[Federal Register Volume 89, Number 98 (Monday, May 20, 2024)]
[Rules and Regulations]
[Pages 44464-44537]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-07873]



[[Page 44463]]

Vol. 89

Monday,

No. 98

May 20, 2024

Part V





Department of Energy





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10 CFR Part 431





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

  Federal Register / Vol. 89 , No. 98 / Monday, May 20, 2024 / Rules 
and Regulations  

[[Page 44464]]


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DEPARTMENT OF ENERGY

10 CFR Part 431

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


Energy Conservation Program: Energy Conservation Standards for 
Circulator Pumps

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

ACTION: Final rule.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''), 
prescribes energy conservation standards for various consumer products 
and certain commercial and industrial equipment, including circulator 
pumps. 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 final rule, DOE is adopting new 
energy conservation standards for circulator pumps. It has determined 
that the energy conservation standards for this equipment would result 
in significant conservation of energy, and are technologically feasible 
and economically justified.

DATES: The effective date of this rule is August 5, 2024. Compliance 
with the standards established for circulator pumps in this final rule 
is required on and after May 22, 2028.

ADDRESSES: The docket for this rulemaking, which includes Federal 
Register notices, public meeting attendee lists and transcripts, 
comments, and other supporting documents/materials, is available for 
review at www.regulations.gov. All documents in the docket are listed 
in the www.regulations.gov index. However, not all documents listed in 
the index may be publicly available, such as information that is exempt 
from public disclosure.
    The docket web page can be found at www.regulations.gov/docket/EERE-2016-BT-STD-0004. The docket web page contains instructions on how 
to access all documents, including public comments, in the docket.
    For further information on how to review the docket, contact the 
Appliance and Equipment Standards Program staff at (202) 287-1445 or by 
email: [email protected].

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. Uchechukwu ``Emeka'' Eze, U.S. Department of Energy, Office of 
the General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 
20585-0121. Telephone: (240) 961-8879. Email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Synopsis of the Final Rule
    A. Benefits and Costs to Consumers
    B. Impact on Manufacturers
    C. National Benefits and Costs
    D. Conclusion
II. Introduction
    A. Authority
    B. Background
III. General Discussion
    A. November 2016 CPWG Recommendations
    1. Energy Conservation Standard Level
    2. Labeling Requirements
    3. Certification Reports
    B. General Comments
    C. Equipment Classes and Scope of Coverage
    1. CPWG Recommendations
    a. Scope
    b. Definitions
    c. Equipment Classes
    d. Small Vertical In-Line Pumps
    D. Test Procedure
    1. Control Mode
    E. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    F. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    G. 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 Equipment
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
    H. Compliance Date
IV. Methodology and Discussion of Related Comments
    A. Market and Technology Assessment
    1. Scope of Coverage and Equipment Classes
    a. Scope
    b. Equipment Classes
    2. Technology Options
    a. Hydraulic Design
    b. More Efficient Motors
    c. Speed Reduction
    B. Screening Analysis
    1. Screened-Out Technologies
    2. Remaining Technologies
    C. Engineering Analysis
    1. Representative Equipment
    a. Circulator Pump Varieties
    2. Efficiency Analysis
    a. Baseline Efficiency
    b. Higher Efficiency Levels
    c. EL Analysis
    3. Cost Analysis
    4. Cost-Efficiency Results
    5. Manufacturer Markup and Manufacturer Selling Price
    D. Markups Analysis
    E. Energy Use Analysis
    1. Circulator Pump Applications
    2. Consumer Samples
    3. Operating Hours
    4. Load Profiles
    F. Life-Cycle Cost and Payback Period Analysis
    1. Equipment Cost
    2. Installation Cost
    3. Annual Energy Consumption
    4. Energy Prices
    5. Maintenance and Repair Costs
    6. Equipment Lifetime
    7. Discount Rates
    a. Residential
    b. Commercial
    8. Energy Efficiency Distribution in the No-New-Standards Case
    9. Payback Period Analysis
    G. Shipments Analysis
    1. No-New-Standards Case Shipments Projections
    2. Standards-Case Shipment Projections
    H. National Impact Analysis
    1. Equipment Efficiency Trends
    2. National Energy Savings
    3. Net Present Value Analysis
    I. Consumer Subgroup Analysis
    J. Manufacturer Impact Analysis
    1. Overview
    2. Government Regulatory Impact Model and Key Inputs
    a. Manufacturer Production Costs
    b. Shipments Projections
    c. Product and Capital Conversion Costs
    d. Manufacturer Markup Scenarios
    K. Emissions Analysis
    1. Air Quality Regulations Incorporated in DOE's Analysis
    L. Monetizing Emissions Impacts
    1. Monetization of Greenhouse Gas Emissions
    a. Social Cost of Carbon
    b. Social Cost of Methane and Nitrous Oxide
    2. Monetization of Other Emissions Impacts
    M. Utility Impact Analysis
    N. Employment Impact Analysis
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

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    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 Equipment
    5. Impact of Any Lessening of Competition
    6. Need of the Nation To Conserve Energy
    7. Other Factors
    8. Summary of Economic Impacts
    C. Conclusion
    1. Benefits and Burdens of TSLs Considered for Circulator Pump 
Standards
    2. Annualized Benefits and Costs of the Adopted Standards
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866, 13563, and 14094
    B. Review Under the Regulatory Flexibility Act
    1. Need for, and Objectives of, Rule
    2. Significant Issues Raised by Public Comments in Response to 
the IRFA
    3. Description and Estimated Number of Small Entities Affected
    4. Description of Reporting, Recordkeeping, and Other Compliance 
Requirements
    5. Significant Alternatives Considered and Steps Taken To 
Minimize Significant Economic Impacts on Small Entities
    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. Congressional Notification
VII. Approval of the Office of the Secretary

I. Synopsis of the Final Rule

    The Energy Policy and Conservation Act, Public Law 94-163, as 
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency 
of a number of consumer products and certain industrial equipment. (42 
U.S.C. 6291-6317) Title III, Part C of the Energy Policy and 
Conservation Act, as amended (EPCA), established the Energy 
Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311-
6317) Such equipment includes pumps. Circulator pumps, which are the 
subject of this rulemaking, are a category of pumps.
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    \1\ 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 energy conservation standard must be 
designed to achieve the maximum improvement in energy efficiency that 
DOE determines is technologically feasible and economically justified. 
(42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A)) Furthermore, the new 
standard must result in significant conservation of energy. (42 U.S.C. 
6295(o)(3)(B)) EPCA also provides that not later than 6 years after 
issuance of any final rule establishing or amending a standard, DOE 
must publish either a notice of determination that standards for the 
equipment 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 analyzed the benefits and burdens of four trial 
standard levels (``TSLs'') for circulator pumps. The TSLs and their 
associated benefits and burdens are discussed in detail in sections V.A 
through V.C of this document. As discussed in section V.C of this 
document, DOE has determined that TSL 2 represents the maximum 
improvement in energy efficiency that is technologically feasible and 
economically justified. The adopted standards, which are expressed in 
in terms of a maximum circulator energy index (``CEI''), are shown in 
Table I.1. These standards apply to all equipment listed in Table I.1 
and manufactured in, or imported into, the United States starting on 
May 22, 2028.
[GRAPHIC] [TIFF OMITTED] TR20MY24.000

    As stated in section III.D.1 of this document, the established 
standards apply to circulator pumps when operated using the least 
consumptive control variety with which they are equipped.
    CEI is defined as shown in equation (1), and consistent \2\ with 
section 41.5.3.2 of HI 41.5-2022, ``Hydraulic Institute Program 
Guideline for Circulator Pump Energy Rating Program.'' \3\ 87 FR 57264.
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    \2\ HI 41.5-2022 uses the term CERREF for the 
analogous concept. In the September 2022 TP Final Rule, DOE 
discussed this decision to instead use CERSTD in the 
context of Federal energy conservation standards.
    \3\ HI 41.5-2022 provides additional instructions for testing 
circulator pumps to determine an Energy Rating value for different 
circulator pump control varieties.
[GRAPHIC] [TIFF OMITTED] TR20MY24.001

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Where:

CEI = the circulator energy index (dimensionless);
CER = circulator energy rating (hp); and
CERSTD = for a circulator pump that is minimally 
compliant with DOE's energy conservation standards with the same 
hydraulic horsepower as the tested pump.

    The value of CER varies according to the circulator pump control 
variety of the tested pump, but in all cases is a function of measured 
pump input power when operated under certain conditions, as described 
in the

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September 2022 TP Final Rule. 87 FR 57264.
    Relatedly, CERSTD represents CER for a circulator pump 
that is minimally compliant with DOE's energy conservation standards 
with the same hydraulic horsepower as the tested pump, as determined in 
accordance with the specifications at paragraph (i) of 10 CFR 431.465. 
87 FR 57264.

A. Benefits and Costs to Consumers

    Table I.2 summarizes DOE's evaluation of the economic impacts of 
the adopted standards on consumers of circulator pumps, as measured by 
the average life-cycle cost (``LCC'') savings and the simple payback 
period (``PBP'').\4\ The average LCC savings are positive for all 
equipment classes, and the PBP is less than the average lifetime of 
circulator pumps, which is estimated to be 10.5 years (see section 
IV.F.6 of this document).
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    \4\ 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 standards (see section 
IV.F.9 of this document). The simple PBP, which is designed to 
compare specific efficiency levels, is measured relative to the 
baseline product (see section IV.C of this document).
[GRAPHIC] [TIFF OMITTED] TR20MY24.002

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

B. Impact on Manufacturers

    The industry net present value (``INPV'') is the sum of the 
discounted cash flows to the industry from the base year through the 
end of the analysis period (2024-2057). Using a real discount rate of 
9.6 percent, DOE estimates that the INPV for manufacturers of 
circulator pumps in the case without new standards is $347.1 million in 
2022$. Under the adopted standards, DOE estimates the change in INPV to 
range from -19.9 percent to 3.2 percent, which is approximately -$69.2 
million to $11.1 million. In order to bring equipment into compliance 
with new standards, it is estimated that industry will incur total 
conversion costs of $81.2 million.
    DOE's analysis of the impacts of the adopted standards on 
manufacturers is described in sections IV.J and V.B.2 of this document.

C. National Benefits and Costs \5\
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    \5\ All monetary values in this document are expressed in 2022 
dollars. and, where appropriate, are discounted to 2024 unless 
explicitly stated otherwise.
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    DOE's analyses indicate that the adopted energy conservation 
standards for circulator pumps would save a significant amount of 
energy. Relative to the case without new standards, the lifetime energy 
savings for circulator pumps purchased in the 30-year period that 
begins in the anticipated year of compliance with the new standards 
(2028-2057), amount to 0.55 quadrillion British thermal units 
(``Btu''), or quads.\6\ This represents a savings of 32.6 percent 
relative to the energy use of these equipment in the case without new 
standards (referred to as the ``no-new-standards case'').
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    \6\ The quantity refers to full-fuel-cycle (FFC) energy savings. 
FFC energy savings includes the energy consumed in extracting, 
processing, and transporting primary fuels (i.e., coal, natural gas, 
petroleum fuels), and, thus, presents a more complete picture of the 
impacts of energy efficiency standards. For more information on the 
FFC metric, see section IV.H.2 of this document.
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    The cumulative net present value (``NPV'') of total consumer 
benefits of the standards for circulator pumps ranges from 0.95 billion 
in 2022$ (at a 7-percent discount rate) to 2.34 billion in 2022$ (at a 
3-percent discount rate). This NPV expresses the estimated total value 
of future operating-cost savings minus the estimated increased 
equipment and installation costs for circulator pumps purchased in 
2028-2057.
    In addition, the adopted standards for circulator pumps are 
projected to yield significant environmental benefits. DOE estimates 
that the standards will result in cumulative emission reductions (over 
the same period as for energy savings) of 10.04 million metric tons 
(``Mt'') \7\ of carbon dioxide (``CO2''), 2.95 thousand tons 
of sulfur dioxide (``SO2''), 18.65 thousand tons of nitrogen 
oxides (``NOX''), 83.84 thousand tons of methane 
(``CH4''), 0.10 thousand tons of nitrous oxide 
(``N2O''), and 0.02 tons of mercury (``Hg'').\8\
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    \7\ A metric ton is equivalent to 1.1 short tons. Results for 
emissions other than CO2 are presented in short tons.
    \8\ DOE calculated emissions reductions relative to the no-new-
standards-case, which reflects key assumptions in the Annual Energy 
Outlook 2023 (``AEO2023''). AEO2023 reflects, to the extent 
possible, laws and regulations adopted through mid-November 2022, 
including the Inflation Reduction Act. See section IV.K of this 
document for further discussion of AEO2023 assumptions that affect 
air pollutant emissions.
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    DOE estimates the value of 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''). DOE used interim SC-GHG values (in terms of benefit 
per ton of GHG avoided) developed by an Interagency Working Group on 
the Social Cost of Greenhouse Gases (``IWG'').\9\ The derivation of 
these values is discussed in section IV.L of this document. For 
presentational purposes, the climate benefits associated with the 
average SC-GHG at a 3-percent discount rate are estimated to be $0.59 
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 sets of SC-GHG estimates. DOE notes, however, 
that the adopted standards would be economically justified even without 
inclusion of monetized benefits of reduced GHG emissions.
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    \9\ To monetize the benefits of reducing GHG emissions this 
analysis uses the interim 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''). www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
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    DOE estimated the monetary health benefits of SO2 and 
NOX emissions reductions, using benefit per ton estimates 
from the Environmental

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Protection Agency,\10\ as discussed in section IV.L of this document. 
DOE estimated the present value of the health benefits would be $0.51 
billion using a 7-percent discount rate, and $1.16 billion using a 3-
percent discount rate.\11\ DOE is currently only monetizing health 
benefits from changes in ambient fine particulate matter 
(PM2.5) concentrations from two precursors (SO2 
and NOX), and from changes in ambient ozone from one 
precursor (for NOX), but will continue to assess the ability 
to monetize other effects such as health benefits from reductions in 
direct PM2.5 emissions.
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    \10\ U.S. EPA. Estimating the Benefit per Ton of Reducing 
Directly Emitted PM2.5, PM2.5 Precursors and 
Ozone Precursors from 21 Sectors. Available at www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
    \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 monetized benefits and costs expected to 
result from the new standards for circulator pumps. There are other 
important unquantified effects, including certain unquantified climate 
benefits, unquantified public health benefits from the reduction of 
toxic air pollutants and other emissions, unquantified energy security 
benefits, and distributional effects, among others.
BILLING CODE 6450-01-P

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[GRAPHIC] [TIFF OMITTED] TR20MY24.004

    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 equipment purchase prices and 
installation costs, plus (3) the value of climate and health benefits 
of emission reductions, all annualized.\12\
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    \12\ To convert the time-series of costs and benefits into 
annualized values, DOE calculated a present value in 2024, the year 
used for discounting the NPV of total consumer costs and savings. 
For the benefits, DOE calculated a present value associated with 
each year's shipments in the year in which the shipments occur 
(e.g., 2020 or 2030), and then discounted the present value from 
each year to 2024. 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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    The national operating cost savings are domestic private U.S. 
consumer monetary savings that occur as a result of purchasing the 
covered equipment and are measured for the lifetime of circulator pumps 
shipped in 2028-2057. The benefits associated with reduced emissions 
achieved as a result of the adopted standards are also calculated based 
on the lifetime of circulator pumps shipped in 2028-2057. Total 
benefits for both the 3-percent and 7-percent cases are presented using 
the average GHG social costs with 3-percent discount rate. Estimates of 
SC-GHG values are presented for all four discount rates in section 
V.B.6 of this document.
    Table I.4 presents the total estimated monetized benefits and costs 
associated with the proposed standard, expressed in terms of annualized 
values. 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,\13\ the estimated cost of the standards 
adopted in this rule is $113.9 million per year in increased equipment 
costs, while the estimated annual benefits are $207.5 million in 
reduced equipment operating costs, $32.7 million in climate benefits, 
and $50.7 million in health benefits. In this case, the net benefit 
would amount to $177.0 million per year.
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    \13\ As discussed in section IV.L.1 of this document, DOE agrees 
with the IWG that using consumption-based discount rates (e.g., 3 
percent) is appropriate when discounting the value of climate 
impacts. Combining climate effects discounted at an appropriate 
consumption-based discount rate with other costs and benefits 
discounted at a capital-based rate (i.e., 7 percent) is reasonable 
because of the different nature of the types of benefits being 
measured.
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    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the standards is $109.4 million per year in increased 
equipment costs, while the estimated annual benefits are $239.7 million 
in reduced operating costs, $32.7 million in climate benefits, and 
$64.7 million in health benefits. In this case, the net benefit would 
amount to $227.7 million per year.

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[[Page 44471]]


[GRAPHIC] [TIFF OMITTED] TR20MY24.006

BILLING CODE 6450-01-C
    DOE's analysis of the national impacts of the adopted standards is 
described in sections IV.H, IV.K and IV.L of this document.

D. Conclusion

    DOE concludes that the standards adopted in this final rule 
represent the maximum improvement in energy efficiency that is 
technologically feasible and economically justified, and would result 
in the significant conservation of energy. Specifically, with regards 
to technological feasibility, equipment achieving these standard levels 
is already commercially available for all equipment in the single 
product class covered by this final rule. As for economic 
justification, DOE's analysis shows that the benefits of the standards 
exceed, to a great extent, the burdens of the 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 
standards for circulator pumps is $113.9 million per year in increased 
equipment costs, while the estimated annual benefits are $207.5 million 
in reduced equipment operating costs, $32.7 million in climate 
benefits, and $50.7 million in health benefits. The net benefit amounts 
to $177.0 million per year. DOE notes that the net benefits are 
substantial even in the absence of the climate benefits \14\ and DOE 
would adopt the same standards in the absence of such benefits.
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    \14\ The information on climate benefits is provided in 
compliance with Executive Order 12866.
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    The significance of energy savings offered by a new energy 
conservation standard cannot be determined without knowledge of the 
specific circumstances surrounding a given rulemaking.\15\ For example, 
some covered equipment have most of their energy consumption occur 
during periods of peak energy demand. The impacts of these equipment on 
the energy infrastructure can be more pronounced than equipment with 
relatively constant demand. Accordingly, DOE evaluates the significance 
of energy savings on a case-by-case basis.
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    \15\ Procedures, Interpretations, and Policies for Consideration 
in New or Revised Energy Conservation Standards and Test Procedures 
for Consumer Products and Commercial/Industrial Equipment, 86 FR 
70892, 70901 (Dec. 13, 2021).
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    As previously mentioned, the standards are projected to result in 
estimated national energy savings of 0.55 quad FFC, the equivalent of 
the primary annual energy use of 5.9 million homes. In addition, they 
are projected to reduce CO2 emissions by 10.04 Mt. Based on 
these findings, DOE has determined the energy savings from the standard 
levels adopted in this final rule are ``significant'' within the 
meaning of 42 U.S.C. 6295(o)(3)(B). A more detailed discussion of the 
basis for these conclusions is contained in the remainder of this 
document and the accompanying TSD.

II. Introduction

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

A. Authority

    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
C of EPCA, added by Public Law 95-619, Title IV, section 441(a), 
established the Energy Conservation Program for Certain Industrial 
Equipment, which sets forth a variety of provisions designed to improve 
energy efficiency. This equipment includes pumps, the subject of this 
rulemaking. (42 U.S.C. 6311(1)(A))
    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 
equipment do not need to be amended, or a notice of proposed rulemaking 
(``NOPR'') including new proposed energy conservation standards 
(proceeding to a final rule, as appropriate). (42 U.S.C. 6316(a); 42 
U.S.C. 6295(m)(1))
    The energy conservation program under EPCA consists essentially of 
four

[[Page 44472]]

parts: (1) testing, (2) labeling, (3) the establishment of Federal 
energy conservation standards, and (4) certification and enforcement 
procedures. Relevant provisions of EPCA include definitions (42 U.S.C. 
6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 
6315), energy conservation standards (42 U.S.C. 6313), and the 
authority to require information and reports from manufacturers (42 
U.S.C. 6316).
    Federal energy efficiency requirements for covered equipment 
established under EPCA generally supersede State laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6316(a) and 42 U.S.C. 6316(b); 42 U.S.C. 6297) DOE may, however, 
grant waivers of Federal preemption in limited instances for particular 
State laws or regulations, in accordance with the procedures and other 
provisions set forth under EPCA. (See 42 U.S.C. 6316(a) (applying the 
preemption waiver provisions of 42 U.S.C. 6297))
    Subject to certain criteria and conditions, DOE is required to 
develop test procedures to measure the energy efficiency, energy use, 
or estimated annual operating cost of all covered equipment. (42 U.S.C. 
6316(a); 42 U.S.C. 6295(o)(3)(A) and (r)) Manufacturers of covered 
equipment must use the Federal test procedures as the basis for: (1) 
certifying to DOE that their equipment complies with the applicable 
energy conservation standards adopted pursuant to EPCA (42 U.S.C. 
6316(a); 42 U.S.C. 6295(s)), and (2) making representations about the 
efficiency of that equipment (42 U.S.C. 6314(d)). Similarly, DOE must 
use these test procedures to determine whether the equipment complies 
with relevant standards promulgated under EPCA. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(s)) The DOE test procedures for circulator pumps appear at 
title 10 of the Code of Federal Regulations (``CFR'') part 431, subpart 
Y, appendix D.
    DOE must follow specific statutory criteria for prescribing new 
standards for covered equipment, including circulator pumps. Any new 
standard for covered equipment must be designed to achieve the maximum 
improvement in energy efficiency that the Secretary of Energy 
determines is technologically feasible and economically justified. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A)) Furthermore, DOE may not adopt 
any standard that would not result in the significant conservation of 
energy. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3))
    Moreover, DOE may not prescribe a standard (1) for certain 
equipment, including circulator pumps, if no test procedure has been 
established for the equipment, or (2) if DOE determines by rule that 
the standard is not technologically feasible or economically justified. 
(42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a 
proposed standard is economically justified, DOE must determine whether 
the benefits of the standard exceed its burdens. Id. 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 equipment subject to the standard;
    (2) The savings in operating costs throughout the estimated 
average life of the covered equipment in the type (or class) 
compared to any increase in the price, initial charges, or 
maintenance expenses for the covered equipment that are likely to 
result from the standard;
    (3) The total projected amount of energy (or as applicable, 
water) savings likely to result directly from the standard;
    (4) Any lessening of the utility or the performance of the 
covered equipment likely to result from the standard;
    (5) The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
standard;
    (6) The need for national energy and water conservation; and
    (7) Other factors the Secretary of Energy (``Secretary'') 
considers relevant.

(42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))

    Further, EPCA, as codified, establishes a rebuttable presumption 
that a standard is economically justified if the Secretary finds that 
the additional cost to the consumer of purchasing equipment complying 
with an energy conservation standard level will be less than three 
times the value of the energy savings during the first year that the 
consumer will receive as a result of the standard, as calculated under 
the applicable test procedure. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(iii))
    EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing 
any new standard that either increases the maximum allowable energy use 
or decreases the minimum required energy efficiency of covered 
equipment. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(1)) Also, the 
Secretary may not prescribe a new standard if interested persons have 
established by a preponderance of the evidence that the standard is 
likely to result in the unavailability in the United States in any 
covered equipment type (or class) of performance characteristics 
(including reliability), features, sizes, capacities, and volumes that 
are substantially the same as those generally available in the United 
States. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(4))
    Additionally, EPCA specifies requirements when promulgating an 
energy conservation standard for covered equipment that has two or more 
subcategories. DOE must specify a different standard level for a type 
or class of equipment that has the same function or intended use if DOE 
determines that equipment within such group (A) consumes a different 
kind of energy from that consumed by other covered equipment within 
such type (or class); or (B) has a capacity or other performance-
related feature which other equipment within such type (or class) does 
not have and such feature justifies a higher or lower standard. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(q)(1)) In determining whether a 
performance-related feature justifies a different standard for a group 
of equipment, DOE must consider such factors as the utility to the 
consumer of such a feature and other factors DOE deems appropriate. Id. 
Any rule prescribing such a standard must include an explanation of the 
basis on which such higher or lower level was established. (42 U.S.C. 
6316(a); 42 U.S.C. 6295(q)(2))

B. Background

    As stated, EPCA includes ``pumps'' among the industrial equipment 
listed as ``covered equipment'' for the purpose of Part A-1, although 
EPCA does not define the term ``pump.'' (42 U.S.C. 6311(1)(A)) In a 
final rule published January 25, 2016, DOE established a definition for 
``pump,'' definitions associated with pumps, and test procedures for 
certain pumps. 81 FR 4086, 4090 (``January 2016 TP Final Rule''). 
``Pump'' is defined as ``equipment designed to move liquids (which may 
include entrained gases, free solids, and totally dissolved solids) by 
physical or mechanical action and includes a bare pump and, if included 
by the manufacturer at the time of sale, mechanical equipment, driver, 
and controls.'' 10 CFR 431.462. Circulator pumps fall within this 
definition. The specific pump categories subject to the test procedures 
described in the January 2016 TP Final Rule are referred to as 
``general pumps'' in this document. Circulator pumps were not included 
as general pumps.
    In general, and relative to pumps at-large, circulator pumps tend 
to be toward the smaller end of the range of both power and hydraulic 
head. Circulated fluid would not require a net elevation gain, and thus 
the required

[[Page 44473]]

head is that associated with the resistance of the hydraulic circuit. A 
circulator pump, by definition, is a pump that is either a wet rotor 
circulator pump; a dry rotor, two-piece circulator pump; or a dry 
rotor, three-piece circulator pump. A circulator pump may be 
distributed in commerce with or without a volute.
    The January 2016 TP Final Rule implemented the recommendations of 
the Commercial and Industrial Pump Working Group (``CIPWG''), 
established through the Appliance Standards Rulemaking Federal Advisory 
Committee (``ASRAC'') to negotiate standards and a test procedure for 
general pumps. (Docket No. EERE-2013-BT-NOC-0039) The CIPWG and ASRAC 
approved a term sheet containing recommendations to DOE that included 
initiation of a separate rulemaking for circulator pumps. (Docket No. 
EERE-2013-BT-NOC-0039, No. 92, Recommendation #5A at p. 2)
    On February 3, 2016, DOE issued a notice of intent to establish a 
working group to negotiate a NOPR for energy conservation standards for 
circulator pumps, to negotiate, if possible, Federal standards and a 
test procedure for circulator pumps, and to announce the first public 
meeting. 81 FR 5658. The members of the Circulator Pump Working Group 
(``CPWG''), which was established under the ASRAC, were selected to 
ensure a broad and balanced array of interested parties and expertise, 
including representatives from efficiency advocacy organizations and 
manufacturers. Additionally, one member from ASRAC and one DOE 
representative were part of the CPWG. Table II.1 lists the 15 members 
of the CPWG and their affiliations.
[GRAPHIC] [TIFF OMITTED] TR20MY24.007

    The CPWG commenced negotiations at an open meeting on March 29, 
2016, and held six additional meetings to discuss scope, metric, and 
the test procedure. The CPWG concluded its negotiations for test 
procedure topics on September 7, 2016, with a consensus vote to approve 
a term sheet containing recommendations to DOE on scope, definitions, 
metric, and the basis of the test procedure (``September 2016 CPWG 
Recommendations''). The September 2016 CPWG Recommendations are 
available in the CPWG docket. (Docket No. EERE-2016-BT-STD-0004, No. 
58)
    The CPWG continued to meet to address potential energy conservation 
standards for circulator pumps. Those meetings were held November 3-4, 
2016, and November 29-30, 2016, with approval of a second term sheet 
(``November 2016 CPWG Recommendations'') containing CPWG 
recommendations related to energy conservation standards, applicable 
test procedure, labeling, and certification requirements for circulator 
pumps (Docket No. EERE-2016-BT-STD-0004, No. 98). Whereas the September 
2016 CPWG Recommendations are discussed in the September 2022 TP Final 
Rule, the November 2016 CPWG Recommendations are summarized in section 
III.A of this document. In a meeting held December 22, 2016, ASRAC 
voted unanimously to approve the September 2016 and November 2016 CPWG 
Recommendations. (Docket No. EERE-2013-BT-NOC-0005, No. 91 at p. 2) 
\16\
---------------------------------------------------------------------------

    \16\ All references in this document to the approved 
recommendations included in 2016 Term Sheets are noted with the 
recommendation number and a citation to the appropriate document in 
the CPWG docket (e.g., Docket No. EERE-2016-BT-STD-0004, No. X, 
Recommendation #Y at p. Z). References to discussions or suggestions 
of the CPWG not found in the 2016 Term Sheets include a citation to 
meeting transcripts and the commenter, if applicable (e.g., Docket 
No. EERE-2016-BT-STD-0004, [Organization], No. X at p. Y).
---------------------------------------------------------------------------

    In a letter dated June 9, 2017, the Hydraulic Institute (``HI'') 
expressed its support for the process that DOE initiated regarding 
circulator pumps and encouraged the publishing of a NOPR and a final 
rule by the end of 2017. (Docket No. EERE-2016-BT-STD-0004, HI, No. 103 
at p. 1) DOE took no actions regarding circulator pumps between 2017 
and 2020. In response to an early assessment review request for 
information (``RFI'') published September 28, 2020, regarding the 
existing test procedures for general pumps (85 FR 60734, ``September 
2020 Early Assessment RFI''), HI commented that it continues to support 
the recommendations from the CPWG. (Docket No. EERE-2020-BT-TP-0032, 
HI, No. 6 at p. 1) The Northwest Energy Efficiency Alliance (``NEEA'') 
also referenced the September 2016 CPWG Recommendations and recommended 
that DOE adopt test procedures for circulator pumps in the pumps 
rulemaking or a separate rulemaking. (Docket No. EERE-2020-BT-TP-0032, 
NEEA, No. 8 at p. 8)
    On May 7, 2021, DOE published a request for information related to 
test procedures and energy conservation standards for circulator pumps 
and received comments from the interested parties. 86 FR 24516 (``May 
2021 RFI'').
    DOE published a NOPR for the test procedure on December 20, 2021, 
presenting DOE's proposals to establish

[[Page 44474]]

a circulator pump test procedure (``December 2021 TP NOPR''). 86 FR 
72096. DOE held a public meeting related to this NOPR on February 2, 
2022. DOE published a final rule for the test procedure on September 
19, 2022 (``September 2022 TP Final Rule''). The test procedure final 
rule established definitions, testing methods and a performance metric, 
requirements regarding sampling and representations of energy 
consumption and certain other metrics, and enforcement provisions for 
circulator pumps.
    DOE published an energy conservation standard NOPR on December 6, 
2022. 87 FR 74850 (``December 2022 NOPR''). DOE held a public meeting 
related to the December 2022 NOPR on January 19, 2023 (``NOPR public 
meeting'').
    DOE received comments in response to the December 2022 NOPR from 
the interested parties listed in Table II.2.
[GRAPHIC] [TIFF OMITTED] TR20MY24.008

    A parenthetical reference at the end of a comment quotation or 
paraphrase provides the location of the item in the public record.\17\ 
To the extent that interested parties have provided written comments 
that are substantively consistent with any oral comments provided 
during the NOPR public meeting, DOE cites the written comments 
throughout this final rule. Any oral comments provided during the NOPR 
public meeting that are not substantively addressed by written comments 
are summarized and cited separately throughout this final rule.
---------------------------------------------------------------------------

    \17\ The parenthetical reference provides a reference for 
information located in the docket of DOE's rulemaking to develop 
energy conservation standards for circulator pumps. (Docket No. 
EERE-2016-BT-STD-0004, which is maintained at www.regulations.gov). 
The references are arranged as follows: (commenter name, comment 
docket ID number, page of that document).
---------------------------------------------------------------------------

III. General Discussion

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

A. November 2016 CPWG Recommendations

    As discussed in section II.B of this document, the CPWG approved 
two term sheets which represented the group's consensus 
recommendations. The second term sheet, referred to in this final rule 
as the ``November 2016 CPWG Recommendations'' contained the CPWG's 
recommendations related to energy conservation standards, applicable 
test procedure, labeling, and certification requirements for circulator 
pumps. (Docket No. EERE-2016-BT-STD-0004, No. 98) The standards 
established in this final rule closely mirror the November 2016 CPWG 
Recommendations, which are summarized in this section.
    In response to the December 2022 NOPR, the CA IOUs provided 
comments that supported DOE's alignment of the proposed regulations and 
the CPWG's consensus November term sheet. (CA IOUs, No. 133 at pp. 1-2) 
HI stated they support the recommendations agreed upon by the CPWG. 
(HI, No. 135 at p.

[[Page 44475]]

1) HI acknowledged DOE has incorporated the appropriate sections for 
the testing and rating of circulator pumps. Id.
1. Energy Conservation Standard Level
    The November 2016 CPWG Recommendations recommended that each 
circulator pump be required to meet an applicable minimum efficiency 
standard. Specifically, the recommendation was that each pump must have 
a CEI \18\ of less than or equal to 1.00. Among the numbered efficiency 
levels (``ELs'') considered by the CPWG as potential standard levels, 
the agreed level was EL 2, i.e., a CEI less than or equal to 1.00 
(``Recommendation #1'').
---------------------------------------------------------------------------

    \18\ The November 2016 CPWG Recommendations predated 
establishment of the current metric, called ``CEI,'' and instead 
used the analogous term ``PEICIRC''. In the December 2021 
TP NOPR, DOE proposed to adopt the ``CEI'' nomenclature instead 
based, in part, on comments received, to remain consistent with 
terminology used in HI 41.5 and to avoid potential confusion. After 
receiving favorable comments on its proposal, DOE adopted the CEI 
nomenclature in the September 2022 TP Final Rule.
---------------------------------------------------------------------------

    In response to the December 2022 NOPR, NEEA/NWPCC supported the 
proposed rulemaking, specifically the proposed adoption of TSL 2. 
(NEEA/NWPCC, No. 134 at pp. 3-4) In the December 2022 NOPR DOE defined 
EL 2 and TSL 2 at the same standard level, which is consistent with 
this final rule, as discussed in section V.B.2 of this document. 87 FR 
74850, 74895. NYSERDA supported the proposed adoption of TSL 2 as well, 
due to the number of multifamily buildings in New York City being 
higher than the national average. (NYSERDA, No. 130 at p. 4) NYSERDA 
commented that circulator pumps likely operate more in any given year 
in places such as New York City and they may see more energy savings 
than the NOPR proposed. Id. The CA IOUs also supported DOE's 
development of energy conservation standards based on the consensus 
recommendations and supported adoption of the proposed TSL 2 
recommendation. (CA IOUs, No. 133 at p. 1)
    DOE did not receive any comments that did not support the CPWG-
recommended standard level for circulator pumps in response to the 
December 2022 NOPR. Accordingly, and as described in section V.C.1 of 
this document, DOE, in this final rule, is adopting energy conservation 
standards for circulator pumps at TSL 2.
    CEI was defined in the September 2022 TP Final Rule consistent with 
the November 2016 CPWG Recommendations as shown in equation (2), and 
consistent with section 41.5.3.2 of HI 41.5-2022. 87 FR 57264.
[GRAPHIC] [TIFF OMITTED] TR20MY24.009

Where:

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

    The value of CER varies according to the circulator pump control 
variety of the tested pump, but in all cases is a function of measured 
pump input power when operated under certain conditions, as described 
in the September 2022 TP Final Rule.
    Relatedly, CERSTD represents CER for a hypothetical 
circulator pump, as a function of hydraulic power, that is minimally 
compliant with DOE's energy conservation standards, as determined in 
accordance with the specifications at paragraph (i) of Sec.  431.465. 
87 FR 57264. Conceptually, it is a curve that provides a value of pump 
input power for any hydraulic output power. Energy conservation 
standards could equivalently have been formulated to direct that a 
circulator pump must carry a CER less than the value of 
CERSTD at its particular hydraulic output power. Defining 
CEI as a ratio of CER and CERSTD serves to normalize the 
energy conservation standard, allowing it to assume a fixed numerical 
value regardless of hydraulic output power, which has the advantage of 
simplicity and better comparability among different pump models.
    The November 2016 CPWG Recommendations contained a proposed method 
for calculating CERSTD.\19\ The equation represents a 
summation of weighted input powers at each part load test point. The 
part load test points are set at 25%, 50%, 75%, and 100% of the flow at 
best efficiency point (``BEP''). Each test point is weighted based on 
the controls used for testing. This equation is shown in equation (3):
---------------------------------------------------------------------------

    \19\ The November 2016 CPWG Recommendations predated 
establishment of the current term ``CERSTD'' and instead 
used the analogous term ``PERCIRC,STD''. In the December 
2021 TP NOPR, DOE proposed to adopt the ``CERSTD'' 
nomenclature instead of ``PERCIRC,STD'' because DOE 
believed that CERSTD was more reflective of Federal 
energy conservation standards. After receiving no opposition on its 
proposal, DOE adopted the CERSTD nomenclature in the 
September 2022 TP Final Rule.
[GRAPHIC] [TIFF OMITTED] TR20MY24.010

---------------------------------------------------------------------------
Where:

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

    Recommendation #2B of the November 2016 CPWG Recommendations 
specified a weighting factor of 25% for each respective test point i. 
(``Recommendation #2B'').
    The November 2016 CPWG Recommendations also included 
(``Recommendation #2C'') a

[[Page 44476]]

recommended reference input power, Pi\in,STD\, as described 
in equation (4).
[GRAPHIC] [TIFF OMITTED] TR20MY24.011

Where:

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

    The November 2016 CPWG Recommendations also included a reference 
efficiency at BEP at the CPWG-recommended standard level, 
[eta]WTW,100 (``Recommendation #2D''), which varies 
by circulator pump hydraulic output power.
    Specifically, for circulator pumps with BEP hydraulic output power 
Pu,100 <1 hp, the reference efficiency at BEP 
([eta]WTW,100) should be determined using equation 
(5):
[GRAPHIC] [TIFF OMITTED] TR20MY24.012

Where:

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

    For the CPWG-recommended standard level, the constants A, B, and C 
used in equation 5 would have the values listed in Table III.1.
[GRAPHIC] [TIFF OMITTED] TR20MY24.013

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

    \20\ The November 2016 CPWG Recommendations did not explicitly 
include a value for the part-load efficiency factor, 
[alpha]i, in Recommendation #2E. Nonetheless, 
Recommendation #2C makes clear that a value for [alpha]i 
is required to calculate reference input power, which calls for a 
value at test point i=100%. DOE infers the omission of 
[alpha]100 from Recommendation #2E to reflect 
that i=100% corresponds to full-load, and thus implies no part-load-
driven reduction in efficiency and, by extension, a load coefficient 
of unity. DOE is making this assumption that 
[alpha]100 = 1 explicit by including it in this 
table, which is otherwise identical to that of Recommendation #2E.
[GRAPHIC] [TIFF OMITTED] TR20MY24.014

    This CPWG-recommended equation structure is used to characterize 
the standard level established in this final rule, with certain 
inconsequential changes to variable names.
2. Labeling Requirements
    Under EPCA, DOE has certain authority to establish labeling 
requirements for covered equipment. (42 U.S.C. 6315) The November 2016 
CPWG Recommendations contained one recommendation regarding labeling 
requirements, which was to include both model number and CEI \21\ on 
the circulator nameplate. (Docket No. EERE-2016-BT-STD-0004, No. 98, 
Recommendation #3 at p. 4)
---------------------------------------------------------------------------

    \21\ The CPWG recommended that ``PEI'' be included in a 
potential labeling requirement which, as described previously, is 
analogous to CEI.

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

[[Page 44477]]

    In response to the December 2022 NOPR, HI recommended that DOE 
establish label requirements for circulator pumps in this rulemaking 
that only include the basic model number and CEI, as agreed to by the 
CPWG. (HI, No. 135 at p. 6) DOE did not receive any other comments 
regarding the establishment of labeling requirements for circulator 
pumps.
    DOE is considering establishing labeling requirements for 
circulator pumps in a separate rulemaking and is carefully evaluating 
the potential benefits of establishing labeling requirements as 
explained by HI. Accordingly, in this final rule, DOE is not 
establishing specific labeling requirements for circulator pumps, but 
DOE may consider such requirements for circulator pumps, including 
those recommended by the CPWG, in a separate rulemaking.
3. Certification Reports
    Under EPCA, DOE has the authority to require information and 
reports from manufacturers with respect to the energy efficiency or 
energy use. (42 U.S.C. 6316; 42 U.S.C. 6296).
    The November 2016 CPWG Recommendations contained one recommendation 
regarding certification reporting requirements. Specifically, the CPWG 
recommended that the following information should be included in both 
certification reports and the public Compliance Certification 
Management System (``CCMS'') database:

 Manufacturer name
 Model number
 CEI \22\
---------------------------------------------------------------------------

    \22\ CEI had not been established at the time of the November 
2016 CPWG Recommendations, which instead referred to this value as 
``PEICIRC''.
---------------------------------------------------------------------------

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

(Docket No. EERE-2016-BT-STD-0004, No. 98, Recommendation #4 at p. 4)
    The aforementioned CPWG recommendation also included that certain 
additional information be permitted but not mandatorily included in 
both certification reports and the public CCMS database. (Docket No. 
EERE-2016-BT-STD-0004, No. 98 Recommendation #4 at p. 4) These 
additional options are: true root mean square (``RMS'') current, true 
RMS voltage, real power, and resultant power factor at measured data 
points. Id.
    In response to the December 2022 NOPR proposal to require a pump 
operating in the least consumptive control mode when meeting compliance 
with energy conservation standards for circulator pumps, the CA IOUs 
noted that the most consumptive performance of circulator products 
indicates the product's combined motor and hydraulic efficiency without 
controls, providing helpful information to consumers and the regulatory 
process. (CA IOUs, No. 133 at p. 2) They encouraged DOE to support 
voluntary reporting of this performance data to inform future 
rulemakings. Id.
    DOE is not establishing certification or reporting, voluntary or 
mandatory, requirements for circulator pumps in this final rule. 
Instead, DOE may consider proposals to address amendments to the 
certification requirements and reporting for circulator pumps under a 
separate rulemaking regarding appliance and equipment certification. 
Further information on this voluntary reporting of performance in 
various control modes is discussed in section III.D.1 of this document.

B. General Comments

    DOE received a single general comment from an interested party 
regarding rulemaking timing and process. Specifically, ASAP et al. 
commented in response to the December 2022 NOPR that they supported 
DOE's proposed rulemaking for circulator pumps. (ASAP et al., No. 131 
at p. 1)

C. Equipment Classes and Scope of Coverage

    When evaluating and establishing energy conservation standards, DOE 
divides covered equipment into equipment classes by the type of energy 
used or by capacity or other performance-related features that justify 
differing standards. In determining whether a performance-related 
feature justifies a different standard, DOE must consider such factors 
as the utility of the feature to the consumer and other factors DOE 
determines are appropriate. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q))
    This final rule covers equipment that meets the definition of 
``circulator pumps,'' as codified at 10 CFR 431.462, which is 
consistent with the September 2016 CPWG Recommendations. DOE identified 
no basis to change the scope of energy conservation standards for 
circulator pumps relative to the scope of test procedures adopted in 
the September 2022 Final Rule. Accordingly, in this final rule, DOE is 
aligning the scope of energy conservation standards for circulator 
pumps with that of the circulator pumps test procedure. 87 FR 57264. 
Specifically, this final rule is applying energy conservation standards 
to all circulator pumps that are also clean water pumps, including on-
demand circulator pumps and circulators-less-volute, and excluding 
submersible pumps and header pumps. Comments related to scope are 
discussed and considered in the test procedure final rule.
    Both of these proposals--scope and equipment classes--match the 
recommendations of the CPWG, which are summarized in this section. They 
are discussed further in section IV.A.1 of this document.
1. CPWG Recommendations
a. Scope
    The September 2016 CPWG Recommendations addressed the scope of a 
circulator pumps rulemaking. Specifically, the CPWG recommended that 
the scope of a circulator pumps test procedure and energy conservation 
standards cover clean water pumps (as defined at 10 CFR 431.462) 
distributed in commerce with or without a volute and that are one of 
the following categories: wet rotor circulator pumps, dry-rotor close-
coupled circulator pumps, and dry-rotor mechanically coupled circulator 
pumps. The CPWG also recommended that the scope exclude submersible 
pumps and header pumps. 86 FR 24516, 24520. (Docket No. EERE-2016-BT-
STD-0004, No. 58, Recommendations #1A, 2A, and 2B at pp. 1-2) As 
previously stated, the scope of this rule aligns with the scope 
recommended by the CPWG, consistent with the September 2022 TP Final 
Rule.
b. Definitions
    The CPWG also recommended several definitions relevant to scope. 
DOE notes that, generally, definitions recommended by the CPWG rely on 
terms previously defined in the January 2016 TP final rule, including 
``close-coupled pump,'' ``mechanically-coupled pump,'' ``dry rotor 
pump,'' ``single axis flow pump,'' and ``rotodynamic pump.'' 81 FR 
4086, 4146-4147; 10 CFR 431.462.
    In the September 2022 TP Final Rule, DOE did not propose a new 
definition for submersible circulator pumps, instead signaling 
applicability of an established term, ``submersible pump,'' which was 
defined in the 2017 test procedure final rule for dedicated-purpose 
pool pumps. 82 FR 36858, 36922 (Aug. 7, 2017):
    ``Submersible pump'' means a pump that is designed to be operated 
with the motor and bare pump fully submerged in the pumped liquid. 10 
CFR 431.462.
    In the September 2022 TP Final Rule, DOE established a number of 
definitions related to circulator pumps. 87 FR

[[Page 44478]]

57264. Specifically, DOE defined ``circulator pump,'' ``wet rotor 
circulator pump,'' ``dry rotor, two-piece circulator pump,'' ``dry 
rotor, three-piece circulator pump,'' ``horizontal motor,'' ``header 
pump,'' and ``circulator-less-volute.'' Id.
    ``Circulator pump'' was defined to include both wet- and dry-rotor 
designs and to include circulators-less-volute, which are distributed 
in commerce without a volute and for which a paired volute is also 
distributed in commerce. Header pumps, by contrast, are those without 
volutes and for which no paired volute is available in commerce. Id.
    DOE is maintaining these definitions from the September 2022 TP 
Final Rule in the standards for circulator pumps.
c. Equipment Classes
    The CPWG recommended that all circulator pumps be analyzed in a 
single equipment class. (Docket No. EERE-2016-BT-STD-0004, No. 98, 
Recommendation #1 at p. 1) DOE's proposal aligns with the 
recommendation of the CPWG. Equipment classes are discussed further in 
section IV.A.1.b of this document.
d. Small Vertical In-Line Pumps
    The CPWG recommended that DOE analyze and establish energy 
conservation standards for small vertical in-line pumps (``SVILs'') 
with a compliance date equivalent to the previous energy conservation 
standards final rule (81 FR 4367, Jan. 26, 2016) for general (not 
circulator) pumps. (Docket No. EERE-2016-BT-STD-0004, No. 58, 
Recommendation #1B at pp. 1-2) The CPWG recommended the standards for 
SVILs be similar in required performance to those of general pumps. 
(Docket No. EERE-2016-BT-STD-0004, No. 58, Recommendation #1B at p. 2) 
In addition to energy conservation standards for SVILs, the CPWG 
recommended SVILs be evaluated using the same test metric as general 
pumps. Id.
    Consistent with the CPWG recommendation, DOE extended the 
commercial and industrial pump test procedures to SVILs in a separate 
final rule published March 24, 2023. 88 FR 17934 (``March 2023 Final 
Rule''). That test procedure allows evaluation of energy conservation 
standards for SVILs as part of a commercial and industrial pumps 
rulemaking process.
    In the December 2022 NOPR, DOE tentatively determined to maintain 
its approach to address energy conservation standards for circulator 
pumps only in this rulemaking, separately from SVILs. 87 FR 74850, 
74862. DOE did not receive adequate data or information to suggest that 
DOE should address standards for SVILs along with the circulator pumps 
within the scope of the December 2022 NOPR. Id. Accordingly, DOE did 
not propose to include SVILs within the scope of the energy 
conservation standards considered in the December 2022 NOPR. Id. 
Relatedly, the September 2022 TP Final Rule did not adopt test 
procedures for SVILs. 87 FR 57264.
    In the December 2022 NOPR, DOE requested comment on its approach to 
exclude SVILs from the scope of the NOPR, and whether DOE should 
consider standards for any SVILs as part of this rulemaking. 87 FR 
74850, 74862.
    HI and NEEA/NWPCC agreed with DOE's decision to exclude SVIL pumps 
from the circulators scope. (NEEA/NWPCC, No. 134 at pp. 4-5; HI, No. 
135 at p. 4) HI also commented that according to ASRAC negotiations, 
SVILs should instead be addressed under the commercial and industrial 
pumps rulemaking. (HI, No. 135 at p. 4)
    Due to stakeholders providing comment supporting SVILs to be 
evaluated in the commercial and pumps rulemaking in both this 
rulemaking and the commercial and industrial pumps rulemaking, DOE has 
determined to maintain its approach to address energy conservation 
standards for circulator pumps only in this rulemaking, separately from 
SVILs. Accordingly, DOE is not including SVILs within the scope of the 
energy conservation standards considered in this final rule.

D. Test Procedure

    EPCA sets forth generally applicable criteria and procedures for 
DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a)) 
Manufacturers of covered equipment must use these test procedures to 
certify to DOE that their equipment complies with energy conservation 
standards and to quantify the efficiency of their equipment. DOE's 
current energy conservation standards for circulator pumps are 
expressed in terms of CEI. CEI represents the weighted average electric 
input power to the driver over a specified load profile, normalized 
with respect to a circulator pump serving the same hydraulic load that 
has a specified minimum performance level. \23\ (See 10 CFR 
431.464(c).)
---------------------------------------------------------------------------

    \23\ The performance of a comparable pump that has a specified 
minimum performance level is referred to as the circulator energy 
rating (``CERstd'').
---------------------------------------------------------------------------

1. Control Mode
    Circulator pumps may be equipped with speed controls that govern 
their response to settings or signals. DOE's test procedure contains 
definitions and test methods applicable to pressure controls, 
temperature controls, manual speed controls, external input signal 
controls, and no controls (i.e., full speed operation only).\24\ 
Section B.1 of appendix D to subpart Y of 10 CFR part 431 specifies 
that circulator pumps without one of the identified control varieties 
(i.e., pressure control, temperature control, manual speed control or 
external input signal control) are tested at full speed.
---------------------------------------------------------------------------

    \24\ In this document, circulator pumps with ``no controls'' are 
also inclusive of other potential control varieties that are not one 
of the specifically identified control varieties.
---------------------------------------------------------------------------

    Some circulator pumps operate in only a single control mode, 
whereas others are capable of operating in any of several control 
modes. As discussed in the September 2022 TP Final Rule, circulator 
pump energy consumption typically varies by control mode, for 
circulator pumps equipped with more than one control mode. 87 FR 57264, 
57273-57275. In the September 2022 TP Final Rule, DOE summarized and 
responded to a variety of stakeholder comments which discussed 
advantages and disadvantages of various potential requirements 
regarding the control variety activated during testing. Id. Ultimately, 
DOE determined not to restrict active control variety during testing. 
Id. To not limit application of a particular control mode, the test 
procedure for circulator pumps states ``if a given circulator pump 
model is distributed in commerce with multiple control varieties 
available, the manufacturer may select a control variety (or varieties) 
among those available with which to test the circulator pump, including 
the test method for circulator pumps at full speed or circulator pumps 
without external input signal, manual, pressure, or temperature 
controls).'' Section 2.2 of appendix D to subpart Y of 10 CFR part 431.
    In the September 2022 TP Final Rule, DOE stated that although the 
test procedure does not restrict active control variety during testing, 
whether compliance with any standards would be based on a specific 
control mode (or no controls) would be addressed in an energy 
conservation standard rulemaking. 87 FR 57264, 57275. It further 
explains that a future energy conservation standard rulemaking could 
determine whether certain information related to the control mode used 
for testing would be required as part of certification. Id.
    In the December 2022 NOPR, DOE proposed to require compliance with

[[Page 44479]]

energy conservation standards for circulator pumps while operated in 
the least consumptive control mode in which it is capable of operating. 
87 FR 74850, 74862. Because many circulator pumps equipped with control 
modes designed to reduce energy consumption relate to full-speed 
operating also include the ability to operate at constant speed, to 
require testing using a circulator pump's most consumptive control mode 
may reduce the ability of rated CEI to characterize the degree of 
energy savings possible across circulator pump models. 87 FR 74850, 
74862-74863. Circulator pump basic models equipped with a variety of 
control modes would receive the same rating as an otherwise identical 
basic model which could operate only at full speed, even though in 
practice the former may consume considerably less energy in many 
applications. 87 FR 74850, 74863.
    In the December 2022 NOPR, DOE requested comment regarding 
circulator pump control variety for the purposes of demonstrating 
compliance with energy conservation standards. 87 FR 74850, 74863.
    HI, ASAP et al., and the CA IOUs all supported using the least 
consumptive operating mode as the CEI rating metric. (HI, No. 135 at p. 
4; ASAP et al., No. 131 at p. 2; CA IOUs, No. 133 at p. 2) The CA IOUs 
also noted that variable-speed control demonstrated potential savings 
relative to maximum-speed-only circulator pumps. (CA IOUs, No. 133 at 
p. 2) Therefore, the CA IOUs recommended DOE support voluntary 
reporting of performance data of variable-speed control as well as 
account for variable-speed control savings in future circulator pump 
test methods and conservation standards. Id.
    Further, ASAP et al. encouraged DOE to require additional reporting 
of ratings with the most consumptive method. (ASAP et al., No. 131 at 
p. 2) ASAP et al. commented that specifying CEI ratings based only on 
the least consumptive model may not accurately reflect the energy usage 
of fixed-speed-mode circulator pumps. Id.
    DOE agrees that performance data obtained from a circulator pump 
operated in one mode may not reflect performance when operated in a 
different mode, including the fixed-speed mode cited by ASAP. While DOE 
is not adopting certification requirements, mandatory or voluntary, in 
this final rule, as stated in section III.A.3 of this document, it may 
do so as part of a separate rulemaking.
    NEEA/NWPCC recommended DOE require circulator pumps to be tested 
and to demonstrate compliance with energy conservation standards in the 
most consumptive control mode because: (1) they ``are concerned that 
manufacturers will meet the standard through an optional speed control 
setting rather than hydraulic redesign or addition of an efficient 
motor, meaning that the circulator will often function in a control 
setting that delivers performance below what is required by the 
standard. In some cases, such as three speed circulator pumps, the 
speed controls are intended to serve different sizes of systems, and 
the least-consumptive mode will not be representative of larger 
systems.'' (2) ``Least-consumptive testing will increase testing 
burden, as manufacturers will have to test multiple settings to first 
determine which setting is the least-consumptive. Conversely, DOE has 
asserted (and we agree) that the most-consumptive control is the full 
speed setting, meaning there is no additional testing required to 
determine the most-consumptive setting.'' (3) ``Non-guaranteed 
performance will discourage utility programs, as they will not be able 
to determine the current practice baseline because many circulators 
will operate below the actual standard.'' (4) ``The market will be 
confused about the performance of circulators in the field, because 
least-consumptive control does not equate to the most representative 
control. While we agree with DOE's assertion in this NOPR that testing 
in the least-consumptive control mode will better communicate the range 
of controls available to the market and their relative energy 
consumption, consumers may be confused as to why the expected energy 
performance fails to materialize.'' (5) ``Manufacturers already support 
testing in most-consumptive control setting as they test and submit 
ratings to the Hydraulic Institute (HI) circulator Energy Rating (ER) 
database.'' (6) '' Least-consumptive testing impedes future rulemakings 
that could strengthen the standard. Least-consumptive testing will 
allow for a range of performance, with some circulators operating in 
modes that perform worse than the DOE standard. Tightening that 
standard in the future may simply widen the gap of tested versus actual 
performance. Conversely, most-consumptive testing would establish a 
clear minimum performance standard that DOE can build upon in future 
rulemakings.'' (NEEA/NWPCC, No. 134 at pp. 2-3) NEEA/NWPCC also 
explained that the most-consumptive testing ensures that any tightening 
of the standard will remove equipment with low performance, but least-
consumptive testing may not if their lowest consumptive method is in 
standards and the rest are not. Id. NEEA/NWPCC stated that the revised 
standard would only achieve the energy conservation goals if using most 
consumptive testing, and NEEA/NWPCC recommend that DOE revisit this 
issue in future circulator pump rulemakings. Id.
    Regarding NEEA/NWPCC's first point that manufacturers may comply 
with a standard based on the least consumptive operating mode by 
incorporating controls, DOE recognizes the possibility but not that it 
would necessarily be detrimental. Speed reduction is a legitimate means 
of reducing circulator pump energy consumption, far outstripping the 
savings potential of other technology options for certain applications. 
Even in nominally fixed-speed applications, which call for no flow 
variability, speed adjustment can be used to match the circulator pump 
output to load imposed by the actual hydraulic circuit at hand. The 
potential for manufacturers of noncompliant circulator pumps adding 
manual speed controls as a way to reduce CEI to reach compliance is not 
expected to be significant. Analysis of submitted manufacturer model 
data indicates that adding manual speed controls reduces a circulator 
pump's CER metric by an average of 6.5%. DOE's analysis of the market 
shows that less than 2% of circulator pumps that would not be compliant 
with the standard levels adopted in this final rule are single-speed 
models that could attain compliance by introducing manual speed 
controls. Further, because there would likely be significant conversion 
cost associated with modifying circulator pump models, manufacturers 
may be hesitant to develop them unless confident of strong demand that 
would enable recovery of those costs. Further, the products themselves 
would cost more to manufacture due to multispeed motors' costing more 
to purchase or construct than single-speed motors, which would reduce 
their appeal to first-cost-motivated consumers. Finally, while NEEA/
NWPCC identifies a potential case in which manual speed controls reduce 
the energy savings achievable by an energy conservation standard, so 
too can manual speed controls be used to save energy in applications 
that do not require the circulator pumps' full output. In view of the 
relatively small fraction of the market that could feasibly function as 
NEEA/NWPCC describes, the additional equipment costs and conversion 
costs associated with multi-speed products relative to single-speed, 
and the potential for manual-speed control to

[[Page 44480]]

help as well as hinder the objective of energy savings, the potential 
of manual speed control to undermine the anticipated energy savings of 
this final rule appears minimal.
    Regarding NEEA/NWPCC's second point that least consumptive testing 
may increase testing burden, industry standard HI 41.5-2022, section 
41.5.3.4 ``Determination of CER'' directs that circulator pumps already 
be rated at both the most and least consumptive control methods. 
Accordingly, DOE finds incremental testing burden to be minimized to 
the extent that computing both methods is already widespread industry 
practice.
    Regarding NEEA/NWPCC's third point that non-guaranteed performance 
may discourage utility programs, DOE does not have information to 
evaluate the size of potential energy savings arising from utility 
programs concerning circulator pumps relative to the magnitude of the 
energy savings estimated to be associated with the energy conservation 
standards adopted in this final rule. Further, a least-consumptive-
based compliance requirement does not necessarily obscure differences 
in full-load performance, as more-efficient motors will tend to perform 
better at both full and reduced speeds.
    Regarding NEEA/NWPCC's fourth point that the market may be confused 
about the performance of circulators in the field, DOE observes that 
the ``field'' would include an array of applications, some of which 
would realize greater or lesser savings than a single CEI value in 
isolation could convey. One factor which may tend to make the former 
less likely than the latter is cost--because variable-speed circulator 
pumps tend to cost more, purchasers may be more likely to have 
developed enough understanding of the product to justify paying a 
premium.
    It is possible that a circulator pump purchaser may wind up with 
less savings than anticipated if purchasing a variable-speed circulator 
pump for an application that truly requires single-speed operation. 
However, even in an application with truly constant demand, variable-
speed circulator pumps may still offer energy savings relative to a 
single-speed circulator pump. Such savings could arise from the fact 
that, while circulator pump applications exist over a continuous 
spectrum of hydraulic power requirements, circulator pump models are 
offered only at certain, discrete hydraulic power levels. Thus, even 
purchasers who accurately estimate their demand would likely end up 
with some amount of unnecessary hydraulic power. A variable-speed 
circulator pump may save energy by operating closer to the necessary 
hydraulic power level, even if that level does not vary over time.
    DOE cannot be certain of how electric utilities might design future 
incentive programs for circulator pumps but does not see that they 
would necessarily dismiss the potential of variable-speed circulator 
pumps to save energy, even while purchase of a variable-speed 
circulator pump does not guarantee that every individual installation 
would realize savings relative to a hypothetical alternative of a 
single-speed circulator pump with less full-speed power consumption. 
One potential mitigating factor, in the case of a utility unwilling to 
consider an incentive program that could not guarantee savings at every 
circulator pump installation using the CEI metric alone, is that full-
speed pump performance data may be published for those pumps and 
subsequently used as basis for incentive qualification provided that 
such data was generated consistently with the test procedure for 
circulator pumps. (See 10 CFR 431.464(c).)
    Regarding NEEA/NWPCC's fifth point that manufacturers already 
support testing in the most-consumptive setting, as evidenced by their 
testing and submission of corresponding ratings to HI's circulator 
Energy Rating database, those manufacturers also submit ratings 
corresponding to the least consumptive setting. As stated, this is a 
voluntary directive of industry standard HI 41.5-2022, Sec.  41.5.3.4 
``Determination of CER''.
    Regarding NEEA/NWPCC's sixth point that least consumptive testing 
may impede future rulemakings that could otherwise have strengthened 
standards, DOE observes that more-stringent standards in a hypothetical 
future rulemaking would not be prohibited, or even materially impeded, 
by this final rule's adoption of requirements to base compliance on the 
least-consumptive operating mode. Improved motors and hydraulic 
assemblies, which are the sources of improved performance in the fixed-
speed evaluation scenario supported by NEEA/NWPCC's arguments, would 
still carry potential to improve under any choice of required operating 
mode for compliance.
    Several commenters argue that testing in the least consumptive 
control mode may provide a less representative CEI value in certain 
situations, but do not openly consider that the same must be true of a 
requirement to test in the most consumptive control mode. Testing and 
certifying performance using the most consumptive mode would also 
generate results that are not accurate in all individual situations. 
Because there are multiple control modes on some circulator pumps, 
testing at one load profile could not represent every potential 
circulator pump application. For the purpose of estimating energy 
savings that would be realized by consumers at various potential 
standard levels, DOE does not assume a pump would consume energy in 
direct proportion to its CEI value, but instead relies on energy use 
assumption as discussed in section IV.E of this document.
    The energy conservation standards evaluated in this final rule are 
based on wire-to-water efficiency, which is influenced by both 
hydraulic efficiency and motor efficiency. Because circulator pump 
efficiency is measured on a wire-to-water basis, it is difficult to 
entirely disentangle performance differences due to motor efficiency 
from those due to hydraulic efficiency. In redesigning a pump model to 
meet the standard established in this final rule, manufacturers would 
likely consider both hydraulic efficiency and motor efficiency. Speed 
reduction is a legitimate means of reducing energy consumption and 
likely offers greater potential energy savings than hydraulic 
optimization would alone due to pump affinity laws, which are described 
in section IV.A.2.c of this document. If compliance with energy 
conservation standards were based on the most consumptive control mode, 
circulator pumps with energy-saving controls would be unlikely to 
receive benefit to their CEI score, as essentially all circulator pumps 
would be evaluated at full speed.
    In view of the foregoing discussion and the support of HI, ASAP et 
al., and the CA IOUs, DOE is adopting the requirement that circulator 
pumps comply with energy conservation standards while operated in their 
least consumptive mode.
    As stated in section III.A.3 of this document, certification 
requirements, including those related to active control variety, are 
not being proposed in this final rule, but may be addressed in a 
potential future rulemaking.

E. 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 equipment that is the subject of the rulemaking. As 
the first step in such an analysis, DOE develops a list of technology 
options for

[[Page 44481]]

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 equipment or in 
working prototypes to be technologically feasible. 10 CFR 431.4; 
sections 6(b)(3)(i) and 7(b)(1) of appendix A to 10 CFR part 430 
subpart C (``Process Rule'').
    After DOE has determined that particular technology options are 
technologically feasible, it further evaluates each technology option 
in light of the following additional screening criteria: (1) 
practicability to manufacture, install, and service; (2) adverse 
impacts on equipment utility or availability; (3) adverse impacts on 
health or safety and (4) unique-pathway proprietary technologies. 10 
CFR 431.4; sections 7(b)(2)-(5). Section IV.B of this document 
discusses the results of the screening analysis for circulator pumps, 
particularly the designs DOE considered, those it screened out, and 
those that are the basis for the standards considered in this 
rulemaking. For further details on the screening analysis for this 
rulemaking, see chapter 4 of the final rule technical support document 
(``TSD'').
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt a new standard for a type or class of 
covered equipment, it must determine the maximum improvement in energy 
efficiency or maximum reduction in energy use that is technologically 
feasible for such equipment. (42 U.S.C. 6316(a); 42 U.S.C. 6295(p)(1)) 
Accordingly, in the engineering analysis, DOE determined the maximum 
technologically feasible (``max-tech'') improvements in energy 
efficiency for circulator pumps, using the design parameters for the 
most efficient equipment available on the market or in working 
prototypes. The max-tech levels that DOE determined for this rulemaking 
are described in section IV.C.2 of this final rule and in chapter 5 of 
the final rule TSD.

F. Energy Savings

1. Determination of Savings
    For each TSL, DOE projected energy savings from application of the 
TSL to circulator pumps purchased in the 30-year period that begins in 
the year of compliance with the new standards (2028-2057).\25\ The 
savings are measured over the entire lifetime of equipment purchased in 
the 30-year analysis period. DOE quantified the energy savings 
attributable to each TSL as the difference in energy consumption 
between each standards case and the no-new-standards case. The no-new-
standards case represents a projection of energy consumption that 
reflects how the market for equipment would likely evolve in the 
absence of new energy conservation standards.
---------------------------------------------------------------------------

    \25\ DOE also presents a sensitivity analysis that considers 
impacts for equipment shipped in a 9-year period.
---------------------------------------------------------------------------

    DOE used its national impact analysis (``NIA'') spreadsheet models 
to estimate national energy savings (``NES'') from potential new 
standards for circulator pumps. The NIA spreadsheet model (described in 
section IV.H of this document) calculates energy savings in terms of 
site energy, which is the energy directly consumed by equipment at the 
locations where it is 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 full-fuel-cycle 
(``FFC'') energy savings. The FFC metric includes the energy consumed 
in extracting, processing, and transporting primary fuels (i.e., coal, 
natural gas, petroleum fuels), and thus presents a more complete 
picture of the impacts of energy conservation standards.\26\ DOE's 
approach is based on the calculation of an FFC multiplier for each of 
the energy types used by covered equipment. For more information on FFC 
energy savings, see section IV.H.2 of this document.
---------------------------------------------------------------------------

    \26\ 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 standards for covered equipment, DOE must 
determine that such action would result in significant energy savings. 
(42 U.S.C. 6295(o)(3)(B))
    The significance of energy savings offered by a new energy 
conservation standard cannot be determined without knowledge of the 
specific circumstances surrounding a given rulemaking.\27\ For example, 
some covered equipment has most of its energy consumption occur during 
periods of peak energy demand. The impact of this equipment on the 
energy infrastructure can be more pronounced than equipment with 
relatively constant demand. Accordingly, DOE evaluates the significance 
of energy savings on a case-by-case basis, considering 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.
---------------------------------------------------------------------------

    \27\ 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).
---------------------------------------------------------------------------

    As stated, the standard levels adopted in this final rule are 
projected to result in national energy savings of 0.55 quad, the 
equivalent of the primary annual energy use of 5.9 million homes. Based 
on the amount of FFC savings, the corresponding reduction in emissions, 
and the need to confront the global climate crisis, DOE has determined 
the energy savings from the standard levels adopted in this final rule 
are ``significant'' within the meaning of 42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(3)(B). Even without considering the need to confront the global 
climate crisis, DOE has determined the energy savings from the standard 
levels adopted in this rule are ``significant'' under EPCA.

G. Economic Justification

1. Specific Criteria
    As noted previously, EPCA provides seven factors to be evaluated in 
determining whether a potential energy conservation standard is 
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(I)-(VII)) The following sections discuss how DOE has 
addressed each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of potential new standards on 
manufacturers, DOE conducts an MIA, as discussed in section IV.J of 
this document. DOE first uses an annual cash-flow approach to determine 
the quantitative impacts. This step includes both a short-term 
assessment--based on the cost and capital requirements during the 
period between when a regulation is issued and when entities must 
comply with the regulation--and a long-term assessment over a 30-year 
period. The industry-wide impacts analyzed include (1) INPV, which 
values the industry on the basis of expected future cash flows; (2) 
cash flows by year; (3) changes in revenue and income; and (4) other 
measures of impact, as appropriate. Second, DOE analyzes and reports 
the impacts on different types of manufacturers, including impacts on 
small manufacturers. Third, DOE considers the impact of standards on

[[Page 44482]]

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 considers cumulative impacts of 
various DOE regulations and other regulatory requirements on 
manufacturers.
    For individual consumers, measures of economic impact include the 
changes in LCC and payback period (``PBP'') associated with new 
standards. These measures are discussed further in the following 
section. For consumers in the aggregate, DOE also calculates the 
national net present value of the consumer costs and benefits expected 
to result from particular standards. DOE also evaluates the impacts of 
potential standards on identifiable subgroups of consumers that may be 
affected disproportionately by a standard.
b. Savings in Operating Costs Compared to Increase in Price (LCC and 
PBP)
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered equipment in the 
type (or class) compared to any increase in the price of, or in the 
initial charges for, or maintenance expenses of, the covered equipment 
that are likely to result from a standard. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC 
and PBP analysis.
    The LCC is the sum of the purchase price of equipment (including 
its installation) and the operating cost (including energy, 
maintenance, and repair expenditures) discounted over the lifetime of 
the equipment. The LCC analysis requires a variety of inputs, such as 
equipment prices, equipment energy consumption, energy prices, 
maintenance and repair costs, equipment lifetime, and discount rates 
appropriate for consumers. To account for uncertainty and variability 
in specific inputs, such as equipment 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 more-efficient equipment through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
due to a more-stringent standard by the change in annual operating cost 
for the year that standards are assumed to take effect.
    For its LCC and PBP analysis, DOE assumes that consumers will 
purchase the covered equipment in the first year of compliance with new 
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 standards. DOE's LCC and PBP analysis is 
discussed in further detail in section IV.F of this document.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for adopting an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(III)) As discussed in section IV.H of this document, 
DOE uses the NIA spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Equipment
    In establishing equipment classes, and in evaluating design options 
and the impact of potential standard levels, DOE evaluates potential 
standards that would not lessen the utility or performance of the 
considered equipment. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data 
available to DOE, the standards adopted in this document would not 
reduce the utility or performance of the equipment under consideration 
in this rulemaking.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from a standard. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine 
the impact, if any, of any lessening of competition likely to result 
from a standard and to transmit such determination to the Secretary 
within 60 days of the publication of a proposed rule, together with an 
analysis of the nature and extent of the impact. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(o)(2)(B)(ii)) To assist the Department of Justice (``DOJ'') 
in making such a determination, DOE transmitted copies of its proposed 
rule and the NOPR TSD to the Attorney General for review, with a 
request that the DOJ provide its determination on this issue. In its 
assessment letter responding to DOE, DOJ concluded that the proposed 
energy conservation standards for circulator pumps are unlikely to have 
a significant adverse impact on competition. DOE is publishing the 
Attorney General's assessment at the end of this final rule.
f. Need for National Energy Conservation
    DOE also considers the need for national energy and water 
conservation in determining whether a new standard is economically 
justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(VI)) The 
energy savings from the adopted standards are likely to provide 
improvements to the security and reliability of the Nation's energy 
system. Reductions in the demand for electricity also may result in 
reduced costs for maintaining the reliability of the Nation's 
electricity system. DOE conducts a utility impact analysis to estimate 
how standards may affect the Nation's needed power generation capacity, 
as discussed in section IV.M of this document.
    DOE has determined 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 adopted standards are likely to result in 
environmental benefits in the form of reduced emissions of air 
pollutants and greenhouse gases (``GHGs'') associated with energy 
production and use. DOE conducts an emissions analysis to estimate how 
potential standards may affect these emissions, as discussed in section 
IV.K of this document; the estimated emissions impacts are reported in 
section V.B.6 of this document. DOE also estimates the economic value 
of emissions reductions resulting from the considered TSLs, as 
discussed in section IV.L of this document.
g. Other Factors
    In determining whether an energy conservation standard is 
economically justified, DOE may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant 
information regarding economic justification that does not fit into the 
other categories described previously, DOE could consider such 
information under ``other factors.''
2. Rebuttable Presumption
    EPCA creates a rebuttable presumption that an energy conservation 
standard is economically justified if the additional cost to the 
equipment that meets the standard is less than three times the value of 
the first year's energy savings resulting from the standard, as 
calculated under the applicable DOE test procedure. (42 U.S.C. 6316(a); 
42 U.S.C.

[[Page 44483]]

6295(o)(2)(B)(iii)) DOE's LCC and PBP analyses generate values used to 
calculate the effect potential new energy conservation standards would 
have on the payback period for consumers. These analyses include, but 
are not limited to, the 3-year payback period contemplated under the 
rebuttable-presumption test. In addition, DOE routinely conducts an 
economic analysis that considers the full range of impacts to 
consumers, manufacturers, the Nation, and the environment, as required 
under (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)) The results of 
this analysis serve as the basis for DOE's evaluation of the economic 
justification for a potential standard level (thereby supporting or 
rebutting the results of any preliminary determination of economic 
justification). The rebuttable presumption payback calculation is 
discussed in section IV.F of this final rule.

H. Compliance Date

    EPCA does not prescribe a compliance lead time for energy 
conservation standards for pumps, i.e., the number of years between the 
date of publication of a final energy conservation standard 
(``effective date'') and the date on which manufacturers must comply 
with the new standard. The November 2016 CPWG Recommendations specified 
a compliance date of four years following publication of the final 
rule.
    In response to the May 2021 RFI, DOE received two comments 
regarding the compliance date. Grundfos recommended a 2-year compliance 
date and NEEA recommended a 3-year compliance date. (Docket No. EERE-
2016-BT-STD-0004, Grundfos, No. 113, at p. 1; Docket No. EERE-2016-BT-
STD-0004, NEEA, No. 115, at p. 3) Neither Grundfos nor NEEA provided 
additional comments regarding the compliance date in response to the 
December 2022 NOPR.
    In the December 2022 NOPR, DOE proposed a 2-year compliance date 
for energy conservation standards due to the industry being more mature 
than when the CPWG made its recommendation. 87 FR 74850, 74865. DOE 
requested comment on its proposal. Id. DOE also noted that, due to 
projected market trends, a change in the rulemaking's compliance date 
may lead to a small but non-negligible change in consumer and 
manufacturer benefits or impacts. Id.
    In response to the December 2022 NOPR, HI and Xylem recommended DOE 
adopt a 4-year compliance lead time for manufacturers to meet the 
proposed standard. (HI, No. 135 at p. 1; Xylem, No. 136 at p. 1) HI and 
Xylem stated that the proposed 2-year compliance lead time conflicts 
with the 4-year time negotiated by the CPWG and that the existing 
equipment on the market meeting EL 2 does not cover the breadth of 
utility required by the market. Id. Xylem explained that implementing a 
2-year compliance timeline for pumps would delay, rather than 
accelerate, manufacturer compliance. (Xylem, No. 136 at p. 1) Xylem 
recommended that DOE make recourse to the European Union's method of 
implementing regulations to decrease circulator pump energy consumption 
by providing manufacturers the necessary time to comply with the 
regulations. (Xylem, No. 136 at p. 2)
    HI and Xylem commented that, as stated in the December 2022 NOPR, 
66 percent of circulator pumps on the market need to be redesigned to 
meet the proposed standard, and manufacturers will benefit from a 4-
year compliance lead time to engineer, develop, and test equipment to 
meet the standard. (HI, No. 135 at p. 2; Xylem, No. 136 at p. 2) HI and 
Xylem commented that, due to supply chain issues, it is not uncommon 
for an 18-month lead time for manufacturers to obtain materials to 
leave just 6 months for all engineering, development, and third-party 
agency testing; meaning this timeline is not feasible for 
manufacturers. (HI, No. 135 at pp. 2-3; Xylem, No. 136 at p. 3). HI and 
Xylem also stated that much of the development, sourcing, testing, and 
equipment line implementation is linear, with each step dependent on 
prior steps being completed. Id. HI and Xylem commented that much 
equipment will require an EL 3 effort to be compliant and meet market 
competitiveness requirements, which will extend the timeline of 
equipment development and testing well beyond 2 years. Id. In addition, 
HI added that manufacturers are required to obtain safety and drinking 
water approvals via third party agency testing for all new/redesigned 
equipment. (HI, No. 135 at p. 3)
    HI and Xylem further commented that manufacturers, including Xylem 
itself, anticipate struggling to meet capacity, for instance regarding 
lead times for electronically commutated motors (``ECMs''), production 
test equipment, and other assets that will delay the compliance lead 
time. (HI, No. 135 at p. 3; Xylem, No. 136 at p. 3) HI noted that ECM 
component suppliers have been unable to meet demand and will continue 
to fall behind as the circulator market transitions to ECMs. (HI, No. 
135 at p. 4) Xylem commented that manufacturers will see similar lead 
time issues when developing new production lines as seen with materials 
in the supply chain. (Xylem, No. 136 at pp. 3-4) Xylem stated it will 
take 12-18 months to source and implement production lines, which will 
delay the compliance lead time. Id. Xylem commented that manufacturers' 
inability to meet the aggressive compliance timeline will result in a 
gap of pumps available in the market and potentially lead to 
overinflated pricing, substitution of older and less efficient 
equipment, and costly conversions to alternative systems. Id.
    In the NOPR public meeting, Taco commented that the proposed 
implementation period is extremely short and requires a lot of changes. 
(Taco, Inc., Public Meeting Transcript, No. 129 at pp. 65-66) Taco 
stated it is nearly impossible to get anything electronic in a two-year 
period to go through this testing. Id. Taco further commented that 
everything would need to be redesigned with no way to get the parts in 
house to make that happen. Id. Taco stated that, at the time of the 
public meeting, it was receiving two-year quotes to get in new 
electronic products. Id.
    HI and Xylem commented that a 2-year lead time will pose an 
additional financial burden on manufacturers due to conversion-cost 
impacts with a quick turnaround. (HI, No. 135 at p. 4; Xylem, No. 136 
at p. 4) Xylem commented that even large companies may not be able to 
justify achieving the extremely short investment-to-launch period 
proposed by DOE. (Xylem, No. 136 at p. 4) Xylem believes manufacturers 
will redesign to be competitive, which likely means redesigning past 
the minimal compliance CEI of 1.0, which will include additional costs 
and time needed. Id. Xylem agreed that basic model counts would 
decrease with a transition to ECMs due to the greater range of 
applications served. Id. However, Xylem recommended DOE consider the 
additional incremental cost to transition these models to EL 3 levels. 
Id. Xylem commented that capital investment is likely to increase when 
going from EL 2 to EL 4 and that DOE has underestimated the capital 
investment and time commitment needed to reach EL 3 and EL 4. Id. HI 
and Xylem recommended that DOE follow up with manufacturers to qualify 
the lead times to acquire and commission manufacturing assets. (HI, No. 
135 at p. 4; Xylem, No. 136 at pp. 3-4).
    Further, HI and Xylem disagreed with DOE's assertion that 
manufacturers

[[Page 44484]]

affected by this rulemaking are not affected by other rulemakings and 
recommended that DOE consider the cumulative burden of rulemakings 
currently in progress, such as those regarding commercial and 
industrial pumps and electric motors. (HI, No. 135 at p. 4; Xylem, No. 
136 at p. 5) HI also recommended DOE consider that the ECM technology 
used in CP2- and CP3-style circulator pumps is under consideration in 
the electric motor rulemakings. (HI, No. 135 at p. 6) HI commented that 
the timing and outcome of the electric motor rulemakings would impact 
circulator manufacturers' ability to redesign CP2 and CP3 equipment 
within the 2-year compliance lead time. Id.
    Wyer commented that the manufacturing industry has seen an increase 
in the number of ECM circulator pumps in recent years and this increase 
has proven problematic. (Tom Wyer, No. 128 at pp. 1-2) Wyer commented 
that the pump manufacturers listed by the CPWG do not currently have 
the ability to produce ECM pumps in sufficient quantities to satisfy a 
growing market. Id. Wyer commented that several manufacturers are 
substituting permanent split capacitor ``''PSC'') motor pumps for ECMs 
to make up for the insufficient availability of ECM pumps, which is due 
to: (1) international supply chain shortages; (2) plant capacity in the 
facilities that manufacturer ECM circulators, all of which are located 
in Europe; and (3) the rapid adoption of hydronic heat pumps in Europe 
caused by the war in Ukraine, natural gas supply constraints, and 
rising prices. Id. Wyer commented that U.S. manufacturing 
infrastructure cannot support the level of production needed to satisfy 
the hydronics market with ECM circulators. (Tom Wyer, No. 128 at p. 2) 
Wyer stated that ECM pumps with the performance curves necessary for 
the geothermal HVAC industry are only manufactured in Europe, while the 
majority of PSC pumps currently used in the geothermal HVAC industry 
are made in the United States. Id. Wyer commented that U.S.-based 
manufacturers are more likely to shut down domestic facilities and 
continue importing ECM circulators rather than invest to upgrade their 
plants to produce ECM pumps. Id. Wyer recommended that DOE consider the 
impact of the proposed rulemaking on domestic manufacturer employment 
and the potential of plant closures. Id. Wyer commented that 3 years is 
not enough time for pump manufacturers to upgrade their capacity to 
supply the entire hydronics market in the U.S. and recommended that DOE 
delay the implementation of the standard until the domestic supply of 
ECM pumps is sufficient to meet current and future demand. Id. Wyer 
recommended that if DOE continues with the proposed rulemaking, the 
compliance time should be increased to a minimum of 6 years. Id.
    In response, DOE notes that, as stated by manufacturers, the 
redesign process for circulator pumps contains multiple, sequential 
steps dependent on completion of the preceding step. Third-party water 
testing, which is necessary after the redesign process but before the 
circulator pumps go to market, adds further time constraints to pump 
manufacturers. These reasons make a 2-year compliance date hard for 
manufacturers to reach EL 2 levels, but some manufacturers will use the 
redesigning process as an opportunity for further energy savings. HI 
and Xylem also noted that they feel the cumulative regulatory burden 
from other rulemakings, including commercial industrial pumps and small 
electric motors, put further strain on manufacturers who expect a 2-
year compliance date for circulator pumps to add significant financial 
burden. Cumulative regulatory burden from other rulemakings is 
discussed in section V.B.2.e of this document.
    As discussed previously, in the December 2022 NOPR DOE did not 
follow the CPWG's recommendation of a 4-year compliance date, instead 
proposing a 2-year compliance date due to the market maturing since the 
2016 CPWG meetings. However, as discussed by stakeholders, the natural 
growth of ECMs in the market has been slow, with only around 1 percent 
of the market switching to ECMs annually, leaving the majority of the 
market in need of redesign to reach EL 2. As such, DOE agrees that a 
longer compliance period than proposed in the DOE 2022 NOPR is 
warranted. However, although the natural market share growth of ECMs 
has been slow, the market is closer to EL 2 on average now than when 
the CPWG initially recommended a 4-year compliance date, which has led 
DOE to conclude that no additional time past the 4-year recommendation, 
such as a 6-year compliance date, is necessary. Accordingly, in this 
final rule, DOE is adopting a 4-year compliance date for energy 
conservation standards.

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
rulemaking with regard to circulator pumps. Separate subsections 
address each component of DOE's analyses.
    DOE used several analytical tools to estimate the impact of the 
standards considered in this document. The first tool is a spreadsheet 
that calculates the LCC savings and PBP of potential 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-2016-BT-STD-0004. Additionally, DOE used output from the latest version of 
the Energy Information Administration's (``EIA's'') Annual Energy 
Outlook (``AEO'') for the emissions and utility impact analyses.

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the equipment 
concerned, including the purpose of the equipment, the industry 
structure, manufacturers, market characteristics, and technologies used 
in the equipment. 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 equipment classes, (2) manufacturers and industry 
structure, (3) existing efficiency programs, (4) shipments information, 
(5) market and industry trends, and (6) technologies or design options 
that could improve the energy efficiency of circulator pumps. The key 
findings of DOE's market assessment are summarized in the following 
sections. See chapter 3 of the final rule TSD for further discussion of 
the market and technology assessment.
    In response to the December 2022 NOPR, HI requested that DOE 
provide its market assessment of basic model information as a 
supplemental publication, including the estimated number of models left 
for conversion and the percentage they make up of the market. (HI, No. 
126 at p. 1) HI requested that DOE allow manufacturers time to review 
the market assessment data and provide comments. Id.
    DOE responded to this comment by publishing a supplementary 
document

[[Page 44485]]

with the estimated number of models at or above EL 2 and the number of 
models below EL 2 on January 31, 2023. (Docket No. EERE-2016-BT-STD-
0004-0127) This information is reflected in Table IV.14 in section 
IV.J.2.c of this document.
1. Scope of Coverage and Equipment Classes
a. Scope
    As stated in the December 2022 NOPR, DOE proposed to align the 
scope of these proposed energy conservation standards with that of the 
circulator pumps test procedure. 87 FR 74850, 74865; 87 FR 57264. In 
that document, DOE finalized the scope of the circulator pumps test 
procedure such that it applies to circulator pumps that are clean water 
pumps, including circulators-less-volute and on-demand circulator 
pumps, and excluding header pumps and submersible pumps. 87 FR 74850, 
74865-74866. That scope is consistent with the recommendations of the 
CPWG. (Docket No. EERE-2016-BT-STD-0004, No. 58)
    In the December 2022 NOPR, DOE proposed to apply energy 
conservation standards to all circulator pumps included in the CWPG 
recommendations, which excluded submersible pumps and header pumps. 87 
FR 74850, 74866. (Docket No. EERE-2016-BT-STD-0004, No. 58) The 
September 2022 TP Final Rule also excluded submersible pumps and header 
pumps. 87 FR 57264, 57272. Any future evaluation of energy conservation 
standards would require a corresponding test procedure.
    In the December 2022 NOPR, DOE requested comment regarding the 
proposed scope of energy conservation standards for circulator pumps. 
87 FR 74850, 74866.
    HI agreed with DOE's proposal to apply standards to all circulator 
pumps included in the CWPG recommendations, which excluded submersible 
pumps and header pumps. (HI, No. 135 at p. 4)
Equipment Diagrams
    In general, DOE establishes written definitions to designate which 
equipment falls within the scope of a test procedure or energy 
conservation standard. In the specific case of circulator pumps, 
certain scope-related definitions were adopted by the September 2022 TP 
Final Rule and codified at 10 CFR 431.462.
    DOE adopted the definitions that distinguish various circulator 
pumps nearly unchanged from those recommended by the CPWG at meeting 2. 
(Docket No. EERE-2016-BT-STD-0004-0021, p. 22) 10 CFR 431.462. CPWG 
membership included five manufacturers of circulator pumps; a trade 
association representing the U.S. hydraulic industry; a trade 
association representing plumbing, heating, and cooling contractors; 
and other manufacturers of equipment that either use or are used by 
circulator pumps as components.
    In the December 2022 NOPR, DOE stated that given the strong 
representation of entities with deep experience in circulator pump 
design and for whom definitional ambiguity could be burdensome, it is 
reasonable to expect the CPWG-proposed definitions were viewed as 
sufficiently clear at the time of their recommendation. 87 FR 74850, 
74866.
    Additionally, in the December 2022 NOPR, DOE explained that the 
development of diagrams to support the definitions could create 
confusion if interpretations of such diagrams differ from those of the 
corresponding written definitions. For this reason, and in the absence 
of any evidence of ambiguity in the definitions, DOE did not propose to 
establish equipment diagrams in the December 2022 NOPR, but requested 
comments on the definitions and whether any clarification was needed. 
87 FR 74850, 74866.
    HI agreed that the proposed definitions are sufficiently clear and 
consistent with the diagrams provided in ANSI/HI 14.1-14.2. (HI, No. 
135 at p. 4)
    Accordingly, DOE is not establishing equipment diagrams in this 
final rule.
b. Equipment Classes
    When evaluating and establishing energy conservation standards, DOE 
may divide covered equipment into equipment classes by the type of 
energy used, or by capacity or other performance-related features that 
justify a different standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q)) In 
making a determination whether capacity or another performance-related 
feature justifies a different standard, DOE must consider such factors 
as the utility of the feature to the consumer and other factors DOE 
deems appropriate. Id.
    For circulator pumps, there are no current energy conservation 
standards and, thus, no preexisting equipment classes. However, the 
November 2016 Term Sheets contained a recommendation related to 
establishing equipment classes for circulator pumps. Specifically, 
``Recommendation #1'' of the November 2016 CPWG Recommendations 
suggests grouping all circulator pumps into a single equipment class, 
though with numerical energy conservation standard values that vary as 
a function of hydraulic output power. (Docket No. EERE-2016-BT-STD-
0004, No. 98, Recommendation #1 at p.1)
    As stated in section III.C.1 of this document, circulator pumps may 
be offered in wet- or dry-rotor configurations, and if dry-rotor, in 
either close-coupled or mechanically coupled construction. Minor 
differences may exist across configurations. For example, during 
interviews with manufacturers, DOE learned that wet-rotor pumps tended 
to be quieter, whereas dry-rotor pumps may be easier to service. In 
general, however, each respective pump variety serves similar 
applications. Similarly, data provided to DOE as part of the 
confidential submission process indicates that each variety may reach 
similar efficiency levels when operated with similar motor technology. 
Accordingly, no apparent basis exists to warrant establishing separate 
equipment classes by circulator pump configuration.
    One additional salient design attribute of circulator pumps is 
housing material. Generally, circulator pumps are built using a cast 
iron, bronze, or stainless-steel housing. Bronze and stainless steel 
(sometimes discussed collectively with the descriptor ``nonferrous'') 
carry greater corrosion resistance and are thus suitable for use in 
applications in which they will be exposed to corrosive elements. 
Typically, corrosion resistance is most important in ``open loop'' 
applications in which new water is constantly being replaced.
    By contrast, cast iron (sometimes described as ``ferrous'' to 
distinguish from the ``nonferrous'' descriptor applied to bronze and 
stainless steel) pump housing is less resistant to corrosion than 
bronze or stainless steel, and as a result is generally limited to 
``closed loop'' applications in which the same water remains in the 
hydraulic circuit, in which it will eventually become deionized and 
less able to corrode metallic elements of circulator pumps. Cast iron 
is generally less expensive to manufacture than bronze or stainless 
steel and, as a result, bronze or stainless-steel circulator pumps are 
less commonly selected by consumers for applications that do not 
strictly require them.
    As discussed in the December 2022 NOPR, although a difference in 
utility exists across circulator pump housing materials, no such 
difference exists in ability to reach higher efficiencies. 87 FR 74850, 
74866. All housing materials can reach all efficiency levels analyzed 
in this final rule. Id. Accordingly, no

[[Page 44486]]

apparent basis exists to warrant establishing separate equipment 
classes by circulator pump housing material. Id.
    In the December 2022 NOPR, DOE requested comment regarding the 
proposal to analyze all circulator pumps within a single equipment 
class. 87 FR 74850, 74866.
    In response, ASAP et al. and HI supported DOE's proposal of a 
single equipment class and standard for all circulator pumps, as it is 
consistent with the CPWG recommendations. (ASAP et al., No. 131 at pp. 
1-2; HI, No. 135 at p. 4)
    Based on the foregoing analysis and the support of stakeholders, 
DOE is establishing circulator pumps in a single equipment class.
    Strauch commented that while DOE regularly considers the cumulative 
regulatory burden on manufacturers, DOE does not address an equivalent 
burden on consumers, for whom regulatory processes result in diminished 
equipment choices. (Mark Strauch, No. 123 at p. 2)
    As discussed by Strauch, DOE evaluated cumulative regulatory burden 
on manufacturers in this rulemaking. See section V.B.2.e of this 
document. In response to Strauch's comment regarding diminishing 
equipment choices, DOE notes that some circulator pump models with 
induction motors also come equipped with automatic continuous variable 
speed controls and therefore not all induction motors will be removed 
from the market. Further, DOE analyzes burden on consumers in section 
IV.I of this document.
On-Demand Circulator Pumps
    On-demand circulator pumps respond to actions of the user rather 
than other factors such as pressure, temperature, or time. In the 
September 2022 TP Final Rule, DOE adopted the following definition for 
on-demand circulator pumps, which is consistent with that recommended 
by the CPWG (Docket No. EERE-2016-BT-STD-0004, No. 98, Recommendation 4 
at p. 5):
    On-demand circulator pump means a circulator pump that is 
distributed in commerce with an integral control that:
     Initiates water circulation based on receiving a signal 
from the action of a user [of a fixture or appliance] or sensing the 
presence of a user of a fixture and cannot initiate water circulation 
based on other inputs, such as water temperature or a pre-set schedule.
     Automatically terminates water circulation once hot water 
has reached the pump or desired fixture.
     Does not allow the pump to operate when the temperature in 
the pipe exceeds 104 [deg]F or for more than 5 minutes continuously.
    10 CFR 431.462.
    The TP final rule (87 FR 57264) responded to a number of comments 
received in response to the December 2021 TP NOPR, which were discussed 
therein. Several commenters encouraged DOE to develop an adjustment to 
the CEI metric that accounted for the potential of on-demand circulator 
pumps to save energy in certain contexts. (EERE-2016-BT-TP-0033, No. 10 
at p. 5; EERE-2016-BT-TP-0033, No. 11 at pp. 4-5). Other commenters did 
not support an adjusted CEI metric for on-demand circulator pumps in 
the test procedure final rule, but recommended evaluation of such in a 
potential future rulemaking. (Docket No. EERE-2016-BT-TP-0033, No. 9 at 
p. 3; EERE-2016-BT-TP-0033, No. 7 at p. 1).
    DOE ultimately did not adopt any modification to the CEI metric for 
on-demand circulator pumps in the final rule but stated that it would 
consider the appropriate scope and equipment categories for standards 
for on-demand circulator pumps in a separate energy conservation 
rulemaking.
    As stated in section III.C of this document, DOE is aligning the 
scope of energy conservation standards for circulator pumps 
consistently with that of the test procedure for circulator pumps, 
which includes on-demand circulator pumps. 87 FR 57264.
    As discussed in the December 2022 NOPR, in developing the equipment 
class structure, DOE is directed to consider, among other factors, 
performance-related features that justify a different standard and the 
utility of such features to the consumer. 87 FR 74850, 74867. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(q)) In the specific case of on-demand 
circulator pumps, the primary distinguishing feature (i.e., ability to 
react to user action or presence) is not obviously performance related 
in that it does not impede the ability of on-demand circulator pumps to 
reach the same performance levels as any other circulator pumps. Id.
    On that basis, DOE proposed not to establish a separate equipment 
class for on-demand circulator pumps in the December 2022 NOPR. Id.
    In the December 2022 NOPR, DOE requested comment on its proposal 
not to establish a separate equipment class for on-demand circulator 
pumps. 87 FR 74850, 74867.
    In response to the December 2022 NOPR, HI and NEEA/NWPCC stated 
their support of DOE's proposal to refrain from creating a separate 
equipment class for on-demand circulators. (HI, No. 135 at p. 4; NEEA/
NWPCC, No. 134 at p. 4) NEEA/NWPCC also recommended that, due to the 
associated energy savings, DOE adopt a CEI credit for on-demand 
circulator pumps, recognizing that the necessary data collection may 
delay implementing such a credit until the next circulator pumps 
rulemaking. (NEEA/NWPCC, No. 134 at p. 4)
    On-demand circulator pumps have access to the same technology 
options as circulator pumps at-large. Thus, it is not clear that on-
demand function relates to efficiency, as measured by the test 
procedure for circulator pumps. (See 10 CFR 431.464(c)) In certain 
applications, on-demand circulator pumps may conceivably save energy if 
used to replace an equivalent non-on-demand circulator pump through 
reduced aggregate operating duration rather the improved energy 
efficiency during operation. DOE expects the energy efficiency during 
operation to be the same. DOE does not have data to determine the 
extent to which on-demand circulator pumps are replacing more 
traditional circulator pumps. However, such energy savings during the 
life of the operation would be highly variable based on used and would 
not materialize if the on-demand circulator pump were installed where 
none had existed previously (i.e., a newly added on-demand circulator 
pump). DOE already accounts for operating duration of on-demand 
circulator pumps in the energy use analysis, which is described in 
section IV.E of this final rule. In summary, on-demand circulator pumps 
neither obviously provide additional utility to consumers relative to 
non-on-demand circulator pumps nor face any impediment to achieving the 
same performance levels as circulator pumps at-large. Accordingly, DOE 
is not able to conclude that on-demand function would meet the 
statutory requirements for establishment of a separate equipment class 
(42 U.S.C. 6316(a); 42 U.S.C. 6295(q)).
    Based on the foregoing analysis and consistent with commenters, DOE 
is not establishing a separate equipment class for on-demand 
circulators. If DOE receives data regarding a potential CEI credit for 
on-demand circulator pumps, DOE may consider a CEI credit at that time.
2. Technology Options
    In the preliminary market analysis and technology assessment, DOE 
identified 3 technology options that would be expected to improve the 
efficiency of circulator pumps, as measured by the DOE test procedure:

 Improved hydraulic design;
 More efficient motors; and

[[Page 44487]]

 Increased number of motor speeds.

    Chapter 3 of the final rule TSD details each of these technology 
options. Section IV.C.2.c of this document provides examples of which 
technology options may be used to reach various efficiency levels.
a. Hydraulic Design
    The performance characteristics of a pump, such as flow, head, and 
efficiency, are influenced by the pump's hydraulic design. For the 
purposes of DOE's analysis, ``hydraulic design'' is a broad term used 
to describe the system design of the wetted components of a pump. 
Although hydraulic design focuses on the specific hydraulic 
characteristics of the impeller and the volute/casing, it also includes 
design choices related to bearings, seals, and other ancillary 
components.
    Impeller and volute/casing geometries, clearances, and associated 
components can be redesigned to a higher efficiency (at the same flow 
and head) using a combination of techniques including historical best 
practices and modern computer-aided design (CAD) and analysis methods. 
The wide availability of modern CAD packages and techniques now enables 
pump designers to reach designs with improved vane shapes, flow paths, 
and cutwater designs more quickly, all of which work to improve the 
efficiency of the pump as a whole.
b. More Efficient Motors
    Different constructions of motors have different achievable 
efficiencies. Two general motor constructions are present in the 
circulator pump market: induction motors and ECMs. Induction motors 
include both single-phase and three-phase configurations. Single-phase 
induction motors may be further differentiated and include split-phase, 
capacitor-start induction-run (``CSIR''), capacitor-start capacitor-run 
(``CSCR''), and PSC motors. In manufacturer interviews, DOE, using 
confidentially submitted manufacturer data, found that induction motor 
circulator pumps account for the majority of the circulator pump 
market.
    The efficiency of an induction motor can be increased by 
redesigning the motor to reduce slip losses between the rotor and 
stator components, as well as reducing mechanical losses at seals and 
bearings. ECMs are generally more efficient than induction motors 
because their construction minimizes slip losses between the rotor and 
stator components. Unlike induction motors, however, ECMs require an 
electronic drive to function. This electronic drive consumes 
electricity, and variations in drive losses and mechanical designs lead 
to a range of ECM efficiencies.
    The energy conservation standard in this rule is based upon wire-
to-water efficiency, which is defined as the hydraulic output power of 
a circulator pump divided by its line input power and is expressed as a 
percentage. The achievable wire-to-water efficiency of circulator pumps 
is influenced by both hydraulic efficiency and motor efficiency. As 
part of the engineering analysis (section IV.C of this document), DOE 
assessed the range of attainable wire-to-water efficiencies for 
circulator pumps with induction motors and those with ECMs over a range 
of hydraulic power outputs. Because circulator pump efficiency is 
measured on a wire-to-water basis, it is difficult to fully separate 
differences due to motor efficiency from those due to hydraulic 
efficiency. In redesigning a pump model to meet the standard 
established in this final rule, manufacturers could consider both 
hydraulic efficiency and motor efficiency.
    Higher motor capacities are generally required for higher hydraulic 
power outputs, and as motor capacity increases, the attainable 
efficiency of the motor at full load also increases. Higher horsepower 
motors also operate close to their peak efficiency for a wider range of 
loading conditions.\28\
---------------------------------------------------------------------------

    \28\ U.S. DOE Building Technologies Office. Energy Savings 
Potential and Opportunities for High-Efficiency Electric Motors in 
Residential and Commercial Equipment. December 2013. Prepared for 
the DOE by Navigant Consulting. pp. 4. Available at energy.gov/sites/prod/files/2014/02/f8/Motor%20Energy%20Savings%20Potential%20Report%202013-12-4.pdf DFR.
---------------------------------------------------------------------------

    Circulator pump manufacturers either manufacture motors in-house or 
purchase complete or partial motors from motor manufacturers and/or 
distributors. Manufacturers may select an entirely different motor or 
redesign an existing motor in order to improve a pump's motor 
efficiency.
c. Speed Reduction
    Circulator pumps with variable speed capability can reduce their 
energy consumption by reducing pump speed to match load requirements. 
As discussed in the September 2022 TP Final Rule, the CER metric is a 
weighted average of input powers at each test point relative to BEP 
flow. The circulator pump test procedure allows CER values for multi- 
and variable-speed circulator pumps to be calculated as the weighted 
average of input powers at full speed BEP flow, and reduced speed at 
flow points less than BEP; CER for single-speed circulator pumps is 
calculated based only on input power at full speed. 10 CFR 
431.464(c)(2). Due to pump affinity laws, variable-speed circulator 
pumps will achieve reduced power consumption at flow points less than 
BEP by reducing their rotational speed to more closely match required 
system head. As such, the CER metric grants benefits on circulator 
pumps capable of variable speed operation.
    Specifically, pump affinity laws describe the relationship of pump 
operating speed, flow rate, head, and hydraulic power. According to the 
affinity laws, flow varies proportionally with the pump's rotational 
speed, as described in equation (6). The affinity laws also establish 
that pump total head is proportional to speed squared, as described in 
equation (7), and pump hydraulic power is proportional to speed cubed, 
as described in equation (8)
[GRAPHIC] [TIFF OMITTED] TR20MY24.015


[[Page 44488]]


[GRAPHIC] [TIFF OMITTED] TR20MY24.016

[GRAPHIC] [TIFF OMITTED] TR20MY24.017

Where:

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

    This means that a pump operating at half speed will provide one 
half of the pump's full-speed flow and one eighth of the pump's full-
speed power.\29\ However, pump affinity laws do not account for changes 
in hydraulic and motor efficiency that may occur as a pump's rotational 
speed is reduced. Typically, hydraulic efficiency and motor efficiency 
will be reduced at lower operating speeds. Consequently, at reduced 
speeds, power consumption is not reduced as drastically as hydraulic 
output power. Even so, the efficiency losses at low-speed operation are 
typically outweighed by the exponential reduction in hydraulic output 
power at low-speed operation; this results in a lower input power at 
low-speed operation at flow points lower than BEP.
---------------------------------------------------------------------------

    \29\ A discussion of reduced-speed pump dynamics is available at 
www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0099.
---------------------------------------------------------------------------

    Circulator pump speed controls may be discrete or continuous, as 
well as manual or automatic. Circulator pumps with discrete speed 
controls vary the circulator pump's rotational speed in a stepwise 
manner. Discrete controls are found mostly on circulator pumps with 
induction motors and have several speed settings that can be used to 
allow contractors greater installation flexibility with a single 
circulator pump model. For these circulator pumps, the speed is set 
manually with a dial or buttons by the installer or user, and they 
operate at a constant speed once the installation is complete.
    Circulator pumps equipped with automatic speed controls can adjust 
the circulator pump's rotational speed based on a signal from 
differential pressure or temperature sensors, or an external input 
signal from a boiler. The variable frequency drives required for ECMs 
make them fairly amenable to the addition of variable speed control 
logic; currently, the vast majority of circulator pumps with automatic 
continuously variable speed controls also have ECMs. However, some 
circulator pump models with induction motors also come equipped with 
automatic continuous variable speed controls. While automatic controls 
can reduce energy consumption by allowing circulator pump speed to 
dynamically respond to changes in system conditions, these controls can 
also reduce energy consumption by reducing speed to a single, constant 
value that is optimized based on system head at the required flow 
point. Automatic controls can be broadly categorized into two groups: 
pressure-based controls, and temperature-based controls.
    Pressure-based controls vary the circulator pump speed based on 
changes in the system pressure. These pressure changes are typically 
induced by a thermostatically controlled zone valve that monitors the 
space temperature in different zones and calls for heat (i.e., opens 
the valve) when the space/zone temperature is below the set-point, 
similar to a thermostat. In this type of control, a pressure sensor 
internal to the circulator pump determines the amount of pressure in 
the system and adjusts the circulator pump speed to achieve the desired 
system pressure.
    Temperature-based controls monitor the supply and return 
temperature to the circulator pump and modulate the circulator pump's 
speed to maintain a fixed temperature drop across the system. 
Circulator pumps with temperature-based controls are able to serve the 
heat loads of a conditioned space at a lower speed, and therefore lower 
input power, than the differential pressure control because it can 
account for the differential temperature between the space and supplied 
hot water, delivering a constant BTU/hr load to the space when less 
heat is needed even in a given zone or zones.
    In the December 2022 NOPR, DOE concluded that the technology 
options identified were sufficient to conduct the engineering analysis, 
which is discussed in section IV.C of this document.

B. Screening Analysis

    DOE uses the following four screening criteria to determine which 
technology options are suitable for further consideration in an energy 
conservation standards rulemaking:

    (1) Technological feasibility. Technologies that are not 
incorporated in commercial equipment or in commercially viable, 
existing prototypes will not be considered further.
    (2) Practicability to manufacture, install, and service. If it 
is determined that mass production of a technology in commercial 
equipment and reliable installation and servicing of the technology 
could not be achieved on the scale necessary to serve the relevant 
market at the time of the projected compliance date of the standard, 
then that technology will not be considered further.
    (3) Impacts on equipment utility. If a technology is determined 
to have a significant adverse impact on the utility of the equipment 
to subgroups of consumers, or result in the unavailability of any 
covered equipment type with performance characteristics (including 
reliability), features, sizes, capacities, and volumes that are 
substantially the same as equipment generally available in the 
United States at the time, it will not be considered further.
    (4) Safety of technologies. 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 technology has 
proprietary protection and represents a unique pathway to achieving 
a given efficiency level, it will not be considered further, due to 
the potential for monopolistic concerns.

10 CFR 431.4; 10 CFR part 430, subpart C, appendix I6(c)(3) and 7(b).
    In sum, 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

[[Page 44489]]

the engineering analysis. The reasons for eliminating any technology 
are discussed in the following sections.
    The subsequent sections include comments from interested parties 
pertinent to the screening criteria, DOE's evaluation of each 
technology option against the screening analysis criteria, and whether 
DOE determined that a technology option should be excluded (``screened 
out'') based on the screening criteria.
1. Screened-Out Technologies
    In the December 2022 NOPR DOE received comment from stakeholders 
regarding the potential of screening out ECMs. HI responded to the May 
2021 RFI by commenting that ECMs and controls could potentially become 
a problem due to scarcity of necessary component materials, reliance on 
foreign sources, and the degree of automation and specialized tooling 
involved in the manufacture of ECMs. (Docket No. EERE-2016-BT-STD-0004, 
HI, No. 112, at p. 7) DOE interpreted HI's comment to be discussing a 
hypothetical future scenario, and not to be stating that ECMs are 
unavailable at this time. 87 FR 74850, 74870. Accordingly in the 
December 2022 NOPR, DOE retained ECMs as a design option for the 
analysis. Id.
    In the December 2022 NOPR DOE requested comment regarding the 
current and anticipated forward availability of ECMs and components 
necessary for their manufacture. 87 FR 74850, 74870.
    HI responded stating the suppliers of ECM components, such as 
chips, electronic components, and rare earth metals, have not been able 
to meet demand and that some manufacturers have been seeing lead times 
of 18 months. (HI, No. 135 at p. 4)
    Subsequent private interview of a well-known circulator pump 
manufacturer concluded that, although certain components had realized 
shortages following the COVID-19 pandemic, the market appeared to be 
equilibrating and there was no reason to expect the shortage would 
persist.
    DOE has found ECMs available in a range of sizes needed to support 
the circulator pumps market and commercially and readily available 
today. Further, the U.S. government is investing in domestic 
manufacturing of semiconductor microchips in programs such as the CHIPS 
and Science Act. Semiconductors are an integral part of ECMs and are 
often the limiting factor in the motor's production. CHIPS for America 
is a program that offers $52 billion of financial incentives for 
domestic manufacturing and development of semiconductors and was signed 
into law on August 9, 2022. Therefore, domestic microchip production 
may be expected to grow.
    DOE did not receive any comments requesting that ECMs be screened 
out in this analysis. Therefore, DOE is retaining ECMs as a design 
option for the analysis.
2. Remaining Technologies
    Through a review of each technology, DOE tentatively concludes that 
all of the other identified technologies listed in section IV.A.2 of 
this document met all five screening criteria to be examined further as 
design options in DOE's final rule analysis. In summary, DOE did not 
screen out the following technology options:

 Improved hydraulic design;
 Improved motor efficiency; or
 Increased number of motor speeds.

    DOE determined that these technology options are technologically 
feasible because they are being used or have previously been used in 
commercially available equipment 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, equipment 
availability, health, or safety). For additional details, see chapter 4 
of the final rule TSD.

C. Engineering Analysis

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

[[Page 44490]]

[GRAPHIC] [TIFF OMITTED] TR20MY24.018

2. Efficiency Analysis
    DOE typically uses one of two approaches to develop energy 
efficiency levels for the engineering analysis: (1) relying on observed 
efficiency levels in the market (i.e., the efficiency-level approach), 
or (2) determining the incremental efficiency improvements associated 
with incorporating specific design options to a baseline model (i.e., 
the design-option approach). Using the efficiency-level approach, the 
efficiency levels established for the analysis are determined based on 
the market distribution of existing equipment (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 equipment on the market) may be 
extended using the design option approach to interpolate to define 
``gap fill'' levels (to bridge large gaps between other identified 
efficiency levels) and/or to extrapolate to the ``max-tech'' level 
(particularly in cases where the ``max-tech'' level exceeds the maximum 
efficiency level currently available on the market).
    In this rulemaking, DOE applied an efficiency-level approach due to 
the availability of robust data characterizing both performance and 
selling price at a variety of efficiency levels.
a. Baseline Efficiency
    For each equipment class, DOE generally selects a baseline model as 
a reference point for each class, and measures changes resulting from 
potential energy conservation standards against the baseline. The 
baseline model in each equipment class represents the characteristics 
of 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 a common, low-efficiency unit on the market.
    For all representative units, DOE modeled a baseline circulator 
pump as one with a PSC motor.
b. Higher Efficiency Levels
    As part of DOE's analysis, the maximum available efficiency level 
is the highest efficiency unit currently available on the market. DOE 
also defines a ``max-tech'' efficiency level to represent the maximum 
possible efficiency for a given type of equipment.
    For all representative units, DOE modeled a max-tech circulator 
pump as one with an ECM and operated on a differential temperature-
based control scheme.
c. EL Analysis
    DOE examined the influence of different parameters on wire-to-water 
efficiency including hydraulic power. Hydraulic power has a significant 
impact on wire-to-water efficiency as seen in the different 
representative units. To find the correlation, the relationship of 
power and wire-to-water efficiency were evaluated for both single speed 
induction and single speed ECMs. Multiple relationships were tested 
with a logarithmic relationship being the most accurate. This 
logarithmic relationship can be used to set efficiency levels inclusive 
of all representative units across the ranges of horsepower.
    To calculate wire-to-water efficiency at part-load conditions, 
wire-to-water efficiency at full-load conditions is multiplied by a 
part-load coefficient, represented by alpha ([alpha]). As instructed by 
the CPWG, a mean fit was developed for each part-load test point across 
representative units to find a single value to use for alpha for each 
test point. This methodology was conducted independently for single-
speed induction, single-speed ECM, and variable-speed ECM to find 
unique alphas at each point for each motor type. The unique alpha 
values are provided in Table IV.2.

[[Page 44491]]

[GRAPHIC] [TIFF OMITTED] TR20MY24.019

    DOE set EL 0 as the baseline configuration of circulator pumps 
representing the minimum efficiency available on the market. DOE used 
the logarithmic function developed when finding the relationship 
between hydraulic power and wire-to-water efficiency to find the lower 
second percentile of single speed induction circulator pumps to set as 
EL 0. DOE finds single speed circulator pumps with induction motors 
have the lowest wire-to-water efficiency and are being set as EL 0, as 
agreed on at CPWG meeting 8. (Docket No. EERE-2016-BT-STD-0004-0061, p. 
15)
    DOE set EL 1 to correspond approximately to single-speed induction 
motors with improved wire-to-water efficiency. EL 1 is an intermediate 
efficiency level between the baseline EL 0 and more efficient ECMs 
defined in higher efficiency levels. EL 1 was defined as the halfway 
between the most efficient single-speed induction motors and the 
baseline used as EL 0.
    EL 2 is set to correspond approximately to single-speed ECMs. The 
values for these circulator pumps are found using the same base 
logarithmic function that was used when finding the relationship 
between hydraulic power and wire-to-water efficiency. EL 2 corresponds 
to a CEI of 1.00, which is the level recommended by the CPWG in the 
November 2016 CPWG Recommendations.
    EL 3 is set to correspond approximately to variable-speed ECMs with 
automatic proportional pressure control. The effect of a 50-percent 
proportional pressure control is applied using equation (9) for each 
part-load test point. The wire-to-water efficiency at each test point 
is found using the alpha values for variable speed ECM values for 
Alpha.
[GRAPHIC] [TIFF OMITTED] TR20MY24.020

Where:

Hi = total system head at each load point i (ft);
Qi = flow rate at each load point i (gpm);
Q100 = flow rate at 100 percent of BEP flow at 
maximum speed (gpm); and
H100 = total pump head at 100 percent of BEP flow 
at maximum speed (ft).

    EL 4 is the max-tech efficiency level, which represents the 
circulator pumps with the maximum possible efficiency. EL 4 is set as 
variable speed ECMs with automatic differential temperature control. 
The effects of the controls are calculated using equation (10). Similar 
to EL 3, the wire-to-water efficiencies are found using the alpha 
values for variable speed ECMs.
[GRAPHIC] [TIFF OMITTED] TR20MY24.021

    For pumps that do not fit exactly into a representative unit, DOE 
developed a continuous function for wire-to-water efficiency at BEP. 
The technique extends the representative units for each EL to compute 
wire-to-water efficiency at BEP for all circulator pumps by using a 
logarithmic function based on hydraulic power represented in equation 
(11) and fit to each pump's specific performance data. A logarithmic 
curve form was selected based on apparent fit over a wide power range 
to manufacturer-submitted pump performance data. Variable d can be 
solved by using equation (12) and the variables for a and b are 
presented in Table IV.3 which contains different values for each 
efficiency level. See TSD Chapter 5 for additional detail on the 
engineering analysis.

[[Page 44492]]

[GRAPHIC] [TIFF OMITTED] TR20MY24.022

[GRAPHIC] [TIFF OMITTED] TR20MY24.023

Where:

[eta]WTW = wire-to-water efficiency
Phydro = hydraulic power (hp);
[GRAPHIC] [TIFF OMITTED] TR20MY24.024

    Table IV.4 contains a summary of the motor type and control scheme 
associated with each EL.
[GRAPHIC] [TIFF OMITTED] TR20MY24.025

3. Cost Analysis
    The cost analysis portion of the engineering analysis is conducted 
using one or a combination of cost approaches. The selection of cost 
approach depends on a suite of factors, including the availability and 
reliability of public information, characteristics of the regulated 
equipment, the availability and timeliness of purchasing the equipment 
on the market. The cost approaches are summarized as follows:
    [ballot] Physical teardowns: Under this approach, DOE physically 
dismantles commercially available equipment, component-by-component, to 
develop a detailed bill of materials for the equipment.
    [ballot] Catalog teardowns: In lieu of physically deconstructing 
equipment, 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 equipment.
    [ballot] Price surveys: If neither a physical nor catalog teardown 
is feasible (for example, for tightly integrated equipment such as 
fluorescent lamps, which are infeasible to disassemble and for which 
parts diagrams are unavailable) or cost-prohibitive and otherwise 
impractical (e.g., large commercial boilers), DOE conducts price 
surveys using publicly available pricing data published on major online 
retailer websites and/or by soliciting prices from distributors and 
other commercial channels.
    In the present case, DOE conducted the analysis using a combination 
of physical teardowns and price surveys. The resulting bill of 
materials provides the basis for the manufacturer production cost 
(``MPC'') estimates.
    To account for manufacturers' non-production costs and profit 
margin, DOE applies a 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 developed 
an average manufacturer markup by examining the annual Securities and 
Exchange Commission (``SEC'') 10-K reports filed by publicly traded 
manufacturers primarily engaged in machinery and equipment-industrial 
pumps, except hydraulic fluid power pumps, not seasonally adjusted 
manufacturing, and whose combined equipment range includes circulator 
pumps.

[[Page 44493]]

4. Cost-Efficiency Results
    The results of the engineering analysis are reported as cost-
efficiency data (or ``curves'') in the form of wire-to-water efficiency 
versus MPC (in dollars). DOE developed 15 curves representing the 15 
representative units in the analysis. The methodology for developing 
the curves started with determining the energy consumption for baseline 
equipment and MPCs for this equipment. Above the baseline, DOE 
implemented design options using the ratio of cost to savings and 
implemented only one design option at each level. Design options were 
implemented until all available technologies were employed (i.e., at a 
max-tech level).
    Table IV.5, Table IV.6, Table IV.7, and Table IV.8 contain cost-
efficiency results of the engineering analysis. MPCs are presented for 
circulator pumps with both ferrous and nonferrous housing material. 
Housing material does not significantly affect the energy consumption 
of circulator pumps but does alter production cost. Housing material is 
discussed further in section IV.A.1.b of this document. See TSD Chapter 
5 for additional detail on the engineering analysis.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TR20MY24.026


[[Page 44494]]


[GRAPHIC] [TIFF OMITTED] TR20MY24.027

[GRAPHIC] [TIFF OMITTED] TR20MY24.028


[[Page 44495]]


[GRAPHIC] [TIFF OMITTED] TR20MY24.029

BILLING CODE 6450-01-C
5. Manufacturer Markup and Manufacturer Selling Price
    To account for manufacturers' non-production costs and profit 
margin, DOE applies a non-production cost multiplier (the manufacturer 
markup) to the full MPC. The resulting MSP is the price at which the 
manufacturer can recover production and non-production costs. To 
calculate the manufacturer markups, DOE used data from 10-K reports 
\30\ submitted to the U.S. Securities and Exchange Commission (``SEC'') 
by the publicly owned circulator pump manufacturers. DOE then averaged 
the financial figures spanning the years 2018 to 2022 to calculate the 
initial estimate of markups for circulator pumps for this rulemaking. 
During the 2022 manufacturer interviews, DOE discussed the manufacturer 
markup with manufacturers and used the feedback to modify the 
manufacturer markup calculated through review of SEC 10-K reports.
---------------------------------------------------------------------------

    \30\ U.S. Securities and Exchange Commission, Annual 10-K 
Reports (Various Years) available at sec.gov (Last accessed Sept. 
19, 2023).
---------------------------------------------------------------------------

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

D. Markups Analysis

    The markups analysis develops appropriate markups (e.g., retailer 
markups, wholesaler 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 
equipment to cover business costs and profit.
    For circulator pumps, the main parties in the distribution channel 
are (1) sales representatives (reps); (2) wholesalers; (3) contractors; 
and (4) original equipment manufacturers (OEMs). For each actor in the 
distribution channel, DOE developed baseline and incremental markups. 
Baseline markups are applied to the price of equipment with baseline 
efficiency, while incremental markups are applied to the difference in 
price between baseline and higher-efficiency models (the incremental 
cost increase). The incremental markup is typically less than the 
baseline markup and is designed to maintain similar per-unit operating 
profit before and after new standards.\31\
---------------------------------------------------------------------------

    \31\ Because the projected price of standards-compliant 
equipment is typically higher than the price of baseline equipment, 
using the same markup for the incremental cost and the baseline cost 
would result in higher per-unit operating profit. While such an 
outcome is possible in the short run, DOE maintains that in markets 
that are reasonably competitive it is unlikely that standards would 
lead to a sustainable increase in profitability in the long run.
---------------------------------------------------------------------------

    DOE identified distribution channels for circulator pumps and 
estimated their respective shares of shipments by sector (residential 
and commercial) based on feedback from manufacturers and the CPWG 
(Docket No. EERE-2016-BT-STD-0004, No. 49 at p. 51), as shown in Table 
IV.9.

[[Page 44496]]

[GRAPHIC] [TIFF OMITTED] TR20MY24.030

    The sales representative in the distribution chain serves the role 
of a wholesale distributor, as they do not take commission from the 
sale, but buy the equipment and take title to it. The OEM channels 
represent sales of circulator pumps, which are included in other 
equipment, such as hot water boilers.
    In the December 2022 NOPR, DOE requested comment on whether the 
distribution channels described above and the percentage of equipment 
sold through the different channels are appropriate and sufficient to 
describe the distribution markets for circulator pumps. 87 FR 74850, 
74875. Specifically, DOE requested comment and data on online sales of 
circulator pumps and the appropriate channel to characterize them. Id.
    HI commented that it generally agreed with the distribution 
channels presented in Table IV.9 and noted that online sales would be 
split between line 2 (Sales Rep [rarr] Distributor [rarr] Contractor 
[rarr] End User) and line 4 (Sales Rep [rarr] Distributor [rarr] End 
User) (HI, No. 135 at p. 5)
    DOE acknowledges that the online sales of circulator pumps may have 
increased in the past few years. However, there is currently no 
sufficient data supporting a notable price difference between online 
sales and conventional sales, namely channel 2 and channel 4. Hence, 
DOE assumed that circulator pumps sold through online channels have the 
same prices as those through conventional channels and that online 
sales have been included in the shares of channel 2 and channel 4.
    To estimate average baseline and incremental markups, DOE relied on 
several sources, including: (1) U.S. Census Bureau 2017 Annual 
Wholesale Trade Survey \32\ (for sales representatives and circulator 
wholesalers), (2) U.S. Census Bureau 2017 Economic Census data \33\ on 
the residential and commercial building construction industry (for 
contractors), and (3) the Heating, Air Conditioning & Refrigeration 
Distributors International (``HARDI'') 2013 Profit Report \34\ (for 
equipment wholesalers). In addition to markups of distribution channel 
costs, DOE applied state and local sales tax provided by the Sales Tax 
Clearinghouse to derive the final consumer purchase prices for 
circulator pumps.\35\
---------------------------------------------------------------------------

    \32\ U.S. Census Bureau, 2017 Annual Wholesale Trade Survey 
(Available at: www.census.gov/data/tables/2017/econ/awts/) (Last 
accessed February 07, 2023).
    \33\ U.S. Census Bureau, 2017 Economic Census Data. available at 
www.census.gov/programs-surveys/economic-census.html (last accessed 
February 07, 2023).
    \34\ Heating, Air Conditioning & Refrigeration Distributors 
International (``HARDI''), 2013 HARDI Profit Report, available at 
hardinet.org/ (last accessed February 07, 2023). Note that the 2013 
HARDI Profit Report is the latest version of the report.
    \35\ Sales Tax Clearinghouse Inc., State Sales Tax Rates Along 
with Combined Average City and County Rates, 2023 (Available at: 
thestc.com/STrates.stm) (Last accessed September. 11, 2023).
---------------------------------------------------------------------------

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

E. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of circulator pumps at different efficiencies in 
representative U.S. single-family homes, multi-family residences, and 
commercial buildings, and to assess the energy savings potential of 
increased circulator pump efficiency. The energy use analysis estimates 
the range of energy use of circulator pumps in the field (i.e., as they 
are actually used by consumers). The energy use analysis provides the 
basis for other analyses DOE performed, particularly assessments of the 
energy savings and the savings in consumer operating costs that could 
result from adoption of new standards.
    Following the same approach as in the December 2022 NOPR, to 
calculate the annual energy use (``AEU'') for circulator pumps, DOE 
multiplied the annual operating hours by the line input power (derived 
in the engineering analysis) at each operating point. The following 
sections describe how DOE estimated circulator pump energy use in the 
field for different applications, geographical areas, and use cases.
1. Circulator Pump Applications
    DOE identified two primary applications for circulator pumps: 
hydronic heating, and hot water recirculation. Hydronic heating systems 
are typically characterized by the use of water to move heating from 
sources such as hot water boilers to different rooms through pipes and 
radiating surfaces. Hot water recirculation systems serve the purpose 
of moving hot water from sources such as water heaters, through pipes, 
to water fixture outlets. For each of these applications, DOE developed 
estimates of operating hours and load profiles to characterize 
circulator pump energy use in the field.
    Circulator pumps used in hydronic heating applications typically 
have cast iron housings, while those used in hot water recirculation 
applications have housings made of stainless steel or bronze. DOE 
collected sales data for circulator pumps, including their housing 
materials, through manufacturer interviews, and was able to estimate 
the market share of each application by horsepower and efficiency 
level. To estimate market shares by sector and horsepower rating, DOE 
relied primarily on industry expert input.
    In the May 2021 RFI, DOE requested feedback on whether the 
breakdowns of circulator pumps by sector and application have changed 
since the CPWG proceedings. HI commented that there have not been any 
market changes to warrant a different estimate. (HI, No. 112 at p. 9) 
During the 2022 manufacturer interviews, DOE collected recent data and 
updated the estimated market shares by application. According to these 
data, DOE estimated the market share of circulator pumps used in 
hydronic heating and hot water recirculation applications at 66.6, and 
33.4 percent, respectively.

[[Page 44497]]

2. Consumer Samples
    To estimate the energy use of circulator pumps in field operating 
conditions, DOE developed consumer samples that are representative of 
installation and operating characteristics of how such equipment is 
used in the field, as well as distributions of annual energy use by 
application and market segment.
    To develop a sample of circulator pump consumers, DOE used the 
Energy Information Administration's (EIA) 2018 Commercial Buildings 
Energy Consumption Survey (CBECS) \36\ and the 2015 residential energy 
consumption survey (RECS) \37\. For the commercial sector, DOE selected 
commercial buildings from CBECS and apartment buildings with five or 
more units from RECS. For the residential sector, DOE selected single 
family attached or detached buildings from RECS. As discussed in 
chapter 7 of the final rule TSD, the majority of consumers (73.7%) of 
circulator pumps are in the residential sector, and the rest (26.3%) 
are in the commercial sector. The following paragraphs describe how DOE 
developed the consumer samples by application.
---------------------------------------------------------------------------

    \36\ U.S. Department of Energy-Energy Information 
Administration. 2012 Commercial Buildings Energy Consumption Survey 
(CBECS). 2018. (Last accessed September 29, 2023.) www.eia.gov/consumption/commercial/data/2012/.
    \37\ U.S. Department of Energy: Energy Information 
Administration. 2015 Residential Energy Consumption Survey (RECS). 
2015. (Last accessed September 29, 2023.) www.eia.gov/consumption/residential/data/2015/.
---------------------------------------------------------------------------

    For hydronic heating, because there is no data in RECS and CBECS 
specifically on the use of circulator pumps, DOE used data on hot water 
boilers to develop its consumer sample. DOE adjusted the selection 
weight associated with the representative RECS and CBECS buildings 
containing boilers to effectively exclude steam boilers, which are not 
used with circulator pumps. To estimate the distribution of circulator 
pumps by geographical region, DOE also used information on each 
building's heated area by boilers to correlate it to circulator 
horsepower rating.
    For hot water recirculation, there is limited information in RECS 
and CBECS. In the residential sector, DOE selected consumers based on 
building square footage and assumed that buildings greater than 3,000 
square feet have a hot water recirculation system, according to 
feedback from the CPWG.\38\ (Docket No. EERE-2016-BT-STD-0004, No. 67 
at pp. 171,172) DOE also assumed that only small (<\1/12\ hp) 
circulator pumps are installed in residential buildings, according to 
feedback from the CPWG. (Docket No. EERE-2016-BT-STD-0004, No. 67 at 
pp. 157-163) For the commercial sector, DOE first selected buildings in 
CBECS with water heaters. Further, DOE assigned a circulator pump size 
category based on the number of floors in each building. The commercial 
segment of the RECS sample was defined as multi-family buildings with 
more than four units. Similar to the hydronic heating application, to 
determine a distribution by region by representative unit, DOE assigned 
circulator pump sizes (i.e., horsepower ratings) to building types 
based on the number of floors in each building.
---------------------------------------------------------------------------

    \38\ As discussed during the CPWG, a hot water recirculation 
pump is more likely to be available in a building where the distance 
from a water heater to outlets (e.g., bathrooms) is such that the 
benefits of a HWR system are more pronounced. (Docket No. EERE-2016-
BT-STD-0004, No. 46 at pp. 180-181,184)
---------------------------------------------------------------------------

    For details on the consumer sample methodology, see chapter 7 of 
the final rule TSD.
3. Operating Hours
    DOE developed annual operating hour estimates by sector 
(commercial, residential) and application (hydronic heating, hot water 
recirculation).
a. Hydronic Heating
    For hydronic heating applications in the residential sector, 
operating hours per year were estimated based on two sources: 2015 
confidential residential field metering data from Vermont, and a 2012-
2013 residential metering study in Ithaca, NY.\39\ DOE used the data 
from these metering data to establish a relationship between heating 
degree days (HDDs) \40\ and circulator pump operating hours. DOE 
correlated monthly operating hours with corresponding HDDs to annual 
operating hours. DOE then used the geographic distribution of 
consumers, derived from the consumer sample based on RECS and CBECS in 
correlation to the presence of hot water boilers, as described in 
section IV.E.2, to estimate weighted-average HDDs for each region. For 
the residential sector, this scaling factor was 0.33 HPY/HDD. For the 
commercial sector, the CPWG recommended a scaling factor of 0.45 HPY/
HDD. (Docket No. EERE-2016-BT-STD-0004, No. 100 at pp. 122-123). The 
weighted average operating hours per year for the hydronic heating 
application were estimated at approximately 1,970 and 2,200 for the 
residential and commercial sector, respectively.
---------------------------------------------------------------------------

    \39\ Arena, L. and O. Faakye. Optimizing Hydronic System 
Performance in Residential Applications. 2013. U.S. Department of 
Energy Building Technologies Office. Last accessed July 21, 2022. 
www.nrel.gov/docs/fy14osti/60200.pdf.
    \40\ Heating Degree Day (HDD) is a measure of how cold a 
location was over a period of time, relative to a base temperature. 
In RECS and CBECS, the base temperature used is 65 [deg]F and the 
period of time is one year. The heating degree-days for a single day 
is the difference between the base temperature and the day's average 
outside temperature if the daily average is less than the base, and 
zero if the daily average outside temperature is greater than or 
equal to the base temperature. The heating degree-days for a longer 
period of time are the sum of the daily heating degree-days for days 
in that period.
---------------------------------------------------------------------------

b. Hot Water Recirculation
    For circulator pumps used in hot water recirculation applications, 
DOE developed operating hour and consumer fractions estimates based on 
their associated control types, according to feedback from the CPWG 
(Docket No. EERE-2016-BT-STD-0004, No. 60 at p. 74; Docket No. EERE-
2016-BT-STD-0004, No. 67 at pp. 194-195; Docket No. EERE-2016-BT-STD-
0004, No. 68 at p. 184), as shown in Table IV.10.

[[Page 44498]]

[GRAPHIC] [TIFF OMITTED] TR20MY24.031

    With regard to Table IV.10, Strauch commented that DOE 
overestimates operating hours for circulator pumps in the residential 
sector and cited personal experience with using a circulator pump with 
an integrated timer. (Strauch, No. 123 at p. 1) In response, while DOE 
acknowledges that the estimates in Table IV.10 are averages and do not 
cover all use cases, it also notes that these estimates were discussed 
in the CPWG and supported by stakeholders following the May 2021 RFI. 
(NEEA, No. 115 at pp. 5-6); (Grundfos, No. 113 at p. 9); (HI, No. 112 
at p. 9)
    NYSERDA commented that DOE's assumed average operating hours across 
technology options are nationally representative but may be higher when 
high-rise multi-family buildings due to longer pipes with increased 
heat loss, as well as larger household sizes and water usage. (NYSERDA, 
No.130 at p. 4)
    DOE agrees with NYSERDA that multi-family buildings may consume 
more water and experience more heat loss than other types of buildings. 
However, DOE is not aware of data relating circulator pump hours of 
operation to building type. DOE also notes that its analysis does 
consider purchasers with the characteristics related to high-rise 
multi-family buildings. For example, half of the purchasers in the hot 
water recirculation application are estimated to use their circulator 
pump 24 hours per day. Further, DOE considers a wide range of piping 
configurations in its calculation of load profiles as described in the 
section IV.E.4, including systems curves related to longer pipes.
4. Load Profiles
    To estimate the power consumption of each representative unit at 
each efficiency level, DOE used the following methodology: For each 
representative unit, DOE defined a range of typical system curves 
representing different piping and fluid configurations and bounded the 
representative unit's pump curve derived in the engineering analysis 
within those system curves. The upper and lower boundaries of this 
range of system curves correspond to a maximum (Qmax) and minimum 
(Qmin) value of volumetric flow. The value of Qmax is capped to 150% of 
BEP flow at most, while the value of the value of Qmin is capped to at 
least 25% of BEP flow.
    For single speed circulator pumps (ELs 0-2) in single zone 
applications, DOE randomly selects a single operating point 
(Q0) within the boundaries of a uniform distribution defined 
by the system curves such that Q0 is between Qmin and Qmax. 
The AEU is then calculated by multiplying the power consumption at the 
volumetric flow Q0, as derived in the engineering analysis, 
by the annual operating hours. DOE notes that while a random operating 
point is assigned to each purchaser of an analyzed representative unit, 
as discussed in the previous paragraph, the boundaries Qmin and Qmax 
are selected such that they correspond to appropriate operating ranges 
specifically for each of those representative units.
    For variable-speed circulator pumps (ELs 3-4) in single-zone 
applications, similarly, DOE randomly selects a single operating point 
(Q0) within the boundaries of the system curves, such that 
Q0 is between Qmin and Qmax. After the operating point is 
selected, the procedure to determine the AEU varies depending on the 
value of Q0: If the selected operating point (Q0) 
has a flow that is equal or higher than QBEP, the method is 
the same as the one for single speed circulator pumps in single zones. 
For operating points where Q0 0.
    For circulator pumps in multi-zone applications DOE modeled their 
operation by assuming that representative multi-zone systems have three 
zones, resulting in two additional operating points (Q- and 
Q+), which are equidistant from a randomly selected 
operating point, Q0, and are within the allowable operating 
flow (between Qmin and Qmax), as defined by the representative unit's 
characteristic system curves. (Docket #0004, No. 61 at p. 88)
    In the December 2022 NOPR, DOE noted that its energy use analysis 
assumes that all purchasers of variable-speed equipment with controls 
(ELs 3 and 4) are installed in systems that benefit from such control 
capabilities. However, this assumption may differ from the reality of 
installations in the field, where a fraction of purchasers may not 
benefit from such control capabilities due to system characteristics or 
improper installation. In such cases, the energy use of EL 3 and EL 4 
equipment would be at similar levels to EL 2 equipment. The CA IOUs 
commented that they agree with DOE's

[[Page 44499]]

assertion that a portion of purchasers do not benefit from controls in 
the field, in which case energy savings of variable speed controls 
compared to EL 2 may not be fully realized. However, they noted that 
occurrences of ineffective installed controls should decrease over time 
as integrated controls and automatic-operating-point adjustments become 
simpler to set-up and more widely adopted (CA IOUs, No. 133 at p. 3) 
ASAP requested that DOE determine the fraction of circulator pump 
installations in the field that are indeed capable of benefiting from 
speed control. (ASAP, No. 131 at p. 2)
    In response to these comments, DOE conducted further research but 
found no data on the fraction of circulator pump installations in the 
field that are indeed capable of benefiting from speed controls. In 
turn, DOE conducted a sensitivity analysis to estimate the impact in 
the LCC analysis of varying the fraction of purchasers that benefit 
from controls in the field. Results showed that the fraction of 
purchasers experiencing a net cost at EL 3 and EL 4 would linearly 
increase from 42.7% to 60.7% and 45.9% to 74.8%, respectively, when the 
fraction of purchasers who do benefit from controls in the field varies 
from 100% to 0%. The remaining ELs (EL0 and EL1) do not include 
controls and were not affected. See chapter 8 of the final rule TSD and 
appendix 8D for more details on this sensitivity analysis.
    Chapter 7 of the final rule TSD provides details on DOE's energy 
use analysis.

F. Life-Cycle Cost and Payback Period Analysis

    DOE conducted LCC and PBP analyses to evaluate the economic impacts 
on individual purchasers of potential energy conservation standards for 
circulator pumps. The effect of new energy conservation standards on 
individual purchasers usually involves a reduction in operating cost 
and an increase in purchase cost. DOE used the following two metrics to 
measure consumer impacts:
    [ballot] The LCC is the total consumer expense of an equipment over 
the life of that equipment, 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 equipment.
    [ballot] The PBP is the estimated amount of time (in years) it 
takes purchasers to recover the increased purchase cost (including 
installation) of a more-efficient equipment 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 new standards are assumed to take effect.
    For any given efficiency level, DOE measures the change in LCC 
relative to the LCC in the no-new-standards case, which reflects the 
estimated efficiency distribution of circulator pumps in the absence of 
new energy conservation standards. In contrast, the PBP for a given 
efficiency level is measured relative to the baseline equipment.
    For each considered efficiency level in each equipment class, DOE 
calculated the LCC and PBP for a nationally representative set of 
commercial and residential purchasers. As stated previously, DOE 
developed purchaser samples from the 2015 RECS and the 2018 CBECS, for 
the residential and commercial sectors, respectively. For each sampled 
purchaser, DOE determined the energy consumption for the circulator 
pumps and the appropriate energy price. By developing a representative 
sample of purchasers, the analysis captured the variability in energy 
consumption and energy prices associated with the use of circulator 
pumps.
    Inputs to the calculation of total installed cost include the cost 
of the equipment--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, equipment lifetimes, and discount rates. DOE created 
distributions of values for equipment 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 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 circulator pumps user samples. The 
model calculated the LCC and PBP for a sample of 75,000 purchasers per 
simulation run. The analytical results include a distribution of 75,000 
data points showing the range of LCC savings. In performing an 
iteration of the Monte Carlo simulation for a given consumer, equipment 
efficiency is chosen based on its probability. By accounting for 
purchasers who already purchase more-efficient equipment, DOE avoids 
overstating the potential benefits from increasing efficiency.
    DOE calculated the LCC and PBP for purchasers of circulator pumps 
as if each were to purchase a new equipment in the first year of 
required compliance with new standards. As discussed in section III.G, 
new standards would apply to circulator pumps manufactured 4 years 
after the date on which any new or amended standard is published. DOE 
is publishing this final rule in 2024. Therefore, for purposes of its 
analysis, DOE used 2028 as the first year of compliance with standards 
for circulator pumps.
    Table IV.11 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 model, and of all the inputs 
to the LCC and PBP analyses, are contained in chapter 8 of the final 
rule TSD and its appendices.

[[Page 44500]]

[GRAPHIC] [TIFF OMITTED] TR20MY24.032

1. Equipment Cost
    To calculate consumer equipment 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 equipment and higher-efficiency equipment because DOE applies 
an incremental markup to the increase in MSP associated with higher-
efficiency equipment. Due to lack of historical price data and 
uncertainty on the factors that may affect future circulator pump 
prices, such as price declines on certain equipment components, DOE 
assumed a constant price over the analysis period. However, DOE 
developed a sensitivity analysis accounting for future price declines 
of electronic components in circulator pumps with ECMs. See chapter 8 
of the final rule TSD and appendix 8D for more details on this 
sensitivity analysis.
2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts associated with installing a circulator pump in the 
place of use. DOE derived installation costs for circulator pumps based 
on data from RSMeans and input from the CPWG.\41\ (Docket #0004, No. 67 
at p. 266)
---------------------------------------------------------------------------

    \41\ RSMeans. 2021 RSMeans Plumbing Cost Data. Rockland, MA. 
http://www.rsmeans.com.
---------------------------------------------------------------------------

    DOE assumed that circulator pumps without variable speed controls 
(ELs 0-2) require a labor time of 3 hours and an additional 30 minutes 
for circulators with electronic controls (ELs 3 and 4). (Docket #0004, 
No. 67 at p. 266) RSMeans provides estimates on the labor hours and 
labor costs required to install equipment. In the NOPR, DOE derived the 
installation cost for circulator pumps as the product of labor hours 
and time required to install a circulator pump. Installation costs vary 
by geographic location and efficiency level. During the 2022 
manufacturer interviews, manufacturers agreed with DOE's approach to 
estimate installation costs.
    In the December 2022 NOPR, the CA IOUs acknowledged DOE's 
installation cost assumptions regarding additional set-up time for 
circulator pumps with controls due to commissioning challenges. 
However, they noted that, in a future rulemaking evaluation cycle, DOE 
should not consider incremental set-up time for circulator pumps at EL 
3 and EL 4 that have automatic-operating-point selection functionality. 
(CA IOUs, No.133 at p. 2-3) In response to the CA IOUs comment, DOE 
states that is not aware of data quantifying the fraction of circulator 
pumps purchasers that have automatic-operating-point selection 
functionality. Therefore, DOE maintained its installation cost 
assumptions, which are based on what was agreed by the CWPG, as 
previously described.
3. Annual Energy Consumption
    For each sampled purchaser, DOE determined the AEU for a circulator 
pump at different efficiency levels using the approach described 
previously in section IV.E.3 of this document.
4. Energy Prices
    Because marginal electricity price more accurately captures the 
incremental savings associated with a change in energy use from higher 
efficiency, it provides a better representation of incremental change 
in consumer costs than average electricity prices. DOE generally 
applies average electricity prices for the energy use of the equipment 
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. In this final rule, DOE only used 
marginal electricity prices due to the calculated annual electricity 
cost for some regions and efficiency levels being negative when using 
average electricity prices for the energy use of the equipment 
purchased in the no-new-standards case. Negative costs can occur in 
instances where the marginal electricity cost for the region and the 
energy savings relative to the baseline for the given efficiency level 
are large enough that the incremental cost savings exceed the baseline 
cost.
    DOE derived electricity prices in 2022 using data from EEI Typical 
Bills and Average Rates reports. Based upon comprehensive, industry-
wide surveys, this semi-annual report presents typical monthly electric 
bills and average kilowatt-hour costs to the customer as charged by 
investor-owned utilities. For the residential sector, DOE calculated

[[Page 44501]]

electricity prices using the methodology described in Coughlin and 
Beraki (2018).\42\ For the commercial sector, DOE calculated 
electricity prices using the methodology described in Coughlin and 
Beraki (2019).
---------------------------------------------------------------------------

    \42\ Coughlin, K. and B. Beraki.2018. Residential Electricity 
Prices: A Review of Data Sources and Estimation Methods. Lawrence 
Berkeley National Lab. Berkeley, CA. Report No. LBNL-2001169. 
ees.lbl.gov/publications/residential-electricity-prices-review.
---------------------------------------------------------------------------

    DOE's methodology allows electricity prices to vary by sector, 
region, and season. In the analysis, variability in electricity prices 
is chosen to be consistent with the way the consumer economic and 
energy use characteristics are defined in the LCC analysis.
    To estimate energy prices in future years, DOE multiplied the 2022 
regional energy prices by the projection of annual change in national-
average residential or commercial energy price from AEO2023, which has 
an end year of 2050.\43\ For each purchaser sampled, DOE applied the 
projection for the geographic location in which the consumer was 
located. To estimate price trends after 2050, DOE assumed that the 
regional prices would remain at the 2050 value.
---------------------------------------------------------------------------

    \43\ EIA. Annual Energy Outlook 2023. Available at www.eia.gov/outlooks/aeo/ (last accessed September, 21, 2023).
---------------------------------------------------------------------------

    DOE used the electricity price trends associated with the AEO 
Reference case, which is a business-as-usual estimate, given known 
market, demographic, and technological trends. DOE also included AEO 
High Economic Growth and AEO Low Economic Growth scenarios in the 
analysis. The high- and low-growth cases show the projected effects of 
alternative economic growth assumptions on energy prices.
    For a detailed discussion of the development of electricity prices, 
see chapter 8 of the final rule TSD.
5. Maintenance and Repair Costs
    Repair costs are associated with repairing or replacing equipment 
components that have failed in an equipment; maintenance costs are 
associated with maintaining the operation of the equipment. Typically, 
small incremental increases in equipment efficiency entail no, or only 
minor, changes in repair and maintenance costs compared to baseline 
efficiency equipment.
    As in the December 2022 NOPR, DOE assumed that only certain types 
of CP3 circulators require annual maintenance through oil lubrication. 
Based on CPWG feedback, DOE assumed that 50 percent of commercial 
purchasers have a maintenance cost of $10 per year and 25 percent of 
residential purchasers have a maintenance cost of $20 per year, which 
result in an overall $5 annual maintenance cost for CP3 circulators in 
each of the two applications. (Docket #0004, No. 47 at pp. 324-327)
    Repair costs consist of both labor and replacement part costs. DOE 
assumed that repair costs for CP1 circulators are negligible because 
purchasers tend to discard such equipment when they fail. For CP2 and 
CP3 circulator pumps, DOE assumed that 50 percent of purchasers will 
incur repairs once in the equipment lifetime, that repair cost does not 
vary with efficiency level, and that cost is spread over the 
equipment's lifetime. Rather than assuming a specific repair year, the 
cost of a single repair is divided over the lifetime of the equipment 
and added to its annual operating expenses. According to CPWG feedback 
and manufacturer interview input, typical repairs for CP2 and CP3 
include seal replacements and coupler plus motor mount replacements, 
respectively. DOE assumed consistent labor time with installation 
costs, which is 3 hours for seal replacement and 1.5 hours for coupler 
and motor mount replacement. Additionally, DOE assumes there is no 
variation in repair costs between a baseline efficiency circulator and 
a higher efficiency circulator. During the 2022 manufacturer 
interviews, manufacturers agreed with DOE's approach to estimate 
maintenance and repair costs. DOE maintained its assumptions in this 
final rule.
6. Equipment Lifetime
    Equipment lifetime is the age when a unit of circulator equipment 
is retired from service. DOE estimated lifetimes and developed lifetime 
distributions for circulator pumps primarily based on manufacturer 
interviews conducted in 2016 and CPWG feedback. (Docket #0004, No. 41 
at p. 74) The data collected by manufacturers allowed DOE to develop a 
survival function, which provides a distribution of lifetimes ranging 
from a minimum of 3 years based on warranty covered period, to a 
maximum of 50 years for CP1, CP2, or CP3 respectively. Based on 
manufacturer interviews, DOE assumed circulator pump lifetimes do not 
vary across efficiency levels. (Docket #0004, No. 41 at p. 74) Table 
IV.12 shows the average and maximum lifetimes by circulator variety.
[GRAPHIC] [TIFF OMITTED] TR20MY24.033

    During the 2022 manufacturer interviews, DOE solicited additional 
feedback from manufacturers on the lifetime assumptions presented in 
Table IV.12, and the general consensus was that there have not been 
significant technological changes to warrant a different estimate on 
the circulator pump lifetimes.
    Mark Strauch commented that equipment lifetime should vary by 
efficiency level because more controls equate to less reliability and 
AC motors and ECMs fail at different rates. (Mark Strauch, No.123 at p. 
1) DOE did not modify its lifetime assumptions because its assumptions 
rely on feedback from manufacturer interviews and CPWG feedback.
7. Discount Rates
    In the calculation of LCC, DOE applies discount rates appropriate 
to residential and commercial purchasers to estimate the present value 
of future operating cost savings. The subsections below provide 
information on the derivation of the discount rates by sector.
a. Residential
    DOE applies weighted average discount rates calculated from 
consumer debt and asset data, rather than marginal

[[Page 44502]]

or implicit discount rates.\44\ The LCC analysis estimates net present 
value over the lifetime of the equipment, so the appropriate discount 
rate will reflect the general opportunity cost of household funds, 
taking this time scale into account. Given the long time-horizon 
modeled in the LCC, the application of a marginal interest rate 
associated with an initial source of funds is inaccurate. Regardless of 
the method of purchase, purchasers are expected to continue to 
rebalance their debt and asset holdings over the LCC analysis period, 
based on the restrictions purchasers 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.
---------------------------------------------------------------------------

    \44\ 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 equipment 
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 triennial Survey of Consumer Finances 
\45\ (``SCF'') in 1995, 1998, 2001, 2004, 2007, 2010, 2013, 2016, and 
2019. U.S. Board of Governors of the Federal Reserve System. Survey of 
Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010, 2013, 2016, and 
2019. (Last accessed August 1, 2023.) http://www.federalreserve.gov/econresdata/scf/scfindex.htm. 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 
new 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 3.9 percent. See chapter 8 of 
the final rule TSD for further details on the development of consumer 
discount rates.
---------------------------------------------------------------------------

    \45\ U.S. Board of Governors of the Federal Reserve System. 
Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010, 
2013, 2016, and 2019. (Last accessed May 1, 2023.) 
www.federalreserve.gov/econresdata/scf/scfindex.htm.
---------------------------------------------------------------------------

b. Commercial
    For commercial purchasers, DOE used the cost of capital to estimate 
the present value of cash flows to be derived from a typical company 
project or investment. Most companies use both debt and equity capital 
to fund investments, so the cost of capital is the weighted-average 
cost to the firm of equity and debt financing. This corporate finance 
approach is referred to as the weighted-average cost of capital. DOE 
used currently available economic data in developing commercial 
discount rates, with Damodaran Online being the primary data 
source.\46\ The average discount rate across the commercial building 
types is 6.9 percent.
---------------------------------------------------------------------------

    \46\ Damodaran, A. Data Page: Costs of Capital by Industry 
Sector. 2021. (Last accessed August 1, 2023.) http://
pages.stern.nyu.edu/~adamodar/.
---------------------------------------------------------------------------

    See chapter 8 of the final rule TSD for further details on the 
development of discount rates.
8. Energy Efficiency Distribution in the No-New-Standards Case
    To accurately estimate the share of purchasers that would be 
affected by a potential energy conservation standard at a particular 
efficiency level, DOE's LCC analysis considered the projected 
distribution (market shares) of equipment efficiencies under the no-
new-standards case (i.e., the case without new energy conservation 
standards).
    To estimate the energy efficiency distribution of circulator pumps 
at the assumed compliance year (2028), DOE first analyzed detailed 
confidential manufacturer shipments data from 2015, broken down by 
efficiency level, circulator variety, and nominal horsepower. During 
the 2016 manufacturer interviews, DOE also collected aggregated 
historical circulator pump efficiency data from 2013 to 2015. Based on 
these data, DOE developed an efficiency trend between the year for 
which DOE had detailed data (2015) and the expected first year of 
compliance.\47\ According to CPWG feedback, DOE applied an efficiency 
trend from baseline (EL 0) circulator pumps to circulator pumps with 
ECMs (ELs 2-4). (Docket #0004, No. 78 at p. 6).
---------------------------------------------------------------------------

    \47\ To develop the efficiency trend, DOE also utilized an 
estimated introduction year of 1994 for circulator pumps with ECMs. 
(Docket #0004, No. 78 at p. 6).
---------------------------------------------------------------------------

    In the May 2021 RFI, DOE requested information on whether any 
changes in the circulator pump market since 2015 have affected the 
market efficiency distribution of circulator pumps. NEEA discussed 
their energy efficiency program for circulators since mid 2020 and the 
circulator sales data collected from circulator manufacturer 
representatives covering the entire Northwest at the start of 2020. 
NEEA stated that more than two-thirds of circulator pumps sold by 
participants in the Northwest are not equipped with ECM. NEEA stated 
that fewer than one-fifth of circulator pumps are equipped with speed 
control technology. (NEEA, No. 115 at pp. 2-3, 6) HI stated that small 
incremental growth is occurring for ECMs, but first cost is a barrier. 
(HI, No. 112 at p. 9-10) Grundfos suggested market changes have 
affected distribution of circulators since 2015 and DOE should use 
manufacturer and market interviews to update their dataset. (Grundfos, 
No. 113 at p. 9)
    During the 2022 manufacturer interviews, DOE collected additional 
aggregated historical circulator pump efficiency data (ranging from 
2016 to 2021). Based on these data, DOE retained the methodology 
described earlier, but updated the efficiency trend, which was used to 
project the no-standards-case efficiency distribution at the assumed 
compliance year (2028) and beyond. See chapter 8 of the final rule TSD 
for further information on the derivation of the efficiency 
distributions.
    Following the December 2022 NOPR, in which DOE requested further 
comment on its approach and inputs to develop the no-new standards case 
efficiency distribution, HI commented that it agrees with DOE's 
approach and noted that markets are moving towards more controlled 
equipment. (HI, No. 135 at p. 5). DOE maintained the same methodology 
as in the December 2022 NOPR to develop the no-standards-case 
efficiency distribution in this final rule.
a. Assignment of Circulator Pump Efficiency to Sampled Consumers
    While DOE expects economic factors to play a role when consumers, 
commercial building owners, or builders decide on what type of 
circulator pump to install, assignment of circulator pump efficiency 
for a given installation based solely on economic measures such as 
life-cycle cost or simple payback period would not fully and accurately 
reflect most real-world installations. There are a number of market 
failures discussed in the economics literature that illustrate how 
purchasing decisions with respect to

[[Page 44503]]

energy efficiency are unlikely to be perfectly correlated with energy 
use, as described subsequently. DOE maintains that the method of 
assignment, which is in part random, is a reasonable approach. It 
simulates behavior in the circulator pump market, where market failures 
result in purchasing decisions not being perfectly aligned with 
economic interests. DOE further emphasizes that its approach does not 
assume that all purchasers of circulator pumps make economically 
irrational decisions (i.e., the lack of a correlation is not the same 
as a negative correlation). As part of the random assignment, some 
homes or buildings with large heating loads will be assigned higher-
efficiency circulator pumps, and some homes or buildings with 
particularly low heating loads will be assigned baseline circulator 
pumps, which aligns with the available data. By using this approach, 
DOE acknowledges the uncertainty inherent in the data and does not 
assume certain market conditions that are unsupported by the available 
evidence.
    The following discussion provides more detail about the various 
market failures that affect circulator pump purchases. First, consumers 
are motivated by more than simple financial trade-offs. There are 
consumers who are willing to pay a premium for more energy-efficient 
products because they are environmentally conscious.\48\ Additionally, 
there are systematic market failures that are likely to contribute 
further complexity to how equipment is chosen by consumers. For 
example, in new construction, builders influence the type of circulator 
pumps used in many buildings but do not pay operating costs. Also, 
contractors install a large share of circulator pumps in replacement 
situations, and they can exert a high degree of influence over the type 
of circulator pump purchased. Furthermore, emergency replacements of 
essential equipment such as a circulator pump in the heating season are 
strongly biased toward like-for-like replacement (i.e., replacing the 
non-functioning equipment with a similar or identical product). Time is 
a constraining factor during emergency replacements, and consumers may 
not consider the full range of available options on the market, despite 
their availability. The consideration of alternative equipment options 
is far more likely for planned replacements and installations in new 
construction.
---------------------------------------------------------------------------

    \48\ Ward, D.O., Clark, C.D., Jensen, K.L., Yen, S.T., & 
Russell, C.S. (2011): ``Factors influencing willingness-to pay for 
the ENERGY STAR[supreg] label,'' Energy Policy, 39 (3), 1450-1458 
(Available at: www.sciencedirect.com/science/article/abs/pii/S0301421510009171) (Last accessed March 14, 2024).
---------------------------------------------------------------------------

    There are market failures relevant to circulator pumps installed in 
commercial applications as well. It is often assumed that because 
commercial and industrial customers are businesses that have trained or 
experienced individuals making decisions regarding investments in cost-
saving measures, some of the commonly observed market failures present 
in the general population of residential customers should not be as 
prevalent in a commercial setting. However, there are many 
characteristics of organizational structure and historic circumstance 
in commercial settings that can lead to underinvestment in energy 
efficiency.
    First, a recognized problem in commercial settings is the split 
incentive problem, where the building owner (or building developer) 
selects the equipment, and the tenant (or subsequent building owner) 
pays for energy costs.49 50 There are other similarly 
misaligned incentives embedded in the organizational structure within a 
given firm or business that can impact the choice of a circulator pump. 
For example, if one department or individual within an organization is 
responsible for capital expenditures (and therefore equipment 
selection) while a separate department or individual is responsible for 
paying the energy bills, a market failure similar to the split-
incentive problem can result.\51\ Additionally, managers may have other 
responsibilities and often have other incentives besides operating cost 
minimization, such as satisfying shareholder expectations, which can 
sometimes be focused on short-term returns.\52\ Decision-making related 
to commercial buildings is highly complex and involves gathering 
information from and for a variety of different market actors. It is 
common to see conflicting goals across various actors within the same 
organization, as well as information asymmetries between market actors 
in the energy efficiency context in commercial building 
construction.\53\
---------------------------------------------------------------------------

    \49\ Vernon, D., and Meier, A. (2012). ``Identification and 
quantification of principal-agent problems affecting energy 
efficiency investments and use decisions in the trucking industry,'' 
Energy Policy, 49, 266-273.
    \50\ Blum, H. and Sathaye, J. (2010). ``Quantitative Analysis of 
the Principal-Agent Problem in Commercial Buildings in the U.S.: 
Focus on Central Space Heating and Cooling,'' Lawrence Berkeley 
National Laboratory, LBNL-3557E (Available at: escholarship.org/uc/item/6p1525mg) (Last accessed March 14, 2024).
    \51\ Prindle, B., Sathaye, J., Murtishaw, S., Crossley, D., 
Watt, G., Hughes, J., and de Visser, E. (2007). ``Quantifying the 
effects of market failures in the end-use of energy,'' Final Draft 
Report Prepared for International Energy Agency (Available from 
International Energy Agency, Head of Publications Service, 9 rue de 
la Federation, 75739 Paris, Cedex 15 France).
    \52\ Bushee, B.J. (1998). ``The influence of institutional 
investors on myopic R&D investment behavior,'' Accounting Review, 
305-333. DeCanio, S.J. (1993). ``Barriers Within Firms to Energy 
Efficient Investments,'' Energy Policy, 21(9), 906-914 (explaining 
the connection between short-termism and underinvestment in energy 
efficiency).
    \53\ International Energy Agency (IEA). (2007). Mind the Gap: 
Quantifying Principal-Agent Problems in Energy Efficiency. OECD Pub. 
(Available at www.iea.org/reports/mind-the-gap) (Last accessed March 
14, 2024).
---------------------------------------------------------------------------

    The arguments for the existence of market failures in the 
commercial and industrial sectors are corroborated by empirical 
evidence. One study in particular showed evidence of substantial gains 
in energy efficiency that could have been achieved without negative 
repercussions on profitability, but the investments had not been 
undertaken by firms.\54\ The study found that multiple organizational 
and institutional factors caused firms to require shorter payback 
periods and higher returns than the cost of capital for alternative 
investments of similar risk. Another study demonstrated similar results 
with firms requiring very short payback periods of 1-2 years in order 
to adopt energy-saving projects, implying hurdle rates of 50 to 100 
percent, despite the potential economic benefits.\55\
---------------------------------------------------------------------------

    \54\ DeCanio, S.J. (1998). ``The Efficiency Paradox: 
Bureaucratic and Organizational Barriers to Profitable Energy-Saving 
Investments,'' Energy Policy, 26(5), 441-454.
    \55\ Andersen, S.T., and Newell, R.G. (2004). ``Information 
programs for technology adoption: the case of energy-efficiency 
audits,'' Resource and Energy Economics, 26, 27-50.
---------------------------------------------------------------------------

    The existence of market failures in the residential and commercial 
sectors is well supported by the economics literature and by a number 
of case studies. If DOE developed an efficiency distribution that 
assigned circulator pump efficiency in the no-new-standards case solely 
according to energy use or economic considerations such as life-cycle 
cost or payback period, the resulting distribution of efficiencies 
within the building sample would not reflect any of the market failures 
or behavioral factors above. Thus, DOE concludes such a distribution 
would not be representative of the circulator pump market.
9. Payback Period Analysis
    The payback period is the amount of time (expressed in years) it 
takes the consumer to recover the additional installed cost of more-
efficient equipment, compared to baseline equipment, through energy 
cost savings. Payback periods that exceed the life of

[[Page 44504]]

the equipment mean that the increased total installed cost is not 
recovered in reduced operating expenses.
    The inputs to the PBP calculation for each efficiency level are the 
change in total installed cost of the equipment and the change in the 
first-year annual operating expenditures relative to the baseline. DOE 
refers to this as a ``simple PBP'' because it does not consider changes 
over time in operating cost savings. The PBP calculation uses the same 
inputs as the LCC analysis when deriving first-year operating costs.
    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 an equipment 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 new standards 
would be required.

G. Shipments Analysis

    DOE uses projections of annual equipment shipments to calculate the 
national impacts of potential new energy conservation standards on 
energy use, NPV, and future manufacturer cash flows.\56\ The shipments 
model takes an accounting approach, tracking market shares of each 
equipment class and the vintage of units in the stock. Stock accounting 
uses equipment shipments as inputs to estimate the age distribution of 
in-service equipment stocks for all years. The age distribution of in-
service equipment 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.
---------------------------------------------------------------------------

    \56\ DOE uses data on manufacturer shipments as a proxy for 
national sales, as aggregate data on sales are lacking. In general, 
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------

    In the accounting approach, shipments are the result either of 
demand for the replacement of existing equipment, or of demand for 
equipment from new commercial and residential construction. 
Replacements in any projection year are based on (a) shipments in prior 
years, and (b) the lifetime of previously shipped equipment. Demand for 
new equipment is based on the rate of increase in commercial floor 
space (in the commercial sector), and residential housing (in the 
residential sector). In each year of shipments projections, retiring 
equipment is removed from a record of existing stock, and new shipments 
are added. DOE accounts for demand lost to demolitions (i.e. loss of 
circulator pumps that will not be replaced) by assuming that a small 
fraction of stock is retired without being replaced in each year, based 
on a derived demolition rate for each sector.
    DOE collected confidential historical shipments data for the period 
2013-2021 from manufacturer interviews held in 2016 (during the CPWG) 
and 2022. Shipments data provided by manufacturers were broken down by 
circulator variety, nominal horsepower rating, and efficiency. Table 
IV.13 presents historical circulator pumps shipments. Note that due to 
confidentiality concerns, DOE is only able to present aggregated 
circulator pump shipments.
[GRAPHIC] [TIFF OMITTED] TR20MY24.034

1. No-New-Standards Case Shipments Projections
    The no-new-standards case shipments projections are an estimate of 
how much of each equipment type would be shipped in the absence of any 
new standard. DOE projected shipments in the no-new-standards case by 
circulator pump variety (CP1, CP2, and CP3) as well as sector 
(residential and commercial) and application (hydronic heating and hot 
water recirculation).
    In the no-new-standards case, DOE assumes that demand for new 
installations would be met by CP1 circulator pumps alone. New demand is 
based on AEO 2023 projections of commercial floorspace and new 
construction (for demand to the commercial sector), and projections of 
residential housing stock and starts (for demand to the residential 
sector).
    HI commented that DOE should consider the impact of legislation and 
increased demand of heat pumps and their impact on circulator pump 
shipments. (HI, No.135 at p. 5) While DOE is not able to explicitly 
estimate the effect of recent legislation incentivizing heat pump 
adoption, DOE assumes that over time, a decreasing amount of demand for 
equipment in the hydronic heating application is met by circulator 
pumps. For each year in the shipments projection period (2022-2057), 
DOE estimates a 6 percent year-over-year reduction of new demand 
penetration for circulator pumps in the hydronic heating application. 
This estimate is based on a trendline fit from available Census data on 
new heating systems.\57\ See Chapter 9 of the final rule TSD for more 
details on this analysis.
---------------------------------------------------------------------------

    \57\ Type of Heating System Used in New Single-Family Houses 
Completed. Available at www.census.gov/construction/chars/xls/heatsystem_cust.xls (Last accessed August 20, 2023).
---------------------------------------------------------------------------

    DOE assumed that demand for replacements would be met by circulator 
pumps of the same variety (e.g., CP2 only replaced by CP2) in each

[[Page 44505]]

sector and application, according to manufacturer feedback.\58\ After 
calculating retirements of existing pumps based on those previously 
shipped and equipment lifetimes, DOE assumes that some of this quantity 
will not be replaced due to demolition. DOE estimates the demolition 
rate of existing equipment stock by using the AEO 2023 projections of 
new commercial floorspace and floorspace growth in the commercial 
sector, and new housing starts and housing stock in the residential 
sector.
---------------------------------------------------------------------------

    \58\ According to manufacturer feedback, circulator pumps are 
typically replaced by the same model if available when they fail. 
Contractors and technicians are more likely to replace a like-for-
like circulator pump in order to match installation configurations 
and that the replacement pump meets the performance criteria of the 
replaced one.
---------------------------------------------------------------------------

2. Standards-Case Shipment Projections
    The standards-case shipments projections account for the effects of 
potential standards on shipments. DOE assumed a ``roll-up'' scenario to 
estimate standards-case shipments, wherein the no-new-standards-case 
shipments that would be below the minimum qualifying efficiency level 
prescribed by a standard beginning in the assumed compliance year 
(2028) are ``rolled up'' (i.e., added to) to the minimum qualifying 
equipment efficiency level at that standard level.
    HI did not provide any further suggestions beyond the approach 
proposed by DOE. (HI, No.135 at p. 5). See chapter 9 of the final rule 
TSD for details on the shipments analysis.

H. National Impact Analysis

    The NIA assesses the national energy savings (``NES'') and the NPV 
from a national perspective of total consumer costs and savings that 
would be expected to result from new standards at specific efficiency 
levels.\59\ (``Consumer'' in this context refers to purchasers of the 
equipment being regulated.) DOE calculates the NES and NPV for the 
potential standard levels considered based on projections of annual 
equipment shipments, along with the annual energy consumption and total 
installed cost data from the energy use and LCC analyses. For the 
present analysis, DOE projected the energy savings, operating cost 
savings, equipment costs, and NPV of consumer benefits over the 
lifetime of circulator pumps sold from 2028 through 2057.
---------------------------------------------------------------------------

    \59\ The NIA accounts for impacts in the 50 states and U.S. 
territories.
---------------------------------------------------------------------------

    DOE evaluates the impacts of new 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 
equipment class in the absence of new 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 equipment class if DOE adopted new 
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 equipment 
with efficiencies greater than the standard.
    DOE provides 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.14 summarizes the inputs and methods DOE used for the NIA 
analysis for the final rule. Discussion of these inputs and methods 
follows the table. See chapter 10 of the final rule TSD for further 
details.
[GRAPHIC] [TIFF OMITTED] TR20MY24.035

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

[[Page 44506]]

become effective (2028). In this scenario, the market shares of 
equipment 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 equipment above the standard would remain 
unchanged.
    The CA IOUs commented that they expect accelerated adoption of 
circulator pumps with variable speed controls following a standard at 
TSL 2 and strongly encouraged DOE to collaborate with stakeholders 
monitoring these trends to better inform the LCC and NIA analyses and 
associated savings from EL 3 and EL 4 circulator pumps. (CA IOUs, 
No.133 at p. 4) In response, DOE notes that based on manufacturer-
provided data, DOE estimates an efficiency trend from baseline (EL 0) 
or EL 1 circulator pumps to ELs 2 through 4 in the absence of standards 
(see section F.8 of this document and chapter 8 of the final rule TSD 
for details). In the standards case, while it is possible that a higher 
percentage of purchasers and applications may shift to circulator pumps 
with variable speed control (i.e., ELs 3 and 4), DOE does not have the 
data (e.g., historical price and efficiency data) to estimate that 
trend, therefore, consistent with the NOPR analysis, it assumes a roll-
up scenario in this final rule.
2. National Energy Savings
    The national energy savings analysis involves a comparison of 
national energy consumption of the considered equipment between each 
potential standards case (``TSL'') and the case with no new energy 
conservation standards. DOE calculated the national energy consumption 
by multiplying the number of units (stock) of each equipment (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 
AEO2023. Cumulative energy savings are the sum of the NES for each year 
over the timeframe of the analysis.
    Use of higher-efficiency equipment is sometimes associated with a 
direct rebound effect, which refers to an increase in utilization of 
the equipment due to the increase in efficiency. DOE did not find any 
data on the rebound effect specific to circulator pumps \60\ and 
requested comment on its assumption of 0 rebound effect in the NOPR 
issued in 2021. DOE requested a comment specifically for circulator 
pumps, including the magnitude of any rebound effect and data sources 
specific to circulator pumps. In response, HI commented that it agrees 
with DOE's assumed negligible rebound effect. (HI, No.135 at p. 5)
---------------------------------------------------------------------------

    \60\ DOE acknowledges that studies have found a rebound effect 
in residential heating situations. However, none of these studies 
address circulator pumps in particular. DOE does not expect that 
consumers would increase utilization of their heating system due to 
increased efficiency of a small component of the system.
---------------------------------------------------------------------------

    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 \61\ 
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 final rule TSD.
---------------------------------------------------------------------------

    \61\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009. 
Available at www.eia.gov/forecasts/aeo/index.cfm (last accessed 
October 5, 2023).
---------------------------------------------------------------------------

3. Net Present Value Analysis
    The inputs for determining the NPV of the total costs and benefits 
experienced by purchasers are (1) total annual installed cost, (2) 
total annual operating costs (energy costs and repair and maintenance 
costs), and (3) a discount factor to calculate the present value of 
costs and savings. DOE calculates net savings each year as the 
difference between the no-new-standards case and each standards case in 
terms of total savings in operating costs versus total increases in 
installed costs. DOE calculates operating cost savings over the 
lifetime of each equipment shipped during the projection period.
    Due to lack of historical price data and uncertainty on the factors 
that may affect future circulator pump prices, DOE assumed a constant 
price (in $2022) when estimating circulator pump prices in future 
years. However, as discussed in section IV.F.1 of this document, DOE 
developed a sensitivity analysis to account for the effect of potential 
future price declines of electronic components in circulator pumps with 
ECMs. See appendix 10C of the final rule TSD for the results of this 
sensitivity analysis.
    The operating cost savings are energy cost savings and costs 
associated with repair and maintenance, which are calculated using the 
estimated operating cost savings in each year and the projected price 
of the appropriate form of energy. The energy cost savings 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 energy 
price changes in the Reference case from AEO2023, which has an end year 
of 2050. To estimate price trends after 2050, the 2050 price was used 
for all years. As part of the NIA, DOE also analyzed scenarios that 
used inputs from variants of the AEO2023 Reference case that have lower 
and higher economic growth. Those cases have lower and higher energy 
price trends compared to the Reference case. NIA results based on these 
cases are presented in appendix10C of the final rule TSD.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
final rule, DOE estimated the NPV of consumer benefits using both a 3-
percent and a 7-percent real discount rate. DOE uses these discount 
rates in accordance with guidance provided by the Office of Management 
and Budget (``OMB'') to Federal agencies on the development of 
regulatory analysis.\62\ The discount rates for the determination of 
NPV are in contrast to the discount rates used in the

[[Page 44507]]

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.
---------------------------------------------------------------------------

    \62\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at 
https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf.
---------------------------------------------------------------------------

I. Consumer Subgroup Analysis

    In analyzing the potential impact of new energy conservation 
standards on purchasers, DOE evaluates the impact on identifiable 
subgroups of purchasers that may be disproportionately affected by a 
new 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 purchasers by analyzing the LCC 
impacts and PBP for those particular purchasers from alternative 
standard levels. For this final rule, due to the high fraction of 
consumers utilizing circulator pumps in the residential sector, DOE 
analyzed the impacts of the considered standard levels on one subgroup: 
i.e., senior-only households. The analysis used subsets of the RECS 
2015 sample composed of households that meet the criteria for the 
considered 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 final rule TSD describes the consumer 
subgroup analysis.
    In the December 2022 NOPR, NYSERDA commented that DOE should 
consider including high-rise multifamily buildings in the subgroup 
analysis for subsequent rulemakings because they are likely to 
experience higher operating hours, especially for the HWR application. 
(NYSERDA, No.130 at p. 4)
    DOE notes the primary purpose of a subgroup analysis is to 
investigate whether a subsection of purchasers would be negatively 
impacted by standards. If high-rise multifamily buildings are expected 
to experience higher operating hours than the general purchaser 
population, then they will incur larger and more positive benefits from 
standards, rendering a subgroup analysis of these purchasers 
unnecessary.

J. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the financial impacts of new 
energy conservation standards on manufacturers of circulator pumps and 
to estimate the potential impacts of such standards on employment and 
manufacturing capacity. The MIA has both quantitative and qualitative 
aspects and includes analyses of projected industry cash flows, the 
INPV, investments in research and development (``R&D'') and 
manufacturing capital, and domestic manufacturing employment. 
Additionally, the MIA seeks to determine how new 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, equipment 
shipments, manufacturer markups, and investments in R&D and 
manufacturing capital required to produce compliant equipment. 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 on domestic manufacturing 
employment. The model uses standard accounting principles to estimate 
the impacts of more-stringent energy conservation standards on a given 
industry by comparing changes in INPV and domestic manufacturing 
employment between a no-new-standards case and the various standards 
cases (i.e., TSLs). To capture the uncertainty relating to manufacturer 
pricing strategies following new standards, the GRIM estimates a range 
of possible impacts under different manufacturer markup scenarios.
    The qualitative part of the MIA addresses manufacturer 
characteristics and market trends. Specifically, the MIA considers such 
factors as a potential standard's impact on manufacturing capacity, 
competition within the industry, the cumulative impact of other DOE and 
non-DOE regulations, and impacts on manufacturer subgroups. The 
complete MIA is outlined in chapter 12 of the final rule TSD.
    DOE conducted the MIA for this rulemaking in three phases. In Phase 
1 of the MIA, DOE prepared a profile of the circulator pump 
manufacturing industry based on the market and technology assessment, 
preliminary manufacturer interviews, and publicly available 
information. This included a top-down analysis of circulator pump 
manufacturers that DOE used to derive preliminary financial inputs for 
the GRIM (e.g., revenues; materials, labor, overhead, and depreciation 
expenses; selling, general, and administrative expenses (``SG&A''); and 
R&D expenses). DOE also used public sources of information to further 
calibrate its initial characterization of the circulator pump 
manufacturing industry, including company filings of form 10-K from the 
SEC,\63\ corporate annual reports, the U.S. Census Bureau's ``Economic 
Census,'' \64\ and reports from D&B Hoovers.\65\
---------------------------------------------------------------------------

    \63\ www.sec.gov/edgar.
    \64\ www.census.gov/programs-surveys/asm/data/tables.html.
    \65\ app.avention.com.
---------------------------------------------------------------------------

    In Phase 2 of the MIA, DOE prepared a framework industry cash-flow 
analysis to quantify the potential impacts of new 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 
standards. These factors include annual expected revenues, costs of 
sales, SG&A and R&D expenses, taxes, and capital expenditures. In 
general, energy conservation standards can affect manufacturer cash 
flow in three distinct ways: (1) creating a need for increased 
investment, (2) raising production costs per unit, and (3) altering 
revenue due to higher per-unit prices and changes in sales volumes.
    In addition, during Phase 2, DOE developed interview guides to 
distribute to manufacturers of circulator pumps in order to develop 
other key GRIM inputs, including product and capital conversion costs, 
and to gather additional information on the anticipated effects of 
energy conservation standards on revenues, direct employment, capital 
assets, industry competitiveness, and subgroup impacts.
    In Phase 3 of the MIA, DOE conducted structured, detailed 
interviews with representative manufacturers. During these interviews, 
DOE discussed engineering, manufacturing, procurement, and financial 
topics to validate assumptions used in the GRIM and to identify key 
issues or concerns. As part of Phase 3, DOE also evaluated subgroups of 
manufacturers that may be disproportionately impacted by new standards 
or that may not be accurately represented by the average cost 
assumptions used to develop the

[[Page 44508]]

industry cash-flow analysis. Such manufacturer subgroups may include 
small business manufacturers, low-volume manufacturers, niche players, 
and/or manufacturers exhibiting a cost structure that largely differs 
from the industry average. DOE identified one subgroup for a separate 
impact analysis: small business manufacturers. The small business 
subgroup is discussed in section VI.B, ``Review under the Regulatory 
Flexibility Act'' and in chapter 12 of the final rule TSD.
2. Government Regulatory Impact Model and Key Inputs
    DOE uses the GRIM to quantify the changes in cash flow due to new 
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 model changes in costs, distribution of 
shipments, investments, and manufacturer margins that could result from 
new energy conservation standards. The GRIM spreadsheet uses the inputs 
to arrive at a series of annual cash flows, beginning in 2024 (the base 
year of the analysis) and continuing to 2057. DOE calculated INPVs by 
summing the stream of annual discounted cash flows during this period. 
For manufacturers of circulator pumps, DOE used a real discount rate of 
9.6 percent, which was derived from industry financials and then 
modified according to feedback received during manufacturer interviews.
    The GRIM calculates cash flows using standard accounting principles 
and compares changes in INPV between the no-new-standards case and each 
standards case. The difference in INPV between the no-new-standards 
case and a standards case represents the financial impact of new energy 
conservation standards on manufacturers. As discussed previously, DOE 
developed critical GRIM inputs using a number of sources, including 
publicly available data, results of the engineering analysis, 
information gathered from industry stakeholders during the course of 
manufacturer interviews, and subsequent Working Group meetings. The 
GRIM results are presented in section V.B.2 of this document. 
Additional details about the GRIM, the discount rate, and other 
financial parameters can be found in chapter 12 of the final rule TSD.
a. Manufacturer Production Costs
    Manufacturing more efficient equipment is typically more expensive 
than manufacturing baseline equipment due to the use of more complex 
components, which are typically more costly than baseline components. 
The changes in the MPCs of covered equipment can affect the revenues, 
gross margins, and cash flow of the industry. MPCs were derived in the 
engineering analysis using methods discussed in section IV.C.3 of this 
document.
    For a complete description of the MPCs, see chapter 5 of the final 
rule 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 2024 (the base year) to 2057 (the end year of 
the analysis period). See chapter 9 of the final rule TSD for 
additional details.
c. Product and Capital Conversion Costs
    New energy conservation standards could cause manufacturers to 
incur conversion costs to bring their production facilities and 
equipment designs into compliance. DOE evaluated the level of 
conversion-related expenditures that would be needed to comply with 
each considered efficiency level in each equipment 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 equipment 
designs comply with new 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 equipment designs can be fabricated and assembled.
    To evaluate the level of product conversion costs manufacturers 
would likely incur to comply with new energy conservation standards, 
DOE estimated the number of basic models that manufacturers would have 
to re-design to move their equipment lines to each incremental 
efficiency level. DOE developed the product conversion costs by 
estimating the amount of labor per basic model manufacturers would need 
for research and development to raise the efficiency of models to each 
incremental efficiency level. DOE anticipates that manufacturer basic 
model counts would decrease with use of ECMs due to the greater range 
of applications served by one ECM as opposed to an induction motor. DOE 
also assumed manufacturers would incur testing costs to establish 
certified ratings using DOE's test procedure for circulator pumps and 
applying DOE's statistical sampling plans to assess compliance.
    For circulator pumps, DOE estimated that the re-design effort 
varies by efficiency level. At EL 1, DOE anticipates a minor redesign 
effort as manufacturers increase their breadth of offerings to meet 
standards at this level. DOE estimated a redesign effort of 18 months 
of engineering labor and 9 months of technician labor per model at this 
level. At EL 2, DOE anticipates manufacturers to integrate ECMs into 
their circulator pumps. This requires a significant amount of re-design 
as manufacturers transition from legacy AC induction motors to ECMs. 
DOE estimated a redesign effort of 35 months of engineering labor and 
18 months of technician labor per model. At EL 3 and EL 4, DOE 
anticipates manufacturers to incur additional control board redesign 
costs as manufacturers add controls (e.g., proportional pressure 
controls). DOE estimated a redesign effort of 54 months of engineering 
labor and 35 months of technician labor per model at EL 3. DOE 
estimated a redesign effort of 54 months of engineering labor and 54 
months of technician labor per model at EL 4.
    To evaluate the level of capital conversion costs manufacturers 
would likely incur to comply with new energy conservation standards, 
DOE used information derived from the engineering analysis, shipments 
analysis, and manufacturer interviews. DOE used the information to 
estimate the additional investments in property, plant, and equipment 
that are necessary to meet energy conservation standards. In the 
engineering analysis evaluation of higher efficiency equipment from 
leading manufacturers of circulator pumps, DOE found a range of designs 
and manufacturing approaches. DOE attempted to account for both the 
range of manufacturing pathways and the current efficiency distribution 
of shipments in the modeling of industry capital conversion costs.
    For all circulator pump varieties, DOE estimates that capital 
conversion costs are driven by the cost for industry to expand 
production capacity at efficiency levels requiring use of an ECM (i.e., 
EL 2, EL 3, and EL 4). DOE anticipates capital investments to be 
similar among EL 2 through EL 4 as circulator pump controls are likely 
to be used to increase a circulator pump

[[Page 44509]]

beyond EL 2, and pump controls do not require additional capital 
investments. At all ELs, DOE anticipates manufacturers will incur costs 
to expand production capacity of more efficient equipment.
    For CP1 type circulator pumps, DOE anticipates manufacturers would 
choose to assemble ECMs in-house. As such, the capital conversion cost 
estimates for CP1-type circulator pumps include, but were not limited 
to, capital investments in welding and bobbin tooling, magnetizers, 
winders, lamination dies, testing equipment, and additional 
manufacturing floor-space requirements.
    For CP2 and CP3 type circulator pumps, DOE anticipates 
manufacturers would purchase ECMs as opposed to assembling in-house. As 
such, DOE estimated that the design changes to produce circulator pumps 
with ECMs would be driven by purchased parts (i.e., ECMs). The capital 
conversion costs for these variety of circulator pumps are based on 
additional manufacturing floor space requirements to expand 
manufacturing capacity of ECMs.
    During the NOPR public meeting, Taco requested that DOE provide an 
estimate on the number of models that are assumed to be redesigned for 
each EL. (Taco, Inc., Public Meeting Transcript, No. 129 at pp. 69-70) 
Table IV.15 displays the number of circulator pump models that would be 
redesigned and introduced into the market at each efficiency level.
[GRAPHIC] [TIFF OMITTED] TR20MY24.036

    HI and Xylem commented on the December 2022 NOPR that the 
investments DOE estimated in the December 2022 NOPR required to comply 
with standards set at TSL 2, TSL 3, and TSL 4, would be substantial 
investments given the size of and total free cash flow available to 
most circulator pump manufacturers. (HI, No. 135 at pp. 3-5; Xylem, No. 
136 at p. 4) HI and Xylem continued by stating that requiring 
manufacturers to make these investments in a 2-year compliance period 
and the current market's supply chain issues increases the conversion 
cost impacts on the manufacturers. (Id.) Additionally, HI and Xylem 
commented that considering lead times for materials and components, it 
is not possible to invest the amount required to comply with TSL 2 
efficiently within the 2-year compliance period.\66\ (Id.) HI and Xylem 
recommended that DOE have a 4-year compliance period, which was the 
compliance period agreed to by the CPWG. (Id.) As discussed in section 
III.H of this document, DOE is establishing a 4-year compliance date 
for energy conservation standards for circulator pumps. DOE interprets 
HI's comment regarding conversion cost impact to manufacturers' will be 
mitigated if a 4-year compliance date is adopted.
---------------------------------------------------------------------------

    \66\ In the December 2022 NOPR (Table IV.13) DOE estimated that 
manufacturers will have to invest $54.7 million in product 
conversion costs and an additional $22.3 million in capital 
conversion cost ($77.0 million total). 87 FR 74850, 74886.
---------------------------------------------------------------------------

    HI and Xylem also commented that it would be difficult for 
companies to introduce a circulator pump into the market that has a CEI 
right at 1.0 and have it be competitive in the market. (HI, No. 135 at 
pp. 3-5; Xylem, No. 136 at p. 4) Therefore, HI and Xylem state that the 
DOE NOPR analysis of TSL 2, which only looks at the costs associated 
with making circulator pumps that are minimally compliant with TSL 2 
(i.e., comply with standards set at TSL 2 but would not meet efficiency 
levels associated with TSL 3) is not accurate. (Id.) HI and Xylem 
stated that the market realities are that new circulators need to be 
designed to successfully compete in the market as well, which will 
require an investment much closer to the impacts (cost & time) which 
DOE has associated with TSL 3. (Id.) As described in section IV.G.2 of 
this document, the shipments analysis models a ``roll-up'' scenario to 
estimate standards-case shipments. In this scenario, the shipments in 
the no-new-standards-case that would be below the minimum qualifying 
efficiency level prescribed by standards are ``rolled up'' (i.e., added 
to) to the minimum qualifying equipment efficiency level at that 
standard level. DOE disagrees that there would not be a market for 
minimally qualifying circulator pumps at any of the analyzed TSLs. As 
displayed in Table IV.4 through Table IV.7, MPCs increase at higher 
efficiency levels, which results in more expensive end-user prices at 
higher efficiency levels. DOE estimates that approximately 70 percent 
of circulator pump shipments currently sold into the U.S. market are at 
baseline or EL 1 (which are the least expensive circulator pumps on the 
market). HI additionally stated that while small incremental growth is 
occurring for ECMs (circulator pumps with ECMs typically are at EL 2, 
EL 3, or EL 4) first cost is a barrier for customers. (HI, No. 112 at 
pp. 9-10) DOE agrees that the initial purchase price prevents some 
customers from purchasing more efficient and expensive circulator 
pumps. Therefore, DOE modeled a shipment scenario that has customers 
continuing to purchase the minimally complaint circulator pumps (which 
would also be the least expensive circulator pumps) after compliance 
with each analyzed energy conservation standard.
    HI and Xylem also commented that capital investment will increase 
going from EL 2 to EL 4. (Id.) HI commented that EL 3 and EL 4 
circulator pumps are more complex equipment that will require 
additional investment in programing and testing infrastructure, and 
additional manufacturing tooling for EL 4 beyond what is required at EL 
3 to simulate the external input signals during manufacturing testing. 
(Id.) DOE agrees that EL 3 and EL 4 will require additional programing 
and testing and has included those additional costs in the product 
conversion costs shown in Table IV.16 as these programing and testing 
costs are non-capitalized costs and should be included in product 
conversion costs and not capital conversion costs.\67\ Therefore, DOE 
has included these additional investments required to comply with EL 3 
and EL 4.
---------------------------------------------------------------------------

    \67\ At EL 2 DOE estimates the product conversion costs will be 
$56.4 million. This will increase to $91.5 million at EL 3 and 
increase to $105.1 million at EL 4.
---------------------------------------------------------------------------

    In general, DOE assumes all conversion-related investments occur 
between the date of publication of this final rule and the year by 
which manufacturers must comply with the new standards. The conversion 
cost figures used in the GRIM can be found in Table IV.16 and in 
section V.B.2.a of this document. For additional information on the 
estimated capital

[[Page 44510]]

and product conversion costs, see chapter 12 of the final rule TSD.
[GRAPHIC] [TIFF OMITTED] TR20MY24.037

d. Manufacturer 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 equipment 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 manufacturer markup scenarios to represent 
uncertainty regarding the potential impacts on prices and profitability 
for manufacturers following the implementation of new energy 
conservation standards: (1) a preservation of gross margin scenario and 
(2) a preservation of operating profit scenario. These scenarios lead 
to different manufacturer markup values that, when applied to the MPCs, 
result in varying revenue and cash flow impacts.
    Under the preservation of gross margin scenario, DOE applied a 
single uniform ``gross margin percentage'' 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 an equipment class. As MPCs increase with efficiency, 
this scenario implies that the absolute dollar markup will increase. 
This is the manufacturer markup scenario that is used in all consumer 
analyses (e.g., LCC, NIA, etc.).
    To estimate the average manufacturer markup used in the 
preservation of gross margin scenario, DOE analyzed publicly available 
financial information for manufacturers of circulator pumps. DOE then 
requested feedback on its initial manufacturer markup estimates during 
manufacturer interviews. Based on manufacturer interviews, DOE revised 
the initial manufacturer markups that were used in December 2022 NOPR. 
DOE did not receive any comments on the manufacturer markups presented 
in the December 2022 NOPR. Therefore, DOE continues to use the same 
manufacturer markups in this final rule analysis that were used in the 
December 2022 NOPR. Table IV.17 presents the manufacturers markups used 
in this final rule analysis for the no-new-standards case and the 
preservation of gross margin scenario standards cases. These markups 
capture all non-production costs, including SG&A expenses, R&D 
expenses, interest expenses, and profit.
[GRAPHIC] [TIFF OMITTED] TR20MY24.038

    Under the preservation of operating profit scenario, DOE modeled a 
situation in which manufacturers are not able to increase per-unit 
operating profit in proportion to increases in MPCs. In this scenario, 
manufacturer markups are set so that operating profit one year after 
the compliance date of energy conservation standards is the same as in 
the no-new-standards case on a per-unit basis. In other words, 
manufacturers are not able to garner additional operating profit from 
the higher MPCs and the investments that are required to comply with 
the energy conservation standards. However, manufacturers are able to 
maintain the same per-unit operating profit in the standards case that 
was earned in the no-new-standards case. Therefore, operating margin in 
percentage terms is reduced between the no-new-standards case and 
standards case.
    A comparison of industry financial impacts under the two 
manufacturer markup scenarios is presented in section V.B.2.a of this 
document.

K. Emissions Analysis

    The emissions analysis consists of two components. The first 
component estimates the effect of potential energy conservation 
standards on power sector and site (where applicable) combustion 
emissions of CO2, NOX, SO2, and Hg. 
The second component estimates the impacts of potential standards on 
emissions of two additional greenhouse gases, CH4 and 
N2O, as well as the reductions in 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 intended to 
represent the marginal impacts of the change in electricity consumption 
associated with 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 final rule TSD. The analysis presented in this 
notice uses projections from AEO2023. 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).\68\
---------------------------------------------------------------------------

    \68\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed September 29, 
2023).

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

[[Page 44511]]

    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 final rule TSD.
    The emissions intensity factors are expressed in terms of physical 
units per MWh or MMBtu of site energy savings. For power sector 
emissions, specific emissions intensity factors are calculated by 
sector and end use. Total emissions reductions are estimated using the 
energy savings calculated in the national impact analysis.
1. Air Quality Regulations Incorporated in DOE's Analysis
    DOE's no-new-standards case for the electric power sector reflects 
the AEO, which incorporates the projected impacts of existing air 
quality regulations on emissions. AEO2023 reflects, to the extent 
possible, laws and regulations adopted through mid-November 2022, 
including the emissions control programs discussed in the following 
paragraphs the emissions control programs discussed in the following 
paragraphs, and the Inflation Reduction Act.\69\
---------------------------------------------------------------------------

    \69\ For further information, see the Assumptions to AEO2023 
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 September 29, 2023).
---------------------------------------------------------------------------

    SO2 emissions from affected electric generating units 
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions 
cap on SO2 for affected EGUs in the 48 contiguous States and 
the District of Columbia (``DC''). (42 U.S.C. 7651 et seq.) 
SO2 emissions from numerous States in the eastern half of 
the United States are also limited under the Cross-State Air Pollution 
Rule (``CSAPR''). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these 
States to reduce certain emissions, including annual SO2 
emissions, and went into effect as of January 1, 2015.\70\ The AEO 
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, for states subject to SO2 
emissions limits under CSAPR, 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.
---------------------------------------------------------------------------

    \70\ CSAPR requires states to address annual emissions of 
SO2 and NOX, precursors to the formation of 
fine particulate matter (``PM2.5'') pollution, in order 
to address the interstate transport of pollution with respect to the 
1997 and 2006 PM2.5 National Ambient Air Quality 
Standards (``NAAQS''). CSAPR also requires certain states to address 
the ozone season (May-September) emissions of NOX, a 
precursor to the formation of ozone pollution, in order to address 
the interstate transport of ozone pollution with respect to the 1997 
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a 
supplemental rule that included an additional five states in the 
CSAPR ozone season program; 76 FR 80760 (Dec. 27, 2011) 
(Supplemental Rule), and EPA issued the CSAPR Update for the 2008 
ozone NAAQS. 81 FR 74504 (Oct. 26, 2016).
---------------------------------------------------------------------------

    However, beginning in 2016, SO2 emissions began to fall 
as a result of the Mercury and Air Toxics Standards (``MATS'') for 
power plants.\71\ 77 FR 9304 (Feb. 16, 2012). The final rule 
establishes power plant emission standards for mercury, acid gases, and 
non-mercury metallic toxic pollutants. 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 will generally reduce 
SO2 emissions. DOE estimated SO2 emissions 
reduction using emissions factors based on AEO2023.
---------------------------------------------------------------------------

    \71\ 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.
---------------------------------------------------------------------------

    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. Depending on the configuration of the power sector in the 
different regions and the need for allowances, however, NOX 
emissions might not remain at the limit in the case of lower 
electricity demand. That would mean that 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. Standards would be expected to reduce 
NOX emissions in the States not covered by CSAPR. DOE used 
AEO2023 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 
AEO2023, which incorporates the MATS.

L. Monetizing Emissions Impacts

    As part of the development of this final 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 equipment 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 final rule.
    To monetize the benefits of reducing GHG emissions, this analysis 
uses the interim 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.
1. Monetization of Greenhouse Gas Emissions
    DOE estimates the monetized benefits of the reductions in emissions 
of CO2, CH4, and N2O by using a 
measure of the SC of each pollutant (e.g., SC-CO2). These 
estimates represent the monetary value of the net harm to society 
associated with a marginal increase in emissions of these pollutants in 
a given year, or the benefit of avoiding that increase. These estimates 
are intended to include (but are not limited to) climate-change-related 
changes in net agricultural productivity, human health, property 
damages from increased flood risk, disruption of energy systems, risk 
of conflict, environmental migration, and the value of ecosystem 
services.
    DOE 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

[[Page 44512]]

rulemaking in the absence of the social cost of greenhouse gases. That 
is, the social costs of greenhouse gases, whether measured using the 
February 2021 interim estimates presented by the Interagency Working 
Group on the Social Cost of Greenhouse Gases or by another means, did 
not affect the rule ultimately proposed by DOE.
    DOE estimated the global social benefits of CO2, 
CH4, and N2O reductions using SC-GHG values that 
were based on the interim values 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-GHG 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, the SC-GHG 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-GHG therefore, reflects the societal value of reducing emissions 
of the gas in question by one metric ton. The SC-GHG 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 agreed that the 
interim SC-GHG estimates represent the most appropriate estimate of the 
SC-GHG until revised estimates are developed reflecting the latest, 
peer-reviewed science. See 87 FR 78382, 78406-78408 for discussion of 
the development and details of the IWG SC-GHG estimates.
    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.\72\ 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 SC-GHG TSD, the IWG has recommended 
that, taken together, the limitations suggest that the interim SC-GHG 
estimates used in this final rule likely underestimate the damages from 
GHG emissions. DOE concurs with this assessment.
---------------------------------------------------------------------------

    \72\ Interagency Working Group on Social Cost of Greenhouse 
Gases. 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/.
---------------------------------------------------------------------------

    Earthjustice et al. commented that DOE appropriately applies the 
social cost estimates developed by the IWG to its analysis of climate 
benefits. They stated that these values are widely agreed to 
underestimate the full social costs of greenhouse gas emissions, but 
for now they remain appropriate to use as conservative estimates. 
(Earthjustice et al., No. 132-1 at p. 1)
    DOE agrees that the interim SC-GHG values applied for this final 
rule are conservative estimates. In the February 2021 SC-GHG TSD, the 
IWG stated that the models used to produce the interim estimates do not 
include all of the important physical, ecological, and economic impacts 
of climate change recognized in the climate change literature. For 
these same impacts, the science underlying their ``damage functions'' 
lags behind the most recent research. In the judgment of the IWG, these 
and other limitations suggest that the range of four interim SC-GHG 
estimates presented in the TSD likely underestimate societal damages 
from GHG emissions. The IWG is in the process of assessing how best to 
incorporate the latest peer-reviewed science and the recommendations of 
the National Academies to develop an updated set of SC-GHG estimates, 
and DOE remains engaged in that process.
    Earthjustice et al. suggested that DOE should state that criticisms 
of the social cost of greenhouse gases are moot in this rulemaking 
because the proposed rule is justified without them. (Earthjustice et 
al., No. 132-1 at p.2) DOE agrees that the proposed rule is 
economically justified without including climate benefits associated 
with reduced GHG emissions.
    Earthjustice et al. commented that DOE should consider applying 
sensitivity analysis using EPA's draft climate-damage estimates 
released in November 2022, as EPA's work faithfully implements the 
roadmap laid out in 2017 by the National Academies of Sciences and 
applies recent advances in the science and economics on the costs of 
climate change. (Earthjustice et al., No. 132-1 at pp. 2-3)
    DOE is aware that in December 2023, EPA issued a new set of SC-GHG 
estimates in connection with a final rulemaking under the Clean Air 
Act.\73\ As DOE had used the IWG interim values in proposing this rule 
and is currently reviewing the updated 2023 SC-GHG values, for this 
final rule, DOE used these updated 2023 SC-GHG values to conduct a 
sensitivity analysis of the value of GHG emissions reductions. DOE 
notes that because EPA's estimates are considerably higher than the 
IWG's interim SC-GHG values applied for this final rule, an analysis 
that uses the EPA's estimates results in significantly greater climate-
related benefits. However, such results would not affect DOE's decision 
in this final rule. As stated elsewhere in this document, DOE would 
reach the same conclusion regarding the economic justification of the 
standards presented in this final rule without considering the IWG's 
interim SC-GHG values, which DOE agrees are conservative estimates. For 
the same reason, if DOE were to use EPA's higher SC-GHG estimates, they 
would not change DOE's conclusion that the standards are economically 
justified.
---------------------------------------------------------------------------

    \73\ See www.epa.gov/environmental-economics/scghg.
---------------------------------------------------------------------------

    DOE's derivations of the SC-CO2, SC-N2O, and 
SC-CH4 values used for this final rule 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.

[[Page 44513]]

a. Social Cost of Carbon
    The SC-CO2 values used for this final rule were based on 
the values developed for the February 2021 SC-GHG TSD, which are shown 
in Table IV.18 in five-year increments from 2020 to 2050. The set of 
annual values that DOE used, which was adapted from estimates published 
by EPA,\74\ is presented in Appendix 14A of the final rule TSD. These 
estimates are based on methods, assumptions, and parameters identical 
to the estimates published by the IWG (which were based on EPA 
modeling), and include values for 2051 to 2070. DOE expects additional 
climate benefits to accrue for equipment still operating 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.
---------------------------------------------------------------------------

    \74\ See EPA, Revised 2023 and Later Model Year Light-Duty 
Vehicle GHG Emissions Standards: Regulatory Impact Analysis, 
Washington, DC, December 2021. Available at nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed October 2, 2023).
[GRAPHIC] [TIFF OMITTED] TR20MY24.039

    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 2022$ 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 
final rule were based on the values developed for the February 2021 SC-
GHG TSD. Table IV.19 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 final rule 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.
[GRAPHIC] [TIFF OMITTED] TR20MY24.040

    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 2022$ 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.
c. Sensitivity Analysis Using Updated SC-GHG Estimates
    In December 2023, EPA issued an updated set of SC-GHG estimates 
(2023

[[Page 44514]]

SC-GHG) in connection with a final rulemaking under the Clean Air 
Act.\75\ These estimates incorporate recent research and address 
recommendations of the National Academies (2017) and comments from a 
2023 external peer review of the accompanying technical report. For 
this rulemaking, DOE used these updated 2023 SC-GHG values to conduct a 
sensitivity analysis of the value of GHG emissions reductions 
associated with alternative standards for circulator pumps. This 
sensitivity analysis provides an expanded range of potential climate 
benefits associated with amended standards. The final year of EPA's new 
2023 SC-GHG estimates is 2080; therefore, DOE did not monetize the 
climate benefits of GHG emissions reductions occurring after 2080.
---------------------------------------------------------------------------

    \75\ See www.epa.gov/environmental-economics/scghg.
---------------------------------------------------------------------------

    The overall climate benefits are greater when using the higher, 
updated 2023 SC-GHG estimates, compared to the climate benefits using 
the older IWG SC-GHG estimates. The results of the sensitivity analysis 
are presented in appendix 14C of the final rule TSD.
2. Monetization of Other Emissions Impacts
    For the final rule, DOE estimated the monetized value of 
NOX and SO2 emissions reductions from electricity 
generation using benefit-per-ton estimates for that sector from the 
EPA's Benefits Mapping and Analysis Program.\76\ 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 and 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 combined the EPA 
regional benefit-per-ton estimates with regional information on 
electricity consumption and emissions from AEO2023 to define weighted-
average national values for NOX and SO2 (see 
appendix 14B of the final rule TSD).
---------------------------------------------------------------------------

    \76\ U.S. Environmental Protection Agency. Estimating the 
Benefit per Ton of Reducing Directly-Emitted PM2.5, 
PM2.5 Precursors and Ozone Precursors from 21 Sectors. 
www.epa.gov/benmap/estimating-benefit-ton-reducing-directly-emitted-pm25-pm25-precursors-and-ozone-precursors.
---------------------------------------------------------------------------

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

M. Utility Impact Analysis

    The utility impact analysis estimates the changes in installed 
electrical capacity and generation projected to result for each 
considered TSL. The analysis is based on published output from the NEMS 
associated with AEO2023. 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 
AEO2023 Reference case and various side cases. Details of the 
methodology are provided in the appendices to chapters 13 and 15 of the 
final rule TSD.
    The output of this analysis is a set of time-dependent coefficients 
that capture the change in electricity generation, primary fuel 
consumption, installed capacity and power sector emissions due to a 
unit reduction in demand for a given end use. These coefficients are 
multiplied by the stream of electricity savings calculated in the NIA 
to provide estimates of selected utility impacts of potential new 
energy conservation standards.

N. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a standard. Employment impacts from new energy 
conservation standards include both direct and indirect impacts. Direct 
employment impacts are any changes in the number of employees of 
manufacturers of the equipment 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 equipment. 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 purchasers on energy, (2) 
reduced spending on new energy supply by the utility industry, (3) 
increased consumer spending on the equipment 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.\77\ 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.
---------------------------------------------------------------------------

    \77\ See U.S. Department of Commerce--Bureau of Economic 
Analysis. Regional Multipliers: A User Handbook for the Regional 
Input-Output Modeling System (``RIMS II''). 1997. U.S. Government 
Printing Office: Washington, DC. Available at apps.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf (last accessed October 02, 2023).
---------------------------------------------------------------------------

    DOE estimated indirect national employment impacts for the standard 
levels considered in this final rule using an input/output model of the 
U.S. economy called Impact of Sector Energy Technologies version 4 
(``ImSET'').\78\ 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.
---------------------------------------------------------------------------

    \78\ 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's 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

[[Page 44515]]

over the long run for this rule. Therefore, DOE used ImSET only to 
generate results for near-term timeframes (2028-2032), where these 
uncertainties are reduced. For more details on the employment impact 
analysis, see chapter 16 of the final rule TSD.

V. Analytical Results and Conclusions

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

A. Trial Standard Levels

    In general, DOE typically evaluates potential new standards for 
equipment by grouping individual efficiency levels for each class into 
TSLs. Use of TSLs allows DOE to identify and consider manufacturer cost 
interactions between the equipment classes, to the extent that there 
are such interactions, and price elasticity of consumer purchasing 
decisions that may change when different standard levels are set.
    In the analysis conducted for this final rule, DOE analyzed the 
benefits and burdens of four TSLs for circulator pumps. As discussed 
previously, because there is only one equipment class for circulator 
pumps, DOE developed TSLs that align with their corresponding ELs 
(i.e., TSL 1 corresponds to EL 1, etc.). DOE presents the results for 
the TSLs in this document, while the results for all efficiency levels 
that DOE analyzed are in the final rule TSD.
    Table V.1 presents the TSLs and the corresponding efficiency levels 
that DOE has identified for potential new energy conservation standards 
for circulator pumps. TSL 4 represents the maximum technologically 
feasible (``max-tech'') energy efficiency.
[GRAPHIC] [TIFF OMITTED] TR20MY24.041

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
    DOE analyzed the economic impacts on circulator pump consumers by 
looking at the effects that potential new 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 equipment affects 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., equipment 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 equipment lifetime and a discount rate. Chapter 8 of the final 
rule TSD provides detailed information on the LCC and PBP analyses.
    Table V.2 and Table V.3 show the LCC and PBP results for the TSLs 
considered for each equipment class. In the first of each pair of 
tables, the simple payback is measured relative to the baseline 
equipment. In the second table, the impacts are measured relative to 
the efficiency distribution in the in the no-new-standards case in the 
compliance year (see section IV.F.8 of this document). Because some 
consumers purchase equipment with higher efficiency in the no-new-
standards case, the average savings are less than the difference 
between the average LCC of the baseline equipment and the average LCC 
at each TSL. The savings refer only to consumers who are affected by a 
standard at a given TSL. Those who already purchase an equipment 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.
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[[Page 44516]]


[GRAPHIC] [TIFF OMITTED] TR20MY24.043

b. Consumer Subgroup Analysis
    In the consumer subgroup analysis, due to the high fraction of 
circulator pumps used in the residential sector, DOE estimated the 
impact of the considered TSLs on senior-only households. The analysis 
used subsets of the RECS 2015 sample composed of households that meet 
the criteria for seniors to generate a new sample of 75,000 senior 
consumers. Table V.4 compares the average LCC savings and PBP at each 
efficiency level for the consumer subgroups with similar metrics for 
the entire consumer sample for circulator pumps. In most cases, the 
average LCC savings and PBP for senior-only households at the 
considered efficiency levels are not substantially different from the 
average for all households. Chapter 11 of the final rule TSD presents 
the complete LCC and PBP results for the considered subgroup.
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[GRAPHIC] [TIFF OMITTED] TR20MY24.044

BILLING CODE 6450-01-C
c. Rebuttable Presumption Payback
    As discussed in section II.A of this document, EPCA establishes a 
rebuttable presumption that an energy conservation standard is 
economically justified if the increased purchase cost for an equipment 
that meets the standard is less than three times the value of the 
first-year energy savings resulting from the standard. In calculating a 
rebuttable presumption payback period for each of the considered TSLs, 
DOE used discrete values, and as required by EPCA, based the energy use 
calculation on the DOE test procedures for circulator pumps. In 
contrast, the PBPs presented in section

[[Page 44517]]

V.B.1.a were calculated using distributions that reflect the range of 
energy use in the field.
    Table V.5 presents the rebuttable-presumption payback periods for 
the considered TSLs for circulator pumps. While DOE examined the 
rebuttable-presumption criterion, it considered whether the standard 
levels considered for this rule are economically justified through a 
more detailed analysis of the economic impacts of those levels, 
pursuant to 42 U.S.C. 6295(o)(2)(B)(i), that considers the full range 
of impacts to the consumer, manufacturer, Nation, and environment. The 
results of that analysis serve as the basis for DOE to definitively 
evaluate the economic justification for a potential standard level, 
thereby supporting or rebutting the results of any preliminary 
determination of economic justification.\79\
---------------------------------------------------------------------------

    \79\ As shown in Table V.5, the rebuttable payback period for 
the recommended standard level (3.0 years) comes very close to 
satisfying the rebuttable presumption.
[GRAPHIC] [TIFF OMITTED] TR20MY24.045

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of new energy 
conservation standards on manufacturers of circulator pumps. The next 
section describes the expected impacts on manufacturers at each 
considered TSL. Chapter 12 of the final rule 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 new energy 
conservation standards. The following tables summarize the estimated 
financial impacts (represented by changes in INPV) of potential new 
energy conservation standards on manufacturers of circulator pumps, as 
well as the conversion costs that DOE estimates manufacturers of 
circulator pumps would incur at each TSL.
    As discussed in section IV.J.2.d of this document, DOE modeled two 
manufacturer markup scenarios to evaluate a range of cash flow impacts 
on the circulator pump industry: (1) the preservation of gross margin 
scenario and (2) the preservation of operating profit scenario. DOE 
considered the preservation of gross margin scenario by applying a 
``gross margin percentage'' for each equipment class across all 
efficiency levels. As MPCs increase with efficiency, this scenario 
implies that the absolute dollar markup will increase. Because this 
scenario assumes that a manufacturer's absolute dollar markup would 
increase as MPCs increase in the standards cases, it represents the 
upper-bound to industry profitability under new energy conservation 
standards.
    The preservation of operating profit scenario reflects 
manufacturers' concerns about their inability to maintain margins as 
MPCs increase to meet higher efficiency levels. In this scenario, while 
manufacturers make the necessary investments required to convert their 
facilities to produce compliant equipment, operating profit remains the 
same in absolute dollars, but decreases as a percentage of revenue.
    Each of the modeled manufacturer markup scenarios results in a 
unique set of cash-flows and corresponding industry values at each TSL. 
In the following discussion, the INPV results refer to the difference 
in industry value between the no-new-standards case and each standards 
case resulting from the sum of discounted cash-flows from 2024 through 
2057. To provide perspective on the short-run cash-flow impact, DOE 
includes in the discussion of results a comparison of free cash flow 
between the no-new-standards case and the standards case at each TSL in 
the year before new energy conservation standards are required.
    DOE presents the range in INPV for circulator pump manufacturers in 
Table V.6 and Table V.7. DOE presents the impacts to industry cash 
flows and the conversion costs in Table V.8.
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[[Page 44518]]


[GRAPHIC] [TIFF OMITTED] TR20MY24.047

[GRAPHIC] [TIFF OMITTED] TR20MY24.048

BILLING CODE 6450-01-C
    At TSL 4, DOE estimates the change in INPV will range from -$118.1 
million to $32.4 million, which represents a change in INPV of -34.0 
percent to 9.3 percent, respectively. At TSL 4, industry free cash flow 
decreases to -$20.8 million, which represents a decrease of 
approximately 173.3 percent, compared to the no-new-standards case 
value of $28.4 million in 2027, the year before the compliance year.
    TSL 4 sets the efficiency level at EL 4, max-tech, for all 
circulator pump varieties. DOE estimates that approximately 2 percent 
of all circulator pump shipments will meet the ELs required at TSL 4 in 
the no-new-standards case in 2028, the compliance year.
    At TSL 4, DOE estimates manufacturers would incur $105.1 million in 
product conversion costs and $24.7 million in capital conversion costs 
to bring their equipment portfolios into compliance with standards set 
at TSL 4. At TSL 4, product conversion costs are the key driver of the 
decrease in free cash flow. These upfront investments result in a 
significantly lower free cash flow in the year before the compliance 
date.
    At TSL 4, the shipment weighted-average MPC significantly increases 
by approximately 65.3 percent relative to the no-new-standards case 
MPC. In the preservation of gross margin scenario, this increase in MPC 
causes an increase in manufacturer free cash flow, while the $129.9 
million in conversion costs estimated at TSL 4 cause a decrease in 
manufacturer free cash flow. Ultimately, these factors result in a 
moderately positive change in INPV at TSL 4 under the preservation of 
gross margin scenario.
    Under the preservation of operating profit scenario, the 
significant increase in the shipment weighted-average MPC results in a 
lower average manufacturer markup. This lower average manufacturer 
markup and the $129.9 million in conversion costs result in a 
significantly negative change in INPV at TSL 4 under the preservation 
of operating profit scenario.
    At TSL 3, DOE estimates the change in INPV will range from -$100.1 
million to $15.2 million, which represents a change in INPV of -28.8 
percent to 4.4 percent, respectively. At TSL 3, industry free cash flow 
decreases to -$14.6 million, which represents a decrease of 
approximately 151.6 percent, compared to the no-new-standards case 
value of $28.4 million in 2027, the year before the compliance year.
    TSL 3 sets the efficiency level at EL 3 for all circulator pump 
varieties. DOE estimates that approximately 20 percent of all 
circulator pump shipments will meet or exceed the ELs required at TSL 3 
in the no-new-standards case in 2028, the compliance year.
    At TSL 3, DOE estimates manufacturers would incur $91.5 million in 
product conversion costs and $24.7 million in capital conversion costs 
to bring their equipment portfolios into compliance with standards set 
at TSL 3. At TSL 3, product conversion costs continue to be a key 
driver of the decrease in free cash flow. These upfront investments 
result in a significantly lower free cash flow in the year before the 
compliance date.
    At TSL 3, the shipment weighted-average MPC significantly increases 
by approximately 51.0 percent relative to the no-new-standards case 
MPC. In the preservation of gross margin scenario, this increase in MPC 
causes an increase in manufacturer free cash flow, while the $116.2 
million in conversion costs estimated at TSL 3 cause a decrease in 
manufacturer free cash flow. Ultimately, these factors result in a 
slightly positive change in INPV at TSL 3 under the preservation of 
gross margin scenario.
    Under the preservation of operating profit scenario, the 
significant increase in the shipment weighted-average MPC results in a 
lower average manufacturer markup. This lower average manufacturer 
markup and the $116.2 million in conversion costs result in a 
significantly negative change in INPV at TSL 3 under the preservation 
of operating profit scenario.

[[Page 44519]]

    At TSL 2, DOE estimates the change in INPV will range from -$69.2 
million to $11.1 million, which represents a change in INPV of -19.9 
percent to 3.2 percent, respectively. At TSL 2, industry free cash flow 
decreases to -$2.1 million, which represents a decrease of 
approximately 107.3 percent, compared to the no-new-standards case 
value of $28.4 million in 2027, the year before the compliance year.
    TSL 2 sets the efficiency level at EL 2 for all circulator pump 
varieties. DOE estimates that approximately 37 percent of all 
circulator pump shipments will meet or exceed the ELs required at TSL 2 
in the no-new-standards case in 2028, the compliance year.
    At TSL 2, DOE estimates manufacturers would incur $56.4 million in 
product conversion costs and $24.7 million in capital conversion costs 
to bring their equipment portfolios into compliance with standards set 
at TSL 2. At TSL 2, product conversion costs continue to be a key 
driver of the decrease in free cash flow. These upfront investments 
result in a lower free cash flow in the year before the compliance 
date.
    At TSL 2, the shipment weighted-average MPC moderately increases by 
approximately 36.5 percent relative to the no-new-standards case MPC. 
In the preservation of gross margin scenario, this increase in MPC 
causes an increase in manufacturer free cash flow, while the $81.2 
million in conversion costs estimated at TSL 2 cause a decrease in 
manufacturer free cash flow. Ultimately, these factors result in a 
slightly positive change in INPV at TSL 2 under the preservation of 
gross margin scenario.
    Under the preservation of operating profit scenario, the moderate 
increase in the shipment weighted-average MPC results in a lower 
average manufacturer markup. This lower average manufacturer markup and 
the $81.2 million in conversion costs result in a moderately negative 
change in INPV at TSL 2 under the preservation of operating profit 
scenario.
    At TSL 1, DOE estimates the change in INPV will be -$3.4 million, 
which represents a change in INPV of -1.0 percent. At TSL 1, industry 
free cash flow decreases to $26.5 million, which represents a decrease 
of approximately 6.6 percent, compared to the no-new-standards case 
value of $28.4 million in 2027, the year before the compliance year.
    TSL 1 sets the efficiency level at EL 1 for all circulator pump 
varieties. DOE estimates that approximately 69 percent of all 
circulator pump shipments will meet or exceed the ELs required at TSL 1 
in the no-new-standards case in 2028, the compliance year.
    At TSL 1, DOE does not expect the increases in efficiency 
requirements at this TSL to require any capital investments. DOE 
anticipates that manufacturers would have to make slight investments in 
R&D to re-design some of their equipment offering to meet standards set 
at TSL 1. Overall, DOE estimates that manufacturers would incur $5.5 
million in product conversion costs to bring their equipment portfolios 
into compliance with standards set to TSL 1. At TSL 1, all 
manufacturers have basic models that meet or exceed these efficiency 
levels.
    At TSL 1, the shipment-weighted average MPC for all circulator 
pumps does not increase relative to the no-new-standards case shipment-
weighted average MPC in 2028. Since the shipment-weighted average MPC 
does not increase at all at TSL 1 compared to the no-new-standards 
case, manufacturers are not able to recover any additional revenue at 
TSL 1, despite the conversion costs that they incur at TSL 1. 
Therefore, the $5.5 million in conversion costs incurred by 
manufacturers causes a slightly negative change in INPV at TSL 1 in 
both manufacturer markup scenarios.
b. Direct Impacts on Employment
    To quantitatively assess the potential impacts of new energy 
conservation standards on direct employment in the circulator pump 
industry, DOE used the GRIM to estimate the domestic labor expenditures 
and number of direct employees in the no-new-standards case and in each 
of the standards cases during the analysis period. This analysis 
includes both production and non-production employees employed by 
circulator pump manufacturers. DOE used statistical data from the U.S. 
Census Bureau's 2021 Annual Survey of Manufacturers \80\ (``ASM''), the 
results of the engineering analysis, and interviews with manufacturers 
to determine the inputs necessary to calculate industry-wide labor 
expenditures and domestic employment levels. Labor expenditures related 
to manufacturing of the equipment are a function of the labor intensity 
of the equipment, the sales volume, and an assumption that wages remain 
fixed in real terms over time.
---------------------------------------------------------------------------

    \80\ U.S. Census Bureau, 2018-2021 Annual Survey of 
Manufacturers: Statistics for Industry Groups and Industries (2021). 
Available at www.census.gov/data/tables/time-series/econ/asm/2018-2021-asm.html.
---------------------------------------------------------------------------

    The total labor expenditures in the GRIM are converted to domestic 
production worker employment levels by dividing production labor 
expenditures by the average fully burdened wage per production worker. 
DOE calculated the fully burdened wage by multiplying the industry 
production worker hourly blended wage (provided by the ASM) by the 
fully burdened wage ratio. The fully burdened wage ratio factors in 
paid leave, supplemental pay, insurance, retirement and savings, and 
legally required benefits. DOE determined the fully burdened ratio from 
the Bureau of Labor Statistics' employee compensation data.\81\ The 
estimates of production workers in this section cover workers, 
including line supervisors who are directly involved in fabricating and 
assembling the equipment within the manufacturing facility. Workers 
performing services that are closely associated with production 
operations, such as materials handling tasks using forklifts, are also 
included as production labor.
---------------------------------------------------------------------------

    \81\ U.S. Bureau of Labor Statistics. Employer Costs for 
Employee Compensation (June 2023). Available at www.bls.gov/news.release/archives/ecec_09122023.pdf.
---------------------------------------------------------------------------

    Non-production worker employment levels were determined by 
multiplying the industry ratio of production worker employment to non-
production employment against the estimated production worker 
employment previously explained. Estimates of non-production workers in 
this section cover above-the-line supervisors, sales, sales delivery, 
installation, office functions, legal, and technical employees.
    The total direct-employment impacts calculated in the GRIM are the 
sum of the changes in the number of domestic production and non-
production workers resulting from energy conservation standards for 
circulator pumps, as compared to the no-new-standards case. Typically, 
more efficient equipment is more complex and labor intensive to 
produce. Per-unit labor requirements and production time requirements 
trend higher with more stringent energy conservation standards.
    DOE estimates that approximately 65 percent of circulator pumps 
sold in the United States are manufactured domestically. In the absence 
of energy conservation standards, DOE estimates that there would be 173 
domestic production workers in the circulator pump industry in 2028, 
the compliance year.
    DOE's analysis estimates that the circulator pump industry will 
domestically employ 284 production and non-production workers in the 
circulator pump industry in 2028 in the absence of energy conservation 
standards. Table V.9 presents the range

[[Page 44520]]

of potential impacts of energy conservation standards on U.S. 
production workers of circulator pumps.
[GRAPHIC] [TIFF OMITTED] TR20MY24.049

    At the upper end of the range, all examined TSLs show an increase 
(or no change) in the number of domestic workers for circulator pumps. 
The upper end of the range represents a scenario where manufacturers 
increase production and non-production hiring due to the increase in 
labor associated with more efficient circulator pumps and the 
additional engineers needed to redesign more efficient circulator 
pumps. However, this assumes that in addition to hiring more production 
and no-production employees, all existing domestic production and non-
production employees would remain in the United States and not shift to 
other countries that currently produce circulator pumps that are sold 
in the United States.
    At the lower end of the range, all examined TSLs show a decrease 
(or no change) in the number of domestic workers for circulator pumps. 
Based on information gathered during manufacturer interviews, DOE 
understands circulator pumps with ECMs are primarily manufactured 
outside the United States. However, manufacturers stated that they 
would likely expand their ECM production capacities in the United 
States if standards were established at efficiency levels that would 
likely require ECMs (i.e., TSL 2 or higher). The lower end of the range 
represents a scenario where some manufacturers with existing production 
facilities abroad move their circulator pump production for ELs that 
will likely require an ECM to those production facilities abroad. 
Therefore, DOE modeled a low-end employment range that assumes half of 
existing domestic production would be relocated to foreign countries 
due to the energy conservation standard at TSL 2 or higher.
    HI stated that domestic employment is specific to each 
manufacturer. To obtain this information DOE is encouraged to procure 
these estimates under NDA with each manufacturer. (HI, No. 135 at p. 6) 
DOE conducted manufacturer interviews with a variety of circulator pump 
manufacturers prior to the December 2022 NOPR. DOE continues to use the 
information gathered during those manufacturer interviews in this final 
rule.
    Wyer commented that U.S. manufacturing infrastructure cannot 
support the level of production needed to satisfy the hydronics market 
with ECM circulators. (Wyer, No. 128 at p. 2) Wyer stated that ECM 
pumps with the performance curves necessary for the geothermal HVAC 
industry are only manufactured in Europe, while the majority of PSC 
pumps currently being used in the geothermal HVAC industry are made in 
the United States. (Id.) Wyer commented that U.S.-based manufacturers 
are more likely to shut down domestic facilities and continue importing 
ECM circulators rather than invest to upgrade their plants to produce 
ECM pumps. (Id.) Wyer recommended that DOE consider the impact of the 
proposed rulemaking on domestic manufacturer employment and the 
potential of plant closures. (Id.) Table V.9 displays the range of 
potential impacts to domestic manufacturing. Specifically, the lower 
end of the range represents a scenario where some manufacturers move 
their circulator pump production for ELs that will likely require an 
ECM to production facilities located abroad.
    Due to variations in manufacturing labor practices, actual direct 
employment could vary depending on manufacturers' preference for high 
capital or high labor practices in response to standards. DOE notes 
that the employment impacts discussed here are independent of the 
indirect employment impacts to the broader U.S. economy, which are 
documented in chapter 15 of the accompanying TSD.
c. Impacts on Manufacturing Capacity
    During manufacturer interviews, industry feedback indicated that 
manufacturers' current production capacity was strained due to upstream 
supply chain constraints. Additionally, manufacturers expressed that 
additional production lines would be required during the conversion 
period if standards were set at a level requiring ECMs. However, many 
manufacturers noted that their portfolios have expanded in recent years 
to accommodate more circulator pumps using ECMs. Furthermore, 
manufacturers indicated that a circulator pump utilizing an ECM could 
support a wider range of applications compared to a circulator pump 
utilizing an induction motor.
    As part of the December 2022 NOPR, DOE requested comment on a 
potential 2-year compliance period. HI and Xylem commented that 
manufacturers will benefit from a 4-year compliance period to allow 
time to engineer, develop, and test equipment to meet the standards. 
Additionally, there could be manufacturing capacity concerns if DOE 
required compliance within 2 years of

[[Page 44521]]

publication of a final rule. (HI, No. 135 at pp. 2-3; Xylem, No. 136 at 
pp. 3-4) This topic is also discussed in more detail in section III.H 
of this document. Given that DOE is requiring compliance with energy 
conservation standards 4 years after publication of this final rule, 
DOE does not anticipate any manufacturing capacity concerns.
d. Impacts on Subgroups of Manufacturers
    As discussed in section IV.J of this document, using average cost 
assumptions to develop an industry cash-flow estimate may not be 
adequate for assessing differential impacts among manufacturer 
subgroups. Small manufacturers, niche manufacturers, and manufacturers 
exhibiting a cost structure substantially different from the industry 
average could be affected disproportionately. DOE used the results of 
the industry characterization to group manufacturers exhibiting similar 
characteristics. Consequently, DOE identified small business 
manufacturers as a subgroup for a separate impact analysis.
    For the small business subgroup analysis, DOE applied the small 
business size standards published by the Small Business Administration 
(``SBA'') to determine whether a company is considered a small 
business. The size standards are codified at 13 CFR part 201. To be 
categorized as a small business under the North American Industry 
Classification System (``NAICS'') code 333914, ``Measuring, Dispensing, 
and Other Pumping Equipment Manufacturing,'' a circulator pump 
manufacturer and its affiliates may employ a maximum of 750 employees. 
The 750-employee threshold includes all employees in a business's 
parent company and any other subsidiaries. Based on this 
classification, DOE identified three small businesses that manufacture 
circulator pumps in the United States. DOE estimates one of the small 
businesses does not manufacture any circulator pump models that would 
meet the adopted standards. The other two small businesses both offer 
circulator pumps that would meet the adopted standards. The first small 
business is estimated to redesign 32 basic models at a cost of 
approximately $50.1 million, which corresponds to approximately 7.9 
percent of that small business's annual revenue over the 4-year 
compliance period. The second small business is estimated to redesign 3 
basic models at a cost of approximately $3.7 million, which corresponds 
to approximately 11.6 percent of that small business's annual revenue 
over the 4-year compliance period. The third small business is 
estimated to redesign 1 basic model at a cost of approximately $1.5 
million, which corresponds to approximately 18.3 percent of that small 
business's annual revenue over the 4-year compliance period.
    The small business subgroup analysis is discussed in more detail in 
chapter 12 of the final rule TSD and 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 regulatory actions 
of other Federal agencies and States that affect the manufacturers of 
covered 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. 
Multiple regulations affecting the same manufacturer can strain profits 
and lead companies to abandon equipment lines or markets with lower 
expected future returns than competing equipment. For these reasons, 
DOE conducts an analysis of cumulative regulatory burden as part of its 
rulemakings pertaining to equipment efficiency.
    DOE evaluates equipment-specific regulations that will take effect 
approximately 3 years before or after the 2028 compliance date of any 
energy conservation standards for circulator pumps.\82\ DOE is aware 
that circulator pump manufacturers produce other equipment or products 
including dedicated-purpose pool pumps \83\ and commercial and 
industrial pumps.\84\ None of these products or equipment have proposed 
or adopted energy conservation standards that require compliance within 
3 years of the adopted energy conservation standards for circulator 
pumps in this final rule.
---------------------------------------------------------------------------

    \82\ Section 13(g)(2) of appendix A to 10 CFR part 430 subpart C 
(``Process Rule'').
    \83\ www.regulations.gov/docket/EERE-2022-BT-STD-0001.
    \84\ www.regulations.gov/docket/EERE-2021-BT-STD-0018.
---------------------------------------------------------------------------

    HI and Xylem stated that the commercial and industrial pumps 
rulemaking is ongoing and the impact of the commercial and industrial 
pumps rulemaking will certainly require extensive resources from the 
same manufacturers being affected by the circulator pumps rulemaking 
during the same time horizon. (HI, No. 135 at p. 4; Xylem, No. 136 at 
p. 5) The commercial and industrial pumps rulemaking is an ongoing 
rulemaking that has not published a proposed rulemaking (i.e., NOPR) or 
a final rule. DOE is unable to estimate the potential impact of 
rulemakings that do not have proposed or adopted energy conservation 
standards. However, DOE will consider the cumulative effect of this 
circulator pumps rulemaking as part of the commercial and industrial 
pumps rulemaking if DOE proposes or establishes standards for 
commercial and industrial pumps in a future rulemaking.
    Lastly, HI and Xylem commented that the electric motors rulemaking 
\85\ will have a significant impact on the availability (style and 
volume), and breadth of ECMs to support conversion, especially the CP2 
and CP3 style circulator pumps. (Id.) DOE was unable to find any 
circulator pump manufacturer that also manufactures electric motors 
covered by that rulemaking. Additionally, the ECMs that are used in the 
circulator pumps to meet the efficiency levels at EL 2 and above, are 
not covered by that electric motors rulemaking.
---------------------------------------------------------------------------

    \85\ 88 FR 36066 (Jun. 1, 2023).
---------------------------------------------------------------------------

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 new standards.
a. Significance of Energy Savings
    To estimate the energy savings attributable to potential new 
standards for circulator pumps, DOE compared their energy consumption 
under the no-new-standards case to their anticipated energy consumption 
under each TSL. The savings are measured over the entire lifetime of 
equipment purchased in the 30-year period that begins in the year of 
anticipated compliance with new standards (2028-2057). Table V.10 
presents DOE's projections of the national energy savings for each TSL 
considered for circulator pumps. The savings were calculated using the 
approach described in section IV.H.2 of this document.

[[Page 44522]]

[GRAPHIC] [TIFF OMITTED] TR20MY24.050

    OMB Circular A-4 \86\ 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 equipment 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.\87\ The review timeframe established in EPCA is generally 
not synchronized with the equipment lifetime, equipment manufacturing 
cycles, or other factors specific to circulator pumps. Thus, such 
results are presented for informational purposes only and are not 
indicative of any change in DOE's analytical methodology. The NES 
sensitivity analysis results based on a 9-year analytical period are 
presented in Table V.11. The impacts are counted over the lifetime of 
circulator pumps purchased in 2028-2036.
---------------------------------------------------------------------------

    \86\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf.
    \87\ EPCA requires DOE to review its standards at least once 
every 6 years, and requires, for certain equipment, 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. (42 U.S.C. 
6295(m)) 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 equipment, the 
compliance period is 5 years rather than 3 years.
[GRAPHIC] [TIFF OMITTED] TR20MY24.051

b. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV of the total costs and savings for 
consumers that would result from the TSLs considered for circulator 
pumps. In accordance with OMB's guidelines on regulatory analysis,\88\ 
DOE calculated NPV using both a 7-percent and a 3-percent real discount 
rate. Table V.12 shows the consumer NPV results with impacts counted 
over the lifetime of equipment purchased in 2028-2057.
---------------------------------------------------------------------------

    \88\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf.
[GRAPHIC] [TIFF OMITTED] TR20MY24.052

    The NPV results based on the aforementioned 9-year analytical 
period are presented in Table V.13. The impacts are counted over the 
lifetime of equipment purchased in 2028-2036. 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 44523]]

[GRAPHIC] [TIFF OMITTED] TR20MY24.053

c. Indirect Impacts on Employment
    DOE estimates that new energy conservation standards for circulator 
pumps will reduce energy expenditures for consumers of those equipment, 
with the resulting net savings being redirected to other forms of 
economic activity. These expected shifts in spending and economic 
activity could affect the demand for labor. As described in section 
IV.N of this document, DOE used an input/output model of the U.S. 
economy to estimate indirect employment impacts of the TSLs that DOE 
considered. There are uncertainties involved in projecting employment 
impacts, especially changes in the later years of the analysis. 
Therefore, DOE generated results for near-term timeframes (2028-2032), 
where these uncertainties are reduced.
    The results suggest that the adopted standards are likely to have a 
negligible impact on the net demand for labor in the economy. The net 
change in jobs is so small that it would be imperceptible in national 
labor statistics and might be offset by other, unanticipated effects on 
employment. Chapter 16 of the final rule TSD presents detailed results 
regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Equipment
    As discussed in section III.G.1.d of this document, DOE has 
concluded that the standards adopted in this final rule will not lessen 
the utility or performance of the circulator pumps under consideration 
in this rulemaking. Manufacturers of these equipment currently offer 
units that meet or exceed the adopted standards.
5. Impact of Any Lessening of Competition
    DOE considered any lessening of competition that would be likely to 
result from new standards. As discussed in section III.G.1.e of this 
document, EPCA directs the Attorney General of the United States 
(``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 in writing 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. To assist the Attorney General 
in making this determination, DOE provided the Department of Justice 
(``DOJ'') with copies of the NOPR and the TSD for review. In its 
assessment letter responding to DOE, DOJ concluded that the proposed 
energy conservation standards for circulator pumps are unlikely to have 
a significant adverse impact on competition. DOE is publishing the 
Attorney General's assessment at the end of this final rule.
6. Need of the Nation To Conserve Energy
    Enhanced energy efficiency, where economically justified, improves 
the Nation's energy security, strengthens the economy, and reduces the 
environmental impacts (costs) of energy production. Reduced electricity 
demand due to energy conservation standards is also likely to reduce 
the cost of maintaining the reliability of the electricity system, 
particularly during peak-load periods. Chapter 15 in the final rule TSD 
presents the estimated impacts on electricity, for the TSLs that DOE 
considered in this rulemaking.
    Energy conservation resulting from potential energy conservation 
standards for circulator pumps is expected to yield environmental 
benefits in the form of reduced emissions of certain air pollutants and 
greenhouse gases. Table V.14 provides DOE's estimate of cumulative 
emissions reductions expected to result from the TSLs considered in 
this rulemaking. The emissions were calculated using the multipliers 
discussed in section IV.K of this document. DOE reports annual 
emissions reductions for each TSL in chapter 13 of the final rule TSD.

[[Page 44524]]

[GRAPHIC] [TIFF OMITTED] TR20MY24.054

    As part of the analysis for this rule, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
that DOE estimated for each of the considered TSLs for circulator 
pumps. Section IV.L of this document discusses the estimated SC-
CO2 values that DOE used. Table V.15 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 selected TSL in chapter 14 of the final rule TSD.
[GRAPHIC] [TIFF OMITTED] TR20MY24.055

    As discussed in section IV.L.2 of this document, DOE estimated the 
climate benefits likely to result from the reduced emissions of methane 
and N2O that DOE estimated for each of the considered TSLs 
for circulator pumps. Table V.16 presents the value of the 
CH4 emissions reduction at each TSL, and Table V.17 presents 
the value of the N2O emissions reduction at each TSL. The 
time-series of annual values is presented for the selected TSL in 
chapter 14 of the final rule TSD.

[[Page 44525]]

[GRAPHIC] [TIFF OMITTED] TR20MY24.056

[GRAPHIC] [TIFF OMITTED] TR20MY24.057

    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, however, that the adopted standards would be economically 
justified even without inclusion of monetized benefits of reduced GHG 
emissions.
    DOE also estimated the monetary value of the economic benefits 
associated with NOX and SO2 emissions reductions 
anticipated to result from the considered TSLs for circulator pumps. 
The dollar-per-ton values that DOE used are discussed in section IV.L 
of this document. Table V.18 presents the present value for 
NOX emissions reduction for each TSL calculated using 7-
percent and 3-percent discount rates, and Table V.19 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 selected TSL in chapter 14 of the final rule TSD.
[GRAPHIC] [TIFF OMITTED] TR20MY24.058


[[Page 44526]]


[GRAPHIC] [TIFF OMITTED] TR20MY24.059

    Not all the public health and environmental benefits from the 
reduction of greenhouse gases, NOX, and SO2 are 
captured in the values above, and additional unquantified benefits from 
the reductions of those pollutants as well as from the reduction of 
direct PM and other co-pollutants may be significant. DOE has not 
included monetary benefits of the reduction of Hg emissions because the 
amount of reduction is very small.
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.20 presents the NPV values that result from adding the 
estimates of the 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 equipment and are measured for the 
lifetime of equipment shipped in 2028-2057. The climate benefits 
associated with reduced GHG emissions resulting from the adopted 
standards are global benefits and are also calculated based on the 
lifetime of circulator pumps shipped in 2028-2057.
[GRAPHIC] [TIFF OMITTED] TR20MY24.060

C. Conclusion

    When considering new energy conservation standards, the standards 
that DOE adopts for any type (or class) of covered equipment must be 
designed to achieve the maximum improvement in energy efficiency that 
the Secretary determines is technologically feasible and economically 
justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A)) In determining 
whether a standard is economically justified, the Secretary must 
determine whether the benefits of the standard exceed its burdens by, 
to the greatest extent practicable, considering the seven statutory 
factors discussed previously. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)) The new standard must also result in significant 
conservation of energy. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(B))
    For this final rule, DOE considered the impacts of new standards 
for circulator pumps at each TSL, beginning with the maximum 
technologically feasible level, to determine whether that level was 
economically justified. Where the max-tech level was not justified, DOE 
then considered the next most efficient level and undertook the same 
evaluation until it reached the highest efficiency level that is both 
technologically feasible and economically justified and saves a 
significant amount of energy.
    To aid the reader as DOE discusses the benefits and/or burdens of 
each TSL, tables in this section present a summary of the results of 
DOE's quantitative analysis for each TSL. In addition to the 
quantitative results presented in the tables, DOE also considers other 
burdens and benefits that affect economic justification. These include 
the impacts on identifiable subgroups of consumers who may be 
disproportionately affected by a national standard and impacts on 
employment.
1. Benefits and Burdens of TSLs Considered for Circulator Pump 
Standards
    Table V.21 and Table V.22 summarize the quantitative impacts 
estimated for each TSL for circulator pumps. The national impacts are 
measured over the lifetime of circulator pumps purchased

[[Page 44527]]

in the 30-year period that begins in the anticipated year of compliance 
with new standards (2028-2057). The energy savings, emissions 
reductions, and value of emissions reductions refer to full-fuel-cycle 
results. DOE is presenting monetized benefits of GHG emissions 
reductions in accordance with the applicable Executive orders and DOE 
would reach the same conclusion presented in this notice in the absence 
of the social cost of greenhouse gases, including the Interim Estimates 
presented by the Interagency Working Group. The efficiency levels 
contained in each TSL are described in section V.A of this document.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TR20MY24.061


[[Page 44528]]


[GRAPHIC] [TIFF OMITTED] TR20MY24.062

BILLING CODE 6450-01-C
    DOE first considered TSL 4, which represents the max-tech 
efficiency levels. TSL 4 would save an estimated 1.19 quads of energy, 
an amount DOE considers significant. Under TSL 4, the NPV of consumer 
benefit would be $1.17 billion using a discount rate of 7 percent, and 
$3.57 billion using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 4 are 21.73 Mt of 
CO2, 40.4 thousand tons of SO2, 6.29 thousand 
tons of NOX, 0.04 tons of Hg, 182.7 thousand tons of 
CH4, and 0.20 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 4 is $1.25 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 4 is $1.07 billion using a 7-percent discount rate and $2.47 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 4 is $3.5 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 4 is $7.29 billion.
    At TSL 4, the average LCC impact is a savings of $112.4. The simple 
payback period is 4.6 years. The fraction of purchasers experiencing a 
net LCC cost is 45.9 percent.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$118.1 million to an increase of $32.4 million, which corresponds to a 
decrease of 34.0 percent and an increase of 9.3 percent, respectively. 
DOE estimates that industry must invest $129.9 million to comply with 
standards set at TSL 4. This investment is primarily driven by 
converting all existing equipment to include differential-temperature 
based controls and the associated product conversion costs that would 
be needed to support such a transition. DOE estimates that 
approximately 2 percent of circulator pump shipments would meet the 
efficiency levels analyzed at TSL 4 in the no-new-standards case.
    The Secretary concludes that at TSL 4 for circulator pump, the 
benefits of energy savings, positive NPV of consumer benefits, emission 
reductions, and the estimated monetary value of the emissions 
reductions would be outweighed by the economic burden on many 
consumers, and the impacts on manufacturers, including the large 
conversion costs, profit margin impacts that could result in a large 
reduction in INPV, and the lack of manufacturers currently offering 
products meeting the efficiency levels required at this TSL, including 
small businesses. Almost a majority of circulator pump customers (45.9 
percent) would experience a net cost and manufacturers would have to 
significantly ramp up production of more efficient models since only 2 
percent of shipments currently meet the efficiency levels at TSL 4. 
Consequently, the Secretary has concluded that TSL 4 is not 
economically justified.
    DOE then considered TSL 3, which represents EL 3 for all circulator 
pumps, and would require automatic proportional pressure controls to be 
added to the circulator pump. TSL 3 would save an estimated 1.02 quads 
of energy, an amount DOE considers significant. Under TSL 3, the NPV of 
consumer benefit would be $1.11 billion using a discount rate of 7 
percent, and $3.25 billion using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 3 are 18.56 Mt of 
CO2, 5.39 thousand tons of SO2, 34.5 thousand 
tons of NOX, 0.04 tons of Hg, 155.86 thousand tons of 
CH4, and 0.18 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 3 is $1.07 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 3 is $0.92 billion using a 7-percent discount rate and $2.11 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 3 is $3.10 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 3 is $6.44 billion.
    At TSL 3, the average LCC impact is a savings of $117.4. The simple 
payback period is 4.5 years. The fraction of consumers experiencing a 
net LCC cost is 42.7 percent.
    At TSL 3, the projected change in INPV ranges from a decrease of 
$100.1 million to an increase of $15.2 million, which corresponds to a 
decrease of 28.8 percent and an increase of 4.4 percent, respectively. 
DOE estimates that industry must invest $116.2 million to comply with 
standards set at TSL 3. DOE estimates that approximately 20 percent of 
circulator pump shipments will meet or exceed the efficiency levels 
analyzed at TSL 3 in the no-new-standards case.
    DOE also notes that the estimated energy and economic savings from 
TSL 3 are highly dependent on the end-use systems in which the 
circulator pumps

[[Page 44529]]

are installed (e.g., hydronic heating or water heating applications). 
Circulator pumps are typically added to systems when installed in the 
field and can be replaced separately than the end-use appliance in 
which they are paired. Depending on the type of controls that the end-
use appliance contains, the circulator pumps may not see the field 
savings benefits from the technologies incorporated in TSL 3 because 
the end-use system cannot accommodate full variable-speed operation. In 
particular, some systems will not achieve any additional savings from 
differential pressure controls as compared to a single speed ECM with 
no controls (i.e., TSL 2). As discussed earlier in this document, to 
evaluate the effect of a varying fraction of circulator pumps 
benefitting from controls, DOE conducted a sensitivity in the LCC 
analysis. The results of this sensitivity analysis showed that the 
fraction of purchasers experiencing a net cost at EL 3 and EL 4 would 
linearly increase from 42.7% to 60.7% and 45.9% to 74.8%, respectively, 
when the fraction of purchasers who do benefit from controls in the 
field varies from 100% to 0%. While the analysis includes the best 
available assumptions on the distribution of system curves and single-
zone versus multi-zone applications, variation in those assumptions 
could have a large impact on savings potential and resulting economics 
providing uncertainty in the savings associated with TSL 3.
    The Secretary concludes that at TSL 3 for circulator pump, the 
benefits of energy savings, positive NPV of consumer benefits, emission 
reductions, and the estimated monetary value of the emissions 
reductions would be outweighed by the economic burden on many 
consumers, and the impacts on manufacturers, including the large 
conversion costs, profit margin impacts that could result in a large 
reduction in INPV, and the lack of manufacturers currently offering 
products meeting the efficiency levels required at this TSL, including 
small businesses. Almost a majority of circulator pump customers (42.7 
percent) would experience a net cost and manufacturers would have to 
significantly ramp up production of more efficient models since only 2 
percent of shipments currently meet TSL 3 efficiency levels. In 
addition, the Secretary is also concerned about the uncertainty 
regarding the potential energy savings as compared to the field savings 
due to the lack of end-use appliances being able to respond to 
differential pressure controls from the circulator pump. Consequently, 
the Secretary has concluded that TSL 3 is not economically justified.
    DOE then considered TSL 2, which represents efficiency level 2 for 
circulator pumps. TSL 2 would save an estimated 0.55 quads of energy, 
an amount DOE considers significant. Under TSL 2, the NPV of consumer 
benefit would be $0.95 billion using a discount rate of 7 percent, and 
$2.34 billion using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 2 are 10.04 Mt of 
CO2, 2.95 thousand tons of SO2, 18.65 thousand 
tons of NOX, 0.02 tons of Hg, 83.84 thousand tons of 
CH4, and 0.10 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 2 is $0.59 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 2 is $0.51 billion using a 7-percent discount rate and $1.16 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 2 is $2.05 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 2 is $4.09 billion.
    At TSL 2, the average LCC impact is a savings of $110.9. The simple 
payback period is 3.3 years. The fraction of consumers experiencing a 
net LCC cost is 28.0 percent.
    At TSL 2, the projected change in INPV ranges from a decrease of 
$69.2 million to an increase of $11.1 million, which corresponds to a 
decrease of 19.9 percent and to an increase of 3.2 percent, 
respectively. DOE estimates that industry must invest $81.2 million to 
comply with standards set at TSL 2. DOE estimates that approximately 37 
percent of circulator pump shipments would meet the efficiency levels 
analyzed at TSL 2. At TSL 2, most manufacturers have current circulator 
pump offerings at this level.
    Standards set at TSL 2 essentially guarantees energy savings in all 
applications currently served by an induction motor, as the savings 
accrue from motor efficiency alone rather than from a particular 
control strategy that must be properly matched to the system in the 
field. In comparison, TSL 3 and 4 include an ECM as in TSL 2, but TSL 3 
and 4 also include the associated variable speed controls that must be 
properly matched in the field. TSL 2 also allows and encourages uptake 
of circulators with controls, as manufacturers may choose to prioritize 
variable speed ECM as opposed to single speed ECM. This could increase 
the potential savings from TSL 2 from those captured in the analysis, 
while providing consumers and manufacturers with flexibility to select 
the motor and/or control strategy most appropriate to their given 
application.
    After considering the analysis and weighing the benefits and 
burdens, the Secretary has concluded that a standard set at TSL 2 for 
circulator pumps would be economically justified. At this TSL, the 
average LCC savings are positive. An estimated 28.0 percent \89\ of 
circulator pump consumers experience a net cost. The FFC national 
energy savings are significant and the NPV of consumer benefits is 
positive using both a 3-percent and 7-percent discount rate. Notably, 
the benefits to consumers vastly outweigh the cost to manufacturers. At 
TSL 2, the NPV of consumer benefits, even measured at the more 
conservative discount rate of 7 percent is over 13 times higher than 
the maximum estimated manufacturers' loss in INPV. The standard levels 
at TSL 2 are economically justified even without weighing the estimated 
monetary value of emissions reductions. When those emissions reductions 
are included--representing $0.59 billion in climate benefits 
(associated with the average SC-GHG at a 3-percent discount rate), and 
$1.16 billion (using a 3-percent discount rate) or $0.51 billion (using 
a 7-percent discount rate) in health benefits--the rationale becomes 
stronger still.
---------------------------------------------------------------------------

    \89\ While there are various factors that may lead to certain 
consumers experiencing a net cost (e.g., high discount rates, lower 
equipment lifetimes, or a combination thereof), typically consumers 
who use their equipment for lower operating hours compared to the 
rest of the sample are generally less likely to recoup the purchase 
price of the equipment through operating cost savings.
---------------------------------------------------------------------------

    As stated, DOE conducts the walk-down analysis to determine the TSL 
that represents the maximum improvement in energy efficiency that is 
technologically feasible and economically justified as required under 
EPCA. The walk-down is not a comparative analysis, as a comparative 
analysis would result in the maximization of net benefits instead of 
energy savings that are technologically feasible and economically 
justified, which would be contrary to the statute. 86 FR 70892, 70908. 
Although DOE has not conducted a comparative analysis to select the new 
energy conservation standards, DOE notes that despite the average 
consumer LCC savings being

[[Page 44530]]

similar between TSL 2 ($110.9), TSL 3 ($117.4) and TSL 4 ($112.4), TSL 
2 has a much lower fraction of consumers who experience a net cost 
(28.0%) than TSL 3 (42.7%) and TSL 4 (45.9%). In terms of industry 
investment to comply with each standard level, TSL 2 ($81.2 million) 
has considerably lower impact than TSL 3 ($116.2 million) and TSL 4 
($129.9 million).
    Therefore, based on the previous considerations, DOE adopts the 
energy conservation standards for circulator pumps at TSL 2. The new 
energy conservation standards for circulator pumps, which are expressed 
as CEI, are shown in Table V.23.
[GRAPHIC] [TIFF OMITTED] TR20MY24.063

2. Annualized Benefits and Costs of the Adopted Standards
    The benefits and costs of the adopted standards can also be 
expressed in terms of annualized values. The annualized net benefit is 
(1) the annualized national economic value (expressed in 2022$) of the 
benefits from operating equipment that meet the adopted standards 
(consisting primarily of operating cost savings from using less 
energy), minus increases in equipment purchase costs, and (2) the 
annualized monetary value of the climate and health benefits.
    Table V.24 shows the annualized values for circulator pumps under 
TSL 2, expressed in 2022$. The results under the primary estimate are 
as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
NOX and SO2 reductions, and the 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
adopted standards for circulator pumps is $113.9 million per year in 
increased equipment installed costs, while the estimated annual 
benefits are $207.5 million from reduced equipment operating costs, 
$32.7 million in GHG reductions (climate benefits), and $50.7 million 
in health benefits from reduced NOX and SO2 
emissions. In this case, the net benefit amounts to $177 million per 
year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the adopted standards for circulator pumps is $109.4 
million per year in increased equipment costs, while the estimated 
annual benefits are $239.7 million in reduced operating costs, $32.7 
million from GHG reductions, and $64.7 million from reduced 
NOX and SO2 emissions. In this case, the net 
benefit amounts to $227.7 million per year.
BILLING CODE 6450-01-P

[[Page 44531]]

[GRAPHIC] [TIFF OMITTED] TR20MY24.064

BILLING CODE 6450-01-C

[[Page 44532]]

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866, 13563, and 14094

    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) and 
amended by E.O. 14094, ``Modernizing Regulatory Review,'' 88 FR 21879 
(April 11, 2023), 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 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 final regulatory action constitutes a 
``significant regulatory action'' within the scope of section 3(f)(1) 
of E.O. 12866., as amended by E.O. 14094. 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 final 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'') 
and a final regulatory flexibility analysis (``FRFA'') for any rule 
that by law must be proposed for public comment, unless the agency 
certifies that the rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities. As required 
by 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 Counsel's website 
(energy.gov/gc/office-general-counsel). DOE has prepared the following 
FRFA for the equipment that is the subject of this rulemaking.
    For manufacturers of circulator pumps, 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 NAICS code and industry description and 
are available at www.sba.gov/document/support-table-size-standards. 
Manufacturing of circulator pumps is classified under NAICS 333914, 
``Measuring, Dispensing, and Other Pumping Equipment Manufacturing.'' 
The SBA sets a threshold of 750 employees or fewer for an entity to be 
considered as a small business for this category.
1. Need for, and Objectives of, Rule
    The January 2016 TP Final Rule and the January 2016 ECS Final Rule 
implemented the recommendations of the CIPWG established through the 
ASRAC to negotiate standards and a test procedure for general pumps. 
(Docket No. EERE-2013-BT-NOC-0039) The CIPWG approved a term sheet 
containing recommendations to DOE on appropriate standard levels for 
general pumps, as well as recommendations addressing issues related to 
the metric and test procedure for general pumps (``CIPWG 
recommendations''). (Docket No. EERE-2013-BT-NOC-0039, No. 92) 
Subsequently, ASRAC approved the CIPWG recommendations. The CIPWG 
recommendations included initiation of a separate rulemaking for 
circulator pumps. (Docket No. EERE-2013-BT-NOC-0039, No. 92, 
Recommendation #5A at p. 2)
    On February 3, 2016, DOE issued a notice of intent to establish the 
Circulator Pumps Working Group to negotiate a NOPR for energy 
conservation standards for circulator pumps; to negotiate, if possible, 
Federal standards and a test procedure for circulator pumps; and to 
announce the first public meeting. 81 FR 5658. The CPWG met to address 
potential energy conservation standards for circulator pumps. Those 
meetings began on November 3-4, 2016, and concluded on November 30, 
2016, with approval of a term sheet (``November 2016 CPWG 
Recommendations'') containing CPWG recommendations related to energy 
conservation standards, applicable test procedure, and labeling and 
certification requirements for circulator pumps. (Docket No. EERE-2016-
BT-STD-0004, No. 98) As such, DOE has undertaken this rulemaking to 
consider establishing energy conservation standards for circulator 
pumps.
2. Significant Issues Raised by Public Comments in Response to the IRFA
    HI commented that while they do not have any specific small 
business data to provide, the 2-year compliance lead time will be very 
difficult for small businesses to comply with, which may cause these 
small businesses to exit the market. As discussed in section III.H of 
this document, DOE is establishing a 4-year compliance date for energy 
conservation standards for circulator pumps. DOE interprets HI's 
comment regarding the impacts to small businesses will be mitigated if 
a 4-year compliance date is adopted.
3. Description and Estimated Number of Small Entities Affected
    As previously described, DOE used SBA's definition of a small 
business to identify any circulator pump small business manufacturers. 
DOE used

[[Page 44533]]

publicly available information to identify small businesses that 
manufacture circulator pumps covered in this rulemaking. DOE identified 
ten companies that are manufacturers of circulator pumps covered by 
this rulemaking. DOE screened out companies that do not meet the 
definition of a ``small business,'' are foreign-owned and operated, or 
do not manufacture circulator pumps in the United States. DOE 
identified three small businesses that manufacture circulator pumps in 
the United States using subscription-based business information tools 
to determine the number of employees and revenue of these small 
businesses.
4. Description of Reporting, Recordkeeping, and Other Compliance 
Requirements
    This final rule establishes energy conservation standards for 
circulator pumps. To determine the impact on the small business 
manufacturers, DOE estimated the product conversion costs and capital 
conversion costs that all circulator pump manufacturers would incur. 
DOE additionally estimated the product and capital conversion costs 
that the three identified small business manufacturers would incur. 
Product conversion costs are investments in research, development, 
testing, marketing, and other non-capitalized costs necessary to make 
equipment designs comply with energy conservation standards. Capital 
conversion costs are one-time investments in plant, property, and 
equipment made in response to standards.
    DOE estimates there is one small business that does not have any 
circulator pump models that would meet the adopted standards. The other 
two businesses both offer circulator pumps that would meet the adopted 
standards. DOE applied the conversion cost methodology described in 
section IV.J.2.c of this document to arrive at its estimate of product 
and capital conversion costs for the small business manufacturers. DOE 
assumes that all circulator pump manufacturers, including small 
business manufacturers, would spread conversion costs over the four-
year compliance timeframe, as manufacturers are required to comply with 
standards four years after the publication of this final rule. Using 
publicly available data, DOE estimated the average annual revenue for 
each of the three small businesses, displayed in Table VI.1.
[GRAPHIC] [TIFF OMITTED] TR20MY24.066

    Additionally, these manufacturers could choose to discontinue their 
least efficient models and ramp up production of existing, compliant 
models rather than redesign each of their non-compliant models. 
Therefore, DOE's estimated conversion costs could overestimate the 
actual conversion costs that these small businesses would incur.
5. Significant Alternatives Considered and Steps Taken To Minimize 
Significant Economic Impacts on Small Entities
    The discussion in the previous section analyzes impacts on small 
businesses that would result from the adopted standards, represented by 
TSL 2. In reviewing alternatives to the adopted standards, DOE examined 
energy conservation standards set at lower efficiency levels. While TSL 
1 would reduce the impacts on small business manufacturers, it would 
come at the expense of a reduction in energy savings. TSL 1 achieves 80 
percent lower energy savings and achieves 51 percent lower consumer net 
benefits compared to the energy savings and consumer net benefits at 
TSL 2.
    Establishing standards at TSL 2 is the maximum improvement in 
energy efficiency that is technologically feasible and that DOE has 
determined in this final rule to be economically justified as 
requirement by EPCA, including considering the potential burdens placed 
on circulator pump manufacturers, including small business 
manufacturers. Accordingly, DOE is not adopting 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 final rule TSD.
    Additional compliance flexibilities may be available through other 
means. Manufacturers subject to DOE's energy efficiency standards may 
apply to DOE's Office of Hearings and Appeals for exception relief 
under certain circumstances. Manufacturers should refer to 10 CFR part 
430, subpart E, and 10 CFR part 1003 for additional details.

C. Review Under the Paperwork Reduction Act

    Manufacturers of circulator pumps must certify to DOE that their 
equipment complies with any applicable energy conservation standards. 
In certifying compliance, manufacturers must test their equipment 
according to the DOE test procedures for circulator pumps, including 
any amendments adopted for those test procedures. DOE has established 
regulations for the certification and recordkeeping requirements for 
all covered consumer equipment and commercial equipment, including 
circulator pumps. (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.
    Certification data will be required for circulator pumps; however, 
DOE is not adopting certification or reporting requirements for 
circulator pumps in this final rule. Instead, DOE may consider 
proposals to establish certification requirements and reporting for 
circulator pumps under a separate rulemaking regarding appliance and 
equipment certification. DOE will address changes to OMB Control

[[Page 44534]]

Number 1910-1400 at that time, as necessary.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    Pursuant to the National Environmental Policy Act of 1969 
(``NEPA''), DOE has analyzed this proposed action rule in accordance 
with NEPA and DOE's NEPA implementing regulations (10 CFR part 1021). 
DOE has determined that this rule qualifies for categorical exclusion 
under 10 CFR part 1021, subpart D, appendix B5.1 because it is a 
rulemaking that establishes energy conservation standards for consumer 
equipment or industrial equipment, none of the exceptions identified in 
B5.1(b) apply, no extraordinary circumstances exist that require 
further environmental analysis, and it meets the requirements for 
application of a categorical exclusion. (See 10 CFR 1021.410.) 
Therefore, DOE has determined that promulgation of this rule is not a 
major Federal action significantly affecting the quality of the human 
environment within the meaning of NEPA, and does not require an 
environmental assessment or an environmental impact statement.

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 rule and has determined 
that it would not have a substantial direct effect on the States, on 
the relationship between the national government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government. EPCA governs and prescribes Federal preemption of State 
regulations as to energy conservation for the equipment that are the 
subject of this final rule. States can petition DOE for exemption from 
such preemption to the extent, and based on criteria, set forth in 
EPCA. See 42 U.S.C. 6316(a) and (b); 42 U.S.C. 6297) Therefore, no 
further action is required by Executive Order 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil 
Justice Reform,'' imposes on Federal agencies the general duty to 
adhere to the following requirements: (1) eliminate drafting errors and 
ambiguity, (2) write regulations to minimize litigation, (3) provide a 
clear legal standard for affected conduct rather than a general 
standard, and (4) promote simplification and burden reduction. 61 FR 
4729 (Feb. 7, 1996). Regarding the review required by section 3(a), 
section 3(b) of E.O. 12988 specifically requires that Executive 
agencies make every reasonable effort to ensure that the regulation (1) 
clearly specifies the preemptive effect, if any, (2) clearly specifies 
any effect on existing Federal law or regulation, (3) provides a clear 
legal standard for affected conduct while promoting simplification and 
burden reduction, (4) specifies the retroactive effect, if any, (5) 
adequately defines key terms, and (6) addresses other important issues 
affecting clarity and general draftsmanship under any guidelines issued 
by the Attorney General. Section 3(c) of E.O. 12988 requires Executive 
agencies to review regulations in light of applicable standards in 
section 3(a) and section 3(b) to determine whether they are met or it 
is unreasonable to meet one or more of them. DOE has completed the 
required review and determined that, to the extent permitted by law, 
this final rule meets the relevant standards of 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, sec. 201 (codified at 2 U.S.C. 1531). 
For a regulatory action likely to result in a rule that may cause the 
expenditure by State, local, and Tribal governments, in the aggregate, 
or by the private sector of $100 million or more in any one year 
(adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to 
develop an effective process to permit timely input by elected officers 
of State, local, and Tribal governments on a ``significant 
intergovernmental mandate,'' and requires an agency plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirements that might 
significantly or uniquely affect them. On March 18, 1997, DOE published 
a statement of policy on its process for intergovernmental consultation 
under UMRA. 62 FR 12820. DOE's policy statement is also available at 
energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
    DOE has concluded that this final rule 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 circulator pumps 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 
higher-efficiency circulator pumps, 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 final rule. (2 I.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 document and the TSD for this 
final rule respond to those requirements.
    Under section 205 of UMRA, DOE 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 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(m), 
this final rule establishes new energy conservation standards for 
circulator pumps that are designed to achieve the

[[Page 44535]]

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 final 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 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 (March 
18, 1988), DOE has determined that this rule would not result in any 
takings that might require compensation under the Fifth Amendment to 
the U.S. Constitution.

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

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

K. Review Under Executive Order 13211

    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 significant energy action. A 
``significant energy action'' is defined as any action by an agency 
that promulgates or is expected to lead to promulgation of a final 
rule, and that (1) is a significant regulatory action under Executive 
Order 12866, or any successor order; and (2) is likely to have a 
significant adverse effect on the supply, distribution, or use of 
energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any significant energy action, the 
agency must give a detailed statement of any adverse effects on energy 
supply, distribution, or use should the proposal be implemented, and of 
reasonable alternatives to the action and their expected benefits on 
energy supply, distribution, and use.
    DOE has concluded that this regulatory action, which sets forth new 
energy conservation standards for circulator pumps, is not a 
significant energy action because the standards are not likely to have 
a significant adverse effect on the supply, distribution, or use of 
energy, nor has it been designated as such by the Administrator at 
OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects 
on this final rule.

L. Information Quality

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (``OSTP''), issued its Final Information 
Quality Bulletin for Peer Review (``the Bulletin''). 70 FR 2664 (Jan. 
14, 2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the Bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as ``scientific information 
the agency reasonably can determine will have, or does have, a clear 
and substantial impact on important public policies or private sector 
decisions.'' 70 FR 2664, 2667.
    In response to OMB's Bulletin, DOE conducted formal peer reviews of 
the energy conservation standards development process and the analyses 
that are typically used and prepared a report describing that peer 
review.\90\ 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 DOE's analyses. DOE is in the 
process of evaluating the resulting report.\91\
---------------------------------------------------------------------------

    \90\ 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 September 19, 2023).
    \91\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------

M. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation of this rule prior to its effective date. Pursuant to 
Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 
1996 (also known as the Congressional Review Act), the Office of 
Information and Regulatory Affairs has determined that this rule meets 
the criteria set forth in 5 U.S.C. 804(2).

VII. Approval of the Office of the Secretary

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

List of Subjects in 10 CFR Part 431

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Incorporation by reference, Reporting 
and recordkeeping requirements.

Signing Authority

    This document of the Department of Energy was signed on April 9, 
2024, by Jeffrey Marootian, Principal Deputy 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

[[Page 44536]]

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 April 10, 2024.
Treena V. Garrett,
Federal Register Liaison Officer,U.S. Department of Energy.
    For the reasons set forth in the preamble, DOE amends part 431 of 
chapter II, subchapter D, of title 10 of the Code of Federal 
Regulations as set forth below:

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

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

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


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


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

* * * * *
    (i) Each circulator pump that is manufactured starting on May 22, 
2028 and that meets the criteria in paragraphs (i)(1) through (i)(2) of 
this section must have a circulator energy index (``CEI'') rating (as 
determined in accordance with the test procedure in Sec.  
431.464(c)(2)) of not more than 1.00 using the instructions in 
paragraph (i)(3) of this section and with a control mode as specified 
in paragraph (i)(4) of this section:
    (1) Is a clean water pump as defined in Sec.  431.462.
    (2) Is not a submersible pump or a header pump, each as defined in 
Sec.  431.462.
    (3) The relationships in this paragraph (i)(3) are necessary to 
calculate maximum CEI.
    (i) Calculate CEI according to the following equation:
Equation 1 to Paragraph (i)(3)(i)
[GRAPHIC] [TIFF OMITTED] TR20MY24.067

Where:

CEI = the circulator energy index (dimensionless);
CER = the circulator energy rating (hp), determined in accordance 
with section 6 of appendix D to subpart Y of part 431; and
CERSTD = the CER for a circulator pump that is minimally 
compliant with DOE's energy conservation standards with the same 
hydraulic horsepower as the rated pump (hp), determined in 
accordance with paragraph (i)(3)(ii) of this section.

    (ii) Calculate CERSTD according to the following 
equation:
Equation 2 to Paragraph (i)(3)(ii)
[GRAPHIC] [TIFF OMITTED] TR20MY24.068

Where:

CERSTD = the CER for a circulator pump that is minimally 
compliant with DOE's energy conservation standards with the same 
hydraulic horsepower as the rated pump (hp);
i = the index variable of the summation notation used to express 
CERSTD (dimensionless) as described in the table 3 to 
paragraph (i)(3)(ii), in which i is expressed as a percentage of 
circulator pump flow at best efficiency point, determined in 
accordance with the test procedure in Sec.  431.464(c)(2);
[omega]i = the weighting factor (dimensionless) at each 
corresponding test point, i, as described in table 3 to paragraph 
(i)(3)(ii); and Piin,STD = the reference power 
input to the circulator pump driver (hp) at test point i, calculated 
using the equations and method specified in paragraph (i)(3)(iii) of 
this section.


                     Table 3 to Paragraph (i)(3)(ii)
------------------------------------------------------------------------
                                                          Corresponding
                         I (%)                               [omega]i
------------------------------------------------------------------------
25.....................................................              .25
50.....................................................              .25
75.....................................................              .25
100....................................................              .25
------------------------------------------------------------------------

    (iii) Calculate Piin,STD according to the 
following equation:
Equation 3 to Paragraph (i)(3)(iii)
[GRAPHIC] [TIFF OMITTED] TR20MY24.069

Where:

Piin,STD = the reference power input to the 
circulator pump driver at test point i (hp);
Pu,i = circulator pump basic model rated hydraulic 
horsepower (hp) determined in accordance with 10 CFR 
429.59(a)(2)(i);
[alpha]i = part-load efficiency factor (dimensionless) at 
each test point i as described in table 4 to paragraph (i)(3)(iii); 
and
[eta]WTW,100 = reference circulator pump wire-to-
water efficiency at best efficiency point (%) at the applicable 
energy conservation standard level, as described in table 5 to 
paragraph (i)(3)(iii) as a function of circulator pump basic model 
rated hydraulic horsepower at 100% BEP flow, 
Pu,100.

[[Page 44537]]



                    Table 4 to Paragraph (i)(3)(iii)
------------------------------------------------------------------------
                                                          Corresponding
                         I (%)                               [alpha]i
------------------------------------------------------------------------
25.....................................................           0.4843
50.....................................................           0.7736
75.....................................................           0.9417
100....................................................                1
------------------------------------------------------------------------


                    Table 5 to Paragraph (i)(3)(iii)
------------------------------------------------------------------------
         Pu,100                    [eta]WTW,100
------------------------------------------------------------------------
<1..............................  10*ln(Pu,100 + 0.001141) +
                                   67.78.
>=1.............................  67.79%.
------------------------------------------------------------------------

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

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

U.S. DEPARTMENT OF JUSTICE
Antitrust Division
RFK Main Justice Building
950 Pennsylvania Avenue NW
Washington, DC 20530-0001

January 26, 2024

Ami Grace-Tardy
Assistant General Counsel
for Litigation, Regulation and Energy Efficiency
U.S. Department of Energy
Washington, DC 20585
Re: Energy Conservation Standards for Circulator Pumps
DOE Docket No. EERE-2016-BT-STD-0004

Dear Assistant General Counsel Grace-Tardy:

    I am responding to your November 28, 2023, letter seeking the views 
of the Attorney General about the potential impact on competition of 
energy conservation standards for circulator pumps.
    Your request was submitted under Section 325(o)(2)(B)(i)(V) of the 
Energy Policy and Conservation Act, as amended (ECPA), 42 U.S.C. 
6295(o)(2)(B)(i)(V), which requires the Attorney General to make a 
determination of the impact of any lessening of competition that is 
likely to result from the imposition of proposed energy conservation 
standards. The Attorney General's responsibility for responding to 
requests from other departments about the effect of a program on 
competition has been delegated to the Assistant Attorney General for 
the Antitrust Division in 28 CFRSec.  0.40(g). The Assistant Attorney 
General for the Antitrust Division has authorized me, as the Policy 
Director for the Antitrust Division, to provide the Antitrust 
Division's views regarding the potential impact on competition of 
proposed energy conservation standards on his behalf.
    In conducting its analysis, the Antitrust Division examines whether 
a potential amended standard may lessen competition, for example, by 
substantially limiting consumer choice, by placing certain 
manufacturers at an unjustified competitive disadvantage, or by 
inducing avoidable inefficiencies in production or distribution of 
particular products. A lessening of competition could result in higher 
prices to manufacturers and consumers.
    We have reviewed the proposed standards contained in the Notice of 
proposed rulemaking and request for comment (87 FR 74850, December 6, 
2022) and the related Technical Support Document. We have also reviewed 
public comments and information discussed at the Working Group Meetings 
held in November 29-30, 2016.
    Based on this review, our conclusion is that the proposed energy 
conservation standards for circulator pumps are unlikely to have a 
significant impact on competition.

Sincerely,
David G.B. Lawrence,
Policy Director

[FR Doc. 2024-07873 Filed 5-17-24; 8:45 am]
BILLING CODE 6450-01-P