[Federal Register Volume 87, Number 233 (Tuesday, December 6, 2022)]
[Proposed Rules]
[Pages 74850-74913]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25953]



[[Page 74849]]

Vol. 87

Tuesday,

No. 233

December 6, 2022

Part III





Department of Energy





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10 CFR Part 431





Energy Conservation Program: Energy Conservation Standards for 
Circulator Pumps; Proposed Rule

  Federal Register / Vol. 87, No. 233 / Tuesday, December 6, 2022 / 
Proposed Rules  

[[Page 74850]]


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DEPARTMENT OF ENERGY

10 CFR Part 431

[EERE-2016-BT-STD-0004]
RIN 1904-AD61


Energy Conservation Program: Energy Conservation Standards for 
Circulator Pumps

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

ACTION: Notice of proposed rulemaking and announcement of public 
meeting.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''), 
prescribes energy conservation standards for various consumer products 
and certain commercial and industrial equipment, including circulator 
pumps. In this notice of proposed rulemaking (``NOPR''), DOE proposes 
energy conservation standards for circulator pumps, and also announces 
a public meeting to receive comment on these proposed standards and 
associated analyses and results.

DATES: 
    Comments: DOE will accept comments, data, and information regarding 
this NOPR no later than February 6, 2023.
    Meeting: DOE will hold a public meeting via webinar on Thursday, 
January 19, 2023, from 1:00 p.m. to 4:00 p.m., in Washington, DC.
    Comments regarding the likely competitive impact of the proposed 
standard should be sent to the Department of Justice contact listed in 
the ADDRESSES section on or before February 6, 2023.
    Interested persons are encouraged to submit comments using the 
Federal eRulemaking Portal at www.regulations.gov, under docket number 
EERE-2016-BT-STD-0004. Follow the instructions for submitting comments. 
Alternatively, interested persons may submit comments, identified by 
docket number EERE-EERE-2016-BT-STD-0004, by any of the following 
methods:
    Email: [email protected]. Include the docket number 
EERE-2016-BT-STD-0004 in the subject line of the message.
    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.
    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 for this activity, which includes Federal 
Register notices, comments, and other supporting documents/materials, 
is available for review at www.regulations.gov. All documents in the 
docket are listed in the www.regulations.gov index. However, 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 www.regulations.gov/docket/EERE-2016-BT-STD-0004/document. The docket web page contains 
instructions on how to access all documents, including public comments, 
in the docket. See section VII of this document for information on how 
to submit comments through www.regulations.gov.
    EPCA requires the Attorney General to provide DOE a written 
determination of whether the proposed standard is likely to lessen 
competition. The U.S. Department of Justice Antitrust Division invites 
input from market participants and other interested persons with views 
on the likely competitive impact of the proposed standard. Interested 
persons may contact the Division at [email protected] on or 
before the date specified in the DATES section. Please indicate in the 
``Subject'' line of your email the title and Docket Number of this 
proposed rulemaking.

FOR FURTHER INFORMATION CONTACT: 
    Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: 
(202) 586-9870. Email: [email protected].
    Mr. Nolan Brickwood, U.S. Department of Energy, Office of the 
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 
20585-0121. Telephone: (202) 586-2555. 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 Rule
    A. Benefits and Costs to Consumers
    B. Impact on Manufacturers
    C. National Benefits and Costs
    D. Conclusion
II. Introduction
    A. Authority
    B. Background
    C. Deviation From Appendix A
III. General Discussion
    A. November 2016 CPWG Recommendations
    1. Energy Conservation Standard Level
    2. Labeling Requirements
    3. Certification Reports
    B. Equipment Classes and Scope of Coverage
    1. CPWG Recommendations
    a. Scope
    b. Definitions
    c. Equipment Classes
    d. Small Vertical In-Line Pumps
    C. Test Procedure
    a. Control Mode
    D. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    E. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    F. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Savings in Operating Costs Compared To Increase in Price (LCC 
and PBP)
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
    G. Effective Date
IV. Methodology and Discussion of Related Comments
    A. Market and Technology Assessment
    1. Scope of Coverage and Equipment Classes
    a. Scope
    b. Equipment Classes
    2. Technology Options
    a. Hydraulic Design
    b. More Efficient Motors
    c. Speed Reduction
    B. Screening Analysis
    1. Screened-Out Technologies
    2. Remaining Technologies
    C. Engineering Analysis
    1. Representative Equipment

[[Page 74851]]

    a. Circulator Pump Varieties
    2. Efficiency Analysis
    a. Baseline Efficiency
    b. Higher Efficiency Levels
    c. EL analysis
    3. Cost Analysis
    4. Cost-Efficiency Results
    5. Manufacturer Markup and Manufacturer Selling Price
    D. Markups Analysis
    E. Energy Use Analysis
    1. Circulator Pump Applications
    2. Consumer Samples
    3. Operating Hours
    a. Hydronic Heating
    b. Hot Water Recirculation
    4. Load Profiles
    F. Life-Cycle Cost and Payback Period Analysis
    1. Product Cost
    2. Installation Cost
    3. Annual Energy Consumption
    4. Energy Prices
    5. Maintenance and Repair Costs
    6. Product Lifetime
    7. Discount Rates
    a. Residential
    b. Commercial
    8. Energy Efficiency Distribution in the No-New-Standards Case
    9. Payback Period Analysis
    G. Shipments Analysis
    1. No-New-Standards Case Shipments Projections
    2. Standards-Case Shipment Projections
    H. National Impact Analysis
    1. Equipment Efficiency Trends
    2. National Energy Savings
    3. Net Present Value Analysis
    I. Consumer Subgroup Analysis
    J. Manufacturer Impact Analysis
    1. Overview
    2. Government Regulatory Impact Model and Key Inputs
    a. Manufacturer Production Costs
    b. Shipments Projections
    c. Product and Capital Conversion Costs
    d. Markup Scenarios
    3. Manufacturer Interviews
    a. Cost Increases and Component Shortages
    b. Motor Availability
    c. Timing of Standard
    K. Emissions Analysis
    1. Air Quality Regulations Incorporated in DOE's Analysis
    L. Monetizing Emissions Impacts
    1. Monetization of Greenhouse Gas Emissions
    a. Social Cost of Carbon
    b. Social Cost of Methane and Nitrous Oxide
    2. Monetization of Other Emissions Impacts
    M. Utility Impact Analysis
    N. Employment Impact Analysis
    O. Other Topics
    a. Acceptance Test Grades
V. Analytical Results and Conclusions
    A. Trial Standard Levels
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Consumers
    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Economic Impacts on Manufacturers
    b. Direct Impacts on Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Subgroups of Manufacturers
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Significance of Energy Savings
    b. Net Present Value of Consumer Costs and Benefits
    c. Indirect Impacts on Employment
    4. Impact on Utility or Performance of Products
    5. Impact of Any Lessening of Competition
    6. Need of the Nation To Conserve Energy
    7. Other Factors
    8. Summary of Economic Impacts
    C. Conclusion
    1. Benefits and Burdens of TSLs Considered for Circulator Pumps 
Standards
    2. Annualized Benefits and Costs of the Proposed Standards
    D. Reporting, Certification, and Sampling Plan
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    1. Description of Reasons Why Action Is Being Considered
    2. Objectives of, and Legal Basis for, Rule
    3. Description on Estimated Number of Small Entities Regulated
    4. Description and Estimate of Compliance Requirements Including 
Differences in Cost, if Any, for Different Groups of Small Entities
    5. Duplication, Overlap, and Conflict With Other Rules and 
Regulations
    6. Significant Alternatives to the Rule
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Information Quality
VII. Public Participation
    A. Participation in the Webinar
    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of the Public Meeting
    D. Submission of Comments
    E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary

I. Synopsis of the Proposed Rule

    Title III, Part C \1\ of EPCA,\2\ established the Energy 
Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311-
6317) Such equipment includes pumps. Circulator pumps, which are the 
subject of this proposed rulemaking, are a category of pumps.
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    \1\ For editorial reasons, upon codification in the U.S. Code, 
Part C was redesignated Part A-1.
    \2\ All references to EPCA in this document refer to the statute 
as amended through the Energy Act of 2020, Public Law 116-260 (Dec. 
27, 2020), which reflect the last statutory amendments that impact 
Parts A and A-1 of EPCA.
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    Pursuant to EPCA, any new or amended energy conservation standard 
must be designed to achieve the maximum improvement in energy 
efficiency that DOE determines is technologically feasible and 
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A)) 
Furthermore, the new or amended standard must result in a significant 
conservation of energy. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(B)) 
EPCA also provides that not later than 6 years after issuance of any 
final rule establishing or amending a standard, DOE must publish either 
a notice of determination that standards for the product do not need to 
be amended, or a notice of proposed rulemaking including new proposed 
energy conservation standards (proceeding to a final rule, as 
appropriate). (42 U.S.C. 6316(a); 42 U.S.C. 6295(m))
    In accordance with these and other statutory provisions discussed 
in this document, DOE proposes energy conservation standards for 
circulator pumps. The proposed standards, which are expressed in terms 
of a maximum circulator energy index (``CEI''), are shown in Table I.1. 
CEI represents the weighted average electric input power to the driver 
over a specified load profile, normalized with respect to a circulator 
pump serving the same hydraulic load that has a specified minimum 
performance level.\3\ These proposed standards, if adopted, would apply 
to all circulator pumps listed in Table I.1 manufactured in, or 
imported into, the United States starting on the date 2 years after the 
publication of the final rule for this proposed rulemaking.
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    \3\ The performance of a comparable pump that has a specified 
minimum performance level is referred to as the circulator energy 
rating (``CER'').

 Table I.1--Proposed Energy Conservation Standards for Circulator Pumps
------------------------------------------------------------------------
                      Equipment class                        Maximum CEI
------------------------------------------------------------------------
(All Circulator Pumps).....................................         1.00
------------------------------------------------------------------------


[[Page 74852]]

    As stated in section III.C.a of this document, the proposed 
standards apply to circulator pumps when operated using the least 
consumptive control variety with which they are equipped.
    CEI is defined as shown in equation (1), and consistent \4\ with 
section 41.5.3.2 of HI 41.5-2022, ``Hydraulic Institute Program 
Guideline for Circulator Pump Energy Rating Program.'' \5\ 87 FR 57264.
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    \4\ HI 41.5-2022 uses the term CERREF for the 
analogous concept. In the September 2022 TP Final Rule, DOE 
discussed this decision to instead use CERSTD in the 
context of Federal energy conservation standards.
    \5\ HI 41.5-2022 provides additional instructions for testing 
circulator pumps to determine an Energy Rating value for different 
circulator pump control varieties.
[GRAPHIC] [TIFF OMITTED] TP06DE22.000

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Where:

CEI = the circulator energy index (dimensionless);
CER = circulator energy rating (hp); and
CERSTD = for a circulator pump that is minimally 
compliant with DOE's energy conservation standards with the same 
hydraulic horsepower as the tested pump, as determined in accordance 
with the specifications at paragraph (i) of Sec.  431.465.

    The specific formulation for CER, in turn, varies according to 
circulator pump control variety, but in all cases is a function of 
measured pump input power when operated under certain conditions, as 
described in the September 2022 TP Final Rule.
    Relatedly, CERSTD represents CER for a circulator pump 
that is minimally compliant with DOE's energy conservation standards 
with the same hydraulic horsepower as the tested pump, as determined in 
accordance with the specifications at paragraph (i) of Sec.  431.465. 
87 FR 57264.

A. Benefits and Costs to Consumers

    Table I.2 presents DOE's evaluation of the economic impacts of the 
proposed standards on consumers of circulator pumps, as measured by the 
average life-cycle cost (``LCC'') savings and the simple payback period 
(``PBP'').\6\ The average LCC savings are positive, and the PBP is less 
than the average lifetime of circulator pumps, which is estimated to be 
approximately 10.5 years (see section IV.F.6 of this document).
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    \6\ The average LCC savings refer to consumers that are affected 
by a standard and are measured relative to the efficiency 
distribution in the no-new-standards case, which depicts the market 
in the compliance year in the absence of new or amended standards. 
The simple PBP, which is designed to compare specific efficiency 
levels, is measured relative to the baseline product. See section 
IV.F of this document).

          Table I.2--Impacts of Proposed Energy Conservation Standards on Consumers of Circulator Pumps
----------------------------------------------------------------------------------------------------------------
                                                               Average LCC savings       Simple payback period
                      Equipment class                                (2021$)                    (years)
----------------------------------------------------------------------------------------------------------------
All Circulator Pumps......................................                    103.2                         4.2
----------------------------------------------------------------------------------------------------------------

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

B. Impact on Manufacturers

    The industry net present value (``INPV'') is the sum of the 
discounted cash flows to the industry from the base year through the 
end of the analysis period (2022-2055). Using a real discount rate of 
9.6 percent, DOE estimates that the INPV for manufacturers of 
circulator pumps in the case without standards is $325.9 million in 
2021$. Under the proposed standards, the change in INPV is estimated to 
range from -19.7 percent to 6.6 percent, which is approximately 
equivalent to a decrease of $64.3 million to an increase of 21.4 
million. In order to bring products into compliance with standards, it 
is estimated that the industry would incur total conversion costs of 
$77.0 million.
    DOE's analysis of the impacts of the proposed standards on 
manufacturers is described in section IV.J of this document. The 
analytic results of the manufacturer impact analysis (``MIA'') are 
presented in section V.B.2 of this document.

C. National Benefits and Costs \7\
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    \7\ All monetary values in this document are expressed in [2021] 
dollars.
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    DOE's analyses indicate that the proposed energy conservation 
standards for circulator pumps would save a significant amount of 
energy. Relative to the case without standards, the lifetime energy 
savings for circulator pumps purchased in the 30-year period that 
begins in the anticipated year of compliance with the standards (2026-
2055) amount to 0.45 quadrillion British thermal units (``Btu''), or 
quads.\8\ This represents a savings of 34 percent relative to the 
energy use of these products in the case without standards (referred to 
as the ``no-new-standards case'').
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    \8\ The quantity refers to full-fuel-cycle (``FFC'') energy 
savings. FFC energy savings includes the energy consumed in 
extracting, processing, and transporting primary fuels (i.e., coal, 
natural gas, petroleum fuels), and, thus, presents a more complete 
picture of the impacts of energy efficiency standards. For more 
information on the FFC metric, see section IV.H.2 of this document.
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    The cumulative net present value (``NPV'') of total consumer 
benefits of the proposed standards for circulator pumps ranges from 
$0.73 billion (at a 7-percent discount rate) to $1.77 billion (at a 3-
percent discount rate). This NPV expresses the estimated total value of 
future operating-cost savings minus the estimated increased equipment 
and installation costs for circulator pumps purchased in 2026-2055.
    In addition, the proposed standards for circulator pumps are 
projected to yield significant environmental benefits. DOE estimates 
that the proposed standards would result in cumulative emission 
reductions (over the same

[[Page 74853]]

period as for energy savings) of 15.8 million metric tons (``Mt'') \9\ 
of carbon dioxide (``CO2''), 7.7 thousand tons of sulfur 
dioxide (``SO2''), 23.8 thousand tons of nitrogen oxides 
(``NOX''), 102 thousand tons of methane 
(``CH4''), 0.2 thousand tons of nitrous oxide 
(``N2O''), and 0.05 tons of mercury (``Hg'').\10\
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    \9\ A metric ton is equivalent to 1.1 short tons. Results for 
emissions other than CO2 are presented in short tons.
    \10\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy 
Outlook 2022 (``AEO2022''). AEO2022 represents current federal and 
state legislation and final implementation of regulations as of the 
time of its preparation. See section IV.K of this document for 
further discussion of AEO2022 assumptions that effect air pollutant 
emissions.
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    DOE estimates climate benefits from a reduction in greenhouse gases 
(GHG) using four different estimates of the social cost of 
CO2 (``SCCO2''), the social cost of methane 
(``SCCH4''), and the social cost of nitrous oxide 
(``SCN2O''). Together these represent the social cost of GHG 
(SCGHG).\11\ DOE used interim SCGHG values developed by an Interagency 
Working Group on the Social Cost of Greenhouse Gases (IWG),\12\ as 
discussed in section IV.L of this document. For presentational 
purposes, the climate benefits associated with the average SCGHG at a 
3-percent discount rate are $0.80 billion. (DOE does not have a single 
central SCGHG point estimate and it emphasizes the importance and value 
of considering the benefits calculated using all four SCGHG estimates.)
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    \11\ On March 16, 2022, the Fifth Circuit Court of Appeals (No. 
22-30087) granted the federal government's emergency motion for stay 
pending appeal of the February 11, 2022, preliminary injunction 
issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a 
result of the Fifth Circuit's order, the preliminary injunction is 
no longer in effect, pending resolution of the federal government's 
appeal of that injunction or a further court order. Among other 
things, the preliminary injunction enjoined the defendants in that 
case from ``adopting, employing, treating as binding, or relying 
upon'' the interim estimates of the social cost of greenhouse 
gases--which were issued by the Interagency Working Group on the 
Social Cost of Greenhouse Gases on February 26, 2021--to monetize 
the benefits of reducing greenhouse gas emissions. In the absence of 
further intervening court orders, DOE will revert to its approach 
prior to the injunction and present monetized benefits where 
appropriate and permissible under law.
    \12\ See Interagency Working Group on Social Cost of Greenhouse 
Gases, Technical Support Document: Social Cost of Carbon, Methane, 
and Nitrous Oxide. Interim Estimates Under Executive Order 13990, 
Washington, DC, February 2021 (``February 2021 SCGHG TSD''). 
www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
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    DOE also estimates health benefits from SO2 and 
NOX emissions reductions.\13\ DOE estimates the present 
value of the health benefits would be $0.65 billion using a 7-percent 
discount rate, and $1.45 billion using a 3-percent discount rate.\14\ 
DOE is currently only monetizing (for SO2 and 
NOX) PM2.5 precursor health benefits and (for 
NOX) ozone precursor health benefits, but will continue to 
assess the ability to monetize other effects such as health benefits 
from reductions in direct PM2.5 emissions.
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    \13\ DOE estimated the monetized value of SO2 and 
NOX emissions reductions associated with electricity 
savings using benefit per ton estimates from the scientific 
literature. See section IV.L.2 of this document for further 
discussion.
    \14\ DOE estimates the economic value of these emissions 
reductions resulting from the considered TSLs for the purpose of 
complying with the requirements of Executive Order 12866.
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    Table I.3 summarizes the economic benefits and costs expected to 
result from the proposed standards for circulator pumps. In the table, 
total benefits for both the 3-percent and 7-percent cases are presented 
using the average GHG social costs with 3-percent discount rate, but 
the Department emphasizes the importance and value of considering the 
benefits calculated using all four SCGHG cases. The estimated total net 
benefits using each of the four cases are presented in section V.C.1 of 
this document.

  Table I.3--Summary of Economic Benefits and Costs of Proposed Energy
           Conservation Standards for Circulator Pumps [TSL 2]
------------------------------------------------------------------------
                                                                Billion
                                                                ($2020)
------------------------------------------------------------------------
3% discount rate:
    Consumer Operating Cost Savings..........................       3.41
    Climate Benefits*........................................       0.80
    Health Benefits**........................................       1.45
        Total Benefits[dagger]...............................       5.65
                                                              ----------
        Consumer Incremental Product Costs[Dagger]...........       1.64
        Net Benefits.........................................       4.02
------------------------------------------------------------------------
7% discount rate:
    Consumer Operating Cost Savings..........................       1.68
    Climate Benefits* (3% discount rate).....................       0.80
    Health Benefits**........................................       0.65
        Total Benefits[dagger]...............................       3.12
                                                              ----------
        Consumer Incremental Product Costs[Dagger]...........       0.95
                                                              ----------
        Net Benefits.........................................       2.18
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with product
  name shipped in 2026-2055. These results include benefits to consumers
  which accrue after 2055 from the products shipped in 2026-2055.
* Climate benefits are calculated using four different estimates of the
  SC-GHG (see section IV.L of this document). For presentational
  purposes of this table, the climate benefits associated with the
  average SC-GHG at a 3 percent discount rate are shown, but the
  Department does not have a single central SC-GHG point estimate, and
  it emphasizes the importance of considering the benefits calculated
  using all four SC-GHG estimates.
** Health benefits are calculated using benefit-per-ton values for NOX
  and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
  precursor health benefits and (for NOX) ozone precursor health
  benefits, but will continue to assess the ability to monetize other
  effects such as health benefits from reductions in direct PM2.5
  emissions. The health benefits are presented at real discount rates of
  3 and 7 percent. See section IV.L of this document for more details.

[[Page 74854]]

 
[dagger] Total and net benefits include consumer, climate, and health
  benefits. For presentation purposes, total and net benefits for both
  the 3-percent and 7-percent cases are presented using the average SC-
  GHG with 3-percent discount rate, but the Department does not have a
  single central SC-GHG point estimate. DOE emphasizes the importance
  and value of considering the benefits calculated using all four SC-GHG
  estimates. See Table V.18 for net benefits using all four SC-GHG
  estimates. On March 16, 2022, the Fifth Circuit Court of Appeals (No.
  22-30087) granted the federal government's emergency motion for stay
  pending appeal of the February 11, 2022, preliminary injunction issued
  in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result
  of the Fifth Circuit's order, the preliminary injunction is no longer
  in effect, pending resolution of the federal government's appeal of
  that injunction or a further court order. Among other things, the
  preliminary injunction enjoined the defendants in that case from
  ``adopting, employing, treating as binding, or relying upon'' the
  interim estimates of the social cost of greenhouse gases--which were
  issued by the Interagency Working Group on the Social Cost of
  Greenhouse Gases on February 26, 2021--to monetize the benefits of
  reducing greenhouse gas emissions. In the absence of further
  intervening court orders, DOE will revert to its approach prior to the
  injunction and present monetized benefits where appropriate and
  permissible under law.
[Dagger] Costs include incremental equipment costs as well as
  installation costs.

    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The monetary values for the 
total annualized net benefits are (1) the reduced consumer operating 
costs, minus (2) the increase in product purchase prices and 
installation costs, plus (3) the value of the benefits of GHG and 
NOX and SO2 emission reductions, all 
annualized.\15\ The national operating savings are domestic private 
U.S. consumer monetary savings that occur as a result of purchasing the 
covered equipment and are measured for the lifetime of circulator pumps 
shipped in 2026-2055. The benefits associated with reduced emissions 
achieved as a result of the proposed standards are also calculated 
based on the lifetime of circulator pumps shipped in 2026-2055.
---------------------------------------------------------------------------

    \15\ To convert the time-series of costs and benefits into 
annualized values, DOE calculated a present value in 2022, the year 
used for discounting the NPV of total consumer costs and savings. 
For the benefits, DOE calculated a present value associated with 
each year's shipments in the year in which the shipments occur 
(e.g.,2030), and then discounted the present value from each year to 
2022. Using the present value, DOE then calculated the fixed annual 
payment over a 30-year period, starting in the compliance year, that 
yields the same present value.
---------------------------------------------------------------------------

    Estimates of annualized benefits and costs of the proposed 
standards are shown in Table I.4. The results under the primary 
estimate are as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
health benefits from reduced NOX and SO2 emissions, and the 
3-percent discount rate case for climate benefits from reduced GHG 
emissions, the estimated cost of the standards proposed in this rule is 
$93.5 million per year in increased equipment costs, while the 
estimated annual benefits are $165.8 in reduced equipment operating 
costs, $44.4 million in climate benefits, and $63.9 million in health 
benefits. In this case, the net benefit would amount to $180.5 million 
per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards is $91.2 million per year in 
increased equipment costs, while the estimated annual benefits are 
$189.9 million in reduced operating costs, $44.4 million in climate 
benefits, and $80.8 million in health benefits. In this case, the net 
benefit would amount to $224.0 million per year.

     Table I.4--Annualized Benefits and Costs of Proposed Energy Conservation Standards for Circulator Pumps
                                                     [TSL 2]
----------------------------------------------------------------------------------------------------------------
                                                                        Million (2021$/year)
                                                  --------------------------------------------------------------
                                                                          Low-net-benefits    High-net-benefits
                                                     Primary estimate         estimate             estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate:
    Consumer Operating Cost Savings..............                189.9                185.7                194.0
    Climate Benefits*............................                 44.4                 44.4                 44.4
    Health Benefits**............................                 80.8                 80.8                 80.8
                                                  --------------------------------------------------------------
        Total Benefits[dagger]...................                315.2                311.0                319.3
        Consumer Incremental Product                              91.2                 91.2                 91.2
         Costs[Dagger]...........................
                                                  --------------------------------------------------------------
        Net Benefits.............................                224.0                219.8                228.1
----------------------------------------------------------------------------------------------------------------
7% discount rate:
    Consumer Operating Cost Savings..............                165.8                162.6                168.7
    Climate Benefits* (3% discount rate).........                 44.4                 44.4                 44.4
    Health Benefits**............................                 63.9                 63.9                 63.9
                                                  --------------------------------------------------------------
        Total Benefits[dagger]...................                274.1                271.0                277.0
        Consumer Incremental Product                              93.5                 93.5                 93.5
         Costs[Dagger]...........................
                                                  --------------------------------------------------------------
        Net Benefits.............................                180.5                177.4                183.4
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with circulator pumps shipped in 2026-2055. These
  results include benefits to consumers which accrue after 2055 from the products shipped in 2026-2055.
* Climate benefits are calculated using four different estimates of the global SCGHG (see section IV.L of this
  document. For presentational purposes of this table, the climate benefits associated with the average SCGHG at
  a 3 percent discount rate are shown, but the Department does not have a single central SCGHG point estimate,
  and it emphasizes the importance and value of considering the benefits calculated using all four SCGHG
  estimates.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
  (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
  continue to assess the ability to monetize other effects such as health benefits from reductions in direct
  PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
  of this document for more details.

[[Page 74855]]

 
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total
  and net benefits for both the 3-percent and 7-percent cases are presented using the average SCGHG with 3-
  percent discount rate, but the Department does not have a single central SCGHG point estimate. DOE emphasizes
  the importance and value of considering the benefits calculated using all four SCGHG estimates. See Table V.18
  for net benefits using all four SCGHG estimates. On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-
  30087) granted the federal government's emergency motion for stay pending appeal of the February 11, 2022,
  preliminary injunction issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the
  Fifth Circuit's order, the preliminary injunction is no longer in effect, pending resolution of the federal
  government's appeal of that injunction or a further court order. Among other things, the preliminary
  injunction enjoined the defendants in that case from ``adopting, employing, treating as binding, or relying
  upon'' the interim estimates of the social cost of greenhouse gases--which were issued by the Interagency
  Working Group on the Social Cost of Greenhouse Gases on February 26, 2021--to monetize the benefits of
  reducing greenhouse gas emissions. In the absence of further intervening court orders, DOE will revert to its
  approach prior to the injunction and present monetized benefits where appropriate and permissible under law.
[Dagger] Costs include incremental equipment costs as well as installation costs.

    DOE's analysis of the national impacts of the proposed standards is 
described in sections IV.H, IV.K and IV.L of this document.

D. Conclusion

    DOE has tentatively concluded that the proposed standards represent 
the maximum improvement in energy efficiency that is technologically 
feasible and economically justified, and would result in the 
significant conservation of energy. Specifically, with regards to 
technological feasibility, equipment achieving these standard levels 
are already commercially available. As for economic justification, 
DOE's analysis shows that the benefits of the proposed standard exceed, 
to a great extent, the burdens of the proposed standards. Using a 7-
percent discount rate for consumer benefits and costs and 
NOX and SO2 reduction benefits, and a 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
proposed standards for circulator pumps is $93.5 million per year in 
increased circulator pumps costs, while the estimated annual benefits 
are $165.8 million in reduced circulator pumps operating costs, $44.4 
million in climate benefits and $63.9 million in health benefits. The 
net benefit amounts to $180.5 million per year.
    The significance of energy savings offered by a new or amended 
energy conservation standard cannot be determined without knowledge of 
the specific circumstances surrounding a given rulemaking.\16\ 
Accordingly, DOE evaluates the significance of energy savings on a 
case-by-case basis.
---------------------------------------------------------------------------

    \16\ Procedures, Interpretations, and Policies for Consideration 
in New or Revised Energy Conservation Standards and Test Procedures 
for Consumer Products and Commercial/Industrial Equipment, 86 FR 
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

    As previously mentioned, the proposed standards are projected to 
result in estimated national energy savings of 0.45 quad, the 
equivalent of the electricity use of 4.4 million homes in one year. The 
NPV of consumer benefit for these projected energy savings is $0.73 
billion using a discount rate of 7 percent, and $1.77 billion using a 
discount rate of 3 percent. The cumulative emissions reductions 
associated with these energy savings are 15.8 Mt of CO2, 
23.8 thousand tons of SO2, 7.7 thousand tons of 
NOX, 0.05 tons of Hg, 102.0 thousand tons of CH4, 
and 0.18 thousand tons of N2O. The estimated monetary value 
of the climate benefits from the reduced GHG emissions (associated with 
the average SC-GHG at a 3-percent discount rate) is $0.80 billion. The 
estimated monetary value of the health benefits from reduced 
SO2 and NOX emissions is $0.65 billion using a 7-
percent discount rate and $1.45 billion using a 3-percent discount 
rate. As such, DOE has initially determined the energy savings from the 
proposed standard levels are ``significant'' within the meaning of 42 
U.S.C. 6295(o)(3)(B). A more detailed discussion of the basis for these 
tentative conclusions is contained in the remainder of this document 
and the accompanying TSD.
    DOE also considered more-stringent energy efficiency levels 
(``ELs'') as potential standards, and is still considering them in this 
rulemaking. However, DOE has tentatively concluded that the potential 
burdens of the more-stringent energy efficiency levels would outweigh 
the projected benefits.
    Based on consideration of the public comments DOE receives in 
response to this document and related information collected and 
analyzed during the course of this rulemaking effort, DOE may adopt 
energy efficiency levels presented in this document that are either 
higher or lower than the proposed standards, or some combination of 
level(s) that incorporate the proposed standards in part.

II. Introduction

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

A. Authority

    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
C of EPCA, added by Public Law 95-619, Title IV, section 441(a) (42 
U.S.C. 6311-6317, as codified), established the Energy Conservation 
Program for Certain Industrial Equipment, which sets forth a variety of 
provisions designed to improve energy efficiency. This equipment 
includes pumps, the subject of this document. (42 U.S.C. 6311(1)(A)))
    The energy conservation program 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. Relevant provisions of EPCA include definitions (42 U.S.C. 
6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 
6315), energy conservation standards (42 U.S.C. 6313), and the 
authority to require information and reports from manufacturers (42 
U.S.C. 6316; 42 U.S.C. 6296).
    Federal energy efficiency requirements for covered equipment 
established under EPCA generally supersede State laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6316(a) and (b); 42 U.S.C. 6297) DOE may, however, grant waivers 
of Federal preemption for particular State laws or regulations, in 
accordance with the procedures and other provisions set forth under 
EPCA. (See 42 U.S.C. 6316(a) (applying the preemption waiver provisions 
of 42 U.S.C. 6297))
    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 equipment. (42 
U.S.C. 6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered 
equipment must use the Federal test procedures as the basis for: (1) 
certifying to DOE that their equipment complies with the applicable 
energy conservation standards adopted pursuant to EPCA (42 U.S.C. 
6316(a); 42 U.S.C. 6295(s)), and (2) making representations about the 
efficiency of that equipment (42 U.S.C. 6314(d)).

[[Page 74856]]

Similarly, DOE must use these test procedures to determine whether the 
equipment complies with relevant standards promulgated under EPCA. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(s))
    The DOE test procedures for circulator pumps appear at title 10 of 
the Code of Federal Regulations (``CFR'') part 431, subpart Y, appendix 
D.
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered equipment, including circulator pumps. 
Any new or amended standard for a covered equipment must be designed to 
achieve the maximum improvement in energy efficiency that the Secretary 
of Energy determines is technologically feasible and economically 
justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C. 
6295(o)(3)(B)) Furthermore, DOE may not adopt any standard that would 
not result in the significant conservation of energy. (42 U.S.C. 
6316(a); 42 U.S.C. 6295(o)(3))
    Moreover, DOE may not prescribe a standard: (1) for certain 
equipment, including circulator pumps, if no test procedure has been 
established for the product, or (2) if DOE determines by rule that the 
standard is not technologically feasible or economically justified. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(B)) In deciding whether a proposed 
standard is economically justified, DOE must determine whether the 
benefits of the standard exceed its burdens. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after 
receiving comments on the proposed standard, and by considering, to the 
greatest extent practicable, the following seven statutory factors:
    (1) The economic impact of the standard on manufacturers and 
consumers of the products subject to the standard;
    (2) The savings in operating costs throughout the estimated average 
life of the covered equipment in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered equipment 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 
equipment likely to result from the standard;
    (5) The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
standard;
    (6) The need for national energy and water conservation; and
    (7) Other factors the Secretary of Energy (``Secretary'') considers 
relevant. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    Further, EPCA establishes a rebuttable presumption that a standard 
is economically justified if the Secretary finds that the additional 
cost to the consumer of purchasing a product complying with an energy 
conservation standard level will be less than three times the value of 
the energy savings during the first year that the consumer will receive 
as a result of the standard, as calculated under the applicable test 
procedure. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(iii))
    EPCA also contains what is known as an ``anti-backsliding'' 
provision, which prevents the Secretary from prescribing any amended 
standard that either increases the maximum allowable energy use or 
decreases the minimum required energy efficiency of covered equipment. 
(42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(1)) Also, the Secretary may not 
prescribe an amended or new standard if interested persons have 
established by a preponderance of the evidence that the standard is 
likely to result in the unavailability in the United States in any 
covered equipment type (or class) of performance characteristics 
(including reliability), features, sizes, capacities, and volumes that 
are substantially the same as those generally available in the United 
States. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(4))
    Additionally, EPCA specifies requirements when promulgating an 
energy conservation standard for covered equipment that has two or more 
subcategories. DOE must specify a different standard level for a type 
or class of product that has the same function or intended use, if DOE 
determines that products within such group: (A) consume a different 
kind of energy from that consumed by other covered equipment within 
such type (or class); or (B) have a capacity or other performance-
related feature which other products within such type (or class) do not 
have and such feature justifies a higher or lower standard. (42 U.S.C. 
6316(a); 42 U.S.C. 6295(q)(1)) In determining whether a performance-
related feature justifies a different standard for a group of products, 
DOE must consider such factors as the utility to the consumer of the 
feature and other factors DOE deems appropriate. Id. Any rule 
prescribing such a standard must include an explanation of the basis on 
which such higher or lower level was established. (42 U.S.C. 6316(a); 
42 U.S.C. 6295(q)(2))

B. Background

    As stated, EPCA includes ``pumps'' among the industrial equipment 
listed as ``covered equipment'' for the purpose of Part A-1, although 
EPCA does not define the term ``pump.'' (42 U.S.C. 6311(1)(A)) In a 
final rule published January 25, 2016, DOE established a definition for 
``pump,'' associated definitions, and test procedures for certain 
pumps. 81 FR 4086, 4090. (``January 2016 TP final rule''). ``Pump'' is 
defined as equipment designed to move liquids (which may include 
entrained gases, free solids, and totally dissolved solids) by physical 
or mechanical action and includes a bare pump and, if included by the 
manufacturer at the time of sale, mechanical equipment, driver, and 
controls. 10 CFR 431.462. Circulator pumps fall within the scope of 
this definition.
    While DOE has defined ``pump'' broadly, the test procedure 
established in the January 2016 TP final rule is applicable only to 
certain categories of clean water pumps,\17\ specifically those that 
are end suction close-coupled; end suction frame mounted/own bearings; 
in-line (``IL''); radially split, multi-stage, vertical, in-line 
diffuser casing; and submersible turbine (``ST'') pumps with the 
following characteristics:
---------------------------------------------------------------------------

    \17\ A ``clean water pump'' is a pump that is designed for use 
in pumping water with a maximum non-absorbent free solid content of 
0.016 pounds per cubic foot, and with a maximum dissolved solid 
content of 3.1 pounds per cubic foot, provided that the total gas 
content of the water does not exceed the saturation volume, and 
disregarding any additives necessary to prevent the water from 
freezing at a minimum of 14 [deg]F. 10 CFR 431.462.
---------------------------------------------------------------------------

     25 gallons per minute (``gpm'') and greater (at best 
efficiency point (``BEP'') at full impeller diameter);
     459 feet of head maximum (at BEP at full impeller diameter 
and the number of stages specified for testing);
     design temperature range from 14 to 248 [deg]F;
     designed to operate with either (1) a 2- or 4-pole 
induction motor, or (2) a non-induction motor with a speed of rotation 
operating range that includes speeds of rotation between 2,880 and 
4,320 revolutions per minute (``rpm'') and/or 1,440 and 2,160 rpm, and 
in either case, the driver and impeller must rotate at the same speed;
     6-inch or smaller bowl diameter for ST pumps;
     A specific speed less than or equal to 5,000 for ESCC and 
ESFM pumps;
     Except for: fire pumps, self-priming pumps, prime-assist 
pumps, magnet driven pumps, pumps designed to be used in a nuclear 
facility subject to 10

[[Page 74857]]

CFR part 50, ``Domestic Licensing of Production and Utilization 
Facilities''; and pumps meeting the design and construction 
requirements set forth in any relevant military specifications.\18\
---------------------------------------------------------------------------

    \18\ E.g., MIL-P-17639F, ``Pumps, Centrifugal, Miscellaneous 
Service, Naval Shipboard Use'' (as amended); MIL-P-17881D, ``Pumps, 
Centrifugal, Boiler Feed, (Multi-Stage)'' (as amended); MIL-P-
17840C, ``Pumps, Centrifugal, Close-Coupled, Navy Standard (For 
Surface Ship Application)'' (as amended); MIL-P-18682D, ``Pump, 
Centrifugal, Main Condenser Circulating, Naval Shipboard'' (as 
amended); and MIL-P-18472G, ``Pumps, Centrifugal, Condensate, Feed 
Booster, Waste Heat Boiler, And Distilling Plant'' (as amended). 
Military specifications and standards are available at https://everyspec.com/MIL-SPECS.
---------------------------------------------------------------------------

    10 CFR 431.464(a)(1). The pump categories subject to the current 
test procedures are referred to as ``general pumps'' in this document. 
As stated, circulator pumps are not general pumps.
    DOE also published a final rule establishing energy conservation 
standards applicable to certain classes of general pumps. 81 FR 4368 
(Jan. 26, 2016) (``January 2016 ECS final rule''); see also, 10 CFR 
431.465.
    The January 2016 TP final rule and the January 2016 ECS final rule 
implemented the recommendations of the Commercial and Industrial Pump 
Working Group (``CIPWG'') established through the Appliance Standards 
Rulemaking Federal Advisory Committee (``ASRAC'') to negotiate 
standards and a test procedure for general pumps. (Docket No. EERE-
2013-BT-NOC-0039) The CIPWG approved a term sheet containing 
recommendations to DOE on appropriate standard levels for general 
pumps, as well as recommendations addressing issues related to the 
metric and test procedure for general pumps (``CIPWG 
recommendations''). (Docket No. EERE-2013-BT-NOC-0039, No. 92) 
Subsequently, ASRAC approved the CIPWG recommendations. The CIPWG 
recommendations included initiation of a separate rulemaking for 
circulator pumps. (Docket No. EERE-2013-BT-NOC-0039, No. 92, 
Recommendation #5A at p. 2)
    On February 3, 2016, DOE issued a notice of intent to establish the 
circulator pumps working group to negotiate a notice of proposed 
rulemaking (``NOPR'') for energy conservation standards for circulator 
pumps to negotiate, if possible, Federal standards and a test procedure 
for circulator pumps and to announce the first public meeting. 81 FR 
5658. The members of the Circulator Pump Working Group (``CPWG'') were 
selected to ensure a broad and balanced array of interested parties and 
expertise, including representatives from efficiency advocacy 
organizations and manufacturers. Additionally, one member from ASRAC 
and one DOE representative were part of the CPWG. Table II.1 lists the 
15 members of the CPWG and their affiliations.

Table II.1--ASRAC Circulator Pump Working Group Members and Affiliations
------------------------------------------------------------------------
            Member                            Affiliation
------------------------------------------------------------------------
Charles White................  Plumbing-Heating-Cooling Contractors
                                Association.
Gabor Lechner................  Armstrong Pumps, Inc.
Gary Fernstrom...............  California Investor-Owned Utilities.
Joanna Mauer.................  Appliance Standards Awareness Project.
Joe Hagerman.................  U.S. Department of Energy.
Laura Petrillo-Groh..........  Air-Conditioning, Heating, and
                                Refrigeration Institute.
Lauren Urbanek...............  Natural Resources Defense Council.
Mark Chaffee.................  TACO, Inc.
Mark Handzel.................  Xylem Inc.
Peter Gaydon.................  Hydraulic Institute.
Richard Gussert..............  Grundfos Americas Corporation.
David Bortolon...............  Wilo Inc.
Russell Pate.................  Rheem Manufacturing Company.
Don Lanser...................  Nidec Motor Corporation.
Tom Eckman...................  Northwest Power and Conservation Council
                                (ASRAC member).
------------------------------------------------------------------------

    The CPWG commenced negotiations at an open meeting on March 29, 
2016, and held six additional meetings to discuss scope, metrics, and 
the test procedure. The CPWG concluded its negotiations for test 
procedure topics on September 7, 2016, with a consensus vote to approve 
a term sheet containing recommendations to DOE on scope, definitions, 
metric, and the basis of the test procedure (``September 2016 CPWG 
Recommendations''). The September 2016 CPWG Recommendations are 
available in the CPWG docket. (Docket No. EERE-2016-BT-STD-0004, No. 
58)
    The CPWG continued to meet to address potential energy conservation 
standards for circulator pumps. Those meetings began on November 3-4, 
2016 and concluded on November 30, 2016, with approval of a second term 
sheet (``November 2016 CPWG Recommendations'') containing CPWG 
recommendations related to energy conservation standards, applicable 
test procedure, labeling and certification requirements for circulator 
pumps (Docket No. EERE-2016-BT-STD-0004, No. 98). Whereas the September 
2016 CPWG Recommendations are discussed in the September 2022 TP Final 
Rule, the November 2016 CPWG Recommendations are summarized in section 
III.A of this document. ASRAC subsequently voted unanimously to approve 
the September and November 2016 CPWG Recommendations during a December 
meeting. (Docket No. EERE-2013-BT-NOC-0005, No. 91 at p.2) \19\
---------------------------------------------------------------------------

    \19\ All references in this document to the approved 
recommendations included in 2016 Term Sheets are noted with the 
recommendation number and a citation to the appropriate document in 
the CPWG docket (e.g., Docket No. EERE-2016-BT-STD-0004, No. #, 
Recommendation #X at p. Y). References to discussions or suggestions 
of the CPWG not found in the 2016 Term Sheets include a citation to 
meeting transcripts and the commenter, if applicable (e.g., Docket 
No. EERE-2016-BT-STD-0004, [Organization], No. X at p. Y).
---------------------------------------------------------------------------

    In a letter dated June 9, 2017, Hydraulic Institute (``HI'') 
expressed its support for the process that DOE initiated regarding 
circulator pumps and encouraged the publishing of a NOPR and a final 
rule by the end of 2017. (Docket No. EERE-2016-BT-STD-0004, HI, No.103 
at p. 1) In response to an early assessment review RFI published 
September 28, 2020 regarding the existing test procedures for general 
pumps (85 FR 60734, ``September 2020 Early Assessment RFI''), HI 
commented that it continues to support the recommendations from the 
CPWG. (Docket No. EERE-2020-BT-TP-0032, HI, No. 6 at p. 1) NEEA also 
referenced

[[Page 74858]]

the September 2016 CPWG Recommendations and recommended that DOE adopt 
test procedures for circulator pumps in the pumps rulemaking or a 
separate rulemaking. (Docket No. EERE-2020-BT-TP-0032, NEEA, No. 8 at 
p. 8)
    On May 7, 2021, DOE published a request for information related to 
test procedures and energy conservation standards for circulator pumps. 
86 FR 24516 (``May 2021 RFI'').
    DOE received comments in response to the May 2021 RFI from the 
interested parties listed in Table II.2.
---------------------------------------------------------------------------

    \20\ The Anonymous comment did not substantively address the 
subject of this rulemaking.

                                 Table II.2--List of Commenters With Written Submissions in Response to the May 2021 RFI
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Commenter(s)              Reference in this final rule                    Docket No.                               Commenter type
--------------------------------------------------------------------------------------------------------------------------------------------------------
People's Republic of China.........  China........................  EERE-2016-BT-STD-0004-0111....................  Country.
Hydraulic Institute................  HI...........................  EERE-2016-BT-STD-0004-0112....................  Trade Association.
Grundfos Americas Corporation......  Grundfos.....................  EERE-2016-BT-STD-0004-0113....................  Manufacturer.
Appliance Standards Awareness        Advocates....................  EERE-2016-BT-STD-0004-0114....................  Efficiency Organization.
 Project, American Council for an
 Energy-Efficient Economy, Natural
 Resources Defense Council.
Northwest Energy Efficiency          NEEA.........................  EERE-2016-BT-STD-0004-0115....................  Efficiency Organization.
 Alliance.
Pacific Gas and Electric Company,    CA IOUs......................  EERE-2016-BT-STD-0004-0116....................  Utility.
 San Diego Gas and Electric, and
 Southern California Edison;
 collectively, the California
 Investor-Owned Utilities.
Anonymous Commenter................  N/A..........................  EERE-2016-BT-STD-0004-0117....................  Anonymous.\20\
--------------------------------------------------------------------------------------------------------------------------------------------------------

    A parenthetical reference at the end of a comment quotation or 
paraphrase provides the location of the item in the public record.\21\
---------------------------------------------------------------------------

    \21\ The parenthetical reference provides a reference for 
information located in the docket of DOE's rulemaking to develop 
test procedures for circulator pumps. EERE-2016-BT-TP-0033 (Docket 
No. EERE-2016-BT-TP-0033, which is maintained at 
www.regulations.gov). The references are arranged as follows: 
(commenter name, comment docket ID number, page of that document).
---------------------------------------------------------------------------

    DOE published a notice of proposed rulemaking (NOPR) for the test 
procedure on December 20, 2021, presenting DOE's proposals to establish 
a circulator pump test procedure (86 FR 72096) (hereafter, the 
``December 2021 TP NOPR''). DOE held a public meeting related to this 
NOPR on February 2, 2022. DOE published a final rule for the test 
procedure on September 19, 2022 (``September 2022 TP Final Rule''). The 
test procedure final rule established definitions, testing methods and 
a performance metric, requirements regarding sampling and 
representations of energy consumption and certain other metrics, and 
enforcement provisions for circulator pumps.

C. Deviation From Appendix A

    In accordance with section 3(a) of 10 CFR part 430, subpart C, 
appendix A (``Appendix A''), DOE notes that it is deviating from two 
provisions in appendix A regarding the NOPR stage for an energy 
conservation standard rulemaking. First, section 6(f)(2) of appendix A 
specifies that the length of the public comment period for a NOPR will 
vary depending upon the circumstances of the particular rulemaking but 
will not be less than 75 calendar days. For this NOPR, DOE is providing 
a 60-day comment period, as required by EPCA. 42 U.S.C. 6316(a); 42 
U.S.C. 6295(p). Second, section 6(a)(2) of appendix A states that if 
DOE determines in is appropriate to proceed with a rulemaking, then the 
preliminary stages of a rulemaking to issue an energy conservation 
standard would include either a framework document and preliminary 
analysis or, alternatively, an advance notice of proposed rulemaking. 
According to section 6(a)(2) of appendix A, DOE may also optionally 
issue requests for information and notices of data availability.
    As stated in section II.B of this document, DOE established a 
working group (the CPWG) to negotiate potential energy conservation 
standards for circulator pumps, which culminated at a consensus 
agreement (the November 2016 CPWG Recommendations) recommending that 
energy conservation standards for circulator pumps be adopted at TSL2, 
the level proposed in this NOPR. The CPWG held a series of formal and 
informal meetings, minutes and supporting material for which are posted 
in Docket No. EERE-2016-BT-STD-0004.
    Additionally, as stated in section II.B of this document, on May 7, 
2021, DOE published a request for information related to test 
procedures and energy conservation standards for circulator pumps in 
which it initially provided a 60-day comment period. 86 FR 24516 (``May 
2021 RFI''). Subsequently, in response to requests, DOE provided a 24-
day extension to that initial comment period, for a total comment 
period of 84 days. 86 FR 28298.
    DOE has relied on many of the same analytical assumptions and 
approaches as used in developing analysis supporting the standard level 
of TSL2 which was the consensus recommendation of the CWPG and which 
was supported by several commenters and which no commenters opposed. 
(HI, No. 112 at p. 6; Grundfos, No. 113 at p. 6; NEEA, No. 115 at p. 3; 
Advocates, No. 114 at p. 1; CA IOUs, No. 116 at p. 5)
    Considering the opportunity for comment and input afforded the CWPG 
by the negotiation process, including the opportunity to vote on a 
consensus level for energy conservation standards, the 84-day comment 
period of the May 2021 RFI in which the CPWG-recommended standard level 
was discussed, and the close adherence of the methods and analysis used 
in this NOPR to support a proposed standard level of TSL 2, interested 
parties have been provided substantial opportunity to provide input. 
Therefore, DOE believes a 60-day comment period is appropriate and will 
provide interested parties with a meaningful opportunity to comment on 
the proposed rule.
    Regarding the provision in section 6(a)(2) of appendix A to issue 
either a framework document and preliminary analysis or, alternatively, 
an advance notice of proposed rulemaking as the preliminary rulemaking 
documents, the function of these documents is to lay out for interested 
parties and the public DOE's planned approach and provide opportunity 
for comment had already been performed by the CPWG meeting process. 
Interested parties were offered opportunity to not only observe and 
comment on but even participate in that process. As discussed in 
section II.B of this document, many did. Table II.1 lists the 15 
members of the CPWG and their

[[Page 74859]]

affiliations. The proceedings of the working group and related ASRAC 
activities have been documented and available for review respectively 
in the rulemaking docket (EERE-2016-BT-STD-0004) and non-rulemaking, 
ASRAC docket (Docket No. EERE-2013-BT-NOC-0005).
    As discussed in section II.B, the CPWG approved two term sheets 
which represented the group's consensus recommendations. The second 
term sheet, referred to in this NOPR as the ``November 2016 CPWG 
Recommendations'' contained the CPWG recommendations related to energy 
conservation standards, applicable test procedure, labeling and 
certification requirements for circulator pumps. (Docket No. EERE-2016-
BT-STD-0004, No. 98) The proposals in this NOPR closely mirror the 
November 2016 CPWG Recommendations, which are accordingly summarized in 
this section.

III. General Discussion

    DOE developed this proposal after considering oral and written 
comments, data, and information from interested parties that represent 
a variety of interests. The following discussion addresses issues 
raised by these commenters.

A. November 2016 CPWG Recommendations

    As discussed in section II.B, the CPWG approved two term sheets 
which represented the group's consensus recommendations. The second 
term sheet, referred to in this NOPR as the ``November 2016 CPWG 
Recommendations'' contained the CPWG recommendations related to energy 
conservation standards, applicable test procedure, labeling and 
certification requirements for circulator pumps. (Docket No. EERE-2016-
BT-STD-0004, No. 98) The proposals in this NOPR closely mirror the 
November 2016 CPWG Recommendations, which are accordingly summarized in 
this section.
1. Energy Conservation Standard Level
    The CPWG recommendation that each circulator pump be required to 
meet an applicable minimum efficiency standard. Specifically, the 
recommendation was that each pump must have a CEI \22\ of less than or 
equal to 1.00. Among the numbered efficiency levels considered by the 
CPWG as potential standard levels, the agreed level was EL2 (i.e., CEI 
less than or equal to 1.00).
---------------------------------------------------------------------------

    \22\ The CPWG recommendations predated establishment of the 
current metric, called ``CEI'', and instead used the analogous term 
``PEICIRC''. In the December 2021 TP NOPR, DOE proposed 
to adopt the ``CEI'' nomenclature instead ``PEICIRC'' to 
``CEI'' based, in part, on comments received, to remain consistent 
with terminology used in HI 41.5, and to avoid potential confusion 
with the nomenclature. After receiving favorable comments on its 
proposal, DOE adopted the CEI nomenclature in the September 2022 TP 
Final Rule.
---------------------------------------------------------------------------

    In response to the May 2021 RFI, several stakeholders commented in 
support of the CPWG's recommendation of energy conservation standards 
at EL2. HI commented that it supported the work and recommendations of 
the CPWG. (HI, No. 112 at p. 6) Grundfos recommended DOE adopt EL2, the 
recommended standard level of the CPWG. (Grundfos, No. 113 at p. 6) 
NEEA commented it believes EL 2 is still appropriate and will result in 
significant energy savings nationally. (NEEA, No. 115 at p. 3) The 
Advocates commented that DOE should quickly adopt energy conservation 
standards for circulator pumps in accordance with the CPWG 
recommendations. (Advocates, No. 114 at p. 1) The CA IOUs commented 
that they support adopting the provisions of the CPWG term sheets, 
including the recommended energy conservation standard level of EL2. CA 
IOUs (CA IOUs, No. 116 at p.5)
    No comments were received arguing against adoption of the CPWG-
recommended standard level.
    In the May 2021 RFI, DOE requested comment on whether any changes 
in the market since publication of the 2016 Term Sheets could make the 
CPWG's recommendation for EL 2 no longer valid. Grundfos, HI, NEEA 
responded stating there were little to no changes and the CPWG's 
recommendation of EL2 is still appropriate. (Grundfos, No. 113 at p. 
10; HI, No. 112 at p. 11; NEEA, No. 115 at p. 2) HI estimated that 
standards at EL 2 would eliminate all permanent-split capacitor 
(``PSC'') motor circulator pumps which is the predominant product sold 
today. (Id.) Grundfos recommended that DOE adopt EL 2 as the standard, 
which would force the market to electronically commutated motor (ECM) 
products and remove 4% of ECMs currently available (based on CPWG 
data). (Grundfos, No. 113 at p. 7)
    Overall, the CPWG-recommended standard level appears well supported 
by commenters. As described in section V.C.1, DOE is proposing in this 
NOPR to adopt energy conservation standards for circulator pumps at TSL 
2, which
    As stated in section I, CEI was defined in the September 2022 TP 
Final Rule consistent with the November 2016 CPWG Recommendations as 
shown in equation (2), and consistent with Section 41.5.3.2 of HI 41.5-
2022. (87 FR 57264).
[GRAPHIC] [TIFF OMITTED] TP06DE22.001

Where:

CER = circulator energy rating (hp); and
CERSTD = circulator energy rating for a minimally 
compliant circulator pump serving the same hydraulic load.

    The specific formulation CER, in turn, varies according to 
circulator pump control variety, but in all cases is a function of 
measured pump input power when operated under certain conditions, as 
described in the September 2022 TP Final Rule.
    Relatedly, CERSTD represents CER for a circulator pump 
that is minimally compliant with DOE's energy conservation standards 
with the same hydraulic horsepower as the tested pump, as determined in 
accordance with the specifications at paragraph (i) of Sec.  431.465. 
(87 FR 57264)
    The November 2016 CPWG Recommendations contained a proposed method 
for calculating CERSTD \23\ as shown in Equation (3):
---------------------------------------------------------------------------

    \23\ The CPWG recommendations predated establishment of the 
current term ``CERSTD'' and instead used the analogous 
term ``PERCIRC,STD''. In the December 2021 TP NOPR, DOE 
proposed to adopt the ``CERSTD'' nomenclature instead 
``PERCIRC,STD'' because DOE believed that the terminology 
CERSTD is more reflective of Federal energy conservation 
standards. After receiving no opposition on its proposal, DOE 
adopted the CEI nomenclature in the September 2022 TP Final Rule.

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

[[Page 74860]]

[GRAPHIC] [TIFF OMITTED] TP06DE22.002

Where:

[omega]i = weight at each test point i, specified in 
Recommendation #2B
Pi\in,STD\ = reference power input to the circulator pump 
driver at test point i, calculated using the equations and method 
specified in Recommendation #2C
i = test point(s), defined as 25%, 50%, 75%, and 100% of the flow at 
best efficiency point (BEP).

    The November 2016 CPWG Recommendations also included a recommended 
weighting factor of 25% for each respective test point, i. 
(``Recommendation #2B'').
    The November 2016 CPWG Recommendations also included 
(``Recommendation #2C'') a recommended reference input power, 
Pi\in,STD\ as described in equation (4).
[GRAPHIC] [TIFF OMITTED] TP06DE22.003

Where:

Pu,i = tested hydraulic power output of the pump being rated at test 
point i, in HP
[eta]WTW,100% = reference BEP circulator pump efficiency 
at the recommended standard level (%), calculated using the 
equations and values specified in Recommendation #2D
[alpha]i = part load efficiency factor at each test point 
i, specified in Recommendation #2E
i = test point(s), defined as 25%, 50%, 75%, and 100% of the flow at 
best efficiency point (BEP).

    The November 2016 CPWG Recommendations also included a reference 
efficiency at BEP at the CPWG-recommended standard level, 
[eta]WTW,100%, (``Recommendation #2D'') which varies by 
circulator pump hydraulic output power.
    Specifically, for circulator pumps with BEP hydraulic output power 
Pu,100% <1 HP, the reference efficiency at BEP 
([eta]WTW,100%) should be determined using equation (5):
[GRAPHIC] [TIFF OMITTED] TP06DE22.004

Where:

[eta]WTW,100% = reference BEP pump efficiency at the 
recommended standard level (%),
Pu,100% = tested hydraulic power output of the pump being 
rated at BEP, in HP

    For the CPWG-recommended standard level, the constants A, B, and C 
used in equation would have the following values:

     Table III.1--CPWG-Recommended Reference Pump WTW,100% Constants
------------------------------------------------------------------------
           A                        B                        C
------------------------------------------------------------------------
          10.00                  .001141                   67.78
------------------------------------------------------------------------

    For circulator pumps with BEP hydraulic output power 
Pu,100% >=1 HP, the reference efficiency at BEP 
([eta]WTW,100%) would have a constant value of 67.79.
    Additionally, the November 2016 CPWG Recommendations included a 
part-load efficiency factor ([alpha]i, as appears in 
equation (4)), which varies according to test point (``Recommendation 
#2E). Specifically, [alpha]i would have values as listed in 
Table III.2.

           Table III.2--CPWG-Recommended Part-Load Efficiency
------------------------------------------------------------------------
                                                          Corresponding
                           i                                 [alpha]i
------------------------------------------------------------------------
25%....................................................           0.4843
50%....................................................           0.7736
75%....................................................           0.9417
100% \24\..............................................                1
------------------------------------------------------------------------

    This CPWG-recommended equation structure is used to characterize 
the standard level proposed in this NOPR, with certain inconsequential 
changes to variable names.
---------------------------------------------------------------------------

    \24\ The November 2016 CPWG Recommendations did not explicitly 
include a value for the part-load efficiency factor, 
[alpha]i, in Recommendation #2E. Nonetheless, 
Recommendation #2C makes clear that a value for the part-load 
efficiency factor, [alpha]i, is required to calculate 
reference input power, which calls for a value at test point i = 
100%. DOE infers the omission of [alpha]100% from 
Recommendation #2E to reflect that i = 100% corresponds to full-
load, and thus imply no part-load-driven reduction in efficiency 
and, by extension, a load coefficient of unity. DOE is making this 
assumption that [alpha]100% = 1 explicit by including it 
in this table, which is otherwise identical to that of CPWG 
Recommendation #2E.
---------------------------------------------------------------------------

2. Labeling Requirements
    Under EPCA, DOE has certain authority to establish labeling 
requirements for covered equipment. (42 U.S.C. 6315) The November 2016 
CPWG Recommendations contained one recommendation regarding labeling 
requirements, which was that both model number and CEI \25\ be included 
on the circulator nameplate (Docket No. EERE-2016-BT-STD-0004, No. 98 
Recommendation #3 at p. 4).
---------------------------------------------------------------------------

    \25\ The CPWG recommended that ``PEI'' be included in a 
potential labeling requirement which, as described previously, is 
analogous to CEI.
---------------------------------------------------------------------------

    In response to the May 2021 RFI, the Advocates commented in support 
of establishing labeling requirements for

[[Page 74861]]

circulator pumps (Advocates, No. 114 at p. 1). No commenters argued 
against establishing labeling requirements for circulator pumps.
    DOE is reviewing the potential benefits of establishing labeling 
requirements for circulator pumps and may share the results of such 
evaluation in a separate notice. Accordingly, in this NOPR, DOE is not 
proposing specific labeling requirements for circulator pumps, but DOE 
may consider such requirements for circulator pumps, including those 
recommended by the CPWG, in a separate rulemaking.
3. Certification Reports
    Under EPCA, DOE has the authority to require information and 
reports from manufacturers with respect to the energy efficiency or 
energy use. (42 U.S.C. 6316; 42 U.S.C. 6296).
    The November 2016 CPWG Recommendations contained one recommendation 
regarding certification reporting requirements. Specifically, the CPWG 
recommended that the following information should be included in both 
certification reports and the public CCMS database:

 Manufacturer name
 Model number
 CEI \26\
---------------------------------------------------------------------------

    \26\ CEI had not been established at the time of the November 
2016 CPWG Recommendations, which instead referred to this value as 
``PEICIRC''.
---------------------------------------------------------------------------

 Flow (in gallons per minute) and Head (in feet) at BEP
 Tested control setting
 Input power at measured data points

    (Docket No. EERE-2016-BT-STD-0004, No. 98 Recommendation #4 at p. 
4)
    The CPWG also recommended that certain additional information be 
permitted but not mandatorily included in both certification reports 
and the public CCMS database. (Docket No. EERE-2016-BT-STD-0004, No. 98 
Recommendation 4 at p. 1) The recommended optional information 
consisted of: true RMS current, true RMS voltage, real power, and the 
resultant power factor at measured data points. (Docket No. EERE-2016-
BT-STD-0004, No. 98 Recommendation #4 at p. 4)
    DOE is not proposing certification or reporting requirements for 
circulator pumps in this NOPR. Instead, DOE may consider proposals to 
address amendments to the certification requirements and reporting for 
circulator pumps under a separate rulemaking regarding appliance and 
equipment certification.

B. Equipment Classes and Scope of Coverage

    When evaluating and establishing energy conservation standards, DOE 
divides covered equipment into equipment 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. 6316(a); 42 U.S.C. 6295(q))
    In this NOPR, DOE proposes to align the scope of energy 
conservation standards for circulator pumps with that of the circulator 
pumps test procedure. 87 FR 57264. Specifically, this NOPR proposes to 
apply energy conservation standards to all circulator pumps that are 
also clean water pumps, including on-demand circulator pumps and 
circulators-less-volute, and excluding submersible pumps and header 
pumps.
    This scope is consistent with the recommendations of the CPWG. DOE 
identified no basis to change the scope of energy conservations 
standard for circulator pumps relative to the scope of test procedures 
adopted in the September 2022 Final Rule. Accordingly, the scope of 
proposed energy conservation standards aligns with that of the test 
procedure. Comments related to scope are discussed and considered in 
the test procedure final rule.
    Both of these proposals--scope and equipment classes--match the 
recommendations of the CPWG, which are summarized in this section. They 
are discussed further in section IV.A.1 of this document.
1. CPWG Recommendations
a. Scope
    The September 2016 CPWG Recommendations addressed the scope of a 
circulator pumps rulemaking. Specifically, the CPWG recommended that 
the scope of a circulator pumps test procedure and energy conservation 
standards cover clean water pumps (as defined at 10 CFR 431.462) 
distributed in commerce with or without a volute and that are one of 
the following categories: wet rotor circulator pumps, dry rotor close-
coupled circulator pumps, and dry rotor mechanically coupled circulator 
pumps. The CPWG also recommended that the scope exclude submersible 
pumps and header pumps. 86 FR 24516, 24520; (Docket No. EERE-2016-BT-
STD-0004, No. 58, Recommendations #1A, 2A and 2B at p. 1-2) In response 
to the May 2021 RFI, HI and Grundfos stated that they believed all 
circulator pumps are included in the scope defined by the CPWG in the 
term sheets. (HI, No. 112 at p. 8; Grundfos, No. 113 at p. 7). DOE's 
proposal aligns with the scope recommended by the CPWG, consistent with 
the September 2022 TP Final Rule.
b. Definitions
    The CPWG also recommended several definitions relevant to scope. 
DOE notes that, generally, definitions recommended by the CPWG rely on 
terms previously defined in the January 2016 TP final rule, including 
``close-coupled pump,'' ``mechanically-coupled pump,'' ``dry rotor 
pump,'' ``single axis flow pump,'' and ``rotodynamic pump.'' 81 FR 
4086, 4146-4147; 10 CFR 431.462. In addition, the recommended 
definition for ``submersible pump'' is the same as that already defined 
in a 2017 test procedure final rule for dedicated-purpose pool pumps 
(``August 2017 DPPP TP final rule''). 82 FR 36858, 36922 (August 7, 
2017); 10 CFR 431.462.
    In the September 19, 2022 TP Final Rule DOE established a number of 
definitions related to circulator pumps as follows. 87 FR 57264. 
Specifically, DOE defined: ``circulator pump'', ``wet rotor circulator 
pump'', ``dry rotor, two-piece circulator pump'', ``dry rotor, three-
piece circulator pump'', ``horizontal motor'', ``header pump'', and 
``circulator-less-volute.'' (87 FR 57264)
    ``Circulator pump'' was defined to include both wet- and dry-rotor 
designs and to include circulators-less-volute, which are distributed 
in commerce without a volute and for which a paired volute is also 
distributed in commerce. Header pumps, by contrast, are those without 
volutes and for which no paired volute is available in commerce. (87 FR 
57264)
    In the September 2022 TP Final Rule (87 FR 57264) DOE did not 
propose a new definition for submersible circulator pumps, instead 
signaling applicability of an established term, ``submersible pump'', 
which was defined in the 2017 test procedure final rule for dedicated-
purpose pool pumps (``August 2017 DPPP TP final rule''). 82 FR 36858, 
36922 (August 7, 2017):
    Submersible pump means a pump that is designed to be operated with 
the motor and bare pump fully submerged in the pumped liquid. 10 CFR 
431.462.
    DOE proposes to maintain these definitions from the September 2022 
TP Final Rule in the standards for circulator pumps.

[[Page 74862]]

c. Equipment Classes
    The CPWG recommended that all circulator pumps be analyzed in a 
single equipment class. (Docket No. EERE-2016-BT-STD-0004, No. 98, 
Recommendation #1 at p. 1) DOE's proposal aligns with the 
recommendation of the CPWG. Equipment classes are discussed further in 
section IV.A.1 of this document.
d. Small Vertical In-Line Pumps
    The CPWG recommended that DOE analyze and establish energy 
conservation standards for small vertical in-line pumps (``SVILs'') 
with a compliance date equivalent to the previous energy conservation 
standards final rule (81 FR 4367, Jan. 26, 2016) for general (and not 
circulator) pumps. (Docket No. EERE-2016-BT-STD-0004, No. 58, 
Recommendation #1B at p. 1-2) The recommendation was that the standards 
for SVILs be similar in required performance to those of general pumps. 
(Docket No. EERE-2016-BT-STD-0004, No. 58, Recommendation #1B at p. 2) 
In addition to energy conservation standards for SVILs, the CPWG 
recommended SVILs be evaluated using the same test metric as general 
pumps. Id.
    In their response to the May 2021 RFI, Advocates requested that 
standards for small vertical in-line pumps (``SVILs'') be established 
that are comparable to those of commercial and industrial inline pumps, 
as the CPWG recommended in 2016 (Advocates, No. 114 at p. 1). 
Consistent with those sentiments, DOE proposed to extend commercial and 
industrial pump test procedures to SVILs in a separate notice of 
proposed rulemaking. 87 FR 21268 (Apr. 11, 2022) (April 2022 NOPR). 
That test procedure, if finalized, may allow evaluation of energy 
conservation standards for SVILs as part of a commercial and industrial 
pumps rulemaking process. However, subsequent to the April 2022 NOPR, 
DOE published a notice of data availability (NODA) in which DOE noted 
that during interviews conducted after the April 2022 NOPR, 
manufacturers provided conflicting suggestions for how DOE should 
conduct its SVIL analysis, including that some manufacturers suggested 
that potential SVIL standards should be equivalent to any future 
standards for circulator pumps. DOE received conflicting feedback on 
whether circulator pumps and SVILs would compete with, or act as 
substitutes for, each other. Some manufacturers stated that an SVIL 
would never be substituted for a circulator pump, while others said 
that it was possible. 87 FR 49537 (Aug. 11, 2022). In that NODA, DOE 
request comment on specific applications for which SVILs could be used 
instead of circulator pumps and how an SVIL would need to be modified 
for use in these applications, and potential benefits and drawbacks of 
setting standards for SVILs that align with circulator pumps versus 
setting standards for SVILs that align with in-line pumps. Id.
    At this time, DOE has tentatively determined to maintain its 
approach to address energy conservation standards for circulator pumps 
only in this rulemaking, separately from SVILs. DOE has not received 
adequate data or information at this time to suggest that DOE should 
address standards for SVILs along with the circulator pumps within the 
scope of this NOPR. Accordingly, DOE is proposing not to include SVILs 
within the scope of the energy conservation standards considered in 
this NOPR. Relatedly, the September 2022 TP Final Rule did not adopt 
test procedures for SVILs. DOE will continue to evaluate manufacturer 
and stakeholder feedback related to this issue and take any additional 
information into consideration as it may relate to including SVILs, or 
a subset of SVILs, within the scope of this rulemaking.
    DOE requests comment on its approach to exclude SVILs from the 
scope of this NOPR, and whether DOE should consider standards for any 
SVILs as part of this rulemaking.

C. Test Procedure

    EPCA sets forth generally applicable criteria and procedures for 
DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a)) 
Manufacturers of covered equipment must use these test procedures to 
certify to DOE that their product complies with energy conservation 
standards and to quantify the efficiency of their product. DOE's 
current energy conservation standards for circulator pumps are 
expressed in terms of circulator energy index (``CEI''). CEI represents 
the weighted average electric input power to the driver over a 
specified load profile, normalized with respect to a circulator pump 
serving the same hydraulic load that has a specified minimum 
performance level. \27\ (See 10 CFR 431.464(c)).
---------------------------------------------------------------------------

    \27\ The performance of a comparable pump that has a specified 
minimum performance level is referred to as the circulator energy 
rating (``CER'').
---------------------------------------------------------------------------

a. Control Mode
    Circulator pumps may be equipped with speed controls that govern 
their response to settings or signals. DOE's test procedure contains 
definitions and test methods applicable to pressure controls, 
temperature controls, manual speed controls, external input signal 
controls, and no controls (i.e., full speed operation only). \28\ 
Section B.1 of appendix D to subpart Y of 10 CFR part 431 specifies 
that circulator pumps without one of the identified control varieties 
(i.e., pressure control, temperature control, manual speed control or 
external input signal control) are tested at full speed.
---------------------------------------------------------------------------

    \28\ In this document, circulator pumps with ``no controls'' are 
also inclusive of other potential control varieties that are not one 
of the specifically identified control varieties. See section 
III.D.7 of this document.
---------------------------------------------------------------------------

    Some circulator pumps operate in only a single control mode (i.e., 
selected variety), whereas others are capable of operating in any of 
several control modes. As discussed in the September 2022 TP Final 
Rule, circulator pump energy performance typically varies by control 
variety, for circulator pumps equipped with more than one control 
variety. In the September 2022 TP Final Rule, DOE summarized and 
responded to a variety of stakeholder comments which discussed 
advantages and disadvantages of various potential requirements 
regarding the control variety activated during testing. Ultimately, DOE 
determined not to restrict active control variety during testing. 87 FR 
57264. The test procedure for circulator pumps allows the manufacturer 
of a circulator pump to does not require a particular control variety 
to limit application to a particular control variety. Section B.2 of 
appendix D to subpart Y of 10 CFR part 431.
    In the September 2022 TP Final Rule, DOE stated that although the 
test procedure does not restrict active control variety during testing, 
whether compliance with a potential future energy conservation standard 
would be based on a specific control mode (or no controls), or whether 
certain information related to the control mode used for testing would 
be required as part of certification, would be addressed in an energy 
conservation standard rulemaking.
    In this NOPR, DOE proposes to require compliance with energy 
conservation standards for circulator pumps while operated in the least 
consumptive control mode in which it is capable of operating. Because 
many circulator pumps equipped with control

[[Page 74863]]

modes designed to reduce energy consumption relate to full-speed 
operating also include the ability to operate at constant-speed, to 
require testing using a circulator pumps' most consumptive control mode 
may reduce the ability of rated CEI to characterize the degree of 
energy savings possible across circulator pump models. Circulator pump 
basic models equipped with a variety of control modes would receive the 
same rating as an otherwise identical basic model which could operate 
only at full speed, even though in practice the former may consume 
considerably less energy in many applications.
    As stated in section III.A.3 of this document, certification 
requirements, including those related to active control variety, are 
not being proposed in this NOPR, but may be addressed in a potential 
future rulemaking.
    DOE requests comment regarding circulator pump control variety for 
the purposes of demonstrating compliance with energy conservation 
standards.

D. Technological Feasibility

1. General
    In each energy conservation standards rulemaking, DOE conducts a 
screening analysis based on information gathered on all current 
technology options and prototype designs that could improve the 
efficiency of the products or equipment that are the subject of the 
rulemaking. As the first step in such an analysis, DOE develops a list 
of technology options for consideration in consultation with 
manufacturers, design engineers, and other interested parties. DOE then 
determines which of those means for improving efficiency are 
technologically feasible. DOE considers technologies incorporated in 
commercially-available products or in working prototypes to be 
technologically feasible. Sections 6(c)(3)(i) and 7(b)(1) of appendix A 
to 10 CFR 431.4; 10 CFR part 430, subpart C (``Process Rule'').
    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; (3) adverse impacts on 
health or safety, and (4) unique-pathway proprietary technologies. 10 
CFR 431.4; Sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5) of the Process 
Rule. Section IV.B of this document discusses the results of the 
screening analysis for circulator pumps, particularly the designs DOE 
considered, those it screened out, and those that are the basis for the 
standards considered in this rulemaking. For further details on the 
screening analysis for this rulemaking, see chapter 4 of the NOPR 
technical support document (``TSD'').
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt a new or amended standard for a type or 
class of covered equipment, it must determine the maximum improvement 
in energy efficiency or maximum reduction in energy use that is 
technologically feasible for such product. (42 U.S.C. 6316(a); 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 circulator pumps, using the 
design parameters for the most efficient products available on the 
market or in working prototypes. The max-tech levels that DOE 
determined for this rulemaking are described in section IV.C of this 
proposed rule and in chapter 5 of the NOPR TSD.

E. Energy Savings

1. Determination of Savings
    For each trial standard level (``TSL''), DOE projected energy 
savings from application of the TSL to circulator pumps purchased in 
the 30-year period that begins in the year of compliance with the 
proposed standards (2026-2055).\29\ The savings are measured over the 
entire lifetime of circulator pumps purchased in the previous 30-year 
period. DOE quantified the energy savings attributable to each TSL as 
the difference in energy consumption between each standards case and 
the no-new-standards case. The no-new-standards case represents a 
projection of energy consumption that reflects how the market for 
equipment would likely evolve in the absence of new energy conservation 
standards.
---------------------------------------------------------------------------

    \29\ Typically, each TSL is composed of specific efficiency 
levels for each equipment class. In the case of circulator pumps, 
because there is only one equipment class, each TSL is the same as 
its corresponding efficiency level. DOE conducted a sensitivity 
analysis that considers impacts for products shipped in a 9-year 
period.
---------------------------------------------------------------------------

    DOE used its national impact analysis (``NIA'') spreadsheet model 
to estimate national energy savings (``NES'') from potential new 
standards for circulator pumps. The NIA spreadsheet model (described in 
section IV.H 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 primary energy savings, which is the savings in the energy 
that is used to generate and transmit the site electricity. DOE also 
calculates NES in terms of 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.\30\ DOE's approach is based on the calculation of an FFC 
multiplier for each of the energy types used by covered products or 
equipment. For more information on FFC energy savings, see section 
IV.H.2 of this document.
---------------------------------------------------------------------------

    \30\ The FFC metric is discussed in DOE's statement of policy 
and notice of policy amendment. 76 FR 51282 (August 18, 2011), as 
amended at 77 FR 49701 (August 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
    To adopt any new or amended standards for covered equipment, DOE 
must determine that such action would result in significant energy 
savings. (42 U.S.C. 6295(o)(3)(B))
    The significance of energy savings offered by a new or amended 
energy conservation standard cannot be determined without knowledge of 
the specific circumstances surrounding a given rulemaking.\31\ For 
example, some covered products and equipment have most of their energy 
consumption occur during periods of peak energy demand. The impacts of 
these products on the energy infrastructure can be more pronounced than 
products with relatively constant demand. In evaluating the 
significance of energy savings, DOE considers differences in primary 
energy and FFC effects for different covered products and equipment 
when determining whether energy savings are significant. Primary energy 
and FFC effects include the energy consumed in electricity production 
(depending on load shape), in distribution and transmission, and in 
extracting, processing, and transporting primary fuels (i.e., coal, 
natural gas, petroleum fuels), and thus present a more complete picture 
of the impacts of energy conservation standards.
---------------------------------------------------------------------------

    \31\ The numeric threshold for determining the significance of 
energy savings established in a final rule published on February 14, 
2020 (85 FR 8626, 8670), was subsequently eliminated in a final rule 
published on December 13, 2021 (86 FR 70892).
---------------------------------------------------------------------------

    Accordingly, DOE evaluates the significance of energy savings on a 
case-by-case basis. As mentioned previously, the proposed standards are 
projected to result in estimated national FFC energy savings of 0.45 
quads, the equivalent of the electricity use of 4.4 million homes

[[Page 74864]]

in one year. DOE has initially determined the energy savings from the 
proposed standard levels are ``significant'' within the meaning of 42 
U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(B).

F. Economic Justification

1. Specific Criteria
    As noted previously, EPCA provides seven factors to be evaluated in 
determining whether a potential energy conservation standard is 
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(I)-(VII)) The following sections discuss how DOE has 
addressed each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of a potential standard on 
manufacturers, DOE conducts an MIA, as discussed in section IV.J of 
this document. DOE first uses an annual cash-flow approach to determine 
the quantitative impacts. This step includes both a short-term 
assessment--based on the cost and capital requirements during the 
period between when a regulation is issued and when entities must 
comply with the regulation--and a long-term assessment over a 30-year 
period. The industry-wide impacts analyzed include (1) INPV, which 
values the industry on the basis of expected future cash flows, (2) 
cash flows by year, (3) changes in revenue and income, and (4) other 
measures of impact, as appropriate. Second, DOE analyzes and reports 
the impacts on different types of manufacturers, including impacts on 
small manufacturers. Third, DOE considers the impact of standards on 
domestic manufacturer employment and 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 consumer costs and benefits expected to result from particular 
standards. DOE also evaluates the impacts of potential standards on 
identifiable subgroups of consumers that may be affected 
disproportionately by a standard.
b. Savings in Operating Costs Compared To Increase in Price (LCC and 
PBP)
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered equipment 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 equipment 
that are likely to result from a standard. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC 
and PBP analysis.
    The LCC is the sum of the purchase price of a product (including 
its installation) and the operating expense (including energy, 
maintenance, and repair expenditures) discounted over the lifetime of 
the product. The LCC analysis requires a variety of inputs, such as 
product prices, product energy consumption, energy prices, maintenance 
and repair costs, product lifetime, and discount rates appropriate for 
consumers. To account for uncertainty and variability in specific 
inputs, such as product lifetime and discount rate, DOE uses a 
distribution of values, with probabilities attached to each value.
    The PBP is the estimated amount of time (in years) it takes 
consumers to recover the increased purchase cost (including 
installation) of a more-efficient product through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
due to a more-stringent standard by the change in annual operating cost 
for the year that standards are assumed to take effect.
    For its LCC and PBP analysis, DOE assumes that consumers will 
purchase the covered equipment in the first year of compliance with new 
or amended standards. The LCC savings for the considered efficiency 
levels are calculated relative to the case that reflects projected 
market trends in the absence of new or amended standards. DOE's LCC and 
PBP analysis is discussed in further detail in section IV.F 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. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(III)) As discussed in section III.E, DOE uses the NIA 
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
    In establishing product classes and in evaluating design options 
and the impact of potential standard levels, DOE evaluates potential 
standards that would not lessen the utility or performance of the 
considered products. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards 
proposed in this document would not reduce the utility or performance 
of the products under consideration in this rulemaking.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from a proposed standard. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(o)(2)(B)(i)(V)) It also directs the Attorney General to 
determine the impact, if any, of any lessening of competition likely to 
result from a proposed standard and to transmit such determination to 
the Secretary within 60 days of the publication of a proposed rule, 
together with an analysis of the nature and extent of the impact. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy 
of this proposed rule to the Attorney General with a request that the 
Department of Justice (``DOJ'') provide its determination on this 
issue. DOE will publish and respond to the Attorney General's 
determination in the final rule. DOE invites comment from the public 
regarding the competitive impacts that are likely to result from this 
proposed rule. In addition, stakeholders may also provide comments 
separately to DOJ regarding these potential impacts. See the ADDRESSES 
section for information to send comments to DOJ.
f. Need for National Energy Conservation
    DOE also considers the need for national energy and water 
conservation in determining whether a new or amended standard is 
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(VI)) The energy savings from the proposed standards 
are likely to provide improvements to the security and reliability of 
the Nation's energy system. Reductions in the demand for electricity 
also may result in reduced costs for maintaining the reliability of the 
Nation's electricity system. DOE conducts a utility impact analysis to 
estimate how standards may affect the Nation's needed power generation

[[Page 74865]]

capacity, as discussed in section IV.M of this document.
    DOE maintains that environmental and public health benefits 
associated with the more efficient use of energy are important to take 
into account when considering the need for national energy 
conservation. The proposed standards are likely to result in 
environmental benefits in the form of reduced emissions of air 
pollutants and greenhouse gases (``GHGs'') associated with energy 
production and use. DOE conducts an emissions analysis to estimate how 
potential standards may affect these emissions, as discussed in section 
IV.K; the estimated emissions impacts are reported in section V.B.6 of 
this document. DOE also estimates the economic value of emissions 
reductions resulting from the considered TSLs, as discussed in section 
IV.L of this document.
g. Other Factors
    In determining whether an energy conservation standard is 
economically justified, DOE may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant 
information regarding economic justification that does not fit into the 
other categories described previously, DOE could consider such 
information under ``other factors.''
2. Rebuttable Presumption
    EPCA creates a rebuttable presumption that an energy conservation 
standard is economically justified if the additional cost to the 
equipment 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. (42 U.S.C. 6316(a); 
42 U.S.C. 6295(o)(2)(B)(iii)). DOE's LCC and PBP analyses generate 
values used to calculate the effects that proposed energy conservation 
standards would have on the payback period for consumers. These 
analyses include, but are not limited to, the 3-year payback period 
contemplated under the rebuttable-presumption test. In addition, DOE 
routinely conducts an economic analysis that considers the full range 
of impacts to consumers, manufacturers, the Nation, and the 
environment, as required under 42 U.S.C. 6316(a); 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.1 of this proposed 
rule.

G. Effective Date

    EPCA does not prescribe a compliance lead time for energy 
conservation standards for pumps, i.e., the number of years between the 
date of publication of a final standards rule and the date on which 
manufacturers must comply with the new standard. And, while 42 U.S.C. 
62959(m)(4)(B) states that manufacturers shall not be required to apply 
new standards to a product with respect to which other new standards 
have been required during the prior 6-year period, the standards 
proposed in this document would be the first energy conservation 
standards for circulator pumps. The November 2016 CPWG Recommendations 
specified a compliance date of four years following publication of the 
final rule.
    Two parties commented in response to the May 2021 RFI regarding 
effective date of potential energy conservation standards.
    Grundfos recommended a 2-year compliance date due to the effort 
already made by the circulator pump industry to test circulator pumps. 
(Grundfos, No.113, at p. 1) NEEA, which recommended a 3-year compliance 
date, also mentioned the testing efforts and experience made by the 
circulator pump industry to test circulator pumps and argued that the 
industry is mature and capable of meeting the standard level 
recommended by the CPWG (which would have gone into effect by the end 
of 2021) at an earlier date. (NEEA, No. 115, at p. 3)
    DOE agrees with commenters' arguments that the circulator pump 
industry is now more mature compared to 2016, and in this NOPR is 
proposing a 2-year compliance date for energy conservation standards. 
DOE is requesting comment on this proposal and notes that, depending on 
stakeholder comment, DOE may also consider a 3-year compliance date in 
the final rule.\32\
---------------------------------------------------------------------------

    \32\ DOE notes that, due to projected market trends, a change in 
the rulemaking's compliance date may lead to a small but non-
negligible change in consumer and manufacturer benefits or impacts.
---------------------------------------------------------------------------

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
rulemaking with regard to circulator pumps. Separate subsections 
address each component of DOE's analyses.
    DOE used several analytical tools to estimate the impact of the 
standards proposed in this document. The first tool is a spreadsheet 
that calculates the LCC savings and PBP of potential amended or new 
energy conservation standards. The national impacts analysis uses a 
second spreadsheet set that provides shipments projections and 
calculates national energy savings and net present value of total 
consumer costs and savings expected to result from potential energy 
conservation standards. DOE uses the third spreadsheet tool, the 
Government Regulatory Impact Model (``GRIM''), to assess manufacturer 
impacts of potential standards. These three spreadsheet tools are 
available on the DOE website for this rulemaking: www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=66. 
Additionally, DOE used output from the latest version of the Energy 
Information Administration's (``EIA's'') Annual Energy Outlook 
(``AEO''), a widely known energy projection for the United States, for 
the emissions and utility impact analyses.

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the products 
concerned, including the purpose of the products, the industry 
structure, manufacturers, market characteristics, and technologies used 
in the products. This activity includes both quantitative and 
qualitative assessments, based primarily on publicly available 
information. The subjects addressed in the market and technology 
assessment for this rulemaking include (1) a determination of the scope 
of the rulemaking and product classes, (2) manufacturers and industry 
structure, (3) existing efficiency programs, (4) shipments information, 
(5) market and industry trends; and (6) technologies or design options 
that could improve the energy efficiency of circulator pumps. The key 
findings of DOE's market assessment are summarized in the following 
sections. See chapter 3 of the NOPR TSD for further discussion of the 
market and technology assessment.
1. Scope of Coverage and Equipment Classes
a. Scope
    As stated in section III.B, DOE is proposing to align the scope of 
these proposed energy conservation standards with that of the 
circulator pumps test procedure. 87 FR 57264. In that notice, DOE 
finalized the scope of the circulator pumps test procedure such that it 
applies to circulator pumps that are

[[Page 74866]]

clean water pumps, including circulators-less-volute and on-demand 
circulator pumps, and excluding header pumps and submersible pumps. 
That scope is consistent with the recommendations of the CPWG (Docket 
No. EERE-2016-BT-STD-0004, No. 58).
    In response to the May 2021 RFI, HI and Grundfos stated that they 
believed all circulator pumps are included in the scope defined by the 
CPWG in the term sheets. (HI, No. 112 at p. 8; Grundfos, No. 113 at p. 
7).
    DOE is proposing to apply energy conservation standards to all 
circulator pumps included in the CWPG recommendations, which excluded 
submersible pumps and header pumps. (Docket No. EERE-2016-BT-STD-0004, 
No. 58). The September 2022 TP Final Rule also excluded submersible 
pumps and header pumps. Any future evaluation of energy conservation 
standards would require a corresponding test procedure.
    DOE requests comment regarding the proposed scope of energy 
conservation standards for circulator pumps.
Equipment Diagrams
    In general, DOE establishes written definitions to designate which 
products or equipment fall within the scope of a test procedure or 
energy conservation standard. In the specific case of circulator pumps, 
certain scope-related definitions were adopted by the September 2022 TP 
Final Rule and codified at 10 CFR 431.462.
    In response to the May 2021 RFI, China requested that DOE add 
schematic diagrams for each product in addition to the text definition 
to avoid misunderstandings (China, No. 111 at p. 1).
    The definitions which serve to distinguish various varieties of 
circulator pumps were adopted nearly unchanged from those recommended 
by the CPWG at meeting 2. (Docket No. EERE-2016-BT-STD-0004-0021, p. 
22) 10 CFR 431.462. CPWG membership included five manufacturers of 
circulator pumps, a trade association representing the US hydraulic 
industry, a trade association representing plumbing, heating, and 
cooling contractors, and other manufacturers of equipment which either 
use or are used by circulator pumps as components.
    Given the strong representation of entities with deep experience in 
circulator pump design and for whom definitional ambiguity could be 
burdensome, it is reasonable to expect the CPWG-proposed definitions 
were viewed at least at the time of their recommendation as 
sufficiently clear.
    Additionally, the development of diagrams which effectively serve 
as parallel equipment definitions creates the possibility of 
introducing confusion insofar as interpretations of such diagrams 
differ from those of the corresponding written definitions.
    In view of the absence of identification of a specific definitional 
ambiguity and of the potential resulting confusion from a diagram that 
could be interpreted differently from corresponding written definitions 
at 10 CFR 431.462, DOE is not proposing to establish equipment diagrams 
in this NOPR.
    DOE requests comment regarding the present circulator pump-related 
definitions, and in particular whether any clarifications are 
warranted.
b. Equipment Classes
    When evaluating and establishing energy conservation standards, DOE 
may divide covered equipment into equipment classes by the type of 
energy used, or by capacity or other performance-related features that 
justify a different standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q)) In 
making a determination whether capacity or another performance-related 
feature justifies a different standard, DOE must consider such factors 
as the utility of the feature to the consumer and other factors DOE 
deems appropriate. (Id.)
    For circulator pumps, there are no current energy conservation 
standards and, thus, no preexisting equipment classes. However, the 
November 2016 Term Sheets contained a recommendation related to 
establishing equipment classes for circulator pumps. Specifically, 
``Recommendation #1'' of the November 2016 CPWG Recommendations 
suggests grouping all circulator pumps into a single equipment class, 
though with numerical energy conservation standard values that vary as 
a function of hydraulic output power. (Docket No. EERE-2016-BT-STD-
0004, No. 98 Recommendation #1 at p. 1)
    In the May 2021 RFI, DOE requested comment regarding the CPWG 
recommendation to include all circulator pumps within a single 
equipment class.
    HI agreed with the CPWG that circulator pumps should be evaluated 
within a single equipment class and no design options are known that 
are incompatible or that would necessitate an additional equipment 
class. (HI, No. 112 at p. 8). Grundfos also agreed with the CPWG 
recommendation of a single circulator pump class as long as 
C[hyphen]values are defined based on motor size. (Grundfos, No. 113 at 
p. 6).
    As stated in section III.B.1, circulator pumps may be offered in 
wet- or dry-rotor configurations, and if dry-rotor, in either close-
coupled or mechanically coupled construction. Minor differences in 
attributes may exist across configurations. For example, during 
interviews with manufacturers DOE learned that wet-rotor pumps tended 
to be quieter, whereas dry-rotor pumps may be easier to service. In 
general, however, each respective pump variety serves similar 
applications. Similarly, data provided to DOE as part of the 
confidential submission process indicates that each variety may reach 
similar efficiency levels when operated with similar motor technology. 
Accordingly, no apparent basis exists to warrant establishing separate 
equipment classes by circulator pump configuration.
    One additional salient design attribute of circulator pumps is 
housing material. Generally, circulator pumps are built using cast 
iron, bronze, or stainless-steel housing. Bronze and stainless steel 
(sometimes discussed collectively with the descriptor ``nonferrous'') 
carry greater corrosion resistance and are thus suitable for use in 
applications in which they will be exposed to corrosive elements. 
Typically, corrosion resistance is most important in ``open loop'' 
applications in which new water is constantly being replaced.
    By contrast, cast iron (sometimes described as ``ferrous'' to 
distinguish from the ``nonferrous'' descriptor applied to bronze and 
stainless steel) pump housing is less resistant to corrosion than 
bronze or stainless steel, and as a result is generally limited to 
``closed loop'' applications in which the same water remains in the 
hydraulic circuit, in which it will eventually become deionized and 
less able to corrode metallic elements of circulator pumps. Cast iron 
is generally less expensive to manufacture than bronze or stainless 
steel, and as a result bronze or stainless-steel circulator pumps are 
less commonly selected by consumers for applications which do not 
strictly require them.
    Although a difference in utility exists across circulator pump 
housing materials, no such difference exists in ability to reach higher 
efficiencies. All housing materials are able to reach all efficiency 
levels analyzed in this NOPR. Accordingly, no apparent basis exists to 
warrant establishing separate equipment classes by circulator pump 
housing material.
    DOE requests comment regarding the proposal to analyze all 
circulator pumps within a single equipment class.

[[Page 74867]]

On-Demand Circulator Pumps
    On-demand circulator pumps respond to actions of the user, rather 
than other factors such as pressure, temperature, or time. In the 
September 2022 TP Final Rule, DOE adopted the following definition for 
on-demand circulator pumps, which is consistent with that recommended 
by the CPWG (Docket No. EERE-2016-BT-STD-0004, No. 98 Recommendation 4 
at p. 5):
    On-demand circulator pump means a circulator pump that is 
distributed in commerce with an integral control that:
     Initiates water circulation based on receiving a signal 
from the action of a user [of a fixture or appliance] or sensing the 
presence of a user of a fixture and cannot initiate water circulation 
based on other inputs, such as water temperature or a pre-set schedule.
     Automatically terminates water circulation once hot water 
has reached the pump or desired fixture.
     Does not allow the pump to operate when the temperature in 
the pipe exceeds 104 [deg]F or for more than 5 minutes continuously.
    10 CFR 431.462.
    In response to the May 2021 RFI, HI commented that greater energy 
savings could be achieved through demand-based variable speed controls 
than would arise from redesign of a circulator pump's hydraulic 
components. (HI, No. 112 at p. 7). DOE interprets this comment to refer 
to other controls than user-reacting, both because of the specific 
naming of variable-speed (which is not necessary for user-triggered 
controls) and because of the context in which the comment was made. 
Nonetheless, it is logically possible that on-demand circulator pumps 
may indeed save energy relative to non-on-demand circulator pumps in 
certain applications.
    The TP final rule (87 FR 57264) responded to a number of comments 
received in response to the December 2021 TP NOPR, which were discussed 
therein. Several commenters encouraged DOE to develop an adjustment to 
the CEI metric that accounted for the potential of on-demand circulator 
pumps to save energy in certain contexts. (EERE-2016-BT-TP-0033, No. 10 
at p. 5; EERE-2016-BT-TP-0033, No. 11 at pp. 4-5). Other commenters did 
not support an adjusted CEI metric for on-demand circulator pumps in 
the test procedure final rule, but recommended evaluation of such in a 
potential future rulemaking. (Docket No. EERE-2016-BT-TP-0033, No. 9 at 
p.3; EERE-2016-BT-TP-0033, No. 7 at p. 1).
    DOE ultimately did not adopt any modification to the CEI metric for 
on-demand circulator pumps in the final rule but stated that it would 
consider the appropriate scope and product categories for standards for 
on-demand circulator pumps in a separate energy conservation 
rulemaking.
    As stated in section III.B, DOE is proposing to align the scope of 
energy conservation standards for circulator pumps consistently with 
that of the test procedure for circulator pumps, which includes on-
demand circulator pumps. 87 FR 57264.
    In developing the equipment class structure, DOE is directed to 
consider, among other factors, performance-related features that 
justify a different standard and the utility of such features to the 
consumer. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q)) In the specific case 
of on-demand circulator pumps, the primary distinguishing feature 
(i.e., ability to react to user action or presence) is not obviously 
performance related. It does not impede the ability of circulator pumps 
to reach the same performance levels as any other circulator pumps. On 
that basis, DOE is proposing not to establish a separate equipment 
class for on-demand circulator pumps in this NOPR.
    It remains true, as observed by commenters, that in certain 
applications on-demand circulator pumps may save energy relative to 
non-on-demand circulator pumps through reduced aggregate operating 
durations. Operating duration of on-demand circulator pumps is 
considered in the energy use analysis, which is described in section 
IV.E.3 of this document.
    DOE requests comment on its proposal not to establish a separate 
equipment class for on-demand circulator pumps.
2. Technology Options
    In the preliminary market analysis and technology assessment, DOE 
identified 3 technology options that would be expected to improve the 
efficiency of circulator pumps, as measured by the DOE test procedure:

 Improved hydraulic design
 More efficient motors
 Increase number of motor speeds

    Chapter 3 of the NOPR TSD details each of these technology options. 
The following sections summarize the stakeholder comments on these 
technology option by variety.
a. Hydraulic Design
    The performance characteristics of a pump, such as flow, head, and 
efficiency, are influenced by the pump's hydraulic design. For purposes 
of DOE's analysis, ``hydraulic design'' is a broad term used to 
describe the system design of the wetted components of a pump. Although 
hydraulic design focuses on the specific hydraulic characteristics of 
the impeller and the volute/casing, it also includes design choices 
related to bearings, seals, and other ancillary components.
    Impeller and volute/casing geometries, clearances, and associated 
components can be redesigned to a higher efficiency (at the same flow 
and head) using a combination of techniques including historical best 
practices and modern computer-aided design (CAD) and analysis methods. 
The wide availability of modern CAD packages and techniques now enables 
pump designers to reach designs with improved vane shapes, flow paths, 
and cutwater designs more quickly, all of which work to improve the 
efficiency of the pump as a whole.
    In response to the May 2021 RFI, Grundfos stated there are only 
small efficiency gains to be gained through hydraulic design. 
(Grundfos, No. 113 at p. 6). HI responded to the May 2021 RFI 
explaining the savings gained through improved hydraulic design is not 
sufficient to meet EPCA requirements. Additionally, the energy savings 
does not offset the cost of modifying the hydraulic design. (HI, No. 
112 at p. 7)
b. More Efficient Motors
    Different constructions of motors have different achievable 
efficiencies. Two general motor constructions are present in the 
circulator pump market: induction motors, and ECMs. Induction motors 
include both single-phase and three-phase configurations. Single-phase 
induction motors may be further differentiated and include split phase, 
capacitor-start induction-run (CSIR), capacitor-start capacitor-run 
(CSCR), and PSC motors. HI stated that the majority of circulator pumps 
currently available on the market use PSC motors, which is a variety of 
induction motor (HI, No. 112 at p. 11). DOE confirmed using 
confidentially submitted manufacturer data that induction motor 
circulator pumps account for the majority of the circulator pump 
market.
    The efficiency of an induction motor can be increased by 
redesigning the motor to reduce slip losses between the rotor and 
stator components, as well as reducing mechanical losses at seals and 
bearings. ECMs are generally more efficient than induction motors 
because their construction minimizes slip losses between the rotor and 
stator components. Unlike induction motors, however, ECMs require an 
electronic drive to function. This electronic drive consumes 
electricity, and variations in

[[Page 74868]]

drive losses and mechanical designs lead to a range of ECM 
efficiencies. In response to the May 2021 RFI HI and NEEA stated ECMs 
are experiencing a slow growth in the market, with faster growth in 
areas where there are utility incentives. (HI, No. 112 at p. 10; NEEA, 
No. 115 at p. 4).
    The performance standard for this rule is based upon wire-to-water 
efficiency, which is defined as the hydraulic output power of a 
circulator pump divided by its line input power and is expressed as a 
percentage. The achievable wire-to-water efficiency of circulator pumps 
is influenced by both hydraulic efficiency and motor efficiency. As 
part of the engineering analysis (Section IV.C), DOE assessed the range 
of attainable wire-to-water efficiencies for circulator pumps with 
induction motors, and those with ECMs, over a range of hydraulic power 
outputs. Because circulator pump efficiency is measured on a wire-to-
water basis, it is difficult to fully separate differences due to motor 
efficiency from those due to hydraulic efficiency. In response to the 
May 2021 RFI, HI stated that improved motor efficiency and demand-based 
variable speed controls can achieve greater energy savings than from 
improved hydraulic efficiency. (HI, No. 112 at p. 7). However, in 
redesigning a pump model to meet today's proposed standard, 
manufacturers could consider both hydraulic efficiency and motor 
efficiency.
    Higher motor capacities are generally required for higher hydraulic 
power outputs, and as motor capacity increases, the attainable 
efficiency of the motor at full load also increases. Higher horsepower 
motors also operate close to their peak efficiency for a wider range of 
loading conditions.\33\
---------------------------------------------------------------------------

    \33\ U.S. DOE Building Technologies Office. Energy Savings 
Potential and Opportunities for High-Efficiency Electric Motors in 
Residential and Commercial Equipment. December 2013. Prepared for 
the DOE by Navigant Consulting. pp. 4. Available at https://energy.gov/sites/prod/files/2014/02/f8/Motor%20Energy%20Savings%20Potential%20Report%202013-12-4.pdf DFR.
---------------------------------------------------------------------------

    Circulator pump manufacturers either manufacture motors in-house or 
purchase complete or partial motors from motor manufacturers and/or 
distributors. Manufacturers may select an entirely different motor or 
redesign an existing motor in order to improve a pump's motor 
efficiency.
c. Speed Reduction
    Circulator pumps with the variable speed capability can reduce 
their energy consumption by reducing pump speed to match load 
requirements. As discussed in the September 2022 TP Final Rule, the CER 
metric is a weighted average of input powers at each test point 
relative to BEP flow. The circulator pump test procedure allows CER 
values for multi- and variable-speed circulator pumps to be calculated 
as the weighted average of input powers at full speed BEP flow, and 
reduced speed at flow points less than BEP; CER for single-speed 
circulator pumps is calculated based only on input power at full speed. 
10 CFR 431.464(c)(2). Due to pump affinity laws, variable-speed 
circulator pumps will achieve reduced power consumption at flow points 
less than BEP by reducing their rotational speed to more closely match 
required system head. As such, the CER metric grants benefits on 
circulator pumps capable of variable speed operation.
    Specifically, pump affinity laws describe the relationship of pump 
operating speed, flow rate, head, and hydraulic power. According to the 
affinity laws, flow varies proportionally with the pump's rotational 
speed, as described in equation (6). The affinity laws also establish 
that pump total head is proportional to speed squared, as described in 
equation (7), and pump hydraulic power is proportional to speed cubed, 
as described in equation (8)
[GRAPHIC] [TIFF OMITTED] TP06DE22.005

Where:

Q1 and Q2 = volumetric flow rate at two operating points
H1 and H2 = pump total head at two operating points
N1 and N2 = pump rotational speed at two operating points
P1 and P2 = pump hydraulic power at two operating points

    This means that a pump operating at half speed will provide one 
half of the pump's full-speed flow and one eighth of the pump's full-
speed power.\34\ However, pump affinity laws do not account for changes 
in hydraulic and motor efficiency that may occur as a pump's rotational 
speed is reduced. Typically, hydraulic efficiency and motor efficiency 
will be reduced at lower operating speeds. Consequently, at reduced 
speeds, power consumption is not reduced as drastically as hydraulic 
output power. Even so, the efficiency losses at low-speed operation are 
typically outweighed by the

[[Page 74869]]

exponential reduction in hydraulic output power at low-speed operation; 
this results in a lower input power at low-speed operation at flow 
points lower than BEP.
---------------------------------------------------------------------------

    \34\ A discussion of reduced-speed pump dynamics is available at 
www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0099.
---------------------------------------------------------------------------

    Circulator pump speed controls may be discrete or continuous, as 
well as manual or automatic. Circulator pumps with discrete speed 
controls vary the circulator pump's rotational speed in a stepwise 
manner. Discrete controls are found mostly on circulator pumps with 
induction motors and have several speed settings that are can be used 
to allow contractors greater installation flexibility with a single 
circulator pump model. For these circulator pumps, the speed is set 
manually with a dial or buttons by the installer or user and operate at 
a constant speed once the installation is complete.
    Circulator pumps equipped with automatic speed controls can adjust 
the circulator pump's rotational speed based on a signal from 
differential pressure or temperature sensors, or an external input 
signal from a boiler. The variable frequency drives required for ECMs 
makes them fairly amenable to the addition of variable speed control 
logic; currently the vast majority of circulator pumps with automatic 
continuously variable speed controls also have ECM motors. However, 
some circulator pump models with induction motors also come equipped 
with automatic continuous variable speed controls. While automatic 
controls can reduce energy consumption by allowing circulator pump 
speed to dynamically respond to changes in system conditions, these 
controls can also reduce energy consumption by reducing speed to a 
single, constant value that is optimized based on system head at the 
required flow point. Automatic controls can be broadly categorized into 
two groups: pressure-based controls, and temperature-based controls.
    Pressure-based controls vary the circulator pump speed based on 
changes in the system pressure. These pressure changes are typically 
induced by a thermostatically controlled zone valve that monitors the 
space temperature in different zones and calls for heat (i.e., opens 
the valve) when the space/zone temperature is below the set-point, 
similar to a thermostat. In this type of control, a pressure sensor 
internal to the circulator pump determines the amount of pressure in 
the system and adjusts the circulator pump speed to achieve the desired 
system pressure.
    Temperature-based controls monitor the supply and return 
temperature to the circulator pump and modulates the circulator pump's 
speed to maintain a fixed temperature drop across the system. 
Circulator pumps with temperature-based controls are able to serve the 
heat loads of a conditioned space at a lower speed, and therefore lower 
input power, than the differential pressure control because it can 
account for the differential temperature between the space and supplied 
hot water, delivering a constant BTU/hr load to the space when less 
heat is needed even in a given zone or zones.
    In response to the 2021 RFI, Grundfos stated the ability to reduce 
speed is the most important criteria for achieving higher efficiency in 
circulator products. (Grundfos, No. 113 at p. 6). Reducing performance 
according to system need can achieve 50-60% savings (Id.). Grundfos 
explains further that the ability to run at reduced speeds is the 
costliest solution, but the larger savings can offset the higher costs 
and to help offset conversion to this technology (Id.). Understanding 
the lifetime energy saving compared to the higher initial cost is 
important for market adoption (Id.). The largest concern for the 
implementation is that optimization of the control mode can be 
problematic for an end user and requires higher level knowledge to gain 
maximum efficiencies (Id.). NEEA responded with data showing that 
currently, fewer than one-fifth of circulator pumps are equipped with 
speed control technology. (NEEA, No. 115 at p. 6). This shows the 
significant potential the market has for energy savings by using more 
pumps with the ability to operate at reduced speeds.
    In the May 2021 RFI, DOE requested comment on increasing circulator 
pump efficiency using improved hydraulic design, more efficient motors, 
and/or increased number of motor speeds.
    HI responded stating they are not aware of other design option that 
increase efficiency. (HI, No. 112 at p. 7). HI stated that the market 
is focused on improved motors and demand-based variable speed control 
and does not believe any other design changes, so far discovered, would 
occur (Id.). HI believes ECM circulator pumps with variable speed 
controls represent the maximum technology option. (Id.). The initial 
cost for these techniques is higher to consumers due to the higher cost 
of the efficient motor and incorporation of controls; however, the 
total life cycle cost to the consumer should be lower due to energy 
savings (Id.). The addition of ECMs and controls adds complexity to 
manufacturing due to scarcity of materials, reliance on non-domestic 
sources, automated assembly, and special tooling. Further complexity 
associated with ECMs are disposal and recycling programs (Id.). HI 
recommends DOE conduct manufacturer interviews to get additional 
updated information such as costs for design options to update the 
previous data request from 2016 (HI, No. 112 at p. 8). DOE received 
this data in the 2022 manufacturer interviews.
    Grundfos responded stating the technology described is a fair 
description of the current state of the market. (Grundfos, No. 113 at 
p. 6). Grundfos explained that the most advanced products in the market 
are approaching the maximum possible efficiency values and any further 
energy use reductions would only be realized through more efficient 
system designs (piping/valves/etc.) and adoption of more efficient 
system interaction (interconnectivity to appliances, smart homes, etc.) 
(Id.).
    In the May 2021 RFI, DOE requested comment on whether certain 
design options may not be applicable to specific equipment classes. 
Grundfos responded stating it does not see any limitations in design 
options for equipment classes. (Grundfos, No. 113 at p. 8). HI 
responded stating that no design options are known that are 
incompatible or that would necessitate an additional equipment class. 
(HI, No. 112 at p. 8).
    Based on comments, DOE concludes that the technology options 
identified are sufficient to conduct the engineering analysis, which is 
discussed in section IV.C.

B. Screening Analysis

    DOE uses the following five 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 a significant adverse impact on 
the utility of the product for significant subgroups of consumers or 
would result in the unavailability of any covered equipment type with 
performance characteristics

[[Page 74870]]

(including reliability), features, sizes, capacities, and volumes that 
are substantially the same as products generally available in the 
United States at the time, it will not be considered further.
    (4) Adverse impacts on health or safety. If it is determined that a 
technology would have significant adverse impacts on health or safety, 
it will not be considered further.
    (5) Unique-Pathway Proprietary Technologies. If a design option 
utilizes proprietary technology that represents a unique pathway to 
achieving a given efficiency level, that technology will not be 
considered further due to the potential for monopolistic concerns.
    10 CFR 431.4; 10 CFR part 430, subpart C, appendix A, sections 
6(b)(3) and 7(b).
    In summary, if DOE determines that a technology, or a combination 
of technologies, fails to meet one or more of the listed five criteria, 
it will be excluded from further consideration in the engineering 
analysis. The reasons for eliminating any technology are discussed in 
the following sections.
    The subsequent sections include comments from interested parties 
pertinent to the screening criteria, DOE's evaluation of each 
technology option against the screening analysis criteria, and whether 
DOE determined that a technology option should be excluded (``screened 
out'') based on the screening criteria.
1. Screened-Out Technologies
    In the May 2021 RFI, DOE requested comment regarding the screening 
criteria and on what impact they may have on currently identified and 
potential future possible technology options for circulator pumps. 86 
FR 24516, 24530 (May 26, 2021).
    In response, HI commented that ECMs and controls could potentially 
become a problem due to scarcity of necessary component materials, 
reliance on foreign sources, and the degree of automation and 
specialized tooling involved in the manufacture of ECMs. (HI, No. 112 
at p. 7)
    DOE interprets HI's comment to be discussing a hypothetical future 
scenario, and not to be stating that ECMs are unavailable today. 
Accordingly, ECMs have been retained as a design option for the 
analysis of this NOPR. DOE will monitor the market for circulator pumps 
with ECMs and consider removing ECMs as a design option in a future 
revision to the analysis if availability declines to the degree that 
circulator pump manufacturers are unable to obtain them, or unable to 
obtain them at a price level that would create a positive estimated 
economic proposition for purchasers of ECM-equipped circulator pumps.
    DOE requests comment regarding the current and anticipated forward 
availability of ECMs and components necessary for their manufacture.
2. Remaining Technologies
    Through a review of each technology, DOE tentatively concludes that 
all the other identified technologies listed in section IV.A.2 met all 
five screening criteria to be examined further as design options in 
DOE's NOPR analysis. In summary, DOE did not screen out the following 
technology options:

     Improved hydraulic design
     More efficient motors
     Increase number of motor speeds

    DOE has initially determined that these technology options are 
technologically feasible because they are being used or have previously 
been used in commercially-available products or working prototypes. DOE 
also finds that all of the remaining technology options meet the other 
screening criteria (i.e., practicable to manufacture, install, and 
service and do not result in adverse impacts on consumer utility, 
product availability, health, or safety, unique-pathway proprietary 
technologies). For additional details, see chapter 4 of the NOPR TSD.

C. Engineering Analysis

    The purpose of the engineering analysis is to establish the 
relationship between the efficiency and cost of circulator pumps. There 
are two elements to consider in the engineering analysis; the selection 
of efficiency levels to analyze (i.e., the ``efficiency analysis'') and 
the determination of product cost at each efficiency level (i.e., the 
``cost analysis''). In determining the performance of higher-efficiency 
circulator pumps, DOE considers technologies and design option 
combinations not eliminated by the screening analysis. For each 
circulator pump class, DOE estimates the baseline cost, as well as the 
incremental cost for the circulator pump at efficiency levels above the 
baseline. The output of the engineering analysis is a set of cost-
efficiency ``curves'' that are used in downstream analyses (i.e., the 
LCC and PBP analyses and the NIA).
1. Representative Equipment
    To assess MPC-efficiency relationships for all circulator pumps 
available on the market, DOE selected a set of representative units to 
analyze. These representative units exemplify capacities and hydraulic 
characteristics typical of circulator pumps currently found on the 
market. In general, to determine representative capacities and 
hydraulic characteristics, DOE analyzed the distribution of all 
available models and/or shipments and discussed its findings with the 
CPWG. The analysis focused on single speed induction motors as they 
represent the bulk of the baseline of the market.
    To start the selection process, nominal horsepower targets based on 
CPWG feedback of 1/40, 1/25, 1/12,1/6, and 1 HP were selected for 
representative units (Docket No. EERE-2016-BT-STD-0004-0061, p. 9). At 
each horsepower target, pump curves were constructed from manufacturer 
data. Near identical pump curves were consolidated into single curves 
and curves that represent circulator pumps with low shipments were 
filtered out to remove the impact of low-selling pumps. These high 
sales consolidated pump curves were then grouped with similar curves to 
form clusters of similar circulator pumps. A representative curve was 
then constructed from this cluster of pumps by using the mean flow and 
head at each test point. Eight of these curves were constructed to form 
the eight representative units used in further analyses.
a. Circulator Pump Varieties
    Circulator pumps varieties are used to classify different pumps in 
industry. Wet rotor circulator pump are commonly referred to as CP1, 
dry rotor, two-piece circulator pumps are commonly referred to as CP2, 
and dry rotor, three-piece circulator pumps are commonly referred to as 
CP3. The distinction of circulator varieties does not have a large 
impact on performance with all circulator pump varieties being capable 
of achieving any particular performance curve. Due to the performance 
similarities, the groups of pump curves used to generate representative 
units contain a mix of all three circulator varieties. Although DOE 
analyzed CP1, CP2, and CP3 circulator varieties as a single equipment 
class, representative units were selected such that all circulator 
varieties were captured in the analysis.
    The parameters of each of the representative units used in this 
analysis are provided in Table IV.1.

[[Page 74871]]



                                                       Table IV.1--Representative Unit Parameters
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Nominal power    Flow at BEP     Head at BEP   Phydro at  BEP
             Representative unit                    (hp)            (GPM)           (ft)            (hp)                        Variety
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................            1/40           3.073           3.043           0.002  CP1.
2............................................            1/40           5.759           6.628           0.010  CP1.
3............................................            1/25          10.065           9.282           0.024  CP1.
4............................................            1/25          10.525           6.064           0.016  CP1.
5............................................            1/12          17.941           6.510           0.030  CP1, CP2, CP3.
6............................................             1/6          19.521          20.254           0.100  CP1, CP2, CP3.
7............................................             1/6          36.531          10.601           0.098  CP1, CP2, CP3.
8............................................               1          61.200          36.782           0.569  CP1, CP3.
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Efficiency Analysis
    DOE typically uses one of two approaches to develop energy 
efficiency levels for the engineering analysis: (1) relying on observed 
efficiency levels in the market (i.e., the efficiency-level approach), 
or (2) determining the incremental efficiency improvements associated 
with incorporating specific design options to a baseline model (i.e., 
the design-option approach). Using the efficiency-level approach, the 
efficiency levels established for the analysis are determined based on 
the market distribution of existing products (in other words, based on 
the range of efficiencies and efficiency level ``clusters'' that 
already exist on the market). Using the design option approach, the 
efficiency levels established for the analysis are determined through 
detailed engineering calculations and/or computer simulations of the 
efficiency improvements from implementing specific design options that 
have been identified in the technology assessment. DOE may also rely on 
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended 
using the design option approach to ``gap fill'' levels (to bridge 
large gaps between other identified efficiency levels) and/or to 
extrapolate to the max-tech level (particularly in cases where the max-
tech level exceeds the maximum efficiency level currently available on 
the market).
    In this proposed rulemaking, DOE relies on an efficiency-level 
approach due to the availability of robust data characterizing both 
performance and selling price at a variety of efficiency levels.
a. Baseline Efficiency
    For each equipment class, DOE generally selects a baseline model as 
a reference point for each class, and measures changes resulting from 
potential energy conservation standards against the baseline. The 
baseline model in each equipment class represents the characteristics 
of an equipment typical of that class (e.g., capacity, physical size). 
Generally, a baseline model is one that just meets current energy 
conservation standards, or, if no standards are in place, the baseline 
is typically the most common or least efficient unit on the market.
    For all representative units, DOE modeled a baseline circulator 
pump as one with a PSC motor.
b. Higher Efficiency Levels
    As part of DOE's analysis, the maximum available efficiency level 
is the highest efficiency unit currently available on the market. DOE 
also defines a ``max-tech'' efficiency level to represent the maximum 
possible efficiency for a given product.
    For all representative units, DOE modeled a max-tech circulator 
pump as one with an ECM and operated on a differential temperature-
based control scheme.
c. EL Analysis
    DOE examined the influence of different paraments on wire-to-water 
efficiency including hydraulic power. Hydraulic power has a significant 
impact on wire to water efficiency as seen in the different 
representative units. To find the correlation, the relationship of 
power and wire to water efficiency were evaluated for both single speed 
induction and single speed ECM motors. Multiple relationships were 
tested with a logarithmic relationship being the most accurate. This 
logarithmic relationship can be used to set efficiency levels inclusive 
of all representative units across the ranges of horsepower.
    To calculate wire to water efficiency at part-load conditions, 
wire-to-water efficiency at full-load conditions is multiplied by a 
part-load coefficient, represented by alpha ([alpha]). As instructed by 
the CPWG, a mean fit was developed for each part load test point across 
representative units to find a single value to use for alpha for each 
test point. This methodology was conducted independently for single 
speed induction, single speed ECM, and variable speed ECM to find 
unique alphas at each point for each motor type. The unique alpha 
values are provided in Table IV.2.

   Table IV.2--Mean Alpha Values by Test Point and Motor Configuration
------------------------------------------------------------------------
                                                       Test
                Motor configuration                   point       Mean
                                                       load      alpha
------------------------------------------------------------------------
Single Speed Induction............................         25     0.4671
                                                           50     0.7674
                                                           75     0.9425
                                                          110     0.9835
Single Speed ECM..................................         25     0.4845
                                                           50     0.7730
                                                           75     0.9408
                                                          110     0.9841
Variable Speed ECM................................         25     0.5914
                                                           50     0.8504
                                                           75     0.9613
------------------------------------------------------------------------

    DOE sets EL 0 as the baseline configuration of circulator pumps 
representing the minimum efficiency available on the market. DOE used 
the logarithmic function developed when finding the relationship 
between hydraulic power and wire-to-water efficiency to find the lower 
second percentile of single speed induction circulator pumps to set as 
EL 0. DOE finds single speed circulator pumps with induction motors 
have the lowest wire-to-water efficiency and are being set as EL 0, as 
agreed on at CPWG meeting 8. (Docket No. EERE-2016-BT-STD-0004-0061, p. 
15)
    DOE set EL 1 to correspond approximately to single-speed induction 
motors with improved wire-to-water efficiency. EL 1 is an intermediate 
efficiency level between the baseline EL 0 and more efficient ECMs 
defined in higher efficiency levels. EL 1 was defined as the halfway 
between the most efficient single speed induction motors and the 
baseline used as EL 0.
    EL 2 is set to correspond approximately to single-speed ECMs. The 
values for these circulator pumps

[[Page 74872]]

are found using the same base logarithmic function that were used when 
finding the relationship between hydraulic power and wire-to-water 
efficiency. EL 2 corresponds to a CEI of 1.00, which is the level 
recommended by the CPWG in the November 2016 CPWG Recommendations.
    EL 3 is set to correspond approximately to variable-speed ECMs with 
automatic proportional pressure control. The effect of a 50 percent 
proportional pressure control is applied using equation (9) for each 
part load test point. The wire-to-water efficiency at each test point 
is found using the alpha values for variable speed ECM values for 
alpha.
[GRAPHIC] [TIFF OMITTED] TP06DE22.006

Where:

Hi = total system head at each load point i (ft);
Qi = flow rate at each load point i (gpm);
Q100% = flow rate at 100 percent of BEP flow at maximum 
speed (gpm); and
H100% = total pump head at 100 percent of BEP flow at 
maximum speed (ft).
    EL 4 is the max-tech efficiency level, which represents the 
circulator pumps with the maximum possible efficiency. EL 4 is set as 
variable speed ECMs with automatic differential temperature control. 
The effects of the controls are calculated using equation (10). Similar 
to EL3, the wire-to-water efficiencies are found using the alpha values 
for variable speed ECMs.
[GRAPHIC] [TIFF OMITTED] TP06DE22.007

    In response to the May 2021 RFI, Grundfos stated they do not 
believe there are any new technologies for DOE to consider and the 
maximum efficiency levels are appropriate for consideration. (Grundfos, 
No. 113 at p. 7).
    For pumps that do not fit exactly into a representative unit, the 
DOE developed a continuous function for wire-to-water efficiency at 
BEP. The technique extends the representative units for each EL to 
compute wire-to-water efficiency at BEP for all circulator pumps by 
using the logarithmic function based on hydraulic power represented in 
equation (11). Variable d can be solved by using equation (12) and the 
variables for a and b are presented in Table IV.3 which contains 
different values for each efficiency level.
[GRAPHIC] [TIFF OMITTED] TP06DE22.008

[GRAPHIC] [TIFF OMITTED] TP06DE22.009

Where:

[eta]WTW = wire-to-water efficiency
Phydro = hydraulic power (HP);

[[Page 74873]]



    Table IV.3--Parameters Used To Solve for Wire-to-Water Efficiency
------------------------------------------------------------------------
                       EL                              a           b
------------------------------------------------------------------------
0...............................................    7.065278    0.003958
1...............................................    8.727971    0.003223
2...............................................   10.002583    0.001140
3...............................................   10.002583    0.001140
4...............................................   10.002583    0.001140
------------------------------------------------------------------------

3. Cost Analysis
    The cost analysis portion of the engineering analysis is conducted 
using one or a combination of cost approaches. The selection of cost 
approach depends on a suite of factors, including the availability and 
reliability of public information, characteristics of the regulated 
product, the availability and timeliness of purchasing the circulator 
pumps on the market. The cost approaches are summarized as follows:
     Physical teardowns: Under this approach, DOE physically 
dismantles a commercially available product, component-by-component, to 
develop a detailed bill of materials for the product.
     Catalog teardowns: In lieu of physically deconstructing a 
product, DOE identifies each component using parts diagrams (available 
from manufacturer websites or appliance repair websites, for example) 
to develop the bill of materials for the product.
     Price surveys: If neither a physical nor catalog teardown 
is feasible (for example, for tightly integrated products such as 
fluorescent lamps, which are infeasible to disassemble and for which 
parts diagrams are unavailable) or cost-prohibitive and otherwise 
impractical (e.g., large commercial boilers), DOE conducts price 
surveys using publicly available pricing data published on major online 
retailer websites and/or by soliciting prices from distributors and 
other commercial channels.
    In the present case, DOE conducted the analysis using a combination 
of physical teardowns and price surveys. The resulting bill of 
materials provides the basis for the manufacturer production cost 
(``MPC'') estimates.
4. Cost-Efficiency Results
    The results of the engineering analysis are reported as cost-
efficiency data (or ``curves'') in the form of wire-to-water efficiency 
versus MPC (in dollars). DOE developed 15 curves representing the 15 
representative units in the analysis. The methodology for developing 
the curves started with determining the energy consumption for baseline 
equipment and MPCs for this equipment. Above the baseline, DOE 
implemented design options using the ratio of cost to savings, and 
implemented only one design option at each level. Design options were 
implemented until all available technologies were employed (i.e., at a 
max-tech level).
    Table IV.4, Table IV.5, Table IV.6 contain cost-efficiency results 
of the engineering analysis. MPCs are presented for circulator pumps 
with both ferrous and nonferrous housing material. Housing material 
does not significantly affect the energy consumption of circulator 
pumps, but does alter production cost. Housing material is discussed 
further in section IV.A.1.b. See TSD Chapter 5 for additional detail on 
the engineering analysis and TSD Appendix 5B for complete cost-
efficiency results.

                              Table IV.4--Engineering Results--CP1, Rep. Units 1-4
----------------------------------------------------------------------------------------------------------------
                                                                                           MPC--        MPC--
       Rep unit            HP         Description             Construction         EL     Ferrous     Nonferrous
----------------------------------------------------------------------------------------------------------------
1.....................     1/40  Single Speed,          CP1....................      0       $31.34       $35.61
                                  Induction.
1.....................     1/40  Improved Single        CP1....................      1        31.34        35.61
                                  Speed, Induction.
1.....................     1/40  Single Speed, ECM....  CP1....................      2        47.91        51.87
1.....................     1/40  Variable Speed, ECM,   CP1....................      3        59.23        63.18
                                  dP.
1.....................     1/40  Variable Speed, ECM,   CP1....................      4        68.28        72.24
                                  dT.
1.....................     1/40  Variable Speed, ECM,   CP1....................      5        68.28        72.24
                                  dT.
2.....................     1/40  Single Speed,          CP1....................      0        34.44        39.13
                                  Induction.
2.....................     1/40  Improved Single        CP1....................      1        34.44        39.13
                                  Speed, Induction.
2.....................     1/40  Single Speed, ECM....  CP1....................      2        53.57        57.92
2.....................     1/40  Variable Speed, ECM,   CP1....................      3        64.88        69.23
                                  dP.
2.....................     1/40  Variable Speed, ECM,   CP1....................      4        73.94        78.28
                                  dT.
2.....................     1/40  Variable Speed, ECM,   CP1....................      5        73.94        78.28
                                  dT.
3.....................     1/25  Single Speed,          CP1....................      0        40.82        54.57
                                  Induction.
3.....................     1/25  Improved Single        CP1....................      1        40.82        54.57
                                  Speed, Induction.
3.....................     1/25  Single Speed, ECM....  CP1....................      2        65.65        78.41
3.....................     1/25  Variable Speed, ECM,   CP1....................      3        76.96        89.72
                                  dP.
3.....................     1/25  Variable Speed, ECM,   CP1....................      4        86.02        98.78
                                  dT.
3.....................     1/25  Variable Speed, ECM,   CP1....................      5        86.02        98.78
                                  dT.
4.....................     1/25  Single Speed,          CP1....................      0        40.82        54.57
                                  Induction.
4.....................     1/25  Improved Single        CP1....................      1        40.82        54.57
                                  Speed, Induction.
4.....................     1/25  Single Speed, ECM....  CP1....................      2        65.65        78.41
4.....................     1/25  Variable Speed, ECM,   CP1....................      3        76.96        89.72
                                  dP.
4.....................     1/25  Variable Speed, ECM,   CP1....................      4        86.02        98.78
                                  dT.
4.....................     1/25  Variable Speed, ECM,   CP1....................      5        86.02        98.78
                                  dT.
----------------------------------------------------------------------------------------------------------------


                              Table IV.5--Engineering Results--CP1, Rep. Units 5-8
----------------------------------------------------------------------------------------------------------------
                                                                                                        MPC--
       Rep unit            HP         Description             Construction         EL      MPC--      Nonferrous
                                                                                        Ferrous ($)      ($)
----------------------------------------------------------------------------------------------------------------
5.....................     1/12  Single Speed,          CP1....................      0        46.89        62.69
                                  Induction.
5.....................     1/12  Improved Single        CP1....................      1        46.89        62.69
                                  Speed, Induction.
5.....................     1/12  Single Speed, ECM....  CP1....................      2        84.51        99.17
5.....................     1/12  Variable Speed, ECM,   CP1....................      3        95.83       110.48
                                  dP.
5.....................     1/12  Variable Speed, ECM,   CP1....................      4       104.88       119.54
                                  dT.
5.....................     1/12  Variable Speed, ECM,   CP1....................      5       104.88       119.54
                                  dT.

[[Page 74874]]

 
6.....................      1/6  Single Speed,          CP1....................      0        58.59        78.32
                                  Induction.
6.....................      1/6  Improved Single        CP1....................      1        58.59        78.32
                                  Speed, Induction.
6.....................      1/6  Single Speed, ECM....  CP1....................      2       135.61       153.92
6.....................      1/6  Variable Speed, ECM,   CP1....................      3       146.93       165.24
                                  dP.
6.....................      1/6  Variable Speed, ECM,   CP1....................      4       155.98       174.29
                                  dT.
6.....................      1/6  Variable Speed, ECM,   CP1....................      5       155.98       174.29
                                  dT.
7.....................      1/6  Single Speed,          CP1....................      0        58.59        78.32
                                  Induction.
7.....................      1/6  Improved Single        CP1....................      1        58.59        78.32
                                  Speed, Induction.
7.....................      1/6  Single Speed, ECM....  CP1....................      2       135.61       153.92
7.....................      1/6  Variable Speed, ECM,   CP1....................      3       146.93       165.24
                                  dP.
7.....................      1/6  Variable Speed, ECM,   CP1....................      4       155.98       174.29
                                  dT.
7.....................      1/6  Variable Speed, ECM,   CP1....................      5       155.98       174.29
                                  dT.
8.....................        1  Single Speed,          CP1....................      0       246.65       314.15
                                  Induction.
8.....................        1  Improved Single        CP1....................      1       246.65       314.15
                                  Speed, Induction.
8.....................        1  Single Speed, ECM....  CP1....................      2       353.43       416.06
8.....................        1  Variable Speed, ECM,   CP1....................      3       364.75       427.38
                                  dP.
8.....................        1  Variable Speed, ECM,   CP1....................      4       373.80       436.43
                                  dT.
8.....................        1  Variable Speed, ECM,   CP1....................      5       373.80       436.43
                                  dT.
----------------------------------------------------------------------------------------------------------------


                                  Table IV.6--Engineering Results--CP2 and CP3
----------------------------------------------------------------------------------------------------------------
                                                                                                        MPC--
       Rep unit            HP         Description             Construction         EL      MPC--      Nonferrous
                                                                                        Ferrous ($)      ($)
----------------------------------------------------------------------------------------------------------------
5.....................     1/12  Single Speed,          CP2....................      0        70.68        95.00
                                  Induction.
5.....................     1/12  Improved Single        CP2....................      1        70.68        95.00
                                  Speed, Induction.
5.....................     1/12  Single Speed, ECM....  CP2....................      2       116.64       139.20
5.....................     1/12  Variable Speed, ECM,   CP2....................      3       127.95       150.52
                                  dP.
5.....................     1/12  Variable Speed, ECM,   CP2....................      4       137.00       159.57
                                  dT.
5.....................     1/12  Variable Speed, ECM,   CP2....................      5       137.00       159.57
                                  dT.
6.....................      1/6  Single Speed,          CP2....................      0       110.21       142.23
                                  Induction.
6.....................      1/6  Improved Single        CP2....................      1       110.21       142.23
                                  Speed, Induction.
6.....................      1/6  Single Speed, ECM....  CP2....................      2       166.86       196.57
6.....................      1/6  Variable Speed, ECM,   CP2....................      3       178.17       207.88
                                  dP.
6.....................      1/6  Variable Speed, ECM,   CP2....................      4       187.22       216.94
                                  dT.
6.....................      1/6  Variable Speed, ECM,   CP2....................      5       187.22       216.94
                                  dT.
7.....................      1/6  Single Speed,          CP2....................      0       110.21       142.23
                                  Induction.
7.....................      1/6  Improved Single        CP2....................      1       110.21       142.23
                                  Speed, Induction.
7.....................      1/6  Single Speed, ECM....  CP2....................      2       166.86       196.57
7.....................      1/6  Variable Speed, ECM,   CP2....................      3       178.17       207.88
                                  dP.
7.....................      1/6  Variable Speed, ECM,   CP2....................      4       187.22       216.94
                                  dT.
7.....................      1/6  Variable Speed, ECM,   CP2....................      5       187.22       216.94
                                  dT.
5.....................     1/12  Single Speed,          CP3....................      0       103.19       130.25
                                  Induction.
5.....................     1/12  Improved Single        CP3....................      1       103.19       130.25
                                  Speed, Induction.
5.....................     1/12  Single Speed, ECM....  CP3....................      2       157.00       182.10
5.....................     1/12  Variable Speed, ECM,   CP3....................      3       168.31       193.41
                                  dP.
5.....................     1/12  Variable Speed, ECM,   CP3....................      4       177.36       202.47
                                  dT.
5.....................     1/12  Variable Speed, ECM,   CP3....................      5       177.36       202.47
                                  dT.
6.....................      1/6  Single Speed,          CP3....................      0       160.89       246.28
                                  Induction.
6.....................      1/6  Improved Single        CP3....................      1       160.89       246.28
                                  Speed, Induction.
6.....................      1/6  Single Speed, ECM....  CP3....................      2       224.59       303.82
6.....................      1/6  Variable Speed, ECM,   CP3....................      3       235.91       315.13
                                  dP.
6.....................      1/6  Variable Speed, ECM,   CP3....................      4       244.96       324.19
                                  dT.
6.....................      1/6  Variable Speed, ECM,   CP3....................      5       244.96       324.19
                                  dT.
7.....................      1/6  Single Speed,          CP3....................      0       160.89       246.28
                                  Induction.
7.....................      1/6  Improved Single        CP3....................      1       160.89       246.28
                                  Speed, Induction.
7.....................      1/6  Single Speed, ECM....  CP3....................      2       224.59       303.82
7.....................      1/6  Variable Speed, ECM,   CP3....................      3       235.91       315.13
                                  dP.
7.....................      1/6  Variable Speed, ECM,   CP3....................      4       244.96       324.19
                                  dT.
7.....................      1/6  Variable Speed, ECM,   CP3....................      5       244.96       324.19
                                  dT.
8.....................        1  Single Speed,          CP3....................      0       472.16       697.64
                                  Induction.
8.....................        1  Improved Single        CP3....................      1       472.16       697.64
                                  Speed, Induction.
8.....................        1  Single Speed, ECM....  CP3....................      2       604.20       813.41
8.....................        1  Variable Speed, ECM,   CP3....................      3       615.52       824.73
                                  dP.
8.....................        1  Variable Speed, ECM,   CP3....................      4       624.57       833.78
                                  dT.
8.....................        1  Variable Speed, ECM,   CP3....................      5       624.57       833.78
                                  dT.
----------------------------------------------------------------------------------------------------------------


[[Page 74875]]

5. Manufacturer Markup and Manufacturer Selling Price
    To account for manufacturers' non-production costs and profit 
margin, DOE applies a non-production cost multiplier (the manufacturer 
markup) to the full MPC. The resulting MSP is the price at which the 
manufacturer can recover production and non-production costs. To 
calculate the manufacturer markups, DOE used data from 10-K reports 
\35\ submitted to the U.S. Securities and Exchange Commission (``SEC'') 
by the publicly-owned circulator pump manufacturers. DOE then averaged 
the financial figures spanning the years 2019 to 2021 to calculate the 
initial estimate of markups for circulator pumps for this rulemaking. 
During the 2022 manufacturer interviews, DOE discussed the manufacturer 
markup with manufacturers and used the feedback to modify the 
manufacturer markup calculated through review of SEC 10-K reports.
---------------------------------------------------------------------------

    \35\ U.S. Securities and Exchange Commission, Annual 10-K 
Reports (Various Years) available at sec.gov (Last accessed June 
15th, 2022).
---------------------------------------------------------------------------

    To calculate the MSP for circulator pump equipment, DOE multiplied 
the calculated MPC at each efficiency level by the manufacturer markup. 
See chapter 12 of the NOPR TSD for more details about the manufacturer 
markup calculation and the MSP calculations.

D. Markups Analysis

    The markups analysis develops appropriate markups (e.g., retailer 
markups, distributor markups, contractor markups) in the distribution 
chain and sales taxes to convert the MSP estimates derived in the 
engineering analysis to consumer prices, which are then used in the LCC 
and PBP analysis and in the manufacturer impact analysis. At each step 
in the distribution channel, companies mark up equipment prices to 
cover business costs and profit margin.
    For circulator pumps, the main parties in the distribution chain 
are (1) sales representatives (reps); (2) distributors; (3) 
contractors; and (4) original equipment manufacturers (OEMs). For each 
actor in the distribution chain, DOE developed baseline and incremental 
markups. Baseline markups are applied to the price of equipment with 
baseline efficiency, while incremental markups are applied to the 
difference in price between baseline and higher-efficiency models (the 
incremental cost increase). The incremental markup is typically less 
than the baseline markup and is designed to maintain similar per-unit 
operating profit before and after new or amended standards.\36\
---------------------------------------------------------------------------

    \36\ Because the projected price of standards-compliant products 
is typically higher than the price of baseline products, using the 
same markup for the incremental cost and the baseline cost would 
result in higher per-unit operating profit. While such an outcome is 
possible in the short run, DOE maintains that in markets that are 
reasonably competitive it is unlikely that standards would lead to a 
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------

    DOE identified distribution channels for circulator pumps and 
estimated their respective shares of shipments by sector (residential 
and commercial) based on feedback from manufacturers and the CPWG 
(Docket No. EERE-2016-BT-STD-0004, No. 49 at p. 51), as shown in Table 
IV.7.

Table IV.7--Circulator Pumps Distribution Channels and Respective Market
                                 Shares
------------------------------------------------------------------------
                                            Residential     Commercial
       Channel: from manufacturer            shipments       shipments
                                             share (%)       share (%)
------------------------------------------------------------------------
Sales Rep [rarr] Contractor [rarr] End    ..............              37
 User...................................
Sales Rep [rarr] Distributor [rarr]                   73              36
 Contractor [rarr] End User.............
Distributor [rarr] End User.............  ..............               2
Sales Rep [rarr] Distributor [rarr] End                2  ..............
 User...................................
OEM [rarr] Contractor [rarr] End User...              12              12
OEM [rarr] Distributor [rarr] Contractor              13              13
 [rarr] End User........................
                                         -------------------------------
    Total...............................             100             100
------------------------------------------------------------------------

    The sales representative in the distribution chain serves the role 
of a wholesale distributor, as they do not take commission from the 
sale, but buy the equipment and take title to it. The OEM channels 
represent sales of circulator pumps, which are included in other 
equipment, such as hot water boilers.
    To estimate average baseline and incremental markups, DOE relied on 
several sources, including: (1) U.S. Census Bureau 2017 Annual 
Wholesale Trade Survey (for sales representatives and circulator 
wholesalers), (2) U.S. Census Bureau 2017 Economic Census data \37\ on 
the residential and commercial building construction industry (for 
contractors), and (3) the Heating, Air Conditioning & Refrigeration 
Distributors International (``HARDI'') 2013 Profit Report \38\ (for 
equipment wholesalers). In addition to markups of distribution channel 
costs, DOE applied state and local sales tax to derive the final 
consumer purchase prices for circulator pumps.
---------------------------------------------------------------------------

    \37\ U.S. Census Bureau, 2017 Economic Census Data. available at 
www.census.gov/programs-surveys/economic-census.html (last accessed 
April 15, 2021).
    \38\ Heating, Air Conditioning & Refrigeration Distributors 
International (``HARDI''), 2013 HARDI Profit Report, available at 
hardinet.org/ (last accessed April 15, 2021). Note that the 2013 
HARDI Profit Report is the latest version of the report.
---------------------------------------------------------------------------

    In the May 2021 RFI, DOE requested feedback on whether there have 
been market changes since the CPWG that would affect the distribution 
channels and the percentage of circulator pump shipments in each 
channel and sector, as shown in Table IV.7 of this document. HI 
commented that there have not been any market changes to warrant a 
different estimate (HI, No. 112 at p. 9), while Grundfos recommended 
manufacturer interviews for collection of relevant data (Grundfos, No. 
113 at p. 8). During the 2022 manufacturer interviews, the general 
feedback from manufacturers was that there have not been significant 
market changes to justify any changes to the distribution channels 
shown in Table IV.7 of this document.
    DOE requests comment on whether the distribution channels described 
above and the percentage of equipment sold through the different 
channels are appropriate and sufficient to describe the distribution 
markets for circulator pumps. Specifically, DOE requests comment and 
data on online sales of circulator pumps and the appropriate channel to 
characterize them.

[[Page 74876]]

    Chapter 6 of the NOPR TSD provides details on DOE's development of 
markups for circulator pumps.

E. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of circulator pumps at different efficiencies in 
representative U.S. single-family homes, multi-family residences, and 
commercial buildings, and to assess the energy savings potential of 
increased circulator pump efficiency. The energy use analysis estimates 
the range of energy use of circulator pumps in the field (i.e., as they 
are actually used by consumers). It also provides the basis for other 
analyses DOE performs, particularly assessments of the energy savings 
and the savings in consumer operating costs that could result from 
adoption of amended or new standards.
    To calculate the annual energy use (``AEU'') for circulator pumps, 
DOE multiplied the annual operating hours by the line input power 
(derived in the engineering analysis) at each operating point. The 
following sections describe how DOE estimated circulator pump energy 
use in the field for different applications, geographical areas, and 
use cases.
1. Circulator Pump Applications
    DOE identified two primary applications for circulator pumps: 
Hydronic heating, and hot water recirculation. Hydronic heating systems 
are typically characterized by the use of water to move heating from 
sources such as hot water boilers to different rooms through pipes and 
radiating surfaces. Hot water recirculation systems serve the purpose 
of moving hot water from sources such as water heaters, through pipes, 
to water fixture outlets. For each of these applications, DOE developed 
estimates of operating hours and load profiles to characterize 
circulator pump energy use in the field.
    Circulator pumps used in hydronic heating applications typically 
have cast iron housings, while those used in hot water recirculation 
applications have housings made of stainless steel or bronze. DOE 
collected sales data for circulator pumps, including their housing 
materials, through manufacturer interviews, and was able to estimate 
the market share of each application by horsepower and efficiency 
level. To estimate market shares by sector and horsepower rating, DOE 
relied primarily on industry expert input.
    In the May 2021 RFI, DOE requested feedback on whether the 
breakdowns of circulator pumps by sector and application have changed 
since the CPWG proceedings. HI commented that there have not been any 
market changes to warrant a different estimate. (HI, No. 112 at p. 9) 
During the 2022 manufacturer interviews, DOE collected recent data and 
updated the estimated market shares by application. According to these 
data, the market share of circulator pumps used in hydronic heating 
applications is estimated at 66.6 percent, while that for hot water 
recirculation applications is 33.4 percent.
    For details on the market breakdowns by sector and horsepower 
rating, for each application, see chapter 7 of the NOPR TSD.
2. Consumer Samples
    To estimate the energy use of circulator pumps in field operating 
conditions, DOE typically develops consumer samples that are 
representative of installation and operating characteristics of how 
such equipment is used in the field, as well as distributions of annual 
energy use by application and market segment.
    To develop a sample of circulator pump consumers, DOE used the 
Energy Information Administration's (EIA) 2012 commercial buildings 
energy consumption survey (CBECS) \39\ and the 2015 residential energy 
consumption survey (RECS) \40\. For the commercial sector, DOE selected 
commercial buildings from CBECS and apartment buildings with five or 
more units from RECS. For the residential sector, DOE selected single 
family attached or detached buildings from RECS.\41\ The following 
sections describe how DOE developed the consumer samples by 
application.
---------------------------------------------------------------------------

    \39\ U.S. Department of Energy-Energy Information 
Administration. 2012 Commercial Buildings Energy Consumption Survey 
(CBECS). 2012. (Last accessed June 1, 2022.) https://www.eia.gov/consumption/commercial/data/2012/.
    \40\ U.S. Department of Energy: Energy Information 
Administration. 2015 Residential Energy Consumption Survey (RECS). 
2015. (Last accessed June 22, 2022.) https://www.eia.gov/consumption/residential/data/2015/.
    \41\ For the final rule, DOE anticipates using the 2018 CBECS 
and the 2020 RECS to develop the consumer sample, for the commercial 
and residential sectors, respectively.
---------------------------------------------------------------------------

    For hydronic heating, because there are no data in RECS and CBECS 
specifically on the use of circulator pumps, DOE used data on hot water 
boilers to develop its consumer sample. DOE adjusted the selection 
weight associated with the representative RECS and CBECS buildings 
containing boilers to effectively exclude steam boilers, which are not 
used with circulator pumps. To estimate the distribution of circulator 
pumps by geographical region, DOE also used information on each 
building's heated area by boilers to correlate it to circulator 
horsepower rating.
    For hot water recirculation, there is limited information in RECS 
and CBECS. In the residential sector, DOE selected consumers based on 
building square footage and assumed that buildings greater than 3,000 
square feet have a hot water recirculation system. (Docket No. EERE-
2016-BT-STD-0004, No. 67 at pp. 171,172) DOE also assumed that only 
small (<1/12 hp) circulator pumps are installed in residential 
buildings. For the commercial sector, DOE first selected buildings in 
CBECS with instant hot water. Further, DOE assigned a circulator pump 
size category based on the number of floors in each building. The 
commercial segment of the RECS sample was defined as multi-family 
buildings with more than four units. Similar to the hydronic heating 
application, to determine a distribution by region by representative 
unit, DOE assigned circulator pump sizes (i.e., horsepower ratings) to 
building types based on the number of floors in each building.
    The CA IOUs commented that, specific to California, a 2017 
workpaper report \42\ estimates that 93 percent of the California 
market is hot water circulator pumps (as opposed to hydronic) (CA IOUs, 
No. 116 at p. 6). DOE reviewed the report cited by the CA IOUs and 
notes that this estimate is based on market data from a subset of 
circulator pump manufacturers compared to the one analyzed by DOE, 
which may lead to different market share estimates by application. 
Regardless, DOE's estimate for circulator pumps used in hot water 
recirculation systems in California is approximately 80 percent, which 
is generally consistent with the estimate cited by the CA IOUs.
---------------------------------------------------------------------------

    \42\ Workpaper PGECOPUM107, High Performance Circulator Pumps, 
S. Putnam, 2017. Last accessed July 21, 2022. Available at https://deeresources.net/workpapers.
---------------------------------------------------------------------------

    For details on the consumer sample methodology, see chapter 7 of 
the NOPR TSD.
3. Operating Hours
    DOE developed annual operating hour estimates by sector 
(commercial, residential) and application (hydronic heating, hot water 
recirculation).
a. Hydronic Heating
    For hydronic heating applications in the residential sector, 
operating hours per year were estimated based on two sources: 2015 
confidential residential

[[Page 74877]]

field metering data from Vermont, and a 2012-2013 residential metering 
study in Ithaca, NY.\43\ DOE used the data from these metering data to 
establish a relationship between heating degree days (HDDs) and 
circulator pump operating hours. DOE correlated monthly operating hours 
with corresponding HDDs to annual operating hours. DOE then used the 
geographic distribution of consumers, as derived from the consumer 
sample, to estimate weighted-average HDDs for each region. For the 
residential sector, this scaling factor was 0.33 HPY/HDD. For the 
commercial sector, the CPWG recommended a scaling factor of 0.45 HPY/
HDD. (Docket No. EERE-2016-BT-STD-0004, No. 100 at pp. 122-123). The 
weighted average operating hours per year for the hydronic heating 
application were estimated at approximately 1,970 and 2,200 for the 
residential and commercial sector, respectively.
---------------------------------------------------------------------------

    \43\ Arena, L. and O. Faakye. Optimizing Hydronic System 
Performance in Residential Applications. 2013. U.S. Department of 
Energy Building Technologies Office. Last accessed July 21, 2022. 
https://www.nrel.gov/docs/fy14osti/60200.pdf.
---------------------------------------------------------------------------

b. Hot Water Recirculation
    For circulator pumps used in hot water recirculation applications, 
DOE developed operating hour estimates based on their associated 
control types (Docket No. EERE-2016-BT-STD-0004, No. 60 at p. 74), as 
shown in Table IV.8.

                     Table IV.8--Circulator Pump Operating Hours for Hot Water Recirculation
----------------------------------------------------------------------------------------------------------------
                                                                           Operating
           Control type                   Sector          Fraction of      hours per              Notes
                                                         consumers (%)       year
----------------------------------------------------------------------------------------------------------------
No Control.......................  Residential........              50           8,760  Constant Operation.
                                   Commercial.........
Timer............................  Residential........              25           7,300  50 operating constantly,
                                                                                         and 50 operating 16 hrs/
                                                                                         day.
                                   Commercial.                                   6,570  50 operating constantly
                                                                                         and 50 operating 12hrs/
                                                                                         day.
Aquastat.........................  Residential........              20           1,095  3 hrs per day.
                                   Commercial.........
On Demand........................  Residential........               5              61  10 minutes per day.*
                                   Commercial.                                     122  20 minutes per day.*
----------------------------------------------------------------------------------------------------------------
* Assuming that circulator pumps operate for 30 sec for each demand ``push''

    In the May 2021 RFI, DOE requested information on any updated or 
recent data sources to inform and validate the circulator pump 
operating hours in the residential and commercial sectors and across 
all applications, as well as any technology or market changes since the 
term sheet to warrant a different approach on the circulator pump 
operating hours.
    NEEA commented that DOE's analysis assumptions are still reasonable 
and provided information from a NEEA research study,\44\ which surveyed 
circulator pumps in hydronic heating applications. NEEA mentioned that 
the study's operating hour estimate, which, for residential hydronic 
heating systems, was 3,291 hours per year in the Pacific Northwest 
region, was substantially similar to those estimated by DOE for the 
same region. (NEEA, No. 115 at pp. 5-6). HI also mentioned the NEEA 
study and suggested that DOE evaluate the circulator pump operating 
hours approach based on recent studies and their expansion of control 
types within hot water recirculation (HI, No. 112 at p. 9). Grundfos 
commented that the operating hour estimates are generally accurate and 
that it was not aware of relevant studies (Grundfos, No. 113 at p. 9). 
Regarding specifically circulator pumps with on-demand controls, HI 
commented that there has not been a market change to warrant a 
different estimate (HI, No. 112 at p. 9), while Grundfos stated that 
the fraction of on[hyphen]demand controls is accurate (Grundfos, No. 
113 at p. 9).
---------------------------------------------------------------------------

    \44\ Cadeo Group. Extended Motor Products Savings Validation 
Research on Clean Water Pumps and Circulators. 2019. Northwest 
Energy Efficiency Alliance. Report No. E19-307. (Last accessed June 
23, 2022.) https://neea.org/resources/extended-motor-products-savings-validation-research-on-clean-water-pumps-and-circulators.
---------------------------------------------------------------------------

    DOE appreciates the data provided by NEEA and continues to use the 
same approach as presented in during the CPWG meetings for the hydronic 
heating application, and discussed earlier in this section. In 
addition, during the 2022 manufacturer interviews, with regard to the 
hot water recirculation application, manufacturers commented that there 
have been zero or negligible changes in market distribution of hot 
water recirculation control types. Therefore, DOE maintained the market 
breakdowns and operating hours (presented in Table IV.8) for this 
application.
4. Load Profiles
    To estimate the power consumption of each representative unit at 
each efficiency level, DOE used the following methodology: For each 
representative unit, DOE defined a range of typical system curves 
representing different piping and fluid configurations and bounded the 
representative unit's pump curve derived in the engineering analysis 
within those system curves. The upper and lower boundaries of this 
range of system curves correspond to a maximum (Qmax) and minimum 
(Qmin) value of volumetric flow. The value of (Qmax) is capped to 150% 
of BEP flow at most, while the value of the value of is capped to at 
least 25% of BEP flow.
    For single speed circulator pumps (ELs 0-2) in single zone 
applications, DOE-randomly selects a single operating point 
(Q0) within the boundaries of the system curves such that 
Q0 is between Qmin and Qmax. The AEU is then calculated by 
multiplying the power consumption at the volumetric flow Q0, 
as derived in the engineering analysis, by the annual operating hours.
    For variable-speed circulator pumps (ELs 3-4) in single-zone 
applications, similarly, DOE randomly selects a single operating point 
(Q0) within the boundaries of the system curves, such that 
Q0 is between Qmin and QmaxAfter the operating point is 
selected, the procedure to determine the AEU varies depending on the 
value of Q0: If the selected operating point (Q0) 
has a flow that is equal or higher than QBEP, the method is 
the same as the one for single speed circulator pumps in single zones. 
For operating points where Q0 < QBEP, DOE assumes that the 
circulator pump reduces its speed and operates at the intersection of 
the corresponding system curve and the control curve of each EL (dP or 
dT), at a flow Qx. The AEU is then calculated by multiplying the power 
consumption at the volumetric flow Qx, as derived in the engineering

[[Page 74878]]

analysis, by the annual operating hours, after adjusting the hours to 
maintain the same heat as Q0.
    For circulator pumps in multi-zone applications DOE modeled their 
operation by assuming that representative multi-zone systems have three 
zones, resulting in two additional operating points (Q- and Q+), which 
are equidistant from a randomly selected operating point, Q0, and are 
within the allowable operating flow (between (Qmin and Qmax) as defined 
by the representative unit's characteristic system curves. (Docket 
#0004, No. 61 at p. 88)
    For variable speed circulator pumps (ELs 3-4), DOE estimated the 
energy use from the variable speed controls assuming all shipments 
would be matched with end-use appliances that reflect variable speed 
field operation. DOE understands that some end-use appliances may not 
be able to respond to variable speed circulator pump controls and 
therefore, the variable speed control operation would not be realized 
in the field. DOE seeks comment on the fraction of the market that 
would not see the benefits of variable speed circulator pump controls 
in the field due to the limitations of the system.
    Chapter 7 of the NOPR TSD provides details on DOE's energy use 
analysis for circulator pumps.

F. Life-Cycle Cost and Payback Period Analysis

    DOE conducted LCC and PBP analyses to evaluate the economic impacts 
on individual consumers of potential energy conservation standards for 
circulator pumps. The effect of new or amended energy conservation 
standards on individual consumers usually involves a reduction in 
operating cost and an increase in purchase cost. DOE used the following 
two metrics to measure consumer impacts:
     The LCC is the total consumer expense of an appliance or 
product over the life of that product, consisting of total installed 
cost (manufacturer selling price, distribution chain markups, sales 
tax, and installation costs) plus operating costs (expenses for energy 
use, maintenance, and repair). To compute the operating costs, DOE 
discounts future operating costs to the time of purchase and sums them 
over the lifetime of the product.
     The PBP is the estimated amount of time (in years) it 
takes consumers to recover the increased purchase cost (including 
installation) of a more-efficient product through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
at higher efficiency levels by the change in annual operating cost for 
the year that amended or new standards are assumed to take effect.
    For any given efficiency level, DOE measures the change in LCC 
relative to the LCC in the no-new-standards case, which reflects the 
estimated efficiency distribution of circulator pumps in the absence of 
new energy conservation standards. In contrast, the PBP for a given 
efficiency level is measured relative to the baseline product.
    For each considered efficiency level in each product class, DOE 
calculated the LCC and PBP for a nationally representative set of 
commercial and residential consumers. As stated previously, DOE 
developed household samples from the 2015 RECS and the 2012 CBECS, for 
the residential and commercial sectors, respectively. For each sample 
consumer, DOE determined the energy consumption for circulator pumps 
and the appropriate energy price. By developing a representative sample 
of consumers, the analysis captured the variability in energy 
consumption and energy prices associated with the use of circulator 
pumps.
    Inputs to the calculation of total installed cost include the cost 
of the product--which includes MPCs, manufacturer markups, retailer and 
distributor markups, and sales taxes--and installation costs. Inputs to 
the calculation of operating expenses include annual energy 
consumption, energy prices and price projections, repair and 
maintenance costs, product lifetimes, and discount rates. DOE created 
distributions of values for product lifetime, discount rates, and sales 
taxes, with probabilities attached to each value, to account for their 
uncertainty and variability.
    The computer model DOE uses to calculate the LCC and PBP relies on 
a Monte Carlo simulation to incorporate uncertainty and variability 
into the analysis. The Monte Carlo simulations randomly sample input 
values from the probability distributions and consumer user samples. 
The model calculated the LCC and PBP for a sample of 10,000 consumers 
per simulation run. The analytical results include a distribution of 
10,000 data points showing the range of LCC savings. In performing an 
iteration of the Monte Carlo simulation for a given consumer, product 
efficiency is chosen based on its probability. By accounting for 
consumers who purchase more-efficient products in the no-new-standards 
case, DOE avoids overstating the potential benefits from increasing 
product efficiency.
    DOE calculated the LCC and PBP for all consumers of circulator 
pumps as if each were to purchase a new product in the expected year of 
required compliance with new or amended standards. As discussed in 
section III.G, new and amended standards would apply to circulator 
pumps manufactured 2 years after the date on which any new or amended 
standard is published. At this time, DOE estimates publication of a 
final rule in 2024. Therefore, for purposes of its analysis, DOE used 
2026 as the first year of compliance with standards for circulator 
pumps.
    Table IV.9 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 LCC model, and of all the 
inputs to the LCC and PBP analyses, are contained in chapter 8 of the 
NOPR TSD and its appendices.

Table IV.9--Summary of Inputs and Methods for the LCC and PBP Analysis *
------------------------------------------------------------------------
             Inputs                            Source/method
------------------------------------------------------------------------
Product Cost....................  Derived by multiplying MPCs by
                                   manufacturer and retailer markups and
                                   sales tax, as appropriate.
Installation Costs..............  Installation cost determined with data
                                   from RSMeans and CPWG input.
Annual Energy Use...............  Derived in energy use analysis. Varies
                                   by geographic location, control type,
                                   sector, and application.
Energy Prices...................  Based on 2021 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 AEO2022 price projections.
Repair and Maintenance Costs....  Varies by circulator pump variety.
Product Lifetime................  CP1: 10 years average; CP2: 15 years
                                   average; CP3 20 years average.
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.

[[Page 74879]]

 
Efficiency Distribution.........  Estimated based on manufacturer-
                                   provided data. An efficiency trend is
                                   applied for the no-standards case.
Compliance Date.................  2026.
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
  in the sections following the table or in chapter 8 of the NOPR TSD.

1. Product Cost
    To calculate consumer product costs, DOE multiplied the MPCs 
developed in the engineering analysis by the markups described 
previously (along with sales taxes). DOE used different markups for 
baseline products and higher-efficiency products, because DOE applies 
an incremental markup to the increase in MSP associated with higher-
efficiency products.
2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts associated with installing a circulator pump in the 
place of use. DOE derived installation costs for circulator pumps based 
on input from the CPWG and data from RSMeans.\45\ (Docket #0004, No. 67 
at p. 266)
---------------------------------------------------------------------------

    \45\ RSMeans. 2021 RSMeans Plumbing Cost Data. Rockland, MA. 
https://www.rsmeans.com.
---------------------------------------------------------------------------

    DOE assumed that circulator pumps without variable speed controls 
(ELs 0-2) require a labor time of 3 hours and an additional 30 minutes 
for circulator pumps with electronic controls (ELs 3 and 4). (Docket 
#0004, No. 67 at p. 266) RSMeans provides estimates on the labor hours 
and labor costs required to install equipment. In the NOPR, DOE derived 
the installation cost for circulator pumps as the product of labor 
hours and time required to install a circulator pump. Installation 
costs vary by geographic location and efficiency level. During the 2022 
manufacturer interviews, manufacturers agreed with DOE's approach to 
estimate installation costs. Annual Energy Consumption
    For each sampled consumer, DOE determined the energy consumption 
for a circulator pump at different efficiency levels using the approach 
described previously in section IV.E. of this document.
3. Annual Energy Consumption
    For each sampled consumer, DOE determined the AEU for a circulator 
pump at different efficiency levels using the approach described 
previously in section IV.E. of this document.
4. Energy Prices
    Because marginal electricity price more accurately captures the 
incremental savings associated with a change in energy use from higher 
efficiency, it provides a better representation of incremental change 
in consumer costs than average electricity prices. Therefore, DOE 
applied average electricity prices for the energy use of the product 
purchased in the no-new-standards case, and marginal electricity prices 
for the incremental change in energy use associated with the other 
efficiency levels considered.
    DOE derived electricity prices in 2021 using data from EEI Typical 
Bills and Average Rates reports. Based upon comprehensive, industry-
wide surveys, this semi-annual report presents typical monthly electric 
bills and average kilowatt-hour costs to the customer as charged by 
investor-owned utilities. For the residential sector, DOE calculated 
electricity prices using the methodology described in Coughlin and 
Beraki (2018).\46\ For the commercial sector, DOE calculated 
electricity prices using the methodology described in Coughlin and 
Beraki (2019).\47\
---------------------------------------------------------------------------

    \46\ Coughlin, K. and B. Beraki.2018. Residential Electricity 
Prices: A Review of Data Sources and Estimation Methods. Lawrence 
Berkeley National Lab. Berkeley, CA. Report No. LBNL-2001169. 
https://ees.lbl.gov/publications/residential-electricity-prices-review.
    \47\ Coughlin, K. and B. Beraki. 2019. Non-residential 
Electricity Prices: A Review of Data Sources and Estimation Methods. 
Lawrence Berkeley National Lab. Berkeley, CA. Report No. LBNL-
2001203. https://ees.lbl.gov/publications/non-residential-electricity-prices.
---------------------------------------------------------------------------

    DOE's methodology allows electricity prices to vary by sector, 
region and season. In the analysis, variability in electricity prices 
is chosen to be consistent with the way the consumer economic and 
energy use characteristics are defined in the LCC analysis.
    To estimate electricity prices in future years, DOE multiplied the 
2021 regional energy prices by a projection of annual change in 
national-average residential or commercial energy price from AEO2022, 
which has an end year of 2050.\48\ For each consumer sampled, DOE 
applied the projection for the geographic location in which the 
consumer was located. To estimate price trends after 2050, DOE assumed 
that the regional prices would remain at the 2050 value.
---------------------------------------------------------------------------

    \48\ U.S. Energy Information Administration. Annual Energy 
Outlook 2022. 2022. Washington, DC (Last accessed April 13, 2022.) 
https://www.eia.gov/outlooks/aeo/index.php.
---------------------------------------------------------------------------

    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. DOE also included AEO 
High Economic Growth and AEO Low Economic Growth scenarios in the 
analysis. The high- and low-growth cases show the projected effects of 
alternative economic growth assumptions on energy prices.
    For a detailed discussion of the development of electricity prices, 
see chapter 8 of the NOPR TSD.
5. Maintenance and Repair Costs
    Repair costs are associated with repairing or replacing product 
components that have failed in equipment; maintenance costs are 
associated with maintaining the operation of the equipment. Typically, 
small incremental increases in equipment efficiency produce no, or only 
minor, changes in repair and maintenance costs compared to baseline 
efficiency products.
    DOE assumed that only certain types of CP3 circulators require 
annual maintenance through oil lubrication. Based on CPWG feedback, DOE 
assumed that 50 percent of commercial consumers have a maintenance cost 
of $10 per year and 25 percent of residential consumers have a 
maintenance cost of $20 per year, which result in an overall $5 annual 
maintenance cost for CP3 circulators in each of the two applications. 
(Docket #0004, No. 47 at pp. 324-327)
    Repair costs consist of both labor and replacement part costs. DOE 
assumed that repair costs for CP1 circulators are negligible because 
consumers tend to discard such products when they fail. For CP2 and CP3 
circulator pumps, DOE assumed that repairs occur every 7 years. 
According to CPWG feedback and manufacturer interview input, typical 
repairs for CP2 and CP3 include seal replacements and coupler plus 
motor mount replacements, respectively. DOE assumed consistent labor 
time with installation costs, which is 3 hours for seal replacement and 
1.5 hours for coupler and motor mount replacement. Additionally, DOE 
assumes there is no variation in repair costs between a

[[Page 74880]]

baseline efficiency circulator and a higher efficiency circulator. 
During the 2022 manufacturer interviews, manufacturers agreed with 
DOE's approach to estimate maintenance and repair costs.
6. Product Lifetime
    Equipment lifetime is the age when a unit of circulator equipment 
is retired from service. DOE estimated lifetimes and developed lifetime 
distributions for circulator pumps primarily based on manufacturer 
interviews conducted in 2016 and CPWG feedback (Docket #0004, No. 37 at 
p. 74). The data collected by manufacturers allowed DOE to develop a 
survival function, which provides a distribution of lifetimes ranging 
from a minimum of 3 years based on warranty covered period, to a 
maximum of 50 years for CP1, CP2, or CP3 respectively. DOE assumed 
circulator lifetimes do not vary across efficiency levels. Table IV.10 
shows the average lifetimes by circulator variety.

Table IV.10--Average Circulator Pump Lifetime by Circulator Pump Variety
------------------------------------------------------------------------
                                                                Average
                   Circulator pump variety                     lifetime
                                                                (years)
------------------------------------------------------------------------
CP1.........................................................          10
CP2.........................................................          15
CP3.........................................................          20
------------------------------------------------------------------------

    During the 2022 manufacturer interviews, DOE solicited additional 
feedback from manufacturers on the lifetime assumptions presented in 
Table IV.10, and the general consensus was that there have not been 
significant technological changes to warrant a different estimate on 
the circulator pump lifetimes.
7. Discount Rates
    In the calculation of the LCC, DOE applies discount rates 
appropriate to residential and commercial consumers to estimate the 
present value of future operating cost savings. The subsections below 
provide information on the derivation of the discount rates by sector. 
See chapter 7 of the SNOPR TSD for further details on the development 
of discount rates.
a. Residential
    DOE applies weighted average discount rates calculated from 
consumer debt and asset data, rather than marginal or implicit discount 
rates.\49\ The LCC analysis 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 
analysis, 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.
---------------------------------------------------------------------------

    \49\ The implicit discount rate is inferred from a consumer 
purchase decision between two otherwise identical goods with 
different first cost and operating cost. It is the interest rate 
that equates the increment of first cost to the difference in net 
present value of lifetime operating cost, incorporating the 
influence of several factors: transaction costs; risk premiums and 
response to uncertainty; time preferences; interest rates at which a 
consumer is able to borrow or lend. The implicit discount rate is 
not appropriate for the LCC analysis because it reflects a range of 
factors that influence consumer purchase decisions, rather than the 
opportunity cost of the funds that are used in purchases.
---------------------------------------------------------------------------

    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 
from the Federal Reserve Board's Survey of Consumer Finances \50\ 
(``SCF'') for 1995, 1998, 2001, 2004, 2007, 2010, 2013, and 2019. 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 standards would take effect. DOE 
assigned each sample household a specific discount rate drawn from one 
of the distributions. The average rate across all types of household 
debt and equity and income groups, weighted by the shares of each type, 
is 4.0 percent.
---------------------------------------------------------------------------

    \50\ U.S. Board of Governors of the Federal Reserve System. 
Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010, 
2013, 2016, and 2019. (Last accessed June 22, 2022.) https://www.federalreserve.gov/econresdata/scf/scfindex.htm.
---------------------------------------------------------------------------

b. Commercial
    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 commercial 
discount rates, with Damadoran Online being the primary data 
source.\51\ The average discount rate across the commercial building 
types is 6.9 percent.
---------------------------------------------------------------------------

    \51\ Damodaran, A. Data Page: Historical Returns on Stocks, 
Bonds and Bills-United States. 2021. (Last accessed April 26, 2022.) 
https://pages.stern.nyu.edu/~adamodar/.
---------------------------------------------------------------------------

8. Energy Efficiency Distribution in the No-New-Standards Case
    To accurately estimate the share of consumers that would be 
affected by a potential energy conservation standard at a particular 
efficiency level, DOE's LCC analysis considered the projected 
distribution (market shares) of equipment efficiencies under the no-
new-standards case (i.e., the case without amended or new energy 
conservation standards).
    To estimate the energy efficiency distribution of circulator pumps 
for the assumed compliance year (2026), DOE first analyzed detailed 
confidential manufacturer shipments data from 2015, broken down by 
efficiency level, circulator variety, and nominal horsepower. During 
the 2016 manufacturer interviews, DOE also collected aggregated 
historical circulator pump efficiency data. Based on these data, DOE 
developed an efficiency trend between the year for which DOE had 
detailed data (2015) and the expected first year of compliance. 
According to CPWG feedback, DOE applied an efficiency trend from 
baseline (EL 0) circulator pumps to circulator pumps with ECMs (ELs 2-
4). (Docket #0004, No. 78 at p. 6)
    In the May 2021 RFI, DOE requested information on whether any 
changes in the circulator pump market since 2015 have affected the 
market efficiency distribution of circulator pumps. NEEA discussed 
their energy efficiency program for circulator pumps since mid 2020 and 
the circulator sales data collected from circulator manufacturer 
representatives covering the entire Northwest at the start of 2020. 
NEEA stated that more than two-thirds of circulator pumps sold by 
participants in the Northwest are not equipped with ECM. NEEA stated 
that fewer than one-fifth of circulator pumps are equipped with speed 
control technology. (NEEA, No. 115 at pp. 2-3, 6) HI stated that small 
incremental growth is occurring

[[Page 74881]]

for ECMs, but first cost is a barrier. (HI, No. 112 at p. 9-10) 
Grundfos suggested market changes have affected distribution of 
circulator pumps since 2015 and DOE should use manufacturer and market 
interviews to update their dataset. (Grundfos, No. 113 at p. 9)
    During the 2022 manufacturer interviews, DOE collected additional 
aggregated historical circulator pump efficiency data (ranging from 
2016 to 2021). Based on these data, DOE retained the methodology 
described earlier, but updated the efficiency trend, which was used to 
project the no-standards-case efficiency distribution at the assumed 
compliance year (2026) and beyond. See chapter 8 of the NOPR TSD for 
further information on the derivation of the efficiency distributions.
    DOE seeks comment on the approach and inputs used to develop no-new 
standards case efficiency distribution.
9. Payback Period Analysis
    The payback period is the amount of time it takes the consumer to 
recover the additional installed cost of more-efficient equipment, 
compared to baseline equipment, through energy cost savings. Payback 
periods are expressed in years. Payback periods that exceed the life of 
the equipment mean that the increased total installed cost is not 
recovered in reduced operating expenses.
    The inputs to the PBP calculation for each efficiency level are the 
change in total installed cost of the equipment and the change in the 
first-year annual operating expenditures relative to the baseline. The 
PBP calculation uses the same inputs as the LCC analysis, except that 
discount rates are not needed.
    As noted previously, EPCA 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 efficiency 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 standards would be 
required.

G. Shipments Analysis

    DOE uses projections of annual product shipments to calculate the 
national impacts of potential amended or new energy conservation 
standards on energy use, NPV, and future manufacturer cash flows.\52\ 
The shipments model takes an 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 operating costs for any 
year depend on the age distribution of the stock.
---------------------------------------------------------------------------

    \52\ 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.
---------------------------------------------------------------------------

    In the accounting approach, shipments are the result either of 
demand for the replacement of existing equipment, or of demand for 
equipment from new commercial and residential construction. 
Replacements in any projection year are based on (a) shipments in prior 
years, and (b) the lifetime of previously shipped equipment. Demand for 
new equipment is based on the rate of increase in commercial floor 
space (in the commercial sector), and residential housing (in the 
residential sector). In each year of shipments projections, retiring 
equipment is removed from a record of existing stock, and new shipments 
are added. DOE accounts for demand lost to demolitions (i.e., loss of 
circulator pumps that will not be replaced) by assuming that a small 
fraction of stock is retired without being replaced in each year, based 
on a derived demolition rate for each sector.
    DOE collected confidential historical shipments data for the period 
2013--2021 from manufacturer interviews held in 2016 (during the CPWG) 
and 2022. Shipments data provided by manufacturers were broken down by 
circulator variety, nominal horsepower rating, and efficiency. Table 
IV.11 presents historical circulator pumps shipments. Note that due to 
confidentiality concerns, DOE is only able to present aggregated 
circulator pump shipments.

            Table IV.11--Historical Circulator Pump Shipments
------------------------------------------------------------------------
                                                            Shipments
                         Year                            (million units)
------------------------------------------------------------------------
2013..................................................             1.676
2014..................................................             1.812
2015..................................................             1.848
2016..................................................             1.735
2017..................................................             1.788
2018..................................................             2.067
2019..................................................             1.883
2020..................................................             1.829
2021..................................................             2.193
------------------------------------------------------------------------

1. No-New-Standards Case Shipments Projections
    The no-new-standards case shipments projections are an estimate of 
how much of each equipment type would be shipped in the absence of any 
new or amended standard. DOE projected shipments in the no-new-
standards case by circulator pump variety (CP1, CP2, and CP3) as well 
as sector & application.
    In response to DOE's request for shipments data in the May 2021 
RFI, both Grundfos and HI recommended DOE conduct market interviews to 
collect relevant sales data (Grundfos, No. 113 at p. 9) (HI, No. 112 at 
p. 10). HI also added that in 2021, HI updated its statistics reporting 
to include circulator pumps as a category, but reporting is limited due 
confidentiality rules. (HI, No. 112 at p. 10)
    DOE also requested information on any market changes since 2015 
that would justify using market drivers and saturation trends that are 
different than those recommended by the CPWG. HI Commented that some 
areas of the market have started to move toward more controlled 
products (boiler OEMs, and where utility incentives are available). 
However, HI did not believe this has impacted the CPWGs recommendations 
(HI, No. 112 at p. 10). Grundfos estimated that the heating market 
growth is near 0.0% and the hot water recirculation market is well 
above 1%; and combined the market growth is near 1% (Grundfos, No. 113 
at p. 9).
    In the no-new-standards case, DOE assumes that demand for new 
installations would be met by CP1 circulator pumps alone. This is based 
on manufacturer feedback and historical shipments trends (see chapter 9 
of the NOPR TSD for details). New demand is based on AEO 2022\3\ 
projections of commercial floorspace & new construction (for demand to 
the commercial sector), and projections of residential housing stock & 
starts (for demand to the residential sector). DOE further assumes that 
over time, a decreasing amount of demand for

[[Page 74882]]

equipment in the hydronic heating application is met by circulator 
pumps. For each year in the analysis period (2026-2055), DOE assumes a 
2 percent reduction of new demand for circulator pumps in the hydronic 
heating application compared to the previous year, according to Census 
data on new heating systems.\53\
---------------------------------------------------------------------------

    \53\ Type of Heating System Used in New Single-Family Houses 
Completed. Available at https://www.census.gov/construction/chars/xls/heatsystem_cust.xls (Last accessed July 7, 2022).
---------------------------------------------------------------------------

    DOE assumed that demand for replacements would be met by circulator 
pumps of the same variety (e.g., CP2 only replaced by CP2) in each 
sector and application. After calculating retirements of existing pumps 
based on those previously shipped and equipment lifetimes, DOE assumes 
that some of this quantity will not be replaced due to demolition. DOE 
estimates the demolition rate of existing equipment stock by using the 
AEO 2022 projections of new commercial floorspace and floorspace growth 
in the commercial sector, and new housing starts and housing stock in 
the residential sector.
    DOE seeks comment on the approach and inputs used to develop no-new 
standards case shipments projections.
2. Standards-Case Shipment Projections
    The standards-case shipments projections account for the effects of 
potential standards on shipments. DOE assumed a ``roll-up'' scenario to 
estimate standards-case shipments, wherein the no-new-standards-case 
shipments that would be below a candidate equipment standard beginning 
in an assumed compliance year (2026) are ``rolled up'' to the minimum 
qualifying equipment efficiency level at that candidate standard.
    DOE seeks comment on the approach and inputs used to develop the 
different standards case shipments projections.
    See chapter 9 of the NOPR TSD for details on the shipments 
analysis.

H. National Impact Analysis

    The NIA assesses the NES and the NPV from a national perspective of 
total consumer costs and savings that would be expected to result from 
new or amended standards at specific efficiency levels.\54\ 
(``Consumer'' in this context refers to consumers of the product being 
regulated.) DOE calculates the NES and NPV for the potential standard 
levels considered based on projections of annual equipment shipments, 
along with the annual energy consumption and total installed cost data 
from the energy use and LCC analyses. For the present analysis, DOE 
projected the energy savings, operating cost savings, product costs, 
and NPV of consumer benefits over the lifetime of circulator pumps sold 
from 2026 through 2055.
---------------------------------------------------------------------------

    \54\ The NIA accounts for impacts in the 50 states and U.S. 
territories.
---------------------------------------------------------------------------

    DOE evaluates the impacts of new or amended standards by comparing 
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each 
product class in the absence of new or amended energy conservation 
standards. For this projection, DOE considers historical trends in 
efficiency and various forces that are likely to affect the mix of 
efficiencies over time. DOE compares the no-new-standards case with 
projections characterizing the market for each product class if DOE 
adopted new or amended standards at specific energy efficiency levels 
(i.e., the TSLs or standards cases) for that class. For the standards 
cases, DOE considers how a given standard would likely affect the 
market shares of products with efficiencies greater than the standard.
    In response to the May 2021 RFI, HI and Grundfos recommends DOE 
include current market data in their analyses. (HI, No. 112 at p. 7; 
Grundfos, No. 113 at p. 6) Updated market data was collected during the 
2022 manufacturer interviews. However, the data suggest similar ranges 
of efficiencies are available in market, so 2016 performances remained 
with costs updated for inflation.
    DOE uses a model coded in the Python programming language to 
calculate the energy savings and the national consumer costs and 
savings from each TSL and presents the results in the form of a 
spreadsheet. Interested parties can review DOE's analyses by changing 
various input quantities within the spreadsheet. The NIA 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 NOPR. Discussion of these inputs and methods follows 
the table. See chapter 10 of the NOPR TSD for further details.

   Table IV.12--Summary of Inputs and Methods for the National Impact
                                Analysis
------------------------------------------------------------------------
              Inputs                               Method
------------------------------------------------------------------------
Shipments.........................  Annual shipments from shipments
                                     model.
Compliance Date of Standard.......  2026.
Efficiency Trends.................  Applied efficiency trend based on
                                     historical efficiency data
Annual Energy Consumption per Unit  Annual weighted-average values are a
                                     function of energy use at each TSL.
Total Installed Cost per Unit.....  Annual weighted-average values are a
                                     function of cost at each
                                     TSL.Incorporates projection of
                                     future product prices based on
                                     historical data.
Annual Energy Cost per Unit.......  Annual weighted-average values as a
                                     function of the annual energy
                                     consumption per unit and energy
                                     prices.
Repair and Maintenance Cost per     Annual values do not change with
 Unit.                               efficiency level.
Energy Price Trends...............  AEO2022 projections (to 2050) and
                                     constant after 2050.
Energy Site-to-Primary and FFC      A time-series conversion factor
 Conversion.                         based on AEO2022.
Discount Rate.....................  3 percent and 7 percent.
Present Year......................  2021.
------------------------------------------------------------------------

1. Equipment Efficiency Trends
    A key component of the NIA is the trend in energy efficiency 
projected for the no-new-standards case and each of the standards 
cases. Section IV.F.8 of this document describes how DOE developed an 
energy efficiency distribution for the no-new-standards case (which 
yields a shipment-weighted average efficiency) for the year of 
anticipated compliance with an amended or new standard. To project the 
trend in efficiency absent standards for circulator pumps over the 
entire shipments projection period, DOE followed the approach discussed 
in section IV.F.8 of this document. The

[[Page 74883]]

approach is further described in chapter 8 of the NOPR TSD.
    For the standards cases, DOE used a ``roll-up'' scenario to 
establish the shipment-weighted efficiency for the year that standards 
are assumed to become effective (2026). In this scenario, the market 
shares of products in the no-new-standards case that do not meet the 
standard under consideration would ``roll up'' to meet the new standard 
level, and the market share of products above the standard would remain 
unchanged.
2. National Energy Savings
    The national energy savings analysis involves a comparison of 
national energy consumption of the considered products between each 
potential standards case (``TSL'') and the case with no new or amended 
energy conservation standards. DOE calculated the national energy 
consumption by multiplying the number of units (stock) of each product 
(by vintage or age) by the unit energy consumption (also by vintage). 
DOE calculated annual NES based on the difference in national energy 
consumption for the no-new standards case and for each higher 
efficiency standard case. DOE estimated energy consumption and savings 
based on site energy and converted the electricity consumption and 
savings to primary energy (i.e., the energy consumed by power plants to 
generate site electricity) using annual conversion factors derived from 
AEO2022. Cumulative energy savings are the sum of the NES for each year 
over the timeframe of the analysis.
    Use of higher-efficiency equipment is occasionally associated with 
a direct rebound effect, which refers to an increase in utilization of 
the product due to the increase in efficiency. DOE did not find any 
data on the rebound effect specific to circulator pumps, and therefore 
did not apply a rebound effect in the calculation of the NES and the 
NPV.
    DOE requests comment on the rebound effect specifically for 
circulator pumps, including the magnitude of any rebound effect and 
data sources specific to circulator pumps.
    In 2011, in response to the recommendations of a committee on 
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy 
Efficiency Standards'' appointed by the National Academy of Sciences, 
DOE announced its intention to use 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 (Aug. 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 (Aug. 17, 2012). NEMS is a public domain, 
multi-sector, partial equilibrium model of the U.S. energy sector \55\ 
that EIA uses to prepare its Annual Energy Outlook. The FFC factors 
incorporate losses in production and delivery in the case of natural 
gas (including fugitive emissions) and additional energy used to 
produce and deliver the various fuels used by power plants. The 
approach used for deriving FFC measures of energy use and emissions is 
described in appendix 10B of the NOPR TSD.
---------------------------------------------------------------------------

    \55\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009. 
Available at www.eia.gov/forecasts/aeo/index.cfm (last accessed July 
7, 2022).
---------------------------------------------------------------------------

3. Net Present Value Analysis
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers are (1) total annual installed cost, (2) total 
annual operating costs (energy costs and repair and maintenance 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 projection period.
    Due to lack of historical price data and uncertainty on the factors 
that may affect future circulator pump prices, DOE assumed a constant 
price (in $2021) when estimating circulator pump prices in future 
years.
    The operating cost savings are energy cost savings and costs 
associated with repair and maintenance, which are calculated using the 
estimated operating cost savings in each year and the projected price 
of the appropriate form of energy. To estimate energy prices in future 
years, DOE multiplied the average regional energy prices by the 
projection of annual national-average commercial and residential energy 
price changes in the Reference case from AEO2022, which has an end year 
of 2050. To estimate price trends after 2050, DOE used the average 
annual rate of change in prices from 2020 through 2050. As part of the 
NIA, DOE also analyzed scenarios that used inputs from variants of the 
AEO2022 Reference case that have lower and higher economic growth. 
Those cases have lower and higher energy price trends compared to the 
Reference case. NIA results based on these cases are presented in 
appendix 10C of the NOPR TSD.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
NOPR, DOE estimated the NPV of consumer benefits using both a 3-percent 
and a 7-percent real discount rate. DOE uses these discount rates in 
accordance with guidance provided by the Office of Management and 
Budget (``OMB'') to Federal agencies on the development of regulatory 
analysis.\56\ 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.
---------------------------------------------------------------------------

    \56\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last accessed July 3, 2022).
---------------------------------------------------------------------------

I. Consumer Subgroup Analysis

    In analyzing the potential impact of new or amended energy 
conservation standards on consumers, DOE evaluates the impact on 
identifiable subgroups of consumers that may be disproportionately 
affected by a new or amended national standard. The purpose of a 
subgroup analysis is to determine the extent of any such 
disproportional impacts. DOE evaluates impacts on particular subgroups 
of consumers by analyzing the LCC impacts and PBP for those particular 
consumers from alternative standard levels. For this NOPR, DOE analyzed 
the impacts of the considered standard levels on senior-only 
households. The analysis used subsets of the RECS 2015 sample composed 
of households that meet the criteria for seniors. DOE used the LCC and 
PBP model to estimate the impacts of the considered efficiency levels 
on seniors. Chapter 11 in the NOPR TSD describes the consumer subgroup 
analysis.

[[Page 74884]]

J. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the financial impacts of energy 
conservation standards on manufacturers of circulator pumps and to 
estimate the potential impacts of such standards on employment and 
manufacturing capacity. The MIA has both quantitative and qualitative 
aspects and includes analyses of projected industry cash flows, the 
INPV, investments in research and development (``R&D'') and 
manufacturing capital, and domestic manufacturing employment. 
Additionally, the MIA seeks to determine how energy conservation 
standards might affect manufacturing employment, capacity, and 
competition, as well as how standards contribute to overall regulatory 
burden. Finally, the MIA serves to identify any disproportionate 
impacts on manufacturer subgroups, including small business 
manufacturers.
    The quantitative part of the MIA primarily relies on the Government 
Regulatory Impact Model (``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 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 model uses 
standard accounting principles to estimate the impacts of more-
stringent energy conservation standards on a given industry by 
comparing changes in INPV and domestic manufacturing employment between 
a no-new-standards case and the various standards cases (i.e., TSLs). 
To capture the uncertainty relating to manufacturer pricing strategies 
following standards, the GRIM estimates a range of possible impacts 
under different markup scenarios.
    The qualitative part of the MIA addresses manufacturer 
characteristics and market trends. Specifically, the MIA considers such 
factors as a potential standard's impact on manufacturing capacity, 
competition within the industry, the cumulative impact of other DOE and 
non-DOE regulations, and impacts on manufacturer subgroups. The 
complete MIA is outlined in chapter 12 of the NOPR TSD.
    DOE conducted the MIA for this rulemaking in three phases. In Phase 
1 of the MIA, DOE prepared a profile of the circulator pump 
manufacturing industry based on the market and technology assessment 
and publicly available information. This included a top-down analysis 
of circulator pump manufacturers that DOE used to derive preliminary 
financial inputs for the GRIM (e.g., revenues; materials, labor, 
overhead, and depreciation expenses; selling, general, and 
administrative expenses (``SG&A''); and R&D expenses). DOE also used 
public sources of information to further calibrate its initial 
characterization of the circulator pump manufacturing industry, 
including company filings of form 10-K from the SEC,\57\ corporate 
annual reports, the U.S. Census Bureau's Economic Census, \58\ and 
reports from D&B Hoovers.\59\
---------------------------------------------------------------------------

    \57\ U.S. Securities and Exchange Commission, Annual 10-K 
Reports (Various Years) available at sec.gov (Last accessed June 
15th, 2022).
    \58\ U.S. Census Bureau, 2018-2020 Annual Survey of 
Manufacturers: Statistics for Industry Groups and Industries (2021) 
available at www.census.gov/programs-surveys/asm.html (Last accessed 
June 15th, 2022).
    \59\ D&B Hoovers available at www.dnb.com (Last Accessed June 
15th, 2022).
---------------------------------------------------------------------------

    In Phase 2 of the MIA, DOE prepared a framework industry cash-flow 
analysis to quantify the potential impacts of energy conservation 
standards. The GRIM uses several factors to determine a series of 
annual cash flows starting with the announcement of the standard and 
extending over a 30-year period following the compliance date of the 
standard. 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.
    In addition, during Phase 2, DOE developed interview guides to 
distribute to manufacturers of circulator pumps in order to develop 
other key GRIM inputs, including product and capital conversion costs, 
and to gather additional information on the anticipated effects of 
energy conservation standards on revenues, direct employment, capital 
assets, industry competitiveness, and subgroup impacts.
    In Phase 3 of the MIA, DOE conducted structured, detailed 
interviews (i.e., 2016 and 2022 manufacturer interviews) with 
representative manufacturers. During these interviews, DOE discussed 
engineering, manufacturing, procurement, and financial topics to 
validate assumptions used in the GRIM and to identify key issues or 
concerns. See section IV.J.3 of this document for a description of the 
key issues raised by manufacturers during the interviews. As part of 
Phase 3, DOE also evaluated subgroups of manufacturers that may be 
disproportionately impacted by standards or that may not be accurately 
represented by the average cost assumptions used to develop the 
industry cash flow analysis. Such manufacturer subgroups may include 
small business manufacturers, low-volume manufacturers (``LVMs''), 
niche players, and/or manufacturers exhibiting a cost structure that 
largely differs from the industry average. DOE identified one subgroup 
for a separate impact analysis: small business manufacturers. The small 
business subgroup is discussed in section VI.B, ``Review under the 
Regulatory Flexibility Act'' and in chapter 12 of the NOPR TSD.
2. Government Regulatory Impact Model and Key Inputs
    DOE uses the GRIM to quantify the changes in cash flow due to 
standards that result in a higher or lower industry value. The GRIM 
uses a standard, annual discounted cash-flow analysis that incorporates 
manufacturer costs, markups, shipments, and industry financial 
information as inputs. The GRIM models changes in costs, distribution 
of shipments, investments, and manufacturer margins that could result 
from an energy conservation standard. The GRIM spreadsheet uses the 
inputs to arrive at a series of annual cash flows, beginning in 2022 
(the base year of the analysis) and continuing to 2055. DOE calculated 
INPVs by summing the stream of annual discounted cash flows during this 
period. For manufacturers of circulator pumps, DOE used a real discount 
rate of 9.6 percent, which was derived from industry financials and 
then modified according to feedback received during manufacturer 
interviews.
    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 the energy 
conservation standard on manufacturers. As discussed previously, DOE 
developed critical GRIM inputs using a number of sources, including 
publicly available

[[Page 74885]]

data, results of the engineering analysis, and information gathered 
from industry stakeholders during the course of manufacturer interviews 
and subsequent Working Group meetings. The GRIM results are presented 
in section V.B.2. Additional details about the GRIM, the discount rate, 
and other financial parameters can be found in chapter 12 of the NOPR 
TSD.
a. Manufacturer Production Costs
    Manufacturing more efficient equipment is typically more expensive 
than manufacturing baseline equipment due to the use of more complex 
components, which are typically more costly than baseline components. 
The changes in the MPCs of covered equipment can affect the revenues, 
gross margins, and cash flow of the industry. MPCs were derived in the 
engineering analysis, using methods discussed in section IV.C.3 of this 
document. For a complete description of the MPCs, see chapter 5 of the 
NOPR TSD.
b. Shipments Projections
    The GRIM estimates manufacturer revenues based on total unit 
shipment projections and the distribution of those shipments by 
efficiency level. 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 derived from the 
shipments analysis from 2022 (the base year) to 2055 (the end year of 
the analysis period). See chapter 9 of the NOPR TSD for additional 
details.
c. Product and Capital Conversion Costs
    Energy conservation standards could cause manufacturers to incur 
conversion costs to bring their production facilities and equipment 
designs into compliance. DOE evaluated the level of conversion-related 
expenditures that would be needed to comply with each considered 
efficiency level in each product class. 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 
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. Due to differences in design and 
manufacturing processes, DOE evaluated conversion costs by circular 
pump variety: CP1, CP2, and CP3.
    To evaluate the level of product conversion costs manufacturers 
would likely incur to comply with energy conservation standards, DOE 
estimated the number of basic models that manufacturers would have to 
re-design to move their equipment lines to each incremental efficiency 
level. DOE developed the product conversion costs by estimating the 
amount of labor per basic model manufacturers would need for research 
and development to raise the efficiency of models to each incremental 
efficiency level. DOE anticipates that manufacturer basic model counts 
would decrease with use of ECMs due to the greater range of 
applications served by one ECM as opposed to an induction motor. DOE 
also assumed manufacturers would incur testing costs to establish 
certified ratings using DOE's test procedure for circulator pumps and 
applying DOE's statistical sampling plans to assess compliance.
    For circulator pumps, DOE estimated the re-design effort varies by 
efficiency level. At EL 1, DOE anticipates a minor redesign effort as 
manufacturers increase their breadth of offerings to meet a standard at 
this level. DOE estimated a redesign effort of 18 months of engineering 
labor and 9 months of technician labor per model at this level. At EL 
2, DOE anticipates manufacturers to integrate ECMs into their 
circulator pumps. This requires a significant amount of re-design as 
manufacturers transition from legacy AC induction motors to ECMs. DOE 
estimated a redesign effort of 35 months of engineering labor and 18 
months of technician labor per model. At EL 3 and EL 4, DOE anticipates 
manufacturers to incur additional control board redesign costs as 
manufacturers add controls (e.g., proportional pressure controls). DOE 
estimated a redesign effort of 54 months of engineering labor and 35 
months of technician labor per model at EL 3. DOE estimated a redesign 
effort of 54 months of engineering labor and 54 months of technician 
labor per model at EL 4.
    To evaluate the level of capital conversion costs manufacturers 
would likely incur to comply with energy conservation standards, DOE 
used information derived from the engineering analysis, shipments 
analysis, and manufacturer interviews. DOE used the information to 
estimate the additional investments in property, plant, and equipment 
that are necessary to meet energy conservation standards. In the 
engineering analysis evaluation of higher efficiency equipment from 
leading manufacturers of circulator pumps, DOE found a range of designs 
and manufacturing approaches. DOE attempted to account for both the 
range of manufacturing pathways and the current efficiency distribution 
of shipments in the modeling of industry capital conversion costs.
    For all circulator pump varieties, DOE estimates capital conversion 
costs are driven by the cost for industry to expand production capacity 
at efficiency levels requiring use of an ECM (i.e., EL 2, EL 3, and EL 
4). DOE anticipates capital investments to be similar among EL 2 
through EL 4 as circulator pump controls are likely to be used to 
increase a circulator pump beyond EL 2 and pump controls do not require 
additional capital investments. At all ELs, DOE anticipates 
manufacturers will incur costs to expand production capacity of more 
efficient equipment.
    For CP1 type circular pumps, DOE anticipates manufacturers would 
choose to assemble ECMs in-house. As such, the capital conversion cost 
estimates for CP1 type circulator pumps include, but were not limited 
to, capital investments in welding and bobbin tooling, magnetizers, 
winders, lamination dies, testing equipment, and additional 
manufacturing floor space requirements.
    For CP2 and CP3 type circular pumps, DOE anticipates manufacturers 
would purchase ECMs as opposed to assembling in-house. As such, DOE 
estimated the design changes to produce circulator pumps with ECMs 
would be driven by purchased parts (i.e., ECMs). The capital conversion 
costs for these variety of circulator pumps are based on additional 
manufacturing floor space requirements to expand manufacturing capacity 
of ECMs.
    In general, DOE assumes all conversion-related investments occur 
between the year of publication of the final rule and the year by which 
manufacturers must comply with the new standard. The conversion cost 
figures used in the GRIM can be found in Table IV.13 and section V.B.2 
of this document. For additional information on the estimated capital 
and product conversion costs, see chapter 12 of the NOPR TSD.

[[Page 74886]]



                 Table IV.13--Industry Product and Capital Conversion Costs per Efficiency Level
----------------------------------------------------------------------------------------------------------------
                                                                                   Efficiency level
                                                     Units           -------------------------------------------
                                                                         EL1        EL2        EL3        EL4
----------------------------------------------------------------------------------------------------------------
EL 1....................................  EL 2......................       EL 3       EL 4
Product Conversion Costs................  2021$ millions............        5.4       54.7       88.8       89.5
Capital Conversion Costs................  2021$ millions............        0.0       22.3       22.3       22.3
----------------------------------------------------------------------------------------------------------------

    DOE seeks input on its estimates of product and capital conversion 
costs associated with manufacturing circulator pumps at the potential 
energy conservation standard.
d. Markup Scenarios
    MSPs include direct manufacturing production costs (i.e., labor, 
materials, and overhead estimated in DOE's MPCs) and all non-production 
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate 
the MSPs in the GRIM, DOE applied non-production cost markups to the 
MPCs estimated in the engineering analysis for each product class and 
efficiency level. Modifying these markups in the standards case yields 
different sets of impacts on manufacturers. For the MIA, DOE modeled 
two standards-case markup scenarios to represent uncertainty regarding 
the potential impacts on prices and profitability for manufacturers 
following the implementation of energy conservation standards: (1) a 
preservation of manufacturer markup scenario; and (2) a preservation of 
per-unit operating profit markup scenario. These scenarios lead to 
different markup values that, when applied to the MPCs, result in 
varying revenue and cash flow impacts.
    Under the preservation of manufacturer markup scenario, DOE applied 
a single uniform manufacturer markup across all efficiency levels for 
each circulator variety, which assumes that manufacturers would be able 
to maintain the same amount of profit as a percentage of revenues at 
all efficiency levels. As MPCs increase with efficiency, this scenario 
implies that the absolute dollar markup will increase.
    To estimate the average manufacturer markup used in the 
preservation of manufacturer markup scenario, DOE analyzed publicly 
available financial information for manufacturers of circulator pump 
equipment. DOE then requested feedback on its initial markup estimates 
during manufacturer interviews. The revised markups, which are used in 
DOE's quantitative analysis of industry financial impacts, are 
presented in Table IV.14. These markups capture all non-production 
costs, including SG&A expenses, R&D expenses, interest expenses, and 
profit.

   Table IV.14--Manufacturer Markups for Preservation of Manufacturer
                             Markup Scenario
------------------------------------------------------------------------
                                                           Manufacturer
                 Circulator pump variety                      markup
------------------------------------------------------------------------
CP1.....................................................            1.60
CP2.....................................................            2.30
CP3.....................................................            1.90
------------------------------------------------------------------------

    Under the preservation of per-unit operating profit markup 
scenario, DOE modeled a situation in which manufacturers are not able 
to increase per-unit operating profit in proportion to increases in 
manufacturer production costs. In this scenario, manufacturer markups 
are set so that operating profit one year after the compliance date of 
energy conservation standards is the same as in the no-new-standards 
case on a per-unit basis. In other words, manufacturers are not able to 
garner additional operating profit from the higher production costs and 
the investments that are required to comply with the standards; 
however, they are able to maintain the same per-unit operating profit 
in the standards case that was earned in the no-new-standards case. 
Therefore, operating margin in percentage terms is reduced between the 
no-new-standards case and standards case.
    A comparison of industry financial impacts under the two markup 
scenarios is presented in section V.B.2 of this document.
3. Manufacturer Interviews
    Throughout the rulemaking process, DOE has sought and continues to 
seek feedback and insight from interested parties that would improve 
the information in this process. DOE interviewed manufacturers as part 
of the NOPR analysis. In interviews, DOE asked manufacturers to 
describe their major concerns regarding this rulemaking. The following 
section highlights manufacturer concerns that helped inform the 
projected potential impacts of energy conservation standards on the 
industry. Manufacturer interviews are conducted under non-disclosure 
agreements (``NDAs''), so DOE does not document these discussions in 
the same way that it does public comments in the comment summaries and 
DOE's responses throughout the rest of this document. This section 
includes a list of the key issues manufacturers identified during the 
interview process.
a. Cost Increases and Component Shortages
    Manufacturers highlighted difficulties in procurement of parts and 
purchased assemblies. Manufacturers noted that increases in raw 
material prices, escalating shipping and transportation costs, and 
limited component availability over the last two years affect 
manufacturer production costs. As a result, manufacturers were 
concerned that cost estimates based on historic 5-year averages would 
underestimate current production costs.
b. Motor Availability
    Some manufacturers raised concerns that there could be procurement 
issues associated with a standard necessitating the use of an ECM. 
Manufacturers noted that there are few ECM suppliers. Additionally, 
manufacturers noted that there is less ECM variety compared to 
induction motors, and this could add additional complexities to 
researching and developing circulator pumps with properly sized ECMs. 
This issue is particularly exacerbated for CP2 and CP3 varieties where 
manufacturers indicated they may be more inclined to purchase ECMs as 
opposed to manufacturing in-house.
c. Timing of Standard
    Some manufacturers emphasized that significant engineering and 
development resources would be required to transition to a standard 
requiring use of an ECM. Specifically, manufacturers noted that any 
transition to a standard requiring an ECM would need to be timed to 
accommodate the research and design of a full portfolio of circulator 
pumps to fit all applications while serving current market needs. As 
noted in discussed in detail in section III.G, this NOPR is proposing 
to adopt a 2-year compliance date for energy

[[Page 74887]]

conservation standards; however, DOE may also consider a 3-year 
compliance date.

K. Emissions Analysis

    The emissions analysis consists of two components. The first 
component estimates the effect of potential energy conservation 
standards on power sector and site (where applicable) combustion 
emissions of CO2, NOX, SO2, and Hg. 
The second component estimates the impacts of potential standards on 
emissions of two additional greenhouse gases, CH4 and 
N2O, as well as the reductions to emissions of other gases 
due to ``upstream'' activities in the fuel production chain. These 
upstream activities comprise extraction, processing, and transporting 
fuels to the site of combustion.
    The analysis of electric power sector emissions of CO2, 
NOX, SO2, and Hg uses emissions factors intended 
to represent the marginal impacts of the change in electricity 
consumption associated with amended or new standards. The methodology 
is based on results published for the AEO, including a set of side 
cases that implement a variety of efficiency-related policies. The 
methodology is described in appendix 13A in the NOPR TSD. The analysis 
presented in this notice uses projections from AEO2022. Power sector 
emissions of CH4 and N2O from fuel combustion are 
estimated using Emission Factors for Greenhouse Gas Inventories 
published by the Environmental Protection Agency (EPA).\60\
---------------------------------------------------------------------------

    \60\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed July 12, 
2021).
---------------------------------------------------------------------------

    FFC upstream emissions, which include emissions from fuel 
combustion during extraction, processing, and transportation of fuels, 
and ``fugitive'' emissions (direct leakage to the atmosphere) of 
CH4 and CO2, are estimated based on the 
methodology described in chapter 15 of the NOPR TSD.
    The emissions intensity factors are expressed in terms of physical 
units per MWh or MMBtu of site energy savings. For power sector 
emissions, specific emissions intensity factors are calculated by 
sector and end use. Total emissions reductions are estimated using the 
energy savings calculated in the national impact analysis.
1. Air Quality Regulations Incorporated in DOE's Analysis
    DOE's no-new-standards case for the electric power sector reflects 
the AEO, which incorporates the projected impacts of existing air 
quality regulations on emissions. AEO2022 generally represents current 
legislation and environmental regulations, including recent government 
actions, that were in place at the time of preparation of AEO2022, 
including the emissions control programs discussed in the following 
paragraphs.\61\
---------------------------------------------------------------------------

    \61\ For further information, see the Assumptions to AEO2022 
report that sets forth the major assumptions used to generate the 
projections in the Annual Energy Outlook. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed June 21, 2022).
---------------------------------------------------------------------------

    SO2 emissions from affected electric generating units 
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions 
cap on SO2 for affected EGUs in the 48 contiguous States and 
the District of Columbia (DC). (42 U.S.C. 7651 et seq.) SO2 
emissions from numerous States in the eastern half of the United States 
are also limited under the Cross-State Air Pollution Rule (``CSAPR''). 
76 FR 48208 (Aug. 8, 2011). CSAPR requires these States to reduce 
certain emissions, including annual SO2 emissions, and went 
into effect as of January 1, 2015.\62\ AEO2022 incorporates 
implementation of CSAPR, including the update to the CSAPR ozone season 
program emission budgets and target dates issued in 2016. 81 FR 74504 
(Oct. 26, 2016). Compliance with CSAPR is flexible among EGUs and is 
enforced through the use of tradable emissions allowances. Under 
existing EPA regulations, any excess SO2 emissions 
allowances resulting from the lower electricity demand caused by the 
adoption of an efficiency standard could be used to permit offsetting 
increases in SO2 emissions by another regulated EGU.
---------------------------------------------------------------------------

    \62\ CSAPR requires states to address annual emissions of 
SO2 and NOX, precursors to the formation of 
fine particulate matter (PM2.5) pollution, in order to 
address the interstate transport of pollution with respect to the 
1997 and 2006 PM2.5 National Ambient Air Quality 
Standards (``NAAQS''). CSAPR also requires certain states to address 
the ozone season (May-September) emissions of NOX, a 
precursor to the formation of ozone pollution, in order to address 
the interstate transport of ozone pollution with respect to the 1997 
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a 
supplemental rule that included an additional five states in the 
CSAPR ozone season program; 76 FR 80760 (Dec. 27, 2011) 
(Supplemental Rule), and EPA issued the CSAPR Update for the 2008 
ozone NAAQS. 81 FR 74504 (Oct. 26, 2016).
    1 In Sept. 2019, the D.C. Court of Appeals remanded the 2016 
CSAPR Update to EPA. In April 2021, EPA finalized the 2021 CSAPR 
Update which resolved the interstate transport obligations of 21 
states for the 2008 ozone NAAQS. 86 FR 23054 (April 30, 2021); see 
also, 86 FR 29948 (June 4, 2021) (correction to preamble). The 2021 
CSAPR Update became effective on June 29, 2021.
---------------------------------------------------------------------------

    However, beginning in 2016, SO2 emissions began to fall 
as a result of the Mercury and Air Toxics Standards (``MATS'') for 
power plants. 77 FR 9304 (Feb. 16, 2012). In the MATS final rule, EPA 
established a standard for hydrogen chloride as a surrogate for acid 
gas hazardous air pollutants (``HAP''), and also established a standard 
for SO2 (a non-HAP acid gas) as an alternative equivalent 
surrogate standard for acid gas HAP. The same controls are used to 
reduce HAP and non-HAP acid gas; thus, SO2 emissions are 
being reduced as a result of the control technologies installed on 
coal-fired power plants to comply with the MATS requirements for acid 
gas. In order to continue operating, coal power plants must have either 
flue gas desulfurization or dry sorbent injection systems installed. 
Both technologies, which are used to reduce acid gas emissions, also 
reduce SO2 emissions. Because of the emissions reductions 
under the MATS, it is unlikely that excess SO2 emissions 
allowances resulting from the lower electricity demand would be needed 
or used to permit offsetting increases in SO2 emissions by 
another regulated EGU. Therefore, energy conservation standards that 
decrease electricity generation would generally reduce SO2 
emissions. DOE estimated SO2 emissions reduction using 
emissions factors based on AEO2022.
    CSAPR also established limits on NOX emissions for 
numerous States in the eastern half of the United States. Energy 
conservation standards would have little effect on NOX 
emissions in those States covered by CSAPR emissions limits if excess 
NOX emissions allowances resulting from the lower 
electricity demand could be used to permit offsetting increases in 
NOX emissions from other EGUs. In such case, NOX 
emissions would remain near the limit even if electricity generation 
goes down. A different case could possibly result, depending on the 
configuration of the power sector in the different regions and the need 
for allowances, such that NOX emissions might not remain at 
the limit in the case of lower electricity demand. In this case, energy 
conservation standards might reduce NOX emissions in covered 
States. Despite this possibility, DOE has chosen to be conservative in 
its analysis and has maintained the assumption that standards will not 
reduce NOX emissions in States covered by CSAPR. Energy 
conservation standards would be expected to reduce NOX 
emissions in the States not covered by CSAPR. DOE used AEO2022 data to 
derive NOX

[[Page 74888]]

emissions factors for the group of States not covered by CSAPR.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would be expected to slightly reduce Hg emissions. DOE 
estimated mercury emissions reduction using emissions factors based on 
AEO2022, which incorporates the MATS.

L. Monetizing Emissions Impacts

    As part of the development of this proposed rule, for the purpose 
of complying with the requirements of Executive Order 12866, DOE 
considered the estimated monetary benefits from the reduced emissions 
of CO2, CH4, N2O, NOX, and 
SO2 that are expected to result from each of the TSLs 
considered. In order to make this calculation analogous to the 
calculation of the NPV of consumer benefit, DOE considered the reduced 
emissions expected to result over the lifetime of products shipped in 
the projection period for each TSL. This section summarizes the basis 
for the values used for monetizing the emissions benefits and presents 
the values considered in this NOPR.
    On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-
30087) granted the federal government's emergency motion for stay 
pending appeal of the February 11, 2022, preliminary injunction issued 
in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of 
the Fifth Circuit's order, the preliminary injunction is no longer in 
effect, pending resolution of the federal government's appeal of that 
injunction or a further court order. Among other things, the 
preliminary injunction enjoined the defendants in that case from 
``adopting, employing, treating as binding, or relying upon'' the 
interim estimates of the social cost of greenhouse gases--which were 
issued by the Interagency Working Group on the Social Cost of 
Greenhouse Gases on February 26, 2021--to monetize the benefits of 
reducing greenhouse gas emissions. In the absence of further 
intervening court orders, DOE will revert to its approach prior to the 
injunction and present monetized benefits where appropriate and 
permissible under law. DOE requests comment on how to address the 
climate benefits and other non-monetized effects of the proposal.
1. Monetization of Greenhouse Gas Emissions
    DOE estimates the monetized benefits of the reductions in emissions 
of CO2, CH4, and N2O by using a 
measure of the SC of each pollutant (e.g., SC-CO2). These 
estimates represent the monetary value of the net harm to society 
associated with a marginal increase in emissions of these pollutants in 
a given year, or the benefit of avoiding that increase. These estimates 
are intended to include (but are not limited to) climate-change-related 
changes in net agricultural productivity, human health, property 
damages from increased flood risk, disruption of energy systems, risk 
of conflict, environmental migration, and the value of ecosystem 
services.
    DOE estimated the global social benefits of CO2, 
CH4, and N2O reductions (i.e., SC-GHGs) using the 
estimates presented in the Technical Support Document: Social Cost of 
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive 
Order 13990, published in February 2021 by the IWG. The SC-GHGs is the 
monetary value of the net harm to society associated with a marginal 
increase in emissions in a given year, or the benefit of avoiding that 
increase. In principle, SC-GHGs includes the value of all climate 
change impacts, including (but not limited to) changes in net 
agricultural productivity, human health effects, property damage from 
increased flood risk and natural disasters, disruption of energy 
systems, risk of conflict, environmental migration, and the value of 
ecosystem services. The SC-GHGs therefore, reflects the societal value 
of reducing emissions of the gas in question by one metric ton. The SC-
GHGs is the theoretically appropriate value to use in conducting 
benefit-cost analyses of policies that affect CO2, 
N2O and CH4 emissions. As a member of the IWG involved in 
the development of the February 2021 SC-GHG TSD, DOE agrees that the 
interim SC-GHG estimates represent the most appropriate estimate of the 
SC-GHG until revised estimates have been developed reflecting the 
latest, peer-reviewed science.
    The SC-GHGs estimates presented here were developed over many 
years, using transparent process, peer-reviewed methodologies, the best 
science available at the time of that process, and with input from the 
public. Specifically, in 2009, the IWG, that included the DOE and other 
executive branch agencies and offices was established to ensure that 
agencies were using the best available science and to promote 
consistency in the social cost of carbon (SC-CO2) values 
used across agencies. The IWG published SC-CO2 estimates in 
2010 that were developed from an ensemble of three widely cited 
integrated assessment models (IAMs) that estimate global climate 
damages using highly aggregated representations of climate processes 
and the global economy combined into a single modeling framework. The 
three IAMs were run using a common set of input assumptions in each 
model for future population, economic, and CO2 emissions 
growth, as well as equilibrium climate sensitivity--a measure of the 
globally averaged temperature response to increased atmospheric 
CO2 concentrations. These estimates were updated in 2013 
based on new versions of each IAM. In August 2016 the IWG published 
estimates of the social cost of methane (SC-CH4) and nitrous 
oxide (SC-N2O) using methodologies that are consistent with 
the methodology underlying the SC-CO2 estimates. The 
modeling approach that extends the IWG SC-CO2 methodology to 
non-CO2 GHGs has undergone multiple stages of peer review. 
The SC-CH4 and SC-N2O estimates were developed by 
Marten et al.\63\ and underwent a standard double-blind peer review 
process prior to journal publication. In 2015, as part of the response 
to public comments received to a 2013 solicitation for comments on the 
SC-CO2 estimates, the IWG announced a National Academies of 
Sciences, Engineering, and Medicine review of the SC-CO2 
estimates to offer advice on how to approach future updates to ensure 
that the estimates continue to reflect the best available science and 
methodologies. In January 2017, the National Academies released their 
final report, Valuing Climate Damages: Updating Estimation of the 
Social Cost of Carbon Dioxide, and recommended specific criteria for 
future updates to the SC-CO2 estimates, a modeling framework 
to satisfy the specified criteria, and both near-term updates and 
longer-term research needs pertaining to various components of the 
estimation process (National Academies, 2017).\64\ Shortly thereafter, 
in March 2017, President Trump issued Executive Order 13783, which 
disbanded the IWG, withdrew the previous TSDs, and directed agencies to 
ensure SC-CO2 estimates used in regulatory analyses are 
consistent with the guidance contained in OMB's Circular A-4, 
``including with respect to the consideration of domestic versus

[[Page 74889]]

international impacts and the consideration of appropriate discount 
rates'' (E.O. 13783, Section 5(c)). Benefit-cost analyses following 
E.O. 13783 used SC-GHG estimates that attempted to focus on the U.S.-
specific share of climate change damages as estimated by the models and 
were calculated using two discount rates recommended by Circular A-4, 3 
percent and 7 percent. All other methodological decisions and model 
versions used in SC-GHG calculations remained the same as those used by 
the IWG in 2010 and 2013, respectively.
---------------------------------------------------------------------------

    \63\ Marten, A. L., E. A. Kopits, C. W. Griffiths, S. C. 
Newbold, and A. Wolverton. Incremental CH4 and N2O mitigation 
benefits consistent with the US Government's SC-CO2 estimates. 
Climate Policy. 2015. 15(2): pp. 272-298.
    \64\ National Academies of Sciences, Engineering, and Medicine. 
Valuing Climate Damages: Updating Estimation of the Social Cost of 
Carbon Dioxide. 2017. The National Academies Press: Washington, DC.
---------------------------------------------------------------------------

    On January 20, 2021, President Biden issued Executive Order 13990, 
which re-established the IWG and directed it to ensure that the U.S. 
Government's estimates of the social cost of carbon and other 
greenhouse gases reflect the best available science and the 
recommendations of the National Academies (2017). The IWG was tasked 
with first reviewing the SC-GHG estimates currently used in Federal 
analyses and publishing interim estimates within 30 days of the E.O. 
that reflect the full impact of GHG emissions, including by taking 
global damages into account. The interim SC-GHG estimates published in 
February 2021 are used here to estimate the climate benefits for this 
proposed rulemaking. The E.O. instructs the IWG to undertake a fuller 
update of the SC-GHG estimates by January 2022 that takes into 
consideration the advice of the National Academies (2017) and other 
recent scientific literature. The February 2021 SC-GHG TSD provides a 
complete discussion of the IWG's initial review conducted under 
E.O.13990. In particular, the IWG found that the SC-GHG estimates used 
under E.O. 13783 fail to reflect the full impact of GHG emissions in 
multiple ways.
    First, the IWG found that the SC-GHG estimates used under E.O. 
13783 fail to fully capture many climate impacts that affect the 
welfare of U.S. citizens and residents, and those impacts are better 
reflected by global measures of the SC-GHG. Examples of omitted effects 
from the E.O. 13783 estimates include direct effects on U.S. citizens, 
assets, and investments located abroad, supply chains, U.S. military 
assets and interests abroad, and tourism, and spillover pathways such 
as economic and political destabilization and global migration that can 
lead to adverse impacts on U.S. national security, public health, and 
humanitarian concerns. In addition, assessing the benefits of U.S. GHG 
mitigation activities requires consideration of how those actions may 
affect mitigation activities by other countries, as those international 
mitigation actions will provide a benefit to U.S. citizens and 
residents by mitigating climate impacts that affect U.S. citizens and 
residents. A wide range of scientific and economic experts have 
emphasized the issue of reciprocity as support for considering global 
damages of GHG emissions. If the United States does not consider 
impacts on other countries, it is difficult to convince other countries 
to consider the impacts of their emissions on the United States. The 
only way to achieve an efficient allocation of resources for emissions 
reduction on a global basis--and so benefit the U.S. and its citizens--
is for all countries to base their policies on global estimates of 
damages. As a member of the IWG involved in the development of the 
February 2021 SC-GHG TSD, DOE agrees with this assessment and, 
therefore, in this proposed rule DOE centers attention on a global 
measure of SC-GHG. This approach is the same as that taken in DOE 
regulatory analyses from 2012 through 2016. A robust estimate of 
climate damages that accrue only to U.S. citizens and residents does 
not currently exist in the literature. As explained in the February 
2021 TSD, existing estimates are both incomplete and an underestimate 
of total damages that accrue to the citizens and residents of the U.S. 
because they do not fully capture the regional interactions and 
spillovers discussed above, nor do they include all of the important 
physical, ecological, and economic impacts of climate change recognized 
in the climate change literature. As noted in the February 2021 SC-GHG 
TSD, the IWG will continue to review developments in the literature, 
including more robust methodologies for estimating a U.S.-specific SC-
GHG value, and explore ways to better inform the public of the full 
range of carbon impacts. As a member of the IWG, DOE will continue to 
follow developments in the literature pertaining to this issue.
    Second, the IWG found that the use of the social rate of return on 
capital (7 percent under current OMB Circular A-4 guidance) to discount 
the future benefits of reducing GHG emissions inappropriately 
underestimates the impacts of climate change for the purposes of 
estimating the SC-GHG. Consistent with the findings of the National 
Academies (2017) and the economic literature, the IWG continued to 
conclude that the consumption rate of interest is the theoretically 
appropriate discount rate in an intergenerational context,\65\ and 
recommended that discount rate uncertainty and relevant aspects of 
intergenerational ethical considerations be accounted for in selecting 
future discount rates.
---------------------------------------------------------------------------

    \65\ Interagency Working Group on Social Cost of Carbon. Social 
Cost of Carbon for Regulatory Impact Analysis under Executive Order 
12866. 2010. United States Government. (Last accessed April 15, 
2022.) www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf; Interagency Working Group on Social Cost of 
Carbon. Technical Update of the Social Cost of Carbon for Regulatory 
Impact Analysis Under Executive Order 12866. 2013. (Last accessed 
April 15, 2022.) www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact; Interagency Working Group on 
Social Cost of Greenhouse Gases, United States Government. Technical 
Support Document: Technical Update on the Social Cost of Carbon for 
Regulatory Impact Analysis-Under Executive Order 12866. August 2016. 
(Last accessed January 18, 2022.) www.epa.gov/sites/default/files/2016-12/documents/sc_co2_tsd_august_2016.pdf; Interagency Working 
Group on Social Cost of Greenhouse Gases, United States Government. 
Addendum to Technical Support Document on Social Cost of Carbon for 
Regulatory Impact Analysis under Executive Order 12866: Application 
of the Methodology to Estimate the Social Cost of Methane and the 
Social Cost of Nitrous Oxide. August 2016. (Last accessed January 
18, 2022.) www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf.
---------------------------------------------------------------------------

    Furthermore, the damage estimates developed for use in the SC-GHG 
are estimated in consumption-equivalent terms, and so an application of 
OMB Circular A-4's guidance for regulatory analysis would then use the 
consumption discount rate to calculate the SC-GHG. DOE agrees with this 
assessment and will continue to follow developments in the literature 
pertaining to this issue. DOE also notes that while OMB Circular A-4, 
as published in 2003, recommends using 3 percent and 7 percent discount 
rates as ``default'' values, Circular A-4 also reminds agencies that 
``different regulations may call for different emphases in the 
analysis, depending on the nature and complexity of the regulatory 
issues and the sensitivity of the benefit and cost estimates to the key 
assumptions.'' On discounting, Circular A-4 recognizes that ``special 
ethical considerations arise when comparing benefits and costs across 
generations,'' and Circular A-4 acknowledges that analyses may 
appropriately ``discount future costs and consumption benefits. . .at a 
lower rate than for intragenerational analysis.'' In the 2015 Response 
to Comments on the Social Cost of Carbon for Regulatory Impact 
Analysis, OMB, DOE, and the other IWG members recognized that 
``Circular A-4 is a living document'' and ``the use of 7 percent is not 
considered appropriate for intergenerational discounting. There is wide 
support for this view in the academic literature, and it is recognized 
in Circular A-4 itself.'' Thus, DOE

[[Page 74890]]

concludes that a 7% discount rate is not appropriate to apply to value 
the social cost of greenhouse gases in the analysis presented in this 
analysis. In this analysis, to calculate the present and annualized 
values of climate benefits, DOE uses the same discount rate as the rate 
used to discount the value of damages from future GHG emissions, for 
internal consistency. That approach to discounting follows the same 
approach that the February 2021 TSD recommends ``to ensure internal 
consistency--i.e., future damages from climate change using the SC-GHG 
at 2.5 percent should be discounted to the base year of the analysis 
using the same 2.5 percent rate.'' DOE has also consulted the National 
Academies' 2017 recommendations on how SC-GHG estimates can ``be 
combined in RIAs with other cost and benefits estimates that may use 
different discount rates.'' The National Academies reviewed ``several 
options,'' including ``presenting all discount rate combinations of 
other costs and benefits with SC-GHG estimates.''
    As a member of the IWG involved in the development of the February 
2021 SC-GHG TSD, DOE agrees with this assessment and will continue to 
follow developments in the literature pertaining to this issue. While 
the IWG works to assess how best to incorporate the latest, peer 
reviewed science to develop an updated set of SC-GHG estimates, it set 
the interim estimates to be the most recent estimates developed by the 
IWG prior to the group being disbanded in 2017. The estimates rely on 
the same models and harmonized inputs and are calculated using a range 
of discount rates. As explained in the February 2021 SC-GHG TSD, the 
IWG has recommended that agencies to revert to the same set of four 
values drawn from the SC-GHG distributions based on three discount 
rates as were used in regulatory analyses between 2010 and 2016 and 
subject to public comment. For each discount rate, the IWG combined the 
distributions across models and socioeconomic emissions scenarios 
(applying equal weight to each) and then selected a set of four values 
recommended for use in benefit-cost analyses: an average value 
resulting from the model runs for each of three discount rates (2.5 
percent, 3 percent, and 5 percent), plus a fourth value, selected as 
the 95th percentile of estimates based on a 3 percent discount rate. 
The fourth value was included to provide information on potentially 
higher-than-expected economic impacts from climate change. As explained 
in the February 2021 SC-GHG TSD, and DOE agrees, this update reflects 
the immediate need to have an operational SC-GHG for use in regulatory 
benefit-cost analyses and other applications that was developed using a 
transparent process, peer-reviewed methodologies, and the science 
available at the time of that process. Those estimates were subject to 
public comment in the context of dozens of proposed rulemakings as well 
as in a dedicated public comment period in 2013.
    There are a number of limitations and uncertainties associated with 
the SC-GHG estimates. First, the current scientific and economic 
understanding of discounting approaches suggests discount rates 
appropriate for intergenerational analysis in the context of climate 
change are likely to be less than 3 percent, near 2 percent or 
lower.\66\ Second, the IAMs used to produce these interim estimates do 
not include all of the important physical, ecological, and economic 
impacts of climate change recognized in the climate change literature 
and the science underlying their ``damage functions''--i.e., the core 
parts of the IAMs that map global mean temperature changes and other 
physical impacts of climate change into economic (both market and 
nonmarket) damages--lags behind the most recent research. For example, 
limitations include the incomplete treatment of catastrophic and non-
catastrophic impacts in the integrated assessment models, their 
incomplete treatment of adaptation and technological change, the 
incomplete way in which inter-regional and intersectoral linkages are 
modeled, uncertainty in the extrapolation of damages to high 
temperatures, and inadequate representation of the relationship between 
the discount rate and uncertainty in economic growth over long time 
horizons. Likewise, the socioeconomic and emissions scenarios used as 
inputs to the models do not reflect new information from the last 
decade of scenario generation or the full range of projections. The 
modeling limitations do not all work in the same direction in terms of 
their influence on the SC-CO2 estimates. However, as 
discussed in the February 2021 TSD, the IWG has recommended that, taken 
together, the limitations suggest that the interim SC-GHG estimates 
used in this final rule likely underestimate the damages from GHG 
emissions. DOE concurs with this assessment.
---------------------------------------------------------------------------

    \66\ Interagency Working Group on Social Cost of Greenhouse 
Gases (IWG). 2021. Technical Support Document: Social Cost of 
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive 
Order 13990. February. United States Government. Available at: 
<https://www.whitehouse.gov/briefing-room/blog/2021/02/26/a-return-to-science-evidence-based-estimates-of-the-benefits-of-reducing-climate-pollution/.
---------------------------------------------------------------------------

    DOE's derivations of the SC-GHG (SC-CO2, SC-
N2O, and SC-CH4) values used for this NOPR are 
discussed in the following sections, and the results of DOE's analyses 
estimating the benefits of the reductions in emissions of these GHGs 
are presented in section V.B.6 of this document.
a. Social Cost of Carbon
    The SC-CO2 values used for this NOPR were generated 
using the values presented in the 2021 update from the IWG's February 
2021 SC-GHG TSD. Table IV.15 shows the updated sets of SC-
CO2 estimates from the latest interagency update in 5-year 
increments from 2020 to 2050. The full set of annual values used is 
presented in Appendix 14-A of the NOPR TSD. For purposes of capturing 
the uncertainties involved in regulatory impact analysis, DOE has 
determined it is appropriate include all four sets of SC-CO2 
values, as recommended by the IWG.\67\
---------------------------------------------------------------------------

    \67\ For example, the February 2021 TSD discusses how the 
understanding of discounting approaches suggests that discount rates 
appropriate for intergenerational analysis in the context of climate 
change may be lower than 3 percent.

                    Table IV.15--Annual SC-CO2Values From 2021 Interagency Update, 2020-2050
                                           [2020$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                          Discount rate and statistic
                                                             ---------------------------------------------------
                            Year                                  5%         3%        2.5%            3%
                                                             ---------------------------------------------------
                                                               Average    Average    Average    95th percentile
----------------------------------------------------------------------------------------------------------------
2020........................................................         14         51         76                152
2025........................................................         17         56         83                169

[[Page 74891]]

 
2030........................................................         19         62         89                187
2035........................................................         22         67         96                206
2040........................................................         25         73        103                225
2045........................................................         28         79        110                242
2050........................................................         32         85        116                260
----------------------------------------------------------------------------------------------------------------

    In calculating the potential global benefits resulting from reduced 
CO2 emissions, DOE used the values from the February 2021 
SC-GHG TSD, adjusted to 2021$ using the implicit price deflator for 
gross domestic product (``GDP'') from the Bureau of Economic Analysis. 
DOE derived values from 2051 to 2070 based on estimates published by 
EPA.\68\ These estimates are based on methods, assumptions, and 
parameters identical to the 2020-2050 estimates published by the IWG. 
DOE expects additional climate benefits to accrue for any longer-life 
circulator pumps after 2070, but a lack of available SC-CO2 
estimates for emissions years beyond 2070 prevents DOE from monetizing 
these potential benefits in this analysis. If further analysis of 
monetized climate benefits beyond 2070 becomes available prior to the 
publication of the final rule, DOE will include that analysis in the 
final rule.
---------------------------------------------------------------------------

    \68\ See EPA, Revised 2023 and Later Model Year Light-Duty 
Vehicle GHG Emissions Standards: Regulatory Impact Analysis, 
Washington, DC, December 2021. Available at: https://www.epa.gov/system/files/documents/2021-12/420r21028.pdf (last accessed January 
13, 2022).
---------------------------------------------------------------------------

    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SC-CO2 value for that year in each of the 
four cases. To calculate a present value of the stream of monetary 
values, DOE discounted the values in each of the four cases using the 
specific discount rate that had been used to obtain the SC-
CO2 values in each case.
b. Social Cost of Methane and Nitrous Oxide
    The SC-CH4 and SC-N2O values used for this 
NOPR were generated using the values presented in the February 2021 SC-
GHG TSD. Table IV.16 shows the updated sets of SC-CH4 and 
SC-N2O estimates from the latest interagency update in 5-
year increments from 2020 to 2050. The full set of annual values used 
is presented in Appendix 14-A of the NOPR TSD. To capture the 
uncertainties involved in regulatory impact analysis, DOE has 
determined it is appropriate to include all four sets of SC-
CH4 and SC-N2O values, as recommended by the IWG. 
DOE derived values after 2050 using the approach described above for 
the SC-CO2.

                                  Table IV.16--Annual SC-CH4 and SC-N2O Values From 2021 Interagency Update, 2020-2050
                                                                 [2020$ per metric ton]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             SC-CH4                                           SC-N2O
                                                       -------------------------------------------------------------------------------------------------
                                                                  Discount rate and statistic                      Discount rate and statistic
                         Year                          -------------------------------------------------------------------------------------------------
                                                           5%        3%       2.5%            3%            5%        3%       2.5%            3%
                                                       -------------------------------------------------------------------------------------------------
                                                         Average   Average   Average   95th percentile    Average   Average   Average   95th percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020..................................................       670      1500      2000               3900      5800     18000     27000              48000
2025..................................................       800      1700      2200               4500      6800     21000     30000              54000
2030..................................................       940      2000      2500               5200      7800     23000     33000              60000
2035..................................................      1100      2200      2800               6000      9000     25000     36000              67000
2040..................................................      1300      2500      3100               6700     10000     28000     39000              74000
2045..................................................      1500      2800      3500               7500     12000     30000     42000              81000
2050..................................................      1700      3100      3800               8200     13000     33000     45000              88000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE multiplied the CH4 and N2O emissions 
reduction estimated for each year by the SC-CH4 and SC-
N2O estimates for that year in each of the cases. To 
calculate a present value of the stream of monetary values, DOE 
discounted the values in each of the cases using the specific discount 
rate that had been used to obtain the SC-CH4 and SC-
N2O estimates in each case.
2. Monetization of Other Emissions Impacts
    For the NOPR, DOE estimated the monetized value of NOX 
and SO2 emissions reductions from electricity generation 
using the latest benefit per ton estimates for that sector from the 
EPA's Benefits Mapping and Analysis Program.\69\ DOE used EPA's values 
for PM2.5-related benefits associated with NOX 
and SO2 and for ozone-related benefits associated with 
NOX for 2025 2030, and 2040, calculated with discount rates 
of 3 percent and 7 percent. DOE used linear interpolation to define 
values for the years not given in the 2025 to 2040 period; for years 
beyond 2040 the values are held constant. DOE derived values specific 
to the sector for circulator pumps using a

[[Page 74892]]

method described in appendix 14B of the NOPR TSD.
---------------------------------------------------------------------------

    \69\ Estimating the Benefit per Ton of Reducing PM2.5 
Precursors from 21 Sectors. www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
---------------------------------------------------------------------------

    DOE multiplied the site emissions reduction (in tons) in each year 
by the associated $/ton values, and then discounted each series using 
discount rates of 3 percent and 7 percent as appropriate.

M. Utility Impact Analysis

    The utility impact analysis estimates several effects on the 
electric power generation industry that would result from the adoption 
of new or amended energy conservation standards. The utility impact 
analysis estimates the changes in installed electrical capacity and 
generation that would result for each TSL. The analysis is based on 
published output from the NEMS associated with AEO2022. NEMS produces 
the AEO Reference case, as well as a number of side cases that estimate 
the economy-wide impacts of changes to energy supply and demand. For 
the current analysis, impacts are quantified by comparing the levels of 
electricity sector generation, installed capacity, fuel consumption and 
emissions in the AEO2022 Reference case and various side cases. Details 
of the methodology are provided in the appendices to chapters 13 and 15 
of the NOPR TSD.
    The output of this analysis is a set of time-dependent coefficients 
that capture the change in electricity generation, primary fuel 
consumption, installed capacity and power sector emissions due to a 
unit reduction in demand for a given end use. These coefficients are 
multiplied by the stream of electricity savings calculated in the NIA 
to provide estimates of selected utility impacts of potential new or 
amended energy conservation standards.

N. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a proposed standard. Employment impacts from new or 
amended energy conservation standards include both direct and indirect 
impacts. Direct employment impacts are any changes in the number of 
employees of manufacturers of the products subject to standards, their 
suppliers, and related service firms. The MIA addresses those impacts. 
Indirect employment impacts are changes in national employment that 
occur due to the shift in expenditures and capital investment caused by 
the purchase and operation of more-efficient appliances. Indirect 
employment impacts from standards consist of the net jobs created or 
eliminated in the national economy, other than in the manufacturing 
sector being regulated, caused by (1) reduced spending by consumers on 
energy, (2) reduced spending on new energy supply by the utility 
industry, (3) increased consumer spending on the products to which the 
new standards apply and other goods and services, and (4) the effects 
of those three factors throughout the economy.
    One method for assessing the possible effects on the demand for 
labor of such shifts in economic activity is to compare sector 
employment statistics developed by the Labor Department's Bureau of 
Labor Statistics (``BLS''). BLS regularly publishes its estimates of 
the number of jobs per million dollars of economic activity in 
different sectors of the economy, as well as the jobs created elsewhere 
in the economy by this same economic activity. Data from BLS indicate 
that expenditures in the utility sector generally create fewer jobs 
(both directly and indirectly) than expenditures in other sectors of 
the economy.\70\ There are many reasons for these differences, 
including wage differences and the fact that the utility sector is more 
capital-intensive and less labor-intensive than other sectors. Energy 
conservation standards have the effect of reducing consumer utility 
bills. Because reduced consumer expenditures for energy likely lead to 
increased expenditures in other sectors of the economy, the general 
effect of efficiency standards is to shift economic activity from a 
less labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and service sectors). Thus, the BLS 
data suggest that net national employment may increase due to shifts in 
economic activity resulting from energy conservation standards.
---------------------------------------------------------------------------

    \70\ See U.S. Department of Commerce--Bureau of Economic 
Analysis. Regional Multipliers: A User Handbook for the Regional 
Input-Output Modeling System (RIMS II). 1997. U.S. Government 
Printing Office: Washington, DC. Available at www.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf (last accessed last accessed July 6, 
2021).
---------------------------------------------------------------------------

    DOE estimated indirect national employment impacts for the standard 
levels considered in this NOPR using an input/output model of the U.S. 
economy called Impact of Sector Energy Technologies version 4 
(``ImSET'').\71\ ImSET is a special-purpose version of the ``U.S. 
Benchmark National Input-Output'' (``I-O'') model, which was designed 
to estimate the national employment and income effects of energy-saving 
technologies. The ImSET software includes a computer-based I-O model 
having structural coefficients that characterize economic flows among 
187 sectors most relevant to industrial, commercial, and residential 
building energy use.
---------------------------------------------------------------------------

    \71\ Livingston, O.V., S.R. Bender, M.J. Scott, and R.W. 
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model 
Description and User Guide. 2015. Pacific Northwest National 
Laboratory: Richland, WA. PNNL-24563.
---------------------------------------------------------------------------

    DOE notes that ImSET is not a general equilibrium forecasting 
model, and that the uncertainties involved in projecting employment 
impacts, especially changes in the later years of the analysis. Because 
ImSET does not incorporate price changes, the employment effects 
predicted by ImSET may over-estimate actual job impacts over the long 
run for this rule. Therefore, DOE used ImSET only to generate results 
for near-term timeframes (2026-2031), where these uncertainties are 
reduced. For more details on the employment impact analysis, see 
chapter 16 of the NOPR TSD.

O. Other Topics

a. Acceptance Test Grades
    In response to the May 2021 RFI, China commented that in the 
context of discussing updates to industry standards, DOE had not 
provided pump test acceptance grades and corresponding tolerances. 
(China, No. 111 at p. 1) DOE interprets the comment to regard minimum 
energy conservation standards, as acceptance tests per se have not been 
discussed as part of this rulemaking process. Energy conservation 
standards, however, are proposed as part of this NOPR. The rationale 
for selecting the proposed standard level is discuss in section V.C.1 
of this document.

V. Analytical Results and Conclusions

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

A. Trial Standard Levels

    In general, DOE typically evaluates potential standards for 
products and equipment by grouping individual efficiency levels for 
each class into TSLs. Use of TSLs allows DOE to identify and consider 
manufacturer cost interactions between the equipment classes, to the 
extent that there are such interactions, and market cross elasticity 
from consumer purchasing decisions

[[Page 74893]]

that may change when different standard levels are set.
    In the analysis conducted for this NOPR, DOE analyzed the benefits 
and burdens of four TSLs for circulator pumps. As discussed previously, 
because there is only one proposed equipment class for circulator 
pumps, DOE developed TSLs that align with their corresponding ELs 
(i.e., TSL 1 corresponds to EL 1, etc). Table V.1 presents the TSLs and 
the corresponding efficiency levels that DOE has identified for 
potential energy conservation standards for circulator pumps. TSL 4 
represents the maximum technologically feasible (``max-tech'') energy 
efficiency.

   Table V.1--Trial Standard Levels for Circulator Pumps by Efficiency
                                  Level
------------------------------------------------------------------------
                           TSL                                  EL
------------------------------------------------------------------------
1.......................................................               1
2.......................................................               2
3.......................................................               3
4.......................................................               4
------------------------------------------------------------------------

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
    DOE analyzed the economic impacts on circulator pump consumers by 
looking at the effects that potential standards at each TSL would have 
on the LCC and PBP. DOE also examined the impacts of potential 
standards on selected consumer subgroups. These analyses are discussed 
in the following sections.
a. Life-Cycle Cost and Payback Period
    In general, higher-efficiency products affect consumers in two 
ways: (1) purchase price increases and (2) annual operating costs 
decrease. Inputs used for calculating the LCC and PBP include total 
installed costs (i.e., product price plus installation costs), and 
operating costs (i.e., annual energy use, energy prices, energy price 
trends, repair costs, and maintenance costs). The LCC calculation also 
uses product lifetime and a discount rate. Chapter [8] of the NOPR TSD 
provides detailed information on the LCC and PBP analyses.
    Table V.2 through Table V.3 show the LCC and PBP results for the 
TSLs considered for circulator pumps. In the table, the simple payback 
is measured relative to the baseline product. In the second table, 
impacts are measured relative to the efficiency distribution in the no-
new-standards case in the compliance year (see section IV.F of this 
document). Because some consumers purchase products with higher 
efficiency in the no-new-standards case, the average savings are less 
than the difference between the average LCC of the baseline product and 
the average LCC at each TSL. The savings refer only to consumers who 
are affected by a standard at a given TSL. Those who already purchase a 
product with efficiency at or above a given TSL are not affected. 
Consumers for whom the LCC increases at a given TSL experience a net 
cost.

                                               Table V.2--Average LCC and PBP Results for Circulator Pumps
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2021$)
                                                         ---------------------------------------------------------------- Simple payback      Average
                TSL                   Efficiency level                     First year's      Lifetime                         )years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                    Baseline............           598.4            40.8           363.3           961.8  ..............            10.6
1.................................  1...................           598.4            34.8           311.1           909.6             0.0            10.6
2.................................  2...................           678.4            21.7           200.0           878.4             4.2            10.6
3.................................  3...................           757.5            11.3           111.4           869.0             5.4            10.6
4.................................  4...................           784.5             7.8            82.0           866.6             5.6            10.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


            Table V.3--Average LCC Savings Relative to the No-New-Standards Case for Circulator Pumps
----------------------------------------------------------------------------------------------------------------
                                                                                   Life-cycle cost savings
                                                                           -------------------------------------
                                                                                                   Percent of
                          TSL                             Efficiency level     Average LCC       consumers that
                                                                            savings * ($2021)    experience net
                                                                                                      cost
----------------------------------------------------------------------------------------------------------------
1......................................................                  1              125.2                0.0
2......................................................                  2              103.2               29.2
3......................................................                  3              105.3               46.4
4......................................................                  4               97.6               49.7
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.

b. Consumer Subgroup Analysis
    In the consumer subgroup analysis, DOE estimated the impact of the 
considered TSLs on senior-only households. Table V.4 compares the 
average LCC savings and PBP at each efficiency level for seniors with 
similar metrics for the entire consumer sample for circulator pumps. In 
most cases, the average LCC savings and PBP for senior-only households 
at the considered efficiency levels are not substantially different 
from the average for all households. Chapter 11 of the NOPR TSD 
presents the complete LCC and PBP results for the subgroups.

[[Page 74894]]



    Table V.4--Comparison of LCC Savings and PBP for Seniors and All
                                Consumers
------------------------------------------------------------------------
                                                Senior-only      All
                      TSL                        households   consumers
------------------------------------------------------------------------
                       Average LCC Savings (2021$)
------------------------------------------------------------------------
1.............................................        116.3        125.2
2.............................................        116.7        103.2
3.............................................        104.1        105.3
4.............................................         92.4         97.6
------------------------------------------------------------------------
                         Payback Period (years)
------------------------------------------------------------------------
1.............................................            0            0
2.............................................          3.5          4.2
3.............................................          5.3          5.4
4.............................................          5.6          5.6
------------------------------------------------------------------------

c. Rebuttable Presumption Payback
    As discussed in section IV.F.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 payback period for each of the considered TSLs, DOE used 
discrete values, and, as required by EPCA, based the energy use 
calculation on the DOE test procedure for circulator pumps. In 
contrast, the PBPs presented in section V.B.1.a were calculated using 
distributions that reflect the range of energy use in the field. Table 
V.5 presents the rebuttable-presumption payback periods for the 
considered TSLs for circulator pumps. While DOE examined the 
rebuttable-presumption criterion, it considered whether the standard 
levels considered for the NOPR are economically justified through a 
more detailed analysis of the economic impacts of those levels, 
pursuant to 42 U.S.C. 6295(o)(2)(B)(i), that considers the full range 
of impacts to the consumer, manufacturer, Nation, and environment. The 
results of that analysis serve as the basis for DOE to definitively 
evaluate the economic justification for a potential standard level, 
thereby supporting or rebutting the results of any preliminary 
determination of economic justification.

            Table V.5--Rebuttable-Presumption Payback Periods
------------------------------------------------------------------------
                                                          Rebuttable PBP
                          TSL                                (years)
------------------------------------------------------------------------
1......................................................  ...............
2......................................................              2.8
3......................................................              4.2
4......................................................              4.5
------------------------------------------------------------------------

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of energy conservation 
standards on manufacturers of circulator pumps. The following section 
describes the expected impacts on manufacturers at each considered TSL. 
Chapter 12 of the NOPR TSD explains the analysis in further detail.
a. Economic Impacts on Manufacturers
    In this section, DOE provides GRIM results from the analysis, which 
examines changes in the industry that would result from a standard. The 
following tables summarize the estimated financial impacts (represented 
by changes in INPV) of potential energy conservation standards on 
manufacturers of circulator pumps, as well as the conversion costs that 
DOE estimates manufacturers of circulator pumps would incur at each 
TSL.
    The impact of potential energy conservation standards was analyzed 
under two markup scenarios: (1) the preservation of manufacturer markup 
scenario and (2) the preservation of per-unit operating profit markup 
scenario, as discussed in section IV.C.5 of this document. The 
preservation of manufacturer markup scenario provides the upper bound 
while the preservation of operating profits scenario results in the 
lower (or more severe) bound to impacts of potential standards on 
industry.
    Each of the modeled scenarios results in a unique set of cash flows 
and corresponding INPV for each TSL. INPV is the sum of the discounted 
cash flows to the industry from the base year through the end of the 
analysis period (2022-2055). The ``change in INPV'' results refer to 
the difference in industry value between the no-new-standards case and 
standards case at each TSL. To provide perspective on the short-run 
cash flow impact, DOE includes a comparison of free cash flow between 
the no-new-standards case and the standards case at each TSL in the 
year before standards would take effect. This figure provides an 
understanding of the magnitude of the required conversion costs 
relative to the cash flow generated by the industry.
    Conversion costs are one-time investments for manufacturers to 
bring their manufacturing facilities and product designs into 
compliance with potential standards. As described in section IV.J.2.c 
of this document, conversion cost investments occur between the year of 
publication of the final rule and the year by which manufacturers must 
comply with the new standard. The conversion costs can have a 
significant impact on the short-term cash flow on the industry and 
generally result in lower free cash flow in the period between the 
publication of the final rule and the compliance date of potential 
standards. Conversion costs are independent of the manufacturer markup 
scenarios and are not presented as a range in this analysis.
    The results in Table V.6 of this NOPR show potential INPV impacts 
for circulator pump manufacturers. The table presents the range of 
potential impacts reflecting both the less severe set of potential 
impacts (preservation of manufacturer markup) and the more severe set 
of potential impacts (preservation of per-unit operating profit). In 
the following discussion, the INPV results refer to the difference in 
industry value between the no-new-standards case and each standards 
case that results from the sum of discounted cash flows from 2022 (the 
base year) through 2055 (the end of the analysis period).
    To provide perspective on the near-term cash flow impact, DOE 
discusses the change in free cash flow between the no-new-standards 
case and the standards case at each efficiency level in the year before 
new standards take effect. These figures provide an understanding of 
the magnitude of the required conversion costs at each TSL relative to 
the cash flow generated by the industry in the no-new-standards case.

                                              Table V.6--Manufacturer Impact Analysis for Circulator Pumps
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               Trial standard level
                                                        Units                 No-new-    ---------------------------------------------------------------
                                                                          standards case        1 *              2               3               4
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV......................................  2021$ millions..............           325.9           322.6     261.6-347.3     228.9-351.4     219.9-376.7
Change in INPV............................  2021$ millions..............  ..............           (3.2)     (64.3)-21.4     (97.0)-25.5    (106.0)-50.8
                                            %...........................  ..............           (1.0)      (19.7)-6.6      (29.8)-7.8     (32.5)-15.6
Free Cash Flow (2025).....................  2021$ millions..............            25.6            23.3           (9.6)          (27.1)          (27.5)

[[Page 74895]]

 
Change in Free Cash Flow..................  2021$ millions..............  ..............           (2.2)          (35.1)          (52.7)          (53.0)
                                            %...........................  ..............           (8.8)         (137.5)         (206.0)         (207.5)
Product Conversion Costs..................  2021$ millions..............  ..............             5.4            54.7            88.8            89.5
Capital Conversion Costs..................  2021$ millions..............  ..............  ..............            22.3            22.3            22.3
                                                                         -------------------------------------------------------------------------------
    Total Conversion Costs................  2021$ millions..............  ..............             5.4            77.0           111.1           111.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Parenthesis indicate negative values.
* Both manufacturer markup scenarios for TSL 1 yield INPV impacts that are not differentiable at the granularity of this table. As such, these impacts
  are expressed as one value.

    At TSL 1, DOE estimates INPV impacts for circulator pump 
manufacturers to decrease by 1 percent, or a decrease of $3.2 million. 
At this level, DOE estimates that industry free cash flow would 
decrease by approximately 8.8 percent to negative $2.2 million, 
compared to the no-new-standards-case value of $23.3 million in the 
year before compliance (2025).
    DOE estimates 58 percent circulator pump shipments meet or exceed 
the efficiency standards at TSL 1. DOE does not expect the modest 
increases in efficiency requirements at this TSL to require large 
capital investments. DOE does anticipate manufacturers to make slight 
investments in R&D to re-design some of their equipment offering to 
meet a standard at this level. Overall, DOE estimates that 
manufacturers would incur $5.4 million in product conversion costs to 
bring their equipment portfolios into compliance with a standard set to 
TSL 1. At TSL 1, manufacturers have basic models that meet or exceed 
this efficiency level.
    At TSL 1, the shipment-weighted average MPC for all circulator 
pumps does not change relative to the no-new-standards case shipment-
weighted average MPC in 2026. Under the preservation of manufacturer 
markup scenario, DOE applies the same markup as the no-new-standards 
scenario allowing manufacturers to maintain the same amount of profit 
as a percentage of revenues (i.e., as MPCs increase, the absolute 
dollar markup increases). However, because the shipment-weighted 
average MPC does not increase at TSL 1 compared to the no-new-standards 
case, manufacturers are unable recover the conversion cost investment 
through additional profit on equipment offerings. Under the 
preservation of per-unit operating profit markup scenario, 
manufacturers earn the same per-unit operating profit as would be 
earned in the no-new-standards case, but manufacturers do not earn 
additional profit from their investments or higher MPCs. Therefore, the 
$5.4 million in conversion costs incurred by manufacturers cause a 
negative change in INPV at TSL 1 in both manufacturer markup scenarios.
    At TSL 2, DOE estimates impacts on INPV for circulator pump 
manufacturers to range from a decrease of 19.7 percent to an increase 
of 6.6 percent, or a decrease of $64.3 million to an increase of $21.4 
million. At this level, DOE estimates that industry free cash flow 
would decrease by approximately 137.5 percent to -$9.6 million, 
compared to the no-new-standards-case value of $25.6 million in the 
year before compliance (2025).
    TSL 2 would set the energy conservation standard at EL 2 for all 
circulator pumps. DOE estimates 19 percent of circulator pump shipments 
meet or exceed the efficiency standards at TSL 2. Product and capital 
conversion costs would increase at this TSL as manufacturers update 
designs and production equipment to meet a standard that would likely 
require manufacturers to use ECMs. DOE anticipates manufacturers would 
need to make a significant investment to purchase production equipment 
to be able to produce ECMs in-house for CP1 variety. For CP2 and CP3 
varieties, DOE anticipates that most manufacturers would choose to 
source ECMs from third parties resulting in a smaller level of 
investment of production equipment for these circulator pump varieties. 
DOE's capital conversion cost estimates include capital investments in 
welding and bobbin tooling, magnetizers, winders, lamination dies, 
testing equipment, and additional manufacturing floor space. DOE 
anticipates manufacturers to incur product conversion costs to redesign 
basic models to incorporate ECMs.
    Overall, DOE estimates that manufacturers would incur $54.7 million 
in product conversion costs and $22.3 million in capital conversion 
costs to bring their equipment portfolios into compliance with a 
standard set to TSL 2. At TSL 2, capital and product conversion costs 
are a key driver of the decrease in free cash flow. These upfront 
investments result in a lower free cash flow in the year before the 
compliance date.
    At TSL 2, the shipment-weighted average MPC for all circulator 
pumps increases by 43.7 percent relative to the no-new-standards case 
shipment-weighted average MPC in 2026. In the preservation of 
manufacturer markup scenario, manufacturers can fully pass on this 
significant cost increase to customers. In this manufacturer markup 
scenario, the additional revenue generated from the significant 
increase in shipment-weighted average MPC outweighs the $77.0 million 
in conversion costs, causing a positive change in INPV at TSL 2.
    Under the preservation of per-unit operating profit markup 
scenario, manufacturers earn the same per-unit operating profit as 
would be earned in the no-new-standards case, but manufacturers do not 
earn additional profit from their investments or higher MPCs. In this 
scenario, the 43.7 percent shipment-weighted average MPC increase 
results in a reduction in the manufacturer markup after the analyzed 
compliance year. This reduction in the manufacturer markup and the 
$77.0 million in conversion costs incurred by manufacturers cause a 
negative change in INPV at TSL 2 under the preservation of per-unit 
operating profit markup scenario.
    At TSL 3, DOE estimates impacts on INPV for circulator pump 
manufacturers to range from a decrease of 29.8 percent to an increase 
of 7.8 percent, or a decrease of $97.0 million to an increase of $25.5 
million. At this level, DOE estimates that industry free cash flow 
would decrease by approximately 206.0 percent to -$27.1 million, 
compared to the no-new-standards-case value of $25.6 million in the 
year before compliance (2025).
    DOE estimates 12 percent of circulator pump base case shipments 
meet or exceed the efficiency standards at TSL

[[Page 74896]]

3. Product conversion costs would increase at this TSL as manufacturers 
improve designs to incorporate added controls necessitated at this TSL. 
DOE anticipates capital conversion costs to remain similar to those at 
TSL 2 as conversion costs are more representative of design changes.
    Overall, DOE estimates that manufacturers would incur $88.8 million 
in product conversion costs and $22.3 million in capital conversion 
costs to bring their equipment portfolios into compliance with a 
standard set to TSL 3. At TSL 3, product conversion costs are a key 
driver of the decrease in free cash flow. These upfront investments 
result in a lower free cash flow in the year before the compliance 
date.
    At TSL 3, the shipment-weighted average MPC for all circulator 
pumps increases by 60.7 percent relative to the no-new-standards case 
shipment-weighted average MPC in 2026. In the preservation of 
manufacturer markup scenario, manufacturers can fully pass on this 
significant cost increase to customers. In this manufacturer markup 
scenario, the additional revenue generated from the significant 
increase in shipment-weighted average MPC outweighs the $111.1 million 
in conversion costs, causing a positive change in INPV at TSL 3.
    Under the preservation of per-unit operating profit markup 
scenario, manufacturers earn the same per-unit operating profit as 
would be earned in the no-new-standards case, but manufacturers do not 
earn additional profit from their investments or higher MPCs. In this 
scenario, the 60.7 percent shipment-weighted average MPC increase 
results in a reduction in the manufacturer markup after the analyzed 
compliance year. This reduction in the manufacturer markup and the 
$111.1 million in conversion costs incurred by manufacturers cause a 
negative change in INPV at TSL 3 under the preservation of per-unit 
operating profit markup scenario.
    At TSL 4, DOE estimates impacts on INPV for circulator pump 
manufacturers to range from a decrease of 32.5 percent to an increase 
of 15.6 percent, or a decrease of $106.0 million to an increase of 
$50.8 million. At this level, DOE estimates that industry free cash 
flow would decrease by approximately 207.5 percent to -$27.5 million, 
compared to the no-new-standards-case value of $25.6 million in the 
year before compliance (2025).
    DOE estimates 2 percent of circulator pump base case shipments meet 
or exceed the efficiency standards at TSL 4. Product conversion costs 
would modestly increase at this TSL as manufacturers update designs to 
incorporate added controls. DOE anticipates capital conversion costs to 
remain similar to those at TSL 2 and TSL 3.
    Overall, DOE estimates that manufacturers would incur $89.5 million 
in product conversion costs and $22.3 million in capital conversion 
costs to bring their equipment portfolios into compliance with a 
standard set to TSL 4. At TSL 4, product conversion costs continue to 
be a key driver of the decrease in free cash flow. These upfront 
investments result in a lower free cash flow in the year before the 
compliance date.
    At TSL 4, the shipment-weighted average MPC for all circulator 
pumps increases by 75.8 percent relative to the no-new-standards case 
shipment-weighted average MPC in 2026. In the preservation of 
manufacturer markup scenario, manufacturers can fully pass on this 
significant cost increase to customers. In this manufacturer markup 
scenario, the additional revenue generated from the significant 
increase in shipment-weighted average MPC outweighs the $111.8 million 
in conversion costs, causing a positive change in INPV at TSL 4.
    Under the preservation of per-unit operating profit markup 
scenario, manufacturers earn the same per-unit operating profit as 
would be earned in the no-new-standards case, but manufacturers do not 
earn additional profit from their investments or higher MPCs. In this 
scenario, the 75.8 percent shipment-weighted average MPC increase 
results in a reduction in the manufacturer markup after the analyzed 
compliance year. This reduction in the manufacturer markup and the 
$111.8 million in conversion costs incurred by manufacturers cause a 
negative change in INPV at TSL 4 under the preservation of per-unit 
operating profit markup scenario.
b. Direct Impacts on Employment
    To quantitatively assess the potential impacts of energy 
conservation standards on direct employment in the circulator pump 
industry, DOE typically uses the GRIM to estimate the domestic labor 
expenditures and number of direct employees in the no-new-standards 
case and in each of the standards cases during the analysis period. 
This analysis includes both production and non-production employees 
employed by circulator pump manufacturers. DOE used statistical data 
from the U.S. Census Bureau's 2020 Annual Survey of Manufacturers \72\ 
(``ASM''), the results of the engineering analysis, and interviews with 
manufacturers to determine the inputs necessary to calculate industry-
wide labor expenditures and domestic employment levels. Labor 
expenditures related to manufacturing of the product are a function of 
the labor intensity of the product, the sales volume, and an assumption 
that wages remain fixed in real terms over time.
---------------------------------------------------------------------------

    \72\ U.S. Census Bureau, 2018-2020 Annual Survey of 
Manufacturers: Statistics for Industry Groups and Industries (2021) 
(Available at www.census.gov/data/tables/time-series/econ/asm/2018-2020-asm.html).
---------------------------------------------------------------------------

    The total labor expenditures in the GRIM are converted to domestic 
production worker employment levels by dividing production labor 
expenditures by the average fully burden wage per production worker. 
DOE calculated the fully burdened wage by multiplying the industry 
production worker hourly blended wage (provided by the ASM) by the 
fully burdened wage ratio. The fully burdened wage ratio factors in 
paid leave, supplemental pay, insurance, retirement and savings, and 
legally required benefits. DOE determined the fully burdened ratio from 
the Bureau of Labor Statistic's employee compensation data.\73\ The 
estimates of production workers in this section cover workers, 
including line-supervisors who are directly involved in fabricating and 
assembling a product within the manufacturing facility. Workers 
performing services that are closely associated with production 
operations, such as materials handling tasks using forklifts, are also 
included as production labor.
---------------------------------------------------------------------------

    \73\ U.S. Bureau of Labor Statistics. Employer Costs for 
Employee Compensation. June 16, 2022. Available at: www.bls.gov/news.release/pdf/ecec.pdf.
---------------------------------------------------------------------------

    Non-production worker employment levels were determined by 
multiplying the industry ratio of production worker employment to non-
production employment against the estimated production worker 
employment explained above. Estimates of non-production workers in this 
section cover above the line supervisors, sales, sales delivery, 
installation, office functions, legal, and technical employees.
    The total direct employment impacts calculated in the GRIM are the 
sum of the changes in the number of domestic production and non-
production workers resulting from the energy conservation standards for 
circulator pumps, as compared to the no-new-standards case. Typically, 
more efficient equipment is more complex and labor intensive to 
produce. Per-unit labor requirements and production time requirements 
trend

[[Page 74897]]

higher with more stringent energy conservation standards.
    DOE estimates that 65 percent of circulator pumps sold in the 
United States are currently manufactured domestically. In the absence 
of energy conservation standards, DOE estimates that there would be 104 
domestic production workers in the circulator pump industry in 2026, 
the year of compliance.
    DOE's analysis forecasts that the industry will domestically employ 
171 production and non-production workers in the circulator pump 
industry in 2026 in the absence of energy conservation standards. Table 
V.7 presents the range of potential impacts of energy conservation 
standards on U.S. production workers of circulator pumps.

 Table V.7--Potential Changes in the Total Number of Circulator Pump Production Workers in Direct Employment in
                                                      2026
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                      No-new-    ---------------------------------------------------------------
                                  standards case         1               2               3               4
----------------------------------------------------------------------------------------------------------------
Number of Domestic Production                104             104          75-149          84-167          92-183
 Workers........................
Number of Domestic Non-                       67              67              96             107             118
 Production Workers.............
Total Domestic Direct Employment             171             171         171-245         191-274         210-301
 **.............................
Potential Changes in Direct       ..............               0            0-74          20-103          39-130
 Employment.....................
----------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative numbers.
** This field presents impacts on domestic direct employment, which aggregates production and non-production
  workers.

    In manufacturer interviews, several manufacturers that produce 
high-efficiency circulator pumps would require additional engineers to 
redesign circulator pumps and production processes. Additionally, 
higher efficiency pump manufacturing is more labor intensive, and would 
require additional labor expenditures. DOE understands circulator pumps 
with ECMs are primarily manufactured outside the U.S. However, during 
manufacturer interviews, manufacturers indicated that they would likely 
expand their ECM production capacities in the U.S. in the presence of a 
standard at TSL 2 or higher. Therefore, DOE modeled a low-end 
employment range that assumes half of domestic production would be 
relocated to foreign countries due to the energy conservation standard. 
The high-end of the range represents no change in the percentage of 
models manufactured in the U.S.
    Due different variations in manufacturing labor practices, actual 
direct employment could vary depending on manufacturers' preference for 
high capital or high labor practices in response to standards. DOE 
notes that the employment impacts discussed here are independent of the 
indirect employment impacts to the broader U.S. economy, which are 
documented in chapter 15 of the accompanying TSD.
    DOE requests comment on its estimates of domestic employment for 
circulator pump manufacturing in the presence of an energy conservation 
standards.
c. Impacts on Manufacturing Capacity
    During manufacturer interviews, industry feedback indicated that 
manufacturers' current production capacity was strained due to upstream 
supply chain constraints. Additionally, manufacturers expressed that 
additional production lines would be required during the conversion 
period if standards were set at a level requiring ECMs. However, many 
manufacturers noted that their portfolios have expanded in recent years 
to accommodate more circulator pumps using ECMs. Furthermore, 
manufacturers indicated that a circulator pump utilizing an ECM could 
support a wider range of applications compared to a circulator pump 
utilizing an induction motor.
d. Impacts on Subgroups of Manufacturers
    As discussed in section IV.J.2 of this document, 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 manufacturers, and manufacturers 
exhibiting a cost structure substantially different from the industry 
average could be affected disproportionately. DOE used the results of 
the industry characterization to group manufacturers exhibiting similar 
characteristics. Consequently, DOE identified small business 
manufacturers as a subgroup for a separate impact analysis.
    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 201. To be 
categorized as a small business under NAICS code 333914, ``Measuring, 
Dispensing, and Other Pumping Equipment Manufacturing'' a circulator 
pump manufacturer and its affiliates may employ a maximum of 750 
employees. The 750-employee threshold includes all employees in a 
business's parent company and any other subsidiaries. Based on this 
classification, DOE identified three potential manufacturers that could 
qualify as domestic small businesses.
    The small business subgroup analysis is discussed in more detail in 
chapter 12 of the NOPR TSD. DOE examines the potential impacts on small 
business manufacturers in section VI.B of this NOPR.
e. 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 or equipment. While any one 
regulation may not impose a significant burden on manufacturers, the 
combined effects of several existing or impending regulations may have 
serious consequences for some manufacturers, groups of manufacturers, 
or an entire industry. Assessing the impact of a single regulation may 
overlook this cumulative regulatory burden. In addition to energy 
conservation standards, other regulations can significantly affect 
manufacturers' financial operations. Multiple regulations affecting the 
same manufacturer can strain profits and lead companies to abandon 
product lines or markets with lower expected future returns than 
competing products. For these reasons, DOE conducts an analysis of 
cumulative regulatory burden as part of its rulemakings pertaining to 
appliance efficiency. DOE requests information regarding the impact of

[[Page 74898]]

cumulative regulatory burden on manufacturers of circulator pumps 
associated with multiple DOE standards or product-specific regulatory 
actions of other Federal agencies.
    DOE evaluates equipment-specific regulations that will take effect 
approximately 3 years before or after the 2026 compliance date of any 
energy conservation standards for circulator pumps. DOE is aware that 
circulator pump manufacturers produce other equipment or products that 
circulator pump manufacturers produce including dedicated-purpose pool 
pumps \74\ and commercial and industrial pumps.\75\ None of these 
products or equipment have proposed or adopted energy conservation 
standards that require compliance within 3 years of the proposed energy 
conservation standards for circulator pumps in this NOPR. If DOE 
proposes or finalizes any energy conservation standards for these 
products or equipment prior to finalizing energy conservation standards 
for circulator pumps, DOE will include the energy conservation 
standards for these products or equipment as part of the cumulative 
regulator burden for this circulator pump rulemaking.
---------------------------------------------------------------------------

    \74\ www.regulations.gov/docket/EERE-2022-BT-STD-0001.
    \75\ www.regulations.gov/docket/EERE-2021-BT-STD-0018.
---------------------------------------------------------------------------

3. National Impact Analysis
    This section presents DOE's estimates of the national energy 
savings and the NPV of consumer benefits that would result from each of 
the TSLs considered as potential standards.
a. Significance of Energy Savings
    To estimate the energy savings attributable to potential standards 
for circulator pumps, 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 (2026-2055). Table V.8 presents DOE's 
projections of the national energy savings for each TSL considered for 
circulator pumps. The savings were calculated using the approach 
described in section IV.H of this document.

            Table V.8--Cumulative National Energy Savings for Circulator Pumps; 30 Years of Shipments
                                                   [2026-2055]
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                 ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                               quads
                                                 ---------------------------------------------------------------
Primary energy..................................            0.07            0.43            0.78            0.92
FFC energy......................................            0.07            0.45            0.81            0.96
----------------------------------------------------------------------------------------------------------------

    OMB Circular A-4 \76\ requires agencies to present analytical 
results, including separate schedules of the monetized benefits and 
costs that show the type and timing of benefits and costs. Circular A-4 
also directs agencies to consider the variability of key elements 
underlying the estimates of benefits and costs. For this rulemaking, 
DOE undertook a sensitivity analysis using 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.\77\ The review timeframe established in EPCA is generally 
not synchronized with the product lifetime, product manufacturing 
cycles, or other factors specific to circulator pumps. 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.9. The impacts are counted over the lifetime of 
circulator pumps purchased in 2026-2034.
---------------------------------------------------------------------------

    \76\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf 
(last accessed July 3, 2022).
    \77\ Section 325(m) of EPCA requires DOE to review its standards 
at least once every 6 years, and requires, for certain products, a 
3-year period after any new standard is promulgated before 
compliance is required, except that in no case may any new standards 
be required within 6 years of the compliance date of the previous 
standards. While adding a 6-year review to the 3-year compliance 
period adds up to 9 years, DOE notes that it may undertake reviews 
at any time within the 6-year period and that the 3-year compliance 
date may yield to the 6-year backstop. A 9-year analysis period may 
not be appropriate given the variability that occurs in the timing 
of standards reviews and the fact that for some products, the 
compliance period is 5 years rather than 3 years.

            Table V.9--Cumulative National Energy Savings for Circulator Pumps; 9 Years of Shipments
                                                   [2026-2034]
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                 ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                               quads
                                                 ---------------------------------------------------------------
Primary energy..................................            0.03            0.15            0.26            0.30
FFC energy......................................            0.03            0.16            0.27            0.31
----------------------------------------------------------------------------------------------------------------


[[Page 74899]]

b. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV of the total costs and savings for 
consumers that would result from the TSLs considered for circulator 
pumps. In accordance with OMB's guidelines on regulatory analysis,\78\ 
DOE calculated NPV using both a 7-percent and a 3-percent real discount 
rate. Table V.10 shows the consumer NPV results with impacts counted 
over the lifetime of products purchased in 2026-2055.
---------------------------------------------------------------------------

    \78\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf 
(last accessed July 3, 2022).

    Table V.10--Cumulative Net Present Value of Consumer Benefits for Circulator Pumps; 30 Years of Shipments
                                                   [2026-2055]
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                  Discount rate                  ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                           million $2021
                                                 ---------------------------------------------------------------
3 percent.......................................           575.1         1,770.7         1,994.1         2,069.3
7 percent.......................................           293.9           731.6           626.6           579.5
----------------------------------------------------------------------------------------------------------------

    The NPV results based on the aforementioned 9-year analytical 
period are presented in Table V.11. The impacts are counted over the 
lifetime of products purchased in 2026-2055. 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.11--Cumulative Net Present Value of Consumer Benefits for Circulator Pumps; 9 Years of Shipments
                                                   [2026-2034]
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                  Discount rate                  ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                           million $2021
                                                 ---------------------------------------------------------------
3 percent.......................................           285.2           813.4           917.2           951.6
7 percent.......................................           180.1           429.0           377.7           355.1
----------------------------------------------------------------------------------------------------------------

    The previous results reflect the assumption of a constant price for 
circulator pumps over the analysis period (see section IV.H.3 of this 
document). As part of the NIA, DOE also conducted a sensitivity 
analysis that considered two scenarios that use inputs from variants of 
the AEO 2022 Reference case: The AEO 2022 High Economic Growth 
scenario, which has a higher energy price trend relative to the 
reference case, and the AEO 2022 Low Economic Growth scenario, which 
has a lower energy price trend relative to the reference case, as well 
as a higher price learning rate. The higher learning rate in this 
scenario accelerates the adoption of more efficient circulator pump 
options in the no-new-standards case (relative to the reference 
scenario) decreasing the available energy savings attributable to a 
standard. The results of these alternative cases are presented in 
appendix 10C of the NOPR TSD.
c. Indirect Impacts on Employment
    It is estimated that that energy conservation standards for 
circulator pumps would reduce energy expenditures for consumers of 
those products, with the resulting net savings being redirected to 
other forms of economic activity. These expected shifts in spending and 
economic activity could affect the demand for labor. As described in 
section IV.N of this document, DOE used an input/output model of the 
U.S. economy to estimate indirect employment impacts of the TSLs that 
DOE considered. There are uncertainties involved in projecting 
employment impacts, especially changes in the later years of the 
analysis. Therefore, DOE generated results for near-term timeframes 
(2026-2031), where these uncertainties are reduced.
    The results suggest that the proposed standards would be likely to 
have a negligible impact on the net demand for labor in the economy. 
The net change in jobs is so small that it would be imperceptible in 
national labor statistics and might be offset by other, unanticipated 
effects on employment. Chapter 16 of the NOPR TSD presents detailed 
results regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
    As discussed in section III.F.1.d of this document, DOE has 
tentatively concluded that the standards proposed in this NOPR would 
not lessen the utility or performance of circulator pumps under 
consideration in this rulemaking. Manufacturers of these products 
currently offer units that meet or exceed the proposed standards.
5. Impact of Any Lessening of Competition
    DOE considered any lessening of competition that would be likely to 
result from new or amended standards. As discussed in section 
III.F.1.e, the Attorney General determines the impact, if any, of any 
lessening of competition likely to result from a proposed standard, and 
transmits such determination in writing to the Secretary, together with 
an analysis of the nature and extent of such impact. To

[[Page 74900]]

assist the Attorney General in making this determination, DOE has 
provided DOJ with copies of this NOPR and the accompanying TSD for 
review. DOE will consider DOJ's comments on the proposed rule in 
determining whether to proceed to a final rule. DOE will publish and 
respond to DOJ's comments in that document. DOE invites comment from 
the public regarding the competitive impacts that are likely to result 
from this proposed rule. In addition, stakeholders may also provide 
comments separately to DOJ regarding these potential impacts. See the 
ADDRESSES section for information to send comments to DOJ.
6. Need of the Nation To Conserve Energy
    Enhanced energy efficiency, where economically justified, improves 
the Nation's energy security, strengthens the economy, and reduces the 
environmental impacts (costs) of energy production. Reduced electricity 
demand due to energy conservation standards is also likely to reduce 
the cost of maintaining the reliability of the electricity system, 
particularly during peak-load periods. Chapter 15 in the NOPR TSD 
presents the estimated impacts on electricity generating capacity, 
relative to the no-new-standards case, for the TSLs that DOE considered 
in this rulemaking.
    Energy conservation resulting from potential energy conservation 
standards for circulator pumps is expected to yield environmental 
benefits in the form of reduced emissions of certain air pollutants and 
greenhouse gases. Table V.12 provides DOE's estimate of cumulative 
emissions reductions expected to result from the TSLs considered in 
this rulemaking. The emissions were calculated using the multipliers 
discussed in section IV.K. DOE reports annual emissions reductions for 
each TSL in chapter 13 of the NOPR TSD.

              Table V.12--Cumulative Emissions Reduction for Circulator Pumps Shipped in 2026-2055
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                 ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
Power Sector Emissions:
    CO2 (million metric tons)...................            2.35           14.69           26.50           31.26
    CH4 (thousand tons).........................            0.20            1.22            2.20            2.60
    N2O (thousand tons).........................            0.03            0.17            0.31            0.37
    SO2 (thousand tons).........................            1.24            7.68           13.83           16.31
    NOX (thousand tons).........................            1.23            7.67           13.82           16.30
    Hg (tons)...................................            0.01            0.05            0.09            0.10
Upstream Emissions:
    CO2 (million metric tons)...................            0.17            1.07            1.93            2.28
    CH4 (thousand tons).........................           15.98          100.77          182.23          215.12
    N2O (thousand tons).........................            0.00            0.01            0.01            0.01
    SO2 (thousand tons).........................            2.56           16.16           29.22           34.49
    NOX (thousand tons).........................            0.01            0.08            0.14            0.16
    Hg (tons)...................................            0.00            0.00            0.00            0.00
Total FFC Emissions:
    CO2 (million metric tons)...................            2.52           15.76           28.43           33.54
    CH4 (thousand tons).........................           16.18          101.99          184.44          217.72
    N2O (thousand tons).........................            0.03            0.18            0.32            0.38
    SO2 (thousand tons).........................            3.80           23.84           43.05           50.79
    NOX (thousand tons).........................            1.25            7.75           13.96           16.47
    Hg (tons)...................................            0.01            0.05            0.09            0.10
----------------------------------------------------------------------------------------------------------------

    As part of the analysis for this rulemaking, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
that DOE estimated for each of the considered TSLs for circulator 
pumps. Section IV.L of this document discusses the SC-CO2 
values that DOE used. Table V.13 presents the value of CO2 
emissions reduction at each TSL for each of the SC-CO2 
cases. The time-series of annual values is presented for the proposed 
TSL in chapter 14 of the NOPR TSD.

         Table V.13--Present Value of CO2 Emissions Reduction for Circulator Pumps Shipped in 2026-2055
----------------------------------------------------------------------------------------------------------------
                                                                          SC-CO2 case
                                              ------------------------------------------------------------------
                                                                  Discount rate and statistics
                     TSL                      ------------------------------------------------------------------
                                                     5%              3%             2.5%               3%
                                              ------------------------------------------------------------------
                                                   Average         Average         Average      95th percentile
----------------------------------------------------------------------------------------------------------------
                                                                         million $2021
                                              ------------------------------------------------------------------
1............................................            26.1           108.0           167.2              328.9
2............................................           157.6           661.3         1,027.3            2,012.1
3............................................           282.0         1,187.1         1,845.8            3,611.3
4............................................           331.7         1,397.7         2,173.9            4,251.6
----------------------------------------------------------------------------------------------------------------


[[Page 74901]]

    As discussed in section IV.L.2, DOE estimated the climate benefits 
likely to result from the reduced emissions of methane and 
N2O that DOE estimated for each of the considered TSLs for 
circulator pumps. Table V.14 presents the value of the CH4 
emissions reduction at each TSL, and Table V.15 presents the value of 
the N2O emissions reduction at each TSL. The time-series of 
annual values is presented for the proposed TSL in chapter 14 of the 
NOPR TSD.

       Table V.14--Present Value of Methane Emissions Reduction for Circulator Pumps Shipped in 2026-2055
----------------------------------------------------------------------------------------------------------------
                                                                          SC-CH4 case
                                              ------------------------------------------------------------------
                                                                  Discount rate and statistics
                     TSL                      ------------------------------------------------------------------
                                                     5%              3%             2.5%               3%
                                              ------------------------------------------------------------------
                                                   Average         Average         Average      95th percentile
----------------------------------------------------------------------------------------------------------------
                                                                         million $2021
                                              ------------------------------------------------------------------
1............................................             7.5            21.4            29.6               56.9
2............................................            46.1           133.1           184.6              353.1
3............................................            82.6           239.9           333.0              636.1
4............................................            97.3           282.9           392.7              749.8
----------------------------------------------------------------------------------------------------------------


    Table V.15--Present Value of Nitrous Oxide Emissions Reduction for Circulator Pumps Shipped in 2026-2055
----------------------------------------------------------------------------------------------------------------
                                                                          SC-N2O Case
                                              ------------------------------------------------------------------
                                                                  Discount rate and statistics
                     TSL                      ------------------------------------------------------------------
                                                     5%              3%             2.5%               3%
                                              ------------------------------------------------------------------
                                                   Average         Average         Average      95th percentile
----------------------------------------------------------------------------------------------------------------
                                                                         million $2021
                                              ------------------------------------------------------------------
1............................................             0.1             0.4             0.7                1.1
2............................................             0.7             2.6             4.0                6.9
3............................................             1.2             4.7             7.2               12.5
4............................................             1.4             5.5             8.5               14.7
----------------------------------------------------------------------------------------------------------------

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other GHG emissions to changes in 
the future global climate and the potential resulting damages to the 
global and U.S. economy continues to evolve rapidly. DOE, together with 
other Federal agencies, will continue to review methodologies for 
estimating the monetary value of reductions in CO2 and other 
GHG emissions. This ongoing review will consider the comments on this 
subject that are part of the public record for this and other 
rulemakings, as well as other methodological assumptions and issues. 
DOE notes that the proposed standards would be economically justified 
even without inclusion of monetized benefits of reduced GHG emissions.
    DOE also estimated the monetary value of the health benefits 
associated with NOX and SO2 emissions reductions 
anticipated to result from the considered TSLs for circulator pumps. 
The dollar-per-ton values that DOE used are discussed in section IV.L 
of this document. Table V.16 presents the present value for 
NOX emissions reduction for each TSL calculated using 7-
percent and 3-percent discount rates, and Table V.17 presents similar 
results for SO2 emissions reductions. The results in these 
tables reflect application of EPA's low dollar-per-ton values, which 
DOE used to be conservative. The time-series of annual values is 
presented for the proposed TSL in chapter 14 of the NOPR TSD.

Table V.16-Present Value of NOX Emissions Reduction for Circulator Pumps
                          Shipped in 2026-2055
------------------------------------------------------------------------
                TSL                  3% Discount rate   7% Discount rate
------------------------------------------------------------------------
                                                million $2021
                                   -------------------------------------
1.................................              165.4               75.9
2.................................            1,006.0              444.3
3.................................            1,802.9              788.4
4.................................            2,121.4              924.2
------------------------------------------------------------------------


[[Page 74902]]


   Table V.17--Present Value of SO2 Emissions Reduction for Circulator
                       Pumps Shipped in 2026-2055
------------------------------------------------------------------------
                TSL                  3% Discount rate   7% Discount rate
------------------------------------------------------------------------
                                                million $2021
                                   -------------------------------------
1.................................               73.5               34.9
2.................................              444.2              202.7
3.................................              795.0              359.1
4.................................              935.0              420.8
------------------------------------------------------------------------

7. Other Factors
    The Secretary of Energy, in determining whether a standard is 
economically justified, may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) No 
other factors were considered in this analysis.
8. Summary of Economic Impacts
    Table V.18 presents the NPV values that result from adding the 
estimates of the potential economic benefits resulting from reduced GHG 
and NOX and SO2 emissions to the NPV of consumer 
benefits calculated for each TSL considered in this rulemaking. The 
consumer benefits are domestic U.S. monetary savings that occur as a 
result of purchasing the covered circulator pumps, and are measured for 
the lifetime of products shipped in 2026-2055. The benefits associated 
with reduced GHG emissions resulting from the adopted standards are 
global benefits, and are also calculated based on the lifetime of 
circulator pumps shipped in 2026-2055.

        Table V.18--Consumer NPV Combined With Present Value of Benefits From Climate and Health Benefits
----------------------------------------------------------------------------------------------------------------
                    Category                           TSL 1           TSL 2           TSL 3           TSL 4
----------------------------------------------------------------------------------------------------------------
                    3% discount rate for NPV of Consumer and Health Benefits (billion 2021$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case..........................             0.8             3.4             5.0             5.6
3% Average SC-GHG case..........................             0.9             4.0             6.0             6.8
2.5% Average SC-GHG case........................             1.0             4.4             6.8             7.7
3% 95th percentile SC-GHG case..................             1.2             5.6             8.9            10.1
----------------------------------------------------------------------------------------------------------------
                    7% discount rate for NPV of Consumer and Health Benefits (billion 2021$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case..........................             0.4             1.6             2.1             2.4
3% Average SC-GHG case..........................             0.5             2.2             3.2             3.6
2.5% Average SC-GHG case........................             0.6             2.6             4.0             4.5
3% 95th percentile SC-GHG case..................             0.8             3.8             6.0             6.9
----------------------------------------------------------------------------------------------------------------

C. Conclusion

    When considering new or amended energy conservation standards, the 
standards that DOE adopts for any type (or class) of covered equipment 
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. 6316(a); 42 U.S.C. 
6295(o)(2)(A)) In determining whether a standard is economically 
justified, the Secretary must determine whether the benefits of the 
standard exceed its burdens by, to the greatest extent practicable, 
considering the seven statutory factors discussed previously. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)) The new or amended standard 
must also result in significant conservation of energy. (42 U.S.C. 
6295(o)(3)(B))
    For this NOPR, DOE considered the impacts of standards for 
circulator pumps at each TSL, beginning with the maximum 
technologically feasible level, to determine whether that level was 
economically justified. Where the max-tech level was not justified, DOE 
then considered the next most efficient level and undertook the same 
evaluation until it reached the highest efficiency level that is both 
technologically feasible and economically justified and saves a 
significant amount of energy.
    To aid the reader as DOE discusses the benefits and/or burdens of 
each TSL, tables in this section present a summary of the results of 
DOE's quantitative analysis for each TSL. In addition to the 
quantitative results presented in the tables, DOE also considers other 
burdens and benefits that affect economic justification. These include 
the impacts on identifiable subgroups of consumers who may be 
disproportionately affected by a national standard and impacts on 
employment.
1. Benefits and Burdens of TSLs Considered for Circulator Pumps 
Standards
    Table V.19 and Table V.20 summarize the quantitative impacts 
estimated for each TSL for circulator pumps. The national impacts are 
measured over the lifetime of circulator pumps purchased in the 30-year 
period that begins in the anticipated year of compliance with standards 
(2026-2055). The energy savings, emissions reductions, and value of 
emissions reductions refer to full-fuel-cycle results. The efficiency 
levels contained in each TSL are described in section V.A of this 
document.

              Table V.19--Summary of Analytical Results for Circulator Pump TSLs: National Impacts
----------------------------------------------------------------------------------------------------------------
                    Category                           TSL 1           TSL 2           TSL 3           TSL 4
----------------------------------------------------------------------------------------------------------------
Cumulative FFC National Energy Savings:

[[Page 74903]]

 
    Quads.......................................            0.07            0.45            0.81            0.96
Cumulative FFC Emissions Reduction:
    CO2 (million metric tons)...................             2.5            15.8            28.4            33.5
    CH4 (thousand tons).........................            16.2           102.0           184.4           217.7
    N2O (thousand tons).........................            0.03            0.18            0.32            0.38
    SO2 (thousand tons).........................             3.8            23.8            43.1            50.8
    NOX (thousand tons).........................             1.2             7.7            14.0            16.5
    Hg (tons)...................................            0.01            0.05            0.09            0.10
Present Value of Benefits and Costs (3% discount
 rate, billion 2021$):
    Consumer Operating Cost Savings.............            0.58            3.41            6.03            7.05
    Climate Benefits *..........................            0.13            0.80            1.43            1.69
    Health Benefits **..........................            0.24            1.45            2.60            3.06
                                                 ---------------------------------------------------------------
        Total Benefits [dagger].................            0.94            5.65           10.06           11.79
    Consumer Incremental Product Costs [Dagger].            0.00            1.64            4.03            4.98
    Consumer Net Benefits.......................            0.58            1.77            1.99            2.07
                                                 ---------------------------------------------------------------
        Total Net Benefits......................            0.94            4.02            6.02            6.81
Present Value of Benefits and Costs (7% discount
 rate, billion 2021$):
    Consumer Operating Cost Savings.............            0.29            1.68            2.94            3.43
    Climate Benefits *..........................            0.13            0.80            1.43            1.69
    Health Benefits **..........................            0.11            0.65            1.15            1.34
                                                 ---------------------------------------------------------------
        Total Benefits [dagger].................            0.53            3.12            5.52            6.46
    Consumer Incremental Product Costs [Dagger].            0.00            0.95            2.32            2.85
    Consumer Net Benefits.......................            0.29            0.73            0.63            0.58
                                                 ---------------------------------------------------------------
        Total Net Benefits......................            0.53            2.18            3.21            3.61
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with circulator pumps shipped in 2026-2055. These
  results include benefits to consumers which accrue after 2055 from the products shipped in 2026-2055.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
  notice). For presentational purposes of this table, the climate benefits associated with the average SC-GHG at
  a 3 percent discount rate are shown, but the Department does not have a single central SC-GHG point estimate,
  and it emphasizes the importance and value of considering the benefits calculated using all four SC-GHG
  estimates.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
  (for NOX and SO2) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
  continue to assess the ability to monetize other effects such as health benefits from reductions in direct
  PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
  of this document for more details.
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total
  and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
  percent discount rate, but the Department does not have a single central SC-GHG point estimate. DOE emphasizes
  the importance and value of considering the benefits calculated using all four SC-GHG estimates. See Table
  V.18 for net benefits using all four SC-GHG estimates. On March 16, 2022, the Fifth Circuit Court of Appeals
  (No. 22-30087) granted the federal government's emergency motion for stay pending appeal of the February 11,
  2022, preliminary injunction issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of
  the Fifth Circuit's order, the preliminary injunction is no longer in effect, pending resolution of the
  federal government's appeal of that injunction or a further court order. Among other things, the preliminary
  injunction enjoined the defendants in that case from ``adopting, employing, treating as binding, or relying
  upon'' the interim estimates of the social cost of greenhouse gases--which were issued by the Interagency
  Working Group on the Social Cost of Greenhouse Gases on February 26, 2021--to monetize the benefits of
  reducing greenhouse gas emissions. In the absence of further intervening court orders, DOE will revert to its
  approach prior to the injunction and present monetized benefits where appropriate and permissible under law.
[Dagger] Costs include incremental equipment costs as well as installation costs.


      Table V.20--Summary of Analytical Results for Circulator Pump TSLs: Manufacturer and Consumer Impacts
----------------------------------------------------------------------------------------------------------------
                    Category                           TSL 1           TSL 2           TSL 3           TSL 4
----------------------------------------------------------------------------------------------------------------
Manufacturer Impacts:
    Industry NPV (million 2021$) (No-new-                  322.6     261.6-347.3     228.9-351.4    219.91-376.7
     standards case INPV = 325.9)...............
    Industry NPV (% change).....................           (3.2)      (19.7)-6.6      (29.8)-7.8     (32.5)-15.6
Consumer Average LCC Savings (2021$):
    All Circulators.............................           125.2           103.2           105.3            97.6
Consumer Simple PBP (years):
    All Circulators.............................             0.0             4.2             5.4             5.6
Percent of Consumers that Experience a Net Cost:
    All Circulators.............................             0.0            29.2            46.4            49.7
----------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.

    DOE first considered TSL 4, which represents the max-tech 
efficiency level, and would require differential temperature-based 
control schemes to be implemented in the field to deliver savings. TSL 
4 would save an estimated 0.96 quads of energy, an amount DOE considers 
significant. Under TSL 4, the NPV of consumer benefit would be

[[Page 74904]]

$0.58 billion using a discount rate of 7 percent, and $2.07 billion 
using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 4 are 33.5 Mt of 
CO2, 50.8 thousand tons of SO2, 16.5 thousand 
tons of NOX, 0.10 tons of Hg, 217.7 thousand tons of 
CH4, and 0.38 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 4 is $1.69 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 4 is $1.34 billion using a 7-percent discount rate and $3.06 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 4 is $3.61 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 4 is $6.81 billion. DOE notes that it 
provides the estimated total NPV as additional information, but 
primarily relies upon the NPV of consumer benefits in its analysis for 
determining whether a proposed standard level is economically 
justified.
    At TSL 4, the average LCC impact is a savings of $97.6. The simple 
payback period is 5.6 years. The fraction of consumers experiencing a 
net LCC cost approximately 50 percent of consumers.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$106.0 million to an increase of $50.8 million, which corresponds to 
decrease of 32.5 percent and an increase of 15.6 percent, respectively. 
DOE estimates that industry must invest $111.8 million to comply with 
standards set at TSL 4. This investment is primarily driven by 
converting all existing products to include differential-temperature 
based controls and the associate product conversion costs that would be 
needed to support such a transition. DOE estimates that only two 
percent of circulator pump shipments would meet the efficiency levels 
analyzed at TSL 4.
    DOE also notes that the estimated energy and economic savings from 
TSL 4 are highly dependent on the end-use systems in which the 
circulator pumps are installed (e.g., hydronic heating or water heating 
applications). Circulator pumps are typically added to systems when 
installed in the field and can be replaced separately than the end-use 
appliance in which they are paired. Depending on the type of controls 
that the end-use appliance contains, the circulator pumps may not see 
the field savings benefits from the technologies incorporated in TSL 4 
because the end-use system cannot accommodate full variable-speed 
operation. In particular, some systems will not achieve any additional 
savings from differential temperature controls as compared to a single 
speed ECM with no controls (i.e., TSL 2). While the analysis includes 
the best available assumptions on the distribution of system curves and 
single-zone versus multi-zone applications, variation in those 
assumptions could have a large impact on savings potential and 
resulting economics providing uncertainty in the savings associated 
with TSL 4.
    The Secretary tentatively concludes that at TSL 4 for circulator 
pump, the benefits of energy savings, positive NPV of consumer 
benefits, emission reductions, and the estimated monetary value of the 
emissions reductions would be outweighed by the economic burden on many 
consumers, and the impacts on manufacturers, including the large 
conversion costs, profit margin impacts that could result in a large 
reduction in INPV, and the lack of manufacturers currently offering 
products meeting the efficiency levels required at this TSL, including 
small businesses. Almost a majority of circulator pump customers (49.7 
percent) would experience a net cost and manufacturers would have to 
significantly ramp up production of more efficient models since only 2 
percent of shipments currently meet TSL efficiency levels. In addition, 
the Secretary is also tentatively concerned about the uncertainty 
regarding the potential energy savings as compared to the field savings 
due to the lack of end-use appliances not being able to respond to 
differential temperature controls from the circulator pump. 
Consequently, the Secretary has tentatively concluded that TSL 4 is not 
economically justified.
    DOE then considered TSL 3, which represents efficiency level three, 
and would require automatic proportional pressure controls to be added 
to the circulator pump. Automatic proportional pressure controls are 
used to simulate variable flow aiding in energy use reductions from the 
pump. TSL 3 would save an estimated 0.81 quads of energy, an amount DOE 
considers significant. Under TSL 3, the NPV of consumer benefit would 
be $0.63 billion using a discount rate of 7 percent, and $1.99 billion 
using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 3 are 28.4 Mt of 
CO2, 43.1 thousand tons of SO2, 14.0 thousand 
tons of NOX, 0.09 tons of Hg, 184.4 thousand tons of 
CH4, and 0.32 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 3 is $1.43 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 3 is $1.15 billion using a 7-percent discount rate and $2.60 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 3 is $3.21 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 4 is $6.02 billion. DOE notes that it 
provides the estimated total NPV as additional information, but 
primarily relies upon the NPV of consumer benefits in its analysis 
determining whether a proposed standard level is economically 
justified.
    At TSL 3, the average LCC impact is a savings of $105.3. The simple 
payback period is 5.4 years. The fraction of consumers experiencing a 
net LCC cost is 46.4 percent.
    At TSL 3, the projected change in INPV ranges from a decrease of 
$97.0 million to an increase of $25.5 million, which corresponds to a 
decrease of 29.8 percent and an increase of 7.8 percent, respectively. 
DOE estimates that industry must invest $111.1 million to comply with 
standards set at TSL 3. DOE estimates that approximately 12 percent of 
circulator pump shipments would meet the efficiency levels analyzed at 
TSL 3.
    Similar to TSL 4, DOE also notes that the estimated energy and 
economic savings from TSL 3 are highly dependent on the systems in 
which the circulator pumps are installed. Depending on the type of 
controls that the end-use appliance contains, the circulator pumps may 
not see the field savings benefits from the technologies incorporated 
in TSL 3 because the end-use system cannot accommodate full variable-
speed operation from the automatic proportional pressure controls. In 
particular, some systems will not achieve any additional savings from 
proportional pressure controls as compared to a single speed ECM with 
no controls (i.e., TSL 2). While the analysis includes the best 
available assumptions on the distribution of system curves and single-
zone versus multi-zone applications, variation in those assumptions 
could have a large impact on savings potential and

[[Page 74905]]

resulting economics providing uncertainty in the benefits for TSL 3.
    The Secretary tentatively concludes that at TSL 3 for circulator 
pump, the benefits of energy savings, positive NPV of consumer 
benefits, emission reductions, and the estimated monetary value of the 
emissions reductions would be outweighed by the economic burden on many 
consumers, and the impacts on manufacturers, including the large 
conversion costs, profit margin impacts that could result in a large 
reduction in INPV, and the lack of manufacturers currently offering 
products meeting the efficiency levels required at this TSL, including 
small businesses. Almost a majority of circulator pump customers (46.4 
percent) would experience a net cost. While most manufacturers offer a 
product that would meet TSL 3 efficiencies and include automatic 
pressure- or temperature-based controls, these are manufactured at low 
production volume. All manufacturers would still need to incur 
significant product conversion expenses and make capital investments to 
extend both automatic pressure- and temperature-based controls to all 
circulator pumps distributed in commerce. In addition, the Secretary is 
also tentatively concerned about the uncertainty regarding the 
potential energy savings as compared to the field savings due to the 
lack of end-use appliances not being able to respond to automatic 
proportional pressure control from the circulator pump. Consequently, 
the Secretary has tentatively concluded that TSL 3 is not economically 
justified.
    DOE then considered TSL 2, which represents efficiency level two 
and includes single speed ECMs in the circulator pump. Single-speed 
ECMs do not depend on the controls of the end-use appliance in order to 
realize the energy-savings benefits of the variable speed motor. In 
addition, TSL 2 is the proposed standard level recommended by the CPWG. 
TSL 2 would save an estimated 0.45 quads of energy, an amount DOE 
considers significant. Under TSL 2, the NPV of consumer benefit would 
be $0.73 billion using a discount rate of 7 percent, and $1.77 billion 
using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 2 are 15.8 Mt of 
CO2, 23.8 thousand tons of SO2, 7.7 thousand tons 
of NOX, 0.05 tons of Hg, 102.0 thousand tons of 
CH4, and 0.18 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 2 is $0.80 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 2 is $0.65 billion using a 7-percent discount rate and $1.45 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 2 is $2.18 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 3 is $4.02 billion. DOE notes that it 
provides the estimated total NPV as additional information, but 
primarily relies upon the NPV of consumer benefits in its analysis for 
determining whether a proposed standard level is economically 
justified.
    At TSL 2, the average LCC impact is a savings of $103.2. The simple 
payback period is 4.2 years. The fraction of consumers experiencing a 
net LCC cost is 29.2 percent.
    At TSL 2, the projected change in INPV ranges from a decrease of 
$64.3 million to an increase of $21.4 million, which corresponds to 
decrease of 19.7 percent and an increase of 6.6 percent, respectively. 
DOE estimates that industry must invest $77.0 million to comply with 
standards set at TSL 2. DOE estimates that approximately 19 percent of 
circulator pump shipments would meet the efficiency levels analyzed at 
TSL 2. At TSL 2, most manufacturers have current circulator pump 
offerings at this level.
    A standard set at TSL 2 essentially guarantees energy savings in 
all applications currently served by an induction motor, as the savings 
accrue from motor efficiency alone rather than from a particular 
control strategy that must be properly matched to the system in the 
field. In comparison, TSL 3 and 4 include an ECM motor like in TSL 2, 
but TSL 3 and 4 also include the associated variable speed controls 
that must be properly matched in the field. TSL 2 also allows and 
encourages uptake of circulators with controls, as manufacturers may 
choose to prioritize variable speed ECM as opposed to single speed ECM. 
This could increase the potential savings from TSL 2 from those 
captured in the analysis, while providing consumers and manufacturers 
with flexibility to select the motor and/or control strategy most 
appropriate to their given application.
    After considering the analysis and weighing the benefits and 
burdens, the Secretary has tentatively concluded that a standard set at 
TSL 2 for circulator pumps would be economically justified. At this 
TSL, the average LCC is positive. An estimated 29.2 percent, less than 
a third, of circulator pump consumers experience a net cost. The FFC 
national energy savings are significant and the NPV of consumer 
benefits is positive using both a 3-percent and 7-percent discount 
rate. Manufacturers supported the CPWG recommendation of establishing 
standards set at TSL 2. Therefore, DOE anticipates that manufacturers 
will be able to absorb the capital and product conversion costs to 
manufacture more efficient equipment. Notably, the benefits to 
consumers significantly outweigh the cost to manufacturers.
    In addition, TSL 2 is consistent with the recommendations voted on 
by the CPWG and approved by the ASRAC. (See Docket No. EERE-2016-BT-
STD-0004, No. 98) DOE has encouraged the negotiation of new standard 
levels as a means for interested parties, representing diverse points 
of view, to analyze and recommend energy conservation standards to DOE. 
Such negotiations may often expedite the rulemaking process. In 
addition, standard levels recommended through a negotiation may 
increase the likelihood for regulatory compliance, while decreasing the 
risk of litigation.
    As stated, DOE conducts the walk-down analysis to determine the TSL 
that represents the maximum improvement in energy efficiency that is 
technologically feasible and economically justified as required under 
EPCA. The walk-down is not a comparative analysis, as a comparative 
analysis would result in the maximization of net benefits instead of 
energy savings that are technologically feasible and economically 
justified, which would be contrary to the statute. 86 FR 70892, 70908. 
Although DOE has not conducted a comparative analysis to select the 
proposed energy conservation standards, DOE notes that despite the 
average consumer LCC savings being similar between TSL 2 ($103.2), TSL 
3 ($105.3) and TSL 4 ($97.6), TSL 2 has a much lower fraction of 
consumers who experience a net cost (29.2%) than TSL 3 (46.4%) and TSL 
4 (49.7%). In terms of industry investment to comply with each standard 
level, TSL 2 ($77.0 million) has considerably lower impact than TSL 3 
($111.1 million) and TSL 4 ($111.8 million). Finally, when comparing 
the cumulative NPV of consumer benefit using a 7% discount rate, TSL 2 
($0.73 billion) has a higher benefit value than both TSL 3 ($0.63 
billion) and TSL 4 ($0.58 billion), while for a 3% discount rate, TSL 2 
($1.77 billion) is below TSL 3 ($1.99 billion) and TSL 4 (2.07 
billion).
    Therefore, based on the previous considerations, DOE proposes to 
adopt

[[Page 74906]]

the energy conservation standards for circulator pumps at TSL 2. The 
proposed energy conservation standards for circulator pumps, which are 
expressed as CEI, are shown in Table V.21. As stated in section 
III.A.1, this proposed standard level of a maximum CEI of 1.00, or TSL 
2, is equivalent to the standard level recommended by the CPWG in the 
November 2016 CWPG Recommendations, in which was described both as EL 2 
and as a CEI value of 1.00.

 Table V.21--Proposed Energy Conservation Standards for Circulator Pumps
------------------------------------------------------------------------
                      Equipment class                        Maximum CEI
------------------------------------------------------------------------
(All Circulator Pumps).....................................         1.00
------------------------------------------------------------------------

2. Annualized Benefits and Costs of the Proposed Standards
    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The annualized net benefit is 
(1) the annualized national economic value (expressed in 2021$) of the 
benefits from operating products that meet the proposed standards 
(consisting primarily of operating cost savings from using less energy, 
minus increases in product purchase costs, and (2) the annualized 
monetary value of the climate and health benefits from emission 
reductions.
    Table V.22 shows the annualized values for circulator pumps under 
TSL 2, expressed in 2021$. The results under the primary estimate are 
as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
health benefits from reduced NOX and SO2 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated cost of the standards 
proposed in this rule is $93.5 million per year in increased equipment 
costs, while the estimated annual benefits are $165.8 in reduced 
equipment operating costs, $44.4 million in climate benefits, and $63.9 
million in health benefits. In this case, the net benefit would amount 
to $180.5 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards is $91.2 million per year in 
increased equipment costs, while the estimated annual benefits are 
$189.9 million in reduced operating costs, $44.4 million in climate 
benefits, and $80.8 million in health benefits. In this case, the net 
benefit would amount to $224.0 million per year.

Table V.22--Annualized Benefits and Costs of Proposed Energy Conservation Standards for Circulator Pumps (TSL 2)
----------------------------------------------------------------------------------------------------------------
                                                                        Million (2021$/year)
                                                  --------------------------------------------------------------
                                                                          Low-net-benefits    High-net-benefits
                                                     Primary estimate         estimate             estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate:
    Consumer Operating Cost Savings..............                189.9                185.7                194.0
    Climate Benefits*............................                 44.4                 44.4                 44.4
    Health Benefits**............................                 80.8                 80.8                 80.8
                                                  --------------------------------------------------------------
        Total Benefits[dagger]...................                315.2                311.0                319.3
        Consumer Incremental Product                              91.2                 91.2                 91.2
         Costs[Dagger]...........................
                                                  --------------------------------------------------------------
        Net Benefits.............................                224.0                219.8                228.1
7% discount rate:
    Consumer Operating Cost Savings..............                165.8                162.6                168.7
    Climate Benefits* (3% discount rate).........                 44.4                 44.4                 44.4
    Health Benefits**............................                 63.9                 63.9                 63.9
                                                  --------------------------------------------------------------
        Total Benefits[dagger]...................                274.1                271.0                277.0
        Consumer Incremental Product                              93.5                 93.5                 93.5
         Costs[Dagger]...........................
                                                  --------------------------------------------------------------
        Net Benefits.............................                180.5                177.4                183.4
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with circulator pumps shipped in 2026-2055. These
  results include benefits to consumers which accrue after 2055 from the products shipped in 2026-2055.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
  notice). For presentational purposes of this table, the climate benefits associated with the average SC-GHG at
  a 3 percent discount rate are shown, but the Department does not have a single central SC-GHG point estimate,
  and it emphasizes the importance and value of considering the benefits calculated using all four SC-GHG
  estimates. On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the federal
  government's emergency motion for stay pending appeal of the February 11, 2022, preliminary injunction issued
  in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order, the
  preliminary injunction is no longer in effect, pending resolution of the federal government's appeal of that
  injunction or a further court order. Among other things, the preliminary injunction enjoined the defendants in
  that case from ``adopting, employing, treating as binding, or relying upon'' the interim estimates of the
  social cost of greenhouse gases--which were issued by the Interagency Working Group on the Social Cost of
  Greenhouse Gases on February 26, 2021--to monetize the benefits of reducing greenhouse gas emissions. In the
  absence of further intervening court orders, DOE will revert to its approach prior to the injunction and
  present monetized benefits where appropriate and permissible under law.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
  (for NOX and SO2) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
  continue to assess the ability to monetize other effects such as health benefits from reductions in direct
  PM2.5 emissions. See section IV.L of this document for more details.
[dagger] Total benefits include consumer, climate, and health benefits. Total benefits for both the 3-percent
  and 7-percent cases are presented using the average SC-GHG with 3-percent discount rate, but the Department
  does not have a single central SC-GHG point estimate. DOE emphasizes the importance and value of considering
  the benefits calculated using all four SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as installation costs.


[[Page 74907]]

D. Reporting, Certification, and Sampling Plan

    Manufacturers, including importers, must use product-specific 
certification templates to certify compliance to DOE. As discussed 
previously, DOE is not proposing to amend the product-specific 
certification requirements for pumps (10 CFR 429.59) to address 
circulator pumps in this NOPR. DOE may consider certification reporting 
requirements for circulator pumps in a separate rulemaking.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

    Executive Order (``E.O.'') 12866, ``Regulatory Planning and 
Review,'' as supplemented and reaffirmed by E.O. 13563, ``Improving 
Regulation and Regulatory Review, 76 FR 3821 (Jan. 21, 2011), requires 
agencies, to the extent permitted by law, to (1) propose or adopt a 
regulation only upon a reasoned determination that its benefits justify 
its costs (recognizing that some benefits and costs are difficult to 
quantify); (2) tailor regulations to impose the least burden on 
society, consistent with obtaining regulatory objectives, taking into 
account, among other things, and to the extent practicable, the costs 
of cumulative regulations; (3) select, in choosing among alternative 
regulatory approaches, those approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages; distributive impacts; and equity); (4) to the 
extent feasible, specify performance objectives, rather than specifying 
the behavior or manner of compliance that regulated entities must 
adopt; and (5) identify and assess available alternatives to direct 
regulation, including providing economic incentives to encourage the 
desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public. DOE 
emphasizes as well that E.O. 13563 requires agencies to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible. In its guidance, the 
Office of Information and Regulatory Affairs (``OIRA'') in the Office 
of Management and Budget (``OMB'') has emphasized that such techniques 
may include identifying changing future compliance costs that might 
result from technological innovation or anticipated behavioral changes. 
For the reasons stated in the preamble, this proposed/final regulatory 
action is consistent with these principles.
    Section 6(a) of E.O. 12866 also requires agencies to submit 
``significant regulatory actions'' to OIRA for review. OIRA has 
determined that this proposed regulatory action constitutes a 
``significant regulatory action'' within the scope of section 3(f)(1) 
of E.O. 12866. Accordingly, pursuant to section 6(a)(3)(C) of E.O. 
12866, DOE has provided to OIRA an assessment, including the underlying 
analysis, of benefits and costs anticipated from the proposed 
regulatory action, together with, to the extent feasible, a 
quantification of those costs; and an assessment, including the 
underlying analysis, of costs and benefits of potentially effective and 
reasonably feasible alternatives to the planned regulation, and an 
explanation why the planned regulatory action is preferable to the 
identified potential alternatives. These assessments are summarized in 
this preamble and further detail can be found in the technical support 
document for this rulemaking.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (``IRFA'') 
for any rule that by law must be proposed for public comment, unless 
the agency certifies that the rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
As required by E.O. 13272, ``Proper Consideration of Small Entities 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 (Feb. 19, 2003). 
DOE has made its procedures and policies available on the Office of the 
General Counsel's website (www.energy.gov/gc/office-general-counsel). 
DOE has prepared the following IRFA for the products that are the 
subject of this rulemaking.
1. Description of Reasons Why Action Is Being Considered
    The January 2016 TP final rule and the January 2016 ECS final rule 
implemented the recommendations of the Commercial and Industrial Pump 
Working Group (``CIPWG'') established through the Appliance Standards 
Rulemaking Federal Advisory Committee (``ASRAC'') to negotiate 
standards and a test procedure for general pumps. (Docket No. EERE-
2013-BT-NOC-0039) The CIPWG approved a term sheet containing 
recommendations to DOE on appropriate standard levels for general 
pumps, as well as recommendations addressing issues related to the 
metric and test procedure for general pumps (``CIPWG 
recommendations''). (Docket No. EERE-2013-BT-NOC-0039, No. 92) 
Subsequently, ASRAC approved the CIPWG recommendations. The CIPWG 
recommendations included initiation of a separate rulemaking for 
circulator pumps. (Docket No. EERE-2013-BT-NOC-0039, No. 92, 
Recommendation #5A at p. 2)
    On February 3, 2016, DOE issued a notice of intent to establish the 
circulator pumps working group to negotiate a notice of proposed 
rulemaking (``NOPR'') for energy conservation standards for circulator 
pumps to negotiate, if possible, Federal standards and a test procedure 
for circulator pumps and to announce the first public meeting. 81 FR 
5658. The CPWG met to address potential energy conservation standards 
for circulator pumps. Those meetings began on November 3-4, 2016 and 
concluded on November 30, 2016, with approval of a term sheet 
(``November 2016 CPWG Recommendations'') containing CPWG 
recommendations related to energy conservation standards, applicable 
test procedure, labeling and certification requirements for circulator 
pumps. (Docket No. EERE-2016-BT-STD-0004, No. 98) As such, DOE has 
undertaken this rulemaking to consider establishing energy conservation 
standards for circulator pumps.
2. Objectives of, and Legal Basis for, Rule
    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
C of EPCA, added by Public Law 95-619, Title IV, section 441(a) (42 
U.S.C. 6311-6317, as codified), established the Energy Conservation 
Program for Certain Industrial Equipment, which sets forth a variety of 
provisions designed to improve energy efficiency. This equipment 
includes pumps, the subject of this document. (42 U.S.C. 6311(1)(A)))
3. Description on Estimated Number of Small Entities Regulated
    For manufacturers of circulator pumps, the Small Business 
Administration (``SBA'') has set a size threshold, which defines those 
entities classified as ``small businesses'' for the purposes of the 
statute. DOE used the SBA's small business size standards to

[[Page 74908]]

determine whether any small entities would be subject to the 
requirements of the rule. In 13 CFR 121.201, the SBA sets a threshold 
of 750 employees or fewer for an entity to be considered as a small 
business for this category. The equipment covered by this rule are 
classified under North American Industry Classification System 
(``NAICS'') code 333914,\79\ ``Measuring, Dispensing, and Other Pumping 
Equipment Manufacturing.''
---------------------------------------------------------------------------

    \79\ The size standards are listed by NAICS code and industry 
description and are available at: www.sba.gov/document/support-table-size-standards (Last accessed on May 1, 2022).
---------------------------------------------------------------------------

    DOE used publicly available information to identify small 
businesses that manufacture circulator pumps covered in this 
rulemaking. DOE identified ten companies that are OEMs of circulator 
pumps covered by this rulemaking. DOE screened out companies that do 
not meet the definition of a ``small business'' or are foreign-owned 
and operated. DOE identified three small, domestic OEMs using 
subscription-based business information tools to determine the number 
of employees and revenue of the potential small businesses.
    DOE seeks input on its estimate that there are three small business 
manufacturers of circulator pumps.
4. Description and Estimate of Compliance Requirements Including 
Differences in Cost, if Any, for Different Groups of Small Entities
    This NOPR proposes to adopt energy conservation standards for 
circulator pumps. To determine the impact on the small OEMs, product 
conversion costs and capital conversion costs were estimated. Product 
conversion costs are investments in research, development, testing, 
marketing, and other non-capitalized costs necessary to make product 
designs comply with energy conservation standards. Capital conversion 
costs are one-time investments in plant, property, and equipment made 
in response to new standards.
    DOE estimates there is one small business that does not have any 
circulator pump models that would meet the proposed standard. The other 
two businesses both offer circulator pumps that would meet the proposed 
standard. DOE applied the conversion cost methodology described in 
section IV.J.2.c of this document to arrive at its estimate of product 
and capital conversion costs. DOE assumes that all circulator pump 
manufacturers would spread conversion costs over the two-year 
compliance timeframe, as standards are expected to require compliance 
approximately two years after the publication of a final rule. Using 
publicly available data, DOE estimated the average annual revenue for 
each of the small businesses. Table VI.1 displays DOE's estimates.

                             Table VI.1--Estimate of Small Business Compliance Costs
----------------------------------------------------------------------------------------------------------------
                                                                                                Compliance costs
                                         Basic models     Conversion costs      2 Years of      as a percent of
     Small business manufacturer         needing re-      (2021$ millions)   revenue estimate    2-year revenue
                                           designed                          (2021$ millions)         (%)
----------------------------------------------------------------------------------------------------------------
Manufacturer A......................                 32               44.5                316                 14
Manufacturer B......................                  3                3.3                 10                 32
Manufacturer C......................                  1                1.3                  4                 33
----------------------------------------------------------------------------------------------------------------

    Additionally, these manufacturers could choose to discontinue their 
least efficient models and ramp up production of existing, compliant 
models rather than redesign each of their noncompliant models. 
Therefore, DOE estimates actual conversion costs could be lower than 
the estimates developed under the assumption that manufacturers would 
redesign all noncompliant models. Lastly, DOE notes that all three 
small businesses are privately owned. Therefore, the exact revenues of 
these small businesses may vary from DOE's estimates.
    DOE seeks input on its estimates of the potential impact to small 
business manufacturers of circulator pumps. Additionally, DOE requests 
comment on if any small businesses might exit the circulator pump 
market in response to the proposed standards, if finalized, or at any 
other analyzed standard levels and how small businesses would finance, 
if necessary, the estimated conversion costs.
5. Duplication, Overlap, and Conflict With Other Rules and Regulations
    DOE is not aware of any rules or regulations that duplicate, 
overlap, or conflict with the proposed rule being considered in this 
action.
6. Significant Alternatives to the Rule
    The discussion in the previous section analyzes impacts on small 
businesses that would result from DOE's proposed rule, represented by 
TSL 2. In reviewing alternatives to the proposed rule, DOE examined a 
range of different efficiency levels and their respective impacts to 
both manufacturers and consumers. DOE examined energy conservation 
standards set at lower efficiency levels. While lower TSLs would reduce 
the impacts on small businesses, it would come at the expense of a 
reduction in energy savings. TSL 1 is estimated to require 
manufacturers to incur investments that are approximately 93 percent 
smaller than the investments estimated to be incurred at TSL 2. 
However, compared to TSL 2, TSL 1 achieves 84 percent less energy 
savings and 60 percent less consumer net benefits using a 7 percent 
discount rate.
    A manufacturer/importer whose annual gross revenue from all its 
operations does not exceed $8 million also may apply for an exemption 
from all or part of any conservation standard for a period not longer 
than 24 months after the effective date of a final rule establishing 
the standard. 42 U.S.C. 6295(t).
    Additionally, the Department of Energy Organization Act empowers 
the Secretary of Energy to adjust a rule issued under the EPCA to 
prevent ``special hardship, inequity, or unfair distribution of 
burdens'' that may be imposed on a manufacturer/importer as a result of 
such a rule (42 U.S.C. 7194). The Department of Energy Office of 
Hearings and Appeals decides whether to grant requests for exceptions.
    Based on the presented discussion, DOE believes that TSL 2 would 
deliver the highest energy savings while mitigating the potential 
burdens placed on circulator pump manufacturers, including small 
business manufacturers. Accordingly, DOE does not propose one of the 
other TSLs considered in the

[[Page 74909]]

analysis, or the other policy alternatives as part of the regulatory 
impact analysis and included in chapter 17 of the NOPR TSD.
    Additional compliance flexibilities may be available through other 
means. Manufacturers subject to DOE's energy efficiency standards may 
apply to DOE's Office of Hearings and Appeals for exception relief 
under certain circumstances. Manufacturers should refer to 10 CFR part 
1003 for additional details.

C. Review Under the Paperwork Reduction Act

    Under the procedures established by the Paperwork Reduction Act of 
1995 (``PRA''), a person is not required to respond to a collection of 
information by a Federal agency unless that collection of information 
displays a currently valid OMB Control Number.
    OMB Control Number 1910-1400, Compliance Statement Energy/Water 
Conservation Standards for Appliances, is currently valid and assigned 
to the certification reporting requirements applicable to covered 
equipment, including circulator pumps.
    DOE's certification and compliance activities ensure accurate and 
comprehensive information about the energy and water use 
characteristics of covered products and covered equipment sold in the 
United States. Manufacturers of all covered products and covered 
equipment must submit a certification report before a basic model is 
distributed in commerce, annually thereafter, and if the basic model is 
redesigned in such a manner to increase the consumption or decrease the 
efficiency of the basic model such that the certified rating is no 
longer supported by the test data. Additionally, manufacturers must 
report when production of a basic model has ceased and is no longer 
offered for sale as part of the next annual certification report 
following such cessation. DOE requires the manufacturer of any covered 
product or covered equipment to establish, maintain, and retain the 
records of certification reports, of the underlying test data for all 
certification testing, and of any other testing conducted to satisfy 
the requirements of part 429, part 430, and/or part 431. Certification 
reports provide DOE and consumers with comprehensive, up-to date 
efficiency information and support effective enforcement.
    DOE is not proposing certification or reporting requirements for 
circulator pumps in this NOPR. Instead, DOE may consider proposals to 
address amendments to the certification requirements and reporting for 
circulator pumps under a separate rulemaking regarding appliance and 
equipment certification. DOE will address changes to OMB Control Number 
1910-1400 at that time, as necessary. Notwithstanding any other 
provision of the law, no person is required to respond to, nor shall 
any person be subject to a penalty for failure to comply with, a 
collection of information subject to the requirements of the PRA, 
unless that collection of information displays a currently valid OMB 
Control Number.

D. Review Under the National Environmental Policy Act of 1969

    DOE is analyzing this proposed regulation 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 rulemakings that establish energy 
conservation standards for consumer products or industrial equipment. 
10 CFR part 1021, subpart D, appendix B5.1. DOE anticipates that this 
rulemaking qualifies for categorical exclusion B5.1 because it is a 
rulemaking that establishes energy conservation standards for consumer 
products or industrial equipment, none of the exceptions identified in 
categorical exclusion B5.1(b) apply, no extraordinary circumstances 
exist that require further environmental analysis, and it 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 rule.

E. Review Under Executive Order 13132

    E.O. 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 rule and has 
tentatively determined that it would not have a substantial direct 
effect on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. EPCA governs 
and prescribes Federal preemption of State regulations as to energy 
conservation for the equipment that is the subject of this proposed 
rule. States can petition DOE for exemption from such preemption to the 
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6316(a) 
and (b); 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 E.O. 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 E.O. 12988 specifically requires that Executive 
agencies make every reasonable effort to ensure that the regulation: 
(1) clearly specifies the preemptive effect, if any, (2) clearly 
specifies any effect on existing Federal law or regulation, (3) 
provides a clear legal standard for affected conduct while promoting 
simplification and burden reduction, (4) specifies the retroactive 
effect, if any, (5) adequately defines key terms, and (6) addresses 
other important issues affecting clarity and general draftsmanship 
under any guidelines issued by the Attorney General. Section 3(c) of 
Executive Order 12988 requires Executive agencies to review regulations 
in light of applicable standards in section 3(a) and section 3(b) to 
determine whether they are met or it is unreasonable to meet one or 
more of them. DOE has completed the required review and determined 
that, to the extent permitted by law, this proposed rule meets the 
relevant standards of E.O. 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, section 201 (codified at 2 U.S.C. 
1531).

[[Page 74910]]

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 
www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
    This rule does not contain a Federal intergovernmental mandate, nor 
is it expected to require expenditures of $100 million or more in any 
one year by the private sector.
    As a result, the analytical requirements of UMRA do not apply.

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

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

I. Review Under Executive Order 12630

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

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

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review 
most disseminations of information to the public under information 
quality guidelines established by each agency pursuant to general 
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 
(Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving 
Implementation of the Information Quality Act (April 24, 2019), DOE 
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has 
reviewed this NOPR under the OMB and DOE guidelines and has concluded 
that it is consistent with applicable policies in those guidelines.

K. Review Under Executive Order 13211

    E.O. 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 order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use.
    DOE has tentatively concluded that this regulatory action, which 
proposes energy conservation standards for circulator pumps, is not a 
significant energy action because the proposed standards are not likely 
to have a significant adverse effect on the supply, distribution, or 
use of energy, nor has it been designated as such by the Administrator 
at OIRA. Accordingly, DOE has not prepared a Statement of Energy 
Effects on this proposed rule.

L. 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.'' 70 FR 2664, 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.\80\ 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. 
Because available data, models, and technological understanding have 
changed since 2007, DOE has engaged with the National Academy of 
Sciences to review DOE's analytical methodologies to ascertain whether 
modifications are needed to improve the Department's analyses. DOE is 
in the process of evaluating the resulting report.\81\
---------------------------------------------------------------------------

    \80\ The 2007 ``Energy Conservation Standards Rulemaking Peer 
Review Report'' is available at the following website: energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last accessed July 21, 2022).
    \81\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------

VII. Public Participation

A. Participation in the Webinar

[[Page 74911]]

    The time and date of the webinar meeting are listed in the DATES 
section at the beginning of this document. Webinar registration 
information, participant instructions, and information about the 
capabilities available to webinar participants will be published on 
DOE's website: www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=66. Participants are responsible for ensuring 
their systems are compatible with the webinar software.

B. Procedure for Submitting Prepared General Statements for 
Distribution

    Any person who has an interest in the topics addressed in this 
proposed rule, or who is representative of a group or class of persons 
that has an interest in these issues, may request an opportunity to 
make an oral presentation at the webinar. Such persons may submit to 
[email protected]. Persons who wish to speak 
should include with their request a computer file in WordPerfect, 
Microsoft Word, PDF, or text (ASCII) file format that briefly describes 
the nature of their interest in this rulemaking and the topics they 
wish to discuss. Such persons should also provide a daytime telephone 
number where they can be reached.

C. Conduct of the Public Meeting

    DOE will designate a DOE official to preside at the webinar/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 webinar. There shall not be discussion of 
proprietary information, costs or prices, market share, or other 
commercial matters regulated by U.S. anti-trust laws. After the webinar 
and until the end of the comment period, interested parties may submit 
further comments on the proceedings and any aspect of the rulemaking.
    The webinar will be conducted in an informal, conference style. DOE 
will a general overview of the topics addressed in this rulemaking, 
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. 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 webinar/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 webinar.
    A transcript of the webinar will be included in the docket, which 
can be viewed as described in the Docket section at the beginning of 
this document. In addition, any person may buy a copy of the transcript 
from the transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule before or after the public meeting, but no later than the 
date provided in the DATES section at the beginning of this proposed 
rule. Interested parties may submit comments, data, and other 
information using any of the methods described in the ADDRESSES section 
at the beginning of this document.
    Submitting comments via www.regulations.gov. The 
www.regulations.gov web page will require you to provide your name and 
contact information. Your contact information will be viewable to DOE 
Building Technologies staff only. Your contact information will not be 
publicly viewable except for your first and last names, organization 
name (if any), and submitter representative name (if any). If your 
comment is not processed properly because of technical difficulties, 
DOE will use this information to contact you. If DOE cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, DOE may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment itself or in any documents attached to your 
comment. Any information that you do not want to be publicly viewable 
should not be included in your comment, nor in any document attached to 
your comment. Otherwise, persons viewing comments will see only first 
and last names, organization names, correspondence containing comments, 
and any documents submitted with the comments.
    Do not submit to www.regulations.gov information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (``CBI'')). Comments submitted 
through www.regulations.gov cannot be claimed as CBI. Comments received 
through the 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 www.regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that www.regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email, hand delivery/courier, or postal 
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to 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

[[Page 74912]]

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 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. DOE will make 
its own determination about the confidential status of the information 
and treat it according to its determination.
    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 requests comment on its approach to exclude SVILs from the 
scope of this NOPR, and whether DOE should consider standards for any 
SVILs as part of this rulemaking.
    (2) DOE requests comment regarding circulator pump control variety 
for the purposes of demonstrating compliance with energy conservation 
standards.
    (3) DOE requests comment regarding the proposed scope of energy 
conservation standards for circulator pumps.
    (4) DOE requests comment regarding the present circulator pump-
related definitions, and in particular whether any clarifications are 
warranted.
    (5) DOE requests comment regarding the proposal to analyze all 
circulator pumps within a single equipment class.
    (6) DOE requests comment on its proposal not to establish a 
separate equipment class for on-demand circulator pumps.
    (7) DOE requests comment regarding the current and anticipated 
forward availability of ECMs and components necessary for their 
manufacture.
    (8) DOE requests comment on whether the distribution channels 
described above and the percentage of equipment sold through the 
different channels are appropriate and sufficient to describe the 
distribution markets for circulator pumps. Specifically, DOE requests 
comment and data on online sales of circulator pumps and the 
appropriate channel to characterize them.
    (9) DOE seeks comment on the approach and inputs used to develop 
no-new standards case efficiency distribution.
    (10) DOE seeks comment on the approach and inputs used to develop 
no-new standards case shipments projections.
    (11) DOE seeks comment on the approach and inputs used to develop 
the different standards case shipments projections.
    (12) DOE requests comment on the rebound effect specifically for 
circulator pumps, including the magnitude of any rebound effect and 
data sources specific to circulator pumps.
    (13) DOE seeks input on its estimates of product and capital 
conversion costs associated with manufacturing circulator pumps at the 
potential energy conservation standard.
    (14) DOE requests comment on its estimates of domestic employment 
for circulator pump manufacturing in the presence of an energy 
conservation standards.
    (15) DOE seeks input on its estimate that there are three small 
business manufacturers of circulator pumps.
    (16) DOE seeks input on its estimates of the potential impact to 
small business manufacturers of circulator pumps. Additionally, DOE 
requests comment on if any small businesses might exit the circulator 
pump market in response to the proposed standards, if finalized, or at 
any other analyzed standard levels and how small businesses would 
finance, if necessary, the estimated conversion costs.
    (17) Additionally, DOE welcomes comments on other issues relevant 
to the conduct of this proposed rulemaking that may not specifically be 
identified in this document.

VIII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this notice of 
proposed rulemaking and announcement of public meeting.

List of Subjects in 10 CFR Part 431

    Administrative practice and procedure, Confidential business 
information, Energy conservation test procedures, Reporting and 
recordkeeping requirements.

Signing Authority

    This document of the Department of Energy was signed on November 
21, 2022, by Francisco Alejandro Moreno, Acting Assistant Secretary for 
Energy Efficiency and Renewable Energy, pursuant to delegated authority 
from the Secretary of Energy. That document with the original signature 
and date is maintained by DOE. For administrative purposes only, and in 
compliance with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of the Department of Energy. This administrative 
process in no way alters the legal effect of this document upon 
publication in the Federal Register.

    Signed in Washington, DC, on November 22, 2022.
Treena V. Garrett,
Federal Register Liaison Officer,U.S. Department of Energy.
    For the reasons set forth in the preamble, DOE proposes to amend 
part 431 of chapter II, subchapter D, of title 10 of the Code of 
Federal Regulations, as set forth below:

PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND 
INDUSTRIAL EQUIPMENT

0
1. The authority citation for part 431 continues to read as follows:

    Authority:  42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.

0
2. Amend Sec.  431.465 by revising the section heading and adding 
paragraph (i) to read as follows:


Sec.  431.465   Circulator pumps energy conservation standards and 
their compliance dates.

* * * * *
    (i) Each circulator pump that is manufactured starting on [date 2 
years after publication of the final in the Federal Register] and that 
meets the criteria in paragraphs (i)(1) through (i)(2) of this section 
must have a circulator energy index (``CEI'') rating (as determined in 
accordance with the test procedure in Sec.  431.464(c)(2)) of not more 
than 1.00 using the instructions in paragraph (i)(3) of this section 
and with a control mode as specified in paragraph (i)(4) of this 
section:
    (1) Is a clean water pump as defined in Sec.  431.462.

[[Page 74913]]

    (2) Is not a submersible pump or a header pump, each as defined in 
Sec.  431.462.
    (3) The relationships in this paragraph (i)(3) are necessary to 
calculate maximum CEI.
    (i) Calculate CEI according to the following equation, as specified 
in section F.1 of appendix D to subpart Y of part 431:
[GRAPHIC] [TIFF OMITTED] TP06DE22.010

Where:

CEI = the circulator energy index (dimensionless);

CER = the circulator energy rating, determined in accordance with 
section F.1 of appendix D to subpart Y of part 431 (hp); and

CERSTD = the CER for a circulator pump that is minimally compliant 
with DOE's energy conservation standards with the same hydraulic 
horsepower as the rated pump, determined in accordance with 
paragraph (i)(3)(ii) of this section (hp).

    (ii) Calculate CERSTD according to the following equation:
    [GRAPHIC] [TIFF OMITTED] TP06DE22.011
    
Where:

CERSTD = the CER for a circulator pump that is minimally compliant 
with DOE's energy conservation standards with the same hydraulic 
horsepower as the rated pump, determined in accordance with 
paragraph (i)(3)(ii) of this section (hp);

i = the index variable of the summation notation used to express 
CERSTD as described in the following table, in which i is 
expressed as a percentage of circulator pump flow at best efficiency 
point, determined in accordance with the test procedure in Sec.  
431.464(c)(2):

------------------------------------------------------------------------
                                    i
-------------------------------------------------------------------------
25%
50%
75%
100%
------------------------------------------------------------------------

(dimensionless); and
[omega]i = the weighting factor at each corresponding test point, i, 
as described in the following table:

------------------------------------------------------------------------
                                                          Corresponding
                           i                                 [omega]
------------------------------------------------------------------------
25%....................................................              .25
50%....................................................              .25
75%....................................................              .25
100%...................................................              .25
------------------------------------------------------------------------

(dimensionless); and
Piin,STD = the reference power input to the circulator pump driver 
at test point i, calculated using the equations and method specified 
in paragraph (i)(3)(iii) of this section (hp).

    (iii) Calculate Piin,STD according to the following equation:
    [GRAPHIC] [TIFF OMITTED] TP06DE22.012
    
Where:

Piin,STD = the reference power input to the circulator pump driver 
at test point i (hp);

Pu,i = circulator pump basic model rated hydraulic horsepower 
determined in accordance with 10 CFR 429.59(a)(2)(i) (hp);

[alpha]i = part load efficiency factor at each test point as 
described in the following table:

------------------------------------------------------------------------
                                                          Corresponding
                           i                                 [alpha]
------------------------------------------------------------------------
25%....................................................           0.4843
50%....................................................           0.7736
75%....................................................           0.9417
100%...................................................                1
------------------------------------------------------------------------

(dimensionless); and
[eta]WTW,100% = reference circulator pump wire-to-water efficiency 
at best efficiency point at the applicable energy conservation 
standard level, as described in the following table as a function of 
circulator pump basic model rated hydraulic horsepower, Pu,100% (%):

------------------------------------------------------------------------
                Pu,100%                           [eta]WTW,100%
------------------------------------------------------------------------
<1.....................................  A*ln(Pu,100%+B)+C.
>=1....................................  67.79%.
------------------------------------------------------------------------

Where A, B, and C are mathematical constants as specified in the 
following table:

------------------------------------------------------------------------
                       A                             B            C
------------------------------------------------------------------------
10.00.........................................      .001141        67.78
------------------------------------------------------------------------


    (4) A circulator pump subject to energy conservation standards as 
described in this paragraph (i) must achieve the maximum CEI as 
described in paragraph (i)(3)(i) of this section and in accordance with 
the test procedure in Sec.  431.464(c)(2) in the least consumptive 
control mode in which it is capable of operating.

[FR Doc. 2022-25953 Filed 12-5-22; 8:45 am]
BILLING CODE 6450-01-P