[Federal Register Volume 79, Number 27 (Monday, February 10, 2014)]
[Rules and Regulations]
[Pages 7846-7932]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-02560]



[[Page 7845]]

Vol. 79

Monday,

No. 27

February 10, 2014

Part III





Department of Energy





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10 CFR Part 430





Energy Conservation Program: Energy Conservation Standards for External 
Power Supplies; Final Rule

  Federal Register / Vol. 79, No. 27 / Monday, February 10, 2014 / 
Rules and Regulations  

[[Page 7846]]


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DEPARTMENT OF ENERGY

10 CFR Part 430

[Docket No. EERE-2008-BT-STD-0005]
RIN 1904-AB57


Energy Conservation Program: Energy Conservation Standards for 
External Power Supplies

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

ACTION: Final rule.

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SUMMARY: Pursuant to the Energy Policy and Conservation Act of 1975 
(EPCA), as amended, today's final rule amends the energy conservation 
standards that currently apply to certain external power supplies and 
establishes new energy conservation standards for other external power 
supplies that are currently not required to meet such standards. 
Through its analysis, DOE has determined that these changes satisfy 
EPCA's requirements that any new and amended energy conservation 
standards for these products result in the significant conservation of 
energy and be both technologically feasible and economically justified.

DATES: The effective date of this rule is April 11, 2014. Compliance 
with the new and amended standards established for EPSs in today's 
final rule is February 10, 2016.
    The incorporation by reference of a certain publication listed in 
this rule is approved by the Director of the Federal Register on April 
11, 2014.

ADDRESSES: The docket, which includes Federal Register notices, public 
meeting attendee lists and transcripts, comments, and other supporting 
documents/materials, is available for review at regulations.gov. All 
documents in the docket are listed in the regulations.gov index. 
However, some documents listed in the index, such as those containing 
information that is exempt from public disclosure, may not be publicly 
available.
    The docket can be accessed from the regulations.gov homepage by 
searching for Docket ID EERE-2008-BT-STD-0005. The regulations.gov Web 
page contains simple 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: Mr. Jeremy Dommu, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Office, EE-5B, 1000 Independence Avenue SW., Washington, 
DC 20585-0121. Telephone: (202) 586-9870. Email: [email protected].
    Mr. Michael Kido, U.S. Department of Energy, Office of the General 
Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 586-8145. Email: [email protected].

SUPPLEMENTARY INFORMATION: This final rule incorporates by reference 
into part 430 the following industry standard:

International Efficiency Marking Protocol for External Power Supplies, 
Version 3.0

    The above referenced document has been added to the docket for this 
rulemaking and can be downloaded from Docket EERE-2008-BT-STD-0005 on 
Regulations.gov.
    The document is discussed in section IV.O of this notice.

Table of Contents

I. Summary of the Final Rule and Its Benefits
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits
D. Conclusion
II. Introduction
A. Authority
B. Background
    1. Current Standards
    2. History of Standards Rulemaking for EPSs
III. General Discussion
A. Compliance Date
B. Product Classes and Scope of Coverage
    1. General
    2. Definition of Consumer Product
    3. Power Supplies for Solid State Lighting
    4. Medical Devices
    5. Security and Life Safety Equipment
    6. Service Parts and Spare Parts
C. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
D. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
E. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Life-Cycle Costs
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion
A. Market and Technology Assessment
    1. Market Assessment
    2. Product Classes
    a. Proposed EPS Product Classes
    b. Differentiating Between Direct and Indirect Operation EPSs
    c. Multiple-Voltage
    d. Low-Voltage, High-Current EPSs
    e. Final EPS Product Classes
    3. Technology Assessment
    a. EPS Efficiency Metrics
    b. EPS Technology Options
    c. High-Power EPSs
    d. Power Factor
B. Screening Analysis
C. Engineering Analysis
    1. Representative Product Classes and Representative Units
    2. EPS Candidate Standard Levels (CSLs)
    3. EPS Engineering Analysis Methodology
    4. EPS Engineering Results
    5. EPS Equation Scaling
    6. Proposed Standards
    a. Product Classes B, C, D, and E
    b. Product Class X
    c. Product Class H
D. Markups Analysis
E. Energy Use Analysis
F. Life-Cycle Cost and Payback Period Analyses
    1. Manufacturer Selling Price
    2. Markups
    3. Sales Tax
    4. Installation Cost
    5. Maintenance Cost
    6. Product Price Forecast
    7. Unit Energy Consumption
    8. Electricity Prices
    9. Electricity Price Trends
    10. Lifetime
    11. Discount Rate
    12. Sectors Analyzed
    13. Base Case Market Efficiency Distribution
    14. Compliance Date
    15. Payback Period Inputs
G. Shipments Analysis
    1. Shipment Growth Rate
    2. Product Class Lifetime
    3. Forecasted Efficiency in the Base Case and Standards Cases
H. National Impact Analysis
    1. Product Price Trends
    2. Unit Energy Consumption and Savings
    3. Unit Costs
    4. Repair and Maintenance Cost per Unit
    5. Energy Prices
    6. National Energy Savings
    7. Discount Rates
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
    1. Manufacturer Production Costs
    2. Product and Capital Conversion Costs
    3. Markup Scenarios
    4. Impacts on Small Businesses
K. Emissions Analysis
L. Monetizing Carbon Dioxide and Other Emissions Impacts
    1. Social Cost of Carbon
    a. Monetizing Carbon Dioxide Emissions
    b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    c. Current Approach and Key Assumptions
    2. Valuation of Other Emissions Reductions
M. Utility Impact Analysis
N. Employment Impact Analysis
O. Marking Requirements
V. Analytical Results
A. Trial Standards Levels
B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Consumers

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    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impact on Manufacturers
    a. Industry Cash Flow Analysis Results
    b. Impacts on Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Manufacturer Subgroups
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Significance of Energy Savings
    b. Net Present Value of Consumer Costs and Benefits
    c. Indirect Impact on Employment
    4. Impact on Utility and Performance of the Products
    5. Impact on Any Lessening of Competition
    6. Need of the Nation to Conserve Energy
    7. Other Factors
    8. Summary of National Economic Impacts
C. Conclusions
    1. Benefits and Burdens of Trial Standard Levels Considered for 
EPS Product Class B
    2. Benefits and Burdens of Trial Standard Levels Considered for 
EPS Product Class X
    3. Benefits and Burdens of Trial Standard Levels Considered for 
EPS Product Class H
    4. Summary of Benefits and Costs (Annualized) of the Proposed 
Standards
    5. Stakeholder Comments on Alternatives to Standards
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
B. Review Under the Regulatory Flexibility Act
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
VII. Approval of the Office of the Secretary

I. Summary of the Final Rule and Its Benefits

    Today's notice announces the Department of Energy's (DOE's) amended 
and new energy conservation standards for certain classes of external 
power supplies (EPSs). These standards, which are based on a series of 
mathematical equations that vary based on output power, will affect a 
wide variety of EPSs used in a wide variety of consumer applications.
    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.\2\ Pursuant to EPCA, any new and 
amended energy conservation standard that DOE prescribes for certain 
products, such as EPSs, shall be designed to achieve the maximum 
improvement in energy efficiency that DOE determines is technologically 
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) 
Furthermore, the new and amended standard must result in significant 
conservation of energy. (42 U.S.C. 6295(o)(3)(B)) In accordance with 
these provisions, DOE is amending the standards for certain EPSs--those 
devices that are already regulated by standards enacted by Congress in 
2007--and establishing new standards for EPSs that have not yet been 
regulated by DOE. These standards, which prescribe a minimum average 
efficiency during active mode (i.e. when an EPS is plugged into the 
main electricity supply and is supplying power in response to a load 
demand from another connected device) and a maximum power consumption 
level during no-load mode (i.e. when an EPS is plugged into the main 
electricity supply but is not supplying any power in response to a 
demand load from another connected device), are expressed as a function 
of the nameplate output power (i.e. the power output of the EPS). These 
standards are shown in Table I-1. and will apply to all products listed 
in Table I.1 and manufactured in, or imported into, the United States 
starting on February 10, 2016.
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    \1\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated Part A.
    \2\ All references to EPCA in this document refer to the statute 
as amended through the American Energy Manufacturing Technical 
Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18, 2012).

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    The new and amended standards being adopted today apply to all 
direct operation EPSs, both Class A and non-Class A, with the 
exceptions noted in the footnote to Table I-1. These exemptions are 
discussed in more detail in Section IV.A.2.d and Section B.5. Note that 
the standards established by Congress for Class A EPSs will continue in 
force for all Class A EPSs, including indirect operation EPSs. 
Therefore, all indirect operation Class A EPSs must continue to meet 
the standards established by Congress at efficiency level IV (discussed 
in Section II.B.1), while direct operation Class A EPSs will be 
required to meet the more stringent standards being adopted today.

A. Benefits and Costs to Consumers

    Table I-2 presents DOE's evaluation of the economic impacts of 
today's standards on EPS consumers, as measured by the average life-
cycle cost (LCC) savings, the median payback period, and the average 
lifetime. The average LCC savings are positive and the median payback 
periods are less than the average lifetimes for all product classes for 
which consumers are impacted by the standards.
[GRAPHIC] [TIFF OMITTED] TR10FE14.004

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 (2013 to 2044). Using a real discount rate of 7.1 
percent, DOE estimates that the industry net present value (INPV) for 
manufacturers of EPSs is $274.0 million in 2012$. Under today's 
standards, DOE expects that manufacturers may lose up to 18.7 percent 
of their INPV, which is approximately $51.2 million. Additionally, 
based on DOE's interviews with the manufacturers of EPSs no domestic 
OEM EPS manufacturers were identified and therefore, DOE does not 
expect any plant closings or significant loss of employment.

[[Page 7850]]

C. National Benefits \3\
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    \3\ All monetary values in this section are expressed in 2012 
dollars and are discounted to 2013.
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    DOE's analyses indicate that today's standards would save a 
significant amount of energy. The lifetime savings for EPSs purchased 
in the 30-year period that begins in the year of compliance with new 
and amended standards (2015-2044) amount to 0.94 quads. The annual 
energy savings in 2030 amount to 0.15 percent of total residential 
energy use in 2012.\4\
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    \4\ Total residential energy use in 2012 was 20.195 quads. See: 
http://www.eia.gov/totalenergy/data/monthly/?src=Total-f3# 
consumption
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    The estimated cumulative net present value (NPV) of total consumer 
costs and savings of today's standards for EPSs ranges from $1.9 
billion (at a 7-percent discount rate) to $3.8 billion (at a 3-percent 
discount rate). This NPV expresses the estimated total value of future 
operating-cost savings minus the estimated increased product costs for 
products purchased in 2015-2044.
    In addition, today's standards are projected to yield significant 
environmental benefits. The energy savings would result in cumulative 
greenhouse gas emission reductions of approximately 47.0 million metric 
tons (Mt) \5\ of carbon dioxide (CO2), 81.7 thousand tons of 
sulfur dioxide (SO2), 15.0 thousand tons of nitrogen oxides 
(NOX) and 0.1 tons of mercury (Hg).\6\ Through 2030, the 
estimated energy savings would result in cumulative emissions 
reductions of 23.6 Mt of CO2.
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    \5\ A metric ton is equivalent to 1.1 short tons. Results for 
NOX and Hg are presented in short tons.
    \6\ DOE calculated emissions reductions relative to the Annual 
Energy Outlook 2013 (AEO 2013) Reference case, which generally 
represents current legislation and environmental regulations for 
which implementing regulations were available as of December 31, 
2012.
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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 and recently updated by an 
interagency process.\7\ The derivation of the SCC values is discussed 
in section IV.L. DOE estimates that the net present monetary value of 
the CO2 emissions reductions is between $0.4 billion and 
$4.7 billion. DOE also estimates that the net present monetary value of 
the NOX emissions reductions is $0.014 billion at a 7-
percent discount rate and $0.024 billion at a 3-percent discount 
rate.\8\
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    \7\ Technical Update of the Social Cost of Carbon for Regulatory 
Impact Analysis Under Executive Order 12866. Interagency Working 
Group on Social Cost of Carbon, United States Government. May 2013; 
revised November 2013. http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf
    \8\ DOE is currently investigating valuation of avoided Hg and 
SO2 emissions.
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    Table I-3 summarizes the national economic costs and benefits 
expected to result from today's standards for EPSs.

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[GRAPHIC] [TIFF OMITTED] TR10FE14.005

    The benefits and costs of today's standards, for products sold in 
2015-2044, can also be expressed in terms of annualized values. The 
annualized monetary values are the sum of (1) the annualized national 
economic value 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.\9\
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    \9\ 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 2013, 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 (2013 through 2042) that 
yields the same present value. 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 value 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 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 
is measured for the lifetime of EPSs shipped in 2015-2044. The SCC 
values, on the other hand, reflect the present value of all future 
climate-related impacts resulting from the emission of one metric ton 
of carbon dioxide in each year. These impacts continue well beyond 
2100.

[[Page 7852]]

    Estimates of annualized benefits and costs of today's standards are 
shown in Table I-4. 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 average SCC series that uses a 3-percent discount 
rate, the cost of the standards in today's rule is $147 million per 
year in increased equipment costs to consumers, while the benefits are 
$293 million per year in reduced equipment operating costs to 
consumers, $77 million in CO2 reductions, and $1.1 million 
in reduced NOX emissions. In this case, the net benefit 
amounts to $223 million per year. Using a 3-percent discount rate for 
all benefits and costs and the average SCC series, the cost of the 
standards in today's rule is $162 million per year in increased 
equipment costs, while the benefits are $350 million per year in 
reduced operating costs, $77 million in CO2 reductions, and 
$1.2 million in reduced NOX emissions. In this case, the net 
benefit amounts to $266 million per year.

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[GRAPHIC] [TIFF OMITTED] TR10FE14.007

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 burdens (loss of INPV and LCC increases for some users of 
these products). 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.

II. Introduction

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

A. Authority

    Title III, Part B \10\ 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, a program covering most major 
household appliances (collectively referred to as ``covered 
products''),\11\ which includes the types of EPSs that are the subject 
of this rulemaking. (42 U.S.C. 6295(u)) (DOE notes that under 42 U.S.C. 
6295(m), the agency must periodically review its already established 
energy conservation standards for a covered product. Under this 
requirement, the next review that DOE would need to conduct must occur 
no later than six years from the issuance of a final rule establishing 
or amending a standard for a covered product.)
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    \10\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated Part A.
    \11\ All references to EPCA in this document refer to the 
statute as amended through the American Energy Manufacturing 
Technical Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18, 
2012).
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    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 implements the 
remainder of the program. The labeling of EPSs, however, is one of the 
few exceptions for which either agency may establish requirements as 
needed. See 42 U.S.C. 6294(a)(5)(A). 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 
EPSs currently appear at title 10 of the Code of Federal Regulations 
(CFR) part 430, subpart B, appendix Z. See also 76 FR 31750 (June 1, 
2011) (finalizing the most recent amendment to the test procedures for 
EPSs).
    DOE must follow specific statutory criteria for prescribing new and 
amended standards for covered products. As indicated above, any new and 
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 EPSs, if no test procedure has been established for the 
product, or (2) if DOE determines by rule that the new and amended 
standard is not technologically feasible or economically justified. (42 
U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a new and 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 (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 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.

[[Page 7855]]

6295(o)(1)) Also, the Secretary may not prescribe a new and amended 
standard if interested persons have established by a preponderance of 
the evidence that the standard is likely to result in the 
unavailability in the United States of any covered product type (or 
class) having 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 product for 
any group of covered products that have the same function or intended 
use if DOE determines that products within such group (A) consume a 
different kind of energy from that consumed by other covered products 
within such type (or class); or (B) have a capacity or other 
performance-related feature which other products within such type (or 
class) do not have and such feature justifies a higher or lower 
standard. (42 U.S.C. 6295(q)(1)) In determining whether a performance-
related feature justifies a different standard for a group of products, 
DOE must consider such factors as the utility to the consumer of 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 preempt 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). The energy conservation standards established in this 
rule will preempt relevant State laws or regulations on February 10, 
2016.
    Also, pursuant to the amendments contained in section 310(3) of 
EISA 2007, any final rule for new and amended energy conservation 
standards promulgated after July 1, 2010, are 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's current test procedures and standards 
for EPSs address standby mode and off mode energy use, as do the 
standards adopted in this final rule.
    Finally, Congress created a series of energy conservation 
requirements for certain types of EPSs--those EPSs that meet the 
``Class A'' criteria. See 42 U.S.C. 6295(u)(3) (establishing standards 
for Class A EPSs) and 6291(36)(C) (defining what a Class A EPS is). 
Congress clarified the application of these standards in a subsequent 
revision to EPCA by creating an exclusion for certain types of Class A 
EPSs. In particular, EPSs that are designed to be used with security or 
life safety alarm or surveillance system that are manufactured prior to 
2017 are not required to meet the no-load mode requirements. See 42 
U.S.C. 6295(u)(3)(E) (detailing criteria for satisfying the exclusion 
requirements). The standards in today's final rule are consistent with 
these Congressionally-enacted provisions.

B. Background

1. Current Standards
    Section 301 of EISA 2007 established minimum energy conservation 
standards for Class A EPSs, which became effective on July 1, 2008. (42 
U.S.C. 6295(u)(3)(A)). Class A EPSs are types of EPSs defined by 
Congress that meet certain design criteria and that are not devices 
regulated by the Food and Drug Administration as medical devices or 
that power the charger of a detachable battery pack or the battery of a 
product that is fully or primarily motor operated. See 42 U.S.C. 
6291(36)(C)(i)-(ii). The current standards for Class A EPSs are set 
forth in Table II.1.
[GRAPHIC] [TIFF OMITTED] TR10FE14.008

    Currently, there are no Federal energy conservation standards for 
EPSs falling outside of Class A.
2. History of Standards Rulemaking for EPSs
    Section 135 of the Energy Policy Act of 2005 (EPACT 2005), Public 
Law 109-58 (Aug. 8, 2005), amended sections 321 and 325 of EPCA by 
defining the term ``external power supply.'' That provision also 
directed DOE to prescribe test procedures related to the energy 
consumption of EPSs and to issue a final rule that determines whether

[[Page 7856]]

energy conservation standards shall be issued for EPSs or classes of 
EPSs. (42 U.S.C. 6295(u)(1)(A) and (E))
    On December 8, 2006, DOE complied with the first of these 
requirements by publishing a final rule that prescribed test procedures 
for a variety of products, including EPSs. 71 FR 71340. See also 10 CFR 
part 430, Subpart B, Appendix Z (``Uniform Test Method for Measuring 
the Energy Consumption of External Power Supplies'') (codifying the EPS 
test procedure).
    On December 19, 2007, Congress enacted EISA 2007, which, among 
other things, amended sections 321, 323, and 325 of EPCA (42 U.S.C. 
6291, 6293, and 6295). As part of these amendments, EISA 2007 
supplemented the EPS definition, which the statute defines as an 
external power supply circuit ``used to convert household electric 
current into DC current or lower-voltage AC current to operate a 
consumer product.'' (42 U.S.C. 6291(36)(A)) In particular, Section 301 
of EISA 2007 created a subset of EPSs called ``Class A External Power 
Supplies,'' which consists of, among other elements, those EPSs that 
can convert to only 1 AC or DC output voltage at a time and have a 
nameplate output power of no more than 250 watts (W). The Class A 
definition, as noted earlier, excludes any device requiring Federal 
Food and Drug Administration (FDA) listing and approval as a medical 
device in accordance with section 513 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 360(c)) along with devices that power the 
charger of a detachable battery pack or that charge the battery of a 
product that is fully or primarily motor operated. (42 U.S.C. 
6291(36)(C)) Section 301 of EISA 2007 also established energy 
conservation standards for Class A EPSs that became effective on July 
1, 2008, and directed DOE to conduct an energy conservation standards 
rulemaking to review those standards.
    Additionally, section 309 of EISA 2007 amended section 325(u)(1)(E) 
of EPCA (42 U.S.C. 6295(u)(1)(E)) by directing DOE to issue a final 
rule prescribing energy conservation standards for battery chargers or 
classes of battery chargers or to determine that no energy conservation 
standard is technologically feasible and economically justified. To 
satisfy these requirements, along with those for EPSs, as noted later, 
DOE chose to bundle the rulemakings for these separate products 
together into a single rulemaking effort. The rulemaking requirements 
contained in sections 301 and 309 of EISA 2007 also effectively 
superseded the prior determination analysis that EPACT 2005 required 
DOE to conduct.
    Section 309 of EISA 2007 also instructed DOE to issue a final rule 
to determine whether DOE should issue energy conservation standards for 
EPSs or classes of EPSs by no later than two years after EISA 2007's 
enactment. (42 U.S.C. 6295(u)(1)(E)(i)(I)) Because Congress had already 
set standards for Class A devices, DOE interpreted this determination 
requirement as applying solely to assessing whether energy conservation 
standards would be warranted for EPSs that fall outside of the Class A 
definition, i.e., non-Class A EPSs. Non-Class A EPSs include those 
devices that (1) have a nameplate output power greater than 250 watts, 
(2) are able to convert to more than one AC or DC output voltage 
simultaneously, and (3) are specifically excluded from coverage under 
the Class A EPS definition in EISA 2007 by virtue of their application 
(i.e. EPSs used with medical devices or that power chargers of 
detachable battery packs or batteries of products that are motor-
operated).\12\
---------------------------------------------------------------------------

    \12\ To help ensure that the standards Congress set were not 
applied in an overly broad fashion, DOE applied the statutory 
exclusion not only to those EPSs that require FDA listing and 
approval but also to any EPS that provides power to a medical 
device.
---------------------------------------------------------------------------

    Finally, section 310 of EISA 2007 established definitions for 
active, standby, and off modes, and directed DOE to amend its existing 
test procedures for EPSs to measure the energy consumed in standby mode 
and off mode. (42 U.S.C. 6295(gg)(2)(B)(i)) Consequently, DOE published 
a final rule incorporating standby- and off-mode measurements into the 
DOE test procedure. See 74 FR 13318 (March 27, 2009) DOE later amended 
its test procedure for EPSs by including a measurement method for 
multiple-voltage EPSs and clarified certain definitions within the 
single voltage EPS test procedure. See 76 FR 31750 (June 1, 2011)
    DOE initiated its current rulemaking effort for these products by 
issuing the Energy Conservation Standards Rulemaking Framework Document 
for Battery Chargers and External Power Supplies (the framework 
document), which explained, among other things, the issues, analyses, 
and process DOE would follow in developing potential standards for non-
Class A EPSs and amended standards for Class A EPSs. See http://www.regulations.gov/#!documentDetail;D=EERE-2008-BT-STD-0005-0005. 74 
FR 26816 (June 4, 2009). DOE also published a notice of proposed 
determination regarding the setting of standards for non-Class A EPSs. 
74 FR 56928 (November 3, 2009). These notices were followed by a final 
determination published on May 14, 2010, 75 FR 27170, which concluded 
that energy conservation standards for non-Class A EPSs appeared to be 
technologically feasible and economically justified, and would be 
likely to result in significant energy savings. Consequently, DOE 
decided to include non-Class A EPSs in the present energy conservation 
standards rulemaking for battery chargers and EPSs.\13\
---------------------------------------------------------------------------

    \13\ See http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/23.
---------------------------------------------------------------------------

    On September 15, 2010, having considered comments from interested 
parties, gathered additional information, and performed preliminary 
analyses for the purpose of developing potential amended energy 
conservation standards for Class A EPSs and new energy conservation 
standards for battery chargers and non-Class A EPSs, DOE announced a 
public meeting and the availability on its Web site of a preliminary 
technical support document (preliminary TSD). 75 FR 56021. The 
preliminary TSD discussed the comments DOE had received in response to 
the framework document and described the actions DOE had taken up to 
this point, the analytical framework DOE was using, and the content and 
results of DOE's preliminary analyses. Id. at 56023, 56024. DOE 
convened the public meeting to discuss and receive comments on: (1) The 
product classes DOE analyzed, (2) the analytical framework, models, and 
tools that DOE was using to evaluate potential standards, (3) the 
results of the preliminary analyses performed by DOE, (4) potential 
standard levels that DOE might consider, and (5) other issues 
participants believed were relevant to the rulemaking. Id. at 56021, 
56024. DOE also invited written comments on these matters. The public 
meeting took place on October 13, 2010. Many interested parties 
participated by submitting written comments.
    DOE published a notice of proposed rulemaking (NOPR) on March 27, 
2012. 77 FR 18478. Shortly after, DOE also published on its Web site 
the complete TSD for the proposed rule, which incorporated the complete 
analyses DOE conducted and technical documentation for each analysis. 
The NOPR TSD included the LCC spreadsheet, the national impact analysis 
spreadsheet, and the manufacturer impact analysis (MIA) spreadsheet--
all of which are available in the docket for this rulemaking. In the 
March 2012 NOPR, in addition to proposing potential standards for 
battery chargers, DOE

[[Page 7857]]

proposed amended energy conservation standards for EPSs as follows:
[GRAPHIC] [TIFF OMITTED] TR10FE14.009


[[Page 7858]]


[GRAPHIC] [TIFF OMITTED] TR10FE14.010

    In the March 2012 NOPR, DOE identified 36 specific issues related 
to battery chargers and EPSs on which it was particularly interested in 
receiving comments. Id. at 18642-18644. DOE also sought comments and 
data that would allow DOE to further bring clarity to the issues 
surrounding battery chargers and EPSs, and determine how the issues 
discussed in the March 2012 NOPR could be adequately addressed. DOE 
also held a public meeting in Washington, DC, on May 2, 2012, to 
solicit comment and information from the public relevant to the 
proposed rule. Finally, DOE received many written comments on these and 
other issues in response to the March 2012 NOPR. All commenters, along 
with their corresponding abbreviations and organization type, are 
listed in Table II-3. In today's notice, DOE summarizes and addresses 
the issues these commenters raised that relate to EPSs. The March 2012 
NOPR included additional, detailed background information on the 
history of this rulemaking. See id. at 18493- 18495.

                     Table II-3--List of Commenters
------------------------------------------------------------------------
          Organization               Abbreviation      Organization type
------------------------------------------------------------------------
ARRIS Group, Inc................  ARRIS Group.......  Manufacturer.
ASAP, ASE, ACEEE, CFA, NEEP, and  ASAP, et al.......  Energy Efficiency
 NEEA.                                                 Advocates.
Association of Home Appliance     AHAM..............  Industry Trade
 Manufacturers.                                        Association.
Brother International             Brother             Manufacturer.
 Corporation.                      International.
California Energy Commission....  California Energy   State Entity.
                                   Commission.
California Investor-Owned         CA IOUs...........  Utilities.
 Utilities.
Cobra Electronics Corporation...  Cobra Electronics.  Manufacturer.
Consumer Electronics Association  CEA...............  Industry Trade
                                                       Association.
Delta-Q Technologies Corp.......  Delta-Q             Manufacturer.
                                   Technologies.
Dual-Lite, a Division of Hubbell  Dual-Lite.........  Manufacturer.
 Lighting, Inc..
Duracell........................  Duracell..........  Manufacturer.
Eastman Kodak Company...........  Eastman Kodak.....  Manufacturer.
Flextronics Power...............  Flextronics.......  Manufacturer.
GE Healthcare...................  GE Healthcare.....  Manufacturer.
Information Technology Industry   ITI...............  Industry Trade
 Council.                                              Association.
Jerome Industries, a subsidiary   Jerome Industries.  Manufacturer.
 of Astrodyne.
Korean Agency for Technology and  Republic of Korea.  Foreign
 Standards.                                            Government.
Logitech Inc....................  Logitech..........  Manufacturer.
Microsoft Corporation...........  Microsoft.........  Manufacturer.
Motorola Mobility, Inc..........  Motorola Mobility.  Manufacturer.
National Electrical               NEMA..............  Industry Trade
 Manufacturers Association.                            Association.
Natural Resources Defense         NRDC..............  Energy Efficiency
 Council.                                              Advocate.
Nintendo of America Inc.........  Nintendo of         Manufacturer.
                                   America.
Nokia Inc.......................  Nokia.............  Manufacturer.
Northeast Energy Efficiency       NEEP..............  Energy Efficiency
 Partnerships.                                         Advocate.
Northwest Energy Efficiency       NEEA and NPCC.....  Energy Efficiency
 Alliance and the Northwest                            Advocates.
 Power and Conservation Council.
NRDC, ACEEE, ASAP, CFA,           NRDC, et al.......  Energy Efficiency
 Earthjustice, MEEA, NCLC, NEEA,                       Advocates.
 NEEP, NPCC, Sierra Club, SEEA,
 SWEEP.
Panasonic Corporation of North    Panasonic.........  Manufacturer.
 America.
PG&E and SDG&E..................  PG&E and SDG&E....  Utilities.
Philips Electronics.............  Philips...........  Manufacturer.
Plantronics.....................  Plantronics.......  Manufacturer.
Power Sources Manufacturers       PSMA..............  Industry Trade
 Association.                                          Association.
Power Tool Institute, Inc.......  PTI...............  Industry Trade
                                                       Association.
Salcomp Plc.....................  Salcomp...........  Manufacturer.
Schneider Electric..............  Schneider Electric  Manufacturer.
Security Industry Association...  SIA...............  Industry Trade
                                                       Association.
Telecommunications Industry       TIA...............  Industry Trade
 Association.                                          Association.

[[Page 7859]]

 
Wahl Clipper Corporation........  Wahl Clipper......  Manufacturer.
------------------------------------------------------------------------

III. General Discussion

A. Compliance Date

    The compliance date is the date when a new standard becomes 
operative, i.e., the date by which EPS manufacturers must manufacture 
products that comply with the standard. EISA 2007 directed DOE to 
complete a rulemaking to amend the Class A EPS standards by July 1, 
2011, with compliance required by July 1, 2013, i.e., giving 
manufacturers a two-year lead time to satisfy those standards. (42 
U.S.C. 6295(u)(3)(D)(i)) There are no similar requirements for non-
Class A EPSs. DOE used a compliance date of 2013 in the analysis it 
prepared for its March 2012 NOPR. As a result, some interested parties 
assumed in their comments to DOE that the compliance date would be July 
1, 2013.
    Many parties submitted comments on the duration of the compliance 
period for EPS standards. Nokia and Plantronics requested 18 to 24 
months; AHAM, CEA, Eastman Kodak, Flextronics, ITI, Microsoft, and 
Salcomp requested two years; Panasonic requested a minimum of two years 
and preferably three years; Nintendo of America requested four years; 
and Motorola Mobility requested at least five years. These commenters 
cited the need to make engineering design changes, conduct reliability 
evaluations, and obtain regulatory approvals for safety, EMC, and other 
global standards. (Nokia, No. 132 at p. 2; Plantronics, No. 156 at p. 
1; AHAM, No. 124 at p. 5; CEA, No. 106 at p. 6; Eastman Kodak, No. 125 
at p. 1; Flextronics, No. 145 at p. 1; ITI, No. 131 at p. 6; Microsoft, 
No. 110 at p. 3; Salcomp, No. 73 at p. 2; Panasonic, No. 120 at p. 5; 
Nintendo of America, No. 135 at p. 1; Motorola Mobility, No. 121 at p. 
2) NEMA also cautioned that the broad scope and severe limits in the 
proposed rule would force the withdrawal of systems from the 
marketplace until testing is concluded and threaten the availability of 
certain consumer products if insufficient lead time is provided. (NEMA, 
No. 134 at p. 2) CEA and Panasonic later submitted supplemental 
comments in response to DOE's March 2013 Request for Information 
requesting that DOE require compliance in 2017, to harmonize with the 
standards the European Union has proposed adopting. (CEA, No. 208 at p. 
4; Panasonic, No. 210 at p. 2)
    Consistent with the two-year lead time provided in EPCA, and in 
light of the passing of the statutorily-prescribed 2013 effective date, 
DOE will provide manufacturers with a lead-time of the same duration as 
prescribed by statute to comply with the new and amended standards set 
forth in today's final rule. EISA 2007 directed DOE to publish a final 
rule for EPSs by July 1, 2011 and further stipulated that any amended 
standards would apply to products manufactured on or after July 1, 
2013, two years later. (42 U.S.C. 6295(u)) In DOE's view, Congress 
created this two-year interval to ensure that manufacturers would have 
sufficient time to meet any new and amended standards that DOE may set 
for EPSs. In effect, DOE is preserving the original compliance period 
length contained in EISA 2007 and ensuring that manufacturers will have 
sufficient time to transition to the new and amended standards.

B. Product Classes and Scope of Coverage

1. General
    When evaluating and establishing energy conservation standards, DOE 
may divide covered products into product classes by the type of energy 
used or by capacity or other performance-related features that would 
justify a different standard. In making a determination whether a 
performance-related feature justifies a different standard, DOE must 
consider such factors as the utility to the consumer of the feature and 
other factors DOE determines are appropriate. See 42 U.S.C. 6295(q) 
(outlining the criteria by which DOE may set different standards for a 
product). EPS product classes are discussed in section IV.A.2.
    An ``external power supply'' is an external power supply circuit 
that is used to convert household electric current into DC current or 
lower-voltage AC current to operate a consumer product. (42 U.S.C. 
6291(36)(A)) EPCA, as amended by EISA 2007, also prescribes the 
criteria for a subcategory of EPSs--those classified as Class A EPSs 
(or in context, ``Class A''). Under 42 U.S.C. 6291(36)(C)(i), a Class A 
EPS is a device that:
    1. Is designed to convert line voltage AC input into lower voltage 
AC or DC output;
    2. is able to convert to only one AC or DC output voltage at a 
time;
    3. is sold with, or intended to be used with, a separate end-use 
product that constitutes the primary load;
    4. is contained in a separate physical enclosure from the end-use 
product;
    5. is connected to the end-use product via a removable or hard-
wired male/female electrical connection, cable, cord, or other wiring; 
and
    6. has nameplate output power that is less than or equal to 250 
watts.
    The Class A definition excludes any device that either (a) requires 
Federal Food and Drug Administration listing and approval as a medical 
device in accordance with section 513 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 360(c)) or (b) powers the charger of a 
detachable battery pack or charges the battery of a product that is 
fully or primarily motor operated. See 42 U.S.C. 6291(36)(C)(ii).
    Based on DOE's examination of product information, all EPSs appear 
to share four of the six criteria under the Class A definition in that 
all are:
     Designed to convert line voltage AC input into lower 
voltage AC or DC output;
     sold with, or intended to be used with, a separate end-use 
product that constitutes the primary load;
     contained in a separate physical enclosure from the end-
use product; and
     connected to the end-use product via a removable or hard-
wired male/female electrical connection, cable, cord, or other wiring.
    Examples of devices that fall outside of Class A (in context, 
``non-Class A'') include EPSs that can convert power to more than one 
output voltage at a time (multiple voltage), EPSs that have nameplate 
output power exceeding 250 watts (high-power), EPSs used to power 
medical devices, and EPSs that provide power to the battery chargers of 
motorized applications and detachable battery packs (MADB). After 
examining the potential for energy savings that could result from 
standards for non-Class A devices, DOE concluded that standards for 
these devices would be likely to result in significant energy savings 
and be technologically feasible and economically justified. 75 FR 27170 
(May 14, 2010). With today's notice, DOE is amending the current 
standards for Class A EPSs and adopting new

[[Page 7860]]

standards for multiple-voltage and high-power EPSs.
    NEMA commented in response to the NOPR that combining battery 
chargers and EPSs into a single rulemaking created burden on 
manufacturers in terms of being able to process the standards proposed 
in the NOPR. NEMA recommended that DOE delay the announcement of new 
and amended standards for EPSs and begin a new rulemaking process 
dedicated solely to EPSs after publishing a final rule for battery 
chargers. According to NEMA, EISA 2007 allows DOE to opt out of 
amending standards at this time if those standards are not warranted 
and instead revisit the possibility of amending EPS standards as part 
of a second rulemaking cycle. (NEMA, No. 134 at p. 6)
    With respect to battery chargers, DOE issued a Request for 
Information (RFI) on March 26, 2013, in which DOE sought additional 
information. (78 FR 18253) The RFI sought, among other things, 
information on battery chargers that manufacturers had certified as 
compliant with the California Energy Commission (CEC) standards that 
became effective on February 1, 2013. The notice also offered 
commenters the opportunity to raise for comment any other issues 
relevant to the proposal.
    Several efficiency advocates submitted comments in response to 
DOE's RFI, requesting that DOE split the combined battery charger and 
EPS rulemaking into two separate rulemakings and issue EPS standards as 
soon as possible. (NRDC, et al., No. 209 at p. 2; CA IOUs, No. 197 at 
p. 9; California Energy Commission, No. 199 at p. 14; NEEA and NPCC, 
No. 200 at p. 2) These commenters gave three reasons for quickly 
finalizing the EPS rule: (1) The significant energy and economic 
savings expected to result from the EPS standard, (2) the need to move 
quickly to finalize standards before the underlying technical data 
become outdated, and (3) the statutory deadline of July 1, 2011 for 
publishing the EPS final rule. In response to DOE's March 2013 Request 
for Information, Dual-Lite, a division of Hubbell Lighting, commented 
that it ``challenges the DOE to adopt a bias towards action in 
rulemakings, whereby initial rules are performed with a cant towards 
getting a more modest rule out the door in a timely manner, versus 
chasing every 0.01 watt of potential savings . . . and delaying actual 
energy savings by months or years.'' (Dual-Lite, No. 189 at p. 3)
    As explained above, this rulemaking initially addressed both 
battery chargers and EPSs. After proposing standards for both product 
types in March 2012, and giving careful consideration to the complexity 
of the issues related to the setting of standards for battery chargers, 
DOE has decided to adopt energy conservation standards for EPSs while 
weighing for further consideration the promulgation of energy 
conservation standards for battery chargers at a later date. The 
battery charger rulemaking has been complicated by a number of factors, 
including the setting of standards by the CEC, which other states have 
chosen to follow.\14\ Because the California standards have already 
become effective, manufacturers are already required to meet that 
battery charger standard. DOE has previously indicated that the facts 
before it did not indicate that it would be likely manufacturers would 
continue to create separate products for California and the rest of the 
country. See 77 FR at 18502. The likelihood of this split-approach 
occurring is even less likely, given that other states have adopted the 
California standards. As a result, DOE believes that manufacturers are 
already making efforts to meet the levels set by California. To avoid 
unnecessary disruptions to the market, provide some level of 
consistency and stability to affected entities, and to further evaluate 
the impacts associated with the California-based standards, DOE is 
deferring the setting of battery charger standards at this time. 
Consequently, today's notice focuses solely on the standards that are 
being adopted today for EPSs, along with the detailed product classes 
that will apply. For further detail, see the March 2013 Request for 
Information.
---------------------------------------------------------------------------

    \14\ Oregon has adopted the California standards; Washington, 
Connecticut and New Jersey are considering doing the same.
---------------------------------------------------------------------------

2. Definition of Consumer Product
    As noted above, the term ``external power supply'' refers to an 
external power supply circuit that is used to convert household 
electric current into DC current or lower-voltage AC current to operate 
a consumer product.
    DOE received comments from a number of stakeholders seeking 
clarification on the definition of a consumer product. Schneider 
Electric commented that the definition of consumer product is 
``virtually unbounded'' and ``provides no definitive methods to 
distinguish commercial or industrial products from consumer products.'' 
(Schneider Electric, No. 119 at p. 2) ITI commented that a more narrow 
definition of a consumer product is needed to determine which state 
regulations are preempted by federal standards. (ITI, No. 131 at p. 2) 
NEMA commented that the FAQ on the DOE Web site is insufficient to 
resolve its members' questions. (NEMA, No. 134 at p. 2) NEMA further 
sought clarification on whether EPSs that power building system 
components are within the scope of this rulemaking. According to NEMA, 
such EPSs typically are permanently installed in electrical rooms near 
the electrical entrance to the building and power such things as 
communication links, central processors for building or lighting 
management systems, and motorized shades. (NEMA, No. 134 at pp. 6-7) 
These stakeholders suggested ways that DOE could clarify the definition 
of a consumer product:
     Adopt the ENERGY STAR battery charger definition.
     Limit the scope to products marketed as compliant with the 
FCC's Class B emissions limits.
     Define consumer products as ``pluggable Type A Equipment 
(as defined by IEC 60950-1), with an input rating of less than or equal 
to 16A.''
    Lutron Electronics commented that it does not believe that the EPSs 
that power components of the lighting control systems and window 
shading systems it manufactures are within the scope of the EPS 
rulemaking because EPSs that meet the special requirements of such 
applications and meet the proposed standards are not commercially 
available. (Lutron Electronics, No. 141 at p. 2) DOE also received 
comments from NEMA and Philips regarding how DOE would treat 
illuminated exit signs and egress lighting. (NEMA, No. 134 at p. 6; 
Philips, No. 128 at p. 2)
    EPCA defines a consumer product as any article of a type that 
consumes or is designed to consume energy and which, to any significant 
extent, is distributed in commerce for personal use or consumption by 
individuals. See 42 U.S.C. 6291(1). Manufacturers are advised to use 
this definition (in conjunction with the EPS definition) to determine 
whether a given device shall be subject to EPS standards. Additional 
guidance is contained in the FAQ document that NEMA referred to, which 
can be downloaded from DOE's Web site.\15\
---------------------------------------------------------------------------

    \15\ http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/cce_faq.pdf.
---------------------------------------------------------------------------

    Consistent with the statutory language and guidance noted above, 
DOE notes that Congress treated EPSs, along with illuminated exit 
signs, as consumer products. See 42 U.S.C. 6295(u) and (w) (provisions 
related to requirements for EPSs and illuminated exit signs, both of

[[Page 7861]]

which are located in Part A of EPCA, which addresses residential 
consumer products). In light of this treatment, by statute, EPSs are 
considered consumer products under EPCA. Accordingly, DOE is treating 
these products in a manner consistent with the framework established by 
Congress.
3. Power Supplies for Solid State Lighting
    NEMA and Philips commented that power supplies for solid state 
lighting (SSL) should not be included in the scope of this rulemaking. 
(NEMA, No. 134 at pp. 3-7; Philips, No. 128 at p. 2) They offered the 
following arguments against the inclusion of SSL power supplies:
     SSL is often used in commercial applications, and 
therefore should not be considered a consumer product;
     SSL power supplies are considered a part of the system as 
a whole and typically tested as such;
     SSL power supplies perform other functions in addition to 
power conversion, such as dimming;
     SSL is an emerging technology and increasing efficiency 
could lead to costs that are prohibitive to most consumers; and
     Regulating components of SSL could contradict DOE's other 
efforts, which include promoting the adoption of SSL.
    DOE notes that Congress prescribed the criteria for an EPS to meet 
in order to be considered a covered product. A device meeting those 
criteria is an EPS under the statute and subject to the applicable EPS 
standards. DOE has no authority to alter these statutorily-prescribed 
criteria.
    Further, all Class A EPSs are subject to the current Class A EPS 
standards, and those that are direct operation EPSs will be subject to 
the amended EPS standards being adopted today. The fact that a given 
type of product, such as SSL products, is often used in commercial 
applications does not mean that it is not a consumer product, as 
explained above. DOE recognizes that many EPSs are considered an 
integral part of the consumer products they power and may be tested as 
such; however, this does not obviate the need to ensure that the EPS 
also meets applicable EPS standards. DOE has determined that there are 
no technical differences between the EPSs that power certain SSL 
(including LED) products and those that are used with other end-use 
applications. And as DOE indicated in its proposal, although it did not 
initially include these devices as part of its NOPR analysis, DOE 
indicated that it may consider revising this aspect of its analysis. 77 
FR at 18503. Therefore, DOE believes that subjecting SSL EPSs to EPS 
standards will not adversely impact SSL consumers, since these devices 
should be able to satisfy the standards. DOE notes that following this 
approach is also consistent with DOE's other efforts, including those 
to promote the broader adoption of SSL technologies.
4. Medical Devices
    As explained above, EPSs for medical devices are not subject to the 
current standards created by Congress in December 2007. In its May 2010 
determination, DOE initially determined that standards for EPSs used to 
power medical devices were warranted because they would result in 
significant energy savings while being technologically feasible and 
economically justified. As a result, in the March 2012 NOPR, DOE 
proposed standards for these devices.
    DOE subsequently received comments from GE Healthcare and Jerome 
Industries, which manufactures power supplies for medical devices. 
These commenters gave several reasons not to apply standards to these 
products. The commenters noted that the design, manufacture, 
maintenance, and post-market monitoring of medical devices is highly 
regulated by the U.S. FDA, and EPS standards would only add to this 
already quite substantial regulatory burden. They also commented that 
there are a large number of individual medical device models, each of 
which must be tested along with its component EPS to ensure compliance 
with applicable standards; redesign of the EPS to meet DOE standards 
would require that all of these models be retested and reapproved, at a 
significant per-unit cost, especially for those devices that are 
produced in limited quantities. Jerome Industries also expressed 
concern that the proposed EPS standards are inconsistent with the 
reliability and safety requirements incumbent on some medical devices, 
i.e., asserting that an EPS cannot be engineered to meet the proposed 
standards and these other requirements. Lastly, Jerome Industries noted 
that medical EPSs are exempt from EPS standards in other jurisdictions, 
including Europe, Australia, New Zealand, and California. (GE 
Healthcare, No. 142 at p. 2; Jerome Industries, No. 191 at pp. 1-2)
    Given these concerns, DOE has reevaluated its proposal to set 
energy conservation standards for medical device EPSs. While DOE 
believes, based on available data, that standards for these devices may 
result in energy savings, DOE also wishes to avoid any action that 
could potentially impact reliability and safety. In the absence of 
sufficient data on this issue, and consistent with DOE's obligation to 
consider such adverse impacts when identifying and screening design 
options for improving the efficiency of a product, DOE has decided to 
refrain from setting standards for medical EPSs at this time. See 42 
U.S.C. 6295(o)(2)(b)(i)(VII). See also 10 CFR part 430, subpart C, 
appendix A, (4)(a)(4) and (5)(b)(4) (collectively setting out DOE's 
policy in evaluating potential energy conservation standards for a 
product).
5. Security and Life Safety Equipment
    The Security Industry Association sought confirmation that 
``security or life safety alarms or surveillance systems'' would 
continue to be excluded from the no-load power requirements that were 
first established in EISA 2007. (SIA, No. 115 at pp. 1-2) See also 42 
U.S.C. 6295(u)(3)(E). This exclusion applies only to the no-load mode 
standard established in EISA 2007 for Class A EPSs. Consistent with 
this temporary exemption, DOE is not requiring these devices to meet a 
no-load mode requirement. Therefore, life safety and security system 
EPSs will, until the statutorily-prescribed sunset date of July 1, 
2017, not be required to meet a no-load standard. At the appropriate 
time, DOE will re-examine this exemption and may opt to prescribe no-
load standards for these products in the future.
6. Service Parts and Spare Parts
    Several commenters requested a temporary exemption from the 
standards being finalized today for service part and spare part EPSs. 
(CEA, No. 106 at p. 7; Eastman Kodak, No. 125 at p. 2; ITI, No. 131 at 
p. 9; Motorola Mobility, No. 121 at p. 11; Nintendo of America, No. 135 
at p. 2) Panasonic commented that ``a seven-year exemption is necessary 
for manufacturers to meet their legal and customer service obligations 
to stock and supply spare parts for sale, product servicing, and 
warranty claims for existing products.'' (Panasonic, No. 120 at p. 6) 
Panasonic later requested a 9-year exemption, in response to DOE's 
March 2013 Request for Information. (Panasonic, No. 210 at p. 2) 
Brother International cited the added cost and unnecessary electronic 
waste that would result from having to stockpile a sufficient quantity 
of legacy EPSs to meet future needs for service or spare parts. 
(Brother International, No. 111 at p. 2)

[[Page 7862]]

    EPCA exempts Class A EPSs from meeting the statutorily prescribed 
standards if the devices are manufactured before July 1, 2015, and are 
made available by the manufacturer as service parts or spare parts for 
end-use consumer products that were manufactured prior to the end of 
the compliance period (July 1, 2008). (42 U.S.C. 6295(u)(3)(B)) 
Congress created this limited (and temporary) exemption as part of a 
broad range of amendments under EISA 2007. The provision does not grant 
DOE with the authority to expand or extend the length of this exemption 
and Congress did not grant DOE with the general authority to exempt any 
already covered product from the requirements set by Congress. 
Accordingly, DOE cannot grant the relief sought by these commenters.

C. Technological Feasibility

    Energy conservation standards promulgated by DOE must be 
technologically feasible. This section addresses the manner in which 
DOE assessed the technological feasibility of the new and amended 
standards being adopted today.
1. General
    In each standards rulemaking, DOE conducts a screening analysis 
based on information gathered on all current technology options and 
prototype designs that could improve the efficiency of the products or 
equipment that are the subject of the rulemaking. As the first step in 
such an 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 those means for 
improving efficiency are technologically feasible. DOE considers 
technologies incorporated in commercially available products or in 
working prototypes to be technologically feasible. 10 CFR part 430, 
subpart C, appendix A, section 4(a)(4)(i).
    After DOE has determined that particular technology options are 
technologically feasible, it further evaluates each technology option 
in light of the following additional screening criteria: (1) 
Practicability to manufacture, install, or service; (2) adverse impacts 
on product utility or availability; and (3) adverse impacts on health 
or safety. Section IV.B of this notice discusses the results of the 
screening analysis for EPSs, particularly the designs DOE considered, 
those it screened out, and those that are the basis for the trial 
standard levels (TSLs) analyzed in this rulemaking. For further detail, 
see chapter 4 of the technical support document (TSD), which 
accompanies this final rule and can be found in the docket on 
regulations.gov.
2. Maximum Technologically Feasible Levels
    When proposing an amended standard for a type or class of covered 
product, DOE must determine the maximum improvement in energy 
efficiency or maximum reduction in energy use that is technologically 
feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the 
engineering analysis, DOE determined the maximum technologically 
feasible (``max-tech'') improvements in energy efficiency for EPSs 
using the design parameters for the most efficient products available 
on the market or in working prototypes. (See chapter 5 of the final 
rule TSD.) The max-tech levels that DOE determined for this rulemaking 
are described in section IV.C of this final rule.

D. Energy Savings

1. Determination of Savings
    For each TSL, DOE projected energy savings from the products that 
are the subject of this rulemaking purchased in the 30-year period that 
begins in the year of compliance with new and amended standards (2015-
2044). The savings are measured over the entire lifetime of products 
purchased in the 30-year period.\16\ DOE quantified the energy savings 
attributable to each TSL as the difference in energy consumption 
between each standards case and the base case. The base case represents 
a projection of energy consumption in the absence of new and amended 
mandatory efficiency standards, and considers market forces and 
policies that affect demand for more efficient products.
---------------------------------------------------------------------------

    \16\ In the past DOE presented energy savings results for only 
the 30-year period that begins in the year of compliance. In the 
calculation of economic impacts, however, DOE considered operating 
cost savings measured over the entire lifetime of products purchased 
in the 30-year period. DOE has chosen to modify its presentation of 
national energy savings to be consistent with the approach used for 
its national economic analysis.
---------------------------------------------------------------------------

    DOE used its national impact analysis (NIA) spreadsheet model to 
estimate energy savings from new and amended standards for the products 
that are the subject of this rulemaking. The NIA spreadsheet model 
(described in section IV.H of this notice) calculates energy savings in 
site energy, which is the energy directly consumed by products at the 
locations where they are used. For electricity, DOE reports national 
energy savings in terms of the savings in the energy that is used to 
generate and transmit the site electricity. To calculate this quantity, 
DOE derives annual conversion factors from the model used to prepare 
the Energy Information Administration's (EIA) Annual Energy Outlook 
(AEO).
    DOE has also begun to estimate full-fuel-cycle energy savings. 76 
FR 51282 (Aug. 18, 2011), as amended at 77 FR 49701 (August 17, 2012). 
The full-fuel-cycle (FFC) metric includes the energy consumed in 
extracting, processing, and transporting primary fuels, and thus 
presents a more complete picture of the impacts of energy efficiency 
standards. For this final rule, DOE did not include the FFC in the NIA. 
However, DOE developed a sensitivity analysis that estimates these 
additional impacts from production activities. DOE's approach is based 
on calculation of an FFC multiplier for each of the energy types used 
by covered products.
2. Significance of Savings
    As noted above, 42 U.S.C. 6295(o)(3)(B) prevents DOE from adopting 
a standard for a covered product unless such standard would result in 
``significant'' energy savings. Although the term ``significant'' is 
not defined in the Act, the U.S. Court of Appeals, in Natural Resources 
Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985), 
indicated that Congress intended ``significant'' energy savings in this 
context to be savings that were not ``genuinely trivial.'' The energy 
savings for all of the TSLs considered in this rulemaking (presented in 
section V.B.3) are nontrivial, and, therefore, DOE considers them 
``significant'' within the meaning of section 325 of EPCA.

E. Economic Justification

1. Specific Criteria
    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)) This section discusses how DOE has addressed 
each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of a new and amended standard on 
manufacturers, DOE first uses an annual cash-flow approach to determine 
the quantitative impacts. This step includes both a short-term 
assessment--based on the cost and capital requirements during the 
period between when a regulation is issued and when entities must 
comply with the regulation--and a long-term

[[Page 7863]]

assessment over a 30-year period. The industry-wide impacts analyzed 
include industry net present value (INPV), which values the industry on 
the basis of expected future cash flows; cash flows by year; changes in 
revenue and income; and other measures of impact, as appropriate. 
Second, DOE analyzes and reports the impacts on different types of 
manufacturers, including 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. Finally, DOE 
takes into account cumulative impacts of various DOE regulations and 
other regulatory requirements on manufacturers.
    For individual consumers, measures of economic impact include the 
changes in life-cycle cost (LCC) and payback period (PBP) associated 
with new and amended standards. The LCC, which is specified separately 
in EPCA as one of the seven factors to be considered in determining the 
economic justification for a new and amended standard, 42 U.S.C. 
6295(o)(2)(B)(i)(II), is discussed in the following section. For 
consumers in the aggregate, DOE also calculates the national net 
present value of the economic impacts applicable to 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 projected market 
trends in the absence of new and 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. For its analysis, DOE assumes 
that consumers will purchase the considered products in the first year 
of compliance with new and amended standards.
    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. DOE identifies the 
percentage of consumers estimated to receive LCC savings or experience 
an LCC increase, in addition to the average LCC savings associated with 
a particular standard level. DOE also evaluates the LCC impacts of 
potential standards on identifiable subgroups of consumers that may be 
affected disproportionately by a national standard.
c. Energy Savings
    Although 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)) As 
discussed in section IV.H, DOE uses the NIA spreadsheet to project 
national energy 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 evaluates 
standards that would not lessen the utility or performance of the 
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) DOE received no 
comments that EPS standards would increase their size and reduce their 
convenience nor have any other significant adverse impacts on consumer 
utility. Thus, DOE believes that the standards adopted in today's final 
rule will not reduce the utility or performance of the products under 
consideration in this rulemaking.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from the imposition of a standard. (42 U.S.C. 
6295(o)(2)(B)(i)(V) It also directs the Attorney General to determine 
the impact, if any, of any lessening of competition likely to result 
from a standard and to transmit such determination to the Secretary 
within 60 days of the publication of a proposed rule, together with an 
analysis of the nature and extent of the impact. (42 U.S.C. 
6295(o)(2)(B)(ii)) DOE transmitted a copy of its proposed rule to the 
Attorney General with a request that the Department of Justice (DOJ) 
provide its determination on this issue. DOJ did not file any comments 
or determination with DOE on the proposed rule.
f. Need for National Energy Conservation
    The energy savings from new and amended standards are likely to 
provide improvements to the security and reliability of the nation's 
energy system. Reductions in the demand for electricity also may result 
in reduced costs for maintaining the reliability of the nation's 
electricity system. DOE conducts a utility impact analysis to estimate 
how standards may affect the nation's needed power generation capacity.
    The new and amended standards also are likely to result in 
environmental benefits in the form of reduced emissions of air 
pollutants and greenhouse gases associated with energy production. DOE 
reports the emissions impacts from today's standards and from each TSL 
it considered in section V.B.6 of this notice. DOE also reports 
estimates of the economic value of emissions reductions resulting from 
the considered TSLs.
g. Other Factors
    EPCA allows the Secretary of Energy, in determining whether a 
standard is economically justified, to consider any other factors that 
the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII))
2. Rebuttable Presumption
    As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates 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's energy savings resulting from the standard, as 
calculated under the applicable DOE test procedure. DOE's LCC and PBP 
analyses generate values used to calculate the effect potential new and 
amended energy conservation standards would have on the payback period 
for consumers. These analyses include, but are not limited to, the 3-
year payback period contemplated under the rebuttable-presumption test. 
In addition, DOE routinely conducts an economic analysis that considers 
the full range of impacts to consumers, manufacturers, the nation, and 
the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The 
results of this analysis serve as the basis for DOE's evaluation of 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 sections IV.F.15 and V.B.1.c of this final rule.

IV. Methodology and Discussion

A. Market and Technology Assessment

    For the market and technology assessment, DOE develops information

[[Page 7864]]

that provides an overall picture of the market for the products 
concerned, including the purpose of the products, the industry 
structure, and market characteristics. This activity includes both 
quantitative and qualitative assessments, based primarily on publicly 
available information. The subjects addressed in the market and 
technology assessment for this rulemaking include product classes and 
manufacturers; quantities and types of products sold and offered for 
sale; retail market trends; regulatory and non-regulatory programs; and 
technologies or design options that could improve the energy efficiency 
of the products under examination. See chapter 3 of the TSD for further 
detail.
1. Market Assessment
    To characterize the market for EPSs, DOE gathered information on 
the products that use them. DOE refers to these products as end-use 
consumer products or EPS ``applications.'' This method was chosen for 
two reasons. First, EPSs are nearly always bundled with or otherwise 
intended to be used with a given application; therefore, the demand for 
applications drives the demand for EPSs. Second, because most EPSs are 
not stand-alone products, their shipments, lifetimes, usage profiles, 
and power requirements are all determined by the associated 
application.
    DOE analyzed the products offered by online and brick-and-mortar 
retail outlets to determine which applications use EPSs and which EPS 
technologies are most prevalent. The list of applications analyzed and 
a full explanation of the market assessment methodology can be found in 
chapter 3 of the TSD.
    While DOE identified the majority of EPS applications, some may not 
have been included in the NOPR analysis. This is due in part because 
the EPS market is dynamic and constantly evolving. As a result some 
applications that use EPSs were not found because they either made up 
an insignificant market share or were introduced to the market after 
the NOPR analysis was conducted. The EPSs for any other applications 
not explicitly analyzed in the market assessment will still be subject 
to the standards announced in today's notice as long as they meet the 
definition of a covered product outlined in the previous section. That 
is, DOE's omission of any particular EPS application from its analysis 
is not by itself an indication that the EPSs that power that 
application are not subject to EPS standards.
    DOE relied on published market research to estimate base-year 
shipments for all applications. DOE estimated that in 2009 a total of 
345 million EPSs were shipped for final sale in the United States.
    DOE did not receive any comments on its assumptions for total base 
year (2009) EPS shipments, but did receive comments on its efficiency 
distributions. ARRIS Group commented that it is nearly impossible to 
purchase EPSs at level IV (the current federal standard level) because 
nearly all products comply with the ENERGY STAR standard (level V); 
ARRIS Group, however, provided no data in support of this claim.\17\ 
(ARRIS Group, No. 105 at p. 1) To determine the distribution of 
shipments at different efficiency levels, DOE relied on EPS testing 
conducted as part of the Engineering Analysis. Of the products DOE 
tested, 61% were below level V. DOE assumed that half of the EPSs below 
level V would improve in efficiency up to level V by the beginning of 
the analysis period in 2015, leaving 30% at level IV and the remaining 
70% at level V or higher. When the ENERGY STAR program for EPSs ended 
in 2010, EPA estimated that over 50% of the market had reached level V 
efficiency or higher.\18\ DOE appreciates ARRIS Group's input on this 
subject, but has maintained its estimate from the NOPR because it is in 
line with the available data.
---------------------------------------------------------------------------

    \17\ By statute, Class A EPSs be marked with a Roman numeral IV. 
See 42 U.S.C. 6295(u)(3)(C). Since the enactment of that 
requirement, EPA adopted the Roman numeral V mark for products that 
meet the ENERGY STAR criteria (version 2.0). These Roman numerals 
correspond to higher levels of efficiency--i.e. V denotes a higher 
level of efficiency than IV.
    \18\ U.S. Environmental Protection Agency, May 26, 2010, 
Accessed at http://www.energystar.gov/ia/partners/prod_development/revisions/downloads/eps_eup_sunset_stakeholder_proposal.pdf?6ec1-54bb
---------------------------------------------------------------------------

2. Product Classes
    When necessary, DOE divides covered products into classes by the 
type of energy used, the capacity of the product, and any other 
performance-related feature that justifies different standard levels, 
such as features affecting consumer utility. (42 U.S.C. 6295(q)) DOE 
then conducts its analysis and considers establishing or amending 
standards to provide separate standard levels for each product class.
a. Proposed EPS Product Classes
    In the NOPR, DOE proposed dividing EPSs into those that can 
directly operate an end-use consumer product and those that cannot, 
termed ``direct operation EPSs'' and ``indirect operation EPSs,'' 
respectively. DOE proposed standards only for direct operation EPSs.
    There exist both Class A and non-Class A indirect operation EPSs. 
DOE believes that these two groups of devices are technically 
equivalent, i.e., there is no difference in performance-related 
features between the two groups that would justify different standard 
levels for the two groups. (42 U.S.C. 6295(q)) Because of this 
technical equivalency, DOE grouped these EPSs into one product class 
for analysis, product class N.
    DOE proposed to divide direct operation EPSs into six product 
classes. Two of these six product classes were treated as non-Class A 
EPSs: Product class X for multiple-voltage EPSs (multiple simultaneous 
output currents) and product class H for high-output power EPSs 
(nameplate output power > 250 Watts). All other direct operation EPSs 
were divided among the remaining four product classes (B, C, D, and E) 
and are largely composed of Class A EPSs.
    These classes, however, also contain some non-Class A EPSs, 
specifically direct operation EPSs for battery charged motorized 
applications. Medical EPSs were previously included, but have since 
been removed, as explained in section IV.A.1 above. While these devices 
are functionally the same as Class A devices, they were excluded from 
the Class A definition through Congressional action. See 42 U.S.C. 
6291(36).
    The primary criteria for determining which of these four product 
classes a given EPS falls into are the type of output current (AC or 
DC) and the nameplate output voltage (low-voltage or basic-voltage). 
These are the same parameters used by the former ENERGY STAR program, 
which DOE used to develop a framework for its EPS analysis. DOE 
proposed adopting the ENERGY STAR definitions for low-voltage and 
standard voltage EPSs with minor variations. According to these 
definitions, if a device has a nameplate output voltage of less than 6 
volts and its nameplate output current is greater than or equal to 550 
milliamps, DOE considers that device a low-voltage EPS. A product that 
does not meet the criteria for being a low-voltage EPS is classified as 
a standard-voltage EPS. DOE proposed to use the term ``basic voltage'' 
in place of ``standard voltage.''
    DOE also proposed definitions for AC-DC and AC-AC EPSs. If an EPS 
converts household electrical current into DC output, DOE classifies 
that product as an AC-DC EPS. Conversely, a device that converts 
household electrical current into a lower voltage AC output is an AC-AC 
EPS. Using these parameters, DOE was able to outline the specific 
requirements for its

[[Page 7865]]

product classes included in the EPS rulemaking.
    The next two subsections summarize comments DOE received on the 
proposed product classes and explain how DOE has addressed these 
comments. The subsection that follows contains a list of the product 
classes and definitions being adopted today.
b. Differentiating Between Direct and Indirect Operation EPSs
    An indirect operation EPS is an EPS that cannot power a consumer 
product (other than a battery charger) without the assistance of a 
battery. In other words, if an end-use product only functions when 
drawing power from a battery, the EPS associated with that product is 
classified as an indirect operation EPS. Because the EPS must first 
deliver power and charge the battery before the end-use product can 
function as intended, DOE considers this device an indirect operation 
EPS and defined a separate product class, N, for all such devices. 
Conversely, if the battery's charge status does not impact the end-use 
product's ability to operate as intended, and the end-use product can 
function using only power from the EPS, DOE considers that device a 
direct operation EPS.
    DOE's initial approach for determining whether a given EPS has 
direct operation capability involved removing the battery from the 
application and attempting to operate the application using only power 
from the EPS. While this approach gave the most definitive EPS 
classifications, this procedure had the potential to create 
complications during testing since it frequently requires the removal 
of integral batteries prior to testing. The removal of such batteries 
can often require access to internal circuitry via sealed moldings 
capable of shattering and damaging the application. DOE also considered 
revising this method to account for removable and integral batteries, 
but believed it might create an overly burdensome process for 
manufacturers to follow.
    DOE then developed a new method to distinguish between direct and 
indirect operation EPSs that minimizes both the risk of damage to the 
application and the complexity associated with the removal of internal 
batteries. This approach requires manufacturers to determine whether an 
EPS can operate its end-use product once the associated battery has 
been fully discharged. Based on its close examination of a variety of 
products, DOE believes that direct operation EPSs are able to power the 
application regardless of the state of the battery, while indirect-
operation EPSs need to charge the battery before the application can be 
used as intended. Comparing the time required for an application to 
operate once power is applied during fully discharged and fully charged 
battery conditions would provide a reliable indication of whether a 
given EPS is an indirect or direct operation device. Recording the time 
for the application to reach its intended functionality is necessary 
because certain applications, such as smartphones, contain firmware 
that can delay the EPS from operating the end-use product as expected. 
If the application takes significantly longer to operate once the 
battery has been fully discharged, DOE views this EPS as one that 
indirectly operates the end-use consumer product and classifies it as 
part of product class N. Using this methodology, one can readily 
determine whether a given device is a direct or indirect operation EPS. 
See Chapter 5 and Appendix 3C of the TSD for further details.
    DOE received several comments on its proposed method for 
identifying indirect operation EPSs. Philips suggested that DOE allow 
manufacturers to submit data showing that their products are rarely 
powered directly from the AC mains despite being designed with such 
capability and asked that the EPSs used with these products be 
classified as indirect operation EPSs. (Philips, No. 128 at pp. 3-4) 
AHAM and Wahl Clipper requested that DOE explicitly define what is 
considered to be a ``fully discharged'' battery for determining whether 
a given device is a direct operation EPS. (AHAM, No. 124 at p. 6: Wahl 
Clipper, No. 153 at p. 2)
    The method for determining whether a device is an indirect 
operation EPS was developed to separate EPSs into direct operation 
product classes and the indirect operation product class N, with the 
emphasis specifically on MADB products. It was developed based on the 
technical capabilities of the EPS and battery charging systems. Any 
product's classification determination must be based on the observable 
technical characteristics of that product. The method evaluates whether 
the EPS can power the product when the battery is depleted to the point 
that the battery can no longer operate the end-use consumer product as 
it was intended to be used. DOE considers this point to be when a 
battery is ``fully discharged.''
    NRDC commented that DOE's proposed method for determining whether a 
given device is an indirect operation EPS ``incorrectly captures 
products, such as mobile, smart phones and MP3 players, that have 
firmware delays on [detection of a] dead battery, but are otherwise 
capable of operating without the battery.'' (NRDC, No. 114 at p. 15) 
NRDC proposed an alternative method that first checks whether the end-
use consumer product has a removable battery, similar to the first 
approach considered by DOE in evaluating whether a particular device is 
an indirect operation EPS. If the device to which the EPS connects has 
a removable battery, NRDC suggested removing the battery, connecting 
the EPS, and attempting to use the product as it was intended. If it 
operates, NRDC believes it should be considered a direct operation EPS, 
but if it does not it should be considered an indirect operation EPS. 
If the battery in the end-use product is not capable of being removed, 
NRDC suggested using DOE's proposed method but with one modification. 
Rather than use the five second delay period DOE proposed in the NOPR, 
NRDC suggested that the delay period be extended to a longer period of 
time closer to five minutes to ``give enough time for firmware 
functions to complete and avoid any temptation to game the system by 
introducing artificial delays.'' (NRDC, No. 114 at p. 15)
    Based on the stakeholder comments, DOE has chosen to partially 
adopt NRDC's proposed method for determining indirect operation with 
the exception that the determination delay remains five seconds in all 
cases. DOE closely examined the operational behavior of several smart 
phones, beard trimmers, and shavers in developing the indirect 
operation determination method it proposed in the March 2012 NOPR. 
Based on its analysis, DOE believes that five seconds is an acceptable 
tolerance for the indirect operation determination method because there 
was a clear dividing point among the test data that reflected the 
ability of the battery to operate the end-use products based on the 
operating time. See Appendix 3C for the full test results from the 
indirect operation determination. During charging, batteries initially 
enter a bulk charge mode where a float voltage, or fast-charge voltage, 
is applied to the battery and the initial charge current is high 
compared to the average charging current throughout the duration of the 
charge cycle. DOE believes that this initial cycle could be enough to 
operate the end-use consumer product after a short period of time, but 
it does not change the fact that the product is still drawing power 
from the battery rather than drawing power directly from the EPS 
itself. No product DOE examined that met the indirect operation 
criteria

[[Page 7866]]

under the determination method came close to operating near the five-
second buffer. Instead, the indirect operation EPSs took as little as 
three times longer (15 seconds) to operate after being discharged and 
much longer in several cases (85 seconds). DOE believes the 5-second 
buffer accurately distinguishes between indirect and direct operation 
EPSs. As NRDC did not provide any data supporting its view that a 5-
minute delay was necessary, DOE sees no reason to modify its proposed 
method in the manner suggested by NRDC.
    Regarding NRDC's contention that a longer delay would reduce the 
risk of gaming, DOE will continue to monitor the operation of these 
products as part of its periodic review of the test procedures required 
under 42 U.S.C. 6293. Should DOE discover any anomalies suggesting a 
manufacturer is circumventing the applicable standards, DOE will make 
the necessary adjustments to prevent this from occurring.
    As part of today's final rule, DOE is combining its proposed 
methods for determining indirect operation into a single method. DOE 
previously considered such a hybrid approach, but initially believed 
the testing might become too burdensome for manufacturers. In light of 
the comments submitted by interested parties, however, DOE believes the 
hybrid approach will reduce the complexity involved in examining 
consumer products that contain a removable battery. There may also be 
side benefits, outside of identifying whether a device is an indirect 
or direct operation EPS, including reducing possible ambiguity with the 
test procedure. See appendix 3C to the TSD for the determination method 
for indirect operation EPSs.
c. Multiple-Voltage
    A multiple-voltage EPS is defined as ``an external power supply 
that is designed to convert line voltage AC input into more than one 
simultaneous lower-voltage output.'' See 10 CFR Part 430 Subpart B 
Appendix Z. Direct operation EPSs that meet this definition are 
considered multiple-voltage EPSs and will be evaluated using the 
multiple-voltage EPS test procedure. These products must comply with 
the new standards being adopted today for multiple-voltage EPSs. An EPS 
cannot be in more than one product class, so such an EPS need not also 
comply with the standards being adopted today for product classes B, C, 
D, E, or H.
    In response to the NOPR regarding multiple-voltage EPSs, Cobra 
Electronics commented that an EPS with multiple simultaneous outputs 
but only one output voltage would be considered both a multiple-voltage 
EPS and a Class A EPS and, thus, in its view, would have to be tested 
according to DOE's multiple-voltage and single-voltage EPS test 
procedures. (Cobra Electronics, No. 130 at p. 3)
    Cobra correctly deduced that an EPS with multiple simultaneous 
outputs, but only one output voltage could be treated either as a 
multiple-voltage EPS or a Class A EPS. The term ``class A external 
power supply'' means a device that, among other things, is able to 
convert to only one AC or DC output voltage at a time. See 42 U.S.C. 
6291(36)(C)(i). As such, an EPS of this type must meet the current 
standards for Class A EPSs prescribed by Congress in EISA 2007. DOE 
notes, however, that the new standards being adopted today for 
multiple-voltage EPSs are more stringent than the current Class A 
standards. Therefore, any EPS that is tested and shown to comply with 
the new multiple-voltage EPS standards will be presumed to also comply 
with the Class A EPS standards prescribed by Congress in EISA 2007.
d. Low-Voltage, High-Current EPSs
    PTI supported DOE's efforts to discern which MADB products should 
be regulated as EPSs and which should be treated as part of a battery 
charger. According to PTI, the inclusion of product class N ``fulfills 
one of PTI's longstanding concerns that components of battery chargers 
and battery chargers themselves should not both be regulated, as this 
`double indemnity' creates a situation where designs are over-
constrained with no incremental consumer benefit.'' (PTI, No. 133 at p. 
3) AHAM and Wahl Clipper, however, submitted identical comments taking 
issue with the classification of MADB direct operation EPSs and the 
CSLs DOE considered for these types of products. Instead, both 
stakeholders suggested DOE split product class C, where their products 
would fall, into two classes. The first would encompass all direct 
operation, low-voltage EPSs with a nameplate output voltage rating of 
3-6 volts and a current rating of 550-1000 mA. The second class would 
include all direct operation, low-voltage EPSs with a nameplate output 
voltage rating of less than 3 volts and a current rating greater than 
1000mA. Under the stakeholders' alternative approach, the first group 
would need to comply with the standard level established in today's 
amended EPS standards, and the second class would not. These 
suggestions were based on the stakeholders' shared concern that the 
standards DOE proposed for product class C were too stringent and 
beyond the achievable efficiency for low-voltage, high-current EPSs. 
(Wahl Clipper, No. 153 at p. 2; AHAM, No. 124 at p. 6) Duracell also 
commented on the proposed standards for direct operation EPSs, 
expressing concern that EPSs that charge the batteries of motor-
operated products such as shavers, epilators, hair clippers, and stick 
mixers would not be able to meet the proposed minimum active-mode 
efficiency requirements. (Duracell, No. 109 at pp. 2-3)
    The commenters' concern relates to those EPSs that are designed 
both to charge multiple low-voltage battery cells in parallel and to 
directly operate an end-use consumer product such as a shaver or beard 
trimmer. These are often called ``cord-cordless'' products. The ability 
to operate an end-use product directly from mains is a distinct 
consumer utility, as it enables the consumer to use the end-use product 
when the battery contains insufficient charge. However, having multiple 
cells generally means that the charging currents are higher and that 
these types of MADB EPSs will incur significantly greater resistive 
power losses than other similar direct operation EPSs, as power 
consumption grows exponentially with an increase in the output current.
    Recognizing this technical difference, DOE has introduced an 
additional criterion for classifying direct operation EPSs that 
recognizes that certain devices with low-voltage and high-current 
outputs have a distinct consumer utility, yet would have extreme 
difficulty meeting the standards being adopted today. Thus, DOE is 
subdividing product class C, splitting out certain low-voltage, high-
current EPSs into a separate product class, product class C-1.\19\ 
Product classes C and C-1 together encompass all direct operation, AC-
DC EPSs with nameplate output voltage less than 6 volts and nameplate 
output current greater than or equal to 550 milliamps (``low-
voltage''). Any product in this group that also has nameplate output 
voltage less than 3 volts and nameplate output current greater than or 
equal to 1,000 milliamps and charges the battery of a product that is 
fully or primarily motor operated is in product class C-1. All others 
remain in product class C.
---------------------------------------------------------------------------

    \19\ In the NOPR analysis, DOE mistakenly placed the EPSs for 
cord-cordless products in product class B, which contains basic-
voltage EPSs. Based on public comments, DOE now recognizes that the 
EPSs in question are low-voltage EPSs and should have been placed in 
product class C.
---------------------------------------------------------------------------

    Given the differences in these low-voltage, high-current EPSs from 
the other products falling into product class C, DOE believes there is 
merit in

[[Page 7867]]

treating them as a separate product class and is currently gathering 
additional information about this subset of EPSs. In the meantime, DOE 
is not adopting standards for EPSs in product class C-1 today, but 
intends to study these products further and may elect to propose 
efficiency standards for them in a future rulemaking. DOE will issue 
appropriate notices when undertaking studies to evaluate this class of 
products. To the extent that any products may be regulated as both a 
battery charger and an EPS, DOE may consider the treatment of those 
products as part of its further consideration of these energy 
conservation standards.
e. Final EPS Product Classes
    DOE is establishing eight product classes for EPSs for the reasons 
discussed above. The eight EPS product classes are listed in Table IV-
1.

            Table IV-1--External Power Supply Product Classes
------------------------------------------------------------------------
           Class ID                           Product class
------------------------------------------------------------------------
B.............................  Direct Operation, AC-DC, Basic-Voltage.
C.............................  Direct Operation, AC-DC, Low-Voltage
                                 (except those with nameplate output
                                 voltage less than 3 volts and nameplate
                                 output current greater than or equal to
                                 1,000 milliamps that charge the battery
                                 of a product that is fully or primarily
                                 motor operated).
C-1...........................  Direct Operation, AC-DC, Low-Voltage
                                 with nameplate output voltage less than
                                 3 volts and nameplate output current
                                 greater than or equal to 1,000
                                 milliamps and charges the battery of a
                                 product that is fully or primarily
                                 motor operated.
D.............................  Direct Operation, AC-AC, Basic-Voltage.
E.............................  Direct Operation, AC-AC, Low-Voltage.
X.............................  Direct Operation, Multiple-Voltage.
H.............................  Direct Operation, High-Power.
N.............................  Indirect Operation.
------------------------------------------------------------------------

    DOE is also adopting definitions for the following terms: Basic-
voltage external power supply, direct operation external power supply, 
indirect operation external power supply, and low-voltage external 
power supply. These definitions will appear at 10 CFR 430.2. DOE 
proposed, but is not adopting, definitions for AC-AC external power 
supply, AC-DC external power supply, and multiple-voltage external 
power supply because similar terms have already been codified. See 
definitions for single-voltage external AC-AC power supply, single-
voltage external AC-DC power supply, and multiple-voltage external 
power supply at 10 CFR 430 Subpart B Appendix Z.
3. Technology Assessment
    In the technology assessment, DOE identifies technology options 
that appear to be feasible to improve product efficiency. This 
assessment provides the technical background and structure on which DOE 
bases its screening and engineering analyses. The following discussion 
provides an overview of the technology assessment for EPSs. Chapter 3 
of the TSD provides additional detail and descriptions of the basic 
construction and operation of EPSs, followed by a discussion of 
technology options to improve their efficiency and power consumption in 
various modes.
a. EPS Efficiency Metrics
    DOE used its EPS test procedures as the basis for evaluating EPS 
efficiency over the course of the standards rulemaking for EPSs. These 
procedures, which are codified in appendix Z to subpart B of 10 CFR 
Part 430 (``Uniform Test Method for Measuring the Energy Consumption of 
EPSs''), include a means to account for the energy consumption from 
single-voltage EPSs, switch-selectable EPSs, and multiple-voltage EPSs.
    On December 8, 2006, DOE codified a test procedure final rule for 
single output-voltage EPSs. See 71 FR 71340. On June 1, 2011, DOE added 
a test procedure to cover multiple output-voltage EPSs. See 76 FR 
31750. DOE's test procedures yield two measurements: Active mode 
efficiency and no-load mode (standby mode) power consumption.
    Active-mode efficiency is the ratio of output power to input power. 
For single-voltage EPSs, the DOE test procedure averages the efficiency 
at four loading conditions--25, 50, 75, and 100 percent of maximum 
rated output current--to assess the performance of an EPS when powering 
diverse loads. For multiple-voltage EPSs, the test procedure provides 
those four metrics individually, which DOE averages to measure the 
efficiency of these types of devices. The test procedure also specifies 
how to measure the power consumption of the EPS when disconnected from 
the consumer product, which is termed ``no-load'' power consumption 
because the EPS outputs zero percent of the maximum rated output 
current to the application.
    To develop the analysis and to help establish a framework for 
setting EPS standards, DOE considered both combining average active-
mode efficiency and no-load power into a single metric, such as unit 
energy consumption (UEC), and maintaining separate metrics for each. 
DOE chose to evaluate EPSs using the two metrics separately. Using a 
single metric that combines active-mode efficiency and no-load power 
consumption to determine the standard may inadvertently permit the 
``backsliding'' of the standards established by EISA 2007. 
Specifically, because a combined metric would regulate the overall 
energy consumption of the EPS as the aggregation of active-mode 
efficiency and no-load power, that approach could permit the 
performance of one metric to drop below the EISA 2007 level if it is 
sufficiently offset by an improvement in the other metric. Such a 
result would, in DOE's view, constitute a backsliding of the standards 
and would violate EPCA's prohibition from setting such a level. DOE's 
approach seeks to avoid this result.
    The DOE test procedure for multiple-voltage EPSs yields five 
values: no-load power consumption as well as efficiency at 25, 50, 75, 
and 100 percent of maximum load. In the March 2012 standards NOPR, DOE 
proposed averaging the four efficiency values to create an average 
efficiency metric for multiple-voltage EPSs, similar to the approach 
followed for single-voltage EPSs. Alternatively, DOE introduced the 
idea of averaging the efficiency measurements at 50 percent and 75 
percent of maximum load because the only known application that 
currently uses a multiple-voltage EPS, a video game console, operates 
most often between those loading conditions. DOE sought comment from 
interested parties on these two approaches.
    Microsoft commented that setting a standard based on arbitrary 
loads that do not represent the intended loading

[[Page 7868]]

point of the end-use application is counterproductive because EPSs are 
designed to be most efficient under the loading conditions they operate 
in most frequently. Instead, Microsoft believes that ``to optimize 
energy savings in real life, loading requirements in energy 
conservation standards should be based on the expected product load.'' 
(Microsoft, No. 110 at p. 2)
    Although it is aware of only one currently available consumer 
product using multiple-voltage EPSs, DOE believes that evaluating 
multiple-voltage EPSs using an average-efficiency metric (based on the 
efficiencies at 25%, 50%, 75%, and 100% of each output's normalized 
maximum nameplate output power) would allow the standard to be applied 
to a diverse range of future products that may operate under different 
loading conditions. In addition, DOE's test data of the only product 
that currently falls into the multiple-voltage product class indicate 
that there is only a fractional percentage difference in the average 
active-mode efficiency when comparing DOE's weighting of the efficiency 
loading measurements and the alternative approach of averaging the 
efficiencies at 50% and 75% load where the console is most likely to 
operate. Therefore, DOE evaluated multiple-voltage EPSs using no-load 
mode power consumption and an average active-mode efficiency metric 
based on the measured efficiencies at 25%, 50%, 75%, and 100% of rated 
output power in developing the new energy conservation standards for 
these products. This loading point averaging methodology is consistent 
with the calculation of average active-mode efficiency for single-
voltage external supplies as outlined in Appendix Z to Subpart B of 10 
CFR Part 430.
b. EPS Technology Options
    DOE considered seven technology options, fully detailed in Chapter 
3 of the TSD, which may improve the efficiency of EPSs: (1) Improved 
Transformers, (2) Switched-Mode Power Supplies, (3) Low-Power 
Integrated Circuits, (4) Schottky Diodes and Synchronous Rectification, 
(5) Low-Loss Transistors, (6) Resonant Switching, and (7) Resonant 
(``Lossless'') Snubbers.
    During its analysis, DOE found that some technology options affect 
both efficiency and no-load performance and that the individual 
contributions from these options cannot be separated from each other in 
a cost analysis. Given this finding, DOE adopted a ``matched pairs'' 
approach for defining the EPS CSLs. This approach used selected test 
units to characterize the relationship between average active-mode 
efficiency and no-load power dissipation. In the matched pairs 
approach, EPS energy consumption decreases as you move from one CSL to 
the next higher CSL either through higher active mode efficiency, lower 
no-load mode power consumption, or both. If DOE allowed one metric to 
decrease in stringency between CSLs, then the cost-efficiency results 
might have shown cost reductions at higher CSLs and skewed the true 
costs associated with increasing the efficiency of EPSs. To avoid this 
result, DOE used an approach that increases the stringency of both 
metrics for each CSL considered during the process of amending the EISA 
standard for EPSs.
    DOE considered all technology options when developing CSLs for all 
four EPS representative units in product class B. DOE considered the 
same efficiency improvements in its analysis for EPSs in product 
classes X and H as it did for Class A EPSs. Where representative units 
were not explicitly analyzed (i.e., product classes C, D, and E), DOE 
extended its analysis from a directly analyzed class. As a result, all 
design options that could apply to these products were implicitly 
considered because the efficiency levels of the analyzed product class 
will be scaled to other product classes, an approach supported by 
interested parties throughout the rulemaking process. The equations 
were structured based on the relationships between product classes C, 
D, and E and representative product class B such that the technology 
options not implemented by the other classes were accounted for in the 
proposed candidate standard levels. For example, AC-AC EPSs (product 
classes C and E) tend to have higher no-load power dissipation than AC-
DC EPSs because they do not use switched-mode topologies (see Chapter 3 
of the TSD for a full technical description). Therefore, to account for 
this characteristic in these products, DOE used higher no-load power 
metrics when generating CSLs for these product classes than are found 
in the corresponding CSLs for the representative product class B.
c. High-Power EPSs
    DOE examined the specific design options for high-power EPSs as 
they relate to ham radios, the sole consumer application for these 
EPSs. DOE found that high-power EPSs are unique because both linear and 
switched-mode versions are available as cost-effective options, but the 
linear EPSs are more expensive and inherently limited in their 
achievable efficiency despite sharing some of the same possible 
efficiency improvements as EPSs in other product classes.\20\ 
Interested parties have expressed concern that setting an efficiency 
standard higher than a linear EPS can achieve would reduce the utility 
of these devices because ham radios are sensitive to the 
electromagnetic interference (EMI) generated by switched-mode EPSs. In 
some cases, EMI can couple through the EPS to the transmitter of ham 
radios and be transmitted on top of the intended signal causing 
distortion.
---------------------------------------------------------------------------

    \20\ A linear mode or linear regulated EPS is an EPS that has 
its resistance regulated and results in a constant output voltage. 
In contrast, a switched mode EPS is an EPS that switches on and off 
to maintain an average value of output voltage.
---------------------------------------------------------------------------

    DOE sought comment on the impacts of excessive EMI in amateur radio 
applications using EPSs with switched-mode topologies. PTI acknowledged 
that EMI generated from switched-mode power supplies is more of a 
factor in radio applications, but could not definitively attest to any 
adverse impacts on consumer utility due to the changeover from linear 
power supplies. (PTI, No. 133 at p. 4)
    DOE believes there is no reduction in utility because EPSs used in 
telecommunication applications are required to meet the EMI regulations 
of the Federal Communications Commission (47 CFR part 15, subpart B), 
regardless of the underlying technology. These regulations specifically 
limit the amount of EMI for ``unintentional radiators'', which are 
devices that are not intended to generate radio frequency signals but 
do to some degree due to the nature of their design. Many such devices 
limit the amount of EMI coupled to the end use product through EMI 
filters and proper component arrangement on the printed circuit board 
(PCB). As part of its engineering analysis, DOE constructed the high 
power cost-efficiency curves using two teardown units including one 
that utilized switched-mode technology and made use of similar EMI-
limiting techniques. This switched-mode design complied with the FCC 
requirements with no reduction in utility or performance despite a 
higher efficiency than the baseline design DOE analyzed. Given the 
presence of switched-mode designs that comply with the FCC regulations 
and the existence of EMI-limiting technology, DOE does not believe that 
the new standard will negatively affect the consumer utility of high-
power EPSs.
d. Power Factor
    Power factor is a relative measure of transmission losses between 
the power plant and a consumer product or the

[[Page 7869]]

ratio of real power to the total power drawn by the EPS. Due to 
nonlinear and energy-storage circuit elements such as diodes and 
inductors, respectively, electrical products often draw currents that 
are not proportional to the line voltage. These currents are either 
distorted or out of phase in relation to the line voltage, resulting in 
no real power drawn by the EPS or transmitted to the load. However, 
although the EPS itself consumes no real power, these currents are real 
and cause power dissipation from conduction losses in the transmission 
and distribution wiring. For a given nameplate output power and 
efficiency, products with a lower power factor cause greater power 
dissipation in the wiring, an effect that also becomes more pronounced 
at higher input powers. DOE examined the issue of power factor in 
section 3.6 of the May 2009 framework document for the present 
rulemaking and noted that certain ENERGY STAR specifications limit 
power factor.
    DOE notes that regulating power factor includes substantial 
challenges, such as quantifying transmission losses that depend on the 
length of the transmission wires, which differ for each residential 
consumer. Further, DOE has not yet conclusively analyzed the benefits 
and burdens from regulating power factor. While DOE plans to continue 
analyzing power factor and the merits of its inclusion as part of a 
future rulemaking, it is DOE's view that the above factors weigh in 
favor of not setting a power factor-based standard at this time.

B. Screening Analysis

    DOE uses the following four screening criteria to determine which 
design options are suitable for further consideration in a standards 
rulemaking:
    1. Technological feasibility. DOE considers technologies 
incorporated in commercial products or in working prototypes to be 
technologically feasible.
    2. Practicability to manufacture, install, and service. If mass 
production and reliable installation and servicing of a technology in 
commercial products could be achieved on the scale necessary to serve 
the relevant market at the time the standard comes into effect, then 
DOE considers that technology practicable to manufacture, install, and 
service.
    3. Adverse impacts on product utility or product availability. If 
DOE determines a technology would have significant adverse impact on 
the utility of the product to significant subgroups of consumers, or 
would result in the unavailability of any covered product type with 
performance characteristics (including reliability), features, sizes, 
capacities, and volumes that are substantially the same as products 
generally available in the United States at the time, it will not 
consider this technology further.
    4. Adverse impacts on health or safety. If DOE determines that a 
technology will have significant adverse impacts on health or safety, 
it will not consider this technology further. See 10 CFR part 430, 
subpart C, appendix A, (4)(a)(4) and (5)(b).
    For EPSs, DOE did not screen out any technology options after 
considering the four criteria. For additional details, see chapter 4 of 
the TSD.
    Brother International commented that the design options DOE 
considered for lowering no-load power consumption could adversely 
impact the health and safety of consumers as manufacturers might 
eliminate existing safety controls to comply with the amended 
standards. Specifically, citing to one example, Brother pointed to the 
lack of a device to discharge residual charge from one of their 
candidate EPS designs, which they believed was removed in order to 
comply with the proposed no-load requirements from the NOPR. Brother 
believes this omission could impact safety to consumers and that DOE 
should not lower the no-load requirements for EPSs below the current 
federal maximum of 0.5 watts. However, they did not elaborate on the 
component involved or state that removing said component was the only 
design option in order to meet the proposed standard. (Brother 
International, No. 111 at p. 3)
    DOE conducts a screening analysis on all the technology options it 
identifies during the technology assessment portion of the rulemaking 
by applying a strict set of statutory criteria. At no point during 
interviews with manufacturers or DOE's independent testing, was there 
concern expressed over the no-load levels DOE was analyzing. The no-
load power metric for each CSL DOE considered was supported by data 
compiled from already commercially available units, which posed no such 
health or safety risk to consumers. While Brother International did not 
expand on its concerns, DOE is aware of certain components in general 
EPS design, such as X capacitors and bleeder resistors. EPS designers 
typically use X capacitors on the input filter stages to protect the 
EPS against line voltage spikes and bleeder resistors to bleed off the 
residual charge from the devices when the EPS is disconnected. It is 
common design to practice to include these components; however, should 
the resistor be omitted, the capacitors will still discharge within 
seconds of the power being removed. In any case, based on its 
examination of this issue, DOE does not believe these design practices 
present any shock hazard to consumers provided they do not attempt to 
physically tear down or otherwise destroy the EPS under live power 
conditions. As a result, DOE did not screen out any additional 
technology options based on adverse impacts to health and safety 
associated with decreasing the no-load power consumption through the 
amended EPS standards.
    Additionally, DOE notes that it has received no comments from 
interested parties regarding patented technologies and proprietary 
designs that would inhibit manufacturers from achieving the energy 
conservation standards adopted in today's rule. DOE believes that those 
standards will not mandate the use of any such technologies.

C. Engineering Analysis

    In the engineering analysis (detailed in chapter 5 of the TSD), DOE 
describes the relationship between the manufacturer selling price (MSP) 
and increases in EPS efficiency. The efficiency values range from that 
of an inefficient EPS sold today (the baseline) to the maximum 
technologically feasible efficiency level. For each efficiency level 
examined, DOE determines the MSP; this relationship is referred to as a 
cost-efficiency curve.
    DOE structured its engineering analysis around two methodologies: 
(1) Test and teardowns, which involves testing products for efficiency 
and determining cost from a detailed bill of materials derived from 
tear-downs and (2) the efficiency-level approach, where the cost of 
achieving increases in energy efficiency at discrete levels of 
efficiency are estimated using information gathered in manufacturer 
interviews supplemented by, and verified through, technology reviews 
and subject matter experts (SMEs). When analyzing the cost of each 
CSL--whether based on existing or theoretical designs--DOE 
distinguishes between the cost of the EPS and the cost of the 
associated end-use product.
1. Representative Product Classes and Representative Units
    DOE selected representative product class B (AC to DC conversion, 
basic-voltage EPSs), which contains most Class A EPSs and some MADB 
EPSs that can directly power an application, as the focus of its 
engineering analysis because it constituted the majority of shipments 
and national energy

[[Page 7870]]

consumption related to EPSs. Within product class B, DOE analyzed four 
representative units with output powers of 2.5 watts, 18 watts, 60 
watts, and 120 watts because the associated consumer applications for 
these, and similar, EPSs constitute a significant portion of shipments 
and energy consumption. Based on DOE's analysis of product class B, DOE 
was able to scale the results for product classes C, D, and E. EPSs in 
each have inherent technical limitations that prevent them from meeting 
the same efficiency and no-load levels as EPSs in product class B. The 
lower-voltage product classes C and E typically have higher loss ratios 
than EPSs in product class B due to their lower nameplate output 
voltages and higher nameplate output currents. Therefore, it was 
necessary for DOE to scale down the efficiency levels established in 
product class B to more technically achievable levels for product 
classes C and E.
    Similarly, EPSs in product class D do not possess control circuitry 
to lower the no-load power consumption. DOE found that including such 
circuitry would increase the no-load consumption while increasing the 
overall cost of EPSs in product class D. DOE subsequently scaled the 
no-load power consumption results established from the analysis of 
product class B to adjust for this limitation of EPSs in product class 
D. Despite the comparatively small percentage of EPSs in product 
classes C, D, and E compared to those in product class B, DOE has taken 
steps to ensure that the standards for each class are technically 
feasible for EPSs in each product class. More detail on DOE's scaling 
methodology can be found in chapter 5 of the final rule TSD.
    Some interested parties supported DOE's approach in creating and 
analyzing representative product classes and representative units 
during the rulemaking process. The California IOUs agreed with using 
product class B as the representative product class and scaling to 
other product classes because of their inherent similarities. (CA IOUs, 
No. 138 at p. 13) Although no specific data were provided, the 
California IOUs also commented in support of the four representative 
units within the product class, noting that their own research \21\ 
into the power supply market corroborates DOE's selections. (CA IOUs, 
No. 138 at p. 13) ARRIS Group, however, claimed that ``by analyzing 
EPSs at the 18W representative unit, DOE overstates annual power cost 
savings'' and suggested that averaging energy savings across output 
powers is more accurate. (ARRIS Group, No. 105 at p. 2) Both of the 
methodologies DOE presented during the NOPR public meeting were 
identical to those originally drafted as part of the preliminary 
analysis.
---------------------------------------------------------------------------

    \21\ http://www.energy.ca.gov/appliances/archive/2004rulemaking/documents/case_studies/CASE_Power_Supplies.pdf.
---------------------------------------------------------------------------

    The representative units DOE selected align with a wide range of 
EPS output powers for consumer applications. The purpose was to select 
units that capture the most common output voltages and output powers 
available on the market. In most cases, as output power increases, 
nameplate output voltage also increases, but DOE found that most EPS 
designs tended to cluster around certain common output voltage and 
output power levels. DOE used this trend in EPS design to categorize 
its four representative units. DOE was also able to test several EPS 
units that exactly met the representative units' specifications and 
scaled units with small variations based on output power, output 
voltage, cord length, and/or cost as described in chapter 5 of the 
final rule TSD. While the costs are analyzed on an individual unit 
basis, the standard levels considered by DOE, and ultimately the energy 
savings, are examined across the entire range of EPSs. National energy 
savings (NES) and consumer NPV are calculated for an entire product 
class, not an individual representative unit. To date, stakeholders 
have supported this approach and the overall engineering analysis 
methodology. Therefore, DOE elected to maintain its selections for the 
EPS representative units and its methodology for estimating the cost 
savings from the standards adopted today.
2. EPS Candidate Standard Levels (CSLs)
    DOE applied the same methodology to establish CSLs in today's final 
rule as it did for its proposal and preliminary analysis. DOE created 
CSLs as pairs of EPS efficiency metrics for each representative unit 
with increasingly stringent standards having higher-numbered CSLs. The 
CSLs were generally based on (1) voluntary (e.g. ENERGY STAR) 
specifications or mandatory (i.e., those established by EISA 2007) 
standards that either require or encourage manufacturers to develop 
products at particular efficiency levels; (2) the most efficient 
products available in the market; and (3) the maximum technologically 
feasible (``max tech'') level. These CSLs are summarized for each 
representative unit in Table IV-2. In section IV.C.5, DOE discusses how 
it developed equations to apply the CSLs from the representative units 
to all EPSs.

   Table IV-2--Summary of EPS CSLs for Product Classes B, C, D, and E
------------------------------------------------------------------------
          CSL                 Reference                  Basis
------------------------------------------------------------------------
0.....................  EISA 2007............  EISA 2007 equations for
                                                efficiency and no-load
                                                power.
1.....................  ENERGY STAR 2.0......  ENERGY STAR 2.0 equations
                                                for efficiency and no-
                                                load power.
2.....................  Intermediate.........  Interpolation between
                                                test data points.
3.....................  Best-in-Market.......  Most efficient test data
                                                points.
4.....................  Max Tech.............  Maximum technologically
                                                feasible efficiency.
------------------------------------------------------------------------

    DOE conducted several rounds of interviews with manufacturers who 
produce EPSs, integrated circuits for EPSs, and applications using 
EPSs. All of the manufacturers interviewed identified ways that EPSs 
could be modified to achieve efficiencies higher than those available 
with current products. These manufacturers also described the costs of 
achieving those efficiency improvements, which DOE examines in detail 
in chapter 5 of the TSD. DOE independently verified the accuracy of the 
information described by manufacturers.\22\ Verifying this information 
required examining and testing products at the best-in-market 
efficiency level and determining what

[[Page 7871]]

design options could still be added to improve their efficiency. By 
comparing the improved best-in-market designs (using predicted 
performance and cost) to the estimates provided by manufacturers, DOE 
was able to assess the reasonableness of the max-tech levels developed.
---------------------------------------------------------------------------

    \22\ In confirming this information, DOE obtained technical 
assistance from two subject matter experts--These two experts were 
selected after having been found through the Institute of Electrical 
and Electronics Engineers (IEEE). Together, they have over 30-years 
of combined experience with power supply design. The experts relied 
on their experience to evaluate the validity of both the design and 
the general cost of the max-tech efficiency levels provided by 
manufacturers.
---------------------------------------------------------------------------

    DOE created the max-tech candidate standard level (CSL 4) equations 
for average efficiency and no-load power using curve-fits (i.e., 
creating a continuous mathematical expression to represent the trend of 
the data as accurately as possible) of the aggregated manufacturer data 
(see chapter 5 of the TSD for details on curve fits). DOE created the 
equations for no-load power based on a curve fit of the no-load power 
among the four representative units. For both the average efficiency 
and no-load power CSL equations, DOE used equations similar to those 
for CSL 1, involving linear and logarithmic terms in the nameplate 
output power. DOE chose the divisions at 1 watt and 49 watts in the CSL 
4 equations to ensure consistency with the nameplate output power 
divisions between the equations for CSL 1.
    DOE evaluated EPSs using the two EPS efficiency metrics, no-load 
power consumption and active-mode average efficiency, which it grouped 
into ``matched pairs.'' Under the matched pairs approach, each CSL 
would increase in stringency in at least one of the metrics and no 
metric would ever be lowered in moving to a higher CSL. DOE's goal in 
using this approach was to ensure that when it associated costs with 
the CSLs, that the costs would reflect the complete costs of increased 
efficiency. If DOE followed an approach that permitted a decrease in 
stringency for a given metric, the result might be a projected 
reduction in EPS cost, which would mask the full cost of increasing EPS 
efficiency.
    Interested parties supported DOE's matched pairs approach for EPS 
CSLs. Stakeholders, such as the California Energy Commission, commented 
that DOE's approach focused directly on what is measured rather than 
introducing usage assumptions to weight the values of standby mode and 
active-mode power consumption. The California Energy Commission 
believes that regulating active-mode efficiency and no-load power 
consumption rather than a combined unit energy consumption (UEC) metric 
is the most appropriate course of action for DOE (California Energy 
Commission, No. 117 at p. 17). While supportive of DOE's approach, 
interested parties, including the California IOUs, also cautioned DOE 
to avoid setting levels for no-load power that were too stringent when 
compared to active-mode efficiency improvements. (CA IOUs, No. 138 at 
p. 13)
    DOE received additional comments regarding its EPS CSLs. NRDC and 
ASAP both urged DOE to ``evaluate an intermediate level for EPS product 
class B between CSL 3 and CSL 4'', suggesting that there may be a more 
stringent standard that is cost-effective between DOE's estimates for 
the best-in-market and maximum technologically feasible CSLs. (NRDC, 
No. 114 at p. 12; ASAP, et al., No. 136 at p. 10)
    As discussed above, DOE's CSL equations are a function of nameplate 
output power and are based on existing standards, incentive programs, 
the most efficient tested units on the market, intermediate levels 
between those points, and a maximum technologically feasible or ``max-
tech'' level. No-load requirements were carefully considered consistent 
in light of the submitted comments. The difference in performance 
between the CSLs noted by NRDC corresponds to the difference between 
the best-in-market level, which is supported by test data, and the 
``max-tech'' level, which is theoretical and based on estimates from 
manufacturers and industry experts. DOE's comprehensive engineering 
analysis selected specific CSLs based on real world data and 
discussions with manufacturers. NRDC did not provide any additional 
data to support its recommendation that DOE examine more stringent 
standard. Instead, it asserted that DOE did not find more efficient 
EPSs on the market above the CSL proposal because market demand is 
shaped primarily by the efficiency marking protocol and there is 
currently little incentive for the market to demand efficiencies higher 
than Level V. (NRDC, No. 114 at p. 12)
    In DOE's view, adopting NRDC's approach would create a standard 
based entirely on theoretical design improvements to the most efficient 
EPSs already on the market today. Such an approach would not be 
supportable by any actual data--whether market-based or through the 
testing of available products. DOE notes that since a second 
determination is required in 2015, any further analysis of efficiency 
levels beyond the current best-in-market CSL would likely occur as part 
of that effort. As a result, based on currently available information, 
DOE chose to maintain its CSLs in the engineering analysis for today's 
final rule.
    Brother International expressed concern that requiring more 
efficient EPSs in line with the proposed minimum efficiency active-mode 
limits would disrupt the stable product supply due to the lack of non-
proprietary semiconductors (Brother International, No. 111 at p. 3). It 
noted that there is one key component needed to meet the proposed 
efficiency levels for EPSs, and that it has been told by EPS suppliers 
that there are a small number of component manufacturers that can 
produce this patented technology. Brother International did not provide 
any evidence to support this. However, during manufacturer interviews, 
DOE was consistently told the candidate standard levels (CSLs) analyzed 
for EPSs were technically achievable without the use of patented 
technologies. Each component manufacturer, original design manufacturer 
(ODMs), or those that design and manufacturer EPSs based on a set of 
specifications, and original equipment manufacturers (OEMs), or those 
that purchase EPSs from ODMs to be solid in retail markets, interviewed 
had different pathways to achieving the proposed standard suggesting 
there are multiple design options to lower EPS energy consumption. At 
no point in discussions with manufacturers has DOE been told that a 
patented technology would be required to meet a CSL for any of the 
product classes, even at the maximum technologically feasible level.
    DOE also maintained the same CSLs for multiple-voltage EPSs 
(product class X) as it proposed in the NOPR because it received no 
comments and has no new information that would merit a change in the 
CSLs for this product class. The CSLs are shown in Table IV-3.

           Table IV-3--Summary of EPS CSLs for Product Class X
------------------------------------------------------------------------
           CSL                  Reference                 Basis
------------------------------------------------------------------------
0........................  Market Bottom......  Test data of the least
                                                 efficient unit in the
                                                 market.
1........................  Mid-Market.........  Test data of the typical
                                                 unit in the market.
2........................  Best-in-Market.....  Manufacturer's data.

[[Page 7872]]

 
3........................  Max Tech...........  Maximum technologically
                                                 feasible efficiency.
------------------------------------------------------------------------

    DOE received no comments concerning the CSLs for high-power EPSs in 
response to the NOPR. Therefore, DOE maintained its selections for CSLs 
from the NOPR in the engineering analysis for today's final rule. The 
CSLs for product class H are listed in Table IV-4.

                               Table IV-4--Summary of EPS CSLs for Product Class H
----------------------------------------------------------------------------------------------------------------
          CSL                Reference                                      Basis
----------------------------------------------------------------------------------------------------------------
0......................  Line Frequency...  Test data of a low-efficiency unit in the market.
1......................  Switched-Mode Low  Test data of a high-efficiency unit in the market.
                          Level.
2......................  Switched-Mode      Manufacturers' theoretical maximum efficiency.
                          High Level.
3......................  Scaled Best-in-    Scaled from 120W EPS CSL 3.
                          Market.
4......................  Scaled Max Tech..  Scaled from 120W EPS CSL 4.
----------------------------------------------------------------------------------------------------------------

3. EPS Engineering Analysis Methodology
    DOE relied upon data gathered from manufacturer interviews to 
construct its engineering analysis for EPSs. DOE's cost-efficiency 
analysis for each of the representative units in product class B was 
generated using aggregated manufacturer cost data. DOE attempted to 
corroborate these estimates by testing and tearing down several EPSs on 
the market. For those products that did not exactly match its 
representative units, DOE scaled the test results for output power, 
output voltage, and cord length as necessary to align with the 
representative unit specifications. The units were then torn down by 
iSuppli to estimate the manufacturer selling price (MSP) and create a 
unique cost-efficiency curve entirely based on measurable results. The 
test and teardown data were inconclusive and generally showed 
decreasing costs with increasing efficiency. DOE previously presented 
both sets of cost-efficiency data to stakeholders for comment and 
consistently received support for using the manufacturer data as the 
basis for any standard setting action. Stakeholders argued that the 
negative cost-efficiency trends seen in the teardown data were not 
representative of the EPS market and that the manufacturer data was 
much more consistent and reliable since the data were more 
comprehensive. Stakeholders indicated that the data collected from 
manufacturer interviews better reflected the industry trends because it 
was derived from the estimates of manufacturers who produce EPSs in 
volume rather than backed out from an overall BOM cost by iSuppli. 
Therefore, in section IV.C of the NOPR, DOE proposed to use only the 
data gathered from manufacturers for its engineering analysis.
    With respect to the scaled test results, Salcomp disagreed with 
DOE's results, stating that the ``scaled average efficiency results in 
the reference data are not in line with theoretical calculations 
related to 5V/1A EPSs'' and that ``it appears that the real effects of 
the cable have not been taken into account.'' Salcomp also proposed 
that USB-A EPS products be measured without the cable, as EPS 
manufacturers do not know anything about the cables that are ultimately 
supplied with the product. (Salcomp, No. 73 at p. 1)
    NRDC suggested that the teardowns commissioned by DOE for the cost-
efficiency curves were not conducted on EPSs of comparable utility, but 
commented that up-to-date manufacturer data should be sufficient to 
conduct an accurate cost-efficiency analysis going forward. (NRDC, No. 
114 at p. 11)
    As stated in DOE's test procedure for single-voltage EPSs, ``power 
supplies must be tested in their final, completed configuration in 
order to represent their measured efficiency on product labels or 
specification sheets.'' (74 FR 13318) USB-A EPSs must, therefore, be 
tested with the USB cable, as supplied by the manufacturer of the EPS, 
connected. DOE took this into account as part of its engineering 
analysis methodology and established a representative DC cable length 
to help scale the measured efficiency of an EPS based on its nameplate 
output power and output voltage. As described in chapter 5 of the TSD, 
the resistivity of a wire is dependent on the resistivity of the copper 
used, the length of the wire, and the cross-sectional area of the wire. 
With all other factors the same, a longer cord length would increase 
the resistivity of the wire and subsequently increase the losses 
associated with the output cord, ultimately lowering the conversion 
efficiency of the EPS. Scaling the measured efficiency using a standard 
cable length meant that DOE needed to factor in any expected resistive 
losses associated with the current provided by the EPS in question. 
However, the scaling was applied not to correct for potential cable 
losses, but to take efficiency data measured with the manufactured 
cable and adjust it to the standard length. In all cases, the output 
cord loss was taken into account in the efficiency results of the EPSs 
DOE tested. Ultimately, these data were only used to support DOE's CSLs 
and not directly factored into the cost-efficiency curves DOE used to 
select standard levels for EPSs. DOE relied only on manufacturer 
interview data in its cost-efficiency analysis.
4. EPS Engineering Results
    DOE characterized the cost-efficiency relationship of the four 
representative units in product class B as shown in Table IV-5, Table 
IV-6, Table IV-7, and Table IV-8. During interviews, manufacturers 
indicated that their switched-mode EPSs currently meet CSL 1, the 
ENERGY STAR 2.0 specification level. This factor is reflected in the 
analysis by setting the incremental MSP for the 18W, 60W, and 120W EPSs 
to $0 at CSL 1, which means that there is no incremental cost above the 
baseline to achieve CSL 1. Costs for the 2.5W EPS, however, are 
estimated at $0.15 for CSL 1. This result occurs because of DOE's 
assumption (based on available information) that the lowest cost 
solution for improving the efficiency of the 2.5W EPS is through the 
use of linear EPSs, which are manufactured both at the EISA 2007

[[Page 7873]]

level as well as the ENERGY STAR 2.0 level. Specifically, as commenters 
suggested, DOE examined linear EPSs and found that they might be a 
cost-effective solution at CSL 0 and CSL 1 for 2.5W EPSs. Thus, $0.15 
indicates the incremental cost for a 2.5W linear EPS to achieve higher 
efficiency. For all four representative units, the more stringent 
CSLs--CSL 2, CSL 3, and CSL 4--correspond to switched-mode EPSs 
designed during the same design cycle, which would cause their costs to 
increase with increased efficiency as more efficient designs require 
more efficient and more expensive components.
[GRAPHIC] [TIFF OMITTED] TR10FE14.011

    NRDC had a number of comments on DOE's cost-efficiency results from 
the NOPR. In general, NRDC asserted that DOE had overestimated the cost 
of efficiency improvements for the 2.5 watt, 18 watt, and 60 watt 
representative units, based on NRDC's own discussions with industry 
professionals. (NRDC, No. 114 at p. 11) In some cases, DOE's estimates 
for the incremental MSPs are nearly three times greater than NRDCs 
estimates. ASAP, who echoed these concerns, stated that the costs of 
highly efficient EPSs are rapidly declining and that DOE should 
reevaluate its estimates to reflect the most recent price trends. 
(ASAP, et al., No. 136 at p. 10)
    While ASAP and NRDC had comments concerning the cost-efficiency 
relationships of several representative units, many stakeholders 
mentioned the 60 watt representative unit cost-efficiency curves as 
being particularly skewed. NRDC stated that the fact that the 60 watt 
costs were higher than the 120 watt costs for most CSLs was not 
accurate, as higher power EPSs require higher material costs. They 
noted that perhaps DOE's analysis of the 60 watt unit included features 
unrelated to efficiency, which would explain the higher than expected 
costs for the lower order CSLs. (NRDC, No. 114 at p. 11) The PSMA 
submitted similar comments stating that the incremental costs for EPSs 
increase ``steadily and predictably with power supply size'' such that 
the 60 watt incremental costs should be lower than those for the 120 
watt

[[Page 7874]]

representative unit. (PSMA, No. 147 at p. 2) NEEP commented that the 
LCC results derived from the cost-efficiency curves for the 60 watt 
representative unit show unexplained irregularities that were 
attributed to manufacturer-provided cost data and suggested DOE conduct 
an additional independent engineering analysis on the 60 watt 
discrepancy. (NEEP, No. 160 at p. 2) These comments were based on the 
negative weighted-average LCC savings for the 60W representative unit 
at all CSLs above the baseline. DOE believes these results were due to 
the large incremental cost associated with moving from CSL 1 to CSL 2 
and the relatively small increases in cost for the higher order CSLs.
    DOE aggregated costs from OEMs, ODMs and component manufacturers to 
reflect the costs associated with incremental improvements in the 
energy efficiency of four representative units within product class B. 
Those costs were presented as the manufacturer selling price (MSP), or 
the price that the OEM pays the ODM for an EPS that meets its 
specifications. These costs were estimated through a series of 
manufacturer interviews to establish a range of average markups and 
incremental costs for efficiency improvements. The MSPs gleaned from 
interviews included only improvements to efficiency-related components 
over the manufacturer's baseline EPS model. Therefore, the incremental 
costs in DOE's analyses are only representative of improvements to the 
energy efficiency of EPSs.
    DOE took the stakeholder comments into consideration when revising 
its engineering analysis for today's final rule. NRDC's assertion that 
the costs are overestimated for the 2.5W EPS representative unit fails 
to acknowledge that certain linear power supplies are still cost-
effective and technically feasible for efficiencies up to CSL 1 for low 
power EPSs. The final cost-efficiency curve incorporates not only 
changes to switched-mode designs for higher efficiencies, but costs 
incurred by manufacturers of linear power supplies to improve the 
efficiency over the current designs. The result of this aggregation 
shows higher overall costs than estimated by NRDC for this 
representative unit.
    In revisiting the cost-efficiency curves, DOE noted that the 60W 
cost aggregation contained the largest concentration of data from 
manufacturer interviews conducted during the preliminary analysis. 
Since the LCC results for the 60W representative unit largely depend on 
the cost changes between the CSLs and the efficiency distribution of 
the current products on the market, DOE decided to revise its 
aggregation using only the most recent data gathered from manufacturer 
interviews to generate the cost-efficiency curves presented in today's 
final rule. DOE believes that these curves better reflect the cost 
impacts of improving the efficiency of 60W EPSs and notes they align 
with NRDC's incremental MSP estimates for achieving the efficiency 
level of the amended standard. The resulting cost-efficiency curve 
shows a substantially smaller incremental cost at the proposed standard 
level of $0.33 compared to $1.29 in the NOPR. This modification caused 
the life-cycle cost savings at the proposed standard level for the 60W 
representative unit to turn strongly positive from the negative result 
depicted in the NOPR. The full LCC impacts can be found in Section 
V.B.1.a. For the 2.5W, 18W, and 120W representative units, DOE 
maintained its cost estimates from the NOPR because they represent the 
aggregated results from DOE's most recent data gathering efforts.
    Unlike product class B, DOE analyzed only a single 203W 
representative unit for multiple-voltage EPSs. In Chapter 5 of the TSD, 
DOE outlines the cost-efficiency relationship for 203W multiple-voltage 
EPSs that it developed as part of the non-Class A EPS determination 
analysis. DOE received no comments on its engineering results for this 
product class and, therefore, maintained the same results in today's 
final rule. The results for the 203W multiple-voltage EPS product class 
are shown in Table IV-9.
[GRAPHIC] [TIFF OMITTED] TR10FE14.012

    Similar to the analysis of multiple-voltage EPSs, DOE analyzed one 
345W representative unit for high-power EPSs. In chapter 5 of the NOPR 
TSD, DOE indicated that it was considering applying the cost-efficiency 
relationship for 345W high-power single-voltage EPSs that it developed 
as part of the non-Class A EPS determination analysis to high-power 
EPSs. In the determination analysis, DOE derived costs for CSL 0 and 
CSL 1 from test and teardown data, whereas costs for CSL 2 and CSL 3 
came from manufacturer and component supplier interviews. DOE did not 
receive comments on this aspect of its approach in the NOPR. Hence, DOE 
used the results from the determination analysis to characterize the 
costs of the less-efficient CSLs for 345W high-power EPSs (CSL 0 and 
CSL 1) for today's final rule.
    After discussions with its subject matter experts (SMEs), DOE 
believes that a 345W EPS can achieve higher efficiencies based on a 
theoretical model of a 360W EPS that exhibits the properties of three 
120W EPSs connected in parallel. This model essentially demonstrates a 
``black box'' approach that supplies the representative unit output 
voltage at a higher output current than a single 120W unit would be 
able to provide. As each EPS in this system would be operating at an 
identical efficiency, the system as a whole would meet the same 
efficiency as any one EPS and, therefore, the 345W unit can be modeled 
as several 120W EPSs connected in parallel.
    These higher output devices are typically used with amateur radio 
equipment, which often transmit at power levels between 100 and 200 
watts while simultaneously providing power to other components. DOE 
developed its costs for the higher-efficiency CSLs (CSL 2, CSL 3, and 
CSL 4) based on its 120W EPS analysis. DOE received no comments on this 
approach and thus retained the cost-efficiency relationship for the 
345W EPS shown in Table IV-10 for today's final rule.

[[Page 7875]]

[GRAPHIC] [TIFF OMITTED] TR10FE14.013

5. EPS Equation Scaling
    In support of the NOPR, DOE presented an approach to deriving the 
average efficiency and no-load power consumption requirements for each 
CSL over the full range of output power for Class A EPSs in chapter 5 
of the NOPR TSD. Mathematical equations define each CSL as a pair of 
relationships that are functions of nameplate output power: (1) Average 
active-mode efficiency and (2) no-load mode power consumption. These 
equations allowed DOE to describe a CSL for any nameplate output power 
and served as the basis for its proposed standards. A complete 
description of the equations can be found in chapter 5 of the TSD.
    For the baseline CSL and CSL 1, DOE relied on equations from EISA 
2007 and ENERGY STAR 2.0, respectively, rather than developing new 
equations. DOE took this approach because EISA created a mandatory 
standard that established a baseline for DOE's analysis while the 
ENERGY STAR voluntary program served as an incentive for manufacturers 
to produce more efficient products in order to brand their products as 
ENERGY STAR compliant, a quality that that many consumers recognize and 
seek. Both equations are defined over ranges of output power, although 
the divisions between ranges are slightly different. EISA 2007 created 
divisions by establishing efficiency equations with breakpoints at 1 
watt and 51 watts; ENERGY STAR 2.0 creates similar divisions at 1 watt 
and 49 watts. See 42 U.S.C. 6295(u)(3)(A) (creating nameplate output 
categories of under 1 watt, 1 watt to not more than 51 watts, and over 
51 watts) and ``ENERGY STAR Program Requirements for Single Voltage 
External AC-DC and AC-AC Power Supplies'' (creating nameplate output 
categories of less than or equal to 1 watt, 1 watt to not more than 49 
watts, and greater than 49 watts). DOE developed equations for all 
other CSLs and for consistency and simplicity used the ENERGY STAR 2.0 
divisions at 1 watt and 49 watts for all CSLs. These divisions were 
created in conjunction with the EPS product classes discussed in 
section IV.A.2.a as part of a complete analysis by the EPA when it 
drafted the ENERGY STAR program requirements for single-voltage 
external AC-DC and AC-AC power supplies.
    DOE derived CSL 2, CSL 3, and CSL 4 by fitting equations to the 
efficiency values of their respective manufacturer and test data points 
for each representative unit. DOE used an equation of the form Y = 
a*ln(Pout) + b*Pout + c, for each of the 
nameplate output power ranges, where Y indicates the efficiency 
requirement; Pout indicates the nameplate output power; and 
a, b, and c represent variables defined for each CSL. DOE ensured that 
the equations met three conditions:
    (1) The distance to each point was minimized.
    (2) The equation did not exceed the tested efficiencies.
    (3) DOE further restricted the parameter choice in order to ensure 
that the CSL curves adhered to a matched pairs approach fully detailed 
in chapter 5 of the TSD.
    For the NOPR, DOE derived a revised max-tech scaling equation from 
data points obtained during manufacturer interviews as noted in section 
III.B.2.a. DOE received no comments averse to the revised max tech CSL 
equation. Therefore, DOE has maintained all of its CSL equations from 
the NOPR in today's final rule.
    As in the NOPR, DOE scaled the CSL equations from product class B 
to the product classes representing low-voltage AC-DC and all AC-AC 
EPSs (product classes C, D, and E). See Chapter 5 of the TSD to today's 
final rule for more information regarding DOE's scaling methodology. 
The scaling for these equations was based on ENERGY STAR 2.0, which 
separates AC-DC conversion and AC-AC conversion into ``basic-voltage'' 
and ``low-voltage'' categories. ENERGY STAR 2.0 sets less stringent 
efficiency levels for low-voltage EPSs because they cannot typically 
achieve the same efficiencies as basic-voltage EPSs due to inherent 
design limitations. Similarly, ENERGY STAR 2.0 sets less stringent no-
load standards for AC-AC EPSs because the devices do not use the 
overhead circuitry found in AC-DC EPSs to limit no-load power 
dissipation. As previously stated, the power consumed by the additional 
AC-AC EPS circuitry would actually increase their no-load power 
consumption. DOE used this approach to develop CSLs other than the 
baseline CSL for product classes C, D, and E. Because the EISA 2007 
standard applies to all Class A EPSs, which comprise most of product 
classes B, C, D, and E, the baseline CSL is exactly the same for all 
four product classes.
    As described throughout the EPS rulemaking, DOE created less 
stringent CSLs for product classes C, D, and E based on the technical 
differences outlined in Section III.A. The efficiency equations for CSL 
1 come directly from the ENERGY STAR 2.0 low-voltage equation because 
of the impact the ENERGY STAR 2.0 levels had on the EPS market. The 
low-voltage curves for CSL 2, CSL 3, and CSL 4 were created by using 
their respective CSL 2, CSL 3, and CSL 4 basic-voltage efficiency 
curves, and altering all equation parameters by the difference in the 
coefficients between the CSL 1 basic-voltage and low-voltage equations. 
This approach had the effect of shifting the CSL 2, CSL 3, and CSL 4 
low-voltage curves downward from their corresponding basic-voltage CSL 
2, CSL 3, and CSL 4 curves, by a similar amount as the shift seen in 
the ENERGY STAR 2.0 equations. Today's amended standards for product 
classes C, D, and E were established using this methodology.
    Eastman Kodak commented that the no-load equations should be a 
continuous function of output power for EPSs with nameplate output 
powers less than 250 watts. (Eastman Kodak, No. 125 at p. 2) However, 
as explained, DOE's approach is consistent with the EISA 2007 standards 
and the former ENERGY STAR 2.0 program for EPSs. In both cases, the no-
load power requirement is a step function based on

[[Page 7876]]

the power output of the EPS. Using that assumption, DOE conducted an 
engineering analysis and found no strong correlation between no-load 
power and output power that would warrant deviating from the analytical 
structure of these programs. The equations for no-load power and 
active-mode efficiency formed the foundation of DOE's standards 
analysis, and the approach has been largely supported by stakeholders 
throughout the course of the rulemaking. Therefore, DOE maintained its 
step function equations for no-load power in amending the standards for 
EPSs in today's final rule.
    After applying the approach described above and analyzing the 
products at issue, DOE believes that the ENERGY STAR 2.0 low-voltage 
standard equation for AC-DC conversion is an appropriate standard for 
multiple-voltage EPSs because lower power EPSs tend to be less 
efficient. DOE took into account that fact and has created an equation 
that scales with output power, should any low-power multiple-voltage 
EPSs enter the market in the future. As detailed in chapter 5 of the 
TSD, the ENERGY STAR 2.0 low-voltage equation matches the CSL equation 
DOE is adopting for the multiple-voltage EPS standard at the 
representative unit's output power of 203 watts, but also sets less 
stringent efficiency standards for lower power EPSs. DOE applied the 
same constraints when fitting the equation to the test data as it did 
for product classes B, C, D, and E. DOE received no comments on this 
approach in setting a standard for multiple-voltage EPSs.
    For product class H (high-power EPSs), DOE set a discrete standard 
for all EPSs greater than 250 watts. DOE believes this is appropriate 
for two main reasons: (1) DOE is aware of only one application for 
high-power EPSs (amateur radios) and (2) this approach is consistent 
with the standard for product class B, which is a discrete level for 
all EPSs with nameplate output powers greater than 49 watts. In light 
of these facts, setting a single efficiency level as the standard for 
all EPSs with output power greater than 250 watts (high-power EPSs) 
appears to be a reasonable approach to ensure a minimal level of energy 
efficiency while minimizing the overall level of burden on 
manufacturers. DOE received no comments on this approach in setting a 
standard for high power EPSs.
6. Proposed Standards
a. Product Classes B, C, D, and E
    In the NOPR, DOE proposed standard levels for all the product 
classes that were analyzed as part of the EPS engineering analysis. For 
product classes B, C, D, and E, which contained Class A, medical, and 
some MADB EPSs broken out by type of power conversion and nameplate 
output voltage, DOE proposed CSL 3, or the best-in-market CSL. To 
develop the proposed standard level, DOE ``curve fit'' an equation to 
test results of the most efficient EPSs it could find on the market at 
each representative output power.\23\ DOE announced its intention to 
designate the proposed level ``Level VI'' in a revised and updated 
version of the International Efficiency Marking Protocol for EPSs. DOE 
received many comments on the proposed standard levels for product 
classes B, C, D, and E.
---------------------------------------------------------------------------

    \23\ The term ``curve fit'' refers to generating an equation 
based on a set of data in order to describe the information 
mathematically.
---------------------------------------------------------------------------

    Panasonic, Cobra Electronics, ITI, Salcomp, Duracell, the Republic 
of Korea, and Eastman Kodak all commented that DOE should forgo setting 
an EPS standard at level VI and adopt the current level V requirement 
as the Federal standard to harmonize with the E.U. and other 
international efficiency programs. (Panasonic, No. 120 at p. 2; Cobra 
Electronics, No. 130 at p. 8; ITI, No. 131 at p. 4, Salcomp, No. 73 at 
p. 2; Duracell, No. 109 at p. 4; Republic of Korea, No. 148 at p. 1; 
Eastman Kodak, No. 125 at p. 2) ITI stated that DOE's proposed standard 
``breaks away from global harmonization efforts and would require 
significant industry-wide redesign,'' and called it ``unjustifiable.'' 
(ITI, No. 131 at p. 4) AHAM also supported harmonization efforts and 
asserted that level V is ``the most stringent level that is 
technologically feasible.'' (AHAM, No. 124 at p. 7) These statements 
were supported by Philips, which suggested that DOE should adopt Level 
V, which is known to be technologically feasible, and contemplate 
higher levels in a later rule. (Philips, No. 128 at p. 3) ITI also 
suggested such a phased approach, in which DOE would first adopt a 
standard at Level V for Class A EPSs and later investigate mandatory or 
voluntary standards for non-Class A EPSs. (ITI, No. 131 at p. 5) Nokia 
claimed that the DOE standards proposal ``lacks sufficient economic 
justification to warrant such swift and demanding changes.'' (Nokia, 
No. 132 at p. 2) For all the reasons suggested by other stakeholders, 
the CEA noted that ``further analysis is needed before DOE promulgates 
an amended energy conservation standard for Class A external power 
supplies.'' (CEA, No. 106 at p. 5)
    Some interested parties made specific comments about the no-load 
power equation of the proposed standard. Flextronics claimed that with 
a compliance date two years from the publication of today's final rule, 
DOE should decrease the no-load power proposal from 100mW to 50mW for 
EPSs for mobile phones. (Flextronics, No. 145 at p. 1) Conversely, 
Logitech argued that they had just undergone costly design improvements 
to meet the no-load power requirement for the former ENERGY STAR 
program for EPSs and the E.U., which is 300 mW. (Logitech, No. 157 at 
p. 1)
    DOE received support from energy efficiency advocates in favor of 
the standards proposed in the NOPR. NEEP noted that DOE's proposal 
represents a strong push toward rapidly increasing the energy 
efficiency of EPSs. (NEEP, No. 160 at p. 2) ARRIS Group also supported 
DOE's conclusion that ``changing to a code V energy efficiency 
requirement will have little to no material cost impact since the 
majority of EPS products already comply.'' (ARRIS Group, No. 105 at p. 
1)
    In any efficiency standards rulemaking, DOE seeks to identify the 
most stringent standard that is economically justified and technically 
feasible. In the NOPR for EPSs, DOE proposed to amend the EISA 2007 
regulations and increase the minimum efficiency standards to the best-
in-market levels identified in the engineering analysis.
    The comments submitted by manufacturers suggest that DOE has 
overestimated the capabilities of EPSs and that it should propose Level 
V as the federal standard (or equivalently to harmonize with the EU 
standards). The most recent EPS standards in the E.U. came into effect 
in 2011 and are equal to the Level V efficiency standard. However, more 
recent E.U. documents on EPS standards indicate a proposal to revise 
those standards to match the levels proposed by DOE in the NOPR by 2017 
for the no-load, 25%, 50%, 75%, and 100% loading scenarios. The E.U. is 
also considering an additional 10% loading requirement outside the 
average efficiency metric from the other four loading conditions.\24\ 
Other standards for EPSs outside the United States, including those in 
Canada and New Zealand, have set less stringent standards equal to the 
EISA 2007 level

[[Page 7877]]

(level IV). In addition, the E.U. instituted standby power consumption 
standards in 2010 and will revise those standards effective 2013. DOE 
notes that current international efficiency standards for EPSs are not 
all harmonized around efficiency level V, but it is possible that 
efficiency standards in the U.S. and E.U. may harmonize around the 
standards announced in today's final rule within the next several 
years. For more detail, see section IV.G.3 below and chapter 9 of the 
TSD.
---------------------------------------------------------------------------

    \24\ ``Review Study on Commission Regulation (EC) No. 278/2009 
External Power Supplies: Draft Final Report.'' March 13, 2012. 
Prepared for European Commission--Directorate-General for Energy. 
http://www.powerint.com/sites/default/files/greenroom/docs/EPSReviewStudy_DraftFinalReport.pdf.
---------------------------------------------------------------------------

    As stakeholders have said, and as is shown in DOE's engineering 
analysis, the majority of EPSs already meet or exceed the Level V 
requirements so, in addition to the most recent E.U. standards, the 
incremental cost to manufacturers to achieve this level is nearly zero 
and any additional energy savings beyond today's market would be 
negligible. (ARRIS Group, No. 105 at p. 1). The DOE analysis of EPS 
shipments projects a base case assumption of the efficiency of EPSs 
that would be shipped in the future if DOE did not issue today's final 
rule. DOE only accounts for the energy savings and incremental costs 
that occur between this base case projection and the standards case 
that results from issuing today's final rule. In the base case 
projection, DOE presumes that 69% of all EPSs sold in the United States 
in 2015 would meet or exceed Level V, while 31% would only meet the 
Level IV requirements. This assumption is equal to the shipments-
weighted average distribution for product classes B, C, D, and E, and 
is based on test results from the engineering analysis and assumptions 
about increases in product efficiency that would occur as a result of 
the ENERGY STAR program and mandatory standards in the European Union. 
Chapters 3 and 9 of the TSD describe DOE's efficiency distribution 
assumptions in greater detail. While DOE believes the baseline 
efficiency levels used in today's final rule are justified, DOE 
conducted an additional sensitivity analysis using different 
assumptions about the base case efficiency of EPSs that will be on the 
market in 2015. The results of this sensitivity analysis, presented in 
Appendix 10-A of the TSD, depict the national economic and energy 
impacts that would occur under alternative scenarios.
    Commenters also claimed, without providing any supporting data, 
that any standard that is more stringent than Level V is technically 
infeasible and economically unjustifiable despite DOE's detailed 
analysis. The proposal put forth by DOE in the NOPR clearly points out 
that the selected standard level can be supported by products on the 
market and is not ``technically infeasible''. DOE outlines its complete 
analysis of the current EPS market as well as pathways to higher 
efficiencies based on information gathered from manufacturers and 
independent consultants in chapter 5 of the TSD to today's final rule.
    Concerning the no-load mode proposal, DOE created matched pairings 
of efficiency and no-load power for all representative units, as 
discussed in section IV.C.2. Under that structure, any standard would 
match a continuous active-mode efficiency equation with a no-load step 
function. While DOE's analysis shows that 50 mW is technically 
achievable, which is equivalent to Flextronic's recommendation, it is 
only achievable for lower power EPSs (e.g., those for cell phones), and 
would not be applicable as a flat standard for all EPSs as outlined in 
Chapter 5 of the TSD. Therefore, in today's final rule, DOE is not 
adopting a no-load power requirement that is flat and equivalent to 50 
mW across all nameplate output powers and instead is adopting a step 
function equation that sets a specific no-load power limit for EPSs 
based on output power.
    DOE is not adopting a standard for either average active-mode 
efficiency or no-load power consumption for EPSs in product class C-1 
in today's final rule. DOE believes the low-voltage high-current output 
inherent in the design of these products limits their achievable 
efficiencies due to input rectification voltage drops relative to the 
output voltage, resistive losses in the higher current outputs, and the 
potential to decrease the utility of these products to improve 
efficiency by forcing manufacturers to utilize more expensive and 
larger components to meet the proposed standards.
    NRDC commented that indirect operation EPSs should be subject to 
the same standards as direct operation EPSs, citing a lack of technical 
differences between the two groups of products. NRDC asserted that the 
proposed battery charger standards, if adopted, might be insufficient 
to increase the efficiency of indirect operation EPSs to the levels 
shown in the EPS standards analysis to be cost-effective. NRDC also 
expressed concern that because there is no obvious way to visually 
distinguish between direct and indirect operation EPSs, a manufacturer 
could circumvent standards by misrepresenting a direct operation EPS as 
an indirect operation EPS. (NRDC, No. 114 at p. 16) The California IOUs 
concurred with NRDC's comments. (CA IOUs, No. 138 at p. 20)
    DOE continues to believe that a distinction between indirect and 
direct operation EPSs is justified. DOE recognizes that some wall 
adapters that are part of battery charging systems serve a different 
purpose than ``regular'' EPSs, have different design constraints, and 
should be regulated differently from each other.
    In the determination analysis and in the standards preliminary 
analysis, the characteristic that distinguished this group of devices 
was the presence of ``charge control.'' (Non-Class A EPS Determination 
Final Rule, 75 FR 27170, May 14, 2010; Preliminary Analysis TSD, No. 31 
at p. 78, September 2010) DOE concluded from this analysis that 
standards would be warranted for non-Class A EPSs based in part on its 
understanding that devices with charge control were outside the scope 
of analysis because they were intended to charge batteries and 
therefore not considered EPSs. This understanding carried over into the 
analyses conducted as part of the present standards rulemaking.
    This general approach has received support from manufacturers and 
utilities throughout the rulemaking process. For example, AHAM, PTI, 
and Wahl Clipper commented in response to the preliminary analysis that 
MADB wall adapters should be regulated as battery charger components, 
but not as EPSs. (AHAM, No. 42 at pp. 2, 3, 13; PTI, No. 45 at p. 4; 
Wahl Clipper, No. 53 at p. 1) Similarly, PG&E, two other energy 
utilities, and five efficiency advocates submitted a joint comment 
expressing their support for requiring wall adapters that perform 
charge control functions to be regulated as battery charger components, 
but not as EPSs. (PG&E, et al., No. 47 at pp. 3-4) In the March 2012 
NOPR, DOE maintained this approach but altered the specific criteria 
for differentiating between the two types of devices by proposing that 
those EPSs that cannot operate an end-use product directly would not be 
subject to the proposed standards. DOE continues to believe that it 
would be inappropriate to require indirect operation EPSs to meet the 
new and amended standards being adopted today.
    DOE notes that battery charger standards will be handled separately 
from EPSs. And while NRDC asserts that DOE's proposed standards for 
battery chargers would not compel manufacturers to increase the 
efficiency of indirect operation EPSs, any battery charger standards 
DOE may adopt would need to achieve the maximum

[[Page 7878]]

improvement in energy efficiency that is technologically feasible and 
economically justified. (42 U.S.C. 6295(o)(2)(A)) These standards would 
be evaluated based on the expected improvements in the energy 
efficiency of battery chargers, not of the EPSs--for which Congress has 
created a separate regulatory scheme. Manufacturers would have the 
flexibility to decide how to modify their products to achieve the 
improvements in energy efficiency necessitated by any battery charger 
standard DOE might adopt. The available choices could include using 
more efficient EPSs or other alternative design paths.
    As for NRDC's concern that manufacturers might mistakenly or 
intentionally misrepresent direct operation EPSs as indirect operation 
EPSs and circumvent any applicable standards, DOE notes that it has 
created a regulatory framework for EPSs that meet statutory 
requirements while minimizing complexity. To that end, DOE developed a 
straightforward method (discussed above) for identifying indirect 
operation EPSs. DOE believes it has developed a method that is simple 
enough that any manufacturer can use it to determine whether a given 
EPS is an indirect operation EPS. Furthermore, Class A indirect 
operation EPSs continue to be required to meet the standards in EISA 
2007 established by Congress.
b. Product Class X
    DOE proposed adopting the ENERGY STAR specification for low-voltage 
EPSs as its standard for multiple-voltage EPSs. In DOE's view, this 
standard would be economically justified because DOE's analysis 
indicated that the standard would provide the greatest accumulation of 
net social benefits for the one product DOE analyzed in product class X 
(see section V.C.1.b of the NOPR). The equation on which this standard 
was based provided a means to apply the standard using a continuous 
function of output power that would readily enable a manufacturer to 
determine what efficiency level it would need to meet for any future 
multiple-voltage products that might be produced. DOE sought comment on 
this proposal from interested parties.
    Microsoft commented that DOE's proposed standard for multiple-
voltage EPSs does not yield results that are comparable or 
representative of actual use citing the fact that the game console EPS 
that would be required to meet the proposed standard is most efficient 
between the loading points it operates in most frequently, roughly 
between 46 and 63 percent load. Microsoft believes that because DOE's 
test procedure requires averaging the efficiency over multiple loading 
points beyond that range, the procedure would not accurately capture 
real world efficiency and energy savings potential of its game console 
EPS. (Microsoft, No. 110 at p. 2) The CEA agreed, stating that the 
``standard for multiple-voltage EPSs is inappropriate for the one 
product impacted by it.'' (CEA, No. 106 at p. 6) NRDC suggested that, 
in lieu of DOE's proposed standard, multiple-voltage EPSs should be 
required to meet only the efficiency level of their lowest output 
voltage. (NRDC, No. 114 at p. 14)
    In the case of multiple-voltage EPSs, DOE's intent was to propose a 
continuous standard as a function of output power similar to the 
single-voltage EPS proposal. While only one product currently falls 
into this class, this situation may not always be the case. To account 
for the possibility of additional types of multiple-voltage EPSs 
becoming commercially available, DOE proposed using an average 
efficiency metric over the four loading conditions identified in the 
multiple-voltage test procedure. Using the current methodology, any 
future products that are sold with multiple-voltage EPSs will have a 
universal test method and set of measurable efficiency metrics to 
evaluate against the new federal standard.
    Adopting the NRDC approach (i.e. setting requirements only on the 
lowest output voltage) would not ensure that the lowest voltage bus 
would provide any significant power to the end-use product in a real-
world application. Consequently, the overall efficiency of the EPS 
could be far less than testing would indicate. In such a situation, a 
highly efficient lower voltage output would have a negligible impact on 
the overall system efficiency should the higher voltage output provide 
significantly more power to the end-use consumer product. For instance, 
the low-voltage output on the EPS in question provides only 2.5 percent 
of the overall system power at full load. While the output may be 
highly efficient, its overall impact on the system is minimal and using 
NRDC's method would not allow DOE to properly capture the additional 
energy usage of the EPS.
    Manufacturers of multiple-voltage EPSs could also take advantage of 
such a loophole by designing a highly efficient low-voltage output 
despite its contribution, or lack thereof, to the overall energy 
consumption of the EPS while paying little attention to the higher 
voltage output(s). There are several ways manufacturers can design 
multiple output EPSs (i.e. multiple transformer taps, separate filter 
stages, paralleling several outputs of a single voltage) and there is 
no guarantee that improving one output bus would result in improvements 
to any other outputs. In any case where DOE does not measure all 
outputs, the reported energy consumption of the EPS (based on NRDC's 
approach) would not be an accurate representation of how much energy a 
given device would use. In light of the potential for this problematic 
result, DOE is opting to adopt its proposed approach to ensure (1) the 
universal applicability of its procedure and the standard and (2) 
reasonably accurate measurements of energy efficiency for these 
products.
c. Product Class H
    To develop the efficiency standard level proposed in the NOPR for 
product class H (high power) EPSs, DOE scaled the CSLs from the 120W 
representative unit to the 345W representative unit in the high power 
product class. Like the proposed standards for the other EPS product 
classes, DOE chose the most stringent level that was technologically 
feasible and economically justified. DOE sought comment on the 
methodology for selecting a standard for high power EPSs, and received 
only one comment.
    NRDC recommended that ``DOE set the same efficiency levels for 
class H as for class B instead of the current proposal of 87.5%.'' 
(NRDC, No. 114 at p. 14) However, like multiple-voltage EPSs, there is 
only one product (amateur radios) that DOE could identify that uses 
high power EPSs. The 120W products in product class B have a 
representative nameplate output voltage of 19 volts while the high 
power EPSs in product class H have a representative nameplate output 
voltage of 13 volts. While the EPSs in product class B do not have 
higher nameplate output powers than 250 watts, the high power product 
class H covers all EPSs above 250 watts. In comparing the 120 watt unit 
at 19 volts to the 345 watt unit at 13 volts, DOE found that the high 
power EPSs have much higher output currents since the nameplate output 
power (i.e. watts) is the product of nameplate output current and 
nameplate output voltage. Higher output currents create greater 
resistive losses associated with the output cord and secondary side 
filtering. When scaling the 120W results to the 345W representative 
unit, DOE adjusted for this disparity using the voltage scaling 
techniques it developed during its EPS testing, as detailed in chapter 
5 of the TSD, and ultimately proposed an efficiency standard slightly 
lower than

[[Page 7879]]

the direct operation EPSs below 250W nameplate output power. This 
technical limitation on the achievable efficiency remains and the 
standards adopted in today's final rule accounts for this limitation.

D. Markups Analysis

    The markups analysis develops appropriate markups in the 
distribution chain to convert the MSP estimates derived in the 
engineering analysis to consumer prices. At each step in the 
distribution chain, companies mark up the price of the product to cover 
business costs and profit margin. Given the variety of products that 
use EPSs, distribution varies depending on the product class and 
application. As such, DOE assumed that the dominant path to market 
establishes the retail price and, thus, the markup for a given 
application. The markups applied to end-use products that use EPSs are 
approximations of the EPS markups.
    In the case of EPSs, the dominant path to market typically involves 
an end-use product manufacturer (i.e. OEM) and retailer. DOE developed 
OEM and retailer markups by examining annual financial filings, such as 
Securities and Exchange Commission (SEC) 10-K reports, from more than 
80 publicly traded OEMs, retailers, and distributors engaged in the 
manufacturing and/or sales of consumer applications that use EPSs.
    DOE typically calculates two markups for each product in the 
markups analysis. These are: a markup applied to the baseline component 
of a product's cost (referred to as a baseline markup) and a markup 
applied to the incremental cost increase that results from standards 
(referred to as an incremental markup). The incremental markup relates 
the change in the MSP of higher-efficiency models (the incremental cost 
increase) to the change in the retailer's selling price.
    Commenting on retail markups, Phillips, Schumacher, and Wahl 
Clipper stated that the concept of margins is very significant to 
retailers, and it is not realistic to predict that retailers 
voluntarily will act in a way that reduces their margins. (Philips, No. 
128 at p. 6; Schumacher, No. 182 at p. 6; Wahl Clipper, No 153 at p. 2) 
Motorola commented that retailers will not be willing to lower their 
markups because product efficiency has increased. (Motorola Mobility, 
No. 121 at p. 4) In contrast, PTI stated that DOE's estimates of 
markups are sufficient for the purposes of the analysis. (PTI, No. 133 
at p. 6)
    DOE recognizes that retailers may seek to preserve margins. 
However, DOE's approach assumes that appliance retail markets are 
reasonably competitive, so that an increase in the manufacturing cost 
of appliances is not likely to contribute to a proportionate rise in 
retail profits, as would be expected to happen if markups remained 
constant. DOE's methodology for estimating markups is based on a mix of 
economic theory, consultation with industry experts, and data from 
appliance retailers.\25\ In conducting research, DOE has found that 
empirical evidence is lacking with respect to appliance retailer markup 
practices when a product increases in cost (due to increased efficiency 
or other factors). DOE understands that real-world retailer markup 
practices vary depending on market conditions and on the magnitude of 
the change in cost of goods sold (CGS) associated with an increase in 
appliance efficiency. DOE acknowledges that detailed information on 
actual retail practices would be helpful in evaluating change in 
markups on products after appliance standards take effect. For this 
rulemaking, DOE requested data from stakeholders in support of 
alternative approaches to markups, as well as any data that shed light 
on actual practices by retailers; however, no such data was provided. 
Thus, DOE continues to use an approach that is consistent with economic 
theory of firm behavior in competitive markets.
---------------------------------------------------------------------------

    \25\ An extensive discussion of the methodology and 
justification behind DOE's general approach to markups calculation 
is presented in Larry Dale, et al. 2004. ``An Analysis of Price 
Determination and Markups in the Air-Conditioning and Heating 
Equipment Industry.'' LBNL-52791. Available for download at http://eetd.lbl.gov/sites/all/files/an_analysis_of_price_determiniation_and_markups_in_the_air_conditioning_and_heating_equipment_industry_lbnl-52791.pdf.
---------------------------------------------------------------------------

    Chapter 6 of the TSD provides additional detail on the markups 
analysis.

E. Energy Use Analysis

    The energy use analysis provides estimates of the annual energy 
consumption of EPSs at the considered efficiency levels. DOE uses these 
values in the LCC and PBP analyses and in the NIA. DOE estimated the 
annual energy use of EPSs in the field as they are used by consumers.
    EPSs are power conversion devices that transform input voltage to a 
suitable voltage for the end-use application they are powering. A 
portion of the energy that flows into an EPS flows out to an end-use 
product and, thus, cannot be considered to be consumed by the EPS. 
However, to provide the necessary output power, other factors 
contribute to EPS energy consumption, e.g., internal losses and 
overhead circuitry.\26\ Therefore, the traditional method for 
calculating energy consumption--by measuring the energy a product draws 
from mains while performing its intended function(s)--is not 
appropriate for EPSs because that method would not factor in the energy 
delivered by the EPS to the end-use application, and thus would 
overstate EPS energy consumption. Instead, DOE considered energy 
consumption to be the energy dissipated by the EPS (losses) and not 
delivered to the end-use product as a more accurate means to determine 
the energy consumption of these products. Once the energy and power 
requirements of those end-use products were determined, DOE considered 
them fixed, and DOE focused its analysis on how standards would affect 
the energy consumption of EPSs themselves.
---------------------------------------------------------------------------

    \26\ Internal losses are energy losses that occur during the 
power conversion process. Overhead circuitry refers to circuits and 
other components of the EPS, such as monitoring circuits, logic 
circuits, and LED indicator lights, that consume power but do not 
directly contribute power to the end-use application.
---------------------------------------------------------------------------

    Applying a single usage profile to each application, DOE calculated 
the unit energy consumption for EPSs. In addition, DOE examined the 
usage profiles of multiple user types for applications where usage 
varies widely (for example, a light user and a heavy user or an amateur 
user and professional user). By examining these usage profiles DOE 
provided stakeholders with greater transparency in its energy 
consumption calculation, such that they could provide specific comments 
where DOE's estimates were incorrect.
    AHAM voiced support for the usage profiles presented by DOE in the 
NOPR. While AHAM commented that DOE could more accurately capture the 
usage of infrequently used product classes, it largely supported DOE's 
efforts to consider the variation in usage for EPSs. AHAM recommended 
that DOE reevaluate these usage profiles in the future to more 
accurately quantify the usage profiles for infrequently charged 
products. (AHAM, No. 124 at p. 7) No other feedback was received on 
this issue. In light of the support expressed for its approach, and for 
the technical reasons explained above, DOE continued to apply the same 
approach.
    With respect to the various loading points DOE used to estimate 
energy usage, NRDC commented that DOE overestimated its loading point 
assumption for laptop computer EPSs in the ``operating'' application 
state, which, given the reduced EPS efficiency at lower loading point 
levels, would lead to an understatement of energy

[[Page 7880]]

losses. (These EPSs fall in product class B.) NRDC pointed to a recent 
EPA dataset underlying the ENERGY STAR v6.0 Computer Specification 
Revision \27\ that showed loading points for a comparable application 
state of approximately 10-20% for most products. This loading point 
range, however, differs from DOE's test data, which showed the 
``operating'' loading point to be at 28%. (NRDC, No. 114 at p. 18)
---------------------------------------------------------------------------

    \27\ https://www.energystar.gov/products/specs/node/143 (last 
accessed October 23, 2012).
---------------------------------------------------------------------------

    To address this comment, DOE worked with the EPA to better 
understand the data that it used to estimate the loading point. DOE 
learned that EPA's estimate was based on a separate set of empirical 
data from Ecma International (formerly the European Computer 
Manufacturers Association) in which measurements were taken from 17 
notebook computers operating in real-world scenarios. DOE analyzed 
these data and found that idle loading points were approximately 30%, 
an estimate that is very much in line with DOE's estimated loading 
point of 28%. Therefore, in developing the final standards, DOE relied 
on the loading points presented in the NOPR.
    DOE also explored high- and low-savings scenarios in an LCC 
sensitivity analysis. As part of the sensitivity analysis, DOE 
considered alternate usage profiles and loading points to account for 
uncertainty in the average usage profiles and explore the effect that 
usage variations might have on energy consumption, life-cycle cost, and 
payback. Additional information on this sensitivity analysis is 
contained in appendix 8B to the TSD.
    DOE does not assume the existence of a rebound effect, in which 
consumers would increase use in response to an increase in energy 
efficiency and resulting decrease in operating costs. For EPSs, DOE 
expects that, in light of the small amount of savings expected to flow 
to each individual consumer over the course of the year, the rebound 
effect is likely to be negligible because consumers are unlikely to be 
aware of the efficiency improvements or notice the decrease in 
operating costs that would result from new standards for these 
products. DOE analyzed the impacts on individual consumers in its Life-
Cycle Cost and Payback Period Analyses described below.

F. Life-Cycle Cost and Payback Period Analyses

    This section describes the LCC and payback period analyses and the 
spreadsheet model DOE used for analyzing the economic impacts of 
possible standards on individual consumers. Details of the spreadsheet 
model, and of all the inputs to the LCC and PBP analyses, are contained 
in chapter 8 and appendix 8A of the TSD. DOE conducted the LCC and PBP 
analyses using a spreadsheet model developed in Microsoft Excel. When 
combined with Crystal Ball (a commercially-available software program), 
the LCC and PBP model generates a Monte Carlo simulation \28\ to 
perform the analysis by incorporating uncertainty and variability 
considerations.
---------------------------------------------------------------------------

    \28\ Monte Carlo simulations model uncertainty by utilizing 
probability distributions instead of single values for certain 
inputs and variables.
---------------------------------------------------------------------------

    The LCC analysis estimates the impact of a standard on consumers by 
calculating the net cost of an EPS under a base-case scenario (in which 
no new energy conservation standard is in effect) and under a 
standards-case scenario (in which the proposed energy conservation 
standard is applied). The base-case scenario is determined by the 
efficiency level that a sampled consumer currently purchases, which may 
be above the baseline efficiency level. The life-cycle cost of a 
particular EPS is composed of the total installed cost (which includes 
manufacturer selling price, distribution chain markups, sales taxes, 
and any installation cost), operating expenses (energy and any 
maintenance costs), product lifetime, and discount rate. As noted in 
the NOPR, DOE considers installation costs to be zero for EPSs.
    The payback period is the change in purchase expense due to a more 
stringent energy conservation standard, divided by the change in annual 
operating cost that results from the standard. Stated more simply, the 
payback period is the time period it takes to recoup the increased 
purchase cost of a more-efficient product through energy savings. DOE 
expresses this period in years.
    Table IV-11 summarizes the approach and data that DOE used to 
derive the inputs to the LCC and PBP calculations for the NOPR and the 
changes made for today's final rule. The following sections discuss 
these inputs and comments DOE received regarding its presentation of 
the LCC and PBP analyses in the NOPR, as well as DOE's responses 
thereto.

[[Page 7881]]

[GRAPHIC] [TIFF OMITTED] TR10FE14.014


[[Page 7882]]


[GRAPHIC] [TIFF OMITTED] TR10FE14.015

1. Manufacturer Selling Price
    In the preliminary analysis, DOE used a combination of test and 
teardown results and manufacturer interview results to develop 
manufacturer selling prices. For the final rule, DOE maintained the 
manufacturer selling prices used in the NOPR analysis, with the 
exception of the 60-Watt representative unit, as discussed in section 
IV.C. Further detail on the MSPs can be found in chapter 5 of the TSD.
    Examination of historical price data for a number of appliances 
that have been subject to energy conservation standards indicates that 
an assumption of constant real prices and costs may overestimate long-
term trends in appliance prices. Economic literature and historical 
data suggest that the real costs of these products may in fact trend 
downward over time according to ``learning'' or ``experience'' curves. 
On February 22, 2011, DOE published a Notice of Data Availability 
(NODA, 76 FR 9696) stating that DOE may consider improving regulatory 
analysis by addressing equipment price trends. In the NODA, DOE 
proposed that when sufficiently long-term data are available on the 
cost or price trends for a given product, it would analyze the 
available data to forecast future trends.
    To forecast a price trend for the NOPR, DOE considered the 
experience curve approach, in which an experience rate parameter is 
derived using two historical data series on price and cumulative 
production, but in the absence of historical data on shipments of EPSs 
and of sufficient historical Producer Price Index (PPI) data for small 
electrical appliance manufacturing from the Bureau of Labor Statistics 
(BLS),\29\ DOE could not use this approach. This situation is partially 
due to the nature of EPS design. EPSs are made up of many electrical 
components whose size, cost, and performance rapidly change, which 
leads to relatively short design lifetimes. DOE also considered 
performing an exponential fit on the deflated AEO's Projected Price 
Indexes that most narrowly include EPSs. However, DOE believes that 
these indexes are too broad to accurately capture the trend for EPSs. 
Furthermore, EPSs are not typical consumer products; they are more like 
a commodity that OEMs purchase.
---------------------------------------------------------------------------

    \29\ Series ID PCU33521-33521; http://www.bls.gov/ppi/.
---------------------------------------------------------------------------

    Given the uncertainty, DOE did not incorporate product price 
changes into the NOPR analysis and is not including them in today's 
final rule. For the NIA, DOE also analyzed the sensitivity of results 
to two alternative EPS price forecasts. Appendix 10-B of the NOPR TSD 
describes the derivation of alternative price forecasts.
2. Markups
    DOE applies a series of markups to the MSP to account for the 
various distribution chain markups applied to the analyzed product. 
These markups are evaluated for each application individually, 
depending on its path to market. Additionally, DOE splits its markups 
into ``baseline'' and ``incremental'' markups. The baseline markup is 
applied to the entire MSP of the baseline product. The incremental 
markups are then applied to the marginal increase in MSP over the 
baseline's MSP. The approach used for markups in the NOPR was 
maintained for the final rule. Further detail on the markups can be 
found in section IV.D above and in chapter 6 of the TSD.
3. Sales Tax
    As in the NOPR, DOE obtained State and local sales tax data from 
the Sales Tax Clearinghouse for the final rule. The data represented 
weighted averages that include county and city rates. DOE used the data 
to compute population-weighted average tax values for each Census 
division and four large States (New York, California, Texas, and 
Florida). For the final rule, DOE retained this methodology and used 
updated sales tax data from the Sales Tax Clearinghouse.\30\ DOE also 
obtained up-to-date population estimates from the U.S. Census Bureau 
for today's final rule.\31\
---------------------------------------------------------------------------

    \30\ Sales Tax Clearinghouse, Aggregate State Tax Rates. https://thestc.com/STRates.stm.
    \31\ The U.S. Census Bureau. Annual Estimates of the Population 
for the United States, Regions, States, and Puerto Rico: April 1, 
2000 to July 1, 2009 http://www.census.gov/popest/data/state/totals/2009/tables/NST-EST2009-01.xls.
---------------------------------------------------------------------------

4. Installation Cost
    As detailed in the NOPR, DOE considered installation costs to be 
zero for EPSs because installation would typically entail a consumer 
simply unpacking the EPS from the box in which it was sold and 
connecting the device to mains power and its associated product. 
Because the cost of this ``installation'' (which may be considered 
temporary, as intermittently used devices might be unplugged for 
storage) is not quantifiable in dollar terms, DOE considered the 
installation cost to be zero.

[[Page 7883]]

    In response to the NOPR, NEMA noted that no installation costs were 
accounted for in the LCC and PBP calculations. NEEA pointed out that 
the LCC focuses on incremental costs, rather than overall costs. It 
noted that it would be very difficult to find data supporting an 
installation cost that increases with increasing efficiency levels. 
(NEEA, Pub. Mtg. Transcript, No. 104 at p. 189) DOE agrees with the 
comments made by NEEA and has maintained zero installation costs for 
the final rule analysis.
5. Maintenance Cost
    In the NOPR analysis, DOE did not consider repair or maintenance 
costs for EPSs. In making this decision, DOE recognized that the 
service life of an EPS typically exceeds that of the consumer product 
it powers. Furthermore, DOE noted that the cost to repair the EPS might 
exceed the initial purchase cost as these products are relatively low 
cost. Thus, DOE estimated that it would be extremely unlikely that a 
consumer would incur repair or maintenance costs for an EPS. Also, if 
an EPS failed, DOE expects that consumers would typically discard the 
EPS and purchase a replacement. DOE received no comments challenging 
this assumption and has continued relying on this assumption for 
purposes of calculating the final rule's potential costs and benefits.
6. Product Price Forecast
    As noted in section IV.F.1, to derive its central estimates DOE 
assumed no change in EPS prices over the 2015-2044 period. In addition, 
DOE conducted a sensitivity analysis using two alternative price trends 
based on AEO indexes. These price trends, and the NPV results from the 
associated sensitivity cases, are described in appendix 10-B of the 
TSD.
7. Unit Energy Consumption
    The final rule analysis uses the same approach for determining UECs 
as the one used in the NOPR. The UEC was determined for each 
application based on estimated loading points and usage profiles. 
Further detail on the UEC calculations can be found in section IV.E 
above and in chapter 7 of the TSD.
8. Electricity Prices
    DOE determined energy prices by deriving regional average prices 
for 13 geographic areas consisting of the nine U.S. Census divisions, 
with four large states (New York, Florida, Texas, and California) 
treated separately. The derivation of prices was based on data in EIA's 
Form EIA-861. For the final rule, DOE updated to EIA's Form EIA-861 
2011.
9. Electricity Price Trends
    In the NOPR analysis, DOE used data from EIA's Annual Energy 
Outlook (AEO) 2010 to project electricity prices to the end of the 
product lifetime.\32\ For the final rule, DOE used the final release of 
the AEO 2013,\33\ which contained reference, high- and low-economic-
growth scenarios. DOE received no comments on the electricity price 
forecasts it used in its analyses.
---------------------------------------------------------------------------

    \32\ U.S. Department of Energy. Energy Information 
Administration. Annual Energy Outlook 2010. November, 2010. 
Washington, DC http://www.eia.doe.gov/oiaf/aeo/.
    \33\ U.S. Department of Energy. Energy Information 
Administration. Annual Energy Outlook 2013. June, 2013. Washington, 
DC http://www.eia.doe.gov/oiaf/aeo/.
---------------------------------------------------------------------------

10. Lifetime
    For the NOPR analysis, DOE considered the lifetime of an EPS to be 
from the moment it is purchased for end-use up until the time when it 
is permanently retired from service. Because the typical EPS is 
purchased for use with a single associated application, DOE assumed 
that it would remain in service for as long as the application does. 
Even though many of the technology options to improve EPS efficiencies 
may result in an increased useful life for the EPS, the lifetime of the 
EPS is still directly tied to the lifetime of its associated 
application. With the exception of EPSs for mobile phones and 
smartphones (see below), the typical consumer will not continue to use 
an EPS once its application has been discarded. For this reason, DOE 
used the same lifetime estimate for the baseline and standard level 
designs of each application for the LCC and PBP analyses. DOE 
maintained this approach in the final rule analysis. Further detail on 
product lifetimes and how they relate to applications can be found in 
chapter 3 of the TSD.
    The one exception to this approach (i.e. that EPSs do not exceed 
the lifetime of their associated end-use products) is the lifetime of 
EPSs for mobile phones and smartphones. While the typical length of a 
mobile phone contract is two years, and many phones are replaced and no 
longer used after two years, DOE assumed that the EPSs for these 
products will remain in use for an average of four years. This 
assumption is based on an expected standardization of the market around 
micro-USB plug technology, driven largely by the GSMA Universal 
Charging Solution.\34\ However, Motorola Mobility commented that DOE 
incorrectly assumed that the mobile phone market is standardizing 
around a micro-USB plug. Motorola Mobility stated that as batteries 
increase in storage capacity, manufacturers may need to abandon micro-
USB technology because of the limits it places on charge currents. 
(Motorola Mobility, No. 121 at p. 7)
---------------------------------------------------------------------------

    \34\ The GSMA Universal Charging Solution is an agreement 
between 17 mobile operators and manufacturers to have the majority 
of all new mobile phones support a universal charging connector by 
January 1, 2012. The press release for the agreement can be accessed 
here: http://www.gsma.com/newsroom/mobile-industry-unites-to-drive-universal-charging-solution-for-mobile-phones/.
_____________________________________-

    To verify that this evolution towards micro-USB plug technology is 
in fact taking place, DOE examined more than 30 top-selling basic 
mobile phone and smartphone models offered online by Amazon.com, 
Sprint, Verizon Wireless, T-Mobile, and AT&T. DOE found that all of the 
newest smartphone models, other than the Apple iPhone, use micro-USB 
plug technology. DOE expects the micro-USB market to increase as more 
phones comply with the IEC 62684-2011. This standard mandates the use 
of common micro-USB chargers for all cellphones and is aimed at 
standardizing EPSs across all mobile phone manufacturers for the 
benefit of the consumer.
    If new EPSs are compatible with a wide range of mobile phone and 
smartphone models, a consumer may continue to use the EPS from their 
old phone after upgrading to a new phone. Even though it is currently 
standard practice to receive a new EPS with a phone upgrade, DOE 
assumes that in the near future consumers will no longer expect 
manufacturers to include an EPS with each new phone.
    For the NOPR analysis, DOE compared LCC results for each CSL for 
mobile and smartphones with a two-year lifetime, to those with a four-
year lifetime. Assuming a lifetime of two (rather than four) years for 
mobile phone and smartphone EPSs resulted in lower life-cycle cost 
savings (or greater net costs) for consumers of those products. 
However, the net effect on Product Class B as a whole was negligible 
because mobile phones and smartphones together comprise only 7 percent 
of shipments in Product Class B. DOE did not receive any comments on 
this approach following the NOPR publication, and therefore retained 
the same lifetime approach used in the NOPR for the final rule 
analysis. LCC results for these and all other applications in Product 
Class B are shown in chapter 11 of the TSD.
    DOE notes that the lifetime of the EPS is directly tied to the 
lifetime of its

[[Page 7884]]

associated application, even if many of the technology options to 
improve EPS efficiencies may result in a longer useful life for the 
EPS. The typical consumer will not use the EPS once the application has 
been discarded. For this reason, the baseline and standard level 
designs use the same lifetime estimate for the LCC and PBP analysis. 
See chapter 8 of the TSD for more details.
11. Discount Rate
    In the NOPR analysis, DOE derived residential discount rates by 
identifying all possible debt or asset classes that might be used to 
purchase and operate products, including household assets that might be 
affected indirectly. DOE estimated the average shares of the various 
debt and equity classes in the average U.S. household equity and debt 
portfolios using data from the Survey of Consumer Finances (SCF) \35\ 
from 1989 to 2007. DOE used the mean share of each class across the 
seven sample years as a basis for estimating the effective financing 
rate for products. DOE estimated interest or return rates associated 
with each type of equity and debt using SCF data and other sources. The 
mean real effective rate across the classes of household debt and 
equity, weighted by the shares of each class, is 5.1 percent.
---------------------------------------------------------------------------

    \35\ http://ww.federalreserve.gov/econresdata/scf/scfindex.htm.
---------------------------------------------------------------------------

    For the commercial sector, DOE derived the discount rate from the 
cost of capital of publicly-traded firms falling in the categories of 
products that involve the purchase of EPSs. To obtain an average 
discount rate value for the commercial sector, DOE used the share of 
each category in total paid employees provided by the U.S. Census 
Bureau \36\ and Federal,\37\ State, and local \38\ governments. By 
multiplying the discount rate for each category by its share of paid 
employees, DOE derived a commercial discount rate of 7.1 percent.
---------------------------------------------------------------------------

    \36\ U.S. Census Bureau. The 2010 Statistical Abstract. Table 
607--Employment by Industry. http://www.census.gov/compendia/statab/2010/tables/10s0607.xls.
    \37\ U.S. Census Bureau. The 2010 Statistical Abstract. Table 
484--Federal Civilian Employment and Annual Payroll by Branch. 
http://www.census.gov/compendia/statab/2010/tables/10s0484.xls.
    \38\ U.S. Census Bureau. Government Employment and Payroll. 2008 
State and Local Government. http://www2.census.gov/govs/apes/08stlall.xls.
---------------------------------------------------------------------------

    For the final rule, DOE used the same methodology as the 
preliminary analysis and NOPR with applicable updates to data sources. 
When deriving the residential discount rates, DOE added the 2010 Survey 
of Consumer Finances to their data set. For all time-series data, DOE 
evaluated rates over the 30-year time period of 1983-2012. The new 
discount rates were derived as 5.2 percent and 5.1 percent in the 
residential and commercial sectors, respectively. For further details 
on discount rates, see chapter 8 and appendix 8D of the TSD.
12. Sectors Analyzed
    The NOPR analysis included an examination of a weighted average of 
the residential and commercial sectors as the reference case scenario. 
Additionally, all application inputs were specified as either 
residential or commercial sector data. Using these inputs, DOE then 
sampled each application based on its shipment weighting and used the 
appropriate residential or commercial inputs based on the sector of the 
sampled application. This approach provided more specificity as to the 
appropriate input values for each sector, and permitted an examination 
of the LCC results for a given representative unit or product class in 
total. DOE maintained this approach in the final rule. For further 
details on sectors analyzed, see chapter 8 of the TSD.
13. Base Case Market Efficiency Distribution
    For purposes of conducting the LCC analysis, DOE analyzed candidate 
standard levels relative to a base case (i.e., a case without new 
federal energy conservation standards). This analysis required an 
estimate of the distribution of product efficiencies in the base case 
(i.e., what consumers would have purchased in 2015 in the absence of 
new federal standards). Rather than analyzing the impacts of a 
particular standard level assuming that all consumers will purchase 
products at the baseline efficiency level, DOE conducted the analysis 
by taking into account the breadth of product energy efficiencies that 
consumers are expected to purchase under the base case.
    In preparing the NOPR analysis, DOE derived base case market 
efficiency distributions that were specific to each application where 
it had sufficient data to do so. This approach helped to ensure that 
the market distribution for applications with fewer shipments was not 
disproportionately skewed by the market distribution of the 
applications with the majority of shipments. As a result, the updated 
analysis more accurately accounted for LCC and PBP impacts. For today's 
final rule, DOE maintained the base case market efficiency 
distributions used in the NOPR analysis.
14. Compliance Date
    The compliance date is the date when a new standard becomes 
operative, i.e., the date by which EPS manufacturers must manufacture 
products that comply with the standard. DOE calculated the LCC savings 
for all consumers as if each would purchase a new product in the year 
that manufacturers would be required to meet the new standard. DOE used 
a compliance date of 2013 in the analysis it prepared for its March 
2012 NOPR and a compliance date of 2015 in the final rule analysis.
15. Payback Period Inputs
    The PBP is the amount of time a consumer needs to recover the 
assumed additional costs of a more-efficient product through lower 
operating costs. As in the NOPR, DOE used a ``simple'' PBP for the 
final rule, because the PBP does not take into account other changes in 
operating expenses over time or the time value of money. As inputs to 
the PBP analysis, DOE used the incremental installed cost of the 
product to the consumer for each efficiency level, as well as the 
first-year annual operating costs for each efficiency level. The 
calculation requires the same inputs as the LCC, except for energy 
price trends and discount rates; only energy prices for the year the 
standard becomes required for compliance (2015 in this case) are 
needed.
    DOE received multiple comments on its payback period analysis. ITI 
pointed out that the NOPR stated ``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.'' (ITI, No. 131 at p. 6) ITI further noted that 
it was aware of preliminary cost-benefit analyses that indicate costs 
of the proposal exceeding the benefits to consumers by more than 10 
times during the first year. Id. As ITI did not provide any data, DOE 
was unable to verify this claim.
    Cobra Electronics also asserted that the projected energy savings 
would yield benefits for a minority of consumers and viewed the payback 
period as requiring that the price the consumer pays for a product will 
not increase more than three times what the value of the energy savings 
will be during the first year after its purchase. (Cobra Electronics, 
No. 130 at p. 7)
    DOE notes that under 42 U.S.C. 6295(o)(2)(B)(iii), if the 
additional cost to the consumer of purchasing the product complying 
with an energy conservation standard level will be less

[[Page 7885]]

than three times the value of the energy savings during the first year 
that the consumer will receive as a result of the standard, there shall 
be a rebuttable presumption that such standard level is economically 
justified. In essence, the statute creates a presumption that a 
standard level satisfying this condition would be economically 
justified. It does not, however, indicate that the standard is 
necessarily economically justified if the payback period is under three 
years, nor does it indicate that the rebuttable presumption is the only 
methodology to show economic justification. DOE notes that it does not 
perform a stand-alone rebuttable presumption analysis, as it is already 
embodied in the LCC and PBP analysis. The rebuttable presumption is an 
alternative to the consideration of the seven factors set forth in 42 
U.S.C. 6295(o)(2)(B)(i)(I)-(VII) for establishing economic 
justification. The LCC and PBP analyses DOE conducted as part of the 
NOPR show that the standard levels proposed for EPSs in product class B 
are economically justified. Furthermore, DOE notes that in today's 
final rule, three out of four of the representative units for product 
class B have payback periods under three years, qualifying the adopted 
standard level for these representative units as economically justified 
under the rebuttable presumption. (The rebuttable presumption payback 
period is discussed further in section III.E.2 above, section V.B.1.c 
below, and in chapter 8 of the TSD.)
    ARRIS Group also expressed concern over the payback periods 
presented in the NOPR. It noted that adjusting to a Level V baseline 
and averaging cost savings across all output powers would more than 
double the payback period to around 7 years, which would exceed the 
product's lifetime and provide no justified savings for the user. 
(ARRIS Group, No. 105 at p. 2)
    As noted in section IV.A.1, level IV is the current federal 
standard, and therefore, units that meet level IV efficiency are 
currently permitted to be sold in the United States. While voluntary 
programs and efficiency standards outside the United States are driving 
the improvement of EPSs so that many EPSs sold in the United States 
meet level V, DOE has observed that EPSs that meet level IV currently 
exist in the marketplace. Therefore, as discussed in section C.6, DOE 
does not believe that adjusting the baseline assumption for all EPSs to 
level V would be appropriate. LCC savings estimates are weighted 
averages of the savings from improving efficiency from each efficiency 
level below the standard level up to the standard level. Thus, DOE's 
analysis accounts for the large percentage of units that would already 
be at level V in the absence of amended federal standards.

G. Shipments Analysis

    Projections of product shipments are needed to predict the impacts 
standards will have on the Nation. DOE develops shipment projections 
based on an analysis of key market drivers for each considered product. 
In DOE's shipments model, shipments of products were calculated based 
on current shipments of product applications powered by EPSs. For the 
National Impact Analysis, DOE built an inventory model to track 
shipments over their lifetime to determine the vintage of units in the 
installed base for each year of the analysis period.
1. Shipment Growth Rate
    In the NOPR, DOE noted that the market for EPSs had grown 
tremendously in the previous ten years. Additionally, DOE found that 
many market reports had predicted enormous future growth for the 
applications that employ EPSs. However, in projecting the size of these 
markets over the next 30-years, DOE considered the possibility that 
much of the market growth associated with EPSs had already occurred. In 
many reports predicting growth of applications that employ EPSs, DOE 
noted that growth was predicted for new applications, but older 
applications were generally not included. That is, EPS demand did not 
grow, but the products using these devices have transitioned to a new 
product mix. For example, during its initial market assessment, DOE 
identified mobile phones, digital cameras, personal digital assistants, 
and MP3 players as applications that use EPSs. However, in the past 
several years, the use of smart phones, which can function as all four 
of these individual applications, has accelerated, and these individual 
products may no longer be sold in large volumes in the near future. A 
quantitative example of this is shown in Table IV-12.

                                   Table IV-12--Example of Product Transition
----------------------------------------------------------------------------------------------------------------
                      Application                          2007 Shipments     2008 Shipments     2009 Shipments
----------------------------------------------------------------------------------------------------------------
Smart Phones...........................................         19,500,000         28,555,000         41,163,000
Mobile Phones..........................................        101,500,000        102,775,000         94,239,000
Personal Digital Assistants............................          2,175,000          1,977,000          1,750,000
MP3 Players............................................         48,020,000         43,731,000         40,101,000
                                                        --------------------------------------------------------
    Total..............................................        171,195,000        177,038,000        177,253,000
----------------------------------------------------------------------------------------------------------------

    With this in mind, DOE based its shipments projections such that 
the per-capita consumption of EPSs will remain steady over time, and 
that the overall number of individual units that use EPSs will grow at 
the same rate as the U.S. population.
    In the NOPR analysis, to estimate future market size while assuming 
no change in the per-capita EPS purchase rate, DOE used the projected 
population growth rate as the compound annual market growth rate. 
Population growth rate values were obtained from the U.S. Census Bureau 
2009 National Projections, which forecast U.S. resident population 
through 2050. DOE took the average annual population growth rate, 0.75 
percent, and applied this rate to all EPS product classes.
    NRDC commented that EPS shipments had been growing significantly 
faster than the growth shown in the NOPR, driven in part by growth in 
consumer electronics and portable appliances over the previous few 
years. They attributed the slower shipment growth in 2009 and 2010 to 
the recession. By 2042, NRDC projected that annual shipments would grow 
to 1.3 billion units, 32% higher than DOE's projection of 1.0 billion 
units. (NRDC, No. 114 at p. 19) The California Investor-Owned Utilities 
also asserted that EPS stocks would grow faster than the population. 
These faster growth rates would increase the energy savings 
attributable to the standards. The CA IOU's stated that they supported 
the conclusions of NRDC, but did not present additional data of their 
own. (CA IOUs, No. 138 at p. 20)

[[Page 7886]]

    DOE recognizes that shipments for certain applications are 
increasing very rapidly. However, DOE researched product growth trends 
dating back to 2006 and found that other products, like digital 
cameras, have seen flat shipments. Some critical applications have even 
had shipments decline year-over-year. There is also significant 
convergence in the consumer electronics industry, in which one new 
device may replace multiple retired devices (such as a single smart 
phone replacing a mobile phone, digital camera, GPS device, and PDA). 
DOE seeks to forecast shipments for EPSs as a whole, but given the 
complexity of these markets, any attempts to forecast behavior of the 
market will be inherently inexact. Therefore, in today's final rule, 
DOE decided to maintain its assumption of 0.75% growth per year from 
the NOPR. In its shipment forecasts, DOE projects that by 2044, 
shipments of EPSs will be 30 percent greater than they were in 2009.
2. Product Class Lifetime
    For the NOPR, DOE calculated product class lifetime profiles using 
the percentage of shipments of applications within a given product 
class, and the lifetimes of those applications. These values were 
combined to estimate the percentage of units of a given vintage 
remaining in use in each year following the initial year in which those 
units were shipped and placed in service.
    DOE received no comments regarding this methodology and maintained 
this methodology for the Final Rule. For more information on the 
calculation of product class lifetime profiles, see chapter 10 of the 
TSD.
3. Forecasted Efficiency in the Base Case and Standards Cases
    A key component of the NIA is the trend in energy efficiency 
forecasted for the base case (without new and amended standards) and 
each of the standards cases. Chapter 3 of the TSD explains how DOE 
developed efficiency distributions (which yield shipment-weighted 
average efficiency) for EPS product classes for the first year of the 
forecast period. To project the trend in efficiency over the entire 
forecast period, DOE considered recent standards, voluntary programs 
such as ENERGY STAR, and other trends.
    DOE found two programs that could influence domestic EPS efficiency 
in the short term: (1) The ENERGY STAR program for EPSs (called 
``external power adapters''), which specified that EPSs be at or above 
CSL 1 and (2) the European Union's (EU's) Eco-design Requirements on 
Energy Using Products. When the Preliminary Analysis was published, the 
ENERGY STAR program was very active, with more than 3,300 qualified 
products as of May 2010.\39\ However, EPA announced that this program 
would end on December 31, 2010.\40\ The EU program requires that EPSs 
sold in the EU be at or above CSL 1, effective April 2011. This program 
applies primarily to Class A EPSs. Recently published documents 
indicate that the EU is currently considering an update to its 
Ecodesign requirements for EPSs which would bring them to a level 
between levels V and VI by 2015. These documents also indicate that the 
EU's approach would bring the EU into harmony with DOE's proposed level 
VI standards by 2017. This approach, however, has not been finalized by 
the EU. The same documents also include a proposal for a more efficient 
standard--approximately 0.25% more efficient than level VI--to come 
into effect in 2019.\41\
---------------------------------------------------------------------------

    \39\ EPA, ``ENERGY STAR External Power Supplies AC-DC Product 
List,'' May 24, 2010 and EPA, ``ENERGY STAR External Power Supplies 
AC-AC Product List,'' May 24, 2010. Both documents last retrieved on 
May 28, 2010 from http://www.energystar.gov/index.cfm?fuseaction=products_for_partners.showEPS.
    \40\ EPA, ``ENERGY STAR EPS EUP Sunset Decision Memo,'' July 19, 
2010. Last retrieved on July 8, 2011 from http://www.energystar.gov/ia/partners/prod_development/revisions/downloads/eps_eup_sunset_decision_july2010.pdf.
    \41\ ``Review Study on Commission Regulation (EC) No. 278/2009 
External Power Supplies: Draft Final Report.'' March 13, 2012. 
Prepared for European Commission--Directorate-General for Energy. 
http://www.powerint.com/sites/default/files/greenroom/docs/EPSReviewStudy_DraftFinalReport.pdf.
---------------------------------------------------------------------------

    Because Europe currently represents approximately one-third of the 
global EPS market, DOE believes that standards established by the EU 
will affect the U.S. market, due to the global nature of EPS design, 
production, and distribution. With the EU and previous ENERGY STAR 
programs in mind, DOE's NOPR analysis assumed that approximately half 
of the Class A EPS market at CSL 0 in 2009 would transition to CSL 1 by 
2013 and that there would be no further improvement in the market in 
the absence of standards. Any EU standards that would come into effect 
after the beginning of the analysis period in 2015 have not been 
announced officially; therefore, DOE's analysis does not account for 
any additional improvement in EPS efficiency beyond the above discussed 
improvements. Aside from the comments from ARRIS Group addressed above 
in sections IV.A.2 and IV.C.6, DOE did not receive comments on the 
improvement of EPS efficiency between 2009 and the beginning of the 
analysis period in 2015, or other factors that may affect EPS 
efficiency after 2015 in the absence of federal standards. Therefore, 
DOE is maintaining this assumption for the Final Rule.
    To estimate efficiency trends in the standards cases, DOE has used 
``roll-up'' and/or ``shift'' scenarios in its standards rulemakings. 
Under the ``roll-up'' scenario, DOE assumes: (1) Product efficiencies 
in the base case that do not meet the standard level under 
consideration would ``roll-up'' to meet the new standard level; and (2) 
product efficiencies above the standard level under consideration would 
not be affected. Under the ``shift'' scenario, DOE reorients the 
distribution above the new minimum energy conservation standard.
    In the NOPR, DOE proposed to use the ``roll-up'' scenario and 
solicited comments from stakeholders on whether such an approach is 
appropriate for EPSs. Delta-Q Technologies agreed with DOE's 
methodology (Delta-Q Technologies, No. 113 at p. 1). PTI commented that 
the ENERGY STAR program could provide an incentive for products to 
improve their efficiency (PTI, No 133 at p. 5). Because the ENERGY STAR 
program for EPS ended, it will not impact the EPS market going forward; 
therefore, DOE has maintained the ``roll-up'' approach for the final 
rule. For further details about the forecasted efficiency 
distributions, see chapter 9 of the TSD.

H. National Impact Analysis

    The National Impact Analysis (NIA) assesses the national energy 
savings (NES) and the net present value (NPV) of total consumer costs 
and savings that would be expected to result from new and amended 
standards at specific efficiency levels. DOE calculates the NES and NPV 
based on projections of annual unit shipments, along with the annual 
energy consumption and total installed cost data from the energy use 
and LCC analyses. DOE projected the energy savings, operating cost 
savings, product costs, and NPV of net consumer benefits for products 
sold over a 30-year period--from 2015 through 2044.
    CEA commented that it is unreasonable for DOE to project shipments, 
energy savings, and emissions reductions over a 30-year period. Product 
lifecycles for many of the covered products are typically measured in 
months, so it can be difficult to make projections years out. (CEA, No. 
106 at p. 9) Although the 30-year analysis period is longer than the 
average lifetime of EPSs, DOE estimates that the considered standard 
levels

[[Page 7887]]

analyzed will transform the market to higher energy efficiencies than 
in the base-case, therefore realizing energy and emission savings 
throughout the analysis period. Further, DOE has conducted a 
sensitivity analysis that projects NIA results out over nine years of 
shipments instead of 30 years. Results of this sensitivity analysis are 
available in section V.B.3 of this notice.
    As in the LCC analysis, DOE evaluates the national impacts of new 
and amended standards 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 and amended energy conservation standards. DOE compares these 
projections with projections characterizing the market for each product 
class if DOE adopted new and amended standards at specific energy 
efficiency levels (i.e., the TSLs or standards cases) for that class.
    To make the analysis more accessible and transparent to all 
interested parties, DOE used an MS Excel spreadsheet model to calculate 
the energy savings and the national consumer costs and savings from 
each TSL. The TSD and other documentation that DOE provides during the 
rulemaking help explain the models and how to use them, and interested 
parties can review DOE's analyses by changing various input quantities 
within the spreadsheet. The NIA spreadsheet model uses average values 
as inputs (as opposed to probability distributions).
    For today's final rule, the NIA used projections of energy prices 
from the AEO 2013 Reference case. In addition, DOE analyzed scenarios 
that used inputs from the AEO 2013 High Economic Growth, and Low 
Economic Growth cases. These cases have higher or lower energy price 
trends compared to the Reference case. NIA results based on these cases 
are presented in appendix 10A to the TSD.
    Table IV-13 summarizes the inputs and key assumptions DOE used in 
the NIA. Discussion of these inputs and changes follows the table. See 
chapter 10 of the TSD for further details.

   Table IV-13--Summary of Inputs, Sources and Key Assumptions for the
                        National Impact Analysis
------------------------------------------------------------------------
                                                      Changes for Final
           Inputs               NOPR description            rule
------------------------------------------------------------------------
Base Year Shipments.........  Annual shipments      No change.
                               from Market
                               Assessment.
Shipment Growth Rate........  0.75 percent          No change.
                               annually, equal to
                               population growth.
Lifetimes...................  EPS lifetime is       No changes in
                               equal to the          methodology.
                               lifetime of the end-  Product Class
                               use product it        lifetimes were
                               powers.               revised based on
                                                     removal of Product
                                                     Class C-1 and
                                                     medical products.
Base Year Efficiencies......  From Market           No change.
                               Assessment.
Base-Case Forecasted          Efficiency            No change.
 Efficiencies.                 distributions
                               remain unchanged
                               throughout the
                               forecast period.
Standards-Case Forecasted     ``Roll-up'' scenario  No change.
 Efficiencies.
Annual Energy Consumption     Annual shipment       No change in the
 per Unit.                     weighted-average      methodology. Inputs
                               marginal energy       to the calculation
                               consumption values    were revised based
                               for each product      on removal of
                               class.                Product Class C-1
                                                     and medical
                                                     products.
Improvement Cost per Unit...  From the Engineering  No change.
                               Analysis.
Markups.....................  From Markups          No change.
                               Analysis.
Repair and Maintenance Cost   Assumed to be zero..  No change.
 per Unit.
Energy Prices...............  AEO 2010 projections  Updated to AEO 2013.
                               (to 2035) and
                               extrapolation for
                               2044 and beyond.
Electricity Site-to-Source    Based on AEO 2010...  Updated to AEO 2013.
 Conversion Factor.
Present Year................  2011................  2013.
Discount Rate...............  3% and 7% real......  No change.
Compliance Date of Standard   2013................  2015.
 (Start of Analysis Period).
------------------------------------------------------------------------

1. Product Price Trends
    As noted in section IV.F.6, DOE assumed no change in EPS pricing 
over the 2015-2044 period in the reference case. AHAM commented that it 
opposes the use of ``experience curves'' to project price trends and 
agreed that DOE should not use that approach. (AHAM, No. 124 at p. 9) 
In contrast, PG&E and SDG&E supported DOE's consideration of falling 
costs in its NIA sensitivity and recommended that falling costs be 
incorporated into the reference case, given past declines in the costs 
of electronic products. (PG&E and SDG&E, No. 163 at p. 1) PSMA agreed, 
stating that while improvements to overall power supply efficiency do 
entail cost premiums, these premiums are often reduced as volumes 
increase and manufacturing technologies improve. (PSMA, No. 147 at p. 
2)
    As discussed in section IV.G.1, it is difficult to predict the 
consumer electronics market far in advance. To derive a price trend for 
EPSs, DOE did not have any historical shipments data or sufficient 
historical Producer Price Index (PPI) data for small electrical 
appliance manufacturing from the Bureau of Labor Statistics (BLS).\42\ 
Therefore, DOE also examined a projection based on the price indexes 
that were projected for AEO2012. DOE performed an exponential fit on 
two deflated projected price indexes that may include the products that 
EPSs are components of: information equipment (Chained price index--
investment in non-residential equipment and software--information 
equipment), and consumer durables (Chained price index--other durable 
goods). However, DOE believes that these indexes are too broad to 
accurately capture the trend for EPSs. Furthermore, most EPSs are 
unlike typical consumer products in that they are typically not 
purchased independently by consumers. Instead, they are similar to 
other commodities and typically bundled with end-use products.
---------------------------------------------------------------------------

    \42\ Series ID PCU33521-33521; http://www.bls.gov/ppi/.
---------------------------------------------------------------------------

    Given the above considerations, DOE decided to use a constant price 
assumption as the default price factor index to project future EPSs 
prices in 2015. While a more conservative method, following this 
approach helped ensure that DOE did not understate the

[[Page 7888]]

incremental impact of standards on the consumer purchase price. Thus, 
DOE's product prices forecast for the LCC and PBP analysis for the 
final rule's analysis were held constant for each efficiency level in 
each product class. DOE also conducted a sensitivity analysis using 
alternative price trends based on AEO indexes. These price trends, and 
the NPV results from the associated sensitivity cases, are described in 
Appendix 10-B of the TSD.
2. Unit Energy Consumption and Savings
    DOE uses the efficiency distributions for the base case along with 
the annual unit energy consumption values to estimate shipment-weighted 
average unit energy consumption under the base and standards cases, 
which are then compared against one another to yield unit energy 
savings values for each CSL.
    To better evaluate actual energy savings when calculating unit 
energy consumption for a product class at a given CSL, DOE considered 
only those units that would actually be at that CSL and did not 
consider any units already at higher CSLs. That is, the shipment-
weighted average unit energy consumption for a CSL ignored any 
shipments from higher CSLs.
    In addition, when calculating unit energy consumption for a product 
class, DOE used marginal energy consumption, which was taken to be the 
consumption of a unit above the minimum energy consumption possible for 
that unit. Marginal unit energy consumption values were calculated by 
subtracting the unit energy consumption values for the highest 
considered CSL from the unit energy consumption values at each CSL.
    As discussed in section IV.G.3, DOE assumes that energy efficiency 
will not improve after 2015 in the base case. Therefore, the projected 
UEC values in the analysis, as well as the unit energy savings values, 
do not vary over time. Per the roll-up scenario, the analysis assumes 
that manufacturers would respond to a standard by improving the 
efficiency of underperforming products but not those that already meet 
or exceed the standard.
    DOE received no comments on its methodology for calculating unit 
energy consumption and savings in the NOPR and maintained its 
methodology in the final rule. For further details on the calculation 
of unit energy savings for the NIA, see chapter 10 of the TSD.
3. Unit Costs
    DOE uses the efficiency distributions for the base case along with 
the unit cost values to estimate shipment-weighted average unit costs 
under the base and standards cases, which are then compared against one 
another to give incremental unit cost values for each CSL. In addition, 
when calculating unit costs for a product class, DOE uses that product 
class's marginal costs--the costs of a given unit above the minimum 
costs for that unit.
    DOE received no comments on its methodology for calculating unit 
costs in the NOPR and maintained its methodology in the final rule. For 
further details on the calculation of unit costs for the NIA, see 
chapter 10 of the TSD.
4. Repair and Maintenance Cost per Unit
    In the preliminary analysis and NOPR, DOE did not consider repair 
or maintenance costs for EPSs because the vast majority cannot be 
repaired and do not require any maintenance. DOE received no comments 
on this approach, and maintained this assumption for the Final Rule.
5. Energy Prices
    While the focus of this rulemaking is on consumer products, 
typically found in the residential sector, DOE is aware that many 
products that employ EPSs are located within commercial buildings. 
Given this fact, the NOPR analysis relied on calculated energy cost 
savings from such products using commercial sector electricity rates, 
which are lower in value than residential sector rates. DOE used this 
approach so as to not overstate energy cost savings in calculating the 
NIA.
    In order to determine the energy usage split between the 
residential and commercial sector, DOE first separated products into 
residential-use and commercial-use categories. Then, for each product 
class, using shipment values for 2015, average lifetimes, and base-case 
unit energy consumption values, DOE calculated the approximate annual 
energy use split between the two sectors. DOE applied the resulting 
ratio to the electricity pricing to obtain a sector-weighted energy 
price for each product class. This ratio was held constant throughout 
the period of analysis.
    DOE received no comments on its methodology for calculating energy 
costs in the NOPR and maintained its approach for the final rule. For 
further details on the determination of energy prices for the NIA, see 
chapter 10 of the TSD.
6. National Energy Savings
    For each year in the forecast period, DOE calculates the national 
energy savings for each standard level by multiplying the shipments of 
EPSs affected by the energy conservation standards by the per-unit 
annual energy savings. Cumulative energy savings are the sum of the NES 
for all products shipped during the analysis period, 2015-2044. Site 
energy savings were converted to primary energy savings using annual 
conversion factors derived from the AEO 2013 version of the National 
Energy Modeling System (NEMS).
    DOE has historically presented NES in terms of primary energy 
savings, as it did in the March 2012 NOPR. However, on August 17, 2012, 
DOE published a statement of amended policy in which it determined that 
all rulemakings that reach the NOPR stage after that date must present 
energy savings in terms of full-fuel-cycle (FFC). 77 FR 49701. Because 
the NOPR was published prior to August 17, 2012, DOE is maintaining its 
use of primary energy savings today's final rule; however, it has also 
decided to present FFC savings as a sensitivity analysis in order to be 
consistent with DOE's current standard practice. The FFC multipliers 
that were applied and the results of that analysis are described in 
appendix 10-C of the TSD.
    For further details about the calculation of national energy 
savings, see chapter 10 of the TSD.
7. Discount Rates
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers of EPSs are: (1) Total increased product cost, 
(2) total annual savings in operating costs, and (3) a discount factor. 
For each standards case, DOE calculated net savings each year as total 
savings in operating costs less total increases in product costs, 
relative to the base case. DOE calculated operating cost savings over 
the life of each product shipped from 2015 through 2044.
    DOE multiplied the net savings in future years by a discount factor 
to determine their present value. DOE estimated the NPV of consumer 
benefits using both a 3-percent and a 7-percent real discount rate. DOE 
uses these discount rates in accordance with guidance provided by the 
Office of Management and Budget (OMB) to Federal agencies on the 
development of regulatory analysis.\43\ The 7-percent real value is an 
estimate of the average before-tax rate of return to private

[[Page 7889]]

capital in the U.S. economy. The 3-percent real value represents the 
``societal rate of time preference,'' which is the rate at which 
society discounts future consumption flows to their present value.
---------------------------------------------------------------------------

    \43\ OMB Circular A-4 (Sept. 17, 2003), section E, ``Identifying 
and Measuring Benefits and Costs. Available at: http://www.whitehouse.gov/omb/memoranda/m03-21.html.
---------------------------------------------------------------------------

    For further details about the calculation of net present value, see 
chapter 10 of the TSD.

I. Consumer Subgroup Analysis

    In analyzing the potential impacts of new and amended standards, 
DOE evaluates the impacts on identifiable subgroups of consumers (e.g., 
low-income households or small businesses) that may be 
disproportionately affected by a national standard. In the NOPR, DOE 
analyzed four consumer subgroups of interest--low-income consumers, 
small businesses, top marginal electricity price tier consumers, and 
consumers of specific applications within a representative unit or 
product class. For each subgroup, DOE considered variations on the 
standard inputs.
    DOE defined low-income consumers as residential consumers with 
incomes at or below the poverty line, as defined by the U.S. Census 
Bureau. DOE found that these consumers face electricity prices that are 
0.2 cents per kWh lower, on average, than the prices faced by consumers 
above the poverty line.
    For small businesses, DOE analyzed the potential impacts of 
standards by conducting the analysis with different discount rates, as 
small businesses do not have the same access to capital as larger 
businesses. DOE estimated that for businesses purchasing EPSs, small 
companies have an average discount rate that is 4.5 percent higher than 
the industry average.
    For top tier marginal electricity price consumers, DOE researched 
inclined marginal block rates for the residential and commercial 
sectors. DOE found that top tier marginal rates for general usage in 
the residential and commercial sectors were $0.306 and $0.221, 
respectively.
    Lastly, for the application-specific subgroup, DOE used the inputs 
from each application for lifetime, markups, market efficiency 
distribution, and UEC to calculate LCC and PBP results. DOE's subgroup 
analysis for consumers of specific applications considered the LCC 
impacts of each application within a representative unit or product 
class. This approach allowed DOE to consider the LCC impacts of 
individual applications when choosing the proposed standard level, 
regardless of the application's weighting in the calculation of average 
impacts. The impacts of the standard on the cost of the EPS as a 
percentage of the application's total purchase price are not relevant 
to DOE's LCC analysis. The LCC considers the incremental cost between 
different standard levels. DOE used the cost of the EPS component, not 
the final price of the application, in the LCC. Therefore, a $2,000 and 
$20 product are assumed to have the same cost for a EPS (e.g., $5) if 
they are within the same CSL of the same representative unit or product 
class. The application-specific subgroup analyses represent an estimate 
of the marginal impacts of standards on consumers of each application 
within a representative unit or product class.
    DOE received no comments on its methodology for the Consumer 
Subgroup Analysis in the NOPR and maintained its approach in the final 
rule. Chapter 11 of the TSD contains further information on the LCC 
analyses for all subgroups.

J. Manufacturer Impact Analysis

    DOE conducted a manufacturer impact analysis (MIA) on EPSs to 
estimate the financial impact of new and amended energy on this 
industry. The MIA is both a quantitative and qualitative analysis. The 
quantitative part of the MIA relies on the Government Regulatory Impact 
Model (GRIM), an industry cash flow model customized for EPSs covered 
in this rulemaking. The key MIA output is industry net present value, 
or INPV. DOE used the GRIM to calculate cash flows using standard 
accounting principles and to compare the difference in INPV between the 
base case and various TSLs (the standards case). The difference in INPV 
between the base and standards cases represents the financial impact of 
the new and amended standards on EPS manufacturers. Different sets of 
assumptions (scenarios) produce different results.
    DOE calculated the MIA impacts of new and amended energy 
conservation standards by creating a GRIM for EPS ODMs. In the GRIM, 
DOE grouped similarly impacted products to better analyze the effects 
that the new and amended standards will have on each industry. DOE 
presented the EPS impacts by grouping the four representative units in 
product class B (with output powers at 2.5, 18, 60, and 120 Watts) to 
characterize the results for product classes B, C, D, and E. The 
results for product classes X and H are presented separately.
    DOE outlined its complete methodology for the MIA in the NOPR. The 
complete MIA is presented in chapter 12 of the final rule TSD.
1. Manufacturer Production Costs
    Through the MIA, DOE attempts to model how changes in efficiency 
impact the manufacturer production costs (MPCs). The MPCs and the 
corresponding prices for which fully assembled EPSs are sold to OEMs 
(frequently referred to as ``factory costs'' in the industry) are major 
factors in industry value calculations. DOE's MPCs include the cost of 
components (including integrated circuits), other direct materials of 
the finalized EPS, the labor to assemble all parts, factory overhead, 
and all other costs borne by the ODM to fully assemble the EPS.
    In the engineering analysis presented in the NOPR, DOE developed 
and subsequently analyzed cost-efficiency curves for four 
representative units in product class B and for representative units in 
product classes X and H. The MPCs are calculated in one of two ways, 
depending on product class. For the product class B representative 
units, DOE based its MPCs on information gathered during manufacturer 
interviews. In these interviews, manufacturers described the costs they 
would have to incur to achieve increases in energy efficiency. For 
product classes X and H, the engineering analysis created a complete 
bill of materials (BOM) derived from the disassembly of the units 
selected for teardown; BOM costs were used to calculate MPCs.
    NRDC commented that DOE overestimated the incremental MPCs in the 
NOPR analysis for EPSs, particularly product class B EPSs, which caused 
DOE to overstate the negative financial impacts reported in the NOPR 
MIA. (NRDC, No. 114 at p. 21) NRDC, however, did not give any specific 
data supporting its view. DOE derived its MPCs from either tear-downs 
or direct manufacturer input. These estimates represent the most 
accurate and comprehensive cost data available to DOE. Accordingly, DOE 
continued to rely on these data in conducting its analysis and did not 
alter the MPCs for the final rule.
2. Product and Capital Conversion Costs
    New and amended standards will cause manufacturers to incur one-
time conversion costs to bring their production facilities and product 
designs into compliance with those standards. For the NOPR MIA, DOE 
classified these one-time conversion costs into two major groups: (1) 
Product conversion costs and (2) capital conversion costs. Product 
conversion costs are one-time investments in research, development, 
testing,

[[Page 7890]]

marketing, and other non-capitalized costs focused on making product 
designs comply with the new and amended energy conservation standards. 
Capital conversion costs are one-time investments in property, plant, 
and equipment to adapt or change existing production facilities so that 
new product designs can be fabricated and assembled.
    In response to the NOPR, NEMA commented that the results of the 
manufacturer impact analysis did not accurately reflect the impact to 
industry, as the cost of compliance was consistently underestimated 
resulting in an overestimation of net savings. NEMA stated the cost to 
manufacturers fails to include safety and reliability testing and these 
testing processes are required to ensure long term efficiency gains. 
(NEMA, No. 134 at p. 2) DOE notes that it included the cost of safety 
and reliability testing as well as certification in the estimated 
product conversion costs for the NOPR. See chapter 12 of the TSD for a 
complete explanation of the conversion costs. Since NEMA did not 
provide any data on the costs of safety and reliability testing, DOE 
was unable to verify if the safety and reliability testing cost used in 
the NOPR were underestimated.
    NRDC commented that DOE overestimated the conversion costs 
associated with EPS standards, which caused the MIA results to 
overstate the negative financial impacts on EPS manufacturers. NRDC 
believes the changes required by the selected standards for EPSs are 
simple and will only require limited capital conversion costs. (NRDC, 
No. 114 at p. 21) In contrast, Dell commented that DOE may have 
underestimated the conversion costs related to production. (Dell, Pub. 
Mtg. Transcript, No. 104 at p. 242) After reviewing the EPS conversion 
costs, DOE agrees it overstated the capital and product conversion 
costs because it overestimated the length of the product design cycle 
of the covered products. In the final rule MIA, DOE corrected its 
estimate of the length of the product design cycle, which reduced the 
EPS conversion costs by approximately 50 percent from the initial 
estimated conversion costs in the NOPR. See chapter 12 of this final 
rule TSD for further explanation.
3. Markup Scenarios
    For the NOPR, DOE modeled two standards case markup scenarios in 
the MIA: (1) A flat markup scenario and (2) a preservation of operating 
profit scenario. These two scenarios represent the uncertainty 
regarding the potential impacts on prices and profitability for 
manufacturers following the implementation of new and amended energy 
conservation standards. Each scenario leads to different markup values, 
which when applied to the inputted MPCs, result in varying revenue and 
cash flow impacts.
    In the flat markup scenario, DOE assumes that the cost of goods 
sold for each product is marked up by a flat percentage to cover SG&A 
expenses, R&D expenses, and profit. In the standards case for the flat 
markup scenario, manufacturers are able to fully pass the additional 
costs that are caused by standards through to their customers.
    DOE also modeled the preservation of operating profit scenario in 
the NOPR MIA. During manufacturer interviews, ODMs and OEMs indicated 
that the electronics industry is extremely price sensitive throughout 
the distribution chain. Because of the highly competitive market, this 
scenario models the case in which ODMs' higher production costs for 
more efficient EPSs cannot be fully passed through to OEMs. In this 
scenario, the manufacturer markups are lowered such that manufacturers 
are only able to maintain the base case total operating profit in 
absolute dollars in the standards case, despite higher product costs 
and required investment. DOE implemented this scenario in the GRIM by 
lowering the manufacturer markups at each TSL to yield approximately 
the same earnings before interest and taxes in both the base case and 
standards cases in the year after the compliance date for the new and 
amended standards. This scenario generally represents the lower-bound 
of industry profitability following new and amended energy conservation 
standards because in this scenario higher production costs and the 
investments required to comply with new and amended energy conservation 
standards do not yield additional operating profit.
    During the NOPR public meeting, ECOVA commented that DOE should 
consider a markup scenario where manufacturers can pass on the one-time 
conversion costs associated with new and amended energy standards. 
(ECOVA, Pub. Mtg. Transcript, No. 104 at p. 294) Based on the EPS 
market pricing conditions described during manufacturer interviews, DOE 
concludes that the markup scenario recommended by ECOVA is realistic 
and should be incorporated into the MIA. Therefore, DOE examined the 
INPV impacts of a return on invested capital markup scenario in the 
final rule MIA as a result of ECOVA's comment. The results of this 
markup scenario are displayed in section V.B.2.a, along with the rest 
of the manufacturer INPV results.
    In the return on invested capital scenario, manufacturers earn the 
same percentage return on total capital in both the base case and 
standards cases in the year after the compliance date for the new and 
amended standards. This scenario models the situation in which 
manufacturers maintain a similar level of profitability from the 
investments required by new and amended energy conservation standards 
as they do from their current business operations. In the standards 
case under this scenario, manufacturers have higher net operating 
profit after taxes, but also have greater working capital and 
investment requirements. This scenario generally represents the upper-
bound of industry profitability following new and amended energy 
conservation standards.
4. Impacts on Small Businesses
    Cobra Electronics commented that it, and other small companies, 
were excluded from DOE's small business impacts analysis. Cobra stated 
that while it does not manufacture EPSs, it manufactures products that 
use EPSs and should have been included in DOE's small business impacts 
analysis. (Cobra Electronics, No. 130 at p. 2) DOE took into 
consideration only small businesses that either are directly impacted 
by these standards and/or manufacture EPSs domestically and found none 
that would be adversely affected by this rule. DOE believes that 
electronics manufacturers, like Cobra, that source their EPSs from 
other companies should not be directly examined, as the EPSs are simply 
one component of their products. DOE does not expect there to be any 
direct employment impacts on these application manufacturers that do 
not manufacture or design the EPSs used with their applications. 
Further, if these companies are not involved in the redesign or 
manufacturing of the EPS, they will not have significant conversion 
costs associated with this EPS standard. DOE acknowledges that the 
application price could increase due to the use of more expensive EPSs, 
which could negatively affect small business application manufacturers 
using EPSs. These price increases are the subject of the markups 
analysis, which is discussed in section IV.D above.

K. Emissions Analysis

    In the emissions analysis, DOE estimated the reduction in power 
sector emissions of carbon dioxide (CO2), nitrogen oxides 
(NOX), sulfur dioxide

[[Page 7891]]

(SO2), and mercury (Hg) from potential energy conservation 
standards for EPSs. In addition, for today's final rule, DOE developed 
a sensitivity analysis that estimates additional emissions impacts in 
production activities (extracting, processing, and transporting fuels) 
that provide the energy inputs to power plants. These are referred to 
as ``upstream'' emissions. Together, these emissions account for the 
full-fuel-cycle (FFC). In accordance with DOE's FFC Statement of Policy 
(76 FR 51282 (Aug. 18, 2011)), the FFC analysis includes impacts on 
emissions of methane (CH4) and nitrous oxide 
(N2O), both of which are recognized as greenhouse gases. The 
results of this FFC sensitivity analysis are described in appendix 13A 
of the final rule TSD.
    DOE conducted the emissions analysis using emissions factors that 
were derived from data in EIA's Annual Energy Outlook 2013 (AEO 2013), 
supplemented by data from other sources. DOE developed separate 
emissions factors for power sector emissions and upstream emissions. 
The method that DOE used to derive emissions factors is described in 
chapter 13 of the final rule TSD.
    EIA prepares the Annual Energy Outlook using the National Energy 
Modeling System (NEMS). Each annual version of NEMS incorporates the 
projected impacts of existing air quality regulations on emissions. AEO 
2013 generally represents current legislation and environmental 
regulations, including recent government actions, for which 
implementing regulations were available as of December 31, 2012.
    SO2 emissions from affected electric generating units 
(EGUs) are subject to nationwide and regional emissions cap-and-trade 
programs. 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 were also limited under the Clean Air Interstate Rule 
(CAIR; 70 FR 25162 (May 12, 2005)), which created an allowance-based 
trading program that operates along with the Title IV program. CAIR was 
remanded to the U.S. Environmental Protection Agency (EPA) by the U.S. 
Court of Appeals for the District of Columbia Circuit but it remained 
in effect. See North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008); 
North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008). On July 6, 2011 
EPA issued a replacement for CAIR, the Cross-State Air Pollution Rule 
(CSAPR). 76 FR 48208 (August 8, 2011). On August 21, 2012, the DC 
Circuit issued a decision to vacate CSAPR. See EME Homer City 
Generation, LP v. EPA, 696 F.3d 7, 38 (D.C. Cir. 2012). The court 
ordered EPA to continue administering CAIR.\44\ The AEO 2013 emissions 
factors used for today's NOPR assumes that CAIR remains a binding 
regulation through 2040.
---------------------------------------------------------------------------

    \44\ On June 24, 2013, the Supreme Court granted certiorari in 
EME Homer City. EPA v. EME Homer City Generation, LP, 133 S.Ct. 2857 
(2013), and has heard oral arguments on this matter on December 10, 
2013. DOE notes that while the outcome of this litigation may 
eventually have an impact on the manner in which DOE calculates 
emissions impacts, accounting for those changes in the context of 
the present rule would be speculative given the uncertainty of the 
case's outcome at this time.
---------------------------------------------------------------------------

    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 adoption of an efficiency standard could be used to permit 
offsetting increases in SO2 emissions by any regulated EGU. 
In past rulemakings, DOE recognized that there was uncertainty about 
the effects of efficiency standards on SO2 emissions covered 
by the existing cap-and-trade system, but it concluded that negligible 
reductions in power sector SO2 emissions would occur as a 
result of standards.
    Beginning in 2015, however, SO2 emissions will fall as a 
result of the Mercury and Air Toxics Standards (MATS) for power plants, 
which were announced by EPA on December 21, 2011. 77 FR 9304 (Feb. 16, 
2012). In the final MATS rule, EPA established a standard for hydrogen 
chloride as a surrogate for acid gas hazardous air pollutants (HAP), 
and also established a standard for SO2 (a non-HAP acid gas) 
as an alternative equivalent surrogate standard for acid gas HAP. The 
same controls are used to reduce HAP and non-HAP acid gas; thus, 
SO2 emissions will be reduced as a result of the control 
technologies installed on coal-fired power plants to comply with the 
MATS requirements for acid gas. AEO 2013 assumes that, in order to 
continue operating, coal plants must have either flue gas 
desulfurization or dry sorbent injection systems installed by 2015. 
Both technologies, which are used to reduce acid gas emissions, also 
reduce SO2 emissions. Under the MATS, NEMS shows a reduction 
in SO2 emissions when electricity demand decreases (e.g., as 
a result of energy efficiency standards). Emissions will be far below 
the cap established by CAIR, so it is unlikely that excess 
SO2 emissions allowances resulting from the lower 
electricity demand would be needed or used to permit offsetting 
increases in SO2 emissions by any regulated EGU. Therefore, 
DOE believes that efficiency standards will reduce SO2 
emissions in 2015 and beyond.
    CAIR established a cap on NOX emissions in 28 eastern 
States and the District of Columbia. Energy conservation standards are 
expected to have little effect on NOX emissions in those 
States covered by CAIR because excess NOX emissions 
allowances resulting from the lower electricity demand could be used to 
permit offsetting increases in NOX emissions. However, 
standards would be expected to reduce NOX emissions in the 
States not affected by the caps, so DOE estimated NOX 
emissions reductions from the standards considered in today's final 
rule for these States.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would likely reduce Hg emissions. DOE estimated mercury 
emissions reduction using emissions factors based on AEO 2013, which 
incorporates the MATS.

L. Monetizing Carbon Dioxide and Other Emissions Impacts

    As part of the development of the proposed rule, DOE considered the 
estimated monetary benefits 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 benefits, 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 
reduction estimates and presents the values considered in this 
rulemaking.
    For today's final rule, DOE did not receive any comments on this 
section of the analysis and retained the same approach as in the NOPR. 
DOE is relying on a set of values for the social cost of carbon (SCC) 
that was developed by an interagency process. A summary of the basis 
for these values is provided below, and a more detailed description of 
the methodologies used is provided as an appendix to chapter 14 of the 
final rule TSD.
1. Social Cost of Carbon
    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

[[Page 7892]]

health, property damages from increased flood risk, and the value of 
ecosystem services. Estimates of the SCC are provided in dollars per 
metric ton of carbon dioxide. A domestic SCC value is meant to reflect 
the value of damages in the United States resulting from a unit change 
in carbon dioxide emissions, while a global SCC value is meant to 
reflect the value of damages worldwide.
    Under section 1(b)(6) of Executive Order 12866, ``Regulatory 
Planning and Review,'' 58 FR 51735 (Oct. 4, 1993), agencies must, to 
the extent permitted by law, assess both the costs and the benefits of 
the intended regulation and, recognizing that some costs and benefits 
are difficult to quantify, propose or adopt a regulation only upon a 
reasoned determination that the benefits of the intended regulation 
justify its costs. The purpose of the SCC estimates presented here is 
to allow agencies to incorporate the monetized social benefits of 
reducing CO2 emissions into cost-benefit analyses of 
regulatory actions that have small, or ``marginal,'' impacts on 
cumulative global emissions. The estimates are presented with an 
acknowledgement of the many uncertainties involved and with a clear 
understanding that they should be updated over time to reflect 
increasing knowledge of the science and economics of climate impacts.
    As part of the interagency process that developed the 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
    When attempting to assess the incremental economic impacts of 
carbon dioxide emissions, the analyst faces a number of serious 
challenges. A recent report from the National Research Council 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.
    Despite the serious limits of both quantification and monetization, 
SCC estimates can be useful in estimating the social benefits of 
reducing carbon dioxide 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 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 the future benefits 
by an appropriate discount factor and summing across all affected 
years. This approach assumes that the marginal damages from increased 
emissions are constant for small departures from the baseline emissions 
path, an approximation that is reasonable for policies that have 
effects on emissions that are small relative to cumulative global 
carbon dioxide emissions. For policies that have a large (non-marginal) 
impact on global cumulative emissions, there is a separate question of 
whether the SCC is an appropriate tool for calculating the benefits of 
reduced emissions. This concern is not applicable to this rulemaking, 
however.
    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. 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
    Economic analyses for Federal regulations have used a wide range of 
values to estimate the benefits associated with reducing carbon dioxide 
emissions. In the final model year 2011 CAFE rule, the U.S. Department 
of Transportation (DOT) used both a ``domestic'' SCC value of $2 per 
metric ton of CO2 and a ``global'' SCC value of $33 per 
metric ton of CO2 for 2007 emission reductions (in 2007$), 
increasing both values at 2.4 percent per year. DOT also included a 
sensitivity analysis at $80 per metric ton of CO2.\45\ A 
2008 regulation proposed by DOT assumed a domestic SCC value of $7 per 
metric ton of CO2 (in 2006$) for 2011 emission reductions 
(with a range of $0-$14 for sensitivity analysis), also increasing at 
2.4 percent per year.\46\ A regulation for packaged terminal air 
conditioners and packaged terminal heat pumps finalized by DOE in 
October of 2008 used a domestic SCC range of $0 to $20 per metric ton 
CO2 for 2007 emission reductions (in 2007$). 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 $40 per metric ton CO2 for 
discount rates of approximately 2 percent and 3 percent, respectively 
(in 2006$ for 2007 emissions).
---------------------------------------------------------------------------

    \45\ 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) 
(Last accessed December 2012).
    \46\ 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) (Last accessed December 2012).
---------------------------------------------------------------------------

    In 2009, an interagency process was initiated to offer a 
preliminary assessment of how best to quantify the benefits from 
reducing carbon dioxide emissions. To ensure consistency in how 
benefits are evaluated across agencies, the Administration sought to 
develop a transparent and defensible method, specifically designed for 
the rulemaking process, to quantify avoided climate change damages from 
reduced CO2 emissions. The interagency group did not 
undertake any original analysis. Instead, it combined SCC estimates 
from the existing literature to use as interim values until a more 
comprehensive analysis could be conducted. The outcome of the 
preliminary assessment by the interagency group was a set of five 
interim values: global SCC estimates for 2007 (in 2006$) of $55, $33, 
$19, $10, and $5 per metric ton of CO2. These interim values 
represented 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.

[[Page 7893]]

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. 
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. 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.
    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 sets of SCC values for use in 
regulatory analyses.\47\ Three sets of values are based on the average 
SCC from three integrated assessment models, at discount rates of 2.5 
percent, 3 percent, and 5 percent. The fourth set, 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 climate change further out in the tails of the SCC distribution. 
The 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, 
although preference is given to consideration of the global benefits of 
reducing CO2 emissions. Table IV-14 presents the values in the 2010 
interagency group report, which is reproduced in appendix 14-A of the 
final rule TSD.
---------------------------------------------------------------------------

    \47\ Social Cost of Carbon for Regulatory Impact Analysis Under 
Executive Order 12866. Interagency Working Group on Social Cost of 
Carbon, United States Government, February 2010. http://www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf.

                     Table IV-14--Annual SCC Values from 2010 Interagency Report, 2010-2050
                                      [In 2007 dollars per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                          Discount rate %
                                                 ---------------------------------------------------------------
                                                         5               3              2.5              3
                      Year                       ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       Percentile
----------------------------------------------------------------------------------------------------------------
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
----------------------------------------------------------------------------------------------------------------

    The SCC values used for today's final rule were generated using the 
most recent versions of the three integrated assessment models that 
have been published in the peer-reviewed literature.\48\ Table IV-15 
shows the updated sets of SCC estimates in five-year increments from 
2010 to 2050. Appendix 14-B of the final rule TSD provides the full set 
of values. The central value that emerges is the average SCC across 
models at a 3-percent discount rate. However, for purposes of capturing 
the uncertainties involved in regulatory impact analysis, the 
interagency group emphasizes the importance of including all four sets 
of SCC values.
---------------------------------------------------------------------------

    \48\ Technical Update of the Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order 12866. Interagency 
Working Group on Social Cost of Carbon, United States Government. 
May 2013; revised November 2013. http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.

                     Table IV-15--Annual SCC Values from 2013 Interagency Update, 2010-2050
                                      [In 2007 dollars per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                          Discount rate %
                                                 ---------------------------------------------------------------
                                                         5               3              2.5              3
                      Year                       ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       Percentile
----------------------------------------------------------------------------------------------------------------
2010............................................              11              32              51              89
2015............................................              11              37              57             109
2020............................................              12              43              64             128
2025............................................              14              47              69             143
2030............................................              16              52              75             159
2035............................................              19              56              80             175

[[Page 7894]]

 
2040............................................              21              61              86             191
2045............................................              24              66              92             206
2050............................................              26              71              97             220
----------------------------------------------------------------------------------------------------------------

    It is important to recognize that a number of key uncertainties 
remain, and that current SCC estimates should be treated as provisional 
and revisable since they will evolve with improved scientific and 
economic understanding. The interagency group also recognizes that the 
existing models are imperfect and incomplete. The National Research 
Council report mentioned above points out that there is tension between 
the goal of producing quantified estimates of the economic damages from 
an incremental ton of carbon and the limits of existing efforts to 
model these effects. There are a number of concerns and problems that 
should be addressed by the research community, including research 
programs housed in many of the Federal agencies participating in the 
interagency process to estimate the SCC. The interagency group intends 
to periodically review and reconsider those estimates to reflect 
increasing knowledge of the science and economics of climate impacts, 
as well as improvements in modeling.
    In summary, in considering the potential global benefits resulting 
from reduced CO2 emissions from today's rule, DOE used the 
values from the 2013 interagency report, adjusted to 2012$ using the 
Gross Domestic Product price deflator. For each of the four cases 
specified, the values used for emissions in 2015 were $11.8, $39.7, 
$61.2, and $117 per metric ton CO2 avoided (values expressed 
in 2012$). DOE derived values after 2050 using the relevant growth rate 
for the 2040-2050 period in the interagency update.
    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SCC value for that year in each of the four cases. 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.
2. Valuation of Other Emissions Reductions
    DOE investigated the potential monetary benefit of reduced 
NOX emissions from the TSLs it considered. As noted above, 
DOE has taken into account how new and amended energy conservation 
standards would reduce NOx emissions in those 22 states not affected by 
the CAIR. DOE estimated the monetized value of NOX emissions 
reductions resulting from each of the TSLs considered for today's final 
rule based on estimates found in the relevant scientific literature. 
Available estimates suggest a very wide range of monetary values per 
ton of NOx from stationary sources, ranging from $468 to $4,809 per ton 
(in 2012$).\49\ DOE calculated monetary benefits using a medium value 
for NOX emissions of $2,639 per short ton (in 2012$), and 
real discount rates of 3 percent and 7 percent.
---------------------------------------------------------------------------

    \49\ 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.
---------------------------------------------------------------------------

    DOE is evaluating appropriate monetization of avoided 
SO2 and Hg emissions in energy conservation standards 
rulemakings. It has not included this monetization in the current 
analysis.
    The California Investor-Owned Utilities and ECOVA asked that DOE 
take into account the decreased cost of complying with sulfur dioxide 
emission regulations as a result of standards. (CA IOUs, No. 138 at p. 
19; ECOVA, Pub. Mtg. Transcript, No. 104 at pp. 292-293) As discussed 
in section IV.L, under the MATS, SO2 emissions are expected 
to be far below the cap established by CSAPR. Thus, it is unlikely that 
the reduction in electricity demand resulting from energy efficiency 
standards would have any impact on the cost of complying with the 
regulations.
    For the final rule, DOE retained the same approach as in the NOPR 
for monetizing the emissions reductions from new and amended standards.

M. Utility Impact Analysis

    The utility impact analysis estimates several effects on the power 
generation industry that would result from the adoption of new and 
amended energy conservation standards. In the utility impact analysis, 
DOE analyzes the changes in electric installed capacity and generation 
that result for each trial standard level. The utility impact analysis 
uses a variant of NEMS,\50\ which is a public domain, multi-sectored, 
partial equilibrium model of the U.S. energy sector. DOE uses a variant 
of this model, referred to as NEMS-BT,\51\ to account for selected 
utility impacts of new and amended energy conservation standards. DOE's 
analysis consists of a comparison between model results for the most 
recent AEO Reference Case and for cases in which energy use is 
decremented to reflect the impact of potential standards. The energy 
savings inputs associated with each TSL come from the NIA. For today's 
final rule, DOE did not receive any comments on this section of the 
analysis and retained the same approach as in the NOPR. Chapter 15 of 
the TSD describes the utility impact analysis in further detail.
---------------------------------------------------------------------------

    \50\ For more information on NEMS, refer to the U.S. Department 
of Energy, Energy Information Administration documentation. A useful 
summary is National Energy Modeling System: An Overview 2003, DOE/
EIA-0581(2003) (March, 2003).
    \51\ DOE/EIA approves use of the name NEMS to describe only an 
official version of the model without any modification to code or 
data. Because this analysis entails some minor code modifications 
and the model is run under various policy scenarios that are 
variations on DOE/EIA assumptions, DOE refers to it by the name 
``NEMS-BT'' (``BT'' is DOE's Building Technologies Program, under 
whose aegis this work has been performed).
---------------------------------------------------------------------------

N. Employment Impact Analysis

    Employment impacts from new and amended energy conservation 
standards include direct and indirect impacts. Direct employment 
impacts are any changes in the number of employees of manufacturers of 
the equipment subject to standards; the MIA addresses those impacts. 
Indirect employment impacts are changes in national employment that 
occur due to the shift in expenditures and capital investment caused by 
the purchase and operation of more efficient equipment. Indirect 
employment impacts from standards consist of the jobs created or 
eliminated

[[Page 7895]]

in the national economy, other than in the manufacturing sector being 
regulated, due to: (1) Reduced spending by end users on energy; (2) 
reduced spending on new energy supply by the utility industry; (3) 
increased consumer spending on the purchase of new equipment; and (4) 
the effects of those three factors throughout the economy.
    One method for assessing the possible effects on the demand for 
labor of such shifts in economic activity is to compare sector 
employment statistics developed by the Department of Labor's Bureau of 
Labor Statistics (BLS). 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. 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 service sectors). Thus, based 
on the BLS data alone, DOE believes net national employment may 
increase because of shifts in economic activity resulting from amended 
standards.
    For the standard levels considered in the final rule, DOE estimated 
indirect national employment impacts using an input/output model of the 
U.S. economy called Impact of Sector Energy Technologies version 3.1.1 
(ImSET). ImSET is a special-purpose version of the ``U.S. Benchmark 
National Input-Output'' (I-O) model, which was designed to estimate the 
national employment and income effects of energy-saving technologies. 
The ImSET software includes a computer-based I-O model having 
structural coefficients that characterize economic flows among the 187 
sectors. ImSET's national economic I-O structure is based on a 2002 
U.S. benchmark table, specially aggregated to the 187 sectors most 
relevant to industrial, commercial, and residential building energy 
use. 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. Because ImSET does not incorporate price changes, the 
employment effects predicted by ImSET may over-estimate actual job 
impacts over the long run. For the final rule, DOE used ImSET only to 
estimate short-term employment impacts.
    The California Energy Commission disagreed with DOE's NOPR 
employment impact analysis, which shows that increasing energy 
efficiency causes U.S. job losses. (California Energy Commission, No. 
117 at p. 33) The California Energy Commission's argument was based on 
an assumed ratio of jobs in the consumer goods sector versus the 
utility sector. The California Energy Commission, however, did not 
provide independent data sources or references to support the 
assumption. As a result, DOE is maintaining its current methodology to 
estimate employment impacts.
    DOE's employment impact analysis is designed to estimate indirect 
national job creation or elimination resulting from possible standards, 
due to reallocation of the associated expenditures for purchasing and 
operating EPSs. There are two cost changes to consider: reduction in 
energy costs from use of the product due to efficiency increase, and 
change in manufacturing cost to improve product energy efficiency.
    Energy cost savings bring a reduction in spending on energy, which 
has a negative impact on employment in electric utilities and directly 
related sectors. Energy cost savings are assumed to be redirected 
according to average U.S. spending patterns; this increase in spending 
on all other goods and services leads to an increase in employment in 
all other sectors. As electric utilities are generally capital-
intensive compared to the average of all sectors, the aggregate 
employment impact of energy cost savings is positive.
    In contrast, with increased manufacturing costs, which lead to 
higher purchase prices, funds will be diverted from general spending, 
increasing spending in product manufacturing and directly related 
sectors. In the case of EPSs, almost all manufacturing takes place in 
other countries, so money flows from general spending (reducing 
employment across all U.S. sectors) to pay for these imported products. 
However, a portion of the money spent on imports returns to the U.S. 
when U.S. exports are sold. Because U.S. exports tend to be less labor-
intensive than the average of general spending on goods and services, 
the aggregate impact of increased manufacturing cost is expected to be 
a decrease in U.S. employment.
    The employment analysis in the NOPR TSD only presented impacts in 
the short run (2015 and 2020). In the short run, the effect from 
increased cost is larger than the effect from energy cost savings, 
which accrue over time. For this reason, DOE kept the same approach 
when developing the employment impact analysis for the final rule. 
Although DOE does not currently quantify long-run employment impacts 
due to modeling uncertainty, DOE anticipates that net labor market 
impacts will in general be negligible over time.

O. Marking Requirements

    Under 42 U.S.C. 6294(a)(5), Congress granted DOE with the authority 
to establish labeling or marking requirements for a number of consumer 
products, including EPSs. DOE notes that EISA 2007 set standards for 
Class A EPSs and required that all Class A EPSs shall be clearly and 
permanently marked in accordance with the ``International Efficiency 
Marking Protocol for External Power Supplies'' (the ``Marking 
Protocol'').\52\ (42 U.S.C. 6295(u)(3)(C))
---------------------------------------------------------------------------

    \52\ U.S. EPA, ``International Efficiency Marking Protocol for 
External Power Supplies,'' October 2008, available at Docket No. 62.
---------------------------------------------------------------------------

    The Marking Protocol, developed by the EPA in consultation with 
stakeholders both within and outside the United States, was originally 
designed in 2005 and updated in 2008 to meet the needs of those 
voluntary and regulatory programs in place at those times. In 
particular, the Marking Protocol defines efficiency mark ``IV'', which 
corresponds to the current Federal standard for Class A EPSs, and 
efficiency mark ``V'', which corresponds to ENERGY STAR version 2.0. 
(The ENERGY STAR program for EPSs ended on December 31, 2010.) In the 
2008 version of the Marking Protocol, these marks apply only to single-
voltage EPSs with nameplate output power less than 250 watts, but not 
to multiple-voltage or high-power EPSs. In the March 2012 NOPR, DOE 
indicated that it would work with the EPA and other stakeholder groups 
to update the Marking Protocol to accommodate any revised EPS standards 
it might adopt.
    Brother, Panasonic, and ITI urged DOE to ensure that its marking 
requirements for EPSs align with the International Efficiency Marking 
Protocol. (Brother International, No. 111 at p. 3; ITI, No. 131 at p. 
8; Panasonic, No. 120 at p. 4)

[[Page 7896]]

    As noted above, EISA 2007 required all Class A EPSs to be clearly 
and permanently marked in accordance with the Marking Protocol--but 
without any reference to a particular version of that protocol.\53\ In 
the absence of any definitive language pointing to the use of a 
particular version of the Marking Protocol, in DOE's view, the statute 
contemplated that the marking requirements would evolve over time as 
needed. This view is supported by the authority Congress gave to DOE in 
setting any necessary labeling requirements for EPSs. See 42 U.S.C. 
6294(a)(5). Consistent with this authority, and the statutory 
foundation laid out by Congress, DOE proposed to revise the marking 
requirements for EPSs to accommodate the standards being adopted today. 
In particular, applying the already existing nomenclature pattern set 
out by the Marking Protocol, DOE proposed a new mark (Roman numeral VI) 
to denote compliance with the proposed standards. DOE has revised the 
Marking Protocol in collaboration with the EPA and those stakeholder 
groups around the world that contributed to earlier versions.
---------------------------------------------------------------------------

    \53\ ``Marking.-- Any class A external power supply manufactured 
on or after the later of July 1, 2008 or December 19, 2007, shall be 
clearly and permanently marked in accordance with the External Power 
Supply International Efficiency Marking Protocol, as referenced in 
the `Energy Star Program Requirements for Single Voltage External 
AC-DC and AC-AC Power Supplies, version 1.1' published by the 
Environmental Protection Agency.'' 42 U.S.C. 6295(u)(3)(C). The 
ENERGY STAR Program Requirements v. 1.1 were announced March 1, 
2006. The initial version of the International Efficiency Marking 
Protocol for EPSs was in effect at that time.
---------------------------------------------------------------------------

    DOE received comments requesting that it not extend marking 
requirements to products for which such requirements do not already 
exist. AHAM opposed adding a marking requirement for EPSs that do not 
already have such requirements, noting that the usual purposes for 
markings--informing consumers, differentiating products in instances 
where there are two standards, and differentiating products that use a 
voluntary standard--are not served here. (AHAM, No. 124 at p. 8) AHAM 
and ITI commented that DOE can verify compliance with the standard by 
reviewing the certification and compliance statements manufacturers are 
already required to file with DOE, obviating the need for marking 
requirements, which impose additional cost and production burdens on 
manufacturers and result in marks that, ITI added, ``consumers are 
likely to ignore anyway.'' (Id.; ITI, No. 131 at p. 8) Panasonic and 
AHAM commented that efficiency marking requirements for battery 
chargers and EPSs are unnecessary and superfluous as the covered 
products must comply with standards as a condition of sale in the 
United States. (Panasonic, No. 120 at pp. 3, 4; AHAM, No. 124 at p. 8)
    DOE acknowledges that manufacturers are required to certify 
compliance with standards using the Compliance Certification Management 
System (CCMS) \54\ and that, in general, markings have limited 
effectiveness in ensuring compliance. At the same time, DOE recognizes 
that manufacturers and retailers could use efficiency markings or 
labels to help ensure that the end-use consumer products they sell 
comply with all applicable standards. However, DOE has not received 
requests from such parties requesting additional marking requirements 
for such purposes. As a result, with the exception of multiple-voltage 
and high-power EPSs, DOE is not extending marking requirements to 
additional products at this time.
---------------------------------------------------------------------------

    \54\ The CCMS is an online system that permits manufacturers and 
third party representatives to create, submit, and track 
certification reports using product-specific templates. See https://www.regulations.doe.gov/ccms.
---------------------------------------------------------------------------

    DOE also received comments from several manufacturers and industry 
associations requesting that it permit any required marking to be 
placed on the product's package or within accompanying documentation in 
lieu of placing the marking on the product itself. Specific reasons 
cited included: (1) Limited space on battery chargers and EPSs for 
additional markings, as devices have become smaller in recent years and 
must already have certain existing markings; (2) wide array of products 
of different types and sizes; (3) package labeling is less costly than 
marking the product itself; (4) package labeling is more visible than 
product markings at point of sale and at customs; (5) manufacturers 
would prefer to have this flexibility for product design and branding 
reasons; (6) such flexibility would be consistent with recent 
government directives on regulatory reform; and (7) product markings 
consume additional energy and resources. (AHAM, No. 124 at p. 9; Apple, 
No. 177 at p. 1; CEA, No. 137 at pp. 7-8; California Energy Commission, 
No. 199 at p. 12; Motorola Mobility, No. 121 at p. 16; Panasonic, No. 
120 at p. 4; Philips, No. 128 at p. 6; TIA, No. 127 at p. 9)
    In today's final rule, DOE is amending its marking requirements to 
permit any required marking to be placed on the product's package or 
accompanying documentation in lieu of the product itself. DOE believes 
that the most compelling reason for permitting more flexibility in the 
placement of the label is that the efficiency of the EPS can still be 
ascertained at any point in the distribution chain by reviewing the 
packaging or accompanying documentation, while allowing manufacturers 
to choose where to place the marking.
    Several interested parties commented on the proposed marking 
requirements for EPSs in product class N. ITI and Panasonic commented 
that they see no need to require a marking on products for which 
standards do not apply and for which there is no provision in the 
Marking Protocol, i.e., non-Class A EPSs in product class N. (ITI, No. 
131 at p. 9; Panasonic, No. 120 at p. 4) Panasonic further expressed 
concern that requiring both a Roman numeral and the letter ``N'' on 
Class A EPSs in product class N would create confusion and recommended 
requiring only the Roman numeral [as required at present]. (Panasonic, 
No. 120 at p. 4) Lastly, AHAM, NRDC, Panasonic, and Wahl Clipper all 
suggested ways of simplifying the marking scheme DOE proposed for EPSs 
in product class N. (AHAM, No. 124 at p. 8; NRDC, No. 114 at p. 17; 
Panasonic, No. 120 at p. 4; Wahl Clipper, Pub. Mtg. Transcript, No. 104 
at p. 265)
    In light of these comments, including those requesting that DOE not 
extend marking requirements to products for which such requirements do 
not already exist, DOE is not establishing a special mark for EPSs for 
product class N in today's final rule. For those EPSs that are already 
subject to standards (Class A EPSs), the Roman numeral marking 
requirement continues in force. For those EPSs in product class N not 
subject to standards (non-Class A EPSs), no efficiency marking is 
required. However, to ensure consistency and avoid confusion, DOE is 
extending the efficiency marking requirement only to those non-Class A 
EPSs subject to the direct operation EPS standards being adopted today, 
i.e., multiple-voltage and high-power EPSs and the EPSs for certain 
battery operated motorized applications. Thus, the marking will be 
required for all devices that are subject to EPS standards and not 
required for any devices that are not subject to EPS standards.
    Congress amended EPCA to exclude EPSs for certain security and life 
safety equipment from the no-load mode efficiency standards. Public Law 
111-360 (Jan. 4, 2011) (codified at 42 U.S.C. 6295(u)(3)). The 
exclusion applies to AC-AC EPSs manufactured before July 1, 2017, that 
have (1) nameplate output

[[Page 7897]]

of 20 watts or more and (2) are certified as being designed to be 
connected to a security or life safety alarm or surveillance system 
component (as defined in the law). The provision also requires that 
once an EPS International Efficiency Marking Protocol is established to 
identify these types of EPSs, they should be permanently labeled with 
the appropriate mark. 42 U.S.C. 6295(u)(3)(E). Currently, no such 
distinguishing mark exists within the Marking Protocol. Once this mark 
is established, an EPS would have to be so marked to qualify for the 
exemption.\55\
---------------------------------------------------------------------------

    \55\ Note that the failure to add such a mark to the Marking 
Protocol or create a DOE requirement for such a mark has no bearing 
on the ability of such products to qualify for the exemption.
---------------------------------------------------------------------------

    The CEC commented that ``DOE should not add EPS security marking to 
the international marking protocol,'' adding that efficiency markings 
are intended to identify ``holistically'' efficient products, covering 
all modes of operation. The CEC continued, ``If DOE decides to adopt a 
marking for these products, the Energy Commission recommends using an 
``S'' in a circle with a sunset date of July 1, 2017. This requirement 
should be added only to 10 CFR 430 and not to the international marking 
protocol.'' (California Energy Commission, No. 117 at p. 30) NRDC 
recommended that DOE adopt a marking for these products that consists 
of the letter ``S'' followed by a hyphen and the appropriate Roman 
numeral marking, e.g., ``S-VI''. (NRDC, No. 114 at p. 17)
    In light of the exemption's limited scope and duration, the 
uncertainty about which mark to use, concerns over requiring the mark, 
and the irrelevance of a DOE marking requirement to determining 
eligibility for the exemption, DOE has decided not to adopt a special 
marking for the EPSs in question.
    Table IV-16 summarizes the EPS marking requirements. The revised 
Marking Protocol (version 3.0) has been added to the docket for this 
rulemaking and can be downloaded from Docket EERE-2008-BT-STD-0005 on 
Regulations.gov.

         Table IV-16 EPS Marking Requirements by Product Class*
------------------------------------------------------------------------
      Class ID              Product class          Marking requirement
------------------------------------------------------------------------
B...................  Direct Operation, AC-DC,  Roman numeral VI.
                       Basic-Voltage.
C...................  Direct Operation, AC-DC,  Roman numeral VI.
                       Low-Voltage (except
                       those with nameplate
                       output voltage less
                       than 3 volts and
                       nameplate output
                       current greater than or
                       equal to 1,000
                       milliamps that charge
                       the battery of a
                       product that is fully
                       or primarily motor
                       operated).
C-1.................  Direct Operation, AC-DC,  No marking requirement.
                       Low-Voltage with
                       nameplate output
                       voltage less than 3
                       volts and nameplate
                       output current greater
                       than or equal to 1,000
                       milliamps and charges
                       the battery of a
                       product that is fully
                       or primarily motor
                       operated.
D...................  Direct Operation, AC-AC,  Roman numeral VI.
                       Basic-Voltage.
E...................  Direct Operation, AC-AC,  Roman numeral VI.
                       Low-Voltage.
X...................  Direct Operation,         Roman numeral VI.
                       Multiple-Voltage.
H...................  Direct Operation, High-   Roman numeral VI.
                       Power.
N...................  Indirect Operation......  Class A: Roman numeral
                                                 IV or higher.
                                                Non-Class A: No marking
                                                 requirement.
------------------------------------------------------------------------
* An EPS not subject to standards need not be marked.

V. Analytical Results

A. Trial Standards Levels

    DOE analyzed the benefits and burdens of multiple TSLs for the 
products that are the subject of today's rule. A description of each 
TSL DOE analyzed is provided below. DOE attempted to limit the number 
of TSLs considered for the NOPR by excluding efficiency levels that do 
not exhibit significantly different economic and/or engineering 
characteristics from the efficiency levels already selected as a TSL. 
While the NOPR presents only the results for those efficiency levels in 
TSL combinations, the TSD contains a fuller discussion and includes 
results for all efficiency levels that DOE examined.
    Table V-1 presents the TSLs for EPSs and the corresponding 
efficiency levels. DOE chose to analyze product class B directly and 
scale the results from the engineering analysis to product classes C, 
D, and E. As a result, the TSLs for these three product classes 
correspond to the TSLs for product class B. DOE created separate TSLs 
for the multiple-voltage (product class X) and high-power (product 
class H) EPSs to determine their standards.
[GRAPHIC] [TIFF OMITTED] TR10FE14.016


[[Page 7898]]


    For product class B, DOE examined three TSLs corresponding to each 
candidate standard level of efficiency developed in the engineering 
analysis. TSL 1 is an intermediate level of performance above ENERGY 
STAR, which offers the greatest consumer NPV. TSL 2 is equivalent to 
the best-in-market CSL and represents an incremental rise in energy 
savings over TSL 1. TSL 3 is the max-tech level and corresponds to the 
greatest NES.
    For product class X, DOE examined three TSLs above the baseline. 
TSL 1 is an intermediate level of performance above the baseline. TSL 2 
is equivalent to the best-in-market CSL and corresponds to the maximum 
consumer NPV. TSL 3 is the max-tech level and corresponds to the 
greatest NES.
    For product class H, DOE examined three TSLs above the baseline. 
TSL 1 corresponds to an intermediate level of efficiency. TSL 2 is the 
scaled best-in-market CSL and corresponds to the maximum consumer NPV. 
TSL 3 is the scaled max-tech level, which provides the highest NES.

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
    For individual consumers, measures of economic impact include the 
changes in LCC and the PBP associated with new and amended standards. 
The LCC, which is also separately specified as one of the seven factors 
to be considered in determining the economic justification for a new 
and amended standard (42 U.S.C. 6295(o)(2)(B)(i)(II)), is discussed in 
the following section. For consumers in the aggregate, DOE also 
calculates the net present value from a national perspective of the 
economic impacts on consumers over the forecast period used in a 
particular rulemaking.
a. Life-Cycle Cost and Payback Period
    As in the NOPR phase, DOE calculated the average LCC savings 
relative to the base case market efficiency distribution for each 
representative unit and product class. DOE's projections indicate that 
a new standard would affect different EPS consumers differently, 
depending on the market segment to which they belong and their usage 
characteristics. Section IV.F discusses the inputs used for calculating 
the LCC and PBP. Inputs used for calculating the LCC include total 
installed costs, annual energy savings, electricity rates, electricity 
price trends, product lifetime, and discount rates.
    The key outputs of the LCC analysis are average LCC savings for 
each product class for each considered efficiency level, relative to 
the base case, as well as a probability distribution of LCC reduction 
or increase. The LCC analysis also estimates, for each product class or 
representative unit, the fraction of consumers for which the LCC will 
either decrease (net benefit), or increase (net cost), or exhibit no 
change (no impact) relative to the base case forecast. No impacts occur 
when the product efficiencies of the base case forecast already equal 
or exceed the considered efficiency level. EPSs are used in 
applications that can have a wide range of operating hours. EPSs that 
are used more frequently will tend to have a larger net LCC benefit 
than those that are used less frequently because of the greater 
operating cost savings.
    Another key output of the LCC analysis is the median payback period 
at each TSL. DOE presents the median payback period rather than the 
mean payback period because it is more robust in the presence of 
outliers in the data.\56\ These outliers skew the mean payback period 
calculation but have little effect on the median payback period 
calculation. A small change in operating costs, which derive the 
denominator of the payback period calculation, can sometimes result in 
a very large payback period, which skews the mean payback period 
calculation. For example, consider a sample of PBPs of 2, 2, 2, and 20 
years, where 20 years is an outlier. The mean PBP would return a value 
of 6.5 years, whereas the median PBP would return a value of 2 years. 
Therefore, DOE considers the median payback period, which is not skewed 
by occasional outliers. Table V-2 shows the results for the 
representative units and product classes analyzed for EPSs. Additional 
detail for these results, including frequency plots of the 
distributions of life-cycle costs and payback periods, are available in 
chapter 8 of the TSD.
---------------------------------------------------------------------------

    \56\ DOE notes that it uses the median payback period to reduce 
the effect of outliers on the data. This method, however, does not 
eliminate the outliers from the data.
[GRAPHIC] [TIFF OMITTED] TR10FE14.017

    For EPS product class B (basic-voltage, AC-DC, direct operation 
EPSs), each representative unit has a unique value for LCC savings and 
median PBP. The 2.5W and 60W representative units both have positive 
LCC savings at all TSLs considered. The 18W and 120W representative 
units have positive LCC savings through TSL 2, but turn negative at TSL 
3.
    The non-Class A EPSs have varying LCC results at each TSL. The 203W 
multiple-voltage unit (product class X) has positive LCC savings 
through TSL 2. DOE notes that for this product class, the LCC savings 
remain largely the same for TSL 1 and 2 because the difference in LCC 
is approximately $0.01, and 95 percent of this market consists of 
purchased products that are already at TSL 1. Therefore, the effects 
are largely from the movement of the 5 percent of the market up from 
the baseline. The 345W high-power unit (product class H) has positive 
LCC savings for each TSL. This projection is largely attributable to

[[Page 7899]]

the installed price of the baseline unit, a linear switching device, 
which is more costly than higher efficiency switch-mode power devices, 
so as consumers move to higher efficiencies, the purchase price 
actually decreases, resulting in savings.
b. Consumer Subgroup Analysis
    Certain consumer subgroups may be disproportionately affected by 
standards. DOE performed LCC subgroup analyses in this final rule for 
low-income consumers, small businesses, top tier marginal electricity 
price consumers, and consumers of specific applications. See section 
IV.F of this final rule for a review of the inputs to the LCC analysis. 
The following discussion presents the most significant results from the 
LCC subgroup analysis.
Low-Income Consumers
    For low-income consumers, the LCC impacts and payback periods are 
different than for the general population. This subgroup considers only 
the residential sector, and uses an adjusted electricity price from the 
reference case scenario. DOE found that low-income consumers below the 
poverty line typically paid electricity prices that were 0.2 cents per 
kWh lower than the general population. To account for this difference, 
DOE adjusted electricity prices by a factor of 0.9814 to derive 
electricity prices for this subgroup. Table V-3 shows the LCC impacts 
and payback periods for low-income consumers purchasing EPSs.
    The LCC savings and PBPs of low-income consumers is similar to that 
of the total population of consumers. In general, low-income consumers 
experience slightly reduced LCC savings, particularly in product 
classes dominated by residential applications. However, product classes 
with a large proportion of commercial applications experience less of 
an effect under the low-income consumer scenario, which is specific to 
the residential sector, and sometimes have greater LCC savings than the 
reference case results. None of the changes in LCC savings move a TSL 
from positive to negative LCC savings, or vice versa.
[GRAPHIC] [TIFF OMITTED] TR10FE14.018

Small Businesses

    For small business consumers, the LCC impacts and payback periods 
are different than for the general population. This subgroup considers 
only the commercial sector, and uses an adjusted discount rate from the 
reference case scenario. DOE found that small businesses typically have 
a cost of capital that is 4.36 percent higher than the industry 
average, which was applied to the discount rate for the small business 
consumer subgroup.
    The small business consumer subgroup LCC results are not directly 
comparable to the reference case LCC results because this subgroup only 
considers commercial applications. In the reference case scenario, the 
LCC results are strongly influenced by the presence of residential 
applications, which typically comprise the majority of application 
shipments. For product class B, the LCC savings become negative at TSL 
2 and TSL 3 for the 2.5W representative unit under the small business 
scenario, and at TSL3 for the 60W unit. None of the savings for other 
representative units change from positive to negative, or vice versa. 
This observation indicates that small business consumers would 
experience similar LCC impacts as the general population.
    Table V-4 shows the LCC impacts and payback periods for small 
businesses purchasing EPSs. DOE did not identify any commercial 
applications for non-Class A EPSs, and, consequently, did not evaluate 
these products as part of the small business consumer subgroup 
analysis.
[GRAPHIC] [TIFF OMITTED] TR10FE14.019


[[Page 7900]]



Top Tier Marginal Electricity Price Consumers

    For top tier marginal electricity price consumers, the LCC impacts 
and payback periods are different than for the general population. The 
analysis for this subgroup considers a weighted-average of the 
residential and commercial sectors and uses an adjusted electricity 
price from the reference case scenario. DOE used an upper tier inclined 
marginal block rate for the electricity price in the residential and 
commercial sectors, resulting in a price of $0.326 and $0.236 per kWh, 
respectively.
    Table V-5 shows the LCC impacts and payback periods for top tier 
marginal electricity price consumers purchasing EPSs.
    Consumers in the top tier marginal electricity price bracket 
experience greater LCC savings than those in the reference case 
scenario. This result occurs because these consumers pay more for their 
electricity than other consumers, and, therefore, experience greater 
savings when using products that are more energy efficient. This 
subgroup analysis increased the LCC savings of most of the 
representative units significantly. For the 203W multiple-voltage 
representative unit, the LCC savings at TSL 3 flipped from negative to 
positive. In product class B, for the 60W and 120W representative 
units, the savings also flipped from negative to positive. All other 
savings remained positive.
[GRAPHIC] [TIFF OMITTED] TR10FE14.020

Consumers of Specific Applications

    DOE performed an LCC and PBP analysis on every application within 
each representative unit and product class. This subgroup analysis used 
the application's specific inputs for lifetime, markups, base case 
market efficiency distribution, and UEC. Many applications in each 
representative unit or product class experienced LCC impacts and 
payback periods that were different from the average results across the 
representative unit or product class. Because of the large number of 
applications considered in the analysis, some of which span multiple 
representative units or product classes, DOE did not present 
application-specific LCC results here. Detailed results on each 
application are available in chapter 11 of the TSD.
    For product class B, the application-specific LCC results indicate 
that most applications will experience similar levels of LCC savings as 
the representative unit's average LCC savings. The 2.5W representative 
unit has positive LCC savings for each TSL, but specific applications, 
such as wireless headphones (among others), experience negative LCC 
savings. Similarly, DOE's projections for the 18W representative unit 
has projected positive LCC savings at TSL 1 and TSL 2, but other 
applications using EPSs, such as portable DVD players and camcorders, 
have negative savings. For the 60W representative unit, all 
applications follow the shipment-weighted average trends, except for at 
TSL 3, where two applications have negative LCC savings. For the 120W 
representative unit, all applications follow the shipment-weighted 
averages. See chapter 11 of the TSD for further detail.
c. Rebuttable Presumption Payback
    As discussed in section IV.F.15, EPCA provides a rebuttable 
presumption that a given 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. However, DOE routinely conducts a full economic 
analysis that considers the full range of impacts, including those to 
the customer, manufacturer, Nation, and environment, as required under 
42 U.S.C. 6295(o)(2)(B)(i) and 42 U.S.C. 6316(e)(1). The results of 
this analysis serve as the basis for DOE to evaluate definitively the 
economic justification for a potential standard level (thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification). Therefore, if the rebuttable presumption is 
not met, DOE may justify its standard on another basis.
    For EPSs, energy savings calculations in the LCC and PBP analyses 
used both the relevant test procedures as well as the relevant usage 
profiles. Because DOE calculated payback periods using a methodology 
consistent with the rebuttable presumption test for EPSs in the LCC and 
payback period analyses, DOE did not perform a stand-alone rebuttable 
presumption analysis, as it was already embodied in the LCC and PBP 
analyses.
2. Economic Impact on Manufacturers
    For the MIA in the March 2012 NOPR, DOE used changes in INPV to 
compare the direct financial impacts of different TSLs on 
manufacturers. DOE used the GRIM to compare the INPV of the base case 
(no new and 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 estimates the 
economic impact of implementing that standard on the entire EPS 
industry. For today's final rule, DOE continues to use the methodology 
presented in the NOPR and in section IV.J of the final rule.
a. Industry Cash Flow Analysis Results
    DOE modeled three different markup scenarios using a different set 
of markup assumptions for each scenario after an energy conservation 
standard goes into effect. These assumptions produce the bounds of a 
range of market responses that DOE anticipates could occur in the 
standards case. Each markup scenario results in a unique set of cash 
flows and corresponding INPV at each TSL.

[[Page 7901]]

    The first scenario DOE modeled is a flat markup scenario, or a 
preservation of gross margin markup scenario. The flat markup scenario 
assumes that in the standards case manufacturers would be able to pass 
the higher production costs required to manufacture more efficient 
products on to their customers. DOE also modeled the return on invested 
capital markup scenario. In this markup scenario, manufacturers 
maintain a similar level of profitability from the investments required 
by new and amended energy conservation standards as they do from their 
current business operations. To assess the higher (more severe) end of 
the range of potential impacts, DOE modeled the preservation of 
operating profit markup scenario. In this scenario, markups in the 
standards case are lowered such that manufacturers are only able to 
maintain their total base case operating profit in absolute dollars, 
despite higher product costs and investment. DOE used the main NIA 
shipment scenario for all MIA scenarios that were used to characterize 
the potential INPV impacts.

Product Classes B, C, D, and E

    Table V-6 through Table V-8 present the projected results for 
product classes B, C, D, and E under the flat, return on invested 
capital, and preservation of operating profit markup scenarios. DOE 
examined four representative units in product class B and scaled the 
results to product classes C, D, and E using the most appropriate 
representative unit for each product class.
[GRAPHIC] [TIFF OMITTED] TR10FE14.021


[[Page 7902]]


    At TSL 1, DOE estimates impacts on INPV to range from -$6.1 million 
to -$32.3 million, or a change in INPV of -2.6 percent to -14.1 
percent. At this level, industry free cash flow is estimated to 
decrease by approximately 89.5 percent to $1.4 million, compared to the 
base case value of $13.6 million in the year leading up to when the 
amended energy conservation standards would need to be met.
    At TSL 1, manufacturers of product class B, C, D, and E EPSs face a 
slight to moderate loss in INPV. For these product classes, the 
required efficiencies at TSL 1 correspond to an intermediate level 
above the ENERGY STAR 2.0 levels but below the best in market 
efficiencies. The conversion costs are a major contribution of the 
decrease in INPV because the vast majority of the product class B, C, 
D, and E EPS shipments fall below CSL 2.\57\ Manufacturers will incur 
product and capital conversion costs of approximately $30.7 million at 
TSL 1. In 2015, approximately 84 percent of product class B, C, D, and 
E shipments are projected to fall below the proposed amended energy 
conservation standards. In addition, 94 percent of the products for the 
2.5W representative unit are projected to fall below the proposed 
efficiency standard, and would likely require more substantial 
conversion costs because meeting the efficiency standard would require 
2.5W representative units to switch from linear to switch mode 
technology. This change would increase the conversion costs for these 
2.5W representative units, which account for approximately half of all 
the product class B, C, D, and E shipments.
---------------------------------------------------------------------------

    \57\ For a mapping of CSLs to TSLs, please see Table V-1.
---------------------------------------------------------------------------

    At TSL 1, the MPC increases 45 percent for the 2.5W representative 
units (a representative unit for product class B and all shipments of 
product classes C and E), 5 percent for the 18 Watt representative 
units (a representative unit for product class B and all shipments of 
product class D), 2 percent for the 60W representative units, and 3 
percent for the 120W representative units over the baseline. The 
conversion costs are significant enough to cause a slight negative 
industry impact even if manufacturers are able to maintain a similar 
return on their invested capital, as they do in the return on invest 
capital scenario. Impacts are more significant under the preservation 
of operating profit scenario because under this scenario manufacturers 
would be unable to pass on the full increase in the product cost to 
OEMs.
    At TSL 2, DOE estimates impacts on INPV to range from -$7.8 million 
to -$44.5 million, or a change in INPV of -3.4 percent to -19.4 
percent. At this level, industry free cash flow is estimated to 
decrease by approximately 105.2 percent to -$0.7 million, compared to 
the base case value of $13.6 million in the year before the compliance 
date.
    TSL 2 represents the best-in-market efficiencies for product class 
B, C, D, and E EPSs. The increase in conversion costs and production 
costs at TSL 2 make the INPV impacts slightly worse than TSL 1. The 
product conversion costs increase by $2.5 million and the capital 
conversion costs increase by $2.8 million from TSL 1 because now even 
more products, 95 percent, fall below the efficiency requirements at 
TSL 2 than at TSL 1. Also, at TSL 2, the MPC increases 60 percent for 
the 2.5W representative units (a representative unit for product class 
B and all shipments of product classes C and E), 18 percent for the 18 
Watt representative units (this is a representative unit for product 
class B and all shipments of product class D), 5 percent for the 60W 
representative units, and 4 percent for the 120W representative units 
over the baseline. However, the similar conversion costs and relatively 
minor additional incremental conversion costs make the industry impacts 
at TSL 2 similar to those at TSL 1.
    At TSL 3, DOE estimates impacts on INPV to range from $40.0 million 
to -$82.7 million, or a change in INPV of 17.4 percent to -36.1 
percent. At this level, industry free cash flow is estimated to 
decrease by approximately 110.5 percent to -$1.4 million, compared to 
the base case value of $13.6 million in the year before the compliance 
date.
    TSL 3 represents the max-tech CSL for product class B, C, D, and E 
EPSs. At TSL 3, DOE modeled a wide range of industry impacts because 
the very large increases in per-unit production costs lead to a wide 
range of potential impacts depending on who captures the additional 
value in the distribution chain. No existing product meets the 
efficiency requirements at TSL 3. However, since most of the products 
at TSL 2 also fall below the standard level, there is only a slight 
difference between the conversion costs at TSL 2 and TSL 3. The 
different INPV impacts occur due to the large changes in incremental 
MPCs at the max-tech level. At TSL 3, the MPC increases 69 percent for 
the 2.5W representative unit (this is a representative unit for product 
class B and all shipments for product classes C and E), 80 percent for 
the 18 Watt representative units (this is a representative unit for 
product class B and all shipments for product class D), 24 percent for 
the 60W representative units, and 53 percent for the 120W 
representative units over the baseline. If manufacturers are able to 
fully pass on these costs to OEMs (the flat markup scenario), the 
increase in cash flow from operations is enough to overcome the 
conversion costs to meet the max-tech level and INPV increases 
moderately. However, if the manufacturers are unable to pass on these 
costs and only maintain the current operating profit (the preservation 
of operating profit markup scenario), there is a significant negative 
impact on INPV, because substantial increases in working capital drain 
operating cash flow. The conversion costs associated with switching the 
entire market, the large increase in incremental MPCs, and the extreme 
pressure from OEMs to keep product prices down make it more likely that 
ODMs will not be able to fully pass on these costs to OEMs and the ODMs 
would face a substantial loss instead of a moderate gain in INPV at TSL 
3.
Product Class X
    Table V-9 through Table V-11 present the projected results for 
product class X under the flat, return on invested capital, and 
preservation of operating profit markup scenarios.

[[Page 7903]]

[GRAPHIC] [TIFF OMITTED] TR10FE14.022

    At TSL 1, DOE estimates impacts on INPV to range from -$0.1 million 
to -$0.4 million, or a change in INPV of -0.2 percent to -1.0 percent. 
At this level, industry free cash flow is estimated to decrease by 
approximately 5.5 percent to $2.5 million, compared to the base case 
value of $2.7 million in the year before the compliance date.
    At TSL 1, manufacturers of product class X face a very slight 
decline in INPV because most of the market already meets TSL 1. The 
total conversion costs are approximately $0.4 million. Conversion costs 
are low because 95 percent of the products already meet the TSL 1 
efficiency requirements.
    At TSL 2, DOE estimates impacts on INPV to range from -$1.3 million 
to -$6.6 million, or a change in INPV of -3.0 percent to -14.8 percent. 
At this level, industry free cash flow is estimated to decrease by 
approximately 109.3 percent to -$0.3 million, compared to the base case 
value of $2.7 million in the year leading up to when the new energy 
conservation standards would need to be met.
    At TSL 2, manufacturers range from a slight to moderate decrease in 
INPV. DOE estimates that manufacturers will incur total product and 
capital conversion costs of $7.3 million at TSL 2. The conversion costs 
increase at TSL 2 because the entire market falls below the efficiency 
requirements at TSL 2. Also, the total impacts are driven by the 
incremental MPCs at TSL 2. At TSL 2, the MPC increases 16 percent over 
the baseline.
    At TSL 3, DOE estimates impacts on INPV to range from $1.7 million 
to -$11.8 million, or a change in INPV of 3.8 percent to -26.4 percent. 
At this level, industry free cash flow is estimated to decrease by 
approximately 109.3 percent to -$0.3 million, compared to the base case 
value of $2.7

[[Page 7904]]

million in the year before the compliance date.
    TSL 3 impacts range from a slight increase to a moderate decrease 
in INPV. As with TSL 2, the entire market falls below the required 
efficiency at TSL 3 and total industry conversion costs are also $7.3 
million. However, the main difference at TSL 3 is the increase in the 
MPC. At TSL 3, the MPC increases 46 percent over the baseline. If the 
ODMs can pass on the higher price of these products to the OEMs at TSL 
3, the gains from the additional revenue are outweighed by conversion 
costs, so manufacturers experience a slight increase in INPV. However, 
if ODMs cannot pass on these higher MPCs to OEMs, manufacturer 
experience a moderate loss in INPV. The conversion costs associated 
with switching the entire market, the large increase in incremental 
MPCs, and the extreme pressure from OEMs to keep product prices down 
make it more likely that ODMs will not be able to fully pass on these 
costs to OEMs and the ODMs would face a moderate loss instead of a 
slight gain in INPV at TSL 3.
Product Class H
    Table V-12 through Table V-14 present the projected results for 
product class H under the flat, return on invested capital, and 
preservation of operating profit markup scenarios.
[GRAPHIC] [TIFF OMITTED] TR10FE14.023

    At TSL 1, DOE estimates impacts on INPV to range from less than -
$10,000 to -$0.03 million, or a change in INPV of -3.3 percent to -26.4 
percent. At this level, industry free cash flow is estimated to 
decrease by approximately

[[Page 7905]]

145.7 percent to less than -$10,000, compared to the base case value of 
$0.01 million in the year before the compliance date.
    At TSL 1, manufacturers of product class H EPSs face a slight to 
significant loss in industry value. The base case industry value of 
$110,000 is low and since DOE estimates that total conversion costs at 
TSL 1 would be approximately $20,000, the conversion costs represent a 
substantial portion of total industry value. The conversion costs are 
high relative to the base case INPV because the entire market in 2015 
is projected to fall below an efficiency standard set at TSL 1. This 
means that all products in product class H would have to be redesigned 
to meet the efficiency level at TSL 1, leading to total conversion 
costs that are large relative to the base case industry value. In 
addition, the MPC at TSL 1 declines by 21 percent compared to the 
baseline since the switching technology that would be required to meet 
this efficiency level is less costly to manufacture than improving the 
efficiency of baseline products that continue to use linear technology. 
This situation results in a lower MSP and lower revenues for 
manufacturers of baseline products, which exacerbates the impacts on 
INPV from new energy conservation standards for these products.
    At TSL 2, DOE estimates impacts on INPV to range from less than -
$10,000 to -$0.03 million, or a change in INPV of -3.4 percent to -24.9 
percent. At this level, industry free cash flow is estimated to 
decrease by approximately 145.7 percent to less than -10,000, compared 
to the base case value of $0.01 million in the year before the 
compliance date.
    The impacts on INPV at TSL 2 are similar to TSL 1. The conversion 
costs are the same since the entire market in 2015 would fall below the 
required efficiency at both TSL 1 and TSL 2. Also, the MPC is projected 
to decrease by 19 percent at TSL 2 compared to the baseline, which is 
similar to the 21 percent decrease at TSL 1. Overall, the similar 
conversion costs and lower industry revenue for the minimally compliant 
products make the INPV impacts at TSL 2 similar to TSL 1.
    At TSL 3, DOE estimates impacts on INPV to range from -0.01 million 
to -$0.03 million, or a change in INPV of -4.9 percent to -28.2 
percent. At this level, industry free cash flow is estimated to 
decrease by approximately 145.7 percent to less than -10,000, compared 
to the base case value of $0.01 million in the year leading up to when 
the new energy conservation standards would need to be met.
    Impacts on INPV range from slightly to substantially negative at 
TSL 3. As with TSL 1 and TSL 2, the entire market falls below the 
required efficiency and the total industry conversion costs estimated 
by DOE remain at $20,000. However, the MPC increases 8 percent at TSL 3 
relative to the estimated cost of the baseline unit and changes the 
possible impacts on INPV at TSL 3. If ODMs can maintain a similar 
return on invested capital in TSL 3 as in the base case, like 
manufacturers do in the return on invested capital scenario, the 
decline in INPV is only slightly negative. However, if the ODMs cannot 
fully pass on the higher MPCs to OEMs, as would occur in the 
preservation of operating profit, then the loss in INPV is much more 
substantial.
b. Impacts on Employment
    As discussed in the March 2012 NOPR, as part of the direct 
employment impact analysis, DOE attempted to quantify the number of 
domestic workers involved in EPS manufacturing. Based on manufacturer 
interviews and DOE's research, DOE believes that all major EPS ODMs are 
foreign owned and operated. DOE did identify a few smaller niche EPS 
ODMs based in the U.S. and attempted to contact these companies. All of 
the companies DOE reached indicated their EPS manufacturing takes place 
abroad. During manufacturer interviews, large manufacturers also 
indicated the vast majority, if not all, EPS production takes place 
overseas. DOE also requested comment in the NOPR about the existence of 
any domestic EPS production and did not receive any comments. Because 
DOE was unable to identify any EPS ODMs with domestic manufacturing, 
DOE has concluded there are no EPSs currently manufactured 
domestically.
    DOE also recognizes there are several OEMs or their domestic 
distributors that have employees in the U.S. that work on design, 
technical support, sales, training, certification, and other 
requirements. However, in interviews manufacturers generally did not 
expect any negative changes in the domestic employment of the design, 
technical support, or other departments of EPS OEMs located in the U.S. 
in response to new and amended energy conservation standards.
c. Impacts on Manufacturing Capacity
    As discussed in the March 2012 NOPR, DOE does not anticipate the 
standards in today's final rule would adversely impact manufacturer 
capacity. EISA 2007 set a statutory compliance date for EPSs, and the 
EPS industry is characterized by rapid product development lifecycles. 
Therefore, DOE believes the compliance date in today's final rule 
provides sufficient time for manufacturers to ramp up capacity to meet 
the standards for EPSs.
d. Impacts on Manufacturer Subgroups
    As discussed in the March 2012 NOPR, using average cost assumptions 
to develop an industry cash flow estimate is not adequate for assessing 
differential impacts among manufacturer subgroups. Small manufacturers, 
niche equipment manufacturers, and manufacturers exhibiting a cost 
structure substantially different from the industry average could be 
affected disproportionately. DOE did not identify any EPS manufacturer 
subgroups that would require a separate analysis in the MIA.
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 EPSs, that manufacturers of these products will face for 
products and equipment they manufacture within approximately three 
years prior to and after the anticipated compliance date of the new and 
amended standards. DOE discusses these and other requirements, 
including the energy conservation standards that take effect beginning 
in 2012, in its full cumulative regulatory burden analysis in chapter 
12 of the TSD.
3. National Impact Analysis
a. Significance of Energy Savings
    For each TSL, DOE projected energy savings for EPSs purchased in 
the 30-

[[Page 7906]]

year period that begins in the year of compliance with amended 
standards (2015-2044). The savings are measured over the entire 
lifetime of products purchased in the 30-year period. DOE quantified 
the energy savings attributable to each TSL as the difference in energy 
consumption between each standards case and the base case. Table V-15 
presents the estimated energy savings for each considered TSL, and 
Table V-16 presents the estimated FFC energy savings for each 
considered TSL. The approach used is further described in section 
IV.G.\58\
---------------------------------------------------------------------------

    \58\ Chapter 10 of the TSD presents tables that show the 
magnitude of the energy savings discounted at rates of 3 percent and 
7 percent. Discounted energy savings represent a policy perspective 
in which energy savings realized farther in the future are less 
significant than energy savings realized in the nearer term.
[GRAPHIC] [TIFF OMITTED] TR10FE14.024

    Circular A-4 requires agencies to present analytical results, 
including separate schedules of the monetized benefits and costs that 
show the type and timing of benefits and costs. Circular A-4 also 
directs agencies to consider the variability of key elements underlying 
the estimates of benefits and costs. For this rulemaking, DOE undertook 
a sensitivity analysis using nine rather than 30-years of product 
shipments. The choice of a 9-year period is a proxy for the timeline in 
EPCA for the review of energy conservation standards and represents 
DOE's standard practice. We would note that the review timeframe 
established in EPCA generally does not overlap with the product 
lifetime, product manufacturing cycles or other factors specific to 
EPSs. In particular, DOE notes that EPS standards may be further 
amended and require compliance within 9 years. However, this 
information is presented for informational purposes only and is not 
indicative of any change in DOE's analytical methodology for this 
rulemaking. The NES results based on a 9-year analytical period are 
presented in Table V-17. The impacts are counted over the lifetime of 
products purchased in 2015-2023.

[[Page 7907]]

[GRAPHIC] [TIFF OMITTED] TR10FE14.025

b. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV of the total costs and savings for 
consumers that would result from the TSLs considered for EPSs. In 
accordance with OMB's guidelines on regulatory analysis,\59\ DOE 
calculated the 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 on private capital in the U.S. economy, and reflects the 
returns on real estate and small business capital as well as corporate 
capital. This discount rate approximates the opportunity cost of 
capital in the private sector (OMB analysis has found the average rate 
of return on capital to be near this rate). The 3-percent rate reflects 
the potential effects of standards on private consumption (e.g., 
through higher prices for products and reduced purchases of energy). 
This rate represents the rate at which society discounts future 
consumption flows to their present value. It can be approximated by the 
real rate of return on long-term government debt (i.e., yield on United 
States Treasury notes), which has averaged about 3 percent for the past 
30-years.
---------------------------------------------------------------------------

    \59\ OMB Circular A-4, section E (Sept. 17, 2003). Available at: 
http://www.whitehouse.gov/omb/circulars_a004_a-4.
---------------------------------------------------------------------------

    Table V-18 shows the consumer NPV results for each TSL considered 
for EPSs. In each case, the impacts cover the lifetime of products 
purchased in 2015-2044.
[GRAPHIC] [TIFF OMITTED] TR10FE14.026

    The NPV results based on this 9-year analytical period are 
presented in Table V-19. The impacts are counted over the lifetime of 
products purchased in 2015-2023. As mentioned previously, this 
information is presented for informational purposes only and is not 
indicative of any change in DOE's analytical methodology or decision 
criteria.

[[Page 7908]]

[GRAPHIC] [TIFF OMITTED] TR10FE14.027

c. Indirect Impact on Employment
    From its analysis, DOE expects energy conservation standards for 
EPSs to reduce energy costs for consumers and the resulting net savings 
to be redirected to other forms of economic activity. Those shifts in 
spending and economic activity could affect the demand for labor. As 
described in section IV.N, DOE used an input/output model of the U.S. 
economy to estimate indirect employment impacts of the TSLs that DOE 
considered in this rulemaking. DOE understands that there are 
uncertainties involved in projecting employment impacts, especially 
changes in the later years of the analysis. Therefore, DOE generated 
results for near-term time frames (2015-2044), where these 
uncertainties are reduced.
    The results suggest that today's standards are likely to have 
negligible impact on the net demand for labor in the economy. The net 
change in jobs is so small that it would be imperceptible in national 
labor statistics and might be offset by other, unanticipated effects on 
employment. Chapter 16 of the final rule TSD presents detailed results.
4. Impact on Utility and Performance of the Products
    In establishing classes of products, and in evaluating design 
options and the impact of potential standard levels, DOE evaluates 
standards that would not lessen the utility or performance of the 
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) DOE examined 
several classes of EPSs in its engineering analysis and used the 
parameters of the screening analysis to determine whether the new and 
amended standards would impact the utility or performance of the end-
use products. Based on the results gathered for each of the EPS product 
classes, DOE believes that the standards adopted in today's final rule 
will not reduce the utility or performance of the products under 
consideration in this rulemaking.
5. Impact on Any Lessening of Competition
    EPCA directs DOE to consider any lessening of competition that is 
likely to result from standards. It also directs the Attorney General 
of the United States (Attorney General) to determine the impact, if 
any, of any lessening of competition likely to result from a proposed 
standard and to transmit such determination to the Secretary within 60 
days of the publication of a direct final rule and simultaneously 
published proposed rule, together with an analysis of the nature and 
extent of the impact. (42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) To 
assist the Attorney General in making a determination for EPS 
standards, DOE provided the Department of Justice (DOJ) with copies of 
the NOPR and the TSD for review. DOE received no adverse comments from 
DOJ regarding the proposal.
6. Need of the Nation To Conserve Energy
    Enhanced energy efficiency, where economically justified, improves 
the Nation's energy security, strengthens the economy, and reduces the 
environmental impacts or costs of energy production. Reduced 
electricity demand due to energy conservation standards is also likely 
to reduce the cost of maintaining the reliability of the electricity 
system, particularly during peak-load periods. As a measure of this 
reduced demand, chapter 15 in the final rule TSD presents the estimated 
reduction in generating capacity in 2044 for the TSLs that DOE 
considered in this rulemaking.
    Energy savings from standards for EPSs could also produce 
environmental benefits in the form of reduced emissions of air 
pollutants and greenhouse gases associated with electricity production. 
Table V-20 to Table V-23 provide DOE's estimate of cumulative 
CO2, SO2, NOX, and Hg emission 
reductions projected to result from the TSLs considered in this 
rulemaking. DOE reports annual CO2, SO2, 
NOX, and Hg emission reductions for each TSL in chapter 13 
of the final rule TSD.

[[Page 7909]]

[GRAPHIC] [TIFF OMITTED] TR10FE14.028

    As part of the analysis for this 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 IV.M, DOE used

[[Page 7910]]

values for the SCC developed by an interagency process. The four sets 
of SCC values resulting from that process (expressed in 2012$) are 
represented by $11.8/metric ton (the average value from a distribution 
that uses a 5-percent discount rate), $39.7/metric ton (the average 
value from a distribution that uses a 3-percent discount rate), $61.2/
metric ton (the average value from a distribution that uses a 2.5-
percent discount rate), and $117/metric 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 2015; the values for 
later years are higher due to increasing damages as the projected 
magnitude of climate change increases.
    Table V-24 to Table V-27 present the global value of CO2 
emission reductions at each TSL for EPSs. DOE calculated a present 
value of the stream of annual values 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, and these results are presented in chapter 14 of 
the final rule TSD.

[[Page 7911]]

[GRAPHIC] [TIFF OMITTED] TR10FE14.029


[[Page 7912]]


[GRAPHIC] [TIFF OMITTED] TR10FE14.030

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other greenhouse gas (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 on reducing CO2 emissions in this rulemaking 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 emissions reductions 
anticipated to result from amended standards for EPSs. The value that 
DOE used is discussed in section IV.L. Table V-28 to Table V-31 present 
the cumulative present values for each TSL calculated using seven-
percent and three-percent discount rates.

[[Page 7913]]

[GRAPHIC] [TIFF OMITTED] TR10FE14.031

7. Other Factors
    The Secretary of Energy, in determining whether a standard is 
economically justified, may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VI)). DOE 
has not considered other factors in development of the standards in 
this final rule.
8. Summary of National Economic Impacts
    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 V-
32 presents the NPV values that result from adding the estimates of the 
potential economic benefits resulting from reduced CO2 and 
NOX emissions in each of four valuation scenarios to the NPV 
of consumer savings calculated for each TSL considered for EPSs, at 
both a three-percent and seven-percent discount rate. The 
CO2 values used in the columns of each table correspond to 
the four sets of SCC values discussed above.

[[Page 7914]]

[GRAPHIC] [TIFF OMITTED] TR10FE14.032

    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 reductions is based on 
a global value. Second, the assessments of operating cost savings and 
the SCC are performed with different methods that use quite different 
time frames for analysis. The national operating cost savings is 
measured for the lifetime of products shipped in 2015-2044. The SCC 
values, on the other hand, reflect the present value of future climate-
related impacts resulting from the emission of one metric ton of 
CO2 in each year. These impacts continue well beyond 2100.

[[Page 7915]]

C. Conclusions

    When considering proposed standards, the new and amended energy 
conservation standard that DOE adopts for any type (or class) of 
covered product shall be designed to achieve the maximum improvement in 
energy efficiency that the Secretary of Energy 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 by, to the greatest extent practicable, 
considering the seven statutory factors discussed previously. (42 
U.S.C. 6295(o)(2)(B)(i)) The new and amended standard must also 
``result in significant conservation of energy.'' (42 U.S.C. 
6295(o)(3)(B))
    For today's rulemaking, DOE considered the impacts of standards at 
each TSL, beginning with the max-tech level, to determine whether that 
level was economically justified. Where 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 technologically feasible, economically justified and 
saves a significant amount of energy.
    To aid the reader in understanding the benefits and/or burdens of 
each TSL, tables in this section summarize the quantitative analytical 
results for each TSL, based on the assumptions and methodology 
discussed herein. The efficiency levels contained in each TSL are 
described in section V.A. In addition to the quantitative results 
presented in the tables below, DOE also considers other burdens and 
benefits that affect economic justification. These include the impacts 
on identifiable subgroups of consumers who may be disproportionately 
affected by a national standard, and impacts on employment. Section 
V.B.1.b presents the estimated impacts of each TSL for the considered 
subgroups. DOE discusses the impacts on employment in external power 
supply manufacturing in section V.B.2.b and discusses the indirect 
employment impacts in section V.B.3.c.
1. Benefits and Burdens of Trial Standard Levels Considered for EPS 
Product Class B
    Table V-33 and Table V-34 summarize the quantitative impacts 
estimated for each TSL for product class B. As explained in section 
IV.C.5, DOE is extending the TSLs for product class B to product 
classes C, D, and E because product class B was the only one directly 
analyzed and interested parties supported this approach because of the 
technical similarities among these products. The efficiency levels 
contained in each TSL are described in section V.A.

[[Page 7916]]

[GRAPHIC] [TIFF OMITTED] TR10FE14.033


[[Page 7917]]


[GRAPHIC] [TIFF OMITTED] TR10FE14.044

    DOE first considered TSL 3, which represents the max-tech 
efficiency level. TSL 3 would save 1.2 quads of energy, an amount DOE 
considers significant. Under TSL 3, the NPV of consumer benefits would 
be $-0.8 billion, using a discount rate of 7 percent, and $-0.7 
billion, using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 3 are 62.3 million 
metric tons of CO2, 20.0 thousand tons of NOX, 
108 thousand tons of SO2, and 0.1 tons of Hg. The estimated 
monetary value of the cumulative CO2 emissions reductions at 
TSL 3 ranges from $476 million to $6,316 million.
    At TSL 3, the average LCC impact is a gain (consumer savings) of 
$0.17 for the 2.5W unit, and $0.60 for the 60W unit and a loss (LCC 
savings decrease) of $0.91 for the 18W unit, and $4.95 for the 120W 
unit. The median payback period is 3.7 years for the 2.5W unit, 8.1 
years for the 18W unit, 3.1 years for the 60W unit, and 8.0 years for 
the 120W unit. The fraction of consumers experiencing an LCC benefit is 
55.2 percent for the 2.5W unit, 29.2 percent for the 18W unit, 65.4 
percent for the 60W unit, and 0.0 percent for the 120W unit. The 
fraction of consumers experiencing an LCC cost is 44.8 percent for the 
2.5W unit, 70.8 percent for the 18W unit, 34.7 percent for the 60W 
unit, and 100 percent for the 120W unit.
    At TSL 3, the projected change in INPV for direct operation product 
classes B, C, D, and E as a group ranges from a decrease of $82.7 
million to an increase of $40.0 million. At TSL 3, DOE recognizes the 
risk of very large negative impacts if manufacturers' expectations 
concerning reduced profit margins are realized. If the high end of the 
range of impacts is reached, as DOE expects, TSL 3 could result in a 
net loss of 36.1 percent in INPV to manufacturers of EPSs in these 
product classes. However, as DOE has not identified any domestic 
manufacturers of direct operation EPSs, it does not project any 
immediate negative impacts on direct domestic jobs.
    The Secretary concludes that at TSL 3 for EPSs in product class B, 
the negative NPV of consumer benefits, the economic burden on a 
significant fraction of consumers due to the large increases in product 
cost, and the capital conversion costs and profit margin impacts that 
could result in a very large reduction in INPV outweigh the benefits of 
energy savings, emission reductions, and the estimated monetary value 
of the CO2 emissions reductions. Consequently, the Secretary 
has concluded that TSL 3 is not economically justified.
    DOE then considered TSL 2. TSL 2 would save 0.7 quads of energy, an 
amount DOE considers significant. Under TSL 2, the NPV of consumer 
benefits would be $1.5 billion, using a discount rate of 7 percent, and 
$2.8 billion, using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 2 are 34.2 million 
metric tons of CO2, 11.0 thousand tons of NOX, 
59.1 thousand tons of SO2, and 0.1 tons of Hg. The estimated 
monetary value of the cumulative CO2 emissions reductions at 
TSL 2 ranges from $261 million to $3,467 million.
    At TSL 2, the average LCC impact is a gain (consumer savings) of 
$0.17 for the 2.5W unit, $0.81 for the 18W unit, $0.90 for the 60W 
unit, and $0.79 for the 120W unit. The median payback period is 3.7 
years for the 2.5W unit, 2.9 years for the 18W unit, 1.3 years for the 
60W unit, and 1.7 years for the 120W unit. The fraction of consumers 
experiencing an LCC benefit is 55.3 percent for the 2.5W unit, 53.6 
percent for the 18W unit, 98.6 percent for the 60W unit, and 94.9 
percent for the 120W unit. The fraction of consumers experiencing an 
LCC cost is 42.8 percent for the 2.5W unit, 35.3 percent for the 18W 
unit, 0.0 percent for the 60W unit, and 2.2 percent for the 120W unit.
    At TSL 2, the projected change in INPV for product classes B, C, D, 
and E as a group ranges from a decrease of $44.5 million to a decrease 
of $7.8 million. DOE recognizes the risk of large negative impacts if 
manufacturers' expectations concerning reduced profit margins are 
realized. If the high end of the range of impacts is reached, as DOE 
expects, TSL 2 could result in a net loss of 19.4 percent in INPV to 
manufacturers of EPSs in these product classes.

[[Page 7918]]

    The Secretary concludes that at TSL 2 for EPSs in product class B, 
the benefits of energy savings, positive NPV of consumer benefits, 
emission reductions, and the estimated monetary value of the 
CO2 emissions reductions outweigh the economic burden on a 
significant fraction of consumers due to the increases in product cost 
and the capital conversion costs and profit margin impacts that could 
result in a reduction in INPV to manufacturers.
    After considering the analysis, public comments on the NOPR, and 
the benefits and burdens of TSL 2, the Secretary concludes that this 
TSL will offer the maximum improvement in efficiency that is 
technologically feasible and economically justified and will result in 
the significant conservation of energy. Therefore, DOE today is 
adopting standards at TSL 2 for EPSs in product class B and, by 
extension, for EPSs in product classes C, D, and E. The new and amended 
energy conservation standards for these EPSs, expressed as equations 
for minimum average active-mode efficiency and maximum no-load input 
power, are shown in Table V-35.

[[Page 7919]]

[GRAPHIC] [TIFF OMITTED] TR10FE14.034


[[Page 7920]]


2. Benefits and Burdens of Trial Standard Levels Considered for EPS 
Product Class X
    Table V-36 and Table V-37 present a summary of the quantitative 
impacts estimated for each TSL for multiple-voltage EPSs. The 
efficiency levels contained in each TSL are described in section V.A.
[GRAPHIC] [TIFF OMITTED] TR10FE14.036

    DOE first considered TSL 3, which represents the max-tech 
efficiency level. TSL 3 would save 0.14 quads of energy, an amount DOE 
considers significant. Under TSL 3, the NPV of consumer benefits would 
be $-0.25 billion, using a discount rate of 7 percent, and $-0.32 
billion, using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 3 are 7.2 million metric 
tons of CO2, 2.3 thousand tons of NOX, 12.5 
thousand tons of SO2, and 0.01 tons of Hg. The estimated 
monetary value of the

[[Page 7921]]

cumulative CO2 emissions reductions at TSL 3 ranges from 
$54.2 million to $722 million.
    At TSL 3, the average LCC impact is a cost (LCC savings decrease) 
of $2.45. The median payback period is 11.3 years. The fraction of 
consumers experiencing an LCC benefit is 5.0 percent while the fraction 
of consumers experiencing an LCC cost is 95.0 percent.
    At TSL 3, the projected change in INPV ranges from a decrease of 
$11.8 million to an increase of $1.7 million. At TSL 3, DOE recognizes 
the risk of very large negative impacts if manufacturers' expectations 
concerning reduced profit margins are realized. If the high range of 
impacts is reached, as DOE expects, TSL 3 could result in a net loss of 
26.4 percent in INPV to manufacturers of multiple-voltage EPSs. 
However, as DOE has not identified any domestic manufacturers of 
multiple-voltage EPSs, it does not project any immediate negative 
impacts on direct domestic jobs.
    The Secretary concludes that at TSL 3 for multiple-voltage EPSs, 
the negative NPV of consumer benefits, the economic burden on a 
significant fraction of consumers due to the large increases in product 
cost, and the capital conversion costs and profit margin impacts that 
could result in a very large reduction in INPV outweigh the benefits of 
energy savings, emission reductions, and the estimated monetary value 
of the CO2 emissions reductions. Consequently, the Secretary 
has concluded that TSL 3 is not economically justified.
    DOE then considered TSL 2. TSL 2 would save 0.07 quads of energy, 
an amount DOE considers significant. Under TSL 2, the NPV of consumer 
benefits would be $0.24 billion, using a discount rate of 7 percent, 
and $0.44 billion, using a discount rate of 3 percent.
    At TSL 2, the average LCC impact is a gain (consumer savings) of 
$2.88. The median payback period is 4.0 years. The fraction of 
consumers experiencing an LCC benefit is 74.6 percent while the 
fraction of consumers experiencing an LCC cost is 25.5 percent.
    The cumulative emissions reductions at TSL 2 are 3.5 million metric 
tons of CO2, 1.1 thousand tons of NOX, 6.1 
thousand tons of SO2, and less than 0.01 tons of Hg. The 
estimated monetary value of the cumulative CO2 emissions 
reductions at TSL 2 ranges from $26.4 million to $353 million.
    At TSL 2, the projected change in INPV ranges from a decrease of 
$6.6 million to a decrease of $1.3 million. At TSL 2, DOE recognizes 
the risk of large negative impacts if manufacturers' expectations 
concerning reduced profit margins are realized. If the high end of the 
range of impacts is reached, as DOE expects, TSL 2 could result in a 
net loss of 14.8 percent in INPV to manufacturers of multiple-voltage 
EPSs.
    The Secretary concludes that at TSL 2 for multiple-voltage EPSs, 
the benefits of energy savings, positive NPV of consumer benefits, 
emission reductions, and the estimated monetary value of the 
CO2 emissions reductions outweigh the economic burden on a 
significant fraction of consumers due to the increases in product cost 
and the capital conversion costs and profit margin impacts that could 
result in a reduction in INPV for manufacturers.
    After considering the analysis, public comments on the NOPR, and 
the benefits and burdens of TSL 2, the Secretary concludes that this 
TSL will offer the maximum improvement in efficiency that is 
technologically feasible and economically justified and will result in 
the significant conservation of energy. Therefore, DOE today is 
adopting standards at TSL 2 for multiple-voltage EPSs. The new energy 
conservation standards for these EPSs, expressed as equations for 
minimum average active-mode efficiency and maximum no-load input power, 
are shown in Table V-38.
[GRAPHIC] [TIFF OMITTED] TR10FE14.037

3. Benefits and Burdens of Trial Standard Levels Considered for EPS 
Product Class H
    Table V-39 and Table V-40 present a summary of the quantitative 
impacts estimated for each TSL for high-power EPSs. The efficiency 
levels contained in each TSL are described in section V.A.

[[Page 7922]]

[GRAPHIC] [TIFF OMITTED] TR10FE14.038

    DOE first considered TSL 3, which represents the max-tech 
efficiency level. TSL 3 would save 0.0015 quads of energy, an amount 
DOE considers significant. Under TSL 3, the NPV of consumer benefits 
would be $0.004 billion, using a discount rate of 7 percent, and $0.009 
billion, using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 3 are 0.07 million 
metric tons of CO2, 0.02 thousand tons of NOX, 
0.1 thousand tons of SO2, and less than 0.001 tons of Hg. 
The estimated monetary value of the cumulative CO2 emissions 
reductions at TSL 3 ranges from less than $0.52 to $7.09 million.
    At TSL 3, the average LCC impact is a gain (consumer savings) of 
$107.67. The median payback period is 0.8 years. The fraction of 
consumers experiencing an LCC benefit is 90.3 percent while the 
fraction of consumers experiencing an LCC cost is 9.7 percent.
    At TSL 3, the projected change in INPV ranges from a decrease of 
$0.03 million to a decrease of $0.01 million. At TSL 3, DOE recognizes 
the risk of very large negative impacts if manufacturers' expectations 
concerning reduced profit margins are realized. If the high end of the 
range of impacts is reached, as DOE expects, TSL 3 could

[[Page 7923]]

result in a net loss of 28.2 percent in INPV to manufacturers of high-
power EPSs. However, as DOE has not identified any domestic 
manufacturers of high-power EPSs, it does not project any immediate 
negative impacts on direct domestic jobs.
    The Secretary concludes that at TSL 3 for high-power EPSs, the 
additional considerations of the potential negative impacts of a 
standard at this max-tech TSL outweigh the benefits of energy savings, 
emission reductions, and the estimated monetary value of the 
CO2 emissions reductions. DOE notes that it scaled results 
from product class B to estimate the cost and efficiency of this max-
tech CSL. Consequently, DOE is unaware of any product that can achieve 
this efficiency level in either product class B or H. Thus, although 
DOE's analysis indicates that the max-tech efficiency level is 
achievable, there is a risk that unforeseen obstacles remain to 
creating an EPS at this efficiency level.
    Additionally, setting a standard at TSL 3 would create a 
discontinuity in the active mode efficiency standards for EPSs. For 
product class B devices, the active mode efficiency standard is 
constant for nameplate output power ratings greater than 49 watts up to 
250 watts. At 250 watts, where product class H begins, the active mode 
efficiency standard would increase by 4 percentage points if DOE set 
standards for this product class at the max-tech CSL. This 
discontinuity in efficiency between the two product classes would be 
the result of the standards for product class B being equivalent to the 
best-in-market CSL equation while the standards for product class H 
would be equivalent to the max-tech CSL equation for high-power EPSs.
    In contrast, by applying the same level of stringency, scaled for 
the representative unit voltage, to all EPSs with output power greater 
than 250 watts, the achievable efficiency in EPS designs that have an 
output power above 49 watts remains nearly constant. This result occurs 
because the switching and conduction losses associated with the EPS 
remain proportionally the same with the increase in output power, which 
creates a relatively flat achievable efficiency above 49 watts. If DOE 
were to adopt a level that created a discontinuity in the efficiency 
levels, it would ignore this trend and set a higher efficiency standard 
between two product classes despite numerous technical similarities. 
Consequently, the Secretary has concluded that TSL 3 is not justified.
    DOE then considered TSL 2. TSL 2 would save 0.0013 quads of energy 
an amount DOE considers significant. Under TSL 2, the NPV of consumer 
benefits would be $0.005 billion, using a discount rate of 7 percent, 
and $0.0011 billion, using a discount rate of 3 percent.
    At TSL 2, the average LCC impact is a gain (consumer savings) of 
$142.18. The median payback period is 0.0 years. The fraction of 
consumers experiencing an LCC benefit is 100.0 percent while the 
fraction of consumers experiencing an LCC cost is 0.0 percent.
    The cumulative emissions reductions at TSL 2 are 0.07 million 
metric tons of CO2, 0.02 thousand tons of NOX, 
0.12 thousand tons of SO2, and less than 0.001 tons of Hg. 
The estimated monetary value of the cumulative CO2 emissions 
reductions at TSL 2 ranges from less than $0.46 to $6.38 million.
    At TSL 2, the projected change in INPV ranges from a decrease of 
$0.03 million to a decrease of less than $10,000. At TSL 2, DOE 
recognizes the risk of large negative impacts if manufacturers' 
expectations concerning reduced profit margins are realized. If the 
high end of the range of impacts is reached, as DOE expects, TSL 2 
could result in a net loss of 24.9 percent in INPV to manufacturers of 
high-power EPSs.
    The Secretary concludes that at TSL 2 for high-power EPSs, the 
benefits of energy savings, positive NPV of consumer benefits, positive 
LCC savings for all consumers, emission reductions, and the estimated 
monetary value of the CO2 emissions reductions outweigh the 
economic burden of the capital conversion costs and profit margin 
impacts that could result in a reduction in INPV for manufacturers.
    After considering the analysis, public comments on the NOPR, and 
the benefits and burdens of TSL 2, the Secretary concludes that this 
TSL will offer the maximum improvement in efficiency that is 
technologically feasible and economically justified and will result in 
the significant conservation of energy. Therefore, DOE today is 
adopting standards at TSL 2 for EPSs in product class H. The new energy 
conservation standards for these EPSs, expressed as a minimum average 
active-mode efficiency value and a maximum no-load input power value, 
are shown in Table V-41.
[GRAPHIC] [TIFF OMITTED] TR10FE14.039

4. Summary of Benefits and Costs (Annualized) of the Proposed Standards
    The benefits and costs of today's standards, for products sold in 
2015-2044, can also be expressed in terms of annualized values. The 
annualized monetary values are the sum of (1) the annualized national 
economic value 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.\60\
---------------------------------------------------------------------------

    \60\ 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 2013, 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 (2015 through 2044) that 
yields the same present value. 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.
---------------------------------------------------------------------------

    Although adding the value of consumer savings to the value of

[[Page 7924]]

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 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 
is measured for the lifetime of EPSs shipped in 2015-2044. The SCC 
values, on the other hand, reflect the present value of all future 
climate-related impacts resulting from the emission of one metric ton 
of carbon dioxide in each year. These impacts continue well beyond 
2100.
    Estimates of annualized benefits and costs of today's standards are 
shown in Table V-42. 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 average SCC series that uses a 3-percent discount 
rate, the cost of the standards in today's rule is $147 million per 
year in increased equipment costs, while the benefits are $293 million 
per year in reduced equipment operating costs, $77 million in 
CO2 reductions, and $1.1 million in reduced NOX 
emissions. In this case, the net benefit amounts to $223 million per 
year. Using a 3-percent discount rate for all benefits and costs and 
the average SCC series, the cost of the standards in today's rule is 
$162 million per year in increased equipment costs, while the benefits 
are $350 million per year in reduced operating costs, $77 million in 
CO2 reductions, and $1.2 million in reduced NOX 
emissions. In this case, the net benefit amounts to $266 million per 
year.

[[Page 7925]]

[GRAPHIC] [TIFF OMITTED] TR10FE14.040


[[Page 7926]]


[GRAPHIC] [TIFF OMITTED] TR10FE14.041

5. Stakeholder Comments on Alternatives to Standards
    Cobra Electronics commented that the ENERGY STAR program is an 
effective means for encouraging the development of more efficient 
technologies. Furthermore, the use of a voluntary program would allow 
DOE to comply with Executive Order 13563, which directed federal 
agencies to ``identify and assess available alternatives to direct 
regulation.'' (Cobra Electronics, No. 130 at p. 8) Executive Order 
13563 also states that regulations should be adopted ``only upon a 
reasoned determination that its benefits justify its costs.'' Because 
the selected standard levels are technologically feasible and 
economically justified, DOE has fulfilled its statutory obligations as 
well as the directives in Executive Order 13563. In addition, DOE 
considered the impacts of a voluntary program as part of the Regulatory 
Impact Analysis and found that such a program would save less energy 
than standards (see chapter 17 of the TSD).

VI. 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 are external benefits resulting from improved energy 
efficiency of EPSs 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. DOE 
attempts to quantify some of the external benefits through use of 
Social Cost of Carbon values.
    In addition, DOE has determined that today's regulatory action is 
an ``economically significant regulatory action'' under section 3(f)(1) 
of Executive Order 12866. Accordingly, section 6(a)(3) of the Executive 
Order requires that DOE prepare a regulatory impact analysis (RIA) on 
today's rule and that the Office of Information and Regulatory Affairs 
(OIRA) in the Office of Management and Budget (OMB) review this rule. 
DOE presented to OIRA for review the draft rule and other documents 
prepared for this rulemaking, including the RIA, and has included these 
documents in the rulemaking record. The assessments prepared pursuant 
to Executive Order 12866 can be found in the technical support document 
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 
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 believes 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.

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://energy.gov/gc/office-general-counsel).

[[Page 7927]]

    For manufacturers of EPSs, 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 North 
American Industry Classification System (NAICS) code and industry 
description and are available at http://www.sba.gov/content/summary-size-standards-industry. EPS manufacturing is classified under NAICS 
335999, ``All Other Miscellaneous Electrical Equipment and Component 
Manufacturing.'' The SBA sets a threshold of 500 employees or less for 
an entity to be considered as a small business for this category.
    As discussed in the March 2012 NOPR, DOE was unable to identify any 
EPS ODMs with domestic manufacturing. Information obtained from 
manufacturer interviews and DOE's research; indicate that all EPS 
manufacturing takes place abroad. DOE notes that it also sought comment 
on this issue. While DOE received comments from small businesses 
application manufacturers who import EPSs (see discussion in J.4), DOE 
did not receive any comments from any small business EPS ODMs or any 
comments challenging the view that all EPS manufacturing is conducted 
abroad. Since DOE was not able to find any small EPS ODMs, DOE 
certifies that today's final rule will not have a significant impact on 
a substantial number of small entities and that a regulatory 
flexibility analysis is not required.

C. Review Under the Paperwork Reduction Act

    Manufacturers of EPSs 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 EPSs, including any amendments adopted for those 
test procedures (76 FR 12422 (March 7, 2011). DOE has established 
regulations for the certification and recordkeeping requirements for 
all covered consumer products and commercial equipment, including 
Class-A EPSs. (cite 429.37) DOE will modify the certification 
requirements specific to non-class A EPSs (multiple-voltage and high-
voltage) in a separate certification rulemaking prior to the effective 
date for the standards prescribed in today's rule. 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

    Pursuant to the National Environmental Policy Act (NEPA) of 1969, 
DOE has determined that the rule fits within the category of actions 
included in Categorical Exclusion (CX) B5.1 and otherwise meets the 
requirements for application of a CX. See 10 CFR Part 1021, App. B, 
B5.1(b); 1021.410(b) and Appendix B, B(1)-(5). The rule fits within 
this category of actions because it is a rulemaking that establishes 
energy conservation standards for consumer products or industrial 
equipment, and for which none of the exceptions identified in CX 
B5.1(b) apply. Therefore, DOE has made a CX determination for this 
rulemaking, and DOE does not need to prepare an Environmental 
Assessment or Environmental Impact Statement for this rule. DOE's CX 
determination for this rule is available at http://cxnepa.energy.gov/.

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 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 regulatory action likely to result in a

[[Page 7928]]

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://energy.gov/gc/office-general-counsel.
    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 EPS 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 EPSs, 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'' chapter of the final rule TSD 
respond to those requirements.
    Under section 205 of UMRA, the Department is obligated to identify 
and consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required. 2 U.S.C. 1535(a). DOE is required to select from those 
alternatives the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule unless DOE publishes an 
explanation for doing otherwise, or the selection of such an 
alternative is inconsistent with law. As required by 42 U.S.C. 6295(d), 
(f), and (o), 6313(e), and 6316(a), today's final rule would establish 
energy conservation standards for EPSs 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'' chapter of the final rule TSD.

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.

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 EPSs, is not a significant energy 
action because the 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 (OSTP), issued its Final Information 
Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 
2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as scientific information the 
agency reasonably can determine will have, or does have, a clear and 
substantial impact on important public policies or private sector 
decisions. 70 FR 2667.
    In response to OMB's Bulletin, DOE conducted formal in-progress 
peer reviews of the energy conservation standards development process 
and analyses and has prepared a Peer Review Report pertaining to the 
energy conservation standards rulemaking analyses. Generation of this 
report involved a rigorous, formal, and documented evaluation using 
objective

[[Page 7929]]

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: 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 not a ``major rule'' 
as defined by 5 U.S.C. 804(2).

VII. 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, 
Incorporation by reference, Intergovernmental relations, and Small 
businesses.

    Issued in Washington, DC, on February 3, 2014.
David T. Danielson,
Assistant Secretary, Energy Efficiency and Renewable Energy.
    For the reasons set forth in the preamble, DOE amends part 430 of 
chapter II, of title 10 of the Code of Federal Regulations, 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:
0
a. Redesignating paragraphs (a), (b), and (c) in the definition for 
Annual fuel utilization efficiency as paragraphs (1), (2), and (3), 
respectively;
0
b. Adding in alphabetical order definitions for Basic-voltage external 
power supply and Direct operation external power supply;
0
c. Redesignating paragraphs (a), (b), (c), and (d) in the definition 
for Furnace as paragraphs (1), (2), (3), and (4), respectively;
0
d. Adding in alphabetical order definitions for Indirect operation 
external power supply and Low-voltage external power supply;
0
e. Redesignating paragraphs (a), (b), and (c) in the definition for 
Water heater as paragraphs (1), (2), and (3), respectively.
    The additions read as follows:


Sec.  430.2  Definitions.

* * * * *
    Basic-voltage external power supply means an external power supply 
that is not a low-voltage external power supply.
* * * * *
    Direct operation external power supply means an external power 
supply that can operate a consumer product that is not a battery 
charger without the assistance of a battery.
* * * * *
    Indirect operation external power supply means an external power 
supply that cannot operate a consumer product that is not a battery 
charger without the assistance of a battery as determined by the steps 
in paragraphs (1)(i) through (v) of this definition:
    (1) If the external power supply (EPS) can be connected to an end-
use consumer product and that consumer product can be operated using 
battery power, the method for determining whether that EPS is incapable 
of operating that consumer product directly is as follows:
    (i) If the end-use product has a removable battery, remove it for 
the remainder of the test and proceed to the step in paragraph (1)(v) 
of this definition. If not, proceed to the step in paragraph (1)(ii).
    (ii) Charge the battery in the application via the EPS such that 
the application can operate as intended before taking any additional 
steps.
    (iii) Disconnect the EPS from the application. From an off mode 
state, turn on the application and record the time necessary for it to 
become operational to the nearest five second increment (5 sec, 10 sec, 
etc.).
    (iv) Operate the application using power only from the battery 
until the application stops functioning due to the battery discharging.
    (v) Connect the EPS first to mains and then to the application. 
Immediately attempt to operate the application. If the battery was 
removed for testing and the end-use product operates as intended, the 
EPS is not an indirect operation EPS and paragraph 2 of this definition 
does not apply. If the battery could not be removed for testing, record 
the time for the application to become operational to the nearest five 
second increment (5 seconds, 10 seconds, etc.).
    (2) If the time recorded in paragraph (1)(v) of this definition is 
greater than the summation of the time recorded in paragraph (1)(iii) 
of this definition and five seconds, the EPS cannot operate the 
application directly and is an indirect operation EPS.
* * * * *
    Low-voltage external power supply means an external power supply 
with a nameplate output voltage less than 6 volts and nameplate output 
current greater than or equal to 550 milliamps.
* * * * *

0
3. Section 430.3 is amended by revising paragraph (p) introductory text 
and adding paragraph (p)(3) to read as follows:
* * * * *


Sec.  430.3  Materials incorporated by reference.

* * * * *
    (p) U.S. Department of Energy, Office of Energy Efficiency and 
Renewable Energy. Resource Room of the Building Technologies Program, 
950 L'Enfant Plaza SW., 6th Floor, Washington, DC 20024, 202-586-2945, 
(Energy Star materials are also found at http://www.energystar.gov.)
* * * * *
    (3) International Efficiency Marking Protocol for External Power 
Supplies, Version 3.0, September 2013, IBR approved for Sec.  430.32.
* * * * *

0
4. Section 430.32 is amended by revising paragraph (w) to read as 
follows:


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

* * * * *
    (w) External power supplies. (1)(i) Except as provided in 
paragraphs (w)(2) and (5) of this section, all Class A external power 
supplies manufactured on or after July 1, 2008, shall meet the 
following standards:

------------------------------------------------------------------------
                               Active Mode
-------------------------------------------------------------------------
                                           Required efficiency (decimal
            Nameplate output               equivalent of a percentage)
------------------------------------------------------------------------
Less than 1 watt.......................  0.5 times the Nameplate output.

[[Page 7930]]

 
From 1 watt to not more than 51 watts..  The sum of 0.09 times the
                                          Natural Logarithm of the
                                          Nameplate Output and 0.5.
Greater than 51 watts..................  0.85.
Not more than 250 watts................  0.5 watts.
------------------------------------------------------------------------

    (ii) Except as provided in paragraphs (w)(5), (w)(6), and (w)(7) of 
this section, all direct operation external power supplies manufactured 
on or after February 10, 2016, shall meet the following standards:

[[Page 7931]]

[GRAPHIC] [TIFF OMITTED] TR10FE14.042


[[Page 7932]]


[GRAPHIC] [TIFF OMITTED] TR10FE14.043

    (2) A Class A external power supply shall not be subject to the 
standards in paragraph (w)(1)(i) of this section if the Class A 
external power supply is--
    (i) Manufactured during the period beginning on July 1, 2008, and 
ending on June 30, 2015, and
    (ii) Made available by the manufacturer as a service part or a 
spare part for an end-use product--
    (A) That constitutes the primary load; and
    (B) Was manufactured before July 1, 2008.
    (3) The standards described in paragraph (w)(1) of this section 
shall not constitute an energy conservation standard for the separate 
end-use product to which the external power supply is connected.
    (4) Any external power supply subject to the standards in paragraph 
(w)(1) of this section shall be clearly and permanently marked in 
accordance with the International Efficiency Marking Protocol for 
External Power Supplies (incorporated by reference; see Sec.  430.3), 
published by the U.S. Department of Energy.
    (5) Non-application of no-load mode requirements. The no-load mode 
energy efficiency standards established in paragraph (w)(1) of this 
section shall not apply to an external power supply manufactured before 
July 1, 2017, that--
    (i) Is an AC-to-AC external power supply;
    (ii) Has a nameplate output of 20 watts or more;
    (iii) Is certified to the Secretary as being designed to be 
connected to a security or life safety alarm or surveillance system 
component; and
    (iv) On establishment within the External Power Supply 
International Efficiency Marking Protocol, as referenced in the 
``Energy Star Program Requirements for Single Voltage External Ac-Dc 
and Ac-Ac Power Supplies'' (incorporated by reference, see Sec.  
430.3), published by the Environmental Protection Agency, of a 
distinguishing mark for products described in this clause, is 
permanently marked with the distinguishing mark.
    (6) An external power supply shall not be subject to the standards 
in paragraph (w)(1) of this section if it is a device that requires 
Federal Food and Drug Administration (FDA) listing and approval as a 
medical device in accordance with section 513 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 360(c)).
    (7) A direct operation, AC-DC external power supply with nameplate 
output voltage less than 3 volts and nameplate output current greater 
than or equal to 1,000 milliamps that charges the battery of a product 
that is fully or primarily motor operated shall not be subject to the 
standards in paragraph (w)(1)(ii) of this section.
* * * * *
[FR Doc. 2014-02560 Filed 2-7-14; 8:45 am]
BILLING CODE 6450-01-P