
consumer to recover). Entries of ``N/A'' indicate standard levels that 
do not reduce operating costs, which prevents the consumer from 
recovering the increased purchase cost. This scenario did not occur at 
any of the standard levels adopted by DOE in today's final rule.
    The results for each TSL are presented 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 70597]]



           Table VII.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 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                    Baseline.................           64          247          311  ...........  ...........  ...........  ...........
1.................................  1........................           57          225          282           29            0          100        -3.35
2.................................  2........................           59          218          277           34            0          100        -1.66
3A, 3B............................  3........................           60          214          274           37            0          100        -1.30
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                    Baseline.................           67          247          314  ...........  ...........  ...........  ...........
1.................................  1........................           59          222          281           32            0          100        -2.97
2.................................  2........................           62          213          275           39            0          100        -1.43
3A, 3B............................  3........................           62          211          273           40            0          100        -1.19
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.


            Table VII.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 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................  Baseline/1...............           56          225          281  ...........  ...........  ...........  ...........
2.................................  2........................           59          218          277            5            0          100         3.62
3A, 3B............................  3........................           59          214          273            8            0          100         2.86
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................  Baseline/1...............           58          225          283  ...........  ...........  ...........  ...........
2.................................  2........................           61          216          277            7            0          100         2.76
3A, 3B............................  3........................           62          214          275            8            0          100         2.74
--------------------------------------------------------------------------------------------------------------------------------------------------------


                        Table VII.4--Product Class 1--IS and RS Ballasts That Operate Four 4-Foot MBP Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............           78          412          490  ...........  ...........  ...........  ...........
3A, 3B..............................  3......................           81          403          484            7            0          100         2.65
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............           81          412          493  ...........  ...........  ...........  ...........
3A, 3B..............................  3......................           83          406          490            3            0          100         4.43
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 70598]]


               Table VII.5--Product Class 1--IS and RS Ballasts That Operate Two 8-Foot Slimline Lamps (T12 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............           90          457          547  ...........  ...........  ...........  ...........
2...................................  2......................           90          432          521           26            0          100        -0.12
3A, 3B..............................  3......................           90          425          514           33            0          100         0.01
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............           92          457          549  ...........  ...........  ...........  ...........
2...................................  2......................           92          440          532           17            0          100        -0.17
3A, 3B..............................  3......................           92          435          527           22            0          100         0.01
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.


               Table VII.6--Product Class 1--IS and RS Ballasts That Operate Two 8-Foot Slimline Lamps (T8 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............           90          432          522  ...........  ...........  ...........  ...........
3A, 3B..............................  3......................           91          425          515            7            0          100         0.46
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............           93          432          524  ...........  ...........  ...........  ...........
3A, 3B..............................  3......................           93          426          519            5            0          100         0.61
--------------------------------------------------------------------------------------------------------------------------------------------------------


                            Table VII.7--Product Class 2--PS Ballasts That Operate Two 4-Foot MBP Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           59          205          263  ...........  ...........  ...........  ...........
1, 2................................  2......................           60          191          251           12            0          100         1.09
3A, 3B..............................  3......................           60          188          249           15            0          100         1.25
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           61          205          266  ...........  ...........  ...........  ...........
1, 2................................  2......................           62          191          253           13            0          100         1.09
3A, 3B..............................  3......................           63          189          252           14            0          100         1.26
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 70599]]


                            Table VII.8--Product Class 2--PS Ballasts That Operate Four 4-Foot MBP Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           77          375          452  ...........  ...........  ...........  ...........
1...................................  1......................           81          373          454           -2          100            0        20.52
2, 3A, 3B...........................  3......................           83          363          446            6            1           99         6.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           79         2375          454  ...........  ...........  ...........  ...........
1...................................  1......................           83          342          425           29            0          100         1.43
2, 3A, 3B...........................  3......................           85          334          419           35            0          100         1.76
--------------------------------------------------------------------------------------------------------------------------------------------------------


                         Table VII.9--Product Class 2--PS Ballasts That Operate Two 4-Foot MiniBP SO Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           64          268          332  ...........  ...........  ...........  ...........
1...................................  1......................           64          251          315           18            0          100         0.05
2...................................  2......................           66          240          306           27            0          100         0.55
3A, 3B..............................  3......................           70          252          322           10            0          100         3.82
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           66          268          335  ...........  ...........  ...........  ...........
1...................................  1......................           67          251          317           18            0          100         0.05
2...................................  2......................           68          248          316           18            0          100         0.78
3A, 3B..............................  3......................           73          242          315           19            0          100         2.41
--------------------------------------------------------------------------------------------------------------------------------------------------------


                         Table VII.10--Product Class 2--PS Ballasts That Operate Two 4-Foot MiniBP HO Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           64          357          421  ...........  ...........  ...........  ...........
1...................................  1......................           68          326          395           26            0          100         1.05
2...................................  2......................           71          318          389           32            0          100         1.40
3A, 3B..............................  3......................           74          319          393           28            0          100         2.03
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           67          357          423  ...........  ...........  ...........  ...........
1...................................  1......................           71          326          397           26            0          100         1.05
2...................................  2......................           74          323          397           26            0          100         1.63
3A, 3B..............................  3......................           77          321          397           26            0          100         2.13
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 70600]]


                 Table VII.11--Product Class 3--IS and RS Ballasts That Operate Two 8-Foot HO Lamps (T12 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............          116          631          747  ...........  ...........  ...........  ...........
1...................................  1......................          111          571          682           65            0          100        -0.66
2, 3A...............................  2......................           97          420          517          230            0          100        -0.69
3B..................................  3......................          101          413          514          233            0          100        -0.53
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............          119          631          750  ...........  ...........  ...........  ...........
1...................................  1......................          114          590          704           46            0          100        -0.98
2, 3A...............................  2......................           99          517          616          134            0          100        -1.26
3B..................................  3......................          103          513          616          134            0          100        -0.97
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.


                  Table VII.12--Product Class 3--IS and RS Ballasts That Operate Two 8-Foot HO Lamps (T8 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2, 3A............................  Baseline/2.............           94          420          514  ...........  ...........  ...........  ...........
3B..................................  3......................           98          413          511            3            3           97         4.57
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2, 3A............................  Baseline/2.............           96          420          517  ...........  ...........  ...........  ...........
3B..................................  3......................          100          417          517           -1           84           16         9.50
--------------------------------------------------------------------------------------------------------------------------------------------------------


                           Table VII.13--Product Class 5--Sign Ballasts That Operate Four 8-Foot HO Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............          164        1,483        1,646  ...........  ...........  ...........  ...........
1, 2, 3A, 3B........................  1......................          157        1,086        1,244          403            0          100        -0.16
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............          166        1,483        1,649  ...........  ...........  ...........  ...........
1, 2, 3A, 3B........................  1......................          160        1,239        1,398          251            0          100        -0.26
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.


[[Page 70601]]


          Table VII.14--Product Class 6--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Residential, T12 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           53           71          124  ...........  ...........  ...........  ...........
1, 2, 3A............................  1......................           46           56          102           21            0          100        -5.46
3B..................................  2......................           47           58          105           19            0          100        -4.92
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           55           71          126  ...........  ...........  ...........  ...........
1, 2, 3A............................  1......................           48           63          111           15            0          100        -9.45
3B..................................  2......................           49           61          110           16            0          100        -6.35
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.


           Table VII.15--Product Class 6--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Residential, T8 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2, 3A............................  Baseline/1.............           45           56          101  ...........  ...........  ...........  ...........
3B..................................  2......................           46           58          104           -2          100            0          N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2, 3A............................  Baseline/1.............           47           56          104  ...........  ...........  ...........  ...........
3B..................................  2......................           49           55          103            1           27           73         8.18
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Entries of ``N/A'' indicate standard levels that do not reduce operating 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 the sub-group analysis.
    DOE adjusted inputs to the LCC model to reflect conditions faced by 
the identified subgroups. For low-income consumers, DOE adjusted 
electricity prices to represent rates typically 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 VII.16 through Table VII.25 shows 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 exhibited the same 
trends and relationships as the averages for all consumers.

[[Page 70602]]



      Table VII.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 2010$                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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           64          195          260  ...........  ...........  ...........  ...........
1...................................  1......................           57          178          235           25            0          100        -5.81
2...................................  2......................           59          173          232           28            0          100        -2.89
3A, 3B..............................  3......................           60          170          230           30            0          100        -2.26
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           67          195          262  ...........  ...........  ...........  ...........
1...................................  1......................           59          176          235           27            0          100        -5.16
2...................................  2......................           62          169          231           32            0          100        -2.48
3A, 3B..............................  3......................           62          167          229           33            0          100        -2.06
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           64          209          273  ...........  ...........  ...........  ...........
1...................................  1......................           57          191          247           26            0          100        -3.35
2...................................  2......................           59          185          244           29            0          100        -1.66
3A, 3B..............................  3......................           60          181          241           32            0          100        -1.30
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           67          209          276  ...........  ...........  ...........  ...........
1...................................  1......................           59          188          247           28            0          100        -2.97
2...................................  2......................           62          180          242           34            0          100        -1.43
3A, 3B..............................  3......................           62          179          241           35            0          100        -1.19
--------------------------------------------------------------------------------------------------------------------------------------------------------
* See Table VII.2 for average LCC savings for all consumers.
** Negative PBP values indicate standards that reduce operating costs and installed costs.


      Table VII.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 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............           56          178          234  ...........  ...........  ...........  ...........
2...................................  2......................           59          173          231            3            1           99         6.28
3A, 3B..............................  3......................           59          170          229            6            0          100         4.96
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............           58          178          237  ...........  ...........  ...........  ...........
2...................................  2......................           61          171          232            5            0          100         4.79
3A, 3B..............................  3......................           62          169          231            6            0          100         4.75
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............           56          191          246  ...........  ...........  ...........  ...........
2...................................  2......................           59          185          243            3            1           99         3.62
3A, 3B..............................  3......................           59          181          240            6            0          100         2.86
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 70603]]

 
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............           58          191          249  ...........  ...........  ...........  ...........
2...................................  2......................           61          183          244            5            0          100         2.76
3A, 3B..............................  3......................           62          181          242            7            0          100         2.74
--------------------------------------------------------------------------------------------------------------------------------------------------------
* See Table VII.3 for average LCC savings for all consumers.


        Table VII.18--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 2010$                 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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............           78          326          405  ...........  ...........  ...........  ...........
3A, 3B..............................  3......................           81          319          400            5            0          100         4.61
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............           81          326          407  ...........  ...........  ...........  ...........
3A, 3B..............................  3......................           83          322          405            2           10           90         7.69
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............           78          349          427  ...........  ...........  ...........  ...........
3A, 3B..............................  3......................           81          341          422            5            0          100         2.65
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............           81          349          429  ...........  ...........  ...........  ...........
3A, 3B..............................  3......................           83          344          427            2            4           96         4.43
--------------------------------------------------------------------------------------------------------------------------------------------------------
* See Table VII.4 for average LCC savings for all consumers.


         Table VII.19--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 2010$                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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............           90          362          452  ...........  ...........  ...........  ...........
2...................................  2......................           90          342          431           20            0          100        -0.20
3A, 3B..............................  3......................           90          336          426           26            0          100        -0.01
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 70604]]

 
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............           92          362          454  ...........  ...........  ...........  ...........
2...................................  2......................           92          348          441           14            0          100        -0.30
3A, 3B..............................  3......................           92          344          436           18            0          100        -0.02
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............           90          387          477  ...........  ...........  ...........  ...........
2...................................  2......................           90          365          455           22            0          100        -0.12
3A, 3B..............................  3......................           90          359          449           28            0          100         0.01
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline/1.............           92          387          479  ...........  ...........  ...........  ...........
2...................................  2......................           92          372          465           15            0          100        -0.17
3A, 3B..............................  3......................           92          368          460           19            0          100         0.01
--------------------------------------------------------------------------------------------------------------------------------------------------------
* See Table VII.5 for average LCC savings for all consumers.
* * Negative PBP values indicate standards that reduce operating costs and installed costs.



         Table VII.20--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 2010$                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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............           90          342          432  ...........  ...........  ...........  ...........
3A, 3B..............................  3......................           91          336          427            5            0          100         0.80
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............           93          342          434  ...........  ...........  ...........  ...........
3A, 3B..............................  3......................           93          337          430            4            0          100         1.05
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............           90          365          456  ...........  ...........  ...........  ...........
3A, 3B..............................  3......................           91          359          450            6            0          100         0.46
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................  Baseline/2.............           93          365          458  ...........  ...........  ...........  ...........
3A, 3B..............................  3......................           93          361          454            4            0          100         0.61
--------------------------------------------------------------------------------------------------------------------------------------------------------
* See Table VII.6 for average LCC savings for all consumers.


[[Page 70605]]


                       Table VII.21--Product Class 2--PS Ballasts That Operate Two 4-Foot MBP Lamps: LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           59          149          208  ...........  ...........  ...........  ...........
1, 2................................  2......................           60          139          199            9            0          100         1.90
3A, 3B..............................  3......................           60          137          198           10            0          100         2.16
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           61          149          210  ...........  ...........  ...........  ...........
1, 2................................  2......................           62          139          201            9            0          100         1.89
3A, 3B..............................  3......................           63          137          200           10            0          100         2.19
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           59          163          222  ...........  ...........  ...........  ...........
1, 2................................  2......................           60          152          212           10            0          100         1.09
3A, 3B..............................  3......................           60          150          211           11            0          100         1.25
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           61          163          225  ...........  ...........  ...........  ...........
1, 2................................  2......................           62          152          215           10            0          100         1.09
3A, 3B..............................  3......................           63          151          213           11            0          100         1.26
--------------------------------------------------------------------------------------------------------------------------------------------------------
* See Table VII.7 for average LCC savings for all consumers.


                      Table VII.22--Product Class 2--PS Ballasts That Operate Four 4-Foot MBP Lamps: LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           77          273          350  ...........  ...........  ...........  ...........
1...................................  1......................           81          272          352           -2          100            0        35.63
2, 3A, 3B...........................  3......................           83          265          347            3           80           20        10.41
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           79          273          353  ...........  ...........  ...........  ...........
1...................................  1......................           83          249          332           20            0          100         2.48
2, 3A, 3B...........................  3......................           85          243          329           24            0          100         3.06
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           77          299          376  ...........  ...........  ...........  ...........
1...................................  1......................           81          298          378           -2          100            0        20.52
2, 3A, 3B...........................  3......................           83          290          373            4           19           81         6.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           79          299          379  ...........  ...........  ...........  ...........
1...................................  1......................           83          273          356           22            0          100         1.43

[[Page 70606]]

 
2, 3A, 3B...........................  3......................           85          267          352           27            0          100         1.76
--------------------------------------------------------------------------------------------------------------------------------------------------------
* See Table VII.8 for average LCC savings for all consumers.


                    Table VII.23--Product Class 2--PS Ballasts That Operate Two 4-Foot MiniBP SO Lamps: LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           64          212          276  ...........  ...........  ...........  ...........
1...................................  1......................           64          198          263           14            0          100         0.09
2...................................  2......................           66          190          256           21            0          100         0.95
3A, 3B..............................  3......................           70          199          270            7            1           99         6.63
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           66          212          279  ...........  ...........  ...........  ...........
1...................................  1......................           67          198          265           14            0          100         0.09
2...................................  2......................           68          197          265           14            0          100         1.35
3A, 3B..............................  3......................           73          192          265           14            0          100         4.19
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           64          227          291  ...........  ...........  ...........  ...........
1...................................  1......................           64          212          276           15            0          100         0.05
2...................................  2......................           66          203          269           22            0          100         0.55
3A, 3B..............................  3......................           70          213          284            7            2           98         3.82
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           66          227          294  ...........  ...........  ...........  ...........
1...................................  1......................           67          212          279           15            0          100         0.05
2...................................  2......................           68          210          278           15            0          100         0.78
3A, 3B..............................  3......................           73          205          278           15            0          100         2.41
--------------------------------------------------------------------------------------------------------------------------------------------------------
* See Table VII.9 for average LCC savings for all consumers.


     Table VII.24--Product Class 6--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Residential, T12 Baseline): LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Sub-Group: Low-Income Consumers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           53           71          124  ...........  ...........  ...........  ...........
1, 2, 3A............................  1......................           46           57          102           21            0          100        -5.46
3B..................................  2......................           47           58          105           19            0          100        -4.92
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 70607]]

 
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Baseline...............           55           71          126  ...........  ...........  ...........  ...........
1, 2, 3A............................  1......................           48           63          111           15            0          100        -9.45
3B..................................  2......................           49           61          110           16            0          100        -6.35
--------------------------------------------------------------------------------------------------------------------------------------------------------
* See Table VII.14 for average LCC savings for all consumers.
** Negative PBP values indicate standards that reduce operating costs and installed costs.


      Table VII.25--Product Class 6--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Residential, T8 Baseline): LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Life-cycle cost 2010$                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                     2010$       Net cost   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Sub-Group: Low-Income Consumers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2, 3A............................  Baseline/1.............           45           57          101  ...........  ...........  ...........  ...........
3B..................................  2......................           46           58          104           -2          100            0          N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2, 3A............................  Baseline/1.............           47           57          104  ...........  ...........  ...........  ...........
3B..................................  2......................           49           55          103            1           27           73         8.18
--------------------------------------------------------------------------------------------------------------------------------------------------------
* See Table VII.15 for average LCC savings for all consumers.
** Entries of ``N/A'' indicate standard levels that do not reduce operating costs.

c. Rebuttable Presumption Payback
    As discussed in section IV.D.2, 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 for calculating the payback period for consumers 
affected by potential energy conservation standards. This includes, but 
is not limited to, the 3-year payback period contemplated under the 
rebuttable presumption test discussed in section IV.D.2. DOE, however, 
routinely conducts an 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).
    For this final rule, DOE calculated a rebuttable presumption 
payback period for each TSL. DOE used discrete values rather than 
distributions for inputs and, as required by EPCA, made the 
calculations using the applicable DOE test procedures for ballasts. DOE 
then calculated a single rebuttable presumption payback value, rather 
than a distribution of payback periods, for each TSL. Table VII.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 also 
considered a more comprehensive analysis of the economic impacts of 
these levels to determine whether the standard levels considered for 
today's rule are economically justified 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 (thereby supporting or rebutting the results of any preliminary 
determination of economic justification).


[[Page 70608]]

[GRAPHIC] [TIFF OMITTED] TR14NO11.001

2. Economic Impacts on Manufacturers
    For the MIA in the April 2011 NOPR, DOE used changes in INPV to 
compare the direct financial impacts of different TSLs on 
manufacturers. 76 FR 20090, 20156-61 (April 11, 2011). DOE used the 
GRIM to compare the INPV of the base case (no new or amended energy 
conservation standards) to that of each TSL. The INPV is the sum of all 
net cash flows discounted by the industry's cost of capital (discount 
rate) to the base year. The difference in INPV between the base case 
and the standards case is an estimate of the economic impacts that 
implementing that standard level would have on the entire fluorescent 
ballast industry. For today's final rule, DOE continues to use the 
methodology presented in the NOPR (76 FR 20090,

[[Page 70609]]

20134-5 (April 11, 2011)) and in section V.H.
a. Industry Cash-Flow Analysis Results
    Table VII.27 and Table VII.28 depict the financial impacts on 
manufacturers (represented by changes in INPV) and the conversion costs 
DOE estimates manufacturers would incur at each TSL. The two tables 
show two sets of INPV impacts: Table VII.27 reflects the lower (less 
severe) bound of impacts and Table VII.28 represents the upper bound. 
To evaluate this range of cash-flow impacts on the fluorescent lamp 
ballast industry, DOE modeled two different scenarios using different 
markup assumptions. These assumptions correspond to the bounds of a 
range of market responses that DOE anticipates could occur in the 
standards case (i.e., where new and amended energy conservation 
standards apply). Each of the two scenarios results in a unique set of 
cash flows and corresponding industry value at each TSL. The April 2011 
NOPR (76 FR 20090, 20156 (April 11, 2011)) discusses each of these 
scenarios in full, and they are also presented in chapter 13 of the 
TSD.

   Table VII.27--Manufacturer Impact Analysis for Fluorescent Lamp Ballasts--Preservation of Operating Profit Markup, Existing Technologies, and Shift
                                                                    Shipment Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             Trial standard level
                                              Units                    Base case     -------------------------------------------------------------------
                                                                                             1                2                3A               3B
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV..........................  (2010$ millions)................               1,219            1,199            1,176            1,144            1,141
Change in INPV................  (2010$ millions)................  ..................           (19.6)           (42.4)           (74.5)           (77.6)
                                (%).............................  ..................            -1.6%            -3.5%            -6.1%            -6.4%
Product Conversion Costs......  (2010$ millions)................  ..................                5               18               46               48
Capital Conversion Costs......  (2010$ millions)................  ..................               11               20               28               29
                                                                 ---------------------------------------------------------------------------------------
    Total Conversion Costs....  (2010$ millions)................  ..................               17               38               74               78
--------------------------------------------------------------------------------------------------------------------------------------------------------


     Table VII.28--Manufacturer Impact Analysis for Fluorescent Lamp Ballasts--Two-Tier Markup, Emerging Technologies, and Roll-Up Shipment Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             Trial standard level
                                                Units                   Base case    -------------------------------------------------------------------
                                                                                             1                2                3A               3B
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV...........................  (2010$ millions)..................              733              616              545              464              431
Change in INPV.................  (2010$ millions)..................  ...............          (116.4)          (188.0)          (268.6)          (301.2)
                                 (%)...............................  ...............           -15.9%           -25.7%           -36.7%           -41.1%
Product Conversion Costs.......  (2010$ millions)..................  ...............                5               18               46               48
Capital Conversion Costs.......  (2010$ millions)..................  ...............               11               20               28               29
                                                                    ------------------------------------------------------------------------------------
    Total Conversion Costs.....  (2010$ millions)..................  ...............               17               38               74               78
--------------------------------------------------------------------------------------------------------------------------------------------------------

    TSL 1 represents EL1 for all five representative product classes. 
At TSL 1, DOE estimates impacts on INPV to range from -$19.6 million to 
-$116.4 million, or a change in INPV of -1.6 percent to -15.9 percent. 
At this level, industry free cash flow \61\ is estimated to decrease by 
approximately 12 percent to $43.4 million, compared to the base-case 
value of $49.3 million in the year leading up to the energy 
conservation standards.
---------------------------------------------------------------------------

    \61\ Industry free cash flow is the operating cash flow minus 
capital expenditures.
---------------------------------------------------------------------------

    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 the new and amended standards 
will be required, over 99 percent of the IS/RS product class shipments, 
73 percent of the PS product class shipments, 98 percent of the 8-foot 
HO IS/RS product class shipments, 64 percent of the sign ballast 
product class shipments, and 96 percent of the residential IS/RS 
product class shipments would meet EL1 or higher in the base case. The 
majority of shipments at baseline efficiency levels that would need to 
be converted at TSL 1 are 2-lamp and 4-lamp 4ft MBP PS ballasts, 4-lamp 
sign ballasts, and 2-lamp 4-foot MBP IS/RS residential ballasts.
    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 
face $17 million in conversion costs. INPV impacts on manufacturers are 
not as significant under this scenario as in other scenarios because 
most shipments already meet TSL 1 and 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 6 percent applied to a

[[Page 70610]]

growing market over the analysis period.
    Shipments under the existing technologies scenario are nearly three 
and a half times 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). Because shipments above the baseline do not shift to 
higher efficiencies with greater costs under the roll-up scenario, the 
shipment-weighted average MPC does not significantly increase. A lower 
average markup of 1.38 and $17 million in conversion costs results 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 nearly 
40 percent lower.
    TSL 2 represents EL1 for the sign ballast and residential IS/RS 
product classes. For the IS/RS, PS, and 8-foot HO IS/RS product 
classes, TSL 2 represents EL2. At TSL 2, DOE estimates impacts on INPV 
to range from -$42.4 million to -$188.0 million, or a change in INPV of 
-3.5 percent to -25.7 percent. At this level, industry free cash flow 
is estimated to decrease by approximately 26 percent to $36.6 million, 
compared to the base-case value of $49.3 million in the year leading up 
to the energy conservation standards.
    Because the sign ballast and residential IS/RS product classes 
remain at EL1 at TSL 2, the additional impacts at TSL 2 relative to TSL 
1 result only from increasing the IS/RS, PS, and 8-foot HO IS/RS 
product classes to EL2. At TSL 2, DOE estimates that 63 percent of the 
IS/RS product class shipments, 19 percent of the PS product class 
shipments, and 89 percent of the 8-foot HO IS/RS product class 
shipments would meet EL2 or higher in the base case. Since the 8-foot 
HO IS/RS product class 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 the IS/RS and PS product classes.
    At TSL 2, conversion costs remain small compared to the industry 
value. Product conversion costs increase to $18 million due to the 
increase in the number of product lines within the IS/RS and PS product 
classes that would need to be redesigned at TSL 2. Capital conversion 
costs grow to $20 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 9 percent compared to the baseline MPC, but this increase 
does not generate enough cash flow to outweigh the $38 million in 
conversion costs at TSL 2, resulting in a -3.5 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 6 percent increase in shipment-weighted 
average MPC, resulting in a negative change in INPV at TSL 2. The $38 
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 INPV impacts on a percentage 
basis.
    TSL 3A represents EL1 for the sign ballasts and residential IS/RS 
product classes, EL2 for the 8-foot HO IS/RS product class, and EL3 for 
the IS/RS and PS product classes. At TSL 3A, DOE estimates impacts on 
INPV to range from -$74.5 million to -$268.6 million, or a change in 
INPV of -6.1 percent to -36.7 percent. At this level, industry free 
cash flow is estimated to decrease by approximately 48 percent to $25.8 
million, compared to the base-case value of $49.3 million in the year 
leading up to the energy conservation standards.
    Because the sign ballast and residential IS/RS product classes 
remain at EL1 and the 8-foot HO IS/RS product class remains at EL2 for 
TSL 3A, the additional impacts at TSL 3A relative to TSL 2 result only 
from increasing the IS/RS and PS product classes to EL3. At TSL 3A, DOE 
estimates that 21 percent of the IS/RS product class shipments and 7 
percent of the PS product class shipments would meet the efficiency 
levels contained in TSL 3A or higher in the base case.
    At TSL 3A, product conversion costs increase to $46 million because 
far more product lines within the IS/RS, and PS product classes would 
need to be redesigned at TSL 3A than TSL 2. Capital conversion costs 
rise to $28 million at TSL 3A 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 ballasts.
    Under the preservation of operating profit markup scenario, INPV 
decreases by 6.1 percent at TSL 3A compared to the base case. The 
shipment-weighted average MPC increases by 17 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 $74 million 
in conversion costs at TSL 3A.
    Under the two-tier markup scenario, at TSL 3A, products are 
commoditized to a lower markup to an even greater extent than under the 
preservation of operating profit markup scenario. The impact of this 
lower average markup of 1.33 outweighs the impact of a 15 percent 
increase in shipment-weighted average MPC, resulting in a negative 
change in INPV at TSL 3A compared to TSL 2. Profitability is further 
reduced by the $74 million in conversion costs and the lower base-case 
INPV over which change in INPV is compared under the emerging 
technologies scenario.
    TSL 3B represents EL1 for the sign ballast product class, EL2 for 
the residential IS/RS product class, and EL3 for the IS/RS, PS, and 8-
foot HO IS/RS product classes. At TSL 3B, DOE estimates impacts on INPV 
to range from -$77.6 million to -$301.2 million, or a change in INPV of 
-6.4 percent to -41.1 percent. At this level, industry free cash flow 
is estimated to decrease by approximately 50 percent to $24.7 million, 
compared to the base-case value of $49.3 million in the year leading up 
to the energy conservation standards.
    Because the sign ballast product class remains at EL1 and the IS/RS 
and PS product classes remain at EL3 for TSL 3B, the additional impacts 
at TSL 3B relative to TSL 3A result only from increasing the 8-foot HO 
IS/RS product class to EL3 and the residential IS/RS product class to 
EL2. At TSL 3B, DOE estimates that 2 percent of the 8-foot HO IS/RS 
product class shipments and 23 percent of the residential IS/RS product 
class shipments would meet the efficiency levels contained in TSL 3B in 
the base case.

[[Page 70611]]

    At TSL 3B, conversion costs are slightly greater compared to TSL 
3A. Product and capital conversion costs increase to $48 million and 
$29 million, respectively, because more product lines would need to be 
redesigned and upgraded at TSL 3B.
    Under the preservation of operating profit markup scenario, INPV 
decreases by 6.4 percent at TSL 3B compared to the base case, which is 
slightly greater than the percentage impact at TSL 3A. The shipment-
weighted average MPC increases by over 17 percent, but manufacturers 
are not able to pass on the full amount of these higher costs to 
consumers. This slight MPC increase is outweighed by the $78 million in 
conversion costs at TSL 3B.
    Under the two-tier markup scenario, at TSL 3B, products are 
commoditized to a lower markup to the greatest extent of any TSL 
analyzed. The impact of this lower average markup of 1.33 outweighs the 
impact of a 17 percent increase in shipment-weighted average MPC, 
resulting in a negative change in INPV at TSL 3B compared to TSL 3A. 
Profitability is further reduced by the $78 million in conversion costs 
and the lower base-case INPV over which change in INPV is compared 
under the emerging technologies scenario.
b. Impacts on Employment
    DOE typically presents modeled quantitative estimates of the 
potential changes in production employment that could result from new 
and amended energy conservation standards. However, for this 
rulemaking, DOE determined that none of the major manufacturers, which 
comprise 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 has 
identified very few domestic production employees in the United States. 
Because many niche manufacturers did not respond to interview requests 
or submit comments on domestic employment impacts, DOE is unable to 
fully quantify domestic production employment impacts. 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 number of domestic 
production employees.
    Based on interviews, DOE projects that significant direct 
employment impacts would occur only in the event that one or more 
businesses exit the market due to new standards. Discussions with 
manufacturers indicated that, at the highest efficiency levels (TSL 3A 
and TSL 3B), some small manufacturers will be faced with the decision 
of whether or not to make the investments necessary to remain in the 
market based on their current technical capabilities. In general, 
however, DOE projects that TSL 3A, the level adopted in today's final 
rule, will not have significant adverse impacts on domestic 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, given the low number of production employees and the 
low likelihood that manufacturers would exit the market at the 
efficiency levels adopted in today's final rule, DOE does not expect a 
significant impact on direct employment following new and amended 
energy conservation standards.
    DOE notes that the direct employment impacts discussed here are 
independent of the indirect employment impacts from the broader U.S. 
economy, which are documented in chapter 15, Employment Impact 
Analysis, of the TSD.
c. 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 the April 2011 NOPR (76 FR 20090, 20139 
(April 11, 2011)). At present, manufacturers 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 premium high-efficiency parts, for which demand would 
increase even more following new and amended energy conservation 
standards. In the near term this increased demand might exacerbate the 
component shortage, thereby impacting manufacturing capacity. While DOE 
recognizes that the component shortage is currently a significant issue 
for manufacturers, DOE projects it to be 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 
new and amended 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 affect the duration of the 
component shortage. Mandatory standards, however, 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. DOE received no comments or additional 
information indicating that its conclusions related to the component 
shortage issue were incorrect and therefore reiterates these 
conclusions for today's final rule.
d. Impacts on Sub-Groups of Manufacturers
    As discussed in the April 2011 NOPR (76 FR 20090, 20135 (April 11, 
2011)), using average cost assumptions to develop an industry cash-flow 
estimate may be 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, many of whom are also small manufacturers. For a 
discussion of the impacts on the small manufacturer sub-group, see the 
Regulatory Flexibility Analysis in section VIII.B and chapter 13 of the 
TSD.
    DOE is not presenting results under the two-tier markup scenario 
for sign ballasts because it did not observe a two-tier effect in the 
sign ballast market. Electronic ballasts at EL1 command neither 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, Table 
VII.29 and Table VII.30 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.

[[Page 70612]]



   Table VII.29--Manufacturer Impact Analysis for Sign Ballasts--Preservation of Operating Profit Markup, Existing Technologies, and Roll-Up Shipment
                                                                        Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               Trial standard level
                                                    Units                    Base case   ---------------------------------------------------------------
                                                                                                 1               2              3A              3B
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV..............................  (2010$ millions)....................             142             138             138             138             138
Change in INPV....................  (2010$ millions)....................  ..............           (4.2)           (4.2)           (4.2)           (4.2)
                                    (%).................................  ..............           -2.9%           -2.9%           -2.9%           -2.9%
Product Conversion Costs..........  (2010$ millions)....................  ..............               2               2               2               2
Capital Conversion Costs..........  (2010$ millions)....................  ..............               6               6               6               6
                                   ---------------------------------------------------------------------------------------------------------------------
    Total Conversion Costs........  (2010$ millions)....................  ..............               8               8               8               8
--------------------------------------------------------------------------------------------------------------------------------------------------------


   Table VII.30--Manufacturer Impact Analysis for Sign Ballasts--Preservation of Operating Profit Markup, Emerging Technologies, and Roll-Up Shipment
                                                                        Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               Trial standard level
                                                    Units                    Base case   ---------------------------------------------------------------
                                                                                                 1               2              3A              3B
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV..............................  (2010$ millions)....................             116             111             111             111             111
Change in INPV....................  (2010$ millions)....................  ..............           (5.1)           (5.1)           (5.1)           (5.1)
                                    (%).................................  ..............           -4.4%           -4.4%           -4.4%           -4.4%
Product Conversion Costs..........  (2010$ millions)....................  ..............               2               2               2               2
Capital Conversion Costs..........  (2010$ millions)....................  ..............               6               6               6               6
                                   ---------------------------------------------------------------------------------------------------------------------
    Total Conversion Costs........  (2010$ millions)....................  ..............               8               8               8               8
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For the sign ballast product class, DOE analyzed only one 
efficiency level; thus, the results are the same at each TSL. TSLs 1 
through 3B represent EL1 for the sign ballast product class. At TSLs 1 
through 3B, 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 levels, industry free cash flow is estimated to decrease by 
approximately 38 percent to $4.9 million, compared to the base-case 
value of $7.9 million in the year leading up to the energy conservation 
standards.
    As shown by the results, DOE expects sign ballast manufacturers 
overall to face small negative impacts under TSLs 1 through 3B. DOE 
estimates that 64 percent of the sign ballast product class shipments 
would meet EL1 in the base case. Many manufacturers already produce 
electronic sign ballasts, which is the design option represented by 
EL1. Many other manufacturers, however, produce only magnetic T12 sign 
ballasts and therefore would face significant capital exposure in 
moving from magnetic to electronic ballasts to meet TSLs 1 through 3B. 
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. DOE 
notes that small sign ballast manufacturers, particularly those who 
would be required to move from magnetic to electronic sign ballasts as 
a result of today's standards, may apply to DOE for an exemption from 
the standard pursuant to 42 U.S.C. 6295(t). The process applicants must 
follow to request an exemption and DOE's process for making a decision 
on a particular request are set forth in DOE's regulations at 10 CFR 
430 Subpart E.
    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 over 4 percent. This is 
because electronic ballasts are a cheaper alternative to magnetic 
ballasts, even though the industry has not yet fully moved toward 
electronic production. During interviews, manufacturers stated that 
consumers were reluctant to convert to electronic ballasts even though 
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 new and 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 3B than in the base case because of the lower average 
unit price and the $8 million in conversion costs. 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.
e. 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 new and 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 
new and amended standards. DOE discusses these and other

[[Page 70613]]

requirements, including the energy conservation standards for lamps 
that take effect beginning in 2012 (74 FR 34080 (July 14, 2009) and 
U.S.C. 6295 (i)(1)(A)), in its full cumulative regulatory burden 
analysis in chapter 13 of the TSD.
    In written comments on the NOPR, NEMA expressed concern that DOE 
has not accounted for other legislation that would increase costs. 
(NEMA, No. 47 at p. 9) While it is not clear to which other legislation 
NEMA is referring, DOE does take into account the cost of compliance 
with other published Federal energy conservation standards, such as the 
2009 lamps rule. DOE does not include the impacts of standards that 
have not yet been finalized, however, because any impacts of such 
standards would be speculative. The cumulative regulatory impact 
analysis is discussed in more detail in chapter 13 of the TSD. In 
response to the September 2011 NODA, NEMA also noted that President 
Obama stated an objective in a September 8, 2011 speech of reducing 
regulatory burden on manufacturers. (NEMA, No. 56 at p. 3) DOE 
acknowledges the President's objective of reducing regulatory burden 
and, as required by EPCA, ensures that each of its energy conservation 
standards is economically justified. DOE has analyzed the various TSLs 
considered in this rulemaking and believes that the burdens of today's 
rulemaking are outweighed and justified by the benefits of the rule, as 
described in section VII.C.2.
3. National Impact Analysis
a. Significance of Energy Savings
    To estimate the energy savings through 2043 attributable to 
potential energy conservation standards for ballasts, DOE compared the 
energy consumption of these products under the base case to their 
anticipated energy use under each TSL. Table VII.31 presents DOE's 
forecasts of the national energy savings for each TSL, for the existing 
and emerging technologies shipment scenarios that represent the maximum 
and minimum energy savings resulting from all the scenarios analyzed. 
Chapter 11 of the final rule TSD describes these estimates in more 
detail.

Table VII.31--Summary of Cumulative National Energy Savings for Ballasts
                               [2014-2043]
------------------------------------------------------------------------
                                         National energy savings quads
                                     -----------------------------------
  Trial  standard     Product class       Existing          Emerging
       level                            technologies,     technologies,
                                            shift            roll-up
------------------------------------------------------------------------
1.................  IS and RS
                     ballasts (not
                     classified as
                     residential)
                     that operate:
                       Two 4-foot                 1.19             0.001
                        MBP lamps.
                       Four 4-foot                   0                 0
                        MBP lamps.
                       Two 8-foot                    0                 0
                        slimline
                        lamps.
                    PS ballasts (not
                     classified as
                     residential)
                     that operate:
                       Two 4-foot                 0.27              0.13
                        MBP lamps.
                       Four 4-foot                0.27              0.10
                        MBP lamps.
                       Two 4-foot                 0.43              0.16
                        MiniBP SO
                        lamps.
                       Two 4-foot                 0.25              0.23
                        MiniBP HO
                        lamps.
                    IS and RS
                     ballasts (not
                     classified as
                     sign ballasts)
                     that operate:
                       Two 8-foot HO              0.04              0.04
                        lamps.
                    Sign ballasts
                     that operate:
                       Four 8-foot                0.92              0.69
                        HO lamps.
                    IS and RS
                     residential
                     ballasts that
                     operate:
                       Two 4-foot                 0.13              0.01
                        MBP lamps.
                                     -----------------------------------
                         Total                    3.50              1.36
                          (TSL1).
------------------------------------------------------------------------
2.................  IS and RS
                     ballasts (not
                     classified as
                     residential)
                     that operate:
                       Two 4-foot                 1.19              0.42
                        MBP lamps.
                       Four 4-foot                   0                 0
                        MBP lamps.
                       Two 8-foot                 0.02             0.001
                        slimline
                        lamps.
                    PS ballasts (not
                     classified as
                     residential)
                     that operate:
                       Two 4-foot                 0.27              0.13
                        MBP lamps.
                       Four 4-foot                0.33              0.13
                        MBP lamps.
                       Two 4-foot                 0.78              0.25
                        MiniBP SO
                        lamps.
                       Two 4-foot                 0.43              0.39
                        MiniBP HO
                        lamps.
                    IS and RS
                     ballasts (not
                     classified as
                     sign ballasts)
                     that operate:
                       Two 8-foot HO              0.04              0.04
                        lamps.
                    Sign ballasts
                     that operate:
                       Four 8-foot                0.92              0.69
                        HO lamps.
                    IS and RS
                     residential
                     ballasts that
                     operate:
                       Two 4-foot                 0.13              0.01
                        MBP lamps.
                                     -----------------------------------
                         Total                    4.10              2.05
                          (TSL2).
------------------------------------------------------------------------
3A................  IS and RS
                     ballasts (not
                     classified as
                     residential)
                     that operate:
                       Two 4-foot                 1.44              0.55
                        MBP lamps.
                       Four 4-foot                0.31              0.12
                        MBP lamps.
                       Two 8-foot                 0.02              0.02
                        slimline
                        lamps.
                    PS ballasts (not
                     classified as
                     residential)
                     that operate:
                       Two 4-foot                 0.30              0.14
                        MBP lamps.
                       Four 4-foot                0.33              0.13
                        MBP lamps.
                       Two 4-foot                 1.51              0.51
                        MiniBP SO
                        lamps.
                       Two 4-foot                 0.56              0.52
                        MiniBP HO
                        lamps.

[[Page 70614]]

 
                    IS and RS
                     ballasts (not
                     classified as
                     sign ballasts)
                     that operate:
                       Two 8-foot HO              0.04              0.04
                        lamps.
                    Sign ballasts
                     that operate:
                       Four 8-foot                0.92              0.69
                        HO lamps.
                    IS and RS
                     residential
                     ballasts that
                     operate:
                       Two 4-foot                 0.13              0.01
                        MBP lamps.
                                     -----------------------------------
                         Total                    5.55              2.74
                          (TSL3A).
------------------------------------------------------------------------
3B................  IS and RS
                     ballasts (not
                     classified as
                     residential)
                     that operate:
                       Two 4-foot                 1.44              0.55
                        MBP lamps.
                       Four 4-foot                0.31              0.12
                        MBP lamps.
                       Two 8-foot                 0.02              0.02
                        slimline
                        lamps.
                    PS ballasts (not
                     classified as
                     residential)
                     that operate:
                       Two 4-foot                 0.30              0.14
                        MBP lamps.
                       Four 4-foot                0.33              0.13
                        MBP lamps.
                       Two 4-foot                 1.51              0.51
                        MiniBP SO
                        lamps.
                       Two 4-foot                 0.56              0.52
                        MiniBP HO
                        lamps.
                    IS and RS
                     ballasts (not
                     classified as
                     sign ballasts)
                     that operate:
                       Two 8-foot HO              0.04              0.04
                        lamps.
                    Sign ballasts
                     that operate:
                       Four 8-foot                0.92              0.69
                        HO lamps.
                    IS and RS
                     residential
                     ballasts that
                     operate:
                       Two 4-foot                 0.13              0.12
                        MBP lamps.
                                     -----------------------------------
                         Total                    5.56              2.86
                          (TSL3B).
------------------------------------------------------------------------

b. 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.
    Table VII.32 shows the consumer NPV results for each TSL DOE 
considered for ballasts, using both a 7-percent and a 3-percent 
discount rate. This table presents the results of the two shipment 
scenarios that represent the maximum and minimum NPV resulting from all 
the scenarios analyzed. Zero values indicate product types with zero 
energy savings at a particular TSL, i.e., the corresponding efficiency 
level is a baseline design. See chapter 11 of the final rule TSD for 
more detailed NPV results.

                 Table VII.32--Summary of Cumulative Net Present Value for Ballasts (2014-2043)
----------------------------------------------------------------------------------------------------------------
                                                                Net present value billion 2010$
                                             -------------------------------------------------------------------
                                                Existing technologies, shift     Emerging technologies, roll-up
 Trial standard level       Product class    -------------------------------------------------------------------
                                                 7 Percent        3 Percent        7 Percent        3 Percent
                                               discount rate    discount rate    discount rate    discount rate
----------------------------------------------------------------------------------------------------------------
1.....................  IS and RS ballasts
                         (not classified as
                         residential) that
                         operate:
                           Two 4-foot MBP                2.33             5.20             0.01             0.01
                            lamps.
                           Four 4-foot MBP                  0                0                0                0
                            lamps.
                           Two 8-foot                       0                0                0                0
                            slimline lamps.
                        PS ballasts (not
                         classified as
                         residential) that
                         operate:
                           Two 4-foot MBP                0.77             1.40             0.51             0.78
                            lamps.
                           Four 4-foot MBP               0.61             1.35             0.30             0.58
                            lamps.

[[Page 70615]]

 
                           Two 4-foot MiniBP             1.11             2.45             0.57             1.02
                            SO lamps.
                           Two 4-foot MiniBP             0.42             0.88             0.42             0.88
                            HO lamps.
                        IS and RS ballasts               0.11             0.12             0.10             0.12
                         (not classified as
                         sign ballasts) that
                         operate two 8-foot
                         HO lamps.
                        Sign ballasts that               2.94             5.55             2.52             4.62
                         operate four 8-foot
                         HO lamps.
                        IS and RS                        0.22             0.49             0.16             0.27
                         residential
                         ballasts that
                         operate two 4-foot
                         MBP lamps.
                                             -------------------------------------------------------------------
                             Total (TSL1)...             8.52            17.43             4.59             8.28
----------------------------------------------------------------------------------------------------------------
2.....................  IS and RS ballasts
                         (not classified as
                         residential) that
                         operate:
                           Two 4-foot MBP                2.33             5.20             1.08             2.15
                            lamps.
                           Four 4-foot MBP                  0                0                0                0
                            lamps.
                           Two 8-foot                    0.05             0.10             0.01             0.01
                            slimline lamps.
                        PS ballasts (not
                         classified as
                         residential) that
                         operate:
                           Two 4-foot MBP                0.77             1.40             0.51             0.78
                            lamps.
                           Four 4-foot MBP               0.73             1.61             0.37             0.72
                            lamps.
                           Two 4-foot MiniBP             1.33             3.09             0.68             1.31
                            SO lamps.
                           Two 4-foot MiniBP             0.42             0.94             0.43             0.94
                            HO lamps.
                        IS and RS ballasts               0.11             0.13             0.11             0.13
                         (not classified as
                         sign ballasts) that
                         operate two 8-foot
                         HO lamps.
                        Sign ballasts that               2.94             5.55             2.52             4.62
                         operate four 8-foot
                         HO lamps.
                        IS and RS                        0.22             0.49             0.16             0.27
                         residential
                         ballasts that
                         operate two 4-foot
                         MBP lamps.
                                             -------------------------------------------------------------------
                             Total (TSL2)...             8.91            18.50             5.85            10.92
----------------------------------------------------------------------------------------------------------------
3A....................  IS and RS ballasts
                         (not classified as
                         residential) that
                         operate:
                           Two 4-foot MBP                2.83             6.31             1.44             2.86
                            lamps.
                           Four 4-foot MBP               0.46             1.06             0.25             0.52
                            lamps.
                           Two 8-foot                    0.05             0.10             0.05             0.10
                            slimline lamps.
                        PS ballasts (not
                         classified as
                         residential) that
                         operate:
                           Two 4-foot MBP                0.84             1.54             0.56             0.87
                            lamps.
                           Four 4-foot MBP               0.73             1.61             0.37             0.72
                            lamps.
                           Two 4-foot MiniBP             1.52             3.89             0.85             1.87
                            SO lamps.
                           Two 4-foot MiniBP             0.36             0.87             0.36             0.87
                            HO lamps.
                        IS and RS ballasts               0.11             0.13             0.11             0.13
                         (not classified as
                         sign ballasts) that
                         operate two 8-foot
                         HO lamps.
                        Sign ballasts that               2.94             5.55             2.52             4.62
                         operate four 8-foot
                         HO lamps.
                        IS and RS                        0.22             0.49             0.16             0.27
                         residential
                         ballasts that
                         operate two 4-foot
                         MBP lamps.
                                             -------------------------------------------------------------------
                             Total (TSL3A)..            10.06            21.55             6.67            12.84
----------------------------------------------------------------------------------------------------------------
3B....................  IS and RS ballasts
                         (not classified as
                         residential) that
                         operate:
                           Two 4-foot MBP                2.83             6.31             1.44             2.86
                            lamps.
                           Four 4-foot MBP               0.46             1.06             0.25             0.52
                            lamps.
                           Two 8-foot                    0.05             0.10             0.05             0.10
                            slimline lamps.
                        PS ballasts (not
                         classified as
                         residential) that
                         operate:
                           Two 4-foot MBP                0.84             1.54             0.56             0.87
                            lamps.
                           Four 4-foot MBP               0.73             1.61             0.37             0.72
                            lamps.
                           Two 4-foot MiniBP             1.52             3.89             0.85             1.87
                            SO lamps.
                           Two 4-foot MiniBP             0.36             0.87             0.36             0.87
                            HO lamps.
                        IS and RS ballasts               0.11             0.13             0.11             0.13
                         (not classified as
                         sign ballasts) that
                         operate two 8-foot
                         HO lamps.
                        Sign ballasts that               2.94             5.55             2.52             4.62
                         operate four 8-foot
                         HO lamps.
                        IS and RS                        0.23             0.50             0.23             0.50
                         residential
                         ballasts that
                         operate two 4-foot
                         MBP lamps.
                                             -------------------------------------------------------------------
                           Total (TSL3B)....            10.06            21.56             6.73            13.07
----------------------------------------------------------------------------------------------------------------


[[Page 70616]]

c. Impacts on Employment
    DOE estimated the indirect employment impacts of potential 
standards on the economy in general, assuming that energy conservation 
standards for ballasts would reduce energy bills for ballast users and 
the resulting net savings would be redirected to other forms of 
economic activity. DOE used an I-O model of the U.S. economy to 
estimate these effects including the demand for labor as described in 
section V.I .
    The I-O model results suggest that today's adopted standards are 
likely to increase the net labor demand. The gains, however, would most 
likely be 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 VII.B.2.b, the major 
manufacturers interviewed for this rulemaking indicate they have no 
domestic ballast production. New and amended standards for ballasts 
therefore will not have a significant impact on the limited number of 
production workers directly employed by ballast manufacturers in the 
U.S.
    Table VII.33--presents the estimated net indirect employment 
impacts from the TSLs that DOE considered in this rulemaking. See 
chapter 15 of the final rule TSD for more detailed results.

               Table VII.33-Net Change in Jobs from Indirect Employment Effects Under Ballast TSLs
----------------------------------------------------------------------------------------------------------------
                                                                                  Net national change in jobs
                                                                                          (thousands)
                                                                             -----------------------------------
            Analysis period year                   Trial standard level           Existing          Emerging
                                                                                technologies,     technologies,
                                                                                    shift            roll-up
----------------------------------------------------------------------------------------------------------------
2020........................................  1.............................               2.5               1.9
                                              2.............................               2.3               2.1
                                              3A............................               2.2               2.1
                                              3B............................               2.2               2.2
2043........................................  1.............................              52.2              17.2
                                              2.............................              57.1              24.2
                                              3A............................              73.8              30.7
                                              3B............................              73.9              34.3
----------------------------------------------------------------------------------------------------------------

4. Impact on Utility or Performance of Products
    As presented in section IV.D.1.d of this final rule, DOE concluded 
that none of the TSLs considered in this final rule 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 adopted standards. (42 U.S.C. 
6295(o)(2)(B)(i)(IV))
5. Impact of Any Lessening of Competition
    As discussed in the April 2011 NOPR, and in section IV.D.1.e of 
this final rule, DOE considers any lessening of competition likely to 
result from standards; the Attorney General determines the impact, if 
any, of any such lessening of competition.
    DOJ concluded that the standards contained in the proposed rule 
could possibly impact competition. Depending on the investment required 
and the opportunity for business expansion, DOJ found it is not clear 
how quickly current manufacturers could comply with new standards. DOE 
considered these comments and notes that TSL 3A, the level adopted in 
today's rule, would impact manufacturers to a lesser extent than the 
TSL 3 proposed in the April 2011 NOPR. Specifically, TSL 3A contains 
lower standards for residential and 8-foot HO product classes than the 
previously proposed TSL 3. Therefore, DOE does not expect that TSL 3A 
will raise competitive issues. For all product classes analyzed, DOE 
found that multiple manufacturers offered products at TSL 3A and any 
product modifications needed to reach TSL 3A do not require proprietary 
technology.
6. Need of the Nation To Conserve Energy
    An improvement in the energy efficiency of the products subject to 
this final 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 VII.34 presents the 
estimated reduction in generating capacity in 2043 for the TSLs that 
DOE considered in this rulemaking.

 Table VII.34--Estimated Reduction in Electricity Generating Capacity in
                         2043 Under Ballast TSLs
------------------------------------------------------------------------
                                       Reduction in electric generating
                                              capacity Gigawatts
                                     -----------------------------------
        Trial standard level              Existing          Emerging
                                        technologies,     technologies,
                                            shift            roll-up
------------------------------------------------------------------------
1...................................               3.8               1.4
2...................................               4.6               2.2
3A..................................               6.4               3.0
3B..................................               6.4               3.1
------------------------------------------------------------------------

    Energy savings from new and amended standards for ballasts could 
also produce environmental benefits in the form of reduced emissions of 
air pollutants and GHGs associated with electricity production. Table 
VII.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

[[Page 70617]]

the environmental assessment of in chapter 16 the final rule TSD.

                       Table VII.35--Summary of Emissions Reduction Estimated for Ballast TSLs (cumulative for 2014 through 2043)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Cumulative reduction in emissions (2014 through 2043)
                                             -----------------------------------------------------------------------------------------------------------
            Trial standard level                          Existing technologies, shift                         Emerging technologies, roll-up
                                             -----------------------------------------------------------------------------------------------------------
                                                   CO2 Mt            NOX kt             Hg t             CO2 Mt            NOX kt             Hg t
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...........................................                64                23              0.88                13                10              0.18
2...........................................                76                28              1.05                20                16              0.29
3A..........................................               106                39              1.47                27                22              0.40
3B..........................................               106                39              1.47                29                23              0.42
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As discussed in section V.K, DOE did not report 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 of the analysis for this final 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 V.L.1, DOE used values for the SCC developed by 
an interagency process. The four values for CO2 emissions 
reductions resulting from that process (for emissions in 2010, 
expressed in 2010$) are $4.9/ton (the average value from a distribution 
that uses a 5-percent discount rate), $22.3/ton (the average value from 
a distribution that uses a 3-percent discount rate), $36.5/ton (the 
average value from a distribution that uses a 2.5-percent discount 
rate), and $67.6/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 final rule 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 17 of the final rule 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 
VII.36 shows an example of the calculation of the combined NPV 
including benefits from emissions reductions for the case of TSL 3A for 
ballasts. The CO2 values used in the table correspond to the 
four scenarios for the valuation of CO2 emission reductions 
presented in section V.L.1.

  Table VII.36--Adding Net Present Value of Consumer Savings to Present
Value of Monetized Benefits from CO2 and NOX Emissions Reductions at TSL
                             3A for Ballasts
                     [Existing Technologies, Shift]
------------------------------------------------------------------------
                                      Present value
             Category                 billion 2010$     Discount rate %
------------------------------------------------------------------------
                                Benefits
------------------------------------------------------------------------
Operating Cost Savings............              15.1                 7
                                                31.5                 3
CO2 Reduction Monetized Value (at                0.40                5
 $4.9/Metric Ton)*................
CO2 Reduction Monetized Value (at                2.01                3
 $22.3/Metric Ton)*...............
CO2 Reduction Monetized Value (at                3.38                2.5
 $36.5/Metric Ton)*...............
CO2 Reduction Monetized Value (at                6.12                3
 $67.6/Metric Ton)*...............
NOX Reduction Monetized Value (at                0.03                7
 $2,537/Ton)*.....................
                                                 0.06                3
Total Monetary Benefits **........              17.1                 7

[[Page 70618]]

 
                                                33.5                 3
------------------------------------------------------------------------
                                  Costs
------------------------------------------------------------------------
Total Incremental Installed Costs.               5.05                7
                                                 9.91                3
------------------------------------------------------------------------
                           Net Benefits/Costs
------------------------------------------------------------------------
Including CO2 and NOX**...........              12.1                 7
                                                23.6                 3
------------------------------------------------------------------------
* The CO2 values represent global monetized values (in 2010$) of the
  social cost of CO2 emissions in 2010 under several scenarios. The
  values of $4.9, $22.3, and $36.5 per metric ton are the averages of
  SCC distributions calculated using 5-percent, 3-percent, and 2.5-
  percent discount rates, respectively. The value of $67.6/t represents
  the 95th percentile of the SCC distribution calculated using a 3-
  percent discount rate. The value for NOX (in 2010$) is the average of
  the low and high values used in DOE's analysis. See section V.L.2 for
  details.
** 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
  $22.3/t in 2010 (in 2010$).

    Although adding the value of consumer savings to the values of 
emission reductions would provide 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 17 of the 
final rule TSD presents calculations of the combined NPV including 
benefits from emissions reductions for each TSL.

C. Conclusions

    EPCA requires 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 after considering, to the greatest extent 
practicable, 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 VII.A) 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 the following tables that 
present a summary of the results of DOE's quantitative analysis for 
each TSL. These include the impacts on identifiable subgroups of 
consumers, specifically low-income households, institutions of 
religious worship, and institutions that serve low-income populations, 
who may be disproportionately affected by an amended national standard. 
Section VII.B.1 presents the estimated impacts of each TSL for these 
subgroups.

                                                      Table VII.37--Summary of Results for Ballasts
                                                             [Existing Technologies, Shift]
--------------------------------------------------------------------------------------------------------------------------------------------------------
              Category                           TSL 1                        TSL 2                        TSL 3A                       TSL 3B
--------------------------------------------------------------------------------------------------------------------------------------------------------
National Energy Savings (quads).....  3.50.......................  4.10.......................  5.55.......................  5.56
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        NPV of Consumer Benefits (2010$ billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% discount rate....................  17.43......................  18.50......................  21.55......................  21.56

[[Page 70619]]

 
7% discount rate....................  8.52.......................  8.91.......................  10.06......................  10.06
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Industry Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (2010$ million)........  1,199......................  1,176......................  1,144......................  1,141
Industry NPV (% change).............  -1.6%......................  -3.5%......................  -6.1%......................  -6.4%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Cumulative Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (Mt)............................  64.........................  76.........................  106........................  106
NOX (kt)............................  23.........................  28.........................  39.........................  39
Hg (t)..............................  0.88.......................  1.05.......................  1.47.......................  1.47
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Value of Cumulative Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (2010$ billion)*................  0.24 to 3.68...............  0.29 to 4.40...............  0.40 to 6.12...............  0.40 to 6.13
NOX--3% discount rate (2010$          35.........................  41.........................  58.........................  58
 million).
NOX--7% discount rate (2010$          18.........................  22.........................  31.........................  31
 million).
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Mean LCC Savings (replacement event, per ballast)** (2010$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IS and RS ballasts (not classified    29.........................  5 to 34....................  7 to 37....................  7 to 37
 as residential) that operate:.
    Two 4-foot MBP lamps.
    Four 4-foot MBP lamps.
    Two 8-foot slimline lamps.
PS ballasts (not classified as        -2 to 26:..................  6 to 32....................  6 to 28....................  6 to 28
 residential) that operate:.
    Two 4-foot MBP lamps.
    Four 4-foot MBP lamps.
    Two 4-foot MiniBP SO lamps.
    Two 4-foot MiniBP HO lamps.
IS and RS ballasts (not classified    65.........................  230........................  230........................  3 to 233
 as sign ballasts) that operate two
 8-foot HO lamps
Sign ballasts that operate four 8-    403........................  403........................  403........................  403
 foot HO lamps
IS and RS residential ballasts that   21.........................  21.........................  21.........................  -2 to 19
 operate two 4-foot MBP lamps.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Median PBP (replacement event)*** (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IS and RS ballasts (not classified    -3.35......................  -1.66 to 3.62..............  -1.30 to 2.86..............  -1.30 to 2.86
 as residential) that operate:.
    Two 4-foot MBP lamps.
    Four 4-foot MBP lamps.
    Two 8-foot slimline lamps.
PS ballasts (not classified as        0.05 to 20.52..............  0.55 to 6.00...............  1.25 to 6.00...............  1.25 to 6.00
 residential) that operate:.
    Two 4-foot MBP lamps.
    Four 4-foot MBP lamps.
    Two 4-foot MiniBP SO lamps.
    Two 4-foot MiniBP HO lamps.
IS and RS ballasts (not classified    -0.66......................  -0.69......................  -0.69......................  -0.53 to 4.57
 as sign ballasts) that operate two
 8-foot HO lamps.
Sign ballasts that operate four 8-    -0.16......................  -0.16......................  -0.16......................  -0.16
 foot HO lamps.
IS and RS residential ballasts that   -5.46......................  -5.46......................  -5.46......................  -4.92
 operate two 4-foot MBP lamps.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Distribution of Consumer LCC Impacts (see Table VII.16 through Table VII.23)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Generation Capacity Reduction         3.82.......................  4.56.......................  6.35.......................  6.35
 (GW)[dagger].
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Employment Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Indirect Domestic Jobs (thousands)    52.........................  57.........................  74.........................  74
 [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 VII.38--Summary of Results for Ballasts
                                                            [Emerging Technologies, Roll-up]
--------------------------------------------------------------------------------------------------------------------------------------------------------
              Category                           TSL 1                        TSL 2                        TSL 3A                       TSL 3B
--------------------------------------------------------------------------------------------------------------------------------------------------------
National Energy Savings (quads).....  1.36.......................  2.05.......................  2.74.......................  2.86
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 70620]]

 
                                                        NPV of Consumer Benefits (2010$ billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% discount rate....................  8.28.......................  10.92......................  12.84......................  13.07
7% discount rate....................  4.59.......................  5.85.......................  6.67.......................  6.73
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Industry Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (2010$ million)........  616........................  545........................  464........................  431
Industry NPV (% change).............  -15.9%.....................  -25.7%.....................  -36.7%.....................  -41.1%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Cumulative Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (Mt)............................  13.........................  20.........................  27.........................  29
NOX (kt)............................  10.........................  16.........................  22.........................  23
Hg (t)..............................  0.18.......................  0.29.......................  0.40.......................  0.42
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Value of Cumulative Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (2010$ billion) *...............  0.06 to 0.80...............  0.09 to 1.27...............  0.12 to 1.75...............  0.13 to 1.84
NOX-3% discount rate (2010$ million)  13.........................  21.........................  29.........................  30
NOX-7% discount rate (2010$ million)  6..........................  10.........................  13.........................  14
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              Mean LCC Savings (replacement event, per ballast) ** (2010$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IS and RS ballasts (not classified    29.........................  5 to 34....................  7 to 37....................  7 to 37
 as residential) that operate.
    Two 4-foot MBP lamps.
    Four 4-foot MBP lamps.
    Two 8-foot slimline lamps.
PS ballasts (not classified as        -2 to 26...................  6 to 32....................  6 to 28....................  6 to 28
 residential) that operate.
    Two 4-foot MBP lamps.
    Four 4-foot MBP lamps.
    Two 4-foot MiniBP SO lamps.
    Two 4-foot MiniBP HO lamps.
IS and RS ballasts (not classified    65.........................  230........................  230........................  3 to 233
 as sign ballasts) that operate Two
 8-foot HO lamps.
Sign ballasts that operate Four 8-    403........................  403........................  403........................  403
 foot HO lamps.
IS and RS residential ballasts that   21.........................  21.........................  21.........................  -2 to 19
 operate Two 4-foot MBP lamps.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Median PBP (replacement event)*** (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IS and RS ballasts (not classified    -3.35......................  -1.66 to 3.62..............  -1.30 to 2.86..............  -1.30 to 2.86
 as residential) that operate.
    Two 4-foot MBP lamps.
    Four 4-foot MBP lamps.
    Two 8-foot slimline lamps.
PS ballasts (not classified as        0.05 to 20.52..............  0.55 to 6.00...............  1.25 to 6.00...............  1.25 to 6.00
 residential) that operate.
    Two 4-foot MBP lamps.
    Four 4-foot MBP lamps.
    Two 4-foot MiniBP SO lamps.
    Two 4-foot MiniBP HO lamps.
IS and RS ballasts (not classified    -0.66......................  -0.69......................  -0.69......................  -0.53 to 4.57
 as sign ballasts) that operate Two
 8-foot HO lamps.
Sign ballasts that operate Four 8-    -0.16......................  -0.16......................  -0.16......................  -0.16
 foot HO lamps.
IS and RS residential ballasts that   -5.46......................  -5.46......................  -5.46......................  -4.92
 operate Two 4-foot MBP lamps.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Distribution of Consumer LCC Impacts (see Table VII.16 through Table VII.23)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Generation Capacity Reduction (GW)    1.37.......................  2.18.......................  2.99.......................  3.14
 [dagger].
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Employment Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Indirect Domestic Jobs                17.........................  24.........................  31.........................  34
 (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.

    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

[[Page 70621]]

explain why consumers 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 salience of the long-term or 
aggregate benefits, (3) 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), (4) 
excessive focus on the short term, in the form of inconsistent 
weighting of future energy cost savings relative to available returns 
on other investments, (5) computational or other difficulties 
associated with the evaluation of relevant tradeoffs, and (6) a 
divergence in incentives (e.g., renter versus owner; builder versus 
purchaser). Other literature indicates that with less than perfect 
foresight and a high degree of uncertainty about the future, consumers 
may trade off investments in efficiency at a higher than expected rate 
between current consumption and uncertain future energy cost savings.
    In its current regulatory analysis, DOE includes potential changes 
in the benefits and costs of a regulation due to changes in consumer 
purchase decisions in two ways. First, if consumers forego a purchase 
of a product in the standards case, it decreases sales for product 
manufacturers and the cost to manufacturers is included in the MIA. 
Second, DOE accounts for energy savings attributable only to products 
used by consumers in the standards case; if a regulatory option 
decreases the number of products used by consumers, this decreases the 
potential energy savings from an energy conservation standard. DOE 
provides detailed estimates of shipments and changes in the volume of 
product purchases under standards in chapter 10 of the TSD. However, 
DOE's current analysis does not explicitly control for differences in 
consumer preferences, preferences across subcategories of products or 
specific features, or consumer price sensitivity varying with household 
income (Reiss and White 2004).
    While DOE is not prepared at present to provide a fuller 
quantifiable framework for estimating the benefits and costs of changes 
in consumer purchase decisions due to an energy conservation standard, 
DOE has posted a paper that discusses the issue of consumer welfare 
impacts of appliance energy efficiency standards, and potential 
enhancements to the methodology by which these impacts are defined and 
estimated in the regulatory process.\62\ DOE is committed to developing 
a framework that can support empirical quantitative tools for improved 
assessment of the consumer welfare impacts of appliance standards. DOE 
welcomes comments on how to more fully assess the potential impact of 
energy conservation standards on consumer choice and how to quantify 
this impact in its regulatory analysis in future rulemakings.
---------------------------------------------------------------------------

    \62\ Alan Sanstad, Notes on the Economics of Household Energy 
Consumption and Technology Choice. Lawrence Berkeley National 
Laboratory. 2010. http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf.
---------------------------------------------------------------------------

1. Trial Standard Level 3B
    DOE first considered the most efficient level, TSL 3B, which would 
save an estimated 2.9 to 5.6 quads of energy through 2043. For the 
nation as a whole, TSL 3B would have a net savings of $6.7 billion-
$10.1 billion at a 7-percent discount rate, and $13.1 billion-$21.6 
billion at a 3-percent discount rate. The emissions reductions at TSL 
3B are estimated at 29-106 million metric tons (Mt) of CO2, 
23-39 kilotons (kt) of NOX, and 0.42-1.47 tons of Hg. Total 
generating capacity in 2043 is estimated to decrease compared to the 
reference case by 3.14-6.35 gigawatts under TSL 3B. As seen in section 
VII.B.1, while consumers of most representative ballast types have 
available ballast designs which result in positive LCC savings, ranging 
from $2.77-$402.86, some consumers experience negative LCC savings at 
TSL 3B. Consumers that experience negative LCC savings, ranging from -
$1 to -$2, are those that currently have a 2-lamp 8-foot HO T8 ballast 
(for the new construction/renovation event) or a 2-lamp 4-foot MBP T8 
ballast in the residential sector (for the replacement event). The 
projected change in industry value would range from a decrease of $77.6 
million to a decrease of $301.2 million, or a net loss of 6.4 percent 
to a net loss of 41.1 percent in INPV.
    DOE based TSL 3B 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 diversity of products (spanning several ballast factors, 
number of lamps per ballast, and types of lamps operated) within each 
product class.
    After carefully considering the analysis and weighing the benefits 
and burdens of TSL 3B, the Secretary has reached the following 
conclusion: At TSL 3B, the benefits of energy savings, emissions 
reductions (both in physical reductions and the monetized value of 
those reductions), and the positive net economic savings to the nation 
would be outweighed by the economic burden on consumers (of residential 
T8 ballasts and 8-foot HO T8 ballasts) and the large product and 
capital conversion costs that could result in a large reduction in INPV 
for manufacturers. Consequently, the Secretary has concluded that trial 
standard level 3B is not economically justified.
2. Trial Standard Level 3A
    DOE next considered TSL 3A, which would save an estimated 2.7 to 
5.6 quads of energy through 2043--a significant amount of energy. For 
the nation as a whole, TSL 3A would have a net savings of $6.7 billion-
$10.1 billion at a 7-percent discount rate, and $12.8 billion-$21.6 
billion at a 3-percent discount rate. The emissions reductions at TSL 
3A are estimated at 27-106 Mt of CO2, 22-39 kt of 
NOX, and 0.40-1.47 tons of Hg. Total generating capacity in 
2043 is estimated to decrease compared to the reference case by 2.99-
6.35 gigawatts under TSL 3A. As seen in section VII.B.1, TSL 3A results 
in positive LCC savings for all representative ballast types, ranging 
from $6-$403. The projected change in industry value would range from a 
decrease of $74.5 million to a decrease of $268.6 million, or a net 
loss of 6.1 percent to a net loss of 36.7 percent in INPV.
    DOE based TSL 3A on the most efficient commercially available 
products for each representative ballast type analyzed except for IS/RS 
ballasts in the residential sector and 8-foot HO ballasts. This TSL 
represents the highest efficiency level for a diversity of products 
(spanning several ballast factors, number of lamps per ballast, and 
types of lamps operated) at which consumers of all ballasts types, 
including those consumers with T8 residential or 8-foot HO systems, 
experience positive LCC savings.
    After considering the analysis, comments on the analysis, and the 
benefits and burdens of TSL 3A, the Secretary has reached the following 
conclusion: TSL 3A 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 
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

[[Page 70622]]

positive life-cycle cost savings would outweigh the reduction in INPV 
for manufacturers. Therefore, DOE adopts the energy conservation 
standards for ballasts at TSL 3A.

D. Backsliding

    As discussed in section II.A, 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 
adopted 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 IV.A, 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 
finds that 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 
VII.39 contains the existing standard in terms of BEF, the existing 
standard in terms of BLE, and the adopted standard in terms of BLE.

                     Table VII.39--Existing Federal BEF Standards and the Corresponding BLE
----------------------------------------------------------------------------------------------------------------
                                                                          Equivalent BLE            Adopted BLE
          Application for operation of             BEF Standard  -----------------------------------------------
                                                                     Low freq        High freq       Standard*
----------------------------------------------------------------------------------------------------------------
One F40T12 lamp.................................            2.29           0.831           0.832           0.875
Two F40T12 lamps................................            1.17           0.849           0.850           0.899
Two F96T12 lamps................................            0.63           0.888           0.897           0.918
Two F96T12/HO lamps.............................            0.39           0.777           0.780           0.886
One F34T12 lamp.................................            2.61           0.777           0.778           0.809
Two F34T12 lamps................................            1.35           0.804           0.805           0.841
Two F96T12/ES lamps.............................            0.77           0.876           0.884           0.913
Two F96T12/HO/ES lamps..........................            0.42           0.711           0.713           0.881
----------------------------------------------------------------------------------------------------------------
* 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.

    As seen in Table VII.39, the standards adopted in this final rule 
are higher than the existing standards, regardless of low or high 
frequency operation. As such, the adopted standards do not decrease the 
minimum required energy efficiency of the covered products and 
therefore do not violate the anti-backsliding provision in EPCA.

VIII. 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 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 fluorescent lamp 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 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 for this rulemaking.
    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 explicitly reaffirms the principles, structures, 
and definitions governing regulatory review established in Executive 
Order 12866. To the extent permitted by law, agencies are required by 
Executive Order 13563 to: (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

[[Page 70623]]

desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public.
    DOE emphasizes as well that Executive Order 13563 requires agencies 
``to use the best available techniques to quantify anticipated present 
and future benefits and costs as accurately as possible.'' In its 
guidance, the Office of Information and Regulatory Affairs has 
emphasized that such techniques may include ``identifying changing 
future compliance costs that might result from technological innovation 
or anticipated behavioral changes.'' For the reasons stated in the 
preamble, DOE finds that today's final rule is consistent with these 
principles, including the requirement that, to the extent permitted by 
law, agencies adopt a regulation only upon a reasoned determination 
that its benefits justify its costs and select, in choosing among 
alternative regulatory approaches, those approaches that maximize net 
benefits.

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, and a final 
regulatory flexibility analysis (FRFA) for any such rule that an agency 
adopts as a final rule, 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 April 2011 NOPR and today's final rule under the 
provisions of the Regulatory Flexibility Act and the procedures and 
policies published on February 19, 2003.
    As presented and discussed in the following sections, the FRFA 
describes potential impacts on small manufacturers associated with the 
required product and capital conversion costs at each TSL and discusses 
alternatives that could minimize these impacts. Chapter 13 of the TSD 
contains more information about the impact of this rulemaking on 
manufacturers.
1. Statement of the Need for, and Objectives of, the Rule
    The reasons why DOE is establishing the standards in today's final 
rule and the objectives of these standards are provided elsewhere in 
the preamble and not repeated here.
2. Summary of and Responses to the Significant Issues Raised by the 
Public Comments, and a Statement of Any Changes Made as a Result of 
Such Comments
    This FRFA incorporates the IRFA and public comments received on the 
IRFA and the economic impacts of the rule. DOE provides responses to 
these comments in the discussion below on the compliance impacts of the 
rule and elsewhere in the preamble. DOE modified the standards adopted 
in today's final rule in response to comments received, including those 
from small businesses, as described in the preamble.
3. 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 
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, 30848 (May 15, 2000), as amended at 65 FR 53533, 
53544 (Sept. 5, 2000) and codified at 13 CFR part 121. The size 
standards are listed by 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.
    In the April 2011 NOPR, DOE identified approximately 10 small 
businesses that produce covered products and can be considered small 
business manufacturers. 76 FR 20090, 20171 (April 11, 2011). Radionic 
disagreed with this estimate, stating that they are the only domestic 
ballast manufacturer, and noted that they were not contacted by DOE. 
(Radionic, No. 36 at p. 1) During its analysis for the NOPR, DOE 
identified Radionic as a small business manufacturer that could 
potentially be affected by new or amended standards. Radionic was 
included in DOE's estimate of ten small manufacturers, which also 
includes U.S. manufacturers with foreign production. DOE contacted 
Radionic and received a survey response during the NOPR analysis 
period. Two other small businesses consented to being interviewed 
during the MIA interviews. DOE also obtained information about small 
business impacts while interviewing large manufacturers.
b. 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 very 
small market shares. 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 final rule 
TSD for further details on the fluorescent lamp ballast market.
c. 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

[[Page 70624]]

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 comprise about 60 percent of the 
industry, while as many as 200 smaller fixture manufacturers have 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 dimming ballasts, LED drivers, and compact 
fluorescent ballasts.
4. Description and Estimate of Compliance Requirements
    Several manufacturers commented on the potential impacts of energy 
conservation standards on small fluorescent lamp ballast manufacturers. 
Radionic noted that small manufacturers would be burdened because they 
have fewer engineering resources and less capital to deploy toward 
redesign and UL testing compared to large manufacturers and suggested 
that consideration for exemption be given to small manufacturers. 
(Radionic, No. 36 at p. 1) In contrast, Lutron stated that they believe 
that the impacts of new and amended standards for fluorescent lamp 
ballasts would be negligible for small manufacturers because small 
manufacturers would concentrate in areas such as emerging 
technologies--where there is potential for growth and high margins--
rather than try to compete with large manufacturers in a high-volume, 
traditional ballast market. (Lutron, Public Meeting Transcript, No. 43 
at p. 207) Philips agreed that small manufacturers do not have a 
significant presence in the traditional ballast market. Philips noted, 
however, that many sign ballast manufacturers, who are also small 
manufacturers, may be adversely affected by the switch from magnetic to 
electronic sign ballasts driven by proposed standards, which may force 
sign ballast manufacturers to source their ballasts. (Philips, Public 
Meeting Transcript, No. 43 at pp. 208-9)
    Small manufacturers have the potential to be significantly affected 
by this rule for the reasons suggested by Radionic. Most small ballast 
manufacturers, however, would be able to remain viable by focusing on 
niche markets or emerging technologies. DOE details its conclusions on 
the impacts on and expected responses of small manufacturers below.
    Additionally, because sign ballast manufacturers may be 
differentially impacted by today's standards, DOE analyzed sign 
ballasts as a manufacturer subgroup in section VII.B.2.d. DOE made 
several attempts to contact sign ballast manufacturers for interviews 
but was unable to speak directly to any of the manufacturers who 
specialize in sign ballasts. As such, DOE's subgroup analysis was 
developed based on information obtained from interviews with large 
manufacturers and from manufacturer Web sites.
    At TSL3A, the level adopted in today's final rule, DOE estimates 
capital conversion costs of $0.3 million and product conversion costs 
of $1.0 million for a typical small manufacturer, compared to capital 
and product conversion costs of $6.3 million and $9.7 million, 
respectively, for a typical large manufacturer. These costs and their 
impacts are described in detail in the following sections.
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 
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 $0.3 million for a typical small manufacturer at TSL 3A, 
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 V.H.4.d. 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 3A, the level adopted in 
today's final rule. To estimate the differential impacts of the adopted 
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 final 
rule 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 V.H.1.a and in chapter 13 
of the final rule TSD.) Table VIII.1 compares the estimated product 
conversion costs of a typical small manufacturer as a percentage of 
their annual R&D expense to those of a typical large manufacturer.

[[Page 70625]]



   Table VIII.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
                                      costs for a     Product conversion      costs for a     Product Conversion
                                     typical large        costs as a         typical small        costs as a
                                     manufacturer        percentage of       manufacturer        percentage of
                                   (2010$ millions)   annual R&D expense   (2010$ millions)   annual R&D expense
----------------------------------------------------------------------------------------------------------------
Baseline........................               $0.00                   0               $0.00                   0
TSL 1...........................                1.41                  16                0.14                  38
TSL 2...........................                6.15                  71                0.63                 163
TSL 3A..........................                9.68                 111                0.99                 257
TSL 3B..........................               12.53                 144                1.28                 333
----------------------------------------------------------------------------------------------------------------

    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 $8.7 million. Because not all products would need to be 
redesigned at TSL 3A, DOE estimates $9.7 million in product conversion 
costs for a typical major manufacturer at TSL 3A (compared to $15.6 
million if all products had to be fully redesigned), which represents 
111 percent of its annual R&D expense. This means that a typical major 
manufacturer could redesign its products in just over a year if it were 
to devote its entire R&D budget for fluorescent lamp ballasts to 
product redesign and could retain the engineering resources.
    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 overseas manufacturers who supply their ballasts. 
As a result, DOE assumed a lower R&D investment, in absolute dollars, 
per model. Because their products are effectively sourced, DOE projects 
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 small manufacturers' 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. Because not all products would 
need to be fully redesigned at TSL 3A, however, DOE estimates product 
conversion costs of $1.0 million at TSL 3A. 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 3A would 
represent 257 percent of its annual R&D expense. This means that a 
typical small manufacturer could redesign its products within 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.
c. 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. Table VIII.2 compares the total conversion costs of a 
typical small manufacturer as a percentage of annual revenue and 
earnings before interest and taxes (EBIT) to those of a typical large 
manufacturer.

                 Table VIII.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    Total conversion    Total conversion
                                      costs for a         costs as a          costs as a          costs for a         costs as a          costs as a
                                  typical large mfr.     percentage of       percentage of    typical small mfr.     percentage of       percentage of
                                    (2010$ millions)    annual revenue        annual EBIT       (2010$ millions)    annual revenue        annual EBIT
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................               $0.00                   0                   0               $0.00                   0                   0
TSL 1...........................                3.99                   2                  21                0.26                   2                  37
TSL 2...........................               10.68                   5                  55                0.83                   8                 119
TSL 3A..........................               16.02                   7                  82                1.27                  12                 182
TSL 3B..........................               19.14                   8                  99                1.58                  15                 226
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As seen in Table VIII.2, the impacts for a typical small 
manufacturer are relatively greater than for a large manufacturer at 
TSL 3A. Total conversion costs represent 182 percent of annual EBIT for 
a typical small manufacturer compared to 82 percent of annual EBIT for 
a typical large manufacturer. DOE believes these

[[Page 70626]]

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. DOE anticipates, however, that 
small manufacturers would take several steps to mitigate the costs 
required to meet new and amended energy conservation standards.
    At TSL 3A, it is more likely that ballast manufacturers would 
temporarily reduce the number of SKUs they offer as in-house designs to 
keep their product conversion costs at manageable levels in the years 
preceding the compliance date. As noted previously, the typical small 
manufacturer business model is not predicated on the supply of a wide 
range of models and specifications. Small manufacturers 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 adopted 
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 ballasts to market in concert with 
large manufacturers. There is a possibility some small manufacturers 
would conserve resources by waiting to upgrade certain products until 
new compliant baseline designs become available or 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 making the technologies necessary to meet 
today's adopted levels.
5. Steps Taken to Minimize Impacts on Small Entities and Reasons Why 
Other Significant Alternatives to Today's Final Rule Were Rejected
    DOE modified the standards established in today's final rule from 
those proposed in the April 2011 NOPR as discussed previously and based 
on comments and additional test data received from interested parties. 
These modifications include a separate product class for residential 
ballasts, which establishes less stringent standards for these ballasts 
than the NOPR, and new standard equations for all product classes.
    The previous discussion also analyzes impacts on small businesses 
that would result from the other TSLs DOE considered. Though TSLs lower 
than the adopted TSL 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. Thus DOE rejected the lower TSLs.
    In addition to the other TSLs being considered, the TSD includes a 
regulatory impact analysis in chapter 18. 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. Thus, DOE rejected these alternatives and is adopting 
the standards set forth in this rulemaking.
    DOE notes that small manufacturers, particularly those small sign 
ballast manufacturers who would be required to move from magnetic to 
electronic sign ballasts as a result of today's standards, may apply to 
DOE for an exemption from the standard pursuant to 42 U.S.C. 6295(t). 
The process applicants must follow to request an exemption and DOE's 
process for making a decision on a particular request are set forth in 
DOE's regulations at 10 CFR 430 Subpart E.

C. Review Under the Paperwork Reduction Act

    Manufacturers of fluorescent lamp ballasts must certify to DOE that 
their products comply with any applicable energy conservation 
standards. In certifying compliance, manufacturers must test their 
products according to the DOE test procedures for fluorescent lamp 
ballasts, including any amendments adopted for those test procedures. 
DOE has established regulations for the certification and recordkeeping 
requirements for all covered consumer products and commercial 
equipment, including fluorescent lamp ballasts. (76 FR 12422 (March 7, 
2011). 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 approved by 
OMB under OMB control number 1910-1400. 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.
    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.

D. Review Under the National Environmental Policy Act of 1969

    DOE prepared an EA of the impacts of the new and amended 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 EA 
has been incorporated into the final rule TSD as chapter 16. Before 
issuing this final rule for fluorescent lamp ballasts, DOE considered 
public comments and issued a FONSI as part of a final EA.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism.'' 64 FR 43255 (Aug. 10, 1999) 
imposes certain requirements on Federal 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

[[Page 70627]]

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 final 
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.

F. 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 final rule meets 
the relevant standards of Executive Order 12988.

G. 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, sec. 201 (codified at 2 U.S.C. 1531). 
For a new or amended 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 
``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. DOE's policy 
statement is also available at http://www.gc.doe.gov.
    DOE has concluded that this final rule would likely require 
expenditures of $100 million or more on the private sector. Such 
expenditures may include: (1) Investment in research and development 
and in capital expenditures by fluorescent lamp ballasts manufacturers 
in the years between the final rule and the compliance date for the new 
standards, and (2) incremental additional expenditures by consumers to 
purchase higher-efficiency fluorescent lamp ballasts, starting at the 
compliance date for the applicable standard.
    Section 202 of UMRA authorizes a Federal agency to respond to the 
content requirements of UMRA in any other statement or analysis that 
accompanies the final 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 final rulemaking and 
the ``Regulatory Impact Analysis'' section of the TSD for this final 
rule respond to those requirements.
    Under section 205 of UMRA, DOE 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(g), 
today's final 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 final rule.

H. 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.

I. 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.

J. 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 Federal 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 final rule under the OMB and DOE 
guidelines and has concluded that it is consistent with applicable 
policies in those guidelines.

[[Page 70628]]

K. 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 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 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 concluded that today's regulatory action, which sets forth 
energy conservation standards for fluorescent lamp ballasts, is not a 
significant energy action because the new and amended 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 final rule.

L. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy, 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.

M. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation of this rule prior to its effective date. The report will 
state that it has been determined that the rule is a ``major rule'' as 
defined by 5 U.S.C. 804(2).

IX. Approval of the Office of the Secretary

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

List of Subjects in 10 CFR Part 430

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

    Issued in Washington, DC, on October 20, 2011.
Henry Kelly,
Acting Assistant Secretary of Energy, Energy Efficiency and Renewable 
Energy.

    For the reasons set forth in the preamble, DOE amends part 430 of 
chapter II, subchapter D, of title 10 of the Code of Federal 
Regulations, to read as set forth below:

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

0
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.


0
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, as defined in Appendix Q1 
of subpart B of this part.
* * * * *

0
3. Appendix Q to subpart B of part 430 is amended by adding 
introductory text after the heading to read as follows:

Appendix Q to Subpart B of Part 430--Uniform Test Method for Measuring 
the Energy Consumption of Fluorescent Lamp Ballasts

    Comply with Appendix Q until November 14, 2014. After this date, 
all fluorescent lamp ballasts shall be tested using the provisions 
of Appendix Q1.
* * * * *

0
4. Appendix Q1 to subpart B of part 430 is amended by adding 
introductory text after the heading to read as follows:

Appendix Q1 to Subpart B of Part 430--Uniform Test Method for Measuring 
the Energy Consumption of Fluorescent Lamp Ballasts

    Comply with Appendix Q1 beginning November 14, 2014. Prior to 
this date, all fluorescent lamp ballasts shall be tested using the 
provisions of Appendix Q.
* * * * *

0
5. Section 430.32 is amended by:
0
a. Revising paragraph (m)(1) introductory text.
0
b. Adding paragraphs (m)(8), (m)(9), and m(10).
    The revision 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 November 14, 2014;
    (ii) Designed--
    (A) To operate at nominal input voltages at or between 120 and 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 70629]]

    (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 are defined in (m)(8)(vi) of this section;
    (C) A ballast luminous efficiency not less than the following:

----------------------------------------------------------------------------------------------------------------
             BLE = A/(1+B*average total lamp arc power [caret] -C) Where A, B, and C are as follows:
-----------------------------------------------------------------------------------------------------------------
                         Description                                  A                B                C
----------------------------------------------------------------------------------------------------------------
Instant start and rapid start ballasts (not classified as                0.993             0.27             0.25
 residential) that are designed to operate...................
    4-foot medium bipin lamps.
    2-foot U-shaped lamps.
    8-foot slimline lamps.
Programmed start ballasts (not classified as residential)                0.993             0.51             0.37
 that are designed to operate................................
    4-foot medium bipin lamps.
    2-foot U-shaped lamps.
    4-foot miniature bipin standard output lamps.
    4-foot miniature bipin high output lamps.
Instant start and rapid start ballasts (not classified as                0.993             0.38             0.25
 sign ballasts) that are designed to operate 8-foot high
 output lamps................................................
Programmed start ballasts (not classified as sign ballasts)              0.973             0.70             0.37
 that are designed to operate 8-foot high output lamps.......
Sign ballasts that operate 8-foot high output lamps..........            0.993             0.47             0.25
Instant start and rapid start residential ballasts that                  0.993             0.41             0.25
 operate.....................................................
    4-foot medium bipin lamps.
    2-foot U-shaped lamps.
    8-foot slimline lamps.
Programmed start residential ballasts that are designed to               0.973             0.71             0.37
 operate.....................................................
    4-foot medium bipin lamps.
    2-foot U-shaped lamps.
----------------------------------------------------------------------------------------------------------------

    (iv) Instant start, rapid start, and programmed start are defined 
in Appendix Q1 of subpart B of this part. Average total lamp arc power 
is as defined and measured in accordance with Appendix Q1 of subpart B 
of this part.
    (v) Sign ballasts have an Underwriters Laboratories Inc. Type 2 
rating and are designed, labeled, and marketed for use in outdoor 
signs.
    (vi) Residential ballasts meet FCC consumer limits as set forth in 
47 CFR part 18 and are designed and labeled for use in residential 
applications.
    (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 (as defined in Appendix Q1 to subpart 
of this part) that:
    (A) Is designed to operate T8 diameter lamps;
    (B) Is designed, labeled, and marketed for use in EMI-sensitive 
environments only;
    (C) Is shipped by the manufacturer in packages containing 10 or 
fewer ballasts; and
    (iii) A programmed start ballast that operates 4-foot medium bipin 
T8 lamps and delivers on average less than 140 milliamperes to each 
lamp.
    (10) Each fluorescent lamp ballast--
    (i) Manufactured on or after November 14, 2014;
    (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 input     Total nominal  -----------------------------------
      Designed for the operation of            voltage         lamp watts       Low frequency    High frequency
                                                                                  ballasts          ballasts
----------------------------------------------------------------------------------------------------------------
One F34T12 lamp.........................           120/277                34             0.777             0.778
Two F34T12 lamps........................           120/277                68             0.804             0.805
Two F96T12/ES lamps.....................           120/277               120             0.876             0.884
Two F96T12HO/ES lamps...................           120/277               190             0.711             0.713
----------------------------------------------------------------------------------------------------------------

* * * * *
[FR Doc. 2011-28451 Filed 11-10-11; 8:45 am]
BILLING CODE 6450-01-P