[Federal Register Volume 84, Number 172 (Thursday, September 5, 2019)]
[Proposed Rules]
[Pages 46830-46862]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-18941]



[[Page 46829]]

Vol. 84

Thursday,

No. 172

September 5, 2019

Part III





 Department of Energy





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





10 CFR Part 430





 Energy Conservation Program: Energy Conservation Standards for General 
Service Incandescent Lamps; Proposed Rule

  Federal Register / Vol. 84 , No. 172 / Thursday, September 5, 2019 / 
Proposed Rules  

[[Page 46830]]


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

DEPARTMENT OF ENERGY

10 CFR Part 430

EERE-2019-BT-STD-0022]
RIN 1904-AE76


Energy Conservation Program: Energy Conservation Standards for 
General Service Incandescent Lamps

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

ACTION: Notice of proposed determination and request for comment.

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

SUMMARY: The Energy Policy and Conservation Act of 1975, as amended 
(EPCA), directs DOE to initiate a rulemaking for general service lamps 
(GSLs) that, among other requirements, determines whether standards in 
effect for general service incandescent lamps (GSILs, a subset of GSLs) 
should be amended. In this notice of proposed determination (NOPD), DOE 
has initially determined that energy conservation standards for GSILs 
do not need to be amended and asks for comment on this proposed 
determination and associated analyses and results.

DATES: 
    Comments: Written comments and information are requested and will 
be accepted on or before November 4, 2019.
    Meeting: DOE will hold a public meeting on Tuesday, October 15, 
2019, from 10:00 a.m. to 3:00 p.m., in Washington, DC. The meeting will 
also be broadcast as a webinar. See section VII, ``Public 
Participation,'' for webinar registration information, participant 
instructions, and information about the capabilities available to 
webinar participants.

ADDRESSES: The public meeting will be held at the U.S. Department of 
Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue SW, 
Washington, DC 20585.
    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-BT-STD-0022, 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-BT-STD-0022 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 telefacsimiles (faxes) will be accepted. For detailed 
instructions on submitting comments and additional information on this 
process, see section VII of this document.
    Docket: The docket, 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, not all 
documents listed in the index may be publicly available, such as 
information that is exempt from public disclosure.
    The docket web page can be found at http://www.regulations.gov/docket?D=EERE-2019-BT-STD-0022. The docket web page contains 
instructions on how to access all documents, including public comments, 
in the docket. See section VII, ``Public Participation,'' for further 
information on how to submit comments through http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Ms. Lucy deButts, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Office, EE-5B, 1000 Independence Avenue SW, Washington, DC 
20585-0121. Email: [email protected].
    Ms. Celia Sher, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. 
Telephone: (202) 287-6122. Email: [email protected].
    For further information on how to submit a comment, review other 
public comments and the docket, or participate in the public meeting, 
contact the Appliance and Equipment Standards Program staff at (202) 
287-1445 or by email: [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Proposed Determination
II. Introduction
    A. Authority and Background
    1. Current Standards
    2. History of Standards Rulemakings for GSILs
III. General Discussion
    A. Product Classes and Scope of Coverage
    B. Test Procedure
    C. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    D. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    E. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Savings in Operating Costs Compared to Increase in Price
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
    A. Market and Technology Assessment
    1. Scope of Coverage
    2. Metric
    3. Technology Options
    4. Screening Analysis
    5. Product Classes
    B. Engineering Analysis
    1. Representative Product Classes
    2. Baseline Lamps
    3. More-Efficacious Substitutes
    4. Efficacy Levels
    5. Scaling to Other Product Classes
    6. Product Substitutes
    C. Product Price Determination
    D. Energy Use Analysis
    1. Operating Hours
    a. Residential Sector
    b. Commercial Sector
    2. Input Power
    3. Lighting Controls
    E. Life-Cycle Cost and Payback Period Analysis
    1. Product Cost
    2. Installation Cost
    3. Annual Energy Consumption
    4. Energy Prices
    5. Energy Price Trends
    6. Product Lifetime
    7. Discount Rates
    8. Efficacy Distribution
    9. LCC Savings Calculation
    10. Payback Period Analysis
    F. Shipments Analysis
    1. Shipments Model
    a. Lamp Demand Module
    b. Price-Learning Module
    c. Market-Share Module
    G. National Impact Analysis
    1. National Energy Savings
    2. Net Present Value Analysis
    H. Manufacturer Impact Analysis
    1. Manufacturer Production Costs

[[Page 46831]]

    2. Shipments Projections
    3. Product and Capital Conversion Costs
    4. Markup Scenarios
V. Analytical Results and Conclusions
    A. Trial Standard Levels
    B. Economic Impacts on Individual Consumers
    1. Life-Cycle Cost and Payback Period
    2. Rebuttable Presumption Payback
    C. National Impact Analysis
    1. Energy Savings
    2. Net Present Value of Consumer Costs and Benefits
    D. Economic Impacts on Manufacturers
    1. Industry Cash Flow Analysis Results
    2. Direct Impacts on Employment
    3. Impacts on Manufacturing Capacity
    4. Impacts on Subgroups of Manufacturers
    5. Cumulative Regulatory Burden
    E. Proposed Determination
    1. Technological Feasibility
    2. Significant Conservation of Energy
    3. Economic Justification
    4. Summary
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Order 12866
    B. Review Under Executive Orders 13771 and 13777
    C. Review Under the Regulatory Flexibility Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Information Quality
VII. Public Participation
    A. Attendance at Public Meeting
    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of Public Meeting
    D. The Time and Date of the Public Meeting and Submission of 
Comments
    E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary

I. Synopsis of the Proposed Determination

    Title III, Part B \1\ of the Energy Policy and Conservation Act of 
1975, as amended (EPCA),\2\ established the Energy Conservation Program 
for Consumer Products Other Than Automobiles. (42 U.S.C. 6291-6309) 
These products include GSILs, the subject of this NOPD.
---------------------------------------------------------------------------

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

    DOE is issuing this NOPD pursuant to the EPCA requirement that DOE 
must initiate a rulemaking for GSLs that, among other requirements, 
determines whether standards in effect for GSILs (a subset of GSLs) 
should be amended. (42 U.S.C. 6295(i)(6)(A))
    For this proposed determination, DOE analyzed GSILs defined at 
title 10 of the Code of Federal Regulations (CFR) part 430, subpart A, 
section 430.2 and subject to standards specified in 10 CFR 430.32(x). 
DOE first analyzed the technological feasibility of more efficient 
GSILs. For those GSILs for which DOE determined higher standards to be 
technologically feasible, DOE estimated energy savings that would 
result from potential energy conservation standards by conducting a 
national impacts analysis (NIA). DOE evaluated whether higher standards 
would be economically justified by conducting life-cycle cost (LCC) and 
payback period (PBP) analyses, and estimated the net present value 
(NPV) of the total costs and benefits experienced by consumers. In 
addition to the consideration of these criteria, DOE conducted a 
manufacturer impact analyses (MIA).
    Based on the results of these analyses, summarized in section V of 
this document, DOE has tentatively determined that current standards 
for GSILs do not need to be amended because more stringent standards 
are not economically justified.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying this proposed determination, as well as some of the relevant 
historical background related to standards for GSLs.

A. Authority and Background

    Title III, Part B of EPCA established the Energy Conservation 
Program for Consumer Products Other Than Automobiles, which includes 
GSILs (a subset of GSLs) as covered products. (42 U.S.C. 6292(a)(14)) 
Amendments to EPCA in the Energy Independence and Security Act of 2007 
(EISA 2007) directed DOE to conduct two rulemaking cycles to evaluate 
energy conservation standards for GSLs. (42 U.S.C. 6295(i)(6)(A)-(B)) 
GSLs are currently defined in EPCA to include GSILs, compact 
fluorescent lamps (CFLs), general service light-emitting diode (LED) 
lamps and organic light-emitting diode (OLED) lamps, and any other 
lamps that the Secretary of Energy (Secretary) determines are used to 
satisfy lighting applications traditionally served by GSILs. (42 U.S.C. 
6291(30)(BB))
    For the first rulemaking cycle, Congress instructed DOE to initiate 
a rulemaking process prior to January 1, 2014, to consider two 
questions: (1) Whether to amend energy conservation standards for 
general service lamps and (2) whether ``the exemptions for certain 
incandescent lamps should be maintained or discontinued.'' (42 U.S.C. 
6295(i)(6)(A)(i)) Further, if the Secretary determines that the 
standards in effect for GSILs should be amended, EPCA provides that a 
final rule must be published by January 1, 2017, with a compliance date 
at least 3 years after the date on which the final rule is published. 
(42 U.S.C. 6295(i)(6)(A)(iii)) In developing such a rule, DOE must 
consider a minimum efficacy standard of 45 lumens per watt (lm/W). (42 
U.S.C. 6295(i)(6)(A)(ii)) If DOE fails to complete a rulemaking in 
accordance with 42 U.S.C. 6295(i)(6)(A)(i)-(iv) or a final rule from 
the first rulemaking cycle does not produce savings greater than or 
equal to the savings from a minimum efficacy standard of 45 lm/W, the 
statute provides a ``backstop'' under which DOE must prohibit sales of 
GSLs that do not meet a minimum 45 lm/W standard beginning on January 
1, 2020. (42 U.S.C. 6295(i)(6)(A)(v))
    The EISA-prescribed amendments further directed DOE to initiate a 
second rulemaking cycle by January 1, 2020, to determine whether 
standards in effect for GSILs should be amended with more-stringent 
requirements and if the exemptions for certain incandescent lamps 
should be maintained or discontinued. (42 U.S.C. 6295(i)(6)(B)(i)) For 
the second review of energy conservation standards, the scope is not 
limited to incandescent lamp technologies. (42 U.S.C. 
6295(i)(6)(B)(ii))
    The energy conservation program for covered products under EPCA 
consists essentially of four parts: (1) Testing, (2) labeling, (3) the 
establishment of Federal energy conservation standards, and (4) 
certification and enforcement procedures. The Federal Trade Commission 
(FTC) is primarily responsible for labeling, and DOE implements the 
remainder of the program.
    Subject to certain criteria and conditions, DOE is required to 
develop test procedures to measure the energy efficiency, energy use, 
or estimated annual operating cost of each covered product. (42 U.S.C. 
6295(o)(3)(A) and (r)) Manufacturers of covered products must use the 
prescribed DOE test procedure as the basis for certifying to DOE that 
their products comply with the applicable energy conservation standards 
adopted under EPCA and when making representations to the public 
regarding the energy use or efficiency of those products. (42 U.S.C. 
6293(c) and 6295(s)) Similarly, DOE must use these test procedures to

[[Page 46832]]

determine whether the products comply with standards adopted pursuant 
to EPCA. (42 U.S.C. 6295(s)) The DOE test procedures for GSILs appear 
at 10 CFR part 430, subpart B, appendix R.
    Federal energy conservation requirements generally supersede State 
laws or regulations concerning energy conservation testing, labeling, 
and standards. (42 U.S.C. 6297(a)-(c)) Absent limited exceptions, 
states generally are precluded from adopting energy conservation 
standards for covered products both before an energy conservation 
standard becomes effective, and after an energy conservation standard 
becomes effective. (42 U.S.C. 6297(b) and (c)) However, the statute 
contains three narrow exceptions to this general preemption provision 
specific to GSLs in 42 U.S.C. 6295(i)(6)(A)(vi). Under the limited 
exceptions from preemption specific to GSLs that Congress included in 
EPCA, only California and Nevada have authority to adopt, with an 
effective date beginning January 1, 2018 or after, either: (1) A final 
rule adopted by the Secretary in accordance with 42 U.S.C. 
6295(i)(6)(A)(i)-(iv); (2) if a final rule has not been adopted in 
accordance with 42 U.S.C. 6295(i)(6)(A)(i)-(iv), the backstop 
requirement under 42 U.S.C. 6295(i)(6)(A)(v); or (3) in the case of 
California only, if a final rule has not been adopted in accordance 
with 42 U.S.C. 6295(i)(6)(A)(i)-(iv), any California regulations 
related to ``these covered products'' adopted pursuant to state statute 
in effect as of the date of enactment of EISA 2007. (42 U.S.C. 
6295(i)(6)(A)(vi)) Because none of these narrow exceptions from 
preemption are available to California and Nevada, all states, 
including California and Nevada, are prohibited from adopting energy 
conservation standards for GSLs.\3\
---------------------------------------------------------------------------

    \3\ DOE provides a more detailed explanation as to why the 
preemption exceptions are not available to California and Nevada in 
its General Service Lamps Definition Rule published elsewhere in 
today's Federal Register.
---------------------------------------------------------------------------

    Pursuant to the amendments contained in EISA 2007, any final rule 
for new or amended energy conservation standards promulgated after July 
1, 2010, is required to address standby mode and off mode energy use. 
(42 U.S.C. 6295(gg)(3)) Specifically, when DOE adopts a standard for a 
covered product after that date, it must, if justified by the criteria 
for adoption of standards under EPCA (42 U.S.C. 6295(o)), incorporate 
standby mode and off mode energy use into a single standard, or, if 
that is not feasible, adopt a separate standard for such energy use for 
that product. (42 U.S.C. 6295(gg)(3)(A)-(B)) DOE's current test 
procedure for GSILs does not address standby mode and off mode energy 
use because DOE concluded in a 2009 final rule that these modes of 
energy consumption were not applicable to the lamps. 74 FR 31829, 31833 
(July 6, 2009). In this analysis DOE only considers active mode energy 
use in its determination of whether energy conservation standards for 
GSILs need to be amended.
    DOE is prohibited from prescribing an amended standard that DOE 
determines will not result in significant conservation of energy, is 
not technologically feasible, or is not economically justified. (42 
U.S.C. 6295(o)(3)) An evaluation of economic justification requires 
that DOE determine whether the benefits of a standard exceed its 
burdens through consideration, to the greatest extent practicable, the 
following seven statutory factors:
    (1) The economic impact of the standard on manufacturers and 
consumers of the products subject to the standard;
    (2) The savings in operating costs throughout the estimated average 
life of the covered products in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered products that are likely to result from the standard;
    (3) The total projected amount of energy (or as applicable, water) 
savings likely to result directly from the standard;
    (4) Any lessening of the utility or the performance of the covered 
products likely to result from the standard;
    (5) The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
standard;
    (6) The need for national energy and water conservation; and
    (7) Other factors the Secretary of Energy (``Secretary'') considers 
relevant.

(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    DOE is publishing this NOPD in satisfaction of EPCA's requirement 
to determine whether the standards in effect for GSILs should be 
amended. (42 U.S.C. 6295(i)(6)(A)(i) and (iii))
1. Current Standards
    In a final rule published on March 23, 2009, DOE codified the 
current energy conservation standards, prescribed by EISA, for GSILs 
manufactured after January 1, 2012; January 1, 2013; or January 1, 
2014. 74 FR 12058. These standards require a color rendering index 
(CRI) greater than or equal to 80 for standard spectrum lamps (or 
greater than or equal to 75 for modified spectrum lamps) and, for four 
specified lumen ranges, a rated wattage no greater than and a rated 
lifetime no less than the values set forth in DOE's regulations at 10 
CFR 430.32(x)(1) and repeated in the tables below.

                  Table II.1--Federal Energy Conservation Standards for Standard Spectrum GSILs
----------------------------------------------------------------------------------------------------------------
                                                                   Maximum rate    Minimum rate
                       Rated lumen ranges                             wattage        life-time    Effective date
----------------------------------------------------------------------------------------------------------------
1490-2600.......................................................              72       1,000 hrs        1/1/2012
1050-1489.......................................................              53       1,000 hrs        1/1/2013
750-1049........................................................              43       1,000 hrs        1/1/2014
310-749.........................................................              29       1,000 hrs        1/1/2014
----------------------------------------------------------------------------------------------------------------


                  Table II.2--Federal Energy Conservation Standards for Modified Spectrum GSILs
----------------------------------------------------------------------------------------------------------------
                                                                   Maximum rate    Minimum rate
                       Rated lumen ranges                             wattage        life-time    Effective date
----------------------------------------------------------------------------------------------------------------
1118-1950.......................................................              72       1,000 hrs        1/1/2012
788-1117........................................................              53       1,000 hrs        1/1/2013
563-787.........................................................              43       1,000 hrs        1/1/2014
232-562.........................................................              29       1,000 hrs        1/1/2014
----------------------------------------------------------------------------------------------------------------


[[Page 46833]]

2. History of Standards Rulemakings for GSILs
    GSILs are a subset of GSLs. As described in section II.A, EPCA 
directed DOE to conduct two rulemaking cycles to evaluate energy 
conservation standards for GSLs and outlined several specific criteria 
for each rulemaking cycle. DOE initiated the first GSL standards 
rulemaking process by publishing in the Federal Register a notice of a 
public meeting and availability of a framework document. 78 FR 73737 
(December 9, 2013); see also 79 FR 73503 (December 11, 2014) (notice of 
public meeting and availability of preliminary analysis). DOE later 
issued a notice of proposed rulemaking (NOPR) to propose amended energy 
conservation standards for GSLs. 81 FR 14528, 14629-14630 (March 17, 
2016) (the March 2016 GSL NOPR). The March 2016 GSL NOPR focused on the 
first question that Congress directed DOE to consider--whether to amend 
energy conservation standards for general service lamps. (42 U.S.C. 
6295(i)(6)(A)(i)(I)) In the March 2016 GSL NOPR proposing energy 
conservation standards for GSLs, DOE stated that it would be unable to 
undertake any analysis regarding GSILs and other incandescent lamps 
because of a then applicable congressional restriction (the 
Appropriations Rider \4\) on the use of appropriated funds to implement 
or enforce 10 CFR 430.32(x). 81 FR 14528, 14540-14541 (March 17, 2016). 
Notably, the applicability of this Appropriations Rider, which had been 
extended in multiple appropriations through 2017, is no longer in 
effect.\5\
---------------------------------------------------------------------------

    \4\ Section 312 of the Consolidated and Further Continuing 
Appropriations Act, 2016 (Pub. L. 114-113, 129 Stat. 2419) prohibits 
expenditure of funds appropriated by that law to implement or 
enforce: (1) 10 CFR 430.32(x), which includes maximum wattage and 
minimum rated lifetime requirements for GSILs; and (2) standards set 
forth in section 325(i)(1)(B) of EPCA (42 U.S.C. 6295(i)(1)(B)), 
which sets minimum lamp efficiency ratings for incandescent 
reflector lamps.
    \5\ See, the Consolidated Appropriations Act of 2017 (Pub. L. 
115-31, div. D, tit. III); See also, Consolidated Appropriations 
Act, 2018 (Pub. L. 115-141); Continuing Appropriations Act, 2019 
(Pub. L. 115-245).
---------------------------------------------------------------------------

    In response to comments on the March 2016 GSL NOPR, DOE conducted 
additional research and published a notice of proposed definition and 
data availability (NOPDDA), which proposed to amend the definitions of 
GSIL, GSL, and other supporting terms. 81 FR 71794, 71815 (Oct. 18, 
2016). DOE explained that the October 2016 NOPDDA related to the second 
question that Congress directed DOE to consider--whether ``the 
exemptions for certain incandescent lamps should be maintained or 
discontinued,'' and stated explicitly that the NOPDDA was not a 
rulemaking to establish an energy conservation standard for GSLs. (42 
U.S.C. 6295(i)(6)(A)(i)(II)); see also 81 FR 71798. The relevant 
``exemptions,'' DOE explained, referred to the 22 categories of 
incandescent lamps that are statutorily excluded from the definitions 
of GSIL and GSL. 81 FR 71798. In the NOPDDA, DOE clarified that it was 
defining what lamps constitute GSLs so that manufacturers could 
understand how any potential energy conservation standards might apply 
to the market. Id.
    On January 19, 2017, DOE published two final rules concerning the 
definition of GSL and related terms. 82 FR 7276; 82 FR 7322. The 
January 2017 definition final rules amended the definitions of GSIL and 
GSL by bringing certain categories of lamps that had been excluded by 
statute from the definition of GSIL within the definitions of GSIL and 
GSL. Like the October 2016 NOPDDA, DOE stated that the January 2017 
definition final rules related only to the second question that 
Congress directed DOE to consider, regarding whether to maintain or 
discontinue certain ``exemptions.'' (42 U.S.C. 6295(i)(6)(A)(i)(II)). 
That is, neither of the two final rules issued on January 19, 2017, 
purported to establish energy conservation standards applicable to 
GSLs.
    With the removal of the Appropriations Rider in the Consolidated 
Appropriations Act, 2017, DOE is no longer restricted from undertaking 
analysis and decision making required by the first question presented 
by Congress, i.e., whether to amend energy conservation standards for 
general service lamps, including GSILs. Thus, on August 15, 2017, DOE 
published a notice of data availability (NODA) and request for 
information seeking data for GSILs and other incandescent lamps. 82 FR 
38613 (August 2017 NODA). The purpose of this NODA was to assist DOE in 
making a decision on the first question posed to DOE by Congress; i.e., 
a determination regarding whether standards for GSILs should be 
amended. Comments submitted in response to the NODA also led DOE to re-
consider the decisions it had already made with respect to the second 
question presented to DOE; i.e., whether the exemptions for certain 
incandescent lamps should be maintained or discontinued. As a result of 
the comments received in response to the August 2017 NODA, DOE re-
assessed the legal interpretations underlying certain decisions made in 
the January 2017 definition final rules and issued a NOPR on February 
11, 2019 to withdraw the revised definitions of GSL, GSIL, and the 
supporting definitions established in the January 2017 definition rules 
(the February 2019 NOPR). 84 FR 3120. DOE held a public meeting on 
February 28, 2019 to hear oral comments and solicit information and 
data relevant to the February 2019 NOPR. Representatives for 
manufacturers, trade associations, environmental and energy efficiency 
advocates, and other interested parties attended the meeting.\6\
---------------------------------------------------------------------------

    \6\ A transcript of the public meeting and supporting documents 
are available in the docket at: https://www.regulations.gov/docket?D=EERE-2018-BT-STD-0010.
---------------------------------------------------------------------------

    The determination on whether to amend standards for GSILs remains a 
decision DOE is obligated to make and is addressed in this NOPD. DOE 
has used the data and comments received in response to the August 2017 
NODA and any relevant data and comments received in response to the 
February 2019 NOPR to conduct its analysis of whether energy 
conservation standards for GSILs need to be amended.

III. General Discussion

    DOE developed this proposed determination after considering oral 
and written comments, data, and information from interested parties 
that represent a variety of interests. This NOPD addresses issues 
raised by these commenters.

A. Product Classes and Scope of Coverage

    When evaluating and establishing energy conservation standards, DOE 
divides covered products into product classes by the type of energy 
used or by capacity or other performance-related features that justify 
differing standards. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such 
factors as the utility of the feature to the consumer and other factors 
DOE determines are appropriate. (42 U.S.C. 6295(q)) The product classes 
for this proposed determination are discussed in further detail in 
section IV.A.5 of this document. This proposed determination covers 
GSILs as currently defined in 10 CFR 430.2, which is the same as the 
statutory definition for GSIL. The scope of coverage is discussed in 
further detail in section IV.A.1 of this document.

B. Test Procedure

    EPCA sets forth generally applicable criteria and procedures for 
DOE's adoption and amendment of test procedures. (42 U.S.C. 6293) 
Manufacturers of covered products must

[[Page 46834]]

use these test procedures to certify to DOE that their product complies 
with energy conservation standards and to quantify the efficiency of 
their product. DOE's current energy conservation standards for GSILs 
are expressed in terms of a maximum rated wattage and a minimum rated 
lifetime. (See 10 CFR 430.32(x))
    A final rule published on July 6, 2009 revised the test procedure 
for GSILs to reflect the energy conservation standards prescribed by 
EISA. The July 2009 final rule concluded that GSILs do not operate in 
standby or off mode. 74 FR 31829. DOE published a test procedure final 
rule on January 27, 2012, establishing revised active mode test 
procedures for GSILs. 77 FR 4203. The test procedure for GSILs is 
codified in appendix R to subpart B of 10 CFR part 430.
    DOE has since published a request for information (RFI) to initiate 
a data collection process to consider whether to amend DOE's test 
procedures for general service fluorescent lamps, GSILs, and 
incandescent reflector lamps. 82 FR 37031 (August 8, 2017).

C. Technological Feasibility

1. General
    In evaluating potential amendments to energy conservation 
standards, DOE conducts a screening analysis based on information 
gathered on all current technology options and prototype designs that 
could improve the efficiency of the products or equipment that are the 
subject of the rulemaking. As the first step in such an analysis, DOE 
develops a list of technology options for consideration in consultation 
with manufacturers, design engineers, and other interested parties. DOE 
then determines which of those means for improving efficiency are 
technologically feasible. DOE considers technologies incorporated in 
commercially available products or in working prototypes to be 
technologically feasible. 10 CFR part 430, subpart C, appendix A, 
section 4(a)(4)(i)
    After DOE has determined that particular technology options are 
technologically feasible, it further evaluates each technology option 
in light of the following additional screening criteria: (1) 
Practicability to manufacture, install, and service; (2) adverse 
impacts on product utility or availability; and (3) adverse impacts on 
health or safety. 10 CFR part 430, subpart C, appendix A, section 
4(a)(4)(ii)-(iv) Additionally, it is DOE policy not to include in its 
analysis any proprietary technology that is a unique pathway to 
achieving a certain efficacy level. Section IV.A.4 of this document 
discusses the results of the screening analysis for GSILs, particularly 
the designs DOE considered, those it screened out, and those that are 
the basis for the standards considered in this proposed determination.
2. Maximum Technologically Feasible Levels
    As when DOE proposes to adopt an amended standard for a type or 
class of covered product, in this analysis it must determine the 
maximum improvement in energy efficiency or maximum reduction in energy 
use that is technologically feasible for such a product. (42 U.S.C. 
6295(p)(1)) Accordingly, in the engineering analysis, DOE determined 
the maximum technologically feasible (``max-tech'') improvements in 
energy efficiency for GSILs, using the design parameters for the most 
efficient products available on the market or in working prototypes. 
The max-tech levels that DOE determined for this analysis are described 
in section IV.B of this proposed determination.

D. Energy Savings

1. Determination of Savings
    For the trial standard level (TSL) evaluated, DOE projected energy 
savings from application of the TSL to the GSIL purchased in the 30-
year period that begins in the assumed year of compliance with the 
potential standards (2023-2052). The savings are measured over the 
entire lifetime of the GSILs and substitute lamps purchased in the 30-
year period. DOE quantified the energy savings attributable to TSL 1 as 
the difference in energy consumption between the standards case with 
substitution effects and the no-new-standards case. The no-new-
standards case represents a projection of energy consumption that 
reflects how the market for a product would likely evolve in the 
absence of amended energy conservation standards. In this case, the 
standards case represents energy savings not from the technology 
outlined in TSL 1, but from product substitution as consumers are 
priced out of the market for GSILs. DOE used its NIA spreadsheet model 
to estimate national energy savings (NES) from potential amended 
standards for GSILs. The NIA spreadsheet model (described in section 
IV.G of this document) calculates energy savings in terms of site 
energy, which is the energy directly consumed by products at the 
locations where they are used. For electricity, DOE reports NES in 
terms of site energy savings and source energy savings, the latter of 
which is the savings in the energy that is used to generate and 
transmit the site electricity. DOE also calculates NES in terms of 
full-fuel-cycle (FFC) energy savings. The FFC metric includes the 
energy consumed in extracting, processing, and transporting primary 
fuels (i.e., coal, natural gas, petroleum fuels), and thus presents a 
more complete picture of the impacts of energy conservation 
standards.\7\ DOE's approach is based on the calculation of an FFC 
multiplier for each of the energy types used by covered products or 
equipment. For more information on FFC energy savings, see section IV.G 
of this document.
---------------------------------------------------------------------------

    \7\ The FFC metric is discussed in DOE's statement of policy and 
notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as amended 
at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
    In determining whether amended standards are needed, DOE must 
consider whether such standards will result in significant conservation 
of energy. (42 U.S.C. 6295(m)(1)(A)) Although the term ``significant'' 
is not defined in EPCA, DOE recently proposed to define a significant 
energy savings threshold (``Process Rule''). 84 FR 3910 (February 13, 
2019). Specifically, DOE stated that it is considering using a two-step 
approach that would consider both a quad threshold value (over a 30-
year period) and a percentage threshold value to ascertain whether a 
potential standard satisfies 42 U.S.C. 6295(o)(3)(B) to ensure that DOE 
avoids setting a standard that ``will not result in significant 
conservation of energy.'' 84 FR 3901, 3924. DOE's updates to the 
Process Rule have not yet been finalized.

E. Economic Justification

1. Specific Criteria
    EPCA provides seven factors to be evaluated in determining whether 
a potential energy conservation standard is economically justified. (42 
U.S.C. 6295(o)(2)(B)(i)) The following sections discuss how DOE has 
addressed each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of a potential amended standard on 
manufacturers, DOE conducts an MIA, as discussed in section IV.H. DOE 
first uses an annual cash-flow approach to determine the quantitative 
impacts. This step includes both a short-term assessment--based on the 
cost and

[[Page 46835]]

capital requirements during the period between when a regulation is 
issued and when entities must comply with the regulation--and a long-
term assessment over a 30-year period. The industry-wide impacts 
analyzed include industry net present value (INPV), which values the 
industry based on expected future cash flows; cash flows by year; 
changes in revenue and income; and other measures of impact, as 
appropriate. Second, DOE analyzes and reports the impacts on different 
types of manufacturers, including impacts on small manufacturers. 
Third, DOE considers the impact of standards on domestic manufacturer 
employment and manufacturing capacity, as well as the potential for 
standards to result in plant closures and loss of capital investment. 
Finally, DOE takes into account cumulative impacts of various DOE 
regulations and other regulatory requirements on manufacturers.
    For individual consumers, measures of economic impact include the 
changes in LCC and PBP associated with new or amended standards. These 
measures are discussed further in the following section. For consumers 
in the aggregate, DOE also calculates the national net present value of 
the economic impacts applicable to a particular rulemaking. DOE also 
evaluates the LCC impacts of potential standards on identifiable 
subgroups of consumers that may be affected disproportionately by a 
national standard. However, because DOE has tentatively concluded 
amended standards for GSILs would not result in significant energy 
savings and, as discussed further in section V.E.3, would not be 
economically justified for one of the potential standard levels 
evaluated based on the PBP analysis, DOE did not conduct an LCC 
subgroup analysis for this notice.
b. Savings in Operating Costs Compared to Increase in Price
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered product compared 
to any increase in the price of the covered product that is likely to 
result from the imposition of the standard. (42 U.S.C. 
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP 
analysis.
    The LCC is the sum of the purchase price of a product (including 
its installation) and the operating expense (including energy, 
maintenance, and repair expenditures) discounted over the lifetime of 
the product. To account for uncertainty and variability in specific 
inputs, such as product lifetime and discount rate, DOE uses a 
distribution of values, with probabilities attached to each value. For 
its analysis, DOE assumes that consumers will purchase the covered 
products in the first year of compliance with amended standards. In 
this analysis, DOE estimates the consumer LCC of the covered product 
under a standards scenario and, as an input to the NPV, the consumer 
LCC of switching to substitute products as a replacement for the 
covered product. However, as described above the statutory factor 
addressed in this analysis is the savings in operating costs throughout 
the estimated average life of the covered product in the type (or 
class) compared to any increase in the price of, or in the initial 
charges for, or maintenance expenses of, the covered products which are 
likely to result from the imposition of the standard (emphasis added). 
Moreover, EPCA prohibits DOE from prescribing an amended or new 
standard if doing so is likely to result in the unavailability in the 
United States in any covered product type (or class) of performance 
characteristics (including reliability), features, sizes, capacities, 
and volumes that are substantially the same as those generally 
available in the United States at the time of the Secretary's finding 
(emphasis added). As such, while DOE presents the LCC of switching to 
substitute products as a replacement for the covered product, DOE 
cannot, in this determination, consider those LCC savings in making a 
determination as to whether amended standards for the covered product 
are economically justified because those LCC savings result from the 
unavailability of the covered product. Rather, DOE's determination 
regarding economic justification must be based on LCC savings resulting 
from establishing an amended standard for the covered product, i.e., 
GSILs.
    The LCC savings for the considered standard levels are calculated 
relative to the no-new-standards case and the PBP for the considered 
efficacy levels are calculated relative to the baseline. DOE's LCC and 
PBP analysis is discussed in further detail in section IV.E of this 
document.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for adopting an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As 
discussed in section IV.G, DOE uses the NIA spreadsheet to project 
national site energy savings.
d. Lessening of Utility or Performance of Products
    In establishing classes of products, and in evaluating design 
options and the impact of potential standard levels, DOE evaluates 
standards that would not lessen the utility or performance of the 
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data 
available to DOE, the standards considered in this proposed 
determination would not reduce the utility or performance of the 
products under consideration in this proposed determination.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from a proposed standard. (42 U.S.C. 
6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine 
the impact, if any, of any lessening of competition likely to result 
from a standard and to transmit such determination to the Secretary 
within 60 days of the publication of a proposed rule, together with an 
analysis of the nature and extent of the impact. (42 U.S.C. 
6295(o)(2)(B)(ii)) Because DOE is not proposing standards for GSILs, 
DOE did not transmit a copy of its proposed determination to the 
Attorney General.
f. Need for National Energy Conservation
    In evaluating the need for national energy conservation, DOE 
expects that energy savings from amended standards would likely provide 
improvements to the security and reliability of the nation's energy 
system. Reductions in the demand for electricity also may result in 
reduced costs for maintaining the reliability of the nation's 
electricity system. Energy savings from amended standards also would 
likely result in environmental benefits in the form of reduced 
emissions of air pollutants and greenhouse gases primarily associated 
with fossil-fuel based energy production. Because DOE has tentatively 
concluded amended standards for GSILs would not be economically 
justified for the potential standard level evaluated based on the PBP 
analysis, DOE did not conduct a utility impact analysis or emissions 
analysis for this NOPD.
g. Other Factors
    EPCA allows the Secretary of Energy, in determining whether a 
standard is economically justified, to consider any other factors that 
the Secretary deems to

[[Page 46836]]

be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII))
2. Rebuttable Presumption
    As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a 
rebuttable presumption that an energy conservation standard is 
economically justified if the additional cost to the consumer of a 
product that meets the standard is less than three times the value of 
the first year's energy savings resulting from the standard, as 
calculated under the applicable DOE test procedure. DOE's LCC and PBP 
analyses generate values used to calculate the effect potential amended 
energy conservation standards would have on the payback period for 
consumers. These analyses include, but are not limited to, the 3-year 
payback period contemplated under the rebuttable-presumption test. In 
addition, DOE routinely conducts an economic analysis that considers 
the full range of impacts to consumers, manufacturers, the nation, and 
the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The 
results of this analysis serve as the basis for DOE's evaluation of the 
economic justification for a potential standard level (thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification). The rebuttable-presumption payback calculation 
is discussed in section V.B.2 of this document.

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
proposed determination with regard to GSILs. Separate subsections 
address each component of DOE's analyses. DOE used several analytical 
tools to estimate the impact of potential energy conservation 
standards. The first tool is a spreadsheet that calculates the LCC 
savings and PBP of potential energy conservation standards. The NIA 
uses a second spreadsheet set that provides shipments projections and 
calculates NES and net present value of total consumer costs and 
savings expected to result from potential energy conservation 
standards. DOE uses the third spreadsheet tool, the Government 
Regulatory Impact Model (GRIM), to assess manufacturer impacts of 
potential standards. These three spreadsheet tools are available in the 
docket (see Docket section at the beginning of this NOPD).

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the products 
concerned, including the purpose of the products, the industry 
structure, manufacturers, market characteristics, and technologies used 
in the products. This activity includes both quantitative and 
qualitative assessments, based primarily on publicly available 
information. The subjects addressed in the market and technology 
assessment for this proposed determination include (1) a determination 
of the scope and product classes, (2) manufacturers and industry 
structure, (3) existing efficiency programs, (4) shipments information, 
(5) market and industry trends, and (6) technologies or design options 
that could improve the energy efficiency of GSILs. The key findings of 
DOE's market assessment are summarized in the following sections.
1. Scope of Coverage
    GSIL means a standard incandescent or halogen type lamp that is 
intended for general service applications; has a medium screw base; has 
a lumen range of not less than 310 lumens and not more than 2,600 
lumens or, in the case of a modified spectrum lamp, not less than 232 
lumens and not more than 1,950 lumens; and is capable of being operated 
at a voltage range at least partially within 110 and 130 volts; however 
this definition does not apply to the following incandescent lamps: (1) 
An appliance lamp; (2) A black light lamp; (3) A bug lamp; (4) A 
colored lamp; (5) An infrared lamp; (6) A left-hand thread lamp; (7) A 
marine lamp; (8) A marine signal service lamp; (9) A mine service lamp; 
(10) A plant light lamp; (11) A reflector lamp; (12) A rough service 
lamp; (13) A shatter-resistant lamp (including a shatter-proof lamp and 
a shatter-protected lamp); (14) A sign service lamp; (15) A silver bowl 
lamp; (16) A showcase lamp; (17) A 3-way incandescent lamp; (18) A 
traffic signal lamp; (19) A vibration service lamp; (20) A G shape lamp 
with a diameter of 5 inches or more; (21) A T shape lamp that uses not 
more than 40 watts or has a length of more than 10 inches; and (22) A 
B, BA, CA, F, G16-1/2, G-25, G30, S, or M-14 lamp of 40 watts or less. 
10 CFR 430.2 In this analysis, DOE relied on the definition of 
``general service incandescent lamp'' currently in 10 CFR 430.2.
2. Metric
    Current energy conservation standards for GSILs are applicable to 
active mode energy use and are based on a maximum wattage for a given 
lumen range. In this proposed determination, DOE used efficacy (lumens 
divided by watts, or lm/W) to assess active mode energy use. The 
measurement of lumens and watts and the calculation of lamp efficacy 
for GSILs is included in the current test procedure at appendix R to 
subpart B of 10 CFR part 430.
3. Technology Options
    To develop a list of technology options, DOE reviewed manufacturer 
catalogs, recent trade publications, technical journals, and the 2015 
IRL final rule \8\ for incandescent reflector lamps (IRLs), and 
consulted with technical experts. Based on DOE's review of product 
offerings and their efficacies in manufacturer catalogs and DOE's 
Compliance Certification Management System (CCMS) database, GSILs are 
not commercially available at efficacy levels above that which is 
currently required. However, DOE identified an infrared coatings 
technology previously used in commercially available IRLs that could be 
used to improve the efficiency of currently commercially available 
GSILs.
---------------------------------------------------------------------------

    \8\ Documents from DOE's rulemaking for IRLs are available here: 
https://www.regulations.gov/docket?D=EERE-2011-BT-STD-0006.
---------------------------------------------------------------------------

    Infrared (IR) coatings on incandescent lamps are used to reflect 
some of the radiant energy emitted back onto the filament. This 
infrared radiation then supplies heat to the filament and the operating 
temperature increases. An increase in operating temperature results in 
a higher light output and therefore an increase in efficacy. These 
infrared coatings are most commonly applied directly to the burner, or 
capsule, of a halogen lamp, which achieves the greatest directed 
reflection back onto the filament for the lowest infrared coating 
usage. For more detail, see chapter 3 of the technical support document 
(TSD) for the 2015 IRL final rule.\9\
---------------------------------------------------------------------------

    \9\ The TSD for the 2015 IRL final rule is available at https://www.regulations.gov/document?D=EERE-2011-BT-STD-0006-0066.
---------------------------------------------------------------------------

    In response to the August 2017 NODA and the February 2019 NOPR, 
several stakeholders commented on potential pathways to improve the 
efficacy of GSILs. The National Electrical Manufacturers Association 
(NEMA) and General Electric (GE) stated that there are no GSILs 
available that are more efficacious than the current GSILs on the 
market. (NEMA, No. 4 at p. 31; \10\

[[Page 46837]]

GE, No. 3 at p. 7) \11\ However, NEMA and GE both noted that more 
efficacious GSILs were previously manufactured and distributed in 
commerce. (NEMA, No. 4 at p. 32; GE, No. 3 at p. 14) \11\ GE, several 
years ago, offered two GSILs that used a halogen capsule with an 
infrared coating, referred to as halogen infrared (HIR) technology. 
Both HIR lamps had rated lifetimes of 3,000 hours and the 60-watt 
equivalent had a rated wattage of 45 watts whereas the 100-watt 
equivalent had a rated wattage of 65 watts. GE stated that neither of 
the products were commercially successful and both were discontinued 
after several years. (GE, No. 3 at p. 14) \11\ GE also noted that the 
lifetime of the HIR lamp could be shortened to reduce its wattage and 
therefore make it more efficacious but the purchase price would not 
change and there would be fewer hours over which to recover the high 
initial purchase price. (GE, No. 3 at p. 16) \11\ NEMA added in 
response to the February 2019 NOPR that Venture Lighting had also sold 
but then discontinued a more efficacious halogen GSIL and that TCP had 
never introduced a more efficacious halogen GSIL because it determined 
the cost of the product was too high. (NEMA, No. 329 at pp. 37-38) \12\
---------------------------------------------------------------------------

    \10\ A notation in this form provides a reference for 
information that is in the docket of either the August 2017 NODA 
(Docket No. EERE-2017-BT-NOA-0052) or the February 2019 NOPR (Docket 
No. EERE-2018-BT-STD-0010). This notation indicates that the 
statement preceding the reference is document number 4 in the 
applicable docket, and appears at page 31 of that document.
    \11\ These documents were submitted to the docket of DOE's 
request for data regarding incandescent lamps (Docket No. EERE-2017-
BT-NOA-0052).
    \12\ This document was submitted to the docket of DOE's proposal 
to withdraw the revised definitions of GSL and GSIL that take effect 
on January 1, 2020. (Docket No. EERE-2018-BT-STD-0010)
---------------------------------------------------------------------------

    Because HIR technology was used in GSILs in the past and is still 
used in commercially available IRLs, it is a technology that could be 
used to improve the efficiency of currently commercially available 
GSILs. Although IRLs include a reflector to direct light, the presence 
of a reflector is not necessary to employ HIR technology. An IR coating 
is applied directly to a halogen capsule, which is present in lamps 
both with and without reflectors. Indeed, currently commercially 
available GSILs and IRLs include halogen capsules. GE stated that the 
lamps were not commercially successful because they could not be 
``economically justified'' (GE, No. 3 at pp. 14-16),\11\ and DOE is 
directed by EPCA to consider enumerated factors in evaluating whether 
standards are economically justified. (42 U.S.C. 6295(o)(2)(B)(i)) The 
analysis corresponding to the EPCA requirements and the results are 
presented in section V. DOE does not consider cost when identifying 
technology options.
    In summary, for this analysis, DOE considers the technology options 
shown in Table IV.1.

                   Table IV.1--GSIL Technology Options
------------------------------------------------------------------------
     Name of technology option                   Description
------------------------------------------------------------------------
Higher Temperature Operation......  Operating the filament at higher
                                     temperatures, the spectral output
                                     shifts to lower wavelengths,
                                     increasing its overlap with the eye
                                     sensitivity curve.
Microcavity Filaments.............  Texturing, surface perforations,
                                     microcavity holes with material
                                     fillings, increasing surface area
                                     and thereby light output.
Novel Filament Materials..........  More efficient filament alloys that
                                     have a high melting point, low
                                     vapor pressure, high strength, high
                                     ductility, or good radiating
                                     characteristics.
Thinner Filaments.................  Thinner filaments to increase
                                     operating temperature. This measure
                                     may shorten the operating life of
                                     the lamp.
Crystallite Filament Coatings.....  Layers of micron or submicron
                                     crystallites deposited on the
                                     filament surface that increases
                                     emissivity of the filament.
Higher Efficiency Inert Fill Gas..  Filling lamps with alternative
                                     gases, such as Krypton, to reduce
                                     heat conduction.
Higher Pressure Tungsten-Halogen    Increased halogen bulb burner
 Lamps.                              pressurization, allowing higher
                                     temperature operation.
Non-Tungsten-Halogen Regenerative   Novel filament materials that
 Cycles.                             regenerate.
Infrared Glass Coatings...........  When used with a halogen burner,
                                     this is referred to as an HIR lamp.
                                     Infrared coatings on the inside of
                                     the bulb to reflect some of the
                                     radiant energy back onto the
                                     filament.
Infrared Phosphor Glass Coatings..  Phosphor coatings that can absorb
                                     infrared radiation and re-emit it
                                     at shorter wavelengths (visible
                                     region of light), increasing the
                                     lumen output.
Ultraviolet Phosphor Glass          Phosphor coatings that convert
 Coatings.                           ultraviolet radiation into longer
                                     wavelengths (visible region of
                                     light), increasing the lumen
                                     output.
High Reflectance Filament Supports  Filament supports that include a
                                     reflective face that reflects light
                                     to another filament, the reflective
                                     face of another filament support,
                                     or radially outward.
Permanent Infrared Reflector        Permanent shroud with an IR
 Coating Shroud.                     reflector coating and a removable
                                     and replaceable lamp can increase
                                     efficiency while reducing
                                     manufacturing costs by allowing IR
                                     reflector coatings to be reused.
Higher Efficiency Burners.........  A double-ended burner that features
                                     a lead wire outside of the burner,
                                     where it does not interfere with
                                     the reflectance of energy from the
                                     burner wall back to the burner
                                     filament in HIR lamps.
------------------------------------------------------------------------

4. Screening Analysis
    DOE uses the following four screening criteria to determine which 
technology options are suitable for further consideration in an energy 
conservation standards rulemaking:
    (1) Technological feasibility. Technologies that are not 
incorporated in commercial products or in working prototypes will not 
be considered further.
    (2) Practicability to manufacture, install, and service. If it is 
determined that mass production and reliable installation and servicing 
of a technology in commercial products could not be achieved on the 
scale necessary to serve the relevant market at the time of the 
projected compliance date of the standard, then that technology will 
not be considered further.
    (3) Impacts on product utility or product availability. If it is 
determined that a technology would have significant adverse impact on 
the utility of the product to significant subgroups of consumers or 
would result in the unavailability of any covered product type with 
performance characteristics (including reliability), features, sizes, 
capacities, and volumes that are substantially the same as products

[[Page 46838]]

generally available in the United States at the time, it will not be 
considered further.
    (4) Adverse impacts on health or safety. If it is determined that a 
technology would have significant adverse impacts on health or safety, 
it will not be considered further.

10 CFR part 430, subpart C, appendix A, 4(a)(4) and 5(b)
    In summary, if DOE determines that a technology, or a combination 
of technologies, fails to meet one or more of the listed four criteria, 
it will be excluded from further consideration in the engineering 
analysis. Additionally, it is DOE policy not to include in its analysis 
any proprietary technology that is a unique pathway to achieving a 
certain efficacy level.
    DOE reviewed the technology options identified in Table IV.1 and 
screened out several because DOE could not find evidence of their 
existence in working prototypes or commercially available products. For 
several of them, DOE also screened them out based on the practicability 
to manufacture and/or impacts on product utility. Table IV.2 summarizes 
the technology options screened out.

    Table IV.2--GSIL Technology Options Screened Out of the Analysis
------------------------------------------------------------------------
      Design option excluded                 Screening criteria
------------------------------------------------------------------------
Novel Filament Materials..........  Technological feasibility,
                                     Practicability to manufacture,
                                     install, and service, Adverse
                                     impact on product utility.
Microcavity Filaments.............  Technological feasibility,
                                     Practicability to manufacture,
                                     install, and service, Adverse
                                     impact on product utility.
Crystallite Filament Coatings.....  Technological feasibility,
                                     Practicability to manufacture,
                                     install, and service.
High Reflectance Filament Supports  Technological feasibility,
                                     Practicability to manufacture,
                                     install, and service.
Non-Tungsten-Halogen Regenerative   Technological feasibility,
 Cycles.                             Practicability to manufacture,
                                     install, and service, Adverse
                                     impact on product utility.
Permanent Infrared Reflector        Technological feasibility,
 Coating Shroud.                     Practicability to manufacture,
                                     install, and service.
Infrared Phosphor Glass Coating...  Technological feasibility,
                                     Practicability to manufacture,
                                     install, and service.
Ultraviolet Phosphor Glass Coating  Technological feasibility,
                                     Practicability to manufacture,
                                     install, and service.
------------------------------------------------------------------------

    DOE did not screen out infrared glass coatings. As noted in section 
IV.A.3, infrared glass coatings were previously used to improve the 
efficiency of GSILs; however those products were not commercially 
viable and are no longer available. The existence of a commercially 
available GSIL that employed the technology in the recent past, in 
addition to the existence of a commercially available IRL that 
currently employs the technology on halogen capsules that could be used 
in GSILs, indicates that infrared glass coatings are technologically 
feasible and practicable to manufacture, install, and service. DOE is 
not aware of any adverse impacts on product utility or adverse impacts 
on health or safety; IRLs that use the technology have been available 
for at least 10 years with no significant issues. As described by GE, 
it was a business decision to discontinue the GSILs that utilized 
infrared glass coatings because of their high costs. DOE considers 
economic impacts on consumers, manufacturers, and the nation as 
described in sections IV.E, IV.H, and IV.G.
    DOE tentatively concludes that the remaining technologies pass all 
four screening criteria to be examined further as design options in 
this analysis. In summary, DOE did not screen out the following 
technology options and considers them as design options in the 
engineering analysis:

 Higher Temperature Operation
 Thinner Filaments
 Higher Efficiency Inert Fill Gas
 Higher Pressure Tungsten-Halogen Lamps
 Infrared Glass Coatings
 Higher Efficiency Burners
5. Product Classes
    In general, when evaluating and establishing energy conservation 
standards, DOE divides the covered product into classes by (1) the type 
of energy used, (2) the capacity of the product, or (3) any other 
performance-related feature that affects energy efficiency and 
justifies different standard levels, considering factors such as 
consumer utility. (42 U.S.C. 6295(q)) Product classes for GSILs are 
currently divided based on lamp spectrum and lumen output.
    DOE proposes to maintain separate product classes based on lamp 
spectrum. Modified spectrum \13\ lamps provide unique utility to 
consumers by providing a different type of light than standard spectrum 
lamps, much like fluorescent and light-emitting diode (LED) lamps with 
different correlated color temperature (CCT) values. However, the same 
technologies that modify the spectral emission of a lamp also decrease 
lamp efficacy. To modify the spectrum, the coating absorbs a portion of 
the light emission from the filament. Neodymium coatings or other 
coatings on modified spectrum lamps absorb some of the visible emission 
from the incandescent filament (usually red), creating a modified, 
reduced spectral emission. Since the neodymium or other coatings absorb 
some of the lumen output from the filament, these coatings decrease the 
efficacy of the lamp. Because of the impact on both efficacy and 
utility, DOE is proposing to maintain separate product classes based on 
spectrum. DOE is proposing separate product classes for standard 
spectrum GSILs (those without modification to the spectral emission) 
and modified spectrum GSILs (some portion of the spectral emission is 
absorbed).
---------------------------------------------------------------------------

    \13\ See CFR 430.2 for the definition of ``modified spectrum'' 
with respect to an incandescent lamp.
---------------------------------------------------------------------------

    DOE did not separate product classes based on lumen output for the 
evaluation under this proposed determination. As described in section 
IV.B.4, DOE evaluated efficacy levels (ELs) that use an equation to 
determine the minimum required efficacy based on the lamp's lumen 
output. Current product classes for GSILs are separated based on lumen 
output, with a constant maximum wattage specified for a given lumen 
range. This results in the minimum efficacy requirement increasing as 
lumen output increases across a given lumen range. DOE evaluated 
efficacy levels that follow the same trend; that is, minimum required 
efficacy increases as lumen output increases. Because DOE is evaluating 
efficacy levels based on an equation in which the minimum efficacy 
requirement changes based on the lumen output of the lamp, DOE did not 
evaluate separate product classes based on lumen output.
    In summary, DOE evaluated two product classes for GSILs--one for 
GSILs that meet the definition of

[[Page 46839]]

modified spectrum in 10 CFR 430.2 and one for standard spectrum GSILs 
(i.e., do not meet the definition of modified spectrum). See chapter 3 
of the NOPD TSD for further discussion.

B. Engineering Analysis

    In the engineering analysis, DOE selects representative product 
classes to analyze. It then selects baseline lamps within those 
representative product classes and identifies more-efficacious 
substitutes for the baseline lamps. DOE uses these more-efficacious 
lamps to develop efficacy levels.
    For this proposed determination, DOE selected more efficacious 
substitutes in the engineering analysis and determined the consumer 
prices of those substitutes in the product price determination. DOE 
estimated the consumer price of lamps directly because reverse-
engineering is impractical since the lamps are not easily disassembled. 
By combining the results of the engineering analysis and the product 
price determination, DOE derived typical inputs for use in the LCC 
analysis and NIA. Section IV.C discusses the product price 
determination.
    The methodology for the engineering analysis consists of the 
following steps: (1) Select representative product classes, (2) select 
baseline lamps, (3) identify more efficacious substitutes, (4) develop 
efficacy levels by directly analyzing representative product classes, 
and (5) scale efficacy levels to non-representative product classes. 
The details of the engineering analysis are discussed in chapter 5 of 
the NOPD TSD.
1. Representative Product Classes
    In the case where a covered product has multiple product classes, 
DOE identifies and selects certain product classes as 
``representative'' and concentrates its analytical effort on those 
classes. DOE chooses product classes as representative primarily 
because of their high market volumes. Based on its assessment of 
product offerings, DOE analyzed as representative standard spectrum 
GSILs (only 3 percent of commercially available halogen GSILs were 
marketed as having a modified spectrum). This is consistent with the 
2015 IRL rulemaking in which DOE analyzed, with support from NEMA, 
standard spectrum IRLs as representative. 79 FR 24068, 24107 (April 29, 
2014).
2. Baseline Lamps
    For each representative product class, DOE selects a baseline lamp 
as a reference point against which to measure changes resulting from 
energy conservation standards. Typically the baseline lamp is the most 
common, least efficacious lamp that meets existing energy conservation 
standards. In this analysis, DOE selected as a baseline the least 
efficacious lamp meeting standards with the most common lumen output 
and, where possible, with the most common wattage, lifetime, input 
voltage, and shape for the product class.
    DOE reviewed certified GSILs in DOE's compliance certification 
database and also used a database of commercially available products to 
identify the baseline lamp. DOE identified 60 watt equivalent lamps, or 
lamps with a lumen output between 750 and 1,049 lumens, to be the most 
common lamps based on the number of products certified within this 
lumen range in the compliance certification database. This is 
consistent with DOE's conclusion in the March 2016 GSL NOPR that 60-
watt equivalent lamps were the most popular lamps within the 310 to 
2,000 lumen product class. 81 FR 14528, 14568-14569 (March 17, 2016). 
DOE also analyzed certified GSILs to identify a common wattage and 
lifetime. For lamps with a lumen output between 750 and 1,049 lumens, 
DOE found certified rated wattage values to range from 41.9 to 43 watts 
and certified rated lifetime values to range from 1,000 to 2,056 hours. 
The wattage values were distributed among the range and about equally 
distributed between values that would round to 42 watts and values that 
would round to 43 watts. Products available in catalogs and on websites 
reported rated wattage to the nearest whole number rather than the 
nearest tenth of a watt. A database of commercially available products 
showed the most popular wattage to be 43 watts (92 percent of all 
halogen GSILs within the lumen range, 100 percent of all GSILs marketed 
as a 60 watt equivalent). Among GSILs with a lumen output between 750 
and 1,049 lumens, the most common rated lifetime was 1,000 hours (76 
percent of all certified GSILs within the lumen range). This was 
consistent with the database for commercially available products--over 
80 percent of halogen lamps with a lumen output between 750 and 1,049 
lumens had a lifetime of 1,000 hours and all halogen lamps in the 
designated lumen range that were marketed as 60 watt equivalents also 
had a lifetime of 1,000 hours. In addition to rated wattage and rated 
lifetime, 95 percent of commercially available halogen lamps (100 
percent of commercially available halogen lamps marketed as 60 watt 
equivalents) within the designated lumen range had an input voltage of 
120 volts and 70 percent of commercially available halogen lamps within 
the designated lumen range had an A19 bulb shape.
    DOE selected the baseline lamp shown in Table IV.3 because it just 
meets existing standards within the most common lumen range and also 
has other common characteristics described in the preceding paragraph. 
See chapter 5 of the NOPD TSD for more detail.

                                                                Table IV.3--Baseline GSIL
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          Rated lifetime   Efficacy (lm/
                    EL                               Technology               Wattage       Bulb shape    Initial lumens       (hrs)            W)
--------------------------------------------------------------------------------------------------------------------------------------------------------
EL 0/Baseline.............................  Halogen.....................              43             A19             750           1,000            17.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. More-Efficacious Substitutes
    Because few, if any, consumers are anticipated to buy HIR lamps 
under TSL 1, DOE expects that consumers who presently buy GSILs would 
substitute less expensive lamps, such as CFLs and LEDs. DOE evaluated 
more-efficacious lamps as replacements for the baseline lamp by 
considering commercially available products and technologies not 
eliminated in the screening analysis. DOE could not use data in the 
compliance certification database to evaluate more efficacious lamps 
because the information required to calculate efficacy was not 
included; rated wattage was reported for a given lumen range rather 
than for an exact lumen output. Instead, DOE reviewed its database of 
commercially available GSILs for lamps that met the definition of a 
GSIL, had a lumen output between 750 and 1,049 lumens, had an A-shape, 
and had a higher efficacy than the baseline lamp while still exceeding 
the minimum standard established by EISA. DOE did not identify any 
commercially available GSILs that could serve as more efficacious 
substitutes for the baseline lamp.

[[Page 46840]]

    Because no commercially available products could serve as a more 
efficacious substitute for the baseline lamp, DOE modeled a more 
efficacious substitute based on design options identified in the 
screening analysis. As noted in section IV.A.4, the technology options 
identified as design options must be technologically feasible; 
practicable to manufacture, install, and service; have no adverse 
impacts on product utility or product availability; and have no adverse 
impacts on health or safety.
    DOE modeled a more efficacious substitute for the baseline lamp 
assuming that the modeled lamp utilized IR coatings on the halogen 
capsule within the baseline lamp. In this instance, the model is based 
on an actual lamp that previously had been commercially available but 
was taken off the market for economic reasons, including high upfront 
cost. The inclusion of an IR coating also increases the lamp's 
operating temperature and pressure (two other identified design 
options). DOE's modeled lamp did not incorporate thinner filaments, 
higher efficiency inert fill gas, or higher efficiency burners because 
it did not believe including those design options would increase the 
efficacy beyond that achieved by the combination of an IR coating and 
higher temperature and pressure operation.
    DOE reviewed information submitted by GE regarding GSILs that it 
previously offered for sale. GE's 60 watt equivalent GSIL that employed 
IR coatings had a rated wattage of 45 watts and a lifetime of 3,000 
hours. DOE reviewed information on discontinued products and found a 
label that indicated this product had a lumen output of 870 lumens. DOE 
used a similar methodology as in the 2009 IRL rulemaking \14\ and the 
2015 IRL rulemaking \15\ to adjust the lumen output and lifetime of the 
lamp to be equal to that of the baseline lamp (see chapter 5 of the TSD 
for the 2009 IRL final rule). Making these adjustments lowered the 
rated wattage of the modeled lamp to 34.3 watts. This decrease in 
wattage in consistent with GE's comment that lowering the lifetime of 
the HIR lamp would reduce its wattage and therefore make it more 
efficacious. (GE, No. 3 at p. 16) \11\ DOE identifies only energy-
saving substitutes in the engineering analysis. The performance 
characteristics of the modeled HIR lamp are shown in Table IV.4.
---------------------------------------------------------------------------

    \14\ DOE published a final rule on July 14, 2009 amending energy 
conservation standards for IRLs. The docket for the 2009 rulemaking 
is available at https://www.regulations.gov/docket?D=EERE-2006-STD-0131.
    \15\ Chapter 5 of the TSD for the 2015 IRL final rule is 
available at https://www.regulations.gov/document?D=EERE-2011-BT-STD-0006-0066.

                                                      Table IV.4--More Efficacious GSIL Substitutes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          Rated lifetime   Efficacy (lm/
                    EL                               Technology               Wattage       Bulb shape    Initial lumens       (hrs)            W)
--------------------------------------------------------------------------------------------------------------------------------------------------------
EL 1......................................  HIR.........................            34.3             A19             750           1,000            21.9
--------------------------------------------------------------------------------------------------------------------------------------------------------

4. Efficacy Levels
    After identifying more-efficacious substitutes for the baseline 
lamp, DOE developed ELs based on the consideration of several factors, 
including: (1) The design options associated with the specific lamps 
being studied, (2) the ability of lamps across lumen outputs to comply 
with the standard level of a given product class, and (3) the max-tech 
level.
    DOE is employing an equation-based approach in this NOPD. DOE is 
relying on a continuous equation based on its assessment that a step 
function, where efficacy rises significantly at certain increments in 
lumen output, is not representative of the technology used by the 
products covered by this proposed determination. DOE recognizes that a 
step function increases the potential for products to be introduced at 
the lowest possible efficacy point in each step. While this could 
potentially encourage the development of similar-wattage products 
across the industry, a wide variety of replacement wattages would offer 
the consumer a greater number of choices. For example, LED lamps exist 
in many different wattages and consumer choice has been positively 
impacted. For these reasons, the limitations of a step function 
outweigh its benefits and DOE is therefore evaluating a standard based 
on a smooth, continuous equation.
    DOE is evaluating a lumens-based approach in this notice. The 
primary utility provided by a lamp is lumen output, which can be 
achieved through a wide range of wattages depending on the lamp 
technology. For this reason, lamps providing equivalent lumen output 
and therefore intended for the same applications should be subject to 
the same minimum efficacy requirements. Thus, DOE is considering a 
continuous equation for ELs that develops a relationship between lumen 
output and efficacy.
    DOE reviewed the equation form used in the March 2016 GSL NOPR to 
evaluate its applicability to GSILs. Specifically, DOE considered the 
following equation that relates the lumen output of a lamp to lamp 
efficacy:

Efficacy = A-29.42 * 0.9983initial lumen output

Where A is a constant that varies by EL.

    In the preliminary analysis \16\ for the GSL energy conservation 
standards rulemaking, DOE utilized a database of commercially available 
lamps to evaluate efficacy trends of GSLs across a range of lumen 
outputs in order to fit the curve. DOE confirmed the curve fit matched 
product performance, particularly in the low and high ends of the GSL 
lumen range. Although GSILs were not included in that analysis because 
it was legally prohibited by an Appropriations Rider from doing so, the 
relationship characterized by the equation is consistent with the 
current standards for GSILs. The structure of the current standards, 
with a maximum wattage for a given lumen range, results in the least 
stringent requirement being at the lowest lumen output within each 
lumen range. Since the current standards have required compliance, 
products on the market have generally been offered at the lowest lumen 
output within given lumen range, likely because it is easiest to comply 
with these requirements. When plotting these commercially available 
lamps, the efficacy increases as lumen output increases, with the 
largest jump in efficacy occurring between the lowest and next-lowest 
lumen output range and each successive jump in efficacy being smaller 
than the one prior to it. The equation under consideration 
characterizes the same trend; that is, efficacy sharply increases as 
lumen

[[Page 46841]]

output increases at the lowest part of the lumen range and then the 
increases slow down such that a curve is formed with a steep slope at 
the low end of the lumen range and a flatter slope at the high end of 
the lumen range. Because the equation from the March 2016 GSL NOPR 
characterizes the same lumen output-efficacy relationship shown by the 
current GSIL standards, DOE has used this equation form to establish 
ELs for GSILs.
---------------------------------------------------------------------------

    \16\ Prior to publishing the March 2016 GSL NOPR, DOE published 
a notice in the Federal Register announcing the availability of the 
preliminary analysis. 79 FR 73503 (Dec. 11, 2014).
---------------------------------------------------------------------------

    As described in section IV.B.3, DOE identified, through modeling, 
one GSIL technology that could perform at an efficacy higher than 
existing standards. DOE developed one EL based on the efficacy of the 
more modeled lamp. Based on a lumen output of 750 lumens and an 
efficacy of 21.9 lm/W (see Table IV.4), DOE determined EL 1 to have an 
A value of 30.0. Table IV.5 summarizes the EL developed by the 
engineering analysis.

               Table IV.5--EL for GSIL Representative Product Class Based on Engineering Analysis
----------------------------------------------------------------------------------------------------------------
                                                                               Efficacy
  Representative product class     Efficacy level   ------------------------------------------------------------
                                                                                 lm/W
----------------------------------------------------------------------------------------------------------------
Standard Spectrum GSILs........  EL 1..............  30.0-29.42 * 0.9983 [supcaret] Initial Lumen Output.
----------------------------------------------------------------------------------------------------------------

5. Scaling to Other Product Classes
    DOE identifies and selects certain product classes as 
representative and analyzes these product classes directly. DOE chooses 
representative product classes primarily due to their high market 
volumes. The ELs for product classes that are not directly analyzed 
(``non-representative product classes'') are then determined by scaling 
the ELs of the representative product classes. For this analysis DOE 
directly analyzed standard spectrum GSILs but did not directly analyze 
modified spectrum GSILs.
    DOE developed an EL for the modified spectrum product class by 
scaling the EL of the standard spectrum product class. The primary 
difference between these product classes is the lamp spectrum; a 
coating applied to the lamp modifies its spectral emission but also 
decreases its efficacy. DOE developed a scaling factor by comparing 
existing standards for standard spectrum GSILs to similar modified 
spectrum GSILs. From this analysis DOE determined that the modified 
spectrum lamps are 25 percent less efficacious than standard spectrum 
lamps. DOE applied this reduction to the A-value for the EL developed 
in section IV.B.4.
    Table IV.6 summarizes the efficacy requirements for the non-
representative product class.

             Table IV.6--EL for GSIL Non-Representative Product Class Based on Engineering Analysis
----------------------------------------------------------------------------------------------------------------
                                                                               Efficacy
   Non-representative product      Efficacy level   ------------------------------------------------------------
             class                                                               lm/W
----------------------------------------------------------------------------------------------------------------
Modified Spectrum GSILs........  EL 1..............  22.5-29.42 * 0.9983 [supcaret] Initial Lumen Output.
----------------------------------------------------------------------------------------------------------------

6. Product Substitutes
    If energy conservation standards for GSILs are amended, consumers 
may substitute alternative lamps that are not GSILs due to the high 
upfront cost and long PBP associated with HIR technology. DOE notes 
that EPCA prohibits DOE from prescribing an amended or new standard if 
that standard is likely to result in the unavailability in the United 
States in any covered product type (or class) of performance 
characteristics (including reliability), features, sizes, capacities, 
and volumes that are substantially the same as those generally 
available in the United States at the time of the Secretary's finding. 
42 U.S.C. 6295(o)(4) As such, DOE could not set a standard applicable 
to GSILs that results in consumers being left with no choice but an 
alternative lamp that is a different product type or has different 
performance characteristics or features than GSILs.
    In this analysis, DOE considered several alternatives available to 
consumers that have the same base type (medium screw base) and input 
voltage (120 volts) as the baseline lamp. DOE considered two more 
efficacious lamps that consumers may choose if standards for GSILs are 
amended: A CFL and an LED lamp. As noted by GE and NEMA, CFLs and LED 
lamps can be used to satisfy lighting applications traditionally served 
by incandescent general service lamps. (GE, No. 3 at p. 7; NEMA, No. 4 
at p. 31) \11\ For consumers who are resistant to changing technology, 
and for those who are trying to replace a 60 watt incandescent lamp 
with a 60 watt replacement, DOE also considered a shatter-resistant 
incandescent lamp that is exempt from the definition of GSIL. Because 
this lamp is not a GSIL, it would not be subject to amended standards 
for GSILs and would remain available on the market. However, all of the 
lamps considered in this consumer choice analysis represent a change in 
product type, technology and performance characteristics compared to a 
halogen or HIR lamp, and, thus are provided for informational purposes 
only. Table IV.7 summarizes the performance characteristics of the GSIL 
alternatives that consumers can choose if GSIL standards are amended.

                                            Table IV.7--Alternative Lamps Consumers May Substitute For GSILs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          Rated lifetime   Efficacy (lm/
                Option                        Technology             Wattage            Bulb shape        Initial lumens       (hrs)            W)
--------------------------------------------------------------------------------------------------------------------------------------------------------
A....................................  Incandescent............              60  A19....................             587           4,000             9.8
B....................................  CFL.....................              13  Spiral.................             900          10,000            69.2
C....................................  LED.....................               9  A19....................             800          15,000            88.9
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 46842]]

C. Product Price Determination

    Typically, DOE develops manufacturer selling prices (MSPs) for 
covered products and applies markups to create end-user prices to use 
as inputs to the LCC analysis and NIA. Because GSILs are difficult to 
reverse-engineer (i.e., not easily disassembled), DOE directly derives 
end-user prices for GSILs. End-user price refers to the product price a 
consumer pays before tax and installation.
    In the March 2016 GSL NOPR, DOE observed a range of consumer prices 
paid for a lamp, depending on the distribution channel through which 
the lamp was purchased. Specifically, DOE identified the following four 
main distribution channels: Small Consumer-Based Distributors (i.e., 
internet retailers, grocery stores, drug stores); Large Consumer-Based 
Distributors: (i.e., home centers, mass merchants, hardware stores); 
Electrical Distributors; and State Procurement. For each distribution 
channel, DOE calculated an average price for the representative lamp 
unit at each EL using prices for the representative lamp unit and 
similar lamp models. Because the similar lamp models included in the 
average price were equivalent to the representative lamp unit in terms 
of performance and utility (i.e., had similar wattage, CCT, bulb shape, 
base type, CRI), DOE considered the pricing of these lamps to be 
representative of the technology of the EL. DOE developed average end-
user prices for the representative lamp units sold in each of the four 
main distribution channels identified. DOE then calculated an average 
weighted end-user price using estimated shipments through each 
distribution channel. DOE applied a 10 percent weighting to the Small 
Consumer-Based Distributors channel, 80 percent to the Large Consumer-
Based Distributors channel, 5 percent to the Electrical Distributors 
channel, and 5 percent to the State Procurement channel.
    DOE used the methodology from the March 2016 GSL NOPR to calculate 
the prices for the GSIL baseline lamp and the three consumer choice 
alternatives. GSILs and the three consumer choice alternatives are 
purchased through the same distribution channels as the CFL and LED 
lamps analyzed in the March 2016 GSL NOPR.
    Because DOE modeled an HIR lamp at EL 1, which is not currently 
commercially available, DOE could not gather prices for commercially 
available lamps and use the same methodology as the March 2016 GSL 
NOPR. Instead, DOE reviewed the incremental pricing from the 2015 IRL 
final rule for the baseline halogen lamp and the more efficacious HIR 
substitute. HIR technology can be utilized in both omnidirectional 
lamps and reflector lamps because it is applied directly to halogen 
capsules contained within both lamp types. DOE therefore added the 
incremental change in end-user price from the 2015 IRL final rule to 
the baseline GSIL analyzed in this evaluation.
    GE stated that HIR lamps are expensive because the coating of the 
halogen capsules occurs during a slow and expensive batch manufacturing 
process. A heavy glass outer jacket is also used because the capsule 
operates at a higher pressure than standard halogen capsules. GE stated 
that the price for the HIR lamp it used to offer for sale ranged from 
$6.00 to $9.00 per lamp depending on the retailer and packaging 
quantity and that the average price was $7.00 per lamp. GE asserted 
that reducing the price much below $6.00 was not a long-term economic 
option because the high cost of the product left little profit margin 
for the manufacturer or retailer at lower prices. (GE, No. 325 at p. 5) 
\12\ As described in the preceding paragraph, DOE determined the price 
of the HIR lamp at EL 1 by reviewing the prices for the halogen 
baseline and HIR lamp in the 2015 IRL final rule. That analysis 
concluded the price of the HIR lamp to be $7, which aligns with the 
price estimate submitted by GE. DOE notes that $7 is significantly more 
than consumers currently pay for 43W Halogen lamps ($1.81), IRLs 
($2.15), CFLs ($2.94), and LEDs ($3.00), further illustrating that HIR 
lamp technology is not commercially viable.
    Table IV.8 summarizes the prices of the GSILs analyzed in this 
rulemaking and Table IV.9 summarizes the prices of the alternative 
lamps consumers may choose if standards for GSILs are amended.

                                                          Table IV.8--End-User Prices for GSILs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Rated lifetime   Efficacy (lm/
                    EL                               Technology               Wattage     Initial lumens       (hrs)            W)        End-user price
--------------------------------------------------------------------------------------------------------------------------------------------------------
EL 0......................................  Halogen.....................              43             750           1,000            17.4           $1.81
EL 1......................................  HIR.........................            34.3             750           1,000            21.9            7.00
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                              Table IV.9--End-User Prices for Consumer Choice Alternatives
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Rated lifetime   Efficacy (lm/
                  Option                             Technology               Wattage     Initial lumens       (hrs)            W)        End-user price
--------------------------------------------------------------------------------------------------------------------------------------------------------
A.........................................  Inc.........................              60             587           4,000             9.8           $2.15
B.........................................  CFL.........................              13             900          10,000            69.2            2.94
C.........................................  LED.........................               9             800          15,000            88.9            3.00
--------------------------------------------------------------------------------------------------------------------------------------------------------

D. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of GSILs in representative U.S. single-family homes, 
multi-family residences, and commercial buildings, and to assess the 
energy savings potential of an amended energy conservation standard 
applied to GSILs. To develop annual energy use estimates, DOE 
multiplied GSIL input power by the number of hours of use (HOU) per 
year and a factor representing the impact of controls. The energy use 
analysis estimates the range of energy use of GSILs in the field (i.e., 
as they are actually used by consumers). The energy use analysis 
provides the basis for other analyses DOE performed, particularly 
assessments of the energy savings and the savings in consumer operating 
costs that could result from adoption of amended or new standards.
    DOE analyzed energy use in the residential and commercial sectors 
separately but did not explicitly analyze GSILs installed in the 
industrial sector. This is because far fewer GSILs are installed in 
that sector compared to the commercial sector, and the average

[[Page 46843]]

operating hours for GSILs in the two sectors were assumed to be 
approximately equal. In the energy use and subsequent analyses, DOE 
analyzed these sectors together (using data specific to the commercial 
sector), and refers to the combined sector as the commercial sector.
1. Operating Hours
a. Residential Sector
    GE commented in response to the August 2017 NODA on GSILs and other 
incandescent lamps that the 2010 DOE Lighting Market Characterization 
(LMC) report \17\ estimated operating hours of GSLs at 1.8 hours per 
day. (GE, No. 3 at p. 5) \11\ DOE notes that a newer version of the LMC 
report has subsequently come out and that both the 2010 and 2015 LMC 
reports relied primarily on data from field studies in California.\18\ 
To take into account the regional variability in the average HOU of 
GSILs in the residential sector--which were assumed to have similar HOU 
to MSB A-type lamps--DOE used the same methodology as for the March 
2016 GSL NOPR. DOE used data from various regional field-metering 
studies of GSL operating hours conducted across the U.S. to determine 
the regional variation in average HOU. Chapter 7 of the NOPD TSD lists 
the regional metering studies used. Specifically, DOE determined the 
average HOU for each EIA 2015 Residential Energy Consumption Survey 
(RECS) reportable domain (i.e., state, or group of 
states).19 20 For regions without HOU metered data, DOE used 
data from adjacent regions. DOE estimated the national weighted-average 
HOU of GSILs in the residential sector to be 2.3 hours per day.
---------------------------------------------------------------------------

    \17\ Navigant Consulting, Inc. Final Report: 2010 U.S. Lighting 
Market Characterization. 2012. U.S. Department of Energy: 
Washington, DC (Last accessed July 22, 2019.) http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2010-lmc-final-jan-2012.pdf.
    \18\ Navigant Consulting, Inc. 2015 U.S. Lighting Market 
Characterization. 2017. U.S. Department of Energy: Washington, DC 
Report No. DOE/EE-1719. (Last accessed July 5, 2019.) https://energy.gov/eere/ssl/downloads/2015-us-lighting-market-characterization.
    \19\ The 2015 RECS provided detail only to the division, not 
reportable domain, level; therefore, in creating its residential 
consumer sample DOE randomly assigned a RECS reportable domain to 
each consumer based on the reportable domain breakdown from RECS 
2009.
    \20\ U.S. Department of Energy-Energy Information 
Administration. 2015 RECS Survey Data. (Last accessed July 2, 2019.) 
https://www.eia.gov/consumption/residential/data/2015/.
---------------------------------------------------------------------------

    The operating hours of lamps in actual use are known to vary 
significantly based on the room type the lamp is located in; therefore, 
DOE estimated this variability by developing HOU distributions for each 
room type using data from Northwest Energy Efficiency Alliance's 
(NEEA's) Residential Building Stock Assessment Metering Study 
(RBSAM),\21\ a metering study of 101 single-family houses in the 
Northwest. DOE assumed that the shape of the HOU distribution for a 
particular room type would be the same across the United States, even 
if the average HOU for that room type varied by geographic location. To 
determine the distribution of GSILs by room type, DOE used data from 
NEEA's 2011 RBSAM for single-family homes,\22\ which included GSL room-
distribution data for more than 1,400 single-family homes throughout 
the Northwest.
---------------------------------------------------------------------------

    \21\ Ecotope Inc. Residential Building Stock Assessment: 
Metering Study. 2014. Northwest Energy Efficiency Alliance: Seattle, 
WA. Report No. E14-283. (Last accessed July 5, 2019.) https://neea.org/resources/2011-rbsa-metering-study.
    \22\ Northwest Energy Efficiency Alliance. 2011 Residential 
Building Stock Assessment Single-Family Database. (Last accessed 
July 5, 2019.) https://neea.org/resources/2011-rbsa-single-family-database.
---------------------------------------------------------------------------

b. Commercial Sector
    DOE determined the HOU for commercial GSILs in the same way as for 
the March 2016 GSL NOPR. For each commercial building type presented in 
the 2015 LMC, DOE determined average HOU based on the fraction of 
installed lamps utilizing each of the light source technologies 
typically used in GSLs and the HOU for each of these light source 
technologies. DOE estimated the national-average HOU for the commercial 
sector by weighting the building-specific HOU for GSLs by the relative 
floor space of each building type as reported in in the 2012 EIA 
Commercial Buildings Energy Consumption Survey (CBECS).\23\ The 
national weighted-average HOU for GSLs, and therefore GSILs, in the 
commercial sector were estimated at 11.8 hours per day. To capture the 
variability in HOU for individual consumers in the commercial sector, 
DOE used data from NEEA's 2014 Commercial Building Stock Assessment 
(CBSA).\24\ As for the residential sector, DOE assumed that the shape 
of the HOU distribution from the CBSA was similar for the U.S. as a 
whole.
---------------------------------------------------------------------------

    \23\ U.S. Department of Energy--Energy Information 
Administration. 2012 CBECS Survey Data. (Last accessed July 5, 
2019.) http://www.eia.gov/consumption/commercial/data/2012/index.cfm?view=microdata.
    \24\ Navigant Consulting, Inc. 2014 Commercial Building Stock 
Assessment: Final Report. 2014. Northwest Energy Efficiency 
Alliance: Seattle, WA. (Last accessed July 5, 2019.) https://neea.org/resources/2014-cbsa-final-report.
---------------------------------------------------------------------------

2. Input Power
    The input power used in the energy use analysis is the input power 
presented in the engineering analysis (section IV.B) for the 
representative lamps considered in this rulemaking.
3. Lighting Controls
    For GSILs that operate with controls, DOE assumed an average energy 
reduction of 30 percent (in keeping with the March 2016 GSL NOPR). This 
estimate was based on a meta-analysis of field measurements of energy 
savings from commercial lighting controls by Williams, et al.\25\ 
Because field measurements of energy savings from controls in the 
residential sector are very limited, DOE assumed that controls would 
have the same impact as in the commercial sector.
---------------------------------------------------------------------------

    \25\ Williams, A., B. Atkinson, K. Garbesi, E. Page, and F. 
Rubinstein. Lighting Controls in Commercial Buildings. LEUKOS. 2012. 
8(3): pp. 161-180.
---------------------------------------------------------------------------

    For this NOPD, DOE assumed that 9 percent of residential GSILs are 
on controls, which aligns with the fraction of lamps reported to be on 
dimmers or occupancy sensors in the 2015 LMC.
    As in the March 2016 GSL NOPR, for the NOPD DOE assumed that 
building codes would drive an increase in floor space utilizing 
controls in the commercial sector. DOE notes that the estimate of the 
impact of controls on energy consumption increases over time in the 
commercial sector, but does not require an update to the HOU estimate.
    DOE welcomes any relevant data and comment on the energy use 
analysis methodology.

E. Life-Cycle Cost and Payback Period Analysis

    DOE conducted LCC and PBP analyses to evaluate the economic effects 
on individual consumers of potential energy conservation standards for 
GSILs. In particular, DOE performed LCC and PBP analyses to evaluate, 
in part, the savings in operating costs throughout the estimated 
average life of GSILs compared to any associated increase in costs 
likely to result from the standards TSL. The effect of new or amended 
energy conservation standards on individual consumers usually involves 
a reduction in operating cost and an increase in purchase cost. DOE 
used the following two metrics to measure effects on the consumer:
     The LCC (life-cycle cost) is the total consumer expense of 
an appliance or product, consisting of total installed cost 
(manufacturer selling price, distribution chain markups, sales tax, and 
installation costs) plus operating costs (expenses for energy use,

[[Page 46844]]

maintenance, and repair) and any applicable disposal costs. To compute 
the operating costs, DOE discounts future operating costs to the time 
of purchase and sums them over the lifetime of the product. For this 
NOPD, DOE presents annualized LCC because average GSIL lifetimes are 
less than a year in the commercial sector.
     The PBP (payback period) is the estimated amount of time 
(in years) it takes consumers to recover the increased purchase cost 
(including installation) of a more-efficient product through lower 
operating costs. DOE calculates the PBP by dividing the change in 
purchase cost at higher efficacy levels by the change in annual 
operating cost for the year that amended or new standards are assumed 
to take effect.
    For each considered efficiency standard level, DOE measures the 
change in annualized LCC relative to the annualized LCC in the no-new-
standards case, which reflects the estimated efficacy distribution of 
GSILs in the absence of new or amended energy conservation standards. 
DOE presents LCC savings results for two scenarios with different 
efficacy distributions: DOE presents the LCC savings of GSILs, the 
covered product in this NOPD, for a GSIL-only scenario in which 
consumers select only between GSIL options and also includes LCC 
savings for a scenario with substitution in which consumers may 
purchase out-of-scope lamps as an input to the NPV calculation. For 
details on the two scenarios, see section IV.F. The PBP for each 
efficacy level is measured relative to the baseline efficacy level. The 
LCC savings with substitution effects is additionally not comparable to 
the PBP analysis because it extends beyond the covered product in this 
NOPD.
    For each considered efficacy level, DOE calculated the annualized 
LCC and PBP for a nationally-representative set of potential customers. 
Separate calculations were conducted for the residential and commercial 
sectors. DOE developed consumer samples based on the 2015 RECS and the 
2012 CBECS for the residential and commercial sectors, respectively. 
For each consumer in the sample, DOE determined the energy consumption 
of the lamp purchased and the appropriate electricity price. By 
developing consumer samples, the analysis captured the variability in 
energy consumption and energy prices associated with the use of GSILs.
    DOE added sales tax, which varied by state, and installation cost 
(for the commercial sector) to the cost of the product developed in the 
product price determination to determine the total installed cost. 
Inputs to the calculation of operating expenses include annual energy 
consumption, energy prices and price projections, lamp lifetimes, and 
discount rates. DOE created distributions of values for lamp lifetimes, 
discount rates, and sales taxes, with probabilities attached to each 
value, to account for their uncertainty and variability.
    For the GSIL standard case (i.e., case where a standard would be in 
place at a particular TSL), DOE measured the annualized LCC savings 
resulting from the technological requirements for GSILs at the 
considered standard relative to the efficacy distribution in the no-
new-standards case for the covered product scenario. DOE also presents 
annualized LCC savings that include substitution effects and their 
effects on efficacy distribution in the standards case relative to the 
estimated efficacy distribution in the no-new-standards case for a 
scenario in which consumers can substitute out-of-scope products. The 
efficacy distributions in the substitution scenario include market 
trends that can result in some lamps with efficacies that exceed the 
minimum efficacy associated with the standard under consideration. In 
contrast, the PBP only considers the average time required to recover 
any increased first cost associated with a purchase at a particular EL 
relative to the baseline product.
    The computer model DOE used to calculate the annualized LCC and PBP 
results relies on a Monte Carlo simulation to incorporate uncertainty 
and variability into the analysis. The Monte Carlo simulations randomly 
sample input values from the probability distributions and consumer 
user samples. The model calculated the annualized LCC and PBP for a 
sample of 10,000 consumers per simulation run.
    DOE calculated the annualized LCC and PBP as if each consumer were 
to purchase a new product in the expected year of required compliance 
with amended standards. Any amended standards would apply to GSILs 
manufactured 3 years after the date on which any amended standard is 
published. (42 U.S.C. 6295(i)(6)(A)(iii)) As this proposed rule is 
being published in 2019, DOE used 2023 as the first full year in which 
compliance with any amended standards for GSILs could occur.
    Table IV.10 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. The subsections that follow 
provide further discussion. Details of the spreadsheet model, and of 
all the inputs to the LCC and PBP analyses, are contained in chapter 8 
of the NOPD TSD and its appendices.
---------------------------------------------------------------------------

    \26\ Although DOE addresses the validity of California law 
relating to GSILs in the General Service Lamps Definition Rule 
published elsewhere in today's Federal Register, in generating its 
consumer samples, DOE did not sample consumers from California.

 Table IV.10--Summary of Inputs and Methods for the LCC and PBP Analysis
                                 * \26\
------------------------------------------------------------------------
              Inputs                            Source/method
------------------------------------------------------------------------
Product Cost......................  Weighted-average end-user price
                                     determined in the product price
                                     determination. For the LCC with
                                     substitution, DOE used a price-
                                     learning analysis to project the
                                     price of the CFL and LED lamp
                                     alternatives in the compliance
                                     year.
Sales Tax.........................  Derived 2023 population-weighted-
                                     average tax values for each state
                                     based on Census population
                                     projections and sales tax data from
                                     Sales Tax Clearinghouse.
Installation Costs................  Used RSMeans and U.S. Bureau of
                                     Labor Statistics data to estimate
                                     an installation cost of $1.54 per
                                     installed GSIL for the commercial
                                     sector.
Annual Energy Use.................  Derived in the energy use analysis.
                                     Varies by geographic location and
                                     room type in the residential sector
                                     and by building type in the
                                     commercial sector.
Energy Prices.....................  Based on 2018 average and marginal
                                     electricity price data from the
                                     Edison Electric Institute.
                                     Electricity prices vary by season
                                     and U.S. region.
Energy Price Trends...............  Based on AEO 2019 price forecasts.
Product Lifetime..................  A Weibull survival function is used
                                     to provide the survival probability
                                     as a function of GSIL age, based on
                                     the GSIL's rated lifetime, sector-
                                     specific HOU, and impact of
                                     dimming.

[[Page 46845]]

 
Discount Rates....................  Approach involves identifying all
                                     possible debt or asset classes that
                                     might be used to purchase the
                                     considered appliances, or might be
                                     affected indirectly. Primary data
                                     source was the Federal Reserve
                                     Board's Survey of Consumer
                                     Finances.
Efficacy Distribution.............  Estimated by the market-share module
                                     of shipments model. See chapter 9
                                     of the NOPD TSD for details.
Compliance Date...................  2023.
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
  in the sections following the table or in chapter 8 of the NOPD TSD.

1. Product Cost
    As noted in section IV.C, DOE rulemaking analyses typically 
calculate consumer product costs by multiplying MSPs developed in the 
engineering analysis by the markups along with sales taxes. For GSILs, 
the engineering analysis determined end-user prices directly; 
therefore, for the LCC analysis, the only adjustment was to add sales 
taxes, which were assigned to each household or building in the LCC 
sample based on its location.
    In the LCC with substitution scenario, DOE used a price-learning 
analysis to determine the impact of GSIL standards on consumers who 
select a CFL or LED lamp alternative under a standard. The price-
learning analysis accounts for changes in LED lamp prices that are 
expected to occur between the time for which DOE has data for lamp 
prices (2018) and the assumed compliance date of the rulemaking (2023). 
For details on the price-learning analysis, see section IV.F.1.b.
2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the product. For this NOPD, DOE 
assumed an installation cost of $1.54 per installed commercial GSIL 
(based on RSMeans \27\ and U.S. Bureau of Labor Statistics data \28\), 
but zero installation cost for residential GSILs.
---------------------------------------------------------------------------

    \27\ RSMeans. Facilities Maintenance & Repair Cost Data 2013. 
2012. RSMeans: Kingston, MA.
    \28\ U.S. Department of Labor-Bureau of Labor Statistics. May 
2014 Occupational Employment Statistics Survey. National 
Occupational and Wage Estimates. (Last accessed July 30, 2019.) 
http://www.bls.gov/oes/tables.htm.
---------------------------------------------------------------------------

3. Annual Energy Consumption
    For each sampled household or commercial building, DOE determined 
the energy consumption for a lamp using the approach described 
previously in section IV.D of this document.
4. Energy Prices
    DOE used both marginal and average electricity prices to calculate 
operating costs. Specifically, DOE used average electricity prices for 
the baseline EL and marginal electricity prices to characterize 
incremental electricity cost savings associated with other TSLs. DOE 
estimated these prices using data published with the Edison Electric 
Institute (EEI) Typical Bills and Average Rates reports for summer and 
winter 2018.\29\ DOE assigned seasonal marginal and average prices to 
each household in the LCC sample based on its location. DOE assigned 
seasonal marginal and average prices to each commercial building in the 
LCC sample based on its location and annual energy consumption.
---------------------------------------------------------------------------

    \29\ Edison Electric Institute. Typical Bills and Average Rates 
Report. 2018. Winter 2018, Summer 2018: Washington, DC.
---------------------------------------------------------------------------

5. Energy Price Trends
    To arrive at electricity prices in future years, DOE multiplied the 
electricity prices described above by the forecast of annual 
residential or commercial electricity price changes for each Census 
division from EIA's AEO 2019, which has an end year of 2050.\30\ To 
estimate the trends after 2050, DOE used the compound annual growth 
rate of change between 2035 and 2050. For each purchase sampled, DOE 
applied the projection for the Census division in which the purchase 
was located. The AEO electricity price trends do not distinguish 
between marginal and average prices, so DOE used the same (AEO 2019) 
trends for both marginal and average prices.
---------------------------------------------------------------------------

    \30\ U.S. Energy Information Administration. Annual Energy 
Outlook 2019 with projections to 2050. 2019. Washington, DC. Report 
No. AEO2019. (Last accessed July 5, 2019.) https://www.eia.gov/outlooks/AEO/pdf/AEO2019.pdf.
---------------------------------------------------------------------------

    DOE used the electricity price trends associated with the AEO 
Reference case, which is a business-as-usual estimate, given known 
market, demographic, and technological trends.
6. Product Lifetime
    DOE considered the lamp lifetime to be the service lifetime (i.e., 
the age at which the lamp is retired from service). For GSILs, the 
lifetime model incorporates the rated lifetime, the presence of 
controls, and the installation sector. For CFL and LED lamp 
alternatives, DOE used the methodology from the reference 
(``Renovation-Driven'') lifetime scenario from the March 2016 GSL NOPR.
    For a detailed discussion of the development of lamp lifetimes, see 
appendix 8C of the NOPD TSD.
7. Discount Rates
    In the calculation of LCC, DOE applies discount rates appropriate 
to commercial and residential consumers to estimate the present value 
of future operating costs. DOE estimated a distribution of discount 
rates for GSILs based on cost of capital of publicly traded firms in 
the sectors that purchase GSILs.
    DOE applies weighted average discount rates calculated from 
consumer debt and asset data, rather than marginal or implicit discount 
rates. DOE notes that the LCC does not analyze the equipment purchase 
decision, so the implicit discount rate is not relevant in this model. 
The LCC estimates net present value over the lifetime of the equipment, 
so the appropriate discount rate will reflect the general opportunity 
cost of household funds, taking this time scale into account. Given the 
long time horizon modeled in the LCC, the application of a marginal 
interest rate associated with an initial source of funds is inaccurate. 
Regardless of the method of purchase, consumers are expected to 
continue to rebalance their debt and asset holdings over the LCC 
analysis period, based on the restrictions consumers face in their debt 
payment requirements and the relative size of the interest rates 
available on debts and assets. DOE estimates the aggregate impact of 
this rebalancing using the historical distribution of debts and assets.
    To establish residential discount rates for the LCC analysis, DOE 
identified all relevant household debt or asset classes in order to 
approximate a consumer's opportunity cost of funds related to appliance 
energy cost savings. It estimated the average percentage shares of the 
various types of debt and equity by household income group using data

[[Page 46846]]

from the Federal Reserve Board's Survey of Consumer Finances (SCF) for 
1995, 1998, 2001, 2004, 2007, 2010, 2013, and 2016.\31\ Using the SCF 
and other sources, DOE developed a distribution of rates for each type 
of debt and asset by income group to represent the rates that may apply 
in the year in which amended standards would take effect.
---------------------------------------------------------------------------

    \31\ U.S. Board of Governors of the Federal Reserve System. 
Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010, 
2013 and 2016. (Last accessed July 16, 2019.) http://www.federalreserve.gov/econresdata/scf/scfindex.htm.
---------------------------------------------------------------------------

    For commercial consumers, DOE used the cost of capital to estimate 
the present value of cash flows to be derived from a typical company 
project or investment. Most companies use both debt and equity capital 
to fund investments, so the cost of capital is the weighted-average 
cost to the firm of equity and debt financing. This corporate finance 
approach is referred to as the weighted-average cost of capital. DOE 
used currently available economic data in developing discount rates.
8. Efficacy Distribution
    To accurately estimate the share of consumers that would be 
affected by a potential energy conservation standard at a particular 
TSL, DOE's LCC analysis considered the projected distribution (i.e., 
market shares) of product efficacies that consumers purchase under the 
no-new-standards case and the standards case (i.e., the case where a 
standard would be set at TSL 1) in the assumed compliance year. The 
estimated market shares for the no-new-standards case and each 
standards case are determined by the shipments analysis and are shown 
in Table IV.11 and Table IV.12 for the LCC with substitution scenario 
and the LCC GSIL-only scenario, respectively. In the LCC with 
substitution scenario, DOE estimates that the GSILs that are covered by 
this NOPD would account for 11.3% of the residential market share in 
2023 in the absence of federal standards, and 3.8% of the residential 
market under TSL 1. That is, most consumers would switch from GSILs to 
out-of-scope substitutes under TSL 1 due to high product price.

                           Table IV.11--GSIL Market Share Distribution by Trial Standard Level in 2023--LCC With Substitution
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               60 W
                  Trial standard level                       EL 0 43 W      EL 1 34.3 W   incandescent *  13 W CFL * (%)   9 W LED * (%)   Total ** (%)
                                                            halogen (%)       HIR (%)           (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Residential
--------------------------------------------------------------------------------------------------------------------------------------------------------
No-New-Standards........................................            11.3               0             4.0             5.2            79.5             100
TSL 1...................................................               0             3.8             4.1             6.2            86.0             100
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Commercial
--------------------------------------------------------------------------------------------------------------------------------------------------------
No-New-Standards........................................             2.7               0               0             3.1            94.2             100
TSL 1...................................................               0             0.3               0             3.2            96.5             100
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Incandescent lamps, CFLs, and LED lamps are out-of-scope consumer choice alternatives for GSILs (see section IV.B.6).
** The total may not sum to 100% due to rounding.

    The market share for GSIL lamps in the LCC GSIL-only (i.e. covered 
product) scenario are shown in Table IV.12. DOE estimates HIR lamps 
will represent 2.3% of the GSIL residential market in the no-new-
standards case.

       Table IV.12--GSIL Market Share Distribution by Trial Standard Level in 2023--LCC Standards Scenario
----------------------------------------------------------------------------------------------------------------
                                                                     EL 0 43 W      EL 1 34.3 W
                      Trial standard level                          halogen (%)       HIR (%)       Total * (%)
----------------------------------------------------------------------------------------------------------------
                                                   Residential
----------------------------------------------------------------------------------------------------------------
No-New-Standards................................................            97.7             2.3             100
TSL 1...........................................................               0             100             100
----------------------------------------------------------------------------------------------------------------
                                                   Commercial
----------------------------------------------------------------------------------------------------------------
No-New-Standards................................................            99.0             1.0             100
TSL 1...........................................................               0             100             100
----------------------------------------------------------------------------------------------------------------
* The total may not sum to 100% due to rounding.

    See section IV.F of this NOPD and chapter 9 of the NOPD TSD for 
further information on the derivation of the market efficacy 
distributions.
9. LCC Savings Calculation
    DOE calculated the annualized LCC savings at TSL 1 based on the 
change in annualized LCC for the standards case compared to the no-new-
standards case. In the covered product scenario, this approach models 
the actual lifecycle cost of HIR lamps under TSL 1 compared to the 
lifecycle cost of GSILs in the no-new standards case. In contrast, the 
LCC savings results in the substitution scenario also includes out-of-
scope lamps in the efficacy distribution for both the standards case 
and the no-new-standards case. That is, the LCC with substitution 
analysis considers the upfront price and operating costs of out-of-
scope lamps that consumers would substitute for covered GSILs. This 
approach models how consumers would substitute other lamps (which are 
more efficient and sometimes less-expensive) and is intended to more 
accurately reflect the impact of a potential standard on consumers. In 
a standards scenario, consumers are unable to recover the

[[Page 46847]]

upfront price of HIR lamps and as a result experience negative LCC 
savings.
    DOE used the consumer-choice model in the shipments analysis to 
determine the fraction of consumers that purchase each lamp option 
under a standard, but the model is unable to track the purchasing 
decision for individual consumers in the LCC sample. However, DOE must 
track any difference in purchasing decision for each consumer in the 
sample in order to determine the fraction of consumers who experience a 
net cost. Therefore, DOE assumed that the rank order of consumers, in 
terms of the efficacy of the product they purchase, is the same in the 
no-new-standards case as in the standards cases. In other words, DOE 
assumed that the consumers who purchased the most-efficacious products 
in the efficacy distribution in the no-new-standards case would 
continue to do so in standards cases, and similarly, those consumers 
who purchased the least efficacious products in the efficacy 
distribution in the no-new-standards case would continue to do so in 
standards cases. This assumption is only relevant in determining the 
fraction of consumers who experience a net cost in the annualized LCC 
savings calculation, and has no effect on the estimated national impact 
of a potential standard.
10. Payback Period Analysis
    The PBP is the amount of time it takes the consumer to recover the 
additional installed cost of more-efficient products, compared to 
baseline products, through energy cost savings. PBPs are expressed in 
years. PBPs that exceed the life of the product mean that the increased 
total installed cost is not recovered in reduced operating expenses.
    The inputs to the PBP calculation for each efficacy level are the 
change in total installed cost of the product and the change in the 
first-year annual operating expenditures relative to the baseline. The 
PBP calculation typically uses the same inputs as the LCC analysis, 
except that discount rates are not needed. In this notice, DOE presents 
the LCC savings in the standards case for a covered product scenario 
along with an LCC with substitution scenario, the latter of which 
differs from the PBP because it includes out-of-scope lamps rather than 
only the product that would be directly regulated by a GSIL standard.
    EPCA, as amended, establishes a rebuttable presumption that a 
standard is economically justified if the Secretary finds that the 
additional cost to the consumer of purchasing a product complying with 
an energy conservation standard level will be less than three times the 
value of the first year's energy savings resulting from the standard, 
as calculated under the applicable test procedure. (42 U.S.C. 
6295(o)(2)(B)(iii)) For each considered efficacy level, DOE determined 
the value of the first year's energy savings by calculating the energy 
savings in accordance with the applicable DOE test procedure, and 
multiplying those savings by the average energy price projection for 
the year in which compliance with the amended standards would be 
required.
    DOE welcomes any relevant data and comment on the LCC and PBP 
analysis methodology.

F. Shipments Analysis

    DOE uses projections of annual product shipments to calculate the 
national impacts of potential amended energy conservation standards on 
energy use, NPV, and future manufacturer cash flows.\32\ The shipments 
model takes a stock-accounting approach, tracking market shares of each 
product class and the vintage of units in the stock. Stock accounting 
uses product shipments as inputs to estimate the age distribution of 
in-service product stocks for all years. The age distribution of in-
service product stocks is a key input to calculations of both the NES 
and NPV, because lamp energy consumption and operating costs for any 
year depend on the age distribution of the stock. The shipments 
analysis also provides the efficacy distribution in the year of 
compliance which is an input to calculating LCC savings.
---------------------------------------------------------------------------

    \32\ DOE uses data on manufacturer shipments as a proxy for 
national sales, as aggregate data on sales are lacking. In general 
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------

1. Shipments Model
    The shipments model projects shipments of GSILs over a thirty-year 
analysis period for the no-new-standards case and for the standards 
case. Separate shipments projections are calculated for the residential 
sector and for the commercial sector. The shipments model used to 
estimate GSIL lamp shipments for this rulemaking has three main 
interacting elements: (1) A lamp demand module that estimates the 
demand for GSIL lighting and GSIL alternatives for each year of the 
analysis period; (2) a price-learning module that projects future 
prices based on historic price trends; and (3) a market-share module 
that assigns shipments to the available lamp options.
    DOE modeled shipments for two scenarios: For the purposes of the 
covered product scenario LCC scenario, DOE ran a version of the 
shipments analysis where consumers selected between product options for 
the covered product at issue in this NOPD (i.e. GSILs). As an input to 
the NIA, DOE modeled a scenario where consumers select between GSIL 
options and out of scope alternatives, including CFL, LED, and 
traditional incandescent (e.g., shatter resistant) lamps, because 
amended standards on GSILs could affect substitution rates. DOE 
welcomes any relevant data and comment on the shipments analysis 
methodology.
a. Lamp Demand Module
    The lamp demand module first estimates the national demand for 
GSILs and potential alternative products in each year for the covered 
product scenario and the substitution scenario, respectively. The 
demand calculation assumes that sector-specific lighting capacity 
(maximum lumen output of installed lamps) remains fixed per square foot 
of floor space over the analysis period, and total floor space changes 
over the analysis period according to the EIA's AEO 2019 projections of 
US residential and commercial floor space.\33\ A lamp turnover 
calculation estimates demand for new lamps in each year based on the 
growth of floor space in each year, the expected demand for replacement 
lamps, and sector-specific assumptions about the distribution of per-
lamp lumen output desired by consumers. The demand for replacements is 
computed based on the historical shipments of lamps, the expected 
lifetimes of the lamps (in terms of total hours of operation), and 
sector-specific assumptions about lamp operating hours. For the 
substitution scenario, the lamp demand module also accounts for the 
adoption of integral LED luminaires into lighting applications 
traditionally served by GSILs and for consumers' transitioning between 
GSILs and CFLs or LED lamps both prior to and during the analysis 
period, either spontaneously or due to amended standards.
---------------------------------------------------------------------------

    \33\ U.S. Energy Information Administration. Annual Energy 
Outlook 2019 with projections to 2050. 2019. Washington, DC. Report 
No. AEO2019. (Last accessed July 5, 2019.) https://www.eia.gov/outlooks/AEO/pdf/AEO2019.pdf.
---------------------------------------------------------------------------

    NEMA commented in response to the February 2019 NOPR that shipments 
of GSILs are declining as shipments of LED lamps continue to exhibit 
strong growth and that GSILs represent a reduced fraction of the 
overall stock of GSLs compared to a few years ago (NEMA, No. 329 at pp. 
44-48).\12\ Along similar lines, LEDVANCE commented in response to the 
August 2017 NODA on

[[Page 46848]]

GSILs and other incandescent lamps that there has been brisk 
substitution of GSILs with LED lamps and declines in lamp shipments as 
consumers switch to LED lamps with longer lifetimes. (LEDVANCE, No. 9 
at p. 3) \11\ In the shipments analysis for this NOPD, DOE incorporated 
data on relative lamp shipments and market share by technology through 
2018, as provided by NEMA in its comments on the February 2019 NOPR and 
in its published lamp indices.\34\ (NEMA, No. 329 at pp. 52-53) \12\ 
DOE notes that these data show a much faster adoption of LED GSLs than 
has previously been projected by DOE's solid-state lighting program; 
further, the data show that LED GSL adoption is growing at the expense 
of both CFLs and GSILs. In the scenario for substitution, fitting the 
NEMA data to the widely used Bass model for the market adoption of new 
technology \35\ suggests that, even in the absence of Federal 
regulation, LED lamps will have captured a significant majority of the 
GSL market by 2023 (79.5 percent of the residential market and 92.0 
percent of the commercial market). After incorporating this growth in 
LED lamp market share prior to 2023 the shipments analysis for this 
NOPD shows a substantial growth in LED lamp shipments prior to 2023, 
owing to the ongoing market transition in the absence of standards.
---------------------------------------------------------------------------

    \34\ National Electrical Manufacturers Association. Lamp 
Indices. (Last accessed July 23, 2019.) http://www.nema.org/Intelligence/Pages/Lamp-Indices.aspx.
    \35\ Bass, F.M. A New Product Growth Model for Consumer 
Durables. Management Science. 1969. 15(5): pp. 215-227.
---------------------------------------------------------------------------

b. Price-Learning Module
    The price-learning module estimates lamp prices in each year of the 
analysis period using a standard price-learning model,\36\ which 
relates the price of a given technology to its cumulative production, 
as represented by total cumulative shipments. GSILs represent a mature 
technology that have reached a stable price point due to the high 
volume of total cumulative shipments, so price learning was not 
considered in the LCC GSIL-only scenario. However, in the scenario with 
substitution, CFL and LED alternative lamps may continue to drop in 
price due to price learning. Current cumulative shipments are 
determined for each lighting technology (CFL and LED) at the start of 
the analysis period and are augmented in each subsequent year of the 
analysis based on the shipments determined for the prior year. New 
prices for each technology are calculated from the updated cumulative 
shipments according to the learning (or experience) curve for each 
technology. The current year's shipments, in turn, affect the 
subsequent year's prices. Because LED lamps are a relatively young 
technology, their cumulative shipments increase rapidly and hence they 
undergo a substantial price decline during the shipments analysis 
period. CFL prices, by contrast, undergo a negligible price decline, 
owing to the low shipments volume and relative maturity of this 
technology.
---------------------------------------------------------------------------

    \36\ Taylor, M. and S.K. Fujita. Accounting for Technological 
Change in Regulatory Impact Analyses: The Learning Curve Technique. 
2013. Lawrence Berkeley National Laboratory: Berkeley, CA. Report 
No. LBNL-6195E. (Last accessed June 23, 2015.) https://eta.lbl.gov/publications/accounting-technological-change.
---------------------------------------------------------------------------

c. Market-Share Module
    The market-share module apportions the lamp shipments in each year 
among the different lamp options developed in the engineering analysis, 
based on consumer sensitivity various lamp features. For the covered 
product scenario, to lamp price energy savings were the only features 
considered. For the substitution scenario, lifetime and mercury content 
were also considered, as measured in a market study,\37\ as well as on 
consumer preferences for lighting technology as revealed in historical 
shipments data. The market-share module assumes that, when replacing a 
lamp, consumers will choose among all of the available lamp options. 
Substitution matrices were developed to specify the product choices 
available to consumers. The substitution scenario considered CFLs, 
LEDs, and traditional incandescent alternatives to the covered product. 
The available options additionally depend on the case under 
consideration; in each standards case corresponding to a TSL, only 
those lamp options at or above the particular standard level, and 
relevant alternative lamps, are considered to be available. In the 
substitution scenario, the market-share module also incorporates a 
limit on the diffusion of LED technology into the market using the 
widely accepted Bass adoption model,\38\ the parameters of which are 
based on data on the market penetration of LED lamps published by 
NEMA,\39\ as discussed previously. In the LCC covered product scenario, 
DOE used a Bass diffusion curve in the no-new-standards case to model 
the adoption of HIR lamps assuming these lamps would be a new entry to 
market in 2020. The Bass diffusion curves puts a limit on the maximum 
market share allowed for HIR lamps in each year of the analysis.
---------------------------------------------------------------------------

    \37\ Krull, S. and D. Freeman. Next Generation Light Bulb 
Optimization. 2012. Pacific Gas and Electric Company. (Last accessed 
July 23, 2019.) http://www.etcc-ca.com/sites/default/files/OLD/images/stories/Lighting_Conjoint_Study_v020712f.pdf.
    \38\ Bass, F.M. A New Product Growth Model for Consumer 
Durables. Management Science. 1969. 15(5): pp. 215-227.
    \39\ National Electrical Manufacturers Association. Lamp 
Indices. (Last accessed July 23, 2019.) http://www.nema.org/Intelligence/Pages/Lamp-Indices.aspx.
---------------------------------------------------------------------------

    In this way, the module assigns market shares to the different ELs, 
and consumer choice alternatives, based on observations of consumer 
preferences.

G. National Impact Analysis

    The NIA assesses the NES and the national NPV from a national 
perspective of total consumer costs and savings that would be expected 
to result from new or amended standards at specific TSLs.\40\ 
(``Consumer'' in this context refers to consumers of the product being 
regulated and includes both residential and commercial consumers.) DOE 
calculated the NES and NPV based on projections of annual product 
shipments and prices from the shipments scenario with substitution, 
along with the HOU and energy prices from the energy use and LCC with 
substitution analyses.\41\ For the present analysis, DOE projected the 
energy savings, operating-cost savings, product costs, and NPV of 
consumer benefits over the lifetime of GSILs sold from 2023 through 
2052. However, unlike for other DOE rulemakings, the energy savings and 
NPV of consumer benefits are not those associated with the technology 
in question for TSL 1. The price of HIR lamps under TSL 1 would be 
preventatively high for most consumers, and HIR efficacy is too low for 
consumers to recover these costs in energy savings. Because 
manufacturers are unlikely to product HIR lamps and consumers are 
unlikely to purchase them, there are no energy savings or benefits from 
transitioning to HIR technology.
---------------------------------------------------------------------------

    \40\ The NIA accounts for impacts in the 50 States and the U.S. 
territories.
    \41\ For the NIA, DOE adjusts the installed cost data from the 
LCC analysis to exclude sales tax, which is a transfer.
---------------------------------------------------------------------------

    DOE evaluates the impacts of new and amended standards by comparing 
a case without such standards against standards-case projections. The 
no-new-standards case characterizes energy use and consumer costs in 
the absence of new or amended energy conservation standards. DOE 
compares the no-new-standards case with projections characterizing the 
market if DOE adopted new or amended standards at specific TSLs. For 
the standards cases,

[[Page 46849]]

DOE considers how a given standard would likely affect the market 
shares of products with efficacies greater than the standard, as well 
as consumer choice alternatives. Any energy savings or benefits 
estimated in the standards case are the result of product shifting as, 
given GE's experience and the economics at issue, manufacturers are 
unlikely to produce and consumers are unlikely to purchase GSIL-HIR 
products. Instead, consumers are more likely to substitute different 
product types such as CFLs and LEDs, which have different performance 
characteristics and features. As noted above, EPCA prohibits DOE from 
prescribing an amended or new standard if that the standard is likely 
to result in the unavailability in the United States in any covered 
product type (or class) of performance characteristics (including 
reliability), features, sizes, capacities, and volumes that are 
substantially the same as those generally available in the United 
States at the time of the Secretary's finding.
    DOE uses a spreadsheet model to calculate the energy savings and 
the national consumer costs and savings from each TSL. Interested 
parties can review DOE's analyses by changing various input quantities 
within the spreadsheet. The NIA spreadsheet model uses typical values 
(as opposed to probability distributions) as inputs.
    Table IV.12 summarizes the inputs and methods DOE used for the NIA 
analysis for the NOPD. Discussion of these inputs and methods follows 
the table.

   Table IV.12--Summary of Inputs and Methods for the National Impact
                                Analysis
------------------------------------------------------------------------
              Inputs                               Method
------------------------------------------------------------------------
Shipments.........................  Annual shipments for each lamp
                                     option from shipments model for the
                                     no-new standards case and each TSL
                                     analyzed.
Assumed compliance date of          January 1, 2023.
 standard.
No-new-standards efficacy           Estimated by the market-share module
 distribution.                       of the shipments analysis.
Standards-case efficacy             Estimated by the market-share module
 distribution.                       of the shipments analysis.
Annual energy use per unit........  Calculated for each lamp option
                                     based on inputs from the Energy Use
                                     Analysis.
Total installed cost per unit.....  Uses lamp prices, and for the
                                     commercial sector only,
                                     installation costs from the LCC
                                     analysis.
Electricity prices................  Estimated marginal electricity
                                     prices from the LCC analysis.
Energy price trends...............  AEO 2019 forecasts (to 2050) and
                                     extrapolation thereafter.
Annual operating cost per unit....  Calculated for each lamp option
                                     using the energy use per unit, and
                                     electricity prices and trends.
Energy Site-to-Source Conversion..  A time-series conversion factor
                                     based on AEO 2019.
Discount rate.....................  Three and seven percent real.
Present year......................  2019.
------------------------------------------------------------------------

1. National Energy Savings
    The NES analysis involves a comparison of national energy 
consumption of the considered products in each standards case with 
consumption in the case with no new or amended energy conservation 
standards. DOE calculated the annual national energy consumption by 
multiplying the number of units (stock) of each lamp option (by vintage 
or age) by the unit energy consumption (also by vintage) for each year 
in the analysis. The NES is based on the difference in annual national 
energy consumption for the no-new-standards case and each of the 
standards cases. DOE estimated the energy consumption and savings based 
on site electricity and converted that quantity to the energy 
consumption and savings at the power plant using annual conversion 
factors derived from AEO 2019. Cumulative energy savings are the sum of 
NES for each year over the analysis period, taking into account the 
full lifetime of GSILs shipped in 2052.
    DOE tracks both the energy consumption of GSILs and substitute out-
of-scope lamps (e.g., CFL, LED, and traditional incandescent lamps). 
Under the standards case, the increase in cost or lack of availability 
of GSIL options can lead to consumers choosing out-of-scope alternative 
lamps. This leads to a decrease in GSIL shipments that appears as a 
decrease in GSIL energy consumption, while the increase in out-of-scope 
shipments appears as an increase in energy consumption for those lamp 
types. DOE also calculated the overall energy impact of a standard 
including the increased energy consumption of out-of-scope lamps.
    DOE generally accounts for the direct rebound effect in its NES 
analyses. Direct rebound reflects the idea that as appliances become 
more efficient, consumers use more of their service because their 
operating cost is reduced. In the case of lighting, the rebound effect 
could be manifested in increased HOU or in increased lighting density 
(lamps per square foot). DOE assumed no rebound effect for GSILs in 
this analysis, consistent with the assumption of no rebound in the 
reference scenario in the March 2016 GSL NOPR. DOE is not aware of any 
data supporting rebound when consumers switch from halogen GSILs to HIR 
GSILs. DOE seeks any relevant data and comment on the potential rebound 
effect for GSILs.
    In response to the recommendations of a committee on ``Point-of-Use 
and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency 
Standards'' appointed by the National Academy of Sciences, DOE 
announced its intention to use FFC measures of energy use and 
greenhouse gas and other emissions in the national impact analyses and 
emissions analyses included in future energy conservation standards 
rulemakings. 76 FR 51281 (August 18, 2011). After evaluating the 
approaches discussed in the August 18, 2011 notice, DOE published a 
statement of amended policy in which DOE explained its determination 
that EIA's National Energy Modeling System (NEMS) is the most 
appropriate tool for its FFC analysis and its intention to use NEMS for 
that purpose. 77 FR 49701 (August 17, 2012). NEMS is a public domain, 
multi-sector, partial equilibrium model of the U.S. energy sector that 
EIA uses to prepare its AEO.\42\ The approach used for deriving FFC 
measures of energy use and emissions is described in appendix 10B of 
the NOPD TSD.
---------------------------------------------------------------------------

    \42\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview, DOE/EIA-0581 (98) (Feb.1998) 
(Available at: http://www.eia.gov/oiaf/aeo/overview/).
---------------------------------------------------------------------------

2. Net Present Value Analysis
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers are: (1) Total annual increases in installed 
cost; (2)

[[Page 46850]]

total annual savings in operating costs; and (3) a discount factor to 
calculate the present value of costs and savings. DOE calculates net 
savings each year as the difference between the no-new-standards case 
and each standards case in terms of total savings in operating costs 
versus total increases in installed costs. DOE calculates operating-
cost savings over the lifetime of each product shipped during the 
analysis period.
    The direct efficacy improvements from TSL 1 do not result in any 
benefits. First, manufacturers are unlikely to produce HIR lamps. 
Manufacturers that have produced and attempted to sell such lamps in 
the recent past have found it uneconomic to do so. However, if a 
manufacturer were hypothetically willing to produce such a lamp, 
consumers would either (1) purchase the HIR lamp and be unable to 
recoup the expense in energy savings or (2) choose not to purchase the 
HIR lamp due to high purchase price. As a result DOE does not 
anticipate that adoption of HIR technology to result directly in any 
consumer benefits. Instead, any benefit from TSL 1 would result from 
product shifting as consumers substitute more efficient alternative 
product types with different performance characteristics and features. 
As discussed in section IV.F.1.b of this NOPD, DOE developed prices for 
alternative LED and CFL lamps using a price-learning module 
incorporated in the shipments analysis.
    The operating cost savings in this document are primarily the 
result of product shifting. The operating-cost savings are primarily 
energy cost savings, which are calculated using the estimated energy 
savings in each year and the projected price of electricity. To 
estimate energy prices in future years, DOE multiplied the average 
national marginal electricity prices by the forecast of annual 
national-average residential or commercial electricity price changes in 
the Reference case from AEO 2019, which has an end year of 2050. To 
estimate price trends after 2050, DOE used the average annual rate of 
change in prices from 2035 to 2050.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
NOPD, DOE estimated the NPV of consumer benefits using both a 3-percent 
and a 7-percent real discount rate. DOE uses these discount rates in 
accordance with guidance provided by the Office of Management and 
Budget (OMB) to federal agencies on the development of regulatory 
analysis.\43\ The discount rates for the determination of NPV are in 
contrast to the discount rates used in the LCC analysis, which are 
designed to reflect a consumer's perspective. The 7-percent real value 
is an estimate of the average before-tax rate of return to private 
capital in the U.S. economy. The 3-percent real value represents the 
``social rate of time preference,'' which is the rate at which society 
discounts future consumption flows to their present value.
---------------------------------------------------------------------------

    \43\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis,'' (Sept. 17, 2003), section E (Available at: 
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf).
---------------------------------------------------------------------------

H. Manufacturer Impact Analysis

    DOE performed an MIA to estimate the financial impacts of potential 
amended energy conservation standards on manufacturers of GSILs. DOE 
relied on the GRIM, an industry cash flow model with inputs specific to 
this rulemaking. The key GRIM inputs include data on the industry cost 
structure, unit production costs, product shipments, manufacturer 
markups, and investments in research and development (R&D) and 
manufacturing capital required to produce compliant products. The key 
GRIM outputs are the INPV, which is the sum of industry annual cash 
flows over the analysis period, discounted using the industry-weighted 
average cost of capital, and the impact to domestic manufacturing 
employment. The GRIM calculates cash flows using standard accounting 
principles and compares changes in INPV between the no-new-standards 
case and each standards case. The difference in INPV between the no-
new-standards case and a standards case represents the financial impact 
of amended energy conservation standards on manufacturers. To capture 
the uncertainty relating to manufacturer pricing strategies following 
potential amended standards, the GRIM estimates a range of possible 
impacts under different manufacturer markup scenarios.
    DOE created initial estimates for the industry financial inputs 
used in the GRIM (e.g., tax rate; working capital rate; net property 
plant and equipment expenses; selling, general, and administrative 
(SG&A) expenses; R&D expenses; depreciation expenses; capital 
expenditures; and industry discount rate) based on publicly available 
sources, such as company filings of form 10-K from the SEC or corporate 
annual reports.\44\
---------------------------------------------------------------------------

    \44\ 10-Ks are collected from the SEC's EDGAR database: https://www.sec.gov/edgar.shtml or from annual financial reports collected 
from individual company websites.
---------------------------------------------------------------------------

    The GRIM uses several factors to determine a series of annual cash 
flows starting with the announcement of potential standards and 
extending over a 30-year period following the compliance date of 
potential standards. These factors include annual expected revenues, 
costs of sales, SG&A and R&D expenses, taxes, and capital expenditures. 
In general, energy conservation standards can affect manufacturer cash 
flow in three distinct ways: (1) Creating a need for increased 
investment, (2) raising production costs per unit, and (3) altering 
revenue due to higher per-unit prices and changes in sales volumes.
    The GRIM spreadsheet uses inputs to arrive at a series of annual 
cash flows, beginning in 2019 (the reference year of the analysis) and 
continuing to 2052. DOE calculated INPVs by summing the stream of 
annual discounted cash flows during this period. DOE used a real 
discount rate of 6.1 percent for GSIL manufacturers. This initial 
discount rate estimate was derived using the capital asset pricing 
model in conjunction with publicly available information (e.g., 10-year 
treasury rates of return and company specific betas).
1. Manufacturer Production Costs
    Manufacturing more efficacious GSILs is more expensive because of 
the machinery required to coat halogen capsules and the process by 
which the capsules are coated. The changes in the MPCs of covered 
products can affect the revenues, gross margins, and cash flow of the 
industry. Typically, DOE develops MSPs for the covered products using 
reverse-engineering. These costs are used as an input to the LCC 
analysis and NIA. However, because GSILs are difficult to reverse-
engineer, DOE derived end-user prices directly in the product price 
determination and then used the end-user prices in conjunction with 
distribution chain markups to calculate the MSPs of GSILs. See section 
IV.C for a further explanation of the product price determination.
    To determine MPCs of GSILs from the end-user prices calculated in 
the engineering analysis, DOE divided the end-user prices by the home 
center markup to calculate the MSP. DOE then divided the MSP by the 
manufacturer markup to get the MPCs. DOE determined the home center 
markup to be 1.52 and the manufacturer markup to be 1.40 for all GSILs. 
Markups are further described in section IV.H.4 of this document.

[[Page 46851]]

2. Shipments Projections
    The GRIM estimates manufacturer revenues based on total unit 
shipment projections and the distribution of those shipments by TSL. 
Changes in sales volumes and efficiency mix over time can significantly 
affect manufacturer finances. For this analysis, the GRIM uses the 
NIA's annual shipment projections starting in 2019 (the reference year) 
and ending in 2052 (the end year of the analysis period).
3. Product and Capital Conversion Costs
    Potential amended energy conservation standards could cause 
manufacturers to incur conversion costs to bring their production 
facilities and product designs into compliance. DOE evaluated the level 
of conversion-related expenditures that would be needed to comply with 
each considered TSL. For the MIA, DOE classified these conversion costs 
into two major groups: (1) Product conversion costs; and (2) capital 
conversion costs. Product conversion costs are investments in research, 
development, testing, marketing, and other non-capitalized costs 
necessary to make product designs comply with amended energy 
conservation standards. Capital conversion costs are investments in 
property, plant, and equipment necessary to adapt or change existing 
production facilities such that new compliant product designs can be 
fabricated and assembled.
    To evaluate the level of capital conversion costs manufacturers 
would likely incur to comply with the analyzed energy conservation 
standards DOE used data submitted during the 2015 IRL rulemaking to 
estimate costs to update manufacturer production lines. DOE then 
estimated the number of production lines currently in existence and the 
number of production lines that would be required to be updated at the 
analyzed TSL using DOE's public compliance certification database. DOE 
then multiplied these numbers together (i.e., capital conversion costs 
per production line and number of production lines that would need to 
be updated) to get the final estimated capital conversion costs at the 
analyzed TSL.
    To evaluate the level of product conversion costs manufacturers 
would likely incur to comply with the analyzed energy conservation 
standards, DOE used data submitted during the 2015 IRL rulemaking to 
estimate per model R&D and testing and certification costs for the TSL. 
DOE then estimated the number of models that would need to be 
redesigned at each analyzed TSL. DOE then multiplied these numbers 
together to get the final estimated product conversion costs for the 
analyzed TSL.
    In general, DOE assumes all conversion-related investments occur 
between the estimated year of publication of the final rule and the 
year by which manufacturers must comply with the potential amended 
standards. The conversion cost figures used in the GRIM can be found in 
Table V.9 and section V.D of this document.
4. Markup Scenarios
    To calculate the MPCs used in the GRIM, DOE divided the end-user 
prices calculated in the engineering analysis by the home center markup 
and the manufacturer markup. The home center markup was calculated in 
the March 2016 GSL NOPR by reviewing SEC 10-K reports of publicly 
traded home centers. DOE continued to use a home center markup of 1.52 
in this analysis.
    The manufacturer markup accounts for the non-production costs 
(i.e., SG&A, R&D, and interest) along with profit. Modifying the 
manufacturer markup in the standards case yields different sets of 
impacts on manufacturers. For the MIA, DOE modeled two standards-case 
manufacturer markup scenarios to represent uncertainty regarding the 
potential impacts on prices and profitability for manufacturers 
following the implementation of analyzed energy conservation standards: 
(1) A preservation of gross margin markup scenario; and (2) a 
technology specific markup scenario. These scenarios lead to different 
manufacturer markup values that, when applied to the MPCs, result in 
varying revenue and cash flow impacts.
    Under the preservation of gross margin scenario, DOE applied a 
single uniform ``gross margin percentage'' manufacturer markup of 1.40 
across all analyzed lamps, which assumes that manufacturers would be 
able to maintain the same amount of profit as a percentage of revenues 
for all lamps analyzed.
    Under the technology specific markup scenario, DOE assumed that 
incandescent lamps, CFLs, and LED lamps have different manufacturer 
markups. As sales of lamp technologies that are no longer able to meet 
the analyzed energy conservation standards are no longer sold, the 
average manufacturer markup is reduced. DOE estimated an incandescent 
lamp manufacturer markup of approximately 1.525, a CFL manufacturer 
markup of approximately 1.453, and an LED lamp manufacturer markup of 
approximately 1.380. In the no-new-standards case these technology 
specific manufacturer markups produce an identical INPV as in the 
preservation of gross margin markup scenario.
    A comparison of industry financial impacts under the two 
manufacturer markup scenarios is presented in section V.D.1 of this 
document.

V. Analytical Results and Conclusions

A. Trial Standard Levels

    DOE analyzed the benefits and burdens of one trial standard level 
for GSILs. TSL 1 is composed of EL 1 and is the max-tech EL for GSILs.
    DOE analyzed the benefits and burdens by conducting the analyses 
described in section IV for each TSL. Table V.1 presents the TSLs and 
the corresponding ELs for GSLs.

                                    Table V.1--Composition of TSLs for GSILs
----------------------------------------------------------------------------------------------------------------
                                                                 Technology required to
                 TSL                              EL              comply with standard         Description
----------------------------------------------------------------------------------------------------------------
TSL 0................................  EL 0...................  Halogen................  No new GSIL standard.
TSL 1................................  EL 1...................  Halogen Infrared (HIR).  HIR standard in 2023.
----------------------------------------------------------------------------------------------------------------

B. Economic Impacts on Individual Consumers

    DOE analyzed the cost effectiveness (i.e., the savings in operating 
costs compared to any increase in purchase price likely to result from 
the imposition of a standard) by considering the LCC and PBP. DOE 
presents the LCC of the covered product (i.e., HIR lamps) and also 
presents a second LCC, which is used as an input for the NPV, which 
goes beyond GSILs and accounts for the purchase price and operating 
costs of out-of-scope substitute lamps (``LCC with substitution''). 
These analyses are discussed in the following sections.

[[Page 46852]]

1. Life-Cycle Cost and Payback Period
    In general, higher-efficiency products can affect consumers in two 
ways: (1) Purchase price increases and (2) annual operating costs 
decrease. Inputs used for calculating the annualized LCC and PBP 
include total installed costs (i.e., product price plus installation 
costs), and operating costs (i.e., annual energy use, energy prices, 
energy price trends, repair costs, and maintenance costs). The 
annualized LCC calculation also uses product lifetime and a discount 
rate.
    Table V.2 shows the average annualized LCC and PBP results for the 
ELs considered for GSILs in this analysis. For both the residential and 
commercial sector, the payback period for HIR lamps is approximately 
three times longer than the product life. As a result, consumers who 
buy HIR technologies have increased life cycle costs and do not see a 
benefit at TSL 1. Table V.3 shows the average annualized LCC savings 
for HIR lamps under TSL 1. Over 97% of residential and commercial 
consumers who purchase HIR lamps experience a net cost in the standards 
case.
    Table V.4 shows the average annualized LCC savings under a product 
shifting scenario for TSL 1. Very few consumers are anticipated to buy 
HIR technology in the standards case, assuming manufacturers produce 
the product. Instead these numbers reflect the result of a substitution 
effect as consumers are priced out of the market for GSILs. That is, 
TSL 1 is anticipated to increase the cost of GSILs by 286 percent 
relative to a no-standards case, therefore driving some consumers to 
shift toward out-of-scope alternative lamps, yielding a reduction in 
operating costs relative to the base case.
    DOE recognizes that the current quantifiable framework does not 
represent the full welfare effects of this shift in consumer purchase 
decisions due to an energy conservation standard. In the 2015 IRL final 
rule, DOE ``committed to developing a framework that can support 
empirical quantitative tools for improved assessment of the consumer 
welfare impacts of appliance standards.'' (80 FR 4141) DOE remains 
committed to this goal and to enhancing the methodology the Department 
uses to represent and quantify the consumer welfare impacts of its 
standards.

                                           Table V.2--Average Annualized LCC and PBP Results by Efficacy Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Average costs 2018$
                                         --------------------------------------------------------------------------------
                   EL                                                                       Annualized                    Simple payback      Average
                                          Installed cost    Annualized     First year's      lifetime     Annualized LCC       years      lifetime years
                                                          installed cost  operating cost  operating cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Residential Sector
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.......................................            1.94            1.99            4.50            4.70            6.69  ..............             2.0
1.......................................            7.49            7.69            3.59            3.75           11.44            6.09             2.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Commercial Sector
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.......................................            3.48           12.39           13.56           14.68           27.08  ..............             0.7
1.......................................            9.04           32.19           10.82           11.71           43.91            2.03             0.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL are calculated assuming that all consumers use products at that EL. The PBP is measured relative to the baseline product.


           Table V.3--Average Annualized LCC Savings Results by Trial Standard Level--Covered Product
                                                     [GSILs]
----------------------------------------------------------------------------------------------------------------
                                                                             GSIL life-cycle cost savings
                                                                     -------------------------------------------
                         TSL                                EL                              Percent of consumers
                                                                       Average annualized    that experience net
                                                                      LCC savings\*\ 2018$          cost
----------------------------------------------------------------------------------------------------------------
                                               Residential Sector
----------------------------------------------------------------------------------------------------------------
1...................................................               1                 -4.77                  97.7
----------------------------------------------------------------------------------------------------------------
                                                Commercial Sector
----------------------------------------------------------------------------------------------------------------
1...................................................               1                -16.85                  99.0
----------------------------------------------------------------------------------------------------------------


        Table V.4--Average Annualized LCC Savings Results by Trial Standard Level--LCC With Substitution
----------------------------------------------------------------------------------------------------------------
                                                                                Life-cycle cost savings
                                                                     -------------------------------------------
                         TSL                                EL                              Percent of consumers
                                                                       Average annualized    that experience net
                                                                      LCC savings\*\ 2018$          cost
----------------------------------------------------------------------------------------------------------------
                                               Residential Sector
----------------------------------------------------------------------------------------------------------------
1...................................................               1                  1.23                   4.0
----------------------------------------------------------------------------------------------------------------

[[Page 46853]]

 
                                                Commercial Sector
----------------------------------------------------------------------------------------------------------------
1...................................................               1                 10.36                  0.43
----------------------------------------------------------------------------------------------------------------
* The savings represent the average annualized LCC savings for affected consumers.

    The cost of HIR lamps cannot be recovered, and the LCC savings are 
negative for the covered product at issue in this NOPD. When accounting 
for out-of-scope product substitutes, average LCC savings are positive 
at TSL 1 because the majority of consumers shift to an out-of-scope LED 
lamp.
2. Rebuttable Presumption Payback
    As discussed in section IV.E.9, EPCA establishes a rebuttable 
presumption that an energy conservation standard is economically 
justified if the increased purchase cost for a product that meets the 
standard is less than three times the value of the first-year energy 
savings resulting from the standard. In calculating a rebuttable 
presumption PBP for each of the considered ELs, DOE used discrete 
values, and, as required by EPCA, based the energy use calculation on 
the DOE test procedure for GSILs. In contrast, the PBPs presented in 
section V.B.1 were calculated using distributions that reflect the 
range of energy use in the field. See chapter 8 of the NOPD TSD for 
more information on the rebuttable presumption payback analysis.

C. National Impact Analysis

    This section presents DOE's estimates of the NES and the NPV of 
consumer benefits that would result from each of the considered TSLs as 
potential amended standards. For these estimates, DOE included the 
impact of consumers substituting GSILs for out-of-scope CFL, LED, and 
incandescent alternatives.
1. Energy Savings
    To estimate the energy savings attributable to potential amended 
standards for GSILs, DOE compared their energy consumption under the 
no-new-standards case to their anticipated energy consumption under 
each TSL. The savings are measured over the entire lifetime of products 
purchased in the 30-year period that begins in the year of anticipated 
compliance with amended standards (2023-2052). Table V.4 presents DOE's 
projections of the NES for each TSL considered for GSILs, as well as 
considered GSIL alternatives. The savings were calculated using the 
approach described in section IV.G of this document. In addition to 
GSIL energy savings, Table V.4 illustrates the increased energy 
consumption of consumers who transition to out-of-scope lamps, 
including CFL, LED, and incandescent alternatives, because more 
consumers purchase these lamps at TSL 1 relative to the no-standards 
case.

    Table V.4--Cumulative National Energy Savings for GSILs and GSIL
                   Alternatives; 30 Years of Shipments
                               [2023-2052]
------------------------------------------------------------------------
                                                               TSL 1
------------------------------------------------------------------------
Site Energy Savings (quads):
    GSILs...............................................           0.240
    CFL alternatives....................................         (0.003)
    LED alternatives....................................         (0.043)
    Incandescent alternatives...........................         (0.002)
                                                         ---------------
        Total...........................................           0.192
Source Energy Savings (quads):
    GSILs...............................................           0.646
    CFL alternatives....................................         (0.009)
    LED alternatives....................................         (0.115)
    Incandescent alternatives...........................         (0.007)
                                                         ---------------
        Total...........................................           0.516
FFC Energy Savings (quads):
    GSILs...............................................           0.677
    CFL alternatives....................................         (0.010)
    LED alternatives....................................         (0.120)
    Incandescent alternatives...........................         (0.007)
                                                         ---------------
        Total...........................................           0.540
------------------------------------------------------------------------

    OMB Circular A-4 \45\ requires agencies to present analytical 
results, including separate schedules of the monetized benefits and 
costs that show the type and timing of benefits and costs. Circular A-4 
also directs agencies to consider the variability of key elements 
underlying the estimates of benefits and costs. For this proposed

[[Page 46854]]

determination, DOE undertook a sensitivity analysis using 9 years, 
rather than 30 years, of product shipments. The choice of a 9-year 
period is a proxy for the timeline in EPCA for the review of certain 
energy conservation standards and potential revision of and compliance 
with such revised standards.\46\ The review timeframe established in 
EPCA is generally not synchronized with the product lifetime, product 
manufacturing cycles, or other factors specific to GSILs. Thus, such 
results are presented for informational purposes only and are not 
indicative of any change in DOE's analytical methodology. The NES 
sensitivity analysis results based on a 9-year analytical period are 
presented in Table V.5. The impacts are counted over the lifetime of 
GSILs purchased in 2023-2031.
---------------------------------------------------------------------------

    \45\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. Available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf.
    \46\ Section 325(m) of EPCA requires DOE to review its standards 
at least once every 6 years, and requires, for certain products, a 
3-year period after any new standard is promulgated before 
compliance is required, except that in no case may any new standards 
be required within 6 years of the compliance date of the previous 
standards. If DOE makes a determination that amended standards are 
not needed, it must conduct a subsequent review within three years 
following such a determination. As DOE is evaluating the need to 
amend the standards, the sensitivity analysis is based on the review 
timeframe associated with amended standards. While adding a 6-year 
review to the 3-year compliance period adds up to 9 years, DOE notes 
that it may undertake reviews at any time within the 6-year period 
and that the 3-year compliance date may yield to the 6-year 
backstop. A 9-year analysis period may not be appropriate given the 
variability that occurs in the timing of standards reviews and the 
fact that for some products, the compliance period is 5 years rather 
than 3 years.

    Table V.6--Cumulative National Energy Savings for GSILs and GSIL
                   Alternatives; 9 Years of Shipments
                               [2023-2031]
------------------------------------------------------------------------
                                                               TSL 1
------------------------------------------------------------------------
Site Energy Savings (quads):
    GSILs...............................................           0.075
    CFL alternatives....................................         (0.003)
    LED alternatives....................................         (0.012)
    Incandescent alternatives...........................         (0.001)
                                                         ---------------
        Total...........................................           0.059
Source Energy Savings (quads):
    GSILs...............................................           0.204
    CFL alternatives....................................         (0.007)
    LED alternatives....................................         (0.033)
    Incandescent alternatives...........................         (0.003)
                                                         ---------------
        Total...........................................           0.161
FFC Energy Savings (quads):
    GSILs...............................................           0.214
    CFL alternatives....................................         (0.007)
    LED alternatives....................................         (0.035)
    Incandescent alternatives...........................         (0.003)
                                                         ---------------
        Total...........................................           0.169
------------------------------------------------------------------------

2. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV of the total costs and savings for 
consumers that would result from TSL 1 for GSILs. However, as described 
above, the benefits of TSL 1 do not come from improved efficiency for 
the product for which DOE is making a determination whether existing 
standards should be amended. Rather, due to the likelihood that 
manufacturers will not produce the product, and fact that consumers 
would be unlikely to buy it, DOE does not anticipate that adoption of 
HIR technology will result in any consumer benefits. Instead, any 
benefit from TSL 1 is the result of product shifting as consumers 
respond to the high upfront price of HIR lamps and substitute lower-
cost, out-of-scope alternatives. In accordance with OMB's guidelines on 
regulatory analysis,\47\ DOE calculated NPV using both a 7-percent and 
a 3-percent real discount rate. Table V.7 shows the consumer NPV 
results with impacts counted over the lifetime of GSILs purchased in 
2023-2052.
---------------------------------------------------------------------------

    \47\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. Available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf.

    Table V.7--Cumulative Net Present Value of Quantifiable Consumer
     Benefits for GSILs and GSIL Alternatives; 30 Years of Shipments
                               [2023-2052]
------------------------------------------------------------------------
                                                               TSL 1
------------------------------------------------------------------------
3 percent (billions 2018$):
    GSILs...............................................           5.436
    CFL alternatives....................................         (0.110)
    LED alternatives....................................         (1.082)
    Incandescent alternatives...........................         (0.071)
                                                         ---------------
        Total...........................................           4.173
7 percent (billions 2018$):

[[Page 46855]]

 
    GSILs...............................................           2.960
    CFL alternatives....................................         (0.072)
    LED alternatives....................................         (0.602)
    Incandescent alternatives...........................         (0.044)
                                                         ---------------
        Total...........................................           2.241
------------------------------------------------------------------------

    The NPV results based on the aforementioned 9-year analytical 
period are presented in Table V.8. The impacts are counted over the 
lifetime of products purchased in 2023-2031. As mentioned previously, 
such results are presented for informational purposes only and are not 
indicative of any change in DOE's analytical methodology or decision 
criteria.

    Table V.8--Cumulative Net Present Value of Quantifiable Consumer
      Benefits for GSIL and GSIL Alternatives; 9 Years of Shipments
                               [2023-2031]
------------------------------------------------------------------------
                                                               TSL 1
------------------------------------------------------------------------
3 percent (billions 2018$):
    GSILs...............................................           2.154
    CFL alternatives....................................         (0.088)
    LED alternatives....................................         (0.441)
    Incandescent alternatives...........................         (0.040)
                                                         ---------------
        Total...........................................           1.585
7 percent (billions 2018$):
    GSILs...............................................           1.548
    CFL alternatives....................................         (0.062)
    LED alternatives....................................         (0.328)
    Incandescent alternatives...........................         (0.030)
                                                         ---------------
        Total...........................................           1.128
------------------------------------------------------------------------

D. Economic Impacts on Manufacturers

    DOE performed an MIA to estimate the impact of analyzed energy 
conservation standards on manufacturers of GSILs. In this instance, DOE 
also can look to the actual experience of manufacturers that have 
produced HIR lamps in the recent past. The following section describes 
the expected impacts on GSIL manufacturers at the analyzed TSL.
1. Industry Cash Flow Analysis Results
    In this section, DOE provides the results from the MIA, which 
examines changes in the industry that would result from the analyzed 
standards. The following tables illustrate the estimated financial 
impacts (represented by changes in INPV) of potential amended energy 
conservation standards on manufacturers of GSILs, as well as the 
conversion costs that DOE estimates manufacturers of GSILs would incur 
at the analyzed TSL.
    To evaluate the range of cash-flow impacts on the GSIL industry, 
DOE modeled two manufacturer markup scenarios that correspond to the 
range of anticipated market responses to potential standards. Each 
markup scenario results in a unique set of cash flows and corresponding 
industry values at the analyzed TSL. In the following discussion, the 
INPV results refer to the difference in industry value between the no-
new-standards case and the standards case that result from the sum of 
discounted cash flows from the reference year (2019) through the end of 
the analysis period (2052).
    DOE modeled a preservation of gross margin markup scenario. This 
scenario assumes that in the standards case, manufacturers would be 
able to pass along all the higher production costs required for more 
efficacious products to their consumers. DOE also modeled a technology 
specific markup scenario. In the technology specific markup scenario, 
different lamp technologies (incandescent, CFL, LED) have different 
manufacturer markups.
    Table V.8 and Table V.9 present the results of the industry cash 
flow analysis for GSIL manufacturers under the preservation of gross 
margin and the technology specific markup scenarios.

         Table V.9--Manufacturer Impact Analysis for GSILs--Preservation of Gross Margin Markup Scenario
----------------------------------------------------------------------------------------------------------------
                                                                                      No-new-
                                                              Units               standards case       TSL 1
----------------------------------------------------------------------------------------------------------------
INPV..........................................  2018$ millions..................           317.5           312.2
Change in INPV................................  2018$ millions..................  ..............           (5.0)
                                                %...............................  ..............           (1.6)

[[Page 46856]]

 
Product Conversion Costs......................  2018$ millions..................  ..............             2.8
Capital Conversion Costs......................  2018$ millions..................  ..............             6.0
Total Conversion Costs........................  2018$ millions..................  ..............             8.8
----------------------------------------------------------------------------------------------------------------


             Table V.10--Manufacturer Impact Analysis for GSILs--Technology Specific Markup Scenario
----------------------------------------------------------------------------------------------------------------
                                                                                      No-new-
                                                              Units               standards case       TSL 1
----------------------------------------------------------------------------------------------------------------
INPV..........................................  2018$ millions..................           317.5           313.6
Change in INPV................................  2018$ millions..................  ..............           (3.7)
                                                %...............................  ..............           (1.2)
Product Conversion Costs......................  2018$ millions..................  ..............             2.8
Capital Conversion Costs......................  2018$ millions..................  ..............             6.0
Total Conversion Costs........................  2018$ millions..................  ..............             8.8
----------------------------------------------------------------------------------------------------------------

    At TSL 1, DOE estimates that impacts on INPV will range from -$5 
million to -$3.7 million, or a change in INPV of -1.6 to -1.2 percent. 
At TSL 1, free cash-flow is $30.0 million, which is a decrease of 
approximately $3.7 million compared to the no-new-standards case value 
of $33.7 million in 2022, the year leading up to the potential 
standard.
    At TSL 1, GSIL manufacturers spend approximately $6 million to 
purchase equipment necessary to manufacture HIR capsules and spend 
approximately $2.8 million in R&D and testing costs to introduce the 
newly created HIR products. Lighting manufacturers sell approximately 
15 million fewer units annually after 2023 at TSL 1 because most 
consumers purchase longer lifetime products. Should manufacturers make 
the unlikely decision to produce HIR lamps, they might experience some 
increase in revenue due to some consumers purchasing significantly more 
expensive HIR lamps. However, any increase in revenue is outweighed by 
the $8.8 million in conversion costs that is spent prior to the 
compliance year in both the preservation of gross margin and technology 
specific margin markup scenarios. This results in a slight decrease in 
INPV in both markup scenarios. Manufacturers, anticipating the cost of 
transitioning product lines and the lack of consumer interest in HIR 
lamps, are highly unlikely to undertake these expenses.
2. Direct Impacts on Employment
    DOE typically presents quantitative estimates of the potential 
changes in production employment that could result from the analyzed 
energy conservation standard levels. However, all production facilities 
that once produced GSILs in the U.S. have either closed or are 
scheduled to close prior to 2023, the estimated compliance year of 
analyzed standards. Therefore, DOE assumed there will not be any 
domestic employment for GSIL production after 2023, and that none of 
the analyzed standards would impact domestic GSIL production 
employment. While there is limited CFL and LED lamp production in the 
U.S., DOE does not assume that any CFL or LED lamp domestic production 
employment would be impacted by the analyzed standards. Therefore, the 
proposed determination would not have a significant impact on domestic 
employment in the GSIL industry.
3. Impacts on Manufacturing Capacity
    DOE does not anticipate any significant capacity constraints at the 
analyzed energy conservation standards. At TSL 1, manufacturers would 
most likely need to purchase machines used to coat halogen capsules. 
These machines are known equipment and are currently used for 
incandescent reflector lamp production. Equipment costs for these 
machines are included in the MIA as part of the capital conversion 
costs at TSL 1. Supply would most likely be able to meet the increase 
in demand for the machines given the 3-year compliance period for any 
potential energy conservation standards.
4. Impacts on Subgroups of Manufacturers
    Using average cost assumptions to develop an industry cash-flow 
estimate may not be adequate for assessing differential impacts among 
manufacturer subgroups. Small manufacturers, niche equipment 
manufacturers, and manufacturers exhibiting cost structures 
substantially different from the industry average could be affected 
disproportionately. DOE identified one manufacturer subgroup for GSILs, 
small manufacturers.
    For the small business subgroup analysis, DOE applied the small 
business size standards published by the Small Business Administration 
(SBA) to determine whether a company is considered a small business. 
The size standards are codified at 13 CFR part 121. To be categorized 
as a small business under NAICS code 335110, ``electric lamp bulb and 
part manufacturing,'' a GSIL manufacturer and its affiliates may employ 
a maximum of 1,250 employees. The 1,250-employee threshold includes all 
employees in a business's parent company and any other subsidiaries. 
The small business subgroup analysis is discussed in section VI.C of 
this document.
5. Cumulative Regulatory Burden
    One aspect of assessing manufacturer burden involves looking at the 
cumulative impact of multiple DOE standards and the product-specific 
regulatory actions of other Federal agencies that affect the 
manufacturers of a covered product. 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

[[Page 46857]]

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 typically conducts an analysis of 
cumulative regulatory burden as part of its rulemakings pertaining to 
appliance efficiency. However, given the tentative conclusion discussed 
in section V.E, DOE did not conduct a cumulative regulatory burden 
analysis.

E. Proposed Determination

    When considering proposed standards, the new or amended energy 
conservation standard that DOE adopts for any type (or class) of 
covered product must be designed to achieve the maximum improvement in 
energy efficiency that the Secretary determines is technologically 
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) In 
determining whether a standard is economically justified, the Secretary 
must determine whether the benefits of the standard exceed its burdens, 
considering to the greatest extent practicable the seven statutory 
factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or 
amended standard must also ``result in significant conservation of 
energy.'' (42 U.S.C. 6295(o)(3)(B))
    In response to the August 2017 NODA, energy efficiency advocates 
\48\ (EEAs) submitted a comment in support of a standard that 
eliminates incandescent lamps. EEAs stated that despite falling prices, 
increased choices, and rising sales of LED lamps, incandescent lamps 
will retain a large share of the U.S. lighting market unless a standard 
eliminates them. EEAs noted that historical experience with technology 
substitution indicates that legacy technologies, like the incandescent 
light bulb, usually persist in the market long after they stop being a 
cost-effective choice for consumers. (EEAs, No. 11 at p. 10) \11\
---------------------------------------------------------------------------

    \48\ The group described as the ``energy efficiency advocates'' 
includes the Appliance Standards Awareness Project, American Council 
for an Energy Efficient Economy, National Consumer Law Center, 
Consumer Federation of America, Natural Resources Defense Council, 
Northwest Energy Efficiency Alliance, Northeast Energy Efficiency 
Partnerships, Alliance to Save Energy, Northwest Power & 
Conservation Council, and the Southeast Energy Efficiency Alliance.
---------------------------------------------------------------------------

    However, NEMA stated the current energy conservation standards for 
GSILs cannot be amended in accordance with the criteria set forth in 42 
U.S.C. 6295(o), and therefore DOE should determine not to amend 
standards for GSILs. (NEMA, No. 329 at p. 38) \12\ GE added that there 
are only two pathways to achieve significant energy savings for GSILs: 
(1) Consider a 45 lm/W standard or (2) consider mandating HIR 
technology. Regarding the first approach, GE concluded that because 
there are no incandescent or halogen products even close to 45 lm/W on 
the market, DOE can quickly reach a conclusion that 45 lm/W GSIL 
products are not technically feasible. DOE agrees with GE's assertion 
concerning the technological feasibility of a 45 lm/W standard for 
GSILs. DOE notes that EPCA requires that DOE make a determination 
whether standards in effect for general service lamps should be amended 
to establish more stringent standards than certain standards specified 
in EPCA. 42 U.S.C. 6295(i)(6)(A)(i)(I). In making that determination 
DOE is not limited to incandescent technologies and DOE must consider a 
minimum standard applicable to GSLs of 45 lm/W. 42 U.S.C. 
6295(i)(6)(A)(ii) DOE will make that determination and will consider a 
45 lm/W standard in a subsequent document. Regarding the second 
approach, GE stated that DOE has already concluded in the 2015 IRL 
final rule that a standard level mandating HIR technology is not 
economically justified. GE pointed out that as nothing has changed with 
this technology, DOE has no reason to believe that the outcome of such 
an analysis for A-line lamps would produce a different result. (GE, No. 
325 at p. 4) \12\
    As described previously, when considering proposed standards, the 
amended energy conservation standard that DOE adopts for any type (or 
class) of covered product must be designed to achieve the maximum 
improvement in energy efficiency that the Secretary determines is 
technologically feasible and economically justified. (42 U.S.C. 
6295(o)(2)(A)) Because an analysis of potential economic justification 
and energy savings first requires an evaluation of the relevant 
technology, in the following sections DOE first discusses the 
technological feasibility of amended standards. DOE then addresses the 
energy savings and economic justification associated with potential 
amended standards.
1. Technological Feasibility
    EPCA mandates that DOE consider whether amended energy conservation 
standards for GSILs would be technologically feasible. (42 U.S.C. 
6295(o)(2)(A)) DOE has tentatively determined that there are design 
options that would improve the efficacy of GSILs. These design options 
are being used in similar products (IRLs) that are commercially 
available and have been used in commercially available GSILs in the 
past and therefore are technologically feasible. (See sections IV.A.3 
and IV.A.4 for further information.) Hence, DOE has tentatively 
determined that amended energy conservation standards for GSILs are 
technologically feasible.
2. Significant Conservation of Energy
    EPCA also mandates that DOE consider whether amended energy 
conservation standards for GSILs would result in result in significant 
conservation of energy. (42 U.S.C. 6295(o)(3)(B)) As stated in section 
III.D.2, DOE has not finalized updates to the Process Rule, in which 
DOE considers how to determine whether a new or amended standard would 
result in a significant energy savings. As this rule is not yet 
finalized, the Department is not relying on that proposed threshold for 
this determination. However, DOE is still required by statute to issue 
only such standards as will save a significant amount of energy. (42 
U.S.C. 6295(o)(3)(B))
    As described above, there are no energy savings or benefits from 
transitioning to HIR technology. Any energy savings that might result 
from establishing a standard at that TSL 1 are the result of product 
shifting as consumers abandon GSIL-HIR products in favor of different 
product types having different performance characteristics and 
features. DOE notes that EPCA prohibits DOE from prescribing an amended 
or new standard if that the standard is likely to result in the 
unavailability in the United States in any covered product type (or 
class) of performance characteristics (including reliability), 
features, sizes, capacities, and volumes that are substantially the 
same as those generally available in the United States at the time of 
the Secretary's finding. 42 U.S.C. 6295(o)(4)
3. Economic Justification
    In determining whether a standard is economically justified, the 
Secretary must determine whether the benefits of the standard exceed 
its burdens, considering to the greatest extent practicable the seven 
statutory factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) 
One of those seven factors is the savings in operating costs throughout 
the estimated average life of the covered products in the type (or 
class) compared to any increase in the price, initial charges, or 
maintenance expenses for the covered products that

[[Page 46858]]

are likely to result from the standard. This factor is assessed using 
life cycle cost and payback period analysis, discussed in section 
III.E.1.b of this NOPD.
    Given the high upfront cost and long payback period, these analyses 
do not anticipate that consumers will benefit from introduction of HIR 
lamp technology. Additionally, the recent experiences of two 
manufacturers who attempted and failed to market such a products 
illustrates that they are not commercially viable. At TSL 1, DOE 
believes there is uncertainty as to whether manufacturers would spend 
the capital required to produce HIR lamps given the low probability of 
recovering those costs as consumers substitute less costly products. 
Manufacturers could instead choose to forego the investment and produce 
other lighting products or exit the market entirely.
    After considering the analysis and weighing the benefits and the 
burdens, DOE concluded that, at TSL 1 for GSILs, the benefits of energy 
savings and positive NPV of consumer benefits would be outweighed by 
the fact that the covered product PBP exceeds covered product lifetime 
by nearly a factor of three. Based on the second EPCA factor that DOE 
is required to evaluate, DOE has tentatively concluded that imposition 
of a standard at TSL 1 is not economically justified because the 
operating costs of the covered product are insufficient to recover the 
upfront cost. Based on these considerations, DOE is not amending energy 
conservation standards for GSILs.
    DOE has presented additional consumer choice analysis anticipating 
that if it were to establish a standard at TSL 1, most consumers will 
substitute other available products, such as LEDs, CFLs, and non-GSIL 
incandescent lamps (the substitution scenario). DOE then estimated the 
NPV of the total costs and benefits experienced by the Nation in this 
scenario. (See results in Table V.7 and Table V.8) DOE also conducted 
an MIA to estimate the impact of amended energy conservation standards 
on manufacturers of GSILs in this consumer choice scenario. (See 
results in Table V.9 and Table V.10)
    Under the consumer choice analysis, the NPV of consumer benefits at 
TSL 1 would be $2.241 billion using a discount rate of 7 percent, and 
$4.173 billion using a discount rate of 3 percent. However, this NPV is 
based on the anticipated lifecycle costs to consumers who substitute 
other lamps due to price sensitivity or the unavailability of GSILs. At 
TSL 1, the average covered product LCC impact is a cost of $4.77 in the 
residential sector and $16.85 in the commercial sector. The simple 
payback period is 6.09 years (compared to an average lifetime of 2.0 
years) in the residential sector and 2.03 years (compared to an average 
lifetime of 0.6 years) in the commercial sector. The fraction of GSIL 
consumers who experience a net LCC cost is 97.7 percent in the 
residential sector and 99 percent in the commercial sector. At TSL 1, 
DOE estimates that INPV will decrease between $5.0 million to $3.7 
million, or a decrease in INPV of 1.6 to 1.2 percent. However, EPCA 
prohibits DOE from prescribing an amended or new standard if that the 
standard is likely to result in the unavailability in the United States 
in any covered product type (or class) of performance characteristics 
(including reliability), features, sizes, capacities, and volumes that 
are substantially the same as those generally available in the United 
States at the time of the Secretary's finding. DOE cannot find economic 
justification in a standard the purpose of which is to force the 
unavailability of a product type, performance characteristic or feature 
in contravention of EPCA.
    In this proposed determination, based on the initial determination 
that amended standards would not be economically justified, and that 
there would not be any benefits from transitioning to HIR technology at 
TSL 1, DOE has tentatively determined that energy conservation 
standards for GSILs do not need to be amended. DOE will consider all 
comments received on this proposed determination in issuing any final 
determination.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866

    This proposed determination has been determined to be a significant 
regulatory action for purposes of Executive Order 12866, ``Regulatory 
Planning and Review,'' 58 FR 51735 (Oct. 4, 1993). As a result, the 
Office of Management and Budget (OMB) reviewed this proposed 
determination.

B. Review Under Executive Orders 13771 and 13777

    On January 30, 2017, the President issued Executive Order (E.O.) 
13771, ``Reducing Regulation and Controlling Regulatory Costs.'' E.O. 
13771 stated the policy of the executive branch is to be prudent and 
financially responsible in the expenditure of funds, from both public 
and private sources. E.O. 13771 stated it is essential to manage the 
costs associated with the governmental imposition of private 
expenditures required to comply with Federal regulations.
    Additionally, on February 24, 2017, the President issued E.O. 
13777, ``Enforcing the Regulatory Reform Agenda.'' E.O. 13777 required 
the head of each agency to designate an agency official as its 
Regulatory Reform Officer (RRO). Each RRO oversees the implementation 
of regulatory reform initiatives and policies to ensure that agencies 
effectively carry out regulatory reforms, consistent with applicable 
law. Further, E.O. 13777 requires the establishment of a regulatory 
task force at each agency. The regulatory task force is required to 
make recommendations to the agency head regarding the repeal, 
replacement, or modification of existing regulations, consistent with 
applicable law. At a minimum, each regulatory reform task force must 
attempt to identify regulations that:
    (1) Eliminate jobs, or inhibit job creation;
    (2) Are outdated, unnecessary, or ineffective;
    (3) Impose costs that exceed benefits;
    (4) Create a serious inconsistency or otherwise interfere with 
regulatory reform initiatives and policies;
    (5) Are inconsistent with the requirements of Information Quality 
Act, or the guidance issued pursuant to that Act, in particular those 
regulations that rely in whole or in part on data, information, or 
methods that are not publicly available or that are insufficiently 
transparent to meet the standard for reproducibility; or
    (6) Derive from or implement Executive Orders or other Presidential 
directives that have been subsequently rescinded or substantially 
modified.
    DOE initially concludes that this proposed determination is 
consistent with the directives set forth in these executive orders. As 
discussed in this document, DOE is not proposing to amend energy 
conservation standards for GSILs and the proposed rule would not yield 
any costs or cost savings. Therefore, if finalized as proposed, this 
NOPD is expected to be an E.O. 13771 other action.

C. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (IRFA) for 
any rule that by law must be proposed for public comment, unless the 
agency certifies that the rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
As required by Executive Order 13272, ``Proper Consideration of Small 
Entities

[[Page 46859]]

in Agency Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published 
procedures and policies on February 19, 2003, to ensure that the 
potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of the General 
Counsel's website (http://energy.gov/gc/office-general-counsel).
    DOE reviewed this proposed determination under the provisions of 
the Regulatory Flexibility Act and the policies and procedures 
published on February 19, 2003. Because DOE is proposing not to amend 
standards for GSILs, if adopted, the determination would not amend any 
energy conservation standards. On the basis of the foregoing, DOE 
certifies that the proposed determination, if adopted, would have no 
significant economic impact on a substantial number of small entities. 
Accordingly, DOE has not prepared an IRFA for this proposed 
determination. DOE will transmit this certification and supporting 
statement of factual basis to the Chief Counsel for Advocacy of the 
Small Business Administration for review under 5 U.S.C. 605(b).

D. Review Under the National Environmental Policy Act of 1969

    DOE is analyzing this NOPD in accordance with the National 
Environmental Policy Act of 1969 (NEPA) and DOE's NEPA implementing 
regulations (10 CFR part 1021). DOE's regulations include a categorical 
exclusion for actions which are interpretations or rulings with respect 
to existing regulations. 10 CFR part 1021, subpart D, Appendix A4. DOE 
anticipates that this action qualifies for categorical exclusion A4 
because it is an interpretation or ruling in regards to an existing 
regulation and otherwise meets the requirements for application of a 
categorical exclusion. See 10 CFR 1021.410. DOE will complete its NEPA 
review before issuing the final action.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), 
imposes certain requirements on Federal agencies formulating and 
implementing policies or regulations that preempt State law or that 
have Federalism implications. The Executive Order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive Order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have Federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR 13735. DOE has examined this 
proposed determination and has tentatively determined that it would not 
have a substantial direct effect on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government. 
EPCA governs and prescribes Federal preemption of State regulations as 
to energy conservation for the products that are the subject of this 
proposed determination. States can petition DOE for exemption from such 
preemption to the extent, and based on criteria, set forth in EPCA. (42 
U.S.C. 6297) Therefore, no further action is required by Executive 
Order 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' imposes on Federal agencies the general duty 
to adhere to the following requirements: (1) Eliminate drafting errors 
and ambiguity, (2) write regulations to minimize litigation, (3) 
provide a clear legal standard for affected conduct rather than a 
general standard, and (4) promote simplification and burden reduction. 
61 FR 4729 (Feb. 7, 1996). Regarding the review required by section 
3(a), section 3(b) of Executive Order 12988 specifically requires that 
Executive agencies make every reasonable effort to ensure that the 
regulation: (1) Clearly specifies the preemptive effect, if any, (2) 
clearly specifies any effect on existing Federal law or regulation, (3) 
provides a clear legal standard for affected conduct while promoting 
simplification and burden reduction, (4) specifies the retroactive 
effect, if any, (5) adequately defines key terms, and (6) addresses 
other important issues affecting clarity and general draftsmanship 
under any guidelines issued by the Attorney General. Section 3(c) of 
Executive Order 12988 requires Executive agencies to review regulations 
in light of applicable standards in section 3(a) and section 3(b) to 
determine whether they are met or it is unreasonable to meet one or 
more of them. DOE has completed the required review and determined 
that, to the extent permitted by law, this proposed determination meets 
the relevant standards of Executive Order 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For a proposed regulatory action likely to result in a rule that may 
cause the expenditure by State, local, and Tribal governments, in the 
aggregate, or by the private sector of $100 million or more in any one 
year (adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to 
develop an effective process to permit timely input by elected officers 
of State, local, and Tribal governments on a proposed ``significant 
intergovernmental mandate,'' and requires an agency plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirements that might 
significantly or uniquely affect them. On March 18, 1997, DOE published 
a statement of policy on its process for intergovernmental consultation 
under UMRA. 62 FR 12820. DOE's policy statement is also available at 
http://energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
    This proposed determination does not contain a Federal 
intergovernmental mandate, nor is it expected to require expenditures 
of $100 million or more in any one year by the private sector. As a 
result, the analytical requirements of UMRA do not apply.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
This proposed determination would not have any impact on the autonomy 
or integrity of the family as an institution. Accordingly, DOE has 
concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

[[Page 46860]]

I. Review Under Executive Order 12630

    Pursuant to Executive Order 12630, ``Governmental Actions and 
Interference with Constitutionally Protected Property Rights,'' 53 FR 
8859 (March 15, 1988), DOE has determined that this proposed 
determination would not result in any takings that might require 
compensation under the Fifth Amendment to the U.S. Constitution.

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review 
most disseminations of information to the public under information 
quality guidelines established by each agency pursuant to general 
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 
(Oct. 7, 2002). DOE has reviewed this NOPD under the OMB and DOE 
guidelines and has concluded that it is consistent with applicable 
policies in those guidelines.

K. Review Under Executive Order 13211

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

L. Information Quality

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (OSTP), issued its Final Information 
Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 
2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as ``scientific information 
the agency reasonably can determine will have, or does have, a clear 
and substantial impact on important public policies or private sector 
decisions.'' Id. at 70 FR 2667.
    In response to OMB's Bulletin, DOE conducted formal peer reviews of 
the energy conservation standards development process and the analyses 
that are typically used and has prepared a report describing that peer 
review.\49\ Generation of this report involved a rigorous, formal, and 
documented evaluation using objective criteria and qualified and 
independent reviewers to make a judgment as to the technical/
scientific/business merit, the actual or anticipated results, and the 
productivity and management effectiveness of programs and/or projects. 
DOE has determined that the peer-reviewed analytical process continues 
to reflect current practice, and the Department followed that process 
for developing energy conservation standards in the case of the present 
action.
---------------------------------------------------------------------------

    \49\ ``Energy Conservation Standards Rulemaking Peer Review 
Report.'' 2007. Available at http://energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0.
---------------------------------------------------------------------------

VII. Public Participation

A. Attendance at Public Meeting

    The time, date and location of the public meeting are listed in the 
DATES and ADDRESSES sections at the beginning of this document. If you 
plan to attend the public meeting, please notify Ms. Regina Washington 
at (202) 586-1214 or [email protected].
    Please note that foreign nationals visiting DOE Headquarters are 
subject to advance security screening procedures which require advance 
notice prior to attendance at the public meeting. If a foreign national 
wishes to participate in the public meeting, please inform DOE of this 
fact as soon as possible by contacting Ms. Regina Washington at (202) 
586-1214 or by email: [email protected] so that the 
necessary procedures can be completed.
    DOE requires visitors to have laptops and other devices, such as 
tablets, checked upon entry into the building. Any person wishing to 
bring these devices into the Forrestal Building will be required to 
obtain a property pass. Visitors should avoid bringing these devices, 
or allow an extra 45 minutes to check in. Please report to the 
visitor's desk to have devices checked before proceeding through 
security.
    Due to the REAL ID Act implemented by the Department of Homeland 
Security (DHS), there have been recent changes regarding ID 
requirements for individuals wishing to enter Federal buildings from 
specific States and U.S. territories. DHS maintains an updated website 
identifying the State and territory driver's licenses that currently 
are acceptable for entry into DOE facilities at https://www.dhs.gov/real-id-enforcement-brief. A driver's license from a State or territory 
identified as not compliant by DHS will not be accepted for building 
entry and one of the alternate forms of ID listed below will be 
required. Acceptable alternate forms of Photo-ID include U.S. Passport 
or Passport Card; an Enhanced Driver's License or Enhanced ID-Card 
issued by States and territories as identified on the DHS website 
(Enhanced licenses issued by these States and territories are clearly 
marked Enhanced or Enhanced Driver's License); a military ID or other 
Federal government-issued Photo-ID card.
    In addition, you can attend the public meeting via webinar. Webinar 
registration information, participant instructions, and information 
about the capabilities available to webinar participants will be 
published on DOE's website: http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/41. Participants are 
responsible for ensuring their systems are compatible with the webinar 
software.

B. Procedure for Submitting Prepared General Statements for 
Distribution

    Any person who has plans to present a prepared general statement 
may request that copies of his or her statement be made available at 
the public meeting. Such persons may submit requests, along with an 
advance electronic copy of their statement in PDF (preferred), 
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to 
the appropriate address

[[Page 46861]]

shown in the ADDRESSES section at the beginning of this NOPR. The 
request and advance copy of statements must be received at least one 
week before the public meeting and may be emailed, hand-delivered, or 
sent by mail. DOE prefers to receive requests and advance copies via 
email. Please include a telephone number to enable DOE staff to make a 
follow-up contact, if needed.

C. Conduct of Public Meeting

    DOE will designate a DOE official to preside at the public meeting 
and may also use a professional facilitator to aid discussion. The 
meeting will not be a judicial or evidentiary-type public hearing, but 
DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 
6306). A court reporter will be present to record the proceedings and 
prepare a transcript. DOE reserves the right to schedule the order of 
presentations and to establish the procedures governing the conduct of 
the public meeting. After the public meeting and until the end of the 
comment period, interested parties may submit further comments on the 
proceedings and any aspect of the rulemaking.
    The public meeting will be conducted in an informal, conference 
style. DOE will present summaries of comments received before the 
public meeting, allow time for prepared general statements by 
participants, and encourage all interested parties to share their views 
on issues affecting this rulemaking. Each participant will be allowed 
to make a general statement (within time limits determined by DOE), 
before the discussion of specific topics. DOE will permit, as time 
permits, other participants to comment briefly on any general 
statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly and comment on 
statements made by others. Participants should be prepared to answer 
questions by DOE and by other participants concerning these issues. DOE 
representatives may also ask questions of participants concerning other 
matters relevant to this rulemaking. The official conducting the public 
meeting will accept additional comments or questions from those 
attending, as time permits. The presiding official will announce any 
further procedural rules or modification of the above procedures that 
may be needed for the proper conduct of the public meeting.
    A transcript of the public meeting will be included in the docket, 
which can be viewed as described in the Docket section at the beginning 
of this notice. In addition, any person may buy a copy of the 
transcript from the transcribing reporter.

D. The Time and Date of the Public Meeting and Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule before or after the public meeting but no later than the 
date provided in the DATES section at the beginning of this NOPD. 
Interested parties may submit comments, data, and other information 
using any of the methods described in the ADDRESSES section at the 
beginning of this document.
    Submitting comments via http://www.regulations.gov. The http://www.regulations.gov web page will require you to provide your name and 
contact information. Your contact information will be viewable to DOE 
Building Technologies staff only. Your contact information will not be 
publicly viewable except for your first and last names, organization 
name (if any), and submitter representative name (if any). If your 
comment is not processed properly because of technical difficulties, 
DOE will use this information to contact you. If DOE cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, DOE may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment itself or in any documents attached to your 
comment. Any information that you do not want to be publicly viewable 
should not be included in your comment, nor in any document attached to 
your comment. Otherwise, persons viewing comments will see only first 
and last names, organization names, correspondence containing comments, 
and any documents submitted with the comments.
    Do not submit to 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 http://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 in a cover letter. Include your first and last names, email 
address, telephone number, and optional mailing address. The cover 
letter will not be publicly viewable as long as it does not include any 
comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. If you submit via postal mail 
or hand delivery/courier, please provide all items on a CD, if 
feasible, in which case it is not necessary to submit printed copies. 
No telefacsimiles (faxes) will be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, that are written in English, and that are free of any 
defects or viruses. Documents should not contain special characters or 
any form of encryption and, if possible, they should carry the 
electronic signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. Pursuant to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email, postal mail, or hand delivery/courier two well-marked copies: 
One copy of the document marked ``confidential'' including all the 
information believed to be confidential, and one copy of the document 
marked ``non-confidential'' with the information believed to be 
confidential deleted. Submit these documents via email or on a CD, if 
feasible. DOE will make its own determination about the confidential

[[Page 46862]]

status of the information and treat it according to its determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include (1) a description of the 
items, (2) whether and why such items are customarily treated as 
confidential within the industry, (3) whether the information is 
generally known by or available from other sources, (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality, (5) an explanation of the 
competitive injury to the submitting person that would result from 
public disclosure, (6) when such information might lose its 
confidential character due to the passage of time, and (7) why 
disclosure of the information would be contrary to the public interest.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).

E. Issues on Which DOE Seeks Comment

    Although DOE welcomes comments on any aspect of this proposal, DOE 
is particularly interested in receiving comments and views of 
interested parties concerning the following issues:
    (1) DOE seeks comment on the technology options identified and the 
ones selected as design options in the screening analysis. See sections 
IV.A.3 and IV.A.4 of this document.
    (2) DOE seeks comment on the performance characteristics of the 
more efficacious substitute modeled for GSILs. See section IV.B.3 of 
this document.
    (3) DOE welcomes any relevant data and comment on the energy use 
analysis methodology. See section IV.D of this document.
    (4) DOE welcomes any relevant data and comment on the LCC and PBP 
analysis methodology. See section IV.E of this document.
    (5) DOE welcomes any relevant data and comment on the shipments 
analysis methodology. See section IV.F of this document.
    (6) DOE seeks any relevant data and comment on the potential 
rebound effect for GSILs. See section IV.G.1 of this document.

VIII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this notice of 
proposed determination.

    Signed in Washington, DC, on August 28, 2019.
Daniel R. Simmons,
Assistant Secretary, Energy Efficiency and Renewable Energy.
[FR Doc. 2019-18941 Filed 9-4-19; 8:45 am]
BILLING CODE 6450-01-P