[Federal Register Volume 84, Number 117 (Tuesday, June 18, 2019)]
[Proposed Rules]
[Pages 28239-28259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-12761]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 84, No. 117 / Tuesday, June 18, 2019 / 
Proposed Rules  

[[Page 28239]]



DEPARTMENT OF ENERGY

10 CFR Part 431

[EERE-2019-BT-STD-0018]


Energy Conservation Program: Energy Conservation Standards for 
Distribution Transformers

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

ACTION: Request for information.

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

SUMMARY: The U.S. Department of Energy (``DOE'') is initiating an 
effort to determine whether to amend the current energy conservation 
standards for distribution transformers. Under the Energy Policy and 
Conservation Act of 1975, as amended, DOE must review these standards 
at least once every six years and publish either a notice of proposed 
rulemaking (``NOPR'') to propose new standards for distribution 
transformers or a notice of determination that the existing standards 
do not need to be amended. This request for information (``RFI'') 
solicits information from the public to help DOE determine whether 
amended standards for distribution transformers would result in 
significant energy savings and whether such standards would be 
technologically feasible and economically justified. DOE welcomes 
written comments from the public on any subject within the scope of 
this document (including topics not raised in this RFI).

DATES: Written comments and information are requested and will be 
accepted on or before August 2, 2019.

ADDRESSES: Interested persons are encouraged to submit comments using 
the Federal eRulemaking Portal at http://www.regulations.gov. Follow 
the instructions for submitting comments. Alternatively, interested 
persons may submit comments, identified by docket number EERE-2019-BT-
STD-0018, by any of the following methods:
    1. Federal eRulemaking Portal: http://www.regulations.gov. Follow 
the instructions for submitting comments.
    2. Email: [email protected]. Include 
the docket number EERE-2019-BT-STD-0018 in the subject line of the 
message.
    3. Postal Mail: Appliance and Equipment Standards Program, U.S. 
Department of Energy, Building Technologies Office, Mailstop EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: 
(202) 287-1445. If possible, please submit all items on a compact disc 
(``CD''), in which case it is not necessary to include printed copies.
    4. Hand Delivery/Courier: Appliance and Equipment Standards 
Program, U.S. Department of Energy, Building Technologies Office, 950 
L'Enfant Plaza SW, 6th Floor, Washington, DC 20024. Telephone: (202) 
287-1445. If possible, please submit all items on a CD, in which case 
it is not necessary to include printed copies.
    No telefacsimilies (faxes) will be accepted. For detailed 
instructions on submitting comments and additional information on this 
process, see section III of this document.
    Docket: The docket for this activity, which includes Federal 
Register notices, comments, and other supporting documents/materials, 
is available for review at http://www.regulations.gov. All documents in 
the docket are listed in the http://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.
    The docket web page can be found at http://www.regulations.gov/#docketDetail;D=EERE-2019-BT-STD-0018. The docket web page contains 
instructions on how to access all documents, including public comments, 
in the docket. See section III for information on how to submit 
comments through http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: 
    Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: 
(202) 586-9870. Email: [email protected].
    Ms. Sarah Butler, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. 
Telephone: (202) 586-1777. Email: [email protected].
    For further information on how to submit a comment or review other 
public comments and the docket contact the Appliance and Equipment 
Standards Program staff at (202) 287-1445 or by email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
    A. Authority and Background
    B. Rulemaking Process
    C. Summary of the Impacts of the Amorphous Steel Market on the 
Current Standards for Liquid-Immersed Distribution Transformers
    D. Summary of the Impacts of the Steel Market on the Current 
Standards for Low-Voltage Dry-Type Distribution Transformers
II. Request for Information and Comments
    A. Equipment Covered by This Process
    B. Market and Technology Assessment
    1. Equipment Classes
    2. Technology Assessment
    3. Electrical Steel Market Assessment
    C. Screening Analysis
    D. Engineering Analysis
    1. General Methodology
    2. Price Inputs to Analysis
    3. Load Loss Scaling
    E. Distribution Channels
    1. Liquid-Immersed Distribution Transformers
    2. Dry-Type Distribution Transformers
    F. Energy Use Analysis
    1. Hourly Load Analysis
    2. Monthly Load Analysis
    G. Life-Cycle Cost and Payback Period Analysis
    1. Base-Case Efficiency Distributions
    2. Installation Costs
    3. Electricity Prices
    4. Future Electricity Prices
    H. Shipments
    1. Equipment Lifetimes
    2. Purchase Price Elasticity and Refurbished Transformers
    I. Manufacturer Impact Analysis
    J. Other Energy Conservation Standards Topics
    1. Market Failures
    2. Emerging Smart Technology Market
    3. Other
III. Submission of Comments

[[Page 28240]]

I. Introduction

A. Authority and Background

    The Energy Policy and Conservation Act of 1975, as amended 
(``EPCA''),\1\ among other things, authorizes DOE to regulate the 
energy efficiency of a number of consumer products and certain 
industrial equipment. (42 U.S.C. 6291-6317) Title III, Part C \2\ of 
EPCA, added by Public Law 95-619, Title IV, section 441(a), established 
the Energy Conservation Program for Certain Industrial Equipment, which 
sets forth a variety of provisions designed to improve energy 
efficiency. This equipment includes distribution transformers, the 
subject of this RFI. Congress directed DOE to prescribe energy 
conservation standards for such equipment. (42 U.S.C. 6317(a)(2)) 
Congress also established energy conservation standards for low-voltage 
dry-type distribution transformers. (42 U.S.C. 6295(y))
---------------------------------------------------------------------------

    \1\ All references to EPCA in this document refer to the statute 
as amended through America's Water Infrastructure Act of 2018, 
Public Law 115-270 (October 23, 2018).
    \2\ For editorial reasons, upon codification in the U.S. Code, 
Part C was redesignated Part A-1.
---------------------------------------------------------------------------

    The energy conservation program under EPCA consists essentially of 
four parts: (1) testing, (2) labeling, (3) Federal energy conservation 
standards, and (4) certification and enforcement procedures. Relevant 
provisions of EPCA include definitions (42 U.S.C. 6311), energy 
conservation standards (42 U.S.C. 6313), test procedures (42 U.S.C. 
6314), labeling provisions (42 U.S.C. 6315), and the authority to 
require information and reports from manufacturers (42 U.S.C. 6316). 
Federal energy efficiency requirements for covered equipment 
established under EPCA generally supersede State laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6316(a) and (b); 42 U.S.C. 6297)
    On October 12, 2007, DOE established energy conservation standards 
for liquid-immersed distribution transformers and medium-voltage, dry-
type (MVDT) distribution transformers. 72 FR 58190. The Energy Policy 
Act of 2005 (Pub. L. 109-58, EPACT 2005) amended EPCA to establish 
energy conservation standards for low-voltage dry-type (LVDT) 
distribution transformers.3 4 (42 U.S.C. 6295(y)) On April 
18, 2013, DOE amended the energy conservation standards for liquid-
immersed, MVDT, and LVDT distribution transformers.\5\ 78 FR 23335 
(``April 2013 standards rule'').
---------------------------------------------------------------------------

    \3\ EPACT 2005 established that the efficiency of a low-voltage 
dry-type distribution transformer manufactured on or after January 
1, 2007 shall be the Class I Efficiency Levels for distribution 
transformers specified in Table 4-2 of the ``Guide for Determining 
Energy Efficiency for Distribution Transformers'' published by the 
National Electrical Manufacturers Association (NEMA TP 1-2002).
    \4\ Although certain provisions pertaining to distribution 
transformers, including test procedures and standards for LVDT 
distribution transformers, have been established in the part of EPCA 
generally applicable to consumer products (See, 42 U.S.C. 6291(35), 
6293(b)(10), 6295(y)), they are commercial equipment. Accordingly, 
DOE has established the regulatory requirements for distribution 
transformers, including LVDT distribution transformers, in 10 CFR 
part 431, Energy Efficiency Program for Certain Commercial and 
Industrial Equipment. See, 70 FR 60407 (October 18, 2005).
    \5\ The Technical Support Document for the April 2013 standards 
rule is available at the following: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    The amended energy conservation standards in the April 2013 
standards rule were informed by a series of negotiated rulemaking 
sessions. DOE established subcommittees under DOE's Energy Efficiency 
and Renewable Energy Advisory Committee (ERAC), in accordance with the 
Federal Advisory Committee Act and the Negotiated Rulemaking Act, to 
negotiate proposed standards for the energy efficiency of MVDT and 
liquid-immersed distribution transformers, and LVDT distribution 
transformers, separately. 76 FR 45471 (July 29, 2011); 76 FR 50148 
(August 12, 2011). The ERAC subcommittees consisted of representatives 
of parties with a defined stake in the outcome of the energy 
conservation standards. The ERAC subcommittee held multiple meetings to 
negotiate the energy conservation standards, wherein DOE presented both 
draft and revised engineering, life-cycle cost and national impact 
analyses and results, based on input from subcommittee members on a 
number of topics. The resulting April 2013 standards rule was informed 
by the content of the negotiation sessions. The negotiating committee 
reached an outright consensus regarding energy conservation standards 
for MVDT distribution transformers but not for liquid-immersed or LVDT 
distribution transformers. 78 FR 23346-22347.
    The current energy conservation standards are located in 10 CFR 
431.196. The currently applicable DOE test procedures for distribution 
transformers appear at 10 CFR part 431, subpart K, appendix A.
    EPCA also requires that, not later than 6 years after the issuance 
of any final rule establishing or amending a standard, DOE must 
evaluate the energy conservation standards for each type of covered 
equipment, including those at issue here, and publish either a notice 
of determination that the standards do not need to be amended based on 
the criteria established under 42 U.S.C. 6295(n)(2), or a NOPR 
including new proposed energy conservation standards based on the 
criteria at 42 U.S.C. 6295(o). (42 U.S.C. 6316(a); 42 U.S.C. 
6295(m)(1))
    If DOE determines not to amend a standard based on the statutory 
criteria, not later than 3 years after the issuance of a final 
determination not to amend standards, DOE must publish either a new 
determination that standards for the product do not need to be amended, 
or a NOPR including new proposed energy conservation standards. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(m)(3)(B)) If DOE decides to amend the 
standard based on the statutory criteria, DOE must publish a final rule 
not later than two years after energy conservation standards are 
proposed. (42 U.S.C. 6316(a); 42 U.S.C. 6295(m)(3)(A))
    DOE must publicize its analysis and determination to not amend 
standards or to propose standards and provide an opportunity for 
written comment. (42 U.S.C. 6316(a); 42 U.S.C. 6295(m)(2)) In making 
either determination, DOE must evaluate whether more stringent 
standards would (1) result in significant conservation of energy and 
(2) be both technologically feasible and economically justified. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(m)(1)(A)).
    DOE is publishing this RFI to collect data and information to 
inform its decision consistent with its obligations under EPCA.

B. Rulemaking Process

    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered equipment. EPCA requires that any new or 
amended energy conservation standard be designed to achieve the maximum 
improvement in energy or water efficiency that is technologically 
feasible and economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(A)) To determine whether a standard is economically 
justified, EPCA requires that DOE determine whether the benefits of the 
standard exceed its burdens by considering, to the greatest extent 
practicable, the following seven factors:
    (1) The economic impact of the standard on the manufacturers and 
consumers of the affected products;
    (2) The savings in operating costs throughout the estimated average 
life of the product compared to any increases in the initial cost, or 
maintenance expenses;
    (3) The total projected amount of energy and water (if applicable) 
savings

[[Page 28241]]

likely to result directly from the standard;
    (4) Any lessening of the utility or the performance of the 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. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(I)-() 
thrVII)).
    DOE fulfills these and other applicable requirements by conducting 
a series of analyses throughout the rulemaking process. Table I.1 shows 
the individual analyses that are performed to satisfy each of the 
requirements within EPCA.

      Table I.1-- EPCA Requirements and Corresponding DOE Analysis
------------------------------------------------------------------------
            EPCA requirement                Corresponding DOE analysis
------------------------------------------------------------------------
Technological feasibility..............   Market and Technology
                                          Assessment.
                                          Screening Analysis.
                                          Engineering Analysis.
Economic Justification:                  ...............................
1. Economic impact on manufacturers and   Manufacturer Impact
 consumers.                               Analysis.
                                          Life-Cycle Cost and
                                          Payback Period Analysis.
                                          Life-Cycle Cost
                                          Subgroup Analysis.
                                          Shipments Analysis.
2. Lifetime operating cost savings        Markups for Product
 compared to increased cost for the       Price Determination.
 product.
                                          Energy and Water Use
                                          Determination.
                                          Life-Cycle Cost and
                                          Payback Period Analysis.
3. Total projected energy savings......   Shipments Analysis.
                                          National Impact
                                          Analysis.
4. Impact on utility or performance....   Screening Analysis.
                                          Engineering Analysis.
5. Impact of any lessening of             Manufacturer Impact
 competition.                             Analysis.
6. Need for national energy and water     Shipments Analysis.
 conservation.
                                          National Impact
                                          Analysis.
7. Other factors the Secretary            Employment Impact
 considers relevant.                      Analysis.
                                          Utility Impact
                                          Analysis.
                                          Emissions Analysis.
                                          Monetization of
                                          Emission Reductions Benefits.
                                          Regulatory Impact
                                          Analysis.
------------------------------------------------------------------------

    As detailed throughout this RFI, DOE is publishing this document 
seeking input and data from interested parties to aid in the 
development of the technical analyses on which DOE will ultimately rely 
to determine whether (and if so, how) to amend the standards for 
distribution transformers.

C. Summary of the Impacts of the Amorphous Steel Market on the Current 
Standards for Liquid-Immersed Distribution Transformers

    In the April 2013 standards rule, DOE set energy conservation 
standards for liquid-immersed distribution transformers, LVDT 
distribution transformers, and MVDT distribution transformers. 75 FR 
23338. In its analyses of liquid-immersed distribution transformers, 
DOE considered seven sets of energy efficiency levels, referred to as 
trial standard levels (``TSL''). The levels represent increasingly 
stringent levels of energy conservation standards, numbered from TSL 1, 
the least stringent, to TSL 7, the most stringent. 78 FR 23397. DOE 
adopted TSL 1 energy conservation levels for liquid-immersed 
distribution transformers. DOE did not adopt energy efficiency levels 
more stringent than TSL 1 in part because of risks associated with 
limitations in the available supply of amorphous steel. At more 
stringent required standard levels DOE determined it likely that the 
market would transition entirely to the use of amorphous steel. 78 FR 
23415-23418. DOE was concerned that if this were the case, there might 
not have been a sufficient supply of amorphous steel to meet 
manufacturers' needs. Id.
    DOE determined that the burden of the risk that manufacturers would 
not be able to obtain the quantities of amorphous steel required to 
meet the higher efficiency requirement levels outweighed the benefits 
of adopting these efficiency levels. Id. This determination contributed 
to DOE's decision that the higher efficiency requirement levels were 
not economically justified. Id. Additionally, DOE acknowledged that 
although the industry could manufacture liquid-immersed distribution 
transformers at TSL 2 and TSL 3 from steels other than amorphous steel, 
amorphous steel was the cheapest design option for at least some of the 
transformer designs that were analyzed at these levels. 78 FR 23417-
23418. In the analysis that led up to the April 2013 standards rule, 
DOE identified only one supplier that produced amorphous steel in any 
significant volume. DOE expressed concern that this one supplier, 
together with others that might enter the market, would not be able to 
increase production of amorphous steel rapidly enough to supply the 
amounts that would be needed by transformer manufactures before the 
compliance date of January 1, 2016, if any energy efficiency levels 
higher than TSL 1 were adopted. 78 FR 23414-23421

D. Summary of the Impacts of the Steel Market on the Current Standards 
for Low-Voltage Dry-Type Distribution Transformers

    In its analyses of low-voltage dry-type distribution transformers 
for the April 2013 standards rule, DOE considered six sets of trial 
standard levels with increasingly stringent levels of energy 
conservation standards and adopted TSL 2 energy conservation levels. 78 
FR 23337. DOE did not adopt energy efficiency levels more stringent 
than TSL 2 for low-voltage dry-type distribution transformers in part 
because of risks associated with limitations in the available supply 
and

[[Page 28242]]

quality of M4, M3, and amorphous steels.\6\ 78 FR 23421. If DOE 
required more stringent levels of energy conservation in low-voltage 
dry-type distribution transformers, manufacturers of the transformers 
might have had to rely on M4, M3, or amorphous steels to meet those 
conservation standards. Id.
---------------------------------------------------------------------------

    \6\ These steels are among the most common grades used in 
manufacture of distribution transformers. M3 and M4 are examples of 
``conventional'' grain-oriented electrical steel, whereas amorphous 
is the lowest-loss grade and a practical necessity to reach the very 
highest efficiency levels.
---------------------------------------------------------------------------

    DOE was concerned that if the next most stringent energy 
conservation levels were adopted (TSL 3), then a significant number of 
small manufacturers would be unable to acquire the M4, M3 or higher 
quality steels in sufficient supply and quality to be able to compete. 
Id. DOE indicated that this risk to small manufacturers outweighed the 
benefits of adopting TSL 3 efficiency levels. Id. Additionally, DOE was 
concerned that small manufacturers might not be able to procure 
sufficient amounts of amorphous steel at competitive prices, if at all, 
if energy conservation levels TSL 4, TSL 5, or TSL 6 were adopted. Id. 
DOE indicated that the benefits of energy conservation levels TSL 4 
through TSL 6 would be outweighed in part by this potential burden on 
manufacturers. These determinations contributed to DOE's decision that 
efficiency requirement levels higher than TSL 2 were not economically 
justified. 78 FR 23419-23421.

II. Request for Information and Comments

    In the following sections, DOE has identified a variety of issues 
on which it seeks input to aid in the development of the technical and 
economic analyses regarding whether amended standards for distribution 
transformers may be warranted. Additionally, DOE welcomes comments on 
other issues relevant to the conduct of this rulemaking that may not 
specifically be identified in this document. In particular, DOE notes 
that under Executive Order 13771, ``Reducing Regulation and Controlling 
Regulatory Costs,'' Executive Branch agencies such as DOE are directed 
to manage the costs associated with the imposition of expenditures 
required to comply with Federal regulations. See 82 FR 9339 (Feb. 3, 
2017). Consistent with that Executive Order, DOE encourages the public 
to provide input on measures DOE could take to lower the cost of its 
energy conservation standards rulemakings, recordkeeping and reporting 
requirements, and compliance and certification requirements applicable 
to distribution transformers while remaining consistent with the 
requirements of EPCA.

A. Equipment Covered by This Process

    This RFI covers equipment that meets the definitions of 
distribution transformers, as codified at 10 CFR 431.192. The 
definitions for distribution transformers were most recently amended in 
an energy conservation standards final rule. 78 FR 23433. The current 
definition for a distribution transformer codified in 10 CFR 431.192 is 
the following:
    Distribution transformer means a transformer that--
    (1) Has an input voltage of 34.5 kV or less;
    (2) Has an output voltage of 600 V or less;
    (3) Is rated for operation at a frequency of 60 Hz; and
    (4) Has a capacity of 10 kVA to 2500 kVA for liquid-immersed units 
and 15 kVA to 2500 kVA for dry-type units; but
    (5) The term ``distribution transformer'' does not include a 
transformer that is an--
    (i) Autotransformer; (ii) Drive (isolation) transformer; (iii) 
Grounding transformer; (iv) Machine-tool (control) transformer; (v) 
Nonventilated transformer; (vi) Rectifier transformer; (vii) Regulating 
transformer; (viii) Sealed transformer; (ix) Special-impedance 
transformer; (x) Testing transformer; (xi) Transformer with tap range 
of 20 percent or more; (xii) Uninterruptible power supply transformer; 
or (xiii) Welding transformer.
    DOE notes that the excluded equipment listed above is specifically 
excluded from energy conservation standards under EPCA at 42 U.S.C. 
6291(35)(B)(ii)). Definitions for these terms are at 10 CFR 431.192 as 
follows:
    Autotransformer means a transformer that:
    (1) Has one physical winding that consists of a series winding part 
and a common winding part;
    (2) Has no isolation between its primary and secondary circuits; 
and
    (3) During step-down operation, has a primary voltage that is equal 
to the total of the series and common winding voltages, and a secondary 
voltage that is equal to the common winding voltage.
    Drive (isolation) transformer means a transformer that:
    (1) Isolates an electric motor from the line;
    (2) Accommodates the added loads of drive-created harmonics; and
    (3) Is designed to withstand the additional mechanical stresses 
resulting from an alternating current adjustable frequency motor drive 
or a direct current motor drive.
    Grounding transformer means a three-phase transformer intended 
primarily to provide a neutral point for system-grounding purposes, 
either by means of:
    (1) A grounded wye primary winding and a delta secondary winding; 
or
    (2) A transformer with its primary winding in a zig-zag winding 
arrangement, and with no secondary winding.
    Liquid-immersed distribution transformer means a distribution 
transformer in which the core and coil assembly is immersed in an 
insulating liquid.
    Machine-tool (control) transformer means a transformer that is 
equipped with a fuse or other over-current protection device, and is 
generally used for the operation of a solenoid, contactor, relay, 
portable tool, or localized lighting
    Medium-voltage dry-type distribution transformer means a 
distribution transformer in which the core and coil assembly is 
immersed in a gaseous or dry-compound insulating medium, and which has 
a rated primary voltage between 601 V and 34.5 kV.
    Mining distribution transformer means a medium-voltage dry-type 
distribution transformer that is built only for installation in an 
underground mine or surface mine, inside equipment for use in an 
underground mine or surface mine, on-board equipment for use in an 
underground mine or surface mine, or for equipment used for digging, 
drilling, or tunneling underground or above ground, and that has a 
nameplate which identifies the transformer as being for this use only.
    Nonventilated transformer means a transformer constructed so as to 
prevent external air circulation through the coils of the transformer 
while operating at zero gauge pressure.
    Rectifier transformer means a transformer that operates at the 
fundamental frequency of an alternating-current system and that is 
designed to have one or more output windings connected to a rectifier.
    Regulating transformer means a transformer that varies the voltage, 
the phase angle, or both voltage and phase angle, of an output circuit 
and compensates for fluctuation of load and input voltage, phase angle 
or both voltage and phase angle.
    Sealed transformer means a transformer designed to remain 
hermetically sealed under specified conditions of temperature and 
pressure.
    Special-impedance transformer means any transformer built to 
operate at an impedance outside of the normal

[[Page 28243]]

impedance range for that transformer's kVA rating. The normal impedance 
range for each kVA rating for liquid-immersed and dry-type transformers 
is shown in Table II.1 and Table II.2 of this document, respectively.

                Table II.1--Normal Impedance Ranges for Liquid-Immersed Distribution Transformers
----------------------------------------------------------------------------------------------------------------
                            Single-phase transformers                                Three-phase transformers
----------------------------------------------------------------------------------------------------------------
                               kVA                                 Impedance (%)        kVA        Impedance (%)
----------------------------------------------------------------------------------------------------------------
10..............................................................         1.0-4.5              15         1.0-4.5
15..............................................................         1.0-4.5              30         1.0-4.5
25..............................................................         1.0-4.5              45         1.0-4.5
37.5............................................................         1.0-4.5              75         1.0-5.0
50..............................................................         1.5-4.5           112.5         1.2-6.0
75..............................................................         1.5-4.5             150         1.2-6.0
100.............................................................         1.5-4.5             225         1.2-6.0
167.............................................................         1.5-4.5             300         1.2-6.0
250.............................................................         1.5-6.0             500         1.5-7.0
333.............................................................         1.5-6.0             750         5.0-7.5
500.............................................................         1.5-7.0           1,000         5.0-7.5
667.............................................................         5.0-7.5           1,500         5.0-7.5
833.............................................................         5.0-7.5           2,000         5.0-7.5
                                                                  ..............           2,500         5.0-7.5
----------------------------------------------------------------------------------------------------------------


                   Table II.2--Normal Impedance Ranges for Dry-Type Distribution Transformers
----------------------------------------------------------------------------------------------------------------
                            Single-phase transformers                                Three-phase transformers
----------------------------------------------------------------------------------------------------------------
                               kVA                                 Impedance (%)        kVA        Impedance (%)
----------------------------------------------------------------------------------------------------------------
15..............................................................         1.5-6.0              15         1.5-6.0
25..............................................................         1.5-6.0              30         1.5-6.0
37.5............................................................         1.5-6.0              45         1.5-6.0
50..............................................................         1.5-6.0              75         1.5-6.0
75..............................................................         2.0-7.0           112.5         1.5-6.0
100.............................................................         2.0-7.0             150         1.5-6.0
167.............................................................         2.5-8.0             225         3.0-7.0
250.............................................................         3.5-8.0             300         3.0-7.0
333.............................................................         3.5-8.0             500         4.5-8.0
500.............................................................         3.5-8.0             750         5.0-8.0
667.............................................................         5.0-8.0           1,000         5.0-8.0
833.............................................................         5.0-8.0           1,500         5.0-8.0
                                                                  ..............           2,000         5.0-8.0
                                                                  ..............           2,500         5.0-8.0
----------------------------------------------------------------------------------------------------------------

    Testing transformer means a transformer used in a circuit to 
produce a specific voltage or current for the purpose of testing 
electrical equipment.
    Transformer means a device consisting of 2 or more coils of 
insulated wire that transfers alternating current by electromagnetic 
induction from 1 coil to another to change the original voltage or 
current value.
    Transformer with tap range of 20 percent or more means a 
transformer with multiple voltage taps, the highest of which equals at 
least 20 percent more than the lowest, computed based on the sum of the 
deviations of the voltages of these taps from the transformer's nominal 
voltage.
    Uninterruptible power supply transformer means a transformer that 
is used within an uninterruptible power system, which in turn supplies 
power to loads that are sensitive to power failure, power sags, over 
voltage, switching transients, line noise, and other power quality 
factors.
    Welding transformer means a transformer designed for use in arc 
welding equipment or resistance welding equipment.
    Issue A.1: DOE requests comment on whether the definitions for 
distribution transformers require any revisions--and if so, how those 
definitions should be revised. In particular, DOE requests feedback 
regarding how closely the kVA and voltage limits mirror those of 
equipment generally considered to serve in a power distribution 
capacity. DOE also requests feedback on whether the sub-category 
definitions currently in place are appropriate or whether further 
modifications are needed. If these sub-category definitions need 
modifying, DOE seeks specific input on how to define these terms.
    Issue A.2: DOE requests comment on whether additional equipment 
definitions are necessary to close any potential gaps in coverage 
between equipment types. DOE also seeks input on whether such products 
currently exist in the market or whether they are being planned for 
introduction. DOE also requests comment on opportunities to combine 
equipment classes that could reduce regulatory burden.

B. Market and Technology Assessment

    The market and technology assessment that DOE routinely conducts 
when analyzing the impacts of a potential new or amended energy 
conservation standard provides information about the distribution 
transformers industry that will be used in DOE's analysis throughout 
the rulemaking process. DOE uses qualitative and quantitative 
information to characterize the structure of the industry and market. 
DOE identifies manufacturers, estimates market shares

[[Page 28244]]

and trends, addresses regulatory and non-regulatory initiatives 
intended to improve energy efficiency or reduce energy consumption, and 
explores the potential for efficiency improvements in the design and 
manufacturing of distribution transformers. DOE also reviews product 
literature, industry publications, and company websites. Additionally, 
DOE considers conducting interviews with manufacturers to improve its 
assessment of the market and available technologies for distribution 
transformers.
1. Equipment Classes
    When evaluating and establishing energy conservation standards, DOE 
may divide covered equipment into equipment classes by the type of 
energy used, or by capacity or other performance-related features that 
justify a different standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q)) In 
making a determination whether capacity or another 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 
deems appropriate. (Id.)
    There are currently eleven equipment classes for distribution 
transformers, one of which (mining transformers) is not presently 
subject to energy conservation standards. 10 CFR 431.196. Ten of the 
eleven equipment classes are determined according to the following 
characteristics: (1) Type of transformer insulation: Liquid-immersed or 
dry-type, (2) Number of phases: Single or three, (3) Voltage class: Low 
or medium (for dry-type only), and (4) Basic impulse insulation level 
(BIL) (for MVDT only). The eleventh equipment class is for mining 
transformers, which is a reserved equipment class but is not currently 
subject to energy conservation standards. 10 CFR 431.196(d). Table II.3 
of this document lists the current 11 equipment classes for 
distribution transformers.

                           Table II.3--Equipment Classes for Distribution Transformers
----------------------------------------------------------------------------------------------------------------
     EC          Insulation            Voltage              Phase             BIL rating           kVA range
----------------------------------------------------------------------------------------------------------------
1..........  Liquid-immersed...  Medium............  Single............  ...................  10-833 kVA.
2..........  Liquid-immersed...  Medium............  Three.............  ...................  15-2500 kVA.
3..........  Dry-type..........  Low...............  Single............  ...................  15-333 kVA.
4..........  Dry-type..........  Low...............  Three.............  ...................  15-1000 kVA.
5..........  Dry-type..........  Medium............  Single............  20-45kV............  15-833 kVA.
6..........  Dry-type..........  Medium............  Three.............  20-45kV............  15-2500 kVA.
7..........  Dry-type..........  Medium............  Single............  46-95kV............  15-833 kVA.
8..........  Dry-type..........  Medium............  Three.............  46-95kV............  15-2500 kVA.
9..........  Dry-type..........  Medium............  Single............  >=96kV.............  75-833 kVA.
10.........  Dry-type..........  Medium............  Three.............  >=96kV.............  225-2500 kVA.
            ----------------------------------------------------------------------------------------------------
11.........  Mining Distribution Transformers
----------------------------------------------------------------------------------------------------------------

    In the April 2013 standards rule, DOE added a definition for mining 
distribution transformers. 78 FR 23353-23354; 10 CFR 431.192. In 
deciding not to set standards for mining distribution transformers, DOE 
explained that mining transformers are subject to several constraints 
that are not usually concerns for transformers used in general power 
distribution. Specifically because space is critical in mines, an 
underground mining transformer may be at a considerable disadvantage in 
meeting an efficiency standard; these transformers must supply power at 
several output voltages simultaneously; and mining transformers in 
general perform a role that may differ from general power distribution 
in many regards, including lifetime, loading, and often the need to 
supply power at several voltages simultaneously. 78 FR 23353. DOE 
stated that it may consider establishing energy conservation standards 
for mining distribution transformers at a later date. 78 FR 23354. 
Specifically, DOE stated that it may set standards if it believes that 
these transformers are being purchased as a way to circumvent energy 
conservation standards for distribution transformers. Id.
    Issue B.1: DOE requests information on the sale and use of mining 
transformers, including information about the applications for which 
mining transformers are currently being used, manufacturers of mining 
transformers, sales data identifying end-users, and information about 
the selling price. DOE requests comment on whether the features of 
mining transformers specified in the regulatory definition limit its 
use to mining applications, or whether they can be repurposed for 
general, above-ground service. DOE also requests data characterizing 
the relative performance abilities of mining transformers. In addition, 
if use of mining transformers is observed in applications other than 
underground, DOE requests comments on whether there are any technical 
aspects of mining transformers that can be identified to improve DOE's 
definition of mining transformers.
    In the April 2013 standards rule, DOE also received several 
comments regarding potential new equipment class setting factors, in 
addition to those used to establish the equipment classes identified in 
Table II.3 of this document. 78 FR 23354-23359. Specifically, Table 
II.4 provides the potential equipment class setting factors (categories 
of transformers) that were identified. These potential class setting 
factors could, if warranted, be used to further subdivide the 
distribution transformers currently subject to standards, as well as 
any additional distribution transformers potentially considered in a 
future standards rulemaking. In the April 2013 standards rule, DOE 
determined that these categories of transformers did not warrant 
separate equipment classes, and accordingly, these transformers are 
subject to the existing equipment classes shown in Table II.3 of this 
document. DOE stated that it may consider establishing separate 
equipment classes for the same in the future.

[[Page 28245]]



      Table II.4--Potential Class Setting Factors for Distribution
                              Transformers
------------------------------------------------------------------------
       Transformer category                      Description
------------------------------------------------------------------------
Step-up transformers..............  Transformers that increase voltage
                                     from primary to secondary (more
                                     secondary winding turns than
                                     primary winding turns).
Pole-mounted transformers.........  Transformers that are mounted above-
                                     ground on poles.
Pad-mounted transformers..........  Transformers that are ground
                                     mounted, specifically in a locked
                                     steel cabinet mounted on a concrete
                                     pad.
Network transformers *............  Transformers that operate within a
                                     grid configuration and connect end
                                     loads to multiple distribution
                                     transformers simultaneously; often
                                     used for redundancy and in densely
                                     populated areas.
Vault-based transformers *........  Transformers that have features
                                     unique to operation in a vault,
                                     which is a fully-enclosed chamber
                                     dedicated to housing the
                                     transformer and is not easily
                                     expandable.
Submersible transformers *........  Transformers that are able to
                                     maintain indefinite rated operation
                                     while submerged.
Transformers with multi-voltage     Transformers that are able to be
 capacity.                           reconfigured to accommodate
                                     different primary and secondary
                                     voltages, in addition to those that
                                     can provide multiple voltages
                                     simultaneously.
------------------------------------------------------------------------
* There may be considerable overlap between ``network,'' ``vault-
  based,'' and ``submersible'' transformers, i.e., transformers with one
  of the three properties may often have another. However, they are
  separated here as they are not always linked and carry different
  features and limitations.

    Issue B.2: DOE requests comment on whether equipment subject to 
present and potential future energy conservation standards should be 
classified based on the factors presented in Table II.4 in any 
potential future energy conservation standards rulemaking. If so, DOE 
requests information on (i) which new equipment class(es) should be 
included, and, (ii) how the performance-related features of equipment 
in the class affect both consumer utility and efficiency. Additionally, 
DOE requests comment on whether DOE should consider additional 
equipment classes not identified in the table, information on the 
performance-related features that provide unique consumer utility, and 
data detailing the corresponding impacts on energy use that would 
justify separate equipment classes.
    Lastly, DOE also received comments from several stakeholders 
indicating BIL affects efficiency in liquid-immersed distribution 
transformers. 78 FR 23357-23358. Specifically, some commenters 
suggested setting separate energy conservation standards based on BIL 
for liquid-immersed distribution transformers. 78 FR 23357. Commenters 
stated that standards by BIL rating will help differentiate 
transformers that require more insulation and that are less efficient. 
Id. Several other stakeholders supported the concept of exploring how 
BIL affects efficiency but felt that it was not a significant enough 
issue to delay publication of the rule. Id. Specifically, commenters 
stated that the efficiency levels under consideration do not warrant 
separating by BIL and pointed out that the efficiency impacts of varied 
BIL were smaller in liquid-immersed than in dry-type transformers. Id. 
While DOE did not include equipment class by BIL rating in the April 
2013 standards rule because DOE did not find a strong technological 
need for such separation at the efficiency levels under consideration, 
DOE did state that it may consider establishing equipment classes by 
BIL rating when considering future standards. 78 FR 23357-23358
    Issue B.3: DOE requests comment on whether separate equipment 
classes by BIL rating should be considered for liquid-immersed 
distribution transformers. If so, please describe why and provide 
information to characterize the effect of BIL on performance.
2. Technology Assessment
    In analyzing the feasibility of potential new or amended energy 
conservation standards, DOE uses information about existing and past 
technology options and prototype designs to help identify technologies 
that manufacturers could use to meet and/or exceed a given set of 
energy conservation standards under consideration. In consultation with 
interested parties, DOE intends to develop a list of technologies to 
consider in its analysis. That analysis will likely include a number of 
the technology options DOE previously considered during its most recent 
rulemaking for distribution transformers.
    In the April 2013 standards rule, DOE identified several technology 
options and designs considered under that rulemaking.\7\ 78 FR 23359. 
Increases in transformer efficiency are based on reduction of 
transformer losses. There are two main types of losses in transformers: 
No-load (core) losses and load (winding) losses. Measures taken to 
reduce one type of loss typically increase the other type of loss. Some 
examples of technology options to improve efficiency include: (1) 
Higher-grade electrical core steels, (2) different conductor types and 
materials, and (3) adjustments to core and coil configurations. A 
summary of the technology options from the April 2013 standards rule 
are presented in Table II.5 and Table II.6 of this document.
---------------------------------------------------------------------------

    \7\ A more detailed discussion can be found in section 3.8 of 
chapter 3, and chapter 4 of the April 2013 standards rule Technical 
Support Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.

  Table II.5--Previously Considered Technology Options and Impacts of Increasing Transformer Efficiency for the
                                            April 2013 Standards Rule
----------------------------------------------------------------------------------------------------------------
                                           No-load losses             Load losses              Cost impact
----------------------------------------------------------------------------------------------------------------
To decrease no-load losses:
    Use lower-loss core materials...  Lower...................  No change *............  Higher.
    Decrease flux density by:
        Increasing core cross-        Lower...................  Higher.................  Higher.
         sectional area (CSA).
        Decreasing volts per turn...  Lower...................  Higher.................  Higher.
    Decrease flux path length by      Lower...................  Higher.................  Lower.
     decreasing conductor CSA.
    Use 120[deg] symmetry in three-   Lower...................  No change..............  TBD.
     phase cores **.

[[Page 28246]]

 
To decrease load losses:
    Use lower-loss conductor          No change...............  Lower..................  Higher.
     material.
    Decrease current density by       Higher..................  Lower..................  Higher.
     increasing conductor CSA.
    Decrease current path length by:
        Decreasing core CSA.........  Higher..................  Lower..................  Lower.
        Increasing volts per turn...  Higher..................  Lower..................  Lower.
----------------------------------------------------------------------------------------------------------------
* Amorphous core materials would result in higher load losses because flux density drops, requiring a larger
  core volume.
** Sometimes referred to as a ``hexa-transformer'' design.


 Table II.6--Other Previously Considered Technology Options in the April
                          2013 Standards Rule *
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Silver as a Conductor Material
High-Temperature Superconductors
Amorphous Core Material in Stacked Core Configuration
Carbon Composite Materials for Heat Removal
High-Temperature Insulating Material
Solid-State (Power Electronics) Technology
Nanotechnology Composites
------------------------------------------------------------------------
* Note: These technology options were not listed as such in the April
  2013 standards rule because they were removed in the screening
  analysis.

    Issue B.4: DOE requests comment on the technologies listed in Table 
II.5 and Table II.6 of this document regarding their applicability to 
the current market, costs, and how these technologies may improve 
efficiency of distribution transformers as measured according to the 
DOE test procedure. DOE also seeks information on how these 
technologies and related costs may have changed since they were 
considered in the April 2013 standards rule. Specifically, DOE seeks 
information as to whether steel grades and fabrication techniques have 
been updated or improved since the April 2013 standards rule.
    In addition, DOE has also identified several potential new 
technology options that could improve efficiency of distribution 
transformers. These new technology options are presented in Table II.7 
of this document.

      Table II.7--Potential New Technology Options for Distribution
                              Transformers
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Core Deactivation
Symmetric Core
Less-flammable insulating liquids
------------------------------------------------------------------------

    Core deactivation technology uses a system of smaller transformers 
to replace a single, larger transformer. For example, three 25 kVA 
transformers operating in parallel could replace a single 75 kVA 
transformer. A control unit constantly monitors the unit's power 
output, and based on the known efficiency of each combination of 
transformers for any given loading, the control unit operates the 
optimal number of cores. In the April 2013 standards rule, DOE stated 
that although core deactivation technology has some potential to save 
energy over a real-world loading cycle, those savings might not be 
represented in the current DOE test procedure, and that each of the 
constituent transformers must comply with the applicable energy 
conservation standard.\8\ 78 FR 23360.
---------------------------------------------------------------------------

    \8\ A more detailed discussion can be found on page 3-28 of 
chapter 3 of the April 2013 standards rule Technical Support 
Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    Symmetric core technology describes a design strategy wherein each 
leg of the transformer is connected to the other two. It uses a 
continuously wound core with 120-degree radial symmetry, resulting in a 
triangularly shaped core when viewed from above. Because of zero-
sequence fluxes \9\ associated with wye-wye connected transformers, 
symmetric core designs may be best suited to delta-delta or delta-wye 
connections. In the April 2013 standards rule, DOE lacked the data 
necessary to perform a thorough engineering analysis of symmetric core 
designs, and therefore did not consider symmetric core technology for 
the rulemaking.\10\ 78 FR 23360-23362.
---------------------------------------------------------------------------

    \9\ ``Zero-sequence'' is a term used to describe a state in 
which flux among a transformer's three electrical phases is 
occurring simultaneously, rather than at the usual staggered 
intervals. In this state, damage or failure can be mitigated if both 
connections (i.e., input and output) are of the delta arrangement.
    \10\ A more detailed discussion can be found on page 3-29 of 
chapter 3 of the April 2013 standards rule Technical Support 
Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    Less-flammable insulating liquid technology is specific to liquid-
immersed distribution transformers and refers to filling these 
transformers with an insulating fluid of higher flash point \11\ than 
that of traditional mineral oil. This technology can benefit certain 
applications in which a fire would be especially costly. In the April 
2013 standards rule, DOE considered whether this technology might be 
disproportionally affected by standards set in the liquid-immersed 
equipment class and concluded that was not likely to be the case. 
Specifically, DOE received some feedback suggesting that less-flammable 
insulating liquids might be capable of higher efficiencies than mineral 
oil units because their higher temperature tolerances may allow the 
unit to be downsized and operated at higher temperatures than those 
using mineral oils.\12\ 78 FR 23355.
---------------------------------------------------------------------------

    \11\ The flash point is the lowest temperature at which vapors 
above the fluid will ignite, given an ignition source.
    \12\ A more detailed discussion can be found on page 3-24 of 
chapter 3, and page 5-22 of chapter 5 of the April 2013 standards 
rule Technical Support Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    Issue B.5: DOE requests comment on the technologies listed in Table 
II.7 of this document. Specifically, DOE seeks information about 
technological maturity, market adoption, costs, and any related 
concerns (e.g., impacts on consumer utility). DOE further requests 
comment on its definition of core deactivation technology as a system 
of distribution transformers. DOE also seeks comment on other 
technology options that it should consider for inclusion in its 
analysis.
    Issue B.6: DOE seeks comment on whether there have been sufficient 
technological or market changes since the most recent standards update 
that may justify a new rulemaking to consider more stringent standards. 
Specifically, DOE seeks data and information that could enable the 
agency to determine whether DOE should propose a ``no new standard'' 
determination because a more stringent standard: 1. would not result in 
a significant savings of energy; 2. is not technologically feasible; 3. 
is not

[[Page 28247]]

economically justified; or 4. any combination of the foregoing.
3. Electrical Steel Market Assessment
a. Amorphous Steel--Producers
    In its preliminary review of the amorphous steel market, DOE 
identified at least six companies with amorphous steel mills either 
already in production or at some stage of development. While DOE is 
aware of only one producer of amorphous ribbon in the United States; 
three companies in China have each recently increased their production 
capacity; one corporation has built a plant in South Korea and plans to 
enter the amorphous steel market; and an additional corporation 
produces at least some amorphous steel. DOE has found no indication 
that either of the two domestic electrical steel production companies 
have any plans to enter the amorphous steel market.
    Issue B.7: DOE seeks comments, data, and information regarding 
current producers of amorphous steel and any barriers to entry by other 
producers or factors that could lead existing producers to exit the 
amorphous steel market. Comments may include, but are not limited to, 
identifying producers of amorphous steel not already identified in 
DOE's preliminary review of the amorphous steel market, and anticipated 
future trends in producers entering and exiting this market.
b. Amorphous Steel--Production Capacity
    In its preliminary analysis of the steel market, DOE identified the 
quantity of amorphous steel produced by some of the companies currently 
in production. The global annual production capacity of amorphous 
ribbon of the one established producer is at least 100,000 tons of 
which 45,000 tons are located in the United States. Additionally, the 
three mills in China have recently increased their collective annual 
production capacity to 90,000 tons of amorphous steel and had plans, as 
of September 2016, to add an additional 40,000 to 50,000 tons in 2016.
    Issue B.8: DOE seeks comments, data, and information quantifying 
and characterizing the current market capacity for amorphous steel, and 
potential changes in the production capacity as compared to current 
production capacity.
c. Amorphous Steel--Quality
    In its preliminary analysis of the steel market, DOE also 
identified improvements in the quality of amorphous steel produced by 
some of the steel makers. In particular, the brittleness, stacking 
factor, and flux density of the amorphous steel produced in China have 
been improved since the April 2013 standards rule was issued. 
Additionally, the three companies in China can all now produce 
amorphous steel in the same widths as available on the U.S. market.
    Issue B.9: DOE seeks comments, data, and information about historic 
trends in the quality of amorphous steel, the quality of the amorphous 
steel currently in production as it pertains to use in manufacturing 
energy-efficient distribution transformers. Additionally, DOE seeks 
comments, data, and information about any planned changes in the 
quality of amorphous steel and potential future trends in the quality 
of amorphous steel.
d. Non-Amorphous Steel--Market Conditions
    In its preliminary review of the core steel market, DOE identified 
an increase in the use by transformer manufacturers of high 
permeability steels rather than M3 steel, which has resulted, in part, 
due to efficiency standards in the United States, the European Union, 
and India as well as China's efforts to improve the efficiency of its 
electricity grid.
    Issue B.10: DOE seeks comments, data, and information about changes 
in the market conditions for low-voltage, dry-type distribution 
transformers that could inform DOE's decision to reevaluate the current 
energy conservation standards including any changes in the availability 
and quality of M4, M3, or other steels used in the manufacturing of 
efficient low-voltage dry-type distribution transformers.

C. Screening Analysis

    The purpose of the screening analysis is to evaluate the 
technologies that improve equipment efficiency to determine which 
technologies will be eliminated from further consideration and which 
will be passed to the engineering analysis for further consideration.
    DOE determines whether to eliminate certain technology options from 
further consideration based on the following criteria defined at 10 CFR 
part 430, subpart C, appendix A, 4(a)(4) and 5(b) as follows:
    (1) Technological feasibility. Technologies that are not 
incorporated in commercial products or in working prototypes will not 
be considered further.
    (2) Practicability to manufacture, install, and service. If it is 
determined that mass production of a technology in commercial products 
and reliable installation and servicing of the technology could not be 
achieved on the scale necessary to serve the relevant market at the 
time of the compliance date of the standard, then that technology will 
not be considered further.
    (3) Impacts on equipment utility or equipment availability. If a 
technology is determined to have significant adverse impact on the 
utility of the equipment to significant subgroups of consumers, or 
result in the unavailability of any covered equipment type with 
performance characteristics (including reliability), features, sizes, 
capacities, and volumes that are substantially the same as equipment 
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 will have significant adverse impacts on health or safety, 
it will not be considered further.
    Technology options identified in the technology assessment are 
evaluated against these criteria using DOE analyses and inputs from 
interested parties (e.g., manufacturers, trade organizations, and 
energy efficiency advocates). Technologies that pass through the 
screening analysis are referred to as ``design options'' in the 
engineering analysis. Technology options that fail to meet one or more 
of the four criteria are eliminated from consideration.
    Additionally, DOE notes that the four screening criteria do not 
directly address the propriety status of technology options. DOE only 
considers potential efficiency levels achieved through the use of 
proprietary designs in the engineering analysis if they are not part of 
a unique pathway to achieve that efficiency level (i.e., if there are 
other non-proprietary technologies capable of achieving the same 
efficiency level).
    Table II.8 summarizes the technology options that DOE screened out 
in the April 2013 standards rule, and the applicable screening 
criteria.

[[Page 28248]]



  Table II.8--Previously Screened Out Technology Options From the April
                        2013 Standards Rule \13\
------------------------------------------------------------------------
       Technology option excluded         Eliminating screening criteria
------------------------------------------------------------------------
Silver as a Conductor Material.........  Practicability to manufacture,
                                          install, and service.
High-Temperature Superconductors.......  Technological feasibility;
                                          Practicability to manufacture,
                                          install, and service.
Amorphous Core Material in Stacked Core  Technological feasibility;
 Configuration.                           Practicability to manufacture,
                                          install, and service.
Carbon Composite Materials for Heat      Technological feasibility.
 Removal.
High-Temperature Insulating Material...  Technological feasibility.
Solid-State (Power Electronics)          Technological feasibility;
 Technology.                              Practicability to manufacture,
                                          install, and service.
Nanotechnology Composites..............  Technological feasibility.
------------------------------------------------------------------------

    Issue C.1: DOE requests feedback on how the four screening criteria 
would relate to the possible technology options available for 
distribution transformers listed in section II.A of this document, and 
any other technologies not identified in this document.
---------------------------------------------------------------------------

    \13\ A more detailed discussion can be found in chapter 4 of the 
April 2013 standards rule Technical Support Document, available 
from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    Issue C.2: DOE seeks information on whether the technology options 
listed in section II.B.2 of this document would continue to be 
eliminated from further consideration based on the four screening 
criteria.

D. Engineering Analysis

    The engineering analysis estimates the cost-efficiency relationship 
of equipment at different levels of increased energy efficiency 
(``efficiency levels''). This relationship serves as the basis for the 
cost-benefit calculations for consumers, manufacturers, and the Nation. 
In determining the cost-efficiency relationship, DOE estimates the 
increase in manufacturer production cost (``MPC'') associated with 
increasing the efficiency of equipment above the baseline, up to the 
maximum technologically feasible (``max-tech'') efficiency level for 
each equipment class.
    DOE historically has used the following three methodologies to 
generate incremental manufacturing costs and establish efficiency 
levels (``ELs'') for analysis: (1) The design-option approach, which 
provides the incremental costs of adding to a baseline model design 
options that will improve its efficiency; (2) the efficiency-level 
approach, which provides the relative costs of achieving increases in 
energy efficiency levels, without regard to the particular design 
options used to achieve such increases; and (3) the cost-assessment (or 
reverse engineering) approach, which provides ``bottom-up'' 
manufacturing cost assessments for achieving various levels of 
increased efficiency, based on detailed cost data for parts and 
material, labor, shipping/packaging, and investment for models that 
operate at particular efficiency levels.

1. General Methodology

    In the April 2013, standards rule, DOE based its engineering 
analysis on a design-option approach, in which design software was used 
to assess the cost-efficiency relationship between various design 
option combinations.\14\ 78 FR 23364. DOE analyzed eleven equipment 
classes, as discussed in section II.B.1. DOE then further classified 
distribution transformers by their kVA rating, within each equipment 
class. These kVA ratings are essentially size categories, indicating 
the power handling capacity of the transformers. For the rulemaking, 
there was a total of 100 kVA ratings across all equipment classes.
---------------------------------------------------------------------------

    \14\ A more detailed discussion can be found on page 5-2 of 
chapter 5 of the April 2013 standards rule Technical Support 
Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    DOE recognized that it would be impractical to conduct a detailed 
engineering analysis on each kVA rating, and therefore developed an 
approach that simplified the analysis while retaining reasonable levels 
of accuracy. DOE found that many of the units share similar designs and 
construction methods and, on that basis, DOE simplified the analysis by 
creating engineering design lines (DLs), which group kVA ratings based 
on similar principles of design and construction. The DLs subdivide the 
equipment classes to improve the accuracy of the engineering analysis. 
These DLs differentiate the transformers by insulation type (liquid 
immersed or dry-type), number of phases (single or three), and primary 
insulation levels for medium-voltage dry-type distribution transformers 
(three different BIL levels).\15\ 78 FR 23364.
---------------------------------------------------------------------------

    \15\ A more detailed discussion of the structure of the 
engineering analysis can be found on page 5-1 of chapter 5 of the 
April 2013 standards rule Technical Support Document, available 
from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    After developing its DLs, DOE then selected one representative unit 
from each DL for study, greatly reducing the number of units for direct 
analysis. These representative units are listed in Table II.9 of this 
document.

                          Table II.9--Engineering Design Lines and Representative Units
----------------------------------------------------------------------------------------------------------------
                                          Type of distribution
      EC[thinsp]*             DL              transformer           kVA range          Representative unit
----------------------------------------------------------------------------------------------------------------
1......................            1  Liquid-immersed, single-          10-167  50 kVA, 65 [deg]C, single-phase,
                                       phase, rectangular tank.                  60Hz, 14400V primary, 240/120V
                                                                                 secondary, rectangular tank,
                                                                                 95kV BIL.
1......................            2  Liquid-immersed, single-          10-167  25 kVA, 65 [deg]C, single-phase,
                                       phase, round tank.                        60Hz, 14400V primary, 120/240V
                                                                                 secondary, round tank, 125 kV
                                                                                 BIL.
1......................            3  Liquid-immersed, single-         250-833  500 kVA, 65 [deg]C, single-
                                       phase.                                    phase, 60Hz, 14400V primary,
                                                                                 277V secondary, 150kV BIL.
2......................            4  Liquid-immersed, three-           15-500  150 kVA, 65 [deg]C, three-phase,
                                       phase.                                    60Hz, 12470Y/7200V primary,
                                                                                 208Y/120V secondary, 95kV BIL.

[[Page 28249]]

 
2......................            5  Liquid-immersed, three-         750-2500  1500 kVA, 65 [deg]C, three-
                                       phase.                                    phase, 60Hz, 24940GrdY/14400V
                                                                                 primary, 480Y/277V secondary,
                                                                                 125 kV BIL.
3......................            6  Dry-type, low-voltage,            15-333  25 kVA, 150 [deg]C, single-
                                       single-phase.                             phase, 60Hz, 480V primary, 120/
                                                                                 240V secondary, 10kV BIL.
4......................            7  Dry-type, low-voltage,            15-150  75 kVA, 150 [deg]C, three-phase,
                                       three-phase.                              60Hz, 480V primary, 208Y/120V
                                                                                 secondary, 10kV BIL.
4......................            8  Dry-type, low-voltage,          225-1000  300 kVA, 150 [deg]C, three-
                                       three-phase.                              phase, 60Hz, 480V Delta
                                                                                 primary, 208Y/120V secondary,
                                                                                 10kV BIL.
6......................            9  Dry-type, medium-voltage,         15-500  300 kVA, 150 [deg]C, three-
                                       three-phase, 20-45kV BIL.                 phase, 60Hz, 4160V Delta
                                                                                 primary, 480Y/277V secondary,
                                                                                 45kV BIL.
6......................           10  Dry-type, medium-voltage,       750-2500  1500 kVA, 150 [deg]C, three-
                                       three-phase, 20-45kV BIL.                 phase, 60Hz, 4160V primary,
                                                                                 480Y/277V secondary, 45kV BIL.
8......................           11  Dry-type, medium-voltage,         15-500  300 kVA, 150 [deg]C, three-
                                       three-phase, 46-95kV BIL.                 phase, 60Hz, 12470V primary,
                                                                                 480Y/277V secondary, 95kV BIL.
8......................           12  Dry-type, medium-voltage,       750-2500  1500 kVA, 150 [deg]C, three-
                                       three-phase, 46-95kV BIL.                 phase, 60Hz, 12470V primary,
                                                                                 480Y/277V secondary, 95kV BIL.
10.....................          13A  Dry-type, medium-voltage,         75-833  300 kVA, 150 [deg]C, three-
                                       three-phase, 96-150kV BIL.                phase, 60Hz, 24940V primary,
                                                                                 480Y/277V secondary, 125kV BIL.
10.....................          13B  Dry-type, medium-voltage,       225-2500  2000 kVA, 150 [deg]C, three-
                                       three-phase, 96-150kV BIL.                phase, 60Hz, 24940V primary,
                                                                                 480Y/277V secondary, 125kV BIL.
----------------------------------------------------------------------------------------------------------------
* There is not a 1:1 correspondence of equipment classes and design lines.

    Issue D.1: For each representative unit, DOE generated hundreds of 
unique designs by contracting with Optimized Program Services, Inc. 
(OPS), a software company specializing in transformer design. The OPS 
software used three primary inputs that it received from DOE: (1) A 
design option combination, which included core steel grade, primary and 
secondary conductor material, and core configuration; (2) a loss 
valuation combination; and (3) material prices. For each representative 
unit, DOE examined anywhere from 8 to 16 design option combinations and 
for each design option combination, the OPS software generated 518 
designs based on unique loss valuation combinations. These loss 
valuation combinations are known in industry as A and B evaluation 
combinations, and represent a commercial consumer's present value of 
future losses in a transformer core and winding, respectively. For each 
design option combination and A and B combination, the OPS software 
generated an optimized transformer design based on the material prices 
that were also part of the inputs. Consequently, DOE obtained thousands 
of transformer designs for each representative unit. The performance of 
these designs ranged in efficiency from a baseline level, equivalent to 
the current distribution transformer energy conservation standards, to 
a theoretical max-tech efficiency level. DOE requests comment on 
whether a future rulemaking, if initiated, should include a greater 
breadth or depth of engineering design simulations.
    After generating each design, DOE used the outputs of the OPS 
software to help create a manufacturer selling price (MSP). The 
material cost corresponding to the outputs of the OPS software, along 
with labor estimates, were marked up for scrap factors, factory 
overhead, shipping, and non-production costs to generate a MSP for each 
design. Thus, DOE obtained a cost versus efficiency relationship for 
each representative unit. Finally, after DOE generated the MSPs versus 
efficiency relationship for each representative unit, it extrapolated 
the results to the other, unanalyzed, kVA ratings within that same 
engineering design line.
    Issue D.2: DOE requests comment on whether its method of performing 
the engineering analysis should be maintained in any future rulemaking 
analysis, if conducted.
    Issue D.3: DOE requests comment on whether there are additional 
methods to establish the relationship between transformer selling price 
and efficiency. For example, DOE seeks comment on whether bid responses 
for publicly owned utilities would provide a representative design and 
pricing data to develop a more accurate cost-efficiency relationship 
and whether such data exists in sufficient volume at efficiency levels 
above the Federal minimum.

2. Price Inputs to Analysis

    As described at the beginning of this section, the main outputs of 
the engineering analysis are cost-efficiency relationships that 
describe the estimated increases in MPC associated with higher-
efficiency equipment for each analyzed equipment class. For 
distribution transformers, one of the inputs to the MPC is the 
materials costs. The primary material costs in distribution 
transformers come from electrical steel used for the core and the 
aluminum or copper conductor used for the primary and secondary 
winding. DOE attempted to account for the frequent fluctuation in price 
of these commodities by examining prices over multiple years.
    For the April 2013 standards rule, DOE used its estimates of both 
2010-year and 2011-year prices as reference cases for results. To 
construct materials price estimates, DOE spoke with manufacturers, 
suppliers, and industry experts to determine the prices paid for each 
raw material used in a distribution transformer. DOE developed an 
average materials price for the year based on the price a medium-to-
large manufacturer would pay.\16\ 78 FR 23367.
---------------------------------------------------------------------------

    \16\ A more detailed discussion can be found on page 5-40 of 
chapter 5 of the April 2013 standards rule Technical Support 
Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    The prices of aluminum and copper conductor, in particular, 
correlated strongly to the price of the underlying commodities, which 
are tracked in various public indices (e.g. the LME). As a result, 
extrapolation of 2010- and 2011-year prices using the index prices of a 
future time period may yield sufficiently accurate conductor prices for 
that time period. Extrapolation of past conductor prices may be more 
accurate than direct use of the index prices, as the latter do not 
include

[[Page 28250]]

transformer industry-specific costs such as drawing into wire and 
shipping.
    Issue D.4: DOE requests comment on whether metals price indices, 
such as those published by the London Metal Exchange (LME) and CME 
Group (e.g., the COMEX), may be reliably used to extrapolate 2010 and 
2011 prices to the present. DOE requests comment on whether there are 
any other price indices that should be considered. DOE also requests 
comment on the impact of tariffs on the price of raw materials used 
manufacturing distribution transformers.

a. Liquid-Immersed Transformers

    Table II.10 and Table II.11 respectively contain material price 
data for liquid-immersed distribution transformers relied upon in the 
April 2013 standards rule.\17\
---------------------------------------------------------------------------

    \17\ Materials prices for liquid-immersed distribution 
transformers were not presented in the final rule Federal Register 
notice, but can be found on page 5-42 of chapter 5 of the April 2013 
standards rule Technical Support Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.

 Table II.10--Typical Manufacturer's Material Prices for Liquid-Immersed
             Design Lines From the April 2013 Standards Rule
------------------------------------------------------------------------
          Item and description              2010 price      2011 price
------------------------------------------------------------------------
M6 core steel...........................            1.33            1.04
M5 core steel...........................            1.38            1.10
M4 core steel...........................            1.45            1.20
M3 core steel...........................            1.88            1.30
M3 Lite Carlite core steel..............            1.95            1.95
M2 core steel...........................            2.00            1.40
M2 Lite Carlite core steel..............            2.10            2.10
ZDMH (mechanically-scribed core steel)..            2.05            1.90
SA1 (amorphous)--finished core, volume              2.38            2.20
 production.............................
Copper wire, formvar, round #10-20......            4.87            4.87
Copper wire, enameled, round #7-10......            4.84            4.84
Copper wire, enameled, rectangular sizes            4.97            4.97
Aluminum wire, formvar, round #9-17.....            3.07            3.07
Aluminum wire, formvar, round #7-10.....            2.57            2.57
Copper strip, thickness range 0.02-0.045            4.97            4.97
Copper strip, thickness range 0.030-                4.97            4.97
 0.060..................................
Aluminum strip, thickness range 0.02-               2.08            2.08
 0.045..................................
Aluminum strip, thickness range 0.045-              2.08            2.08
 0.080..................................
Kraft insulating paper with diamond                 1.52            1.52
 adhesive...............................
Mineral oil.............................            3.35            3.35
Tank Steel..............................            0.38            0.38
------------------------------------------------------------------------


 Table II.11--Summary Table of Fixed Material Costs for Liquid-Immersed Units From the April 2013 Standards Rule
----------------------------------------------------------------------------------------------------------------
      Item and description              DL1             DL2             DL3             DL4             DL5
----------------------------------------------------------------------------------------------------------------
High voltage bushings...........             $28              $6              $6             $21             $60
Low voltage bushings............             $30              $8             $60             $24            $160
Core clamp, nameplate, and misc.           41.65           19.15           50.65           75.65          105.65
 hardware.......................
Transformer tank average cost *.            ~143             ~73            ~629            ~389          ~1,016
----------------------------------------------------------------------------------------------------------------

    Issue D.5: DOE requests comment on the prices of materials and 
labor used to construct liquid-immersed distribution transformers, 
including all grades of electrical steel, that are presented in section 
II.D.2.a. Such data may include data both in absolute terms and 
expressed relative to the 2010 and 2011 estimates from the April 2013 
standards rule.
b. Dry-Type Transformers
    Table II.12 and Table II.13 respectively contain material cost data 
for dry-type distribution transformers relied upon in the April 2013 
standards rule.\18\
---------------------------------------------------------------------------

    \18\ Materials prices for dry-type transformers were not 
presented in the final rule Federal Register notice, but can be 
found on page 5-44 of chapter 5 of the April 2013 standards rule 
Technical Support Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.

  Table II.12--Manufacturer's Material Prices for Dry-Type Design Lines
                   From the April 2013 Standards Rule
------------------------------------------------------------------------
          Item and description              2010 price      2011 price
------------------------------------------------------------------------
M36 core steel (26 gauge)...............            0.60            0.66
M19 core steel (26 gauge)...............            0.83            0.91
M12 core steel..........................            0.95            0.78
M6 core steel...........................            1.33            1.04
M5 core steel...........................            1.38            1.10
M4 core steel...........................            1.45            1.20
M3 core steel...........................            1.88            1.30

[[Page 28251]]

 
M2 core steel...........................            2.00            1.40
H-0 DR core steel (laser-scribed).......            2.06            1.70
SA1 (amorphous)--finished core, volume              2.38            2.20
 production.............................
Copper wire, rectangular 0.1 x 0.2,                 4.52            4.52
 Nomex wrapped..........................
Aluminum wire, rectangular 0.1 x 0.2,               2.97            2.97
 Nomex wrapped..........................
Copper strip, thickness range 0.02-0.045            4.97            4.97
Aluminum strip, thickness range 0.02-               2.08            2.08
 0.045..................................
Nomex insulation (per pound)............           24.50           24.50
Cequin insulation (per pound)...........            5.53            5.53
Impregnation (per gallon)...............           22.55           22.55
Winding Combs (per pound)...............           12.34           12.34
Enclosure Steel (per pound).............            0.38            0.38
------------------------------------------------------------------------


                        Table II.13--Summary Table of Fixed Material Costs for Dry-Type Units From the April 2013 Standards Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                         Item                            DL $6      DL $7      DL $8      DL $9      DL $10     DL $11     DL $12    DL $13A    DL $13B
--------------------------------------------------------------------------------------------------------------------------------------------------------
LV and HV terminals (set)............................          4        n/a        n/a         75        120        100        135        115        150
HV terminal board(s).................................        n/a         27         27         27         27         27         27         27         27
LV bus[dash]bar......................................        n/a      10.50      22.50         80        140         80        192        100        270
Core/coil mounting frame.............................       9.25         19         36         36        120         42        125         50        175
Additional Bracing...................................        n/a        n/a        n/a        n/a       ~230        n/a       ~270        n/a       ~330
Nameplate............................................       0.65       0.65       0.65       0.65       0.65       0.65       0.65       0.65       0.65
Dog-bone duct spacer (ft.)...........................       0.24       0.32       0.42       0.42       0.52       0.42       0.56       0.42       0.60
Winding combs (lb.)..................................        n/a        n/a        n/a        n/a        n/a      10.00      10.00      10.00      10.00
Misc. hardware.......................................       4.50          7         12         25         42         32         54         36         60
Enclosure (12, 14 gauge).............................        ~50        ~90       ~100       ~135       ~400       ~200       ~450       ~200       ~450
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Issue D.6: DOE requests comment on the prices of materials used to 
construct dry-type distribution transformers, including all grades of 
electrical steel, that are presented in section II.D.2.b. Such data may 
include data both in absolute terms and expressed relative to the 2010 
and 2011 estimates from the April 2013 standards rule.
c. Labor Markups
    Table II.14 contains labor cost data for both liquid-immersed and 
dry-type manufacturers relied upon in the April 2013 standards 
rule.\19\
---------------------------------------------------------------------------

    \19\ Labor markups were not presented in the final rule Federal 
Register notice, but can be found on page 5-49 of chapter 5 of the 
April 2013 standards rule Technical Support Document, available 
from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.

       Table II.14--Labor Markups for Liquid-Immersed and Dry-Type
                              Manufacturers
------------------------------------------------------------------------
                                              Markup       Rate per hour
            Item description                percentage          ($)
------------------------------------------------------------------------
Labor cost per hour *...................  ..............           16.80
Indirect Production **..................              33           22.35
Overhead ***............................              30           29.05
Fringe [dagger].........................              24           36.03
Assembly Labor Up[dash]time                           43           51.52
 [dagger][dagger].......................
Fully-Burdened Cost of Labor............              25           64.40
------------------------------------------------------------------------
* Cost per hour is from U.S. Census Bureau, 2007 Economic Census--
  Detailed Statistics, published October 2009. Data for NAICS code
  3353111 ``Power and distribution transformers, except parts''
  Production workers' hours and wages.
** Indirect production labor (e.g., production managers, quality
  control) as a percent of direct labor on a cost basis. Navigant
  Consulting, Inc. (NCI) estimate.
*** Overhead includes commissions, dismissal pay, bonuses, vacation,
  sick leave, and social security contributions. NCI estimate.
[dagger] Fringe includes pension contributions, group insurance premiums
  worker's compensation. Source: U.S. Census Bureau, 2007 Economic
  Census--Detailed Statistics, published October 2009. Data for NAICS
  code 3353111 ``Power and distribution transformers, except parts''
  Total fringe benefits as a percent of total compensation for all
  employees (not just production workers).
[dagger][dagger] Assembly labor up-time is a factor applied to account
  for the time that workers are not assembling units and/or reworking
  unsatisfactory units. The markup of 43 percent represents a 70 percent
  utilization (multiplying by 100/70). NCI estimate.

    Issue D.7: DOE requests comment on the prices of labor used to 
construct distribution transformers that are presented in section 
II.D.2.c. of this document. Such data may include data both in absolute 
terms and expressed relative to estimates from the April 2013 standards 
rule.
3. Load Loss Scaling
    Currently, DOE energy conservation standards apply only at a single 
per-unit load (PUL) value for a given distribution

[[Page 28252]]

transformer equipment class (e.g., 50% for liquid-immersed). 10 CFR 
431.196. However, distribution transformers exhibit varying efficiency 
with varying PUL.
    Distribution transformer loss is commonly separated into ``load'' 
and ``no-load'' components. The former is often approximated as a 
quadratic function of PUL, i.e., load losses grow in proportion to the 
square of PUL. 78 FR 23372. Transformers in service may deviate from 
this simplified assumption for a variety of reasons (e.g., temperature 
rise) and DOE is requesting comment on the nature and magnitude of that 
deviation.
    Issue D.8: DOE requests comment on how load losses vary as a 
function of per-unit load. Specifically, DOE seeks mathematical 
characterizations of load losses, expressed as a function of PUL. DOE 
is especially interested in learning about formulas that may be more 
accurate than the widely used quadratic approximation, and explanations 
of the bases of those formulas.

E. Distribution Channels

    In generating end-user price inputs for the life-cycle cost 
(``LCC'') analysis and national impact analysis (``NIA''), DOE must 
identify distribution channels (i.e., how the products are distributed 
from the manufacturer to the consumer), and estimate relative sales 
volumes through each channel Markups depend on the distribution 
channels for the different equipment classes and consumer types, for 
both new construction and replacement equipment. In the April 2013 
standards rule, DOE characterized these distribution channels as 
described in the following sections and shown in Table II.15 of this 
document.
1. Liquid-Immersed Distribution Transformers
    DOE assumed for liquid-immersed distribution transformers sold to 
investor-owned utilities (IOUs) that 82 percent of sales were direct 
from the manufacturer to a utility consumer through a national account, 
and the remaining 18 percent of sales were through a transformer 
distributor.\20\ 78 FR 23371. For liquid-immersed distribution 
transformers sold to publicly owned utilities, DOE assumed that all 
sales were through a transformer distributor.\21\
---------------------------------------------------------------------------

    \20\ A more detailed discussion can be found on page 6-7 of 
chapter 6 of the April 2013 standards rule Technical Support 
Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
    \21\ Distribution channels are discussed in detail on page 6-1 
of chapter 6 of the April 2013 standards rule Technical Support 
Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

2. Dry-Type Distribution Transformers
    In the April 2013 rule, DOE assumed dry-type distribution 
transformers were installed by an electrical contractor. An electrical 
contractor usually purchases the distribution transformer from a 
distributor, and in this case, DOE assumed it was appropriate to 
include a contractor markup.

                        Table II.15--Distribution Channels for Distribution Transformers
----------------------------------------------------------------------------------------------------------------
                                                                    Market share
                 Type                            Consumer                (%)            Distribution channel
----------------------------------------------------------------------------------------------------------------
Liquid-immersed.......................  Investor-owned utility...              82  Manufacturer (National
                                                                                    Account) [rarr] Consumer.
                                                                               18  Manufacturer [rarr]
                                                                                    Distributor [rarr] Consumer.
                                        Publicly-owned utility...             100  Manufacturer [rarr]
                                                                                    Distributor [rarr] Consumer.
LVDT..................................  All......................             100  Manufacturer [rarr]
                                                                                    Distributor [rarr]
                                                                                    Electrical contractor [rarr]
                                                                                    Consumer.
MVDT..................................  All......................             100  Manufacturer [rarr]
                                                                                    Distributor [rarr]
                                                                                    Electrical contractor [rarr]
                                                                                    Consumer.
----------------------------------------------------------------------------------------------------------------

    Issue E.1: DOE seeks input from stakeholders on whether the 
distribution channels described above continue to accurately describe 
the distribution chain for distribution transformers and are sufficient 
to describe the distribution market.
    Issue E.2: DOE seeks input on the percentage of equipment 
distributed through the different distribution channels, and whether 
the share of equipment through each channel varies based on equipment 
capacity, or number of phases, or other equipment characteristics.

F. Energy Use Analysis

    As part of the rulemaking process, DOE conducts an energy use 
analysis to identify how products are used by consumers, and thereby 
determine the energy savings potential of energy efficiency 
improvements. The energy-use analysis produces energy use estimates and 
end-use load shapes for distribution transformers. The energy use 
estimates enable evaluation of energy savings from the operation of 
distribution transformers at various efficiency levels, while the end-
use load characterization allows evaluation of the impact on monthly 
and peak demand for electricity.
    The energy used by distribution transformers is characterized by 
two types of losses. The first are no-load losses, which are also known 
as core losses. No-load losses are roughly constant and exist whenever 
the transformer is energized (i.e., connected to live power lines). The 
second are load losses, which are also known as resistance or I\2\R 
losses. Load losses generally vary with the square of the PUL being 
served by the transformer.
    DOE is considering using the same methodology for its energy-use 
analysis as it did in the April 2013 standards rule, where it assumed 
the following: (1) Application of distribution transformers vary 
significantly by transformer type (liquid-immersed or dry-type) and 
ownership; (2) electric utilities own approximately 95 percent of 
liquid-immersed transformers; and (3) commercial/industrial (C&I) 
entities use mainly dry-type distribution transformers. To account for 
the differences in transformer application, in the April 2013 standards 
rule, DOE performed two separate end-use load analyses to evaluate 
distribution transformer efficiency, as described in the following 
sections.\22\ 78 FR 23372.
---------------------------------------------------------------------------

    \22\ The energy-use analysis is discussed in detail in Chapter 7 
and Appendix 7A of the April 2013 standards rule Technical Support 
Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

1. Hourly Load Analysis
    The hourly load analysis for liquid-immersed distribution 
transformers used two types of information related to electric 
utilities. The first was drawn from the Energy Information 
Administration's (EIA's) Form 861

[[Page 28253]]

database.\23\ Form 861 provides, through its Form 2, the annual sales 
in megawatt-hours for each utility to the residential, commercial, and 
industrial sectors. Form 861's Form 4 lists all the utilities that own 
electricity distribution equipment, and the county in which that 
equipment is located. Based on those data, DOE created a consumer 
sample of utilities that own transformers and assigned a sample weight 
to each based on the electricity sales of that utility.
---------------------------------------------------------------------------

    \23\ U.S. Department of Energy-Energy Information 
Administration. Form EIA-861: Annual Electric Power Industry 
Database. (2008). at http://www.eia.doe.gov/cneaf/electricity/page/eia861.html.
---------------------------------------------------------------------------

    The second type of utility information used is hourly system loads 
and prices. DOE developed regional system loads and prices for the set 
of regions defined in the EIA National Energy Modeling System (NEMS) 
Electricity Market Module (EMM).\24\ The regions represent both 
national reliability regions and, where they exist, integrated 
wholesale electricity markets. Each region in turn comprises a number 
of electric utility control area operators (CAOs), some of which may 
also be utility companies. DOE obtained hourly load and system lambda 
data (for regions without wholesale markets) or day-ahead market price 
data (for market regions) from the Federal Energy Regulatory Commission 
(FERC) Form 714 database.\25\ DOE aggregated the hourly data to produce 
regional time series for the EMM regions.\26\
---------------------------------------------------------------------------

    \24\ Energy Information Administration--Office of Integrated 
Analysis and Forecasting. The National Energy Modeling System 
(NEMS): An Overview. (U.S. Department of Energy, 2009). at http://www.eia.doe.gov/oiaf/aeo/overview/.
    \25\ U.S. Department of Energy-Federal Energy Regulatory 
Commission. Form No. 714--Annual Electric Control and Planning Area 
Report. (U.S. Department of Energy-Federal Energy Regulatory 
Commission, 2008). at http://www.ferc.gov/docs-filing/forms/form-714/overview.asp.
    \26\ The hourly load analysis is discussed in detail in Chapter 
7 and Appendix 7A of the April 2013 standards rule Technical Support 
Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    From these data, DOE estimated the loads on individual liquid-
immersed distribution transformers for both residential and non-
residential utility consumers by creating hourly proxy transformer 
loads. These resulted in the initial (first year) RMS load for liquid-
immersed transformers ranging from 34 and 40 percent for single- and 
three-phase equipment, respectively. Additionally, as in the April 2013 
standards rule, DOE is considering projecting the energy consumption 
for distribution transformers into the future. This projection included 
a 0.5 percent per-year load growth factor to account for utility growth 
in the connected load on liquid-immersed distribution transformers, and 
no-load growth for LVDT and MVDT transformers.\27\ 78 FR 23375.
---------------------------------------------------------------------------

    \27\ A more detailed discussion can be found on page 8-25 of 
chapter 8 of the April 2013 standards rule Technical Support 
Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    Issue F.1: DOE requests comment on whether it should use the hourly 
load analysis for liquid-immersed distribution transformers relied upon 
in April 2013 standards rule and what updates to the inputs should be 
considered. Included in the type of information that DOE would find 
useful are: (i) Sources of data and recommendations to support an 
hourly load model; (ii) data on utility-owned distribution transformer 
hourly loads for the liquid-immersed equipment classes under 
consideration; (iii) field or simulated energy use data or other 
relevant information that could assist in the development or 
calibration for its hourly load analysis; (iv) data and information 
supporting or refuting the assumption that larger capacity liquid-
immersed transformers are loaded to a higher degree than smaller 
capacity liquid-immersed transformers, and; (v) any other data 
commenters believe would be relevant.
    Issue F.2: DOE requests comment on the appropriateness of its prior 
assumption of future load growth. Examples of information requested 
include, but are not limited to, sources of data or recommendation to 
support to an annual load growth assumption, and information on whether 
the growth of connected loads would vary with geography, transformer 
type, capacity, or phase-count.
a. Utilities Serving Low Population Densities
    DOE recognizes that in rural areas, the number of utility customers 
per distribution transformer is likely to be significantly lower than 
in urban or suburban areas, which in turn results in lower PULs. DOE is 
considering using the same methodology that it used in the April 2013 
standards rule, where the PUL was reduced by 10 percent for utilities 
serving counties with less than 32 households per square mile.\28\
---------------------------------------------------------------------------

    \28\ PUL estimates for utilities serving low population 
densities were not presented in the final rule Federal Register 
notice, but can be found on page 8-16 of chapter 8 of the April 2013 
standards rule Technical Support Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    Issue F.3: DOE seeks comment on the continued appropriateness of 
the adjustment to the PUL for areas with low population density, 
including information and data as to the PULs experienced by 
transformers in-service in low population density areas.
2. Monthly Load Analysis
    The consumer sample for the monthly load analysis used for LVDT and 
MVDT distribution transformer owners was taken from the EIA's 
Commercial Buildings Energy Consumption Survey (CBECS) databases.\29\ 
Survey data for the years 1992 and 1995 were used, as these are the 
only years for which monthly consumer electricity consumption (kWh) and 
peak demand (kW) are provided. To account for changes in the 
distribution of building floor space by building type and size, the 
weights defined in the 1992 and 1995 building samples were rescaled to 
reflect the distribution in the 2012 CBECS survey. CBECS covers 
primarily commercial buildings, but a significant fraction of 
transformers are shipped to industrial building owners. To account for 
this in the sample, data from the EIA's 2010 Manufacturing Energy 
Consumption Survey (MECS) \30\ was used to estimate the amount of floor 
space of buildings that might use the type of transformer covered by 
the rulemaking. The statistical weights assigned to the building sample 
were rescaled to reflect this additional floor space.
---------------------------------------------------------------------------

    \29\ Commercial Building Energy Consumption and Expenditures 
Survey (CBECS); 1992 and 1995; U.S. Department of Energy--Energy 
Information Administration; http://www.eia.doe.gov/emeu/cbecs/microdat.html.
    \30\ Manufacturing Energy Consumption Survey (MECS); 2006 U.S. 
Department of Energy--Energy Information Administration; http://www.eia.gov/emeu/mecs/contents.html.
---------------------------------------------------------------------------

    From these data, in the April 2013 standards rule, DOE estimated 
that on average, the RMS PUL for LVDT transformers ranged from 20 and 
25 percent for commercial and industrial consumers, respectively;\31\ 
and that, on average, the RMS PUL for MVDT transformers ranged from 32 
and 38 percent for commercial and industrial consumers, 
respectively.\32\
---------------------------------------------------------------------------

    \31\ The result of DOE's transformer load analysis for LVDT 
distribution transformers are contained in the Life-cycle Cost and 
Payback Period spreadsheet tools for DLs 6 through 8 on the Forecast 
Cells tab. (available at: https://www.regulations.gov/document?D=EERE-2011-BT-STD-0051-0085)
    \32\ The result of DOE's transformer load analysis for MVDT 
distribution transformers are contained in the Life-cycle Cost and 
Payback Period spreadsheet tools for DL 9 through 13B on the 
Forecast Cells tab. (available at: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0764)
---------------------------------------------------------------------------

    Issue F.4: DOE requests comment on the methodology for determining 
monthly loads for LVDT and MVDT

[[Page 28254]]

equipment classes relied upon in the April 2013 standards rule and 
whether DOE should consider changes to the methodology.
    Issue F.5: DOE requests comment on the appropriateness of the data 
sources relied upon for determining monthly loads for LVDT and MVDT 
equipment classes in the April 2013 standards rule and whether 
additional sources should be considered. Comments may include field or 
simulated energy use data or other relevant information that could 
assist in the development or calibration for its monthly load analysis.

G. Life-Cycle Cost and Payback Period Analysis

    The purpose of the LCC and PBP analyses is to evaluate the economic 
impacts of potential energy conservation standards on individual 
consumers. The effect of new or amended energy conservation standards 
on consumers usually involves a reduction in operating cost and an 
increase in purchase cost.
    DOE intends to analyze the potential for variability by performing 
the LCC and PBP calculations on a representative sample of individual 
consumers. DOE plans to utilize the sample of buildings developed for 
the energy use analysis and the corresponding simulation results.\33\ 
DOE plans to model uncertainty in many of the inputs to the LCC and PBP 
analysis using Monte Carlo simulation and probability distributions. As 
a result, the LCC and PBP results will be displayed as distributions of 
impacts compared to the no-new-standards case (without amended 
standards) conditions.
---------------------------------------------------------------------------

    \33\ DOE plans to utilize the utility information from EIA-Form 
851 and FERC No. 714, commercial, and manufacturing building types 
defined in CEBCS and MECS databases.
---------------------------------------------------------------------------

    Issue G.1: DOE requests comment on the overall methodology that it 
intends to use to conduct the LCC and PBP analysis for distribution 
transformers.
1. Base-Case Efficiency Distributions
    To determine an appropriate base case against which to compare 
various potential standard levels, in the April 2013 standards rule DOE 
incorporated in the LCC calculations a purchase-decision model that 
specifies which of the hundreds of designs from the engineering 
database are likely to be selected by transformer purchasers to meet a 
given efficiency level. The engineering analysis yielded a cost-
efficiency relationship in the form of MSPs, no-load losses, and load 
losses for a wide range of realistic transformer designs. This set of 
data provides the LCC model with a distribution of transformer design 
choices.
    If it determines that a rulemaking is necessary, DOE plans on using 
the same approach as in the April 2013 standards rule that employs the 
selection criteria known in the transformer industry as total owning 
cost (TOC). The TOC method combines transformer first costs with the 
consumer's cost of losses to produce a present value of losses over the 
lifetime of a transformer. Consumers of distribution transformers, 
especially in the utility sector, have long used the TOC method to 
determine which transformers to purchase. DOE refers to those consumers 
who employ the TOC method to determine which transformer to purchase in 
the context of the LCC as ``evaluators''.
    In the April 2013 standards rule, DOE assumed the following 
fraction of consumers to be evaluators: 10 percent for liquid-immersed 
transformers, and 2 percent for both LVDT and MVDT transformers. DOE 
assumed the fraction of evaluators to select a transformer with the 
best TOC for their cost of losses (this was usually of higher 
efficiency than the baseline), while the remaining consumers, who were 
not considered evaluators, selected new distribution transformers at 
the baseline efficiency.\34\ 78 FR 23374.
---------------------------------------------------------------------------

    \34\ The transformer selection approach is discussed in detail 
in chapter 8 of the April 2013 standards rule Technical Support 
Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    Issue G.2: DOE seeks information on the fraction of consumers who 
employ an evaluation methodology, such as the Total Owning Cost 
methodology,35 36 that may lead to transformer purchases at 
a cost greater than lowest-first-costs. Further, DOE seeks information 
on whether this changes with the size of consumer (in terms of peak 
demand), or by equipment class or equipment capacity.
---------------------------------------------------------------------------

    \35\ IEEE, Loss Evaluation Guide for Power Transformers and 
Reactors, 1992, DOI: 10.1109/IEEESTD.1992.114388.
    \36\ United States Department Of Agriculture: Rural Utilities 
Services, Guide for Economic Evaluation of Distribution 
Transformers, August 2016, RUS Bulletin 1724D-107, See: https://www.rd.usda.gov/files/UEP_Bulletin_1724D-107.pdf.
---------------------------------------------------------------------------

    Issue G.3: DOE seeks information on the fraction of consumers who 
purchase LVDT transformers at efficiencies at, or greater than, those 
specified under the NEMA Premium Efficiency Transformer Program.\37\
---------------------------------------------------------------------------

    \37\ See: https://www.nema.org/Technical/Pages/NEMA-Premium-Efficiency-Transformers-Program.aspx
---------------------------------------------------------------------------

2. Installation Costs
    The primary inputs for establishing the total installed cost are 
the baseline consumer price, standard-level consumer price increases, 
and installation costs. Baseline transformer prices and standard-level 
transformer price increases will be determined by applying markups to 
MSP estimates.
a. Impact of Increased Distribution Transformer Weight on Installation 
Costs
    Total installed costs for distribution transformers dependent 
heavily on the weight of the equipment. DOE plans to derive the weight-
versus-capacity relationship for a typical distribution transformer 
from the design data produced by the engineering analysis as it did in 
the April 2013 standards rule. DOE estimated a scaling relationship 
between transformer weight, and direct installation labor and equipment 
costs from RSMeans for the electrical equipment categories: ``dry-type 
transformer'', ``oil-filled transformer'', and ``transformer, liquid-
filled''.\38\
---------------------------------------------------------------------------

    \38\ See page 6-2 of chapter 6 of the April 2013 standards rule 
Technical Support Document for a more detailed discussion on 
transformer installation costs, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    Issue G.4: DOE seeks information and data on the installation cost 
versus transformer weight relationship for the different types of 
transformers and capacities under consideration.
b. Estimation of Pole Replacement Costs
    In addition to including installation costs that scale with 
transformer weight, DOE is considering including costs to account for 
the rare occasion that a more efficient pole-mounted replacement 
transformer may require the installation of a new, higher-grade, 
utility pole to support any increase in weight due to increased 
transformer efficiency.\39\ If it determines that a rulemaking is 
necessary, DOE plans to use the same methodology it used in the April 
2013 standards rule, where the pole-replacement cost function was 
applied to those modelled design lines that included pole-mounted 
distribution transformers.\40\ 78 FR 23374.
---------------------------------------------------------------------------

    \39\ In the April 2013 standards rule DOE estimated an average 
relative increase in transformer weight when compared to baseline 
equipment to be between 14 percent and 4 percent for DL 2, and DL 3, 
respectively. In absolute terms, the average weight increase was 
between 48 lbs. and 120 lbs. for DL 2, and DL3, respectively. The 
results of DOE's pole replacement analysis for pole-mounted liquid-
immersed distribution transformers are contained in the Life-cycle 
Cost and Payback Period spreadsheet tools for DL 2 and DL 3 on the 
Forecast Cells tab. (available at: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0767)
    \40\ See page 6-2 of chapter 6 of the April 2013 standards rule 
Technical Support Document for a more detailed discussion on 
transformer installation costs, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.

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

[[Page 28255]]

    The degree of weight increase depends on how a transformer design 
is modified to improve efficiency. For pole-mounted transformers 
(represented by design lines 2 and 3 in the April 2013 standards rule), 
the increased weight may lead to situations where the pole needs to be 
upgraded to support the additional weight of the transformer, which in 
turn, leads to an increase in the installation cost.
    The methodology employed in the April 2013 standards rule 
established the threshold change in weight of the transformer between 
the no-new standards case and standard case level that would trigger 
the need to upgrade the utility pole to support the new more efficient 
transformer. DOE assumed that a pole change-out would only be necessary 
if the weight increase was greater than 15 percent of the base case and 
was also 150 pounds heavier than the weight of the base case unit for 
a25 kVA unit. To determine the weight-change threshold for larger 
capacity units (i.e., 500kVA), the 150-pound threshold was scaled using 
the 0.75 scaling rule \41\ to 1,418 pounds. In some cases, utilities 
have the option to reinforce pole or structures with guy wires instead 
of outright pole replacement. Because of the general practice of over-
sizing of utility poles for safety reasons, and the availability of 
other supporting options, DOE limited the total fraction of pole 
replacements to 25 percent of the total population. 78 FR 23374-23375
---------------------------------------------------------------------------

    \41\ The 0.75 Scaling Rule holds that for similarly designed 
transformers, costs of construction and losses scale with the ratio 
of their kVA ratings raised to the 0.75 power. See 78 FR 23369 for a 
more detailed description of the 0.75 Scaling Rule.
---------------------------------------------------------------------------

    Issue G.5: DOE seeks comment on its prior approach to accounting 
for the need for pole replacement, including data on the rate of pole 
change-out that is driven by the increased weight of more efficient 
distribution transformers of the same capacity.
    The cost of pole replacement typically involves the removal of the 
old pole and its disposal, erection of the upgraded replacement pole, 
and the transferring of all attached equipment and concessions. DOE 
plans on using the labor and equipment cost estimates from the RSMeans, 
to construct a distribution of possible costs paid by a utility when 
performing a pole replacement for single pole, and multi-pole 
(platform) replacements.
    Issue G.6: DOE seeks comment on its understanding of utility pole 
upgrades that result from an increase in transformer weight; the 
continued appropriateness of this consideration, including but not 
limited to information and data on the rate of pole change-out and on 
the cost of pole replacement by transformer capacity.
    Issue G.7: DOE seeks information on any other factors that would 
impact transformer installations costs due to an increase in 
transformer efficiency.
3. Electricity Prices
    DOE plans to estimate electricity prices and costs to place a value 
on transformer losses using the same methodologies it used in the April 
2013 standards rule. One hourly methodology captured the nature of 
regional hourly transformer loads, their correlation with the overall 
utility system load, and their correlation with hourly electricity 
costs and prices. The monthly methodology estimated the impacts of 
transformer loads and resultant losses on monthly electricity usage, 
demand, and electricity bills. DOE plans to use the hourly analysis for 
liquid-immersed transformers, which are owned predominantly by 
utilities that pay costs that vary by the hour, and the monthly 
analysis for dry-type transformers, which typically are owned by 
commercial and industrial establishments that receive monthly 
electricity bills.\42\ 78 FR 73375-73377.
---------------------------------------------------------------------------

    \42\ A more detailed discussion can be found on page 8-17 of 
chapter 8 of the April 2013 standards rule Technical Support 
Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

a. Hourly Electricity Costs
    To evaluate the electricity costs associated with liquid-immersed 
distribution transformers, DOE plans to use marginal electricity 
prices. Marginal prices are those utilities pay for the last kilowatt-
hour of electricity produced and may be higher or lower than the 
average price, depending on the relationships among capacity, 
generation, transmission, and distribution costs. The general structure 
of the hourly marginal cost methodology divides the costs of 
electricity into capacity components and energy cost components. For 
each component, the economic value for both no-load losses and load 
losses is estimated. The capacity components include generation and 
transmission capacity; it also includes a reserve margin for ensuring 
system reliability, with factors that account for system losses. Energy 
cost components include a marginal cost of supply that varies by the 
hour.
    DOE plans on using a marginal costs methodology for the set of EMM 
regions. To calculate the hourly price of electricity, DOE plans on 
using the day-ahead market clearing price for regions having wholesale 
electricity markets, and system lambda values for all other regions. 
System lambda values, which are roughly equal to the operating cost of 
the next unit in line for dispatch, are filed by control area operators 
under FERC Form 714. DOE plans on using the most recent data available 
for both market prices and system lambdas.
    Issue G.8: DOE seeks comment on its approach for developing hourly 
electricity prices, as well as additional sources of relevant data.
b. Monthly Electricity Costs
    To evaluate the electricity costs associated with LVDT and MVDT 
distribution transformers, DOE plans to derive nationally 
representative distributions of annual electricity prices for different 
consumer categories (industrial, commercial, and residential) from the 
most recent data available in the EIA Form 861, ``Annual Electric Power 
Industry Report,'' as well as data from the Edison Electric 
Institute.\43\
---------------------------------------------------------------------------

    \43\ Edison Electric Institute. Typical Bills and Average Rates 
Report. Washington, DC, October 2016.
---------------------------------------------------------------------------

    Issue G.9: DOE seeks comment on its approach for developing monthly 
electricity prices as well as additional sources of relevant data.
4. Future Electricity Prices
    DOE plans to use projections of national average energy prices for 
commercial and industrial consumers to estimate future energy prices. 
DOE will use the most recent available edition of AEO as the default 
source of projections for future energy prices.
    Issue G.10: DOE seeks comment on its consideration of future 
electricity prices as well as additional relevant sources for 
projecting future electricity prices.

H. Shipments

    DOE develops shipments forecasts of distribution transformers to 
calculate the national impacts of potential amended energy conservation 
standards on energy consumption, net present value (``NPV''), and 
future manufacturer cash flows. DOE shipments projections are based on 
available historical data broken out by equipment class and capacity. 
Current sales estimates allow for a more accurate model that captures 
recent trends in the market.
    In the April 2013 standards rule, DOE used sales estimates for the 
entire market for distribution transformers for years 2001 and 2009, 
disaggregated by transformer type (liquid-immersed or

[[Page 28256]]

dry-type) and kVA rating.44 45 DOE projected these shipments 
to future years by assuming that annual transformer shipments growth is 
equal to growth in electricity consumption as given by AEO 2012, and 
then continuing this rate from 2030 to 2045. DOE assumed that the 
market share of transformers for each type, and at each capacity, to be 
constant throughout the analysis period. If DOE initiates an energy 
conservation standards rulemaking, DOE will consider using a similar 
approach.\46\
---------------------------------------------------------------------------

    \44\ Hopkinson, P. & Puri, J. Distribution Transformer Market 
Shipment Estimates for 2001. (HVOLT Consultants Inc.: Washington DC, 
2003).
    \45\ Hopkinson, P. & Puri, J. Distribution Transformer Market 
Shipment Estimates for 2009. (HVOLT Consultants Inc.: Washington DC, 
2010).
    \46\ The market shares for distribution transformers were not 
presented in the final rule Federal Register notice, but can be 
found on page 9-11 of chapter 9 of the April 2013 standards rule 
Technical Support Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    Issue H.1: DOE seeks comment on its approach to estimating current 
shipments and future sales. Such information may include, but need not 
be limited to: (i) Data and information on current and historical 
shipments and market shares of distribution transformers categories 
discussed in this notice; (ii) data and information on the distribution 
of shipments (in units) of distribution transformers discussed in this 
notice by rated capacity, type, BIL, and installation application 
(pole-mounted, surface pad-mounted, subsurface pad-mounted); and (iii) 
data and information on how the distribution of shipments of 
distribution transformers discussed in this notice has changed over 
time by rated capacity, type, BIL, and installation application (pole-
mounted, surface pad-mounted, subsurface pad-mounted).
    Issue H.2: DOE requests comment on the approach it intends on using 
to develop the shipments model and shipments forecasts for distribution 
transformers under consideration for potential standards.
1. Equipment Lifetimes
    The equipment lifetime is the age at which the equipment is retired 
from service. DOE plans on using the same approach that it used in the 
April 2013 standards rule, which was based on a report by Oak Ridge 
National Laboratory.\47\ It estimated that the average life of a 
distribution transformer is 32 years. This lifetime estimate includes a 
constant failure rate of 0.5 percent/year due to lightning and other 
random failures unrelated to transformer age, and an additional 
corrosive failure rate of 0.5 percent/year starting at year 15. 78 FR 
23377
---------------------------------------------------------------------------

    \47\ Barnes. Determination Analysis of Energy Conservation 
Standards for Distribution Transformers. ORNL-6847. 1996.
---------------------------------------------------------------------------

    Issue H.3: DOE seeks comments on its approach for estimating 
equipment lifetimes.
2. Purchase Price Elasticity and Refurbished Transformers
    DOE recognizes that increase in transformer prices due to changes 
in standards may cause changes in purchases of new transformers. Due to 
the essential nature of the utility provided by a distribution 
transformer, the option to forego purchase, or substitute with other 
equipment, is very limited. However, because the general trend of 
utility transformer purchases is determined by increases in generation, 
utilities could conceivably exercise some discretion in how much 
transformer stock to buy--the amount of ``over-capacity'' to purchase 
and hold as reserve stock, and may draw on these reserves instead of 
purchasing new equipment. In addition, some utilities may choose to 
refurbish failed transformers and return them to service, rather than 
purchase a new transformer if the price of the latter increases 
significantly.
    In the April 2013 standards rule, DOE estimated the purchase price 
elasticity at -0.04 for liquid-immersed transformers, and -0.02 for all 
dry-type transformers. To capture the negative impact on the national 
energy saving estimates of replacement refurbished liquid-immersed 
transformers, DOE assumed that the operational need for a fraction of 
forgone purchases due to an increase in price would be met with less 
efficient refurbished equipment. DOE assumed that 20 percent of these 
foregone purchases would be met by refurbished transformers; and that 
refurbished transformers would have shorter average lifetimes at 20 
years, and an efficiency of 70 percent, of baseline transformers of the 
same capacity and equipment class.\48\ 78 FR 23379.
---------------------------------------------------------------------------

    \48\ A more detailed discussion can be found on page 9-14 of 
chapter 9 of the April 2013 standards rule Technical Support 
Document, available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    Issue H.4: DOE requests comment on the purchase price elasticity 
values of -0.04 and -0.02 for liquid-immersed and dry-type 
transformers, respectively.
    Issue H.5: DOE requests comments on the assumptions regarding 
consumer response to amended standards made in the April 2013 standards 
rule, including but not limited to information and data on the fraction 
and efficiency characteristics of transformers that are refurbished and 
are returned to service, and whether the decision to use refurbished 
equipment would vary with equipment capacity, installation application, 
or other circumstances.
    The following tables of the types of data requested for 2018 
shipments in can be found in Table II.16 and Table II.17 of this 
document. Interested parties are also encouraged to provide additional 
shipment data as may be relevant.

                          Table II.16--Summary Table of Single-Phase Distribution Transformers Shipments-Related Data Requests
                                                                  [Units Shipped, 2018]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                               Liquid-immersed, medium-                             Dry-type, medium-        Dry-type, medium-       Dry-type, medium-
          kVA range                    voltage           Dry-type, low- voltage   voltage, 20-45 kV BIL    voltage, 46-95 kV BIL   voltage, >=96 kV BIL
--------------------------------------------------------------------------------------------------------------------------------------------------------
10...........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
15...........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
25...........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
37.5.........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 28257]]

 
50...........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
75...........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
100..........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
167..........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
250..........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
333..........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
500..........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
667..........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
833..........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
* BIL = basic impulse insulation level.


                           Table II.17--Summary Table of Three-Phase Distribution Transformers Shipments-Related Data Requests
                                                                  [Units Shipped, 2018]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                               Liquid-immersed, medium-                             Dry-type, medium-        Dry-type, medium-       Dry-type, medium-
          kVA range                    voltage           Dry-type, low-voltage    voltage, 20-45 kV BIL    voltage, 46-95 kV BIL   voltage, >=96 kV BIL
--------------------------------------------------------------------------------------------------------------------------------------------------------
15...........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
30...........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
45...........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
75...........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
112.5........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
150..........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
225..........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
300..........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
500..........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
750..........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
1000.........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
1500.........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
2000.........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
2500.........................  .......................  .......................  .......................  ......................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
* BIL = basic impulse insulation level.

    If disaggregated fractions of annual sales are not available at the 
equipment type level, DOE requests more aggregated fractions of annual 
sales at the category level.
    Issue H.6: If available, DOE requests the same information in Table 
II.16 and Table II.17 of this document for the previous five years 
(2013 through 2017).
I. Manufacturer Impact Analysis
    The purpose of the manufacturer impact analysis (``MIA'') is to 
estimate the financial impact of amended energy conservation standards 
on manufacturers of distribution transformers, and to evaluate the 
potential impact of such standards on direct employment and 
manufacturing capacity. The MIA includes both quantitative and 
qualitative aspects. The quantitative part of the MIA primarily relies 
on the Government Regulatory Impact Model (``GRIM''), an industry cash-
flow model adapted for the equipment in this analysis, with the key 
output of industry net present value (``INPV''). The qualitative part 
of the

[[Page 28258]]

MIA addresses the potential impacts of energy conservation standards on 
manufacturing capacity and industry competition, as well as factors 
such as equipment characteristics, impacts on particular subgroups of 
firms, and important market and equipment trends.
    To account for manufacturers' non-production costs and profit 
margin, DOE applies a non-production cost multiplier (the manufacturer 
markup) to the MPC. The resulting MSP is the price at which 
manufacturers sell their distribution transformers to their first 
commercial consumer along the distribution chain. For the April 2013 
standards rule, DOE used a manufacturer markup of 1.25 for all 
distribution transformer equipment classes: liquid-immersed, LVDT and 
MVDT.\49\
---------------------------------------------------------------------------

    \49\ Manufacturer markups were not presented in the final rule 
Federal Register notice, but can be found on pages 12-18 through 12-
23 of the April 2013 standards rule Technical Support Document, 
available from: https://www.regulations.gov/document?D=EERE-2010-BT-STD-0048-0760.
---------------------------------------------------------------------------

    Issue I.1: DOE requests feedback on whether a manufacturer markup 
of 1.25 is appropriate for all distribution transformers.
    As part of the MIA, DOE intends to analyze impacts of amended 
energy conservation standards on subgroups of manufacturers of covered 
equipment, including small business manufacturers. DOE uses the Small 
Business Administration's (``SBA'') small business size standards to 
determine whether manufacturers qualify as small businesses, which are 
listed by the applicable North American Industry Classification System 
(``NAICS'') code.\50\ Manufacturing of consumer distribution 
transformers is classified under NAICS 335311, ``Power, Distribution, 
and Specialty Transformer Manufacturing,'' and the SBA sets a threshold 
of 750 employees or less for a domestic entity to be considered as a 
small business. This employee threshold includes all employees in a 
business' parent company and any other subsidiaries.
---------------------------------------------------------------------------

    \50\ Available online at https://www.sba.gov/document/support-table-size-standards.
---------------------------------------------------------------------------

    One aspect of assessing manufacturer burden involves examining the 
cumulative impact of multiple DOE standards and the equipment-specific 
regulatory actions of other Federal agencies that affect the 
manufacturers of a covered product or equipment. While any one 
regulation may not impose a significant burden on manufacturers, the 
combined effects of several existing or impending regulations may have 
serious consequences for some manufacturers, groups of manufacturers, 
or an entire industry. Assessing the impact of a single regulation may 
overlook this cumulative regulatory burden. In addition to energy 
conservation standards, other regulations can significantly affect 
manufacturers' financial operations. Multiple regulations affecting the 
same manufacturer can strain profits and lead companies to abandon 
product lines or markets with lower expected future returns than 
competing products. For these reasons, DOE conducts an analysis of 
cumulative regulatory burden as part of its rulemakings pertaining to 
appliance efficiency.
    Issue I.2: To the extent feasible, DOE seeks the names and contact 
information of any domestic or foreign-based manufacturers that 
distribute distribution transformers in the United States.
    Issue I.3: DOE requests feedback on the degree to which small 
businesses perform core manufacturing techniques themselves, such as 
assembly and mitering, versus choosing to outsource, and the 
corresponding effect on capital investments required to achieve greater 
efficiencies. DOE requests specific comment on relative changes in 
these practices relative to before the April 2013 standards rule.
    Issue I.4: DOE identified small businesses as a subgroup of 
manufacturers that could be disproportionally impacted by amended 
energy conservation standards. DOE requests the names and contact 
information of small business manufacturers, as defined by the SBA's 
size threshold, of distribution transformers that distribute products 
in the United States. In addition, DOE requests comment on any other 
manufacturer subgroups that could be disproportionally impacted by 
amended energy conservation standards. DOE requests feedback on any 
potential approaches that could be considered to address impacts on 
manufacturers, including small businesses.
    Issue I.5: DOE requests information regarding the cumulative 
regulatory burden impacts on manufacturers of distribution transformers 
associated with (1) other DOE standards applying to different products 
that these manufacturers may also make and (2) equipment-specific 
regulatory actions of other Federal agencies. DOE also requests comment 
on its methodology for computing cumulative regulatory burden and 
whether there are any flexibilities it can consider that would reduce 
this burden while remaining consistent with the requirements of EPCA.

J. Other Energy Conservation Standards Topics

1. Market Failures
    In the field of economics, a market failure is a situation in which 
the market outcome does not maximize societal welfare. Such an outcome 
would result in unrealized potential welfare. DOE welcomes comment on 
any aspect of market failures, especially those in the context of 
amended energy conservation standards for distribution transformers.
2. Emerging Smart Technology Market
    DOE recently published an RFI on the emerging smart technology 
appliance and equipment market. 83 FR 46886 (Sept. 17, 2018). In that 
RFI, DOE sought information to better understand market trends and 
issues in the emerging market for appliances and commercial equipment 
that incorporate smart technology. DOE's intent in issuing the RFI was 
to ensure that DOE did not inadvertently impede such innovation in 
fulfilling its statutory obligations in setting efficiency standards 
for covered products and equipment. DOE seeks comments, data and 
information on the issues presented in the RFI as they may be 
applicable to distribution transformers.
3. Other
    In addition to the issues identified earlier in this document, DOE 
welcomes comment on any other aspect of energy conservation standards 
for distribution transformers not already addressed by the specific 
areas identified in this document.

III. Submission of Comments

    DOE invites all interested parties to submit in writing by August 
2, 2019, comments and information on matters addressed in this document 
and on other matters relevant to DOE's consideration of amended energy 
conservations standards for distribution transformers. After the close 
of the comment period, DOE will review the public comments received and 
may begin collecting data and conducting the analyses discussed in this 
RFI.
    Submitting comments via http://www.regulations.gov. The http://www.regulations.gov web page requires you to provide your name and 
contact information. Your contact information will be viewable to DOE 
Building Technologies Office staff only. Your contact information will 
not be publicly viewable except for your first and last names, 
organization name (if any), and submitter representative name (if any). 
If your comment is not processed

[[Page 28259]]

properly because of technical difficulties, DOE will use this 
information to contact you. If DOE cannot read your comment due to 
technical difficulties and cannot contact you for clarification, DOE 
may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment or in any documents attached to your comment. 
Any information that you do not want to be publicly viewable should not 
be included in your comment, nor in any document attached to your 
comment. Persons viewing comments will see only first and last names, 
organization names, correspondence containing comments, and any 
documents submitted with the comments.
    Do not submit to http://www.regulations.gov information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (``CBI'')). Comments submitted 
through http://www.regulations.gov cannot be claimed as CBI. Comments 
received through the website will waive any CBI claims for the 
information submitted. For information on submitting CBI, see the 
Confidential Business Information section.
    DOE processes submissions made through http://www.regulations.gov 
before posting. Normally, comments will be posted within a few days of 
being submitted. However, if large volumes of comments are being 
processed simultaneously, your comment may not be viewable for up to 
several weeks. Please keep the comment tracking number that 
www.regulations.gov provides after you have successfully uploaded your 
comment.
    Submitting comments via email, hand delivery/courier, or postal 
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to http://www.regulations.gov. If you do not want your personal contact 
information to be publicly viewable, do not include it in your comment 
or any accompanying documents. Instead, provide your contact 
information on a cover letter. Include your first and last names, email 
address, telephone number, and optional mailing address. The cover 
letter will not be publicly viewable as long as it does not include any 
comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. If you submit via postal mail 
or hand delivery/courier, please provide all items on a CD, if 
feasible. It is not necessary to submit printed copies. No 
telefacsimiles (faxes) will be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, written in English and free of any defects or viruses. 
Documents should not contain special characters or any form of 
encryption and, if possible, they should carry the electronic signature 
of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. According to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email, postal mail, or hand delivery/courier two well-marked copies: 
one copy of the document marked confidential including all the 
information believed to be confidential, and one copy of the document 
marked ``non-confidential'' with the information believed to be 
confidential deleted. Submit these documents via email or on a CD, if 
feasible. DOE will make its own determination about the confidential 
status of the information and treat it according to its determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include: (1) A description of the 
items, (2) whether and why such items are customarily treated as 
confidential within the industry, (3) whether the information is 
generally known by or available from other sources, (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality, (5) an explanation of the 
competitive injury to the submitting person which would result from 
public disclosure, (6) when such information might lose its 
confidential character due to the passage of time, and (7) why 
disclosure of the information would be contrary to the public interest.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).
    DOE considers public participation to be a very important part of 
the process for developing energy conservation standards. DOE actively 
encourages the participation and interaction of the public during the 
comment period in each stage of the rulemaking process. Interactions 
with and between members of the public provide a balanced discussion of 
the issues and assist DOE in the rulemaking process. Anyone who wishes 
to be added to the DOE mailing list to receive future notices and 
information about this process or would like to request a public 
meeting should contact Appliance and Equipment Standards Program staff 
at (202) 287-1445 or via email at 
[email protected].

    Signed in Washington, DC, on June 11, 2019.
Daniel R. Simmons,
Assistant Secretary, Energy Efficiency and Renewable Energy.
[FR Doc. 2019-12761 Filed 6-17-19; 8:45 am]
 BILLING CODE 6450-01-P