[Federal Register Volume 88, Number 22 (Thursday, February 2, 2023)]
[Proposed Rules]
[Pages 7284-7346]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-01282]
[[Page 7283]]
Vol. 88
Thursday,
No. 22
February 2, 2023
Part V
Department of Energy
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10 CFR Part 430
Energy Conservation Program: Energy Conservation Standards for External
Power Supplies; Proposed Rule
Federal Register / Vol. 88, No. 22 / Thursday, February 2, 2023 /
Proposed Rules
[[Page 7284]]
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DEPARTMENT OF ENERGY
10 CFR Part 430
[EERE-2020-BT-STD-0006]
RIN 1904-AD87
Energy Conservation Program: Energy Conservation Standards for
External Power Supplies
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 external
power supplies (``EPSs''). EPCA also requires the U.S. Department of
Energy (``DOE'') to periodically determine whether more-stringent,
standards would be technologically feasible and economically justified,
and would result in significant energy savings. In this notice of
proposed rulemaking (``NOPR''), DOE proposes amended energy
conservation standards for EPSs, and also announces a public meeting to
receive comment on these proposed standards and associated analyses and
results.
DATES:
Meeting: DOE will hold a public meeting via webinar on Wednesday,
March 1, 2023, from 1:00 p.m. to 4:00 p.m. See section VII, ``Public
Participation,'' for webinar registration information, participant
instructions, and information about the capabilities available to
webinar participants.
Comments: DOE will accept comments, data, and information regarding
this NOPR no later than April 3, 2023. 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 March 6, 2023.
ADDRESSES: Interested persons are encouraged to submit comments using
the Federal eRulemaking Portal at www.regulations.gov, under docket
number EERE-2020-BT-STD-0006. Follow the instructions for submitting
comments. Alternatively, interested persons may submit comments,
identified by docket number EERE-2020-BT-STD-0006, by any of the
following methods:
Email: [email protected]. Include the docket number EERE-
2020-BT-STD-0006 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-2020-BT-STD-0006. 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 rule.
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) 586-4498. 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: DOE proposes to incorporate by reference the
following industry standard in part 430:
International Efficiency Marking Protocol for External Power
Supplies, Version 4.0, January, 2023.
The above referenced document has been added to the docket for this
rulemaking and can be downloaded from Docket EERE-2020-BT-STD-0006 on
Regulations.gov.
For a further discussion of this standard, see section VI.M of this
document.
Table of Contents
I. Synopsis of the Proposed Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for External Power Supplies
3. Deviation From Appendix A
III. General Discussion
A. Product Classes and Scope of Coverage
B. Materials Incorporated by Reference
C. Test Procedure
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
IV. Methodology and Discussion of Related Comments
[[Page 7285]]
A. General Comments and Responses
B. Market and Technology Assessment
1. Scope of Coverage and Product Classes
2. Existing Efficiency Programs
3. Technology Options
C. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
D. Engineering Analysis
1. Efficiency Analysis
a. Baseline Efficiency
b. Higher Efficiency Levels
2. Cost Analysis
3. Cost-Efficiency Results
E. Markups Analysis
F. Energy Use Analysis
G. 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
8. Energy Efficiency Distribution in the No-New-Standards Case
9. Payback Period Analysis
H. Shipments Analysis
I. National Impact Analysis
1. Product Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
J. Consumer Subgroup Analysis
K. 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. Discussion of MIA Comments
L. Emissions Analysis
1. Air Quality Regulations Incorporated in DOE's Analysis
M. 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
N. Utility Impact Analysis
O. Employment Impact Analysis
P. Marking Requirements
V. Analytical Results and Conclusions
A. Trial Standard Levels
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
b. Consumer Subgroup Analysis
c. Rebuttable Presumption Payback
2. Economic Impacts on Manufacturers
a. Industry Cash Flow Analysis Results
b. 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 EPS 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
M. Description of Materials Incorporated by Reference
VII. Public Participation
A. Attendance at the Public Meeting
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of the Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary
I. Synopsis of the Proposed Rule
Title III, Part B \1\ of EPCA,\2\ established the Energy
Conservation Program for Consumer Products Other Than Automobiles. (42
U.S.C. 6291-6309) These products include external power supplies
(``EPSs''), the subject of this rulemaking.
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\1\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated Part A.
\2\ All references to EPCA in this document refer to the statute
as amended through the Energy 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. 6295(o)(2)(A)) Furthermore, the new
or amended standard must result in a significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B)) EPCA also provides that not later
than 6 years after issuance of any final rule establishing or amending
a standard, DOE must publish either a notice of determination that
standards for the product do not need to be amended, or a notice of
proposed rulemaking including new proposed energy conservation
standards (proceeding to a final rule, as appropriate). (42 U.S.C.
6295(m))
In accordance with these and other statutory provisions discussed
in this document, DOE proposes amended energy conservation standards
for EPSs. The proposed standards, which are expressed in percentage and
Watts (``W''), are shown in Table I.1. These proposed standards, if
adopted, would apply to all EPSs 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 rulemaking.
Table I.1--Proposed Energy Conservation Standards for External Power Supplies
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Minimum average efficiency in active mode Maximum power in
Nameplate output power (Pout) (expressed as a decimal) no-load mode [W]
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Single-Voltage External AC-DC Power Supply, Basic-Voltage
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Pout <= 1 W............................. >=0.5 x Pout + 0.169............................... <=0.075
1 W < Pout <= 49 W...................... >=0.071 x ln(Pout)-0.00115 x Pout + 0.67........... <=0.075
49 W < Pout <= 250 W.................... >=0.890............................................ <=0.150
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Pout > 250 W............................ >=0.890............................................ <=0.150
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Single-Voltage External AC-DC Power Supply, Low-Voltage
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Pout <= 1 W............................. >=0.517 x Pout + 0.091............................. <=0.075
1 W < Pout <= 49 W...................... >=0.0834 x ln(Pout)-0.0011x Pout + 0.609........... <=0.075
49 W < Pout <= 250 W.................... >=0.880............................................ <=0.150
Pout > 250 W............................ >=0.880............................................ <=0.150
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Single-Voltage External AC-AC Power Supply, Basic-Voltage
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Pout <= 1 W............................. >=0.5 x Pout + 0.169............................... <=0.075
1 W < Pout <= 49 W...................... >=0.0582 x ln(Pout)-0.00104 x Pout + 0.727......... <=0.075
49 W < Pout <= 250 W.................... >=0.902............................................ <=0.075
Pout > 250 W............................ >=0.902............................................ <=0.200
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Single-Voltage External AC-AC Power Supply, Low-Voltage
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Pout <= 1 W............................. >=0.517 x Pout + 0.091............................. <=0.072
1 W < Pout <= 49 W...................... >=0.0834 x ln(Pout)-0.0011 x Pout + 0.609.......... <=0.072
49 W < Pout <= 250 W.................... >=0.880............................................ <=0.185
Pout > 250 W............................ >=0.880............................................ <=0.500
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Multiple-Voltage External Power Supply
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Pout <= 1 W............................. >=0.497 x Pout + 0.067............................. <=0.075
1 W < Pout <= 49 W...................... >=0.0782 x ln(Pout)-0.0013 x Pout + 0.643.......... <=0.075
49 W < Pout <= 250 W.................... >=0.885............................................ <=0.125
Pout > 250 W............................ >=0.885............................................ <=0.125
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A. Benefits and Costs to Consumers
Table I.2 presents DOE's evaluation of the economic impacts of the
proposed standards on consumers of EPSs, as measured by the average
life-cycle cost (``LCC'') savings and the simple payback period
(``PBP'').\3\ The average LCC savings are positive or nearly zero for
all product classes and the PBP is similar to or less than the average
lifetime of EPSs, which is estimated to range from 4.2 to 6.2 years
(see section IV.G of this document).
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\3\ 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.G of this document).
Table I.2--Impacts of Proposed Energy Conservation Standards on Consumers of External Power Supplies
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Average LCC
Product class savings [2021 Simple payback
dollars] period [years]
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AC-DC, Basic-Voltage...................................................... $-0.03 5.0
AC-DC, Low-Voltage........................................................ 0.01 3.2
AC-AC, Basic-Voltage...................................................... 0.52 4.1
Multiple-Voltage.......................................................... 0.24 7.0
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DOE's analysis of the impacts of the proposed standards on
consumers is described in section IV.G 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 (2022-2056). Using a real discount rate of
7.1 percent, DOE estimates that the INPV for manufacturers of EPSs in
the case without amended standards is $847.5 million in 2021 dollars.
Under the proposed standards, the change in INPV is estimated to range
from a decrease of 1.4 percent to a decrease of 0.9 percent, which
corresponds to decreases of approximately $11.6 million and $7.9
million. In order to bring products into compliance with amended
standards, it is estimated that the industry would incur total
conversion costs of $17.4 million.
DOE's analysis of the impacts of the proposed standards on
manufacturers is described in section IV.K of this document. The
analytic results of the manufacturer impact analysis (``MIA'') are
presented in section V.B.2 of this document.
[[Page 7287]]
C. National Benefits and Costs \4\
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\4\ 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 EPSs would save a significant amount of energy. Relative
to the case without amended standards, the lifetime energy savings for
EPSs purchased in the 30-year period that begins in the anticipated
year of compliance with the amended standards (2027-2056) amount to
0.11 quadrillion British thermal units (``Btu''), or quads.\5\ This
represents a savings of 2.9 percent relative to the energy use of these
products in the case without amended standards (referred to as the
``no-new-standards case'').
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\5\ 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.I of this document.
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The cumulative net present value (``NPV'') of total consumer
benefits of the proposed standards for EPSs ranges from $0.17 billion
(at a 7-percent discount rate) to $0.45 billion (at a 3-percent
discount rate). This NPV expresses the estimated total value of future
operating-cost savings minus the estimated increased product costs for
EPSs purchased in 2027-2056.
In addition, the proposed standards for EPSs are projected to yield
significant environmental benefits. DOE estimates that the proposed
standards would result in cumulative emission reductions (over the same
period as for energy savings) of 3.9 million metric tons (``Mt'') \6\
of carbon dioxide (``CO2''), 26.3 thousand tons of methane
(``CH4''), 0.04 thousand tons of nitrous oxide
(``N2O''), 6.0 thousand tons of nitrogen oxides
(``NOX''), 1.7 thousand tons of sulfur dioxide
(``SO2''), and 0.01 tons of mercury (``Hg'').\7\
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\6\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO2 are presented in short tons.
\7\ DOE calculated emissions reductions relative to the no-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.L 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 (``SC-CO2''), the social cost of methane
(``SC-CH4''), and the social cost of nitrous oxide (``SC-
N2O''). Together these represent the social cost of GHG
(``SC-GHG'').\8\ DOE used interim SC-GHG values developed by an
Interagency Working Group on the Social Cost of Greenhouse Gases
(IWG),\9\ as discussed in section IV.M of this document. For
presentational purposes, the climate benefits associated with the
average SC-GHG at a 3-percent discount rate are $0.20 billion. DOE 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.
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\8\ 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.
\9\ 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 SC-GHG 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.\10\ DOE estimates the present
value of the health benefits would be $0.16 billion using a 7-percent
discount rate, and $0.36 billion using a 3-percent discount rate.\11\
DOE is currently monetizing only PM2.5 precursor health
benefits for SO2 and NOX and ozone precursor
health benefits for NOX, but will continue to assess the
ability to monetize other effects, such as health benefits from
reductions in direct PM2.5 emissions. If any such additional
health benefits were monetized, they would only further increase the
total benefits of the proposed rule.
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\10\ 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.M of this document for further
discussion.
\11\ 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 EPSs. 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 SC-GHG cases. The estimated total
net benefits using each of the four cases are presented in section IV.M
of this document.
Table I.3--Summary of Economic Benefits and Costs of Proposed Energy
Conservation Standards for External Power Supplies
[TSL 4]
------------------------------------------------------------------------
Billion 2020
dollars
------------------------------------------------------------------------
3% discount rate
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Consumer Operating Cost Savings......................... 0.82
Climate Benefits *...................................... 0.20
Health Benefits **...................................... 0.36
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Total Benefits [dagger]............................. 1.38
Consumer Incremental Product Costs...................... 0.37
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Net Benefits............................................ 1.01
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[[Page 7288]]
7% discount rate
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Consumer Operating Cost Savings......................... 0.40
Climate Benefits * (3% discount rate)................... 0.20
Health Benefits **...................................... 0.16
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Total Benefits [dagger]............................. 0.76
Consumer Incremental Product Costs...................... 0.23
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Net Benefits............................................ 0.53
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Note: This table presents the costs and benefits associated with EPSs
shipped in 2027-2056. These results include benefits to consumers
which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the
SC-GHG (see section IV.M of this proposed rule). 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. 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 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.M 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.24 for net benefits using all four SC-GHG
estimates.
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.\12\ The national operating savings are domestic private
U.S. consumer monetary savings that occur as a result of purchasing the
covered products and are measured for the lifetime of EPSs shipped in
2027-2056. The benefits associated with reduced emissions achieved as a
result of the proposed standards are also calculated based on the
lifetime of EPSs shipped in 2027-2056.
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\12\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2021, 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.
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Estimates of annualized benefits and costs of the proposed
standards are shown in Table I.4. The results under the primary
estimate are as follows.
Using a 7-percent discount rate for 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 $24.3 million per year in increased equipment
costs, while the estimated annual benefits are $42.7 million in reduced
equipment operating costs, $11.5 million in climate benefits, and $16.7
million in health benefits. The net benefit would amount to $46.6 per
year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards is $21.4 per year in increased
equipment costs, while the estimated annual benefits are $47.3 in
reduced operating costs, $11.5 million in climate benefits, and $20.4
million in health benefits. In this case, the net benefit would amount
to $57.8 million per year.
Table I.4--Annualized Benefits and Costs of Proposed Energy Conservation Standards for External Power Supplies
[TSL 4]
----------------------------------------------------------------------------------------------------------------
Million 2021 dollars/year
-----------------------------------------------
Low-net- High-net-
Primary benefits benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 47.3 46.1 48.8
[[Page 7289]]
Climate Benefits *.............................................. 11.5 11.5 11.5
Health Benefits **.............................................. 20.4 20.4 20.4
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Total Benefits [dagger]..................................... 79.2 78.0 80.7
Consumer Incremental Product Costs.............................. 21.4 23.4 19.3
Net Benefits.................................................... 57.8 54.6 61.3
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7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 42.7 41.8 43.9
Climate Benefits * (3% discount rate)........................... 11.5 11.5 11.5
Health Benefits **.............................................. 16.7 16.7 16.7
Total Benefits [dagger]..................................... 70.9 70.0 72.1
Consumer Incremental Product Costs.............................. 24.3 26.1 22.4
Net Benefits.................................................... 46.6 43.9 49.6
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with EPSs shipped in 2027-2056. These results
include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.M of this
proposed rule). 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. 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 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.M
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.24 for net benefits using all four SC-GHG estimates.
DOE's analysis of the national impacts of the proposed standards is
described in sections IV.I, IV.L and IV.M 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 that they would result in the
significant conservation of energy. Regarding technological
feasibility, products achieving these standard levels are already
commercially available for all product classes covered by this
proposal. Considering economic justification, DOE's analysis shows that
the benefits of the proposed standard greatly exceed 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 EPSs is $24.3 million per year in
increased EPS costs, while the estimated annual benefits are $42.7
million in reduced EPS operating costs, $11.5 million in climate
benefits and $16.7 million in health benefits. The net benefit amounts
to $46.6 million per year.
The significance of energy savings is evaluated by DOE on a case-
by-case basis considering the specific circumstances surrounding a
specific rulemaking. The standards are projected to result in estimated
national energy savings of 0.11 quads. Based on the amount of FFC
savings, the corresponding reduction in GHG emissions, and the need to
confront the global climate crisis DOE has initially determined the
energy savings that would result 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 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
EPSs.
[[Page 7290]]
A. Authority
EPCA authorizes DOE to regulate the energy efficiency of a number
of consumer products and certain industrial equipment. Title III, Part
B of EPCA established the Energy Conservation Program for Consumer
Products Other Than Automobiles. These products include EPSs, the
subject of this document. (42 U.S.C. 6295(u)) EPCA prescribed the
initial energy conservation standards for these products (42 U.S.C.
6295(u)(3)), and directed DOE to conduct several future rulemakings to
determine whether to amend these initial standards. (42 U.S.C.
6295(u)(1)(E)(i)(I) and 42 U.S.C. 6295(u)(3)(D)) EPCA further provides
that, not later than 6 years after the 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 NOPR including new proposed energy conservation standards
(proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m))
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 specifically include
definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293),
labeling provisions (42 U.S.C. 6294), energy conservation standards (42
U.S.C. 6295), and the authority to require information and reports from
manufacturers (42 U.S.C. 6296).
Federal energy efficiency requirements for covered products
established under EPCA generally supersede State laws and regulations
concerning energy conservation testing, labeling, and standards. (42
U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal
preemption for particular State laws or regulations, in accordance with
the procedures and other provisions set forth under EPCA. (See 42
U.S.C. 6297(d))
Subject to certain criteria and conditions, DOE is required to
develop test procedures to measure the energy efficiency, energy use,
or estimated annual operating cost of each covered product. (42 U.S.C.
6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered products
must use the prescribed DOE test procedure as the basis for certifying
to DOE that their products comply with the applicable energy
conservation standards adopted under EPCA and when making
representations to the public regarding the energy use or efficiency of
those products. (42 U.S.C. 6293(c) and 42 U.S.C. 6295(s)) Similarly,
DOE must use these test procedures to determine whether the products
comply with standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)) The
DOE test procedures for EPSs appear at title 10 of the Code of Federal
Regulations (``CFR'') part 430, subpart B, appendix Z (``Appendix Z'').
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products, including EPSs. Any new or
amended standard for a covered product 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. 6295(o)(2)(A)) Furthermore, DOE may not adopt a standard that
DOE determines would not result in the significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B))
Moreover, DOE may not prescribe a standard: (1) for certain
products, including EPSs, if no test procedure has been established for
the product, or (2) if DOE determines by rule that the standard is not
technologically feasible or economically justified. (42 U.S.C.
6295(o)(3)(A)-(B)) In deciding whether a proposed standard is
economically justified, DOE must determine whether the benefits of the
standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make
this determination after receiving comments on the proposed standard,
and by considering, to the greatest extent practicable, the following
seven statutory factors:
(1) The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the covered products in the type (or class) compared to any
increase in the price, initial charges, or maintenance expenses for the
covered products that are likely to result from the standard;
(3) The total projected amount of energy (or as applicable, water)
savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the covered
products likely to result from the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary of Energy (``Secretary'') considers
relevant.
(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA establishes a rebuttable presumption that a standard
is economically justified if the Secretary finds that the additional
cost to the consumer of purchasing a product complying with an energy
conservation standard level will be less than three times the value of
the energy savings during the first year that the consumer will receive
as a result of the standard, as calculated under the applicable test
procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
EPCA also contains what is known as an ``anti-backsliding''
provision, which prevents the Secretary from prescribing any amended
standard that either increases the maximum allowable energy use or
decreases the minimum required energy efficiency of a covered product.
(42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended
or new standard if the Secretary finds that interested persons have
established by a preponderance of the evidence that the standard is
likely to result in the unavailability in the United States in any
covered product type (or class) of performance characteristics
(including reliability), features, sizes, capacities, and volumes that
are substantially the same as those generally available in the United
States. (42 U.S.C. 6295(o)(4))
Additionally, EPCA specifies requirements when promulgating an
energy conservation standard for a covered product that has two or more
subcategories. DOE must specify a different standard level for a type
or class of product that has the same function or intended use, if DOE
determines that products within such group: (A) consume a different
kind of energy from that consumed by other covered products within such
type (or class); or (B) have a capacity or other performance-related
feature which other products within such type (or class) do not have
and such feature justifies a higher or lower standard. (42 U.S.C.
6295(q)(1)) In determining whether a performance-related feature
justifies a different standard for a group of products, DOE must
consider the utility of the feature to the consumer and other factors
DOE deems appropriate. Id. Any rule prescribing such a standard must
include an explanation of the basis on which such higher or lower level
was established. (42 U.S.C. 6295(q)(2))
Finally, pursuant to the amendments contained in the Energy
Independence and Security Act of 2007 (``EISA 2007''), Pub. L. 110-140,
any final rule for new or amended energy conservation standards
promulgated after July 1, 2010, is required to address standby mode and
off mode energy use. (42
[[Page 7291]]
U.S.C. 6295(gg)(3)) Specifically, when DOE adopts a standard for a
covered product after that date, it must, if justified by the criteria
for adoption of standards under EPCA (42 U.S.C. 6295(o)), incorporate
standby mode and off mode energy use into a single standard, or, if
that is not feasible, adopt a separate standard for such energy use for
that product. (42 U.S.C. 6295(gg)(3)) DOE's current test procedures for
EPSs address standby mode energy use. In this rulemaking, DOE intends
to incorporate such energy use into any amended energy conservation
standards that it may adopt.
B. Background
1. Current Standards
In a final rule published on February 10, 2014 (``February 2014
Final Rule''), DOE prescribed the current energy conservation standards
for EPSs manufactured on and after February 10, 2016. 79 FR 7846. These
standards are set forth in DOE's regulations at 10 CFR 430.32(w) and
are repeated in Table II.1.
Table II.1--Federal Energy Conservation Standards for External Power Supplies
----------------------------------------------------------------------------------------------------------------
Minimum average efficiency in active mode Maximum power in
Nameplate output power (Pout) (expressed as a decimal) no-load mode [W]
----------------------------------------------------------------------------------------------------------------
Single-Voltage External AC-DC Power Supply, Basic-Voltage
----------------------------------------------------------------------------------------------------------------
Pout <= 1 W............................. >= 0.5 x Pout + 0.16............................... <= 0.100
1 W < Pout <= 49 W...................... >= 0.071 x ln(Pout)-0.0014 x Pout + 0.67........... <= 0.100
49 W < Pout <= 250 W.................... >= 0.880........................................... <= 0.210
Pout > 250 W............................ >= 0.875........................................... <= 0.500
----------------------------------------------------------------------------------------------------------------
Single-Voltage External AC-DC Power Supply, Basic-Voltage
----------------------------------------------------------------------------------------------------------------
Pout <= 1 W............................. >= 0.517 x Pout + 0.087............................ <= 0.100
1 W < Pout <= 49 W...................... >= 0.0834 x ln(Pout)-0.0014 x Pout + 0.609......... <= 0.100
49 W < Pout <= 250 W.................... >= 0.870........................................... <= 0.210
Pout > 250 W............................ >= 0.875........................................... <= 0.500
----------------------------------------------------------------------------------------------------------------
Single-Voltage External AC-AC Power Supply, Basic-Voltage
----------------------------------------------------------------------------------------------------------------
Pout <= 1 W............................. >= 0.5 x Pout + 0.16............................... <= 0.210
1 W < Pout <= 49 W...................... >= 0.071 x ln(Pout)-0.0014 x Pout + 0.67........... <= 0.210
49 W < Pout <= 250 W.................... >= 0.880........................................... <= 0.210
Pout > 250 W............................ >= 0.875........................................... <= 0.500
----------------------------------------------------------------------------------------------------------------
Single-Voltage External AC-AC Power Supply, Low-Voltage
----------------------------------------------------------------------------------------------------------------
Pout <= 1 W............................. >= 0.517 x Pout + 0.087............................ <= 0.210
1 W < Pout <= 49 W...................... >= 0.0834 x ln(Pout)-0.0014 x Pout + 0.609......... <= 0.210
49 W < Pout <= 250 W.................... >= 0.870........................................... <= 0.210
Pout > 250 W............................ >= 0.875........................................... <= 0.500
----------------------------------------------------------------------------------------------------------------
Multiple-Voltage External Power Supply
----------------------------------------------------------------------------------------------------------------
Pout <= 1 W............................. >= 0.497 x Pout + 0.067............................ <= 0.300
1 W < Pout <= 49 W...................... >= 0.075 x ln(Pout) + 0.561........................ <= 0.300
Pout > 49 W............................. >= 0.860........................................... <= 0.300
----------------------------------------------------------------------------------------------------------------
2. History of Standards Rulemaking for External Power Supplies
On December 19, 2007, Congress enacted EISA 2007, which, among
other things, amended sections 321, 323, and 325 of EPCA (42 U.S.C.
6291, 6293, and 6295). As part of these amendments, EISA 2007
supplemented the EPS definition, which the statute defines as an
external power supply circuit ``used to convert household electric
current into DC current or lower-voltage AC current to operate a
consumer product.'' (42 U.S.C. 6291(36)(A)) In particular, Section 301
of EISA 2007 created a subset of EPSs called ``Class A External Power
Supplies,'' which consist of, among other elements, those EPSs that can
convert to only 1 AC or DC output voltage at a time and have a
nameplate output power of no more than 250 watts (W). The Class A
definition excludes any device requiring Federal Food and Drug
Administration (FDA) listing and approval as a medical device in
accordance with section 513 of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 360(c)) along with devices that power the charger of a
detachable battery pack or that charge the battery of a product that is
fully or primarily motor operated. (42 U.S.C. 6291(36)(C)) Section 301
of EISA 2007 also established energy conservation standards for Class A
EPSs (hereinafter referred to as ``Level IV standards'') that became
effective on July 1, 2008, and directed DOE to conduct an energy
conservation standards rulemaking to review those standards.
In the February 2014 Final Rule, DOE completed a rulemaking cycle
by adopting amended performance standards for EPSs manufactured on or
after February 10, 2016. 79 FR 7846. The final rule amended the Level
IV standards prescribed by Congress and separated EPSs into two groups
regardless of whether they met the Class A criteria--direct operation
EPSs and indirect operation EPSs.\13\ 79 FR 7846, 7865-7866. The
February 2014 Final Rule set new standards that applied only to direct
operation EPSs (hereafter referred to as ``Level VI standards''), which
increased the stringency of the average active-mode and no-load power
consumption metrics over the Level IV standards. 79 FR 7846, 7849.
Under the February 2014 Final Rule, Class A EPSs that could directly
power a consumer product (excluding battery chargers)
[[Page 7292]]
became subject to the Level VI standards, whereas Class A EPSs that
require the use of a battery to power a consumer product remained
subject to the Level IV standards. (Id.) Likewise, non-Class A EPSs
that could directly power a consumer product (excluding battery
chargers) became subject to efficiency standards for the first time
(Level VI standards)--non-Class A indirect operation EPSs continued to
remain free from any efficiency requirements. 79 FR 7846, 7849, 7865.
---------------------------------------------------------------------------
\13\ An indirect operation EPS is an EPS that cannot power a
consumer product (other than a battery charger) without the
assistance of a battery. Conversely, if the battery's charge status
does not impact the end-use product's ability to operate as
intended, and the end-use product can function using only power from
the EPS, DOE considers that device a direct operation EPS.
---------------------------------------------------------------------------
As part of the current analysis, on May 20, 2020, DOE prepared a
Request for Information (``May 2020 RFI''), which solicited information
from the public to help DOE determine whether amended standards for
EPSs would result in a significant amount of additional energy savings
and whether those standards would be technologically feasible and
economically justified. 85 FR 30636.
Comments received following the publication of the May 2020 RFI
helped DOE identify and resolve issues related to the subsequent
preliminary analysis.\14\ DOE published a notice of public meeting and
availability of the preliminary technical support document (``TSD'') on
February 25, 2022 (``February 2022 Preliminary Analysis''). 87 FR
10719.
---------------------------------------------------------------------------
\14\ Comments are available at www.regulations.gov/document/EERE-2020-BT-STD-0006-0001/comment and www.regulations.gov/document/EERE-2020-BT-STD-0006-0008/comment.
---------------------------------------------------------------------------
DOE subsequently held a public meeting on March 24, 2022, to
discuss and receive comments on the preliminary TSD. The preliminary
TSD that presented the methodology and results of the preliminary
analysis is available at: www.regulations.gov/document/EERE-2020-BT-STD-0006-0012. DOE received comments in response to the February 2022
Preliminary Analysis from the interested parties listed in Table II.2.
Table II.2--February 2022 Preliminary Analysis Written Comments
----------------------------------------------------------------------------------------------------------------
Comment
number
Commenter(s) Abbreviation in the Commenter type
docket
----------------------------------------------------------------------------------------------------------------
Association of Home Appliance Manufacturers Joint Trade Associations... 23 Trade Associations.
(``AHAM''), Consumer Technology
Association (``CTA''), National Electrical
Manufacturers Association (``NEMA''),
Outdoor Power Equipment Institute
(``OPEI''), Plumbing Manufacturers
Institute (PMI), and Power Tool Institute
(``PTI'').
Appliance Standards Awareness Project Joint Efficiency Advocates. 24 Efficiency Organizations.
(``ASAP''), National Consumer Law Center
(``NCLC''), Natural Resources Defense
Council (``NRDC''), and New York State
Energy Research and Development Authority
(``NYSERDA'').
Pacific Gas and Electric Company, San Diego CA IOUs.................... 25 Utility Association.
Gas and Electric, and Southern California
Edison.
Information Technology Industry Council.... ITI........................ 20 Trade Association.
Northwest Energy Efficiency Alliance....... NEEA....................... 21 Efficiency Organization.
National Electrical Manufacturers NEMA....................... 22 Trade Association.
Association.
Power Sources Manufacturers Association.... PSMA....................... 19 Trade Association.
----------------------------------------------------------------------------------------------------------------
A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\15\
---------------------------------------------------------------------------
\15\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for EPSs. (Docket No. EERE-2020-BT-
STD-0006, which is maintained at www.regulations.gov). The
references are arranged as follows: (commenter name, comment docket
ID number, page of that document).
---------------------------------------------------------------------------
3. 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 the
provision in appendix A regarding the pre-NOPR stages for an energy
conservation standards rulemaking. Section 6(d)(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 has opted to
instead provide a 60-day comment period. DOE requested comment in the
May 2020 RFI on the technical and economic analyses and provided
stakeholders with a 47-day comment period. 85 FR 30636. Additionally,
DOE reopened the comment period for the May 2020 RFI for an additional
32 days. 85 FR 44484. Furthermore, DOE requested comment on the
February 2022 Preliminary Analysis for a period of 60 days. 87 FR
10719. DOE has relied on many of the same analytical assumptions and
approaches as used in the preliminary assessment and has determined
that a 60-day comment period in conjunction with the prior comment
periods provides sufficient time for interested parties to review the
proposed rule and develop comments.
Section 6(a)(2) of appendix A states that if the Department
determines it is appropriate to proceed with a rulemaking, the
preliminary stages of a rulemaking to issue or amend an energy
conservation standard that DOE will undertake will be a framework
document and preliminary analysis, or an advance notice of proposed
rulemaking. DOE is opting to deviate from this step by publishing a
NOPR following the preliminary analysis without a framework document. A
framework document is intended to introduce and summarize the various
analyses DOE conducts during the rulemaking process and requests
initial feedback from interested parties. As discussed, prior to the
preliminary analysis and this NOPR, DOE published the May 2020 RFI, in
which DOE identified and sought comment on the technical and economic
analyses to be conducted in determining whether amended energy
conservation standards would be justified. Comments received following
publication of the May 2020 RFI assisted DOE in identifying and
resolving issues related to the preliminary analyses. As a result,
publication of a framework document would be largely redundant with the
published RFI and preliminary analysis. As such, DOE is deviating from
the procedures provided in appendix A and is not publishing a framework
document prior to the publication of this NOPR. The Department has
determined that it
[[Page 7293]]
is appropriate to proceed with this proposal due to the information
obtained through the May 2020 RFI and the preliminary analysis.
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. Product Classes and Scope of Coverage
When evaluating and establishing energy conservation standards, DOE
divides covered products into product classes by the type of energy
used, by capacity, or by other performance-related features that
justify differing standards. In making a determination whether a
performance-related feature justifies a different standard, DOE must
consider the utility of the feature to the consumer and other factors
DOE determines are appropriate. (42 U.S.C. 6295(q))
EPSs are currently classified as direct operation and indirect
operation EPSs. Direct operation EPSs are further divided into the
following five single-voltage sub-product classes: AC-DC, Basic-
Voltage; AC-DC, Low-Voltage (except those with nameplate output voltage
less than 3 volts and nameplate output current greater than or equal to
1,000 milliamps that charge the battery of a product that is fully or
primarily motor operated); AC-DC, Low-Voltage (with nameplate output
voltage less than 3 volts and nameplate output current greater than or
equal to 1,000 milliamps and charges the battery of a product that is
fully or primarily motor operated); AC-AC, Basic-Voltage; AC-AC, Low-
Voltage; and Multiple-Voltage.
The February 2014 Final Rule maintained the Level IV standards
established by Congress for all Class A\16\ EPSs, including indirect
operation EPSs, and adopted more stringent Level VI standards
applicable to all direct operation non-Class A EPSs. 79 FR 7846, 7849.
A summary of the standards currently applicable to these different
types of EPSs are shown in Table III.1.
---------------------------------------------------------------------------
\16\ A Class A EPS means a device that (i) Is designed to
convert line voltage AC input into lower voltage AC or DC output;
(ii) Is able to convert to only one AC or DC output voltage at a
time; (iii) Is sold with, or intended to be used with, a separate
end-use product that constitutes the primary load; (iv) Is contained
in a separate physical enclosure from the end-use product; (v) Is
connected to the end-use product via a removable or hard-wired male/
female electrical connection, cable, cord, or other wiring; and (vi)
Has nameplate output power that is less than or equal to 250 watts;
But, does not include any device that--(i) Requires Federal Food and
Drug Administration listing and approval as a medical device in
accordance with section 513 of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 360(c)); or (ii) Powers the charger of a detachable
battery pack or charges the battery of a product that is fully or
primarily motor operated. 42 U.S.C. 6291(36)(C)
Table III.1--Application of Energy Conservation Standards for External
Power Supplies
------------------------------------------------------------------------
Class A EPS Non-class A EPS
------------------------------------------------------------------------
Direct Operation EPS........ Level VI............ Level VI.
Indirect Operation EPS...... Level IV............ No-standards.
------------------------------------------------------------------------
In this NOPR, DOE proposes more stringent Level VII standards that
would be applicable to all EPSs, including direct and indirect
operation Class A and non-Class A EPSs. This approach makes the
distinction between these various types of EPSs redundant with respect
to the applicability of energy conservation standards. See section
IV.B.1 of this document for additional discussion on this point.
B. Materials Incorporated by Reference
The current Level VI standards mandate the labeling of compliant
EPSs in accordance with the International Efficiency Marking Protocol
for External Power Supplies (``IEMP''), Version 3. See 10 CFR 430.3(s).
DOE proposes to incorporate by reference version 4.0 of IEMP, which
will outline the marking requirements for the proposed amendments to
the energy conservation standards.
DOE requests comment on its proposal to incorporate by reference
version 4.0 of IEMP for this proposed 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. 6293)
Manufacturers of covered products must use these test procedures to
certify to DOE that their product complies with energy conservation
standards and to quantify the efficiency of their product. DOE
published a test procedure final rule for EPSs on August 19, 2022
(``August 2022 TP Final Rule''), which amended appendix Z by clarifying
the scope of the test procedure more explicitly, providing more
specific instructions for testing single-voltage EPSs with multiple-
output busses and EPSs shipped without an output cord, providing
instructions allowing for functionality unrelated to the external power
supply circuit to be disconnected during testing so long as the
disconnection does not impact the functionality of the EPS itself, and
specifying test requirements for adaptive EPSs. 87 FR 51200. Except
where specifically noted, changes from the August 2022 TP Final Rule
were incorporated into the methodology used to test EPSs for this NOPR
analysis.
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(b)(3)(i) and 7(b)(1) of appendix A
to 10 CFR part 430 subpart C (``Appendix A'').
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.
Sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5) of appendix A. Section IV.C of
this document discusses the results of the
[[Page 7294]]
screening analysis for EPSs, 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 TSD.
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt an amended standard for a type or class
of covered product, it must determine the maximum improvement in energy
efficiency or maximum reduction in energy use that is technologically
feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the
engineering analysis, DOE determined the maximum technologically
feasible (``max-tech'') improvements in energy efficiency for EPSs,
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.D.1.b 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 EPSs purchased in the 30-year
period that begins in the year of compliance with the proposed
standards ([2027-2056]).\17\ The savings are measured over the entire
lifetime of EPSs 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 a
product would likely evolve in the absence of amended energy
conservation standards.
---------------------------------------------------------------------------
\17\ Each TSL is composed of specific efficiency levels for each
product class. The TSLs considered for this NOPR are described in
section V.A of this document. DOE conducted a sensitivity analysis
that considers impacts for products shipped in a 30-year period.
---------------------------------------------------------------------------
DOE used its national impact analysis (``NIA'') spreadsheet model
to estimate national energy savings (``NES'') from potential amended or
new standards for EPSs. The NIA spreadsheet model (described in section
IV.I 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 national
energy savings 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.\18\ 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.I of this document.
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\18\ The FFC metric is discussed in DOE's statement of policy
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------
2. Significance of Savings
To adopt any new or amended standards for a covered product, DOE
must determine that such action would result in significant energy
savings. (42 U.S.C. 6295(o)(3)(B))
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.\19\ 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.
---------------------------------------------------------------------------
\19\ 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, taking into account the significance of cumulative
FFC national energy savings, the cumulative FFC emissions reductions,
and the need to confront the global climate crisis, among other
factors. 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).
F. Economic Justification
1. Specific Criteria
EPCA provides seven factors to be evaluated in determining whether
a potential energy conservation standard is economically justified. (42
U.S.C. 6295(o)(2)(B)(i)(I)-(VII)) The following sections discuss each
of those seven factors in this proposed rulemaking.
a. Economic Impact on Manufacturers and Consumers
EPCA requires DOE to consider the economic impact of the standard
on manufacturers and consumers of the product that would be subject to
the standard. (42 U.S.C. 6295(o)(2)(B)(i)(I). In determining the
impacts of a potential amended standard on manufacturers, DOE conducts
an MIA, as discussed in section IV.K of this document. First, DOE 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 section IV. 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
[[Page 7295]]
that may be affected disproportionately by a standard.
b. Savings in Operating Costs Compared to Increase in Price (LCC and
PBP)
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered product
that are likely to result from a standard. (42 U.S.C.
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP
analysis.
The LCC is the sum of the purchase price of a product (including
its installation) and the operating expense (including energy,
maintenance, and repair expenditures) discounted over the lifetime of
the product. The LCC analysis requires a variety of inputs, such as
product prices, product energy consumption, energy prices, maintenance
and repair costs, product lifetime, and discount rates appropriate for
consumers. To account for uncertainty and variability in specific
inputs, such as product lifetime and discount rate, DOE uses a
distribution of values, with probabilities attached to each value.
The PBP is the estimated amount of time (in years) it takes
consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
due to a more-stringent standard by the change in annual operating cost
for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will
purchase the covered products in the first year of compliance with 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.G 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 likely to result
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As
discussed in section III.E of this document, DOE uses the NIA
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
EPCA requires that DOE evaluate whether potential standards would
lessen the utility or performance of the considered products. (42
U.S.C. 6295(o)(2)(B)(i)(IV)) DOE considers this evaluation in
establishing product classes and considering design options and the
impact of potential standard levels. 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 proposed
rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from a proposed standard. (42 U.S.C.
6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine
the impact, if any, of any lessening of competition likely to result
from a proposed standard and to transmit such determination to the
Secretary within 60 days of the publication of a proposed rule,
together with an analysis of the nature and extent of the impact. (42
U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of this proposed
rule to the Attorney General with a request that the Department of
Justice (``DOJ'') provide its determination on this issue. DOE will
publish and respond to the Attorney General's determination in the
final rule. 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 is required to consider the need for national energy and water
conservation in determining whether a new or amended standard is
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy
savings from the proposed standards are likely to improve the security
and reliability of the nation's energy system. Reductions in the demand
for electricity also may result in reduced costs for maintaining the
reliability of the nation's electricity system. DOE conducts a utility
impact analysis to estimate how standards may affect the nation's
needed power generation capacity, as discussed in section IV.N 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 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.L of this document;
the estimated emissions impacts are reported in section IV.L of this
document. DOE also estimates the economic value of emissions reductions
resulting from the considered TSLs, as discussed in section V.B 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. 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.'' In this proposed rulemaking, DOE has not identified or
considered any other factors for determining whether the proposed
standard is economically justified.
2. Rebuttable Presumption
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a
rebuttable presumption that an energy conservation standard is
economically justified if the additional cost to the consumer of a
product that meets the standard is less than three times the value of
the first year's energy savings resulting from the standard, as
calculated under the applicable DOE test procedure. DOE's LCC and PBP
analyses generate values used to calculate the effects that proposed
energy conservation standards would have on the payback period for
consumers. These analyses include, but are not limited to, the 3-year
payback period contemplated under the rebuttable-presumption test. In
addition, DOE conducts an economic analysis that considers the full
range of impacts to consumers, manufacturers, the nation, and the
environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The results
of this
[[Page 7296]]
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 of this document.
IV. Methodology and Discussion of Related Comments
This section addresses the analyses DOE has performed for this
rulemaking with regard to EPSs. 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: www.regulations.gov/docket/EERE-2020-BT-STD-0006. 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. General Comments and Responses
In response to the February 2022 Preliminary Analysis, the Joint
Trade Associations and ITI commented that DOE's preliminary analysis
clearly demonstrated that amended energy conservation standards for
EPSs were not economically justified and instead made a strong case for
no new standards. (Joint Trade Associations, No. 23 at pp. 1-3; ITI,
No. 20 at p. 2) The Joint Trade Associations noted that for all of the
product classes DOE analyzed, the payback periods significantly
exceeded the average useful life of the products and that consumers
would therefore not recoup the additional cost of the more efficient
products over its lifetime, and that this alone could justify not
amending standards for EPSs. (Joint Trade Associations, No. 23 at pp.
2-3)
DOE notes that the costs and benefits of amended standards
presented in the February 2022 Preliminary Analysis were incomplete and
the notice primarily served to provide stakeholders with a preview of
the methodology undertaken in evaluating whether amended standards are
justified. The preliminary analysis stage of the rulemaking also allows
stakeholders an opportunity to help refine the analysis prior to NOPR.
The results presented in the preliminary analysis should therefore not
be relied upon in determining whether amended standards are
economically justified.
In addition, PSMA urged DOE to publish a roadmap of energy
conservation standards over the next 3-5 years, to assist the industry
in adapting to any higher tiers of energy conservation standards.
(PSMA, No. 19 at p. 3) DOE notes that it is required by EPCA to conduct
two cycles of rulemakings to determine whether to amend existing
standards for EPSs. (42 U.S.C. 6295(u)(3)(D)) DOE completed the first
of the two rulemaking cycles in 2014 by adopting amended performance
standards in the February 2014 Final Rule for EPSs manufactured on or
after February 10, 2016. 79 FR 7846. DOE is publishing this NOPR to
satisfy its obligation to conduct a second rulemaking cycle under EPCA.
EISA 2007 directed DOE to publish an updated final rule for EPSs by
July 1, 2021, and further stipulated that any amended standards would
apply to products manufactured on or after July 1, 2023, two years
later. (42 U.S.C. 6295(u)(3)(D)(ii)) In DOE's view, Congress created
this two-year interval to ensure that manufacturers would have
sufficient time to meet any new and amended standards that DOE may set
for EPSs. Consistent with this two-year lead time provided by EISA
2007, DOE will provide manufacturers with a lead-time of the same two-
year duration as prescribed by statute to comply with any amended
standards after the publication of a final rule in the Federal
Register. This aligns with DOE's approach in the February 2014 Final
Rule. 79 FR 7846, 7859. The Joint Trade Associations stated that DOE's
process decreases the value of early stakeholder engagement. They
stated that it would have been more effective and efficient for DOE to
use the completed, amended test procedure rather than the currently
applicable test procedure to conduct the preliminary analysis. They
further commented that DOE provided a shortened 60-day comment period
on the preliminary analysis, which significantly overlapped with other
comment periods relevant to many of the same stakeholders. (Joint Trade
Associations, No. 23 at pp. 4-)
As stated above, the preliminary analysis is primarily intended to
provide stakeholders with an opportunity to comment on the various
methodologies DOE intends to use in the NOPR. DOE again notes that the
preliminary analysis results should not be relied upon to assess
whether amended standards for EPSs are justified. DOE weighed the
arguments for and against delaying the preliminary analysis until after
the test procedure final rule had been published and concluded that the
contemplated differences between the two test procedures, as it applies
to the development of amended standards, were minor. DOE further
determined that the benefits of using the revised test procedure did
not outweigh the benefits of publishing the preliminary analysis on
time. Moreover, as the EPS test procedure had not been finalized at the
time the preliminary analysis was published, any analysis based on
proposed changes to the test procedure would itself have been subject
to change; DOE therefore chose to proceed using its then-current
finalized test procedure. Additionally, unless otherwise noted, test
results used in support of this NOPR were obtained using the test
procedure as finalized in the August 2022 TP Final Rule.
With regards to a shortened comment period, DOE believes the length
of time provided to have been sufficient because of extensive
stakeholder engagement in prior rulemaking cycles as well as the
lengthy 79-day comment period provided for stakeholders to comment on
the May 2020 RFI.
ITI commented that given the long payback periods and limited
energy savings, DOE must consider the opportunity costs of amended
standards. ITI stated that work to increase the efficiency of EPSs with
little energy savings would divert original equipment manufacturer
(``OEM'') resources away from other significant technological
developments that could have a bigger impact on society. (ITI, No. 20
at p. 9) DOE considers multiple factors in its analysis when
considering amended energy conservation standards, as explained in
sections III.D and III.E of this document, including the significance
of national energy savings and manufacturer impacts.
B. 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,
[[Page 7297]]
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 EPSs. 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 Product Classes
In the February 2022 Preliminary Analysis, DOE did not identify any
potential changes to the existing scope of coverage for EPSs. 87 FR
10719, 10723. In the August 2022 TP Final Rule, DOE clarified that the
EPS test procedure did not apply to commercial and industrial power
supplies and devices that provide power conversion as an auxiliary
function. DOE additionally provided a definition of commercial and
industrial power supplies, and noted that commercial and industrial
power supplies are not covered unless distributed in commerce for use
with a consumer product. 87 FR 51200, 51206-51207.
NEMA commented in response to the February 2022 Preliminary
Analysis that hard-wired AC-outlets traditionally found in residential
environments can now be purchased with built-in Universal Serial Bus
(``USB'') ports that provide USB services as a secondary function. NEMA
stated that such outlets correctly have been omitted from previous DOE
analyses for EPSs and recommended that DOE exempt duplex receptacles
until such time as a thorough analysis and LCC benefit examination is
completed, because the installation of duplex receptacles requires
certified professionals and results in a non-negligible cost to the
consumer. (NEMA, No. 22 at pp. 1-2) An EPS is defined to be an external
power supply circuit that is used to convert household electric current
into DC current or lower-voltage AC current to operate a consumer
product. 10 CFR 430.2. In the August 2022 TP Final Rule, DOE specified
that devices for which the primary load of the converted voltage within
the device is not delivered to a separate end-use product are not
subject to the test procedure. 87 FR 51200, 51207-51208. For the EPS
test procedure to be applicable to a power supply, the intended primary
load of the converted voltage must be to a separate end-use product.
Id. DOE believes this to be the case for the hard-wired AC receptacles
with USB ports described by NEMA. In these products, the USB ports
provide converted power with the intention of delivering that converted
power to a separate end-use product. DOE tentatively determines that it
would not be appropriate to include the installation costs of these
products in its LCC estimates because there are no higher installation
costs above the baseline. Because a consumer is willing to accept the
installation cost at the baseline, this cost doesn't factor into the
determination of LCC savings.
The CA IOUs urged DOE to consider including certain AC-input
``combination'' products that incorporate convenient charging ports
within the scope of this regulation, as the CA IOUs had described in
response to the EPS November 2021 test procedure supplementary notice
of proposed rulemaking.\20\ (CA IOUs, No. 25 at pp. 6-7)
---------------------------------------------------------------------------
\20\ DOE responded to CA IOUs comment on the November 2021 TP
SNOPR seeking clarification for combination products that internally
convert power to supply another product via a ``convenience charging
port'' (for example, lamps and furniture with USB ports). 87 FR
51200, 51208.
---------------------------------------------------------------------------
DOE addressed the CA IOUs comment in the August 2022 TP Final Rule.
87 FR 51200, 51208. As in that final rule, DOE here maintains that
devices for which the primary load of the converted voltage within the
device is not a separate end-use product are not subject to the test
procedure. As such, only those combination products that meet this
criterion would be in scope. As an example, a bedside table lamp with
an LED bulb and a USB port may be in scope of EPS regulations if the
power provided to a separate end-use load by the USB port constitutes
the main load of the converted power inside the lamp. Such a product
however would not be in scope if the LED bulb, which is internal to the
product, is the primary load.
In the preliminary analysis, DOE tentatively determined that
evaluation of separate standards for indirect operation and direct
operation product classes would not be warranted. The Joint Efficiency
Advocates, the CA IOUs, and NEEA supported DOE's decision to evaluate
direct and indirect power supplies together, as these commenters
believe the distinction is unnecessary, confusing, and leaves
achievable energy savings untapped. (Joint Efficiency Advocates, No. 24
at pp. 1-2; CA IOUs, No. 25 at p. 6; NEEA, No. 21 at pp. 5-6) CA IOUs
noted the distinction was not warranted based on technological
differences and should be eliminated. (CA IOUs, No. 25 at p. 6)
The Joint Trade Associations commented that DOE should retain the
current distinction in product classes, citing that there were good
reasons for splitting them apart--the main reason being avoiding
double-regulation--and nothing has changed to render this conclusion
obsolete. (Joint Trade Associations, No. 23 at pp. 3-4) They conceded
that indirect operation EPSs make up only .5 percent of certified EPSs,
and that 71% of those indirect operation EPSs meet the Level IV and VI
standards, but disagreed that this warranted terminating the
differentiation. The Joint Trade Associations noted that indirect
operation EPSs would be forced to meet both EPS and battery charger
standards if subject to the EPS standards, and therefore DOE should
retain the current distinction. (Id.)
Since the publication of the February 2014 Final Rule, DOE has
received many questions regarding EPSs that provide direct operation
with one end-use product but may also be used to provide indirect
operation with a different consumer product containing batteries and or
a battery charging system. In an August 25, 2015 final rule (``August
2015 TP Final Rule'') amending the EPS test procedures, DOE clarified
that if an EPS can operate any consumer product directly, that product
would be treated as a direct operation EPS. 80 FR 51424, 51434. Of
particular importance are EPSs with common output plugs that can be
used with products made by different manufacturers. An example of this
scenario are EPSs with standard USB connectors. These devices are often
sold with end-use products containing batteries, such as a smartphone.
Because these same EPSs are also capable of directly operating other
end-use products that do not contain batteries (e.g., small LED lamps,
external speakers, etc.), they are not treated as indirect operation
EPSs under DOE's regulations. As such, only a small percentage of EPSs
are considered to be true indirect operation EPSs. DOE noted in section
2.3.1.2 of the preliminary TSD that indirect operation EPSs make up a
small percentage of certified EPSs in the Compliance Certification
Database (``CCD''). According to the CCD, indirect operation EPSs
comprise 0.5 percent of all certified EPSs, and of
[[Page 7298]]
those units, 71 percent meet DOE Level VI standards. Therefore,
different standards would not be justified for indirect EPSs.
Furthermore, since the February 2014 Final Rule, questions received by
DOE enquiring how to effectively classify products into these
categories demonstrates that the indirect/direct operation
classification complicates the readability of regulations. This
observation, coupled with limited prevalence of true indirect operation
EPSs in the marketplace (i.e., they do not become direct operation EPSs
when used in another application) and their ability to meet Level VI
standards with ease, suggests that continuing to treat these EPSs
separately is unwarranted. As such, in this NOPR, DOE proposes to
remove the distinction in the standards between direct and indirect
operation EPSs, and to require indirect operation EPSs to meet the same
standards as for their direct operation counterparts.
As noted in section II.B.2, the February 2014 Final Rule required
direct operation EPSs, including Class A and non-Class A direct
operation EPS, to be subject to the Level VI standards and maintained
the Level IV standards established by EISA for indirect operation Class
A EPSs. DOE retained the use of the term Class A to ensure that DOE's
regulations reflected that indirect operation EPSs meeting the
definition of a Class A EPS remained subject to the Level IV standards
established by EISA. However, at this time, DOE notes that continued
use of the terms Class A and non-Class A would not be necessary and may
be confusing to maintain in the regulations if all EPSs became subject
to standards that are more stringent than Level IV. In addition to
removing the distinction between indirect and direction operation EPS,
DOE therefore also proposes to remove use of the terms Class A and non-
Class A in the amended standards for EPSs.
ITI recommended DOE create new product classes for adaptive EPSs,
stating that it is harder to achieve a given efficiency level in an
adaptive design than in a fixed voltage design, and that DOE should
track different adaptive technologies within adaptive EPS classes to
avoid stifling innovation. (ITI, No. 20 at pp. 2-3) In addition, ITI
expressed that for USB-C adaptive EPSs rated above 65W, there is
typically a regulatory requirement to provide power factor correction
circuitry, which it commented can significantly decrease average
efficiency for low-voltage outputs (3.3 volts (``V'') or 5V). ITI urged
DOE to make a distinction between single output EPSs and adaptive EPSs,
with adaptive EPSs having a less stringent efficiency limit for 3.3V
and 5V outputs. (ITI, No. 20 at p. 7)
According to the CCD, over 85 percent of adaptive EPS models rated
above 65W meet or exceed the first candidate standard level (``CSL'')
above the baseline, CSL1, that DOE analyzed in the preliminary
analysis, and over 60 percent of such models meet or exceed CSL2
analyzed in the preliminary analysis. This indicates that any added
redesign burden or efficiency penalty from factoring in power factor
correction is already accounted for with current adaptive EPS designs.
Accordingly, DOE does not propose a new product class or separate
standards for adaptive EPSs.
The CA IOUs commented that the four size bins (less than or equal
to 1 W; greater than one to 49 W; greater than 49 to 250 W; and greater
than 250 W) may limit DOE's ability to capture cost-effective savings.
Therefore, the CA IOUs recommended using more granular wattage bins to
capture cost-effective savings; more specifically, DOE should consider
delineating the current wattage bin for the largest EPS products. (CA
IOUs, No. 25 at pp. 3-4)
The equations representing the different efficiency levels analyzed
in this rulemaking are presented in three groups simply for ease of
readability and accuracy. In the preliminary TSD as well as this NOPR
TSD, DOE describes in detail the derivation of these equations, noting
that the process considers far more granular output wattage ``bins''
than the 0 to 1W, 1W to 49W, and greater than 49W bins described by the
CA IOUs. While the multiple regression analysis can be used to generate
any number of equations spanning the entire output power range, DOE
settled on three groups because doing so allowed the equations to be
expressed in the same ``a*ln(P) + b*P + c'' format found in DOE's
current standards at 10 CFR 430.32(w). Therefore, the number of bins
used to present the proposed active mode efficiency equations did not
limit DOE's ability to capture cost-effective savings.
ITI stated that it was unclear how DOE determined market share and
noted that EPSs are sold both bundled and unbundled, but that DOE does
not explain how this is accounted for in its analysis. In addition, ITI
encouraged DOE to start collecting data on cable length and gauge to
assist the analyses, as well as require reporting in the CCD the type
of adaptive technologies used in adaptive EPSs. (ITI, No. 20 at pp. 1-
2)
DOE estimates market share by using model counts for products
registered in the CCD as a proxy. For example, DOE observed that many
models were clustered around 24W in the AC-DC Basic-Voltage product
class, which DOE estimated was indicative of 24W EPSs having a
significant market share of the AC-DC Basic-Voltage product class. DOE
clarifies that its analysis is agnostic regarding bundling and
unbundling, as the cost of the EPS carries through to the consumer
regardless. With regards to collecting data on adaptive EPS topologies,
DOE notes that it typically requires reporting of only those product
characteristics that would be necessary to determine the applicable
energy conservation standards. Given that the information about the
topologies employed is not required for either of these determinations,
DOE is not proposing to require such a reporting requirement in this
NOPR.
2. Existing Efficiency Programs
When evaluating the potential for amended energy conservation
standards, DOE considers other relevant efficiency programs. Most
notably for EPSs, DOE has established one of its CSLs based on the
proposed, but never implemented, European Union Code of Conduct Version
5 Tier 2 standards (``EU CoC''). A more detailed description of this
program can be found in chapter 3 of the NOPR TSD.
ITI commented that DOE should consider international harmonization
and consider that testing with a 115V input (U.S. requirement) will
yield different results than testing with a 230V input (EU/United
Kingdom ``UK'' requirement). Because EPSs are designed for the global
market, ITI stated most models would have less margin if tested at 230V
input. Furthermore, ITI requested that DOE obtain more details on EU/UK
green initiatives with regards to adaptive EPSs and how efficiency
would be impacted. (ITI, No. 20 at pp. 7-8)
Switched-mode power supplies (``SMPSs'') designed to operate on
115V AC input will typically demonstrate marginally lower active mode
efficiency when compared to those designed to operate on 230VAC.
Nonetheless, DOE's analysis indicates that nearly 75 percent of all
EPSs currently certified to DOE can meet CSL1, the EU CoC Tier 2
equivalent in DOE's analysis. It should also be noted that CSL1 was
evaluated as part of TSL 3 using the full cost-benefit analysis,
ensuring that, if adopted, amended standards at that level would be
technologically feasible and economically justified in the United
States.
[[Page 7299]]
3. Technology Options
In the preliminary market analysis and technology assessment, DOE
identified 11 technology options that would be expected to improve the
efficiency of EPSs, as measured by the DOE test procedure:
Table IV.1--Preliminary Analysis Technology Options for External Power
Supplies
------------------------------------------------------------------------
-------------------------------------------------------------------------
Improved Transformers.
Switched-Mode Power Supplies.
Low-Power Integrated Circuits.
Diodes with Low Forward Voltage and Synchronous Rectification.
X-Capacitor Discharge Control.
Improved Shunt Regulators in Flyback SMPSs that use Optocouplers.
Low-Loss Transistors.
Resonant Switching.
Resonant (``Lossless'') Snubbers.
Active and Bridgeless Power Factor Correction (``PFC'').
Use of Emerging Semiconductor Technologies.
------------------------------------------------------------------------
DOE did not receive any comments regarding the inclusion or
exclusion of any technology options presented in the preliminary
analysis, and evaluated the same set of technology options for this
NOPR.
C. 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 product type with
performance characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as products
generally available in the United States at the time, it will not be
considered further.
(4) Adverse impacts on health or safety. If it is determined that a
technology would have significant adverse impacts on health or safety,
it will not be considered further.
(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.
Sections 6(b)(3) and 7(b) of appendix A.
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.
1. Screened-Out Technologies
DOE did not screen out any of the technology options identified for
EPSs based on the five criteria listed in section IV.B.3 of this
document.
2. Remaining Technologies
Through a review of each technology, DOE tentatively concludes that
all of the other identified technologies listed in section IV.B.3 of
this document 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:
Table IV.2--NOPR Technology Options for External Power Supplies
------------------------------------------------------------------------
-------------------------------------------------------------------------
Improved Transformers.
Switched-Mode Power Supplies.
Low-Power Integrated Circuits.
Diodes with Low Forward Voltage and Synchronous Rectification.
X-Capacitor Discharge Control.
Improved Shunt Regulators in Flyback SMPSs that use Optocouplers.
Low-Loss Transistors.
Resonant Switching.
Resonant (``Lossless'') Snubbers.
Active and Bridgeless Power Factor Correction (``PFC'').
Use of Emerging Semiconductor Technologies.
------------------------------------------------------------------------
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.
D. Engineering Analysis
The purpose of the engineering analysis is to establish the
relationship between the efficiency and the cost of
[[Page 7300]]
EPSs. 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 products, DOE considers technologies and design
option combinations not eliminated by the screening analysis. For each
product class, DOE estimates the baseline cost, as well as the
incremental cost for the product 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. 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).
DOE currently measures active-mode efficiency by averaging the
efficiencies at the 100, 75, 50, and 25-percent loading conditions.
Section 5(a)(1)(vi) and Section 5(b)(1)(vi) of appendix Z. In their
comments responding to the February 2022 Preliminary Analysis, PSMA,
NEEA, Joint Efficiency Advocates, and the CA IOUs urged DOE to
incorporate a 10-percent loading condition in the EPS test procedure
and energy conservation standards, stating that such a loading
condition would be more representative of real-world use. (PSMA, No. 19
at p. 2-3; CA IOUs, No. 25 at p. 7; NEEA, No. 21 at pp. 4-5; Joint
Efficiency Advocates, No. 24 at p. 3) NEEA noted that 10% is a unique
loading condition and that the higher mode efficiencies may not
guarantee that the lower loading points between 0% and 25% in actual
use would also be efficient, and therefore the 10% loading condition
was justified. (NEEA, No. 21 at p. 5) NEEA and the CA IOUs also noted
that the EU Code of Conduct used an efficiency measurement and
efficiency target at the 10% loading level, and that efficiency gains
at the 10% level were possible. ((NEEA, No. 21 at p. 5; (CA IOUs, No.
25 at p. 7) The CA IOUs claimed that a separate 10-percent loading
condition standard would be most effective in producing energy savings
and would add no additional burden to manufacturers who sell EPSs in
the EU. (CA IOUs, No. 25 at p. 7) NEEA and Joint Efficiency Advocates
encouraged DOE to incorporate the 10-percent loading condition in the
active-mode efficiency metric. (NEEA, No. 21 at pp. 4-5; Joint
Efficiency Advocates, No. 24 at p. 3) While PSMA encouraged a separate
10-percent loading condition standard to assist in harmonizing with EU
Ecodesign requirements, PSMA recommended incorporation of the 10-
percent loading condition into the active-mode efficiency metric if a
separate standard is not possible. (PSMA, No. 19 at pp. 2-3)
In the August 2015 TP Final Rule, DOE concluded that a voluntary or
optional reporting of a 10-percent loading condition would result in
very few certifications at that loading condition. 80 FR 51424, 51433.
EPCA requires that any test procedures prescribed or amended under this
section be reasonably designed to produce test results that measure
energy efficiency, energy use, or estimated annual operating cost of a
covered product during a representative average use cycle or period of
use, and not be unduly burdensome to conduct. (42 U.S.C. 6293(b)(3)) As
such, DOE must weigh the representativeness of test results with the
associated test burden in evaluating any amendments to its test
procedures. Regarding representativeness, the commenters have not
provided specific data, nor is DOE aware of any specific data,
demonstrating how a 10-percent loading condition improve
representativeness of test results for EPSs. In addition, DOE's test
procedure does not differentiate between specific end-use applications;
as such, load profiles specific to certain applications (e.g., charging
a smartphone versus powering an LED lamp) may not be representative of
overall average use of EPSs across all end-use applications. If DOE
were to consider a 10-percent load condition, DOE is not aware of any
data to suggest what corresponding weighting factor should be used to
combine this loading condition with the other defined loading
conditions comprising the overall efficiency metric. Consequently, DOE
is tentatively proposing not to modify the specified loading conditions
to include a measurement at 10-percent load.
a. Baseline Efficiency
For each product/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 product/equipment class represents
the characteristics of a product/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.
In its preliminary analysis, DOE evaluated the current energy
conservation standards as baseline efficiency level for all product
classes.\21\ DOE did not receive any comments regarding the baseline
levels in response to the February 2022 Preliminary Analysis, and DOE
evaluated the same baseline levels for this NOPR's analysis.
---------------------------------------------------------------------------
\21\ See Chapter 5 of the 2022 Preliminary Analysis Technical
Support Document for External Power Supplies. (Available at:
www.regulations.gov/document/EERE-2020-BT-STD-0006-0012) (last
accessed Sept. 12, 2022).
---------------------------------------------------------------------------
b. Higher Efficiency Levels
DOE defined several higher efficiency levels at which to evaluate
manufacturer production costs (``MPCs'') for this NOPR. The first
level, Efficiency Level 1 (``EL1''), corresponds to the proposed EU CoC
Tier 2 standards. Higher efficiency levels were defined using an
analysis of active-mode efficiencies and no-load power draws reported
in the CCD. For the AC-DC Basic- and Low-Voltage product classes, EL2
and EL3 were defined on the basis of pass rates of 50 percent and 10-20
percent (termed ``best in market''), respectively. As part of DOE's
analysis, the maximum available efficiency level is the highest
efficiency unit currently available on
[[Page 7301]]
the market. DOE defined the ``max-tech'' efficiency level, EL4, as the
efficiency and no-load power draw which result in a 5 percent pass rate
of all AC-DC Basic-Voltage EPS models on the market. For the AC-AC
product classes, DOE did not derive separate ELs based on pass rates.
DOE maintained the same active mode efficiency equations as their AC-DC
counterparts, with a slightly higher no-load allowance to account for
the higher typical no-load consumption seen in AC-AC power supplies.
DOE notes that there are no EU COC Tier 2 equivalent standards for
multiple-voltage EPSs. Therefore, DOE defined EL1 for this product
class on the basis of a 70 percent pass rate. This pass rate aligns
with the EL1 pass rate of 72% for AC-DC basic voltage products. EL2,
EL3 and EL4 were subsequently defined based on a 40 percent, 10
percent, and 1 percent pass rate.
In summary, DOE analyzed the following efficiency levels for this
proposal:
Table IV.3--Efficiency Levels for AC-DC, Basic-Voltage External Power
Supplies
------------------------------------------------------------------------
Minimum average
Nameplate output power (Pout) efficiency in active Maximum power in
mode (expressed as a no-load mode [W]
decimal)
------------------------------------------------------------------------
EL0: Current Standards
------------------------------------------------------------------------
Pout <=1 W.................... >=0.5 x Pout + 0.16.. <=0.100
1 W < Pout <=49 W............. >=0.071 x ln(Pout)- <=0.100
0.0014 x Pout + 0.67.
49 W < Pout <=250 W........... >=0.880.............. <=0.210
Pout > 250 W.................. >=0.875.............. <=0.500
------------------------------------------------------------------------
EL1: EU CoC Tier 2 Standards
------------------------------------------------------------------------
Pout <=1 W.................... >=0.5 x Pout + 0.169. <=0.075
1 W < Pout <=49 W............. >=0.071 x ln(Pout)- <=0.075
0.00115 x Pout +
0.67.
49 W < Pout <=250 W........... >=0.890.............. <=0.150
Pout > 250 W.................. >=0.890.............. <=0.150
------------------------------------------------------------------------
EL2: Top 50 Percent
------------------------------------------------------------------------
Pout <=1 W.................... >=0.5 x Pout + 0.169. <=0.065
1 W < Pout <=49 W............. >=0.0617 x ln(Pout)- <=0.065
0.00105 x Pout +
0.704.
49 W < Pout <=250 W........... >=0.895.............. <=0.130
Pout > 250 W.................. >=0.900.............. <=0.130
------------------------------------------------------------------------
EL3: Best In Market
------------------------------------------------------------------------
Pout <=1 W.................... >=0.5 x Pout + 0.169. <=0.050
1 W < Pout <=49 W............. >=0.0582 x ln(Pout)- <=0.050
0.00104 x Pout +
0.727.
49 W < Pout <=250 W........... >=0.902.............. <=0.110
Pout > 250 W.................. >=0.907.............. <=0.110
------------------------------------------------------------------------
EL4: Max-Tech
------------------------------------------------------------------------
Pout <=1 W.................... >=0.52 x Pout + 0.170 <=0.039
1 W < Pout <=49 W............. >=0.0654 x ln(Pout)- <=0.039
0.00149 x Pout +
0.732.
49 W < Pout <=250 W........... >=0.916.............. <=0.089
Pout > 250 W.................. >=0.916.............. <=0.120
------------------------------------------------------------------------
Table IV.4--Efficiency Levels for AC-DC, Low-Voltage External Power
Supplies
------------------------------------------------------------------------
Minimum average
Nameplate output power (Pout) efficiency in active Maximum power in
mode (expressed as a no-Load mode [W]
decimal)
------------------------------------------------------------------------
EL0: Current Standards
------------------------------------------------------------------------
Pout <= 1 W................... >=0.517 x Pout + <=0.100
0.087.
1 W < Pout <= 49 W............ >=0.0834 x ln(Pout)- <=0.100
0.0014 x Pout +
0.609.
49 W < Pout >= 250 W.......... >=0.870.............. <=0.210
Pout < 250 W.................. >=0.875.............. <=0.500
------------------------------------------------------------------------
EL1: EU CoC Tier 2 Standards
------------------------------------------------------------------------
Pout <= 1 W................... >=0.517 x Pout + <=0.075
0.091.
1 W < Pout <= 49 W............ >=0.0834 x ln(Pout)- <=0.075
0.0011 x Pout +
0.609.
49 W < Pout <= 250 W.......... >=0.880.............. <=0.150
Pout > 250 W.................. >=0.880.............. >=0.150
------------------------------------------------------------------------
EL2: Top 50 Percent
------------------------------------------------------------------------
Pout <= 1 W................... >=0.517 x Pout + <=0.065
0.091.
1 W < Pout <= 49 W............ >=0.0741 x ln(Pout)- <=0.065
0.00105 x Pout +
0.643.
49 W < Pout < 250 W........... >=0.885.............. <=0.130
[[Page 7302]]
Pout < 250 W.................. >=0.900.............. <=0.150
------------------------------------------------------------------------
EL3: Best In Market
------------------------------------------------------------------------
Pout <= 1 W................... >=0.517 x Pout + <=0.050
0.091.
1 W < Pout <= 49 W............ >=0.0706 x ln(Pout)- <=0.050
0.00104 x Pout +
0.666.
49 W < Pout < 250 W........... >=0.892.............. <=0.110
Pout < 250 W.................. >=0.907.............. <=0.130
------------------------------------------------------------------------
EL4: Max-Tech
------------------------------------------------------------------------
Pout <= 1 W................... >=0.537 x Pout + <=0.039
0.097.
1 W < Pout <= 49 W............ >=0.0778 x ln(Pout)- <=0.039
0.00149 x Pout +
0.671.
49 W < Pout <= 250 W.......... >=0.906.............. <=0.089
Pout < 250 W.................. >=0.916.............. <=0.120
------------------------------------------------------------------------
Table IV.5--Efficiency Levels for AC-AC, Basic-Voltage External Power
Supplies
------------------------------------------------------------------------
Minimum average
Nameplate output power (Pout) efficiency in active Maximum power in
mode (expressed as a no-load mode [W]
decimal)
------------------------------------------------------------------------
EL0: Current Standards
------------------------------------------------------------------------
Pout <= 1 W................... >=0.5 x Pout + 0.16.. <=0.210
1 W < Pout <= 49 W............ >=0.071 x ln(Pout)- <=0.210
0.0014 x Pout +
0.670.
49 W < Pout <= 250 W.......... >=0.880.............. <=0.210
Pout < 250 W.................. >=0.875.............. <=0.500
------------------------------------------------------------------------
EL1: EU CoC Tier 2 Standards
------------------------------------------------------------------------
Pout <= 1 W................... >=0.5 x Pout + 0.169. <=0.185
1 W < Pout <= 49 W............ >=0.071 x ln(Pout)- <=0.185
0.00115 x Pout +
0.670.
49 W < Pout <= 250 W.......... >=0.890.............. <=0.185
Pout < 250 W.................. >=0.890.............. <=0.500
------------------------------------------------------------------------
EL2
------------------------------------------------------------------------
Pout <= 1 W................... >=0.5 x Pout + 0.169. <=0.150
1 W < Pout <= 49 W............ >=0.0617 x ln(Pout)- <=0.150
0.00105 x Pout +
0.704.
49 W < Pout <= 250 W.......... >=0.895.............. <=0.150
Pout < 250 W.................. >=0.895.............. <=0.300
------------------------------------------------------------------------
EL3: Best In Market
------------------------------------------------------------------------
Pout <= 1 W................... >=0.5 x Pout + 0.169. <=0.075
1 W < Pout <= 49 W............ >=0.0582 x ln(Pout)- <=0.075
0.00104 x Pout +
0.727.
49 W < Pout <= 250 W.......... >=0.902.............. <=0.075
Pout <= 250 W................. >=0.902.............. <=0.200
------------------------------------------------------------------------
EL4: Max-Tech
------------------------------------------------------------------------
Pout <= 1 W................... >=0.520 x Pout + <= 0.039
0.170.
1 W < Pout <= 49 W............ >=0.0654 x ln(Pout)- <= 0.039
0.00149 x Pout +
0.732.
49 W < Pout <= 250 W.......... >=0.916.............. <=0.089
Pout <= 250 W................. >=0.916.............. <=0.100
------------------------------------------------------------------------
Table IV.6--Efficiency Levels for AC-AC, Low-Voltage External Power
Supplies
------------------------------------------------------------------------
Minimum average
Nameplate output power (Pout) efficiency in active Maximum power in
mode (expressed as a no-load mode [W]
decimal)
------------------------------------------------------------------------
EL0: Current Standards
------------------------------------------------------------------------
Pout >= 1 W................... >=0.517 x Pout + >=0.210
0.087.
1 W < Pout >= 49 W............ >=0.0834 x ln(Pout)- >=0.210
0.0014 x Pout +
0.609.
49 W < Pout >= 250 W.......... >=0.870.............. >=0.210
Pout > 250 W.................. >=0.875.............. >=0.500
------------------------------------------------------------------------
[[Page 7303]]
EL1: EU CoC Tier 2 Standards
------------------------------------------------------------------------
Pout >= 1 W................... >=0.517 x Pout + >=0.072
0.091.
1 W < Pout >= 49 W............ >=0.0834 x ln(Pout)- >=0.072
0.0011 x Pout +
0.609.
49 W < Pout >= 250 W.......... >=0.880.............. >=0.185
Pout > 250 W.................. >=0.880.............. >=0.500
------------------------------------------------------------------------
EL2
------------------------------------------------------------------------
Pout >= 1 W................... >=0.517 x Pout + >=0.060
0.091.
1 W < Pout >= 49 W............ >=0.0741 x ln(Pout)- >=0.060
0.00105 x Pout +
0.643.
49 W < Pout >= 250 W.......... >=0.885.............. >=0.150
Pout > 250 W.................. >=0.900.............. >=0.300
------------------------------------------------------------------------
EL3: Best In Market
------------------------------------------------------------------------
Pout >= 1 W................... >=0.517 x Pout + >=0.050
0.091.
1 W < Pout >= 49 W............ >=0.0706 x ln(Pout)- >=0.050
0.00104 x Pout +
0.666.
49 W < Pout >= 250 W.......... >=0.892.............. >=0.075
Pout > 250 W.................. >=0.907.............. >=0.200
------------------------------------------------------------------------
EL4: Max-Tech
------------------------------------------------------------------------
Pout >= 1 W................... >=0.537 x Pout + >=0.039
0.097.
1 W < Pout >= 49 W............ >=0.0778 x ln(Pout)- >=0.039
0.00149 x Pout +
0.671.
49 W < Pout >= 250 W.......... >=0.906.............. >=0.089
Pout > 250 W.................. >=0.916.............. >=0.100
------------------------------------------------------------------------
Table IV.7--Efficiency Levels for Multiple-Voltage External Power
Supplies
------------------------------------------------------------------------
Minimum average
Nameplate output power (Pout) efficiency in active Maximum power in
mode (expressed as a no-load mode [W]
decimal)
------------------------------------------------------------------------
EL0: Current Standards
------------------------------------------------------------------------
Pout >= 1 W................... >=0.497 x Pout + >=0.300
0.067.
1 W < Pout >= 49 W............ >=0.075 x ln(Pout) + >=0.300
0.561.
Pout > 49 W................... >=0.860.............. >=0.300
------------------------------------------------------------------------
EL1: Top 65 Percent
------------------------------------------------------------------------
Pout >= 1 W................... >=0.497 x Pout + >=0.100
0.067.
1 W < Pout >= 49 W............ >=0.0703 x ln(Pout)- >=0.100
0.000406 x Pout +
0.628.
Pout > 49 W................... >=0.880.............. >=0.150
------------------------------------------------------------------------
EL2: Top 40 Percent
------------------------------------------------------------------------
Pout >= 1 W................... >=0.497 x Pout + >=0.075
0.067.
1 W < Pout >= 49 W............ >=0.0782 x ln(Pout)- >=0.075
0.0013 x Pout +
0.643.
Pout > 49 W................... >=0.885.............. >=0.125
------------------------------------------------------------------------
EL3: Best In Market
------------------------------------------------------------------------
Pout >= 1 W................... >=0.497 x Pout + >=0.050
0.067.
1 W < Pout >= 49 W............ >=0.0861 x ln(Pout)- >=0.050
0.00169 x Pout +
0.642.
Pout > 49 W................... >=0.895.............. >=0.075
------------------------------------------------------------------------
EL4: Max-Tech
------------------------------------------------------------------------
Pout >= 1 W................... >=0.497 x Pout + >=0.030
0.067.
1 W < Pout >= 49 W............ >=0.0758 x ln(Pout)- >=0.030
0.00132 x Pout +
0.674.
Pout > 49 W................... >=0.905.............. >=0.050
------------------------------------------------------------------------
2. 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
[[Page 7304]]
product 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 this NOPR, DOE conducted the analysis using all three methods of
analysis (physical teardowns, catalog teardowns, and price surveys) to
determine manufacturing costs relating to the efficiency of a power
supply. Representative units for teardown were selected from the CCD
based on reported active mode efficiency and no-load power. Several
units were selected as representative units for each EL. In addition to
units from the CCD, DOE purchased evaluation boards from semiconductor
manufacturers to evaluate generic designs likely to be used in a wide
variety of power supplies on the market. DOE received additional cost
data from manufacturer interviews and from stakeholder feedback, which
were incorporated in the cost modeling.
Prior to testing and teardown of CCD units and evaluation boards,
test units were prepared to reduce application-specific variables
present in some units that might skew test results. Preparation
included removal of circuitry not related to EPS functionality and
installation of new, standardized cables. Prepared units were tested in
accordance with DOE test procedures.
After testing, DOE performed physical teardowns of CCD units and
catalog teardowns of evaluation boards. DOE developed estimates of MPCs
for each unit in the teardown sample to develop a set of MPCs at each
efficiency level. DOE selected most of its units from the AC-DC Basic-
Voltage product class, as a significant number of models and shipments
of EPSs belong to this class. Additional units belonging to the AC-DC
Low-Voltage and Multiple-Voltage product classes were also torn down.
Further, price survey data was collected in manufacturer interviews and
from stakeholder feedback for units at each efficiency level. Data was
combined to generate cost/efficiency relationships at each evaluated
power level, to which exponential curve fits were applied. Finally,
incremental MPCs were calculated at each efficiency level using the fit
equations. A further discussion of the cost analysis can be found at
chapter 5 of the NOPR TSD.
DOE received several comments about the cost analysis performed
during the February 2022 Preliminary Analysis.
ITI expressed concern about the broad amount of extrapolation used
during the preliminary analysis, and encouraged DOE to study more
representative models in each product class. (ITI, No. 20 at p. 2)
Additionally, ITI encouraged DOE to use less extrapolation and more
representative units when estimating MPCs. (ITI, No. 20 at p. 3) NEEA
encouraged DOE to conduct detailed teardowns of the AC-DC low-voltage
product class, citing the prevalence of such EPSs in the market and the
potential for differing technology options among them. (NEEA, No. 21 at
pp. 3-4)
The Joint Efficiency Advocates and the CA IOUs urged DOE to conduct
additional product testing and teardowns on representative units for
AC-DC Basic-Voltage and Low-Voltage product classes. The Joint
Efficiency Advocates acknowledged DOE's method of extrapolating and
interpolating from known AC-DC basic-voltage units but stated concerns
about the accuracy of the methods. (Joint Efficiency Advocates, No. 24
at p. 2) Furthermore, the Joint Efficiency Advocates and the CA IOUs
stated that DOE should test and teardown more AC-DC low-voltage EPSs
because these are estimated to have greater shipments than AC-DC basic-
voltage EPSs. (Joint Efficiency Advocates, No. 24 at p. 2; CA IOUs, No.
25 at pp. 4-5) The CA IOUs urged DOE to expand the current analysis
scope to analyze potential savings of updated standards levels more
thoroughly. In addition to products with high shipments, the CA IOUs
commented that ``high-energy-impact products'' should be further
examined, such as those with Power over Ethernet (``PoE'') technology.
(CA IOUs, No. 25 at pp. 4-5)
DOE agreed that an increased number of teardowns from the February
2022 Preliminary Analysis would improve its analysis. As such, DOE
performed additional teardowns for this NOPR, including teardowns
across other product classes (AC-DC Low-Voltage and Multiple-Voltage),
to validate both the representative unit MPC values as well as those
obtained using extrapolation methods. With regards to the CA IOUs'
suggestion to evaluate ``high-energy-impact products,'' DOE's analysis
adequately captures all major applications of EPSs, especially high-
energy-impact-products, and pairs each application with a usage profile
to calculate total energy consumption with and without amended
standards.
The Joint Efficiency Advocates, NEEA, and PSMA urged DOE to update
its cost assumptions about the CSLs presented in the preliminary
analysis, especially CSL4 (max-tech). PSMA also stated that certain
technologies can deliver efficiencies higher than those listed for
CSL4, and the incremental costs DOE cited in its Preliminary Analysis
were greatly overstated compared to what PSMA observes in the
marketplace, and in some cases were over twice the marketplace
incremental costs. (PSMA, No. 19 at p. 2) PSMA noted there was minimal
cost overhead due to the high volume manufacturing and claimed that
with more representative pricing, raising standards to at the very
least CSL1 should be justifiable, but that CSL2 or higher would be
preferable looking to where power supply efficiencies will be in the
future. (Id.) According to PSMA, current semiconductors already meet
both CSL2 and CSL3, and therefore currently available technologies
could meet those standards. (Id.) Similarly, both NEEA and the Joint
Efficiency Advocates claimed they obtained manufacturer-reported max-
tech incremental cost data that differed significantly from DOE's
estimates in the preliminary analysis and that DOE overestimated the
incremental costs. The Joint Efficiency Advocates and NEEA further
encouraged DOE to perform manufacturer interviews and additional tear-
downs to improve estimated cost values. (Joint Efficiency Advocates,
No. 24 at p. 2; NEEA, No. 21 at pp. 1-4)
After presenting its initial methodology and preliminary
engineering analysis in the February 2022 Preliminary Analysis, DOE
conducted manufacturer interviews to obtain feedback and updated the
engineering analysis as presented in this NOPR. The information
received during these interviews as well as additional data from
further teardowns has resulted in updated incremental costs, which can
be found in chapter 5 of the NOPR TSD.
More detail about the selection process and extrapolation methods
can be found in chapter 5 of the NOPR TSD.
[[Page 7305]]
To account for manufacturers' non-production costs and profit
margin, DOE applies a non-production cost multiplier (the manufacturer
markup) to the MPC. The resulting manufacturer selling price (MSP) is
the price at which the manufacturer distributes a unit into commerce.
DOE, throughout its analysis, is using the average manufacturer markup
presented in the February 2014 Final Rule TSD.\22\ This markup was
determined based on information collected during the manufacturer
interviews preceding that rulemaking. More detail on the manufacturer
markup is given in section IV.E of this document.
---------------------------------------------------------------------------
\22\ See Chapter 12 of the 2014 Final Rule Technical Support
Document for External Power Supplies. (Available at: www.https://
www.regulations.gov/document/EERE-2008-BT-STD-0005-0217) (last
accessed Sept. 28, 2022).
---------------------------------------------------------------------------
DOE requests comment on its cost analysis approach performed for
this NOPR.
3. Cost-Efficiency Results
The results of the engineering analysis are presented as cost-
efficiency data for each of the efficiency levels for each of the
product classes that were analyzed at popular power output levels, as
well as those extrapolated from a product class with similar
capabilities and features. Tables and plots with MPC results, as well
as extrapolation methods used both within and across each product
class, are presented below as well as in greater detail in chapter 5 of
the NOPR TSD. The results of the engineering analysis are reported as
cost-efficiency data (or ``curves'') in the form of daily energy
consumption (DEC) (in kWh) versus MSP (in dollars). DOE developed six
curves representing the two equipment classes and three different size
machines in each equipment class. 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). See TSD Chapter 5 for additional detail on the
engineering analysis and TSD Appendix 5B for complete cost-efficiency
results.
DOE requests comment on the incremental MPCs from the NOPR
engineering analysis.
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E. 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 the price of the product
to cover business costs and profit margin.
For EPSs, the main parties in the distribution chain are EPS
Manufacturers, End-Use Product Original Equipment Manufacturers,
Consumer Product Retailers, and Consumers.
DOE developed baseline and incremental markups for each actor in
the distribution chain. Baseline markups are applied to the price of
products 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.\23\
---------------------------------------------------------------------------
\23\ 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, 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.
---------------------------------------------------------------------------
In the February 2022 Preliminary Analysis, DOE used the same
baseline and incremental markups that were used in the February 2014
Final Rule.\24\ DOE did not receive any comments regarding the markups
or distribution channels in the February 2022 Preliminary Analysis.
Therefore, DOE used the same markups in this NOPR.
---------------------------------------------------------------------------
\24\ See Chapter 6 of the 2014 Final Rule Technical Support
Document for External Power Supplies. (Available at:
www.regulations.gov/document/EERE-2008-BT-STD-0005-0217) (last
accessed Sept. 12, 2022). See also Chapter 6 of the 2022 Preliminary
Analysis Technical Support Document for External Power Supplies.
(Available at: www.regulations.gov/document/EERE-2020-BT-STD-0006-0012) (last accessed Sept. 12, 2022).
---------------------------------------------------------------------------
Chapter 6 of the NOPR TSD provides details on DOE's development of
markups for EPSs.
DOE requests comment on the estimated increased manufacturer
markups and incremental MSPs that result from the analyzed energy
conservation standards from the NOPR engineering analysis.
F. Energy Use Analysis
The purpose of the energy use analysis is to determine the annual
energy consumption of EPSs 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 EPS
efficiency. The energy use analysis estimates the range of energy use
of EPSs in the field (i.e., as they are actually used by consumers).
The energy use analysis 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.
In the February 2022 Preliminary Analysis, DOE used usage profiles
that were developed in the February 2014 Final Rule, along with
efficiency data at different load conditions to calculate the UECs for
EPSs for a variety of applications.\25\ Usage profiles are
[[Page 7310]]
estimates of the average time a device spends in each mode of
operation.
---------------------------------------------------------------------------
\25\ See Appendix 7A of the 2014 Final Rule Technical Support
Document for External Power Supplies. (Available at:
www.regulations.gov/document/EERE-2008-BT-STD-0005-0217) (last
accessed Sept. 12, 2022). See also Appendix 7A of the 2022
Preliminary Analysis Technical Support Document for External Power
Supplies. (Available at: www.regulations.gov/document/EERE-2020-BT-STD-0006-0012) (last accessed Sept. 12, 2022).
---------------------------------------------------------------------------
DOE received a comment from ITI that the 2014 usage profiles are
outdated and that they may not represent current EPS customer usage
profiles and energy use, stating that devices used less energy than
they used to and that they often spent different times in different
modes than in the past. ITI did not provide any data regarding EPS
usage and indicated that DOE should conduct a study to understand the
current usage profiles of EPSs. (ITI, No. 20 at p. 3)
DOE was unable to find any updated usage information or data for
most EPSs. However, in response to the comment from ITI, for certain
applications, DOE revised its usage profiles compared to the 2014
estimates. These applications are likely to have more usage (and spend
time in different modes) than assumed in the 2014 Final Rule analysis.
The specific UECs depend on the output power and efficiency level. Some
applications are analyzed across multiple output power ratings. For
other applications, DOE maintained the same approach for developing
UECs as in the preliminary analysis.
Chapter 7 of the NOPR TSD provides details on DOE's energy use for
EPSs.
G. 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
EPSs. 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 EPSs in the absence of new or
amended 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
housing units and commercial buildings. DOE developed household samples
from the 2015 Residential Energy Consumption Survey \26\ (RECS 2015)
and the 2018 Commercial Building Energy Consumption Survey \27\ (CBECS
2018). For each sample household, DOE determined the energy consumption
for the EPSs and the appropriate energy price. By developing a
representative sample of households, the analysis captured the
variability in energy consumption and energy prices associated with the
use of EPSs.
---------------------------------------------------------------------------
\26\ www.eia.gov/consumption/residential/data/2015/ (last
accessed Sept. 12, 2022). EIA is currently working on RECS 2020, and
the entire RECS 2020 microdata are expected to be fully released in
early 2023. Until that time, RECS 2015 remains the most recent full
data release. For future analyses, DOE plans to consider using the
complete RECS 2020 microdata when available.
\27\ www.eia.gov/consumption/commercial/ (last accessed Sept.
12, 2022).
---------------------------------------------------------------------------
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 EPCs user samples. For
this rulemaking, the Monte Carlo approach is implemented in MS Excel.
The model calculated the LCC and PBP for products at each efficiency
level for 10,000 housing units and commercial buildings per simulation
run. The analytical results include a distribution of 10,000 data
points showing the range of LCC savings for a given efficiency level
relative to the no-new-standards case efficiency distribution. In
performing an iteration of the Monte Carlo simulation for a given
consumer, product efficiency is chosen based on its probability. If the
chosen product efficiency is greater than or equal to the efficiency of
the standard level under consideration, the LCC and PBP calculation
reveals that a consumer is not impacted by the standard level. By
accounting for consumers who already purchase more-efficient products,
DOE avoids overstating the potential benefits from increasing product
efficiency.
DOE calculated the LCC and PBP for all consumers of EPSs as if each
were to purchase a new product in the expected year of required
compliance with new or amended standards. New and amended standards
would apply to EPSs manufactured 2 years after the date on which any
new or amended standard is published. (42 U.S.C. 6295(g)(10)(B)) At
this time, DOE estimates publication of a final rule in the latter half
of 2024 Therefore, for purposes of its analysis, DOE used 2027 \28\ as
the first year of compliance with any amended standards for EPSs.
---------------------------------------------------------------------------
\28\ Compliance begins two years from the publication of the
final rule (i.e., latter half of 2026). However, for the purposes of
simplifying it analysis, DOE used the beginning of 2027 as the first
year of compliance with any amended standards for EPSs.
---------------------------------------------------------------------------
Table IV.13 summarizes the approach and data DOE used to derive
inputs to the LCC and PBP calculations. The subsections that follow
provide further discussion. Details of the spreadsheet model, and of
all the inputs to the LCC and PBP analyses, are contained in chapter 8
of the NOPR TSD and its appendices.
[[Page 7311]]
Table IV.13--Summary of Inputs and Methods for the LCC and PBP Analysis
*
------------------------------------------------------------------------
Inputs Source/method
------------------------------------------------------------------------
Product Cost................. Derived by multiplying MPCs by EPS
manufacturer and appliance manufacturer
markups and sales tax, as appropriate.
Used historical PPI data for
semiconductors to derive a price scaling
index to project product costs.
Installation Costs........... No installation costs.
Annual Energy Use............ The total annual energy use calculated
using product efficiency and operating
hours.
Variability: Based on the 2015 RECS and
2018 CBECS.
Energy Prices................ Electricity: EIA data--2021.
Variability: Census Division.
Energy Price Trends.......... Based on AEO2022 price projections.
Repair and Maintenance Costs. No repair or maintenance costs were
considered.
Product Lifetime............. Average: 3 to 10 years.
Discount Rates............... Approach involves identifying all
possible debt or asset classes that
might be used to purchase the considered
appliances, or might be affected
indirectly. Primary data source was the
Federal Reserve Board's Survey of
Consumer Finances.
Compliance Date.............. 2027.
------------------------------------------------------------------------
* 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.
In the February 2022 Preliminary Analysis, DOE did not use any
price trend.\29\ In response, NEEA and the CA IOUs commented that DOE
should incorporate price learning into its analysis and suggested that
DOE use the Producer Price Index (PPI) for the semiconductor industry
to develop the price trend. (NEEA, No. 21 at p. 4, CA IOUs, No. 25 at
p. 2) In this NOPR, DOE has incorporated a price trend based on the PPI
for semiconductors,\30\ with an estimated annual deflated price decline
of approximately 6 percent per year from 1967 through 2021. DOE applied
this price trend to the proportion of EPS costs attributable to
semiconductors.
---------------------------------------------------------------------------
\29\ See Chapters 8 and 10 of the 2022 Preliminary Analysis
Technical Support Document for External Power Supplies. (Available
at: www.regulations.gov/document/EERE-2020-BT-STD-0006-0012) (last
accessed Sept. 12, 2022).
\30\ Producer Price Index: Semiconductors and Related
Manufacturing. Series ID: PCU334413334413. (Available at:
beta.bls.gov/dataViewer/view/timeseries/PCU334413334413) (last
accessed Sept. 12, 2022).
---------------------------------------------------------------------------
2. Installation Cost
NEMA commented that hard-wired AC-outlets traditionally found in
residential environments can now be purchased with built-in Universal
Serial Bus (``USB'') ports that provide USB services as a secondary
function. NEMA further stated that the installation of such a product
requires certified professionals and results in a non-negligible cost
to the consumer. (NEMA, No. 22 at p. 2)
With respect to installation costs, DOE notes that the installation
costs would be the same regardless of efficiency level for hard-wired
AC receptacles. As a result, the incremental installation costs would
be $0 for higher efficiency products and would not impact the LCC
analysis. Therefore, DOE did not consider installation costs in this
analysis.
3. Annual Energy Consumption
For each sampled household or commercial business, DOE determined
the energy consumption for an EPS at different efficiency levels using
the approach described previously in section IV.F 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, marginal electricity price 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.
For the NOPR, DOE derived average monthly residential and
commercial marginal electricity prices for the various regions using
2021 data from EIA.\31\
---------------------------------------------------------------------------
\31\ U.S. Department of Energy-Energy Information
Administration, Form EIA-861M (formerly EIA-826) Database Monthly
Electric Utility Sales and Revenue Data (1990-2020). (Available at:
www.eia.gov/electricity/data/eia861m/) (last accessed Sept. 12,
2022).
---------------------------------------------------------------------------
See chapter 8 of the NOPR TSD for details.
To estimate energy prices in future years, DOE multiplied the 2021
energy prices by the projection of annual average price changes for
each of the nine census divisions from the Reference case in AEO2022,
which has an end year of 2050.\32\ To estimate price trends after 2050,
DOE used the average annual rate of change in prices from 2023 through
2050.
---------------------------------------------------------------------------
\32\ EIA. Annual Energy Outlook 2018 with Projections to 2050.
Washington, DC. (Available at www.eia.gov/forecasts/aeo/) (last
accessed Sept. 12, 2022).
---------------------------------------------------------------------------
5. Maintenance and Repair Costs
In the February 2022 Preliminary Analysis, DOE noted that it
expects consumers would discard and replace an EPS which fails before
the product with which it is designed to operate, rather than seek to
repair that EPS.\33\ DOE did not receive comment on this approach, and
therefore DOE did not consider maintenance and repair costs in this
analysis.
---------------------------------------------------------------------------
\33\ See Chapter 8, section 8.3.3 of the 2022 Preliminary
Analysis Technical Support Document for External Power Supplies.
(Available at: www.regulations.gov/document/EERE-2020-BT-STD-0006-0012) (last accessed Sept. 12, 2022).
---------------------------------------------------------------------------
6. Product Lifetime
In the February 2022 Preliminary Analysis, DOE based the EPS
lifetime on the lifetime of the application for which it is
associated.\34\ In response, the CA IOUs suggested that this approach
is reasonable for most EPSs, but that some manufacturers commonly sell
products (like phones) with only a USB cord and
[[Page 7312]]
not an EPS. Therefore, an EPS with a USB connection may have a lifetime
longer than that of the initial application and DOE's assumption may no
longer be valid. (CA IOUs, No. 25 at p. 6) The Joint Efficiency
Advocates also commented that DOE should re-evaluate the approach to
lifetimes as many AC-DC low voltage EPS are sold as stand-alone
products that are independent from the end-use product, and that
sellers of end-use products increasingly no longer bundle low-voltage
EPSs so that users may reuse their existing EPSs. The Joint Efficiency
Advocates believe that these stand-alone EPSs will have much longer
lifetimes than their end use applications, and therefore DOE should
extend the lifetime estimates for these products. (Joint Efficiency
Advocates, No. 24 at p. 3). However, the CA IOUs and the Joint
Efficiency Advocates did not provide any lifetime data for this
specific type of EPS.
---------------------------------------------------------------------------
\34\ See Chapter 8, section 8.3.4 of the 2022 Preliminary
Analysis Technical Support Document for External Power Supplies.
(Available at: www.regulations.gov/document/EERE-2020-BT-STD-0006-0012) (last accessed Sept. 12, 2022).
---------------------------------------------------------------------------
DOE was unable to find any updated lifetime information or data for
EPSs. However, in response to these comments, DOE increased the
lifetime for thirteen applications. DOE agrees that some applications
(e.g., phones) are likely to have an EPS lifetime longer than that of
the application. DOE also increased the lifetime estimates for a few
other applications to be more representative of current usage. The
increase in lifetime ranges from one to three years, except for
security cameras which now match the lifetime of home security systems
used in the 2022 Preliminary Analysis for battery chargers.\35\ For the
rest of the applications, DOE maintained the lifetime approach that it
used in the February 2022 Preliminary Analysis.
---------------------------------------------------------------------------
\35\ See Chapter 8, section 8.3.4 of the 2022 Preliminary
Analysis Technical Support Document for Battery Chargers. (Available
at: www.regulations.gov/document/EERE-2020-BT-STD-0013-0009) (last
accessed Sept. 12, 2022).
---------------------------------------------------------------------------
7. Discount Rates
In the calculation of LCC, DOE applies discount rates appropriate
to households and commercial buildings to estimate the present value of
future operating cost savings. DOE estimated a distribution of discount
rates for EPSs based on the opportunity cost of consumer funds.
For residential households, DOE applies weighted average discount
rates calculated from consumer debt and asset data, rather than
marginal or implicit discount rates.\36\ The LCC analysis estimates net
present value over the lifetime of the product, 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.
---------------------------------------------------------------------------
\36\ 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 \37\
(``SCF'') for 1995, 1998, 2001, 2004, 2007, 2010, 2013, 2016, 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 amended standards would take
effect. DOE assigned each sample household a specific discount rate
drawn from one of the distributions. The average rate across all types
of household debt and equity and income groups, weighted by the shares
of each type, is 4.26% percent.
---------------------------------------------------------------------------
\37\ Board of Governors of the Federal Reserve System. Survey of
Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010, 2013, 2016,
and 2019. (Available at: www.federalreserve.gov/econres/scfindex.htm) (last accessed Sept. 12, 2022).
---------------------------------------------------------------------------
For commercial buildings, DOE derived the discount rates for the
LCC analysis by estimating the cost of capital for companies or public
entities that purchase EPSs. For private firms, the weighted average
cost of capital (``WACC'') is commonly used to estimate the present
value of cash flows to be derived from a typical company project or
investment. Most companies use both debt and equity capital to fund
investments, so their cost of capital is the weighted average of the
cost to the firm of equity and debt financing, as estimated from
financial data for publicly traded firms across all commercial sectors.
The average commercial cost of capital is 6.77%.
See chapter 8 of the NOPR TSD for further details on the
development of consumer discount rates.
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 product efficiencies under the no-new-
standards case (i.e., the case without amended or new energy
conservation standards).
In the February 2022 Preliminary Analysis, DOE used the CCD \38\ to
estimate the energy efficiency distribution of EPSs for 2027.\39\ The
estimated market shares for the no-new-standards case for EPSs are
shown in Table IV.14. See chapter 8 of the NOPR TSD for further
information on the derivation of the efficiency distributions.
---------------------------------------------------------------------------
\38\ https://www.regulations.doe.gov/ccms.
\39\ See Chapter 8, section 8.4 of the 2022 Preliminary Analysis
Technical Support Document for External Power Supplies. (Available
at: www.regulations.gov/document/EERE-2020-BT-STD-0006-0012) (last
accessed Sept. 12, 2022).
Table IV.14--Estimated Market Shares of EPSs in No-New-Standards Case
----------------------------------------------------------------------------------------------------------------
Efficiency levels
-------------------------------------------------------------------------------
Power level Current DOE Best in market
stds. (%) EU CoC T2 (%) Top 50% (%) (%) Max-tech (%)
----------------------------------------------------------------------------------------------------------------
PC 1: Dir SV AC-DC Basic (2.5w). 0 52 26 22 0
[[Page 7313]]
PC 1: Dir SV AC-DC Basic (12w).. 18 35 41 6 0
PC 1: Dir SV AC-DC Basic (24w).. 22 40 34 4 0
PC 1: Dir SV AC-DC Basic (60w).. 50 21 17 13 0
PC 1: Dir SV AC-DC Basic (120w). 26 32 26 16 0
PC 2: Dir SV AC-DC Low (5w)..... 6 65 19 8 2
PC 2: Dir SV AC-DC Low (10w).... 17 29 28 26 0
PC 2: Dir SV AC-DC Low (12w).... 27 28 26 17 3
PC 2: Dir SV AC-DC Low (24w).... 44 7 45 4 0
PC 3: Dir SV AC-AC Basic (3.6w). 67 0 33 0 0
PC 3: Dir SV AC-AC Basic (24w).. 0 50 50 0 0
PC 3: Dir SV AC-AC Basic (40w).. 100 0 0 0 0
PC 5: Dir MV (18w).............. 2 14 51 24 8
PC 5: Dir MV (30w).............. 56 8 25 11 0
PC 5: Dir MV (90w).............. 0 50 25 0 25
----------------------------------------------------------------------------------------------------------------
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 products,
compared to baseline products, through energy cost savings. Payback
periods are expressed in years. Payback periods that exceed the life of
the product mean that the increased total installed cost is not
recovered in reduced operating expenses.
The inputs to the PBP calculation for each efficiency level are the
change in total installed cost of the product and the change in the
first-year annual operating expenditures relative to the baseline. The
PBP calculation 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 amended standards
would be required.
H. 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.\40\
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.
---------------------------------------------------------------------------
\40\ 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 February 2022 Preliminary Analysis, DOE developed shipments
estimates based on actual shipments from 2019 and a population growth
rate based on U.S. Census population projections through 2050.\41\ DOE
did not receive any comments on the shipments analysis and therefore
used this same approach in the NOPR.
---------------------------------------------------------------------------
\41\ See Chapter 9 of the 2022 Preliminary Analysis Technical
Support Document for External Power Supplies. (Available at:
www.regulations.gov/document/EERE-2020-BT-STD-0006-0012) (last
accessed Sept. 12, 2022).
---------------------------------------------------------------------------
See Chapter 9 of the NOPR TSD for more detail on the shipments
analysis.
DOE requests comment on its methodology for estimating shipments.
DOE also requests comment on its approach to estimate the market share
for EPSs of all product classes. DOE requests comment on the observed
and expected changes in quantity and use of external power supplies, by
type of power supply, and changes in shipments of products that use
external power supplies, including consumer electronics, power tools,
and medical devices, among others.
I. 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.\42\
(``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 product 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 EPSs sold from 2027
through 2056.
---------------------------------------------------------------------------
\42\ 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.
[[Page 7314]]
DOE uses a spreadsheet model to calculate the energy savings and
the national consumer costs and savings from each TSL. Interested
parties can review DOE's analyses by changing various input quantities
within the spreadsheet. The NIA spreadsheet model uses typical values
(as opposed to probability distributions) as inputs.
Table IV.15 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.15--Summary of Inputs and Methods for the National Impact
Analysis
------------------------------------------------------------------------
Inputs Method
------------------------------------------------------------------------
Shipments......................... Annual shipments from shipments
model.
Compliance Date of Standard....... 2027.
Efficiency Trends................. No-new-standards case: Varies by
application.
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
extrapolation thereafter based on
the growth rate from 2023-2050.
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. Product Efficiency Trends
A key component of the NIA is the trend in energy efficiency
projected for the no-new-standards case and each of the standards
cases. Section IV.G.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 each of the
considered product classes for the year of anticipated compliance with
an amended or new standard. To project the trend in efficiency absent
amended standards for EPSs over the entire shipments projection period,
DOE assumed a constant efficiency trend. The approach is further
described in chapter 10 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 (2027). 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.
To develop standards case efficiency trends after 2027, DOE used a
constant efficiency trend, keeping the distribution equal to the
compliance year.
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 products 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 consider a
rebound effect in this analysis, because the price differences by EL
and energy use are so small that any rebound effect would be close to
zero.
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 \43\
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.
---------------------------------------------------------------------------
\43\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview. (Available at: www.eia.gov/analysis/pdfpages/0581(2009)index.php) (last accessed Sept. 12, 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
[[Page 7315]]
costs. DOE calculates operating cost savings over the lifetime of each
product shipped during the projection period.
As discussed in section IV.G.1 of this document, DOE developed EPS
price trends based on historical PPI data for the semiconductor
industry. DOE applied the same trends to project prices for each
product class at each considered efficiency level. By 2056, which is
the end date of the projection period, the average EPS price is
projected to drop 90 percent relative to 2021. DOE's projection of
product prices is described in appendix 10C of the NOPR TSD.
The operating cost savings are energy cost savings, which are
calculated using the estimated energy 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 residential and
commercial 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 2023 through
2050.
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.\44\ 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.
---------------------------------------------------------------------------
\44\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. (Available
at: www.whitehouse.gov/omb/memoranda/m03-21.html) (last accessed
Sept. 12, 2022).
---------------------------------------------------------------------------
J. 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 one subgroup: low-
income households. The analysis used subsets of the RECS 2015 and CBECS
2018 sample composed of households that meet the criteria for the two
subgroups. DOE used the LCC and PBP spreadsheet model to estimate the
impacts of the considered efficiency levels on these subgroups. Chapter
11 in the NOPR TSD describes the consumer subgroup analysis.
K. Manufacturer Impact Analysis
1. Overview
DOE performed an MIA to estimate the financial impacts of amended
energy conservation standards on manufacturers of EPSs 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 amended 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 (``TSLs''). To
capture the uncertainty relating to manufacturer pricing strategies
following amended 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, as well as 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 EPS manufacturing industry
based on the market and technology assessment, manufacturer interviews,
and publicly-available information. This included a top-down analysis
of EPS 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
EPS manufacturing industry, including company filings of form 10-K from
the U.S. Securities and Exchange Commission (``SEC''),\45\ corporate
annual reports, the U.S. Census Bureau's Economic Census,\46\ and
reports from D&B Hoovers.\47\
---------------------------------------------------------------------------
\45\ See www.sec.gov/edgar.shtml.
\46\ See www.census.gov/programs-surveys/asm/data.html.
\47\ See https://app.dnbhoovers.com.
---------------------------------------------------------------------------
In Phase 2 of the MIA, DOE prepared a framework industry cash-flow
analysis to quantify the potential impacts of amended 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.
[[Page 7316]]
In Phase 3 of the MIA, DOE also evaluated subgroups of
manufacturers that may be disproportionately impacted by amended
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 of this document, ``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
amended 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 amended energy conservation standard. The GRIM
uses the inputs to arrive at a series of annual cash flows, beginning
in 2022 (the reference year of the analysis) and continuing to 2056.
DOE calculated INPVs by summing the stream of annual discounted cash
flows during this period. For manufacturers of EPSs, DOE used a real
discount rate of 7.1 percent, which was the value used in the February
2014 Final Rule.\48\
---------------------------------------------------------------------------
\48\ 79 FR 7846, 7849.
---------------------------------------------------------------------------
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
amended energy conservation standard on manufacturers. As discussed
previously, DOE developed critical GRIM inputs using a number of
sources, including publicly available data, results of the engineering
analysis, and information gathered from industry stakeholders. The GRIM
results are presented in section V.B.2 of this document. 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 products can affect the revenues,
gross margins, and cash flow of the industry. An overview of the
methodology used to generate MPCs is located in the engineering
analysis, and a complete discussion of the MPCs can be found in 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 2056 (the end year of
the analysis period). See chapter 9 of the NOPR TSD for additional
details.
c. Product and Capital Conversion Costs
Amended energy conservation standards could cause manufacturers to
incur conversion costs to bring their production facilities and product
designs into compliance. DOE evaluated the level of conversion-related
expenditures that would be needed to comply with each considered
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
amended energy conservation standards. Capital conversion costs are
investments in property, plant, and equipment necessary to adapt or
change existing production facilities such that new compliant product
designs can be fabricated and assembled.
DOE estimated that EPS manufacturers would not incur any capital
conversion costs. DOE expects, as is indicated by the engineering
analysis, that efficiency improvements would be accomplished through
component changes, changes to the design of EPSs, or some combination
therein. To DOE's understanding, this would not require any significant
change to the capital equipment used in the production of EPSs.
Manufacturers of EPSs typically do not produce their own components but
rather source these components from outside manufacturers.
Manufacturers of EPSs are not expected to incur any capital costs when
purchasing these more expensive and efficient components. However, the
increase in per unit component costs is reflected in the higher MPCs
derived in the engineering analysis. See section IV.D.2 for a complete
description of the MPCs derived for this NOPR analysis. Additionally,
the design of EPSs is not expected to change in such a way as a result
of any amended standards that the underlying production equipment would
change.
DOE does expect that manufacturers would incur product redesign
costs due to amended standards. Manufacturers may need to redesign
models outside of their normal product redesign cycles and would need
to design around a higher efficiency constraint. To evaluate the level
of product conversion costs manufacturers would likely incur to comply
with amended energy conservation standards, DOE developed estimates of
product conversion costs for each product class at each efficiency
level using estimated revenues related to EPSs, the R&D factor of
revenue used in the February 2014 Final Rule, and research related to
the engineering analysis. The conversion cost estimates used in the
GRIM can be found in section IV.K.2.c of this document. DOE assumes
that all conversion-related investments would occur between the year of
publication of the final rule and the year by which manufacturers must
comply with amended energy conservation standards.
For additional information on the estimated conversion costs and
the related methodology, see chapter 12 of the NOPR TSD.
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 amended energy
[[Page 7317]]
conservation standards: (1) a preservation of gross margin scenario;
and (2) a preservation of operating profit scenario. These scenarios
lead to different margins that, when applied to the MPCs, result in
varying revenue and cash flow impacts.
Under the preservation of gross margin scenario, DOE applied a
single uniform gross margin across all efficiency levels, which assumes
that manufacturers would be able to maintain the same amount of profit
as a percentage of revenues at all efficiency levels within a product
class. This scenario represents the upper bound of INPV impacts modeled
by DOE in this analysis.
Under the preservation of operating profit scenario, DOE modeled a
situation in which manufacturers are not able to maintain the per-unit
operating profit in proportion to increases in manufacturer production
costs but are able to maintain the total amount operating profit (as a
dollar value). This scenario represents the lower bound of INPV impacts
modeled by DOE in this analysis.
A comparison of industry financial impacts under the two markup
scenarios is presented in section V.B.2.a of this document.
3. Discussion of MIA Comments
ITI commented in response to the February 2022 Preliminary Analysis
that if DOE were to raise efficiency levels for EPSs across the board,
there is likely to be a significant impact for all manufacturers of
small-network equipment and for other equipment that use an off-the-
shelf EPS. ITI further stated that these impacts would be seen in the
redesigns and supply chains required for complying with higher
efficiency standards and therefore these cost impacts would likely be
higher than in DOE's preliminary analysis. (ITI, No. 20 at pp. 3-4) ITI
also stated that there is significant potential for many units of non-
compliant EPSs to be scrapped if standard levels were raised. (ITI, No.
20 at p. 8) In the event that energy efficiency requirements are
changed, ITI requested that DOE allow for an implementation time of at
least 5 years to account for time needed for inventory draw down, EPS
and end-product redesign considerations, and securing necessary
components for production. (ITI, No. 20 at pp. 4-6) ITI stated that
changing the components of an EPS to abide by more stringent efficiency
standards could result in necessary redesigns for the growing or
shrinking of the EPS enclosure. (ITI, No. 20 at pp. 8-9)
Regarding ITI's first point, DOE has created estimates of the
conversion costs necessary to comply with amended standards as well as
estimates of the MSPs of EPSs at different efficiency levels. ITI did
not provide data on or quantify the costs that might be expected by
manufacturers, so DOE is unable to evaluate those costs in relation to
its own estimates. DOE requests comment on DOE's estimated costs to see
if they align with expectations. DOE also requests comment on inventory
quantities of consumer electronics and other goods that use EPSs that
do not meet the proposed standard.
Regarding ITI's second point, DOE does not expect that
manufacturers will need to scrap a large number of non-compliant EPSs--
a large fraction of the EPSs currently in the market meet the proposed
standard level, as laid out in Table IV.14. Additionally, given the
compliance window, manufacturers will have time to adjust production
and inventories accordingly. Further, while the domestic market is the
largest market for North American-type EPSs, markets elsewhere in North
America remain an option if inventories of non-compliant models are not
successfully drawn down completely.
For the third point, requesting a compliance window of 5 years in
the event the proposed amended standards are finalized, DOE believes
that the statutorily mandated 2-year compliance window will be
sufficient. A 2-year compliance window already covers much of DOE's
estimated model lifecycle of 4 years for EPSs, and, as noted
previously, many extant EPS models are expected to meet the proposed
standard. For the fourth point, the product conversion cost estimates
in this NOPR are expected to encapsulate all changes to EPS designs--
including enclosure changes.
DOE requests comment on the estimated EPS model production cycle of
four years. DOE requests comment on the impacts of the proposed
standard, including the compliance date, on the inventory and potential
redesign of products that use EPSs that would not meet the proposed
standards.
L. 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).\49\
---------------------------------------------------------------------------
\49\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed Sept. 12,
2022).
---------------------------------------------------------------------------
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.
[[Page 7318]]
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.\50\
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\50\ 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 Sept. 12,
2022).
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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 (D.C.). (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.\51\ 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.
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\51\ 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).
---------------------------------------------------------------------------
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 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.
M. 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.
[[Page 7319]]
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 social cost (``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 exercises its own judgment in presenting monetized climate
benefits as recommended by applicable Executive orders, and DOE would
reach the same conclusion presented in this proposed rulemaking in the
absence of the social cost of greenhouse gases, including the February
2021 Interim Estimates presented by the Interagency Working Group on
the Social Cost of Greenhouse Gases.
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 (``February 2021 SC-
GHG TSD''). 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.\52\ and underwent a standard double-blind
peer review process prior to journal publication.
---------------------------------------------------------------------------
\52\ 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.
---------------------------------------------------------------------------
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).\53\ 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 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.
---------------------------------------------------------------------------
\53\ 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.
---------------------------------------------------------------------------
[[Page 7320]]
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, 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 SC-GHG 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,\54\ and
recommended that discount rate uncertainty and relevant aspects of
intergenerational ethical considerations be accounted for in selecting
future discount rates.
---------------------------------------------------------------------------
\54\ 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.
(Available at: www.epa.gov/sites/default/files/2016-12/documents/sc_co2_tsd_august_2016.pdf) (Last accessed Sept. 12, 2022) ;
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.
(Available at: www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf) (Last accessed Sept. 12,
2022).
---------------------------------------------------------------------------
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 concludes that a 7 percent discount
rate is not appropriate to apply to value the social cost of greenhouse
gases in the analysis presented in this document.
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
[[Page 7321]]
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 the aforementioned 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 revert
to the same set of four values drawn from the SC-GHG distributions
based on three discount rates as were developed in regulatory analyses
between 2010 and 2016 and were 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.\55\ 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 proposed rule likely underestimate the damages from GHG
emissions. DOE concurs with this assessment.
---------------------------------------------------------------------------
\55\ 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:
www.whitehouse.gov/briefing-room/blog/2021/02/26/a-return-to-science-evidence-based-estimates-of-the-benefits-of-reducing-climate-pollution) (Last accessed Sept. 12, 2022).
---------------------------------------------------------------------------
DOE's derivations of the 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 based on the
values developed for the IWG's February 2021 TSD. Table IV.16 shows the
updated sets of SC-CO2 estimates from the IWG's TSD in 5-
year increments from 2020 to 2050. The full set of annual values that
DOE used is presented in Appendix 14A 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.\56\
---------------------------------------------------------------------------
\56\ 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.16--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050
[2020 Dollars per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
Discount rate
------------------------------------------------------------------
Year 3% 95th
5% average 3% average 2.5% average percentile
----------------------------------------------------------------------------------------------------------------
2020......................................... 14 51 76 152
2025......................................... 17 56 83 169
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
----------------------------------------------------------------------------------------------------------------
[[Page 7322]]
For 2051 to 2070, DOE used SC-CO2 estimates published by
EPA, adjusted to 2021 dollars.\57\ 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 EPSs 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.
---------------------------------------------------------------------------
\57\ See EPA, Revised 2026 and Later Model Year Light-Duty
Vehicle GHG Emissions Standards: Regulatory Impact Analysis,
Washington, DC, December 2021. (Available at: www.epa.gov/regulations-emissions-vehicles-and-engines/final-rule-revise-existing-national-ghg-emissions) (last accessed Sept. 12, 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. DOE adjusted the values to 2021 dollars using the implicit
price deflator for gross domestic product (``GDP'') from the Bureau of
Economic Analysis. 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
TSD. Table IV.17 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 14A 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.17--Annual SC-CH4 and SC-N2O Values From 2021 Interagency Update, 2020-2050
[2020 Dollars per metric ton]
--------------------------------------------------------------------------------------------------------------------------------------------------------
SC-CH4 SC-N2O
-------------------------------------------------------------------------------------
Discount rate and statistic Discount rate and statistic
Year -------------------------------------------------------------------------------------
5% 3% 2.5% 3% 95th 5% 3% 2.5% 3% 95th
average average average percentile average average average percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020.............................................................. 670 1,500 2,000 3,900 5,800 18,000 27,000 48,000
2025.............................................................. 800 1,700 2,200 4,500 6,800 21,000 30,000 54,000
2030.............................................................. 940 2,000 2,500 5,200 7,800 23,000 33,000 60,000
2035.............................................................. 1,100 2,200 2,800 6,000 9,000 25,000 36,000 67,000
2040.............................................................. 1,300 2,500 3,100 6,700 10,000 28,000 39,000 74,000
2045.............................................................. 1,500 2,800 3,500 7,500 12,000 30,000 42,000 81,000
2050.............................................................. 1,700 3,100 3,800 8,200 13,000 33,000 45,000 88,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
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. DOE
adjusted the values to 2021 dollars using the implicit price deflator
for gross domestic product (``GDP'') from the Bureau of Economic
Analysis. 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.\58\ 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 EPSs using a method described in appendix 14B of the
NOPR TSD.
---------------------------------------------------------------------------
\58\ Estimating the Benefit per Ton of Reducing PM2.5 Precursors
from 21 Sectors. (Available at: www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors) (last accessed
Sept. 12, 2022).
---------------------------------------------------------------------------
N. 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.
[[Page 7323]]
O. 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.\59\ 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.
---------------------------------------------------------------------------
\59\ See U.S. Department of Commerce-Bureau of Economic
Analysis. Regional Input-Output Modeling System (RIMS II) User's
Guide. (Available at: www.bea.gov/resources/methodologies/RIMSII-user-guide) (last accessed Sept. 12, 2022).
---------------------------------------------------------------------------
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'').\60\ 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.
---------------------------------------------------------------------------
\60\ 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 (2027-2032), where these uncertainties are
reduced. For more details on the employment impact analysis, see
chapter 16 of the NOPR TSD.
P. Marking Requirements
Under 42 U.S.C. 6294(a)(5), Congress granted DOE with the authority
to establish labeling or marking requirements for a number of consumer
products, including EPSs. EISA 2007 set initial standards for Class A
EPSs, and required that all Class A EPSs be clearly and permanently
marked in accordance with the ``International Efficiency Marking
Protocol for External Power Supplies'' (the ``Marking Protocol''). (42
U.S.C. 6295(u)(3)(C)). Subsequently, the February 2014 Final Rule
amended the Marking Protocol to mandate the labeling of its finalized
efficiency standards (the Level VI standards) with the Roman number VI.
79 FR 7846, 7895-7897.
DOE notes that it is proposing amended standards for EPSs across
all product classes that exceed efficiency level ``VI'', the highest
level currently defined in the Marking Protocol. DOE is proposing to
define the proposed standards as ``Level VII'' and require updating
markings per the Marking Protocol. As noted in Section III.A, these
Level VII standards would be applicable to all EPSs, including direct
and indirect operation Class A and non-Class A EPSs. This approach
makes the distinction between these various types of EPSs redundant
with respect to the applicability of energy conservation standards.
Accordingly, DOE proposes to avoid using these terms in establishing
Level VII standards in 10 CFR 430.32(w)(1)(iv).
DOE requests comment on its proposal for Level VII efficiency
markings. DOE also requests feedback on its proposal to using the terms
direct and indirect operation Class A and non-Class A EPSs in
establishing Level VII standards in 10 CFR 430.32(w)(1)(iv).
V. Analytical Results and Conclusions
The following section addresses the results from DOE's analyses
with respect to the considered energy conservation standards for EPSs.
It addresses the TSLs examined by DOE, the projected impacts of each of
these levels if adopted as energy conservation standards for EPSs, 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 amended 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 product classes, to the
extent that there are such interactions, and market cross elasticity
from consumer purchasing decisions that may change when different
standard levels are set.
In the analysis conducted for this NOPR, DOE analyzed the benefits
and burdens of six TSLs for EPSs. DOE developed TSLs that combine
efficiency levels for each analyzed product class. DOE presents the
results for the TSLs in this document, while the results for all
efficiency levels that DOE analyzed are in the NOPR TSD.
Table V.1 presents the TSLs and the corresponding efficiency levels
that DOE has identified for potential amended energy conservation
standards for EPSs. TSL 6 represents the maximum technologically
feasible
[[Page 7324]]
(``max-tech'') energy efficiency for all product classes.
Table V.1--Trial Standard Levels for EPSs
----------------------------------------------------------------------------------------------------------------
Efficiency Level
-----------------------------------------------------------------------------------------------------------------
AC-DC basic- AC-DC low- AC-AC basic- AC-AC low- Multiple-
TSL voltage voltage voltage voltage voltage
----------------------------------------------------------------------------------------------------------------
1............................... 0 1 1 1 1
2............................... 0 1 3 1 2
3............................... 1 1 1 1 1
4............................... 1 1 3 1 2
5............................... 3 1 4 1 1
6............................... 4 4 4 4 4
----------------------------------------------------------------------------------------------------------------
DOE constructed the TSLs for this NOPR to include ELs
representative of ELs with similar characteristics (i.e., using similar
technologies and/or efficiencies, and having roughly comparable
equipment availability). The use of representative ELs provided for
greater distinction between the TSLs. While representative ELs were
included in the TSLs, DOE considered all efficiency levels as part of
its analysis.\61\
---------------------------------------------------------------------------
\61\ Efficiency levels that were analyzed for this NOPR are
discussed in section IV.D of this document. Results by efficiency
level are presented in TSD chapters 8, 10, and 12.
---------------------------------------------------------------------------
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
DOE analyzed the economic impacts on EPS consumers by looking at
the effects that potential amended 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.5 show the LCC and PBP results for the
TSLs considered for each product class. The impacts are measured
relative to the efficiency distribution in the no-new-standards case in
the compliance year (see section IV.G.8 of this document). 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. Results for AC-AC Low Voltage are not
shown because there are no shipments of this product class.
Table V.2--Average LCC and PBP Results for AC-DC Basic-Voltage
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs and savings (2021 dollars)
------------------------------------------------ Average LCC Percent of Average
EL First year's Lifetime savings * consumers with Simple payback lifetime
Installed operating operating (2021 dollars) net cost (years) (years)
cost savings savings
--------------------------------------------------------------------------------------------------------------------------------------------------------
EL 1.................................... $0.35 $0.06 $0.31 -$0.03 20 5.0 4.8
EL 2.................................... 0.53 0.09 0.43 -0.10 49 6.5 4.8
EL 3.................................... 0.95 0.14 0.68 -0.27 77 7.3 4.8
EL 4.................................... 1.82 0.24 1.17 -0.64 86 8.0 4.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Numbers may not add up due to rounding.
Table V.3--Average LCC and PBP Results for AC-DC Low Voltage
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs and savings (2021 dollars)
------------------------------------------------ Average LCC Percent of Average
EL First year's Lifetime savings * consumers with Simple payback lifetime
Installed cost operating operating (2021 dollars) net cost (years) (years)
savings savings
--------------------------------------------------------------------------------------------------------------------------------------------------------
EL 1.................................... $0.05 $0.01 $0.05 $0.01 4 3.2 4.2
EL 2.................................... 0.59 0.02 0.09 -0.50 69 26.4 4.2
EL 3.................................... 1.07 0.04 0.15 -0.91 89 27.3 4.2
EL 4.................................... 1.51 0.05 0.21 -1.30 97 28.5 4.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Numbers may not add up due to rounding.
[[Page 7325]]
Table V.4--Average LCC and PBP Results for AC-AC Basic-Voltage
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs and savings (2021 dollars)
------------------------------------------------ Average LCC Percent of Average l
EL First year's Lifetime savings * consumers with Simple payback ifetime
Installed cost operating operating (2021 dollars) net cost (years) (years)
savings savings
--------------------------------------------------------------------------------------------------------------------------------------------------------
EL 1.................................... $0.18 $0.07 $0.36 $0.18 10 2.3 6.2
EL 2.................................... 0.53 0.16 0.81 0.29 17 3.7 6.2
EL 3.................................... 1.02 0.30 1.53 0.52 28 4.1 6.2
EL 4.................................... 1.96 0.48 2.51 0.55 43 4.7 6.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Numbers may not add up due to rounding.
Table V.5--Average LCC and PBP Results for Multiple-Voltage
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs and savings (2021 dollars)
------------------------------------------------ Average LCC Percent of Average
EL First year's Lifetime savings * consumers with Simple payback lifetime
Installed cost operating operating (2021 dollars) net cost (years) (years)
savings savings
--------------------------------------------------------------------------------------------------------------------------------------------------------
EL 1.................................... $0.02 $0.06 $0.49 $0.46 0 0.1 6.2
EL 2.................................... 0.42 0.09 0.65 0.24 39 7.0 6.2
EL 3.................................... 1.23 0.14 0.85 -0.38 66 9.8 6.2
EL 4.................................... 2.37 0.20 1.12 -1.25 70 12.5 6.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Numbers may not add up due to rounding.
b. Consumer Subgroup Analysis
In the consumer subgroup analysis, DOE estimated the impact of the
considered TSLs on low-income households. Table V.6 compares the
average LCC savings and PBP at each efficiency level for the consumer
subgroups with similar metrics for the entire consumer sample for a
product class. In most cases, the average LCC savings and PBP for low-
income 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.
Table V.6--Comparison of LCC Savings and PBP for Consumer Subgroups and
All Households; AC-DC Basic-Voltage
------------------------------------------------------------------------
Low-income
households All households
------------------------------------------------------------------------
Average LCC Savings (2021 Dollars)
------------------------------------------------------------------------
EL 1.................................... $0.00 -$0.03
EL 2.................................... -0.06 -0.10
EL 3.................................... -0.20 -0.27
EL 4.................................... -0.53 -0.64
------------------------------------------------------------------------
Payback Period (years)
------------------------------------------------------------------------
EL 1.................................... .............. 5.0
EL 2.................................... 6.1 6.5
EL 3.................................... 6.8 7.3
EL 4.................................... 7.6 8.0
------------------------------------------------------------------------
Consumers with Net Cost (%)
------------------------------------------------------------------------
EL 1.................................... 19 20
EL 2.................................... 48 49
EL 3.................................... 74 77
EL 4.................................... 84 86
------------------------------------------------------------------------
Table V.7--Comparison of LCC Savings and PBP for Consumer Subgroups and
All Households; AC-DC Low Voltage
------------------------------------------------------------------------
Low-income
households All households
------------------------------------------------------------------------
Average LCC Savings (2021 Dollars)
------------------------------------------------------------------------
EL 1.................................... $0.01 $0.01
EL 2.................................... -0.51 -0.50
EL 3.................................... -0.92 -0.91
EL 4.................................... -1.31 -1.30
------------------------------------------------------------------------
Payback Period (years)
------------------------------------------------------------------------
EL 1.................................... 3.0 3.2
EL 2.................................... 26.8 26.4
EL 3.................................... 27.8 27.3
EL 4.................................... 29.1 28.5
------------------------------------------------------------------------
Consumers with Net Cost (%)
------------------------------------------------------------------------
EL 1.................................... 4 4
EL 2.................................... 70 69
EL 3.................................... 89 89
EL 4.................................... 98 97
------------------------------------------------------------------------
Table V.8--Comparison of LCC Savings and PBP for Consumer Subgroups and
All Households; AC-AC Basic-Voltage
------------------------------------------------------------------------
Low-income
households All households
------------------------------------------------------------------------
Average LCC Savings (2021 Dollars)
------------------------------------------------------------------------
EL 1.................................... $0.24 $0.18
EL 2.................................... 0.41 0.29
EL 3.................................... 0.74 0.52
EL 4.................................... 0.95 0.55
------------------------------------------------------------------------
Payback Period (years)
------------------------------------------------------------------------
EL 1.................................... .............. 2.3
EL 2.................................... 3.5 3.7
EL 3.................................... 3.9 4.1
EL 4.................................... 4.5 4.7
------------------------------------------------------------------------
Consumers with Net Cost (%)
------------------------------------------------------------------------
EL 1.................................... 10 10
[[Page 7326]]
EL 2.................................... 14 17
EL 3.................................... 22 28
EL 4.................................... 27 43
------------------------------------------------------------------------
Table V.9--Comparison of LCC Savings and PBP for Consumer Subgroups and
All Households; Multiple-Voltage
------------------------------------------------------------------------
Low-income
households All households
------------------------------------------------------------------------
Average LCC Savings (2021 Dollars)
------------------------------------------------------------------------
EL 1.................................... $0.46 $0.46
EL 2.................................... 0.21 0.24
EL 3.................................... -0.43 -0.38
EL 4.................................... -1.32 -1.25
------------------------------------------------------------------------
Payback Period (years)
------------------------------------------------------------------------
EL 1.................................... .............. 0.1
EL 2.................................... 8.1 7.0
EL 3.................................... 11.3 9.8
EL 4.................................... 14.3 12.5
------------------------------------------------------------------------
Consumers with Net Cost (%)
------------------------------------------------------------------------
EL 1.................................... 0 0
EL 2.................................... 39 39
EL 3.................................... 67 66
EL 4.................................... 71 70
------------------------------------------------------------------------
c. Rebuttable Presumption Payback
As discussed in section IV.G.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 EPSs.
Table V.10 presents the rebuttable-presumption payback periods for
the considered TSLs for EPSs. 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, which may
support or rebut the preliminary determination of economic
justification.
Table V.10--Rebuttable-Presumption Payback Periods
----------------------------------------------------------------------------------------------------------------
AC-DC basic- AC-DC low- AC-AC basic- Multiple-
EL voltage voltage voltage voltage
----------------------------------------------------------------------------------------------------------------
1............................................... 5.0 3.2 2.3 0.1
2............................................... 6.5 26.4 3.7 7.0
3............................................... 7.3 27.3 4.1 9.8
4............................................... 8.0 28.5 4.7 12.5
----------------------------------------------------------------------------------------------------------------
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of amended energy
conservation standards on manufacturers of EPSs. The following section
describes the expected impacts on manufacturers at each considered TSL.
Section IV.K of this document discusses the MIA methodology, and
chapter 12 of the NOPR TSD explains the analysis in further detail.
a. Industry Cash Flow Analysis Results
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 amended energy conservation standards
on manufacturers of EPSs as well as the conversion costs that DOE
estimates manufacturers of EPSs would incur at each TSL.
Table V.11--Manufacturer Impact Analysis for External Power Supplies--Preservation of Gross Margin Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
No-new- Trial standard level
Units standards -----------------------------------------------------------------------------
case 1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV................................ 2021 Dollars millions.. 847.5 846.1 845.3 840.4 839.6 801.5 814.6
Change in INPV...................... 2021 Dollars millions.. ........... (1.4) (2.2) (7.1) (7.9) (46.0) (32.9)
%...................... ........... (0.2) (0.3) (0.8) (0.9) (5.4) (3.9)
Total Conversion Costs.............. 2021 Dollars millions.. ........... 2.7 4.7 15.4 17.4 105.9 186.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses ``( )'' are negative. Some numbers might not round due to rounding.
Table V.12--Manufacturer Impact Analysis for External Power Supplies--Preservation of Operating Profit Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
No-new- Trial standard level
Units standards -----------------------------------------------------------------------------
case 1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV................................ 2021 Dollars millions.. 847.5 845.8 844.4 837.3 835.9 775.2 700.0
Change in INPV...................... 2021 Dollars millions.. ........... (1.7) (3.1) (10.2) (11.6) (72.3) (147.5)
%...................... ........... (0.2) (0.4) (1.2) (1.4) (8.5) (17.4)
[[Page 7327]]
Total Conversion Costs.............. 2021 Dollars millions.. ........... 2.7 4.7 15.4 17.4 105.9 186.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses ``( )'' are negative. Some numbers might not round due to rounding.
At TSL 1, DOE estimates impacts on INPV will range from
approximately -$1.7 million to -$1.4 million, which represents a change
of approximately -0.2 percent. At TSL 1, industry free cash-flow
decreases to $77.6 million, which represents a decrease of
approximately 1.5 percent, compared to the no-new-standards case value
of $78.7 million in 2026, the year before the estimated compliance
date.
TSL 1 would set the energy conservation standard at baseline for
the AC-DC Basic-Voltage product class and at EL 1 for all other product
classes. DOE estimates that all AC-DC basic-voltage shipments,
approximately 93 percent of AC-DC low-voltage shipments, approximately
41 percent of AC-AC basic-voltage shipments, and approximately 89
percent of multiple-voltage shipments would meet the efficiency levels
analyzed at TSL 1 in 2027. As noted previously, shipment data is not
available for the AC-AC Low-Voltage product class. DOE expects EPS
manufacturers to incur approximately $2.7 million in product conversion
costs to redesign all non-compliant models.
At TSL 1, the shipment-weighted average MPC for EPSs slightly
increases by 0.1 percent, relative to the no-new-standards case
shipment-weighted average MPC in 2027. In the preservation of gross
margin scenario, manufacturers can fully pass on this slight cost
increase. The slight increase in shipment weighted average MPC is
outweighed by the $2.7 million in conversion costs, causing a slightly
negative change in INPV at TSL 1 under the preservation of gross margin
scenario.
Under the preservation of operating profit 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 0.1
percent shipment weighted average MPC increase results in a reduction
in the margin after the analyzed compliance year. This reduction in the
margin and the $2.7 million in conversion costs incurred by
manufacturers cause a slightly negative change in INPV at TSL 1 under
the preservation of operating profit scenario.
At TSL 2, DOE estimates impacts on INPV will range from -$3.1
million to -$2.2 million, which represents a change of -0.4 percent to
-0.3 percent, respectively. At TSL 2, industry free cash-flow decreases
to $76.7 million, which represents a decrease of approximately 2.6
percent, compared to the no-new-standards case value of $78.7 million
in 2026, the year before the estimated compliance date.
TSL 2 would set the energy conservation standard at baseline for
the AC-DC Basic-Voltage product class; at EL 1 for the AC-DC Low-
Voltage and AC-AC Low-Voltage product classes; at EL 2 for the
Multiple-Voltage product class; and at EL 3 for the AC-AC Basic-Voltage
product class. DOE estimates that all AC-DC basic-voltage shipments,
approximately 93 percent of AC-DC low-voltage shipments, approximately
24 percent of AC-AC basic-voltage shipments, and approximately 23
percent of multiple-voltage shipments would meet the efficiency levels
analyzed at TSL 2 in 2027. DOE expects EPS manufacturers to incur
approximately $4.7 million in product conversion costs to redesign all
non-compliant models.
At TSL 2, the shipment-weighted average MPC for EPSs slightly
increases by 0.3 percent relative to the no-new-standards case
shipment-weighted average MPC in 2027. In the preservation of gross
margin scenario, manufacturers can fully pass on this slight cost
increase. The slight increase in shipment weighted average MPC is
outweighed by the $4.7 million in conversion costs, causing a slightly
negative change in INPV at TSL 2 under the preservation of gross margin
scenario.
Under the preservation of operating profit scenario, the 0.3
percent shipment weighted average MPC increase results in a reduction
in the margin after the analyzed compliance year. This reduction in the
margin and the $4.7 million in conversion costs incurred by
manufacturers cause a slightly negative change in INPV at TSL 2 under
the preservation of operating profit scenario.
At TSL 3, DOE estimates impacts on INPV will range from -$10.2
million to -$7.1 million, which represents a change of -1.2 percent to
-0.8 percent, respectively. At TSL 3, industry free cash-flow decreases
to $72.1 million, which represents a decrease of approximately 8.5
percent, compared to the no-new-standards case value of $78.7 million
in 2026, the year before the estimated compliance date.
TSL 3 would set the energy conservation standard at EL 1 for all
AC-DC Basic-Voltage product classes. DOE estimates that approximately
75 percent of AC-DC basic-voltage shipments, approximately 93 percent
of AC-DC low-voltage shipments, approximately 41 percent of AC-AC
basic-voltage shipments, and approximately 89 percent of multiple-
voltage shipments would meet the efficiency levels analyzed at TSL 3 in
2027. DOE expects EPS manufacturers to incur approximately $15.4
million in product conversion costs to redesign all non-compliant
models.
At TSL 3, the shipment-weighted average MPC for EPSs slightly
increases by 0.8 percent relative to the no-new-standards case
shipment-weighted average MPC in 2027. In the preservation of gross
margin scenario, manufacturers can fully pass on this cost increase.
The increase in shipment weighted average MPC is outweighed by the
$15.4 million in conversion costs, resulting in a slightly negative
change in INPV at TSL 3 under the preservation of gross margin
scenario.
Under the preservation of operating profit scenario, the 0.8
percent shipment weighted average MPC increase results in a reduction
in the margin after the analyzed compliance year. This reduction in the
margin and the $15.4 million in conversion costs incurred by
manufacturers cause a slightly negative change in INPV at TSL 3 under
the preservation of operating profit scenario.
At TSL 4, DOE estimates impacts on INPV will range from -$11.6
million to -$7.9 million, which represents a change of -1.4 percent to
-0.9 percent, respectively. At TSL 4, industry free cash-flow decreases
to $71.2 million, which represents a decrease of approximately 9.6
percent, compared to
[[Page 7328]]
the no-new-standards case value of $78.7 million in 2026, the year
before the estimated compliance date.
TSL 4 would set the energy conservation standard at EL 1 for all
product classes except for the Multiple-Voltage and AC-AC Basic-Voltage
product classes, which would be set at EL 2 and EL 3 respectively. DOE
estimates that approximately 75 percent of AC-DC basic-voltage
shipments, approximately 93 percent of AC-DC low-voltage shipments,
approximately 0 percent of AC-AC basic-voltage shipments, and
approximately 49 percent of multiple-voltage shipments would meet the
efficiency levels analyzed at TSL 4 in 2027. DOE expects EPS
manufacturers to incur approximately $17.4 million in product
conversion costs to redesign all non-compliant models.
At TSL 4, the shipment-weighted average MPC for EPSs slightly
increases by 1.0 percent relative to the no-new-standards case
shipment-weighted average MPC in 2027. In the preservation of gross
margin scenario, manufacturers can fully pass on this slight cost
increase. The slight increase in shipment weighted average MPC is
outweighed by the $17.4 million in conversion costs, causing a slightly
negative change in INPV at TSL 4 under the preservation of gross margin
scenario.
Under the preservation of operating profit 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 1.0
percent shipment weighted average MPC increase results in a reduction
in the margin after the analyzed compliance year. This reduction in the
margin and the $17.4 million in conversion costs incurred by
manufacturers cause a slightly negative change in INPV at TSL 4 under
the preservation of operating profit scenario.
At TSL 5, DOE estimates impacts on INPV will range from -$72.3
million to -$46.0 million, which represents a change of -8.5 percent to
-5.4 percent, respectively. At TSL 5, industry free cash-flow decreases
to $32.7 million, which represents a decrease of approximately 58.4
percent, compared to the no-new-standards case value of $78.7 million
in 2026, the year before the estimated compliance date.
TSL 5 would set the energy conservation standard at EL 1 for the
AC-DC Low-Voltage, AC-AC Low-Voltage, and Multiple-Voltage product
classes. The AC-DC Basic-Voltage and AC-AC Basic-Voltage product
classes would be set at EL 3 and EL 4 respectively. EL 4 constitutes
max-tech for the AC-AC Basic-Voltage product class. DOE estimates that
approximately 8 percent AC-DC basic-voltage shipments, approximately 93
percent of AC-DC low-voltage shipments, approximately 0 percent of AC-
AC basic-voltage shipments, and approximately 89 percent of multiple-
voltage shipments would meet the efficiency levels analyzed at TSL 5 in
2027. DOE expects EPS manufacturers to incur approximately $105.9
million in product conversion costs to redesign all non-compliant
models.
At TSL 5, the shipment-weighted average MPC for EPSs moderately
increases by 6.8 percent relative to the no-new-standards case
shipment-weighted average MPC in 2027. In the preservation of gross
margin scenario, manufacturers can fully pass on this moderate cost
increase. The moderate increase in shipment weighted average MPC is
outweighed by the $105.9 million in conversion costs, causing a
moderately negative change in INPV at TSL 5 under the preservation of
gross margin scenario.
Under the preservation of operating profit scenario, the 6.8
percent shipment weighted average MPC increase results in a moderate
reduction in the margin after the analyzed compliance year. This
reduction in the margin and the $105.9 million in conversion costs
incurred by manufacturers cause a moderately negative change in INPV at
TSL 5 under the preservation of operating profit scenario.
At TSL 6, DOE estimates impacts on INPV will range from -$147.5
million to -$32.9 million, which represents a change of -17.4 percent
to -3.9 percent, respectively. At TSL 6, industry free cash-flow
decreases to -$5.9 million, which represents a decrease of
approximately 107.5 percent, compared to the no-new-standards case
value of $78.7 million in 2026, the year before the estimated
compliance date.
TSL 6 would set the energy conservation standard at EL 4 for all
product classes. EL 4 constitutes max-tech for all product classes. DOE
estimates that approximately 0 percent of AC-DC basic-voltage
shipments, approximately 2 percent of AC-DC low-voltage shipments,
approximately 0 percent of AC-AC basic-voltage shipments, and
approximately 19 percent of multiple-voltage shipments would meet the
efficiency levels analyzed at TSL 6 in 2027. DOE expects EPS
manufacturers to incur approximately $186.5 million in product
conversion costs to redesign all non-compliant models.
At TSL 6, the shipment-weighted average MPC for EPSs significantly
increases by 29.6 percent relative to the no-new-standards case
shipment-weighted average MPC in 2027. In the preservation of gross
margin scenario, manufacturers can fully pass on this cost increase.
The significant increase in shipment weighted average MPC is outweighed
by the $186.5 million in conversion costs, causing a slightly negative
change in INPV at TSL 6 under the preservation of gross margin
scenario.
Under the preservation of operating profit scenario, the 29.6
percent shipment weighted average MPC increase results in a significant
reduction in the margin after the analyzed compliance year. This
reduction in the margin and the $186.5 million in conversion costs
incurred by manufacturers cause a moderately negative change in INPV at
TSL 6 under the preservation of operating profit scenario.
DOE requests comment on the GRIM results and the estimated
conversion costs.
b. Direct Impacts on Employment
DOE was unable to identify any domestic EPS manufacturing
facilities, based on the industry profile developments for this NOPR
analysis and manufacturer interviews that were conducted for this
product as well as other products that use EPSs. As such, DOE does not
expect that there would be any direct impacts on domestic production
employment as a result of any amended energy conservation standards.
DOE requests comment on whether there is domestic EPS
manufacturing, where and to what extent such manufacturing occurs, and
how the proposed energy conservation standard might affect that
possible domestic EPS manufacturing.
c. Impacts on Manufacturing Capacity
As noted in prior sections, DOE does not expect that energy
conservation standards would result in substantial changes to EPS
manufacturing equipment. Further, DOE does not expect that there would
be capacity issues providing components to EPS manufacturers for more
efficient EPSs.
DOE requests comment on possible impacts on manufacturing capacity
stemming from amended energy conservation standards, including any
potential issues with supply chain costs, and or chips and devices used
in the national security sector.
[[Page 7329]]
d. Impacts on Subgroups of Manufacturers
DOE identified one subgroup of manufactures that may experience
disproportionate or different impacts as a result of amended
standards--small businesses. Analysis of the possible impact on this
group is discussed in Section VI.B of this document.
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.
Table V.13--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting External Power Supply Manufacturers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry
Number of conversion
Federal energy conservation standard Number of manufacturers Approx. Industry conversion costs costs/product
manufacturers * affected from standards year (millions) revenue ***
this rule ** (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Room Air Conditioners [dagger] 87 FR 20608 8 3 2026 $22.8 (2020 Dollar)............. 0.5
(Apr. 7, 2022).
Microwave Ovens [dagger] 87 FR 52282 (Aug. 24, 19 6 2026 $46.1 (2021 Dollars)............ 0.7
2022).
Clothes Dryers [dagger] 87 FR 51734 (Aug. 23, 15 2 2027 $149.7 (2020 Dollar)............ 1.8
2022).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This column presents the total number of manufacturers identified in the energy conservation standard rule contributing to cumulative regulatory
burden.
** This column presents the number of manufacturers producing EPSs that are also listed as manufacturers in the listed energy conservation standard
contributing to cumulative regulatory burden.
*** This column presents industry conversion costs as a percentage of product revenue during the conversion period. Industry conversion costs are the
upfront investments manufacturers must make to sell compliant products/equipment. The revenue used for this calculation is the revenue from just the
covered product/equipment associated with each row. The conversion period is the time frame over which conversion costs are made and lasts from the
publication year of the final rule to the compliance year of the energy conservation standard. The conversion period typically ranges from 3 to 5
years, depending on the rulemaking.
[dagger] Indicates NOPR or SNOPR publications. Values may change on publication of a Final Rule.
In addition to the rulemaking listed in Table V.13 DOE has ongoing
rulemakings for other products or equipment that EPS manufacturers
produce, including air cleaners; \62\ automatic commercial ice makers;
\63\ commercial clothes washers; \64\ dehumidifiers; \65\ miscellaneous
refrigeration products; \66\ refrigerators, refrigerator-freezers, and
freezers; \67\ conventional cooking products; \68\ battery chargers;
\69\ and residential clothes washers.\70\ If DOE proposes or finalizes
any energy conservation standards for these products or equipment prior
to finalizing energy conservation standards for EPSs, DOE will include
the energy conservation standards for these other products or equipment
as part of the cumulative regulatory burden for the EPS final rule.
---------------------------------------------------------------------------
\62\ www.regulations.gov/docket/EERE-2021-BT-STD-0035.
\63\ www.regulations.gov/docket/EERE-2017-BT-STD-0022.
\64\ www.regulations.gov/docket/EERE-2019-BT-STD-0044.
\65\ www.regulations.gov/docket/EERE-2019-BT-STD-0043.
\66\ www.regulations.gov/docket/EERE-2020-BT-STD-0039.
\67\ www.regulations.gov/docket/EERE-2017-BT-STD-0003.
\68\ www.regulations.gov/docket/EERE-2014-BT-STD-0005.
\69\ www.regulations.gov/docket/EERE-2020-BT-STD-0013.
\70\ www.regulations.gov/docket/EERE-2017-BT-STD-0014.
---------------------------------------------------------------------------
DOE requests information regarding the impact of cumulative
regulatory burden on manufacturers of EPSs associated with multiple DOE
standards or product-specific regulatory actions of other Federal
agencies.
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 amended standards.
a. Significance of Energy Savings
To estimate the energy savings attributable to potential amended
standards for EPSs, 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 (2027-2056). presents DOE's
projections of the national energy savings for each TSL considered for
EPSs. The savings were calculated using the approach described in
section IV.I of this document.
[[Page 7330]]
Table V.14--Cumulative National Energy Savings for External Power Supplies; 30 Years of Shipments
[2027-2056]
----------------------------------------------------------------------------------------------------------------
Trial standard level
-----------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
quads
----------------------------------------------------------------------------------------------------------------
Primary energy.................... 0.01 0.04 0.08 0.11 0.49 1.09
FFC energy........................ 0.02 0.04 0.09 0.11 0.51 1.14
----------------------------------------------------------------------------------------------------------------
OMB Circular A-4 \71\ 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.\72\ The review timeframe established in EPCA is generally
not synchronized with the product lifetime, product manufacturing
cycles, or other factors specific to EPSs. 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.15. The impacts are counted over the lifetime of EPSs purchased in
2026-2035.
---------------------------------------------------------------------------
\71\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003.
obamawhitehouse.archives.gov/omb/circulars_a004_a-4/ (last accessed
Sept. 12, 2022).
\72\ 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.15--Cumulative National Energy Savings for External Power Supplies; 9 Years of Shipments
[2027-2036]
----------------------------------------------------------------------------------------------------------------
Trial standard level
-----------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
quads
----------------------------------------------------------------------------------------------------------------
Primary energy.................... 0.004 0.01 0.02 0.03 0.14 0.31
FFC energy........................ 0.004 0.01 0.02 0.03 0.14 0.32
----------------------------------------------------------------------------------------------------------------
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 EPSs. In
accordance with OMB's guidelines on regulatory analysis,\73\ DOE
calculated NPV using both a 7-percent and a 3-percent real discount
rate. Table V.16 shows the consumer NPV results with impacts counted
over the lifetime of products purchased in 2027-2056.
---------------------------------------------------------------------------
\73\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003. (Available at:
obamawhitehouse.archives.gov/omb/circulars_a004_a-4/) (last accessed
Sept. 12, 2022).
Table V.16--Cumulative Net Present Value of Consumer Benefits for External Power Supplies; 30 Years of Shipments
[2027-2056]
----------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate -----------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
billion (2021 Dollars)
----------------------------------------------------------------------------------------------------------------
3 percent......................... 0.08 0.22 0.31 0.45 1.96 (1.14)
7 percent......................... 0.03 0.10 0.11 0.17 0.75 (1.72)
----------------------------------------------------------------------------------------------------------------
The NPV results based on the aforementioned 9-year analytical
period are presented in . The impacts are counted over the lifetime of
products purchased in 2027-2035. 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.
[[Page 7331]]
Table V.17--Cumulative Net Present Value of Consumer Benefits for External Power Supplies; 9 Years of Shipments
[2027-2035]
----------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate -----------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
billion (2021 Dollars)
----------------------------------------------------------------------------------------------------------------
3 percent......................... 0.02 0.06 0.05 0.09 0.35 (2.47)
7 percent......................... 0.01 0.04 0.02 0.04 0.17 (1.99)
----------------------------------------------------------------------------------------------------------------
c. Indirect Impacts on Employment
It is estimated that that amended energy conservation standards for
EPSs 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.O 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 (2027-2032),
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 IV.C of this document, DOE has tentatively
concluded that the standards proposed in this NOPR would not lessen the
utility or performance of the EPSs under consideration in this
rulemaking. Manufacturers of these products currently offer units that
meet or exceed the proposed standards without a loss of utility or
performance.
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 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 EPSs is expected to yield environmental benefits in the
form of reduced emissions of certain air pollutants and greenhouse
gases. Table V.18 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.L. DOE reports annual emissions reductions for
each TSL in chapter 13 of the NOPR TSD.
Table V.18--Cumulative Emissions Reduction for EPSs Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
Trial standard level
-----------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)......... 0.5 1.4 2.7 3.6 16.1 36.0
CH4 (thousand tons)............... 0.04 0.1 0.2 0.3 1.3 2.8
N2O (thousand tons)............... 0.01 0.01 0.03 0.04 0.2 0.4
NOX (thousand tons)............... 0.2 0.7 1.4 1.8 8.2 18.5
SO2 (thousand tons)............... 0.2 0.7 1.3 1.7 7.7 17.4
Hg (tons)......................... 0.001 0.004 0.008 0.011 0.048 0.108
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)......... 0.04 0.1 0.2 0.3 1.2 2.7
CH4 (thousand tons)............... 3.5 9.9 19.6 26.0 115.4 257.0
[[Page 7332]]
N2O (thousand tons)............... 0.0002 0.001 0.001 0.001 0.01 0.01
NOX (thousand tons)............... 0.6 1.6 3.1 4.2 18.5 41.2
SO2 (thousand tons)............... 0.0 0.01 0.02 0.02 0.1 0.2
Hg (tons)......................... 0.000 0.000 0.000 0.000 0.0002 0.0004
----------------------------------------------------------------------------------------------------------------
Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)......... 0.5 1.5 2.9 3.9 17.3 38.7
CH4 (thousand tons)............... 3.5 10.0 19.8 26.3 116.7 259.8
N2O (thousand tons)............... 0.01 0.02 0.03 0.04 0.2 0.4
NOX (thousand tons)............... 0.8 2.3 4.5 6.0 26.8 59.7
SO2 (thousand tons)............... 0.2 0.7 1.3 1.7 7.8 17.6
Hg (tons)......................... 0.001 0.004 0.008 0.011 0.048 0.109
----------------------------------------------------------------------------------------------------------------
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 EPSs. Section
IV.L of this document discusses the SC-CO2 values that DOE
used. 9 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.19--Present Value of CO2 Emissions Reduction for EPSs Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
SC-CO2 case
-------------------------------------------------------------------
Discount rate and statistics
TSL -------------------------------------------------------------------
5% 3% 2.5% 3%
-------------------------------------------------------------------
Average Average Average 95th percentile
----------------------------------------------------------------------------------------------------------------
million (2021 Dollars)
----------------------------------------------------------------------------------------------------------------
1........................................... 5 22 34 67
2........................................... 15 62 97 190
3........................................... 30 124 192 377
4........................................... 39 164 255 500
5........................................... 176 738 1,145 2,245
6........................................... 395 1,650 2,560 5,023
----------------------------------------------------------------------------------------------------------------
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
EPSs. Table V.20 presents the value of the CH4 emissions
reduction at each TSL, and Table V.21 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.20--Present Value of Methane Emissions Reduction for EPSs Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
SC-CH4 case
-------------------------------------------------------------------
Discount rate and statistics
TSL -------------------------------------------------------------------
5% 3% 2.5% 3%
-------------------------------------------------------------------
Average Average Average 95th percentile
----------------------------------------------------------------------------------------------------------------
million (2021 Dollars)
----------------------------------------------------------------------------------------------------------------
1........................................... 2 5 6 12
2........................................... 5 13 18 35
3........................................... 9 26 36 69
4........................................... 12 35 48 92
5........................................... 54 154 213 408
6........................................... 120 343 475 910
----------------------------------------------------------------------------------------------------------------
[[Page 7333]]
Table V.21--Present Value of Nitrous Oxide Emissions Reduction for EPSs Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
SC-N2O Case
-------------------------------------------------------------------
Discount rate and statistics
TSL -------------------------------------------------------------------
5% 3% 2.5% 3%
-------------------------------------------------------------------
Average Average Average 95th percentile
----------------------------------------------------------------------------------------------------------------
million (2021 Dollars)
----------------------------------------------------------------------------------------------------------------
1........................................... 0.0 0.1 0.1 0.2
2........................................... 0.1 0.2 0.3 0.6
3........................................... 0.1 0.5 0.7 1.2
4........................................... 0.2 0.6 0.9 1.6
5........................................... 0.7 2.7 4.2 7.2
6........................................... 1.6 6.1 9.3 16.2
----------------------------------------------------------------------------------------------------------------
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 EPSs. The dollar-
per-ton values that DOE used are discussed in section IV.M of this
document. Table V.22 presents the present value for NOX
emissions reduction for each TSL calculated using 7-percent and 3-
percent discount rates, and Table V.23 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.22--Present Value of NOX Emissions Reduction for EPSs Shipped in
2027-2056
------------------------------------------------------------------------
7% Discount 3% Discount
TSL rate rate
------------------------------------------------------------------------
million (2021 Dollars)
------------------------------------------------------------------------
1....................................... 15 34
2....................................... 42 97
3....................................... 86 193
4....................................... 113 256
5....................................... 510 1,146
6....................................... 1,144 2,561
------------------------------------------------------------------------
Table V.23--Present Value of SO2 Emissions Reduction for EPSs Shipped in
2027-2056
------------------------------------------------------------------------
7% Discount 3% Discount
TSL rate rate
------------------------------------------------------------------------
million (2021 Dollars)
------------------------------------------------------------------------
1....................................... 6 13
2....................................... 17 38
3....................................... 35 76
4....................................... 46 100
5....................................... 209 455
6....................................... 472 1,024
------------------------------------------------------------------------
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.24 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 products, and are measured for the
lifetime of products shipped in 2027-2056. The benefits associated with
reduced GHG emissions resulting from the adopted standards are global
benefits, and are also calculated based on the lifetime of EPSs shipped
in 2027-2056.
Table V.24--Consumer NPV Combined With Present Value of Benefits From Climate and Health Benefits
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
----------------------------------------------------------------------------------------------------------------
3% discount rate for Consumer NPV and Health Benefits (billion 2021 Dollars)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case........................ 0.13 0.37 0.61 0.86 3.79 2.97
3% Average SC-GHG case........................ 0.15 0.43 0.72 1.01 4.45 4.45
2.5% Average SC-GHG case...................... 0.16 0.47 0.80 1.11 4.92 5.49
3% 95th percentile SC-GHG case................ 0.20 0.58 1.02 1.40 6.22 8.40
----------------------------------------------------------------------------------------------------------------
7% discount rate for Consumer NPV and Health Benefits (billion 2021 Dollars)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case........................ 0.06 0.17 0.27 0.38 1.70 0.42
3% Average SC-GHG case........................ 0.08 0.23 0.38 0.53 2.36 1.90
[[Page 7334]]
2.5% Average SC-GHG case...................... 0.09 0.27 0.46 0.64 2.83 2.95
3% 95th percentile SC-GHG case................ 0.13 0.38 0.68 0.93 4.13 5.85
----------------------------------------------------------------------------------------------------------------
C. Conclusion
When considering new or amended energy conservation standards, the
standards that DOE adopts for any type (or class) of covered product
must be designed to achieve the maximum improvement in energy
efficiency that the Secretary determines is technologically feasible
and economically justified. (42 U.S.C. 6295(o)(2)(A)) In determining
whether a standard is economically justified, the Secretary must
determine whether the benefits of the standard exceed its burdens by,
to the greatest extent practicable, considering the seven statutory
factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or
amended standard must also result in significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B))
For this NOPR, DOE considered the impacts of amended standards for
EPSs 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.
DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade off upfront costs and energy
savings in the absence of government intervention. Much of this
literature attempts to explain why consumers appear to undervalue
energy efficiency improvements. There is evidence that consumers
undervalue future energy savings as a result of (1) a lack of
information, (2) a lack of sufficient salience of the long-term or
aggregate benefits, (3) a lack of sufficient savings to warrant
delaying or altering purchases, (4) excessive focus on the short term,
in the form of inconsistent weighting of future energy cost savings
relative to available returns on other investments, (5) computational
or other difficulties associated with the evaluation of relevant
tradeoffs, and (6) a divergence in incentives (for example, between
renters and owners, or builders and purchasers). Having less than
perfect foresight and a high degree of uncertainty about the future,
consumers may trade off these types of investments at a higher than
expected rate between current consumption and uncertain future energy
cost savings.
In DOE's current regulatory analysis, potential changes in the
benefits and costs of a regulation due to changes in consumer purchase
decisions are included in two ways. First, if consumers forego the
purchase of a product in the standards case, this decreases sales for
product manufacturers, and the impact on manufacturers attributed to
lost revenue is included in the MIA. Second, DOE accounts for energy
savings attributable only to products actually used by consumers in the
standards case; if a standard decreases the number of products
purchased by consumers, this decreases the potential energy savings
from an energy conservation standard. DOE provides estimates of
shipments and changes in the volume of product purchases in chapter 9
of the NOPR TSD. However, DOE's current analysis does not explicitly
control for heterogeneity in consumer preferences, preferences across
subcategories of products or specific features, or consumer price
sensitivity variation according to household income.\74\
---------------------------------------------------------------------------
\74\ P.C. Reiss and M.W. White. Household Electricity Demand,
Revisited. Review of Economic Studies. 2005. 72(3): pp. 853-883.
doi: 10.1111/0034-6527.00354.
---------------------------------------------------------------------------
While DOE is not prepared at present to provide a fuller
quantifiable framework for estimating the benefits and costs of changes
in consumer purchase decisions due to an energy conservation standard,
DOE is committed to developing a framework that can support empirical
quantitative tools for improved assessment of the consumer welfare
impacts of appliance standards. DOE has posted a paper that discusses
the issue of consumer welfare impacts of appliance energy conservation
standards, and potential enhancements to the methodology by which these
impacts are defined and estimated in the regulatory process.\75\ DOE
welcomes comments on how to more fully assess the potential impact of
energy conservation standards on consumer choice and how to quantify
this impact in its regulatory analysis in future rulemakings.
---------------------------------------------------------------------------
\75\ Sanstad, A.H. Notes on the Economics of Household Energy
Consumption and Technology Choice. 2010. Lawrence Berkeley National
Laboratory. www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf (last accessed Oct. 4, 2022).
---------------------------------------------------------------------------
1. Benefits and Burdens of TSLs Considered for EPS Standards
Table V.25 and Table V.26 summarize the quantitative impacts
estimated for each TSL for EPSs. The national impacts are measured over
the lifetime of EPSs purchased in the 30-year period that begins in the
anticipated year of compliance with amended standards (2027-2056). 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.
[[Page 7335]]
Table V.25--Summary of Analytical Results for External Power Supply TSLs: National Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
----------------------------------------------------------------------------------------------------------------
Cumulative FFC National Energy Savings
----------------------------------------------------------------------------------------------------------------
Quads......................................... 0.02 0.04 0.09 0.11 0.51 1.14
----------------------------------------------------------------------------------------------------------------
Cumulative FFC Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)..................... 0.5 1.5 2.9 3.9 17.3 38.7
CH4 (thousand tons)........................... 3.5 10.0 19.8 26.3 116.7 259.8
N2O (thousand tons)........................... 0.0 0.0 0.0 0.0 0.2 0.4
SO2 (thousand tons)........................... 0.8 2.3 4.5 6.0 26.8 59.7
NOX (thousand tons)........................... 0.2 0.7 1.3 1.7 7.8 17.6
Hg (tons)..................................... 0.0 0.0 0.0 0.0 0.0 0.1
----------------------------------------------------------------------------------------------------------------
Present Value of Benefits and Costs (3% discount rate, billion 2021 Dollars)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings............... 0.11 0.31 0.62 0.82 3.73 8.40
Climate Benefits *............................ 0.03 0.08 0.15 0.20 0.89 2.00
Health Benefits **............................ 0.05 0.13 0.27 0.36 1.60 3.58
-----------------------------------------------------------------
Total Benefits [dagger]................... 0.18 0.52 1.04 1.38 6.23 13.99
Consumer Incremental Product Costs............ 0.03 0.09 0.32 0.37 1.78 9.54
Consumer Net Benefits......................... 0.08 0.22 0.31 0.45 1.96 (1.14)
Total Net Benefits........................ 0.15 0.43 0.72 1.01 4.45 4.45
----------------------------------------------------------------------------------------------------------------
Present Value of Benefits and Costs (7% discount rate, billion 2021 Dollars)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings............... 0.05 0.15 0.31 0.40 1.85 4.18
Climate Benefits *............................ 0.03 0.08 0.15 0.20 0.89 2.00
Health Benefits **............................ 0.02 0.06 0.12 0.16 0.72 1.62
-----------------------------------------------------------------
Total Benefits[dagger].................... 0.10 0.29 0.58 0.76 3.46 7.79
Consumer Incremental Product Costs............ 0.02 0.06 0.19 0.23 1.10 5.89
Consumer Net Benefits......................... 0.03 0.10 0.11 0.17 0.75 (1.72)
-----------------------------------------------------------------
Total Net Benefits........................ 0.08 0.23 0.38 0.53 2.36 1.90
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with external power supplies shipped in 2027-2056.
These results include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.M 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.
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. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.M
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.24 for net benefits using all four SC-GHG estimates.
Table V.26--Summary of Analytical Results for External Power Supply TSLs: Manufacturer and Consumer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (million 2021 Dollars) (No-new-standards 845.8-846.1 844.4-845.3 837.3-840.4 835.9-839.6 775.2-801.5 700.0-814.6
case INPV = 847.5).....................................
Industry NPV (% change)................................. (0.2)-(0.2) (0.4)-(0.3) (1.2)-(0.8) (1.4)-(0.9) (8.5)-(5.4) (17.4)-(3.9)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Average LCC Savings (2021 Dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
AC-DC Basic-Vol......................................... $0.00 $0.00 ($0.03) ($0.03) ($0.27) ($0.64)
AC-DC Low-Vol........................................... $0.01 $0.01 $0.01 $0.01 $0.01 ($1.30)
AC-AC Basic-Vol......................................... $0.18 $0.52 $0.18 $0.52 $0.55 $0.55
Multiple-Voltage........................................ $0.46 $0.24 $0.46 $0.24 $0.46 ($1.25)
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 7336]]
Consumer Simple PBP (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
AC-DC Basic-Vol......................................... 0.0 0.0 5.0 5.0 7.3 8.0
AC-DC Low-Vol........................................... 3.2 3.2 3.2 3.2 3.2 28.5
AC-AC Basic-Vol......................................... 2.3 4.1 2.3 4.1 4.7 4.7
Multiple-Voltage........................................ 0.1 7.0 0.1 7.0 0.1 12.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent of Consumers that Experience a Net Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
AC-DC Basic-Vol......................................... 0% 0% 20% 20% 77% 86%
AC-DC Low-Vol........................................... 4% 4% 4% 4% 4% 97%
AC-AC Basic-Vol......................................... 10% 28% 10% 28% 43% 43%
Multiple-Voltage........................................ 0% 39% 0% 39% 0% 70%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
DOE first considered TSL 6, which represents the max-tech
efficiency levels for all product classes. Approximately 5 percent of
all EPS models on the market currently meet these efficiency levels.
Achieving max-tech level efficiencies may require several of the
technology options identified in Table IV.1. TSL 6 would save an
estimated 1.14 quads of energy, an amount DOE considers significant.
Under TSL 6, the NPV of consumer impacts would represent a cost of
$1.72 billion using a discount rate of 7 percent, and a cost of $1.14
billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 6 are 38.7 Mt of
CO2, 259.8 thousand tons of CH4, 0.4 thousand
tons of N2O, 59.7 thousand tons of NOX, 17.6
thousand tons of SO2, and 0.1 tons of Hg. 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 6 is $2.0 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 6 is $1.62 billion using a 7-percent discount rate and $3.58
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 6 is $1.90
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 6 is $4.45 billion. The estimated total
NPV is provided for additional information, however DOE primarily
relies upon the NPV of consumer benefits when determining whether a
proposed standard level is economically justified.
As discussed in chapters 3, 5, and 9 of the NOPR TSD, shipments for
the AC-DC Low Voltage and AC-DC Basic Voltage product classes dominate
the EPS market. These two classes are followed by Multiple Voltage, AC-
DC Basic Voltage, and AC-DC Low Voltage, respectively. At TSL 6, the
average LCC impact is negative for all product classes except AC-AC
Basic-Voltage, which has significantly fewer shipments than the AC-DC
product classes and represents approximately 1% of the market. A
negative LCC results when the incremental installed costs exceed the
incremental lifetime operating savings. The average increases in
incremental installed costs range from $1.51 to $2.37 and the average
lifetime operating savings range from $0.21 to $2.51. The simple
payback period ranges from 4.7 years to nearly 30 years, the latter
being significantly longer than the lifetime of most EPSs (4.8 years).
The fraction of consumers experiencing a net LCC cost ranges from 43
percent to 97 percent, indicating that a majority of consumers would
experience a net cost at TSL 6 over the lifetime of EPSs due to the
increases in purchase costs. Low-income households would experience a
similar impact as the full consumer sample and thus a majority of those
households would experience a net cost.
At TSL 6, the projected change in INPV ranges from a decrease of
$147.5 million to a decrease of $32.9 million, which corresponds to a
decrease of 17.4 percent and a decrease of 3.9 percent, respectively.
DOE estimates that industry must invest $186.5 million to comply with
standards set at TSL 6--these investments would all relate to the
research and development costs associated with generating new EPS
designs, prototyping, and testing EPS models (conversion costs are
elaborated on in IV.K.2.c). Based on DOE's shipments analysis conducted
for this NOPR, DOE estimates that in the absence of new standards, less
than 1 percent of AC-DC basic-voltage shipments, approximately 2
percent of AC-DC low-voltage shipments, no AC-AC basic-voltage
shipments, and approximately 19 percent of multiple-voltage shipments
would meet the efficiency levels analyzed at TSL 6 by 2027, the
estimated compliance year. As noted previously, shipments data are not
available for the AC-AC low-voltage product class. Based on this
shipments analysis, at TSL 6, which is max-tech for all product
classes, manufacturers would be required to redesign approximately 99
percent \76\ of all EPS shipments covered by this rulemaking. This
would require manufacturers to redesign models corresponding to
approximately 739 million EPS shipments in the 2-year compliance time
frame. These redesigns would require a significant overhaul of the
design and components associated with non-compliant EPS models. It is
questionable if most manufacturers would have the engineering capacity
to complete the necessary redesigns within the 2-year compliance
period. If manufacturers require more than 2 years to redesign all
their covered EPSs, they will likely prioritize redesigns based on
sales volume. There is risk that some models will become either
temporarily or permanently unavailable after the compliance date.
---------------------------------------------------------------------------
\76\ DOE estimates five percent of the models in the CCD as
being able to meet the max-tech levels. DOE additionally estimates
that these models represent less than one percent of shipments.
---------------------------------------------------------------------------
The Secretary tentatively concludes that at TSL 6 for EPSs, the
benefits of energy savings, emission reductions, and the estimated
monetary value of the emissions reductions would be outweighed by the
substantial negative NPV of consumer benefits, and the impacts on
manufacturers, including the large conversion costs and the potential
[[Page 7337]]
impacts to profit margin that would result in a reduction in INPV, and
the lack of manufacturers currently offering products meeting the
efficiency levels required at this TSL for some product classes.
Consequently, the Secretary has tentatively concluded that TSL 6 is not
economically justified.
DOE then considered TSL 5. At this TSL, the efficiency level for
the AC-AC Basic-Voltage product class remains at max-tech. For the AC-
DC Basic-Voltage product class, the efficiency level represents ``best
in market'' (characterized in section IV.D.1.b as the active mode
efficiency and standby mode power consumption that only the top 10 to
20 percent of models on the market are able to achieve). For AC-AC and
AC-DC product classes, the efficiency levels correspond to the proposed
EU CoC Tier 2 standards and with Multiple-Voltage at EL1. TSL 5 would
save an estimated 0.51 quads of energy, an amount DOE considers
significant. Under TSL 5, the NPV of consumer benefit would be $0.75
billion using a discount rate of 7 percent, and $1.96 billion using a
discount rate of 3 percent.
The cumulative emissions reductions at TSL 5 are 17.3 Mt of
CO2, 116.7 thousand tons of CH4, 0.2 thousand
tons of N2O, 26.8 thousand tons of NOX, 7.8
thousand tons of SO2, and 0.05 tons of Hg. 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 5 is $0.89 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 5 is $0.72 billion using a 7-percent discount rate and $1.60
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 5 is $2.36
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 5 is $4.45 billion. The estimated total
NPV is provided for additional information, however DOE primarily
relies upon the NPV of consumer benefits when determining whether a
proposed standard level is economically justified.
At TSL 5, the average LCC impact is negative for the AC-DC Basic-
Voltage product class, with a large majority (77 percent) of AC-DC
basic-voltage EPS consumers experiencing a net cost due to increases in
purchase costs coupled with low operating cost savings throughout the
lifetime. A negative LCC results when the incremental installed costs
exceed the incremental lifetime operating savings. The average increase
in incremental installed costs for AC-DC basic voltage EPS consumers is
$0.95 and the average lifetime operating savings is only $0.68. The
simple payback period is 7.3 for the AC-DC Basic-Voltage product class,
which is significantly longer than the average lifetime of 4.8 years.
Additionally, individual households are likely to have several EPSs
from a variety of separate end-uses, such that the aggregate LCC impact
for a given household is likely to be more negative. Low-income
households would experience a similar impact as the full consumer
sample and thus a large majority would experience a net cost as well.
The other product classes experience positive LCC savings at TSL 5 with
a smaller percentage of consumers experiencing a net cost. However,
given that the AC-DC Basic-Voltage product class represents nearly 40
percent of shipments of the total EPS market, overall, many EPS
consumers would experience a net cost at TSL 5.
At TSL 5, the projected change in INPV ranges from a decrease of
$72.3 million to a decrease of $46.0 million, which corresponds to a
decrease of 8.5 percent and a decrease of 5.4 percent, respectively.
DOE estimates that industry must invest $105.9 million to comply with
standards set at TSL 5. DOE estimates that in the absence of new
standards, approximately 8 percent of AC-DC basic-voltage shipments,
approximately 93 percent of AC-DC low-voltage shipments, no AC-AC
basic-voltage shipments, and approximately 89 percent of multiple-
voltage shipments would meet or exceed the efficiency levels analyzed
at TSL 5 by 2027, the estimated compliance year. Based on this
shipments analysis, at TSL 5, manufacturers would be required to
redesign approximately 36 percent of all EPS shipments covered by this
rulemaking. This would require manufacturers to redesign models
corresponding to approximately 284 million EPS shipments in the 2-year
compliance time frame. These redesigns would require a significant
overhaul of the design and components associated with the AC-DC basic
and AC-AC basic product classes and less substantial component level
improvements for all other product classes.
The Secretary tentatively concludes that at TSL 5 for EPSs, 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
(77 percent of AC-DC basic voltage EPS consumers and 43 percent of AC-
AC basic voltage EPS consumers experience a net cost), and the impacts
on manufacturers, including the large conversion costs and the
potential impact to profit margin that would result in a reduction in
INPV, and the lack of manufacturers currently offering products meeting
the efficiency levels required at this TSL for some product classes.
Consequently, the Secretary has tentatively concluded that TSL 5 is not
economically justified.
DOE then considered TSL 4. At this TSL, the efficiency levels for
AC-AC basic-voltage EPSs represent ``best in market'' models
(characterized in section IV.D.1.b as the active mode efficiency and
standby mode power consumption that only the top 10 to 20 percent of
models on the market are able to achieve). For multiple-voltage EPSs,
approximately 50 percent of models on the market currently meet these
efficiency levels, representing an approximate mid-point of the market.
For the other product classes, the efficiency levels correspond to the
proposed EU CoC Tier 2 standards. TSL 4 would save an estimated 0.11
quads of energy, an amount DOE considers significant. Under TSL 4, the
NPV of consumer benefit would be $0.17 billion using a discount rate of
7 percent, and $0.45 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 4 are 3.9 Mt of
CO2, 26.3 thousand tons of CH4, 0.04 thousand
tons of N2O, 6.0 thousand tons of NOX, 1.7
thousand tons of SO2, and 0.01 tons of Hg. 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 $0.20 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 4 is $0.16 billion using a 7-percent discount rate and $0.36
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 $0.53
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 4 is $1.01 billion. The estimated total
NPV is provided for additional information, however DOE primarily
relies upon the NPV of consumer benefits when determining whether a
proposed standard level is economically justified.
[[Page 7338]]
At TSL 4, the average LCC impact for the AC-DC Basic-Voltage
product class, while negative, is close to zero (negative $0.03) and
only 20 percent of AC-DC basic-voltage EPS consumers experience a net
cost. The average increase in incremental installed costs for AC-DC
basic voltage EPS consumers is $0.35 and the average lifetime operating
savings is $0.31. The simple payback period is 5.0 for the AC-DC Basic-
Voltage product class, which is nearly the same as the average lifetime
of 4.8 years. DOE also notes that the LCC impacts, as presented in
Table V.26 above, are only estimated for the first year of compliance
(2027) of a potential standard. However, due to the price trend on EPS
costs (as described in section IV.G.1), the incremental purchase costs
of more efficient EPSs will significantly decrease in years after 2027
while operating savings will remain largely the same. Therefore, LCC
impacts become more positive in years beyond 2027 and a lower
percentage of consumers will experience a net cost. For this reason,
the NPV as estimated in the NIA is positive even though the LCC is
marginally negative for the AC-DC basic voltage EPS product class. Low-
income households would experience a similar impact as the full
consumer sample, since the usage characteristics do not vary much
between the two samples. The other product classes experience positive
LCC savings at TSL 4. The average increases in incremental installed
costs for product classes other than AC-DC basic voltage EPSs range
from $0.05 to $1.02 and the average lifetime operating savings range
from $0.05 to $1.53.
At TSL 4, the projected change in INPV ranges from a decrease of
$11.6 million to a decrease of $7.9 million, which corresponds to a
decrease of 1.4 percent and a decrease of 0.9 percent, respectively.
DOE estimates that industry must invest $17.4 million to comply with
standards set at TSL 4. DOE estimates that 75 percent of 2021 AC-DC
basic-voltage shipments, approximately 93 percent of AC-DC low-voltage
shipments, no AC-AC basic-voltage shipments, and approximately 49
percent of multiple-voltage shipments would meet or exceed the
efficiency levels analyzed at TSL 4 by 2027, the estimated compliance
year. Based on this shipments analysis, at TSL 4, manufacturers would
be required to redesign approximately 15 percent of all EPS shipments
covered by this rulemaking. This would require manufacturers to
redesign models corresponding to approximately 113 million EPS
shipments in the 2-year compliance time frame. While these redesigns
would require a significant overhaul at the design and component level
for the AC-AC basic voltage product class, DOE notes that the high
compliance rates for the AC-DC and multiple voltage product classes
demonstrate that manufacturers are already familiar with implementing
the design options needed to achieve these levels for these products.
After considering the analysis and weighing the benefits and
burdens, the Secretary has tentatively concluded that at a standard set
at TSL 4 for external power supplies would be economically justified.
At this TSL, a minority of consumers experience a net cost, and the
average LCC savings for consumers are positive or a minimally negative
$0.03. The average incremental product costs for all EPSs are very
small relative to the costs of the applications using the EPSs (e.g., a
smartphone), which are likely greater by several factors of 10.
Furthermore, due to price trends reducing EPS costs, the average LCC
savings will grow in years beyond 2027 and fewer consumers would
actually experience a net cost. Low-income households are likely to
experience very similar results and are not disproportionately
disadvantaged at this TSL. 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. Notably, the benefits to
consumers vastly outweigh the cost to manufacturers. At TSL 4, the NPV
of consumer benefits, even measured at the more conservative discount
rate of 7 percent is over 14 times higher than the maximum estimated
manufacturers' loss in INPV. The standard levels at TSL 4 are
economically justified even without weighing the estimated monetary
value of emissions reductions. When those emissions reductions are
included--representing $0.20 billion in climate benefits (associated
with the average SC-GHG at a 3-percent discount rate), and $0.36
billion (using a 3-percent discount rate) or $0.16 billion (using a 7-
percent discount rate) in health benefits--the rationale becomes
stronger still.
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
the maximization 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 at
TSLs higher than the one proposed, a significant fraction of consumers
for some product classes experience increased purchase costs greater
than operating savings.
Although DOE considered proposed amended standard levels for EPSs
by grouping the efficiency levels for each product class into TSLs, DOE
evaluates all analyzed efficiency levels in its analysis.
Therefore, based on the previous considerations, DOE proposes to
adopt the energy conservation standards for EPSs at TSL 4. The proposed
amended energy conservation standards for EPSs, which are expressed as
average efficiency in active mode and power in no-load mode, are shown
in Table V.27.
Table V.27--Proposed Amended Energy Conservation Standards for EPSs
------------------------------------------------------------------------
Minimum average
Nameplate output power (Pout) efficiency in active Maximum power in
mode (expressed as a no-load mode [W]
decimal)
------------------------------------------------------------------------
Single-Voltage External AC-DC Power Supply, Basic-Voltage
------------------------------------------------------------------------
Pout <= 1 W................... >=0.5 x Pout + 0.169. <=0.075
1 W < Pout <= 49 W............ >=0.071 x ln(Pout)- <=0.075
0.00115 x Pout +
0.67.
49 W < Pout <= 250 W.......... >=0.890.............. <=0.150
Pout > 250 W.................. >=0.890.............. <=0.150
------------------------------------------------------------------------
[[Page 7339]]
Single-Voltage External AC-DC Power Supply, Low-Voltage
------------------------------------------------------------------------
Pout <= 1 W................... >=0.517 x Pout + <=0.075
0.091.
1 W < Pout <= 49 W............ >=0.0834 x ln(Pout)- <=0.075
0.0011 x Pout +
0.609.
49 W < Pout <= 250 W.......... >=0.880.............. <=0.150
Pout > 250 W.................. >=0.880.............. <=0.150
------------------------------------------------------------------------
Single-Voltage External AC-AC Power Supply, Basic-Voltage
------------------------------------------------------------------------
Pout <= 1 W................... >=0.5 x Pout + 0.169. <=0.075
1 W < Pout <= 49 W............ >=0.0582 x ln(Pout)- <=0.075
0.00104 x Pout +
0.727.
49 W < Pout <= 250 W.......... >=0.902.............. <=0.075
Pout > 250 W.................. >=0.902.............. <=0.200
------------------------------------------------------------------------
Single-Voltage External AC-AC Power Supply, Low-Voltage
------------------------------------------------------------------------
Pout <= 1 W................... >=0.517 x Pout + <=0.072
0.091.
1 W < Pout <= 49 W............ >=0.0834 x ln(Pout)- <=0.072
0.0011 x Pout +
0.609.
49 W < Pout <= 250 W.......... >=0.880.............. <=0.185
Pout > 250 W.................. >=0.880.............. <=0.500
------------------------------------------------------------------------
Multiple-Voltage External Power Supply
------------------------------------------------------------------------
Pout <= 1 W................... >=0.497 x Pout + <=0.075
0.067.
1 W < Pout <= 49 W............ >=0.0782 x ln(Pout)- <=0.075
0.0013 x Pout +
0.643.
49 W < Pout <= 250 W.......... >=0.885.............. <=0.125
Pout > 250 W.................. >=0.885.............. <=0.125
------------------------------------------------------------------------
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 Dollars)
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.288 shows the annualized values for EPSs under TSL 4,
expressed in 2021 Dollars. The results under the primary estimate are
as follows.
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 EPSs is $24.3 million per year in increased
equipment costs, while the estimated annual benefits are $42.7 million
from reduced equipment operating costs, $11.5 million from GHG
reductions, and $16.7 million from reduced NOX and
SO2 emissions. In this case, the net benefit amounts to
$46.6 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards for EPSs is $21.4 million per
year in increased equipment costs, while the estimated annual benefits
are $47.3 million in reduced operating costs, $11.5 million from GHG
reductions, and $20.4 million from reduced NOX and
SO2 emissions. In this case, the net benefit amounts to
$57.8 million per year.
Table V.28--Annualized Benefits and Costs of Proposed Energy Conservation Standards for External Power Supplies
[TSL 4]
----------------------------------------------------------------------------------------------------------------
Million 2021 dollars/year
-----------------------------------------------
Low-net- High-net-
Primary benefits benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 47.3 46.1 48.8
Climate Benefits *.............................................. 11.5 11.5 11.5
Health Benefits **.............................................. 20.4 20.4 20.4
-----------------------------------------------
Total Benefits [dagger]..................................... 79.2 78.0 80.7
Consumer Incremental Product Costs.............................. 21.4 23.4 19.3
-----------------------------------------------
Net Benefits................................................ 57.8 54.6 61.3
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 42.7 41.8 43.9
Climate Benefits * (3% discount rate)........................... 11.5 11.5 11.5
[[Page 7340]]
Health Benefits **.............................................. 16.7 16.7 16.7
-----------------------------------------------
Total Benefits [dagger]..................................... 70.9 70.0 72.1
Consumer Incremental Product Costs.............................. 24.3 26.1 22.4
-----------------------------------------------
Net Benefits................................................ 46.6 43.9 49.6
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with EPSs shipped in 2027-2056. These results
include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.M of this
proposed rule). 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. 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 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.M
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.24 for net benefits using all four SC-GHG estimates.
D. Reporting, Certification, and Sampling Plan
Manufacturers, including importers, must use product-specific
certification templates to certify compliance to DOE. For EPSs, the
certification template reflects the general certification requirements
specified at 10 CFR 429.12 and the product-specific requirements
specified at 10 CFR 429.37. As discussed in the previous paragraphs,
DOE is not proposing to amend the product-specific certification
requirements for these products.
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. DOE has made its
procedures and policies available on the Office of the General
[[Page 7341]]
Counsel's website (energy.gov/gc/office-general-counsel). DOE has
prepared the following IRFA for the products that are the subject of
this proposed rulemaking.
For manufacturers of EPSs the SBA has set a size threshold, which
defines those entities classified as ``small businesses'' for the
purposes of the statute. DOE used the SBA's small business size
standards to determine whether any small entities would be subject to
the requirements of the rule. (See 13 CFR part 121.) The size standards
are listed by North American Industry Classification System (``NAICS'')
code and industry description and are available at www.sba.gov/document/support-table-size-standards. Manufacturing of EPSs is
classified under NAICS 335999, ``All Other Miscellaneous Electrical
Equipment and Component Manufacturing.'' The SBA sets a threshold of
500 employees or fewer for an entity to be considered as a small
business for this category.
1. Description of Reasons Why Action Is Being Considered
EPCA requires that, not later than 6 years after the 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 NOPR including new proposed energy
conservation standards (proceeding to a final rule, as appropriate).
(42 U.S.C. 6295(m)(1)).
2. Objectives of, and Legal Basis for, Rule
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered equipment, including EPSs. Any new or
amended standard for a covered product 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. 6295(o)(2)(A) and 42 U.S.C. 6295(o)(3)(B))
3. Description on Estimated Number of Small Entities Regulated
DOE conducted a more focused inquiry of the companies that could be
small businesses that manufacture or sell EPSs covered by this
rulemaking. DOE referenced DOE's publicly available CCD to generate a
list of businesses producing or selling covered products and referenced
D&B Hoovers reports,\77\ as well as the online presence of identified
businesses in order to determine whether they might meet the criteria
of a small business. DOE screened out companies that do not offer
products covered by this rulemaking, do not meet the definition of a
``small business,'' or are foreign owned and operated. Additionally,
DOE filters out businesses that do not directly produce EPSs, but that
rather sell sourced EPSs with other products or relabel sourced EPSs to
sell separately.
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\77\ app.avention.com.
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From these sources, DOE identified 658 unique businesses associated
with at least one covered EPS model, of which 165 were identified as
businesses that meet SBA's definition of a small business under this
rulemaking. While each of these small businesses certify models with
DOE's CCD, DOE has not been able to identify any domestic manufacturing
of EPSs and therefore does not expect that any of the small businesses
manufacture EPSs, even if they may be OEM manufacturers of EPS
applications.
DOE requests comment on the number of small businesses identified
that manufacture or sell EPSs covered by this proposed rulemaking.
4. Description and Estimate of Compliance Requirements Including
Differences in Cost, if Any, for Different Groups of Small Entities
While DOE has not been able to identify any domestic manufacturing
of EPSs directly, DOE does expect that some small businesses may design
EPSs--in part or in total--and therefore would incur some product
conversion costs as a result of the proposed standard, if finalized. As
with the broader industry, outlined in section IV.K of this document,
DOE has estimated that these conversion costs would be proportional to
the annual revenue attributable to EPSs that do not meet the standards.
If, as a result of standards, a small business were to need to redesign
all of their EPS models, DOE expects that these small businesses would
incur product conversion costs equivalent to one additional annual R&D
expenditure across the two-year compliance window.\78\ DOE estimated
the industry average annual R&D expenditure to be approximately 3.8
percent of annual revenue. Accordingly, small manufacturers may incur
product conversion costs of up to 1.9 percent of revenue attributable
to EPSs for each year during the two-year compliance period.
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\78\ These conversion costs would be in addition to the normal
annual R&D expenditures that manufacturers incur every year
associated with manufacturing EPSs.
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Additional information about product conversion costs and small
business impacts is in chapter 12 of the NOPR TSD.
DOE requests comment on the estimated product conversion costs of
small businesses that manufacture or sell EPSs covered by this
rulemaking.
5. Duplication, Overlap, and Conflict With Other Rules and Regulations
DOE is not aware of any other rules or regulations that duplicate,
overlap, or conflict with the rule being considered today.
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 4. In reviewing alternatives to the proposed rule, DOE examined
energy conservation standards set at lower efficiency levels. While
selecting from TSLs 1-3, would reduce the possible impacts on small
businesses, it would come at the expense of a significant reduction in
energy savings. TSL 4 achieves approximately over 760 percent of the
energy savings compared to the energy savings at TSL 1, over 260
percent of the energy savings compared to the energy savings at TSL 2,
and over 130% of the energy savings as compared to the energy savings
at TSL 3. DOE additionally estimates that TSLs 1-3 would result in a
lower net present value of consumer benefits than TSL 4 to the order of
approximately $142 million, $79 million, and $63 million respectively.
Based on the presented discussion, establishing standards at TSL 4
balances the benefits of the energy savings at TSL 4 with the potential
burdens placed on EPS manufacturers and small businesses. Accordingly,
DOE does not propose one of the other TSLs considered in the analysis,
or the other policy alternatives examined 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. EPCA provides that a manufacturer whose annual gross revenue
from all of its operations does not exceed $8 million may apply for an
exemption from all or part of an energy conservation standard for a
period not longer than 24 months after the effective date of a final
rule establishing the standard. (42 U.S.C. 6295(t)) Additionally,
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 430, subpart
[[Page 7342]]
E, and 10 CFR part 1003 for additional details.
C. Review Under the Paperwork Reduction Act
Manufacturers of EPSs must certify to DOE that their products
comply with any applicable energy conservation standards. In certifying
compliance, manufacturers must test their products according to the DOE
test procedures for EPSs including any amendments adopted for those
test procedures. DOE has established regulations for the certification
and recordkeeping requirements for all covered consumer products and
commercial equipment, including EPSs. (See generally 10 CFR part 429).
The collection-of-information requirement for the certification and
recordkeeping is subject to review and approval by OMB under the
Paperwork Reduction Act (``PRA''). This requirement has been approved
by OMB under OMB control number 1910-1400. Public reporting burden for
the certification is estimated to average 35 hours per response,
including the time for reviewing instructions, searching existing data
sources, gathering and maintaining the data needed, and completing and
reviewing the collection of information.
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the PRA, unless that collection of information displays
a currently valid OMB Control Number.
D. Review Under the National Environmental Policy Act of 1969
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 products that are the subject of this proposed
rule. States can petition DOE for exemption from such preemption to the
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297)
Therefore, no further action is required by Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of 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). 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 energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
Although this proposed rule does not contain a Federal
intergovernmental mandate, it may require expenditures of $100 million
or more in any one year by the private sector. Such expenditures may
include: (1) investment in research and development and in capital
expenditures by EPS manufacturers in the years between the final rule
and the compliance date for the new standards and (2) incremental
additional expenditures by consumers to purchase
[[Page 7343]]
higher-efficiency EPSs, starting at the compliance date for the
applicable standard.
Section 202 of UMRA authorizes a Federal agency to respond to the
content requirements of UMRA in any other statement or analysis that
accompanies the proposed rule. (2 U.S.C. 1532(c)) The content
requirements of section 202(b) of UMRA relevant to a private sector
mandate substantially overlap the economic analysis requirements that
apply under section 325(o) of EPCA and Executive Order 12866. The
SUPPLEMENTARY INFORMATION section of this NOPR and the TSD for this
proposed rule respond to those requirements.
Under section 205 of UMRA, the Department is obligated to identify
and consider a reasonable number of regulatory alternatives before
promulgating a rule for which a written statement under section 202 is
required. (2 U.S.C. 1535(a)) DOE is required to select from those
alternatives the most cost-effective and least burdensome alternative
that achieves the objectives of the proposed rule unless DOE publishes
an explanation for doing otherwise, or the selection of such an
alternative is inconsistent with law. As required by 42 U.S.C. 6295(u),
this proposed rule would establish amended energy conservation
standards for EPSs that are designed to achieve the maximum improvement
in energy efficiency that DOE has determined to be both technologically
feasible and economically justified, as required by 6295(o)(2)(A) and
6295(o)(3)(B). A full discussion of the alternatives considered by DOE
is presented in chapter 17 of the TSD for this proposed rule.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This proposed 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
amends energy conservation standards for EPSs, 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.
[[Page 7344]]
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.\79\ 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.\80\
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\79\ 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 Oct. 4, 2022).
\80\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
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M. Description of Materials Incorporated by Reference
In this NOPR, DOE proposes to incorporate by reference Version 4.0
of the International Efficiency Marking Protocol for External Power
Supplies to account for the changes in labeling due to the proposed
amended energy conservation standards. The international efficiency
marking protocol provides a system for EPS manufacturers to designate
the minimum efficiency performance of an EPS, so that finished product
manufacturers and government representatives can easily determine a
unit's efficiency. This document can be found in the docket at
www.regulations.gov/docket/EERE-2020-BT-STD-0006.
VII. Public Participation
A. Attendance at the Public Meeting
The time, date, and location of the public meeting are listed in
the DATES and ADDRESSES sections at the beginning of this document. If
you plan to attend the public meeting, please notify the Appliance and
Equipment Standards staff at (202) 287-1445 or
[email protected].
Please note that foreign nationals visiting DOE Headquarters are
subject to advance security screening procedures which require advance
notice prior to attendance at the public meeting. If a foreign national
wishes to participate in the public meeting, please inform DOE of this
fact as soon as possible by contacting Ms. Regina Washington at (202)
586-1214 or by email ([email protected]) so that the
necessary procedures can be completed.
DOE requires visitors to have laptops and other devices, such as
tablets, checked upon entry into the Forrestal Building. Any person
wishing to bring these devices into the building will be required to
obtain a property pass. Visitors should avoid bringing these devices,
or allow an extra 45 minutes to check in. Please report to the
visitor's desk to have devices checked before proceeding through
security.
Due to the REAL ID Act implemented by the Department of Homeland
Security (``DHS''), there have been recent changes regarding ID
requirements for individuals wishing to enter Federal buildings from
specific States and U.S. territories. DHS maintains an updated website
identifying the State and territory driver's licenses that currently
are acceptable for entry into DOE facilities at www.dhs.gov/real-id-enforcement-brief. A driver's licenses from a State or territory
identified as not compliant by DHS will not be accepted for building
entry and one of the alternate forms of ID listed below will be
required. Acceptable alternate forms of Photo-ID include U.S. Passport
or Passport Card; an Enhanced Driver's License or Enhanced ID-Card
issued by States and territories as identified on the DHS website
(Enhanced licenses issued by these States and territories are clearly
marked Enhanced or Enhanced Driver's License); a military ID or other
Federal government-issued Photo-ID card.
In addition, you can attend the public meeting via webinar. Webinar
registration information, participant instructions, and information
about the capabilities available to webinar participants will be
published on DOE's website at www.energy.gov/eere/buildings/public-meetings-and-comment-deadlines. Participants are responsible for
ensuring their systems are compatible with the webinar software.
B. Procedure for Submitting Prepared General Statements for
Distribution
Any person who has plans to present a prepared general statement
may request that copies of his or her statement be made available at
the public meeting. Such persons may submit requests, along with an
advance electronic copy of their statement in PDF (preferred),
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to
the appropriate address shown in the ADDRESSES section at the beginning
of this document. The request and advance copy of statements must be
received at least one week before the public meeting and are to be
emailed. Please include a telephone number to enable DOE staff to make
follow-up contact, if needed.
C. Conduct of the Public Meeting
DOE will designate a DOE official to preside at the public meeting
and may also use a professional facilitator to aid discussion. The
meeting will not be a judicial or evidentiary-type public hearing, but
DOE will conduct it in accordance with section 336 of EPCA. (42 U.S.C.
6306) A court reporter will be present to record the proceedings and
prepare a transcript. DOE reserves the right to schedule the order of
presentations and to establish the procedures governing the conduct of
the public meeting. There shall not be discussion of proprietary
information, costs or prices, market share, or other commercial matters
regulated by U.S. anti-trust laws. After the public meeting, interested
parties may submit further comments on the proceedings, as well as on
any aspect of the rulemaking, until the end of the comment period.
The public meeting will be conducted in an informal, conference
style. DOE will present 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 allow, as time
permits, other participants to comment briefly on any general
statements.
At the end of all prepared statements on a topic, DOE will permit
participants to clarify their statements briefly. Participants should
be prepared to answer questions by DOE and by other participants
concerning these issues. DOE representatives may also ask questions of
participants concerning other matters relevant to this rulemaking. The
official conducting the public meeting will accept additional comments
or questions from those attending, as time permits. The presiding
official will announce any further procedural rules or modification of
the previous procedures that may be
[[Page 7345]]
needed for the proper conduct of the public meeting.
A transcript of the public meeting will be included in the docket,
which can be viewed as described in the Docket section at the beginning
of this document and will be accessible on the DOE website. 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
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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
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DOE processes submissions made through www.regulations.gov before
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Include your first and last names, email address, telephone number, and
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Include contact information each time you submit comments, data,
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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
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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
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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
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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 proposal to incorporate by
reference version 4.0 of IEMP for this rulemaking.
(2) DOE requests comment on its cost analysis approach performed
for this NOPR.
(3) DOE requests comment on the incremental MPCs from the NOPR
engineering analysis.
(4) DOE requests comment on the estimated increased manufacturer
markups and incremental MSPs that result from the analyzed energy
conservation standards from the NOPR engineering analysis.
(5) DOE requests comment on the estimated EPS model production
cycle of four years.
(6) DOE requests comment on the GRIM results and the estimated
conversion costs.
(7) DOE requests comment on whether there is domestic EPS
manufacturing, where and to what extent such manufacturing occurs, and
how the proposed energy conservation standard might affect that
possible domestic EPS manufacturing.
(8) DOE requests comment on possible impacts on manufacturing
capacity stemming from amended energy conservation standards, including
any potential issues with supply chain costs, and or chips and devices
used in the national security sector.
(9) DOE requests information regarding the impact of cumulative
regulatory burden on manufacturers of EPSs associated with multiple DOE
standards or product-specific regulatory actions of other Federal
agencies.
(10) DOE requests comment on the number of small businesses
identified that manufacture or sell EPSs covered by this proposed
rulemaking.
(11) DOE requests comment on the estimated product conversion costs
of small businesses that manufacture or
[[Page 7346]]
sell EPSs covered by this proposed rulemaking.
Additionally, DOE welcomes comments on other issues relevant to the
conduct of this 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 430
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Imports,
Incorporation by reference, Intergovernmental relations, Small
businesses.
Signing Authority
This document of the Department of Energy was signed on January 13,
2023, 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 January 19, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons stated in the preamble, DOE amends part 430 of
chapter II of title 10, Code of Federal Regulations as set forth below:
PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS
0
1. The authority citation for part 430 continues to read as follows:
Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
0
2. Amend Sec. 430.3 by adding a new paragraph (s)(4), to read as
follows:
Sec. 430.3 Materials incorporated by reference.
* * * * *
(s) * * *
(4) International Efficiency Marking Protocol for External Power
Supplies, Version 4.0, January 2023, IBR approved for Sec. 430.32.
* * * * *
0
3. Amend Sec. 430.32 by adding a new paragraph (w)(1)(iv) to read as
follows:
Sec. 430.32 Energy and water conservation standards and their
compliance dates.
* * * * *
(w) * * *
(1) * * *
(iv) Except as provided in paragraphs (w)(5), (6), and (7) of this
section, all external power supplies manufactured on or after [date 2
years after publication of a final rule], shall meet the following
Level VII standards:
------------------------------------------------------------------------
Minimum average
Nameplate output power (Pout) efficiency in active Maximum power in
mode (expressed as a no-load mode [W]
decimal)
------------------------------------------------------------------------
Single-Voltage External AC-DC Power Supply, Basic-Voltage
------------------------------------------------------------------------
(A) Pout <= 1 W............... >=0.5 x Pout + 0.169. <=0.075
(B) 1 W < Pout <= 49 W........ >=0.071 x ln(Pout)- <=0.075
0.00115 x Pout +
0.67.
(C) 49 W < Pout <= 250 W...... >=0.890.............. <=0.150
(D) Pout > 250 W.............. >=0.890.............. <=0.150
------------------------------------------------------------------------
Single-Voltage External AC-DC Power Supply, Low-Voltage
------------------------------------------------------------------------
(E) Pout <= 1 W............... >=0.517 x Pout + <=0.075
0.091.
(F) 1 W < Pout <= 49 W........ >=0.0834 x ln(Pout)- <=0.075
0.0011x Pout + 0.609.
(G) 49 W < Pout <= 250 W...... >=0.880.............. <=0.150
(H) Pout > 250 W.............. >=0.880.............. <=0.150
------------------------------------------------------------------------
Single-Voltage External AC-AC Power Supply, Basic-Voltage
------------------------------------------------------------------------
(I) Pout <= 1 W............... >=0.5 x Pout + 0.169. <=0.075
(J) 1 W < Pout <= 49 W........ >=0.0582 x ln(Pout)- <=0.075
0.00104 x Pout +
0.727.
(K) 49 W < Pout <= 250 W...... >=0.902.............. <=0.075
Pout > 250 W.................. >=0.902.............. <=0.200
------------------------------------------------------------------------
Single-Voltage External AC-AC Power Supply, Low-Voltage
------------------------------------------------------------------------
(L) Pout <= 1 W............... >=0.517 x Pout + <=0.072
0.091.
(M) 1 W < Pout <= 49 W........ >=0.0834 x ln(Pout)- <=0.072
0.0011x Pout + 0.609.
(N) 49 W < Pout <= 250 W...... >=0.880.............. <=0.185
(O) Pout > 250 W.............. >=0.880.............. <=0.500
------------------------------------------------------------------------
Multiple-Voltage External Power Supply
------------------------------------------------------------------------
(P) Pout <= 1 W............... >=0.497 x Pout + <=0.075
0.067.
(Q) 1 W < Pout <= 49 W........ >=0.0782 x ln(Pout)- <=0.075
0.0013 x Pout +
0.643.
(R) 49 W < Pout <= 250 W...... >=0.885.............. <=0.125
(S) Pout > 250 W.............. >=0.885.............. <=0.125
------------------------------------------------------------------------
* * * * *
[FR Doc. 2023-01282 Filed 2-1-23; 8:45 am]
BILLING CODE 6450-01-P