[Federal Register Volume 81, Number 3 (Wednesday, January 6, 2016)]
[Rules and Regulations]
[Pages 580-633]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-33071]



[[Page 579]]

Vol. 81

Wednesday,

No. 3

January 6, 2016

Part II





Department of Energy





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10 CFR Parts 429 and 430





Energy Conservation Program: Energy Conservation Standards for Ceiling 
Fan Light Kits; Final Rule

  Federal Register / Vol. 81 , No. 3 / Wednesday, January 6, 2016 / 
Rules and Regulations  

[[Page 580]]


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DEPARTMENT OF ENERGY

10 CFR Parts 429 and 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: Final rule.

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SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as 
amended, prescribes energy conservation standards for various consumer 
products and certain commercial and industrial equipment, including 
ceiling fan light kits (CFLKs). EPCA also requires the U.S. Department 
of Energy (DOE) to periodically determine whether more-stringent 
standards would be technologically feasible and economically justified, 
and would save a significant amount of energy. In this final rule, DOE 
is adopting more-stringent energy conservation standards for CFLKs. It 
has determined that the amended energy conservation standards for these 
products would result in significant conservation of energy, and are 
technologically feasible and economically justified.

DATES: The effective date of this rule is March 7, 2016. Compliance 
with the amended standards established for CFLKs in this final rule is 
required on and after January 7, 2019.

ADDRESSES: The docket, which includes Federal Register notices, public 
meeting attendee lists and transcripts, comments, and other supporting 
documents/materials, is available for review at www.regulations.gov. 
All documents in the docket are listed in the www.regulations.gov 
index. However, some documents listed in the index, such as those 
containing information that is exempt from public disclosure, may not 
be publicly available.
    A link to the docket Web page can be found at: http://www.regulations.gov/#!docketDetail;D=EERE-2012-BT-STD-0045. The 
www.regulations.gov Web page will contain instructions on how to access 
all documents, including public comments, in the docket.
    For further information on how to review the docket, contact Ms. 
Brenda Edwards at (202) 586-2945 or by email: 
[email protected].

FOR FURTHER INFORMATION CONTACT: Ms. Lucy deButts, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Office, EE-2J, 1000 Independence Avenue SW., Washington, 
DC 20585-0121. Telephone: (202) 586-7796. 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].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Synopsis of the Final 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
    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 Limiter Requirement
    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. Annual Energy Consumption
    4. Energy Prices
    5. Energy Price Trends
    6. Lamp Replacements
    7. Product Lifetime
    8. Residual Value
    9. Discount Rates
    10. Efficacy Distributions
    11. LCC Savings Calculation
    12. Payback Period Analysis
    G. Shipments Analysis
    H. National Impact Analysis
    1. Product Efficiency Trends
    2. National Energy Savings
    3. Net Present Value Analysis
    I. Consumer Subgroup Analysis
    J. Manufacturer Impact Analysis
    1. Manufacturer Production Costs
    2. Shipment Projections
    3. Markup Scenarios
    4. Capital and Product Conversion Costs
    5. Other Comments from Interested Parties
    6. Manufacturer Interviews
    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
    O. Proposed Standards in August 2015 NOPR
    1. Proposed Standard
    2. Regulatory Text
V. Analytical Results and Conclusions
    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 Adopted 
Standards

[[Page 581]]

VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    1. Description of the Need for, and Objectives of, the Rule
    2. Description of Significant Issues Raised by Public Comment
    3. Description of Comments Submitted by the Small Business 
Administration
    4. Description on Estimated Number of Small Entities Regulated
    5. Description and Estimate of Compliance Requirements
    6. Description of Steps Taken to Minimize Impacts to Small 
Businesses
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Review Under the Information Quality Bulletin for Peer Review
    M. Congressional Notification
VII. Approval of the Office of the Secretary

I. Synopsis of the Final Rule

    Title III, Part B \1\ of the Energy Policy and Conservation Act of 
1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as 
codified), established the Energy Conservation Program for Consumer 
Products Other Than Automobiles.\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 redesignated Part A.
    \2\ All references to EPCA in this document refer to the statute 
as amended through the Energy Efficiency Improvement Act of 2015, 
Public Law 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 DOE determines is technologically feasible and 
economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new 
or amended standard must result in 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 is adopting amended energy conservation standards 
for CFLKs. The amended standards, which are expressed in minimum lumen 
output per watt (lm/W), are shown in Table I.1. These standards apply 
to all products listed in Table I.1 and manufactured in, or imported 
into, the United States starting on January 7, 2019.

   Table I.1--Energy Conservation Standards for Ceiling Fan Light Kits
                  [Compliance starting January 7, 2019]
------------------------------------------------------------------------
         Product type            Lumens \1\     Minimum efficacy (lm/W)
------------------------------------------------------------------------
All CFLKs....................            <120  50
                                        >=120  74.0 - 29.42 x 0.9983
                                                \lumens\
------------------------------------------------------------------------
\1\ Use the lumen output for each basic model of lamp packaged with the
  basic model of CFLK or each basic model of integrated SSL in the CFLK
  basic model to determine the applicable standard.

A. Benefits and Costs to Consumers

    Table I.2 presents DOE's evaluation of the economic impacts of the 
adopted 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.6).
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    \3\ The average LCC savings are measured relative to the 
efficacy distribution in the no-new-standards case, which depicts 
the market in the compliance year in the absence of standards (see 
section IV.F.10). The simple PBP, designed to compare specific 
efficacy levels, is measured relative to the least efficient model 
on the market (see section IV.C.3).

Table I.2--Impacts of Amended Energy Conservation Standards on Consumers
                                of CFLKs
------------------------------------------------------------------------
                                            Average LCC       Simple
              Product class                   savings         payback
                                              (2014$)     period (years)
------------------------------------------------------------------------
                           Residential Sector
------------------------------------------------------------------------
All CFLKs...............................            24.3             1.2
------------------------------------------------------------------------
                            Commercial Sector
------------------------------------------------------------------------
All CFLKs...............................            53.4             0.3
------------------------------------------------------------------------

    DOE's analysis of the impacts of the adopted standards on consumers 
is described in section IV.F of this document.

B. Impact on Manufacturers

    The industry net present value (INPV) is the sum of the discounted 
cash flows to the industry from the reference 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-new-standards case is $174.9 million in 2014$. Under the adopted 
standards, DOE expects that manufacturers may lose up to 3.7

[[Page 582]]

percent of this INPV, which is approximately $6.4 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 standards for CFLKs.
    DOE's analysis of the impacts of the adopted standards on 
manufacturers is described in section IV.J of this document.

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 adopted 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-new-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 0.049 quadrillion Btu (quads).\5\ This 
represents a savings of 3.6 percent relative to the energy use of these 
products in the no-new-standards case.
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    \5\ A quad is equal to 10 \15\ British thermal units (Btu). The 
quantity refers to full-fuel-cycle (FFC) energy savings. FFC energy 
savings 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 efficiency standards. For more information on the FFC 
metric, see section IV.H.
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    The cumulative net present value (NPV) of total consumer costs and 
savings of the standards for CFLKs ranges from $0.50 billion (at a 7-
percent discount rate) to $0.66 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 standards for CFLKs are projected to yield 
significant environmental benefits. DOE estimates that the standards 
would result in cumulative greenhouse gas emission reductions (over the 
same period as for energy savings) of 3.4 million metric tons (Mt) \6\ 
of carbon dioxide (CO2), 2.6 thousand tons of sulfur dioxide 
(SO2), 5.2 tons of nitrogen oxides (NOX), 11.2 
thousand tons of methane (CH4), 0.05 thousand tons of 
nitrous oxide (N2O), and 0.01 tons of mercury (Hg).\7\ The 
cumulative reduction in CO2 emissions through 2030 amounts 
to 3.1 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 
NOX and Hg are presented in short tons.
    \7\ DOE calculated emissions reductions relative to the no-new-
standards-case, which reflects key assumptions in the Annual Energy 
Outlook 2015 (AEO 2015) Reference case, which generally represents 
current legislation and environmental regulations for which 
implementing regulations were available as of October 31, 2014.
---------------------------------------------------------------------------

    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 Federal 
interagency working group.\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 that the net 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 $40.0/t in 
2015. DOE also estimates that the net 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, United States 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 estimated the monetized value of NOX 
emissions reductions using benefit per ton estimates from the 
Regulatory Impact Analysis titled, ``Proposed Carbon Pollution 
Guidelines for Existing Power Plants and Emission Standards for 
Modified and Reconstructed Power Plants,'' published in June 2014 by 
EPA's Office of Air Quality Planning and Standards. (Available at: 
http://www3.epa.gov/ttnecas1/regdata/RIAs/111dproposalRIAfinal0602.pdf.) See section IV.L.2 for further 
discussion. Note that the agency is presenting a national benefit-
per-ton estimate for particulate matter emitted from the Electricity 
Generating Unit sector based on an estimate of premature mortality 
derived from the ACS study (Krewski et al., 2009). If the benefit-
per-ton estimates were based on the Six Cities study (Lepuele et 
al., 2011), the values would be nearly two-and-a-half times larger. 
Because of the sensitivity of the benefit-per-ton estimate to the 
geographical considerations of sources and receptors of emissions, 
DOE intends to investigate refinements to the agency's current 
approach of one national estimate by assessing the regional approach 
taken by EPA's Regulatory Impact Analysis for the Clean Power Plan 
Final Rule. Note that DOE is currently investigating valuation of 
avoided SO2 and Hg emissions.
---------------------------------------------------------------------------

    Table I.3 summarizes the national economic benefits and costs 
expected to result from the adopted standards for CFLKs.

  Table I.3--Summary of National Economic Benefits and Costs of Amended
                Energy Conservation Standards for CFLKs *
------------------------------------------------------------------------
                                         Present value    Discount rate
               Category                 (billion 2014$)        (%)
------------------------------------------------------------------------
                                Benefits
------------------------------------------------------------------------
Consumer Operating Cost Savings.......             0.56                7
                                                   0.73                3
CO2 Reduction Value ($12.2/t case) **.             0.03                5
CO2 Reduction Value ($40.0/t case) **.             0.13                3
CO2 Reduction Value ($62.3/t case) **.             0.20              2.5
CO2 Reduction Value ($117/t case) **..             0.40                3
NOX Reduction Monetized Value [dagger]             0.02                7
                                                   0.03                3
Total Benefits [dagger][dagger].......             0.71                7
                                                   0.89                3
------------------------------------------------------------------------
                                  Costs
------------------------------------------------------------------------
Consumer Incremental Installed Costs..             0.06                7
------------------------------------------------------------------------

[[Page 583]]

 
                                                   0.07                3
------------------------------------------------------------------------
                              Net Benefits
------------------------------------------------------------------------
Including CO2 and NOX Reduction                    0.65                7
 Monetized Value [dagger][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
  costs 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. The value for NOX is the average of high and low
  values found in the literature.
[dagger] The $/ton values used for NOX are described in section IV.L.
  DOE estimated the monetized value of NOX emissions reductions using
  benefit per ton estimates from the Regulatory Impact Analysis titled,
  ``Proposed Carbon Pollution Guidelines for Existing Power Plants and
  Emission Standards for Modified and Reconstructed Power Plants,''
  published in June 2014 by EPA's Office of Air Quality Planning and
  Standards. (Available at: http://www3.epa.gov/ttnecas1/regdata/RIAs/111dproposalRIAfinal0602.pdf.) See section IV.L.2 for further
  discussion. Note that the agency is presenting a national benefit-per-
  ton estimate for particulate matter emitted from the Electric
  Generating Unit sector based on an estimate of premature mortality
  derived from the ACS study (Krewski et al., 2009). If the benefit-per-
  ton estimates were based on the Six Cities study (Lepuele et al.,
  2011), the values would be nearly two-and-a-half times larger. Because
  of the sensitivity of the benefit-per-ton estimate to the geographical
  considerations of sources and receptors of emissions, DOE intends to
  investigate refinements to the agency's current approach of one
  national estimate by assessing the regional approach taken by EPA's
  Regulatory Impact Analysis for the Clean Power Plan Final Rule.
[dagger][dagger] Total Benefits for both the 3% and 7% cases are derived
  using the series corresponding to average SCC with 3-percent discount
  rate ($40.0/t case).

    The benefits and costs of the adopted standards, for CFLKs sold in 
2019-2048, can also be expressed in terms of annualized values. The 
monetary values for the total annualized net benefits are the sum of 
(1) the national economic value of the benefits in reduced operating 
costs, minus (2) the increases in product purchase prices and 
installation costs, plus (3) the value of the benefits of 
CO2 and NOX emission reductions, all 
annualized.\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 the value of operating cost savings and CO2 
emission reductions are both important, two issues are relevant. First, 
the national operating cost 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 in future years reflect future CO2-emissions 
impacts 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 adopted 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 SCC series that has a value of $40.0/t in 
2015),\12\ the estimated cost of the standards 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 $1.7 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 SCC series has a value of $40.0/t in 2015, the estimated 
cost of the 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 $1.4 
million in reduced NOX emissions. In this case, the net 
benefit amounts to $46 million per year.
---------------------------------------------------------------------------

    \12\ DOE used a 3-percent discount rate because the SCC values 
for the series used in the calculation were derived using a 3-
percent discount rate (see section IV.L).

                                        Table I.4--Annualized Benefits and Costs of Amended Standards for CFLKs *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     (million 2014$/year)
                                              Discount rate          -----------------------------------------------------------------------------------
                                                                           Primary estimate        Low net benefits estimate  High net benefits estimate
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings...  7%..............................  55........................  36........................  59.
                                    3%..............................  41........................  24........................  43.
CO2 Reduction Value ($12.2/t case)  5%..............................  3.........................  1.........................  3.
 **.

[[Page 584]]

 
CO2 Reduction Value ($40.0/t case)  3%..............................  7.........................  4.........................  8.
 **.
CO2 Reduction Value ($62.3/t case)  2.5%............................  11........................  5.........................  11.
 **.
CO2 Reduction Value ($117/t case)   3%..............................  22........................  11........................  23.
 **.
NOX Reduction Value [dagger]......  7%..............................  1.7.......................  1.0.......................  4.0.
                                    3%..............................  1.4.......................  0.7.......................  3.4.
Total Benefits [dagger][dagger]...  7% plus CO2 range...............  60 to 79..................  38 to 48..................  66 to 86.
                                    7%..............................  65........................  40........................  71.
                                    3% plus CO2 range...............  45 to 64..................  26 to 36..................  50 to 70.
                                    3%..............................  50........................  28........................  55.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Incremental Product Costs  7%..............................  6.0.......................  3.5.......................  6.4.
                                    3%..............................  4.0.......................  2.3.......................  4.2.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total [dagger][dagger]............  7% plus CO2 range...............  54 to 73..................  34 to 44..................  59 to 80.
                                    7%..............................  59........................  37........................  65.
                                    3% plus CO2 range...............  41 to 60..................  24 to 33..................  45 to 66.
                                    3%..............................  46........................  26........................  51.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 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 CFLKs purchased from 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 light-emitting diode (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 methods used to derive projected price trends are explained in section IV.G.
** 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] The $/ton values used for NOX are described in section IV.L. DOE estimated the monetized value of NOx emissions reductions using benefit per
  ton estimates from the Regulatory Impact Analysis titled, ``Proposed Carbon Pollution Guidelines for Existing Power Plants and Emission Standards for
  Modified and Reconstructed Power Plants,'' published in June 2014 by EPA's Office of Air Quality Planning and Standards. (Available at: http://www3.epa.gov/ttnecas1/regdata/RIAs/111dproposalRIAfinal0602.pdf.) See section IV.L.2 for further discussion. For DOE's Primary Estimate and Low Net
  Benefits Estimate, the agency is presenting a national benefit-per-ton estimate for particulate matter emitted from the Electric Generating Unit
  sector based on an estimate of premature mortality derived from the ACS study (Krewski et al., 2009). For DOE's High Net Benefits Estimate, the
  benefit-per-ton estimates were based on the Six Cities study (Lepuele et al., 2011), which are nearly two-and-a-half times larger than those from the
  ACS study. Because of the sensitivity of the benefit-per-ton estimate to the geographical considerations of sources and receptors of emissions, DOE
  intends to investigate refinements to the agency's current approach of one national estimate by assessing the regional approach taken by EPA's
  Regulatory Impact Analysis for the Clean Power Plan Final Rule.
[dagger][dagger] Total Benefits for both the 3% and 7% cases are derived using the series corresponding to the average SCC with 3-percent discount rate
  ($40.0/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 adopted standards is 
described in sections IV.H, IV.K and IV.L of this document.

D. Conclusion

    Based on the analyses culminating in this final rule, DOE found the 
benefits to the nation of the standards (energy savings, consumer LCC 
savings, positive NPV of consumer benefit, and emission reductions) 
outweigh the burdens (loss of INPV and LCC increases for some users of 
these products). DOE has concluded that the standards in this final 
rule represent the maximum improvement in energy efficiency that is 
technologically feasible and economically justified, and would result 
in significant conservation of energy.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying this final 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 the Energy Policy and Conservation Act of 1975 
(EPCA or the Act), Public Law 94-163 (codified as 42 U.S.C. 6291-6309) 
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, prescribed energy conservation standards for these 
products (42 U.S.C. 6295(ff)), and authorized DOE to consider whether 
to amend these standards. Under 42 U.S.C. 6295(m), DOE must also 
periodically review its already established energy conservation 
standards for a covered product.
    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

[[Page 585]]

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, appendices V and V1 and 10 CFR 430.23(x).
    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))
    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))
    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 in any covered product type (or 
class) of performance characteristics (including reliability), 
features, sizes, capacities, and volumes that are substantially the 
same as those generally available in the United States. (42 U.S.C. 
6295(o)(4))
    Additionally, EPCA 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 products 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 such a feature 
and other factors DOE deems appropriate. Id. Any rule prescribing such 
a standard must include an explanation of the basis on which such 
higher or lower level was established. (42 U.S.C. 6295(q)(2))
    Federal energy conservation requirements generally supersede State 
laws or regulations concerning energy conservation testing, labeling, 
and standards. (42 U.S.C. 6297(a)-(c)) DOE may, however, grant waivers 
of Federal preemption for particular State laws or regulations, in 
accordance with the procedures and other provisions set forth under 42 
U.S.C. 6297(d)).
    Finally, pursuant to the amendments contained in the Energy 
Independence and Security Act of 2007 (EISA 2007), Public L.aw 110-140, 
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)) DOE published a final rule amending test procedures 
for CFLKs on December 24, 2015 (hereafter ``CFLK TP final rule''). 80 
FR 80209. In the CFLK TP final rule, DOE specified that CFLKs do not 
consume power in off mode. Further, the CFLK TP final rule stated that 
the energy use in standby mode is attributed to the ceiling fan to 
which the CFLK is attached, and accounted for in the ceiling fan 
efficiency metric. 80 FR 80209, 80220 (December 24, 2015). Thus, DOE's 
test procedures and standards for CFLKs address energy consumption only 
in active mode, as do the amended standards adopted in this final rule.

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).
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

[[Page 586]]

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 EPCA requirements for the Medium Screw Base 
and Pin-Based product classes. 70 FR 60413 EPAct 2005 also specified 
that if DOE did not 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, 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 (Jan. 11, 2007). In another technical amendment final 
rule, DOE added a provision that CFLKs with sockets for pin-based 
fluorescent lamps must be packaged with lamps to fill all sockets. 74 
FR 12058 (Mar. 3, 2009). (42 U.S.C. 6295(ff)(4)(C)(ii)) These standards 
for CFLKs are codified at 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.
    DOE held the public meeting for the framework document on March 22, 
2013 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.
    DOE published a preliminary analysis for the CFLK energy 
conservation standards rulemaking 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. 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).
    In August 2015, DOE published a notice of proposed rulemaking 
(NOPR) in the Federal Register proposing amended energy conservation 
standards for CFLKs. 80 FR 48624 (August 13, 2015). In conjunction with 
the NOPR, DOE also published on its Web site the complete TSD for the 
proposed rule.\13\ The NOPR TSD included updated results of the 
analyses conducted in the preliminary analysis stage as well as the 
following additional analyses: 1) LCC subgroup analysis, 2) 
manufacturer impact analysis, 3) employment impact analysis, 4) utility 
impact analysis, 5) emissions analysis, 6) monetization of emission 
reduction benefits, and 7) regulatory impact analysis (RIA). The NOPR 
TSD was accompanied by the LCC spreadsheet, the NIA spreadsheet, and 
the MIA spreadsheet--all of which are available on regulations.gov.\14\ 
In the NOPR, DOE invited comment on these analyses and related issues. 
DOE held a NOPR public meeting on August 18, 2015, to hear oral 
comments on and solicit information relevant to the proposed rule 
(hereafter the NOPR public meeting). DOE considered the comments 
received in response to the NOPR after its publication and at the NOPR 
public meeting when developing this final rule, and responds to these 
comments in this rule.
---------------------------------------------------------------------------

    \13\ The NOPR TSD is available at regulations.gov under docket 
number EERE-2012-BT-STD-0045.
    \14\ Supporting spreadsheets for the NOPR TSD are available at 
regulations.gov under docket number EERE-2012-BT-STD-0045.
---------------------------------------------------------------------------

III. General Discussion

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. (42 U.S.C. 6291(50)(A), (B)) In 
the CFLK TP final rule, DOE withdrew the current guidance on accent 
lighting and reinterpreted the EPCA definition of ``ceiling fan light 
kit'' to include all lighting, including accent lighting. As a result, 
all lighting packaged with a CFLK is subject to energy conservation 
requirements. 80 FR 80209, 80213-15 (December 24, 2015). Additionally, 
in the CFLK TP final rule, DOE reinterpreted the definition of a 
ceiling fan to include hugger fans, and clarified that the definition 
includes multi-mount fans and fans that produce a large volume of 
airflow. 80 FR 80209, 80215-16 (December 24, 2015).
    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 justify 
differing standards. 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 final rule 
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. DOE 
published a final rule amending test procedures for CFLKs on December 
24, 2015. 80 FR 80209. Test procedures for CFLKs are provided 10 CFR 
430.23(x) and in appendices V and V1 to 10 CFR part 430, subpart B.

[[Page 587]]

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 CFLK TP final rule, DOE determined that CFLKs do not consume 
power in off mode, and that only CFLKs offering the functionality of a 
wireless remote control may consume power in standby mode. Because the 
standby sensor and controller nearly always provide functionality 
shared between the ceiling fan and the CFLK, DOE concluded that the 
energy use from standby mode associated with CFLKs is attributed to the 
ceiling fan to which they are attached, and thus any standby mode 
energy use will be accounted for in the ceiling fan efficiency metric. 
Therefore, DOE's test procedures for CFLKs account for only active mode 
power consumption. 80 FR 80209, 80220 (December 24, 2015).

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 efficacy level (EL). Section IV.B of this document 
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 standards considered in this rulemaking. For further 
details on the screening analysis for this rulemaking, see chapter 4 of 
the final rule TSD.
2. Maximum Technologically Feasible Levels
    When DOE 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 
final rule and in chapter 5 of the final rule TSD.

D. Energy Savings

1. Determination of Savings
    For each trial standard level (TSL), DOE projected energy savings 
from application of the TSL to CFLKs purchased in the 30-year period 
that begins in the year of compliance with any amended standards (2019-
2048).\15\ The savings are measured over the entire lifetime of 
products purchased in the 30-year analysis period. DOE quantified the 
energy savings attributable to each TSL as the difference in energy 
consumption between each standards case and the no-new-standards case. 
The no-new-standards case represents a projection of energy consumption 
that reflects how the market for a product would likely evolve in the 
absence of amended energy conservation standards.
---------------------------------------------------------------------------

    \15\ DOE also presents a sensitivity analysis that considers 
impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------

    DOE used its national impact analysis (NIA) spreadsheet models to 
estimate energy savings from potential amended standards for CFLKs. The 
NIA spreadsheet model (described in section IV.H of this document) 
calculates savings in site energy, which is the energy directly 
consumed by products at the locations where they are used. Based on the 
site energy, DOE calculates national energy savings (NES) in terms of 
primary energy savings at the site or at power plants, and also in 
terms of full-fuel-cycle (FFC) energy savings. 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.\16\ 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 on FFC energy savings, see section 
IV.H.2 of this document.
---------------------------------------------------------------------------

    \16\ The FFC metric is discussed in DOE's statement of policy 
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as 
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
    To adopt 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 
opined in Natural Resources Defense Council v. Herrington, 768 F.2d 
1355, 1373 (D.C. Cir. 1985), that Congress intended ``significant'' 
energy savings in the context of EPCA to be savings that were not 
``genuinely trivial.'' The energy savings for all the TSLs considered 
in this rulemaking, including the adopted standards, are nontrivial, 
and, therefore, DOE considers them ``significant'' within the meaning 
of section 325 of EPCA.

E. Economic Justification

1. Specific Criteria
    As noted above, 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 a manufacturer impact analysis (MIA), as 
discussed in section IV.J. DOE first uses an annual cash-flow approach 
to

[[Page 588]]

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) Industry net 
present value (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 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 net present value of the economic impacts applicable to a 
particular rulemaking. DOE also evaluates the LCC impacts of potential 
standards on identifiable subgroups of consumers that may be affected 
disproportionately by a national 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 cost (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 discount rates appropriate for 
consumers. 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 (including 
installation) of a more-efficient product through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
due to a more-stringent standard by the 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 the no-new-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 adopted in this final rule 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 standard. (42 U.S.C. 6295(o)(2)(B)(i)(V)) It 
also directs the Attorney General to determine the impact, if any, of 
any lessening of competition likely to result from a standard and to 
transmit such determination to the Secretary within 60 days of the 
publication of a proposed rule, together with an analysis of the nature 
and extent of the impact. (42 U.S.C. 6295(o)(2)(B)(ii)) DOE transmitted 
a copy of its proposed rule to the Attorney General with a request that 
the Department of Justice (DOJ) provide its determination on this 
issue. DOE received no adverse comments from DOJ regarding the proposed 
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 
adopted 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 adopted standards also are likely to result in environmental 
benefits in the form of reduced emissions of air pollutants and 
greenhouse gases associated with energy production 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 document. 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

[[Page 589]]

calculated under the applicable DOE test procedure. DOE's LCC and PBP 
analyses generate values used to calculate the effect potential amended 
energy conservation standards would have on the payback period for 
consumers. These analyses include, but are not limited to, the 3-year 
payback period contemplated under the rebuttable-presumption test. In 
addition, DOE routinely conducts an economic analysis that considers 
the full range of impacts to consumers, manufacturers, the nation, and 
the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The 
results of this analysis serve as the basis for DOE's evaluation of the 
economic justification for a potential standard level (thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification). The rebuttable presumption payback calculation 
is discussed in section IV.F of this final 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 adopted in this document. The first tool is a spreadsheet 
that calculates the LCC savings and PBP of potential amended or new 
energy conservation standards. The national impacts analysis uses a 
second spreadsheet set that provides shipments forecasts and calculates 
national energy savings and net present value of total consumer costs 
and savings expected to result 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 
Web site for this rulemaking: http://www.regulations.gov/#!docketDetail;dct=FR%252BPR%252BN%252BO%252BSR%252BPS;rpp=25;po=25;D=EE
RE-2012-BT-STD-0045. Additionally, DOE used output from the latest 
version of the U.S. Energy Information Administration's (EIA's) Annual 
Energy Outlook (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. The subjects addressed in the market and technology 
assessment for this rulemaking include: (1) A determination of the 
scope of the rulemaking and product classes; (2) manufacturers and 
industry structure; (3) existing efficiency programs; (4) shipments 
information; (5) market and industry trends; and (6) technologies or 
design options that could improve the energy efficiency of CFLKs. The 
key findings of DOE's market assessment are summarized below. See 
chapter 3 of the final rule TSD for further discussion of the market 
and technology assessment.
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 NOPR analysis, DOE restructured the current three CFLK 
product classes to one product class: All CFLKs.
    Products in the All CFLKs product class are currently subject to 
either ENERGY STAR Program Requirements for Residential Light Fixtures 
version 4.0, ENERGY STAR Program requirements for Compact Fluorescent 
Lamps, version 3, or a 190 watt limitation. (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 adopting 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.1.

      Table IV.1--All CFLKs Product Class Current Minimum Efficacy
                              Requirements
------------------------------------------------------------------------
                                                              Minimum
                     Lamp power (W)                        efficacy (lm/
                                                                W)
------------------------------------------------------------------------
<15.....................................................            50.0
>=15 and <30............................................            60.0
>=30....................................................            70.0
------------------------------------------------------------------------

    DOE received several comments agreeing with the restructuring of 
product classes. Westinghouse stated that having only one product class 
makes compliance less complex and the standard fairly easy to 
understand, and provides design flexibility. However, Westinghouse 
cautioned that if the proposed EL 2 is adjusted even slightly, some of 
the design flexibility would be lost under a single product class 
structure. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 26-
27) Hunter agreed with Westinghouse's comments. (Hunter, Public Meeting 
Transcript, No. 112 at p. 27)
    Subject to adoption of TSL 2, the American Lighting Association 
(ALA) also agreed with the proposed class structure because it would 
simplify compliance. (ALA, No. 115 at p. 7) ASAP and PG&E agreed with 
the product class combination from a structural perspective. (ASAP, 
Public Meeting Transcript, No. 112 at p. 27; PG&E, Public Meeting 
Transcript, No. 112 at p. 27) ASAP and the California Investor Owned 
Utilities (CA IOUs) supported not using base type as a class setting 
factor. ASAP also supported not using light source technology as a 
class setting factor. ASAP and CA IOUs stated that a single product 
class would eliminate the current standard's product class definitions, 
which have driven the CFLK market towards inefficient candelabra base 
lamps to avoid the more stringent standards for CFLKs that use medium 
screw base lamps. 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'') and CA IOUs noted that as

[[Page 590]]

SSL technology continues to improve, and more CFLKs with integrated SSL 
circuitry (which do not have removable lamps) enter the market, they 
will be assessed alongside CFLKs with removable lamps under a single 
product class structure. This would prevent future standards from 
driving the market to less efficient technology. (Joint Comment, No. 
117 at p. 1; CA IOUs, No. 118 at pp. 1-2)
    DOE did not receive any comments that disagreed with the product 
class structure proposed in the NOPR. In this final rule, 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 final rule analysis, DOE is 
adopting a single ``All CFLKs'' product class. (See chapter 3 of the 
final rule TSD for further details on the CFLK product class.)
2. Metrics
    In the NOPR, DOE proposed luminous efficacy as the efficiency 
metric for CFLKs. DOE used lamp efficacy except where the components in 
the CFLK necessary to measure lamp efficacy are not designed to be 
consumer replaceable from the CFLK (i.e., for CFLKs with integrated SSL 
circuitry, such as those with inseparable LED lighting). In those 
cases, DOE used luminaire efficacy.
    ALA asked DOE to confirm that the lumens per watt requirements for 
CFLKs that utilized an ANSI base are determined by lumen output per 
light source rather than the total lumen output of all light sources in 
the CFLK. (ALA, Public Meeting Transcript, No. 112 at pp. 10-11, 43)
    In the final rule, DOE continued to base its analysis on luminous 
efficacy as the efficiency metric for CFLKs. DOE used lamp efficacy 
except where the components in the CFLK necessary to measure lamp 
efficacy are not designed to be consumer replaceable from the CFLK. In 
those cases, DOE used luminaire efficacy. Hence, for a CFLK packaged 
with three medium screw base lamps, the minimum efficacy standard 
applies to each lamp individually.
3. 190 W Limiter Requirement
    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 as a 
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).
    In the NOPR, DOE proposed that CFLKs with solid-state lighting 
(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.\17\ DOE proposed to incorporate the clarification in this 
rulemaking and make it effective 30 days after the publication of the 
final rule.
---------------------------------------------------------------------------

    \17\ DOE proposed these four conditions in the preamble of the 
NOPR. However, the proposed associated regulatory text incorrectly 
specified that both the SSL light source and SSL driver had to be 
non-consumer replaceable.
---------------------------------------------------------------------------

    DOE received several comments regarding this proposal and addressed 
these comments in the CFLK TP final rule. 80 FR 80209, 80216-18 
(December 24, 2015). In the CFLK TP final rule, DOE clarified that, for 
purposes of compliance with the CFLK standards at 10 CFR 430.32(s)(4), 
CFLKs that (1) include only SSL technology; (2) do not include an SSL 
lamp with an ANSI standard base, and (3) include only SSL drivers with 
a combined maximum operating wattage of no more than 190 W meet the 190 
W limit requirement. 80 FR 80209, 80218 (December 24, 2015)
    ALA requested that DOE make the clarification of the 190 W limiter 
requirement for CFLKs with integrated SSL components effective as soon 
as possible, either in a separate notice or in the forthcoming final 
rule of the CFLK test procedure. (ALA, No. 115 at p. 4, 6) The 
interpretation of the 190 W limit requirement for CFLKs with SSL 
technology will be effective with the publication of the CFLK TP final 
rule in the Federal Register. 80 FR 80209, 80218 (December 24, 2015)
    ALA also requested that DOE clarify that CFLKs subject to amended 
energy efficiency standards are not to be subject to the 190 W limit 
requirement or, alternatively, that CFLKs that comply with the amended 
energy efficiency standards also comply with the 190 wattage limit 
requirement. ALA reasoned that amended energy efficiency standards 
would require any CFLK to meet a minimum efficacy standard of 50 lm/W 
and therefore a CFLK modified to operate a total of more than 190 watts 
would emit more than 9,500 lumens. Because this is too much light for 
residential and commercial CFLK applications, consumers would not 
modify CFLKs subject to DOE's amended efficiency standards to operate 
at wattages higher than 190 watts. (ALA, No. 115 at p. 7)
    As described in section IV.C.3, DOE determined that any amended 
energy efficiency standards would require lamps packaged with CFLKs to 
comply with a minimum efficacy of 50 lm/W. CFLKs that are currently 
packaged with lamps totaling 190 W typically offer a total lumen output 
of about 1,600 total lumens, or approximately 8 lm/W per lamp included. 
If each lamp included were to comply with a minimum efficacy standard 
of 50 lm/W, the lumen output of the CFLK would increase to at least 
9,500 lumens, or almost six times greater than the existing light 
output. This light output is substantially higher than suitable for 
almost all applications in which CFLKs are used. Therefore, DOE has 
determined that the amended efficiency standards require lamps to be 
more efficient than if complying with the 190 W limit requirement. As a 
result, lamps complying with the amended energy efficiency standards 
adopted in this rulemaking will be presumed to meet the 190 W limit 
requirement, and manufacturers will not be required 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.
4. Technology Options
    In the NOPR market analysis and technology assessment, DOE 
identified 21 technology options that would be expected to improve the 
efficiency of CFLKs, as measured by the DOE test procedure. DOE 
reviewed manufacturer catalogs, recent trade publications, technical 
journals, and patent filings to identify these technology options.
    For compact fluorescent lamps (CFLs), DOE considered technology 
options related to improvements in electrode coatings, fill gas, 
phosphors, glass coatings, cold spot optimization, and ballast 
components. For LED lamps, DOE considered 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.
    NEMA asserted that CFLs have reached their ultimate balance of 
price

[[Page 591]]

and performance and are no longer a product experiencing a lot of 
innovation. NEMA followed that CFLs were always intended to be a bridge 
technology and although there may be minor tweaks left, they have 
already reached their peak in investment. (NEMA, Public Meeting 
Transcript, No. 112 at p. 30)
    Although CFLs may not be experiencing a lot of innovation, DOE 
reviewed manufacturer catalogs, recent trade publications, technical 
journals, and patent filings and identified some technology options 
that could be used to increase the efficacy of CFLs relative to that of 
the baseline lamp. DOE considers product price or industry investment 
in the LCC, NIA and/or MIA analyses, rather than when identifying 
technology options.
    Westinghouse noted that they have provided feedback through NEMA on 
individual LED technology options. (Westinghouse, Public Meeting 
Transcript, No. 112 at p. 29) NEMA stated that they preferred to have 
LED technology evolve naturally, unencumbered by regulatory 
constraints, because options that might not look useful now may become 
essential in the future. (NEMA, Public Meeting Transcript, No. 112 at 
pp. 30-31)
    To determine potential ELs in the engineering analysis, DOE 
considers only technology options that meet the four criteria outlined 
in the screening analysis. As described in section IV.B, one criterion 
is to maintain product utility and/or product availability. Thus, 
features and capabilities of existing products are maintained at higher 
ELs. Furthermore, all ELs considered specify only the minimum required 
efficacy rather than specific design options that must be used to 
comply with that EL. Thus, manufacturers can use the combination of 
options that works best for current market needs.
Summary of CFLK Technology Options
    In summary, DOE has developed the list of technology options shown 
in Table IV.2 to increase efficacy of CFLKs. See chapter 3 of the final 
rule TSD for more information on the CFLK technology options.

                   Table IV.2--CFLK Technology Options
------------------------------------------------------------------------
                                     Name of
           Lamp type            technology option       Description
------------------------------------------------------------------------
CFL...........................  Highly Emissive    Improved electrode
                                 Electrode          coatings allow
                                 Coatings.          electrons to be more
                                                    easily removed from
                                                    electrodes, reducing
                                                    lamp power and
                                                    increasing overall
                                                    efficacy.
                                Higher-Efficiency  Fill gas compositions
                                 Lamp Fill Gas      improve cathode
                                 Composition.       thermionic emission
                                                    or increase mobility
                                                    of ions and
                                                    electrons in the
                                                    lamp plasma.
                                Higher-Efficiency  Techniques to
                                 Phosphors.         increase the
                                                    conversion of
                                                    ultraviolet (UV)
                                                    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
                                 Phosphors.         one visible photon
                                                    for each incident UV
                                                    photon.
                                Cold Spot          Improve cold spot
                                 Optimization.      design to maintain
                                                    optimal temperature
                                                    and improve light
                                                    output.
                                Improved Ballast   Use of higher-grade
                                 Components.        components to
                                                    improve efficiency
                                                    of integrated
                                                    ballasts.
                                Improved Ballast   Better circuit design
                                 Circuit Design.    to improve
                                                    efficiency of
                                                    integrated ballasts.
                                Change in          Replace CFL with LED
                                 Technology.        technology.
LED...........................  Efficient Down     New high-efficiency
                                 Converters.        wavelength
                                                    conversion
                                                    materials, such as
                                                    optimized phosphor
                                                    conversion, quantum-
                                                    dots, have the
                                                    potential for
                                                    creating warm-white
                                                    LEDs with improved
                                                    spectral efficiency,
                                                    high color quality,
                                                    and improved thermal
                                                    stability.
                                Improved Package   Novel package
                                 Architectures.     architectures such
                                                    as color mixing
                                                    (RGB+) and hybrid
                                                    architecture to
                                                    improve package
                                                    efficacy.
                                Improved Emitter   The development of
                                 Materials.         efficient red,
                                                    green, or amber LED
                                                    emitters, will allow
                                                    for optimization of
                                                    spectral efficiency
                                                    with high color
                                                    quality over a range
                                                    of correlated color
                                                    temperature (CCT)
                                                    and which also
                                                    exhibit color and
                                                    efficiency stability
                                                    with respect to
                                                    operating
                                                    temperature.
                                Alternative        Alternative
                                 Substrate          substrates such as
                                 Materials.         gallium nitride
                                                    (GaN), silicon
                                                    carbide to enable
                                                    high-quality epitaxy
                                                    for improved device
                                                    quality and
                                                    efficacy.
                                Improved Thermal   TIMs that enable high-
                                 Interface          efficiency thermal
                                 Materials (TIMs).  transfer for long-
                                                    term reliability and
                                                    performance
                                                    optimization of the
                                                    LED device.
                                Optimized Heat     Improve thermal
                                 Sink Design.       conductivity and
                                                    heat dissipation
                                                    from the LED chip,
                                                    thus reducing
                                                    efficacy loss from
                                                    rises in junction
                                                    temperature.
                                Active Thermal     Devices such as
                                 Management         internal fans and
                                 Systems.           vibrating membranes
                                                    to improve thermal
                                                    dissipation from the
                                                    LED chip.
                                Device-Level       Enhancements to the
                                 Optics.            primary optic of the
                                                    LED package such as
                                                    surface etching that
                                                    would optimize
                                                    extraction of usable
                                                    light from the LED
                                                    package and reduce
                                                    losses due to light
                                                    absorption at
                                                    interfaces.
                                Increased Light    Reduce or eliminate
                                 Utilization.       optical losses from
                                                    the lamp housing,
                                                    diffusion, beam
                                                    shaping, and other
                                                    secondary optics to
                                                    increase efficacy
                                                    using mechanisms
                                                    such as reflective
                                                    coatings and
                                                    improved diffusive
                                                    coatings.
                                Improved Driver    Increase driver
                                 Design.            efficiency through
                                                    novel and
                                                    intelligent circuit
                                                    design.
                                AC LEDs..........  Eliminate the
                                                    requirements of a
                                                    driver and therefore
                                                    reduce efficiency
                                                    losses from the
                                                    driver.
                                Reduced Current    Driving LED chips at
                                 Density.           lower currents while
                                                    maintaining light
                                                    output, and thereby
                                                    reducing the
                                                    efficiency losses
                                                    associated with
                                                    efficacy droop.
------------------------------------------------------------------------

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

[[Page 592]]

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).
    In sum, 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. The reasons for eliminating any technology are discussed 
below.
1. Screened-Out Technologies
    In the NOPR, several technology options were screened out based on 
the four screening criteria. Table IV.3 summarizes the technology 
options DOE proposed to screen out and the associated screening 
criteria.

  Table IV.3--CFLK Technology Options Screened Out of the NOPR 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.
------------------------------------------------------------------------

    Westinghouse commented that because there is little product 
development happening in CFL technology and none is expected in the 
future, DOE can screen in any CFL technology options identified as they 
are not in the research and development (R&D) phase. (Westinghouse, 
Public Meeting Transcript, No. 112 at p. 28) DOE uses the four 
screening criteria previously discussed to determine whether to screen 
out technology options. While DOE found that the vast majority of 
technology options for CFLs met all four screening criteria, DOE 
continues to screen out multi-photon phosphors in this final rule based 
on technological feasibility. (See chapter 4 of the final rule TSD for 
further detail.)
    Westinghouse commented that there are active legal disputes between 
manufacturers, including NEMA members, on design and technology patents 
for three to five of the technology options for LED lamps. Westinghouse 
favored letting the technology develop naturally without forcing 
manufacturers to use another manufacturer's technology patents or 
designs. (Westinghouse, Public Meeting Transcript, No. 112 at p. 29) 
NEMA added that the LED market is very dynamic. Neither NEMA nor 
Westinghouse commented on which technology options were involved in the 
lawsuits, but Westinghouse noted that sometimes they do not realize 
that they are in violation of a patent or proprietary design until 
there is enough market share for the competitor to tell them. (NEMA, 
Public Meeting Transcript, No. 112 at pp. 29-30; Westinghouse, Public 
Meeting Transcript, No. 112 at p. 33)
    DOE reviewed several sources, including patent filings, to 
determine technology options. DOE can identify technology options and 
subsequently determine that they meet the four screening criteria even 
if they require proprietary technology. However, DOE does not consider 
ELs in the engineering analysis that can only be achieved using 
proprietary technology.
    In the final rule, DOE continued to screen out the technology 
options in Table IV.3.
2. Remaining Technologies
    Through a review of each technology, DOE tentatively concludes that 
all of the other identified technologies listed in section IV.A.4 met 
all four screening criteria to be examined further as design options in 
DOE's final rule analysis. In summary, DOE retained 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., 
practicability to manufacture, install, and service and do not result 
in adverse impacts on consumer utility, product availability, health, 
or safety). For additional details, see chapter 4 of the final rule 
TSD.

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 
determines 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 final rule TSD for further information on technology and design 
options.) The methodology consists of the following steps: (1) 
Selecting representative product classes, (2)

[[Page 593]]

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. For CFLKs, DOE based the efficiency of the product on the 
efficacy of the lamps packaged with CFLKs. The details of the 
engineering analysis are discussed in chapter 5 of the final rule 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 final rule TSD).
    Efficacy levels: After identifying the more efficacious substitutes 
for each baseline lamp, DOE develops efficacy levels (ELs). DOE bases 
its analysis on three factors: (1) The design options associated with 
the specific lamps studied; (2) the ability of lamps across different 
lumen outputs to comply with the standard level of a given product 
class; and (3) the max-tech EL. DOE then scales the ELs of 
representative product classes to any classes not directly analyzed.
2. Representative Product Classes
    In the NOPR analysis, DOE established one product class (All CFLKs) 
and analyzed it as representative. DOE did not receive any comments on 
the representative product class identified in the NOPR analysis. 
Therefore, in this final rule, DOE continued to analyze the one product 
class as representative.
3. Baseline Lamps
    Once DOE identifies 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 NOPR analysis, DOE selected a lamp representative of the 
least efficacious lamp that can be packaged with a CFLK that just meets 
existing CFLK standards. To calculate lamp efficacy, DOE used the 
catalog lumens and the catalog wattage of the lamp. In the NOPR 
analysis, 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, 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. (For further detail on the baseline lamp 
selected in the NOPR analysis, see chapter 5 of the NOPR TSD.) DOE 
received several comments regarding the baseline selection.
    Westinghouse and ALA stated that the proposed baseline was 
appropriate for medium screw bases. Westinghouse and ALA further stated 
that the baseline is not the most common lamp used in CFLKs, with 
Westinghouse noting that 80 percent of the current market uses 
incandescent candelabra base lamps. (Westinghouse, Public Meeting 
Transcript, No. 112 at pp. 35-36; ALA, No. 115 at pp. 7-8) ALA added 
that such lamps, which are low efficiency incandescent lamps, cannot be 
replaced with the baseline lamp due to their physical size and shape. 
(ALA, No. 115 at pp. 7-8) Westinghouse and ALA acknowledged, however, 
that under the current product class structure, the candelabra base 
lamps are in a product class that is subject to a design standard that 
requires a power limiter rather than an efficacy standard. 
(Westinghouse, Public Meeting Transcript, No. 112 at p. 33; ALA, No. 
115 at pp. 7-8) Hunter agreed with Westinghouse regarding the proposed 
baseline. (Hunter, Public Meeting Transcript, No. 112 at p. 36)
    Westinghouse further pointed out that the efficacy of the proposed 
levels is significantly greater than the baseline when considering the 
baseline to be the candelabra base lamps with average efficacies of 10 
to 12 lm/W. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 
45-46) Westinghouse stated that there is a gap in the analysis because 
it neglects to consider the current products being purchased. 
Westinghouse elaborated that the lamps currently packaged with CFLKs 
have efficacies between 9 and 10 lm/W, with some 60 W candelabra lamps 
at 11 lm/W. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 
54-55)
    As discussed in section IV.A.1, DOE reviewed the existing product 
class structure and determined that all three existing product classes 
could be combined into a single product class. Because the existing 
product classes each are subject to different standards, DOE selected a 
sub-baseline representative lamp unit to account for the impacts of the 
product class restructuring in the LCC analysis and NIA. DOE determined 
that lamps in the Other Base Type product class, which includes 
candelabra base lamps, generally have the lowest efficacies and 
selected a sub-baseline representative lamp unit from this product 
class to serve as a reference point from which to measure changes 
resulting from the new product class structure. Therefore, DOE did 
account for the savings from CFLKs packaged with lower efficiency 
incandescent lamps that are currently being sold on the market. See 
appendix 7A of the final rule TSD for further detail on the sub-
baseline representative lamp unit.
    In the final rule analysis, DOE used the same baseline as specified 
in the NOPR. The modeled baseline for the new, combined All CFLKs 
product class is specified in Table IV.4. (See chapter 5 of the final 
rule TSD for further details.)

[[Page 594]]



                                                    Table IV.4--All CFLKs Product Class Baseline Lamp
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Initial
                                                                                    Lamp        lumen     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 NOPR 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 NOPR analysis, see chapter 5 of 
the NOPR TSD.)
    In the NOPR 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 light kit design, including the same number of 
sockets, and replace only the lamp. Thus, DOE selected the more 
efficacious substitutes to have the same base type as that of the 
baseline lamp. In the light kit replacement scenario, DOE accounted for 
the possibility that manufacturers may change light kit designs. Thus, 
the base type of the more efficacious substitutes was 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/or non-medium screw base types. 
For example, the EL 1 light kit replacement option utilized three 
medium screw base 9 W CFLs, and the EL 3 light kit replacement option 
included one medium screw base 16 W LED lamp.
    For the NOPR analysis, DOE determined that a commercially available 
3-way LED lamp operated at its middle setting was 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 EL achieved by the 
middle setting demonstrated the potential for a standard, non-3-way, 8 
W LED lamp to achieve this EL. 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.
    Regarding the modeled lamp at max tech, Westinghouse commented that 
while they understood using this approach to determine where the level 
should be set, they were apprehensive of modeling potential lamps. In 
general, Westinghouse was cautious of selecting a particular feature 
and modeling other features. (Westinghouse, Public Meeting Transcript, 
No. 112 at pp. 39-40) Westinghouse noted that the 3-way lamp used as 
the basis for the modeled lamp was an A21 shape rather than A19. 
(Westinghouse, Public Meeting Transcript, No. 112 at pp. 39-40) 
Westinghouse looked at their own 3-way lamp and found that the highest 
setting is more efficient than the middle setting. Westinghouse also 
looked at a 3-way lamp from another manufacturer and found that the 
middle setting was the least efficient setting. (Westinghouse, Public 
Meeting Transcript, No. 112 at pp. 39-40) Westinghouse acknowledged 
that the efficacy of the modeled lamp may have been achieved, but was 
unclear whether it was done through proprietary technology or just by 
accident. Either way, Westinghouse asserted that using the middle 
setting on a product not designed for a CFLK does not seem correct. 
(Westinghouse, Public Meeting Transcript, No. 112 at pp. 39-40)
    NEMA added that unless the modeled lamp is very special, it is 
probably not dimmable, which is a desired consumer feature. NEMA 
further stated that the circuitry for dimmability adds power 
consumption, and could add additional cost as well, so it is likely 
that the modeled lamp cannot be directly compared to a dimmable lamp. 
(NEMA, Public Meeting Transcript, No. 112 at p. 40)
    PG&E, on the other hand, stated that in five years, lamps that are 
currently feasible will be obsolete. Thus, PG&E stated that the modeled 
3-way max tech lamp will be viable and the best option for the market. 
(PG&E, Public Meeting Transcript, No. 112 at p. 41) Similarly, ASAP 
supported DOE's approach in choosing more efficacious substitutes. ASAP 
stated that an analysis based on currently available products and their 
performance characteristics will be obsolete when the standard requires 
compliance. (ASAP, Public Meeting Transcript, No. 112 at p. 41)
    When DOE proposes to adopt a 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 using the 
design parameters for the most efficient product available on the 
market. DOE acknowledges that the 3-way lamp used as the basis for the 
modeled lamp has an A21 shape; however, DOE modeled the max tech 
representative lamp unit to have an A19 shape because that is a more 
common lamp shape. Based on its assessment of lamp catalogs, DOE 
determined that

[[Page 595]]

LED lamps with A19 shapes include lamps with lumen outputs above and 
below 820 lumens. Therefore, it should be possible to make an LED lamp 
with an A19 shape and lumen output of 820 lumens. The modeled lamp has 
a higher efficacy and more efficient components than similar products 
currently on the market, and therefore, would achieve and maintain this 
efficacy within an A19 shape. DOE acknowledges that dimmability is a 
desired consumer feature and modeled the max tech representative lamp 
unit to be dimmable. While NEMA noted that dimmability requires 
additional circuitry, DOE notes that the efficacy of the modeled lamp 
is based on the performance of a 3-way lamp, which also has additional 
circuitry that is likely comparable to a dimmable lamp. Therefore, DOE 
concluded that the efficacy of the modeled lamp is representative of 
the efficacy of a dimmable product.
    CA IOUs commented that LED technology continues to improve. CA IOUs 
pointed out that recent research and development in LED technology have 
significantly accelerated the speed of lighting efficiency innovation. 
DOE's Solid-State Lighting Research and Development Multi-Year Program 
Plan (MYPP) found that ``the light output of LEDs has increased 20 fold 
each decade for the last 40 years.'' \18\ Some of the first projections 
for LED performance illustrate how the rate of LED technology 
innovation observed in the market has surpassed MYPP's original 
performance expectations. As an example, CA IOUs provided data from the 
MYPPs showing that in 2006, the MYPP did not expect cool white LED 
efficacy to exceed 135 lm/W until 2015; however, in 2011, LED efficacy 
was over 165 lm/W. Observing increases in LED performance with 
corresponding decreases in price, CA IOUs stated that these trends have 
surpassed previous forecasts, providing the market with higher 
performing and lower priced products than originally anticipated. (CA 
IOUs, No. 118 at pp. 3-4) CA IOUs stated that as LED technology 
continues to mature, it is critical that DOE account for these expected 
changes. (CA IOUs, No. 118 at p. 7, 8)
---------------------------------------------------------------------------

    \18\ ``Solid-State Lighting Research and Development Multi-Year 
Program Plan.'' March 2010. Available online at: http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_mypp2010_web.pdf.
---------------------------------------------------------------------------

    Further, CA IOUs stated that CFLKs primarily include medium screw 
base and candelabra base omnidirectional and decorative lamps, with CRI 
>=80 and CCT <=2,700 K and provided figures forecasting performance of 
these lamps. Specifically, based on data gathered from DOE's Lighting 
Facts Database since 2012, CA IOUs showed that the efficacies of 
average products and the top 15 percent of products would exceed EL 3 
and EL 4 by 2019. (CA IOUs, No. 118 at pp. 5-7)
    The Joint Comment noted that the standard would likely require 
compliance in early 2019 and that the evolution of SSL technology 
continues to outstrip projections. The Joint Comment continued that 
recent DOE research indicated that for 2013, the installed base of LEDs 
in the U.S. increased in all LED applications, more than doubling from 
2012 to about 105 million units. The Joint Comment stated that by 2019, 
SSL options for CFLKs will be available at higher levels of performance 
than today. (Joint Comment, No. 117 at p. 2) Westinghouse commented 
that there may be more efficient lamps available on the market in five 
years than the max tech level. However, the standards from this 
rulemaking should not prevent consumers from purchasing lamps with a 
wide range of efficacies, with lower price points available for lower 
efficacy products. (Westinghouse, Public Meeting Transcript, No. 112 at 
p. 45)
    The increase in the efficacy of LED lamps over the last several 
years could be indicative of future trends, but it is not certain. New 
products have been recently introduced to the market that have lower 
efficacy than previous iterations. DOE cannot be sure that the 
forecasted improvements in LED technology will occur and LED lamps at 
the predicted efficacies will be available at the compliance date of 
this rulemaking. DOE based the more efficacious substitutes in this 
analysis on technology that is available today. The engineering 
analysis is based on efficacies achievable through design options that 
can be found in commercially available products or working prototypes. 
(See chapter 4 of the final rule TSD for further information on design 
options.) As noted previously, DOE derives ELs from the efficacies of 
the more efficacious substitutes identified in the engineering analysis 
and consumer prices in the product price determination. These results 
are then combined to determine the cost and savings to the consumer 
associated with each EL in the LCC.
    DOE's review of the market in the final rule analysis did not 
result in any changes that impacted the selection of more efficacious 
substitutes. The CFLK representative lamp units that DOE analyzed in 
the final rule are shown in Table IV.5 for the lamp replacement 
scenario and in Table IV.6 for the light kit replacement scenario.

                                      Table IV.5--All CFLKs Product Class Design Options: Lamp Replacement Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Initial
                                                                                         Wattage     lumen     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
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                       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 shape        Fixture   wattage   wattage    lumen     lumen   Efficacy     CRI     CCT (K)    life
                                                                                                         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

[[Page 596]]

 
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 NOPR 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 lumen packages. The continuous 
equations specify a minimum lamp efficacy for a given lumen package.
    ALA and Westinghouse generally supported the equations used to 
define the minimum efficacy requirements at each EL. (ALA, Public 
Meeting Transcript, No. 112 at p. 43; Westinghouse, Public Meeting 
Transcript, No. 112 at pp. 43-44)
    Westinghouse cautioned that lamp designs should be driven by the 
market and not restricted by requirements at high ELs. Westinghouse 
noted that the market is volatile and, while a year ago they would not 
have considered reducing lifetime of their lamps, currently 
omnidirectional, non-dimmable LED lamps with reduced lifetimes are 
popular products. (Westinghouse, Public Meeting Transcript, No. 112 at 
pp. 107-08) While lamps with 25,000 hours and 40,000 hours remain 
popular, three brands, including Westinghouse, also sell LED lamps with 
lifetimes between 10,000 and 15,000 hours, no dimmable features, and 
efficacies of 65-70 lm/W that are in high demand. Westinghouse stated 
that if consumers want to make tradeoffs between features, such as 
giving up lifetime for aesthetics, they should have that option 
available to them. Westinghouse asserted that at higher ELs, 
manufacturers would lose this design flexibility and consumers will 
either not want to pay the higher price or not be satisfied with the 
product. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 52-
53)
    While certain consumers may opt for a product with low efficacy and 
minimal features because it has a lower price or offers an aesthetic 
appeal, DOE found that certain lamp characteristics are commonplace in 
the market. To maintain the existing product utility to the consumer, 
DOE ensured that lamps at higher levels can be omnidirectional, 
dimmable, and achieve the common lifetime on the market. (For LED 
lamps, DOE determined 25,000 hours to be the most common lifetime.)
    In the NOPR analysis, DOE proposed four ELs. (For further details, 
see chapter 5 of the NOPR TSD.) In the final rule analysis, DOE 
maintained ELs 1-3 as proposed in the NOPR. In the NOPR, DOE set EL 4 
according to the efficacy of the modeled 8 W lamp, but adjusted it to 
be slightly lower to allow for additional products to meet the level, 
such as consumer replaceable LED modules and driver systems. Based on a 
review of the market, in the final rule analysis, DOE determined that 
certain more efficacious products were now available and adjusted the 
level downward to a lesser extent to allow for any replacement options 
in the light kit replacement scenario.
    CA IOUs noted that if DOE remains concerned that there will not be 
enough products on the market when proposed standards require 
compliance, DOE should consider an EL roughly halfway between EL 2 and 
EL 3, where many more high-efficiency LED options already exist. (CA 
IOUs, No. 118 at p. 7) Westinghouse disagreed, stating that an 
additional EL was not necessary between EL 2 and EL 3. (Westinghouse, 
Public Meeting Transcript, No. 112 at pp. 54-55)
    DOE considered ELs between EL 2 and EL 3, but determined that the 
price of the LED representative lamp units at those levels was higher 
than the price of the representative lamp unit at EL 3. It was unlikely 
that consumers would purchase a CFLK packaged with a less efficient, 
more expensive lamp. Further, DOE has found that as they introduce more 
efficacious LED lamps, manufacturers begin to phase out their less 
efficacious LED lamps which, due to the low volume and older 
technology, are priced higher. Therefore, DOE did not evaluate lamps at 
additional ELs.
    Table IV.7 presents the ELs for CFLKs. See chapter 5 of the final 
rule 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         Lumen output (lm)         efficacy (lm/W)
----------------------------------------------------------------------------------------------------------------
All CFLKs............................  EL 1...................  <260...................  50
                                                                >=260 and <=2040.......  69.0-29.42 x
                                                                                          0.9983\lumens\
                                                                >2040 and <2100........  >(1/30) x lumens
                                                                >=2100.................  70
                                       EL 2...................  <120...................  50
                                                                >=120..................  74.0-29.42 x
                                                                                          0.9983\lumens\
                                       EL 3...................  All....................  101.0-29.42 x
                                                                                          0.9983\lumens\
                                       EL 4...................  All....................  108.0-29.42 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.1. See 
sections II.A and IV.A.1 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

[[Page 597]]

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. See chapter 5 of the final rule TSD for further 
information on the anti-backsliding adjustments that DOE made to the 
ELs.
    Westinghouse agreed with setting a minimum level for EL 1 and EL 2 
to prevent backsliding. Westinghouse further stated that the levels DOE 
had identified were appropriate and would not be disruptive to the 
market. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 43-44) 
DOE maintained these levels in the final rule.
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 metric for CFLKs is the efficacy of the lamp with which 
it is packaged, DOE developed prices for the lamp component of a 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 lamp components of CFLKs in this rulemaking.
    DOE first determined the consumer price of a CFLK. In doing so, DOE 
considered distributor net prices (DNP), distribution channels, and 
shipment volumes. DOE obtained distributor net prices for CFLKs 
packaged with a representative lamp unit (i.e., the 13 W spiral CFL). 
DOE calculated the consumer price of a CFLK in each major distribution 
channel (electrical/specialty, home centers, and lighting showrooms) by 
applying the appropriate premium to the distributor net price. DOE 
developed a weighted average consumer price for a CFLK by using 
estimated shipments through each distribution channel (80 percent home 
centers, 12 percent electrical distributors/specialty, 8 percent 
lighting showrooms).
    DOE then determined the consumer price of a lamp in a CFLK. DOE 
calculated this value based on manufacturer feedback and relative 
prices for commercially-available lamps. Based on manufacturer 
feedback, DOE determined that for a CFLK packaged with a CFL, the lamp 
component comprises an estimated 15 percent of the CFLK consumer price. 
To develop a consumer price for all other representative lamp units 
when sold in CFLKs, DOE applied a ratio based on the retail cost of the 
lamps at other levels relative to the retail cost of the 13 W spiral.
    DOE received several comments on the methodology and results of the 
product price determination. Westinghouse stated that the consumer 
price results for ELs with LED lamp representative units were not 
accurate because DOE is forward-modeling prices based on observed 
retail shelf prices and including legacy products put on clearance to 
deplete their inventory. (Westinghouse, Public Meeting Transcript, No. 
112 at pp. 58-59)
    DOE used the latest retail price data available at the time of the 
analysis and ensured these prices reflected the original lamp price 
rather than a discounted or rebated price. Based on the lamp prices 
collected in this rulemaking, DOE has noted a trend showing that lower 
wattage, more efficacious LED lamps have lower prices than higher 
wattage, less efficacious LED lamps. Comments received in response to 
the preliminary analysis of the general service lamp rulemaking 
indicated that lamp manufacturers begin to phase out their less 
efficacious LED lamps as they introduce lamps that are more 
efficacious.\19\ The lower volume and older technology likely results 
in higher prices for the less efficacious products. The results of this 
product price determination accurately capture this consistently 
observed price trend for LED lamps.
---------------------------------------------------------------------------

    \19\ Comments for the preliminary analysis of the General 
Service Lamps Energy Conservation Standards rulemaking can be 
accessed at: http://www.regulations.gov/#!docketDetail;D=EERE-2013-
BT-STD-0051.
---------------------------------------------------------------------------

    Westinghouse provided specific comments regarding the consumer 
price of the EL 4 representative lamp unit that was modeled based on 
the middle setting of a commercially available 3-way lamp. Westinghouse 
stated that the price for a 3-way lamp is two to four times higher than 
the price for a non-dimmable, omnidirectional A-shape lamp, and 
therefore, would likely not be cost-effective. (Westinghouse, Public 
Meeting Transcript, No. 112 at pp. 40-41) Further, Westinghouse 
commented that DOE's resulting average consumer price of $4.09 for the 
8 W LED representative lamp unit at EL 4 is more accurate for a 9 W, 
non-dimmable LED lamp meeting EL 2. Westinghouse stated that a lamp 
meeting EL 4, if available, would be a commercial product closer to $40 
rather than $4. (Westinghouse, Public Meeting Transcript, No. 112 at 
pp. 57-58)
    As noted in section IV.C.4, DOE modeled an 8 W LED lamp at EL 4 at 
the lumen output and efficacy of the middle (8 W) setting of a 
commercially available 3-way lamp. DOE determined that this efficacy 
was achievable by a standard 8 W, non-3-way LED lamp that could be 
packaged with a CFLK and made available through all CFLK distribution 
channels. DOE developed the retail price of the representative lamp 
unit at EL 4 by using a wattage-price trend based on retail prices of 
non-3-way LED lamps. As noted previously, DOE has observed a trend 
showing that lower wattage, more efficacious LED lamps are less 
expensive than higher wattage, less efficacious LED lamps. Therefore, a 
lower price for the less efficacious LED lamp at EL 2 than the more 
efficacious LED lamp at EL 4 would not reflect actual prices.
    Westinghouse stated that they provide both dimmable and non-
dimmable versions of the medium screw base, omnidirectional LED lamp. 
Westinghouse recommended DOE use a non-dimmable LED lamp as that is a 
true replacement for CFLs, which are generally not dimmable. 
Westinghouse noted that the price range for such a lamp at 8.5 W would 
be close to $4 and would increase by about a dollar with the addition 
of dimming functionality. (Westinghouse, Public Meeting Transcript, No. 
112 at p. 58)
    DOE believes that dimming is a feature desired by consumers. 
Although dimmable CFLs are not available at all levels, dimmable LED 
lamps are available at all ELs; thus this functionality is maintained 
in the analysis. In this rulemaking, DOE determines corresponding 
prices for

[[Page 598]]

LED lamps that maintain consumer utility, including dimming 
functionality.
    Westinghouse recommended that DOE obtain component cost information 
from manufacturers. (Westinghouse, Public Meeting Transcript, No. 112 
at p. 59) In the light kit replacement scenario, DOE included the 
incremental cost due to changes in socket configuration when 
applicable. Based on manufacturer feedback, DOE estimated the cost of 
different socket types to the manufacturer and then applied the 
appropriate manufacturer and distributor markups to obtain the consumer 
price of the socket.
    The Joint Comment stated that LED A-lamp pricing continues to 
decline, with non-dimmable, 60 W A19 replacement lamps now available 
for less than $10 per bulb. The Joint Comment continued, stating that 
the price drops even further in regions with utility rebates. The Joint 
Comment also stated that by 2019, SSL options for CFLKs will be 
available at lower cost than today. (Joint Comment, No. 117 at p. 2) CA 
IOUs stated that based on DOE's forecasts in its 2006 MYPP and 2015 
MYPP reports, LED package prices, which are comparable to LED lamp 
prices, have steadily decreased from 2006 and at a rate faster than 
initially projected. Additionally, CA IOUs used price data collected 
since December 2013 \20\ from nine retailers to show an observed trend 
in the past two years and forecasted trend until 2020 of decreasing 
prices for candelabra base and medium screw base LED lamps. CA IOUs 
concluded that LED market-level price trends as well as prices observed 
for products specific to this rulemaking have shown a consistent 
decline over time. CA IOUs stated that these trends have surpassed 
previous forecasts, providing the market with higher performing and 
lower priced products than originally anticipated. (CA IOUs, No. 118 at 
pp. 3-7)
---------------------------------------------------------------------------

    \20\ CA IOUs collected LED lamp price data from nine lighting 
retailers' Web sites (i.e., Home Depot, Lowe's, Ace Hardware, Wal-
Mart, Costco, 1000Bulbs.com, Bulbs.com, and BulbAmerica.com) for 
roughly each month since December 2013, with the most recent monthly 
data including over 2,000 unique products.
---------------------------------------------------------------------------

    Declining prices of LED lamps over the last several years can be 
indicative of a future trend, but it is not certain. DOE used the 
latest pricing data available at the time of the analysis to determine 
consumer prices. In this final rule, DOE maintains the same methodology 
for the product price determination as that used in the NOPR analysis. 
(See chapter 7 of the final rule TSD for further details on the 
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 efficiencies 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 
energy use of CFLKs in the field (i.e., as they are actually used by 
consumers). The energy use analysis also provides the basis for other 
analyses 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
    In the NOPR analysis, 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 general service lamps (GSL) 
preliminary analysis,\21\ 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),\22\ 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 (LBNL survey) \23\ 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. ALA agreed with the methodology used to estimate operating 
hours for CFLKs in the residential sector and also agreed that CFLK 
operating hours do not vary by light source technology. (ALA, No. 115 
at p. 8) DOE, therefore, maintained its NOPR approach for the final 
rule.
---------------------------------------------------------------------------

    \21\ 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.
    \22\ DNV KEMA Energy and Sustainability and Pacific Northwest 
National Laboratory. Residential Lighting End-Use Consumption Study: 
Estimation Framework and Baseline Estimates. 2012. (Last accessed 
October 13, 2015.) http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2012_residential-lighting-study.pdf.
    \23\ 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. (Last accessed 
October 13, 2015.) 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 final rule TSD). DOE organized the 
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),\24\ 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.
---------------------------------------------------------------------------

    \24\ Ecotope Inc. Residential Building Stock Assessment: 
Metering Study. 2014. Northwest Energy Efficiency Alliance: Seattle, 
WA. Report No. E14-283. (Last accessed October 13, 2015.) 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 final rule TSD.
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).\25\ For each commercial 
building type presented in the LMC, DOE determined

[[Page 599]]

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 the 2003 EIA Commercial Buildings Energy 
Consumption Survey (CBECS).\26\ 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 final rule TSD.
---------------------------------------------------------------------------

    \25\ Navigant Consulting, Inc. Final Report: 2010 U.S. Lighting 
Market Characterization. 2012. U.S. Department of Energy. (Last 
accessed October 13, 2015.) http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2010-lmc-final-jan-2012.pdf.
    \26\ U.S. Department of Energy-Energy Information 
Administration. 2003 CBECS Survey Data. (Last accessed October 13, 
2015.) 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 final rule TSD for details 
on the price-weighting market share adjustment and how DOE estimated 
average weighted lumen output for all CFLKs.
3. Lighting Controls
    Based on the technical issues pertaining to the ability of CFLs to 
dim, as well as the significant price premium for dimmable CFLs, DOE 
assumed in the NOPR analyses that CFLKs are not likely to feature 
dimmable CFLs. ALA agreed with this assumption. (ALA, No 115 at p. 8) 
In the final rule analyses, DOE again assumed CFL CFLKs are not 
operated with controls. On the other hand, in the NOPR analyses, DOE 
assumed that some fraction of LED and incandescent CFLKs are likely to 
be operated with a dimmer, which DOE considered to be the only relevant 
lighting control for CFLKs. ALA and Lutron supported this assumption. 
(ALA, No. 115 at p. 8; Lutron, No. 113 at p. 2) For the final rule 
analyses, as in the NOPR analyses, DOE used the results of an LBNL 
survey \27\ 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. 
Furthermore, DOE 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 \28\ 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.
---------------------------------------------------------------------------

    \27\ Kantner, et al. (2013), op. cit.
    \28\ Navigant Consulting, Inc. Final Report: 2010 U.S. Lighting 
Market Characterization. 2012. U.S. Department of Energy. (Last 
accessed October 13, 2015.) http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2010-lmc-final-jan-2012.pdf.
---------------------------------------------------------------------------

    In the NOPR analyses, DOE assumed dimmable CFLKs have an average 
energy reduction of 30 percent. This estimate was based on a meta-
analysis of field measurements of energy savings from commercial 
lighting controls by Williams, et al.\29\ 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. ALA and Lutron agreed with DOE's energy savings 
estimate from the use of dimmers in the residential sector. (ALA, No. 
115 at p. 8; Lutron, No. 113 at p. 2). For the final rule analyses, DOE 
maintained its assumption of an average 30 percent energy reduction in 
both sectors. Chapter 6 of the final rule TSD provides details on how 
DOE accounted for the impact of dimmers on CFLK energy use.
---------------------------------------------------------------------------

    \29\ Williams, A., B. Atkinson, K. Garbesi, E. Page, and F. 
Rubinstein. Lighting Controls in Commercial Buildings. LEUKOS. 2012. 
8(3): pp. 161-180. (Last accessed October 22, 2015.) http://eetd.lbl.gov/publications/lighting-controls-commercial-buildings.
---------------------------------------------------------------------------

F. Life-Cycle Cost and Payback Period Analysis

    DOE conducted LCC and PBP analyses to evaluate the economic impacts 
on individual consumers of potential energy conservation standards for 
CFLKs. 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 used the following two metrics to 
measure consumer impacts:
     The LCC (life-cycle cost) 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 ELs by the change in annual operating cost for 
the year that 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-new-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 for a given 
EL is measured relative to the baseline product.
    For each considered EL, 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 EL, and therefore did not consider them in the analysis. 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

[[Page 600]]

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 EL 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 expected year of compliance with amended 
standards. At this time, DOE estimates publication of a final rule in 
2016. For purposes of its analysis, DOE assumed a compliance date three 
years after publication of any final amended standard (i.e., 2019).
    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 
of the final rule TSD and its appendices.

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.
Annual 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 final rule TSD for details.
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 final rule
  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 final 
rule TSD). DOE did not account for the remaining price of the CFLKs 
(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 \30\ and used population projections from the Census 
Bureau \31\ to develop population-weighted-average sales tax values for 
each state in 2019.
---------------------------------------------------------------------------

    \30\ Sales Tax Clearinghouse, Inc. The Sales Tax Clearinghouse. 
(Last accessed October 22, 2015.) https://thestc.com/STRates.stm.
    \31\ U.S. Department of Commerce-Bureau of the Census. Table A1: 
Interim Projections of the Total Population for the United States 
and States: April 1, 2000 to July 1, 2030. Population Division, 
Interim State Population Projections. 2005.
---------------------------------------------------------------------------

2. Disposal Cost
    Disposal cost is the cost a consumer pays to dispose of their 
retired CFLK. As in the NOPR analyses, DOE assumed in the final rule 
analyses that because LED lamps do not contain mercury, LED CFLKs do 
not have an associated disposal cost. 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. 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,\32\ which estimated a 29 percent commercial recycling rate, 
and a 2009 draft report from the Massachusetts Department of 
Environmental Protection \33\ that indicated a recycling rate of 
approximately 34 percent. Given this

[[Page 601]]

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 assumed that the disposal cost is $0.70 
per lamp based on feedback from a lighting industry expert and 
stakeholder comments received on the GSL preliminary analysis TSD.\34\ 
ALA agreed with DOE's identical assumptions on disposal costs in the 
NOPR analyses. (ALA, No. 115 at p. 8)
---------------------------------------------------------------------------

    \32\ Association of Lighting and Mercury Recyclers. National 
Mercury-Lamp Recycling Rate and Availability of Lamp Recycling 
Services in the U.S. 2004. (Last accessed October 13, 2015.) http://www.lamprecycle.org/wp-content/uploads/2014/02/ALMR_capacity_statement.2004.-pdf.pdf.
    \33\ Massachusetts Department of Environmental Protection. Draft 
2009 Mercury Lamp Recycling Rate Determination. 2011. Massachusetts.
    \34\ 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. Annual Energy Consumption
    For each consumer sample, DOE determined the energy consumption for 
a CFLK at different ELs using the approach described above in section 
IV.E of this document.
4. Energy Prices
    DOE used marginal electricity prices to calculate the operating 
costs associated with each EL in the final rule analyses. 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. 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.\35\ 
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 8D of the final rule TSD.
---------------------------------------------------------------------------

    \35\ Edison Electric Institute. Typical Bills and Average Rates 
Report. Winter 2014 published April 2014, Summer 2014 published 
October 2014: Washington, DC.
---------------------------------------------------------------------------

5. Energy 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.\36\ 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.
---------------------------------------------------------------------------

    \36\ U.S. Energy Information Administration. Annual Energy 
Outlook 2015 with Projections to 2040. 2015. Washington, DC Report 
No. DOE/EIA-0383(2015). (Last accessed October 13, 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.
6. 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 which depend on 
the replacement lamp wattage, and the residual value of the lamp at the 
end of the CFLK lifetime. For details, see chapter 8 of the final rule 
TSD.
7. Product Lifetime
    DOE accounted for variability in the CFLK lifetimes by assigning a 
lifetime distribution \37\ that is tied to the lifetime of the ceiling 
fan \38\ 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.\39\ 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.
---------------------------------------------------------------------------

    \37\ DOE used a Weibull distribution to model the lifetime of 
ceiling fans. Weibull distributions are commonly used to model 
appliance lifetimes.
    \38\ 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.
    \39\ 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.
---------------------------------------------------------------------------

8. 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.
9. 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

[[Page 602]]

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 in order to 
approximate a consumer's opportunity cost of funds related to appliance 
energy cost savings. DOE 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 \40\ (SCF) 
for 1995, 1998, 2001, 2004, 2007, and 2010. Further, 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 final rule TSD for further details on the 
development of consumer discount rates.
---------------------------------------------------------------------------

    \40\ Board of Governors of the Federal Reserve System. Survey of 
Consumer Finances. 1989, 1992, 1995, 1998, 2001, 2004, 2007, and 
2010. (Last accessed October 13, 2015.) http://www.federalreserve.gov/econresdata/scf/scfindex.htm.
---------------------------------------------------------------------------

    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 \41\ 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 final rule TSD for further 
details on the development of commercial sector discount rates.
---------------------------------------------------------------------------

    \41\ Damodaran, A. Cost of Capital by Sector. January 2014. 
(Last accessed October 13, 2015.) http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/wacc.htm.
---------------------------------------------------------------------------

10. Efficacy Distributions
    To accurately estimate the share of consumers that would be 
affected by a potential energy conservation standard at a particular 
EL, DOE's LCC analysis considered the projected distribution (market 
shares) of product efficacies in the no-new-standards case (i.e., the 
case without amended or new energy conservation standards) 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-new-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 document and chapter 9 of the final rule 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-baseline
                   Trial standard level                           (%)         EL 0 (%)     EL 1 (%)     EL 2 (%)     EL 3 (%)     EL 4 (%)    Total (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
No-new-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
--------------------------------------------------------------------------------------------------------------------------------------------------------

11. LCC Savings Calculation
    As in the NOPR analysis, in the final rule reference scenario, DOE 
calculated the LCC savings at each TSL based on the change in LCC for 
each standards case compared to the no-new-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 reference scenario 
and the roll-up approach, see chapter 8 of the final rule TSD.
12. 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 EL are the change in 
total installed cost of the product and the change in the initial 
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 EL, 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.

[[Page 603]]

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 final rule 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-new-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 further assumed in its 
analysis that CFLKs are primarily found on standard and hugger ceiling 
fans. DOE also assumed 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.
    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.
1. Shipments Demand and Stock Accounting
    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 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.\42\ 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.
---------------------------------------------------------------------------

    \42\ Kantner, et al. (2013), op. cit.
---------------------------------------------------------------------------

2. Market-Share Projections
    The modified consumer-choice model estimates the market shares of 
purchases in each year in the analysis period for each EL 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 CFLs, 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. 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's shipments model estimates the adoption of LED technologies 
using an incursion curve and a modified consumer-choice model in both 
the no-new-standards and amended standards cases. For the final rule 
analysis, DOE used the Bass diffusion curve developed in the Energy 
Savings Potential of Solid-State Lighting in General Illumination 
Applications \43\ (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 final rule analysis, DOE's LED incursion curve for 
CFLKs results in a market share of 14 percent for LED lamps in 2019.
---------------------------------------------------------------------------

    \43\ Navigant Consulting, Inc. Energy Savings Potential of 
Solid-State Lighting in General Illumination Applications. 2012. 
U.S. Department of Energy. (Last accessed October 23, 2015.) http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_energy-savings-report_jan-2012.pdf.
---------------------------------------------------------------------------

    In the NOPR analysis, DOE assumed the market for LED lamps would 
naturally move to more efficacious ELs in the no-new-standards case as 
well as the standards cases based on observed trends in the efficacy of 
LED lamps on the market over time. CA IOUs were supportive of DOE's 
efforts to model the efficacy trend of LEDs. (CA IOUs, No. 118 at p. 1) 
In the final rule, DOE continued to use the same methodology to project 
LED efficacy over the analysis period.
3. Price Learning
    In the final rule analysis, DOE assumed that price learning would 
occur only for LEDs. 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; \44\ therefore, DOE believes the 
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 final rule TSD and chapter 9 of the GSL preliminary analysis 
TSD.\45\
---------------------------------------------------------------------------

    \44\ 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. (Last accessed October 
23, 2015.) http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/energysavingsforecast14.pdf.
    \45\ 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. December 2014. 
Washington, DC (Last accessed October 23, 2015.) http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0051-0022.
---------------------------------------------------------------------------

4. Impact of EISA 2007 Backstop
    In the preliminary analysis for the ongoing GSL energy conservation 
standards rulemaking,\46\ DOE

[[Page 604]]

determined that 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 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, beginning on 
January 1, 2020, the sale of any GSL that does not meet a minimum 
efficacy standard of 45 lm/W if the ongoing 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).
---------------------------------------------------------------------------

    \46\ 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 Continuing Appropriations Act, 2016 (Pub. L. 114-53, Sept. 30, 
2015), in relevant part, continues to restrict the use of appropriated 
funds in connection with several aspects of DOE's incandescent lamps 
energy conservation standards program. Specifically, 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. Therefore, DOE assumed that the backstop would go into effect 
on January 1, 2020.
    As a result, in the CFLK NOPR analysis, DOE assumed in both the no-
new-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. The Joint Comment supported that all lamps 
packaged with CFLKs, including candelabra-based lamps, will be subject 
to a 45 lm/W standard starting January 1, 2020. (Joint Comment, No. 117 
at p. 2). In the final rule, DOE continued to assume that all lamps 
packaged with CFLKs would be subject to the 45 lm/W standard beginning 
January 1, 2020.
5. Impact of a Standard on Shipments
    For the CFLK final rule analyses, 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.
    For this final rule, DOE assumed that the vast majority of CFLKs 
are sold with ceiling fans and acknowledges that any standard adopted 
on ceiling fans that would increase the average price of ceiling fans 
would decrease shipments of CFLKs. However, DOE did not assume a 
standard on ceiling fans in its projections for CFLK shipments because 
DOE has not yet adopted a ceiling fan standard.\47\ In any ECS NOPR for 
ceiling fans, DOE will consider the impact of these adopted CFLK 
standards in its projections of ceiling fan shipments.
---------------------------------------------------------------------------

    \47\ 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 national energy savings (NES) and the national 
net present value (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.\48\ (``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.\49\ For the present analysis, DOE projected the energy 
savings, operating cost savings, product costs, and NPV of consumer 
benefits over the lifetime of CFLKs sold from 2019 through 2048.
---------------------------------------------------------------------------

    \48\ The NIA accounts for impacts in the 50 states and U.S. 
territories.
    \49\ For the NIA, DOE adjusts the installed cost data from the 
LCC analysis to exclude sales tax, which is a transfer.
---------------------------------------------------------------------------

    DOE evaluates the impacts of amended standards by comparing a no-
new-standards-case projection with standards-case projections. The no-
new-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 final rule, DOE developed market 
share distributions for CFLKs at each EL in the no-new-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 final rule. Discussion of these inputs and methods 
follows the table. See chapter 10 of the final rule 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.
Compliance Date of Standard.......  2019.
No-new-standards Case Forecasted    Estimated by market-share module of
 Efficacies.                         shipments model including impact of
                                     SSL incursion.
Standards Case Forecasted           Estimated by market-share module of
 Efficacies.                         shipments model including impact of
                                     SSL incursion.
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.

[[Page 605]]

 
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     Annual values do not change with
 Unit.                               efficacy level. Replacement lamp
                                     costs are calculated for each
                                     efficacy level over the analysis
                                     period.
Energy Prices.....................  AEO 2015 forecasts (to 2040) and
                                     extrapolation through 2048.
Energy Site-to-Primary and FFC      A time-series conversion factor
 Conversion.                         based on AEO 2015.
Discount Rate.....................  Three and seven percent.
Present Year......................  2015.
------------------------------------------------------------------------

1. Product Efficiency Trends
    A key component of the NIA is the trend in energy efficiency 
projected for the no-new-standards case and each of the standards 
cases. Section IV.F.10 of this document describes how DOE developed an 
energy efficacy distribution for the no-new-standards case (which 
yields a shipment-weighted average efficacy) for the first year of the 
forecast period. To project the trend in efficacy for CFLKs over the 
entire shipments projection period, DOE used estimates for LED 
incursion and a modified consumer-choice model sensitive to the first 
cost of available lamp options. For standards cases, lamp options that 
do not meet the standard are eliminated as options for the consumer-
choice model. The consumer-choice model used to project market shares 
over the course of the analysis period is further described in chapter 
9 of the final rule TSD.
2. 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-new-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 2015. Cumulative energy savings are the sum of the NES 
for each year over the timeframe of the analysis.
    In 2011, 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 full-fuel-cycle (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 \50\ that EIA uses to prepare its Annual Energy 
Outlook. The approach used for deriving FFC measures of energy use and 
emissions is described in appendix 10B of the final rule TSD.
---------------------------------------------------------------------------

    \50\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview, DOE/EIA-0581 (98) (Feb. 1998) 
(Available at: http://webapp1.dlib.indiana.edu/virtual_disk_library/index.cgi/4265704/FID3754/pdf/Multi/058198.pdf).
---------------------------------------------------------------------------

3. 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-new-standards case 
and each standards case in terms of total savings in operating costs 
versus 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 energy 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.
    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.\51\ The benefits to consumers from amended CFLK standards are 
lower if LED prices decline faster because consumers convert to LED 
CFLKs more

[[Page 606]]

quickly in the no-new-standards case. NIA results based on these 
alternative scenarios are presented in appendix 10C of the final rule 
TSD.
---------------------------------------------------------------------------

    \51\ 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. (Last accessed 
October 13, 2015.) http://eetd.lbl.gov/publications/the-evolving-price-of-household-led-l.
---------------------------------------------------------------------------

    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
final rule, 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.\52\ 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.
---------------------------------------------------------------------------

    \52\ United States 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 final rule, DOE 
analyzed the impacts of the considered standard levels on low-income 
households and small businesses that purchase CFLKs. Chapter 11 of the 
final rule TSD describes the consumer subgroup analysis.

J. Manufacturer Impact Analysis

    DOE conducted an MIA for CFLKs to estimate the financial impact of 
adopted standards on CFLK manufacturers. For this rulemaking, DOE 
considered CFLK manufacturers to be companies that produce ceiling fans 
with CFLKs or produce CFLKs for the purpose of attaching them to 
ceiling fans. While the adopted CFLK standards regulate the efficacy of 
the lamps used in CFLKs, DOE does not consider lamp manufacturers as 
part of the MIA for this rulemaking. 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, product costs, shipments, 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-new-standards case and various 
TSLs (the standards cases). The difference in INPV between the no-new-
standards 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 outlined its complete methodology for the MIA in the previously 
published NOPR. The complete MIA is also presented in chapter 12 of the 
final rule TSD.
1. 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. In the final rule, DOE adjusted the 
number of lamps used per CFLK when calculating the overall CFLK MPCs to 
be consistent with calculations in other downstream analyses, such as 
the NIA and LCC. For a complete description of the MPCs, see chapter 12 
of the final rule TSD.
2. Shipment Projections
    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 replacement scenarios (because prices vary by 
replacement scenario); and, (3) the distribution of shipments across 
ELs (because prices vary with CFLK efficacy). In the final rule, DOE 
included sub-baseline shipments that do not meet the 45 lm/W baseline 
efficacy. These shipments represent the number of shipments that would 
not meet or exceed the efficacy levels required by the EISA 2007 
backstop in the years prior to the compliance date for the EISA 2007 
backstop (January 1, 2020) in the no-new-standards case. For a complete 
description of the shipments analysis, see chapter 9 of the final rule 
TSD.
3. Markup Scenarios
    In the final rule, DOE modeled only one markup scenario for the 
MIA, the preservation of gross margin markup scenario. DOE did not 
model additional manufacturer markup scenarios, because there are 
already significant market transformations taking place due to the 
implementation of the EISA 2007 backstop, which is included in the no-
new-standards case. DOE finds that higher efficacy standards analyzed 
in the standards cases, above 45 lm/W, would not significantly alter 
the manufacturer markup modeled in the no-new-standards case for the 
CFLK market. DOE determined that the two-tiered markup scenario used in 
the NOPR was not applicable to the CFLK market in the final rule, 
because by 2021, the vast majority of CFLK shipments in the no-new-
standards case use LED lamps. Therefore, DOE determined that by 2021, 
LEDs will no longer be considered a premium product and would not 
likely command a premium markup even in the no-new-standards case. For 
a complete description of the markup scenario used in the MIA, see 
chapter 12 of the final rule TSD.
4. Capital and Product Conversion Costs
    Amended energy conservation standards could cause manufacturers to 
incur additional one-time conversion costs to bring their tooling and 
product designs into compliance with amended CFLK 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 CFLK standards.
    In the NOPR, DOE conducted a bottom-up analysis that used 
manufacturer feedback to develop capital and product conversion costs 
for CFLK manufacturers for each product class at each EL. Based on 
comments received from ALA, DOE modeled a high investment scenario in 
addition to the low investment scenario that was

[[Page 607]]

used in the NOPR, due to the uncertainty of these conversion costs 
across the entire CFLK industry. ALA commented that to comply with TSL 
4, CFLK manufacturers would be forced to redesign most of their CFLKs 
at a significant cost. (ALA, No. 115 at pp. 2-3) ALA added that CFLK 
manufacturers would be required to undertake costly redesigns of 
popular CFLK products to comply with TSLs 3 or 4. (ALA, No. 115 at p. 
3)
    The conversion costs calculated in the NOPR were used as the 
conversion costs in the low investment scenario and DOE estimated the 
high investment scenario conversion costs based on the range of 
responses given by manufacturers during manufacturer interviews. This 
high investment scenario reflects ALA's concerns that higher TSLs would 
present significant investments for CFLK manufacturers to comply with 
the analyzed TSLs. Each conversion cost investment scenario leads to 
different levels of investment by CFLK manufacturers, which, when used 
in the discounted cash flow model, result in varying free cash flow 
impacts on CFLK manufacturers.
    In addition to modeling a high and low investment scenario in the 
final rule, DOE estimated conversion costs in the no-new-standards case 
incurred by CFLK manufacturers complying with the minimum 45 lm/W 
backstop required by EISA 2007. DOE also estimated the value of 
stranded assets in the form of production equipment made obsolete by 
the EISA 2007 backstop. DOE assumed that CFLK manufacturers would be 
required to make these investments regardless of DOE adopting the 
amended CFLK standards in this final rule. Therefore, the conversion 
costs and stranded assets associated with EISA 2007 backstop compliance 
are included in the no-new-standards case of the CFLK final rule and 
are additive to the conversion costs incurred in the standards cases 
analyzed by this rulemaking.
5. Other Comments From Interested Parties
    During the NOPR public meeting and comment period, interested 
parties had the opportunity to comment on the assumptions, methodology, 
and results of the NOPR MIA. ALA commented that at TSLs 3 and 4, impact 
to CFLK manufacturers would be significant and that CFLK manufacturers 
cannot fully pass on the expected price increases to consumers in the 
highly-competitive CFLK market. ALA stated that, in summary, if DOE 
adopts TSL 3 or TSL 4 as a final energy conservation standard, CFLK 
manufacturers would be forced to significantly raise their prices to 
comply with the standard and this would be an untenable burden for 
industry to bear. (ALA, No. 115 at p. 3) DOE notes that the MPC and MSP 
of CFLKs using LEDs decrease throughout the analysis period and becomes 
less costly than CFLs just a few years after compliance with the CFLK 
standards is required. Because of the decreasing MPCs of CFLKs using 
LEDs, DOE has determined that manufacturers would most likely be able 
to maintain the no-new-standards case manufacturer margins estimated in 
the preservation of gross margin markup scenario. Additionally, DOE 
notes that both the decreasing MPCs of LEDs and the high percentage of 
CFLKs using LEDs in the no-new-standards case support DOE's decision to 
model only a preservation of gross margin markup in the final rule for 
the MIA. For more information on the benefits and burdens of the 
analyzed TSLs, see section V.C.1.
6. Manufacturer Interviews
    DOE interviewed manufacturers representing more than 30 percent of 
covered CFLK sales in the United States. DOE conducted interviews as 
part of the preliminary analysis and NOPR analysis. DOE outlined the 
key issues for CFLK manufacturers in the NOPR. 78 FR 48657 (August 13, 
2015). DOE considered the information received during these interviews 
in the development of the NOPR and this final rule. DOE did not conduct 
additional interviews with manufacturers between the publication of the 
NOPR and this final rule.

K. Emissions Analysis

    The emissions analysis consists of two components. The first 
component estimates the effect of potential energy conservation 
standards on power sector and site (where applicable) combustion 
emissions of carbon dioxide (CO2), nitrogen oxides 
(NOX), sulfur dioxide (SO2), and mercury (Hg). 
The second component estimates the impacts of potential standards on 
emissions of two additional greenhouse gases, methane (CH4) 
and nitrous oxide (N2O), as well as the reductions to 
emissions of all species due to ``upstream'' activities in the fuel 
production chain. These upstream activities comprise extraction, 
processing, and transporting fuels to the site of combustion. The 
associated emissions are referred to as upstream emissions.
    The analysis of power sector emissions uses marginal emissions 
factors that were derived from data in AEO 2015, as described in 
section IV.M. The methodology is described in chapters 13 and 15 of the 
final rule TSD.
    Combustion emissions of CH4 and N2O are 
estimated using emissions intensity factors published by the U.S. 
Environmental Protection Agency (EPA), GHG Emissions Factors Hub.\53\ 
The FFC upstream emissions are estimated based on the methodology 
described in chapter 15 of the final rule TSD. The upstream emissions 
include both emissions from fuel combustion during extraction, 
processing, and transportation of fuel, and ``fugitive'' emissions 
(direct leakage to the atmosphere) of CH4 and 
CO2.
---------------------------------------------------------------------------

    \53\ Available at: http://www.epa.gov/climateleadership/inventory/ghg-emissions.html.
---------------------------------------------------------------------------

    The emissions intensity factors are expressed in terms of physical 
units per megawatt hour (MWh) or million British thermal units (MMBtu) 
of site energy savings. Total emissions reductions are estimated using 
the energy savings calculated in the national impact analysis.
    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,\54\ DOE used 
GWP values of 28 for CH4 and 265 for N2O.
---------------------------------------------------------------------------

    \54\ Intergovernmental Panel on Climate Change. Chapter 8: 
Anthropogenic and Natural Radiative Forcing. In Climate Change 2013: 
The Physical Science Basis. Contribution of Working Group I to the 
Fifth Assessment Report of the Intergovernmental Panel on Climate 
Change. T. F. Stocker, D. Qin, G.-K. Plattner, M. M. B. Tignor, S. 
K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex, and P. M. Midgley, 
Editors. 2013. Cambridge University Press: Cambridge, United Kingdom 
and New York, NY, USA. (Last accessed October 23, 2015.) http://www.ipcc.ch/pdf/assessment-report/ar5/wg1/WG1AR5_Chapter08_FINAL.pdf.
---------------------------------------------------------------------------

    The AEO incorporates the projected impacts of existing air quality 
regulations on emissions. AEO 2015 generally represents current 
legislation and environmental regulations, including recent government 
actions, for which implementing regulations were available as of the 
end of October 2014. 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 trading 
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 (D.C.). SO2 emissions from 28

[[Page 608]]

eastern states and D.C. were also limited under the Clean Air 
Interstate Rule (CAIR), which created an allowance-based trading 
program that operates along with the Title IV program in those States 
and D.C. 70 FR 25162 (May 12, 2005). CAIR was remanded to EPA by the 
U.S. Court of Appeals for the District of Columbia Circuit (D.C. 
Circuit) but parts of it remained in effect. On July 6, 2011 EPA issued 
a replacement for CAIR, the Cross-State Air Pollution Rule (CSAPR). 76 
FR 48208 (August 8, 2011). On August 21, 2012, the D.C. Circuit issued 
a decision to vacate CSAPR. See EME Homer City Generation, LP v. EPA, 
696 F.3d 7, 38 (D.C. Cir. 2012). The court ordered EPA to continue 
administering CAIR. On April 29, 2014, the U.S. Supreme Court reversed 
the judgment of the D.C. Circuit and remanded the case for further 
proceedings consistent with the Supreme Court's opinion.\55\ On October 
23, 2014, the D.C. Circuit lifted the stay of CSAPR.\56\ Pursuant to 
this action, CSAPR went into effect (and CAIR ceased to be in effect) 
as of January 1, 2015.
---------------------------------------------------------------------------

    \55\ 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.
    \56\ See Georgia v. EPA, Order (D.C. Cir. filed October 23, 
2014) (No. 11-1302),
---------------------------------------------------------------------------

    EIA was not able to incorporate CSAPR into AEO 2015, so it assumes 
implementation of CAIR. Although DOE's analysis used emissions factors 
that assume that CAIR, not CSAPR, is the regulation in force, 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 efficiency standard could be used to permit 
offsetting increases in SO2 emissions by any regulated EGU. 
In past rulemakings, DOE recognized that there was uncertainty about 
the effects of efficiency standards on SO2 emissions covered 
by the existing cap-and-trade system, but it concluded that no 
reductions in power sector emissions would occur for SO2 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 
2015 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.\57\ Therefore, DOE believes that energy conservation standards 
will generally reduce SO2 emissions in 2016 and beyond.
---------------------------------------------------------------------------

    \57\ DOE notes that the Supreme Court recently remanded EPA's 
2012 rule regarding national emission standards for hazardous air 
pollutants from certain electric utility steam generating units. See 
Michigan v. EPA (Case No. 14-46, 2015). DOE has tentatively 
determined that the remand of the MATS rule does not change the 
assumptions regarding the impact of energy efficiency standards on 
SO2 emissions. Further, while the remand of the MATS rule 
may have an impact on the overall amount of mercury emitted by power 
plants, it does not change the impact of the energy efficiency 
standards on mercury emissions. DOE will continue to monitor 
developments related to this case and respond to them as 
appropriate.
---------------------------------------------------------------------------

    CAIR established a cap on NOX emissions in 28 eastern 
States and the District of Columbia.\58\ Energy conservation standards 
are expected to have little effect on NOX emissions in those 
States covered by CSAPR 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 CAIR, so DOE estimated NOX emissions 
reductions from the standards considered in this final rule for these 
States.
---------------------------------------------------------------------------

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

    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 reductions using the reference and side cases published with 
AEO 2015, which incorporates the MATS.

L. Monetizing Carbon Dioxide and Other Emissions Impacts

    As part of the development of this rule, DOE considered the 
estimated monetary benefits from the reduced emissions of 
CO2 and NOX that are expected to result from each 
of the TSLs considered. In order to make this calculation 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 final rule.
    For this final rule, DOE relied on a set of values for the social 
cost of carbon (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 
as an appendix to chapter 14 of the final rule TSD.
1. Social Cost of Carbon
    The SCC is an estimate of the monetized damages associated with an 
incremental increase in carbon emissions in a given year. It is 
intended to include (but is not limited to) changes in net agricultural 
productivity, human 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, agencies must, to the 
extent permitted by law, ``assess both the costs and the benefits of 
the intended regulation and, recognizing that some costs and benefits 
are difficult to quantify, propose or adopt a regulation only upon a 
reasoned determination that the benefits of the intended regulation 
justify its costs.'' The purpose of the SCC estimates presented here is 
to allow agencies to incorporate the monetized social benefits of 
reducing CO2 emissions into cost-benefit analyses of 
regulatory actions that have small, or ``marginal,'' impacts on 
cumulative global emissions. The estimates are

[[Page 609]]

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 explore the technical literature in relevant fields, discuss 
key model inputs and assumptions, and consider public comments. 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 serious 
challenges. A report from the National Research Council \59\ points out 
that any assessment will suffer from uncertainty, speculation, and lack 
of information about: (1) Future emissions of greenhouse gases (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 serious questions 
of science, economics, and ethics and should be viewed as provisional.
---------------------------------------------------------------------------

    \59\ National Research Council. Hidden Costs of Energy: Unpriced 
Consequences of Energy Production and Use. 2010. National Academies 
Press: Washington, DC (Last accessed October 16, 2015.) http://www.nap.edu/catalog/12794/hidden-costs-of-energy-unpriced-consequences-of-energy-production-and.
---------------------------------------------------------------------------

    Despite the serious 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.
    It is important to emphasize that the interagency process is 
committed to updating these estimates as the science and economic 
understanding of climate change and its impacts on society improves 
over time. In the meantime, the interagency group will continue to 
explore the issues raised by this analysis and consider public comments 
as part of the ongoing interagency process.
b. 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: (1) Climate sensitivity; (2) socio-economic and 
emissions trajectories; and (3) 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 values are based on the average SCC 
from three integrated assessment models, at discount rates of 2.5, 3, 
and 5 percent. The fourth value, which represents the 95th percentile 
SCC estimate across all three models at a 3 percent discount rate, is 
included to represent higher-than-expected impacts from temperature 
change further out in the tails of the SCC distribution. The values 
grow in real terms over time, as depicted in Table IV.11. 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,\60\ 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,\61\ which is 
reproduced in appendix 14A of the final rule TSD.
---------------------------------------------------------------------------

    \60\ 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.
    \61\ Interagency Working Group on Social Cost of Carbon. Social 
Cost of Carbon for Regulatory Impact Analysis under Executive Order 
12866. 2010. United States Government. (Last accessed October 16, 
2015.) http://www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf.

[[Page 610]]



                     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 document were generated using the most 
recent versions of the three integrated assessment models that have 
been published in the peer-reviewed literature, as described in the 
2013 update from the interagency working group (revised July 2015).\62\
---------------------------------------------------------------------------

    \62\ Interagency Working Group on Social Cost of Carbon. 
Technical Support Document: Technical Update of the Social Cost of 
Carbon for Regulatory Impact Analysis Under Executive Order 12866. 
2015. United States Government. (Last accessed October 23, 2015.) 
https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf.
---------------------------------------------------------------------------

    Table IV.12 shows the updated sets of SCC estimates from the latest 
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 final rule 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.

           Table IV.12--Annual SCC Values From 2013 Interagency Report (Revised July 2015), 2010-2050
                                           [2007$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                           Discount rate
                                                 ---------------------------------------------------------------
                                                        5%              3%             2.5%             3%
                      Year                       ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
2010............................................              10              31              50              86
2015............................................              11              36              56             105
2020............................................              12              42              62             123
2025............................................              14              46              68             138
2030............................................              16              50              73             152
2035............................................              18              55              78             168
2040............................................              21              60              84             183
2045............................................              23              64              89             197
2050............................................              26              69              95             212
----------------------------------------------------------------------------------------------------------------

    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. 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.\63\
---------------------------------------------------------------------------

    \63\ In November 2013, OMB announced a new opportunity for 
public comment on the interagency technical support document 
underlying the revised SCC estimates. 78 FR 70586. In July 2015, OMB 
published a detailed summary and formal response to the many 
comments that were received. https://www.whitehouse.gov/blog/2015/07/02/estimating-benefits-carbon-dioxide-emissions-reductions. It 
also stated its intention to seek independent expert advice on 
opportunities to improve the estimates, including many of the 
approaches suggested by commenters.
---------------------------------------------------------------------------

    In summary, in considering the potential global benefits resulting 
from reduced CO2 emissions, DOE used the values from the 
2013 interagency report (revised July 2015) 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, $40.0, $62.3, 
and $117 per metric ton avoided (values expressed in 2014$). 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

[[Page 611]]

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.
    In response to the CFLKs NOPR, DOE received a comment from a group 
of trade associations led by the U.S. Chamber of Commerce. This group 
objected to DOE's continued use of the SCC in the cost-benefit analysis 
and stated that the SCC calculation should not be used in any 
rulemaking until it undergoes a more rigorous notice, review and 
comment process. (U.S. Chamber of Commerce, No. 114 at p. 4) In 
contrast, DOE received another comment from the Environmental Defense 
Fund, Institute for Policy Integrity at New York University School of 
Law, Natural Resources Defense Council, and Union of Concerned 
Scientists affirming DOE's use of the SCC values proposed in the NOPR. 
(Environmental Defense Fund, et al., No. 116 at p. 1)
    In response to the U.S. Chamber of Commerce, et al., in conducting 
the interagency process that developed the SCC values, 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. Key uncertainties and 
model differences transparently and consistently inform the range of 
SCC estimates. These uncertainties and model differences are discussed 
in the interagency Working Group's reports, which are reproduced in 
appendices 14A and 14B of the final rule TSD, as are the major 
assumptions. Specifically, uncertainties in the assumptions regarding 
climate sensitivity, as well as other model inputs such as economic 
growth and emissions trajectories, are discussed and the reasons for 
the specific input assumptions chosen are explained. However, the three 
integrated assessment models used to estimate the SCC are frequently 
cited in the peer-reviewed literature and were used in the last 
assessment of the IPCC. In addition, new versions of the models that 
were used in 2013 to estimate revised SCC values were published in the 
peer-reviewed literature (see appendix 14B of the final rule TSD for 
discussion). Although uncertainties remain, the revised estimates that 
were issued in November 2013 are based on the best available scientific 
information on the impacts of climate change. The current estimates of 
the SCC have been developed over many years, using the best science 
available, and with input from the public. In November 2013, OMB 
announced a new opportunity for public comment on the interagency 
technical support document underlying the revised SCC estimates. 78 FR 
70586. In July 2015, OMB published a detailed summary and formal 
response to the many comments that were received.\64\ DOE stands ready 
to work with OMB and the other members of the interagency Working Group 
on further review and revision of the SCC estimates as appropriate.
---------------------------------------------------------------------------

    \64\ https://www.whitehouse.gov/blog/2015/07/02/estimating-benefits-carbon-dioxide-emissions-reductions. OMB also stated its 
intention to seek independent expert advice on opportunities to 
improve the estimates, including many of the approaches suggested by 
commenters.
---------------------------------------------------------------------------

2. Social Cost of Other Air Pollutants
    The Environmental Defense Fund, et al. encouraged DOE to consider 
monetizing the benefits of greenhouse gas reductions other than 
CO2. (Environmental Defense Fund, et al., No. 116 at p. 1) 
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 NOX emissions 
reductions using benefit per ton estimates from the Regulatory Impact 
Analysis titled, ``Proposed Carbon Pollution Guidelines for Existing 
Power Plants and Emission Standards for Modified and Reconstructed 
Power Plants,'' published in June 2014 by EPA's Office of Air Quality 
Planning and Standards. The report includes high and low values for 
NOX (as PM2.5) for 2020, 2025, and 2030 
discounted at 3 percent and 7 percent,\65\ which are presented in 
chapter 14 of the Final Rule TSD. DOE assigned values for 2021-2024 and 
2026-2029 using, respectively, the values for 2020 and 2025. DOE 
assigned values after 2030 using the value for 2030.
---------------------------------------------------------------------------

    \65\ For the monetized NOX benefits associated with 
PM2.5, the related benefits (derived from benefit-per-ton 
values) are based on an estimate of premature mortality derived from 
the ACS study (Krewski et al., 2009), which is the lower of the two 
EPA central tendencies. Using the lower value is more conservative 
when making the policy decision concerning whether a particular 
standard level is economically justified so using the higher value 
would also be justified. If the benefit-per-ton estimates were based 
on the Six Cities study (Lepuele et al., 2012), the values would be 
nearly two-and-a-half times larger. (See chapter 14 of the Final 
Rule TSD for further description of the studies mentioned above.)
---------------------------------------------------------------------------

    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. DOE will continue for 
evaluate the monetization of avoided NOX emissions and will 
make any appropriate updates in energy conservation standards 
rulemakings.
    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 the NEMS associated with AEO 2015. NEMS produces the AEO 
Reference case, as well as a number of side cases to estimate the 
marginal impacts of reduced energy demand on the utility sector. These 
marginal factors are estimated based on the changes to electricity 
sector generation, installed capacity, fuel consumption and emissions 
in the AEO Reference case and various side cases. Details of the 
methodology are provided in the appendices to chapters 13 and 15 of the 
final rule TSD.
    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 use calculated in the NIA to 
provide estimates of selected utility impacts of new or amended energy 
conservation standards.

N. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a 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. 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

[[Page 612]]

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).\66\ 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.\67\ There are many reasons for these differences, 
including wage differences and the fact that the utility sector is more 
capital-intensive and less labor-intensive than other sectors. Energy 
conservation standards have the effect of reducing consumer utility 
bills. Because reduced consumer expenditures for energy likely lead to 
increased expenditures in other sectors of the economy, the general 
effect of efficiency standards is to shift economic activity from a 
less labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and service sectors). Thus, based 
on the BLS data alone, DOE believes net national employment may 
increase due to shifts in economic activity resulting from energy 
conservation standards.
---------------------------------------------------------------------------

    \66\ 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].
    \67\ U.S. Department of Commerce-Bureau of Economic Analysis. 
Regional Multipliers: A User Handbook for the Regional Input-Output 
Modeling System (RIMS II). 1992. U.S. Government Printing Office: 
Washington, DC (Last accessed October 23, 2015.) https://ia801602.us.archive.org/5/items/regionalmultipl00unit/regionalmultipl00unit.pdf.
---------------------------------------------------------------------------

    DOE estimated indirect national employment impacts for the standard 
levels considered in this final rule using an input/output model of the 
U.S. economy called Impact of Sector Energy Technologies version 3.1.1 
(ImSET).\68\ 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.
---------------------------------------------------------------------------

    \68\ Scott, M., J. Roop, O. Livingston, R. Schultz, and P. 
Balducci. ImSET 3.1: Impact of Sector Energy Technologies Model 
Description and User's Guide. 2009. Pacific Northwest National 
Laboratory,: Richland, WA. (Last accessed October 15, 2015.) http://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 final rule TSD.

O. Proposed Standards in August 2015 NOPR

1. Proposed Standard
    In the NOPR, DOE proposed to adopt amended standards for CFLKs. DOE 
proposed adopting TSL 2, which would set energy conservation standards 
at EL 2 for All CFLKs. DOE received several comments on the proposed 
standard level.
    Several stakeholders commented on the range and quality of products 
that would be available at TSL 3 and TSL 4, which can be met by only 
LED lamps, as opposed to TSL 2, which be met by both CFLs and LED 
lamps. CA IOUs supported amending standards for CFLKs, but requested 
DOE consider a standard higher than TSL 2. (CA IOUs, No. 118 at p. 2, 
8) CA IOUs said that according to a 2014 press release from the 
European Council for an Energy-Efficient Economy,\69\ many LED lamps 
with similar characteristics to the representative lamps presented in 
DOE's analysis (omnidirectional, approximately 800 lumens, 2,700 CCT, 
CRI of 80 or greater, and screw base) already comfortably exceed TSL 3. 
Especially as the market continues to advance, CA IOUs believe that 
setting a standard level at TSL 3 would not result in the 
unavailability of compliant products serving CFLK applications. (CA 
IOUs, No. 118 at p. 2) CA IOUs noted they had provided sufficient data 
indicating the LED industry will be able to comfortably support the EL 
at TSL 3, for a standard requiring compliance in 2019. (See section 
IV.C.4 and IV.D for a summary of data provided by CA IOUs) (CA IOUs, 
No. 118 at p. 7) PG&E stated that there was less innovation and R&D in 
CFL technology and more in LED and therefore, the largest benefit to 
the consumer would be a standard that can be met only by LED lamps 
(i.e., TSL 3). (PG&E, Public Meeting Transcript, No. 112 at p. 129)
---------------------------------------------------------------------------

    \69\ http://www.eceee.org/all-news/press/2014/rapid-development-LED-lamps.
---------------------------------------------------------------------------

    ASAP added that regarding both energy savings and performance 
characteristics, LED technology will replace CFLs in CFLKs. (ASAP, 
Public Meeting Transcript, No. 112 at pp. 129-130) The Joint Comment 
and CA IOUs stated that while manufacturers commented that TSL 3 or TSL 
4 would reduce consumer choice because the CFLs commonly found in CFLKs 
today would no longer meet the standard, no unique utility has been 
defined that distinguishes CFLKs that use CFLs from ones that use LED 
lamps. (Joint Comment, No. 117 at p. 2; CA IOUs, No. 118 at p. 2) The 
Joint Comment and CA IOUs asserted that adopting TSL 3 would improve 
performance without loss of utility. (Joint Comment, No. 117 at p. 2; 
CA IOUs, No. 118 at p. 2) According to the Joint Comment, CA IOUs, and 
ASAP, the primary distinguishing characteristic of CFLKs that use CFLs 
appears to be lower cost. (Joint Comment, No. 117 at p. 2; CA IOUs, No. 
118 at p. 2; ASAP, Public Meeting Transcript, No. 112 at pp. 129-130) 
ASAP warned that experience with low-priced CFLs had not been good and, 
therefore, maintaining CFLs would negatively impact consumer 
satisfaction, while adopting TSL 3 would maintain long-term health of 
the product category. ASAP stated that while DOE's methodology was 
sound, the rapid pace of technology called for an ambitious approach in 
setting standards. (ASAP, Public Meeting Transcript, No. 112 at pp. 
129-130)
    On the other hand, Hunter stated that the market for CFLKs was 
aesthetically-driven and because they were not driving innovation in 
LED technology, they could not ensure that the base types and 
associated product offerings would be there at levels higher than the 
proposed TSL 2. (Hunter, Public Meeting Transcript, No. 112 at p. 131) 
ALA stated that TSL 2 would allow manufacturers to continue to offer 
CFLKs with CFLs, which consumers value for their unique combination of 
performance and price. (ALA, No. 115 at p. 2) Further, it would allow 
manufacturers to continue offering

[[Page 613]]

consumers nearly all CFLK models currently on the market at or near 
current market prices. (ALA, No. 115 at p. 2)
    Further, ALA stated that manufacturers would have limited 
flexibility to comply with TSLs 3 or 4, which would negatively impact 
consumers. Westinghouse stated that while the main barrier to adoption 
of CFLs had been features, for LED lamps it is cost and size. 
(Westinghouse, Public Meeting Transcript, No. 112 at pp. 44-45) ALA 
stated that at TSL 3 manufacturers would need to redesign CFLKs with 
small base sockets and high lumen outputs and at TSL 4 manufacturers 
would need to redesign the most common, least efficacious CFLKs at 
significant cost, or else discontinue them, limiting the range of CFLKs 
available to consumers. (ALA, No. 115 at pp. 2-3) According to ALA, 
redesigning CFLKs to comply with TSL 3 or TSL 4 would, in many cases, 
adversely impact aesthetic appeal, a significant part of the utility 
CFLKs offer to consumers. (ALA, No. 115 at p. 3)
    Lamps Plus stated that adopting TSL 2 does not limit potential CFLK 
designs and, at the same time, allows more efficient SSL technology to 
continue to develop. (Lamps Plus, Public Meeting Transcript, No. 112 at 
p. 132) ALA noted that the market is already moving towards more 
energy-efficient products. (ALA, Public Meeting Transcript, No. 112 at 
p. 131) PG&E agreed that the market was moving towards more efficient 
products, however, PG&E contended that this trend indicated that a 
higher standard (i.e., TSL 3 or TSL 4) would just push the market in 
the direction it is already headed. (PG&E, Public Meeting Transcript, 
No. 112 at p. 129)
    In its evaluation of TSLs, DOE assessed which products would be 
available at the time manufacturers would need to comply with 
standards. As TSL 4 corresponding to 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. Because 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 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, 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 EL.
    At TSL 3 which corresponds to EL 3, the representative lamp unit 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 available only with low lumen 
outputs, consumer replaceable LED modules and drivers in limited lumen 
ranges, and a few integrated LED modules and drivers systems are 
available at EL 3.
    At TSL 2, which corresponds to EL 2, the representative lamp units 
are a commercially available LED lamp and CFL and at TSL 1, which 
corresponds to EL 1, the representative lamp unit 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, both consumer replaceable as well as integrated 
LED modules and drivers are available with lumen outputs that are not 
an option at higher ELs.
    DOE also received comments regarding the energy savings as well as 
costs and benefits to consumers, manufacturers, and the nation 
resulting from the TSLs evaluated. ASAP recommended that DOE adopt TSL 
3 given the potential energy savings estimated for that level. (ASAP, 
Public Meeting Transcript, No. 112 at pp. 129-130) The Joint Comment 
and CA IOUs stated that TSL 3 would generate significantly more energy 
savings than TSL 2. (Joint Comment, No. 117 at p. 1; CA IOUs, No. 118 
at p. 2) On the other hand, Westinghouse commented that by proposing 
TSL 2, DOE had appropriately chosen a level that results in maximum 
energy savings. (Westinghouse, Public Meeting Transcript, No. 112 at p. 
133) Lutron supported the proposal of TSL 2, stating that it would 
result in significant energy savings, well beyond that analyzed from 
the baseline. (Lutron, No. 113 at p. 2)
    The Joint Comment and CA IOUs stated that DOE's analysis shows that 
adopting TSL 3 would result in CFLKs that are competitive on a first 
cost basis and superior on an LCC basis. (Joint Comment, No. 117 at p. 
2; CA IOUs, No. 118 at p. 2) Further, the Joint Comment and CA IOUs 
noted that DOE's analysis shows that TSL 3 and TSL 4 with NPVs of $0.70 
billion and $0.71 billion, respectively, at a 7% discount rate, are 
more cost effective than TSL 2 with NPV at $0.50 billion. (Joint 
Comment, No. 117 at p. 1; CA IOUs, No. 118 at p. 2)
    Westinghouse appreciated that DOE factored INPV in its decision, an 
element Westinghouse stated is sometimes outweighed by other factors in 
some rulemakings. (Westinghouse, Public Meeting Transcript, No. 112 at 
p. 133) ALA stated that the MIA indicates that the economic impacts of 
TSLs 3 and 4 on manufacturers would be grave. ALA added that if TSL 3 
or TSL 4 were adopted, CFLK manufacturers would be forced to 
significantly raise their prices in order to comply with the standard, 
which would be an untenable burden for industry to bear. (ALA, No. 115 
at p. 3)
    ALA stated that relative to TSL 2, the incremental burdens imposed 
on manufacturers by TSLs 3 and 4 are much larger than the corresponding 
incremental benefits in terms of national energy savings and consumer 
benefits. (ALA, No. 115 at p. 3) ALA and Lutron agreed that TSL 2 
ensures the standard is economically justified while TSLs 3 and 4 do 
not. (ALA, No. 115 at pp. 2-3; Lutron, No. 113 at p. 2)
    When selecting a TSL, DOE weighs the benefits and burdens of each 
TSL, considering to the extent practicable factors such as national 
energy savings and costs to the consumer, industry, and the nation. DOE 
first considers the max tech level, and then less-stringent levels 
until DOE determines the maximum

[[Page 614]]

increase in energy efficiency that is technologically feasible and 
economically justified. In the NOPR analysis and in this final rule DOE 
determined that TSL 2 is the highest TSL for which the benefits 
outweigh the burdens. (See section V.C.1 for further details.)
2. Regulatory Text
    ALA commented that DOE should clarify that 10 CFR 430.32(s)(2) and 
10 CFR 430.32(s)(3) are inapplicable to CFLKs subject to DOE's amended 
CFLK efficiency standards by replacing the phrase ``manufactured on or 
after January 1, 2007'' in each paragraph with ``manufactured on or 
after January 1, 2007, and before January 7, 2019.'' (ALA, No. 115 at 
p. 7)
    Paragraphs (2) and (3) of 10 CFR 430.32(s) specify the current 
standards for respectively, CFLKs with medium screw base sockets and 
CFLKs with pin-base sockets for fluorescent lamps. Paragraph (4) of 10 
CFR 430.32(s) specifies the current standards for CFLKs with other 
socket types. Once the amended standards established in this final rule 
require compliance, the efficacy and energy consumption requirements in 
10 CFR 430.32(s)(2) through (s)(4) will be superseded by the amended 
standards. DOE notes that only the efficacy and energy consumption 
requirements are amended by this rulemaking. The other requirements in 
paragraphs (2)-(4) of 10 CFR 430.32(s) will remain in effect after the 
compliance date of this rule. Specifically, the following requirements 
will remain in effect: (1) The requirement for CFLKs to be packaged 
with lamps to fill all sockets; (2) lumen maintenance at 1,000 hours, 
lumen maintenance at 40 percent of lifetime, rapid cycle stress test, 
and lifetime for CFLKs with medium screw base sockets packaged with 
compact fluorescent lamps; and (3) use of an electronic ballast for 
CFLKs with pin-base sockets for fluorescent lamps.
    The proposed regulatory language would have codified amended 
standards from this rulemaking in 10 CFR 430.32 (s)(5). As proposed, 
the efficacy and energy consumption standards in paragraphs (2) and (3) 
of 10 CFR 430.32(s) would no longer have been applicable to CFLKs 
subject to the amended standards by specifying an exception in 
paragraphs (2) and (3) for the minimum efficacy requirement provided in 
paragraph (s)(5) and specifying an exception in paragraph (4) for the 
requirements provided in paragraph (s)(5). This text was intended to 
indicate that the efficacy standards established in this rulemaking 
would supersede current efficacy and energy consumption requirements. 
Taking into consideration stakeholder suggestions, in this final rule, 
DOE modified the proposed regulatory language in paragraph (s)(2), (3), 
and (4) to state that the standards in those paragraphs are applicable 
to ceiling fan light kits manufactured on or after January 1, 2009 and 
prior to 3 years after date of final rule publication in the Federal 
Register. Further, in paragraph (s)(5), DOE has specified all of 
standards to which CFLKs will be subject at the compliance date of 
amended standards adopted in this final rule. For clarity, the 
references to paragraph (s)(5) in paragraphs (s)(2)-(s)(4) were 
eliminated, and all of the non-efficacy and energy consumption 
requirements were reiterated in paragraph (s)(5).
    Philips expressed concern over the use of the term ``lifetime'' in 
the table of requirements, recommending that the term ``rated life'' be 
used instead. Philips referred DOE to the Philips and NEMA comments on 
the CFL test procedure rulemaking for further suggestions and 
background. (Philips, No. 119 at p. 3)
    The certification values for compliance with the lifetime 
requirement in 10 CFR 430.32(s)(2) should be determined according to 
definitions and procedures specified in applicable DOE test procedures. 
Lifetime is a statutory definition, and DOE has proposed related 
definitions when necessary in test procedures for products included in 
this rulemaking (i.e., CFLs and LED lamps). See http://www.regulations.gov/#!docketDetail;D=EERE-2015-BT-TP-0014 and http://www.regulations.gov/#!docketDetail;D=EERE-2011-BT-TP-0071 for further 
details.

V. Analytical Results and Conclusions

    The following section addresses the results from DOE's analyses 
with respect to the considered energy conservation standards for CFLKs. 
It addresses the TSLs examined by DOE, the projected impacts of each of 
these levels if adopted as energy conservation standards for CFLKs, and 
the standards levels that DOE is adopting in this final rule. 
Additional details regarding DOE's analyses are contained in the final 
rule TSD supporting this document.

A. Trial Standard Levels

    DOE analyzed the benefits and burdens of four TSLs for CFLKs. These 
TSLs were developed by combining specific ELs for each of the product 
classes analyzed by DOE. DOE presents the results for the TSLs in this 
document, while the results for all ELs that DOE analyzed are in the 
final rule TSD. Table V.1 presents the TSLs and the corresponding ELs 
for CFLKs. TSL 4 represents the maximum technologically feasible 
(``max-tech'') 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. As discussed in section IV.D, 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 final 
rule 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-new-standards efficacy distribution in 
the compliance year (see section IV.F.10 of this document).

[[Page 615]]



                                         Table V.2--Average LCC and PBP Results by Efficacy Level for All CFLKs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2014$)
                                                         ----------------------------------------------------------------     Simple          Average
                           EL                                              First year's      Lifetime                         payback        lifetime
                                                          Installed cost     operating       operating          LCC           (years)         (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 that have efficacies below the baseline set for the new product class structure set forth in this
  rulemaking).
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-new-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
------------------------------------------------------------------------
* The LCC savings calculation excludes consumers with zero LCC savings
  (no impact).
Note: The results for each TSL represent the impact of a standard set at
  that TSL, based on the no-new-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 that 
purchase CFLKs. 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 that purchase 
CFLKs are not substantially different from the average LCC savings and 
simple PBP for all households and all buildings, respectively. Chapter 
11 of the final rule TSD presents the complete LCC and PBP results for 
the subgroups.

[[Page 616]]



            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 Businesses
----------------------------------------------------------------------------------------------------------------
                                                    Average LCC savings (2014$)    Simple payback period (years)
                       TSL                       ---------------------------------------------------------------
                                                        All         Low-income          All         Low-income
----------------------------------------------------------------------------------------------------------------
--..............................................            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.12, 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 energy 
savings resulting from the standard. In calculating a rebuttable 
presumption payback period for each of the considered TSLs, DOE used 
discrete values, and, as required by EPCA, based the energy use 
calculation on the DOE test procedures for CFLKs. In contrast, the PBPs 
presented in section V.B.1.a were calculated using distributions that 
reflect the range of energy use in the field.
    Table V.6 presents the rebuttable presumption payback periods for 
the considered TSLs. 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.

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

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of amended energy 
conservation standards on manufacturers of CFLKs. Section V.B.2.a 
describes the expected impacts on manufacturers at each TSL. Chapter 12 
of the final rule TSD explains the analysis in further detail.
a. Industry Cash-Flow Analysis Results
    DOE examined the financial impacts (represented by changes in INPV) 
of today's adopted 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 used the preservation of gross margin markup scenario to 
estimate the impacts on manufacturers. The preservation of gross margin 
markup scenario assumes that in the standards cases, manufacturers 
would be able to pass along any potential higher production costs 
required for more efficacious products to their consumers. 
Specifically, the industry would be able to maintain its average no-
new-standards case gross margin (as a percentage of revenue) despite 
any potential higher production costs in the standards cases.
    DOE also modeled a low investment scenario and a high investment 
scenario for manufacturers that corresponds to the range of potential 
investments manufacturers must make to comply with amended standards. 
Each investment 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-new-standards case and the 
standards cases that result from the sum of discounted cash flows from 
the reference year (2015) through the end of the analysis period 
(2048). The results also discuss the difference in cash flows between 
the no-new-standards case and the standards cases in the year before 
the compliance date for the adopted 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 low investment conversion 
cost scenario and to assess the lower (more severe) end of the range of 
potential impacts on CFLK manufacturers, DOE modeled a high investment 
conversion cost scenario.
    In both the high and low investment scenarios, DOE expects that 
most manufacturers will not incur conversion costs at any of the TSLs 
in the lamp

[[Page 617]]

replacement scenario as a result of amended CFLK standards. Conversion 
costs in the lamp replacement scenario at each of the TSLs are 
attributed to complying with the EISA 2007 45 lm/W backstop rather than 
the standards adopted in this final rule. For the light kit replacement 
scenario, as efficacy levels increase with each TSL, product conversion 
costs will increase incrementally in proportion with the increasing 
amount of R&D needed to design more efficacious CFLKs. Manufacturers 
will incur capital conversion costs in the light kit replacement 
scenario as a result of amended CFLK standards requiring retooling 
costs to produce fixtures using LEDs. The product and conversion costs 
incurred by complying with today's CFLK standard in the light kit 
replacement scenario are additive to conversion costs incurred by 
complying with the EISA 2007 45 lm/W backstop. In the following 
results, DOE expresses conversion costs in terms of the conversion cost 
investment scenarios, which aggregate the conversion costs incurred by 
complying with the EISA 2007 backstop and the incremental conversion 
costs incurred at each TSL.
    Table V.7 and Table V.8 present the projected range of potential 
results for CFLK manufacturers for the low investment and high 
investment scenarios.

                               Table V.7--Manufacturer Impact Analysis for Ceiling Fan Light Kits--Low Investment Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              No-new-                          Trial standard levels
                                                        Units                standards   ---------------------------------------------------------------
                                                                               case              1               2               3               4
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV......................................  2014$ millions..............           174.9           175.2           169.9           166.2           166.0
Change in INPV............................  2014$ millions..............  ..............             0.3           (5.0)           (8.7)           (8.9)
                                            %...........................  ..............             0.2           (2.8)           (5.0)           (5.1)
Product Conversion Costs..................  2014$ millions..............             4.5             4.5             5.1             5.3             5.3
Capital Conversion Costs..................  2014$ millions..............            10.6            10.6            11.9            12.2            12.3
Total Conversion Costs....................  2014$ millions..............            15.1            15.1            17.0            17.5            17.7
--------------------------------------------------------------------------------------------------------------------------------------------------------


                              Table V.8--Manufacturer Impact Analysis for Ceiling Fan Light Kits--High Investment Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              No-new-                          Trial standard levels
                                                        Units                standards   ---------------------------------------------------------------
                                                                               case              1               2               3               4
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV......................................  2014$ millions..............           174.9           175.2           168.5           164.3           164.0
Change in INPV............................  2014$ millions..............  ..............             0.3           (6.4)          (10.6)          (10.9)
                                            %...........................  ..............             0.2           (3.7)           (6.0)           (6.2)
Product Conversion Costs..................  2014$ millions..............             4.5             4.5             5.6             6.0             6.1
Capital Conversion Costs..................  2014$ millions..............            10.6            10.6            13.3            13.9            14.1
Total Conversion Costs....................  2014$ millions..............            15.1            15.1            18.9            20.0            20.3
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For the no-new-standards case, DOE typically assumes conversion 
costs are zero because manufacturers typically do not need to make 
additional investments beyond their normal capital expenditures and 
investments in research and development if no standards are prescribed 
by a rulemaking. However, DOE included conversion costs in the no-new-
standards case since manufacturers would have to make significant 
investments to comply with the EISA 2007 45 lm/W backstop. DOE 
estimates CFLK manufacturers will incur product conversion costs of 
$4.5 million and capital conversion costs of $10.6 million to comply 
with the efficacy requirements prescribed by the EISA 2007 backstop. 
Product conversion costs include investments in research, development, 
testing, and marketing that manufacturers must make redesigning CFLKs 
to accommodate lamps that meet the EISA 2007 backstop efficacy 
requirements. Capital conversion costs include investments in 
production equipment that CFLK manufacturers would be required to make 
in order to significantly expand their CFLK manufacturing capacity to 
meet expected market demand for CFLKs that accommodate more efficacious 
CFL and LED lamps to comply with the EISA 2007 backstop.
    TSL 1 sets the efficacy level at EL 1 for all CFLKs. At TSL 1, DOE 
estimates the impact on INPV to be $0.3 million or a change in INPV of 
0.2 percent. At TSL 1, industry free cash flow (operating cash flow 
minus capital expenditures) is expected to decrease by approximately 12 
percent to $9.3 million, compared to the no-new-standards case value of 
$10.5 million in 2018, the year leading up to the energy conservation 
standards.
    The percentage impact on INPV is slightly positive at TSL 1. DOE 
anticipates that most manufacturers would not be significantly impacted 
at this TSL. DOE projects that in 2019, 100 percent of shipments that 
meet the efficacy level required by the no-new-standards case would 
also meet or exceed the efficacy level required at TSL 1.
    At TSL 1, the shipment-weighted average MPC increases by 11 percent 
relative to the no-new-standards case MPC in 2019, the expected year of 
compliance. In both the high and low investment scenarios, 
manufacturers are able to recover their conversion costs through a 
moderate increase in MPC over the course over of the analysis period, 
resulting in a slightly positive INPV impact 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 -$6.4 million to -$5.0 million, or 
a change in INPV of -3.7 percent to -2.8 percent. At TSL 2, industry 
free cash flow is expected to range from $7.8 million to $8.5 million, 
which represents a decrease of approximately 26 percent to 19 percent 
respectively, compared to the no-new-standards case value of $10.5 
million in 2018, the year leading up to the energy conservation 
standards.
    Percentage impacts on INPV are slightly negative 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 shipments

[[Page 618]]

that meet or exceed the efficacy level required by the no-new-standards 
case would also meet or exceed the efficacy level required at TSL 2.
    DOE expects product conversion costs will rise from $4.5 million at 
TSL 1 to $5.1 million at TSL 2 in the low investment scenario and from 
$4.5 million at TSL 1 to $5.6 million at TSL 2 in the high investment 
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 efficacy level at TSL 2. Capital conversion costs 
will increase from $10.6 million at TSL 1 to $11.9 million at TSL 2 in 
the low investment scenario and from $10.6 million at TSL 1 to $13.3 
million at TSL 2 in the high investment scenario.
    At TSL 2, the shipment-weighted average MPC increases by 25 percent 
relative to the no-new-standards case MPC in 2019. Manufacturers are 
not able to recover the $17.0 million in conversion costs in the low 
investment scenario or the $18.9 million in conversion costs in the 
high investment scenario through the increase in MPC over the course of 
the analysis period, resulting in slightly negative INPV 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 -$10.6 million to -$8.7 million, 
or a change in INPV of -6.0 percent to -5.0 percent. At this level, 
industry free cash flow is expected to range from $7.4 million to $8.3 
million, which represents a decrease of approximately 30 percent and 21 
percent respectively, compared to the no-new-standards case value of 
$10.5 million in 2018, the year leading up to the energy conservation 
standards.
    Percentage impacts on INPV range are moderately negative at TSL 3. 
TSL 3 sets the first efficacy level that can be met only by LED lamps. 
DOE projects that in 2019, 17 percent of shipments that meet or exceed 
the efficacy level required by the no-new-standards case would also 
meet or exceed the efficacy level required at TSL 3.
    DOE expects product conversion costs will rise from $5.1 million at 
TSL 2 to $5.3 million at TSL 3 in the low investment scenario and from 
$5.6 million at TSL 2 to $6.0 million at TSL 3 in the high investment 
scenario. Product conversion costs are driven primarily by increased 
R&D efforts needed to redesign CFLKs to accommodate the more 
efficacious LED lamps. DOE expects capital conversion costs to increase 
from $11.9 million at TSL 2 to $12.2 million at TSL 3 in the low 
investment scenario and from $13.3 million at TSL 2 to $13.9 million at 
TSL 3 in the high investment scenario as a result of retooling costs 
necessary to produce redesigned CFLK fixtures that use LEDs at TSL 3.
    At TSL 3, the shipment-weighted average MPC increases by 27 percent 
relative to the no-new-standards case MPC in 2019. Manufacturers are 
not able to recover the $17.5 million in conversion costs in the low 
investment scenario or the $20.0 million in conversion costs in the 
high investment scenario through the increase in MPC over the course of 
the analysis period, resulting in moderately negative INPV impacts at 
TSL 3.
    TSL 4 sets the efficacy level at EL 4 for all CFLKs, which 
represents max-tech. At TSL 4, DOE estimates impacts on INPV to range 
from -$10.9 million to -$8.9 million, or a change in INPV of -6.2 
percent to -5.1 percent. At this level, industry free cash flow is 
expected to range from $7.2 million to $8.3, which represents a 
decrease of approximately 31 percent and 21 percent respectively, 
compared to the no-new-standards case value of $10.5 million in 2018, 
the year leading up to the energy conservation standards.
    Percentage impacts on INPV are moderately negative at TSL 4. DOE 
projects that in 2019, 9 percent of shipments that meet or exceed the 
efficacy level required by the no-new-standards case would also meet or 
exceed the efficacy level required at TSL 4.
    DOE expects product conversion costs will rise by less than $50 
thousand dollars from TSL 3 to TSL 4 in the low investment scenario and 
slightly rise from $6.0 million at TSL 3 to $6.1 million at TSL 4 in 
the high investment scenario. DOE estimates manufacturers will incur 
slightly higher product conversion costs as they allocate more capital 
to R&D efforts necessary to redesign CFLKs that meet the max-tech EL. 
DOE expects capital conversion costs to increase slightly from $12.2 
million at TSL 3 to $12.3 million at TSL 4 in the low investment 
scenario and from $13.9 million at TSL 3 to $14.1 million at TSL 4 in 
the high investment scenario 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, the shipment-weighted average MPC increases by 26 percent 
relative to the no-new-standards case MPC in 2019. Manufacturers are 
not able to recover the $17.7 million in conversion costs in the low 
investment scenario or the $20.3 million in conversion costs in the 
high investment scenario through the increase in MPC over the course of 
the analysis period, resulting in moderately negative INPV 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 due to amended energy conservation standards on CFLKs.
c. Impacts on Manufacturing Capacity
    CFLK manufacturers stated that they did not anticipate 
manufacturing capacity constraints as a result of amended energy 
conservation standards. If manufacturers 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 this 
final rule to the compliance date. Additionally, at the standard levels 
adopted in this final rule, 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 manufacturing capacity as 
a result of this rulemaking. See section V.C.1 for more details on the 
standard adopted in this rulemaking.
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 small business manufacturers as a 
subgroup that would require a separate analysis in the MIA. DOE 
analyzes the impacts on small businesses in section VI.B of this final

[[Page 619]]

rule. DOE did not identify any other adversely impacted manufacturer 
subgroups for CFLKs for this rulemaking based on the results of the 
industry characterization.
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 
conducted a cumulative regulatory burden analysis as part of this 
rulemaking.
    DOE identified a number of requirements, in addition to amended 
energy conservation standards for CFLKs, that CFLK manufacturers could 
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 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 
final rule 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 notice of availability for a 
framework document (78 FR 16443; Mar. 15, 2013) and preliminary 
analysis TSD. (79 FR 64712; Oct. 31, 2014) The CFLK standards adopted 
in this rulemaking affect many of the same manufacturers as the ongoing 
ceiling fan standards rulemaking and have 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 rulemaking.
    DOE has also 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) In 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 operation of 
the GSL 45 lm/W provision will impact GSLs available to be packaged 
with CFLKs. Therefore, regardless of the standards in this rulemaking, 
CFLK manufacturers will likely need to package more efficacious lamps 
with CFLKs.
    In addition to the 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-intensity discharge lamp 
standards (80 FR 6016; Feb. 4, 2015). 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  $25 million
                                                      (2012$).\70\
General Service Fluorescent                    2018  $26.6 million
 Lamps.                                               (2013$).\71\
High-Intensity Discharge 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 Continuing
  Appropriations Act, 2016 (Pub. L. 114-53, Sept. 30, 2015).
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.


[[Page 620]]

3. National Impact Analysis
a. Significance of Energy Savings
    To estimate the energy savings attributable to potential standards 
for CFLKs, DOE compared their energy consumption under the no-new-
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 
document.
---------------------------------------------------------------------------

    \70\ 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 https://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/16.
    \71\ 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 https://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/24.

                  Table V.10--Cumulative National Energy Savings for CFLKs Shipped in 2019-2048
----------------------------------------------------------------------------------------------------------------
                                                                   Trial standard level  (quads)
                                                 ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
Primary Energy..................................           0.008           0.047           0.066           0.067
FFC Energy......................................           0.008           0.049           0.069           0.070
----------------------------------------------------------------------------------------------------------------

    OMB Circular A-4 \72\ 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.\73\ 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.
---------------------------------------------------------------------------

    \72\ U.S. Office of Management and Budget. Circular No. A-4, 
Regulatory Analysis. 2003. Washington, DC (Last accessed October 23, 
2015.) http://www.whitehouse.gov/sites/default/files/omb/assets/regulatory_matters_pdf/a-4.pdf.
    \73\ 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..................................           0.008           0.047           0.064           0.065
FFC Energy......................................           0.008           0.049           0.067           0.068
----------------------------------------------------------------------------------------------------------------

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,\74\ DOE 
calculated NPV using both a 7-percent and a 3-percent real discount 
rate. Table V.12 shows the consumer NPV results with impacts counted 
over the lifetime of products purchased in 2019-2048.
---------------------------------------------------------------------------

    \74\ 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--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
----------------------------------------------------------------------------------------------------------------


[[Page 621]]

    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%..............................................            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 
final rule TSD. In the high-price-decline case, the NPV is lower than 
in the default case. This is due the faster adoption of LED CFLKs in 
the no-new-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 adopted 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 final rule TSD presents detailed results 
regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
    DOE has concluded that the standards adopted in this final rule 
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 adopted standards.
5. Impact of Any Lessening of Competition
    As discussed in section III.E.1.e, the Attorney General of the 
United States (Attorney General) to determine the impact, if any, of 
any lessening of competition likely to result from an amended standard 
and to transmit such determination in writing to the Secretary within 
60 days of the publication of a final rule, together with an analysis 
of the nature and extent of the impact. To assist the Attorney General 
in making such determination, DOE provided the Department of Justice 
(DOJ) with copies of the NOPR and the TSD for review. In its assessment 
letter responding to DOE, DOJ concluded that the proposed energy 
conservation standards for CFLKs are unlikely to have a significant 
adverse impact on competition. DOE is publishing the Attorney General's 
assessment at the end of this final rule.
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 final rule TSD presents the estimated 
reduction in generating capacity, relative to the no-new-standards 
case, for the TSLs that DOE considered in this rulemaking.
    Energy conservation resulting from amended standards for CFLKs is 
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 final 
rule 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            3.28            4.50            4.59
SO2 (thousand tons).............................            0.71            2.56            3.40            3.46

[[Page 622]]

 
NOX (thousand tons).............................            0.52            3.25            4.53            4.63
Hg (tons).......................................            0.00            0.01            0.01            0.01
CH4 (thousand tons).............................            0.09            0.35            0.47            0.47
N2O (thousand tons).............................            0.01            0.05            0.07            0.07
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................            0.02            0.14            0.20            0.20
SO2 (thousand tons).............................            0.00            0.03            0.04            0.04
NOX (thousand tons).............................            0.23            1.98            2.82            2.89
Hg (tons).......................................            0.00            0.00            0.00            0.00
CH4 (thousand tons).............................            1.32           10.88           15.54           15.92
N2O (thousand tons).............................            0.00            0.00            0.00            0.00
----------------------------------------------------------------------------------------------------------------
                                               Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................            0.66            3.42            4.70            4.79
SO2 (thousand tons).............................            0.71            2.59            3.44            3.50
NOX (thousand tons).............................            0.75            5.23            7.36            7.53
Hg (tons).......................................            0.00            0.01            0.01            0.01
CH4 (thousand tons).............................            1.42           11.23           16.01           16.39
CH4 (thousand tons CO2eq)*......................           39.62          314.42          448.21          458.92
N2O (thousand tons).............................            0.01            0.05            0.07            0.07
N2O (thousand tons CO2eq)*......................            3.58           13.67           18.23           18.56
----------------------------------------------------------------------------------------------------------------
* CO2eq is the quantity of CO2 that would have the same GWP.

    As part of the analysis for this rule, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
and NOX that DOE estimated for each of the considered TSLs 
for CFLKs. As discussed in section IV.L of this document, 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), $40.0/
metric ton (the average value from a distribution that uses a 3-percent 
discount rate), $62.3/metric ton (the average value from a distribution 
that uses a 2.5-percent discount rate), and $117/metric ton (the 95th-
percentile value from a distribution that uses a 3-percent discount 
rate). 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 final rule 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...............................................             8.7            29.5            43.3            83.2
2...............................................            33.1           128.3           196.0           379.4
3...............................................            43.9           172.9           265.3           513.6
4...............................................            44.6           176.1           270.4           523.5
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................             0.3             0.9             1.2             2.4
2...............................................             1.4             5.4             8.3            16.1
3...............................................             1.9             7.6            11.7            22.6
4...............................................             2.0             7.8            11.9            23.1
----------------------------------------------------------------------------------------------------------------

[[Page 623]]

 
                                               Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................             9.0            30.3            44.5            85.5
2...............................................            34.5           133.7           204.4           395.5
3...............................................            45.8           180.5           277.0           536.2
4...............................................            46.6           183.9           282.3           546.6
----------------------------------------------------------------------------------------------------------------
* For each of the four cases, the corresponding SCC value for emissions in 2015 is $12.2, $40.0, $62.3, and $117
  per metric ton (2014$). 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 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. This table presents values that use the low 
dollar-per-ton values, which reflect DOE's primary estimate. Results 
that reflect the range of NOX dollar-per-ton values are 
presented in Table V.18.

  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.......................................            3.49            3.44
2.......................................           15.73           10.88
3.......................................           21.20           13.98
4.......................................           21.59           14.18
------------------------------------------------------------------------
                           Upstream Emissions
------------------------------------------------------------------------
1.......................................            1.75            1.85
2.......................................            9.51            6.52
3.......................................           13.08            8.51
4.......................................           13.34            8.64
------------------------------------------------------------------------
                           Total FFC Emissions
------------------------------------------------------------------------
1.......................................            5.25            5.29
2.......................................           25.24           17.40
3.......................................           34.27           22.49
4.......................................           34.93           22.82
------------------------------------------------------------------------

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:
                                                 ---------------------------------------------------------------
                                                  SCC Case $12.2/ SCC Case $40.0/ SCC Case $62.3/ SCC Case $117/
                       TSL                        metric ton and  metric ton and  metric ton and  metric ton and
                                                    3% low NOX      3% low NOX      3% low NOX      3% low NOX
                                                      values          values          values          values
----------------------------------------------------------------------------------------------------------------
1...............................................            0.22            0.25            0.26            0.30
2...............................................            0.72            0.82            0.89            1.08
3...............................................            1.03            1.16            1.26            1.52

[[Page 624]]

 
4...............................................            1.05            1.19            1.28            1.55
----------------------------------------------------------------------------------------------------------------
                                                           Consumer NPV at 7% discount rate added with:
----------------------------------------------------------------------------------------------------------------
                       TSL                        SCC Case $12.2/ SCC Case $40.0/ SCC Case $62.3/ SCC Case $117/
                                                  metric ton and  metric ton and  metric ton and  metric ton and
                                                    7% low NOX      7% low NOX      7% low NOX      7% low NOX
                                                          values          values          values          values
----------------------------------------------------------------------------------------------------------------
1...............................................            0.22            0.25            0.26            0.30
2...............................................            0.55            0.65            0.72            0.91
3...............................................            0.76            0.90            0.99            1.25
4...............................................            0.78            0.91            1.01            1.28
----------------------------------------------------------------------------------------------------------------

    In considering the above results, two issues are relevant. 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 shipped in 2019 to 2048. Because CO2 emissions have 
a very long residence time in the atmosphere,\75\ the SCC values in 
future years reflect future climate-related impacts that continue 
beyond 2100.
---------------------------------------------------------------------------

    \75\ 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 standards, the new or amended energy conservation 
standards 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 final rule, DOE considered the impacts of amended 
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 EL 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 
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 decreases the number of products 
purchased by consumers, this decreases the potential energy savings 
from an energy conservation standard. DOE provides estimates of 
shipments and changes in the volume of product purchases in chapter 9 
of the final rule TSD. However, DOE's current analysis does not 
explicitly control for heterogeneity in consumer preferences, 
preferences across subcategories of products or specific features, or

[[Page 625]]

consumer price sensitivity variation according to household income.\76\
---------------------------------------------------------------------------

    \76\ 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.\77\ 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.
---------------------------------------------------------------------------

    \77\ Alan Sanstad, Notes on the Economics of Household Energy 
Consumption and Technology Choice. Lawrence Berkeley National 
Laboratory (2010) (Available online at: https://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 document.

                    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):
    quads.......................................           0.008           0.049           0.069           0.070
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
 Emission):
    CO2 (million metric tons)...................            0.66            3.42            4.70            4.79
    SO2 (thousand tons).........................            0.71            2.59            3.44            3.50
    NOX (thousand tons).........................            0.75            5.23            7.36            7.53
    Hg (tons)...................................            0.00            0.01            0.01            0.01
    CH4 (thousand tons).........................            1.42           11.23           16.01           16.39
    CH4 (thousand tons CO2eq) *.................           39.62          314.42          448.21          458.92
    N2O (thousand tons).........................            0.01            0.05            0.07            0.07
    N2O (thousand tons CO2eq)*..................            3.58           13.67           18.23           18.56
Value of Emissions Reduction (Total FFC
 Emissions):
    CO2 (2014$ billion)**.......................  0.009 to 0.086  0.034 to 0.396  0.046 to 0.536  0.047 to 0.547
    NOX--3% discount rate (2014$ million).......     5.2 to 12.4    25.2 to 58.3    34.3 to 78.9    34.9 to 80.4
    NOX--7% discount rate (2014$ million).......     5.3 to 11.6    17.4 to 38.4    22.5 to 49.7    22.8 to 50.4
----------------------------------------------------------------------------------------------------------------
* CO2eq is the quantity of CO2 that would have the same global warming potential (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-new-                  175.2     168.5-169.9     164.3-166.2     164.0-166.0
     standards case INPV = 174.9)...............
    Industry NPV (% change).....................             0.2     (3.7)-(2.8)     (6.0)-(5.0)     (6.2)-(5.1)
----------------------------------------------------------------------------------------------------------------
                                               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


[[Page 626]]

    DOE first considered TSL 4, which represents the max-tech EL. 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 4.79 Mt of 
CO2, 3.50 thousand tons of SO2, 7.53 thousand 
tons of NOX, 0.01 tons of Hg, 16.4 thousand tons of 
CH4, and 0.07 thousand tons of N2O. The estimated 
monetary value of the CO2 emissions reduction at TSL 4 
ranges from $46.6 million to $546.6 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.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$10.9 million to a decrease of $8.9 million, which corresponds to 
decreases of 6.2 percent and 5.1 percent, respectively.
    The Secretary 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 reduction in manufacturer industry value and the 
potentially limited availability of compliant CFLKs discussed in 
section IV.O.1. Consequently, the Secretary has concluded that TSL 4 is 
not economically justified.
    DOE then considered TSL 3, which would save an estimated 0.069 
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 4.70 Mt of 
CO2, 3.44 thousand tons of SO2, 7.36 thousand 
tons of NOX, 0.01 tons of Hg, 16.0 thousand tons of 
CH4, and 0.07 thousand tons of N2O. The estimated 
monetary value of the CO2 emissions reduction at TSL 3 
ranges from $45.8 million to $536.2 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 
$10.6 million to a decrease of $8.7 million, which corresponds to 
decreases of 6.0 percent and 5.0 percent, respectively.
    After considering the analysis and weighing the benefits and 
burdens, the Secretary has concluded that at TSL 3 for CFLKs, the 
benefits of energy savings, positive NPV of consumer benefits, and the 
estimated monetary value of the emissions reductions would be 
outweighed by the reduction in manufacturer industry value and by the 
potential limited availability of compliant CFLKs discussed in section 
IV.O.1. Consequently, the Secretary has 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 3.42 Mt of 
CO2, 2.59 thousand tons of SO2, 5.23 thousand 
tons of NOX, 0.01 tons of Hg, 11.2 thousand tons of 
CH4, and 0.05 thousand tons of N2O. The estimated 
monetary value of the CO2 emissions reduction at TSL 2 
ranges from $34.5 million to $395.5 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 
$6.4 million to a decrease of $5.0 million, which corresponds to 
decreases of 3.7 percent and 2.8 percent, respectively.
    After considering the analysis and weighing the benefits and 
burdens, the Secretary has 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 reduction in 
manufacturer industry value.
    Accordingly, the Secretary has 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 is adopting the 
energy conservation standards for CFLKs at TSL 2. The amended energy 
conservation standards for CFLKs, which are expressed as minimum lm/W, 
are shown in Table V.20.

       Table V.20--Amended Energy Conservation Standards for CFLKs
------------------------------------------------------------------------
                                               Minimum required efficacy
        Product class            Lumens \1\              (lm/W)
------------------------------------------------------------------------
All CFLKs....................            <120  50
                                        >=120  74.0-29.42 x
                                                0.9983\lumens\
------------------------------------------------------------------------
\1\ Use the lumen output for each basic model of lamp packaged with the
  basic model of CFLK or each basic model of integrated SSL in the CFLK
  basic model to determine the applicable standard.

2. Summary of Annualized Benefits and Costs of the Adopted Standards
    The benefits and costs of the adopted standards can also be 
expressed in terms of annualized values. The annualized net benefit is 
the sum of: (1) The annualized national economic value (expressed in 
2014$) of the benefits from operating products that meet the adopted 
standards (consisting primarily of operating cost savings from using 
less energy, minus increases in product purchase costs, and (2) the 
annualized monetary value of the benefits of CO2 and 
NOX emission reductions.\78\
---------------------------------------------------------------------------

    \78\ 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.

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

[[Page 627]]

    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 reductions (for which DOE used a 3-percent discount 
rate along with the average SCC series corresponding to a value of 
$40.0/ton in 2015 [2014$]), the estimated cost of the adopted standards 
for CFLKs is $6.0 million per year in increased equipment costs, while 
the estimated benefits are $55 million per year in reduced equipment 
operating costs, $7.5 million per year in CO2 reductions, 
and $1.7 million per year 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 corresponding to a value of $40.0/ton in 2015 (in 
2014$), the estimated cost of the adopted standards for CFLKs 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 $1.4 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                                        Low net benefits estimate  High net benefits estimate
                                                                          Primary  estimate *                  *                           *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Operating-Cost Savings...  7%..............................  55........................  36........................  59
                                    3%..............................  41........................  24........................  43
CO2 Reduction Value ($12.2/t) **..  5%..............................  2.6.......................  1.4.......................  2.7
CO2 Reduction Value ($40.0/t) **..  3%..............................  7.5.......................  3.9.......................  7.9
CO2 Reduction Value ($62.3/t) **..  2.5%............................  11........................  5.........................  11
CO2 Reduction Value ($117/t) **...  3%..............................  22........................  12........................  24
NOX Reduction Value [dagger]......  7%..............................  1.7.......................  1.0.......................  4.0
                                    3%..............................  1.4.......................  0.7.......................  3.4
Total Benefits [dagger][dagger]...  7% plus CO2 range...............  60 to 79..................  38 to 48..................  66 to 86
                                    7%..............................  65........................  40........................  71
                                    3% plus CO2 range...............  45 to 64..................  26 to 36..................  50 to 70
                                    3%..............................  50........................  28........................  55
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Incremental Product Costs  7%..............................  6.0.......................  3.5.......................  6.4
                                    3%..............................  4.0.......................  2.3.......................  4.2
Total [dagger][dagger]............  7% plus CO2 range...............  54 to 73..................  34 to 44..................  59 to 80
                                    7%..............................  59........................  37........................  65
                                    3% plus CO2 range...............  41 to 60..................  24 to 33..................  45 to 66
                                    3%..............................  46........................  26........................  51
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 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] The $/ton values used for NOX are described in section IV.L. DOE estimated the monetized value of NOX emissions reductions using benefit per
  ton estimates from the Regulatory Impact Analysis titled, ``Proposed Carbon Pollution Guidelines for Existing Power Plants and Emission Standards for
  Modified and Reconstructed Power Plants,'' published in June 2014 by EPA's Office of Air Quality Planning and Standards. (Available at: http://www3.epa.gov/ttnecas1/regdata/RIAs/111dproposalRIAfinal0602.pdf.) See section IV.L.2 for further discussion. For DOE's Primary Estimate and Low Net
  Benefits Estimate, the agency is presenting a national benefit-per-ton estimate for particulate matter emitted from the Electric Generating Unit
  sector based on an estimate of premature mortality derived from the ACS study (Krewski et al., 2009). For DOE's High Net Benefits Estimate, the
  benefit-per-ton estimates were based on the Six Cities study (Lepuele et al., 2011), which are nearly two-and-a-half times larger than those from the
  ACS study. Because of the sensitivity of the benefit-per-ton estimate to the geographical considerations of sources and receptors of emissions, DOE
  intends to investigate refinements to the agency's current approach of one national estimate by assessing the regional approach taken by EPA's
  Regulatory Impact Analysis for the Clean Power Plan Final Rule.
[dagger][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 ($40.0/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.


[[Page 628]]

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 adopted standards for CFLKs are intended to 
address are as follows:
    (1) 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.
    (2) 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.
    (3) There are external benefits resulting from improved energy 
efficiency of appliances that are not captured by the users of such 
equipment. 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 qualify some of the external benefits through 
use of social cost of carbon values.
    The Administrator of the Office of Information and Regulatory 
Affairs (OIRA) in the OMB has determined that the regulatory action is 
not a significant regulatory action under section (3)(f) of Executive 
Order 12866. Section 6(a)(3)(A) of the Executive Order states that 
absent a material change in the development of the planned regulatory 
action, regulatory action not designated as significant will not be 
subject to review under section 6(a)(3) unless, within 10 working days 
of receipt of DOE's list of planned regulatory actions, the 
Administrator of OIRA notifies the agency that OIRA has determined that 
a planned regulation is a significant regulatory action within the 
meaning of the Executive order. Accordingly, DOE did not submit this 
final rule to OIRA for review.
    DOE has also reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011. (76 FR 3281, Jan. 21, 2011) EO 13563 
is supplemental to and explicitly reaffirms the principles, structures, 
and definitions governing regulatory review established in Executive 
Order 12866. To the extent permitted by law, agencies are required by 
Executive Order 13563 to: (1) Propose or adopt a regulation only upon a 
reasoned determination that its benefits justify its costs (recognizing 
that some benefits and costs are difficult to quantify); (2) tailor 
regulations to impose the least burden on society, consistent with 
obtaining regulatory objectives, taking into account, among other 
things, and to the extent practicable, the costs of cumulative 
regulations; (3) select, in choosing among alternative regulatory 
approaches, those approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity); (4) to the extent 
feasible, specify performance objectives, rather than specifying the 
behavior or manner of compliance that regulated entities must adopt; 
and (5) identify and assess available alternatives to direct 
regulation, including providing economic incentives to encourage the 
desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public.
    DOE emphasizes as well that Executive Order 13563 requires agencies 
to use the best available techniques to quantify anticipated present 
and future benefits and costs as accurately as possible. In its 
guidance, 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 final rule is 
consistent with these principles, including the requirement that, to 
the extent permitted by law, benefits justify costs and that net 
benefits are maximized.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of a final regulatory flexibility analysis (FRFA) 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 FRFA for the products that are the subject 
of this rulemaking.
1. Description of the Need For, and Objectives of, the Rule
    A description of the need for, and objectives of, the rule is set 
forth elsewhere in the preamble and not repeated here.
2. Description of Significant Issues Raised by Public Comment
    DOE received no comments specifically on the initial regulatory 
flexibility analysis prepared for this rulemaking. Comments on the 
economic impacts of the rule are discussed elsewhere in the preamble 
and did not necessitate changes to the analysis required by the 
Regulatory Flexibility Act.
3. Description of Comments Submitted by the Small Business 
Administration
    The Small Business Administration did not submit comments on DOE's 
proposed rule.
4. Description on Estimated Number of Small Entities Regulated
    For manufacturers of CFLKs, the Small Business Administration (SBA) 
has set a size threshold, which defines those entities classified as 
``small businesses'' for the purposes of the statute. DOE used the 
SBA's small business size standards to determine whether any small 
entities would be subject to the requirements of the rule. 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

[[Page 629]]

by trade associations (e.g., ALA \79\) and information from previous 
rulemakings, individual company Web sites, SBA's database, and market 
research tools (e.g., Hoover's reports \80\). 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.
---------------------------------------------------------------------------

    \79\ American Lighting Association Company Information Industry 
Information Lists, http://www.americanlightingassoc.com/) (Last 
accessed Nov 13, 2015).
    \80\ Hoovers Company Information Industry Information Lists, 
http://www.hoovers.com/) (Last accessed Nov 13, 2015).
---------------------------------------------------------------------------

    For CFLKs, DOE initially identified a total of 67 potential 
companies that sell CFLKs in the United States. Of these, DOE 
identified only one manufacturer that also manufactures 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 small 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.
5. Description and Estimate of Compliance Requirements
    At TSL 2, the adopted standard in this final rule, 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; and the range of 
available options to replace non-compliant lamps with lamps on the 
market that can meet the adopted standards.
    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 adopted standards 
(though CFLK manufacturers would shoulder any increase in purchase 
price of a more efficacious lamp).
    At the adopted 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 adopted CFLK standards without 
redesigning their existing CFLKs. However, these more efficacious lamps 
could be more expensive for CFLK manufacturers to purchase and could 
require CFLK manufacturers to increase the sale price of their CFLKs to 
recover these higher production costs. DOE's shipments analysis found 
that approximately 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 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 by small and large CFLK businesses is outsourced to a limited 
number of original equipment manufacturers located abroad. CFLK 
businesses typically pay retooling costs to these original equipment 
manufacturers located abroad, who operate and maintain machinery used 
to produce the CFLKs that those 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, because the adopted 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 
redesign their CFLKs. Total estimated conversion costs for the industry 
at TSL 2 range from $17.0 million in the low investment scenario to 
$18.9 million in the high investment scenario.
    As stated in section V.B.2.a, DOE estimates that CFLK manufacturers 
may experience a decrease in INPV ranging from a decrease of 3.7 
percent to a decrease of 2.8 percent at TSL 2. For the reasons outlined 
previously, DOE has determined that most small businesses would not be 
disproportionally impacted by the adopted CFLK energy conservation 
standard compared to industry average impacts previously stated. DOE 
estimates that the overall percent change in INPV for the CFLK industry 
is reflective of the range of potential impacts for small businesses as 
well.
    DOE notes that because lamp manufacturers typically test and 
certify their lamps, CFLK businesses can use the testing and 
certification data provided by the lamp manufacturer to comply with the 
CFLK standards. By using existing testing and certification data, both 
large and small CFLK businesses can significantly reduce their own 
testing and certification costs associated with complying with amended 
CFLK standards. DOE emphasizes, however, that CFLK manufacturers are 
ultimately responsible for demonstrating compliance with applicable 
CFLK standards.
6. Description of Steps Taken To Minimize Impacts to Small Businesses
    The discussion in the previous section analyzes impacts on small 
businesses that would result from DOE's final rule. In reviewing 
alternatives to the final rule, DOE examined energy conservation 
standards set at higher and lower ELs.

[[Page 630]]

    With respect to TSL 4, DOE estimated that while there would be 
significant consumer benefits from the projected energy savings of 0.07 
quads (ranging from $0.71 billion using a 7-percent discount rate to 
$0.97 billion using a 3-percent discount rate), along with emissions 
reductions, the overall impacts would result in an INPV reduction of 
5.1-6.2 percent. DOE determined that this INPV reduction, along with 
the potential limited availability of compliant CFLKs, would outweigh 
the potential benefits. For TSL 3, DOE estimated that while there would 
be significant consumer benefits from the projected energy savings of 
0.069 quads (ranging from $0.70 billion using a 7-percent discount rate 
to $0.95 billion using a 3-percent discount rate), along with emissions 
reductions, the overall impacts would result in an INPV reduction of 
5.0-6.0 percent. DOE determined that this INPV reduction, along with 
the potential limited availability of compliant CFLKs, would outweigh 
the potential benefits. In addition, 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.
    EPCA requires DOE to establish standards at the level that would 
achieve the maximum improvement in energy efficiency that is 
technologically feasible and economically justified. Based on its 
analysis, DOE concluded that TSL 2 achieves the maximum improvement in 
energy efficiency that is technologically feasible and economically 
justified. Therefore, DOE did not establish standards at the levels 
considered at TSLs 3 and 4 because DOE determined that they were not 
economically justified. DOE's analysis of economic justification 
considers impacts on manufacturers, including small businesses. While 
TSL 1 would reduce the impacts on small business manufacturers, EPCA 
prohibits DOE from adopting TSL 1.
    In summary, DOE concluded 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 
does not adopt any 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 final rule TSD.
    Additional compliance flexibilities may be available through other 
means. 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 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 App. B, B(1)-(5). The rule fits within this 
category of actions because it is a rulemaking that establishes energy 
conservation standards for consumer products or industrial equipment, 
and for which none of the exceptions identified in CX B5.1(b) apply. 
Therefore, DOE has made a CX determination for this rulemaking, and DOE 
does not need to prepare an Environmental Assessment or Environmental 
Impact Statement for this rule. DOE's CX determination for this rule is 
available at http://energy.gov/nepa/categorical-exclusion-cx-determinations-cx.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism.'' 64 FR 43255 (Aug. 10, 1999) 
imposes certain requirements on Federal agencies formulating and 
implementing policies or regulations that preempt State law or that 
have Federalism implications. The Executive Order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive Order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have Federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR 13735. DOE has examined this 
rule and has 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 final rule. 
States can petition DOE for exemption from such preemption to the 
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) 
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

[[Page 631]]

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 final rule meets the relevant standards of 
Executive Order 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For a regulatory action likely to result in a rule that may cause the 
expenditure by State, local, and Tribal governments, in the aggregate, 
or by the private sector of $100 million or more in any one year 
(adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to 
develop an effective process to permit timely input by elected officers 
of State, local, and Tribal governments on a ``significant 
intergovernmental mandate,'' and requires an agency plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirements that might 
significantly or uniquely affect 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.
    This rule does not contain a Federal intergovernmental mandate, nor 
is it expected to require expenditures of $100 million or more in any 
one year by the private sector. As a result, the analytical 
requirements of UMRA do not apply.

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 18, 1988), DOE has determined that this 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 final rule under the OMB 
and DOE guidelines and has concluded that it is consistent with 
applicable policies in those guidelines.

K. Review Under Executive Order 13211

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

L. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (OSTP), issued its Final Information 
Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 
2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as ``scientific information 
the agency reasonably can determine will have, or does have, a clear 
and substantial impact on important public policies or private sector 
decisions.'' 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

[[Page 632]]

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.

M. Congressional Notification

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

VII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this final 
rule.

List of Subjects

10 CFR Part 429

    Confidential business information, Energy conservation, Household 
appliances, Imports, Reporting and recordkeeping requirements.

10 CFR Part 430

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

    Issued in Washington, DC, on December 17, 2015.
David T. Danielson,
Assistant Secretary, Energy Efficiency and Renewable Energy.
    For the reasons set forth in the preamble, DOE amends parts 429 and 
430 of chapter II, subchapter D, of title 10 of the Code of Federal 
Regulations as set forth below:

PART 429--CERTIFICATION, COMPLIANCE, AND ENFORCEMENT FOR CONSUMER 
PRODUCTS AND COMMERCIAL AND INDUSTRIAL EQUIPMENT

0
1. The authority citation for part 429 continues to read as follows:

    Authority:  42 U.S.C. 6291-6317.

0
2. Section 429.33 is amended by revising the introductory text of 
paragraph (a)(3) to read as follows:


Sec.  429.33  Ceiling fan light kits.

    (a) * * *
    (3) For ceiling fan light kits that require compliance with the 
January 7, 2019 energy conservation standards:
* * * * *

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

0
3. 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
4. Section 430.23 is amended by revising the introductory text of 
paragraph (x)(2) to read as follows:


Sec.  430.23  Test procedures for the measurement of energy and water 
consumption.

* * * * *
    (x) * * *
    (2) For each ceiling fan light kit that requires compliance with 
the January 7, 2019 energy conservation standards:
* * * * *

0
5. Section 430.32 is amended by:
0
a. Revising the introductory text of paragraphs (s)(2) and (3);
0
b. Revising paragraph (s)(4); and
0
c. Adding paragraph (s)(5).
    The addition and revisions read as follows:


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

* * * * *
    (s) * * *
    (2) Ceiling fan light kits manufactured on or after January 1, 
2007, and prior to January 7, 2019, with medium screw base sockets must 
be packaged with medium screw base lamps to fill all sockets. These 
medium screw base lamps must--
* * * * *
    (3) Ceiling fan light kits manufactured on or after January 1, 
2007, and prior January 7, 2019, 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:
* * * * *
    (4) Ceiling fan light kits manufactured on or after January 1, 
2009, and prior to January 7, 2019, with socket types other than those 
covered in paragraphs (s)(2) or (3) of this section, including 
candelabra screw base sockets, must be packaged with lamps to fill all 
sockets and must not be capable of operating with lamps that total more 
than 190 watts.
    (5) Ceiling fan light kits manufactured on or after January 7, 2019 
must be packaged with lamps to fill all sockets, and each basic model 
of lamp packaged with the basic model of CFLK and each basic model of 
integrated SSL in the CFLK basic model shall meet the requirements 
shown in the table:

------------------------------------------------------------------------
              Lumens \1\                Minimum required efficacy (lm/W)
------------------------------------------------------------------------
<120.................................  50
>=120................................  (74.0-29.42 x 0.9983 \lumens\)
------------------------------------------------------------------------
\1\ Use the lumen output for each basic model of lamp packaged with the
  basic model of CFLK or each basic model of integrated SSL in the CFLK
  basic model to determine the applicable standard.

    (i) Ceiling fan light kits with medium screw base sockets 
manufactured on or after January 7, 2019 and packaged with compact 
fluorescent lamps must include lamps that also meet the following 
requirements:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Lumen Maintenance at 1,000 hours.......  >=90.0%.
Lumen Maintenance at 40 Percent of       >=80.0%.
 Lifetime.
Rapid Cycle Stress Test................  Each lamp must be cycled once
                                          for every 2 hours of lifetime
                                          of compact fluorescent lamp as
                                          defined in Sec.   430.2. At
                                          least 5 lamps must meet or
                                          exceed the minimum number of
                                          cycles.
Lifetime...............................  >=6,000 hours for the sample of
                                          lamps.
------------------------------------------------------------------------

    (ii) Ceiling fan light kits with pin based sockets for fluorescent 
lamps, manufactured on or after January 7, 2019, must also use an 
electronic ballast.
* * * * *

    Note:  The following attachment will not appear in the Code of 
Federal Regulations.

U.S. DEPARTMENT OF JUSTICE

Antitrust Division

RFK Main Justice Building 950 Pennsylvania Avenue NW., Washington, 
DC 20530-0001, (202) 514-2401/(202) 616-2645 (Fax)

October 13, 2015

Anne Harkavy
Deputy General Counsel
For Litigation, Regulation and Enforcement

[[Page 633]]

Department of Energy
Washington, DC 20585

Dear Deputy General Counsel Harkavy:

    I am responding to your letter of October 2, 2015 seeking the 
views of the Attorney General about the potential impact on 
competition of proposed amended energy conservation standards for 
Ceiling Fan Light Kits. Your request was submitted under Section 325 
(o)(2)(B)(i)(V) of the Energy Policy and Conservation Act, as 
amended (EPCA), 42 U.S.C. 6295(o)(2)(B)(i)(V), which requires the 
Attorney General to make a determination of the impact of any 
lessening of competition that is likely to result from the 
imposition of proposed energy conservation standards. The Attorney 
General's responsibility for responding to requests from other 
departments about the effect of a program on competition has been 
delegated to the Assistant Attorney General for the Antitrust 
Division in 28 CFR 0.40(g).
    In conducting its analysis, the Antitrust Division examines 
whether a proposed standard may lessen competition, for example, by 
substantially limiting consumer choice or increasing industry 
concentration. A lessening of competition could result in higher 
prices to manufacturers and consumers.
    We have reviewed the proposed standards contained in the Notice 
of Proposed Rulemaking published in the Federal Register (80 FR 156, 
at 48624-48682, August 13, 2015) (NOPR). We have also reviewed 
supplementary information submitted to the Attorney General by the 
Department of Energy, including the Technical Support Document, and 
reviewed industry source material.
    Based on this review, our conclusion is that the proposed 
amended energy conservation standards set forth in the NOPR for 
Ceiling Fan Light Kits are unlikely to have a significant adverse 
impact on competition.

Sincerely,

William J. Baer

[FR Doc. 2015-33071 Filed 1-5-16; 8:45 am]
 BILLING CODE 6450-01-P