[Federal Register Volume 80, Number 156 (Thursday, August 13, 2015)]
[Proposed Rules]
[Pages 48624-48682]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-19650]
[[Page 48623]]
Vol. 80
Thursday,
No. 156
August 13, 2015
Part II
Department of Energy
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10 CFR Part 430
Energy Conservation Program: Energy Conservation Standards for Ceiling
Fan Light Kits; Proposed Rules
Federal Register / Vol. 80 , No. 156 / Thursday, August 13, 2015 /
Proposed Rules
[[Page 48624]]
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DEPARTMENT OF ENERGY
10 CFR Part 430
[Docket Number EERE-2012-BT-STD-0045]
RIN 1904-AC87
Energy Conservation Program: Energy Conservation Standards for
Ceiling Fan Light Kits
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking (NOPR) and announcement of public
meeting.
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SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as
amended, prescribes energy conservation standards for various consumer
products and certain commercial and industrial equipment, including
ceiling fan light kits (CFLKs). EPCA also requires the U.S. Department
of Energy (DOE) to periodically determine whether more-stringent,
amended standards would be technologically feasible and economically
justified, and would save a significant amount of energy. In this
notice, DOE proposes amended energy conservation standards for CFLKs,
and also announces a public meeting to receive comment on these
proposed standards and associated analyses and results.
DATES: Meeting: DOE will hold a public meeting on Tuesday, August 18,
2015 from 9:00 a.m. to 4:00 p.m., in Washington, DC. The meeting will
also be broadcast as a webinar. See section VII, ``Public
Participation,'' for webinar registration information, participant
instructions, and information about the capabilities available to
webinar participants.
Comments: DOE will accept comments, data, and information regarding
this NOPR before and after the public meeting, but no later than
October 13, 2015. See section VII, ``Public Participation,'' for
details.
ADDRESSES: The public meeting will be held at the U.S. Department of
Energy, Forrestal Building, Room 4A-104, 1000 Independence Avenue SW.,
Washington, DC 20585. Any foreign national wishing to participate in
the meeting should advise DOE as soon as possible by contacting
[email protected] to initiate the necessary procedures.
Please also note that any person wishing to bring a laptop into the
Forrestal Building will be required to obtain a property pass. Visitors
should avoid bringing laptops, or allow an extra 45 minutes. Persons
may also attend the public meeting via webinar.
Instructions: Any comments submitted must identify the NOPR on
Energy Conservation Standards for ceiling fan light kits, and provide
docket number EE-2012-BT-STD-0045 and/or regulatory information number
(RIN) 1904-AC87. Comments may be submitted using any of the following
methods:
1. Federal eRulemaking Portal: www.regulations.gov. Follow the
instructions for submitting comments.
2. Email: [email protected]. Include the
docket number and/or RIN in the subject line of the message. Submit
electronic comments in WordPerfect, Microsoft Word, PDF, or ASCII file
format, and avoid the use of special characters or any form of
encryption.
3. Postal Mail: Ms. Brenda Edwards, U.S. Department of Energy,
Building Technologies Office, Mailstop EE-5B, 1000 Independence Avenue
SW., Washington, DC 20585-0121. If possible, please submit all items on
a compact disc (CD), in which case it is not necessary to include
printed copies.
4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of
Energy, Building Technologies Office, 950 L'Enfant Plaza, SW., Suite
600, Washington, DC 20024. Telephone: (202) 586-2945. If possible,
please submit all items on a CD, in which case it is not necessary to
include printed copies.
Written comments regarding the burden-hour estimates or other
aspects of the collection-of-information requirements contained in this
proposed rule may be submitted to Office of Energy Efficiency and
Renewable Energy through the methods listed above and by email to
[email protected].
No telefacsimilies (faxes) will be accepted. For detailed
instructions on submitting comments and additional information on the
rulemaking process, see section VII of this document (``Public
Participation'').
Docket: The docket, which includes Federal Register notices, public
meeting attendee lists and transcripts, comments, and other supporting
documents/materials, is available for review at www.regulations.gov.
All documents in the docket are listed in the www.regulations.gov
index. However, some documents listed in the index may not be publicly
available, such as those containing information that is exempt from
public disclosure.
A link to the docket Web page can be found at:
www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/66. This Web page contains a link to the docket for this notice
on the www.regulations.gov site. The www.regulations.gov Web page
contains simple instructions on how to access all documents, including
public comments, in the docket. See section VII, ``Public
Participation,'' for further information on how to submit comments
through www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Ms. Lucy deButts, 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) 287-1604. Email:
[email protected].
Ms. Elizabeth Kohl, U.S. Department of Energy, Office of the
General Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC
20585-0121. Telephone: (202) 586-7796. Email:
[email protected].
For further information on how to submit a comment, review other
public comments and the docket, or participate in the public meeting,
contact Ms. Brenda Edwards at (202) 586-2945 or by email:
[email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Proposed Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for CFLKs
III. General Discussion
A. Product Classes and Scope of Coverage
B. Test Procedure
1. Standby and Off-Mode Energy Consumption
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. Savings in Operating Costs Compared to Increase in Price (LCC
and PBP)
c. Energy Savings
d. Lessening of Utility or Performance of Products
e. Impact of Any Lessening of Competition
[[Page 48625]]
f. Need for National Energy Conservation
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
A. Market and Technology Assessment
1. Product Classes
2. Metrics
3. 190 W Limitation
4. Technology Options
B. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. General Approach
2. Representative Product Classes
3. Baseline Lamps
4. More Efficacious Substitutes
5. Efficacy Levels
6. Scaling to Other Product Classes
D. Product Price Determination
E. Energy Use Analysis
1. Operating Hours
a. Residential Sector
b. Commercial Sector
2. Input Power
3. Lighting Controls
F. Life-Cycle Cost and Payback Period Analysis
1. Product Cost
2. Disposal Cost
3. Electricity Prices
4. Electricity Price Trends
5. Lamp Replacements
6. Product Lifetime
7. Residual Value
8. Discount Rates
9. Efficacy Distributions
10. LCC Savings Calculation
11. Payback Period Analysis
G. Shipments Analysis
H. National Impact Analysis
1. National Energy Savings
2. Net Present Value Analysis
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. GRIM Analysis and Key Inputs
a. Capital and Product Conversion Costs
b. Manufacturer Production Costs
c. Shipment Scenarios
d. Markup Scenarios
3. Discussion of Comments
4. Manufacturer Interviews
a. Duplicative Regulation
b. Shift to Air Conditioning
K. Emissions Analysis
L. Monetizing Carbon Dioxide and Other Emissions Impacts
1. Social Cost of Carbon
a. Monetizing Carbon Dioxide Emissions
b. Development of Social Cost of Carbon Values
c. Current Approach and Key Assumptions
2. Social Cost of Other Air Pollutants
M. Utility Impact Analysis
N. Employment Impact Analysis
V. Analytical Results
A. Trial Standard Levels
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
b. Consumer Subgroup Analysis
c. Rebuttable-Presumption Payback
2. Economic Impacts on Manufacturers
a. Industry Cash-Flow Analysis Results
b. Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Subgroups of Manufacturers
e. Cumulative Regulatory Burden
3. National Impact Analysis
a. Significance of Energy Savings
b. Net Present Value of Consumer Costs and Benefits
c. Indirect Impacts on Employment
4. Impact on Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
8. Summary of National Economic Impacts
C. Conclusion
1. Benefits and Burdens of TSLs Considered for CFLK Standards
2. Summary of Annualized Benefits and Costs of the Proposed
Standards
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
B. Review Under the Regulatory Flexibility Act
1. Description on Estimated Number of Small Entities Regulated
2. Description and Estimate of Compliance Requirements
3. Duplication, Overlap, and Conflict With Other Rules and
Regulations
4. Significant Alternatives to the Rule
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Review Under the Information Quality Bulletin for Peer Review
VII. Public Participation
A. Attendance at the Public Meeting
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of the Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary
I. Synopsis of the Proposed Rule
Title III, Part B \1\ of the Energy Policy and Conservation Act of
1975 (EPCA or the Act) (42 U.S.C. 6291, et. seq.), established the
Energy Conservation Program for Consumer Products Other Than
Automobiles.\2\ These products include CFLKs, the subject of this
document.
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\1\ For editorial reasons, upon codification in the U.S. Code,
Part B was re-designated Part A.
\2\ All references to EPCA in this document refer to the statute
as amended through the Energy Efficiency Improvement Act of 2015,
Pub. L. 114-11 (Apr. 30, 2015).
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Pursuant to EPCA, any new or amended energy conservation standard
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, the new or amended standard must
result in a significant conservation of energy. (42 U.S.C.
6295(o)(3)(B)) EPCA also provides that not later than 6 years after
issuance of any final rule establishing or amending a standard, DOE
must publish either a notice of determination that standards for the
product do not need to be amended, or a notice of proposed rulemaking
including new proposed energy conservation standards. (42 U.S.C.
6295(m)(1))
In accordance with these and other statutory provisions discussed
in this document, DOE proposes amended energy conservation standards
for CFLKs. The proposed standards, which are expressed in minimum lumen
output per watt (lm/W) of a lamp, or lamp efficacy, are shown in Table
I.1. These proposed standards, if adopted, would apply to all CFLKs
listed in Table I.1 and manufactured in, or imported into, the United
States on and after the date three years after the publication of any
final rule for this rulemaking.
Table I.1--Proposed Energy Conservation Standards for Ceiling Fan Light
Kits
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Product type Lumens Proposed level (lm/W)
------------------------------------------------------------------------
All CFLKs...................... <120 50
>120 74-29.42 x 0.9983
\lumens\
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[[Page 48626]]
A. Benefits and Costs to Consumers
Table I.2 presents DOE's evaluation of the economic impacts of the
proposed standards on consumers of CFLKs, as measured by the average
life-cycle cost (LCC) savings and the simple payback period (PBP).\3\
The average LCC savings are positive for the product class, and the PBP
is less than the average lifetime of CFLKs, which is estimated to be
13.8 years (see section IV.F).
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\3\ The average LCC savings are measured relative to the no-
standards case efficacy distribution, which depicts the market in
the compliance year in the absence of standards (see section
IV.F.9). The simple PBP, designed to compare specific efficacy
levels, is measured relative to the least efficient model on the
market (see section IV.F).
Table I.2--Impacts of Proposed Energy Conservation Standards on
Consumers of CFLKs (TSL 2)
------------------------------------------------------------------------
Simple
Average LCC payback
Product class savings period
(2014$) (years)
------------------------------------------------------------------------
Residential Sector
------------------------------------------------------------------------
All CFLKs...............................................................
------------------------------------------------------------------------
Commercial Sector
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All CFLKs................................... 53.4 0.3
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DOE's analysis of the impacts of the proposed standards on
consumers is described in section IV.F of this notice.
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 (2015 to 2048). Using a real discount rate of 7.4
percent, DOE estimates that the INPV for manufacturers of CFLKs in the
no-standards case is $94.8 million in 2014$. Under the proposed
standards, DOE expects that manufacturers may lose up to 8.4 percent of
this INPV, which is approximately $7.9 million. Additionally, based on
DOE's interviews with the manufacturers of CFLKs, DOE does not expect
significant impacts on manufacturing capacity or loss of employment for
the industry as a whole to result from the proposed standards for
CFLKs.
DOE's analysis of the impacts of the amended standards on
manufacturers is described in section IV.J of this notice.
C. National Benefits and Costs \4\
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\4\ All monetary values in this section are expressed in 2014
dollars and, where appropriate, are discounted to 2015 unless
explicitly stated otherwise. Energy savings in this section refer to
the full-fuel-cycle savings (see section IV.H for discussion).
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DOE's analyses indicate that the proposed energy conservation
standards for CFLKs would save a significant amount of energy. Relative
to the case where no amended energy conservation standard is set
(hereinafter referred to as the ``no-standards case''), the lifetime
energy savings for CFLKs purchased in the 30-year period that begins in
the anticipated year of compliance with the amended standards (2019-
2048) amount to 0.047 quadrillion Btu (quads).\5\ This represents a
savings of 3.6 percent relative to the energy use of these products in
the no-standards case.
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\5\ A quad is equal to 10\15\ British thermal units (Btu).
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The cumulative net present value (NPV) of total consumer costs and
savings of the proposed standards for CFLKs ranges from $0.65 billion
(at a 7-percent discount rate) to $0.82 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
CFLKs purchased in 2019-2048.
In addition, the proposed standards for CFLKs would have
significant environmental benefits. DOE estimates that the proposed
standards would result in cumulative emission reductions of 3.3 million
metric tons (Mt) \6\ of carbon dioxide (CO2), 3.5 thousand
tons of sulfur dioxide (SO2), 4.7 thousand tons of nitrogen
oxides (NOX), 11.2 thousand tons of methane
(CH4), 0.037 thousand tons of nitrous oxide
(N2O), and 0.011 tons of mercury (Hg).\7\ The cumulative
reduction in CO2 emissions through 2030 amounts to 3.08 Mt,
which is equivalent to the emissions resulting from the annual
electricity use of almost 400 thousand homes.
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\6\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO2 are presented in short tons.
\7\ DOE calculated emissions reductions relative to the no-
standards case, which reflects key assumptions in the Annual Energy
Outlook 2014 (AEO 2014) Reference case. AEO 2014 generally
represents current legislation and environmental regulations for
which implementing regulations were available as of October 31,
2013.
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The value of the CO2 reductions is calculated using a
range of values per metric ton of CO2 (otherwise known as
the Social Cost of Carbon, or SCC) developed by a recent Federal
interagency process.\8\ The derivation of the SCC values is discussed
in section IV.L. Using discount rates appropriate for each set of SCC
values (see Table I.3), DOE estimates the present monetary value of the
CO2 emissions reduction (not including CO2
equivalent emissions of other gases with global warming potential) is
between $0.03 billion and $0.40 billion, with a value of $0.13 billion
using the central SCC case represented by $41.2/t in 2015. DOE also
estimates the present monetary value of the NOX emissions
reduction to be $0.02 billion at a 7-percent discount rate and $0.03
billion at a 3-percent discount rate.\9\
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\8\ Technical Update of the Social Cost of Carbon for Regulatory
Impact Analysis Under Executive Order 12866, Interagency Working
Group on Social Cost of Carbon, U.S. Government (May 2013; revised
November 2013) (Available at: http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf).
\9\ DOE is currently investigating valuation of avoided
SO2 and Hg emissions.
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Table I.3 summarizes the national economic benefits and costs
expected to result from the proposed standards for CFLKs.
Table I.3--Summary of National Economic Benefits and Costs of Proposed
Energy Conservation Standards for CFLKs (TSL 2) *
------------------------------------------------------------------------
Present value Discount rate
Category (billion 2014$) (%)
------------------------------------------------------------------------
Benefits
------------------------------------------------------------------------
Consumer Operating-Cost Savings..... 0.56 7
0.73 3
CO2 Reduction Monetized Value ($12.2/ 0.03 5
t case) **.........................
CO2 Reduction Monetized Value ($41.2/ 0.13 3
t case) **.........................
CO2 Reduction Monetized Value ($63.4/ 0.21 2.5
t case) **.........................
CO2 Reduction Monetized Value ($121/ 0.40 3
t case) **.........................
[[Page 48627]]
NOX Reduction Monetized Value....... 0.02 7
0.02 3
-----------------------------------
Total Benefits [dagger]......... 0.71 7
0.89 3
------------------------------------------------------------------------
Costs
------------------------------------------------------------------------
Consumer Incremental Installed Costs 0.06 7
0.07 3
-----------------------------------
Total Net Benefits:
Including Emissions Reduction 0.65 7
Monetized Value [dagger]....... 0.82 3
------------------------------------------------------------------------
* This table presents the costs and benefits associated with CFLKs
shipped in 2019-2048. These results include benefits to consumers
which accrue after 2048 from the products purchased in 2019-2048. The
results account for the incremental variable and fixed costs incurred
by manufacturers due to the standard, some of which may be incurred in
preparation for the rule.
** The CO2 values represent global monetized values of the SCC, in
2014$, in 2015 under several scenarios of the updated SCC values. The
first three cases use the averages of SCC distributions calculated
using 5%, 3%, and 2.5% discount rates, respectively. The fourth case
represents the 95th percentile of the SCC distribution calculated
using a 3% discount rate. The SCC time series incorporate an
escalation factor.
[dagger] Total Benefits for both the 3% and 7% cases are derived using
the series corresponding to average SCC with 3-percent discount rate
($41.2/t case).
The benefits and costs of the proposed standards, for CFLKs sold in
2019-2048, 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 consumer operation of products that
meet the new or amended standards (consisting primarily of operating-
cost savings from using less energy, minus increases in product
purchase prices and installation costs, which is another way of
representing consumer NPV), and (2) the annualized monetary value of
the benefits of emission reductions, including CO2 emission
reductions.\10\
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\10\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2015, the year
used for discounting the NPV of total consumer costs and savings.
For the benefits, DOE calculated a present value associated with
each year's shipments in the year in which the shipments occur
(e.g., 2020 or 2030), and then discounted the present value from
each year to 2015. The calculation uses discount rates of 3 and 7
percent for all costs and benefits except for the value of
CO2 reductions, for which DOE used case-specific discount
rates, as shown in Table I.3. Using the present value, DOE then
calculated the fixed annual payment over a 30-year period, starting
in the compliance year, that yields the same present value.
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Although combining the values of operating savings and
CO2 emission reductions is relevant to DOE's determination,
two issues should be considered. First, the national operating savings
are domestic U.S. consumer monetary savings that occur as a result of
market transactions, whereas 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 CFLKs shipped in 2019-
2048. Because CO2 emissions have a very long residence time
in the atmosphere,\11\ the SCC values after 2050 reflect future
climate-related impacts resulting from the emission of CO2
that continue beyond 2100.
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\11\ The atmospheric lifetime of CO2 is estimated of
the order of 30-95 years. Jacobson, MZ (2005), ``Correction to
`Control of fossil-fuel particulate black carbon and organic matter,
possibly the most effective method of slowing global warming,' '' J.
Geophys. Res. 110. pp. D14105.
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Estimates of annualized benefits and costs of the proposed
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 has a
value of $41.2/t in 2015), the estimated cost of the standards proposed
in this rule is $6.0 million per year in increased equipment costs,
while the estimated annual benefits are $55 million in reduced
equipment operating costs, $7.5 million in CO2 reductions,
and $1.6 million in reduced NOX emissions. In this case, the
net benefit amounts to $59 million per year. Using a 3-percent discount
rate for all benefits and costs and the average SCC series that has a
value of $41.2/t in 2015, the estimated cost of the proposed CFLK
standards is $4.0 million per year in increased equipment costs, while
the estimated annual benefits are $41 million in reduced operating
costs, $7.5 million in CO2 reductions, and $1.3 million in
reduced NOX emissions. In this case, the net benefit amounts
to $46 million per year.
[[Page 48628]]
Table I.4--Annualized Benefits and Costs of Proposed Energy Conservation Standards for CFLKs (TSL 2)
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(million 2014$/year)
-----------------------------------------------------
Discount rate Low net High net
Primary benefits benefits
estimate * estimate * estimate *
----------------------------------------------------------------------------------------------------------------
Benefits
----------------------------------------------------------------------------------------------------------------
Consumer Operating-Cost 7%......................... 55.............. 36.............. 59
Savings. 3%......................... 41.............. 24.............. 43
CO2 Reduction Monetized Value 5%......................... 2.6............. 1.4............. 2.7
($12.2/t case) *.
CO2 Reduction Monetized Value 3%......................... 7.5............. 3.9............. 7.9
($41.2/t case) *.
CO2 Reduction Monetized Value 2.5%....................... 11.............. 5............... 11
($63.4/t case) *.
CO2 Reduction Monetized Value 3%......................... 22.............. 12.............. 24
($112.1/t case) *.
NOX Reduction Monetized Value 7%......................... 1.6............. 0.90............ 1.6
3%......................... 1.3............. 0.65............ 1.3
----------------------------------------------------------------------------------
Total Benefits [dagger].. 7% plus CO2 range.......... 60 to 79........ 38 to 48........ 63 to 85
7%......................... 65.............. 40.............. 69
3% plus CO2 range.......... 45 to 64........ 26 to 36........ 47 to 68
3%......................... 49.............. 28.............. 53
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Costs
----------------------------------------------------------------------------------------------------------------
Consumer Incremental 7%......................... 6.0............. 3.5............. 6.4
Installed Product Costs. 3%......................... 4.0............. 2.3............. 4.2
----------------------------------------------------------------------------------------------------------------
Net Benefits
----------------------------------------------------------------------------------------------------------------
Total [dagger]........... 7% plus CO2 range.......... 54 to 73........ 34 to 44........ 57 to 78
7%......................... 59.............. 37.............. 62
3% plus CO2 range.......... 41 to 60........ 24 to 34........ 43 to 64
3%......................... 46.............. 26.............. 48
----------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with CFLKs shipped in 2019-2048. These
results include benefits to consumers which accrue after 2048 from the products purchased in 2019-2048. The
results account for the incremental variable and fixed costs incurred by manufacturers due to the standard,
some of which may be incurred in preparation for the rule. The Primary Estimate assumes the reference case
electricity prices and housing starts from AEO 2015 and decreasing product prices for LED CFLKs, due to price
learning. The Low Benefits Estimate uses the Low Economic Growth electricity prices and housing starts from
AEO 2015 and a faster decrease in product prices for LED CFLKs. The High Benefits Estimate uses the High
Economic Growth electricity prices and housing starts from AEO 2015 and the same product price decrease for
LED CFLKs as in the Primary Estimate.
** The CO2 values represent global monetized values of the SCC, in 2014$, in 2015 under several scenarios of the
updated SCC values. The first three cases use the averages of SCC distributions calculated using 5%, 3%, and
2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution
calculated using a 3% discount rate. The SCC time series incorporate an escalation factor.
[dagger] Total Benefits for both the 3% and 7% cases are derived using the series corresponding to the average
SCC with a 3-percent discount rate ($41.2/t case). In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2
range,'' the operating-cost and NOX benefits are calculated using the labeled discount rate, and those values
are added to the full range of CO2 values.
DOE's analysis of the national impacts of the proposed standards is
described in sections IV.H, IV.K and IV.L of this notice.
D. Conclusion
DOE has tentatively concluded that the proposed standards represent
the maximum improvement in energy efficiency that is technologically
feasible and economically justified, and would result in the
significant conservation of energy. DOE further notes that products
achieving these standard levels are already commercially available for
all product classes covered by this proposal. Based on the analyses
described above, DOE has tentatively concluded that the benefits of the
proposed standards to the nation (energy savings, positive NPV of
consumer benefits, consumer LCC savings, and emission reductions) would
outweigh the burdens (loss of INPV for manufacturers and LCC increases
for some consumers).
DOE also considered more- and less-stringent efficacy levels (EL)s
as trial standard levels, and is still considering them in this
rulemaking. However, DOE has tentatively concluded that the potential
burdens of the more-stringent ELs would outweigh the projected
benefits. Based on consideration of the public comments DOE receives in
response to this notice and related information collected and analyzed
during the course of this rulemaking effort, DOE may adopt ELs
presented in this notice that are either higher or lower than the
proposed standards, or some combination of level(s) that incorporate
the proposed standards in part.
II. Introduction
The following section briefly discusses the statutory authority
underlying this proposed rule, as well as some of the relevant
historical background related to the establishment of standards for
CFLKs.
A. Authority
Title III, Part B of EPCA, 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''), which includes the CFLKs that are the subject of this
rulemaking. (42 U.S.C. 6295(ff)) EPCA, as amended, authorized DOE to
conduct future rulemakings to determine whether to amend these
standards. (42 U.S.C. 6295(ff)(5)-(6)) Under 42 U.S.C. 6295(m), DOE
must also periodically review its already established energy
conservation standards for a covered product.
[[Page 48629]]
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. 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. 6295(o)(3)(A) and (r)) 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. (42 U.S.C.
6295(s)) The DOE test procedures for CFLKs appear at title 10 of the
Code of Federal Regulations (CFR) part 430, subpart B, appendix V.
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products, including CFLKs. Any new or
amended standard for a covered product must be designed to achieve the
maximum improvement in energy efficiency that is technologically
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) and
(3)(B)) 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 CFLKs, if no test procedure has been established
for the product, or (2) if DOE determines by rule that the standard is
not technologically feasible or economically justified. (42 U.S.C.
6295(o)(3)(A)-(B)) In deciding whether a proposed standard is
economically justified, DOE must determine whether the benefits of the
standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make
this determination after receiving comments on the proposed standard,
and by considering, to the greatest extent practicable, the following
seven statutory 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 standard;
(3) The total projected amount of energy (or as applicable, water)
savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the covered
products likely to result from 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
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. 6295(o)(1)) Also, the Secretary may not prescribe
an amended or new standard if interested persons have established by a
preponderance of the evidence that the standard is likely to result in
the unavailability in the United States of any covered product type (or
class) of performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as those generally available in the United States. (42 U.S.C.
6295(o)(4))
Further, EPCA, 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. (42 U.S.C. 6295(o)(2)(B)(iii))
Additionally, 42 U.S.C. 6295(q)(1) specifies requirements when
promulgating an energy conservation standard for a covered product that
has two or more subcategories. DOE must specify a different standard
level for a type or class of product that has 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 the
feature and other factors DOE deems appropriate. Id. Any rule
prescribing such a standard must include an explanation of the basis on
which such higher or lower level was established. (42 U.S.C.
6295(q)(2))
Federal energy conservation requirements generally supersede state
laws or regulations concerning energy conservation testing, labeling,
and standards. (42 U.S.C. 6297(a)-(c)) DOE 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)).
EPCA also requires that any final rule for new or amended energy
conservation standards promulgated after July 1, 2010, is required to
address standby mode and off-mode energy use. (42 U.S.C. 6295(gg)(3))
Specifically, when DOE adopts a standard for a covered product after
that date, it must, if justified by the criteria for adoption of
standards under EPCA (42 U.S.C. 6295(o)), incorporate standby mode and
off-mode energy use into a single 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)) In a test procedure NOPR for
ceiling fan light kits (hereafter ``CFLK TP NOPR''), DOE proposed that
the energy use from standby mode and off mode associated with CFLKs be
attributed to the ceiling fan to which they are attached, and thus any
standby mode energy use is accounted for in the ceiling fan test
procedure. Therefore, the CFLK metric accounts for energy consumption
only in active mode. 79 FR 64688 (October 31, 2014). DOE will account
for active mode energy use in any final amended energy conservation
standards.
B. Background
1. Current Standards
The current energy conservation standards apply to CFLKs with
medium screw base and pin-based sockets manufactured on and after
January 1, 2007, and CFLKs with all other socket types manufactured on
or after January 1, 2009. 70 FR 60407, 60413 (October 18, 2005). These
standards are set forth in DOE's regulations at 10 CFR 430.32(s) as
follows:
[[Page 48630]]
(2)(i) Ceiling fan light kits with medium screw base sockets
manufactured on or after January 1, 2007, must be packaged with screw-
based lamps to fill all screw base sockets.
(ii) The screw-based lamps required under paragraph (2)(i) of this
section must--
(A) Be compact fluorescent lamps that meet or exceed the following
requirements or be as described in paragraph (2)(ii)(B) of this
section:
------------------------------------------------------------------------
Factor Requirements
------------------------------------------------------------------------
Rated Wattage (Watts) & Configuration Minimum Initial Lamp Efficacy
\1\. (lumens per watt).\2\
Bare Lamp:
Lamp Power <15..................... 45.0.
Lamp Power >=15.................... 60.0.
Covered Lamp (no reflector):
Lamp Power <15..................... 40.0.
15 <= Lamp Power <19............... 48.0.
19 <= Lamp Power <25............... 50.0.
Lamp Power >=25.................... 55.0.
With Reflector:
Lamp Power <20..................... 33.0.
Lamp Power >=20.................... 40.0.
Lumen Maintenance at 1,000 hours....... >=90.0%.
Lumen Maintenance at 40 Percent of >=80.0%.
Lifetime.
Rapid Cycle Stress Test................ At least 5 lamps must meet or
exceed the minimum number of
cycles.
Lifetime............................... >=6,000 hours for the sample of
lamps.
------------------------------------------------------------------------
\1\ Use rated wattage to determine the appropriate minimum efficacy
requirements in this table.
\2\ Calculate efficacy using measured wattage, rather than rated
wattage, and measured lumens to determine product compliance. Wattage
and lumen values indicated on products or packaging may not be used in
calculation.
(B) Light sources other than compact fluorescent lamps that have
lumens per watt performance at least equivalent to comparably
configured compact fluorescent lamps meeting the energy conservation
standards in paragraph (2)(ii)(A) of this section.
(3) Ceiling fan light kits manufactured on or after January 1,
2007, with pin-based sockets for fluorescent lamps must use an
electronic ballast and be packaged with lamps to fill all sockets.
These lamp ballast platforms must meet the following requirements:
------------------------------------------------------------------------
Factor Requirement
------------------------------------------------------------------------
System Efficacy per Lamp Ballast >=50 lm/w for all lamps below
Platform in Lumens per Watt (lm/w). 30 total listed lamp watts.
>=60 lm/w for all lamps that
are <=24 inches and >=30 total
listed lamp watts.
>=70 lm/w for all lamps that
are >24 inches and >=30 total
listed lamp watts.
------------------------------------------------------------------------
(4) Ceiling fan light kits with socket types other than those
covered in paragraphs (2) and (3) of this section, including candelabra
screw base sockets, manufactured on or after January 1, 2009--
(i) Shall not be capable of operating with lamps that total more
than 190 watts; and
(ii) Shall be packaged to include the lamps described in clause (i)
with the ceiling fan light kits. 10 CFR 430.32(s)
2. History of Standards Rulemaking for CFLKs
Current energy conservation standards for CFLKs (42 U.S.C.
6295(ff)) were established by the Energy Policy Act of 2005 (EPAct
2005) (Title I, Subtitle C, section 135(c)), which were later amended
by EPCA. Specifically, EPAct 2005 established individual energy
conservation standards for three groups of CFLKs: (1) Those having
medium screw base sockets (hereafter ``Medium Screw Base product
class''); (2) those having pin-based sockets for fluorescent lamps
(hereafter ``Pin-Based product class''); and (3) any CFLKs other than
those included in the Medium Screw Base product class or the Pin-Based
product class (hereafter ``Other Base Type product class''). (42 U.S.C.
6295(ff)(2)-(4)) In a technical amendment published on October 18,
2005, DOE codified the statute's requirements for the Medium Screw Base
and Pin-Based product classes. 70 FR 60413. EPAct 2005 also specified
that if DOE failed to issue a final rule on energy conservation
standards for Other Base Type product class CFLKs by January 1, 2007, a
190 W limit would apply to those products. (42 U.S.C. 6295(ff)(4)(C))
Because DOE did not issue a final rule on standards for CFLKs by that
date, on January 11, 2007, DOE published a technical amendment that
codified the statute's requirements for Other Base Type product class
CFLKs, which applied to Other Base Type product class CFLKs
manufactured on or after January 1, 2009. 72 FR 1270. Another technical
amendment final rule published on March 3, 2009 (74 FR 12058), added a
provision that CFLKs with sockets for pin-based fluorescent lamps must
be packaged with lamps to fill all sockets. (42 U.S.C.
6295(ff)(4)(C)(ii)) These standards for CFLKs are codified in 10 CFR
430.32(s)(2)-(4).
To initiate the rulemaking cycle to consider amended energy
conservation standards for ceiling fans and CFLKs, on March 15, 2013,
DOE published a notice announcing the availability of the framework
document, ``Energy Conservation Standards Rulemaking Framework Document
for Ceiling Fans and Ceiling Fan Light Kits,'' and a public meeting to
discuss the proposed analytical framework for the rulemaking. 76 FR
56678. DOE also posted the framework document on its Web site, in which
DOE described the procedural and analytical approaches DOE anticipated
using to evaluate the establishment of energy conservation standards
for ceiling fans and CFLKs.
[[Page 48631]]
DOE held the public meeting for the framework document on March 22,
2013,\12\ to present the framework document, describe the analyses DOE
planned to conduct during the rulemaking, seek comments from
stakeholders on these subjects, and inform stakeholders about and
facilitate their involvement in the rulemaking. At the public meeting,
and during the comment period, DOE received many comments that both
addressed issues raised in the framework document and identified
additional issues relevant to this rulemaking.
---------------------------------------------------------------------------
\12\ The framework document and public meeting information are
available at regulations.gov under docket number EERE-2012-BT-STD-
0045-0001.
---------------------------------------------------------------------------
DOE issued the preliminary analysis for the CFLK energy
conservation standards rulemaking on October 27, 2014, and published it
in the Federal Register on October 31, 2014. 78 FR 13563. DOE posted
the preliminary analysis, as well as the complete preliminary technical
support document (TSD), on its Web site.\13\ The preliminary TSD
includes the results of the following DOE preliminary analyses: (1)
Market and technology assessment; (2) screening analysis; (3)
engineering analysis; (4) energy use analysis; (5) product price
determination; (6) LCC and PBP analyses; (7) shipments analysis; (8)
national impact analysis (NIA); and (9) preliminary manufacturer impact
analysis (MIA).
---------------------------------------------------------------------------
\13\ The preliminary analysis, preliminary TSD, and preliminary
analysis public meeting information are available at regulations.gov
under docket number EERE-2012-BT-STD-0045-0072.
---------------------------------------------------------------------------
III. General Discussion
DOE developed this proposal after considering comments, data, and
information from interested parties that represent a variety of
interests. The following discussion addresses issues raised by these
commenters.
A. Product Classes and Scope of Coverage
EPCA defines a ``ceiling fan light kit'' as ``equipment designed to
provide light from a ceiling fan that can be: (1) Integral, such that
the equipment is attached to the ceiling fan prior to the time of
retail sale; or (2) attachable, such that at the time of retail sale
the equipment is not physically attached to the ceiling fan, but may be
included inside the ceiling fan at the time of sale or sold separately
for subsequent attachment to the fan.'' \14\ (42 U.S.C. 6291(50)(A),
(B)) In the CFLK TP NOPR, DOE proposed to withdraw the current guidance
\15\ on accent lighting and to consider all lighting packaged with any
CFLK to be subject to energy conservation requirements. 79 FR 64688,
64692 (October 31, 2014). Additionally, in the ceiling fan test
procedure NOPR published on October 17, 2014, DOE proposed to
reinterpret the definition of a ceiling fan to include hugger fans. 79
FR 62521, 62525-26 (October 17, 2014). For additional details on DOE's
reasoning for proposing these changes, please see the proposed
rulemaking documents.
---------------------------------------------------------------------------
\14\ Ceiling fan is defined as ``a nonportable device that is
suspended from a ceiling for circulating air via the rotation of fan
blades.'' (42 U.S.C. 6291(49))
\15\ Guidance on accent lighting is available at
www1.eere.energy.gov/guidance/detail_search.aspx?IDQuestion=470&pid=2&spid=1.
---------------------------------------------------------------------------
When evaluating and establishing energy conservation standards, DOE
divides covered products into product classes by the type of energy
used or by capacity or other performance-related features that
justifies a different standard. In making a determination whether a
performance-related feature justifies a different standard, DOE must
consider such factors as the utility of the feature to the consumer and
other factors DOE determines are appropriate. (42 U.S.C. 6295(q)) For
further details on product classes, see section IV.A.1 and chapter 3 of
the NOPR TSD.
B. Test Procedure
EPCA sets forth generally applicable criteria and procedures for
DOE's adoption and amendment of test procedures. (42 U.S.C. 6293)
Manufacturers of covered products must use these test procedures to
certify to DOE that their product complies with energy conservation
standards and to quantify the efficiency of their product. As noted,
the test procedures for CFLKs are provided in appendix V. As noted, DOE
published a NOPR to amend these test procedures on October 31, 2014. 79
FR 64688.
With respect to the process of establishing test procedures and
standards for a given product, DOE notes that, while not legally
obligated to do so, it generally follows the approach laid out in
guidance found in 10 CFR part 430, subpart C, Appendix A (Procedures,
Interpretations and Policies for Consideration of New or Revised Energy
Conservation Standards for Consumer Products). That guidance provides,
among other things, that, when necessary, DOE will issue final,
modified test procedures for a given product prior to publication of
the NOPR proposing energy conservation standards for that product.
While DOE strives to follow the procedural steps outlined in its
guidance, there may be circumstances in which it may be necessary or
appropriate to deviate from it. In such instances, the guidance
indicates that DOE will provide notice and an explanation for the
deviation. Accordingly, DOE is providing notice that it continues to
develop the final test procedure for CFLKs. DOE received comment on the
proposed test procedure regarding the applicability of the CFLK test
procedures and energy conservation standards to accent lighting. DOE
also received comments on the appropriate metric for CFLKs with
integrated SSL circuitry. DOE continues to consider those comments in
the development of the final test procedure rule. DOE will attempt to
issue the final test procedure within the comment period provided for
this proposed standards rule. In the event that additional time to
comment on the proposed standards in light of the final test procedure
rule is desired, interested parties can seek an extension or reopening
of the comment period upon issuance of the final test procedure.
1. Standby and Off-Mode Energy Consumption
EPCA directs DOE to update its test procedures to account for
standby mode and off-mode energy consumption, with such energy
consumption integrated into the overall energy efficiency, energy
consumption, or other energy descriptor, unless the current test
procedure already accounts for standby mode and off-mode energy use.
(42 U.S.C. 6295(gg)(2)(A)) Furthermore, if an integrated test procedure
is technically infeasible, DOE must prescribe a separate standby mode
and off-mode test procedure for the covered product, if technically
feasible.
In the preliminary analysis, DOE determined that energy use from
standby mode and off mode associated with CFLKs be attributed to the
ceiling fan to which they are attached. DOE's research indicates that
standby power is relevant only to combined ceiling fan and light kit
systems operated by remote control. The remote control receiver, which
is almost always installed in the ceiling fan housing and used to
receive signals for both the ceiling fan and the CFLK, is the component
that constitutes the standby power consumption in the ceiling fan and
light kit system. DOE therefore proposed to account for standby power
in the ceiling fan test procedures. 79 FR 64688, 64690 (October 31,
2014). DOE further notes if standby mode were included into a single
metric for CFLKs with remote controls, the CFLK would have a different
efficacy than its lamps. Therefore, DOE has proposed to only include
active mode energy
[[Page 48632]]
consumption in the CFLK test procedure. Id. See the preliminary
analysis TSD or the CFLK TP NOPR for further details.
Based on its review of products currently on the market, DOE
concludes that CFLKs do not consume power in off mode. Therefore DOE
did not propose to measure off-mode power consumption in the ceiling
fan light kit test procedure rulemaking.
C. Technological Feasibility
1. General
In each energy conservation 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, and service; (2) adverse
impacts on product utility or availability; and (3) adverse impacts on
health or safety. 10 CFR part 430, subpart C, appendix A, section
4(a)(4)(ii)-(iv). Additionally, it is DOE policy not to include in its
analysis any proprietary technology that is a unique pathway to
achieving a certain EL. Section IV.B of this notice discusses the
results of the screening analysis for CFLKs, particularly the designs
DOE considered, those it screened out, and those that are the basis for
the trial standard levels (TSLs) in this rulemaking. For further
details on the screening analysis for this rulemaking, see chapter 4 of
the NOPR TSD.
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt an amended standard for a type or class
of covered product, it must determine the maximum improvement in energy
efficiency or maximum reduction in energy use that is technologically
feasible for 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 CFLKs,
using the design parameters for the most efficient products available
on the market or in working prototypes. The max-tech levels that DOE
determined for this rulemaking are described in section IV.C.5 of this
proposed rule and in chapter 5 of the NOPR TSD.
D. Energy Savings
1. Determination of Savings
For each TSL, DOE projected energy savings from the CFLKs that are
the subject of this rulemaking purchased in the 30-year period that
begins in the year of compliance with any amended standards (2019-
2048).\16\ The savings are measured over the entire lifetime of CFLKs
purchased in the above 30-year period. DOE quantified the energy
savings attributable to each TSL as the difference in energy
consumption between each standards case and the no-standards case. The
no-standards case represents a projection of energy consumption in the
absence of amended energy conservation standards, and it considers
market forces and policies that may affect future demand for more-
efficient products.
---------------------------------------------------------------------------
\16\ DOE also presents a sensitivity analysis that considers
impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------
DOE used its NIA spreadsheet model to estimate energy savings from
potential amended standards for CFLKs. 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 calculates national
energy savings on an annual basis in terms of primary energy savings,
which is the savings in the energy that is used to generate and
transmit the site electricity. To calculate primary energy savings from
site electricity savings, DOE derives annual conversion factors from
data provided in the Energy Information Administration's (EIA) most
recent Annual Energy Outlook (AEO).
In addition to primary energy savings, DOE also calculates full-
fuel-cycle (FFC) energy savings. As discussed in DOE's statement of
policy, the FFC metric includes the energy consumed in extracting,
processing, and transporting primary fuels (i.e., coal, natural gas,
petroleum fuels), and thus presents a more complete picture of the
impacts of energy conservation standards. 76 FR 51282 (August 18,
2011), as amended at 77 FR 49701 (August 17, 2012). DOE's approach is
based on the calculation of an FFC multiplier for each of the energy
types used by covered products or equipment. For more information, see
section IV.H.1.
2. Significance of Savings
To adopt any new or amended standards for a covered product, DOE
must determine that such action would result in ``significant'' energy
savings. (42 U.S.C. 6295(o)(3)(B)) Although the term ``significant'' is
not defined in the Act, the U.S. Court of Appeals for the District of
Columbia Circuit, in Natural Resources Defense Council v. Herrington,
768 F.2d 1355, 1373 (D.C. Cir. 1985), opined that Congress intended
``significant'' energy savings in the context of EPCA to be savings
that were not ``genuinely trivial.'' The energy savings for all of the
TSLs considered in this rulemaking, including the proposed standards
(presented in section IV.H.1), 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)(I)-(VII)) The following sections discuss 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 potential amended standard on
manufacturers, DOE conducts an MIA, as discussed in section IV.J. 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 assessment over a 30-year period. The
industry-wide impacts analyzed include: (1) INPV, which values the
industry on the basis of expected future cash flows; (2) cash flows by
year; (3) changes in revenue and income; and (4) 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
[[Page 48633]]
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 LCC and payback period (PBP) associated with new or amended
standards. These measures are discussed further in the following
section. For consumers in the aggregate, DOE also calculates the
national NPV of the consumer costs and benefits expected to result from
particular standards. DOE also evaluates the impacts of potential
standards on identifiable subgroups of consumers that may be affected
disproportionately by a standard.
b. Savings in Operating Costs Compared to Increase in Price (LCC and
PBP)
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered product
that are likely to result from a standard. (42 U.S.C.
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP
analysis.
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 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. 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. The PBP is the estimated
amount of time (in years) it takes consumers to recover the increased
purchase cost of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
by the initial change in annual operating cost for the year that
standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will
purchase the covered products in the first year of compliance with
amended standards. The LCC savings for the considered ELs are
calculated relative to a no-standards case that reflects projected
market trends in the absence of amended standards. DOE's LCC and PBP
analysis is discussed in further detail in section IV.F.
c. Energy Savings
Although significant conservation of energy is a separate statutory
requirement for adopting 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 III.D.1, DOE uses the NIA spreadsheet models to
project national energy savings.
d. Lessening of Utility or Performance of Products
In establishing product classes and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data
available to DOE, the standards proposed in this notice would 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 a proposed 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 proposed 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 will transmit a copy of this proposed
rule to the Attorney General with a request that the Department of
Justice (DOJ) provide its determination on this issue. DOE will publish
and respond to the Attorney General's determination in the final rule.
f. Need for National Energy Conservation
DOE also considers the need for national energy conservation in
determining whether a new or amended standard is economically
justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy savings from the
proposed 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, as discussed in section IV.M.
The proposed standards also are likely to result in environmental
benefits in the form of reduced emissions of air pollutants and
greenhouse gases (GHGs) associated with energy production and use. DOE
conducts an emissions analysis to estimate how potential standards may
affect these emissions, as discussed in section IV.K; the emissions
impacts are reported in section V.C.2 of this notice. DOE also
estimates the economic value of emissions reductions resulting from the
considered TSLs, as discussed in section IV.L.
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))
To the extent interested parties submit any relevant information
regarding economic justification that does not fit into the other
categories described above, DOE could consider such information under
``other factors.''
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 effects that proposed
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
[[Page 48634]]
economic justification). The rebuttable-presumption payback calculation
is discussed in section IV.F of this proposed rule.
IV. Methodology and Discussion of Related Comments
This section addresses the analyses DOE has performed for this
rulemaking with regard to CFLKs. Separate subsections address each
component of DOE's analyses.
DOE used several analytical tools to estimate the impact of the
standards proposed in this document. The first tool is a spreadsheet
that calculates the LCC and PBP of potential amended or new energy
conservation standards. The NIA uses a second spreadsheet set that
provides shipments forecasts and calculates national energy savings and
NPV resulting from potential energy conservation standards. DOE uses
the third spreadsheet tool, the Government Regulatory Impact Model
(GRIM), to assess manufacturer impacts of potential standards. These
three spreadsheet tools are available on the DOE Web site for this
rulemaking: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/66. Additionally, DOE used output from the
latest version of EIA's AEO, a widely known energy forecast for the
United States, for the emissions and utility impact analyses.
A. Market and Technology Assessment
DOE develops information in the market and technology assessment
that provides an overall picture of the market for the products
concerned, including the purpose of the products, the industry
structure, manufacturers, market characteristics, and technologies used
in the products. This activity includes both quantitative and
qualitative assessments, based primarily on publicly available
information. (See chapter 3 of the NOPR TSD for further discussion of
the market and technology assessment.) DOE received comments regarding
product classes, the metric to determine the energy efficiency of
CFLKs, and technology options identified that can improve the
efficiency of CFLKs. Responses to these comments are discussed in the
following sections.
1. Product Classes
DOE divides covered products into classes by: (a) The type of
energy used; (b) the capacity of the product; or (c) other performance-
related features that justify different standard levels, considering
the consumer utility of the feature and other relevant factors. (42
U.S.C. 6295(q)) The current product class structure for CFLKs, which
was established by EPACT 2005, divides CFLKs into three product
classes: CFLKs with medium screw base (E26) sockets (Medium Screw Base
product class), CFLKs with pin-based sockets for fluorescent lamps
(Pin-Based product class), and any CFLKs other than those in the Medium
Screw Base or Pin-Based product classes (Other Base Type product
class). In the preliminary analysis, DOE restructured the current three
CFLK product classes to the following two product classes: (1) CFLKs
with Externally Ballasted or Driven Lamps and (2) All Other CFLKs. DOE
received several comments related to the restructuring of product
classes.
ASAP noted that they support DOE's proposed adjustments to the
product class structure. (ASAP, Public Meeting Transcript, No. 82 at p.
85) \17\ In a joint comment, ASAP, the American Council for an Energy-
Efficient Economy, the National Resources Defense Council, and the
Northwest Energy Efficiency Alliance (hereafter the ``Joint Comment'')
specified that changing the product class structure in this way would
correct unintended market distortions caused by the original CFLK
standards. The Joint Comment continued that as CFLKs all use the same
type of energy, do not have different capabilities requiring different
energy conservation standards, and can provide a full range of
illumination with different socket types equipped with light-emitting
diode (LED) lamps or compact fluorescent lamps (CFLs), they support
DOE's redefinition of product classes. (Joint Comment, No. 95 at pp. 1-
2) Available information indicates that all CFLKs use the same type of
energy and different socket types do not represent dissimilar
capacities or require different standard levels. Therefore, as in the
preliminary analysis, DOE proposes not to define CFLK product classes
by socket type.
---------------------------------------------------------------------------
\17\ A notation in this form provides a reference for
information that is in the docket of DOE's rulemaking to develop
energy conservation standards for CFLKs (Docket No. EERE-2012-BT-
STD-0045), which is maintained at www.regulations.gov. This notation
indicates that the statement preceding the reference was made by
ASAP, is included in a public meeting transcript, is from document
number 82 in the docket, and appears at page 85 of that document.
---------------------------------------------------------------------------
The Joint Comment did recommend, however, that DOE reconsider
establishing a separate product class for externally ballasted or
driven CFLKs. The Joint Comment noted that the market share of these
products is small and is unlikely to grow due to the difficulty for
consumers in diagnosing ballast or driver failure and finding the
correct replacements. (Joint Comment, No. 95 at p. 2) The Minka Group
and Lamps Plus agreed that with externally driven CFLKs, consumers will
replace the entire CFLK rather than change a failed ballast. (The Minka
Group, Public Meeting Transcript, No. 82 at p. 155; Lamps Plus, Public
Meeting Transcript, No. 82 at p. 156) Emerson Electric noted that
consumers are often unable to replace a ballast because the model is no
longer available from the manufacturer, and thus consumers select a new
CFLK instead. (Emerson Electric, Public Meeting Transcript, No. 82 at
p. 156)
DOE also received comments that externally driven solid-state
lighting (SSL) CFLKs (i.e., with LED module and driver systems)
typically do not come with consumer replaceable parts. Emerson Electric
commented that they offer an LED array with an integrated driver and
heat sink as a repair part. (Emerson Electric, Public Meeting
Transcript, No. 82 at pp. 105-106) Hunter Fans commented that only the
serviceable driver can be replaced in the SSL CFLKs that they offer.
(Hunter Fans, Public Meeting Transcript, No. 82 at p. 219) Westinghouse
Lighting (Westinghouse) commented that their limited offerings of
integrated SSL CFLKs did not include consumer replaceable parts.
Westinghouse noted that in the commercial marketplace, while there is
interest in replaceable drivers and modules, it is unclear if
manufacturers are planning to offer drivers and modules as consumer
replaceable parts instead of repair parts. (Westinghouse, Public
Meeting Transcript, No. 82 at pp. 106; 218-219) Further, Westinghouse
noted that replacing an externally driven fluorescent lamp with an
externally driven LED lamp would require an entire CFLK change, as they
were unaware of any retrofit LED lamps for pin-based lamps.
(Westinghouse, No. 82 at p. 157) Westinghouse added that this product
class is only 1 percent or less of the market. (Westinghouse, No. 82 at
p. 157) As a result of the market's reluctance to embrace externally
ballasted or driven products, The Joint Comment questioned whether this
product group provides a distinct utility. (Joint Comment, No. 95 at p.
2)
In the preliminary analysis, DOE placed externally ballasted or
driven lamps in a separate product class based on their unique utility
in that they allow consumers to replace the lamp, and potentially the
ballast or driver, separately if one fails independently of the other.
However, feedback from stakeholders and interviews with manufacturers
indicated that most consumers of CFLKs will typically replace both the
lamp and ballast/driver
[[Page 48635]]
system or the entire CFLK rather than a failed component. Thus, DOE no
longer identified the externally ballasted or driven lamps as providing
a unique utility to consumers, and is not proposing a separate product
class for these lamp types in the NOPR.
DOE received comments regarding maintaining a separate product
class for CFLKs with sockets other than medium screw base lamps and
pin-based fluorescent lamps. The Joint Comment noted that most CFLKs
used medium screw base lamps prior to the previous CFLK standards, but
once the existing standard set separate product classes and thereby
different requirements for CFLKs with medium screw base sockets, those
with pin-based sockets, and those with all other sockets, manufacturers
switched to producing CFLKs with all other sockets, specifically
candelabra and intermediate-base sockets. The Joint Comment stated that
the switch to these small bases has decreased the anticipated savings
of the previous CFLK standards, and also the impact of the previous
general service lamp (GSL) standards. The Joint Comment noted that
current CFLK sales are 80 percent intermediate and candelabra based
sockets, even though there is no utility advantage over medium screw
base sockets. (Joint Comment, No. 95 at p. 1)
Westinghouse disagreed, stating that the two product classes
considered in the preliminary analysis make sense from the lamp
manufacturer perspective, but limit design options for fan
manufacturers. (Westinghouse, Public Meeting Transcript, No. 82 at pp.
117, 129) Westinghouse asserted that consumers look for fashion and
style in CFLKs and therefore design is a utility that is met by
different types of CFLKs. Westinghouse reported that medium screw base
lamps are usually A-shape lamps and physically larger, whereas
candelabra-base lamps are typically bullet, flame, or B-shape lamps,
which fulfill a decorative purpose rather than providing improved
efficacy or light output. Westinghouse also noted that halogen lamps
with specialty bases, such as E11 and bipin, are able to provide a lot
of light in very small spaces. (Westinghouse, Public Meeting
Transcript, No. 82 at pp. 121-123)
Finally, American Lighting Association (ALA) commented that the All
Other CFLKs product class would eliminate incandescent and halogen
lamps in CFLKs. ALA and Westinghouse asserted that more efficacious
substitutes, such as CFLs and LED lamps, currently do not serve as
adequate replacements for the halogen lamps, especially those with
smaller or specialty bases. Specifically, ALA and Westinghouse noted
that it is difficult for LED lamps to have the same lumen package and
lifetime as existing candelabra based lamps in CFLKs in the same small
space without issues such as heat dissipation, especially while also
meeting proposed efficacy standards. (ALA, No. 93 at p. 8;
Westinghouse, Public Meeting Transcript, No. 82 at p. 100) Westinghouse
noted that to use the LED lamps currently on the market, an entire
luminaire design would be required to adequately dissipate heat.
(Westinghouse, Public Meeting Transcript, No. 82 at pp. 121-123)
While Westinghouse noted that LED lamps will soon be able to meet
these challenges, they expressed concern about finalizing a rulemaking
that requires products that are not yet equivalent to existing lamps.
(Westinghouse, Public Meeting Transcript, No. 82 at p. 100) Hunter Fans
commented that they agree with Westinghouse's concerns with design
utility being adversely affected by the use of more efficacious light
sources in CFLKs. (Hunter Fans, Public Meeting Transcript, No. 82 at p.
124) ALA noted that CFLK manufacturers have no control over the rate of
LED technology advancement. (ALA, No. 93 at p. 8) NEMA stated that
there can be a predilection towards moving to solely LED technology due
to ELs, but while LED technology is feasible in the smaller lamp sizes,
the market is very small and few manufacturers have moved to supply LED
options. NEMA continued that this may be the same issue with the
ceiling fan industry. (NEMA, Public Meeting Transcript, No. 82 at pp.
115-116) Westinghouse commented that DOE needs to make sure that less
efficient candelabra bases and small profile SSL options are viable for
manufacturers and priced at an acceptable level for consumers if DOE
stays with a two product class system. (Westinghouse, Public Meeting
Transcript, No. 82 at pp. 116-177, 138)
Based on an evaluation of lamp efficacies reported in manufacturer
catalogs, DOE has determined that small base LED lamps are currently
available at the highest ELs proposed. (See section IV.C.4 for further
details on this analysis.) DOE has found that these small base lamps
have lifetimes at or above that of the baseline lamp selected in the
engineering analysis. (See section IV.C.3 for further details on the
baseline lamp selected.) While the lumen package of these small base
LED lamps may not be comparable to small base halogen lamps,
modifications in the CFLK design (e.g., number of sockets) can achieve
the targeted light output regardless of the lamp used. DOE also
confirmed, based on information in manufacturer catalogs and product
specifications, that there are commercially available small base lamps
available at the highest proposed efficacy level and these lamps are
marketed as being suitable for use in enclosed spaces. Thus, issues
such as heat dissipation should not be a concern.
In this NOPR, DOE is proposing one product class for CFLKs,
including CFLKs packaged with all lamp types, regardless of socket
type, and CFLKs with consumer replaceable or non-consumer-replaceable
LED modules and drivers.
Summary of CFLK Product Classes
In summary, DOE is no longer considering a separate product class
for externally ballasted or driven lamps in CFLKs, as the ability to
change the ballast/driver or lamp when one of these components fail
rather than replacing the entire system is not a utility to consumers.
Upon further analysis, DOE did not identify any class setting factors
for CFLKs that use a different type of energy, offer a different
capacity of the product, or provide unique performance-related features
to consumers, and thereby warrant a separate product class. Therefore,
in this NOPR analysis, DOE is proposing a single ``All CFLKs'' product
class. (See chapter 3 of the NOPR TSD for further details on the CFLK
product class.) DOE requests comment on the product class structure
proposed in this document.
2. Metrics
In the preliminary analysis, DOE indicated that it is considering
using luminous efficacy as the efficiency metric for all CFLKs. DOE
considered using lamp efficacy where possible, and using luminaire
efficacy where the lamp component in the CFLK is not designed to be
consumer replaceable from the CFLK (i.e., for CFLKs with SSL circuitry,
such as those with inseparable LED lighting).
ASAP expressed support for the use of lamp efficacy as the primary
metric. (ASAP, Public Meeting Transcript, No. 82 at p. 85) Westinghouse
initially agreed with using lamp efficacy as the efficiency metric for
CFLKs and luminaire efficacy for CFLKs with integrated SSLs.
Specifically, Westinghouse approved of the method for this rulemaking,
given current practices and test procedures, and suggested that DOE
wait until industry or ENERGY STAR developed an alternative to adopt
something else. (Westinghouse, Public Meeting Transcript, No. 82 at p.
59) However,
[[Page 48636]]
upon further reflection, Westinghouse remarked that integrated SSLs
should use the system efficacy, or ``light engine efficacy,'' based on
IES LM-79. Westinghouse noted that this method would be less expensive
and burdensome for manufacturers. Westinghouse added that products
without existing test procedures would still use luminaire efficacy.
(Westinghouse, No. 82 at pp. 81-82)
In the NOPR, DOE continued to base its analysis on luminous
efficacy as the efficiency metric for CFLKs. DOE used lamp efficacy
where possible and luminaire efficacy where the lamp component in the
CFLK is not designed to be consumer replaceable from the CFLK. As
proposed in the CFLK TP NOPR (79 FR 64688, 64694 [October 31, 2014]),
IES LM-79-08 would be used to test the luminaire efficacy of CFLKs with
integrated SSL circuitry (i.e., light sources, drivers, or intermediate
circuitry that is not consumer replaceable). DOE determined that for
CFLKs with integrated SSL circuitry, luminaire efficacy was an
appropriate metric because either destructive disassembly would be
required to determine the lamp efficacy or, where non-destructive
disassembly was possible, lamp efficacy measurements may not be
consistent or accurate. 79 FR 64688, 64693, 64703-64704 (October 31,
2014).
Westinghouse noted that while an efficacy metric was acceptable,
due to the combination of the existing product classes, the proposed
standards may need to allow for more flexibility. (Westinghouse, Public
Meeting Transcript, No. 82 at pp. 58-59) The proposed standards account
for the effects of the product class combination. DOE established the
baseline level as discussed in section IV.C.3. DOE then evaluated each
efficacy level to determine if it is technologically feasible and
economically justified.
ALA stated that DOE's position to not include the energy savings
potential of lighting controls might not be valid. ALA noted that
lighting controls can be as powerful as efficacy in generating energy
savings. ALA followed that DOE should be open to new test procedures
for incorporating the energy savings of lighting controls. (ALA, Public
Meeting Transcript, No. 82 at pp. 118-119)
DOE notes that CFLKs are not typically integrated with and/or sold
with all components necessary to utilize lighting controls. Further,
when a CFLK is set up to function with lighting controls, the use of
controls is dependent on various factors, thereby making it difficult
to generate consistent and repeatable results across product types that
can be measured to a single standard. Therefore, DOE is not proposing
to include lighting controls in the efficacy metric for CFLKs. However,
DOE did assess various factors related to the use of controls and
conducted an analysis to determine potential energy savings from
controls. See section IV.E.3 for further information on energy savings
from lighting controls.
Westinghouse commented that lifetime testing is burdensome for CFLK
manufacturers because of the time associated with the testing,
especially because product development of CFLKs trails the development
of lamps. (Westinghouse, Public Meeting Transcript, No. 82 at pp. 141-
142) Additionally, ALA remarked that lifetime should not be a metric
because CFLK manufacturers have limited control over lamp performance,
but that if it is included, the standard should be 10,000 hours. ALA
added that DOE can harmonize with ENERGY STAR Program Requirements for
Lamps version 1.1, which specifies 10,000 hours for all CFLs and 15,000
hours for decorative LED lamps. (ALA, No. 93 at pp. 9, 12)
Current standards specify that CFLKs packaged with medium screw
base CFLs must also meet the ENERGY STAR Program requirements for
Compact Fluorescent Lamps, version 3.0. The additional requirements
specify a minimum lifetime of 6,000 hours. DOE is proposing to maintain
this requirement for medium screw base CFLs packaged with CFLKs.
3. 190 W Limitation
Current standards require that CFLKs with medium screw base
sockets, or pin-based sockets for fluorescent lamps, be packaged with
lamps that meet certain efficiency requirements. All other CFLKs must
not be capable of operating with lamps that exceed 190 W. In the final
rule for energy conservation standards for certain CFLKs published on
January 11, 2007, DOE interpreted this 190 W limitation requirement as
a statutory requirement to incorporate an electrical device or measure
that ensures the light kit is not capable of operating with a lamp or
lamps that draw more than a total of 190 W. 72 FR 1270, 1271 (Jan. 11,
2007).
Westinghouse questioned whether the 190 W limitation was needed in
CFLKs with candelabra or intermediate-base lamps, noting that EPACT
limits candelabra lamps to 60 W and intermediate-base lamps to 40 W,
and thus a CFLK with three or fewer sockets would never have a total
wattage exceeding 190 W. (Westinghouse, Public Meeting Transcript, No.
82 at pp. 50-51) CFLKs, however, can have more than three sockets, and
there are socket adapters available that can enable the use of medium
base lamps in sockets intended for candelabra lamps. As a result, DOE
has determined that the EPACT wattage restrictions on candelabra and
intermediate-base lamps provides an insufficient basis for DOE to
remove the 190 W limit requirement.
ALA stated that DOE should eliminate the 190 W limit for CFLKs with
SSL technology or recognize that as such CFLKs use a fixed number of
LEDs and a current-limiting device, they meet the 190 W limitation
requirement by design. (ALA, Public Meeting Transcript, No. 82 at pp.
16, 42) The Minka Group asked for clarification on whether an LED
driver counts as a wattage limiting device. (The Minka Group, Public
Meeting Transcript, No. 82 at p. 39) ALA requested that DOE clarify
that the design of a CFLK, with such an SSL system that (1) has an SSL
driver and/or SSL light source that is not designed to be consumer
replaceable; (2) has a rated wattage of 190 W or fewer; and (3) does
not use any other light source, meets the requirement of an electrical
device or measure that renders the CFLK incapable of operating lamps
that total more than 190 W. (ALA, No. 93 at pp. 1-2, 4; ALA, No. 102 at
pp. 1-4)
ALA provided several arguments supporting its recommendation.
Noting that SSL technology is highly efficient, ALA stated that a 190 W
SSL system in a CFLK would provide too much light for a typical
consumer and manufacturers generally offer CFLKs with SSL systems rated
at no more than 50 W. ALA also stated that the SSL driver, light
source, and thermal management system are designed to operate together
at the rated wattage and attempts to operate the system at a higher
wattage would result in failure of these parts. Specifically, ALA
commented that the thermal management system cannot be modified to
handle the additional heat from operating at higher wattages. Thus, ALA
concluded the SSL electrical and thermal system design acts as an
electrical device or measure that limits the power the CFLK can draw,
and the systems inherently limit the power that can be consumed during
operation. (ALA, No. 93 at pp. 1-2, 4; ALA, No. 102 at p. 2)
ALA also argued that as long as either the SSL driver and/or light
source are not consumer replaceable, the CFLK cannot be operated at a
wattage higher than the rated wattage. ALA explained that the SSL light
source and driver must match in terms of the design wattage or the
system will fail.
[[Page 48637]]
Therefore, if the consumer replaceable part is replaced to operate the
system above the rated wattage, the non-consumer replaceable part must
also be replaced, which would require destructive disassembly. ALA
stated that this would be beyond the capability of a typical consumer
and would invalidate the CFLK's manufacturer warranty and Underwriters
Laboratories (UL) listing. (ALA, No. 93 at pp. 1-2; ALA, No. 102 at p.
3) ALA also provided figures of a CFLK with SSL technology that
consumes fewer than 20 W. In these figures, ALA noted that the CFLK has
a non-consumer replaceable thermal management system that is customized
for the CFLK and a consumer replaceable LED driver that is customized
for the CFLK. (ALA, No. 93 at pp. 2-3; ALA, No. 102 at pp. 3-4)
Available information indicates that in some scenarios, CFLKs with
only SSL technology could be considered to be inherently current
limiting. These scenarios are (1) neither SSL drivers and nor SSL light
sources are consumer replaceable, (2) SSL drivers are non-replaceable
but SSL light sources are replaceable, and (3) SSL light sources are
non-replaceable but SSL drivers are replaceable. In the scenario where
the CFLK has a consumer replaceable SSL light source, once the light
source is replaced with one that can operate at a higher wattage, the
non-replaceable SSL driver would act as a limiting device and not allow
the system to operate higher than the rated wattage. In the scenario
where the consumer replaceable SSL driver is replaced with a driver
that can operate at a higher wattage, rapid failure of the SSL light
source would likely occur as it would be operated beyond the current,
voltage, and/or temperature design limits. Moreover, significant
increases in the rated wattage of drivers result in significant size
increases in the drivers and the physical constraints of CFLK designs
would not allow for such modification. Further, requiring that no other
light source besides the SSL system be included in the CFLK would
prevent any other means of operating the CFLK at a wattage higher than
the rated wattage. Therefore, DOE proposes that CFLKs with SSL
circuitry that (1) have SSL drivers and/or light sources that are not
consumer replaceable, (2) do not have both an SSL driver and light
source that are consumer replaceable, (3) do not include any other
light source, and (4) include SSL drivers with a maximum operating
wattage of no more than 190 W are considered to incorporate some
electrical device or measure that ensures they do not exceed the 190 W
limit. DOE proposes to incorporate this clarification in this
rulemaking.
DOE is also considering whether all CFLKs with SSL circuitry should
be determined to not exceed the 190 W limit. DOE seeks comment on this
approach.
4. Technology Options
The technology assessment identifies technology options that
improve CFLK efficacy. This assessment provides the technical
background and structure on which DOE bases its screening and
engineering analyses. The technology assessment begins with a
description of the basic structure and operation of CFLKs and then
develops a list of technology options considered in the screening
analysis.
In the preliminary analysis, DOE identified more efficacious light
sources as the technology option that could increase CFLK efficacy. In
the preliminary analysis, DOE considered but decided not to include
lighting controls and luminaire designs as technology options.
Regarding lighting controls, DOE determined that CFLK controls are
mostly manual (dimming or multi-level) that can be operated by remote
control or at the wall switch and are usually combined with those of
the ceiling fan into a single device. The CFLK TP does not provide test
procedures for measuring energy savings from controls used on CFLKs,
nor is such data available at a comprehensive level for the residential
sector. DOE decided not to consider luminaire designs as a technology
option because the metric of efficiency for CFLKs proposed in this
rulemaking is lamp efficacy, and only in certain cases where lamp
efficacy test procedures cannot be used is luminaire efficacy required
(see section IV.A.2 for further details.) ALA and Westinghouse agreed
with DOE's decision to consider more efficacious lamps as a technology
option, and not to include lighting controls. (ALA, No. 93 at p. 8;
Westinghouse, Public Meeting Transcript, No. 82 at pp. 113-115) ALA
also agreed with DOE's decision not to include luminaire design as a
technology option. (ALA, No. 93 at p. 8)
In the NOPR analysis, DOE broke down the more efficacious light
sources technology option into specific technology options to identify
the different mechanisms for increasing the efficacy of lamps packaged
with CFLKs. DOE reviewed manufacturer catalogs, recent trade
publications, technical journals, and patent filings to identify these
technology options.
For CFLs, DOE is considering technology options related to
improvements in electrode coatings, fill gas, phosphors, glass
coatings, cold spot optimization, and ballast components. For LED
lamps, DOE is considering technology options related to improvements in
down converters, package architectures, emitter materials, substrate
materials, thermal interface materials, heat sink design, thermal
management, device-level optics, light utilization, driver design, and
electric current.
Summary of CFLK Technology Options
In summary, DOE has developed the list of technology options shown
in Table IV.1 to increase efficacy of CFLKs. See chapter 3 of the NOPR
TSD for more information on the proposed CFLK technology options. DOE
requests comment on the CFL and LED technology options being proposed
for CFLKs and any additional options that should be included.
Table IV.1--CFLK Technology Options
----------------------------------------------------------------------------------------------------------------
Name of technology
Lamp type option Description
----------------------------------------------------------------------------------------------------------------
CFL......................... Highly Emissive Improved electrode coatings allow electrons to be more
Electrode Coatings. easily removed from electrodes, reducing lamp power and
increasing overall efficacy.
Higher-Efficiency Fill gas compositions improve cathode thermionic emission or
Lamp Fill Gas increase mobility of ions and electrons in the lamp plasma.
Composition.
Higher-Efficiency Techniques to increase the conversion of ultraviolet (UV)
Phosphors. light into visible light.
Glass Coatings...... Coatings on inside of bulb enable the phosphors to absorb
more UV energy, so that they emit more visible light.
Multi-Photon Emitting more than one visible photon for each incident UV
Phosphors. photon.
Cold Spot Improve cold spot design to maintain optimal temperature and
Optimization. improve light output.
Improved Ballast Use of higher-grade components to improve efficiency of
Components. integrated ballasts.
[[Page 48638]]
Improved Ballast Better circuit design to improve efficiency of integrated
Circuit Design. ballasts.
Change in Technology Replace CFL with LED technology.
LED......................... Efficient Down New high-efficiency wavelength conversion materials,
Converters. including optimized phosphor conversion, quantum-dots and
nano-phosphors, have the potential for creating warm-white
LED emitters with improved spectral efficiency, high color
quality, and improved thermal stability.
Improved Package Novel package architectures such as RGB+, system-in-package,
Architectures. hybrid color, and chip-on-heat-sink have the potential to
improve thermal management, color-efficiency, and optical
distribution, as well as electrical integration to greatly
improve overall lamp and luminaire efficacy.
Improved Emitter The development of efficient red, green, or amber LED
Materials. emitters, will allow for optimization of spectral
efficiency with high color quality over a range of CCT and
which also exhibit color and efficiency stability with
respect to operating temperature.
Alternative Alternative substrates such as gallium nitride (GaN),
Substrate Materials. silicon (Si), GaN-on-Si, and silicon carbide to enable high-
quality epitaxy for improved device quality and efficacy.
Improved Thermal Develop TIMs that enable high-efficiency thermal transfer
Interface Materials for long-term reliability and performance optimization of
(TIM). the LED device and overall lamp product.
Optimized Heat Sink Improve thermal conductivity and heat dissipation from the
Design. LED chip, thus reducing efficacy loss from rises in
junction temperature.
Active Thermal Devices such as internal fans, vibrating membranes, and
Management Systems. circulated liquid cooling systems to improve thermal
dissipation from the LED chip.
Device-Level Optics. Enhancements to the primary optic of the LED package that
would simplify or remove entirely the secondary optic, and
thereby reduce losses due to absorption at interfaces.
Increased Light Reduce optical losses from the lamp housing, diffusion, beam
Utilization. shaping and color-mixing to increase the efficacy of the
LED lamp.
Improved Driver Increase driver efficiency through novel and intelligent
Design. circuit design.
AC LEDs............. Reduce or eliminate the requirements of a driver and
therefore the effect of driver efficiency on lamp efficacy.
Reduced Current Increase the number of LEDs in a lamp to reduce current
Density. density while maintaining lumen output. This reduces the
efficiency losses associated with higher current density.
----------------------------------------------------------------------------------------------------------------
B. Screening Analysis
DOE uses the following four screening criteria to determine which
technology options are suitable for further consideration in an energy
conservation standards rulemaking:
1. Technological feasibility. Technologies that are not
incorporated in commercial products or in working prototypes will
not be considered further.
2. Practicability to manufacture, install, and service. If it is
determined that mass production and reliable installation and
servicing of a technology in commercial products could not be
achieved on the scale necessary to serve the relevant market at the
time of the projected compliance date of the standard, then that
technology will not be considered further.
3. Impacts on product utility or product availability. If it is
determined that 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 be considered further.
4. Adverse impacts on health or safety. If it is determined that
a technology would have significant adverse impacts on health or
safety, it will not be considered further.
10 CFR part 430, subpart C, appendix A, 4(a)(4) and 5(b).
If DOE determines that a technology, or a combination of
technologies, fails to meet one or more of the above four criteria, it
will be excluded from further consideration in the engineering
analysis.
1. Screened-Out Technologies
In the preliminary analysis, DOE did not screen out more
efficacious light sources as a technology option because more
efficacious light sources were found to be commercially available
products that met the four screening criteria. ALA stated that they
agreed with the screening analysis, and DOE did not receive any further
comments on retaining more efficacious light sources as a design
option. (ALA, No. 93 at p. 9)
In the NOPR, as noted, DOE identified the specific technologies
underlying more efficacious light sources. Of these technology options,
several technology options were screened out based on the four
screening criteria. Table IV.2 summarizes the technology options DOE is
proposing to screen out and the associated screening criteria.
Table IV.2--CFLK Technology Options Screened Out of the Analysis
------------------------------------------------------------------------
Design option
Technology excluded Screening criteria
------------------------------------------------------------------------
CFL......................... Multi-Photon Technological
Phosphors. feasibility.
LED......................... Colloidal Quantum Technological
Dot Phosphors. feasibility.
Improved Emitter Technological
Materials. feasibility.
------------------------------------------------------------------------
[[Page 48639]]
2. Remaining Technologies
Through a review of each technology, DOE tentatively concludes that
all of the other identified technologies listed in section IV.A.3 meet
all four screening criteria to be examined further as design options in
DOE's NOPR analysis. In summary, DOE did not screen out the following
technology options:
CFL Design Options
Highly Emissive Electrode Coatings
Higher-Efficiency Lamp Fill Gas Composition
Higher-Efficiency Phosphors
Glass Coatings
Cold Spot Optimization
Improved Ballast Components
Improved Ballast Circuit Design
LED Design Options
Efficient Down Converters (with the exception of colloidal
quantum-dots phosphors)
Improved Package Architectures
Alternative Substrate Materials
Improved Thermal Interface Materials
Optimized Heat Sink Design
Active Thermal Management Systems
Device-Level Optics
Increased Light Utilization
Improved Driver Design
AC LEDs
Reduced Current Density
DOE determined that these technology options are technologically
feasible because they are being used in commercially available products
or working prototypes. DOE also finds that all of the remaining
technology options meet the other screening criteria (i.e., practicable
to manufacture, install, and service and do not result in adverse
impacts on consumer utility, product availability, health, or safety).
(See chapter 4 of the NOPR TSD for further details on the CFLK
screening analysis.)
C. Engineering Analysis
DOE derives ELs in the engineering analysis and consumer prices in
the product price determination. By combining the results of the
engineering analysis and the product price determination, DOE derives
typical inputs for use in the LCC and NIA.
1. General Approach
The engineering analysis is generally based on commercially
available lamps that incorporate the design options identified in the
technology assessment and screening analysis. (See chapters 3 and 4 of
the NOPR TSD for further information on technology and design options.)
The methodology consists of the following steps: (1) Selecting
representative product classes, (2) selecting baseline lamps, (3)
identifying more efficacious substitutes, and (4) developing ELs by
directly analyzing representative product classes and then scaling
those ELs to non-representative product classes. The details of the
engineering analysis are discussed in chapter 5 of the NOPR TSD. The
following discussion summarizes the general steps of the engineering
analysis:
Representative product classes: DOE first reviews CFLKs covered
under the scope of the rulemaking and the associated product classes.
When a product has multiple product classes, DOE selects certain
classes as ``representative'' and concentrates its analytical effort on
these classes. DOE selects representative product classes primarily
because of their high market volumes and/or distinct characteristics.
Baseline lamps: For each representative product class, DOE selects
a baseline lamp as a reference point against which to measure changes
resulting from energy conservation standards. Typically, a baseline
lamp is the most common, least efficacious lamp in a CFLK sold in a
given product class. DOE also considers other lamp characteristics in
choosing the most appropriate baseline for each product class, such as
wattage, lumen output, and lifetime.
More efficacious substitutes: DOE selects higher efficacy lamps as
replacements for each of the baseline lamps considered. When selecting
higher efficacy lamps, DOE considers only design options that meet the
criteria outlined in the screening analysis (see section IV.B or
chapter 4 of the NOPR TSD).
Efficacy levels: After identifying the more efficacious substitutes
for each baseline lamp, DOE develops ELs. DOE bases its analysis on
three factors: (1) The design options associated with the specific
lamps studied; (2) the ability of lamps across wattages (or lumen
outputs) to comply with the standard level of a given product class;
\18\ and (3) the max-tech EL. DOE then scales the ELs of representative
product classes to any classes not directly analyzed.
---------------------------------------------------------------------------
\18\ ELs span multiple lamps of different wattages. In selecting
ELs, DOE considered whether these multiple lamps can meet the
standard levels.
---------------------------------------------------------------------------
2. Representative Product Classes
In the preliminary analysis, DOE established two product classes
and identified both the CFLKs with Externally Ballasted or Driven Lamps
and the All Other CFLKs product classes as representative. Although the
All Other CFLKs product class constituted the majority of CFLKs sold,
DOE also considered the CFLKs with Externally Ballasted or Driven Lamps
product class as representative because the CFLKs in this class offered
a unique utility in their ability to allow the consumer to replace the
lamp or ballast/driver. DOE did not receive any comments on the
representative product classes identified in the preliminary analysis.
As discussed in section IV.A.1, DOE is no longer establishing a
separate product class for products that are externally ballasted or
driven and proposes to include all CFLKs in one product class.
Therefore, in this NOPR DOE analyzes one product class as
representative.
3. Baseline Lamps
Once DOE identifies the representative product classes for
analysis, it selects baseline lamps to analyze in each product class.
DOE selects baseline lamps that are typically the most common, least
efficacious lamps in a CFLK that meet existing energy conservation
standards. Specific lamp characteristics are used to characterize the
most common lamps packaged with CFLKs today (e.g., wattage and light
output). To identify baseline lamps, DOE reviews product offerings in
catalogs and manufacturer feedback obtained during interviews.
In the preliminary analysis, DOE selected lamps representative of
the most common, least efficacious lamps packaged with CFLKs that just
meet existing CFLK standards. To calculate efficacy for lamps in the
All Other CFLKs product class, DOE used the catalog lumens and the
catalog wattage of the lamp. DOE used the catalog lumens and the
American National Standards Institute (ANSI) rated wattage, or the
catalog wattage if the ANSI rated wattage was not available, to
calculate the efficacy for externally ballasted or driven lamps. (For
further detail on the baseline lamps selected in the preliminary
analysis, see chapter 5 of the preliminary TSD.) DOE received several
comments regarding these baseline selections.
For the CFLKs with Externally Ballasted or Driven Lamps product
class, Westinghouse commented that the selected circline fluorescent
baseline lamp is accurate because it represents the only product used
in externally ballasted or driven CFLKs. (Westinghouse, Public Meeting
Transcript, No. 82 at p. 175) For the All Other CFLKs product class,
Westinghouse remarked that the baseline lamp DOE selected is not the
least efficacious lamp used in CFLKs because the least efficacious lamp
is not currently subject to an efficiency standard. (Westinghouse,
Public
[[Page 48640]]
Meeting Transcript, No. 82 at pp. 134-135)
DOE notes that incandescent lamps, such as those that have
candelabra bases, are commonly used in CFLKs, and are subject to a
maximum wattage standard rather than an efficacy standard. As stated by
Westinghouse, these lamps have lower efficacy values than the CFL used
as the baseline lamp in DOE's analysis. As explained in the paragraphs
that follow, DOE selected the baseline lamps consistent with the
revised product class structure for the NOPR.
In the product class structure analyzed in the preliminary
analysis, DOE determined that lamps in the All Other CFLKs product
class, such as the candelabra-base lamps, must comply with a minimum
standard of 45.0 lm/W for lamps less than 15 W and 60.0 lm/W for lamps
greater than or equal to 15 W. The Joint Comment agreed with DOE's
determination of the 45 lm/W minimum efficacy for the All Other CFLKs
product class. (Joint Comment, No. 95 at p. 2).
DOE revised the product class structure in the NOPR and determined
that, consistent with 42 U.S.C. 6295(o)(1) lamps packaged with CFLKs
must comply with a minimum standard of 50.0 lm/W for lamps less than 15
W, 60.0 lm/W for lamps greater than or equal to 15 W and less than 30
W, and 70.0 lm/W for lamps greater than or equal to 30 W. The following
discussion provides further detail on this change.
Existing standards for CFLKs, codified at 10 CFR 430.32(s), are
currently divided into three product classes: (1) Ceiling fan light
kits with medium screw base sockets (Medium Screw Base product class);
(2) Ceiling fan light kits with pin-based sockets for fluorescent lamps
(Pin-Based product class); and, (3) Ceiling fan light kits with socket
types other than those covered in the previous two product classes,
including candelabra screw base sockets (Other Base Type product
class). In the preliminary analysis, DOE combined these three product
classes for CFLKs and conducted a product class analysis that
identified the following two product classes for consideration: CFLKs
with Externally Ballasted or Driven Lamps product class and All Other
CFLKs product class. See section IV.A.1 for further details.
Current standards require lamps in the Medium Screw Base product
class to ``meet the ENERGY STAR Program requirements for Compact
Fluorescent Lamps, version 3.'' 10 CFR 430.32(s). In the preliminary
analysis, DOE determined that the products in the All Other CFLKs
product class are subject to the same efficacy standards as the
existing Medium Screw Base product class. These minimum efficacy
standards are specific to wattage bins and whether the lamp is bare or
covered. Because DOE determined that lamp cover was not a class setting
factor in the preliminary analysis product class structure, the minimum
efficacy requirements for this product class were determined by lamp
wattage. Therefore, for products less than 15 W, DOE determined that
the minimum efficacy for products in the All Other CFLKs product class
is 45 lm/W, the highest of the existing standards for that wattage bin.
For products greater than or equal to 15 W, DOE determined that the
minimum efficacy is 60 lm/W, the highest of the existing standards for
that wattage bin.
Current standards require lamps in the Pin-Based product class to
``meet the ENERGY STAR Program Requirements for Residential Light
Fixtures version 4.0.'' 10 CFR 430.32(s) In the preliminary analysis,
DOE determined that the products in the CFLKs with Externally Ballasted
or Driven Lamps product class are subject to the same efficacy
standards as the existing Pin-Based product class. These minimum
efficacy standards are specific to wattage bins and lamp length.
Because DOE determined that lamp length was not a class setting factor
in the preliminary analysis product class structure, the minimum
efficacy requirements for this product class were determined by lamp
wattage. DOE determined that lamps in the CFLKs with Externally
Ballasted or Driven Lamps product class must comply with a minimum
standard of 50 lm/W for lamps less than 30 W and 70 lm/W for lamps
greater than or equal to 30 W.
In the NOPR, DOE is proposing a single product class, and thus re-
evaluated the minimum standard efficacy. Products in the All CFLKs
product class are subject to either ENERGY STAR Program Requirements
for Residential Light Fixtures version 4.0 (10 CFR 430.32(s)) or ENERGY
STAR Program requirements for Compact Fluorescent Lamps, version 3. (10
CFR 430.32(s)). ENERGY STAR Program Requirements for Residential Light
Fixtures version 4.0 minimum efficacy requirements are specific to
wattage and length and ENERGY STAR Program requirements for Compact
Fluorescent Lamps version 3 are specific to wattage and whether the
lamp is bare or covered. Because DOE is not proposing length or lamp
cover as product class setting factors, minimum efficacy requirements
for this product class were determined by lamp wattage. Consistent with
42 U.S.C. 6295(o)(1), DOE determined that products in the All CFLKs
product class are subject to the highest of the existing standards for
each wattage bin. Therefore, for products less than 15 W, DOE set the
minimum baseline efficacy at 50 lm/W. For products greater than or
equal to 15 W and less than 30 W, DOE set the baseline efficacy at 60
lm/W. For products greater than or equal to 30 W, DOE set the baseline
efficacy at 70 lm/W. The combined minimum efficacy requirements based
on wattage are shown in Table IV.3.
Table IV.3--All CFLKs Product Class Current Standard Efficacy
Requirements
------------------------------------------------------------------------
Minimum
Lamp power (W) efficacy
(lm/W)
------------------------------------------------------------------------
<15........................................................ 50.0
>=15 and <30............................................... 60.0
>=30....................................................... 70.0
------------------------------------------------------------------------
In the preliminary analysis, DOE identified a 14 W spiral CFL with
730 lumens as the baseline lamp. However, DOE found product literature
indicating that the lamp is marketed for rough service applications, a
feature DOE did not find to be utilized in CFLKs. DOE also received
feedback that CFLK manufacturers typically purchase the least expensive
lamp available and a rough service lamp would command a premium.
Further, market information indicated that many 14 W CFLs with low
lumen outputs typically had an additional feature (e.g., a cover or a
coating for rough service operation) that was not used for lamps
packaged in CFLKs. Thus, in the NOPR analysis, DOE modeled a 14 W CFL
as the baseline lamp without these additional features and a light
output of 800 lumens, which is a common lumen output for this lamp. DOE
assumed the modeled baseline lamp would have the same characteristics
(spiral shape, 82 Color Rendering Index [CRI], 2,700 kelvin [K]
correlated color temperature [CCT], and 10,000-hour lifetime) as the
most common commercially available lamps. The modeled baseline that DOE
is proposing for the All CFLKs product class is specified in Table
IV.4. (See chapter 5 of the NOPR TSD for further details.) DOE requests
comment on the baseline lamp analyzed in the NOPR analysis.
[[Page 48641]]
Table IV.4--All CFLKs Product Class Baseline Lamp
--------------------------------------------------------------------------------------------------------------------------------------------------------
Initial
Lamp light Efficacy Lamp
Bulb shape Base type Lamp type wattage output (lm/W) lifetime CRI CCT (K)
(W) (lm) (hr)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Spiral.................................................. E26 CFL 14 800 57.1 10,000 80 2,700
--------------------------------------------------------------------------------------------------------------------------------------------------------
4. More Efficacious Substitutes
After choosing a baseline lamp, DOE identifies commercially
available lamps that can serve as more efficacious substitutes. DOE
utilized a database of commercially available lamps and selected
substitute lamps that both save energy and maintain comparable light
output to the baseline lamp. Specifically, in the preliminary analysis,
DOE ensured that potential substitutions maintained light output within
10 percent of the baseline lamp lumen output for the lamp replacement
scenario and within 10 percent of the baseline fixture lumen output for
the light kit replacement scenario. Further, DOE considered only
technologies that met all four criteria in the screening analysis.
Regarding the lamp characteristics of the substitutes, DOE selected
replacement lamp units with lifetimes greater than or equal to that of
the lifetime of the baseline lamp. DOE also selected replacement lamp
units with a CRI, CCT, and bulb shape comparable to that of the
baseline representative lamp unit. (For further detail on the more
efficacious substitutes selected in the preliminary analysis, see
chapter 5 of the preliminary TSD.)
In the preliminary analysis, DOE considered more efficacious lamps
under two different substitution scenarios: (1) A lamp replacement
scenario and (2) a light kit replacement scenario. DOE selected the
baseline light kit for both scenarios as a two-socket medium base light
kit because it was representative of the most common basic CFLK
product. In the lamp replacement scenario, DOE assumed that
manufacturers would maintain the original fixture design, including the
number of sockets, and only replace the lamp. Thus, DOE selected the
base types of the more efficacious substitutes to be the same as that
of the baseline lamp. In the light kit replacement scenario, DOE
accounted for the possibility that manufacturers may change fixture
designs. Thus, the base types of the more efficacious substitutes were
not required to be the same as that of the baseline lamp and the number
of sockets could be changed. Specifically, DOE considered replacement
light kits with between one and four sockets and non-medium screw base
types. For example, the candidate standard level (CSL) 1 light kit
replacement option utilized one medium screw base 23 W CFL, and the CSL
3 light kit replacement option included four medium screw base 5 W LED
lamps in the preliminary analysis.
DOE received several comments on the two substitution scenarios.
Westinghouse and Hunter Fans commented that the lamp replacement
scenario is preferred to the light kit replacement scenario because it
is less cumbersome in terms of design changes and product cost.
(Westinghouse, Public Meeting Transcript, No. 82 at pp. 132-133; Hunter
Fans, Public Meeting Transcript, No. 82 at p. 173) Further,
Westinghouse commented that the lamp replacement scenario is the
primary method used by manufacturers, but that an increase in
integrated SSL CFLKs might make the light kit replacement scenario more
popular. In the short term, however, Westinghouse stated that the split
between manufacturers replacing lamps versus changing light kits to
meet standards is unlikely to be equal. (Westinghouse, Public Meeting
Transcript, No. 82 at p. 173) When it was clarified that the light kit
replacement scenario referred to a change in the number of sockets, and
not replacement with integrated LED CFLKs, however, Westinghouse
indicated that an even split between the lamp replacement and light kit
replacement scenarios would be a reasonable estimate. (Westinghouse,
Public Meeting Transcript, No. 82 at p. 175)
While comments from some stakeholders indicated that the light kit
replacement scenario may not be the likely choice taken by
manufacturers, it remains an option and one that may become more common
in the future. A change in the number of sockets allows for a wider
variety of lamp types, wattages, and lumen packages to be considered,
including CFLKs that utilize integrated LEDs. Therefore, DOE retained
the light kit replacement scenario for the NOPR because changing the
light kit is a path that manufacturers may take to comply with
standards. For further discussion of the percentage allocated to the
likelihood of manufacturers choosing each scenario, see section IV.G.
DOE also received several comments from stakeholders on the more
efficacious substitute lamps selected for CFLKs in the preliminary
analysis. ALA agreed with the criteria used to select more efficacious
substitute lamps, and with the proposed substitute lamps that DOE
selected. (ALA, No. 93 at p. 9) The Joint Comment noted that many CFLKs
on the market already exceed the minimum standard of 45 lm/W, and that
there are ample CFL and LED CFLK options already offered by retailers.
(Joint Comment, No. 95 at p. 2)
Westinghouse noted that the medium base, 800 lumen, 60 W equivalent
product used as the basis for DOE's analysis is not used in 70 percent
of CFLKs. (Westinghouse, Public Meeting Transcript, No. 82 at pp. 231-
232) DOE acknowledges that the majority of CFLKs currently reside in
the existing Other Base Type product class, typically using lamps with
candelabra bases. However, as a result of the revised product class
structure discussed in section IV.C.3, DOE selected an 800-lumen
baseline lamp because it was the most common lamp with an efficacy near
the baseline level of the revised product class structure. DOE selects
more efficacious substitutes with lumens within 10 percent of the
baseline, but does not limit these substitutes to products found in
CFLKs.
The Minka Group commented that the LED representative lamp units
are not omnidirectional. (The Minka Group, Public Meeting Transcript,
No. 82 at pp. 149-150) ALA stated that it is not currently aware of an
LED lamp that offers the omnidirectional lighting of halogen lamps at a
comparable size to halogens. (ALA, No. 93 at pp. 8) DOE performed a
review of lamp catalog data and confirmed that the A-shape general
service LED lamps used as more efficacious substitutes are marketed as
omnidirectional.
Westinghouse commented that medium base A19 LED lamps are more
efficacious than LED lamps with other base types and sizes, noting that
candelabra-base LED lamps are about 10 percent lower in efficacy than
medium base A-shape LED lamps. Further, Westinghouse stated that medium
base
[[Page 48642]]
A-shape LED lamps would not fit in CFLKs with candelabra sockets or be
aesthetically pleasing. (Westinghouse, Public Meeting Transcript, No.
82 at pp. 137-140) Westinghouse recommended that DOE ensure that the
standard would allow products with small bases to comply.
(Westinghouse, Public Meeting Transcript, No. 82 at pp. 145-147) The
Minka Group commented that LED lamps are not suitable replacements from
a decorative perspective. (The Minka Group, Public Meeting Transcript,
No. 82 at pp. 149-150) The Minka Group specifically recommended that
DOE analyze G9 bases in the analysis and Westinghouse urged DOE to
include base types smaller than G9 bases. (The Minka Group, Public
Meeting Transcript, No. 82 at p. 140; Westinghouse, Public Meeting
Transcript, No. 82 at p. 140) The Joint Comment, however, remarked that
LED lamps provide the same amenities as incandescent lamps, and that
LED lamps will only improve by the 2019 compliance date of this
rulemaking. (Joint Comment, No. 95 at p. 2) Hunter Fans noted that it
is not possible to estimate the efficacies of future LED lamps,
especially externally driven LED CFLKs, but the market does have
potential. (Hunter Fans, Public Meeting Transcript, No. 82 at pp. 158,
207-208)
DOE performed a survey of lamps with small bases (e.g., E12, E17,
and G9) and small form factors (e.g., candle, flame tip, torpedo) based
on catalog data and concluded that these lamp types are available at
all ELs. For example, DOE identified a 3 W LED with a G9 base, a light
output of 275 lm, and an efficacy of 91.7 lm/W, and also a 2 W LED with
an E12 base, a light output of 200 lm, and an efficacy of 100 lm/W,
with T4 and B11 shapes, respectively. These lamps meet the max-tech
level, EL 4, which is discussed further in section IV.C.5.
Further, DOE notes that CFLKs with LED modules and driver systems
can offer similar modular design options as CFLKs that use lamps with
small bases. DOE applied thermal and driver losses estimated from the
DOE Multi-Year Program Plan for Solid-State Lighting Research and
Development \19\ to commercially available LED modules and drivers to
determine their lamp efficacy if they were incorporated as a consumer
replaceable system in a CFLK. Per the CFLK test procedure NOPR, lamp
efficacy is used to measure the efficiency of SSL CFLKs unless a CFLK
has any light sources, drivers, or intermediate circuitry, such as
wiring between a replaceable driver and a replaceable light source,
that are not consumer replaceable. 79 FR 64688, 64693 (October 31,
2014). DOE determined that these CFLKs would meet EL 4, the max-tech
level.
---------------------------------------------------------------------------
\19\ U.S. Department of Energy. Solid-State Lighting Research
and Development Multi-Year Program Plan. April 2013. <http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_mypp2013_web.pdf>.
---------------------------------------------------------------------------
The Minka Group commented that the warranty of LED lamps labeled as
50,000 hours is actually 25,000 hours, which is an industry standard.
(The Minka Group, Public Meeting Transcript, No. 82 at p. 142) ALA
agreed, remarking that the 50,000 hour lifetimes for LED lamps are very
optimistic and do not hold in the field. ALA noted that ENERGY STAR
life ratings would be more appropriate. (ALA, Public Meeting
Transcript, No. 82 at pp. 140-141)
In the preliminary analysis, LED replacement lamps selected at
higher CSLs had lifetimes of 50,000 hours. DOE revised its selection of
more efficacious substitutes for the NOPR analysis. DOE performed a
review of data from lamp catalogs and the ENERGY STAR database of
certified products \20\ and determined that the lifetime of the LED
lamps selected as representative lamp units in the NOPR is between
25,000 and 30,000 hours.
---------------------------------------------------------------------------
\20\ ENERGY STAR. ENERGY STAR Certified Bulbs. Last accessed
February 20, 2015. <http://www.energystar.gov/productfinder/product/certified-light-bulbs/>.
---------------------------------------------------------------------------
Several stakeholders commented on dimming. ALA commented that
dimmable CFLs are unacceptable for CFLKs because they have a larger
form factor, a slower startup time, and poor dimming performance. (ALA,
No. 93 at p. 7) Westinghouse agreed, commenting that CFLs usually do
not dim well, and the ones that do are more expensive. (Westinghouse,
Public Meeting Transcript, No. 82 at pp. 110-111) ALA added that CFLK
controls are not typically designed for use with dimmable CFLs. (ALA,
No. 93 at p. 7) DOE notes that although dimmable CFLs are not available
at all levels, dimmable LED lamps are available at higher ELs; thus
this functionality is maintained in the analysis.
ALA remarked that there are issues with dimmable LED compatibility
with controls, but it expects this to change over time. ALA projected
that LED CFLKs will increase to 15 percent of the market in five years,
and that 25-50 percent of these CFLKs will be dimmable, with 7.5
percent having acceptable dimming functionality. (ALA, No. 93 at p. 8)
Fanimation also commented that a high percentage of LED lamps will have
dimming functionality. (Fanimation, Public Meeting Transcript, No. 82
at p. 112) Westinghouse commented that dimmable LED lamps are more
functional than dimmable CFLs, but noted that their cost is very high
compared to incandescent and halogen technologies, which represent 80
percent of the CFLK market. Westinghouse added that dimmable LED lamps
may be unsatisfactory to the consumer compared to incandescent lamps.
Westinghouse opined that if a rule is promulgated that creates consumer
dissatisfaction, the consumer will switch to less efficient products
that are not currently regulated. (Westinghouse, Public Meeting
Transcript, No. 82 at pp. 110-111)
In response to these comments, DOE reviewed catalog data and
feedback from stakeholders. Through this research, DOE confirmed that
dimmable lamps are available at all of the analyzed levels, and that
the ability to dim has a negligible impact on efficacy. Based on
feedback from manufacturers and DOE's research, DOE has found that
current issues regarding dimming mainly relate to compatibility with
controls originally intended to be used with incandescent lamps.
Further, NEMA is actively addressing the issue with SSL 7A-2013,\21\
which seeks to minimize compatibility issues by providing design and
testing guidelines for both LED dimmers and lamps. Therefore, DOE
agrees that issues with dimming LED lamps in conjunction with controls
will be minimal at the time of compliance with any amended standards,
and that the proposed ELs will not result in a loss of dimming
functionality in CFLKs. Further, because all of the representative lamp
units analyzed are dimmable, the consumer prices determined for these
representative lamp units include the cost of dimming functionality and
are used as inputs to determine the first cost of these lamps in the
LCC analysis and NIA. Hence, the results of these analyses incorporate
any additional costs due to dimming functionality.
---------------------------------------------------------------------------
\21\ National Electrical Manufacturers Association. Phase Cut
Dimming for Solid State Lighting--Basic Compatibility. April 22,
2013. <http://www.nema.org/Standards/Pages/Phase-Cut-Dimming-for-Solid-State-Lighting-Basic-Compatibility.aspx>.
---------------------------------------------------------------------------
DOE made several key changes in the NOPR analysis that impacted the
selection of more efficacious substitutes. First, using the baseline
updated for the NOPR, DOE selected more efficacious substitute lamps
that have a light output within 10 percent of 800 lumens, the light
output of the new baseline lamp. Second, at EL 2, DOE analyzed two
[[Page 48643]]
representative lamp units (a CFL and LED lamp) because DOE found that
efficacies meeting this level were common for both CFLs and LED lamps,
but there was a difference in price between the two options. Third,
using updated catalog information, DOE found commercially available
lamps at levels of efficacy higher than the max-tech level identified
in the preliminary analysis. DOE also found that for representative
lamp units above EL 2 (which are LED lamps), the end-user price
decreased as efficacy increased. Therefore, DOE analyzed the most
efficient commercially available LED lamp as a more efficacious
substitute because it was at the lowest incremental first cost for an
available product above EL 2: an 8.5 W LED lamp with 94.1 lm/W at EL 3.
Finally, as described in the paragraph that follows, DOE also modeled
an 8 W LED lamp with 102.5 lm/W at the max-tech level, EL 4.
At the time of this NOPR analysis, DOE has determined that a
commercially available 3-way LED lamp when operated at its middle
setting is more efficacious than any other commercially available lamp
that could be considered an adequate replacement for the baseline lamp
(i.e., has a non-reflector shape, a lumen output within 10 percent of
the baseline lamp, a CCT around 2,700 K, a CRI greater than or equal to
80, a lifetime greater than or equal to that of the baseline, and a
medium screw base). Specifically, the 3-way lamp is 8 W at its middle
setting, and has a light output of 820 lumens, an efficacy of 102.5 lm/
W, and a lifetime of 25,000 hours. DOE concluded that the higher
efficacy level achieved by the middle setting demonstrated the
potential for a standard, non-3-way, 8 W LED lamp to achieve this
efficacy level. Therefore, DOE modeled an 8 W lamp with 820 lumens and
an efficacy of 102.5 lm/W. DOE assumed the modeled lamp would have
similar characteristics to the most common commercially available LED
lamps in the 800-lumen range. Hence, DOE modeled the lamp to have an
A19 shape, medium base type, 25,000-hour lifetime, 2,700 K CCT, 80 CRI,
and dimming functionality. DOE requests comment on the 3-way lamp used
as a basis for the modeled max-tech LED lamp and information on whether
such a lamp would meet DOE's screening criteria and should be
maintained for the final rule analysis.
As EL 4 is based on a modeled product, a lamp suitable for direct
replacement that complies with EL 4 is not currently commercially
available. DOE learned through interviews that most CFLK manufacturers
do not manufacture lamps, but rather purchase lamps from another
supplier or manufacturer to package in CFLKs. As lamp manufacturers are
not required to comply with standards promulgated by this rulemaking,
DOE is uncertain as to whether such a lamp meeting EL 4 would be
commercially available at the time CFLK manufacturers would need to
comply with any amended standards.
DOE has determined that EL 4 can be met by other methods available
to CFLK manufacturers; however, most of these options require redesigns
of existing fixtures. Some commercially available lamps with smaller
base types meet EL 4, but these are available with low lumen outputs
and would therefore require several lamps to be incorporated into a new
CFLK to provide the same amount of light. Some commercially available
lamps with the same base type as the baseline lamp are available at EL
4, but these have higher lumen outputs such that a CFLK would have to
be redesigned with fewer sockets to maintain the same light output.
Alternatively, a few LED modules and drivers with a similar lumen
output as the baseline lamp could be incorporated as consumer
replaceable parts in CFLKs. However, all of these methods of meeting EL
4 reflect the fact that, for most situations, direct lamp replacement
would not be a means of meeting the efficacy level.
The representative lamp unit at EL 3 is the most efficacious
commercially available LED lamp that could be considered an adequate
substitute for the baseline lamp (i.e., has a non-reflector shape, a
lumen output within 10 percent of the baseline lamp, a CCT around 2,700
K, a CRI greater than or equal to 80, a lifetime greater than or equal
to that of the baseline, and a medium screw base). Small base lamps are
only available with low lumen outputs at EL 3 and LED modules and
drivers are only available in a limited lumen range.
The representative lamp units at EL 2 are a commercially available
LED lamp and CFL and the representative lamp unit at EL 1 is a
commercially available CFL, all of which are considered adequate
substitutes for the baseline lamp (i.e., have a non-reflector shape, a
lumen output within 10 percent of the baseline lamp, a CCT around 2,700
K, a CRI greater than or equal to 80, a lifetime greater than or equal
to that of the baseline, and a medium screw base). At EL 2 and EL 1,
CFLK manufacturers can choose from a large number of suitable options
for direct lamp replacements, as well as fixture redesigns to meet this
level. In particular, LED modules and drivers are available with lumen
outputs that are not an option at higher ELs.
The CFLK representative lamp units that DOE analyzed in the NOPR
are shown in Table IV.5 for the lamp replacement scenario and in Table
IV.6 for the light kit replacement scenario. DOE requests comment on
the criteria used in selecting more efficacious substitute lamps, as
well as the characteristics of the lamps selected.
Table IV.5--All CFLKs Product Class Design Options: Lamp Replacement Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
Initial
Wattage light Efficacy Lamp
Efficacy level Lamp type Base type Bulb shape (W) output (lm/W) CRI CCT (K) lifetime
(lm) (hr)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................... CFL............. E26............ Spiral......... 14 800 57.1 80 2,700 10,000
EL 1.............................. CFL............. E26............ Spiral......... 13 800 61.5 80 2,700 10,000
EL 2.............................. CFL............. E26............ Spiral......... 11 730 66.4 82 2,700 10,000
LED............. E26............ A19............ 12 800 66.7 82 2,700 25,000
EL 3.............................. LED............. E26............ A19............ 8.5 800 94.1 81 2,700 25,000
EL 4.............................. LED............. E26............ A19............ 8 820 102.5 80 2,700 25,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 48644]]
Table IV.6--All CFLKs Product Class Design Options: Light Kit Replacement Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
Lamp Fixture
Lamp Fixture initial initial Lamp
Efficacy level Lamp type Base type Bulb Fixture wattage wattage light light Efficacy CRI CCT (K) life
shape sockets (W) (W) output output (lm/W) (hr)
(lm) (lm)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..................... CFL...... E26...... Spiral... 2 14 28 800 1,600 57.1 80 2,700 10,000
EL 1......................... CFL...... E26...... Spiral... 3 9 27 520 1,560 57.8 80 2,700 10,000
EL 2......................... LED...... E26...... G25...... 3 8 24 500 1,500 62.5 82 2,700 25,000
EL 3......................... LED...... E26...... A21...... 1 16 16 1,600 1,600 100.0 80 2,700 25,000
EL 4......................... LED...... E26...... A21...... 1 15 15 1,600 1,600 106.7 82 2,700 25,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5. Efficacy Levels
DOE adopted an equation-based approach to establish ELs for CFLKs.
In the preliminary analysis, DOE developed the general form of the
equation by evaluating lamps with similar characteristics, such as
technology, bulb shape, and lifetime, across a range of wattages. The
continuous equations specified a minimum lamp efficacy requirement
across wattages and represented the efficacy a lamp achieves. DOE
received several comments regarding the EL equations.
The Joint Comment agreed with the equation-based lm/W standard,
remarking that it is the most effective metric for establishing
lighting standards for CFLKs. (Joint Comment, No. 95 at pp. 2-3) The
Joint Comment opposed the use of lumen bins, and remarked that for
general service incandescent lamps (GSILs), lumen bins have resulted in
manufacturers selecting the lowest allowable light output within a bin.
(Joint Comment, No. 95 at p. 3) However, Westinghouse commented that
wattage-based efficacy equations would be confusing for CFLK
manufacturers because they do not manufacture lamps. (Westinghouse,
Public Meeting Transcript, No. 82 at pp. 144-145) The Joint Comment
suggested that, similar to the European Union, DOE should use an
equation-based approach to establish minimum ELs as a function of light
output. (Joint Comment, No. 95 at p. 3)
DOE analyzed commercially available lamps and found that a
continuous equation best describes the relationship between efficacy
and lamp wattage rather than bins. In the NOPR analysis, DOE altered
its approach to base ELs on continuous equations as a function of light
output rather than wattage. Available information indicates that the
primary utility provided by a lamp is lumen output, which can be
achieved through a range of wattages depending on the lamp technology.
Further, fixed losses in lamps, such as power consumed by the
integrated ballast/driver, become proportionally smaller at higher
lumen outputs, thereby increasing efficacy proportionally to light
output. For these reasons, DOE believes that lamps providing equivalent
lumen output should be subject to the same minimum efficacy
requirements.
Westinghouse commented that while DOE is setting an energy
conservation standard, consumers value utility, and price points have
been set for certain aspects, such as lamp size, dimmability, and
lifetime. If the standard is too high, CFLK manufacturers trying to
balance efficacy and utility at a consumer price point may not have any
suitable products. (Westinghouse, Public Meeting Transcript, No. 82 at
pp. 148-149) DOE analyzed each EL to maintain the products' existing
utility to the consumer including lifetime, dimming functionality, and
availability of CFLK design options. DOE then analyzed the cost
associated with each EL in the LCC analysis; see section IV.F for
discussion on the cost effectiveness to consumers.
ALA suggested that DOE use minimum LCC as a criterion in developing
its TSLs and selecting its proposed standard, and that DOE propose a
standard that is no more stringent than CSL 2. (ALA, No. 93 at p. 11)
ALA recommended that DOE propose a standard level that permits both
CFLs and LED lamps, allowing CFLK manufacturers to select the best
lighting technology to meet necessary utilities. (ALA, No. 93 at pp. 9-
10, 12) DOE developed TSLs as described in section V.A. When proposing
a standard, DOE weighs a variety of factors, including the maximum
energy savings and NPV to the nation, as well as product availability
and the costs and benefits to the individual consumer. See section
V.C.1 for more information on the rationale used in selecting the
proposed level.
As mentioned previously, DOE considered two scenarios: A lamp
replacement scenario and a light kit replacement scenario. DOE selected
ELs that could be met by the more efficacious substitutes identified in
the lamp replacement scenario. DOE also identified more efficacious
lamp substitutes for the light kit replacement scenario that had
efficacies equal to or greater than the efficacies of the corresponding
EL based on the lamp replacement scenario.
In the preliminary analysis, DOE had considered one CSL for the
CFLKs with Externally Ballasted or Driven Lamps product class and five
CSLs for the All Other CFLKs product class. (For further details, see
chapter 5 of the preliminary TSD.) In the NOPR analysis, DOE analyzed
all covered CFLKs in one product class. DOE surveyed the market,
analyzed product catalogs, and took into account feedback from
manufacturers to develop ELs. Based on this assessment, DOE identified
varying levels of efficacy that reflected technology changes and met
the criteria for developing ELs previously outlined. In the NOPR, DOE
is considering four ELs.
Table IV.7 presents the ELs for CFLKs. See chapter 5 of the NOPR
TSD for additional information on the methodology and results of the
engineering analysis.
Table IV.7--Summary of Efficacy Levels for All CFLKs
----------------------------------------------------------------------------------------------------------------
Minimum required
Representative product class Efficacy level Light output (lm) efficacy (lm/W)
----------------------------------------------------------------------------------------------------------------
All CFLKs............................. EL 1................ <260.................... 50
>=260 and <=2040........ 69-29.42 x
0.9983\lumens\
>2040 and <2100......... >(\1/30\) x lumens
>=2100.................. 70
[[Page 48645]]
EL 2................ <120.................... 50
>=120................... 74-29.42 x
0.9983\lumens\
EL 3................ All..................... 101-29.42 x
0.9983\lumens\
EL 4................ All..................... 106-29.42 x
0.9983\lumens\
----------------------------------------------------------------------------------------------------------------
As shown in Table IV.7, DOE made adjustments to EL 1 and EL 2 to
ensure that, consistent with 42 U.S.C. 6295(o), the efficacy remains
above the current minimum standards summarized in Table IV.3. See
Sections II.A and IV.C.3 for further discussion of this issue. For
lamps less than 15 W, the minimum efficacy is 50 lm/W. For a light
output of less than 260 lumens, DOE found that the EL 1 equation could
potentially allow lamps that are less than 50 lm/W to meet standards
and therefore set the minimum efficacy requirement at 50 lm/W for lamps
in this lumen range. For a light output of less than 120 lumens, DOE
found that the EL 2 equation could potentially allow lamps that are
less than 50 lm/W to meet standards and therefore set the minimum
efficacy requirement at 50 lm/W for lamps in this lumen range. DOE
determined that no adjustments to any ELs were necessary to meet the 60
lm/W current standard applicable to lamps greater than 15 W and less
than 30 W.
For lamps greater than 30 W, DOE determined that the minimum
efficacy is 70 lm/W. DOE found that the equation for EL 1 could
potentially allow lamps that are less than 70 lm/W to meet standards.
Therefore, for lumens greater than 2040 and less than 2100, DOE set the
minimum efficacy requirement at greater than (\1/30\) x lumens for EL
1. For lumens greater than or equal to 2100, DOE set the minimum
efficacy requirement at 70 lm/W. DOE requests comment on the equations
used to define the efficacy requirements at each EL. See chapter 5 of
the NOPR TSD for further information on the anti-backsliding
adjustments that DOE made to the ELs.
6. Scaling to Other Product Classes
Typically DOE determines ELs for product classes that were not
directly analyzed (``non-representative product classes'') by scaling
from the ELs of the representative product classes. As DOE only
identified one product class for CFLKs, no scaling was required.
D. Product Price Determination
Because the efficiency of a CFLK is based on the efficacy of the
lamps with which it is packaged, DOE developed a product price
determination for the lamp component of the CFLK. Typically, DOE
develops manufacturer selling prices (MSPs) for covered products and
applies markups to create consumer prices to use as inputs to the LCC
analysis and NIA. Because lamps are difficult to reverse-engineer
(i.e., not easily disassembled), DOE directly derives consumer prices
for the lamps in this rulemaking.
In the preliminary analysis, DOE determined premiums on CFLKs by
comparing distributor net prices \22\ to the retail prices of these
products in each distribution channel. DOE identified three main
distribution channels for CFLKs: Electrical/specialty centers, home
centers (e.g., Home Depot, Lowes), and lighting showrooms. DOE then
developed an average premium weighted by estimated shipments that go
through each distribution channel. DOE applied the average shipment-
weighted premium to the distributor net prices of CFLKs packaged with
the representative lamp unit to obtain the average CFLK consumer price.
Based on manufacturer feedback received during the preliminary
analysis, DOE determined that a fluorescent lamp, CFL, or LED in a CFLK
comprises 15 percent of the CFLK consumer price. DOE applied this
percentage to the CFLK consumer price to obtain the consumer price of
the representative lamp unit packaged with the CFLK. DOE received
several comments on the pricing methodology.
---------------------------------------------------------------------------
\22\ Prices suggested by manufacturers that distributors pay for
a product.
---------------------------------------------------------------------------
ALA agreed that for CFLKs packaged with ceiling fans, a CFL would
comprise 15 percent of the CFLK price. (ALA, No. 93 at p. 10) Hunter
Fans also agreed with the 15 percent estimate for CFLs in a CFLK.
(Hunter Fans, Public Meeting Transcript, No. 82 at p. 164) Hunter Fans,
Westinghouse, Lamps Plus, and The Minka Group remarked that the
percentage of consumer price attributable to an LED in a CFLK was too
low, and that it is actually closer to 30 percent. (Hunter Fans, Public
Meeting Transcript, No. 82 at p. 164; Westinghouse, Public Meeting
Transcript, No. 82 at p. 165; Lamps Plus, Public Meeting Transcript,
No. 82 at p. 165; The Minka Group, Public Meeting Transcript, No. 82 at
p. 165) ALA commented that for CFLKs packaged with ceiling fans, an LED
would comprise 30 percent of the consumer CFLK price and for a CFLK
sold alone, an LED would comprise over 50 percent of the consumer
price. (ALA, No. 93 at p. 10)
In the preliminary analysis, DOE used the methodology of applying a
percentage of the CFLK consumer price attributable to the lamp only for
CSL 1 because the representative lamp unit at this level is sold with
CFLKs for which distributor net prices were available. Specifically,
DOE applied 15 percent to CFLK consumer prices to obtain the consumer
lamp price for a 13 W spiral CFL, the representative lamp unit at CSL
1. The CFL representative lamp unit at the baseline is also sold with
CFLKs, but distributor net prices were not available for these CFLKs.
The LED representative lamp units at all other levels are not sold with
CFLKs. For these cases, DOE developed a ratio between the consumer
price of the 13 W spiral CFL representative lamp unit when sold with a
CFLK to the blue-book \23\ price of the lamp when sold alone. DOE then
applied this ratio to the blue-book price of the representative lamp
unit when sold alone to obtain the consumer price of the lamp if it
were sold with a CFLK. Therefore, with the exception of the 13 W spiral
CFL representative lamp unit, the consumer lamp prices for the other
CFL representative lamp units are not necessarily 15 percent of the
total CFLK consumer price nor 30 percent for the LED representative
lamp units. Maintaining this same methodology, in the NOPR analysis,
DOE also analyzed an 11 W spiral CFL at EL 2, a lamp that is also not
sold with CFLKs. In this case DOE applied the methodology described
above except used retail prices instead of blue-book prices, a change
in the analysis that is expanded on further in this section.
---------------------------------------------------------------------------
\23\ Blue-book prices refer to suggested retail prices issued by
lamp manufacturers and are usually specified for bulk quantity
purchases.
---------------------------------------------------------------------------
[[Page 48646]]
Westinghouse noted that assuming that an LED lamp is 15 or 30
percent of the CFLK consumer price, the consumer price of the lamp at
CSL 5, which requires an LED lamp, would imply that a CFLK at that
level costs about $100. Westinghouse stated that $100 for a CFLK was
unreasonably high, especially when compared to CFLKs packaged with CFLs
sold at Home Depot for $25-$30, and could potentially put manufacturers
out of business. (Westinghouse, Public Meeting Transcript, No. 82 at
pp. 204-207) However, Westinghouse commented that it is difficult to
know whether the considered LED lamp price is too high or not, as price
projections for LED lamps are difficult to estimate. (Westinghouse,
Public Meeting Transcript, No. 82 at pp. 210-211) Lamps Plus stated
that regardless, if the price of a CFLK attributable to an LED was
higher than 27 percent, sales would be significantly affected. (Lamps
Plus, Public Meeting Transcript, No. 82 at p. 217) Lamps Plus added
that at the $100 price point, consumers may choose to buy a lower cost
light fixture instead of the CFLK. (Lamps Plus, Public Meeting
Transcript, No. 82 at pp. 213-214)
In the preliminary analysis, DOE calculated the remaining CFLK
consumer price (i.e., CFLK price excluding the lamps and sockets) based
on the lamp and socket prices \24\ and total CFLK consumer price
determined for CSL 1. DOE assumed that this remaining CFLK consumer
price was the same at all levels, and the only changes in the total
CFLK consumer price were a function of the lamp and socket consumer
prices at a particular level. DOE maintained this approach in the NOPR
analysis using the lamp, socket, and total CFLK consumer prices
determined for EL 1. The total CFLK consumer price at all ELs for both
the lamp and light kit replacement scenario remained under
approximately $60. For further clarity, DOE presents the consumer
prices for the lamp, socket, remaining CFLK consumer price, and total
CFLK consumer price at each level in chapter 7 of the NOPR TSD.
---------------------------------------------------------------------------
\24\ For consumer prices of sockets, DOE estimated the
manufacturer production cost of different socket types based on
feedback received in manufacturer interviews and then applied the
appropriate manufacturer and distributor markups.
---------------------------------------------------------------------------
Noting that lamps meeting higher CSLs were not currently sold in
CFLKs, Westinghouse commented that the consumer lamp price and socket
price were not being analyzed correctly because the analysis leaves out
the current cost to consumers. (Westinghouse, Public Meeting
Transcript, No. 82 at pp. 182) Westinghouse commented that DOE did not
determine the price of an incandescent lamp packaged with a CFLK in
this analysis. (Westinghouse, Public Meeting Transcript, No. 82 at p.
167) Westinghouse added that the baseline price for a CFLK uses a
medium base CFL, but that this product is more expensive than a CFLK
with incandescent lamps. (Westinghouse, Public Meeting Transcript, No.
82 at p. 117)
Because representative lamp units at the baseline and ELs under
consideration did not utilize incandescent technology, DOE did not
develop prices for incandescent lamps. For further information on the
selection of the representative lamp units, see section IV.C.
Overall, DOE maintained the general methodology used in the
preliminary analysis to determine consumer prices of lamps sold with
CFLKs in the NOPR analysis. However, in addition to updating the price
data used, to more accurately reflect prices consumers will pay, DOE
made the following modifications.
When developing consumer prices for representative lamp units not
currently sold in CFLKs, in the NOPR analysis DOE used home center
channel retail prices of the representative lamp units when sold alone
instead of using the blue-book prices of the lamps. Because the home
center channel has the highest volume of CFLKs, DOE determined that
these prices more closely represent prices paid by CFLK consumers.
As noted, an average shipment-weighted premium on distributor net
prices is used to calculate the consumer price of a CFLK packaged with
the 13 W spiral CFL representative lamp unit. DOE updated the CFLK
retail prices used to determine this premium for the NOPR analysis.
Additionally, because DOE did not have distributor net price lists from
all manufacturers, DOE adjusted the premium to ensure that it reflected
the majority of the CFLK market. DOE based this adjustment on a ratio
of CFLK retail prices from manufacturers that represent a majority of
the market to the manufacturers for which DOE had distributor net
prices.
In the preliminary analysis, to determine the consumer price of the
13 W spiral CFL representative lamp unit sold with a CFLK, DOE applied
15 percent to the consumer price of CFLKs sold with a ceiling fan and
CFLKs sold alone. While comments from stakeholders verified that 15
percent should be applied to obtain the price of a CFL packaged with a
CFLK sold with a ceiling fan, it is not clear that the same percentage
would apply to CFLKs sold alone. Further CFLKs are primarily sold with
ceiling fans. Therefore, in the NOPR analysis DOE only used consumer
prices of CFLKs sold with ceiling fans to determine the consumer price
of the 13 W spiral CFL representative lamp unit. (See chapter 7 of the
NOPR TSD for further information on the methodology and results of the
pricing analysis.) DOE welcomes feedback on the pricing methodology and
results.
E. Energy Use Analysis
The purpose of the energy use analysis is to determine the annual
energy consumption of CFLKs at different efficacies in representative
U.S. homes and commercial buildings, and to assess the energy savings
potential of increased CFLK efficacy. To develop annual energy use
estimates, DOE multiplied CFLK input power by the number of hours of
use (HOU) per year. The energy use analysis estimates the range of
operating hours of CFLKs in the field (i.e., as they are actually used
by consumers). The energy use analysis provides the basis for other
analyses that DOE performed, particularly assessments of the energy
savings and the savings in consumer operating costs that could result
from adoption of amended standards.
1. Operating Hours
a. Residential Sector
To determine the average HOU of CFLKs in the residential sector,
DOE collected data from a number of sources. Consistent with the
approach taken in the GSL preliminary analysis,\25\ DOE used data from
various field metering studies of GSL operating hours in the
residential sector. To account for any difference in CFLK HOU compared
to GSL HOU, DOE considered two factors: (1) The relative HOU for GSLs
installed in ceiling light fixtures compared to all GSLs based on data
from the Residential Lighting End-Use Consumption Study (RLEUCS),\26\
and (2) the HOU associated with the specific room types in which CFLKs
are installed based on installation location data from a Lawrence
Berkeley National Laboratory survey of ceiling fan and CFLK owners
[[Page 48647]]
(LBNL survey) \27\ and room-specific HOU data from RLEUCS. As in the
GSL preliminary analysis, DOE assumed that CFLK operating hours do not
vary by light source technology.
---------------------------------------------------------------------------
\25\ DOE has published a framework document and preliminary
analysis for amending energy conservation standards for general
service lamps. Further information is available at
www.regulations.gov under Docket ID: EERE-2013-BT-STD-0051.
\26\ DNV KEMA Energy and Sustainability and Pacific Northwest
National Laboratory. Residential Lighting End-Use Consumption Study:
Estimation Framework and Baseline Estimates. 2012. http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2012_residential-lighting-study.pdf.
\27\ Kantner, C.L.S., S.J. Young, S.M. Donovan, and K. Garbesi.
Ceiling Fan and Ceiling Fan Light Kit Use in the U.S.--Results of a
Survey on Amazon Mechanical Turk. 2013. Lawrence Berkeley National
Laboratory: Berkeley, CA. Report No. LBNL-6332E. http://www.escholarship.org/uc/item/3r67c1f9.
---------------------------------------------------------------------------
DOE determined the regional variation in average HOU using average
HOU data from regional metering studies, all of which are listed in the
energy use chapter (chapter 6 of the NOPR TSD). DOE organized regional
variation in HOU by each EIA Residential Energy Consumption Survey
(RECS) reportable domain (i.e., state, or group of states). For regions
without HOU metered data, DOE used data from adjacent regions.
To estimate the variability in CFLK HOU by room type, DOE developed
HOU distributions for each room type using data from the Northwest
Energy Efficiency Alliance's Residential Building Stock Assessment
Metering Study (RBSAM),\28\ which is a metering study of 101 single-
family houses in the Northwest. DOE assumed that the shape of the HOU
distribution for a particular room type would be the same across the
United States, even if the average HOU for that room type varied by
geographic location. To determine the room and geographic location-
specific HOU distributions, DOE scaled the HOU distribution for a given
room type from the RBSAM study by the average HOU in a given region,
adjusted based on the geographic location-specific variability in HOU
between different room types from RLEUCS.
---------------------------------------------------------------------------
\28\ Ecotope Inc. Residential Building Stock Assessment:
Metering Study. 2014. Northwest Energy Efficiency Alliance: Seattle,
WA. Report No. E14-283. http://neea.org/docs/default-source/reports/residential-building-stock-assessment-metering-study.pdf?sfvrsn=6.
---------------------------------------------------------------------------
Based on the approach described in this section, DOE estimated the
national weighted-average HOU of CFLKs to be 2.0 hours per day. For
more details on the methodology DOE used to estimate the HOU for CFLKs
in the residential sector, see chapter 6 of the NOPR TSD. DOE requests
comment on the data and methodology used to estimate operating hours
for CFLKs in the residential sector, as well as on the assumption that
CFLK operating hours do not vary by light source technology (see
section VII.E).
b. Commercial Sector
The HOU for CFLKs in commercial buildings were developed using
lighting data for 15 commercial building types obtained from the 2010
U.S. Lighting Market Characterization (LMC).\29\ For each commercial
building type presented in the LMC, DOE determined average HOU based on
the fraction of installed lamps utilizing each of the light source
technologies typically used in CFLKs and the HOU for each of these
light source technologies. A national-average HOU for the commercial
sector was then estimated by weighting the building-specific HOU for
lamps used in CFLKs by the relative floor space of each building type
as reported in in the 2003 EIA Commercial Buildings Energy Consumption
Survey (CBECS).\30\ To capture the variability in HOU for individual
consumers in the commercial sector, DOE applied a triangular
distribution to each building type's weighted-average HOU with a
minimum of 80 percent and a maximum of 120 percent of the weighted-
average HOU value. For further details on the commercial sector
operating hours, see chapter 6 of the NOPR TSD.
---------------------------------------------------------------------------
\29\ Navigant Consulting, Inc. Final Report: 2010 U.S. Lighting
Market Characterization. 2012. http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2010-lmc-final-jan-2012.pdf.
\30\ U.S. Department of Energy-Energy Information
Administration. 2003 CBECS Survey Data. (Last accessed October 6,
2014.) http://www.eia.gov/consumption/commercial/data/2003/index.cfm?view=microdata.
---------------------------------------------------------------------------
2. Input Power
DOE developed its estimate of the power consumption of CFLKs by
scaling the input power and lumen output of the representative lamp
units for CFLKs characterized in the engineering analysis to account
for the lumen output of CFLKs in the market. DOE estimated average CFLK
lumen output based on a weighted average of CFLK models from data
collected in 2014 from in-store shelf surveys and product offerings on
the Internet. DOE estimated the market share of each identified CFLK
model based on price. See chapter 6 of the NOPR TSD for details on the
price-weighting market share adjustment and how DOE estimated average
weighted lumen output for all CFLKs
3. Lighting Controls
In response to the energy use analysis presented in the preliminary
analysis, stakeholders provided comment only on DOE's handling of
dimmable CFLKs. In the preliminary analysis, DOE did not account for
energy savings resulting from dimming. Fanimation expects that a high
percentage of CFLKs will have dimming functionality in the future.
(Fanimation, Public Meeting Transcript, No. 82 at p. 112) ALA and
Westinghouse added that dimmable CFLs are not a viable option for use
in CFLKs due to their size, slow startup time, insufficient dimming
capability, and cost, which leads to consumer dissatisfaction. (ALA,
No. 93 at p. 7; Westinghouse, Public Meeting Transcript, No. 82 at pp.
110-111) ALA and Westinghouse also believe that the current control
incompatibility issues associated with dimmable LED CFLKs prevent
dimmable LEDs from being a viable option, but ALA believes that in five
years LED CFLKs with acceptable dimming functionality could represent
up to 7.5 percent of the CFLK market. (Id.)
Based on the technical issues ALA and Westinghouse raised, as well
as the significant price premium for dimmable CFLs, DOE assumed that
CFLKs are not likely to feature dimmable CFL lamps. DOE requests
comments on this assumption (see section VII.E). In the NOPR analyses,
DOE did not assume CFL CFLKs were operated with controls. On the other
hand, DOE does believe that some fraction of LED and incandescent CFLKs
are likely to be operated with a dimmer, which DOE considers to be the
only relevant lighting control for CFLKs. For the NOPR analyses, DOE
used the results of an LBNL survey \31\ to estimate that 11 percent of
CFLKs are operated with dimmers. DOE assumed that the fraction of CFLKs
used with dimmers is the same in the residential sector and the
commercial sector, and DOE requests comment on this assumption (see
section VII.E). Furthermore, DOE has assumed that an equal fraction of
LED and incandescent CFLKs are operated with dimmers, based on the
increasing fraction of commercially available dimmers that are now
compatible with LEDs, the increase in LED lamps that are being designed
to operate on legacy dimmers, and the assumption that integral LEDs
have built-in dimming capability with no compatibility issues. DOE used
the 2010 LMC \32\ and the aforementioned LBNL survey to account for the
likelihood that a CFLK with a dimmer will be installed in a given room
type. This affects the impact of dimming controls on energy use
because, as discussed previously, average HOU varies by room type.
---------------------------------------------------------------------------
\31\ Kantner, et al. (2013), op. cit.
\32\ Navigant Consulting, Inc. Final Report: 2010 U.S. Lighting
Market Characterization. 2012. http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2010-lmc-final-jan-2012.pdf.
---------------------------------------------------------------------------
For dimmable CFLKs, DOE assumed an average energy reduction of 30
percent. This estimate was based on a meta-analysis of field
measurements of
[[Page 48648]]
energy savings from commercial lighting controls by Williams, et
al.\33\ Because field measurements of energy savings from controls in
the residential sector are very limited, DOE assumed that controls
would have the same impact as in the commercial sector. DOE requests
comments on this approach (see section VII.E). In addition, following
publication of the GSL preliminary analysis, NEMA agreed with a similar
assumption made in that analysis (i.e., that 30 percent energy savings
due to dimming in the residential sector is a reasonable estimate).\34\
DOE was able to find a single study \35\ that suggests energy savings
from dimming may be larger than 30 percent in the residential sector.
However, because of the very small sample size of this study (the
findings were based on metered data from two houses in California), DOE
did not base its analysis on the findings of this study. Chapter 6 of
the NOPR TSD provides details on how DOE accounted for the impact of
dimmers on CFLK energy use. DOE requests comments on the assumption
that the only lighting controls used with CFLKs are dimmers, and the
energy savings estimate from dimmers in the residential sector (see
section VII.E).
---------------------------------------------------------------------------
\33\ Williams, A., B. Atkinson, K. Garbesi, E. Page, and F.
Rubinstein. Lighting Controls in Commercial Buildings. LEUKOS. 2012.
8(3): pp. 161-180.
\34\ NEMA's comment (NEMA, No. 34, at p.21) is available at the
GSL rulemaking docket available at http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0051-0034.
\35\ Consortium for Energy Efficiency. Residential Lighting
Controls Market Characterization. Available at: http://library.cee1.org/sites/default/files/library/11458/CEE_LightingMarketCharacterization.pdf.
---------------------------------------------------------------------------
F. Life-Cycle Cost and Payback Period Analysis
DOE conducts LCC and PBP analyses to evaluate the economic impacts
on individual consumers of potential energy conservation standards. The
effect of new or amended energy conservation standards on individual
consumers usually involves a reduction in operating cost and an
increase in purchase cost. DOE uses the following two metrics to
measure consumer impacts:
The LCC is the total consumer expense of an appliance
or product over the life of that product, consisting of total
installed cost (product price, sales tax, and installation costs)
plus operating costs (expenses for energy use, maintenance, and
repair). To compute the operating costs, DOE discounts future
operating costs to the time of purchase and sums them over the
lifetime of the product.
The PBP (payback period) is the estimated amount of
time (in years) it takes consumers to recover the increased purchase
cost (including installation) of a more-efficient product through
lower operating costs. DOE calculates the PBP by dividing the change
in purchase cost at higher efficiency levels by the initial change
in annual operating cost when amended or new standards are assumed
to take effect.
For each CFLK standards case (i.e., case where a standard would be
in place at a particular TSL), DOE measures the change in LCC based on
the estimated change in efficacy distribution in the standards case
relative to the estimated efficacy distribution in the no-standards
case. These efficacy distributions include market trends for products
that may exceed the efficacy associated with a given TSL as well as the
current energy conservation standards. In contrast, the PBP only
considers the average time required to recover any increased first cost
associated with a purchase at a particular efficacy level relative to
the least efficient product on the market.
For each considered efficacy level, DOE calculated the LCC and PBP
for a nationally representative consumer sample in each of the
residential and commercial sectors. DOE developed consumer samples
based on the 2009 RECS and the 2003 CBECS, for the residential and
commercial sectors, respectively. For each consumer in the sample, DOE
determined the energy consumption of CFLKs and the appropriate
electricity price. By developing consumer samples, the analysis
captured the variability in energy consumption and energy prices
associated with the use of CFLKs.
DOE added sales tax, which varied by state, to the cost of the
product developed in the product price determination to determine the
total installed cost. DOE assumed that the installation costs did not
vary by efficacy level, and therefore did not consider them in the
analysis. DOE welcomes comments on this assumption (see section VII.E).
Inputs to the calculation of operating expenses include annual energy
consumption, energy prices and price projections, repair and
maintenance costs, product lifetimes, and discount rates. DOE created
distributions of values for product lifetime and discount rates, with
probabilities attached to each value, to account for their uncertainty
and variability.
The computer model DOE uses to calculate the LCC and PBP relies on
a Monte Carlo simulation to incorporate uncertainty and variability
into the analysis. The Monte Carlo simulations randomly sample input
values from the probability distributions and CFLK user samples. The
model calculated the LCC and PBP for products at each efficacy level
for sample of 10,000 consumers per simulation run.
DOE calculated the LCC and PBP for all consumers as if each were to
purchase a new product in the year that compliance with any amended
standards is expected to be required. For this NOPR, DOE estimates
publication of a final rule in 2016. Consistent with 42 U.S.C. 6295(m)
and 6295(ff), DOE used 2019 as the first year of compliance with any
amended standards.
Table IV.8 summarizes the approach and data DOE used to derive
inputs to the LCC and PBP calculations. The subsections that follow
provide further discussion. Details of the spreadsheet model, and of
all the inputs to the LCC and PBP analyses, are contained in chapter 8
and its appendices of the NOPR TSD.
Table IV.8--Summary of Inputs and Methods for the LCC and PBP Analysis *
------------------------------------------------------------------------
Inputs Source/method
------------------------------------------------------------------------
Product Cost.............................. Multiplied the weighted-
average consumer price of
each CFLK lamp and socket
(determined in the product
price determination) with a
scaling factor to account
for the total weighted-
average CFLK lumen output.
For LED lamps, DOE used a
price learning analysis to
project CFLK lamp prices to
the compliance year.
Sales Tax................................. Derived 2019 population-
weighted-average tax values
for each state based on
Census population
projections and sales tax
data from Sales Tax
Clearinghouse.
Disposal Cost............................. Assumed 35% of commercial
CFLs are disposed of at a
cost of $0.70 per CFL.
Assumptions based on
industry expert feedback
and a Massachusetts
Department of Environmental
Protection mercury lamp
recycling rate report.
[[Page 48649]]
Energy Use................................ Derived in the energy use
analysis. Varies by
geographic location and
room type in the
residential sector and by
building type in the
commercial sector.
Energy Prices............................. Electricity: Based on 2014
marginal electricity price
data from the Edison
Electric Institute.
Variability: Marginal
electricity prices vary by
season, U.S. region, and
baseline electricity
consumption level.
Energy Price Trends....................... Based on AEO 2015 price
forecasts.
Lamp Replacements......................... For lamp failures during the
lifetime of the CFLK,
consumers replace lamps
with lamp options available
in the market that have the
same base type and provide
a similar lumen output to
the initially packaged
lamps.
Residual Value............................ Represents the value of
surviving lamps at the end
of the CFLK lifetime. DOE
discounts the residual
value to the start of the
analysis period and
calculates it based on the
remaining lamp's lifetime
and price in the year the
CFLK is retired.
Product Lifetime.......................... Based on a ceiling fan
lifetime distribution, with
a mean of 13.8 years.
Discount Rates............................ Approach involves
identifying all possible
debt or asset classes that
might be used to purchase
the considered appliances,
or might be affected
indirectly.
Primary data source was the
Federal Reserve Board's
Survey of Consumer
Finances.
Efficacy Distribution..................... Estimated by the market-
share module of shipments
model. See chapter 9 of the
NOPR TSD for details.
Assumed Compliance Date................... 2019.
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
in the sections following the table or in chapter 8 of the NOPR TSD.
1. Product Cost
DOE developed the weighted-average CFLK socket costs and consumer
prices for all representative lamp units presented in the engineering
analysis in the product price determination (chapter 7 of the NOPR
TSD). DOE did not account for the remaining price of the CFLK (i.e.,
CFLK price excluding the lamps and sockets) in the LCC calculation
because these are assumed to be the same for all CFLKs regardless of
efficacy. As discussed earlier, DOE scaled the lumen output of each
representative lamp unit by a factor equal to the ratio of the market-
weighted average total lumen output to the baseline lamp lumen output.
For consistency, DOE also multiplied the price of the lamp and socket
by the same scaling factor to determine the total product cost.
DOE also used a price learning analysis to account for changes in
lamp prices that are expected to occur between the time for which DOE
has data for lamp prices (2014) and the assumed compliance date of the
rulemaking (2019). For details on the price learning analysis, see
section IV.G.
DOE applied sales tax, which varies by geographic location, to the
total product cost. DOE collected sales tax data from the Sales Tax
Clearinghouse \36\ and used population projections from the Census
Bureau \37\ to develop population-weighted-average sales tax values for
each state in 2019.
---------------------------------------------------------------------------
\36\ https://thestc.com/STRates.stm. Last accessed March 5th
2015.
\37\ U.S. Census Bureau, Population Division, Interim State
Population Projections, 2005. Table A1: Interim Projections of the
Total Population for the United States and States: April 1, 2000 to
July 1, 2030.
---------------------------------------------------------------------------
2. Disposal Cost
Disposal cost is the cost a consumer pays to dispose of their
retired CFLK. In the preliminary analysis, DOE assumed that 10 percent
of commercial consumers pay $1 per lamp to dispose of CFL and LED
lamps. Westinghouse agreed with DOE's assumed disposal cost of $1 per
lamp for CFL lamps, but disagreed with DOE's assumption that LED lamps
have a disposal cost associated with them. (Westinghouse, Public
Meeting Transcript, No. 82 at p. 195) ALA agreed with Westinghouse
regarding disposal costs for LED lamps, stating that LEDs would not
have equivalent disposal costs to CFLs because LEDs do not contain
mercury. (ALA, No. 93 at p. 10)
Because LED lamps do not contain mercury, DOE assumed in the NOPR
analyses that LED CFLKs do not have an associated disposal cost. In the
preliminary analysis, DOE assumed that 10 percent of commercial
consumers pay a $1 per lamp disposal cost for CFLs. DOE also assumed
that the fraction of commercial consumers who pay to recycle CFLs is
smaller than the fraction who pay to recycle linear fluorescent lamps.
However, DOE received comments from stakeholders during the GSL
preliminary analysis public meeting indicating that the commercial
consumers who pay to recycle linear fluorescent lamps also pay to
recycle CFLs.\38\ DOE estimates that the fraction of commercial
consumers who pay disposal fees for fluorescent lamps will increase to
35 percent by 2019 based on a 2004 report from the Association of
Lighting and Mercury Recyclers,\39\ which estimated a 29 percent
commercial recycling rate, and a 2009 draft report from the
Massachusetts Department of Environmental Protection \40\ that
indicated a recycling rate of approximately 34 percent. Given this
increased recycling percentage and DOE's assumption that the rate of
commercial fluorescent lighting recycling would increase by the
compliance date of this rulemaking, DOE has assumed that 35 percent of
consumers of commercial CFLs pay to recycle their lamps by 2019. DOE
assumes that this fraction will have saturated by 2019 and will remain
constant throughout the analysis period due to the availability of free
options for recycling small numbers of CFLs and the likelihood that
some CFLs in the commercial sector will not be disposed of through
recommended methods. DOE also reduced the disposal cost from $1 per
lamp to $0.70 per lamp based on feedback from a lighting industry
expert and stakeholder comments received on the GSL preliminary
analysis TSD.\41\ DOE requests comment and relevant data on the
disposal cost assumptions used in its analyses (see section VII.E).
---------------------------------------------------------------------------
\38\ The public meeting transcript for the energy conservation
standards preliminary analysis for GSLs is available at: http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0051-0029.
\39\ http://www.lamprecycle.org/wp-content/uploads/2014/02/ALMR_capacity_statement.2004.-pdf.pdf.
\40\ http://www.mass.gov/eea/docs/dep/toxics/stypes/09hglrrd.pdf.
\41\ These comments can be viewed on the General Service Lamps
Energy Conservation Standards docket Web site: http://www.regulations.gov/#!docketDetail;D=EERE-2013-BT-STD-0051.
---------------------------------------------------------------------------
3. Electricity Prices
In the preliminary analysis, DOE used average retail electricity
prices to conduct its analyses. In response to this methodology, ALA
suggested DOE use marginal retail electricity prices rather
[[Page 48650]]
than average retail electricity prices. (ALA, No. 93 at p. 5) Marginal
electricity prices may provide a better representation of consumer
costs than average electricity prices because marginal electricity
prices more accurately reflect the expected change in a consumer's
electric utility bill due to an increase in end-use efficiency.
Therefore, DOE used marginal electricity prices to calculate the
operating costs associated with each efficacy level in the NOPR
analyses. In the LCC analysis, marginal electricity prices vary by
season, region, and baseline household electricity consumption level.
DOE estimated these prices using data published with the Edison
Electric Institute (EEI) Typical Bills and Average Rates reports for
summer and winter 2014.\42\ DOE assigned seasonal marginal prices to
each household or commercial building in the LCC sample based on its
location and its baseline monthly electricity consumption for an
average summer or winter month. For a detailed discussion of the
development of electricity prices, see appendix 8B of the NOPR TSD.
---------------------------------------------------------------------------
\42\ Edison Electric Institute. Typical Bills and Average Rates
Report. Winter 2014 published April 2014, Summer 2014 published
October 2014. See http://www.eei.org/resourcesandmedia/products/Pages/Products.aspx.
---------------------------------------------------------------------------
4. Electricity Price Trends
To arrive at electricity prices in future years, DOE multiplied the
marginal 2014 electricity prices by the forecast of annual residential
or commercial electricity price changes for each Census division from
EIA's AEO 2015, which has an end year of 2040.\43\ For each purchase
sampled, DOE applied the projection for the Census division in which
the purchase was located. The AEO electricity price trends do not
distinguish between marginal and average prices, so DOE used the AEO
2015 trends for the marginal prices. DOE reviewed the EEI data for the
years 2007 to 2014 and determined that there is no systematic
difference in the trends for marginal vs. average electricity prices in
the data.
---------------------------------------------------------------------------
\43\ U.S. Energy Information Administration. Annual Energy
Outlook 2015 with Projections to 2040. 2015. Washington, DC Report
No. DOE/EIA-0383(2015). http://www.eia.gov/forecasts/aeo/pdf/0383(2015).pdf.
---------------------------------------------------------------------------
DOE used the electricity price trends associated with the AEO
reference case scenarios for the nine Census divisions. The reference
case is a business-as-usual estimate, given known market, demographic,
and technological trends. DOE also included AEO High Growth and AEO
Low-Growth scenarios in the analysis. The high- and low-growth cases
show the projected effects of alternative economic growth assumptions
on energy markets. To estimate the trends after 2040, DOE used the
average rate of change during 2025-2040.
5. Lamp Replacements
In the LCC analysis, DOE assumes that in both the commercial and
residential sectors, lamps fail only at the end of the lamp service
life. The service life (in years) is determined by dividing the lamps'
rated lifetime (in hours) by the lamps' average operating hours per
year.
Replacement costs include, in principle, both the lamps and labor
associated with replacing a CFLK lamp at the end of its lifetime.
However, DOE assumes that labor costs for lamp replacements are
negligible and therefore did not include them in the analysis. Thus,
DOE considers that the only first costs associated with lamp
replacements are lamp purchase costs to consumers.
DOE assumed that consumers replace failed lamps with new lamps
chosen from options available in the lighting market that have the same
base type and provide an equivalent lumen output. DOE modeled this
decision using a consumer-choice model, which incorporates consumer
sensitivity to first cost and operation and maintenance (O&M) cost. DOE
accounted for the first cost associated with purchasing a replacement
lamp, the electricity consumption and operating costs depending on
replacement lamp wattage, and the residual value of the lamp at the end
of the CFLK lifetime. For details, see chapter 8 of the NOPR TSD.
6. Product Lifetime
DOE accounted for variability in the CFLK lifetimes by assigning a
lifetime distribution \44\ that is tied to the lifetime of the ceiling
fan \45\ to which the CFLK is attached. DOE used the ceiling fan
lifetime distribution determined in the preliminary analysis of the
energy conservation standards rulemaking for ceiling fans.\46\ If
originally packaged lamps fail before the end of the CFLK lifetime, DOE
assumed that consumers replace those lamps with lamps of the same
socket type and equivalent lumen output, as described in the previous
section.
---------------------------------------------------------------------------
\44\ DOE used a Weibull distribution to model the lifetime of
ceiling fans. Weibull distributions are commonly used to model
appliance lifetimes.
\45\ The lifetime of the ceiling fan, rather than that of the
CFLK, is used because the fan, having moving parts, is likely to
have a shorter life, and the available data suggest that when fans
cease to function, their light kit is also retired.
\46\ DOE has published a framework document and preliminary
analysis for establishing energy conservation standards for ceiling
fans. Further information is available at www.regulations.gov under
Docket ID: EERE-2012-BT-STD-0045.
---------------------------------------------------------------------------
7. Residual Value
The residual value represents the remaining dollar value of
surviving lamps at the end of the CFLK lifetime, discounted to the
compliance year. DOE assumed that all lamps with lifetimes shorter than
the CFLK lifetime are replaced. To account for the value of any
initially packaged or replacement lamps with remaining life to the
consumer, the LCC model applies this residual value as a ``credit'' at
the end of the CFLK lifetime, which is discounted back to the start of
the analysis period. Because DOE estimates that LED lamps undergo price
learning, the residual value of these lamps is calculated based on the
LED lamp price in the year the CFLK is retired.
8. Discount Rates
In the calculation of LCC, DOE applies discount rates appropriate
to households to estimate the present value of future operating costs.
DOE estimated a distribution of residential discount rates for CFLKs
based on consumer financing costs and opportunity cost of funds related
to appliance energy cost savings and maintenance costs.
To establish residential discount rates for the LCC analysis, DOE
identified all relevant household debt or asset classes to approximate
a consumer's opportunity cost of funds related to appliance energy cost
savings. It estimated the average percentage shares of the various
types of debt and equity by household income group using data from the
Federal Reserve Board's Survey of Consumer Finances \47\ (SCF) for
1995, 1998, 2001, 2004, 2007, and 2010. Using the SCF and other
sources, DOE developed a distribution of rates for each type of debt
and asset by income group to represent the rates that may apply in the
year in which amended standards would take effect. DOE assigned each
sample household a specific discount rate drawn from one of the
distributions. The average rate across all types of household debt and
equity and income groups, weighted by the shares of each type, is 4.4
percent. See chapter 8 of the NOPR TSD for further details on the
development of consumer discount rates.
---------------------------------------------------------------------------
\47\ Board of Governors of the Federal Reserve System. Survey of
Consumer Finances. 1995, 1998, 2001, 2004, 2007, and 2010. (Last
accessed October 10, 2014.) http://www.federalreserve.gov/econresdata/scf/scfindex.htm.
---------------------------------------------------------------------------
[[Page 48651]]
To establish commercial discount rates for the LCC analysis, DOE
estimated the cost of capital for companies that purchase CFLKs. The
weighted-average cost of capital is commonly used to estimate the
present value of cash flows to be derived from a typical company
project or investment. Most companies use both debt and equity capital
to fund investments, so their cost of capital is the weighted average
of the cost to the firm of equity and debt financing, as estimated from
financial data for publicly traded firms in the sectors that purchase
CFLKs. For this analysis, DOE used Damodaran online \48\ as the source
of information about company debt and equity financing. The average
rate across all types of companies, weighted by the shares of each
type, is 5.0 percent. See chapter 8 of the NOPR TSD for further details
on the development of commercial sector discount rates.
---------------------------------------------------------------------------
\48\ Damodaran, A. Cost of Capital by Sector. January 2014.
(Last accessed September 25, 2014.) http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/wacc.htm.
---------------------------------------------------------------------------
9. Efficacy Distributions
To accurately estimate the share of consumers that would be
affected by a potential energy conservation standard at a particular
efficacy level, DOE's LCC analysis considered the projected
distribution (i.e., market shares) of product efficacies that consumers
purchase under the no-standards case and each of the standards cases
(i.e., the cases where a standard would be set at each TSL) at the
assumed compliance year. The estimated market shares for the no-
standards case and each standards case for CFLKs are determined by the
shipments analysis and are shown in Table IV.9. See section IV.G of
this notice and chapter 9 of the NOPR TSD for further information on
the derivation of the market efficacy distributions.
Table IV.9--Market Efficacy Distribution by Trial Standard Level in 2019
----------------------------------------------------------------------------------------------------------------
Sub-
Trial standard level baseline EL 0 (%) EL 1 (%) EL 2 (%) EL 3 (%) EL 4 (%) Total (%)
(%)
----------------------------------------------------------------------------------------------------------------
No-Standards................ 55.9 0.0 26.3 10.2 3.5 4.1 100
TSL 0....................... 0.0 0.0 82.2 10.2 3.5 4.1 100
TSL 1....................... 0.0 0.0 82.2 10.2 3.5 4.1 100
TSL 2....................... 0.0 0.0 0.0 51.3 3.5 45.2 100
TSL 3....................... 0.0 0.0 0.0 0.0 3.5 96.5 100
TSL 4....................... 0.0 0.0 0.0 0.0 0.0 100.0 100
----------------------------------------------------------------------------------------------------------------
10. LCC Savings Calculation
In the reference scenario, DOE calculated the LCC savings at each
TSL based on the change in LCC for each standards case compared to the
no-standards case, considering the efficacy distribution of products
derived by the shipments analysis. Unlike the roll-up approach applied
in the preliminary analysis, where the market share of ELs below the
standard level `rolls up' to the least efficient EL still available in
each standards case, the reference approach allows consumers to choose
more-efficient (and sometimes less expensive) products at higher ELs
and is intended to more accurately reflect the impact of a potential
standard on consumers.
DOE also performed the roll-up approach as an alternative scenario
to calculate LCC savings. For details on both the market-transformation
and the roll-up approach, see chapter 8 of the NOPR TSD.
11. Payback Period Analysis
The payback period is the amount of time it takes the consumer to
recover the additional installed cost of more-efficient products,
compared to the least efficient products on the market, through energy
cost savings. Payback periods are expressed in years. Payback periods
that exceed the life of the product mean that the increased total
installed cost is not recovered in reduced operating expenses.
The inputs to the PBP calculation for each efficacy level are the
change in total installed cost of the product and the change in the
initial annual operating expenditures relative to the least efficient
product on the market. The PBP calculation uses the same inputs as the
LCC analysis, except that discount rates and energy price trends are
not needed. DOE did not consider the impact of replacement lamps (that
replace the initially packaged lamps when they fail) in the calculation
of the PBP.
As noted above, EPCA, as amended, 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 first year's energy savings resulting from
the standard, as calculated under the applicable test procedure. (42
U.S.C. 6295(o)(2)(B)(iii)) For each considered efficacy level, DOE
determined the value of the first year's energy savings by calculating
the energy savings in accordance with the applicable DOE test
procedure, and multiplying those savings by the average energy price
forecast for the year in which compliance with the amended standards
would be required.
G. Shipments Analysis
DOE uses projections of product shipments to calculate the national
impacts of potential amended energy conservation standards on energy
use, NPV, and future manufacturer cash flows. Historical shipments data
are used to build up an equipment stock, and to calibrate the shipments
model to project shipments over the course of the analysis period based
on the estimated future demand for CFLKs. Details of the shipments
analysis are described in chapter 9 of the NOPR TSD.
The shipments model projects total shipments and market share
efficacy distributions in each year of the 30-year analysis period
(2019-2048) for the no-standards case and each of the standards cases.
Shipments are calculated for the residential and commercial sectors
assuming 95 percent of shipments are to the residential sector and 5
percent are to the commercial sector. DOE requests comments on this
assumed breakdown of CFLK usage (see section VII.E). DOE further
assumed in its analysis that CFLKs are primarily found on low-volume
ceiling fans. DOE requests any information regarding shipments of CFLKs
intended for high-volume ceiling fans. DOE also assumed that the
distribution of CFLKs by light source
[[Page 48652]]
technology in the commercial sector is the same as the light source
technology distribution in the residential sector, and DOE welcomes
comments and input on this assumption (see section VII.E).
The shipments model consists of three main components: (1) A demand
model that determines the total demand for new CFLKs in each year of
the analysis period, (2) a stock model that tracks the age distribution
of the stock over the analysis period, and (3) a modified consumer-
choice model that determines the market shares of purchased CFLKs
across ELs.
The CFLK shipments demand model considers four market segments that
impact the net demand for total shipments: Replacements for retired
stock, additions due to new building construction, additions due to
expanding demand in existing buildings, and reductions due to building
demolitions, which erodes demand from replacements and existing
buildings.
The stock accounting model tracks the age (vintage) distribution of
the installed CFLK stock. The age distribution of the stock is a key
input to both the national energy savings (NES) and NPV calculations,
because the operating costs for any year depend on the age distribution
of the stock. Older, less efficient units may have higher operating
costs, while newer, more-efficient units have lower operating costs.
The stock accounting model is initialized using historical shipments
data and accounts for additions to the stock (i.e., shipments) and
retirements. The age distribution of the stock in 2012 is estimated
using results from the LBNL survey of ceiling fan owners.\49\ The stock
age distribution is updated in subsequent years using projected
shipments and retirements determined by the stock age distribution and
a product retirement function.
---------------------------------------------------------------------------
\49\ Kantner, et al. (2013), op. cit.
---------------------------------------------------------------------------
The modified consumer-choice model estimates the market shares of
purchases in each year in the analysis period for each efficacy level
presented in the engineering analysis. In the case of CFLKs, the lamps
included with the CFLK are chosen by the CFLK manufacturer. A key
assumption of DOE's CFLK consumer-choice model is that when LED lamps
reach price parity with comparable CFL lamps, manufacturers will
purchase LED lamps to package with a CFLK, making only those lamps
available to the consumer. In other words, DOE assumes that CFLK
manufacturers will not pay a price premium to package with CFLs
compared to LED lamps. DOE requests feedback on this assumption (see
section VII.E). Prior to the point when LED lamps reach price parity
with CFLs, market share to LED CFLKs is allocated following an adoption
curve discussed in more detail below.
As described in the engineering analysis, DOE assumed that CFLK
manufacturers could respond in two ways to an amended energy
conservation standard. Manufacturers could maintain the current base
type and number of lamps in a CFLK design and simply replace lamps
currently packaged with CFLKs with a more-efficient option (lamp
replacement scenario), or they could reconfigure CFLKs to include a
different base type and/or number of lamps, in addition to packaging
with more-efficient lamp options (light kit replacement scenario). DOE
assumed that there was no inherent preference between the two scenarios
and split market share evenly between them. DOE requests comment on the
likelihood of CFLK manufacturers selecting each substitution scenario
and information on any alternative scenarios that manufacturers may
choose (see section VII.E).
DOE's shipments model estimates the adoption of LED technologies
using an incursion curve and a modified consumer-choice model in both
the no-standards and amended standards cases. In the preliminary
analysis, DOE estimated the market share of LED CFLKs in the compliance
year would be approximately 27 percent in its reference scenario. This
estimate was based on the market shares of LED A-type lamps presented
in the report, Energy Savings Potential of Solid-State Lighting in
General Illumination Applications \50\ (SSL report). DOE assumed that
LED incursion into CFLKs would lag behind general service applications
by two years. Westinghouse tentatively agreed with this projected
market share of LED CFLKs in the compliance year (2019). (Westinghouse,
Public Meeting Transcript, No. 82 at p. 234) Westinghouse appreciated
that DOE's estimated LED CFLK adoption rate is projected to trail the
LED GSL adoption rate, but also noted that CFLK manufacturers are
dependent on what products are available to them. (Id.) ALA believes
DOE's LED incursion estimate is too high and estimates that LED CFLKs
will have no more than 15 percent market share in 2018. (ALA, No. 93 at
p. 4)
---------------------------------------------------------------------------
\50\ Navigant Consulting, Inc. Energy Savings Potential of
Solid-State Lighting in General Illumination Applications. 2012.
http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_energy-savings-report_jan-2012.pdf.
---------------------------------------------------------------------------
Based on the current market share of LED CFLKs, a market share
lower than 27 percent in the compliance year is a reasonable
assumption. For the NOPR analysis, DOE used the Bass diffusion curve
developed in the SSL report for GSLs to estimate the market share
apportioned to LED ELs. DOE assumed the adoption of LEDs in the CFLK
market would trail behind adoption of LED technology in the GSL market
by 3.5 years. In the NOPR analysis, DOE's LED incursion curve for CFLKs
results in a market share of 14 percent for LED lamps in 2019. DOE
requests comment on this approach (see section VII.E). Based on
observed trends in the efficacy of LED lamps on the market over time,
DOE assumed the market for LED lamps would naturally move to more
efficacious ELs in the no-standards case as well as the standards
cases. DOE requests comment on this assumption (see section VII.E).
In the preliminary analysis, DOE assumed that only LEDs will
continue to undergo significant cost reduction due to price learning,
and DOE estimated the learning rate based on price learning projections
for the general LED market. Westinghouse and ALA agree with DOE's
assumption that only LEDs will continue to undergo significant cost
reduction due to price learning; however, ALA believes DOE's LED price
learning assumption estimate is too high. (Westinghouse, Public Meeting
Transcript, No. 82 at pp. 231-233; ALA, No. 93 at p. 10) Westinghouse,
on the other hand, was tentatively in agreement with DOE's LED price
learning estimates for CFLKs. (Westinghouse, Public Meeting Transcript,
No. 82 at pp. 231-233)
In the NOPR analysis, DOE again assumed that price learning would
occur only for LEDs. DOE requests comment on this assumption (see
section VII.E). DOE used the price trends developed in the GSLs
preliminary analysis for the reference scenario in the base case of
that rulemaking (i.e., shipments of LED GSLs were affected by the EISA
2007 backstop but not by a GSL final rule). That scenario assumed that
LED GSLs would experience the same learning rate historically observed
for CFLs. Most recent estimates for LED GSL price trends indicate
faster historic price decline; \51\ therefore DOE believes the
[[Page 48653]]
scenario it used may be a conservative estimate of LED GSL price
trends. Details on the development of the price trends are in chapter 9
of the NOPR TSD and chapter 9 of the GSL preliminary analysis TSD.\52\
---------------------------------------------------------------------------
\51\ Navigant Consulting, Inc. Energy Savings Forecast of Solid-
State Lighting in General Illumination Applications. 2014. U.S.
Department of Energy. Report No. DOE/EE-1133. http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/energysavingsforecast14.pdf.
\52\ U.S. Department of Energy--Office of Energy Efficiency and
Renewable Energy. Preliminary Technical Support Document: Energy
Efficiency Program for Consumer Products and Commercial and
Industrial Equipment: General Service Lamps. 2014. Washington, DC
http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-
00051-0022.
---------------------------------------------------------------------------
In the preliminary analysis for the concurrent GSL energy
conservation standards rulemaking,\53\ DOE considered lamps that have
base types specified by ANSI, have a lumen output of at least 310
lumens, and are intended to serve in general lighting applications to
meet the GSL definition. Therefore, DOE considers candelabra-base lamps
that meet the lumen output and general application requirements to meet
the GSL definition, which available information indicates would include
all candelabra-base lamps currently packaged with CFLKs. All lamps that
meet the GSL definition would be subject to the EISA 2007 backstop
requirement prohibiting the sale of any GSL that does not meet a
minimum efficacy standard of 45 lm/W if the concurrent GSL rulemaking
is not completed by January 1, 2017, or if the energy savings of the
GSL final rule are not greater than or equal to the savings from a
minimum efficacy standard of 45 lumens per watt. 42 U.S.C.
6295(i)(6)(A)(v)
---------------------------------------------------------------------------
\53\ The GSL energy conservation standards preliminary analysis
technical support document and public meeting information are
available at regulations.gov under docket ID EERE-2013-BT-STD-0051-
0022: http://www.regulations.gov/#!docketDetail;D=EERE-2013-BT-STD-
0051.
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The Consolidated and Further Continuing Appropriations Act, 2015
(Public Law 113-235, Dec. 16, 2014), in relevant part, restricts the
use of appropriated funds in connection with several aspects of DOE's
incandescent lamps energy conservation standards program. Specifically,
section 313 states that none of the funds made available by the Act may
be used to implement or enforce standards for GSILs, intermediate base
incandescent lamps and candelabra base incandescent lamps. Thus, DOE is
not considering GSILs in the GSL rulemaking. Because GSILs are not
included in the scope of the GSL rulemaking, DOE assumed that any GSL
final rule would not yield sufficient energy savings to avoid
triggering the EISA 2007 45 lm/W backstop requirement in 2020.
Accordingly, DOE has assumed in both the no-standards and the
standards-case shipment projections that candelabra-base lamps with
efficacy below the minimum requirement of 45 lm/W will no longer be an
option available for packaging with CFLKs beginning January 1, 2020.
In the preliminary analysis, DOE used an initial relative price
elasticity of demand of -0.34, which is the value DOE has typically
used for residential appliances. DOE notes that the fractional drop in
CFLK shipments in the standards cases is proportional to the change in
CFLK purchase price compared to the total price of a ceiling fan and
CFLK system. Given that the CFLK price is relatively small compared to
the ceiling fan price, DOE will address comments related to price
elasticity in the ceiling fan ECS NOPR. For the CFLK NOPR analyses, DOE
again used an initial relative price elasticity of demand of -0.34.
In the preliminary analysis, DOE assumed that the vast majority of
CFLKs were sold with ceiling fans and noted that a standard for ceiling
fans could also reduce CFLK shipments (and vice versa). For this NOPR,
DOE did not assume a standard on ceiling fans in its projections for
CFLK shipments because DOE has not yet proposed a ceiling fan
standard.\54\ In any ECS NOPR for ceiling fans, DOE will consider the
impact of these proposed CFLK standards in its projections of ceiling
fan shipments. In any CFLK ECS final rule, DOE will take into account
the impact of a potential proposed ceiling fan standard on CFLK
shipments and will consider taking comment on its revised analysis as
appropriate.
---------------------------------------------------------------------------
\54\ The ceiling fans energy conservation standards docket
(docket number EERE-2012-BT-STD-0045-0065) is located at
regulations.gov: http://www.regulations.gov/#!docketDetail;D=EERE-
2012-BT-STD-0045.
---------------------------------------------------------------------------
H. National Impact Analysis
The NIA assesses the NES and the NPV from a national perspective of
total consumer costs and savings that would be expected to result from
new or amended standards at specific ELs. (``Consumer'' in this context
refers to consumers of the product being regulated.) DOE calculates the
NES and NPV based on projections of annual product shipments, along
with the annual energy consumption, total installed cost, and the costs
of relamping. For the NOPR analysis, DOE projected the energy savings,
operating-cost savings, product costs, and NPV of consumer benefits
over the lifetime of CFLKs shipped from 2019 through 2048.
DOE evaluates the impacts of amended standards by comparing a no-
standards-case projection with standards-case projections. The no-
standards-case projection characterizes energy use and consumer costs
in the absence of amended energy conservation standards. The standards-
case projections characterize energy use and consumer cost for the
market distribution where CFLKs that do not meet the TSL being analyzed
are excluded as options available to the consumer. As described in
section IV.G of this notice, DOE developed market share distributions
for CFLKs at each EL in the no-standards case and each of the standards
cases in its shipments analysis.
DOE uses a spreadsheet model to calculate the energy savings and
the national consumer costs and savings from each TSL. Interested
parties can review DOE's analyses by changing various input quantities
within the spreadsheet. The NIA spreadsheet model uses typical values
(as opposed to probability distributions) as inputs.
Table IV.10 summarizes the inputs and methods DOE used for the NIA
analysis for the NOPR. Discussion of these inputs and methods follows
the table. See chapter 10 of the NOPR TSD for further details.
Table IV.10--Summary of Inputs and Methods for the National Impact
Analysis
------------------------------------------------------------------------
Inputs Method
------------------------------------------------------------------------
Shipments.................................... Annual shipments from
shipments model.
Assumed Compliance Date of Standard.......... 2019.
No Standard-Case Forecasted Efficacies....... Estimated by market-share
module of shipments
model including impact
of SSL incursion.
Standards-Case Forecasted Efficacies......... Estimated by market-share
module of shipments
model including impact
of SSL incursion.
[[Page 48654]]
Annual Energy Consumption per Unit........... Annual weighted-average
values are a function of
energy use at each EL
including impacts of
relamping over the CFLK
lifetime.
Total Installed Cost per Unit................ Annual weighted-average
values are a function of
cost at each EL.
Incorporates projection
of future LED lamp
prices based on
historical data.
Annual Energy Cost per Unit.................. Annual weighted-average
values as a function of
the annual energy
consumption per unit and
energy prices.
Repair and Maintenance Cost per Unit......... Annual repair values do
not change with efficacy
level.
Replacement lamp costs
are calculated for each
efficacy level over the
analysis period.
Energy Prices................................ AEO 2015 forecasts (to
2040) and extrapolation
thereafter.
Energy Site-to-Primary Conversion............ A time-series conversion
factor based on AEO
2014.
Discount Rate................................ Three and seven percent.
Present Year................................. 2015.
------------------------------------------------------------------------
1. National Energy Savings
The NES analysis involves a comparison of national energy
consumption of the considered products in each potential standards case
(TSL) with consumption in the case with no new or amended energy
conservation standards. DOE calculated the national energy consumption
by multiplying the number of units (stock) of each product (by vintage
or age) by the unit energy consumption (also by vintage). DOE accounts
for changes in unit energy consumption as the lamps packaged with the
CFLK are retired at the end of the lamp lifetime and new lamps are
purchased as replacements for the existing CFLK. DOE uses a consumer-
choice model, described in section IV.G, to determine the mix of lamps
chosen as replacements.
DOE calculated annual NES based on the difference in national
energy consumption for the no-standards case and for the case where a
standard is set at each TSL. DOE estimated energy consumption and
savings based on site energy and converted the electricity consumption
and savings to primary energy (i.e., the energy consumed by power
plants to generate site electricity) using annual conversion factors
derived from AEO 2014. Cumulative energy savings are the sum of the NES
for each year over the timeframe of the analysis.
In response to the recommendations of a committee on ``Point-of-Use
and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency
Standards'' appointed by the National Academy of Sciences, DOE
announced its intention to use FFC measures of energy use and
greenhouse gas and other emissions in the national impact analyses and
emissions analyses included in future energy conservation standards
rulemakings. 76 FR 51281 (August 18, 2011). After evaluating the
approaches discussed in the August 18, 2011 notice, DOE published a
statement of amended policy in which DOE explained its determination
that EIA's National Energy Modeling System (NEMS) is the most
appropriate tool for its FFC analysis and its intention to use NEMS for
that purpose. 77 FR 49701 (August 17, 2012). NEMS is a public domain,
multi-sector, partial equilibrium model of the U.S. energy sector \55\
that EIA uses to prepare its AEO. The approach used for deriving FFC
measures of energy use and emissions is described in appendix 10B of
the NOPR TSD.
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\55\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview, DOE/EIA-0581 (98) (Feb.1998)
(Available at: http://www.eia.gov/oiaf/aeo/overview/).
---------------------------------------------------------------------------
In response to the calculated NES presented in the preliminary
analysis, the Joint Comment requested that DOE review the savings
estimates to confirm that they accurately represent the effect of a
standard set at each CSL. The Joint Comment conducted an analysis of
energy savings per unit for CFLKs packaged with sub-baseline lamps
compared to CFLKs packaged with lamps corresponding to each of several
ELs considered by DOE. The Joint Comment compared the results of this
analysis to the NES reported by DOE for each case when a standard is
set at a particular efficacy level, and suggested that the estimated
energy savings in the preliminary analysis for CSL 0 may be too low.
(Joint Comment, No. 95 at p. 3)
DOE has reviewed and confirmed its analysis of NES at each efficacy
level. ASAP, et al.'s analysis does not take into account two
significant factors that account for the divergence in estimated energy
savings. First, ASAP et al.'s analysis does not take into account
significant changes in the CFLK market efficacy distribution over the
course of the analysis period, even in the absence of an amended
standard for CFLKs, instead assuming a persistent, significant fraction
of CFLKs are packaged with sub-baseline products. DOE's analysis, on
the other hand, assumed significant and rapid LED incursion into the
CFLK market, which displaced CFLKs packaged with sub-baseline products
early in the analysis period, even in the absence of amended standards.
Second, ASAP et al.'s analysis does not take into account the lifetime
of the lamps originally packaged with a CFLK and appears to assume that
when the originally packaged lamps are retired, those lamps are always
replaced by lamps with the same efficacy. DOE's analysis, in contrast,
assumes significant LED incursion into the market for lamps that
replace the originally packaged lamps, which can have a significant
impact on the efficacy and energy consumption of a CFLK over its
lifetime, particularly for CFLKs originally packaged with sub-baseline
lamps. As a result, DOE's calculation of the lifetime energy
consumption for a CFLK originally packaged with sub-baseline lamps
yields a lower value than an analysis that assumes that the efficacy of
that CFLK is constant. Thus, the energy savings potential associated
with a standard set at any given CSL is lower. DOE notes that the
aforementioned assumption that the 45 lm/W standard requirement will
take effect on January 1, 2020 further reduces the energy savings
potential for this rulemaking by impacting both the lamps available for
packaging with a CFLK and the replacement lamps available to consumers.
2. Net Present Value Analysis
The inputs for determining the NPV of the total costs and benefits
experienced by consumers are: (1) Total annual installed cost; (2)
total annual savings in operating costs; and (3) a discount factor to
calculate the present value of costs and savings. DOE calculates net
savings each year as the difference between the no-standards case and
each standards case in terms of total savings in operating costs versus
[[Page 48655]]
total increases in installed costs. DOE calculates operating-cost
savings over the lifetime of each product shipped during the forecast
period.
The operating-cost savings are primarily energy cost savings, which
are calculated using the estimated energy savings in each year and the
projected price of electricity. To estimate electricity prices in
future years, DOE multiplied the average regional electricity prices by
the forecast of annual national-average residential or commercial
electricity price changes in the reference case from AEO 2015, which
has an end year of 2040. To estimate price trends after 2040, DOE used
the average annual rate of change in prices from 2025 to 2040. As part
of the NIA, DOE also analyzed scenarios that used inputs from the AEO
2015 Low Economic Growth and High Economic Growth cases.
Operating-cost savings are also impacted by the costs incurred by
consumers to relamp their CFLK over the course of the CFLK lifetime, as
well as any impact the new lamps may have on the efficacy of the CFLK.
Any remaining residual life in lamps at the end of the CFLK lifetime
(for either the initially packaged lamps or replacement lamps) is
expressed as a credit that is deducted from the operating cost.
DOE estimated the range of potential impacts of amended standards
by considering high and low benefit scenarios. In the high benefits
scenario, DOE used the High Economic Growth AEO 2015 estimates for new
housing starts and electricity prices along with its reference LED
price learning trend. As discussed in section IV.G, the reference LED
price trend assumes the learning rate measured from historical CFL
price trends can be applied to cumulative LED shipments to determine
future LED prices. In the low benefits scenario, DOE used the Low
Economic Growth AEO 2015 estimates for housing starts and electricity
prices, along with a high LED learning rate. The high LED learning rate
is estimated from historical LED price trends and shows a faster price
decline in comparison to the CFL learning rate as estimated by
LBNL.\56\ The benefits to consumers from amended CFLK standards are
lower if LED prices decline faster because consumers convert to LED
CFLKs more quickly in the no-standards case. NIA results based on these
alternative scenarios are presented in appendix 10C of the NOPR TSD.
---------------------------------------------------------------------------
\56\ Gerke, B., A. Ngo, A. Alstone, and K. Fisseha. The Evolving
Price of Household LED Lamps: Recent Trends and Historical
Comparisons for the US Market. 2014. Lawrence Berkeley National
Laboratory: Berkeley, CA. Report No. LBNL-6854E.
---------------------------------------------------------------------------
In calculating the NPV, DOE multiplies the net savings in future
years by a discount factor to determine their present value. For this
NOPR, 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.\57\ The discount rates for the determination of NPV are in
contrast to the discount rates used in the LCC analysis, which are
designed to reflect a consumer's perspective. The 7-percent real value
is an estimate of the average before-tax rate of return to private
capital in the U.S. economy. The 3-percent real value represents the
``social rate of time preference,'' which is the rate at which society
discounts future consumption flows to their present value.
---------------------------------------------------------------------------
\57\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis,'' (Sept. 17, 2003), section E (Available at:
www.whitehouse.gov/omb/memoranda/m03-21.html).
---------------------------------------------------------------------------
I. Consumer Subgroup Analysis
In analyzing the potential impact of new or amended standards on
consumers, DOE evaluates the impact on identifiable subgroups of
consumers that may be disproportionately affected by a new or amended
national standard. DOE evaluates impacts on particular subgroups of
consumers by analyzing the LCC impacts and PBP for those particular
consumers from alternative standard levels. For this NOPR, DOE analyzed
the impacts of the considered standard levels on low-income households
and small businesses. Chapter 11 of the NOPR TSD describes the consumer
subgroup analysis.
J. Manufacturer Impact Analysis
1. Overview
DOE conducted an MIA for CFLKs to estimate the financial impact of
proposed standards on manufacturers of CFLKs. The MIA has both
quantitative and qualitative aspects. The quantitative part of the MIA
relies on the GRIM, an industry cash-flow model customized for the
CFLKs covered in this rulemaking. The key GRIM inputs are data on the
industry cost structure, equipment costs, shipments, and assumptions
about markups, and conversion costs. The key MIA output is INPV. DOE
used the GRIM to calculate cash flows using standard accounting
principles and to compare changes in INPV between a no-standards case
and various TSLs (the standards case). The difference in INPV between
the base and standards cases represents the financial impact of amended
energy conservation standards on CFLK manufacturers. Different sets of
assumptions (scenarios) produce different INPV results. The qualitative
part of the MIA addresses factors such as manufacturing capacity;
characteristics of, and impacts on, any particular subgroup of
manufacturers; and impacts on competition.
DOE conducted the MIA for this rulemaking in three phases. In the
first phase, DOE prepared an industry characterization based on the
market and technology assessment, preliminary manufacturer interviews,
and publicly available information. In the second phase, DOE estimated
industry cash flows in the GRIM using industry financial parameters
derived in the first phase and the shipment scenarios used in the NIA.
In the third phase, DOE conducted interviews with a variety of CFLK
manufacturers that account for more than 30 percent of domestic CFLK
sales covered by this rulemaking. During these interviews, DOE
discussed engineering, manufacturing, procurement, and financial topics
specific to each company and obtained each manufacturer's view of the
CFLK industry as a whole. The interviews provided information that DOE
used to evaluate the impacts of amended standards on manufacturers'
cash flows, manufacturing capacities, and direct domestic manufacturing
employment levels. See section V.B.2.b of this NOPR for the discussion
on the estimated changes in the number of domestic employees involved
in manufacturing CFLKs covered by standards. See section IV.J.4 of this
NOPR for a description of the key issues that manufacturers raised
during the interviews.
During the third phase, DOE also used the results of the industry
characterization analysis in the first phase and feedback from
manufacturer interviews to group manufacturers that exhibit similar
production and cost structure characteristics. DOE identified one
manufacturer subgroup for a separate impact analysis--small business
manufacturers--using the small business employee threshold of 750 total
employees published by the Small Business Administration (SBA). This
threshold includes all employees in a business' parent company and any
other subsidiaries. Based on this classification, DOE identified 34
CFLK manufacturers that qualify as small businesses. The complete MIA
is presented in chapter 12 of the NOPR TSD, and the analysis required
by the
[[Page 48656]]
Regulatory Flexibility Act, 5 U.S.C. 601, et. seq., is presented in
section VI.B of this NOPR and chapter 13 of the NOPR TSD.
2. GRIM Analysis and Key Inputs
DOE uses the GRIM to quantify the changes in cash flows over time
due to amended energy conservation standards. These changes in cash
flows result in either a higher or lower INPV for the standards case
compared to the no-standards case (the case where a new standard is not
set). The GRIM analysis uses a standard annual cash-flow analysis that
incorporates manufacturer costs, markups, shipments, and industry
financial information as inputs. It then models changes in costs,
investments, and manufacturer margins that result from amended energy
conservation standards. The GRIM uses these inputs to calculate a
series of annual cash flows beginning with the base year of the
analysis, 2015, and continuing to 2048. DOE computes INPV by summing
the stream of annual discounted cash flows during the analysis period.
DOE used a real discount rate of 7.4 percent for CFLK manufacturers.
Initial discount rate estimates were derived from industry corporate
annual reports to the Securities and Exchange Commission (SEC 10-Ks).
DOE initially derived a real discount rate of 5.9 percent from publicly
available SEC 10-Ks. During manufacturer interviews, CFLK manufacturers
were asked to provide feedback on this discount rate. Based on
manufacturer feedback that the 5.9 percent discount was too low for the
CFLK industry and that 7.4 percent was a more accurate reflection of
their typical rate of return on their investments, DOE revised the real
discount rate to be 7.4 percent for this analysis. Many inputs into the
GRIM come from the engineering analysis, the NIA, manufacturer
interviews, and other research conducted during the MIA. The major GRIM
inputs are described in detail in the following sections.
a. Capital and Product Conversion Costs
DOE expects amended CFLK energy conservation standards to cause
manufacturers to incur conversion costs by bringing their tooling and
product designs into compliance with amended standards in the light kit
replacement scenario. For the MIA, DOE classified these conversion
costs into two major groups: (1) Capital conversion costs and (2)
product conversion costs. Capital conversion costs are investments in
property, plant, and equipment necessary to adapt or change existing
tooling equipment such that new product designs can be fabricated and
assembled. Product conversion costs are investments in research,
development, testing, marketing, certification, and other non-
capitalized costs necessary to make product designs comply with amended
standards.
Using feedback from manufacturer interviews, DOE conducted a
bottom-up analysis to calculate the capital and product conversion
costs for CFLK manufacturers for each product class at each EL. To
conduct this bottom-up analysis, DOE used manufacturer input from
manufacturer interviews regarding the types and dollar amounts of
discrete capital and product expenditures that would be necessary to
convert specific production lines for CFLKs at each EL. DOE examined
conversion costs for each replacement scenario separately. In the lamp
replacement scenario, CFLK manufacturers comply with amended standards
by replacing the lamps in the CFLKs with more efficacious lamps that
meet amended standards. DOE assumed that there would be no capital or
product conversion costs for the lamp replacement scenario because CFLK
manufacturers are not required to adjust the type or number of lamps in
their CFLK, nor are they required to make any adjustments to the
existing fixtures. In the light kit replacement scenario, CFLK
manufacturers can comply with amended standards by changing the fixture
designs (i.e., changing the number of sockets and/or using more
efficacious substitutes with different base types and/or shapes than
the baseline lamp). In the light kit replacement scenario, however,
manufacturers would incur product and capital conversion costs at ELs
that require LED lamps. Based on manufacturer feedback DOE determined
that some CFLKs would need to be redesigned due to potential heat sink
issues associated with LED lamps and the potentially larger size of LED
lamps. Manufacturers would also need to purchase tooling equipment
necessary to produce these redesigned CFLKs. Once DOE compiled these
capital and product conversion costs, DOE took average values (i.e.,
average number of hours or average dollar amounts) based on the range
of responses given by manufacturers for each capital and product
conversion cost at each EL. See chapter 12 of the NOPR TSD for a
complete description of DOE's assumptions for the capital and product
conversion costs and section IV.C.4 of this NOPR for further discussion
on more efficacious substitutes and replacement scenarios.
b. Manufacturer Production Costs
Manufacturing more efficacious CFLKs can result in changes in
manufacturer production costs (MPCs) as a result of varying components
required to meet ELs at each TSL. Changes in MPCs for these more
efficacious components can impact the revenue, gross margin, and the
cash flows of CFLK manufacturers. Typically, DOE develops MPCs for the
covered products and uses the prices as an input to the LCC analysis
and NIA. However, because the CFLK standard is based on the efficacy of
the lamps with which it is packaged and lamps are difficult to reverse-
engineer, DOE directly derived end-user prices and used them to
calculate the MPCs for CFLKs in this rulemaking.
To determine MPCs of CFLKs from end-user prices, DOE divided the
end-user price of CFLKs at each EL by a manufacturer markup and by a
distributor markup. DOE determined the manufacturer markup by examining
the SEC 10-Ks of all publicly traded CFLK manufacturers to estimate an
average CFLK manufacturer markup of 1.37. DOE determined the
distributor markup by surveying distributor net prices in the three
main CFLK distribution channels to estimate a distributor markup of
1.52 for CFLKs. Feedback from manufacturer interviews indicated that
the respective markups were appropriate for the CFLK industry. In the
no-standards case, the MSP is represented by the end-user price divided
by the distributor markup. For a complete description of end-user
prices, see the product price determination in section IV.D of this
NOPR.
c. Shipment Scenarios
INPV, which is the key GRIM output, depends on industry revenue,
which depends on the quantity and prices of CFLKs shipped in each year
of the analysis period. Industry revenue calculations require forecasts
of: (1) Total annual shipment volume of CFLKs; (2) the distribution of
shipments across the product class (because prices vary by product
class); and, (3) the distribution of shipments across ELs (because
prices vary with lamp efficacy).
Since the majority of CFLKs are sold with ceiling fans, DOE modeled
CFLK shipments based on ceiling fan shipments. DOE modeled ceiling fan
shipments and the growth of ceiling fan shipments using replacements
shipments of failed ceiling fan units, new construction starts as
projected by AEO 2015, and the number of additions
[[Page 48657]]
to existing buildings due to expanding demand throughout the analysis
period. DOE then determined that 88 percent of ceiling fan shipments
included a CFLK, which was used as the basis for CFLKs shipped in this
analysis.
In the standards case, the change in the number of shipments is
driven by changes in average CFLK price as a result of the standard.
The lifetime of CFLKs is estimated to be the same as the lifetime of a
ceiling fan in this analysis, and is not projected to impact the
shipments of CFLKs. For a complete description of the shipments, see
the shipments analysis discussion in section IV.G of this NOPR.
d. Markup Scenarios
As discussed in the previous manufacturer production costs section,
the MPCs for CFLKs are the manufacturers' costs for those units. These
costs include materials, labor, depreciation, and overhead, which are
collectively referred to as the cost of goods sold (COGS). The MSP is
the price received by CFLK manufacturers from their consumers,
typically a distributor, regardless of the downstream distribution
channel through which the CFLKs are ultimately sold. The MSP is not the
cost the end user pays for CFLKs because there are typically multiple
sales along the distribution chain and various markups applied to each
sale. The MSP equals the MPC multiplied by the manufacturer markup. The
manufacturer markup covers all the CFLK manufacturer's non-production
costs (i.e., selling, general and administrative expenses [SG&A],
research and development [R&D], interest) as well as profit. Total
industry revenue for CFLK manufacturers equals the MSPs at each EL
multiplied by the number of shipments at that EL.
Modifying these manufacturer markups in the standards case yields a
different set of impacts on CFLK manufacturers than in the no-standards
case. For the MIA, DOE modeled two standards-case markup scenarios for
CFLKs to represent the uncertainty regarding the potential impacts on
prices and profitability for CFLK manufacturers following the
implementation of amended energy conservation standards. The two
scenarios are: (1) A preservation of gross margin, or flat, markup
scenario; and (2) a two-tiered markup scenario. Each scenario leads to
different manufacturer markup values, which, when applied to the
inputted MPCs, result in varying revenue and cash-flow impacts on CFLK
manufacturers.
The preservation of gross margin markup scenario assumes that the
COGS for each product is marked up by a preservation of gross margin
percentage to cover SG&A expenses, R&D expenses, interest expenses, and
profit. This allows manufacturers to preserve the same gross margin
percentage in the standards case as in the no-standards case. This
markup scenario represents the upper bound of the CFLK industry's
profitability in the standards case because CFLK manufacturers are able
to fully pass additional costs due to standards to their consumers.
To derive the preservation of gross margin markup percentages for
CFLKs, DOE examined the SEC 10-Ks of all publicly traded CFLK
manufacturers to estimate the industry average gross margin percentage.
Manufacturers were then asked to verify the industry gross margin
percentage derived from SEC 10-Ks during manufacturer interviews.
DOE also modeled a two-tiered markup scenario, which reflects the
industry's high and low efficacy product pricing structure. DOE modeled
the two-tiered markup scenario because multiple manufacturers stated in
interviews that they offer multiple tiers of product lines that are
differentiated, in part, by efficacy level. The higher efficacy tiers
typically earn premiums (for the manufacturer) over the baseline
efficacy tier. Several manufacturers suggested that amended standards
would lead to a reduction in premium markups and reduce the
profitability of higher efficacy products. During the MIA interviews,
manufacturers provided information on the range of typical ELs in those
tiers and the change in profitability at each level. DOE used this
information to estimate markups for CFLKs under a two-tiered pricing
strategy in the no-standards case. In the standards case, DOE modeled
the situation in which standards result in less product
differentiation, compression of the markup tiers, and an overall
reduction in profitability.
3. Discussion of Comments
Interested parties commented on the assumptions and results of the
preliminary analysis. Hunter Fans stated that because CFLK
manufacturers are not lamp manufacturers, if the standard requires a
more efficacious LED lamp than the lamp manufacturers produce for
CFLKs, the fan manufacturers would have to stop producing CFLKs.
(Hunter Fans, Public Meeting Transcript, No. 82 at pp. 208-209)
Westinghouse agreed, emphasizing that CFLK product development trails
the development of applicable lamps. If the standard is set beyond the
efficacy of commercially available lamps, CFLK manufacturers would be
forced to wait, and choose between significantly redesigning existing
products and exiting the market. (Westinghouse, Public Meeting
Transcript, No. 82 at pp. 141-142) Westinghouse also noted that it
becomes somewhat burdensome for fan manufacturers to lead the efficacy
on lamps instead of lamps manufacturers as a result of a lamps
rulemaking such as the ongoing GSL energy conservation standards
rulemaking. (Westinghouse, Public Meeting Transcript, No. 82 at p.
192).
DOE understands that most CFLK manufacturers do not manufacture
lamps but rather purchase lamps from another supplier or manufacturer.
DOE has determined that the proposed TSL can be met with replacement
lamps currently available on the market. See section V.C of this NOPR
for more information on the selection of the proposed TSL.
4. Manufacturer Interviews
DOE conducted additional interviews with manufacturers following
the preliminary analysis as part of the NOPR analysis. In these
interviews, DOE asked manufacturers to describe their major concerns
with this CFLK rulemaking. Manufacturers identified two major areas of
concern: (1) Duplicative regulation and (2) shift to air conditioning.
a. Duplicative Regulation
Some manufacturers commented that a separate regulation
specifically for CFLKs was unnecessary, as most lamps placed in CFLKs
would be covered by other lighting energy conservation standards, such
as the ongoing GSLs rulemaking. 78 FR 73737 (December 9, 2013). These
manufacturers claimed that there would not be significant additional
energy savings from separate CFLK standards.
b. Shift to Air Conditioning
Manufacturers were also concerned about a potential technology
shift in the CFLK market as a result of energy conservation standards.
Manufacturers stated that CFLK standards may require that more
efficacious lamps be used in CFLKs, which could significantly increase
the price of the overall ceiling fan. Manufacturers pointed out that
this could cause consumers to choose air conditioning systems rather
than ceiling fans. These manufacturers claimed that this could result
in more energy use, since ceiling fans could be more efficient at
cooling rooms than air conditioners.
K. Emissions Analysis
In the emissions analysis, DOE estimated the change in power sector
[[Page 48658]]
emissions of carbon dioxide (CO2), nitrogen oxides
(NOX), sulfur dioxide (SO2), and mercury (Hg)
from potential energy conservation standards for CFLKs. In addition,
DOE estimated 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 FFC. In accordance with DOE's
FFC Statement of Policy (76 FR 51281 (August 18, 2011), as amended at
77 FR 49701 (August 17, 2012)), the FFC analysis includes impacts on
emissions of methane (CH4) and nitrous oxide
(N2O), both of which are recognized as greenhouse gases.
DOE primarily conducted the emissions analysis using emissions
factors for CO2 and most of the other gases derived from
data in AEO 2014. Combustion emissions of CH4 and
N2O were estimated using emissions intensity factors
published by the Environmental Protection Agency (EPA) in its GHG
Emissions Factors Hub.\58\ 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 NOPR TSD.
---------------------------------------------------------------------------
\58\ See http://www.epa.gov/climateleadership/inventory/ghg-emissions.html.
---------------------------------------------------------------------------
For CH4 and N2O, DOE calculated emissions
reduction in tons and also in terms of units of carbon dioxide
equivalent (CO2eq). Gases are converted to CO2eq
by multiplying each ton of gas by the gas' global warming potential
(GWP) over a 100-year time horizon. Based on the Fifth Assessment
Report of the Intergovernmental Panel on Climate Change,\59\ DOE used
GWP values of 28 for CH4 and 265 for N2O.
---------------------------------------------------------------------------
\59\ IPCC, 2013: Climate Change 2013: The Physical Science
Basis. Contribution of Working Group I to the Fifth Assessment
Report of the Intergovernmental Panel on Climate Change [Stocker,
T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A.
Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge
University Press, Cambridge, United Kingdom and New York, NY, USA.
Chapter 8.
---------------------------------------------------------------------------
The AEO 2014 projections incorporate the projected impacts of
existing air quality regulations on emissions. AEO 2014 generally
represents current legislation and environmental regulations, including
recent government actions, for which implementing regulations were
available as of October 31, 2013. DOE's estimation of impacts accounts
for the presence of the emissions control programs discussed in the
following paragraphs.
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). (42 U.S.C. 7651 et seq.) SO2
emissions from 28 eastern states and DC were also limited under the
Clean Air Interstate Rule (CAIR). 70 FR 25162 (May 12, 2005). CAIR
created an allowance-based trading program that operates along with the
Title IV program. In 2008, CAIR was remanded to EPA by the U.S. Court
of Appeals for the District of Columbia Circuit, but it remained in
effect.\60\ In 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,\61\ and the
court ordered EPA to continue administering CAIR. On April 29, 2014,
the U.S. Supreme Court reversed the judgment of the DC Circuit and
remanded the case for further proceedings consistent with the Supreme
Court's opinion.\62\ On October 23, 2014, the DC Circuit lifted the
stay of CSAPR.\63\ Pursuant to this action, CSAPR went into effect (and
CAIR ceased to be in effect) as of January 1, 2015.
---------------------------------------------------------------------------
\60\ 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).
\61\ See EME Homer City Generation, LP v. EPA, 696 F.3d 7, 38
(D.C. Cir. 2012), cert. granted, 81 U.S.L.W. 3567, 81 U.S.L.W. 3696,
81 U.S.L.W. 3702 (U.S. June 24, 2013) (No. 12-1182).
\62\ See EPA v. EME Homer City Generation, 134 S.Ct. 1584, 1610
(U.S. 2014). The Supreme Court held in part that EPA's methodology
for quantifying emissions that must be eliminated in certain States
due to their impacts in other downwind States was based on a
permissible, workable, and equitable interpretation of the Clean Air
Act provision that provides statutory authority for CSAPR.
\63\ See Georgia v. EPA, Order (DC. Cir. filed October 23, 2014)
(No. 11-1302),
---------------------------------------------------------------------------
Because AEO 2014 was prepared prior to the Supreme Court's opinion,
it assumed that CAIR remains a binding regulation through 2040. Thus,
DOE's analysis used emissions factors that assume that CAIR, not CSAPR,
is the regulation in force. However, the difference between CAIR and
CSAPR is not relevant for the purpose of DOE's analysis of emissions
impacts from energy conservation standards.
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 energy conservation 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 energy conservation 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 2016, however, SO2 emissions will fall as a
result of the Mercury and Air Toxics Standards (MATS) for power plants.
77 FR 9304 (Feb. 16, 2012). In the 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
2014 assumes that, in order to continue operating, coal plants must
have either flue gas desulfurization or dry sorbent injection systems
installed by 2016. Both technologies, which are used to reduce acid gas
emissions, also reduce SO2 emissions. Under the MATS,
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 energy conservation standards will
generally reduce SO2 emissions in 2016 and beyond.
CAIR established a cap on NOX emissions in 28 eastern
states and DC.\64\ 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 this NOPR for these states.
---------------------------------------------------------------------------
\64\ CSAPR also applies to NOX and it would supersede
the regulation of NOX under CAIR. As stated previously,
the current analysis assumes that CAIR, not CSAPR, is the regulation
in force. The difference between CAIR and CSAPR with regard to DOE's
analysis of NOX emissions is slight.
---------------------------------------------------------------------------
[[Page 48659]]
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 2014, which
incorporates the MATS.
L. Monetizing Carbon Dioxide and Other Emissions Impacts
As part of the development of this 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. To make this calculation analogous to the
calculation of the NPV of consumer benefit, DOE considered the reduced
emissions expected to result over the lifetime of products shipped in
the forecast period for each TSL. This section summarizes the basis for
the monetary values used for each of these emissions and presents the
values considered in this NOPR.
For this NOPR, DOE relied on a set of values for the SCC that was
developed by a Federal interagency process. The basis for these values
is summarized in the next section, and a more detailed description of
the methodologies used is provided in appendices 14A and 14B of the
NOPR 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 health, property damages from increased flood risk,
and the value of ecosystem services. Estimates of the SCC are provided
in dollars per metric ton of CO2. A domestic SCC value is
meant to reflect the value of damages in the United States resulting
from a unit change in CO2 emissions, while a global SCC
value is meant to reflect the value of damages worldwide.
Under section 1(b) 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. The estimates are presented with an acknowledgement
of the many uncertainties involved and with a clear understanding that
they should be updated over time to reflect increasing knowledge of the
science and economics of climate impacts.
As part of the interagency process that developed these SCC
estimates, technical experts from numerous agencies met on a regular
basis to consider public comments, explore the technical literature in
relevant fields, and discuss key model inputs and assumptions. The main
objective of this process was to develop a range of SCC values using a
defensible set of input assumptions grounded in the existing scientific
and economic literatures. In this way, key uncertainties and model
differences transparently and consistently inform the range of SCC
estimates used in the rulemaking process.
a. Monetizing Carbon Dioxide Emissions
When attempting to assess the incremental economic impacts of
CO2 emissions, the analyst faces a number of challenges. A
report from the National Research Council \65\ points out that any
assessment will suffer from uncertainty, speculation, and lack of
information about: (1) Future emissions of GHGs; (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 questions of science, economics, and
ethics and should be viewed as provisional.
---------------------------------------------------------------------------
\65\ National Research Council, Hidden Costs of Energy: Unpriced
Consequences of Energy Production and Use, National Academies Press:
Washington, DC (2009).
---------------------------------------------------------------------------
Despite the limits of both quantification and monetization, SCC
estimates can be useful in estimating the social benefits of reducing
CO2 emissions. The agency can estimate the benefits from
reduced (or costs from increased) emissions in any future year by
multiplying the change in emissions in that year by the SCC values
appropriate for that year. The NPV of the benefits can then be
calculated by multiplying each of these future benefits by an
appropriate discount factor and summing across all affected years.
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. Development of Social Cost of Carbon Values
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 Federal 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.
c. Current Approach and Key Assumptions
After the release of the interim values, the interagency group
reconvened on a regular basis to generate improved SCC estimates.
Specially, 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 (IPCC).
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:
[[Page 48660]]
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.
In 2010, the interagency group selected four sets of SCC values for
use in regulatory analyses. Three sets of values are based on the
average SCC from the three integrated assessment models, at discount
rates of 2.5, 3, and 5 percent. The fourth set, which represents the
95th percentile SCC estimate across all three models at a 3-percent
discount rate, was 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,\66\ although preference is given to consideration of the
global benefits of reducing CO2 emissions. Table IV.11
presents the values in the 2010 interagency group report,\67\ which is
reproduced in appendix 14A of the NOPR TSD.
---------------------------------------------------------------------------
\66\ It is recognized that this calculation for domestic values
is approximate, provisional, and highly speculative. There is no a
priori reason why domestic benefits should be a constant fraction of
net global damages over time.
\67\ Social Cost of Carbon for Regulatory Impact Analysis Under
Executive Order 12866. Interagency Working Group on Social Cost of
Carbon, U.S. Government (February 2010) (Available at:
www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf).
Table IV.11--Annual SCC Values From 2010 Interagency Report, 2010-2050
[2007$ 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 this notice were generated using the most
recent versions of the three integrated assessment models that have
been published in the peer-reviewed literature.\68\ Table V.12 shows
the updated sets of SCC estimates from the 2013 interagency update in
5-year increments from 2010 to 2050. The full set of annual SCC
estimates between 2010 and 2050 is reported in appendix 14B of the NOPR
TSD. The central value that emerges is the average SCC across models at
the 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.
---------------------------------------------------------------------------
\68\ Technical Update of the Social Cost of Carbon for
Regulatory Impact Analysis Under Executive Order 12866, Interagency
Working Group on Social Cost of Carbon, U.S. Government (May 2013;
revised November 2013) (Available at: http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf).
Table IV.12--Annual SCC Values From 2013 Interagency Report, 2010-2050
[2007$ 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
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 because they will evolve with improved scientific and
economic understanding.
[[Page 48661]]
The interagency group also recognizes that the existing models are
imperfect and incomplete. The National Research Council report
mentioned previously 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 analytical challenges that are
being 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, DOE used the values from the
2013 interagency report adjusted to 2014$ using the implicit price
deflator for gross domestic product (GDP) from the Bureau of Economic
Analysis. For each of the four sets of SCC cases specified, the values
for emissions in 2015 were $12.2, $41.2, $63.4, and $121 per metric ton
avoided (values expressed in 2014$). DOE derived values after 2050
using the relevant growth rates 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. Social Cost of Other Air Pollutants
As noted previously, DOE has estimated how the considered energy
conservation standards would reduce site NOX emissions
nationwide and decrease power sector NOX emissions in those
22 states not affected by the CAIR. DOE estimated the monetized value
of net NOX emissions reductions resulting from each of the
TSLs considered for this NOPR based on estimates developed by EPA for
2016, 2020, 2025, and 2030.\69\ The values reflect estimated mortality
and morbidity per ton of directly emitted NOX reduced by
electricity generating units. EPA developed estimates using a 3-percent
and a 7-percent discount rate to discount future emissions-related
costs. The values in 2016 are $5,562/ton using a 3-percent discount
rate and $4,920/ton using a 7-percent discount rate (2014$). DOE
extrapolated values after 2030 using the average annual rate of growth
in 2016-2030. DOE multiplied the emissions reduction (tons) in each
year by the associated $/ton values, and then discounted each series
using discount rates of 3 percent and 7 percent as appropriate.
---------------------------------------------------------------------------
\69\ http://www2.epa.gov/benmap/sector-based-pm25-benefit-ton-estimates.
---------------------------------------------------------------------------
DOE is evaluating appropriate monetization of avoided
SO2 and Hg emissions in energy conservation standards
rulemakings. DOE has not included monetization of those emissions in
the current analysis.
M. Utility Impact Analysis
The utility impact analysis estimates several effects on the
electric power industry that would result from the adoption of new or
amended energy conservation standards. The utility impact analysis
estimates the changes in installed electrical capacity and generation
that would result for each TSL. The analysis is based on published
output from NEMS, which is updated annually to produce the AEO
reference case, as well as a number of side cases that estimate the
economy-wide impacts of changes to energy supply and demand. DOE uses
published side cases that incorporate efficiency-related policies to
estimate the marginal impacts of reduced energy demand on the utility
sector. The output of this analysis is a set of time-dependent
coefficients that capture the change in electricity generation, primary
fuel consumption, installed capacity and power sector emissions due to
a unit reduction in demand for a given end use. These coefficients are
multiplied by the stream of electricity savings calculated in the NIA
to provide estimates of selected utility impacts of new or amended
energy conservation standards. Chapter 15 of the NOPR TSD describes the
utility impact analysis in further detail.
N. Employment Impact Analysis
DOE considers employment impacts in the domestic economy as one
factor in selecting a proposed standard. Employment impacts from new or
amended energy conservation standards include both direct and indirect
impacts. Direct employment impacts are any changes in the number of
employees of manufacturers of the products subject to standards, their
suppliers, and related service firms. The MIA addresses those impacts
(see section V.B.2.b). 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 appliances. Indirect employment impacts from standards
consist of the net jobs created or eliminated in the national economy,
other than in the manufacturing sector being regulated, caused by: (1)
Reduced spending by end users on energy; (2) reduced spending on new
energy supply by the utility industry; (3) increased consumer spending
on new products to which the new standards apply; 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 Labor Department's Bureau of
Labor Statistics (BLS).\70\ 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.\71\ 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 energy conservation 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 due to shifts in economic activity resulting from energy
conservation standards.
---------------------------------------------------------------------------
\70\ Data on industry employment, hours, labor compensation,
value of production, and the implicit price deflator for output for
these industries are available upon request by calling the Division
of Industry Productivity Studies (202-691-5618) or by sending a
request by email to [email protected].
\71\ See Bureau of Economic Analysis, Regional Multipliers: A
User Handbook for the Regional Input-Output Modeling System (RIMS
II), U.S. Department of Commerce (1992).
---------------------------------------------------------------------------
DOE estimated indirect national employment impacts for the standard
levels considered in this NOPR using an input/output model of the U.S.
economy called Impact of Sector Energy Technologies version 3.1.1
(ImSET).\72\
[[Page 48662]]
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 187 sectors most
relevant to industrial, commercial, and residential building energy
use.
---------------------------------------------------------------------------
\72\ J. M. Roop, M. J. Scott, and R. W. Schultz, ImSET 3.1:
Impact of Sector Energy Technologies, PNNL-18412, Pacific Northwest
National Laboratory (2009) (Available at: www.pnl.gov/main/publications/external/technical_reports/PNNL-18412.pdf).
---------------------------------------------------------------------------
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 this rule. Therefore, DOE generated
results for near-term timeframes, where these uncertainties are
reduced. For more details on the employment impact analysis, see
chapter 16 of the NOPR TSD.
V. Analytical Results
The following section addresses the results from DOE's analyses
with respect to potential amended energy conservation standards for
CFLKs. It addresses the TSLs examined by DOE and the projected impacts
of each of these levels if adopted as energy conservation standards for
CFLKs. Additional details regarding DOE's analyses are contained in the
NOPR TSD supporting this notice.
A. Trial Standard Levels
DOE analyzed the benefits and burdens of four TSLs for CFLKs. These
TSLs were developed using the ELs for the product class analyzed by
DOE. DOE presents the results for those TSLs in this rule. The results
for all ELs that DOE analyzed are in the NOPR TSD. Table V.1 presents
the TSLs and the corresponding ELs for CFLKs. TSL 4 represents the
maximum technologically feasible (``max-tech'') improvements in energy
efficiency for the CFLK product class.
Table V.1--CFLK Trial Standard Levels
------------------------------------------------------------------------
Trial standard
All CFLKs efficacy level level
------------------------------------------------------------------------
1....................................................... 1
2....................................................... 2
3....................................................... 3
4....................................................... 4
------------------------------------------------------------------------
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
DOE analyzed the economic impacts on CFLK consumers by looking at
the effects potential amended standards at each TSL would have on the
LCC and PBP. DOE also examined the impacts of potential standards on
consumer subgroups. These analyses are discussed below.
a. Life-Cycle Cost and Payback Period
In general, higher-efficiency products affect consumers in two
ways: (1) Purchase price increases, and (2) annual operating costs
decrease. In the case of CFLKs, however, DOE projects that higher-
efficiency CFLKs will have a lower purchase price than less efficient
products. Inputs used for calculating the LCC and PBP include total
installed costs (i.e., product price plus installation costs), and
operating costs (i.e., annual energy use, energy prices, energy price
trends, repair costs, and maintenance costs). The LCC calculation also
uses product lifetime and a discount rate. Chapter 8 of the NOPR TSD
provides detailed information on the LCC and PBP analyses.
Table V.2 and Table V.3 show the LCC and PBP results for the TSL
efficacy levels considered for the All CFLKs product class. In the
first table, the simple payback is measured relative to the least
efficient product on the market. In the second table, the LCC savings
are measured relative to the no-standards efficacy distribution in the
compliance year (see section IV.F.10 of this notice).
Table V.2--Average LCC and PBP Results by Efficacy Level for All CFLKs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs 2014$
----------------------------------------------------------------
EL First year's Lifetime Simple Average
Installed cost operating operating LCC payback years lifetime years
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Residential Sector
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub\*\.................................................. 2.8 17.4 70.3 71.3 .............. 13.8
0....................................................... 5.5 3.6 40.4 45.6 0.2 13.8
1....................................................... 8.8 3.4 40.0 48.4 0.4 13.8
2....................................................... 19.4 2.9 33.4 51.8 1.2 13.8
3....................................................... 10.5 2.0 23.4 32.8 0.5 13.8
4....................................................... 9.3 1.9 22.0 30.3 0.4 13.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Commercial Sector
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub \*\................................................. 2.8 76.9 194.5 196.7 .............. 13.8
0....................................................... 5.5 15.8 136.9 142.9 0.0 13.8
1....................................................... 8.8 14.9 157.2 167.3 0.1 13.8
2....................................................... 19.4 12.8 140.8 160.6 0.3 13.8
3....................................................... 10.5 9.0 107.7 117.8 0.1 13.8
4....................................................... 9.3 8.5 104.9 113.8 0.1 13.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
* ``Sub'' corresponds to the sub-baseline (i.e., lamps which have efficacies below the baseline set for the new product class structure proposed in this
rulemaking).
[[Page 48663]]
Note: The results for each EL are calculated assuming that all consumers use products at that efficacy level. The PBP is measured relative to the least
efficient product currently available on the market.
Table V.3--Average LCC Savings Relative to the No-Standards-Case
Efficacy Distribution for All CFLKs
------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------------
% of consumers Average savings
TSL that experience *
-------------------------------------
Net cost 2014$
------------------------------------------------------------------------
Residential Sector
------------------------------------------------------------------------
0.6 23.0
1................................. 0.6 23.0
2................................. 9.7 24.3
3................................. 7.6 30.9
4................................. 7.6 30.9
------------------------------------------------------------------------
Commercial Sector
------------------------------------------------------------------------
10.5 28.7
1................................. 10.5 28.7
2................................. 1.9 53.4
3................................. 0.3 67.7
4................................. 0.3 67.8
------------------------------------------------------------------------
Note: The results for each TSL represent the impact of a standard set at
that TSL, based on the no-standards-case and standards-case efficacy
distributions calculated in the shipments analysis. The calculation
excludes consumers with zero LCC savings (no impact).
b. Consumer Subgroup Analysis
In the consumer subgroup analysis, DOE estimated the impact of the
considered TSLs on low-income households and small businesses. Table
V.4 and Table V.5 compare the average LCC savings for each TSL and the
simple PBP at each efficacy level for the two consumer subgroups to the
average LCC savings and the simple PBP for the entire sample. In most
cases, the average LCC savings and the simple PBP for low-income
households and small businesses are not substantially different from
the average LCC savings and simple PBP for all households and all
buildings, respectively. Chapter 11 of the NOPR TSD presents the
complete LCC and PBP results for the subgroups.
Table V.4--Comparison of LCC Savings and PBP for Low-Income Households and All Households
----------------------------------------------------------------------------------------------------------------
Average LCC savings (2014$) Simple payback period (years)
TSL ---------------------------------------------------------------
All Low-income All Low-income
----------------------------------------------------------------------------------------------------------------
23.0 23.0 0.2 0.2
1............................................... 23.0 23.0 0.4 0.4
2............................................... 24.3 24.1 1.2 1.2
3............................................... 30.9 30.6 0.5 0.5
4............................................... 30.9 30.7 0.4 0.4
----------------------------------------------------------------------------------------------------------------
Table V.5--Comparison of LCC Savings and PBP for Small Businesses and All Buildings
----------------------------------------------------------------------------------------------------------------
Average LCC savings (2014$) Simple payback period (years)
---------------------------------------------------------------
TSL Small Small
All businesses All businesses
----------------------------------------------------------------------------------------------------------------
28.7 31.7 0.0 0.0
1............................................... 28.7 31.7 0.1 0.1
2............................................... 53.4 51.9 0.3 0.3
3............................................... 67.7 65.4 0.1 0.1
4............................................... 67.8 65.5 0.1 0.1
----------------------------------------------------------------------------------------------------------------
c. Rebuttable-Presumption Payback
As discussed in section IV.F.11, EPCA establishes a rebuttable
presumption that an energy conservation standard is economically
justified if the increased purchase cost for a product that meets the
standard is less than three times the value of the first year's energy
savings resulting from the standard. DOE expresses this criterion as
having a simple payback period of less than three years. In calculating
a rebuttable-presumption payback period for each of the considered
TSLs, DOE based the energy use calculation on DOE test
[[Page 48664]]
procedures for CFLKs,\73\ as required by EPCA. Table V.6 shows the
results of this analysis for the considered TSLs.
Table V.6--Rebuttable-Presumption Payback Period Results
------------------------------------------------------------------------
Residential Commercial
TSL sector sector
------------------------------------------------------------------------
0.2 0.4
1....................................... 0.4 0.1
2....................................... 1.1 0.2
3....................................... 0.5 0.1
4....................................... 0.4 0.1
------------------------------------------------------------------------
While DOE examined the rebuttable-presumption criterion, it
considered whether the standard levels considered for this rule are
economically justified through a more detailed analysis of the economic
impacts of those levels, pursuant to 42 U.S.C. 6295(o)(2)(B)(i), that
considers the full range of impacts to the consumer, manufacturer,
nation, and environment. The results of that analysis serve as the
basis for DOE to evaluate the economic justification for a potential
standard level, thereby supporting or rebutting the results of any
preliminary determination of economic justification.
---------------------------------------------------------------------------
\73\ Specifically, DOE used the CFLK test procedures as proposed
in the CFLK TP NOPR. 79 FR 64688 (Oct. 31, 2014).
---------------------------------------------------------------------------
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of amended energy
conservation standards on manufacturers of CFLKs. The section below
describes the expected impacts on manufacturers at each TSL. Chapter 12
of the NOPR TSD explains the analysis in further detail.
a. Industry Cash-Flow Analysis Results
Table V.7 and Table V.8 present the financial impacts (represented
by changes in INPV) of proposed standards on CFLK manufacturers as well
as the conversion costs that DOE estimates CFLK manufacturers would
incur at each TSL. To evaluate the range of cash-flow impacts on the
CFLK industry, DOE modeled two markup scenarios that correspond to the
range of anticipated market responses to amended standards. Each
scenario results in a unique set of cash flows and corresponding
industry values at each TSL.
In the following discussion, the INPV results refer to the
difference in industry value between the no-standards case and the
standards case that result from the sum of discounted cash flows from
the base year (2015) through the end of the analysis period (2048). The
results also discuss the difference in cash flows between the no-
standards case and the standards case in the year before the compliance
date for proposed standards. This difference in cash flow represents
the size of the required conversion costs relative to the cash flow
generated by the CFLK industry in the absence of amended energy
conservation standards.
To assess the upper (less severe) end of the range of potential
impacts on CFLK manufacturers, DOE modeled a preservation of gross
margin, or flat, markup scenario. This scenario assumes that in the
standards case, manufacturers would be able to pass along all the
higher production costs required for more efficacious products to their
consumers. Specifically, the industry would be able to maintain its
average no-standards-case gross margin (as a percentage of revenue)
despite the higher product costs in the standards-case. In general, the
larger the product price increases, the less likely manufacturers are
to achieve the cash flow from operations calculated in this scenario
because it is less likely that manufacturers would be able to fully
mark up these larger cost increases.
To assess the lower (more severe) end of the range of potential
impacts on the CFLK manufacturers, DOE modeled a two-tiered markup
scenario. This scenario represents the lower end of the range of
potential impacts on manufacturers because manufacturers reduce profit
margins on high efficacy products as these products become the
baseline, higher volume product.
Table V.7--Manufacturer Impact Analysis for Ceiling Fan Light Kits--Preservation of Gross Margin Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard levels
Units No-standards ---------------------------------------------------------------
case 1 2 3 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV...................................... (2014$ millions)............ 94.8 98.9 96.8 92.1 91.9
Change in INPV............................ (2014$ millions)............ .............. 4.1 2.1 (2.6) (2.8)
(%)......................... .............. 4.3 2.2 (2.8) (3.0)
Product Conversion Costs.................. (2014$ millions)............ .............. .............. 0.6 0.8 0.8
Capital Conversion Costs.................. (2014$ millions)............ .............. .............. 1.4 1.7 1.8
Total Conversion Costs.................... (2014$ millions)............ .............. .............. 1.9 2.5 2.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 48665]]
Table V.8--Manufacturer Impact Analysis for Ceiling Fan Light Kits--Two-Tiered Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units No-standards ---------------------------------------------------------------
case 1 2 3 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV...................................... (2014$ millions)............ 94.8 97.9 86.8 74.9 74.7
Change in INPV............................ (2014$ millions)............ .............. 3.1 (7.9) (19.9) (20.0)
(%)......................... .............. 3.3 (8.4) (21.0) (21.1)
Product Conversion Costs.................. (2014$ millions)............ .............. .............. 0.6 0.8 0.8
Capital Conversion Costs.................. (2014$ millions)............ .............. .............. 1.4 1.7 1.8
Total Conversion Costs.................... (2014$ millions)............ .............. .............. 1.9 2.5 2.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1 sets the efficacy level at EL 1 for all CFLKs. At TSL 1, DOE
estimates impacts on INPV range from $3.1 million to $4.1 million, or a
change in INPV of 3.3 percent to 4.3 percent. At TSL 1, industry free
cash flow (operating cash flow minus capital expenditures) is expected
to remain constant at $5.0 million, which is the same as the no-
standards-case value in 2018, the year leading up to the standard.
Percentage impacts on INPV are slightly positive at TSL 1. DOE
anticipates that most manufacturers would not lose any of their INPV at
this TSL. DOE estimates that 100 percent of shipments will meet the
efficacy standards at TSL 1 in 2019, the expected compliance year of
the standard. Since none of the shipments are required to be converted
at this efficacy level, DOE projects that there will be no conversion
costs at this TSL.
At TSL 1, the shipment-weighted average MPC decreases by 9 percent
relative to the no-standards-case MPC in 2019, the expected year of
compliance. Manufacturers are able to maintain their manufacturer
markups in both the preservation of gross margin and the two-tiered
markup scenarios, resulting in slightly positive INPV impacts at TSL 1.
TSL 2 sets the efficacy level at EL 2 for all CFLKs. At TSL 2, DOE
estimates impacts on INPV range from -$7.9 million to $2.1 million, or
a change in INPV of -8.4 percent to 2.2 percent. At this TSL, industry
free cash flow is estimated to decrease by approximately 15 percent to
$4.2 million, compared to the no-standards-case value of $5.0 million
in 2018, the year leading up to the proposed standard.
Percentage impacts on INPV range from slightly negative to slightly
positive at TSL 2. DOE anticipates that most manufacturers would not
lose a significant portion of their INPV at TSL 2 because the ELs at
this TSL can be met by purchasing replacement lamps that are currently
available on the market. DOE projects that in 2019, 40 percent of all
CFLK shipments would meet or exceed the efficacy level required at TSL
2.
For each of TSLs 2-4, DOE expects that most manufacturers will not
incur any conversion costs in the lamp replacement scenario. In
addition, as ELs rise with each TSL, product conversion costs will
increase incrementally in proportion with the increasing amount of R&D
needed to design more efficacious CFLKs in the light kit replacement
scenario. Manufacturers will also incur capital conversion costs driven
by retooling costs associated with producing fixtures using LEDs.
For TSL 2, DOE expects that product conversion costs will rise from
zero at TSL 1 to $0.6 million in the light kit replacement scenario.
Manufacturers will incur product conversion costs, primarily driven by
increased R&D efforts needed to redesign CFLKs to use LED lamps that
meet the ELs, at TSL 2. Capital conversion costs will increase from
zero at TSL 1 to $1.4 million at TSL 2 in the light kit replacement
scenario.
At TSL 2, under the preservation of gross margin markup scenario,
the shipment-weighted average MPC increases by 27 percent relative to
the no-standards-case MPC in 2019. In this scenario, INPV impacts are
slightly negative because the higher production costs are outweighed by
the $1.9 million in conversion costs. Under the two-tiered markup
scenario, the 27 percent MPC increase is slightly outweighed by a lower
average markup of 1.35 (compared to the preservation of gross margin
markup of 1.37) and $1.9 million in conversion costs, resulting in
slightly negative impacts at TSL 2.
TSL 3 sets the efficacy level at EL 3 for all CFLKs. At TSL 3, DOE
estimates impacts on INPV range from -$19.9 million to -$2.6 million,
or a change in INPV of -21.0 percent to -2.8 percent. At this level,
industry free cash flow is estimated to decrease by approximately 20
percent to $4.0 million, compared to the no-standards-case value of
$5.0 million in 2018.
Percentage impacts on INPV range from moderately negative to
slightly negative at TSL 3. TSL 3 proposes the first efficacy level
that will require manufacturers to use LED lamps, as CFLs are currently
not capable of meeting the ELs required at TSL 3. DOE projects that in
2019, 17 percent of all CFLKs shipments would meet or exceed the ELs at
TSL 3.
At TSL 3, DOE estimates manufacturers will incur product conversion
costs of $0.8 million in the light kit replacement scenario. Product
conversion costs are driven primarily by increased R&D efforts needed
to redesign CFLKs to accommodate the more efficacious LEDs.
Manufacturers are estimated to incur $1.7 million in capital conversion
costs as a result of retooling costs necessary to produce redesigned
CFLK fixtures that use LEDs TSL 3.
At TSL 3, under the preservation of gross margin markup scenario,
the shipment-weighted average MPC increases by 1 percent relative to
the no-standards-case MPC in 2019. In this scenario, INPV impacts are
slightly negative because the slightly higher production costs are
outweighed by the $2.5 million in conversion costs. Under the two-
tiered markup scenario, the 1 percent MPC increase is moderately
outweighed by a lower average markup of 1.35 (compared to the
preservation of gross margin markup scenario markup of 1.37) and $2.5
million in conversion costs, resulting in moderately negative impacts
at TSL 3.
TSL 4 sets the efficacy level at max-tech, EL 4, for all CFLKs. At
TSL 4, DOE estimates impacts on INPV to range from -$20.0 million to -
$2.8 million, or a change in INPV of -21.1 percent to -3.0 percent. At
this level, industry free cash flow is estimated to decrease by
approximately 21 percent to $4.0 million, compared to the no-standards-
case value of $5.0 million in 2018.
Percentage impacts on INPV are slightly negative to moderately
negative at TSL 4. DOE projects that in 2019, 9 percent of all CFLK
shipments would meet or exceed the ELs at TSL 4.
[[Page 48666]]
DOE expects total conversion costs in the light kit replacement
scenario to increase from $2.5 million at TSL 3 to $2.6 million at TSL
4. DOE estimates manufacturers will incur product conversion costs of
$0.8 million as they allocate more capital to R&D efforts necessary to
redesign CFLKs that meet max-tech ELs. DOE estimates that manufacturers
will incur $1.8 million in capital conversion costs due to retooling
costs associated with the high number of models that will be redesigned
in the light kit replacement scenario at TSL 4.
At TSL 4, under the preservation of gross margin markup scenario,
the shipment-weighted average MPC increases by 1 percent relative to
the no-standards-case MPC in 2019. In this scenario, the INPV impacts
are slightly negative because the slightly higher production costs are
outweighed by $2.6 million in conversion costs. Under the two-tiered
markup scenario, the 1 percent MPC increase is outweighed by a lower
average markup of 1.35 (compared to the preservation of gross margin
markup scenario markup of 1.37) and $2.6 million in conversion costs,
resulting in moderately negative impacts at TSL 4.
b. Impacts on Employment
DOE determined that there was only one CFLK manufacturer with
domestic production of CFLKs, and this manufacturer's sales of ceiling
fans packaged with CFLKs represents a very small portion of their
overall revenue. During manufacturer interviews, manufacturers stated
that the vast majority of manufacturing of the CFLKs they sell is
outsourced to original equipment manufacturers located abroad. These
original equipment manufacturers produce CFLKs based on designs from
domestic CFLK manufacturers. Because of this feedback, DOE did not
quantitatively assess any potential impacts on domestic production
employment as a result of amended energy conservation standards on
CFLKs. DOE seeks comment on the assumption that there is only one CFLK
manufacturer with domestic production. Additionally, DOE seeks comment
on any potential domestic employment impacts as a result of amended
energy conservation standards for CFLKs.
c. Impacts on Manufacturing Capacity
CFLK manufacturers stated that they did not anticipate
manufacturing capacity constraints as a result of an amended energy
conservation standard. If manufacturers choose to redesign their CFLK
fixtures to comply with amended standards, the original equipment
manufacturers of CFLKs would be able to make the changes necessary to
comply with standards in the estimated three years from the publication
of the final rule to the compliance date. Additionally, at the proposed
standard, manufacturers have a range of options to comply with
standards for a significant portion of the CFLKs by replacing the lamps
with existing products that are sold on the market today. DOE does not
anticipate any impact on the manufacturing capacity at the proposed
amended energy conservation standards in this NOPR. See section V.C.1
for more details on the proposed standard. DOE seeks comment on any
potential impact on manufacturing capacity at the efficacy level
proposed in this NOPR.
d. Impacts on Subgroups of Manufacturers
Using average cost assumptions to develop an industry cash-flow
estimate may not be adequate for assessing differential impacts among
manufacturer subgroups. Small manufacturers, niche product
manufacturers, and manufacturers exhibiting cost structures
substantially different from the industry average could be affected
disproportionately. DOE identified only one manufacturer subgroup that
would require a separate analysis in the MIA because it is a small
business. DOE analyzes the impacts on small businesses in a separate
analysis in section VI.B of this NOPR. DOE did not identify any other
adversely impacted manufacturer subgroups for CFLKs for this rulemaking
based on the results of the industry characterization. DOE seeks
comment on any other potential manufacturer subgroups that could be
disproportionally impacted by amended energy conservation standards for
CFLKs.
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. 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
a cumulative regulatory burden analysis as part of its rulemakings for
CFLKs.
DOE identified a number of requirements, in addition to amended
energy conservation standards for CFLKs, that CFLK manufacturers will
face for products they manufacture approximately three years prior to
and three years after the estimated compliance date of these amended
standards. The following section addresses key related concerns that
manufacturers raised during interviews regarding cumulative regulatory
burden.
Manufacturers raised concerns about existing regulations and
certifications separate from DOE's energy conservation standards that
CFLK manufacturers must meet. These include California Title 20, which
has energy conservation standards identical to DOE's existing CFLK
standards, but requires an additional certification, and Interstate
Mercury Education and Reduction Clearinghouse (IMERC) labeling
requirements, among others.
DOE discusses these and other requirements in chapter 12 of the
NOPR TSD, which lists the estimated compliance costs of those
requirements when available. In considering the cumulative regulatory
burden, DOE evaluates the timing of regulations that impact the same
product because the coincident requirements could strain financial
resources in the same profit center and consequently impact capacity.
DOE identified the upcoming ceiling fan standards rulemaking and the
GSLs standards rulemaking, as well as the 45 lm/W standard for GSLs in
2020, as potential sources of additional cumulative regulatory burden
on CFLK manufacturers.
DOE has initiated a rulemaking to evaluate the energy conservation
standards of ceiling fans by publishing a notices of availability for a
framework document (78 FR 16443; Mar. 15, 2013) and preliminary
analysis TSD (79 FR 64712; Oct. 31, 2014), hereafter the ``CF standards
rulemaking.'' The CF standards rulemaking affects the same set of
manufacturers as the proposed amended CFLK standard and has a similar
projected compliance date. Due to these similar projected compliance
dates, manufacturers could potentially be required to make investments
to bring CFLKs and ceiling fans into compliance during the same time
period. Additionally, redesigned CFLKs could also require adjustments
to ceiling fan redesigns separate from those potentially required by
the ceiling fan rule.
DOE has initiated a rulemaking to evaluate the energy conservation
standards of GSLs by publishing notices of availability for a framework
document (78 FR 73737; Dec. 9, 2013) and preliminary analysis TSD (79
FR 73503; Dec. 11, 2014), hereafter the ``GSL standards rulemaking.''
In
[[Page 48667]]
addition, if standards from the GSL standards rulemaking do not produce
savings greater than or equal to the savings from a minimum efficacy
standard of 45 lm/W, sales of GSLs that do not meet the minimum 45 lm/W
standard would be prohibited as of January 1, 2020. (42 U.S.C.
6295(i)(6)(A)(v)) Any potential standards established by the GSL
rulemaking are also projected to require compliance in 2020. Potential
standards promulgated from the GSL standards rulemaking and/or the
enactment of the GSL 45 lm/W provision will impact GSLs available to be
packaged with CFLKs. Therefore, regardless of the standards proposed in
this rulemaking, CFLK manufacturers will likely need to package more
efficacious lamps with CFLKs.
In addition to the proposed amended energy conservation standards
on CFLKs, several other existing and pending Federal regulations may
apply to other products produced by lamp manufacturers and may
subsequently impact CFLK manufacturers. These lighting regulations
include the finalized metal halide lamp fixture standards (79 FR 7745
[Feb. 10, 2014]), the finalized general service fluorescent lamp
standards (80 FR 4041 [Jan. 26, 2015]), and the ongoing high-impact
discharge lamp standards (77 FR 18963 [Feb. 28, 2012]). DOE
acknowledges that each regulation can impact a manufacturer's financial
operations. Multiple regulations affecting the same manufacturer can
strain manufacturers' profit and possibly cause them to exit particular
markets. Table V.9 lists the other DOE energy conservation standards
that could also affect CFLK manufacturers in the three years leading up
to and after the estimated compliance date of amended energy
conservation standards for these products.
Table V.9--Other DOE Regulations Potentially Affecting CFLK
Manufacturers
------------------------------------------------------------------------
Estimated industry
Regulation Approximate total conversion
compliance date expenses
------------------------------------------------------------------------
Metal Halide Lamp Fixtures...... 2017 $25 million
(2012$).\74\
General Service Fluorescent 2018 $26.6 million
Lamps. (203$).\75\
HID Lamps....................... * 2018 N/A.[dagger]
Ceiling Fans.................... * 2019 N/A.[dagger]
General Service Lamps........... * 2019 N/A.[dagger]
Candelabra-Base Incandescent [beta] N/A N/A.[dagger]
Lamps and Intermediate-Base
Incandescent Lamps.
Other Incandescent Reflector [beta] N/A N/A.[dagger]
Lamps.
------------------------------------------------------------------------
* The dates listed are an approximation. The exact dates are pending
final DOE action.
[dagger] For energy conservation standards for rulemakings awaiting DOE
final action, DOE does not have a finalized estimated total industry
conversion cost.
[beta] These rulemakings are placed on hold due to the Consolidated and
Further Continuing Appropriations Act, 2015 (Public Law 113-235, Dec.
16, 2014).
Note: For minimum performance requirements prescribed by the Energy
Independence and Security Act of 2007 (EISA 2007), DOE did not
estimate total industry conversion costs because an MIA was not
completed as part of the final rule codifying these statutorily-
prescribed standards.
DOE did not receive any data on other regulatory costs that affect
the industry modeled in the cash-flow analysis. To the extent DOE
receives specific costs associated with other regulations affecting the
CFLK profit centers modeled in the GRIM, DOE will incorporate that
information, as appropriate, into its cash-flow analysis. DOE seeks
comment on the compliance costs of any other regulations on products
that CFLK manufacturers also manufacture, especially if compliance with
those regulations is required three years before or after the estimated
compliance date of this proposed standard.
---------------------------------------------------------------------------
\74\ Estimated industry conversion expenses were published in
the TSD for the February 2014 Metal Halide Lamp Fixtures final rule.
79 FR 7745 The TSD for the 2014 Metal Halide Lamp Fixture final rule
can be found at http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/16.
\75\ Estimated industry conversion expenses were published in
the TSD for the January 2015 general service fluorescent lamps final
rule. 80 FR 4042 The TSD for the 2015 general service fluorescent
lamps final rule can be found at http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/24.
---------------------------------------------------------------------------
3. National Impact Analysis
a. Significance of Energy Savings
To estimate the energy savings attributable to potential standards
for CFLKs, DOE compared the energy consumption of those products under
the no-standards case to their anticipated energy consumption under
each TSL. The savings are measured over the entire lifetime of products
purchased in the 30-year period that begins in the year of anticipated
compliance with amended standards (2019-2048). Table V.10 presents
DOE's projections of the NES for each TSL considered for CFLKs. The
savings were calculated using the approach described in section IV.H of
this notice.
Table V.10--Cumulative National Energy Savings for CFLKs Shipped in 2019-2048
----------------------------------------------------------------------------------------------------------------
Trial standard level (quads)
---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Primary Energy.................................. 0.0080 0.047 0.065 0.066
FFC Energy...................................... 0.0083 0.049 0.068 0.069
----------------------------------------------------------------------------------------------------------------
[[Page 48668]]
OMB Circular A-4 \76\ 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 nine-year period is a proxy for
the timeline in EPCA for the review of certain energy conservation
standards and potential revision of and compliance with such revised
standards.\77\ The review timeframe established in EPCA is generally
not synchronized with the product lifetime, product manufacturing
cycles, or other factors specific to CFLKs. Thus, such results are
presented for informational purposes only and are not indicative of any
change in DOE's analytical methodology. The NES sensitivity analysis
results based on a nine-year analytical period are presented in Table
V.11. The impacts are counted over the lifetime of CFLKs purchased in
2019-2027.
---------------------------------------------------------------------------
\76\ U.S. Office of Management and Budget, ``Circular A-4:
Regulatory Analysis'' (Sept. 17, 2003) (Available at: http://www.whitehouse.gov/omb/circulars_a004_a-4/).
\77\ Section 325(m) of EPCA requires DOE to review its standards
at least once every 6 years, and requires, for certain products, a
3-year period after any new standard is promulgated before
compliance is required, except that in no case may any new standards
be required within 6 years of the compliance date of the previous
standards. While adding a 6-year review to the 3-year compliance
period adds up to 9 years, DOE notes that it may undertake reviews
at any time within the 6 year period and that the 3-year compliance
date may yield to the 6-year backstop. A 9-year analysis period may
not be appropriate given the variability that occurs in the timing
of standards reviews and the fact that for some consumer products,
the compliance period is 5 years rather than 3 years.
Table V.11--Cumulative National Energy Savings for CFLKs; Nine Years of Shipments
[2019-2027]
----------------------------------------------------------------------------------------------------------------
Trial standard level (quads)
---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Primary Energy.................................. 0.0080 0.047 0.063 0.064
FFC Energy...................................... 0.0083 0.049 0.066 0.067
----------------------------------------------------------------------------------------------------------------
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 CFLKs. In
accordance with OMB's guidelines on regulatory analysis,\78\ DOE
calculated NPV using both a 7-percent and a 3-percent real discount
rate.
---------------------------------------------------------------------------
\78\ U.S. Office of Management and Budget, ``Circular A-4:
Regulatory Analysis,'' section E, (Sept. 17, 2003) (Available at:
http://www.whitehouse.gov/omb/circulars_a004_a-4/).
---------------------------------------------------------------------------
Table V.12 shows the consumer NPV results with impacts counted over
the lifetime of products purchased in 2019-2048.
Table V.12--Cumulative Net Present Value of Consumer Benefits for CFLKs Shipped in 2019-2048
----------------------------------------------------------------------------------------------------------------
Trial standard level (billion 2014$)
Discount rate ---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
3%.............................................. 0.21 0.66 0.95 0.97
7%.............................................. 0.21 0.50 0.70 0.71
----------------------------------------------------------------------------------------------------------------
The NPV results based on the aforementioned 9-year analytical
period are presented in Table V.13. The impacts are counted over the
lifetime of products purchased in 2019-2027. As mentioned previously,
such results are presented for informational purposes only and are not
indicative of any change in DOE's analytical methodology or decision
criteria.
Table V.13--Cumulative Net Present Value of Consumer Benefits for CFLKs; Nine Years of Shipments
[2019-2027]
----------------------------------------------------------------------------------------------------------------
Trial standard level (billion 2014$)
Discount rate ---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
3%.............................................. 0.21 0.66 0.92 0.93
7%t............................................. 0.21 0.50 0.68 0.69
----------------------------------------------------------------------------------------------------------------
The above results reflect the use of a default trend to estimate
the change in price for CFLKs over the analysis period (see section
IV.G of this document). DOE also conducted a sensitivity analysis that
considered a higher rate of price decline than the reference case. The
results of these alternative cases are presented in appendix 10C of the
NOPR TSD. In the high-price-decline case, the NPV is lower than in the
default case. This is due the faster adoption of LED
[[Page 48669]]
CFLKs in the no-standards case which results in consumers moving to
CFLKs that already meet or exceed potential standards. Therefore in
this scenario, setting a standard does not move as many consumers to a
higher efficacy level, resulting in lower energy savings from the
standard.
c. Indirect Impacts on Employment
DOE expects energy conservation standards for CFLKs to reduce
energy bills for consumers of those products, with the resulting net
savings being redirected to other forms of economic activity. These
expected shifts in spending and economic activity could affect the
demand for labor. As described in section IV.N of this document, 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 timeframes
(2019-2024), where these uncertainties are reduced.
The results suggest that the proposed standards are likely to have
a 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 NOPR TSD presents detailed results
regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
DOE has tentatively concluded that the standards proposed in this
NOPR would not reduce the utility or performance of the CFLKs under
consideration in this rulemaking. Manufacturers of these products
currently offer units that meet or exceed the proposed standards.
5. Impact of Any Lessening of Competition
DOE has considered any lessening of competition that is likely to
result from the proposed standards. The Attorney General determines the
impact, if any, of any lessening of competition likely to result from a
proposed standard, and transmits such determination in writing to the
Secretary, together with an analysis of the nature and extent of such
impact.
To assist the Attorney General in making such determination, DOE
has provided DOJ with copies of this NOPR and the accompanying TSD for
review. DOE will consider DOJ's comments on the proposed rule in
determining whether to proceed to a final rule. DOE will publish and
respond to DOJ's comments in that document.
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 (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 of the NOPR TSD presents the estimated impact on
generating capacity, relative to the no-standards case, for the TSLs
that DOE considered in this rulemaking.
Energy savings from amended standards for CFLKs are expected to
yield environmental benefits in the form of reduced emissions of air
pollutants and greenhouse gases. Table V.14 provides DOE's estimate of
cumulative emissions reductions expected to result from the TSLs
considered in this rulemaking. The table includes both power sector
emissions and upstream emissions. The emissions were calculated using
the multipliers discussed in section IV.K. DOE reports annual emissions
reductions for each TSL in chapter 13 of the NOPR TSD.
Table V.14--Cumulative Emissions Reduction for CFLKs Shipped in 2019-2048
----------------------------------------------------------------------------------------------------------------
Trial standard level
---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................... 0.65 3.21 4.40 4.49
SO2 (thousand tons)............................. 0.95 3.46 4.58 4.66
NOX (thousand tons)............................. 0.67 2.79 3.76 3.83
Hg (tons)....................................... 0.00 0.01 0.01 0.01
CH4 (thousand tons)............................. 0.04 0.25 0.35 0.36
N2O (thousand tons)............................. 0.01 0.04 0.05 0.05
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................... 0.02 0.13 0.19 0.20
SO2 (thousand tons)............................. 0.00 0.03 0.04 0.04
NOX (thousand tons)............................. 0.21 1.88 2.69 2.76
Hg (tons)....................................... 0.00 0.00 0.00 0.00
CH4 (thousand tons)............................. 1.25 10.9 15.7 16.1
N2O (thousand tons)............................. 0.00 0.00 0.00 0.00
----------------------------------------------------------------------------------------------------------------
Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................... 0.67 3.35 4.59 4.68
SO2 (thousand tons)............................. 0.96 3.48 4.62 4.70
NOX (thousand tons)............................. 0.88 4.67 6.45 6.59
Hg (tons)....................................... 0.00 0.01 0.01 0.01
CH4 (thousand tons)............................. 1.28 11.20 16.04 16.43
CH4 (thousand tons CO2eq) *..................... 35.9 314 449 460
N2O (thousand tons)............................. 0.01 0.04 0.05 0.05
[[Page 48670]]
N2O (thousand tons CO2eq) *..................... 1.39 9.87 13.93 14.25
----------------------------------------------------------------------------------------------------------------
* CO2eq is the quantity of CO2 that would have the same GWP.
As part of the analysis for this proposed rule, DOE estimated
monetary benefits likely to result from the reduced emissions of
CO2 and NOX that DOE estimated for each of the
considered TSLs for CFLKs. As discussed in section IV.L of this notice,
for CO2, DOE used the most recent values for the SCC
developed by an interagency process. The four sets of SCC values for
CO2 emissions reductions in 2015 resulting from that process
(expressed in 2014$) are represented by $12.2/metric ton (the average
value from a distribution that uses a 5-percent discount rate), $41.2/
metric ton (the average value from a distribution that uses a 3-percent
discount rate), $63.4/metric ton (the average value from a distribution
that uses a 2.5-percent discount rate), and $121/metric ton (the 95th-
percentile value from a distribution that uses a 3-percent discount
rate). The values for later years are higher due to increasing damages
(public health, economic and environmental) as the projected magnitude
of climate change increases.
Table V.15 presents the global value of CO2 emissions
reductions at each TSL. For each of the four cases, DOE calculated a
present value of the stream of annual values using the same discount
rate as was used in the studies upon which the dollar-per-ton values
are based. DOE calculated domestic values as a range from 7 percent to
23 percent of the global values; these results are presented in chapter
14 of the NOPR TSD.
Table V.15--Estimates of Global Present Value of CO2 Emissions Reduction for Products Shipped in 2019-2048
----------------------------------------------------------------------------------------------------------------
SCC case * (Million 2014$)
---------------------------------------------------------------
TSL 3% discount
5% discount 3% discount 2.5% discount rate, 95th
rate, average rate, average rate, average percentile
----------------------------------------------------------------------------------------------------------------
Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
1............................................... 8.5 30.5 44.7 86.6
2............................................... 32.7 128.9 196.9 386.3
3............................................... 43.4 173.2 265.7 521.9
4............................................... 44.2 176.4 270.7 531.8
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
1............................................... 0.24 0.83 1.18 2.28
2............................................... 1.35 5.34 8.17 16.0
3............................................... 1.86 7.47 11.5 22.6
4............................................... 1.90 7.64 11.7 23.1
----------------------------------------------------------------------------------------------------------------
Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
1............................................... 8.77 31.28 45.84 88.86
2............................................... 34.1 134 205 402
3............................................... 45.3 181 277 544
4............................................... 46.1 184 282 555
----------------------------------------------------------------------------------------------------------------
* For each of the four cases, the corresponding SCC value for emissions in 2015 is $12.2, $41.2, $63.4, and $121
per metric ton (2014$). The values are for CO2 only (i.e., not CO2eq of other greenhouse gases).
DOE is well aware that scientific and economic knowledge about the
contribution of CO2 and other GHG emissions to changes in
the future global climate and the potential resulting damages to the
world economy continues to evolve rapidly. Thus, any value placed on
reduced 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 proposed rule the
most recent values and analyses resulting from the interagency review
process.
DOE also estimated the cumulative monetary value of the economic
benefits associated with NOX emissions reductions
anticipated to result from the considered TSLs for CFLKs. The dollar-
per-ton value that DOE used is discussed in section IV.L of this
document. Table V.16 presents the cumulative present values for
NOX emissions for each TSL calculated using 7-percent and 3-
percent discount rates.
[[Page 48671]]
Table V.16--Estimates of Present Value of NOX Emissions Reduction for
CFLKs Shipped in 2019-2048
------------------------------------------------------------------------
(Million 2014$)
-------------------------------
TSL 3% discount 7% discount
rate rate
------------------------------------------------------------------------
Power Sector Emissions
------------------------------------------------------------------------
1....................................... 3.81 3.54
2....................................... 13.5 9.54
3....................................... 17.8 12.0
4....................................... 18.1 12.2
------------------------------------------------------------------------
Upstream Emissions
------------------------------------------------------------------------
1....................................... 1.47 1.67
2....................................... 8.97 6.18
3....................................... 12.5 8.13
4....................................... 12.7 8.26
------------------------------------------------------------------------
Total FFC Emissions
------------------------------------------------------------------------
1....................................... 5.28 5.21
2....................................... 22.5 15.7
3....................................... 30.2 20.1
4....................................... 30.8 20.4
------------------------------------------------------------------------
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)(VII)) No
other factors were considered in this analysis.
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.17 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 for CFLKs considered in
this rulemaking, at both a 7-percent and 3-percent discount rate. The
CO2 values used in the columns of each table correspond to
the four sets of SCC values discussed above.
Table V.17--Net Present Value of Consumer Savings Combined With Present Value of Monetized Benefits From CO2 and
NOX Emissions Reductions
----------------------------------------------------------------------------------------------------------------
(Billion 2014$) Consumer NPV at 3% discount rate added with:
---------------------------------------------------------------
TSL SCC Case $12.2/ SCC Case $41.2/ SCC Case $63.4/ SCC Case $121/
metric ton and metric ton and metric ton and metric ton and
3% NOX Values 3% NOX Values 3% NOX Values 3% NOX Values
----------------------------------------------------------------------------------------------------------------
1............................................... 0.22 0.25 0.26 0.30
2............................................... 0.72 0.82 0.89 1.08
3............................................... 1.02 1.16 1.25 1.52
4............................................... 1.04 1.18 1.28 1.55
----------------------------------------------------------------------------------------------------------------
Consumer NPV at 7% discount rate added with:
---------------------------------------------------------------
TSL SCC Case $12.2/ SCC Case $41.2/ SCC Case $63.4/ SCC Case $121/
metric ton and metric ton and metric ton and metric ton and
7% NOX Values 7% NOX Values 7% NOX Values 7% NOX Values
----------------------------------------------------------------------------------------------------------------
1............................................... 0.22 0.25 0.26 0.30
2............................................... 0.55 0.65 0.72 0.92
3............................................... 0.76 0.90 0.99 1.26
4............................................... 0.77 0.91 1.01 1.28
----------------------------------------------------------------------------------------------------------------
Although adding the value of consumer savings to the values of
emission reductions informs DOE's evaluation, two issues should be
considered. First, the national operating-cost savings are domestic
U.S. 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 different time frames for
analysis. The national operating-cost savings is measured for the
lifetime of products
[[Page 48672]]
shipped in 2019 to 2048. Because CO2 emissions have a very
long residence time in the atmosphere,\79\ the SCC values in future
years reflect future climate-related impacts resulting from the
emission of CO2 that continue beyond 2100.
---------------------------------------------------------------------------
\79\ The atmospheric lifetime of CO2 is estimated of
the order of 30-95 years. Jacobson, MZ, ``Correction to `Control of
fossil-fuel particulate black carbon and organic matter, possibly
the most effective method of slowing global warming,' '' J. Geophys.
Res. 110. pp. D14105 (2005).
---------------------------------------------------------------------------
C. Conclusion
When considering proposed standards, the new or amended energy
conservation standard that DOE adopts for any type (or class) of
covered product must be designed to achieve the maximum improvement in
energy efficiency that the Secretary determines is technologically
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) In
determining whether a standard is economically justified, the Secretary
must determine whether the benefits of the standard exceed its burdens
by, to the greatest extent practicable, considering the seven statutory
factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or
amended standard must also result in significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B))
For this NOPR, DOE considered the impacts of standards for CFLKs at
each TSL, beginning with the maximum technologically feasible 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 efficacy level that is both technologically feasible and
economically justified and saves a significant amount of energy.
To aid the reader as DOE discusses the benefits and/or burdens of
each TSL, tables in this section present a summary of the results of
DOE's quantitative analysis for each TSL. In addition to the
quantitative results presented in the tables, DOE also considers other
burdens and benefits that affect economic justification. These include
but are not limited to the impacts on identifiable subgroups of
consumers who may be disproportionately affected by a national standard
and impacts on employment.
DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade off upfront costs and energy
savings in the absence of government intervention. Much of this
literature attempts to explain why consumers appear to undervalue
energy efficiency improvements. There is evidence that consumers
undervalue future energy savings as a result of: (1) A lack of
information; (2) a lack of sufficient salience of the long-term or
aggregate benefits; (3) a lack of sufficient savings to warrant
delaying or altering purchases; (4) excessive focus on the short term,
in the form of inconsistent weighting of future energy cost savings
relative to available returns on other investments; (5) computational
or other difficulties associated with the evaluation of relevant
tradeoffs; and (6) a divergence in incentives (for example, between
renters and owners, or builders and purchasers). Having less than
perfect foresight and a high degree of uncertainty about the future,
consumers may trade off these types of investments at a higher-than-
expected rate between current consumption and uncertain future energy
cost savings.
In DOE's current regulatory analysis, potential changes in the
benefits and costs of a regulation due to changes in consumer purchase
decisions are included in two ways. First, if consumers forego the
purchase of a product in the standards case, this decreases sales for
product manufacturers, and the impact on manufacturers attributed to
lost revenue is included in the MIA. Second, DOE accounts for energy
savings attributable only to products actually used by consumers in the
standards case; if a regulatory option changes the number of products
purchased by consumers, then the potential energy savings from the
potential energy conservation standard changes as well. DOE provides
estimates of shipments and changes in the volume of product purchases
in chapter 9 of the NOPR TSD. However, DOE's current analysis does not
explicitly control for heterogeneity in consumer preferences,
preferences across subcategories of products or specific features, or
consumer price sensitivity variation according to household income.\80\
---------------------------------------------------------------------------
\80\ P.C. Reiss and M.W. White, Household Electricity Demand,
Revisited, Review of Economic Studies (2005) 72, 853-883.
---------------------------------------------------------------------------
While DOE is not prepared at present to provide a fuller
quantifiable framework for estimating the benefits and costs of changes
in consumer purchase decisions due to an energy conservation standard,
DOE is committed to developing a framework that can support empirical
quantitative tools for improved assessment of the consumer welfare
impacts of appliance standards. DOE has posted a paper that discusses
the issue of consumer welfare impacts of appliance energy conservation
standards, and potential enhancements to the methodology by which these
impacts are defined and estimated in the regulatory process.\81\ DOE
welcomes comments on how to more fully assess the potential impact of
energy conservation standards on consumer choice and how to quantify
this impact in its regulatory analysis in future rulemakings.
---------------------------------------------------------------------------
\81\ Alan Sanstad, Notes on the Economics of Household Energy
Consumption and Technology Choice. Lawrence Berkeley National
Laboratory (2010) (Available online at: www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf).
---------------------------------------------------------------------------
1. Benefits and Burdens of TSLs Considered for CFLK Standards
Table V.18 and Table V.19 summarize the quantitative impacts
estimated for each TSL for CFLKs. The national impacts are measured
over the lifetime of CFLKs purchased in the 30-year period that begins
in the anticipated year of compliance with amended standards (2019-
2048). The energy savings, emissions reductions, and value of emissions
reductions refer to FFC results. The ELs contained in each TSL are
described in section V.A of this notice.
Table V.18--Summary of Analytical Results for CFLK TSLs: National Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4
----------------------------------------------------------------------------------------------------------------
Cumulative FFC National Energy Savings
----------------------------------------------------------------------------------------------------------------
quads............................... 0.008 0.049 0.068 0.069
----------------------------------------------------------------------------------------------------------------
[[Page 48673]]
NPV of Consumer Costs and Benefits
(2014$ billion)
----------------------------------------------------------------------------------------------------------------
3% discount rate.................... 0.21 0.66 0.95 0.97
7% discount rate.................... 0.21 0.50 0.70 0.71
----------------------------------------------------------------------------------------------------------------
Cumulative FFC Emissions Reduction
(Total FFC Emissions)
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)........... 0.67 3.35 4.59 4.68
SO2 (thousand tons)................. 0.96 3.48 4.62 4.70
NOX (thousand tons)................. 0.88 4.67 6.45 6.59
Hg (tons)........................... 0.00 0.01 0.01 0.01
CH4 (thousand tons)................. 1.28 11.2 16.0 16.4
CH4 (thousand tons CO2eq) *......... 35.9 314 449 460
N2O (thousand tons)................. 0.01 0.04 0.05 0.05
N2O (thousand tons CO2eq) *......... 1.39 9.87 13.93 14.2
----------------------------------------------------------------------------------------------------------------
Value of Emissions Reduction
(Total FFC Emissions)
----------------------------------------------------------------------------------------------------------------
CO2 (2014$ billion) **.............. 0.009 to 0.089 0.034 to 0.402 0.045 to 0.544 0.046 to 0.555
NOX--3% discount rate (2014$ 5.28 22.5 30.2 30.8
million)...........................
NOX--7% discount rate (2014$ 5.21 15.7 20.1 20.4
million)...........................
----------------------------------------------------------------------------------------------------------------
* CO2eq is the quantity of CO2 that would have the same GWP.
** Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2
emissions.
Table V.19--Summary of Analytical Results for CFLK TSLs: Manufacturer and Consumer Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 * TSL 2 * TSL 3 * TSL 4 *
----------------------------------------------------------------------------------------------------------------
Manufacturer Impacts
----------------------------------------------------------------------------------------------------------------
Industry NPV (2014$ million) (No- 97.9-98.9 86.8-96.8 74.9-92.1 74.7-91.9
Standards-Case INPV = 2014$
million)...........................
Industry NPV (% change)............. 3.3-4.3 (8.4)-2.2 (21.0)-(2.8) (21.1)-(3.0)
----------------------------------------------------------------------------------------------------------------
Residential Sector
----------------------------------------------------------------------------------------------------------------
Consumer Average LCC Savings
(2014$):
All CFLKs....................... 23.0 24.3 30.9 30.9
Consumer Simple PBP ** (years):
All CFLKs....................... 0.4 1.2 0.5 0.4
% of Consumers that Experience Net
Cost:
All CFLKs....................... 0.6 9.7 7.6 7.6
----------------------------------------------------------------------------------------------------------------
Commercial Sector
----------------------------------------------------------------------------------------------------------------
Consumer Average LCC Savings
(2014$):
All CFLKs....................... 28.7 53.4 67.7 67.8
Consumer Simple PBP ** (years):
All CFLKs....................... 0.1 0.3 0.1 0.1
% of Consumers that Experience Net
Cost:
All CFLKs....................... 10.5 1.9 0.3 0.3
----------------------------------------------------------------------------------------------------------------
* Parentheses indicate negative (-) values.
** Simple PBP results are calculated assuming that all consumers use products at that efficacy level. The PBP is
measured relative to the least efficient product currently available on the market.
DOE first considered TSL 4, which represents the max-tech efficacy
level. TSL 4 would save 0.07 quads of energy, an amount DOE considers
significant. Under TSL 4, the NPV of consumer benefit would be $0.71
billion using a discount rate of 7 percent, and $0.97 billion using a
discount rate of 3 percent.
The cumulative emissions reductions at TSL 4 are 4.68 Mt of
CO2, 4.70 thousand tons of SO2, 6.59 thousand
tons of NOX, 0.01 ton of Hg, 16.4 thousand tons of
CH4, and 0.05 thousand tons of N2O. The estimated
monetary value of the CO2 emissions reduction at TSL 4
ranges from $46.1 million to $554.9 million.
At TSL 4, the average LCC impact is a savings of $30.9 in the
residential sector and a savings of $67.8 in the commercial sector. The
simple payback period is 0.4 years in the residential sector and 0.1
years in the commercial sector. The fraction of consumers experiencing
a net LCC cost is 7.6 percent in the residential sector and 0.3 percent
in the commercial sector.
[[Page 48674]]
At TSL 4, the projected change in INPV ranges from a decrease of
$20.0 million to a decrease of $2.8 million, which represent decreases
of 21.1 percent and 3.0 percent, respectively.
The Secretary tentatively concludes that at TSL 4 for CFLKs, the
benefits of energy savings, positive NPV of consumer benefits, emission
reductions, and the estimated monetary value of the emissions
reductions would be outweighed by the potential reduction in industry
value and the potentially limited availability of compliant CFLKs
discussed in section IV.C.4. Consequently, the Secretary has
tentatively concluded that TSL 4 is not justified.
DOE then considered TSL 3, which would save an estimated 0.068
quads of energy, an amount DOE considers significant. Under TSL 3, the
NPV of consumer benefit would be $0.70 billion using a discount rate of
7 percent, and $0.95 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 4.59 Mt of
CO2, 4.62 thousand tons of SO2, 6.45 thousand
tons of NOX, 0.01 tons of Hg, 16.0 thousand tons of
CH4, and 0.05 thousand tons of N2O. The estimated
monetary value of the CO2 emissions reduction at TSL 3
ranges from $45.3 million to $544.4 million.
At TSL 3, the average LCC impact is a savings of $30.9 in the
residential sector and a savings of $67.7 in the commercial sector. The
simple payback period is 0.5 years in the residential sector and 0.1
years in the commercial sector. The fraction of consumers experiencing
a net LCC cost is 7.6 percent in the residential sector and 0.3 percent
in the commercial sector.
At TSL 3, the projected change in INPV ranges from a decrease of
$19.9 million to a decrease of $2.6 million, which represent decreases
of 21.0 percent and 2.8 percent, respectively.
The Secretary tentatively concludes that at TSL 3 for CFLKs, the
benefits of energy savings, positive NPV of consumer benefits, emission
reductions, and the estimated monetary value of the emissions
reductions would be outweighed by the potential reduction in industry
value and by the potential limited availability of compliant CFLKs
discussed in section IV.C.4. Consequently, the Secretary has
tentatively concluded that TSL 3 is not justified.
DOE then considered TSL 2, which would save an estimated 0.049
quads of energy, an amount DOE considers significant. Under TSL 2, the
NPV of consumer benefit would be $0.50 billion using a discount rate of
7 percent, and $0.66 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 2 are 3.35 Mt of
CO2, 3.48 thousand tons of SO2, 4.67 thousand
tons of NOX, 0.01 tons of Hg, 11.2 thousand tons of
CH4, and 0.04 thousand tons of N2O. The estimated
monetary value of the CO2 emissions reduction at TSL 2
ranges from $34.1 million to $402.4 million.
At TSL 2, the average LCC impact is a savings of $24.3 in the
residential sector and a savings of $53.4 in the commercial sector. The
simple payback period is 1.2 years in the residential sector and 0.3
years in the commercial sector. The fraction of consumers experiencing
a net LCC cost is 9.7 percent in the residential sector and 1.9 percent
in the commercial sector.
At TSL 2, the projected change in INPV ranges from a decrease of
$7.9 million to an increase of $2.1 million, which represents a
decrease of 8.4 percent to an increase of 2.2 percent.
After considering the analysis and weighing the benefits and
burdens, the Secretary has tentatively concluded that at TSL 2 for
CFLKs, the benefits of energy savings, positive NPV of consumer
benefits, emission reductions, the estimated monetary value of the
emissions reductions, and positive average LCC savings would outweigh
the potential reduction in industry value. Accordingly, the Secretary
has tentatively concluded that TSL 2 would offer the maximum
improvement in efficiency that is technologically feasible and
economically justified, and would result in the significant
conservation of energy.
Therefore, based on the above considerations, DOE proposes to adopt
the energy conservation standards for CFLKs at TSL 2. The proposed
amended energy conservation standards for CFLKs are shown in Table
V.20.
Table V.20--Proposed Amended Energy Conservation Standards for CFLKs
----------------------------------------------------------------------------------------------------------------
Minimum required efficacy
Product class Lumens ----------------------------------------------------
lm/W
----------------------------------------------------------------------------------------------------------------
All CFLKs.................................. <120 50.
>=120 74-29.42 x 0.9983 \lumens\.
----------------------------------------------------------------------------------------------------------------
2. Summary of Annualized Benefits and Costs of the Proposed Standards
The benefits and costs of the proposed standards can also be
expressed in terms of annualized values. The annualized monetary values
are the sum of: (1) The annualized national economic value (expressed
in 2014$) of the benefits from operating products that meet the
proposed standards (consisting primarily of operating-cost savings from
using less energy, minus increases in product purchase costs, which is
another way of representing consumer NPV), and (2) the annualized
monetary value of the benefits of CO2 and NOX
emission reductions.\82\
---------------------------------------------------------------------------
\82\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2014, the year
used for discounting the NPV of total consumer costs and savings.
For the benefits, DOE calculated a present value associated with
each year's shipments in the year in which the shipments occur
(2020, 2030, etc.), and then discounted the present value from each
year to 2015. The calculation uses discount rates of 3 and 7 percent
for all costs and benefits except for the value of CO2
reductions, for which DOE used case-specific discount rates. Using
the present value, DOE then calculated the fixed annual payment over
a 30-year period, starting in the compliance year that yields the
same present value.
---------------------------------------------------------------------------
Table V.21 shows the annualized values for CFLKs under TSL 2,
expressed in 2014$. 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 has a value of $41.2/t in 2015),
the estimated cost of the standards proposed in this rule is $6.0
million per year in increased equipment costs, while the estimated
annual benefits are $55 million in reduced equipment operating costs,
$7.5 million in CO2 reductions, and $1.6 million in reduced
NOX emissions. In this case, the net benefit amounts to $59
million per year.
[[Page 48675]]
Using a 3-percent discount rate for all benefits and costs and the
average SCC series that has a value of $41.2/t in 2015, the estimated
cost of the proposed CFLK standards is $4.0 million per year in
increased equipment costs, while the estimated annual benefits are $49
million in reduced operating costs, $7.5 million in CO2
reductions, and $1.3 million in reduced NOX emissions. In
this case, the net benefit amounts to $46 million per year.
Table V.21--Annualized Benefits and Costs of Proposed Standards (TSL 2) for CFLKs
----------------------------------------------------------------------------------------------------------------
(Million 2014$/year)
-----------------------------------------------------
Discount rate (%) High net
Primary estimate Low net benefits benefits
* estimate * estimate *
----------------------------------------------------------------------------------------------------------------
Benefits
----------------------------------------------------------------------------------------------------------------
Consumer Operating-Cost 7.......................... 55.............. 36.............. 59.
Savings. 3.......................... 41.............. 24.............. 43.
CO2 Reduction Value ($12.2/t) 5.......................... 2.6............. 1.4............. 2.7.
**.
CO2 Reduction Value ($41.2/t) 3.......................... 7.5............. 3.9............. 7.9.
**.
CO2 Reduction Value ($63.4/t) 2.5........................ 11.............. 5............... 11.
**.
CO2 Reduction Value ($121/t) 3.......................... 22.............. 12.............. 24.
**.
NOX Reduction Value.......... 7.......................... 1.6............. 0.90............ 1.6.
3.......................... 1.3............. 0.65............ 1.3.
----------------------------------------------------------------------------------------------------------------
Total Benefits [dagger].. 7 plus CO2 range........... 60 to 79........ 38 to 48........ 63 to 85.
7.......................... 65.............. 40.............. 69.
3 plus CO2 range........... 45 to 64........ 26 to 36........ 47 to 68.
3.......................... 49.............. 28.............. 53.
----------------------------------------------------------------------------------------------------------------
Costs
----------------------------------------------------------------------------------------------------------------
Consumer Incremental Product 7.......................... 6.0............. 3.5............. 6.4.
Costs. 3.......................... 4.0............. 2.3............. 4.2.
Total [dagger]........... 7 plus CO2 range........... 54 to 73........ 34 to 44........ 57 to 78.
7.......................... 59.............. 37.............. 62.
3 plus CO2 range........... 41 to 60........ 24 to 34........ 43 to 64.
3.......................... 46.............. 26.............. 48.
----------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with CFLKs shipped in 2019-2048. These
results include benefits to consumers which accrue after 2048 from the products purchased in 2019-2048. The
results account for the incremental variable and fixed costs incurred by manufacturers due to the standard,
some of which may be incurred in preparation for the rule. The Primary Estimate assumes the reference case
electricity prices and housing starts from AEO 2015 and decreasing product prices for LED CFLKs, due to price
learning. The Low Benefits Estimate uses the Low Economic Growth electricity prices and housing starts from
AEO 2015 and a faster decrease in product prices for LED CFLKs. The High Benefits Estimate uses the High
Economic Growth electricity prices and housing starts from AEO 2015 and the same product price decrease for
LED CFLKs as in the Primary Estimate.
** The CO2 values represent global monetized values of the SCC, in 2014$, in 2015 under several scenarios of the
updated SCC values. The first three cases use the averages of SCC distributions calculated using 5%, 3%, and
2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution
calculated using a 3% discount rate. The SCC time series incorporate an escalation factor.
[dagger] Total Benefits for both the 3% and 7% cases are derived using the series corresponding to the average
SCC with a 3-percent discount rate ($41.2/t case). In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2
range,'' the operating-cost and NOX benefits are calculated using the labeled discount rate, and those values
are added to the full range of CO2 values.
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 the proposed standards set forth in this NOPR are
intended to address are as follows:
Insufficient information and the high costs of
gathering and analyzing relevant information leads some consumers to
miss opportunities to make cost-effective investments in energy
efficiency.
In some cases, the benefits of more-efficient equipment
are not realized due to misaligned incentives between purchasers and
users. An example of such a case is when the equipment purchase
decision is made by a building contractor or building owner who does
not pay the energy costs.
There are external benefits resulting from improved
energy efficiency of appliances and equipment that are not captured
by the users of such products. These benefits include externalities
related to public health, environmental protection, and national
energy security that are not reflected in energy prices, such as
reduced emissions of air pollutants and greenhouse gases that impact
human health and global warming. DOE attempts to quantify some of
the external benefits through use of SCC values.
The Administrator of the Office of Information and Regulatory
Affairs (OIRA) in the OMB has determined that the proposed regulatory
action is not a significant regulatory action under section (3)(f) of
Executive Order 12866. Accordingly, the rule was not reviewed by OIRA.
DOE has also reviewed this regulation pursuant to Executive Order
13563, issued on January 18, 2011. 76 FR 3281 (Jan. 21, 2011).
Executive Order 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
[[Page 48676]]
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, OIRA 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 this NOPR 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, 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). DOE
has prepared the following IRFA for the products that are the subject
of this rulemaking.
1. Description on Estimated Number of Small Entities Regulated
For manufacturers of CFLKs, the 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. See 13 CFR part 121. The size standards
are listed by North American Industry Classification System (NAICS)
code and industry description available at: https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf. CFLK manufacturing is
classified under NAICS code 335210, ``Small Electrical Appliance
Manufacturing.'' The SBA sets a threshold of 750 employees or less for
an entity to be considered as a small business for this category.
To estimate the number of companies that could be small businesses
that sell CFLKs covered by this rulemaking, DOE conducted a market
survey using publicly available information. DOE's research involved
information provided by trade associations (e.g., ALA \83\) and
information from previous rulemakings, individual company Web sites,
SBA's database, and market research tools (e.g., Hoover's reports
\84\). DOE also asked stakeholders and industry representatives if they
were aware of any small businesses during manufacturer interviews and
DOE public meetings. DOE used information from these sources to create
a list of companies that potentially manufacture or sell CFLKs and
would be impacted by this rulemaking. DOE screened out companies that
do not offer products covered by this rulemaking, do not meet the
definition of a ``small business,'' or are completely foreign owned and
operated.
---------------------------------------------------------------------------
\83\ American Lighting Association [verbar] Company Information
[verbar] Industry Information [verbar] Lists, http://www.americanlightingassoc.com//) (last accessed Mar 16, 2015).
\84\ Hoovers [verbar] Company Information [verbar] Industry
Information [verbar] Lists, http://www.hoovers.com/) (last accessed
Mar 31, 2015).
---------------------------------------------------------------------------
For CFLKs, DOE initially identified a total of 67 potential
companies that sell CFLKs in the United States. However, DOE only
identified one manufacturer that also manufacturers the lamps sold with
their CFLKs. All other CFLK manufacturers source the lamps packaged
with their CFLKs. After reviewing publicly available information on
these potential CFLK businesses, DOE determined that 40 were either
large businesses or businesses that were completely foreign owned and
operated. DOE determined that the remaining 27 companies were small
businesses that either manufacture or sell covered CFLKs in the United
States. The one CFLK manufacturer that also sells lamps that DOE
identified is also a small business. Based on manufacturer interviews,
DOE estimates that these small businesses account for approximately 25
percent of the CFLK market. One small business accounts for
approximately five percent of the CFLK market, while all other small
businesses account for one percent or less of the CFLK market
individually.
DOE seeks comments, information, and data on the small businesses
in the industry, including their numbers and their role in the CFLK
market. DOE also requests data on the market share of small businesses
in the CFLK market.
2. Description and Estimate of Compliance Requirements
At TSL 2, the proposed standard in today's NOPR, DOE projects that
impacts on small businesses as a result of amended standards would be
consistent with the overall CFLK industry impacts presented in section
V.B.2. Small businesses are not expected to experience differential
impacts as a result of the amended CFLK standards due to the majority
of large and small businesses sourcing the lamps used in their CFLKs
from lamp manufacturers; small and large CFLK businesses typically
outsourcing the manufacturing of the CFLKs they sell to original
equipment manufacturers located abroad; the range of available options
to replace non-complaint lamps with lamps on the market that can meet
the proposed standard; and the potential standards from the GSL
rulemaking and the 45 lm/W requirement for GSLs that is expected to
take effect in 2020.
DOE identified only one CFLK small business that is also a lamp
manufacturer. For this analysis, DOE refers to lamp manufacturers as
entities that produce and sell lamps, as opposed to purchasing lamps
from a third party. The majority of lamps packaged in CFLKs are
purchased from lamp manufacturers, then inserted into a CFLK or
packaged with a CFLK. Therefore, CFLK businesses will typically not be
responsible for the costs associated with producing more efficacious
lamps packaged with CFLKs that comply with the proposed standards.
Furthermore, because lamp manufacturers typically test and certify
their lamps, CFLK businesses can choose to use the testing and
certification data provided by the lamp manufacturer to comply with the
CFLK standards. Thereby, both large and small
[[Page 48677]]
CFLK businesses can significantly reduce their own testing and
certification costs associated with compliance to proposed standards.
At the proposed standard level, CFLK businesses have the option to
replace the lamps used in their CFLKs with more efficacious lamps
available on the market. This lamp replacement option allows most CFLK
businesses to comply with the proposed CFLK standards without
redesigning their existing CFLKs. DOE's shipments analysis found that
over 50 percent of CFLKs sold at TSL 2 will follow this lamp
replacement option, allowing these CFLK businesses to avoid redesign
and conversion costs. Based on manufacturer interviews, small
businesses are just as likely to pursue the lamp replacement option as
large businesses.
DOE expects that CFLK businesses that choose to meet amended CFLK
standards by redesigning CFLK fixtures instead of replacing lamps are
expected to incur conversion costs driven by retooling costs, increased
R&D efforts, product certification costs, and testing costs. DOE
learned during manufacturer interviews that the majority of the
manufacturing of CFLKs sold by small and large CFLK businesses is
outsourced to a limited number of original equipment manufacturers
located abroad. CFLK businesses pay retooling costs to original
equipment manufacturers located abroad, who operate and maintain
machinery used to produce the CFLKs those CFLK businesses then sell.
DOE also learned from manufacturer interviews that, in some cases,
multiple CFLK businesses, including small and large CFLK businesses,
are outsourcing production to the same original equipment manufacturer
located abroad. Small businesses are currently competing against large
businesses despite purchasing components at lower volumes, and DOE
expects that they will continue to compete after the adoption of
standards, since the proposed standards will not significantly disrupt
most CFLK manufacturers' supply chain. DOE does not expect that small
businesses would be disadvantaged compared to large businesses if they
chose to redesign their CFLKs. Total estimated conversion costs for the
industry at TSL 2 are $1.9 million, which is relatively small compared
to an INPV of almost $95 million in the no-standards case.
Potential standards from the GSL standards rulemaking and the
minimum efficacy of 45 lm/W required for GSLs, expected to require
compliance in 2020, will impact GSLs used in CFLKs (see section V.B.2.e
for further details). Therefore, regardless of the standards proposed
in this rulemaking, CFLK businesses will likely need to package more
efficacious lamps with CFLKs in 2020.
For the reasons outlined above, DOE has determined that most small
businesses would not be disproportionally impacted by the proposed CFLK
energy conservation standard compared to large businesses. At TSL 2,
overall impacts on CFLK INPV range from -8.4 percent to 2.2 percent
(see section V.B.2). DOE estimates that the overall percent change in
INPV for the CFLK industry is reflective of the range of potential
impacts for small businesses.
DOE seeks comment on the potential impacts of the amended standards
on CFLK small businesses.
3. Duplication, Overlap, and Conflict With Other Rules and Regulations
DOE is not aware of any rules or regulations that duplicate,
overlap, or conflict with the proposed amended standard. DOE seeks
comment on any rules or regulations that could potentially duplicate,
overlap, or conflict with the proposed amended standard.
4. Significant Alternatives to the Rule
The discussion in the previous section analyzes impacts on small
businesses that would result from DOE's proposed level, TSL 2. In
reviewing alternatives to the proposed rule, DOE examined energy
conservation standards set at lower efficiency levels. While TSL 1
would reduce the impacts on small business manufacturers, it would come
at the expense of a significant reduction in energy savings and NPV
benefits to consumers, achieving 83 percent lower energy savings and 58
percent less NPV benefits to consumers compared to the energy savings
and NPV benefits at TSL 2.
DOE believes that establishing standards at TSL 2 balances the
benefits of the energy savings and the NPV benefits to consumers at TSL
2 with the potential burdens placed on CFLK manufacturers, including
small business manufacturers. Accordingly, DOE is declining to adopt
one of the other TSLs considered in the analysis, or the other policy
alternatives detailed as part of the regulatory impacts analysis
included in chapter 17 of the NOPR TSD.
Additional compliance flexibilities may be available through other
means. For example, individual manufacturers may petition for a waiver
of the applicable test procedure. (See 10 CFR 431.401.) Further, EPCA
provides that a manufacturer whose annual gross revenue from all of its
operations does not exceed $8 million may apply for an exemption from
all or part of an energy conservation standard for a period not longer
than 24 months after the effective date of a final rule establishing
the standard. Additionally, Section 504 of the Department of Energy
Organization Act, 42 U.S.C. 7194, provides authority for the Secretary
to adjust a rule issued under EPCA in order to prevent ``special
hardship, inequity, or unfair distribution of burdens'' that may be
imposed on that manufacturer as a result of such rule. Manufacturers
should refer to 10 CFR part 430, subpart E, and part 1003 for
additional details.
C. Review Under the Paperwork Reduction Act
Manufacturers of CFLKs 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 CFLKs, including any amendments adopted for those
test procedures. DOE has established regulations for the certification
and recordkeeping requirements for all covered consumer products and
commercial equipment, including CFLKs. See generally 10 CFR part 429.
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 30 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 proposed 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,
[[Page 48678]]
B(1)-(5). The proposed rule fits within the 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
proposed rule. DOE's CX determination for this proposed rule is
available at http://cxnepa.energy.gov/.
E. Review Under Executive Order 13132
Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 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. DOE has examined this
proposed rule and has tentatively determined that it would not have a
substantial direct effect on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government. EPCA
governs and prescribes Federal preemption of state regulations as to
energy conservation for the products that are the subject of this
proposed rule. States can petition DOE for exemption from such
preemption to the extent, and based on criteria, set forth in EPCA. (42
U.S.C. 6297) Therefore, 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; (3)
provide a clear legal standard for affected conduct rather than a
general standard; and (4) promote simplification and burden reduction.
61 FR 4729 (Feb. 7, 1996). Regarding the review required by section
3(a), section 3(b) of Executive Order 12988 specifically requires that
Executive agencies make every reasonable effort to ensure that the
regulation: (1) Clearly specifies the preemptive effect, if any; (2)
clearly specifies any effect on existing Federal law or regulation; (3)
provides a clear legal standard for affected conduct while promoting
simplification and burden reduction; (4) specifies the retroactive
effect, if any; (5) adequately defines key terms; and (6) addresses
other important issues affecting clarity and general draftsmanship
under any guidelines issued by the Attorney General. Section 3(c) of
Executive Order 12988 requires Executive agencies to review regulations
in light of applicable standards in section 3(a) and section 3(b) to
determine whether they are met or it is unreasonable to meet one or
more of them. DOE has completed the required review and determined
that, to the extent permitted by law, this proposed rule meets the
relevant standards of Executive Order 12988.
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. Pub. L. 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For a proposed regulatory action likely to result in a rule that may
cause the expenditure by state, local, and tribal governments, in the
aggregate, or by the private sector of $100 million or more in any one
year (adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of state, local, and tribal governments on a proposed ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect them. 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/sites/prod/files/gcprod/documents/umra_97.pdf.
Because this proposed rule does not contain a Federal
intergovernmental mandate, and DOE expects that it will not require
expenditures of $100 million or more by the private sector, the
requirements of Title II of UMRA do not apply to this proposed rule.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This rule would not have any impact on the autonomy or integrity of the
family as an institution. Accordingly, DOE has concluded that it is not
necessary to prepare a Family Policymaking Assessment.
I. Review Under Executive Order 12630
Pursuant to Executive Order 12630, ``Governmental Actions and
Interference with Constitutionally Protected Property Rights,'' 53 FR
8859 (March 15, 1988), DOE has determined that this proposed rule 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 information
quality 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 this NOPR 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 proposed significant
energy action. A ``significant energy action'' is defined as any action
by an agency that promulgates or is expected to lead to
[[Page 48679]]
promulgation of a final rule, and that: (1) Is a significant regulatory
action under Executive Order 12866, or any successor order; and (2) is
likely to have a significant adverse effect on the supply,
distribution, or use of energy, or (3) is designated by the
Administrator of OIRA as a significant energy action. For any proposed
significant energy action, the agency must give a detailed statement of
any adverse effects on energy supply, distribution, or use should the
proposal be implemented, and of reasonable alternatives to the action
and their expected benefits on energy supply, distribution, and use.
DOE has tentatively concluded that this regulatory action, which
proposes amended energy conservation standards for CFLKs, is not a
significant energy action because the proposed standards are not likely
to have a significant adverse effect on the supply, distribution, or
use of energy, nor has it been designated as such by the Administrator
at OIRA. Accordingly, DOE has not prepared a Statement of Energy
Effects on this proposed 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.'' Id. at FR 2667.
In response to OMB's Bulletin, DOE conducted formal in-progress
peer reviews of the energy conservation standards development process
and analyses and has prepared a Peer Review Report pertaining to the
energy conservation standards rulemaking analyses. Generation of this
report involved a rigorous, formal, and documented evaluation using
objective criteria and qualified and independent reviewers to make a
judgment as to the technical/scientific/business merit, the actual or
anticipated results, and the productivity and management effectiveness
of programs and/or projects. The ``Energy Conservation Standards
Rulemaking Peer Review Report'' dated February 2007 has been
disseminated and is available at the following Web site:
www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.
VII. Public Participation
A. Attendance at the Public Meeting
The time, date, and location of the public meeting are listed in
the DATES and ADDRESSES sections at the beginning of this notice. If
you plan to attend the public meeting, please notify Ms. Brenda Edwards
at (202) 586-2945 or [email protected].
Please note that foreign nationals visiting DOE Headquarters are
subject to advance security screening procedures which require advance
notice prior to attendance at the public meeting. If a foreign national
wishes to participate in the public meeting, please inform DOE of this
fact as soon as possible by contacting [email protected] so that
the necessary procedures can be completed.
DOE requires visitors to have laptops and other devices, such as
tablets, checked upon entry into the Forrestal Building. Any person
wishing to bring these devices into the building will be required to
obtain a property pass. Visitors should avoid bringing these devices,
or allow an extra 45 minutes to check in. Please report to the
visitor's desk to have devices checked before proceeding through
security.
Due to the REAL ID Act implemented by the Department of Homeland
Security (DHS), there have been recent changes regarding identification
(ID) requirements for individuals wishing to enter Federal buildings
from specific states and U.S. territories. As a result, driver's
licenses from several states or territory will not be accepted for
building entry, and instead, one of the alternate forms of ID listed
below will be required. DHS has determined that regular driver's
licenses (and ID cards) from the following jurisdictions are not
acceptable for entry into DOE facilities: Alaska, American Samoa,
Arizona, Louisiana, Maine, Massachusetts, Minnesota, New York,
Oklahoma, and Washington. Acceptable alternate forms of Photo-ID
include: U.S. Passport or Passport Card; an Enhanced Driver's License
or Enhanced ID Card issued by the States of Minnesota, New York, or
Washington (Enhanced licenses issued by these states are clearly marked
Enhanced or Enhanced Driver's License); a military ID or other federal-
government-issued Photo-ID card.
In addition, you can attend the public meeting via webinar. Webinar
registration information, participant instructions, and information
about the capabilities available to webinar participants will be
published on DOE's Web site at: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/66. Participants are
responsible for ensuring their systems are compatible with the webinar
software.
B. Procedure for Submitting Prepared General Statements for
Distribution
Any person who has plans to present a prepared general statement
may request that copies of his or her statement be made available at
the public meeting. Such persons may submit requests, along with an
advance electronic copy of their statement in PDF (preferred),
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to
the appropriate address shown in the ADDRESSES section at the beginning
of this notice. The request and advance copy of statements must be
received at least one week before the public meeting and may be
emailed, hand-delivered, or sent by mail. DOE prefers to receive
requests and advance copies via email. Please include a telephone
number to enable DOE staff to make follow-up contact, if needed.
C. Conduct of the Public Meeting
DOE will designate a DOE official to preside at the public meeting
and may also use a professional facilitator to aid discussion. The
meeting will not be a judicial or evidentiary-type public hearing, but
DOE will conduct it in accordance with section 336 of EPCA. (42 U.S.C.
6306) A court reporter will be present to record the proceedings and
prepare a transcript. DOE reserves the right to schedule the order of
presentations and to establish the procedures governing the conduct of
the public meeting. There shall not be discussion of proprietary
information, costs or prices, market share, or other commercial matters
regulated by U.S. anti-trust laws. After the public meeting, interested
parties may submit further comments on the proceedings, as well as on
any aspect of the rulemaking, until the end of the comment period.
The public meeting will be conducted in an informal, conference
style. DOE will present summaries of comments received before the
public meeting, allow time for prepared general statements by
participants, and encourage all interested parties to share their views
on issues affecting this
[[Page 48680]]
rulemaking. Each participant will be allowed to make a general
statement (within time limits determined by DOE), before the discussion
of specific topics. DOE will allow, as time permits, other participants
to comment briefly on any general statements.
At the end of all prepared statements on a topic, DOE will permit
participants to clarify their statements briefly and comment on
statements made by others. Participants should be prepared to answer
questions by DOE and by other participants concerning these issues. DOE
representatives may also ask questions of participants concerning other
matters relevant to this rulemaking. The official conducting the public
meeting will accept additional comments or questions from those
attending, as time permits. The presiding official will announce any
further procedural rules or modification of the above procedures that
may be needed for the proper conduct of the public meeting.
A transcript of the public meeting will be included in the docket,
which can be viewed as described in the docket section at the beginning
of this notice and will be accessible on the DOE Web site. In addition,
any person may buy a copy of the transcript from the transcribing
reporter.
D. Submission of Comments
DOE will accept comments, data, and information regarding this
proposed rule before or after the public meeting, but no later than the
date provided in the DATES section at the beginning of this proposed
rule. Interested parties may submit comments, data, and other
information using any of the methods described in the ADDRESSES section
at the beginning of this notice.
Submitting comments via www.regulations.gov. The
www.regulations.gov Web page will require you to provide your name and
contact information. Your contact information will be viewable to DOE
Building Technologies staff only. Your contact information will not be
publicly viewable except for your first and last names, organization
name (if any), and submitter representative name (if any). If your
comment is not processed properly because of technical difficulties,
DOE will use this information to contact you. If DOE cannot read your
comment due to technical difficulties and cannot contact you for
clarification, DOE may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment itself or in any documents attached to your
comment. Any information that you do not want to be publicly viewable
should not be included in your comment, nor in any document attached to
your comment. Otherwise, persons viewing comments will see only first
and last names, organization names, correspondence containing comments,
and any documents submitted with the comments.
Do not submit to www.regulations.gov information for which
disclosure is restricted by statute, such as trade secrets and
commercial or financial information (hereinafter referred to as
Confidential Business Information [CBI]). Comments submitted through
www.regulations.gov cannot be claimed as CBI. Comments received through
the Web site will waive any CBI claims for the information submitted.
For information on submitting CBI, see the Confidential Business
Information section below.
DOE processes submissions made through www.regulations.gov before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
simultaneously, your comment may not be viewable for up to several
weeks. Please keep the comment tracking number that www.regulations.gov
provides after you have successfully uploaded your comment.
Submitting comments via email, hand delivery/courier, or mail.
Comments and documents submitted via email, hand delivery/courier, or
mail also will be posted to www.regulations.gov. If you do not want
your personal contact information to be publicly viewable, do not
include it in your comment or any accompanying documents. Instead,
provide your contact information in a cover letter. Include your first
and last names, email address, telephone number, and optional mailing
address. The cover letter will not be publicly viewable as long as it
does not include any comments.
Include contact information each time you submit comments, data,
documents, and other information to DOE. If you submit via mail or hand
delivery/courier, please provide all items on a CD, if feasible, in
which case it is not necessary to submit printed copies. No
telefacsimiles (faxes) will be accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are not secured, that are written in English, and that are free of any
defects or viruses. Documents should not contain special characters or
any form of encryption and, if possible, they should carry the
electronic signature of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
Confidential Business Information. Pursuant to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
email, postal mail, or hand delivery/courier two well-marked copies:
one copy of the document marked ``confidential'' including all the
information believed to be confidential, and one copy of the document
marked ``non-confidential'' with the information believed to be
confidential deleted. Submit these documents via email or on a CD, if
feasible. DOE will make its own determination about the confidential
status of the information and treat it according to its determination.
Factors of interest to DOE when evaluating requests to treat
submitted information as confidential include: (1) A description of the
items; (2) whether and why such items are customarily treated as
confidential within the industry; (3) whether the information is
generally known by or available from other sources; (4) whether the
information has previously been made available to others without
obligation concerning its confidentiality; (5) an explanation of the
competitive injury to the submitting person that would result from
public disclosure; (6) when such information might lose its
confidential character due to the passage of time; and (7) why
disclosure of the information would be contrary to the public interest.
It is DOE's policy that all comments may be included in the public
docket, without change and as received, including any personal
information provided in the comments (except information deemed to be
exempt from public disclosure).
E. Issues on Which DOE Seeks Comment
Although DOE welcomes comments on any aspect of this proposal, DOE
is particularly interested in receiving comments and views of
interested parties concerning the following issues:
1. DOE is considering whether all CFLKs with SSL circuitry should
be determined to not exceed the 190 W limit and seeks comment on this
approach.
2. DOE requests comment on the proposed CFLK product class
structure,
[[Page 48681]]
a single ``All CFLKs'' product class. See section IV.A.1.
3. DOE requests comment on the CFL and LED technology options being
proposed for CFLKs and any additional options that should be included.
See section IV.A.4.
4. DOE requests comment on the modeled 14 W CFL (with spiral shape,
800 lm, 82 CRI, 2,700 K CCT, and 10,000-hour lifetime) analyzed as the
baseline lamp in this NOPR analysis. See section IV.C.3.
5. DOE requests comment on the criteria used in selecting more
efficacious substitute lamps, as well as the characteristics of the
lamps selected. Specifically, DOE requests comment on the 3-way lamp
used as a basis for the modeled max-tech LED lamp. See section IV.C.4.
6. DOE requests comment on the equations used to define the
efficacy requirements at each EL. See section IV.C.5.
7. DOE requests comment on the data and methodology used to
estimate operating hours for CFLKs, particularly in the residential
sector. DOE also seeks comment on its assumption that CFLK operating
hours do not vary by light source technology. See section IV.E.1.
8. DOE estimated 30 percent energy savings from the use of dimmers
in the residential sector based on energy savings estimates for
lighting controls in the commercial sector and stakeholder comments in
response to the GSL preliminary analysis. DOE requests comments on the
assumption that the only relevant lighting controls used with CFLKs are
dimmers, and on the energy savings estimate from dimmers in the
residential sector. See section IV.E.3.
9. DOE requests comment on its assumption that the fraction of
CFLKs used with dimmers is the same in the residential sector and the
commercial sector (11 percent). See section IV.E.3.
10. DOE requests comment on its assumption that CFLs packaged in
CFLKs are not dimmable. See section IV.E.3.
11. DOE requests comment and relevant data on the disposal cost
assumptions used in its analyses. See section IV.F.2.
12. DOE assumed that the installation costs for CFLKs are the same
for all ELs for each of the residential and commercial sectors. DOE
also assumed that the installation cost for replacement lamps after the
original lamps packaged with the CFLK fail are negligible. Therefore,
in the LCC analysis, DOE did not include installation costs for CFLKs
or for replacement lamps. DOE welcomes comment on its approach of not
including installation costs in the LCC analysis. See section IV.F.
13. DOE requests comment on the overall methodology and results of
the LCC and PBP analyses. See section IV.F.
14. In evaluating overall U.S. shipments of CFLKs, DOE assumed in
its analysis that CFLKs are primarily found on low-volume ceiling fans.
DOE requests any information regarding shipments of CFLKs intended for
high-volume ceiling fans. See section IV.G.
15. DOE considered more efficacious lamps under two different
substitution scenarios: (1) A lamp replacement scenario and (2) a light
kit replacement scenario. In its analysis, DOE split market share
evenly between both scenarios when distributing market share among ELs.
DOE requests comment on the likelihood of CFLK manufacturers selecting
each substitution scenario and information on any alternative scenarios
that manufacturers may choose.
16. DOE assumed that only LEDs will continue to experience price
learning because of the relative maturity of the other lamp
technologies and their anticipated sharp decline as market share shifts
to LED. DOE requests comment on the assumption that only LEDs will
continue to undergo significant cost reduction due to price learning.
17. DOE requests comment and input regarding its assumption that
the distribution of CFLKs by light source technology in the commercial
sector is the same as the light source technology distribution in the
residential sector.
18. Although LED technology currently accounts for a small fraction
of the CFLK market, manufacturers indicate that LED penetration is
expected to dominate the lighting market in a relatively short time.
DOE estimated the market penetration of LEDs into the ceiling fan light
kit market as a Bass diffusion curve. DOE requests comment on this
approach.
19. Based on observed trends on the efficacy of LED lamps on the
market over time, DOE assumed the market share for LED lamps would
naturally shift to more efficacious ELs in the no-standards and
standards shipments cases. DOE requests feedback on this assumption.
20. DOE assumed that when the price of LED lamps reached parity
with comparable CFL lamps, manufacturers would choose to package CFLKs
only with LED lamps. DOE requests feedback on the likelihood of this
assumption.
21. DOE requests comments on its assumed breakdown of CFLK usage as
95 percent in the residential sector and 5 percent commercial sector.
22. DOE requests comments on the overall methodology used to
develop shipment forecasts and estimate national energy savings and the
NPV of those savings.
23. DOE seeks comment on the assumption that almost all CFLK
manufacturing takes place abroad. Additionally, DOE seeks comment on
any potential domestic employment impacts as a result of amended energy
conservation standards for CFLKs.
24. DOE seeks comment on any potential impact on manufacturing
capacity at the efficacy level proposed in this NOPR.
25. DOE seeks comment on any potential manufacturer subgroups that
could be disproportionally impacted by amended energy conservation
standards for CFLKs.
26. DOE seeks comment on the compliance costs of any other
regulations on products that CFLK manufacturers also manufacture,
especially if compliance with those regulations is required three years
before or after the estimated compliance date of this proposed
standard.
27. DOE seeks comments, information, and data on the small
businesses in the industry, including their number and their role in
the CFLK market. DOE also requests data on the market share of small
businesses in the CFLK market. Additionally, DOE seeks comment on the
potential impacts of the amended standards on CFLK small businesses.
28. DOE seeks comment on any rules or regulations that could
potentially duplicate, overlap, or conflict with the proposed amended
standard.
VIII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this notice of
proposed rulemaking.
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, Small
businesses.
Issued in Washington, DC, on June 18, 2015.
David T. Danielson,
Assistant Secretary, Energy Efficiency and Renewable Energy.
For the reasons set forth in the preamble, DOE proposes to amend
part 430 of chapter II, subchapter D, of title 10 of the Code of
Federal Regulations, as set forth below:
[[Page 48682]]
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. Amend Sec. 430.32 to revise paragraphs (s)(2), (s)(3), and (s)(4)
and to add paragraph (s)(5) to read as follows:
Sec. 430.32 Energy and water conservation standards and their
compliance dates.
* * * * *
(s) * * *
(2)(i) Except for the minimum efficacy requirement as provided in
paragraph (s)(5) of tis section, ceiling fan light kits with medium
screw base sockets manufactured on or after January 1, 2007, must be
packaged with screw-based lamps to fill all screw base sockets.
(ii) The screw-based lamps required under paragraph (s)(2)(i) of
this section must--
(A) Be compact fluorescent lamps that meet or exceed the following
requirements or be as described in paragraph (s)(2)(ii)(B) of this
section, except for the minimum efficacy requirement as provided in
paragraph (s)(5) of this section:
------------------------------------------------------------------------
Factor Requirements
------------------------------------------------------------------------
Rated Wattage (Watts) & Configuration \1\. Minimum Initial Lamp
Efficacy (lumens per
watt).\2\
Bare Lamp:
Lamp Power <15.......................... 45.0.
Lamp Power >=15......................... 60.0.
Covered Lamp (no reflector):
Lamp Power <15.......................... 40.0.
15< Lamp Power <19...................... 48.0.
19< Lamp Power <25...................... 50.0.
Lamp Power >=25......................... 55.0.
With Reflector:
Lamp Power <20.......................... 33.0.
Lamp Power >=20......................... 40.0.
Lumen Maintenance at 1,000 hours.......... >=90.0%.
Lumen Maintenance at 40 Percent of >=80.0%.
Lifetime.
Rapid Cycle Stress Test................... At least 5 lamps must meet
or exceed the minimum
number of cycles.
Lifetime.................................. >=6,000 hours for the sample
of lamps.
------------------------------------------------------------------------
\1\ Use rated wattage to determine the appropriate minimum efficacy
requirements in this table.
\2\ Calculate efficacy using measured wattage, rather than rated
wattage, and measured lumens to determine product compliance. Wattage
and lumen values indicated on products or packaging may not be used in
calculation.
(B) Light sources other than compact fluorescent lamps that have
lumens per watt performance at least equivalent to comparably
configured compact fluorescent lamps meeting the energy conservation
standards in paragraph (s)(2)(ii)(A) of this section.
(3) Ceiling fan light kits manufactured on or after January 1,
2007, with pin-based sockets for fluorescent lamps must use an
electronic ballast and be packaged with lamps to fill all sockets.
Except for the minimum efficacy requirement as provided in paragraph
(s)(5) of this section, these lamp ballast platforms must meet the
following requirements:
------------------------------------------------------------------------
Factor Requirement
------------------------------------------------------------------------
System Efficacy per Lamp Ballast >=50 lm/w for all lamps below
Platform in Lumens per Watt (lm/w). 30 total listed lamp watts.
>=60 lm/w for all lamps that
are <=24 inches and >=30 total
listed lamp watts.
>=70 lm/w for all lamps that
are >24 inches and >=30 total
listed lamp watts.
------------------------------------------------------------------------
(4) Except for the requirements as provided in paragraph (s)(5) of
this section, ceiling fan light kits with socket types other than those
covered in paragraphs (s)(2) and (3) of this section, including
candelabra screw base sockets, manufactured on or after January 1,
2009--
(i) Shall not be capable of operating with lamps that total more
than 190 watts. On [DATE 30 DAYS AFTER DATE OF FINAL RULE PUBLICATION
IN THE Federal Register], ceiling fan light kits with integrated solid-
state lighting (SSL) circuitry that
(A) Have only SSL drivers and light sources that are not consumer
replaceable,
(B) Do not include any other light source, and
(C) Include SSL drivers with a maximum operating wattage of no more
than 190 W, are considered to incorporate some electrical device or
measure that ensures they do not exceed the 190 W limit.
(ii) Shall be packaged to include the lamps described in paragraph
(s)(4)(i) of this section with the ceiling fan light kits.
(5) Ceiling fan light kits manufactured on or after [DATE 3 YEARS
AFTER DATE OF FINAL RULE PUBLICATION IN THE Federal Register] shall
meet the requirements shown in the table:
----------------------------------------------------------------------------------------------------------------
Metric Minimum standard
----------------------------------------------------------------------------------------------------------------
Minimum Average Lamp Efficacy for lamps with 50 lm/W.
output <120 lumens.
Minimum Average Lamp Efficacy for lamps with (74 - 29.42 x 0.9983 \lumens\) lm/W.
output >=120 lumens.
----------------------------------------------------------------------------------------------------------------
* * * * *
[FR Doc. 2015-19650 Filed 8-12-15; 8:45 am]
BILLING CODE 6450-01-P