[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
------------------------------------------------------------------------
          Product type               Lumens       Proposed level (lm/W)
------------------------------------------------------------------------
All CFLKs......................            <120  50
                                           >120  74-29.42 x 0.9983
                                                  \lumens\
------------------------------------------------------------------------


[[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
------------------------------------------------------------------------
All CFLKs...................................         53.4           0.3
------------------------------------------------------------------------

    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)
----------------------------------------------------------------------------------------------------------------
                                                                            (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
----------------------------------------------------------------------------------------------------------------
                                                      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.
---------------------------------------------------------------------------

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

    \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