[Federal Register Volume 74, Number 133 (Tuesday, July 14, 2009)]
[Rules and Regulations]
[Pages 34080-34179]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-15710]
[[Page 34079]]
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Part II
Department of Energy
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10 CFR Part 430
Energy Conservation Program: Energy Conservation Standards and Test
Procedures for General Service Fluorescent Lamps and Incandescent
Reflector Lamps; Final Rule
Federal Register / Vol. 74, No. 133 / Tuesday, July 14, 2009 / Rules
and Regulations
[[Page 34080]]
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DEPARTMENT OF ENERGY
10 CFR Part 430
[Docket Number EE-2006-STD-0131]
RIN 1904-AA92
Energy Conservation Program: Energy Conservation Standards and
Test Procedures for General Service Fluorescent Lamps and Incandescent
Reflector Lamps
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Final rule.
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SUMMARY: The Department of Energy (DOE) is announcing that pursuant to
the Energy Policy and Conservation Act (EPCA), it is amending the
energy conservation standards for certain general service fluorescent
lamps and incandescent reflector lamps. DOE is also adopting new energy
conservation standards and amendments to its test procedures for
certain general service fluorescent lamps not currently covered by
standards. Additionally, DOE is amending the definitions of certain
terms found in the general provisions. It has determined that energy
conservation standards for these products would result in significant
conservation of energy, and are technologically feasible and
economically justified.
DATES: The effective date of this rule is September 14, 2009.
Compliance with the standards established in today's final rule is
required starting on July 14, 2012. The incorporation by reference of
certain publications listed in this rule was approved by the Director
of the Federal Register on September 14, 2009.
ADDRESSES: For access to the docket to read background documents, the
technical support document, transcripts of the public meetings in this
proceeding, or comments received, visit the U.S. Department of Energy,
Resource Room of the Building Technologies Program, 950 L'Enfant Plaza,
SW., 6th Floor, Washington, DC 20024, (202) 586-2945, between 9 a.m.
and 4 p.m., Monday through Friday, except Federal holidays. Please call
Ms. Brenda Edwards at the above telephone number for additional
information regarding visiting the Resource Room. You may also obtain
copies of certain previous rulemaking documents in this proceeding
(i.e., framework document, advance notice of proposed rulemaking,
notice of proposed rulemaking), draft analyses, public meeting
materials, and related test procedure documents from the Office of
Energy Efficiency and Renewable Energy's Web site at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/incandescent_lamps.html.
FOR FURTHER INFORMATION CONTACT:
Ms. Linda Graves, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Program, EE-2J,
1000 Independence Avenue, SW., Washington, DC 20585-0121. Telephone:
(202) 586-1851. E-mail: [email protected].
Mr. Eric Stas, U.S. Department of Energy, Office of the General
Counsel, GC-72, 1000 Independence Avenue, SW., Washington, DC 20585-
0121. Telephone: (202) 586-9507. E-mail: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Summary of the Final Rule
A. The Standard Levels
B. Current Federal Standards for General Service Fluorescent
Lamps and Incandescent Reflector Lamps
C. Benefits and Burdens to Purchasers of General Service
Fluorescent Lamps and Incandescent Reflector Lamps
D. Impact on Manufacturers
E. National Benefits
F. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for General Service
Fluorescent Lamps, Incandescent Reflector Lamps, and General Service
Incandescent Lamps
III. Issues Affecting the Scope of This Rulemaking
A. Additional General Service Fluorescent Lamps for Which DOE is
Adopting Standards
1. Scope of EPCA Requirement that DOE Consider Standards for
Additional Lamps
2. Determination of the Additional Lamps to Which Standards Will
Apply
a. Four-Foot Medium Bipin Lamps
b. Two-Foot Medium Bipin, U-Shaped Lamps
c. Eight-Foot Recessed, Double-Contact Lamps
d. Eight-Foot Single Pin Slimline Lamps
e. Very High Output Straight-Shaped Lamps
f. T5 Lamps
g. Various Other Fluorescent Lamps
3. Summary of GSFL for Which DOE Has Adopted Standards
B. Incandescent Reflector Lamp Scope of Coverage
1. Covered Wattage Range
2. Exempted Incandescent Reflector Lamps
3. Museum Lighting
C. Amended Definitions
1. ``Rated Wattage''
2. ``Colored Fluorescent Lamp''
D. Off Mode and Standby Mode Energy Consumption Standards
E. Color Rendering Index Standards for General Service
Fluorescent Lamps
IV. General Discussion
A. Test Procedures
B. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
C. Energy Savings
D. Economic Justification
1. Specific Criteria
a. Economic Impact on Consumers and Manufacturers
b. Life-Cycle Costs
c. Energy Savings
d. Lessening of Utility or Performance of Products
e. Impact of Any Lessening of Competition
f. Need of the Nation To Conserve Energy
g. Other Factors
2. Rebuttable Presumption
V. Methodology and Discussion of Comments on Methodology
A. Market and Technology Assessment
1. Product Classes
a. General Service Fluorescent Lamps
i. Modified-Spectrum Fluorescent Lamps
ii. 25 Watt 4-Foot MBP Lamps
iii. Summary of GSFL Product Classes
b. Incandescent Reflector Lamps
i. Modified-Spectrum Lamps
ii. Lamp Diameter
iii. Voltage
iv. IRL Summary
B. Engineering Analysis
1. Approach
2. Representative Product Classes
3. Baseline Models
4. Efficacy Levels
a. GSFL Compliance Reports
b. 4-Foot MiniBP Efficacy Levels
c. IRL Manufacturing Variability
5. Scaling to Product Classes Not Analyzed
a. 2-Foot U-Shaped Lamps
b. Lamps With Higher CCTs
c. Modified Spectrum IRL
d. Small Diameter IRL
e. IRL With Rated Voltages Greater Than or Equal to 125 Volts
C. Life-Cycle Cost and Payback Period Analysis
1. Consumer Product Price
2. Sales Tax
3. Annual Operating Hours
4. Electricity Prices and Electricity Price Trends
5. Ballast Lifetime
6. Lamp Lifetime
7. Discount Rates
8. Residential Fluorescent Lamp Analysis
9. Rebuttable Payback Period Presumption
D. National Impact Analysis--National Energy Savings and Net
Present Value Analysis
1. Overview of NIA Changes in This Notice
2. Shipments Analysis
3. Macroeconomic Effects on Growth
4. Reflector Market Growth
5. Penetration of R-CFLs and Emerging Technologies
6. Building Codes
7. GSFL Shipments Growth
8. Residential Installed GSFL Stock
9. GSFL Lighting Expertise Scenarios
10. IRL Product Substitution Scenarios
11. Discount Rates
E. Consumer Sub-Group Analysis
F. Manufacturer Impact Analysis
[[Page 34081]]
G. Employment Impact Analysis
H. Utility Impact Analysis
I. Environmental Assessment
J. Monetizing Carbon Dioxide and Other Emissions Impacts
VI. Discussion of Other Key Issues and Comments
A. Sign Industry Impacts
B. Max-Tech IRL
1. Treatment of Proprietary Technologies
2. Other Technologies
a. High-Efficiency IR Coatings
b. Silverized Reflectors
c. Integrally-Ballasted Low-Voltage IRL
3. Lamp Lifetime
C. IRL Lifetime
1. Baseline Lifetime Scenario
2. Minimum Lamp Lifetime Requirement
3. 6,000-Hour-Lifetime Lamps
D. Impact on Competition
1. Manufacturers
2. Suppliers
E. Xenon
F. IRL Hot Shock
G. Rare Earth Phosphors
H. Product and Performance Feature Availability
1. Dimming Functionality
2. GSFL Product Availability
I. Alternative Standard Scenarios
1. Tiered Standard
2. Delayed Effective Date
3. Residential Exemption
4. Conclusions Regarding Alternative Standard Scenarios
J. Benefits and Burdens
VII. Analytical Results and Conclusions
A. Trial Standard Levels
1. General Service Fluorescent Lamps
2. Incandescent Reflector Lamps
B. Significance of Energy Savings
C. Economic Justification
1. Economic Impact on Consumers
a. Life-Cycle Costs and Payback Period
i. General Service Fluorescent Lamps
ii. Incandescent Reflector Lamps
b. Consumer Subgroup Analysis
2. Economic Impact on Manufacturers
a. Industry Cash-Flow Analysis Results for the IRL Lifetime
Sensitivity
b. Cumulative Regulatory Burden
c. Impacts on Employment
d. Impacts on Manufacturing Capacity
e. Impacts on Manufacturers That Are Small Businesses
3. National Net Present Value and Net National Employment
4. Impact on Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
D. Conclusion
1. General Service Fluorescent Lamps Conclusion
a. Trial Standard Level 5
b. Trial Standard Level 4
2. Incandescent Reflector Lamps Conclusion
a. Trial Standard Level 5
b. Trial Standard Level 4
VIII. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act
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 of 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act of 2001
K. Review Under Executive Order 13211
L. Review Under the Information Quality Bulletin for Peer Review
M. Congressional Notification
IX. Approval of the Office of the Secretary
Acronyms and Abbreviations
ACEEE American Council for an Energy Efficient Economy
ACG Applied Coatings Group
ADLT Advanced Lighting Technologies, Inc.
AEO Annual Energy Outlook
ANOPR advance notice of proposed rulemaking
ANSI American National Standards Institute
ASAP Appliance Standards Awareness Project
BEF ballast efficacy factor
BF ballast factor
BR bulged reflector (reflector lamp shape)
BT Building Technologies Program
Btu British thermal units
CAIR Clean Air Interstate Rule
CAMR Clean Air Mercury Rule
CBECS Commercial Buildings Energy Consumption Survey
CCT correlated color temperature
CEC California Energy Commission
CEE Consortium for Energy Efficiency
CFR Code of Federal Regulations
CFL compact fluorescent lamp
CIE International Commission on Illumination
CO2 carbon dioxide
CRI color rendering index
CSL candidate standard level
DOE U.S. Department of Energy
DOJ U.S. Department of Justice
E26 Medium screw-base (incandescent lamp base type)
EEI Edison Electric Institute
EIA Energy Information Administration
EISA 2007 Energy Independence and Security Act of 2007
EL efficacy level
E.O. Executive Order
EPA U.S. Environmental Protection Agency
EPACT 1992 Energy Policy Act of 1992
EPACT 2005 Energy Policy Act of 2005
EPCA Energy Policy and Conservation Act
ER elliptical reflector (reflector lamp shape)
EU European Union
EuP Energy-Using Product
FEMP Federal Energy Management Program
FR Federal Register
FTC U.S. Federal Trade Commission
GE General Electric Lighting and Industrial
GRIM Government Regulatory Impact Model
GSFL general service fluorescent lamp
GSIL general service incandescent lamp
GW gigawatt
Hg mercury
HID high-intensity discharge
HIR halogen infrared reflector
HO high output
HVAC heating, ventilating and air-conditioning
IALD International Association of Lighting Designers
IESNA Illuminating Engineering Society of North America
ImSET Impact of Sector Energy Technologies
INPV industry net present value
IPCC Intergovernmental Panel on Climate Change
I-O input-output
IR infrared
IRL incandescent reflector lamp
K Kelvin
kt kilotons
LCC life-cycle cost
LED light-emitting diode
lm lumens
LMC U.S. Lighting Market Characterization Volume I
lm/W lumens per watt
MBP medium bipin
MECS Manufacturer Energy Consumption Survey (MECS)
MIA manufacturer impact analysis
miniBP miniature bipin
MMt million metric tons
Mt metric tons
MW megawatts
NAICS North American Industry Classification System
NEEP Northeast Energy Efficiency Partnership
NEMA National Electrical Manufacturers Association
NEMS National Energy Modeling System
NEMS-BT National Energy Modeling System--Building Technologies
NES national energy savings
NIA national impact analysis
NIST National Institute of Standards and Technology
NOPR notice of proposed rulemaking
NOX nitrogen oxides
NPV net present value
NRDC Natural Resources Defense Council
NVLAP National Voluntary Laboratory Accreditation Program
OEM original equipment manufacturer
OIRA Office of Information and Regulatory Affairs
OMB U.S. Office of Management and Budget
PAR parabolic aluminized reflector (reflector lamp shape)
PBP payback period
PG&E Pacific Gas and Electric
PSI Product Stewardship Institute
quad quadrillion (1015) Btu
R reflector (reflector lamp shape)
R-CFL reflector compact fluorescent lamp
R&D research and development
RDC recessed double contact
RECS Residential Energy Consumption Survey
RIA regulatory impact analysis
SBA U.S. Small Business Administration
SO standard output
SO2 sulfur dioxide
SP single pin
[[Page 34082]]
T5, T8, T10, T12 tubular fluorescent lamps, diameters of 0.625, 1,
1.25 or 1.5 inches, respectively
TSD technical support document
TSL trial standard level
TWh terawatt-hour
UMRA Unfunded Mandates Reform Act
U.S.C. United States Code
UV ultraviolet
V volts
VHO very high output
W watts
I. Summary of the Final Rule
A. The Standard Levels
The Energy Policy and Conservation Act, as amended (42 U.S.C. 6291
et seq.; EPCA), provides that any new or amended energy conservation
standard that the Department of Energy prescribes for covered consumer
and/or commercial products, including general service fluorescent lamps
(GSFL) and incandescent reflector lamps (IRL), must be designed to
``achieve the maximum improvement in energy efficiency * * * which the
Secretary determines is technologically feasible and economically
justified.'' (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended
standard must ``result in significant conservation of energy.'' (42
U.S.C. 6295(o)(3)(B)) The energy conservation standards in today's
final rule, which apply to certain types of types of GSFL and IRL,
satisfy these requirements, as well as all other applicable statutory
provisions discussed in this notice.
Table I.1 and Table I.2 present the energy conservation standard
levels DOE is adopting today. These standards will apply to GSFL and
IRL listed in those tables that are manufactured for sale in the United
States, or imported into the United States, on or after July 14, 2012.
Table I.1--Summary of the Amended Energy Conservations Standards for
General Service Fluorescent Lamps
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Energy
Lamp type Correlated color conservation
temperature standard (lm/W)
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4-Foot Medium Bipin........... <=4,500K............. 89
>4,500K and <=7,000K. 88
2-Foot U-Shaped............... <=4,500K............. 84
>4,500K and <=7,000K. 81
8-Foot Slimline............... <=4,500K............. 97
>4,500K and <=7,000K. 93
8-Foot High Output............ <=4,500K............. 92
>4,500K and <=7,000K. 88
4-Foot Miniature Bipin <=4,500K............. 86
Standard Output.
>4,500K and <=7,000K. 81
4-Foot Miniature Bipin High <=4,500K............. 76
Output.
>4,500K and <=7,000K. 72
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Table I.2--Summary of the Energy Conservation Standards for Incandescent Reflector Lamps
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Energy
Lamp wattage Lamp type Diameter Voltage conservation
(inches) standard (lm/W)
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40W-205W............................ Standard Spectrum...... >2.5 >=125 6.8*P0.27
<125 5.9*P0.27
<=2.5 >=125 5.7*P0.27
<125 5.0*P0.27
40W-205W............................ Modified Spectrum...... >2.5 >=125 5.8*P0.27
<125 5.0*P0.27
<=2.5 >=125 4.9*P0.27
<125 4.2*P0.27
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Note 1: P is equal to the rated lamp wattage, in watts.
Note 2: Standard Spectrum means any incandescent reflector lamp that does not meet the definition of ``modified
spectrum'' in 430.2.
B. Current Federal Standards for General Service Fluorescent Lamps and
Incandescent Reflector Lamps
Table I.3 and Table I.4 present the current statutorily-prescribed
Federal energy conservation standards for GSFL and IRL. The standards
set requirements for minimum efficacy and color rendering index (CRI)
levels for certain GSFL, and minimum efficacy levels for certain IRL.
(42 U.S.C. 6295(i)(1); 10 CFR 430.32(n))
Table I.3--EPCA Standard Levels for GSFL
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Nominal lamp Minimum average
Lamp type wattage Minimum CRI efficacy (lm/W)
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4-Foot Medium Bipin.......................................... >35W 69 75.0
<=35W 45 75.0
2-Foot U-Shaped.............................................. >35W 69 68.0
<=35W 45 64.0
8-Foot Slimline.............................................. >65W 69 80.0
<=65W 45 80.0
[[Page 34083]]
8-Foot High Output........................................... >100W 69 80.0
<=100W 45 80.0
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Table I.4--EPCA Standard Levels for IRL
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Minimum
average
Wattage efficacy (lm/
W)
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40-50................................................... 10.5
51-66................................................... 11.0
67-85................................................... 12.5
86-115.................................................. 14.0
116-155................................................. 14.5
156-205................................................. 15.0
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C. Benefits and Burdens to Purchasers of General Service Fluorescent
Lamps and Incandescent Reflector Lamps
In the April 2009 notice of proposed rulemaking (NOPR), DOE
considered the impacts on consumers of several trial standard levels
(TSLs) related to the efficiency of GSFL and IRL. 74 FR 16920 (April
13, 2009). In the April 2009 NOPR, DOE tentatively concluded that the
economic impacts on most consumers (i.e., the average life-cycle cost
(LCC) savings) of amended standards for GSFL and IRL would be positive.
DOE has reached the same conclusion in today's final rule, as explained
below.
The economic impacts on consumers, i.e., the average life-cycle
cost savings, are generally positive in this final rule. DOE's analyses
indicate that on average residential and commercial consumers would see
benefits from the proposed standards. DOE expects that under the
standards presented in this final rule, the purchase price of high-
efficacy GSFL would be higher (up to thirteen times higher, including
the purchase of new lamps and a new ballast) than the average price of
these products today; the energy efficiency gains, however, would
result in lower energy costs that more than offset such higher costs
for the majority of consumers analyzed in this final rule. When the
potential savings due to efficiency gains are summed over the lifetime
of the high-efficacy products, consumers would be expected to save up
to $67.06 (depending on the lamp type), on average, compared to their
expenditures over the lives of today's baseline GSFL. The results of
DOE's analyses for IRL follow a similar pattern. Although DOE expects
the purchase price of the higher-efficacy IRL to be 47 to 64 percent
higher than the average price of these products today, the energy
efficiency gains would result in lower energy costs that more than
offset the higher costs for the majority of consumers analyzed in this
final rule. When these potential savings due to efficiency gains are
summed over the lifetime of the higher-efficacy IRL, it is estimated
that consumers would save up to $7.95 per lamp (depending on the
wattage and operating sector), on average, compared to their
expenditures over the lives of today's baseline IRL.
D. Impact on Manufacturers
Using a real corporate discount rate of 10.0 percent, DOE estimates
the net present value (NPV) of the GSFL and IRL industries to be $527-
639 million and $221-301 million in 2008$, respectively. DOE expects
the impact of today's standards on the industry net present value
(INPV) of manufacturers of GSFL to be between a 0.6 percent loss and a
30.7 percent loss (-$4 million to -$162 million), and between a 6.8
percent loss and a 44.4 percent loss (-$21 million to -$98 million) for
IRL manufacturers. Based on DOE's interviews with GSFL and IRL
manufacturers, DOE expects minimal plant closings or loss of employment
as a result of the standards.
E. National Benefits
DOE estimates the GSFL standards will save approximately 3.83 to
9.94 quads (quadrillion (10\15\) British thermal units (Btu)) of energy
over 30 years (2012-2042). Over the same time period, DOE estimates IRL
standards will save approximately 0.94 to 2.39 quads. By 2042, DOE
expects the energy savings from the GSFL and IRL standards to eliminate
the need for approximately 1.8 to 6.2 and 0.2 to 1.1 gigawatts of
generating capacity, respectively.
These energy savings from GSFL will result in cumulative
(undiscounted) greenhouse gas emission reductions of 175 to 488 million
tons (Mt) of carbon dioxide (CO2); for IRL, DOE estimates
these reductions will be 44 to 106 million tons (Mt) of CO2.
Cumulative for GSFL and IRL, DOE estimates that the range of the
monetized value of CO2 emission reductions is between $0.2
billion to $24.8 billion, at a 7-percent discount rate, and between
$0.5 billion to $49.8 billion at a 3-percent discount rate. The mid-
range of the CO2 value (using $33 per ton) is $3.9 to $10.2
billion and $7.6 to $20.6 billion at 7-percent and 3-percent discount
rates, respectively.
Additionally, the GSFL standards will help alleviate air pollution
by resulting in between approximately 11,000 to 36,780 tons (11.0 and
36.8 kilotons (kt)) of nitrogen oxides (NOX) cumulative
emission reductions from 2012 through 2042; the IRL standards will
result in NOX cumulative emission reductions of 6.4 to 8.4
kt. Mercury (Hg) cumulative emissions reductions over the same time
period will be reduced by up to 7.3 metric tons due to GSFL standards
and 1.65 metric tons from IRL standards. The monetized values of these
emissions reductions, cumulative for both GSFL and IRL, are estimated
at $6.0 to $131.5 million for NOX and up to $82.6 million
for Hg at a 7-percent discount rate. Using a 3-percent discount rate,
the monetized values of these emission reductions are $6.9 to $162.3
million for NOX and up to $153.7 million for Hg.
The national NPV of the GSFL and IRL standards is between $10.02
and $26.31 billion and $1.83 and $9.06 billion, respectively, using a
7-percent discount rate cumulative from 2012 to 2042 in 2008$. Using a
3-percent discount rate, the national NPV of the GSFL and IRL standards
is between $21.84 and $53.53 billion and $3.78 and $17.81 billion,
respectively, cumulative from 2012 to 2042 in 2008$. This is the
estimated total value of future savings minus the estimated increased
costs of purchasing GSFL and IRL, discounted to 2009.
The benefits and costs of today's final rule can also be expressed
in terms of annualized 2008$ values over the forecast period 2012
through 2042. Using a 7-percent discount rate for the annualized cost
analysis, the cost of the standards established in today's final rule
is $700 million per year in increased product and installation costs,
while the annualized benefits are $2.95 billion per year in reduced
product operating costs. Using a 3-percent discount rate, the cost of
the standards established in today's final rule is $531 million per
year, while the benefits of today's standards are $3.12 billion per
year. The following tables depict these annualized benefits and costs
for the adopted standards for GSFL and IRL.
[[Page 34084]]
Table I.5--Annualized Benefits and Costs for GSFL
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Units
----------------------------------------
Category Primary estimate Low estimate High estimate Disc Period
Year dollars (%) covered
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Benefits
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Annualized Monetized $millions/year. 2302................... 1329................... 3275................... 2008 7 31
2420................... 1387................... 3452................... 2008 3 31
Annualized Quantified............... 10.48 CO2 (Mt)......... 5.76 CO2 (Mt).......... 15.2 CO2 (Mt).......... .............. 7 31
1.78 NOX (kt).......... 1.03 NOX (kt).......... 2.54 NOX (kt).......... .............. 7 31
0.11 Hg (t)............ 0 Hg (t)............... 0.22 Hg (t)............ .............. 7 31
10.6 CO2 (Mt).......... 5.69 CO2 (Mt).......... 15.52 CO2 (Mt)......... .............. 3 31
1.19 NOX (kt).......... 0.63 NOX (kt).......... 1.76 NOX (kt).......... .............. 3 31
0.11 Hg (t)............ 0 Hg (t)............... 0.23 Hg (t)............ .............. 3 31
Qualitative
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Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized Monetized $millions/year. 582.................... 378.................... 786.................... 2008 7 31
425.................... 230.................... 621.................... 2008 3 31
Qualitative
--------------------------------------------------------------------------------------------------------------------------------------------------------
Net Benefits/Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized Monetized $millions/year. 1720................... 951.................... 2489................... 2008 7 31
1994................... 1158................... 2831................... 2008 3 31
Qualitative
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table I.6--Annualized Benefits and Costs for IRL
--------------------------------------------------------------------------------------------------------------------------------------------------------
Units
----------------------------------------
Category Primary estimate Low estimate High estimate Disc Period
Year dollars (%) covered
--------------------------------------------------------------------------------------------------------------------------------------------------------
Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized Monetized $millions/year. 650.................... 406.................... 894.................... 2008 7 31
696.................... 424.................... 968.................... 2008 3 31
Annualized Quantified............... 2.39 CO2 (Mt).......... 1.51 CO2 (Mt).......... 3.28 CO2 (Mt).......... .............. 7 31
0.51 NOX (kt).......... 0.45 NOX (kt).......... 0.58 NOX (kt).......... .............. 7 31
0.02 Hg (t)............ 0 Hg (t)............... 0.05 Hg (t)............ .............. 7 31
2.4 CO2 (Mt)........... 1.45 CO2 (Mt).......... 3.35 CO2 (Mt).......... .............. 3 31
0.35 NOX (kt).......... 0.31 NOX (kt).......... 0.4 NOX (kt)........... .............. 3 31
0.02 Hg (t)............ 0 Hg (t)............... 0.05 Hg (t)............ .............. 3 31
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized Monetized $millions/year. 118.................... 227.................... 9...................... 2008 7 31
106.................... 218.................... -6..................... 2008 3 31
--------------------------------------------------------------------------------------------------------------------------------------------------------
Qualitative
--------------------------------------------------------------------------------------------------------------------------------------------------------
Net Benefits/Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized Monetized $millions/year. 532.................... 179.................... 885.................... 2008 7 31
590.................... 207.................... 973.................... 2008 3 31
--------------------------------------------------------------------------------------------------------------------------------------------------------
F. Conclusion
DOE has evaluated the benefits (energy savings, consumer LCC
savings, positive national NPV, and emissions reductions) to the Nation
of today's new and amended energy conservation standards for certain
GSFL and IRL, as well as the costs (loss of manufacturer INPV and
consumer LCC increases for some users of GSFL and IRL). Based upon all
available information, DOE has determined that the benefits to the
Nation of the standards for GSFL and IRL outweigh their costs. Today's
standards also represent the maximum improvement in energy efficiency
that is technologically feasible and economically justified, and will
result
[[Page 34085]]
in significant energy savings. At present, GSFL and IRL that meet the
new standard levels are commercially available.
II. Introduction
A. Authority
Title III of EPCA sets forth a variety of provisions designed to
improve energy efficiency. Part A\1\ of Title III (42 U.S.C. 6291-6309)
provides for the Energy Conservation Program for Consumer Products
Other Than Automobiles. The program covers consumer products and
certain commercial products (all of which are referred to hereafter as
``covered products''), including GSFL and IRL. (42 U.S.C. 6292(a)(14)
and 6292(i)) DOE publishes today's final rule pursuant to Part A of
Title III, which provides for test procedures, labeling, and energy
conservation standards for GSFL and IRL and certain other types of
products, and authorizes DOE to require information and reports from
manufacturers. The test procedures for GSFL and IRL appear at title 10
of the Code of Federal Regulations (CFR) part 430, subpart B, appendix
R.
---------------------------------------------------------------------------
\1\ This part was originally titled Part B; however, it was
redesignated Part A after Part B was repealed by Public Law 109-58.
---------------------------------------------------------------------------
The scope of coverage of these provisions for GSFL and IRL is
dictated by EPCA's definitions of these and related terms, as further
discussed below. EPCA defines ``general service fluorescent lamp'' as
follows:
* * * [F]luorescent lamps which can be used to satisfy the majority
of fluorescent applications, but does not include any lamp designed
and marketed for the following non-general lighting applications:
(i) Fluorescent lamps designed to promote plant growth.
(ii) Fluorescent lamps specifically designed for cold
temperature installations.
(iii) Colored fluorescent lamps.
(iv) Impact-resistant fluorescent lamps.
(v) Reflectorized or aperture lamps.
(vi) Fluorescent lamps designed for use in reprographic
equipment.
(vii) Lamps primarily designed to produce radiation in the
ultra-violet region of the spectrum.
(viii) Lamps with a color rendering index of 87 or greater.
(42 U.S.C. 6291(30)(B))
EPCA defines ``incandescent reflector lamp'' as follows:
* * * [A] lamp in which light is produced by a filament heated to
incandescence by an electric current * * * [and] (commonly referred
to as a reflector lamp) which is not colored or designed for rough
or vibration service applications, that contains an inner reflective
coating on the outer bulb to direct the light, an R, PAR, ER, BR,
BPAR, or similar bulb shapes with E26 medium screw bases, a rated
voltage or voltage range that lies at least partially within 115 and
130 volts, a diameter which exceeds 2.25 inches, and has a rated
wattage that is 40 watts or higher.
(42 U.S.C. 6291(30)(C), (C)(ii) and (F))
EPCA further clarifies this definition of IRL by defining lamp
types excluded from the definition, including ``rough service lamp,''
``vibration service lamp,'' and ``colored incandescent lamp.'' (42
U.S.C. 6291(30)(X), (AA), and (EE)) EPCA prescribes specific energy
conservation standards for certain GSFL and IRL. (42 U.S.C. 6295(i)(1))
The statute further directs DOE to conduct two cycles of rulemakings to
determine whether to amend these standards, and to initiate a
rulemaking to determine whether to adopt standards for additional types
of GSFL. (42 U.S.C. 6295(i)(3)-(5)) This rulemaking represents the
first round of amendments to the GSFL and IRL energy conservation
standards as directed by 42 U.S.C. 6295(i)(3), and it also implements
the requirement for DOE to consider energy conservation standards for
additional GSFL under 42 U.S.C. 6295(i)(5). The advance notice of
proposed rulemaking (ANOPR) in this proceeding, 73 FR 13620, 13622,
13625, 13628-29 (March 13, 2008) (the March 2008 ANOPR), the notice of
proposed rulemaking (NOPR) in this proceeding, 74 FR 16920, 16924-26
(April 13, 2009) (the April 2009 NOPR), and subsections II.B.2 and
III.B.2 below provide additional detail on the nature and statutory
history of EPCA's requirements for GSFL and IRL.
EPCA provides criteria for prescribing new or amended standards for
covered products, including GSFL and IRL. As indicated above, any such
new or amended standard must be designed to achieve the maximum
improvement in energy efficiency that is technologically feasible and
economically justified. (42 U.S.C. 6295(o)(2)(A)) Further, DOE may not
prescribe an amended or new standard if DOE determines by rule that
such standard would not result in ``significant conservation of
energy,'' or ``is not technologically feasible or economically
justified.'' (42 U.S.C. 6295(o)(3)(B)) Additionally, DOE may not
prescribe an amended or new standard for any GSFL or IRL for which DOE
has not established a test procedure. (42 U.S.C. 6295(o)(3)(A))
EPCA also provides that in deciding whether such a standard is
economically justified for covered products, DOE must, after receiving
comments on the proposed standard, determine whether the benefits of
the standard exceed its burdens by considering, to the greatest extent
practicable, the following seven factors:
(1) The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of products in the type (or class) compared to any increase in the
price, initial charges, or maintenance expenses for the covered
products that are likely to result from the imposition of the standard;
(3) The total projected amount of energy savings likely to result
directly from the imposition of the standard;
(4) Any lessening of the utility or the performance of the covered
products likely to result from the imposition of 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
imposition of the standard;
(6) The need for national energy conservation; and
(7) Other factors the Secretary considers relevant.
(42 U.S.C. 6295(o)(2)(B)(i))
In addition under (42 U.S.C. 6295(o)(2)(B)(iii)), EPCA, as amended,
establishes a rebuttable presumption that a standard for covered
products is economically justified if the Secretary finds that ``the
additional cost to the consumer of purchasing a product complying with
an energy conservation standard level will be less than three times the
value of the energy, and as applicable, water, savings during the first
year that the consumer will receive as a result of the standard, as
calculated under the test procedure * * *'' in place for that standard.
EPCA also contains what is commonly known as an ``anti-
backsliding'' provision. (42 U.S.C. 6295(o)(1)) This provision mandates
that the Secretary not prescribe any amended standard that either
increases the maximum allowable energy use or decreases the minimum
required energy efficiency of a covered product. EPCA further provides
that the Secretary may not prescribe an amended or new standard if
interested persons have established by a preponderance of the evidence
that the standard is ``likely to result in the unavailability in the
United States of any product type (or class) with performance
characteristics (including reliability), features, sizes, capacities,
and volumes that are substantially the same as those generally
available in the United States * * *.'' (42 U.S.C. 6295(o)(4))
[[Page 34086]]
Section 325(q)(1) of EPCA sets forth additional requirements
applicable to promulgating standards for any type or class of covered
product that has two or more subcategories. (42 U.S.C. 6295(q)(1))
Under this provision, DOE must specify a different standard level than
that which applies generally to such type or class of product ``for any
group of covered products which have the same function or intended use,
if * * * products within such group--(A) consume a different kind of
energy from that consumed by other covered products within such type
(or class); or (B) have a capacity or other performance-related feature
which other products within such type (or class) do not have and such
feature justifies a higher or lower standard'' than applies or will
apply to the other products. (42 U.S.C. 6295(q)(1)(A) and (B)) In
determining whether a performance-related feature justifies such a
different standard for a group of products, DOE must ``consider such
factors as the utility to the consumer of such a feature'' and other
factors DOE deems appropriate. (42 U.S.C. 6295(q)(1)) Any rule
prescribing such a standard must include an explanation of the basis on
which DOE established such higher or lower level. (42 U.S.C.
6295(q)(2))
Federal energy conservation requirements for covered products
generally supersede State laws or regulations concerning energy
conservation testing, labeling, and standards. (42 U.S.C. 6297(a)-(c))
DOE can, however, grant waivers of Federal preemption for particular
State laws or regulations, in accordance with the procedures and other
provisions of section 327(d) of EPCA. (42 U.S.C. 6297(d))
B. Background
1. Current Standards
The energy conservation standards that EPCA prescribes for GSFL and
IRL, and that are currently in force, set efficacy levels and color
rendering index (CRI) levels for certain GSFL, and efficacy standards
for certain IRL. (42 U.S.C. 6295(i)(1); 10 CFR 430.32(n)) These
standard levels are set forth in Table I.3 and Table I.4 above.
2. History of Standards Rulemaking for General Service Fluorescent
Lamps, Incandescent Reflector Lamps, and General Service Incandescent
Lamps
This rulemaking represents the first round of amendments to these
GSFL and IRL standards, and it also addresses the adoption of standards
for additional GSFL, as directed by 42 U.S.C. 6295(i)(3) and (5),
respectively. Initially, this rulemaking also included consideration of
energy conservation standards for general service incandescent lamps
(GSIL). However, as explained in the April 2009 NOPR, amendments to
EPCA in the Energy Independence and Security Act of 2007 \2\ (EISA
2007) eliminated DOE's authority to regulate additional GSIL and
statutorily prescribed standards for GSIL; therefore this rulemaking no
longer addresses GSIL. 74 FR 16920, 16926 (April 13, 2009).
---------------------------------------------------------------------------
\2\ Public Law 110-140 (enacted Dec. 19, 2007).
---------------------------------------------------------------------------
DOE commenced this rulemaking on May 31, 2006, by publishing its
framework document for the rulemaking, and by giving notice of a public
meeting and of the availability of the document for review and public
comment. 71 FR 30834 (May 31, 2006). The framework document described
the procedural and analytical approaches DOE anticipated using and
issues to be resolved in the rulemaking. DOE held a public meeting on
June 15, 2006, to present the framework document, describe the analyses
DOE planned to conduct during the rulemaking, obtain public comment on
these subjects, and facilitate the public's involvement in the
rulemaking. DOE also allowed the submission of written statements after
the public meeting, and in response received 10 written statements.
On February 21, 2008, DOE issued the March 2008 ANOPR in this
proceeding. 73 FR 13620 (March 13, 2008). In the March 2008 ANOPR, DOE
described and sought comment on the analytical framework, models, and
tools that DOE was using to analyze the impacts of energy conservation
standards for the two appliance products. In conjunction with issuance
of the March 2008 ANOPR, DOE published on its Web site the complete
ANOPR technical support document (TSD), which included the results of
DOE's various preliminary analyses in this rulemaking. In the March
2008 ANOPR, DOE requested oral and written comments on these results,
and on a range of other issues. DOE held a public meeting in
Washington, DC, on March 10, 2008, to present the methodology and
results of the ANOPR analyses, and to receive oral comments from those
who attended. In the March 2008 ANOPR, DOE invited comment in
particular on the following issues: (1) Consideration of additional
GSFL; (2) amended definitions; (3) product classes; (4) scaling to
product classes not analyzed; (5) screening of design options; (6) lamp
operating hours; (7) energy consumption of GSFL; (8) LCC calculation;
(9) installation costs; (10) base-case market-share matrices; (11)
shipment forecasts; (12) base-case and standards-case forecasted
efficiencies; (13) trial standard levels; and (14) period for lamp
production equipment conversion. 73 FR 13620, 13686-88 (March 13,
2008). In addition, subsequent to the public meeting and the close of
the ANOPR comment period, DOE and the National Electrical Manufacturers
Association (NEMA) met on June 26, 2008 at NEMA's request to discuss
appropriate standards for high correlated color temperature (CCT)
fluorescent lamps. 74 FR 16920, 16926 (April 13, 2009). DOE addressed
in detail the comments it received in response to the ANOPR, including
NEMA's presentation at the June 2008 meeting, in the April 2009 NOPR.
In the April 2009 NOPR, DOE proposed amended and new energy
conservation standards for GSFL and IRL. In conjunction with the NOPR,
DOE also published on its Web site the complete TSD for the proposed
rule, which incorporated the final analyses DOE conducted and technical
documentation for each analysis. The TSD included the engineering
analysis spreadsheets, the LCC spreadsheet, the national impact
analysis spreadsheet, and the MIA spreadsheet-all of which are
available on DOE's Web site.\3\ The proposed standards were as shown in
Table II.1 and Table II.2, as presented in the April 2009 NOPR. 74 FR
16920, 17027 (April 13, 2009).
---------------------------------------------------------------------------
\3\ The Web site address for all the spreadsheets developed for
this rulemaking proceeding are available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/incandescent_lamps.html.
Table II.1--Proposed GSFL Standard Levels in April 2009 NOPR
------------------------------------------------------------------------
Correlated color Proposed level
Lamp type temperature (lm/W)
------------------------------------------------------------------------
4-Foot Medium Bipin................. <=4,500K 84
>4,500K 78
[[Page 34087]]
2-Foot U-Shaped..................... <=4,500K 78
>4,500K 73
8-Foot Slimline..................... <=4,500K 95
>4,500K 91
8-Foot High Output.................. <=4,500K 88
>4,500K 84
4-Foot Miniature Bipin Standard <=4,500K 103
Output.............................
>4,500K 97
4-Foot Miniature Bipin High Output.. <=4,500K 89
>4,500K 85
------------------------------------------------------------------------
* For these product classes, EPCA has different efficacy standards for
lamps with wattages less than 35W and greater than or equal to 35W.
Table II.2--Proposed IRL Standards in April 2009 NOPR
----------------------------------------------------------------------------------------------------------------
Diameter Proposed level
Lamp type (inches) Voltage (lm/W)
----------------------------------------------------------------------------------------------------------------
Standard Spectrum 40W-205W...................................... >2.5 <=125 7.1P \0.27\
<125 6.2P \0.27\
<=2.5 >=125 6.3P \0.27\
<125 5.5P \0.27\
Modified Spectrum 40W-205W...................................... >2.5 >=125 5.8P \0.27\
<125 5.0P \0.27\
<=2.5 >=125 5.1P \0.27\
<125 4.4P \0.27\
----------------------------------------------------------------------------------------------------------------
Note: P is equal to the rated lamp wattage, in watts.
DOE held a public meeting in Washington, DC, on February 3, 2009,
to hear oral comments on and solicit information relevant to the
proposed rule. At the public meeting and in the April 2009 NOPR, DOE
invited comment in particular on the following issues: (1) The scope of
covered products; (2) the amended definition of ``colored fluorescent
lamp''; (3) product classes for IRL; (4) product classes for T5 lamps;
(5) the 4-foot MBP residential engineering analysis; (6) performance
characteristics of model lamps used in the engineering analysis; (7)
the efficacy levels for IRL; (8) the efficacy levels for GSFL; (9)
scaling to product classes not analyzed; (10) ballast operating hours
in all sectors and GSFL operating hours in the residential sector; (11)
growth rates and market penetration in the shipments analysis; (12)
base-case and standards-case market-share matrices; (13) the
manufacturer impact analysis; (14) the determination of environmental
impacts; (15) the selected trial standard levels; (16) the proposed
standard levels; (17) alternative scenarios to achieve greater energy
savings for GSFL; (18) other technology pathways to meet IRL TSL5. 74
FR 16920, 17025-26 (April 13, 2009). The April 2009 NOPR also included
additional background information on the history of this rulemaking. 74
FR 16920, 16925-26 (April 13, 2009).
III. Issues Affecting the Scope of This Rulemaking
A. Additional General Service Fluorescent Lamps for Which DOE Is
Adopting Standards
1. Scope of EPCA Requirement That DOE Consider Standards for Additional
Lamps
As discussed above, EPCA established energy conservation standards
for certain general service fluorescent lamps (42 U.S.C. 6295(i)(1))
and directed the Secretary to ``initiate a rulemaking procedure to
determine if the standards in effect for fluorescent lamps * * * should
be amended so that they would be applicable to additional general
service fluorescent [lamps] * * *.'' (42 U.S.C. 6295(i)(5)) Thus, EPCA
directs DOE to consider whether to adopt energy efficacy standards for
additional GSFL beyond those already covered by standards prescribed in
the statute.
However, as set forth in greater detail in the March 2008 ANOPR and
the April 2009 NOPR, although many GSFL not currently subject to
standards are potential candidates for coverage, it could be argued
that EPCA's definitions of ``general service fluorescent lamp'' and
``fluorescent lamp'' conflict with (and negate) the requirement of 42
U.S.C. 6295(i)(5) that DOE consider standards for additional GSFL. 73
FR 13620, 13628-29 (March 13, 2008); 74 FR 16920, 16920, 16926-27
(April 13, 2009). Specifically, EPCA defines ``general service
fluorescent lamp'' as ``fluorescent lamps'' that can satisfy the
majority of fluorescent lamp applications and that are not designed and
marketed for certain specified, nongeneral lighting applications. (42
U.S.C. 6291(30)(B)) Furthermore, EPCA defines ``fluorescent lamp'' as
``a low pressure mercury electric-discharge source in which a
fluorescing coating transforms some of the ultraviolet energy generated
by the mercury discharge into light,'' and as including ``only'' the
four enumerated types of fluorescent lamps for which EPCA already
prescribes standards. (42 U.S.C. 6291(30)(A); 42 U.S.C. 6295(i)(1)(B))
Thus, to construe ``general service fluorescent lamp'' in 42 U.S.C.
6295(i)(5) as being limited by all elements of the EPCA definition of
``fluorescent lamp,'' would mean there are no GSFL that are not already
subject to standards, and hence, there would be no ``additional'' GSFL
for which DOE could consider standards. Such an interpretation would
conflict with the directive in 42 U.S.C. 6295(i)(5) that DOE consider
standards for ``additional'' GSFL, thereby rendering that provision a
nullity.
For the reasons below, DOE has concluded that the term ``additional
general service fluorescent lamps'' in 42 U.S.C. 6295(i)(5) should be
construed as
[[Page 34088]]
not being limited to the four enumerated lamp types specified in the
EPCA definition of ``fluorescent lamp,'' thereby giving effect to the
directive in 42 U.S.C. 6295(i)(5) that DOE consider standards for
additional GSFL. First, DOE added this directive to EPCA at the same
time it added the definitions for ``general service fluorescent lamps''
and ``fluorescent lamps,'' as part of the Energy Policy Act of 1992
(EPACT 1992; Pub. L. 102-486). DOE does not believe Congress would
intentionally insert a legislative provision that, when read in
conjunction with simultaneously added definitions, amounts to a
nullity. Second, reading the definition of ``fluorescent lamp'' to
preclude consideration of standards for additional GSFL would run
counter to the energy-saving purposes of EPCA. It is reasonable to
assume that, when Congress incorporated this directive into EPCA, it
sought to have DOE consider whether standards would be warranted for
generally available products for which EPCA did not prescribe
standards. Also, it is assumed that Congress would not have intended
for DOE to limit itself to consideration of energy conservation
standards only for those products utilizing technologies available in
1992, but instead, it would seek to cast a broader net that would
achieve energy efficiency improvements in lighting products
incorporating newer technologies.
In addition, DOE understands that the industry routinely refers to
``fluorescent lamps'' as including products in addition to the four
enumerated in the statutory definition of that term. In fact, in the
March 2008 ANOPR, DOE presented its plan for including additional GSFL
for coverage, and DOE did not receive adverse comment. 73 FR 13620,
13628-29 (March 13, 2008)
For these reasons, and as further explained in the March 2008
ANOPR, 73 FR 13620, 13629 (March 13, 2008), and in the April 2009 NOPR,
74 FR 16920, 16926-27 (April 13, 2009), DOE has concluded that, in
addressing general service fluorescent lamps in 42 U.S.C. 6295(i)(5),
Congress intended to refer to ``fluorescent lamps'' in a broader, more
generic sense than as expressed in the EPCA definition for that term.
Consequently, as set forth in the April 2009 NOPR, 74 FR 16920, 16927
(April 13, 2009), DOE views ``additional'' GSFL, as that term is used
in 42 U.S.C. 6295(i)(5), as lamps that: (1) Meet the technical portion
of the statutory definition of ``fluorescent lamp'' (i.e., a low-
pressure mercury electric-discharge source in which a fluorescing
coating transforms some of the ultraviolet energy generated by the
mercury discharge into light) (42 U.S.C. 6291(30)(A)) without
restriction to the four lamp types specified in that definition; (2)
can be used to satisfy the majority of fluorescent lighting
applications (42 U.S.C. 6291(30)(B)); (3) are not within the exclusions
from the definition of GSFL specified in 42 U.S.C. 6291(30)(B); and (4)
are ones for which EPCA does not prescribe standards. Such an
interpretation does not alter the existing statutory provision or
standards for ``fluorescent lamps,'' but it does permit DOE to give
effect to section 6295(i)(5) of EPCA by adopting energy conservation
standards for a wide variety of GSFL that are not currently covered by
standards. DOE notes that it received no adverse comments on this
interpretation in response to the April 2009 NOPR.
2. Determination of the Additional Lamps to Which Standards Will Apply
To determine the additional GSFL to which energy conservation
standards should apply, DOE first comprehensively reviewed the
fluorescent lighting market and identified the following types of lamps
as ``additional'' GSFL for consideration pursuant to 42 U.S.C. 6295
(i)(5), based on the four criteria above:
4-foot, medium bipin (MBP), straight-shaped lamps, rated
wattage of less than 28W;
2-foot, medium bipin, U-shaped lamps, rated wattage of
less than 28W;
8-foot, recessed double contact (RDC), rapid start, high-
output (HO) lamps not defined in ANSI Standard C78.1-1991 \4\ or with
current other than 0.800 nominal amperes;
---------------------------------------------------------------------------
\4\ Titled ``for Fluorescent Lamps--Rapid-Start Types--
Dimensional and Electrical Characteristics.''
---------------------------------------------------------------------------
8-foot single pin (SP), instant start, slimline lamps with
a rated wattage greater than or equal to 52, not defined in ANSI
Standard C78.3-1991; \5\
---------------------------------------------------------------------------
\5\ Titled ``for Fluorescent Lamps--Instant-Start and Cold-
Cathode Types--Dimensional and Electrical Characteristics''
---------------------------------------------------------------------------
Very high output (VHO) straight-shaped lamps;
T5 \6\ miniature bipin (miniBP) straight-shaped lamps;
---------------------------------------------------------------------------
\6\ T5, T8, T10, and T12 are nomenclature used to refer to
tubular fluorescent lamps with diameters of 0.625, 1, 1.25, and 1.5
inches respectively.
---------------------------------------------------------------------------
Additional straight-shaped and U-shaped lamps other than
those listed above (e.g., alternate lengths, diameters, or bases); and
Additional fluorescent lamps with alternate shapes (e.g.,
circline lamps and pin-based compact fluorescent lamps (CFL)).
73 FR 13620, 13630 (March 13, 2008); 74 FR 16920, 16927-28 (April 13,
2009).
For each of these categories of GSFL, DOE assessed whether
standards had the potential to result in energy savings. For each
category for which it appeared that standards could save significant
amounts of energy, DOE then performed a preliminary analysis of whether
potential standards appeared to be technologically feasible and
economically justified. Finally, for GSFL that met that test, DOE did
an in-depth analysis of whether, and at what levels, standards would be
warranted under the EPCA criteria in 42 U.S.C. 6295(o), pertaining to
energy savings, technological feasibility, economic justification, and
certain other factors. Based on this analysis, as summarized in the
April 2009 NOPR, DOE proposed to cover the following additional GSFL:
2-foot, medium bipin U-shaped lamps with a rated wattage
greater than or equal to 25 and less than 28;
4-foot, medium bipin lamps with a rated wattage greater
than or equal to 25 and less than 28;
4-foot T5, miniature bipin, straight-shaped, standard
output lamps with rated wattage greater than or equal to 26;
4-foot T5, miniature bipin, straight-shaped, high output
lamps with rated wattage >=51;
8-foot recessed double contact, rapid start, HO lamps
other than those defined in ANSI Standard C78.1-1991;
8-foot recessed double contact, rapid start, HO lamps
(other than 0.800 nominal amperes) defined in ANSI Standard C78.1-1991;
and
8-foot single pin instant start slimline lamps, with a
rated wattage greater than or equal to 52, not defined in ANSI Standard
C78.3-1991
74 FR 16920, 16930 (April 13, 2009).
DOE received several comments regarding the additional GSFL
proposed for coverage. In terms of methodology, the Green Lighting
Campaign questioned the criteria DOE used in determining whether to
include additional fluorescent lamps in coverage. Specifically, the
Green Lighting Campaign argued that just because a product is low-
volume, and, therefore, does not represent significant energy savings,
does not indicate that it should not be subject to standards. According
to the commenter, many low-volume products are some of the least-
efficient products on the market. (Green Lighting Campaign, No. 74 at
p. 3)
In response, as described in more detail for each lamp described
below for which coverage was not extended, DOE concluded that coverage
was inappropriate given the small market share of these lamps. DOE
emphasizes that it will vigilantly monitor the market
[[Page 34089]]
shares and other relevant information for these lamps and consider
whether to extend coverage in a future rulemaking.
NEMA and EEI agreed with the scope of coverage proposed in the
April 2009 NOPR. (NEMA, Public Meeting Transcript, No. 38.4 at p. 43;
EEI, No. 45 at p. 3) However, the Green Lighting Campaign disagreed
with DOE's proposed scope of coverage, expressing concern that DOE's
proposed standards in the April 2009 NOPR would allow a significant
amount of outdated lighting equipment to be sold in the U.S. even
though more efficient replacement technologies exist. Specifically, the
Green Lighting Campaign requested that two-pin compact fluorescent
lamps, high-intensity discharge (HID) lamps, ballasts, luminaires, and
fluorescent lamps of other shapes and sizes be included in coverage.
(Green Lighting Campaign, No. 74 at pp. 1-4)
In response, DOE considered two-pin compact fluorescent lamps and
fluorescent lamps of other shapes and sizes for coverage but concluded
that they did not meet the statutory criteria defined by EPCA, because
these lamps represent relatively small market shares and do not possess
the ability to serve as substitutes for most covered GSFL. See section
III.A.2.g for more details. Additionally, this rulemaking only amends
standards for GSFL and IRL, as described in section III. DOE is
addressing standards for ballasts and HID lamps in separate
rulemakings, and DOE currently does not have the authority to set
energy conservation standards for luminaires. Please consult the Web
site of DOE's Appliances and Commercial Equipment Standards Program for
further detail.\7\
---------------------------------------------------------------------------
\7\ Available at: http://www1.eere.energy.gov/buildings/appliance_standards/index.html.
---------------------------------------------------------------------------
Earthjustice and the Green Lighting Campaign disagreed with DOE's
proposed covered wattage ranges. In the April 2009 NOPR, DOE determined
the wattage range for covered products based on commercially-available
products. 74 FR 16920, 16929-30 (April 13, 2009). This approach allowed
DOE to confirm that an energy conservation standard would be
technologically feasible and economically justified for any covered
product. In comments on the March 2008 ANOPR, stakeholders stated that
instead of determining a covered wattage range based on commercially-
available products, DOE should substantially lower covered wattage
ranges and use narrowly-drawn exemptions for those products that did
not meet the EPCA criteria for inclusion as a covered product. 74 FR
16920, 16929-30 (April 13, 2009). The stakeholders believed that this
approach ensured that energy conservation standards would achieve
largest potential energy savings. DOE responded in the April 2009 NOPR
and agreed that current covered wattage ranges should be extended when
commercially-available product exists, but disagreed that they should
be extended when no products are available. DOE is required to consider
energy conservation standards that are technologically feasible. If a
lower wattage lamp does not yet exist, DOE cannot confirm that it would
be technologically feasible or economically justified for such a lamp
to meet a set energy conservation standard. Furthermore, DOE encourages
the introduction of lamps at lower wattages. Thus, DOE decided to only
lower the wattage range of a covered product if a commercially
available product existed at a lower wattage. 74 FR 16920, 16929-30
(April 13, 2009).
In commenting on the April 2009 NOPR, Earthjustice again disagreed
with DOE's approach and urged DOE to be proactive in extending the
standards' covered wattage range so as to eliminate potential
loopholes. Earthjustice argued that DOE should cover all wattages of
the designated product classes that are lower than the existing covered
wattage range unless DOE can prove that standards are not
technologically feasible or economically justified. In not doing so,
Earthjustice claims DOE is not meeting its obligations under EPCA to
consider standards for all GSFL, including those that do not currently
exist, but might be popular at the time the standard takes effect.
(Earthjustice, No. 60 at p. 4) The Green Lighting Campaign asserted
that the covered wattage ranges proposed in the April 2009 NOPR ``seem
arbitrary and unjustified,'' commenting that the European Union's (EU)
energy efficiency standards for lighting cover a much larger range of
rated wattages. (Green Lighting Campaign, No. 74 at pp. 2-3)
In seeking to advance the energy-saving goals of EPCA, DOE
understands stakeholders' concerns that new products may emerge that
are outside of the covered wattage range. However, in setting up the
statutory structure, Congress was very careful to ensure that any
standards set would be based upon the best available data, particularly
in terms of what standards would be technologically feasible and
economically justified. Furthermore, given the anti-backsliding
provision of 42 U.S.C. 6295(o)(1), DOE must exercise great care so as
to set an appropriate standard in the first instance. Contrary to
EPCA's direction that DOE set standards for products that the data show
to be technologically feasible and economically justified, Earthjustice
would have DOE broaden coverage without data, unless DOE can prove a
negative (i.e., that such standards are not economically feasible and
economically justified). DOE concludes that such an approach would
violate the statute. Accordingly, DOE maintains that it is
inappropriate to lower the covered wattage range to include products
that do not exist. Without knowing the performance characteristics of a
lamp, DOE cannot know how energy conservation standards will affect it.
It is not possible for DOE to set standards for lower-wattage lamps
that currently do not exist because DOE cannot prove that standards for
such lamps are technologically feasible and economically justified.
Therefore, DOE maintains the covered wattage range proposed in the
April 2009 NOPR in this final rule. It is further noted that if low-
wattage products do subsequently enter the market, DOE would address
the appropriateness of energy conservation standards for such products
in considering periodic amendments to the GSFL and IRL standards
pursuant to 42 U.S.C. 6295(m).
In response to comments on the EU's lighting efficiency standards,
DOE notes that these standards are not directly comparable, because
they are applied to a larger scope of products than what is covered in
this rulemaking. Thus, the cited EU standards encompass a broader range
of covered wattages (i.e., include lower wattage levels) than those
proposed by DOE, because the EU standard covers lamps with shorter
lengths.
ACEEE and the CA Stakeholders suggested that DOE should lower the
wattage range of covered products by one watt in order to account for
imprecision in how lamps are rated. (ACEEE, Public Meeting Transcript,
No. 38.4 at p. 44-45; CA Stakeholders, No. 63 at p. 11) ACEEE argued
that because a lamp's rated wattage and its ``actual'' wattage often
differ, lowering the wattage range would prevent manufacturers from
circumventing standards by rating lamps at artificially low wattages.
For example, a manufacturer could rerate a 25 watt lamp as a 24 watt
lamp, which would then not be covered by standards.
While DOE understands the stakeholders' concerns, DOE believes that
the definition of ``rated wattage'' sufficiently addresses the issue of
potential circumvention. As discussed in further detail in section
III.C.1 below,
[[Page 34090]]
for lamps currently commercially-available and listed in ANSI C78.81-
2005 or ANSI C78.901-2005, ``rated wattage'' (as defined in amended 10
CFR 430.2) is specified for each lamp on its corresponding datasheet in
the same industry standard. Therefore, for these lamps, manufacturers
may not arbitrarily lower the rated wattage of lamps listed in the ANSI
standards. However, due to the emergence of new products on the market
after publication of the ANSI standards, not all currently
commercially-available lamps are listed in ANSI C78.81-2005 or ANSI
C78.901-2005. For lamps not listed in either standard, the rated
wattage corresponds to the wattage measured when operating the lamp on
an appropriate ballast, as specified by part 1(iii) of the revised
definition of ``rated wattage.'' In such a case, the ``actual'' wattage
would be equivalent to the rated wattage, thereby preventing
circumvention of the standard. Thus, for all covered lamps, DOE
believes that the definition of ``rated wattage'' adopted in this final
rule prevents manufacturers from artificially raising or lowering the
rated wattage of a lamp, thereby addressing any potential loopholes.
The following sections discuss each additional GSFL category DOE
considered throughout this rulemaking and summarize the analysis
performed to determine to which lamps DOE should extend coverage.
a. Four-Foot Medium Bipin Lamps
DOE found that there are no 4-foot medium bipin lamps with a rated
wattage below 25W currently on the market, but that manufacturers do
market and sell 25W 4-foot medium bipin T8 fluorescent lamps as
replacements for higher-wattage 4-foot bipin T8 lamps. Thus, DOE
initially concluded that standards for these lamps that are 25W or
higher, but less than 28W, would mitigate the risk of unregulated 25W
lamps becoming a loophole, and would maximize potential energy savings.
In addition, because the technology and incremental costs associated
with increased efficacy of 25W lamps are similar to their already
regulated 28W counterparts, DOE tentatively concluded that standards
for these lamps would be technologically feasible and economically
justified. 73 FR 13620, 13630 (March 13, 2008) and 74 FR 16920, 16928
(April 13, 2009). As explained in the April 2009 NOPR and as set forth
below in section VII, DOE has now determined that standards for 4-foot
medium bipin lamps with a rated wattage at or above 25W, and below 28W,
would save significant amounts of energy and are technologically
feasible and economically justified, and includes such standards in
today's rule. DOE has not, however, pursued standards for 4-foot medium
bipin lamps with a rated wattage below 25W. The lack of existence of
such lamps precludes DOE from assessing whether standards for them are
technologically feasible and economically justified, and the inability
to make such an assessment could also result in the adoption of
standards that would reduce the utility of such a product or even
preclude its development. 74 FR 16920, 16929-30 (April 13, 2009).
Therefore, in this final rule, DOE extends coverage to 4-foot medium
bipin lamps with a rated wattage greater than or equal to 25W and less
than 28W.
b. Two-Foot Medium Bipin, U-Shaped Lamps
DOE initially decided not to consider standards for 2-foot U-shaped
lamps less than 28W, based on its understanding that no such products
are commercially available. NEMA provided information, however, that
such lamps have been introduced at 25W. Therefore, consistent with its
approach just described for 4-foot medium bipin lamps, DOE evaluated
for standards 2-foot U-shaped lamps of 25W or more, but less than 28W.
74 FR 16920, 16929-30 (April 13, 2009). As set forth below in section
VII, DOE has now determined that standards for these lamps would save
significant amounts of energy and are technologically feasible and
economically justified, and includes such standards in today's rule. In
addition, DOE has not pursued standards for 2-foot U-shaped lamps with
a rated wattage below 25W, for the same reasons that it has declined to
pursue standards for 4-foot medium bipin lamps with a rated wattage
below 25W. Therefore, in this final rule, DOE extends coverage to 2-
foot U-shaped lamps with a rated wattage greater than or equal to 25W
and less than 28W.
c. Eight-Foot Recessed, Double-Contact Lamps
As indicated above, DOE examined 8-foot recessed double-contact
(RDC) rapid-start HO lamps, including those not defined in ANSI
Standard C78.1-1991 as well as those defined in ANSI Standard C78.1-
1991, but with other than 0.800 nominal amperes. These are T8 8-foot
lamps, and neither is currently subject to standards. DOE concluded
that these lamps serve or could serve as substitutes for GSFL currently
subject to standards, and, therefore, coverage of these lamps would
maximize energy savings from standards. DOE also tentatively concluded
that energy conservation standards for these T8 lamps would be: (1)
Technologically feasible because they use technologies similar to the
technologies used by their already-regulated T12 counterparts; and (2)
economically justified because preliminary analysis indicated such
standards would result in substantial economic savings. 73 FR 13620,
13630-31 (March 13, 2008) and 74 FR 16920, 16928 (April 13, 2009). As
set forth below in section VII, DOE has now determined that standards
for these lamps would save significant amounts of energy and are
technologically feasible and economically justified, and includes such
standards in today's rule. Therefore, in this final rule, DOE extends
coverage to the following 8-foot recessed double contact, rapid start,
HO lamps: (1) Ones other than those defined in ANSI Standard C78.1-
1991; and (2) those defined in ANSI Standard C78.1-1991 with other than
0.800 nominal amperes.
d. Eight-Foot Single Pin Slimline Lamps
As with 8-foot recessed double contact, rapid start, HO lamps, DOE
concluded that 8-foot, single pin, instant start, slimline lamps not
included in ANSI Standard C78.3-1991, with a rated wattage greater than
or equal to 52W, could serve as substitutes for GSFL currently subject
to standards. Therefore, DOE tentatively concluded that regulation of
these lamps has the potential to achieve substantial energy savings.
DOE's preliminary analysis also indicated that energy conservation
standards for these 8-foot single pin lamps would be: (1)
Technologically feasible because they use technologies similar to the
technologies used by their already-regulated T12 counterparts; and (2)
economically justified because preliminary analysis indicated such
standards would result in substantial economic savings. 73 FR 13620,
13631-32 (March 13, 2008) and 74 FR 16920, 16929 (April 13, 2009). As
set forth below in section VII, DOE has now determined that standards
for these lamps would save significant amounts of energy and are
technologically feasible and economically justified, and includes such
standards in today's rule. Therefore, in this final rule, DOE extends
coverage to 8-foot single pin instant start slimline lamps, with a
rated wattage greater than or equal to 52W that are not defined in ANSI
Standard C78.3-1991.
e. Very High Output Straight-Shaped Lamps
Although individual VHO T12 lamps consume relatively large amounts
of
[[Page 34091]]
energy, they are commonly used in outdoor applications where high-
intensity discharge (HID) lamps are rapidly gaining market share, and
shipments of VHO lamps are declining rapidly. Therefore, the total
energy savings that would result from standards for these lamps would
be small and would likely decrease over time. In response to the April
2009 NOPR, DOE received no adverse comment regarding its decision to
not cover VHO lamps. Accordingly, DOE has not pursued standards for VHO
lamps and does not extend them coverage in this final rule. 73 FR
13620, 13632 (March 13, 2008) and 74 FR 16920, 16928 (April 13, 2009).
As emphasized above, DOE will vigilantly monitor the market shares and
other relevant information for these lamps and consider whether to
extend coverage in a future rulemaking.
f. T5 Lamps
DOE initially decided not to consider standards for T5 lamps
because it believed that standards for these lamps would have limited
potential to result in energy savings. First, these lamps have a
relatively small market share. Second, although T5 lamps can substitute
for T8 or T12 lamps, T5 lamps tend to have higher efficacies than T8s
or T12s. Therefore, DOE inferred that a lack of standards for T5 lamps
would be unlikely to undermine energy savings resulting from a T12 and
T8 standard, even if the standard caused increased sales of T5 systems.
73 FR 13620, 13632 (March 13, 2008).
However, after receiving comments on this issue in response to the
March 2008 ANOPR, including comments advocating energy conservation
standards for T5 lamps, DOE decided it should reconsider whether such
standards are warranted. Specifically, DOE concluded that, absent
standards for T5 lamps, less-efficient T5 lamps could enter the market
and be substituted for T8 and T12 lamps that are subject to standards.
Thus, a lack of standards for T5 lamps could potentially reduce the
energy savings that could result from the standards for T8 and T12
lamps. Accordingly, in the NOPR, DOE tentatively concluded that
regulation of T5 lamps has the potential to achieve substantial energy
savings. Furthermore, DOE research indicated that: (1) The primary
driver of T5 market share growth is substitution for currently
regulated 4-foot MBP lamps; (2) standard-output (approximately 28W) and
high-output (approximately 54W) lamps are the highest volume T5
miniature bipin lamps; and (3) reduced-wattage versions of these lamps
(26W and 51W, respectively) are available. Therefore, DOE evaluated for
standards 4-foot nominal, straight-shaped, T5 miniature bipin standard
output lamps with rated wattages >=26W and 4-foot nominal, straight-
shaped, T5 miniature bipin high output lamps with rated wattages >=51W,
as they present the greatest potential for energy savings. DOE also
tentatively concluded that energy conservation standards for these T5
lamps would be: (1) Technologically feasible because higher-efficacy
versions of some of these lamps are already present in the market; and
(2) economically justified because preliminary analysis indicated such
standards would result in substantial economic savings. 74 FR 16920,
16929 (April 13, 2009). Both NEMA and ACEEE supported the extension of
coverage to T5 lamps. (NEMA, Public Meeting Transcript, No. 38.4 at p.
43; ACEEE, Public Meeting Transcript, No. 38.4 at p. 44; NEMA, No. 81
at p. 7)
Since the publication of the NOPR, DOE has learned that a 49W T5
miniature bipin high-output lamp has been introduced to the market. As
this lamp is very similar to a 51W T5 miniature bipin high-output lamp,
DOE concludes that standards for these lamps would be technologically
feasible and economically justified for the reasons listed above.
Therefore, as set forth in more detail in section VII, DOE has
determined that standards for T5 lamps would save significant amounts
of energy and are technologically feasible and economically justified.
Thus, in this final rule, DOE extends coverage to 4-foot T5, miniature
bipin, straight-shaped, standard output lamps with rated wattage
greater than or equal to 26W and 4-foot T5, miniature bipin, straight-
shaped, high output lamps with rated wattage greater than or equal to
49W.
g. Various Other Fluorescent Lamps
In addition to the GSFL already covered by standards and those just
discussed, there exist straight-shaped and U-shaped fluorescent lamps
that have, for example, alternate lengths, diameters, or bases, as well
as fluorescent lamps with alternative shapes (e.g., circline lamps and
pin-based compact fluorescent lamps (CFL)). In this rulemaking, DOE has
not pursued standards for these additional fluorescent lamps. The GSFL
already covered and those DOE included in this rulemaking represent a
significant majority of the GSFL market, and, thus, the bulk of the
potential energy savings from amended or new standards. Furthermore,
there is limited potential for lamps with miscellaneous lengths and
bases to grow in market share, given the constraints of fixture lengths
and socket compatibility. 73 FR 13620, 13632 (March 13, 2008) and 74 FR
16920, 16928 (April 13, 2009). Given the relatively low shipments and
limited potential for growth in shipments, DOE does not extend coverage
to GSFL with alternate lengths, diameters, bases, or shapes. DOE again
emphasizes that it will vigilantly monitor the market shares and other
relevant information for these lamps and consider whether to extend
coverage in a future rulemaking.
Magnaray, a luminaire manufacturer, commented that the amended
standards should not eliminate existing ``twin T5'' fluorescent lamps
from the market. Magnaray stated that ``twin T5'' lamps have
demonstrated significant energy savings relative to their replacements.
The luminaire manufacturer further requested that DOE recommend these
lamps for use in all outdoor lighting applications. (Magnaray, No. 58
at p. 1) DOE research indicates that ``twin T5'' lamps are actually
high-lumen-output single-ended twin-tube T5 pin-based CFL. In general,
these lamps are offered with wattages between 18W and 80W, CCTs between
3000K and 5000K, lengths between 9 and 22.6 inches, and CRIs of 82. As
discussed above, based on their relatively low market-share and the low
potential energy savings associated with their regulation, DOE is not
extending coverage to pin-based CFL. DOE reiterates that it will
vigilantly monitor the market shares and other relevant information for
these lamps and consider whether to extend coverage in a future
rulemaking. In addition, it should be noted that DOE does not endorse
particular products or recommend that consumers adopt particular
technologies in the energy conservation standards rulemaking.
3. Summary of GSFL for Which DOE Has Adopted Standards
DOE has determined that energy conservation standards are
technologically feasible and economically justified, and would result
in significant energy savings, for all of the ``additional'' GSFL for
which DOE proposed standards in the April 2009 NOPR. Therefore, DOE is
adopting standards today for the following additional GSFL:
2-foot, medium bipin U-shaped lamps with a rated wattage
greater than or equal to 25 and less than 28;
4-foot, medium bipin lamps with a rated wattage greater
than or equal to 25 and less than 28;
4-foot T5, miniature bipin, straight-shaped, standard
output lamps with rated wattage greater than or equal to 26;
[[Page 34092]]
4-foot T5, miniature bipin, straight-shaped, high output
lamps with rated wattage greater than or equal to 49;
8-foot recessed double contact, rapid start, HO lamps
other than those defined in ANSI Standard C78.1-1991;
8-foot recessed double contact, rapid start, HO lamps
(other than 0.800 nominal amperes) defined in ANSI Standard C78.1-1991;
and
8-foot single pin instant start slimline lamps, with a
rated wattage greater than or equal to 52, not defined in ANSI Standard
C78.3-1991.
B. Incandescent Reflector Lamp Scope of Coverage
The April 2009 NOPR proposed amended energy conservations standards
for incandescent reflector lamps with a rated wattage from 40W to 205W,
other than those exempted from standards under 42 U.S.C. 6295(i)(1)(C).
74 FR 16920, 16924-25, 16930-31, 17017-18 (April 13, 2009) In response
to the April 2009 NOPR, DOE received several comments regarding the
proposed incandescent reflector lamp scope coverage. These comments are
discussed below.
1. Covered Wattage Range
In response to the April 2009 NOPR, the Edison Electric Institute
(EEI) expressed concern that the scope of coverage for IRL is too
limited, specifically with regard to the proposed covered wattage range
(i.e., 40W-205W). EEI suggested that manufacturers could easily produce
lamps at 39W or 206W to circumvent energy conservation standards.
Because IRL exist in the market at wattages as low as 35W and as high
as 500W, EEI recommended that the covered wattage range for IRL be
extended to include lamps as low as 20W and as high as 505W. (EEI, No.
45 at p. 2)
In amending energy conservation standards for IRL, DOE is limited
to the definition prescribed by EISA 2007, which defines IRL as a lamp
that ``has a rated wattage that is 40 watts or higher.'' (42 U.S.C.
6291(30)(C), (C)(ii), and (F)) Given this definition, DOE does not have
the authority to decrease the lower wattage limit of covered IRL below
40W. DOE does, however, have the authority to alter the upper limit of
the wattage range for covered IRL. In response to EEI's comment, DOE
analyzed commercially-available product in manufacturer catalogs to
assess the prevalence of products with wattages greater than 205W.
Based on this research, DOE believes that IRL with rated wattages
greater than 205W comprise a very small portion of the market and,
therefore, do not represent substantial potential energy savings. For
these reasons, DOE has decided, in this final rule, to adopt standards
for IRL with a rated wattage greater than or equal to 40W and less than
or equal to 205W.
2. Exempted Incandescent Reflector Lamps
As discussed in more detail in the April 2009 NOPR, 74 FR 16920,
16930 (April 13, 2009), section 332(b) of EISA 2007 amended EPCA to
expand its definition of ``incandescent reflector lamp'' to include
lamps with a diameter between 2.25 and 2.75 inches, as well as ER, BR,
BPAR, or similar bulb shapes (42 U.S.C. 6291(30)(C)(ii)) and also to
exempt certain of these lamps from EPCA's standards for IRL (42 U.S.C.
6295(i)(1)(C)). As discussed in section II.B.2, DOE issued and posted
on its Web site the January 2009 NOPR in which DOE adhered to its
conclusion that these exemptions, read in conjunction with other
language in 42 U.S.C. 6295(i)(1)(C) and 42 U.S.C. 6295(i)(3), precluded
DOE from adopting energy conservation standards for lamps covered by
the exemptions. DOE subsequently held a public meeting where
stakeholders commented on the contents of the January 2009 NOPR.
At the February 3, 2009 NOPR public meeting, NEMA stated its
agreement with DOE's interpretation of the statute regarding the
exempted IRL. (NEMA, Public Meeting Transcript, No. 38.4 at p. 323)
However, stakeholders presented comments disagreeing with DOE's
conclusion and urging DOE to set standards for the exempted lamps.
Several commenters stated that exempted lamps comprise a substantial
portion of the market and, therefore, represent significant potential
energy savings. (ASAP, Public Meeting Transcript, No. 38.4 at p. 27-28;
EEI, No. 45 at p. 3; Woolsey, No. 46 at p. 1) Furthermore, ASAP argued
that DOE's interpretation that these lamps are exempt from DOE
regulation, does not accurately reflect what Congress intended when
making these lamps covered products in EISA 2007. According to the
commenter, because States are preempted from setting standards for
covered products, these exempted IRL would remain beyond the reach of
any energy conservation standards. Several stakeholders urged DOE to
draft and publish a supplementary NOPR to address the exempted ER and
BR lamps. (ASAP, Public Meeting Transcript, No. 38.4 at pp. 33, 52-53,
322-323; Woolsey, No. 46 at p. 2)
After carefully considering the testimony of the February 3, 2009
NOPR public meeting and reexamining the ANOPR public comments on this
issue, DOE has reexamined its authority under EPCA to amend standards
for ER, BR, and small-diameter lamps and concluded that its earlier
view may have been in error. As discussed in more detail in the April
2009 NOPR, DOE is reconsidering whether, under 42 U.S.C 6295(i)(3), the
directive to amend the standards in paragraph (1) encompasses both the
statutory levels and the exemptions to those standards. Regardless of
the outcome of that decision, DOE has not considered such lamps as part
of the present rulemaking because it had not conducted the requisite
analyses to adopt appropriate standard levels. At the same time, DOE
did not wish to delay the present rulemaking (and the accompanying
energy savings to the Nation) for the sole reason of considering this
subset of ER, BR, and small-diameter lamps. Therefore, as explained in
the April 2009 NOPR, DOE has decided to proceed with setting energy
conservation standards for the lamps that are the subject of the
present rulemaking and to commence a separate rulemaking for ER, BR,
and small-diameter lamps. 74 FR 16920, 16930-31 (April 13, 2009).
Following the publication of the April 2009 NOPR, several
stakeholders supported DOE's decision to address the exempted lamps in
a separate rulemaking and urged DOE to act quickly to set these new
standards. (Earthjustice, No. 60 at p. 2; NEEP, No. 61 at p. 5; Joint
Comment, No. 62 at pp. 2-3; ACEEE, No. 76 at p. 5; NRDC, No. 82 at p.
4) Commenters encouraged DOE to establish energy conservation standards
for the exempted lamps with the same effective date as those adopted in
this rulemaking in order to minimize market distortions and potential
shifting from regulated products to unregulated products. (EEI, No. 45
at p. 3; NEEP, No. 61 at p. 5; EEI, No. 78 at p. 2) DOE will consider
these comments in its separate rulemaking assessing energy conservation
standards for the exempted ER, BR, and small diameter lamps.
3. Museum Lighting
DOE received a comment from The J Paul Getty Museum requesting that
museum lighting, and particularly art museum lighting, be exempt from
standards. The comment stated that HIR lamps do not provide the same
quality of light as the halogen lamps that would be eliminated by the
proposed standard. (The J Paul Getty Museum, No. 56 at p. 1) In
response, DOE is unaware of any
[[Page 34093]]
specific light quality of halogen lamps that would necessitate their
usage instead of halogen infrared reflector lamps for museum
applications. In addition, the commenter did not provide any further
details on the unique utility of current lamps in museum settings that
could not be provided by substitute lamps that would meet the
requirements of the energy conservation standards under consideration.
Although the infrared reflector coating causes a reduction in the
infrared region of the electromagnetic spectrum, these wavelengths of
light are largely invisible to the human eye. Therefore, DOE does not
believe that halogen lamps represent a distinct utility. In addition,
given the identical nature of halogen PAR lamps used in museum settings
and non-museum settings, it would be potentially easy for any consumer
to purchase and install a lamp meant for museum use. Accordingly, DOE
is concerned that failure to regulate this type of lamp could
significantly undermine the energy savings potential of the IRL
standard. In light of this concern and the lack of information to
substantiate a unique utility of halogen IRL, DOE has decided not to
create an exemption from IRL standards for museum lighting.
C. Amended Definitions
1. ``Rated Wattage''
To implement the expanded scope of EPCA's coverage of GSFL and IRL,
and of standards adopted for GSIL in EISA 2007, DOE proposed to revise
its definitions of ``rated wattage'' and ``colored fluorescent lamp.''
74 FR 16920, 16931-32 (April 13, 2009). As to ``rated wattage,'' one
element of EPCA's definitions for both ``fluorescent lamp'' and
``incandescent reflector lamp'' is a lamp's rated wattage. (42 U.S.C.
6291(30)(A), (C)(ii), and (F)) Also, EPCA prescribes maximum rated
wattages as part of its energy conservation standards for GSIL. (42
U.S.C. 6295(i)(1)) Although EPCA does not define the term ``rated
wattage,'' DOE's regulations do, but the current DOE definition covers
only 4-foot medium bipin T8, T10, and T12 fluorescent lamps. 10 CFR
430.2.
Therefore, DOE proposed a revised and updated definition of ``rated
wattage.'' This definition included references to the current versions
of applicable ANSI standards, clarified and improved the definition,
and applied it to those lamps for which rated wattage is a key
characteristic but to which DOE's current definition does not apply. 74
FR 16920, 16931 (April 13, 2009). DOE did not receive any comments in
response to this proposed change. However, because ``electrical power''
is appropriately defined in paragraph 2.8 or Appendix R of Subpart B,
DOE note that it has decided to replace the term ``wattage'' in parts
(1)(ii) and (1)(iii) of the definition of ``rated wattage'' with
``electrical power.'' Therefore, for the reasons explained above and in
the April 2009 NOPR, DOE adopts the definition of ``rated wattage'' as
set out in the regulatory text of this final rule.
2. ``Colored Fluorescent Lamp''
With respect to the definition of ``colored fluorescent lamp,'' DOE
first notes that EPCA defines general service fluorescent lamps as
fluorescent lamps ``which can be used to satisfy the majority of
fluorescent [lighting] applications,'' but which are not designed and
marketed for certain specifically listed ``nongeneral lighting
applications,'' including ``colored fluorescent lamps.'' (42 U.S.C.
6291(30)(B)) As with ``rated wattage,'' EPCA does not define the term
``colored fluorescent lamp,'' but DOE's regulations do. The DOE
regulations currently define the term as ``a fluorescent lamp
designated and marketed as a colored lamp'' and having a CRI less than
40 or a CCT less than 2500 K or greater than 6600 K. 10 CFR 430.2.
Because lamps meeting this definition are not GSFL under EPCA, they are
not covered by the standards applicable to GSFL.
After becoming aware of a lamp on the European market that is
intended for general illumination applications but has a CCT of 17000 K
and might meet DOE's definition of ``colored fluorescent lamp,'' DOE
became concerned that some new products with general service
applications might be excluded from the coverage of standards
applicable to GSFL. 73 FR 13620, 13634 (March 13, 2008). To avoid this
possibility, DOE considered adding the following phrase to its
definition of ``colored fluorescent lamp'': ``* * * and not designed or
marketed for general illumination applications.'' Id.
Following publication of the March 2008 ANOPR, DOE obtained
information indicating that, instead, it should amend the definition of
``colored fluorescent lamp'' both to: (1) Exclude from the definition,
and thereby place under energy conservation standards, lamps with CCTs
from 6600 K to 7000 K; and (2) include in the definition, and thereby
place outside the coverage of standards, all lamps with a CCT greater
than 7000 K (i.e., regardless of how the lamp is designated and
marketed). Although lamps with CCTs greater than 6600 K and less than
or equal to 7000 K are not prevalent in the market, such lamps are
commercially available and becoming increasingly popular. Furthermore,
manufacturers would likely be able to produce a lamp at 7000 K using
the same materials as a 6500 K lamp (a commonly sold lamp). Thus, DOE
tentatively concluded that covering such lamps would maintain the
coverage under DOE's energy conservation standards of GSFL serving
general application purposes, and that the technological similarity
between 6500 K and 7000 K lamps makes it possible to establish
technologically feasible efficacy levels for 7000 K lamps. However,
very few lamps with a CCT greater than 7000 K exist in the market, and
the inherently ``blue'' color of these high-CCT lamps appears to
prevent their widespread adoption as substitutes for standard CCT lamps
(e.g., 4100 K). In addition, the materials used in the manufacture of
such lamps, as well as the design trade-offs in developing them, would
differ from those applicable to current products serving this market.
Thus, DOE tentatively concluded that it could not determine whether a
particular standard level would be technologically feasible for lamps
with a higher CCT, and that these lamps would not be expected to be a
potential loophole to standards it was considering in this rulemaking.
For these reasons, which DOE discussed in greater detail in the April
2009 NOPR, DOE proposed to modify the definition of ``colored
fluorescent lamp'' by raising the upper CCT limit for lamps excluded
from that term from 6600 K to 7000 K, and including in that term all
lamps (regardless how the lamp is designated and marketed) with a CCT
greater than 7000 K. 74 FR 16920, 16931-32 (April 13, 2009).
Both EEI and NEMA agreed with the proposed definition of ``colored
fluorescent lamp.'' (EEI, No. 45 at p. 2, NEMA, Public Meeting
Transcript, No. 38.4 at p. 46-47; NEMA, No. 81 at p. 7) However, ACEEE
pointed out that at an earlier stage of the rulemaking process, NEMA
had identified an 8000 K lamp and claimed that lamps at high CCT values
were capturing an increasing market share of general service
applications. ACEEE argued that, if this is true, lamps with a CCT up
through 8000 K should be included in coverage. (ACEEE, Public Meeting
Transcript, No. 38.4 at p. 48). NEMA responded that it is not aware of
an 8000 K lamp gaining market share in the general service lighting
market because such a lamp would be too blue and not suitable for
general service applications. (NEMA,
[[Page 34094]]
Public Meeting Transcript, No. 38.4 at pp. 49-50)
ACEEE also suggested that DOE should reinsert the phrase ``and not
designed or marketed for general illumination applications'' in the
definition of ``colored fluorescent lamp'' to ensure that only
specialty lamps are excluded from the definition of ``general service
fluorescent lamp.'' (ACEEE, Public Meeting Transcript, No. 38.4 at pp.
48-49; ACEEE, No. 76 at p. 4) In response, DOE agrees that the
intention of the exemption for colored fluorescent lamps is to exclude
only specialty lamps from standards. DOE believes that the amended
definition of ``colored fluorescent lamp'' should not become a loophole
for fluorescent lamps that are used in general service applications,
and, therefore, should be subject to energy conservation standards.
However, DOE also maintains that there are enough lamps available with
CCTs greater than 7000 K to determine technologically feasible energy
conservation standards. In addition, DOE believes that the inherently
``blue'' color of these lamps may prevent widespread adoption as
substitutes for standard CCT lamps (e.g., 4100 K).
Therefore, in this final rule, DOE is modifying the definition of
``colored fluorescent lamp'' as follows. DOE has decided to incorporate
the phrase ``and not designed or marketed for general illumination
applications'' into the definition of ``colored fluorescent lamp.''
This phrase will apply to those lamps with CCTs greater than 7000 K, as
well as lamps with a CRI less than 40 and lamps with a CCT under 2500
K. However, because DOE believes that there are insufficient data to
determine whether amended standards for lamps with CCTs greater than
7000 K would be technologically feasible, DOE is modifying the range of
CCTs for which it is adopting standards. As a result, lamps referred to
as possessing high CCTs in this standard-setting rulemaking are now
being classified as those with a CCT greater than 4500 K and less than
or equal to 7000 K (rather than simply greater than 4500 K).
DOE is implementing these changes in this manner because of the
anti-backsliding provision in EPCA. Because lamps with CCTs greater
than 7000K that are not designated and marketed as colored lamps are
currently subject to energy conservation standards, exempting all lamps
with a CCT above 7000 K through inclusion in the definition of
``colored fluorescent lamp'' would prescribe a standard which
impermissibly ``decreases the minimum required energy efficiency, of a
covered product.'' (42 U.S.C. 6295 (o)(1)) Thus, if lamps with CCTs
greater than 7000 K are used in general service applications, they will
not be covered by the standards adopted by this final rule, although
they will continue to be subject to the existing energy conservation
standards (which have not been eliminated, despite being superseded in
terms of efficacy levels for most--but not all, as demonstrated here--
of those lamps upon the effective date of the updated GSFL standards).
In conclusion, DOE adopts the following definition for ``colored
fluorescent lamp'' as set out in the regulatory text of this final
rule.
D. Off Mode and Standby Mode Energy Consumption Standards
Section 310(3) of EISA 2007 amended EPCA to require energy
conservation standards adopted for a covered product after July 1, 2010
to address standby mode and off mode energy use. (42 U.S.C.
6295(gg)(3)) Although the final rule in this standards rulemaking is
scheduled for publication by June 2009 (i.e., before this statutory
deadline), DOE nonetheless did a preliminary analysis of the potential
for energy savings associated with the regulation of standby mode and
off mode energy use in covered lamps. DOE tentatively determined that
current technologies for the GSFL and IRL that are the subjects of this
rulemaking do not use a standby mode or off mode, so it is neither
feasible nor necessary to incorporate energy use in these modes into
the energy conservation standards for GSFL and IRL. Therefore, DOE did
not propose amendments to the standards to address lamp operation in
such modes. 73 FR 13620, 13627 (March 13, 2008); 74 FR 16920, 16932-33
(April 13, 2009). DOE did not receive any comments regarding this
subject, so DOE concludes that standby mode and off mode are not
applicable to these products. Therefore, in this final rule, DOE is not
adopting provisions to address lamp operation in off mode or standby
mode as part of the energy conservation standards that are the subject
of this rulemaking.
E. Color Rendering Index Standards for General Service Fluorescent
Lamps
EPCA specifies minimum levels of both lumens per watt and CRI that
GSFL must meet. (42 U.S.C. 6295(i)(1)) However, EPCA authorizes DOE to
consider and adopt only energy conservation standards that consist of
energy performance requirements. (42 U.S.C. 6291(6)) In the March 2008
ANOPR, commenters suggested that it may be necessary for DOE to amend
the existing CRI standards to prevent the possible emergence of
loopholes in the product class structure and standards levels. In the
April 2009 NOPR, DOE concluded that it does not have the authority to
change the CRI standard because CRI is not a measure of energy
consumption or efficacy, but rather a measure of the color quality of
the light. 74 FR 16920, 16933 (April 13, 2009).
In written comments, Earthjustice argued that DOE has the authority
to amend EPCA's Color Rendering Index (CRI) for GSFL, stating that DOE
ignored the context of the duties that Congress imposed in 42 U.S.C.
Sec. 6295(i)(3). Earthjustice correctly noted that Congress included a
table specifying both lamp efficacy and CRI standards for GSFL. (42
U.S.C. 6295(i)(1)(B)). The commenter also correctly stated that
Congress provided that all GSFL ``shall meet or exceed the [specified]
lamp efficacy and CRI standards'' (42 U.S.C. 6295(i)(1)(B)), and
directed DOE to ``determine if the standards in paragraph (1) should be
amended.'' (42 U.S.C. 6295(i)(3)). From there, Earthjustice took the
position that Congress did not intend to require DOE to assess only the
``energy conservation standards'' established in 42 U.S.C. 6295(i)(1),
but instead to review all ``standards'' established in that paragraph,
which include both lamp efficacy and CRI standards. (Earthjustice, No.
60 at pp. 3-4) The Green Lighting Campaign also argued that DOE should
place restrictions on the CRI of covered GSFL because CRI can be used
to enhance a lamp's visual acuity, thereby enabling substitution of
lower-wattage lamps in a given lamp application without sacrificing
utility. Therefore, the commenter argued that CRI affects energy
efficiency and that DOE should screen out lamps with a CRI below 80.
(Green Lighting Campaign, No. 74 at p. 2, 4)
Furthermore, Earthjustice stated that the relevant discussion in
the preamble of DOE's April 2009 NOPR did not clarify whether DOE
believes that amendment of the CRI standards is foreclosed by EPCA's
plain language (which Earthjustice disputed for the reasons above), or
that is DOE's interpretation of an ``allegedly ambiguous provision''
(which Earthjustice asserted would be arbitrary and capricious).
Earthjustice also commented that DOE's rationale on this point in the
April 2009 NOPR explanation cannot be reconciled with the purposes of
the statute and the intent of Congress, which enacted EPCA to
``conserve energy supplies through energy conservation programs'' and
``provide for improved energy efficiency of * * * consumer products.''
42 U.S.C.
[[Page 34095]]
6201(4) and (5). Finally, Earthjustice argued that DOE must consider
amending EPCA's CRI standards if an efficacy-only standard is not
sufficient to capture all technologically feasible and economically
justified energy savings. (Earthjustice, No. 60 at pp. 3-4)
In response, DOE disagrees with the Green Lighting Campaign and
Earthjustice's interpretation of the relevant statutory language.
Despite the overarching energy-savings purposes of EPCA, Congress
promulgated a highly detailed statute (both initially and through
subsequent amendments) with numerous provisions specifying (or
restricting) DOE's authority. In general, Congress did not provide DOE
unfettered discretion to set standards, but instead established
detailed criteria, definitions, and other limitations on DOE's
authority. Consequently, when DOE faces specific provisions which limit
its authority, it seems clear that Congress did not intend the general
energy-savings provisions of EPCA to override such limitations.
Instead, DOE interprets its mandate as to maximize energy savings
within the confines of its statutory authority. With that said, DOE
continues to believe that it does not have the authority to regulate
CRI standards for the reasons discussed in the NOPR. 74 FR 16920, 16933
(April 13, 2009). That is, the language in the statute does not provide
DOE with the authority to amend the CRI standard because it is not an
energy performance standard. In implementing the amended standards
rulemaking required under 42 U.S.C. 6295(i)(3), DOE must abide by the
criteria for prescribing new or amended standards set forth in 42
U.S.C. 6295(o). In relevant part, 42 U.S.C. 6295(o)(2)(A) provides that
any new or amended ``energy conservation standard'' must be designed to
achieve the maximum improvement in energy efficiency that is
technologically feasible and economically justified. More specifically,
as discussed in the NOPR, according to 42 U.S.C. 6291(6), ``energy
conservation standard'' means either: (1) A performance standard which
prescribes a minimum level of energy efficiency or a maximum quantity
of energy use; or (2) a design requirement (only for specifically
enumerated products). Although CRI is a performance requirement, it is
not an energy performance requirement within the meaning of the term
``energy conservation standard.'' Because, in the case of GSFL, DOE has
the authority to regulate only energy conservation standards (i.e.,
energy performance requirements), DOE is not amending the existing
minimum CRI requirements in this final rule.
Even if DOE did have authority to amend the minimum CRI
requirements, DOE does not believe any modification would have impacted
the potential energy savings of this final rule. CRI does not affect
energy consumption or efficacy and, therefore, would not affect any of
the results of DOE's analysis that are summarized in section VII.
IV. General Discussion
A. Test Procedures
DOE's test procedures for fluorescent and incandescent lamps are
set forth at 10 CFR part 430, subpart B, appendix R.\8\ These test
procedures provide detailed instructions for measuring GSFL and IRL
performance, as well as performance attributes of GSIL, largely by
incorporating several industry standards. As explained in the April
2009 NOPR (74 FR 16920, 16933 (April 13, 2009)), DOE published a test
procedure NOPR that proposed to update the current test procedure's
references to industry standards for fluorescent and incandescent
lamps, as well as to propose adoption of test procedure amendments to
address lamps to which coverage was extended by EISA 2007 or to which
DOE was considering extending coverage through rulemaking. 73 FR 13465,
13467-68 (March 13, 2008)(the test procedure NOPR). The test procedure
NOPR also proposed the following: (1) A small number of definitional
and procedural modifications to the test procedure to accommodate
technological migrations in the GSFL market and approaches DOE has
considered in this standards rulemaking; (2) revision of the reporting
requirements for GSFL, such that all covered lamp efficacies would be
reported with an accuracy to the tenths decimal place; and (3) adoption
of a testing and calculation method for measuring the CCT of
fluorescent and incandescent lamps. Id. at 13472-74. The March 2008
ANOPR also contains a detailed discussion of these proposals and
related matters. 73 FR 13620, 13627-28 (March 13, 2008).
---------------------------------------------------------------------------
\8\ ``Uniform Test Method for Measuring Average Lamp Efficiency
(LE) and Color Rendering Index (CRI) of Electric Lamps.''
---------------------------------------------------------------------------
In response to the test procedure NOPR, NEMA commented that it
strongly opposed establishing test procedures for lamps to which
coverage has not yet been extended by the energy conservation standards
rulemaking. NEMA was concerned that specifying mandatory test
conditions prior to inclusion of coverage would inadvertently prevent
new, high-efficient lamp designs from entering the market. (NEMA, No.
25 at p. 6-8) \9\ In response, in the June 2009 test procedure Final
Rule previously published (hereafter the test procedure Final Rule)),
DOE agreed with NEMA's suggestion and proceeded to finalize all other
aspects of the lamps test procedure amendments but deferred
consideration of test procedures for potentially new covered products
until DOE establishes, by final rule, the lamps to which it is
extending energy conservation standards coverage. Therefore, today's
final rule simultaneously adopts both energy conservation standards and
test procedures for these ``additional'' GSFL. In setting test
procedures for these additional GSFL, DOE is also responding to the
public comments on that topic submitted in response to the March 2008
test procedure NOPR, as discussed below.
---------------------------------------------------------------------------
\9\ Energy Conservation Program: Test Procedures for General
Service Fluorescent Lamps, Incandescent Reflector Lamps, and General
Service Incandescent Lamps; Docket No. EERE-2007-BT-TP-0013; RIN
number 1904-AB72.
---------------------------------------------------------------------------
As discussed in section III.A, DOE has decided to adopted standards
for the following additional GSFL: (1) 2-foot U-shaped; (2) 4-foot MBP;
(3) 8-foot SP slimline; (4) 8-foot RDC HO; (5) 4-foot MiniBP SO; and
(6) 4-foot MiniBP HO lamps. For the additional 2-foot U-shaped and 4-
foot MBP lamps, 10 CFR part 430, subpart B, appendix R already contains
adequate test procedures (either through existing test procedures or
those newly adopted in the test procedure final rule). Therefore, in
this final rule, DOE is not adopting new test procedures for those
lamps. However, for the added 8-foot SP slimline, 8-foot RDC HO, 4-foot
MiniBP SO, and 4-foot MiniBP HO lamps, DOE has determined that several
new provisions need to be added to the existing test procedures for
GSFL.
These provisions pertain to the adoption of reference ballast
settings for lamps not listed in ANSI C78.81-2005 nor in ANSI C78.901-
2005, as proposed in the test procedure NOPR. In response to that test
procedure proposal, NEMA stated that instituting generic test
conditions, particularly reference ballast settings, without knowing
the specific GSFL to which the conditions may apply could have
unexpected consequences. In particular, NEMA argued that such test
procedures could constrain innovation by affecting the introduction of
new lamps into the market. NEMA also committed to developing
standardized test conditions that DOE could consider for several
covered lamp types for which no test
[[Page 34096]]
conditions currently exist. (NEMA, No. 25 at p. 6-8) \10\
---------------------------------------------------------------------------
\10\ Energy Conservation Program: Test Procedures for General
Service Fluorescent Lamps, Incandescent Reflector Lamps, and General
Service Incandescent Lamps; Docket No. EERE-2007-BT-TP-0013; RIN
number 1904-AB72.
---------------------------------------------------------------------------
DOE does not agree that imposing test conditions for future covered
products would limit innovation in the lighting industry. DOE maintains
a test procedure waiver process specifically for this reason. Under 10
CFR 430.27, DOE's regulations state, ``Any interested person may submit
a petition to waive for a particular basic model any requirements of
Sec. 430.23, or of any appendix to this subpart, upon the grounds that
the basic model contains one or more design characteristics which
either prevent testing of the basic model according to the prescribed
test procedures, or the prescribed test procedures may evaluate the
basic model in a manner so unrepresentative of its true energy
consumption characteristics, or water consumption characteristics (in
the case of faucets, showerheads, water closets, and urinals) as to
provide materially inaccurate comparative data.'' (10 CFR 430.27(a)(1))
This waiver process exists to avoid constraining innovation in the
industry. Thus, DOE believes it is not preventing the introduction of
future products into the market by specifying generic test conditions
in this final rule.
While DOE appreciates NEMA's offer to develop additional
standardized test procedure provisions, the organization did not set a
timeframe for developing the new test conditions, and DOE believes that
this final rule needs to establish test conditions for all lamps
subject to energy conservation standards. In addition, DOE believes
that the test conditions set forth in the March 2008 NOPR are
appropriate for most commercially-available lamps. DOE arrived at the
ballast settings for these lamps by determining the appropriate lamp
replacement that exists in the relevant industry standard and using the
corresponding reference ballast settings for all lamps that fall into
that category. However, if NEMA supplies test conditions for industry
standards, DOE will consider incorporating them into its test procedure
regulations in a subsequent rulemaking.
Thus, in this final rule, DOE is adopting the following reference
ballast settings for those additional GSFL for which it is setting
standards, as proposed in the test procedure NOPR:
For any 8-foot SP slimline lamp not listed in the updated ANSI
C78.81-2005, the lamp should be tested using the following reference
ballast settings:
T12 lamps: 625 volts, 0.425 amps, and 1280 ohms.
T8 lamps: 625 volts, 0.260 amps, and 1960 ohms.
For any 8-foot RDC HO lamp not listed in the updated ANSI C78.81-
2005, the lamp should be tested using the following reference ballast
settings:
T12 lamps: 400 volts, 0.800 amps, and 415 ohms. &
T8 lamps: 450 volts, 0.395 amps, and 595 ohms.
For any 4-foot MiniBP standard output or high output lamp that is
not listed in ANSI C78.81-2005, the lamp should be tested using the
following reference ballast settings:
Standard Output: 329 volts, 0.170 amps, and 950 ohms.
High Output: 235 volts, 0.460 amps, and 255 ohms.
B. Technological Feasibility
1. General
As stated above, any standards that DOE establishes for GSFL and
IRL must be technologically feasible. (42 U.S.C. 6295(o)(2)(A) and
(o)(3)(B)) DOE considers a design option to be technologically feasible
if it is in use by the respective industry or if research has
progressed to the development of a working prototype. ``Technologies
incorporated in commercial products or in working prototypes will be
considered technologically feasible.'' 10 CFR part 430, subpart C,
appendix A, section 4(a)(4)(i).
This final rule considers the same design options as those
evaluated in the April 2009 NOPR. 74 FR 16920, 16933-34 (April 13,
2009) As discussed in section VI.B.2.c, DOE additionally considers
integrally-ballasted low voltage IRL as a design option to improve IRL
efficacy. (See the final rule TSD accompanying this notice, chapter 3.)
Except for trial standard level (TSL) 1 for IRL, products are
commercially available in the market at all of the TSLs evaluated for
today's rule. As to TSL1 for IRL, DOE used a design option (i.e.,
higher-efficiency gas fills) to model the performance of lamps that
would meet this TSL, and received input from manufacturers to verify
that such a design option is technologically feasible. Therefore, DOE
determined that all of the efficacy levels evaluated in this notice are
technologically feasible.
2. Maximum Technologically Feasible Levels
As required under 42 U.S.C. 6295(p)(1), in developing the April
2009 NOPR, DOE identified the efficacy levels that would achieve the
maximum improvements in energy efficiency that are technologically
feasible (max-tech levels) for GSFL and IRL. 74 FR 16920, 16933-35
(April 13, 2009). (See chapter 5 of the TSD)
For GSFL, DOE considered five TSLs in the April 2009 NOPR, with
TSL5 being the most stringent level for which DOE performed full
analyses. 74 FR 16920, 16979-82 (April 13, 2009). It is noted that DOE
also considered the potential for a standard level beyond TSL5 that
would require GSFL to use a higher-efficiency gas fill composition,
which would have been the maximum technologically feasible level.
Although more-efficient fill gases (often including higher molecular
weight gases) are appropriate for and are currently used in some lamp
applications, DOE is also aware employing this technology can cause
lamp instability resulting in striations or flickering in some
circumstances. DOE's research indicated that a potential standard level
that would require the use of higher-efficiency fill gases would
significantly reduce (or in some cases eliminate) the utility and
performance of the covered GSFL, DOE concluded on this basis that a
level with such an adverse impact on product utility would not be
economically justified.\11\ (42 U.S.C. 6295(o)(2)(B)(i)(IV) and (3)(B))
Having made this determination, there was no need or benefits to
performing additional analyses relevant to the other statutory
criteria. (See section I.A.2 for additional detail.) Consequently, TSL5
represents the most-efficient level analyzed for GSFL.
---------------------------------------------------------------------------
\11\ DOE notes that it did not eliminate higher-efficiency fill
gases from further consideration as a technology under the screening
analysis, because that technology may be appropriate for low-wattage
lamp applications.
---------------------------------------------------------------------------
For IRL, as explained in the April 2009 NOPR, DOE believes that the
maximum technologically feasible efficacy level incorporates the
highest-efficiency technologically feasible reflector, halogen infrared
coating, and filament design. Id. Combining all three of these high-
efficiency technologies simultaneously results in the maximum
technologically feasible level. However, this level is dependent on the
use of a silver reflector, which is a proprietary technology. Because
DOE is unaware of any alternate technology pathways to achieve this
efficacy level, DOE did not consider it in its analysis.
Instead, in the April 2009 NOPR, DOE based the highest efficacy
level analyzed for IRL on a commercially-available IRL which employs a
silver reflector, an improved (but not most efficient) IR
[[Page 34097]]
coating, and a filament design that results in a lifetime of 4,200
hours. Although this commercially-available lamp uses silver
technology, DOE believes that there are alternate pathways to achieve
this level. A combination of redesigning the filament to achieve higher
temperature operation (and thus reducing lifetime to 3,000 hours),
employing other non-proprietary high-efficiency reflectors, and
applying a higher-efficiency IR coating has the potential to result in
an IRL that meets an equivalent efficacy level (for more information
regarding these technologies, see chapter 3 of the TSD). Therefore, in
the April 2009 NOPR, DOE concluded that TSL5 is the maximum
technologically feasible level for IRL that is not dependent on the use
of a proprietary technology. Id.
In response to the April 2009 NOPR, DOE received several comments
on the efficiency levels analyzed and the maximum technologically
feasible levels. For further discussion of these comments see section
VI.B. For today's final rule, the max-tech levels are provided in Table
IV.1 and Table IV.2 below.
Table IV.1--Max-Tech Levels for GSFL
------------------------------------------------------------------------
Max-tech
Lamp type CCT efficacy lm/W
------------------------------------------------------------------------
4-foot medium bipin............ <=4,500K............... 93
>4,500K and <=7,000K... 92
2-foot U-shaped................ <=4,500K............... 87
>4,500K and <=7,000K... 85
8-foot single pin slimline..... <=4,500K............... 98
>4,500K and <=7,000K... 94
8-foot recessed double contact <=4,500K............... 95
HO.
>4,500K and <=7,000K... 91
4-foot T5 miniature bipin SO... <=4,500K............... 90
>4,500K and <=7,000K... 85
4-foot T5 miniature bipin HO... <=4,500K............... 76
>4,500K and <=7,000K... 72
------------------------------------------------------------------------
Table IV.2--Max-Tech Levels for IRL
----------------------------------------------------------------------------------------------------------------
Diameter (in Max-tech
Lamp wattage Lamp type inches) Voltage efficacy lm/W
----------------------------------------------------------------------------------------------------------------
40W-205W.............................. Standard-spectrum....... >2.5 >=125V 7.4P\0.27\
<125V 6.4P\0.27\
<=2.5 >=125V 6.2P\0.27\
<125V 5.4P\0.27\
40W-205W.............................. Modified-spectrum....... >2.5 >=125V 6.3P\0.27\
<125V 5.4P\0.27\
<=2.5 >=125V 5.3P\0.27\
<125V 4.6P\0.27\
----------------------------------------------------------------------------------------------------------------
Note 1: P is equal to the rated lamp wattage, in watts.
Note 2: Standard Spectrum means any incandescent reflector lamp that does not meet the definition of ``modified
spectrum'' in 430.2.
C. Energy Savings
DOE forecasted energy savings in its national impact analysis (NIA)
through the use of an NIA spreadsheet tool, as discussed in the April
2009 NOPR. 74 FR 16920, 16935, 16958-72 (April 13, 2009).
One of the criteria that governs DOE's adoption of standards for
covered products is that the standard must result in ``significant
conservation of energy.'' (42 U.S.C. 6295(o)(3)(B)) While EPCA does not
define the term ``significant,'' a U.S. Court of Appeals, in Natural
Resources Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir.
1985), indicated that Congress intended ``significant'' energy savings
in this context to be savings that were not ``genuinely trivial.''
DOE's estimates of the energy savings for energy conservation standards
at each of the TSLs considered for GSFL and IRL for today's rule
indicate that the energy savings each would achieve are nontrivial.
Therefore, DOE considers these savings ``significant'' within the
meaning of Section 325 of EPCA.
D. Economic Justification
1. Specific Criteria
As noted earlier, EPCA provides seven factors to evaluate in
determining whether an energy conservation standard for covered
products is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)) The
following sections discuss how DOE has addressed each of those seven
factors in evaluating efficiency standards for GSFL and IRL.
a. Economic Impact on Consumers and Manufacturers
DOE considered the economic impact of potential standards on
consumers and manufacturers of GSFL and IRL. For consumers, DOE
measured the economic impact on consumers as the change in installed
cost and life-cycle operating costs (i.e., the LCC). (See sections V.C
and VII.C.1.a, and chapter 8 of the TSD accompanying this notice.) DOE
investigated the impacts on manufacturers through the manufacturer
impact analysis (MIA). (See section VII.C.2, and chapter 13 of the TSD
accompanying this notice.) The MIA is discussed in detail in the April
2009 NOPR. 74 FR 16920, 16972-77 (April 13, 2009).
[[Page 34098]]
b. Life-Cycle Costs
DOE considered life-cycle costs of GSFL and IRL, as discussed in
the April 2009 NOPR. 74 FR 16920, 16950-58 (April 13, 2009). DOE
calculated the sum of the purchase price and the operating expense--
discounted over the lifetime of the equipment--to estimate the range in
LCC benefits that consumers would expect to achieve due to standards.
c. Energy Savings
Although significant conservation of energy is a separate statutory
requirement for adopting an energy conservation standard, EPCA also
requires DOE, in determining the economic justification of a proposed
standard, to consider the total projected energy savings that are
expected to result directly from the standard. (42 U.S.C.
6295(o)(2)(B)(i)(III)) As in the April 2009 NOPR (74 FR 16920, 16936
(April 13, 2009)), for today's final rule DOE used the NIA spreadsheet
results in its consideration of total projected savings that are
directly attributable to the standard levels DOE considered.
d. Lessening of Utility or Performance of Products
In considering standard levels, DOE sought to avoid new standards
for GSFL and IRL that would lessen the utility or performance of such
products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)); 74 FR 16920, 16936 (April
13, 2009)).
e. Impact of Any Lessening of Competition
DOE considers any lessening of competition that is likely to result
from standards. Accordingly, as discussed in the April 2009 NOPR (74 FR
16920, 16936 (April 13, 2009)) and as required under EPCA, DOE
requested that the Attorney General transmit to the Secretary a written
determination of the impact, if any, of any lessening of competition
likely to result from the standards proposed in the April 2009 NOPR,
together with an analysis of the nature and extent of such impact. (42
U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) Note also that the National
Impact Analysis does not consider the possibility of lessened
competition effects, and so, depending on their magnitude, such effects
may negatively impact the Net Present Value of the standards.
To assist the Attorney General in making such a determination, DOE
provided the Department of Justice (DOJ) with copies of the April 2009
NOPR and the TSD for review. The Attorney General's response is
discussed in section VII.C.5 below, and is reprinted at the end of this
rule. For IRLs, DOJ concluded that the proposed TSL 4 could adversely
affect competition. DOJ requested that DOE consider the possibility of
new technology for IRLs as it settles on standards in this field (DOJ,
No. 77 at pp. 1-2). Although DOJ did not evaluate the impacts on
competition of TSL 4 for GSFL, DOE believes that TSL 4 does not raise
competitive issues.
f. Need of the Nation to Conserve Energy
In considering standards for GSFL and IRL, the Secretary must
consider the need of the Nation to conserve energy. (42 U.S.C.
6295(o)(2)(B)(i)(VI)) The Secretary recognizes that energy conservation
benefits the Nation in several important ways. The non-monetary
benefits of standards are likely to be reflected in improvements to the
security and reliability of the Nation's energy system. As discussed in
the April 2009 NOPR and in section VII.C.6 of this final rule, DOE has
considered these factors in considering whether to adopt standards for
GSFL and IRL. 74 FR 16920, 16936 (April 13, 2009).
g. Other Factors
The Secretary of Energy, in determining whether a standard is
economically justified, considers any other factors that the Secretary
deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) In adopting
today's standards, the Secretary considered the potential for GSFL and
IRL standards to adversely affect low-income consumers, institutions of
religious worship, historical facilities, institutions that serve low-
income populations, and consumers of T12 electronic ballasts. In
considering these subgroups, DOE analyzed variations on electricity
prices, operating hours, discount rates, and baseline lamps. 74 FR
16920, 16936 (April 13, 2009). The impact on these subgroups is
summarized in section VII.C.1.b.
2. Rebuttable Presumption
Section 325(o)(2)(B)(iii) of EPCA states that there is a rebuttable
presumption that an energy conservation standard is economically
justified if the increased installed cost for a product that meets the
standard is less than three times the value of the first-year energy
savings resulting from the standard, as calculated under the applicable
DOE test procedure. (42 U.S.C. 6295(o)(2)(B)(iii)) DOE's LCC and
payback period (PBP) analyses generate values that calculate the
payback period for consumers of potential energy conservation
standards, which includes, but is not limited to, the three-year
payback period contemplated under the rebuttable presumption test
discussed above. However, DOE routinely conducts a full economic
analysis that considers the full range of impacts, including those to
the consumer, manufacturer, Nation, and environment, as required under
42 U.S.C. 6295(o)(2)(B)(i). The results of this 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).
V. Methodology and Discussion of Comments on Methodology
DOE used several analytical tools that it developed previously and
adapted for use in this rulemaking. One is a spreadsheet that
calculates LCC and PBP. Another tool calculates national energy savings
and national NPV that would result from the adoption of energy
conservation standards. DOE also used the Government Regulatory Impact
Model (GRIM), along with other methods, in its MIA to determine the
impacts of standards on manufacturers in light of other cumulative
regulatory requirements. Finally, DOE developed an approach using the
National Energy Modeling System (NEMS) to estimate impacts of standards
for GSFL and IRL on utilities and the environment. The April 2009 NOPR
discusses each of these analytical tools in detail. 74 FR 16920, 16958,
16972, 16978-79, 16982 (April 13, 2009).
As a basis for this final rule, DOE has continued to use the
spreadsheets and approaches explained in the April 2009 NOPR. DOE used
the same general methodology as applied in the NOPR, but revised some
of the assumptions and inputs for the final rule in response to public
comments. The following paragraphs discuss these revisions.
A. Market and Technology Assessment
When beginning an energy conservation standards rulemaking, DOE
develops information that provides an overall picture of the market for
the products concerned, including the purpose of the products, the
industry structure, and market characteristics. This activity includes
both quantitative and qualitative assessments based primarily on
publicly available information. DOE presented various subjects in the
market and technology assessment for this rulemaking. (See chapter 3 of
the NOPR TSD.) These include product definitions, product classes,
manufacturers, quantities and types of products sold and offered for
[[Page 34099]]
sale, retail market trends, and regulatory and nonregulatory programs.
As discussed below, commenters raised a variety of issues related to
the market and technology assessment, to which DOE responds in the
following sections.
1. Product Classes
In general, in evaluating and establishing energy conservation
standards, DOE divides covered products into classes by the type of
energy used, capacity, or other performance-related features that
affect efficiency, and factors such as the utility of the product to
users. (42 U.S.C. 6295(q))
a. General Service Fluorescent Lamps
In the April 2009 NOPR, DOE proposed to establish product classes
for GSFL based on the following three attributes that have differential
utility and affect efficacy: (1) Physical constraints of lamps (i.e.,
lamp shape and length); (2) lumen package (i.e., standard versus high
output); and (3) correlated color temperature. 74 FR 16920, 16936
(April 13, 2009). Based on these criteria, DOE proposed to separate
coverage into six lamp types: (1) 4-foot medium bipin; (2) 2-foot U-
shaped; (3) 8-foot single pin slimline; (4) 8-foot recessed double
contact high output; (5) 4-foot miniature bipin T5 standard output; and
(6) 4-foot miniature bipin T5 high output. DOE also proposed to
establish separate product classes for those lamps with CCT less than
or equal to 4,500 kelvin (K) and lamps with CCT greater than 4,500 K.
In total, therefore, DOE proposed 12 product classes for GSFL. In
general stakeholders expressed overall agreement with the GSFL product
class structure proposed in the April 2009 NOPR. However, DOE did
receive several comments requesting additional product classes for
specific lamps or lamp types, as discussed below.
i. Modified-Spectrum Fluorescent Lamps
In response to the April 2009 NOPR, GE commented that it is
currently researching and developing a 4-foot MBP modified-spectrum
fluorescent lamp that imitates the color quality of modified-spectrum
incandescent lighting. Although not yet commercially-available, GE
expects to release such a product before 2012, the effective date of
the energy conservation standard that is being established by this
final rule. Expecting that these lamps may not be able to meet minimum
efficacy requirements as amended by this rulemaking, GE recommended
that DOE either set separate lower efficacy standards for ``modified-
spectrum fluorescent lamps'' or exempt these lamps from standards
altogether. (GE, No. 80 at pp. 3-6)
In response, DOE believes that it does not have the authority to
exempt modified spectrum fluorescent lamps from standards. Pursuant to
42 U.S.C. 6295(o)(1), DOE cannot prescribe an amended standard which
``decreases the minimum required energy efficiency, of a covered
product.'' Although no such product currently exists, DOE notes that if
they did, modified-spectrum fluorescent lamps fall under the definition
of ``general service fluorescent lamp,'' so they would already be
subject to the statutory minimum efficacy requirements. Therefore, if
DOE were to exempt these lamps from any standards, this would
constitute backsliding from the minimum efficacy requirements, which is
impermissible, as noted above.
With regard to setting lower minimum efficacy requirements for
modified-spectrum fluorescent lamps, DOE generally sets separate
efficiency standards for products deemed to be in separate product
classes. While these lamps may in the future provide a distinct utility
to consumers (a basis on which product classes may be established under
42 U.S.C. 6295(q)), at this time, DOE has no evidence that this utility
in fact exists or is even required of the general service fluorescent
market, because there is no such product yet developed. Therefore, in
this final rule, DOE is not establishing a separate product class for
modified-spectrum fluorescent lamps. However, DOE notes that if the
company successfully develops its modified-spectrum fluorescent lamp
and believes that it warrants exemption from DOE's amended standards,
it may be possible for GE to seek exception relief from DOE's Office of
Hearings and Appeals (OHA) pursuant to 10 CFR Part 1003.
i. 25 Watt 4-Foot MBP Lamps
In the April 2009 NOPR, DOE established one product class for 4-
foot MBP lamps (of a single CCT category) that spanned the full range
of covered lamp wattages (i.e., greater than or equal to 25W). The
effects of doing this were such that at TSL5, as considered in the
NOPR, the 25W 4-foot MBP T8 lamp was expected to be eliminated from the
market, as it would not meet the minimum efficacy requirements. In
response to the April 2009 NORP, the California Stakeholders and ACEEE
suggested DOE should establish a separate product class for the 25W 4-
foot T8 MBP because it represents a significant energy-savings
opportunity. While DOE recognizes that the availability of the 25W 4-
foot T8 MBP lamp provides additional energy savings opportunities to
consumers, DOE does not believe that this alone is a basis to establish
a separate product class for this lamp. As noted above, DOE establishes
product classes only when a product type either: (1) Consumes a
different type of energy, or (2) has a capacity or other performance-
related feature which justifies a higher or lower standard level. In
making such a determination, DOE considers whether there is a
differential utility which affects efficacy. To DOE's knowledge, the
25W 4-foot MBP lamp does not provide any additional utility over that
which its 32W full-wattage counterpart provides. Therefore, DOE has not
established a different product classes for 25W lamps.
ii. Summary of GSFL Product Classes
Because DOE received no other comments on the GSFL product classes
proposed in the April 2009 NOPR, DOE is not making any changes in this
final rule related to GSFL product classes. Table V.1 summarizes the
GSFL product classes for this final rule.
Table V.1--Final Rule Product Classes for GSFL
------------------------------------------------------------------------
Lamp type CCT
------------------------------------------------------------------------
4-Foot Medium Bipin........................................ <=4500 K
>4500 K
2-Foot U-Shaped............................................ <=4500 K
>4500 K
8-Foot Single Pin Slimline................................. <=4500 K
>4500 K
8-Foot RDC HO.............................................. <=4500 K
>4500 K
4-Foot Miniature Bipin SO.................................. <=4500 K
>4500 K
4-Foot Miniature Bipin HO.................................. <=4500 K
>4500 K
------------------------------------------------------------------------
b. Incandescent Reflector Lamps
For incandescent reflector lamps, in the April 2009 NOPR, DOE
proposed to base its product class structure on: (1) Lamp spectrum
(modified versus standard spectrum); (2) lamp diameter (greater than
2.5 inches or less than or equal to 2.5 inches); and (3) rated voltage
(less than 125V or greater than or equal to 125V). DOE received several
comments on these product classes. The following sections summarize and
address those public comments.
i. Modified-Spectrum Lamps
Modified-spectrum lamps provide a unique performance-related
feature to consumers, in that they offer a different spectrum of light
from the typical incandescent lamp. These lamps offer
[[Page 34100]]
benefits such as ensuring better color discrimination and often
appearing more similar to natural daylight, possibly resulting in
psychological benefits. In addition to providing a unique performance
feature, DOE also understands that the technologies that modify the
spectral emission from these lamps also decrease their efficacy,
because a portion of the light emission is absorbed by the coating.
Therefore, in the April 2009 NOPR, DOE proposed to establish a separate
product class for modified-spectrum lamps based on their unique
performance feature and the impact of this performance feature on
product efficacy. 74 FR 16920, 16938-39 (April 13, 2009).
NEMA supported DOE's proposal for separate product classes based on
modified spectrum. (GE, Public Meeting Transcript, No. 38.4 at p. 60;
NEMA, No. 81 at p. 12) Conversely, ASAP, ACEEE, and the California
Stakeholders commented that separate product classes based on spectrum
are unnecessary because existing technologies such as LEDs and
phosphor-based lamps (e.g., CFLs) can deliver the same utility to
consumers that modified-spectrum IRL offer. ASAP stated that DOE should
evaluate the unique utility of a product rather than the technology
providing it. (ASAP, Public Meeting Transcript, No. 38.4, at pp. 68-69;
California Stakeholders, No. 63 at pp. 2, 25)
In response, DOE agrees that other technologies could produce
modified spectrum light. However, DOE reiterates the point it made in
the NOPR that the governing statutory provision directs DOE to maintain
performance-related features for a covered product type. (42 U.S.C.
6295(o)(4)) If DOE were to regulate modified-spectrum lamps within the
same product class as standard-spectrum lamps, this could result in an
energy conservation standard that would eliminate the modified-spectrum
utility from the IRL market. Furthermore, DOE believes some consumers
may find a unique utility in modified-spectrum IRL that does not exist
in CFL or LED lamps that emit modified spectra. For example, modified-
spectrum IRL have a higher CRI than many of their potential substitutes
(e.g., CFL), thereby providing a different, and in some cases a
preferable, quality of light. In addition, DOE cannot confirm that a
full range of lumen outputs are currently commercially available from
LED reflector lamps. This could potentially eliminate the modified
spectrum utility for some consumers requiring specific lumen packages
(e.g., high-lumen lamps).
PG&E, NRDC, ASAP, and the California Stakeholders also commented
that no efficacy allowance is necessary for modified-spectrum lamps for
two main reasons. First, they argued that incandescent reflector
technology that results in modified-spectrum efficacies greater that
the highest standard-spectrum standard level (TSL5) already exists.
They demonstrated these efficacies in prototypes utilizing advanced IR
coatings and silver reflectors. Second, the stakeholders argued that
there are other means (beyond the use of absorptive elements within the
glass cover) to produce modified-spectrum lamps. They suggested that
reflective coatings, similar to the infrared ones that already exist,
could, in principle, be used to create a modified spectrum in a much
more efficient way. (California Stakeholders, No. 63 at pp. 2, 25;
PG&E, NRDC, ASAP, No. 59 at p. 15-16; NRDC, No. 82 at pp. 2, 4)
DOE reiterates that it establishes product classes based on whether
a given product has unique performance features that affect the
efficacy of the product, not on whether it is technologically feasible
for the product to meet another product class's efficacy levels.
Therefore, the absolute efficacy of a given modified-spectrum IRL does
not play a role in whether DOE should or should not establish a
distinct product class. Then once it is determined that a separate
class is appropriate under the statute, an appropriate level is set
based upon examination of lamps within that class, rather than a
comparison to different types of lamps. What is relevant is whether
there is a change in efficacy that is caused by a unique performance
feature. DOE maintains that at this time modified spectrum IRL cannot
achieve an equivalent maximum technologically feasible level as
standard-spectrum IRL. To this point, the stakeholders themselves
acknowledge in their comments that lenses used to modify the spectrum
of IRL result in at least a 10 percent decrease in efficacy as compared
to standard-spectrum lamps. (PG&E, NRDC, ASAP, No. 59 at p. 2) Although
the stakeholders have demonstrated that modified-spectrum IRL might
potentially be able to achieve efficacies exceeding that of the highest
efficacy level analyzed for standard-spectrum lamps, DOE believes that
there is considerable uncertainty surrounding the efficacies of the
prototypes provided. Therefore, DOE is not establishing minimum
efficacy requirements based solely on these prototype efficacies. DOE
further addresses its consideration of these prototype efficacies in
section VI.B.2.
On the stakeholders' second point, DOE agrees that, in principle,
there may be other means of producing modified-spectrum lamps. However,
at present, DOE is unaware of any commercially-available IRL or working
IRL prototype using the alternative methods suggested by stakeholders.
For all of the above reasons, DOE has decided to establish a separate
product class for modified-spectrum incandescent reflector lamps.
Also related to modified-spectrum IRL, Tailored Lighting, a
specialty lighting company, commented that it produces specialty lamps
that alter the spectrum, differently than modified-spectrum lamps,
which the commenter claims better simulates daylight. Due to the
different spectra of light that are filtered in Tailored Lighting's
lamps relative to modified-spectrum lamps, Tailored Lighting argued
that their product would not qualify under the statutory definition of
``modified spectrum.'' Therefore, Tailored Lighting recommended that
DOE should either specifically exempt their product from regulation or
amend the definition of ``modified spectrum'' so as to include their
products, thereby allowing them to have reduced minimum efficacy
requirements. (Tailored Lighting, No. 73 at p. 11) Eiko Ltd, a
manufacturer of Tailored Lighting's products supported the same
amendments to the definition of ``modified spectrum.'' (Eiko, No. 79 at
p. 1)
While DOE acknowledges that many of Tailored Lighting's products
may not fall under the definition of ``modified spectrum,'' DOE notes
that ``modified spectrum'' is a statutory definition, defined by EISA
2007 for incandescent lamps, which includes both general service
incandescent lamps and incandescent reflector lamps. (42 U.S.C.
6291(30)(W); 42 U.S.C. 6291(30)(F)) Therefore, DOE lacks the authority
to amend the definition of ``modified spectrum.'' In addition, adopting
Tailored Lighting's recommended amendment would not only affect minimum
efficacy requirements for IRL, but would also result in an amendment to
the general service incandescent lamp standards prescribed by Congress.
For these reasons, DOE is leaving the definition of ``modified
spectrum'' unchanged from that presented in the April 2009 NOPR.
In addition, DOE notes that according to the comment, even though
Tailored Lighting also sells 12-volt MR-16 lamps with these special
daylight qualities, these lamps do not fall under the definition of
``incandescent reflector lamp.'' Tailored Lighting requested an
[[Page 34101]]
exemption (or lowered minimum efficacy requirement) for its forthcoming
PAR lamp, that would fall under the definition of ``incandescent
reflector lamp'' and is currently under development. (Tailored
Lighting, No. 73 at p. 4)) However, according to interviews and
Tailored Lighting's Web site, this lamp is not yet for sale.
In response, DOE generally sets separate efficiency standards for
products deemed to be in separate product classes. While PAR-shaped
Tailor Lighting lamps may in the future provide a distinct utility to
consumers (a basis on which product classes are established), at this
time, because there is no product yet developed, DOE has no evidence
that this utility in fact exists or is even required of the
incandescent reflector lamp (or PAR-shaped) market. Therefore, in this
final rule, DOE is not establishing a separate product class for
Tailored Lighting's products. However, DOE notes that if Tailored
Lighting successfully develops its PAR lamp and believes that it
warrants exemption from DOE's amended standards, it may be possible for
Tailored Lighting to seek exception relief from DOE's OHA pursuant to
10 CFR Part 1003.
ii. Lamp Diameter
As mentioned above, DOE also proposed separate product classes for
smaller-diameter lamps (i.e., lamps with a diameter less than or equal
to 2.5 inches). Such lamps provide a distinct utility (such as the
ability to be installed in smaller fixtures) which generally results in
lower efficacy because they have an inherently lower optical efficiency
than larger-diameter lamps of similar filament size. Both NEMA and the
California Stakeholders supported DOE's proposal to establish a
separate product class for small-diameter lamps. (NEMA, No. 81 at p. 7,
p. 12; GE Lighting, Public Meeting Transcript, No. 38.4 at p. 60;
California Stakeholders, No. 63 at p. 22) Because DOE received no other
comments on this issue, DOE continues to set separate product classes
for lamps of diameter less than or equal to 2.5 inches.
iii. Voltage
Current DOE test procedures provide for lamps rated at 130 volts
(V) to be tested at 130 V and for lamps rated at 120 V to be tested at
120 V. However, DOE is aware that a large number of consumers actually
operate 130 V lamps at 120 V, which results in longer lifetime but
lower efficacy. With a single efficacy level for lamps rated at each
voltage, this situation would effectively lead to a lower efficacy
requirement for these 130 V lamps that are run at 120 V, compared to
120 V lamps run at 120 V. These 130V lamps would not require the same
level of technology as 120 V-rated lamps to meet the same standard,
and, thus, they would be cheaper to produce. Therefore, setting higher
standards for IRL without accounting for voltage differences could
result in increased migration to the 130 V lamps and possible lost
energy savings. For these reasons, in the April 2009 NOPR, DOE proposed
to set separate standards for 130 V lamps. Specifically, DOE proposed
to establish two separate product classes: (1) Lamps with a rated
voltage less than 125 V, and (2) lamps with a rated voltage greater
than or equal to 125 V. 74 FR 16920, 16940 (April 13, 2009). DOE also
requested comment on the alternative approach of having all IRL be
tested at 120 V, the most common application voltage in the market. Id.
Philips commented that setting a 130 V-lamp efficacy level that was
15 percent higher than the level for 120 V lamps, as DOE proposed in
the NOPR, would drive 130 V lamps from the market because such a level
would be technologically infeasible. In addition, Philips and GE stated
that it is not uncommon for consumers to run lamps at 130 V in certain
regions of the country. Therefore, NEMA and Philips stated, with 130 V
lamps gone from the marketplace, some consumers may be forced to run
120 V lamps at 130 V, which could cut lamp lifetime in half and cause a
loss of utility for these consumers. For those reasons, manufacturers
argued, there should be no separate product class for voltage. Instead,
manufacturers argued that DOE should test IRL at their rated voltages
and subject the lamps to the same standard. Supporting this idea, GE
noted that even if one operates a 130 V lamp at 120 V, power is reduced
proportionally, meaning there would be lower energy consumption. (GE
and Philips, Public Meeting Transcript, No. 38.4 at pp. 61-62, 67;
NEMA, No. 81 at pp. 4, 7-8)
Conversely, the California Stakeholders, EEI and ACEEE argued that
130 V lines are very rare. EEI stated that many utilities must follow
agreements to maintain voltages in the residential sector within a 5
percent range of 120 V (114 V to 126 V) and agreed with DOE's approach.
The California Stakeholders commented that utilities are trending
toward lower line voltage to minimize transmission losses. In addition,
they stated that FTC labeling requirements already require
manufacturers to provide power and light output for 120 V, even if the
lamps are designed to be run at 130 V. Therefore, the California
Stakeholders argued, all lamps should be regulated based on testing at
120 V. (ACEEE and EEI, Public Meeting Transcript, No. 38.4 at pp. 63-
64, 66; EEI, No. 45 at p. 3; California Stakeholders, No. 63 at p. 25-
26)
GE argued that while utilities do face line voltage regulation,
there are cases in which the voltage is higher than that prescribed in
ANSI C-84.1, ``American National Standard for Electric Power Systems
and Equipment-Voltage Ratings (60 Hertz),'' (the source of the
prescribed voltage range that EEI referenced in the above comment).
Therefore, the 130 V lamps have utility for consumers in these cases.
(GE, Public Meeting Transcript, No. 38.4 at p. 67)
In response, DOE remains concerned that the operation of 130 V
lamps at 120 V has the potential to significantly affect energy
savings. As discussed above, when operated under 120 V conditions,
lamps rated at 130 V and in compliance with existing IRL efficacy
standards are generally less efficacious than lamps using equivalent
technology rated at 120 V. Because of this inherent difference in
efficacy, it may be less costly to manufacture a lamp rated and tested
at 130 V that complies with a standard than a similar 120 V lamp
complying with the same standard. If DOE does not establish a separate
product class and standard for lamps rated at 130 V, more consumers may
purchase 130 V lamps because they may be less expensive, as they would
require less costly technology. When consumers operate these lamps at
120 V, in order to obtain sufficient light output, they may migrate to
higher wattages and use more energy than standards-compliant 120 V
lamps.
DOE also believes, as commenters pointed out, that 130 V conditions
in the residential sector are very rare. Indeed, in many cases such
sustained voltages would violate electrical codes. As NEMA commented
earlier, 130 V lamps ``are almost always used by customers to achieve
`double life' by operating them at 120 V, resulting in performance
below 1992 EPACT levels.'' (NEMA, No. 21 at p. 16) DOE acknowledges
that in very rare cases, some consumers with 130 V power may be forced
to realize shorter lifetimes. However, based on stakeholder comments
and research into electrical codes, DOE does not believe the rare
instances of consumers with 130 V power experiencing shortened
lifetimes offsets the benefit in energy savings from closing this
potential loophole. In addition, as discussed in the April 2009 NOPR,
because DOE considers lifetime
[[Page 34102]]
an economic issue rather than a utility issue, DOE does not believe it
is eliminating any unique utility of feature from the market by setting
increased efficacy requirements for lamps rated greater than or equal
to 125 V. 74 FR 16920, 16939 (April 13, 2009)
Finally, stakeholders have not provided any compelling arguments
for why DOE should amend the test procedure to test all lamps at 120 V
rather than set higher efficacy standards for these lamps. Therefore,
in this final rule DOE is maintaining separate product classes for
lamps with rated voltages less than 125 V and lamps with rated voltages
greater than or equal to 125 V.
iv. IRL Summary
In summary, DOE is not making any changes in this final rule
related to IRL product classes from those proposed in the April 2009
NOPR. 74 FR 16920, 17027 (April 13, 2009). Table V.2 summarizes the IRL
product classes for this final rule.
Table V.2--Final Rule Product Classes for IRL
------------------------------------------------------------------------
Diameter
Spectrum (in Voltage
inches)
------------------------------------------------------------------------
Standard Spectrum................................. >2.5 >=125 V
<125 V
<=2.5 >=125 V
<125 V
Modified Spectrum................................. >2.5 >=125 V
<125 V
<=2.5 >=125 V
<125 V
------------------------------------------------------------------------
B. Engineering Analysis
For each product class, the engineering analysis identifies
potential, increasing efficacy levels above the level of the baseline
model. Those technologies not eliminated in the screening analysis
(design options) are inputs to this process. Design options consist of
discrete technologies (e.g., infrared reflective coatings, rare-earth
phosphor mixes). As detailed in the April 2009 NOPR, to ensure that
efficacy levels analyzed are technologically feasible, DOE concentrated
its efforts in the engineering analysis on developing product efficacy
levels associated with ``lamp designs,'' based upon commercially-
available lamps that incorporate a range of design options. 74 FR
16920, 16941 (April 13, 2009). However, when necessary, DOE
supplemented commercially-available product information with an
examination of the incremental costs and improved performance
attributable to discrete technologies so that a substitute lamp at each
efficacy level would be available for each baseline lamp.
In energy conservation standard rulemakings for other products, DOE
often develops cost-efficiency relationships in the engineering
analysis. However, for this rulemaking, DOE derived efficacy levels in
the engineering analysis and end-user prices in the product price
determination. By combining the results of the engineering analysis and
the product price determination, DOE derived typical inputs for use in
the LCC and NIA. See chapter 7 of the TSD for further details on the
product price determination.
1. Approach
For the final rule, DOE is using the same methodology for the
engineering analysis that was detailed in the April 2009 NOPR. 74 FR
16920, 16941-47 (April 13, 2009). The following is a summary of the
steps taken in the engineering analysis:
Step 1: Select Representative Product Classes
Step 2: Select Baseline Lamps
Step 3: Identify Lamp or Lamp-and-Ballast Designs
Step 4: Develop Efficacy Levels.
A more detailed discussion of the methodology DOE followed to
perform the engineering analysis can be found in the engineering
analysis chapter of the TSD (chapter 5).
2. Representative Product Classes
As discussed in section V.A.1 of this notice, DOE is establishing
twelve product classes for GSFL and eight product classes for IRL. As
detailed in the April 2009 NOPR, DOE did not analyze each and every
product class. 74 FR 16920, 16941-42 (April 13, 2009). Instead, DOE
selected certain product classes to analyze, and then scaled its
analytical findings for those representative product classes to other
product classes that were not analyzed. While DOE received several
stakeholder comments regarding methods of scaling to product classes
not analyzed (discussed in section V.C.7), DOE did not receive
objections to the decision to scale to certain product classes or the
representative product classes proposed in the April 2009 NOPR. Id. at
16941-42. Therefore, for this final rule, DOE analyzed the same product
classes proposed for direct analysis in the April 2009 NOPR.
For GSFL, the analyzed product classes included 4-foot medium
bipin, 8-foot single pin slimline, 8-foot recessed double-contact high
output, 4-foot MiniBP standard output, and 4-foot MiniBP high output
GSFL product classes, all with CCTs less than or equal to 4,500K. DOE
did not explicitly analyze U-shaped lamps, but instead scaled the
results of the 4-foot medium bipin class analysis, as discussed in
section V.B.5.a. For IRL, the representative product class DOE analyzed
was IRL with standard spectrum, voltage less than 125 V, and diameter
greater than 2.5 inches. For further information on representative
product classes, see chapter 5 of the TSD.
3. Baseline Models
Once DOE identified the representative product classes for
analysis, DOE selected the representative units for analysis (i.e.,
baseline lamps) from within each product class. These representative
units are generally what DOE believes to be the most common, least
efficacious lamps in their respective product classes. For further
discussion on baseline lamps and lamp-and-ballast systems chosen for
analysis, see the April 2009 NOPR (74 FR 16920, 16942-45 (April 13,
2009)) and Chapter 5 of the TSD.
In general, DOE decided to maintain the baseline models proposed in
the April 2009 NOPR. However, DOE did receive a comment on its
selection of the baseline model for 4-foot MiniBP lamps, as discussed
and responded to below. In the April 2009 NOPR, DOE developed model T5
halophosphor lamps as the baselines for the 4-foot MiniBP SO and 4-foot
MiniBP HO product classes. To create these model T5 lamps, DOE used
efficacy data from short halophosphor fluorescent T5 lamps currently
available and developed a relationship between length and efficacy. DOE
validated this relationship by comparing it to previous industry
research and efficacies of other halophosphor lamps. DOE then used this
relationship to determine the efficacies of a halophosphor 4-foot
miniature bipin standard output lamp and a halophosphor 4-foot
halophosphor T5 miniature bipin HO lamp. The resulting baseline
efficacies for 4-foot MiniBP SO and 4-foot MiniBP HO lamps were 86.0
lm/W and 76.6 lm/W. 74 FR 16920, 16943 (April 13, 2009)
In response to the April 2009 NOPR, NEMA and GE commented that
baseline efficacies and efficacy levels for 4-foot MiniBP lamps should
reflect testing at an ambient temperature of 25 [deg]C rather than 35
[deg]C, the temperature at which standards for 4-foot MiniBP lamps in
the April 2009 NOPR were based. GE also stated that manufacturers test
4-foot
[[Page 34103]]
MiniBP lamps at 25 [deg]C and then use a relative measurement to
estimate performance at 35 [deg]C. This additional information is
provided in catalogs because many T5 lamps are operated in higher-
temperature environments. (GE, Public Meeting Transcript, No. 38.4 at
pp. 72-73, 76-78, NEMA, No. 81 at p. 3, 7, 8, 9, 22)
DOE has confirmed that test procedures for 4-foot MiniBP lamps in
fact specify that the test should be performed at 25 [deg]C. While DOE
agrees that the minimum efficacy standards (and therefore efficacy
levels) should be based on this testing condition, DOE believes that
the efficacies and lumen outputs of lamps analyzed in the engineering
analysis (and thus LCC and NIA) should reflect typical operating
conditions. It is DOE's understanding that 4-foot MiniBP lamps most
often operate at 35 [deg]C. Therefore DOE bases all lamp efficacies and
lumen outputs used in the engineering, LCC, and national impacts
analyses on this operating condition. DOE discusses its approach to
establishing 4-foot MiniBP efficacy levels based on testing at 25
[deg]C in section V.B.4.b.
NEMA also commented that a more accurate and straightforward
approach to modeling the 4-foot MiniBP halophosphor baseline lamp
efficacies would be to base it on the ratio of halophosphor to
triphosphor lamp efficacies in 4-foot T8 MBP lamps (0.78). (NEMA, No.
81 at p. 9) DOE believes that NEMA's suggested approach is valid.
However, when using efficacies of commercially-available 4-foot MBP
halophosphor lamps (77.9 lm/W) and triphosphor lamps (95.4 lm/W), DOE
calculated an efficacy ratio of 0.82. Applying this ratio to 35 [deg]C
catalog lamp efficacies results in baseline efficacies of 4-foot MiniBP
SO and 4-foot MiniBP HO lamps of 85.5 lm/W and 76.1 lm/W. Because these
efficacies are within an acceptable margin of uncertainty relative to
the baseline efficacies used in the April 2009 NOPR, DOE has not
changed its 4-foot MiniBP baseline lamps.
For more information about these and other baseline lamps, see
chapter 5 and appendix 5B of the TSD.
4. Efficacy Levels
a. GSFL Compliance Reports
For the March 2008 ANOPR, DOE developed candidate standards levels
for GSFL by dividing initial lumen output by the ANSI rated wattages of
commercially-available lamps, thereby resulting in rated lamp
efficacies.\12\ 74 FR 16920, 16945 (April 13, 2009). In response to the
potential GSFL efficacy levels presented in the March 2008 ANOPR, NEMA
commented on several reasons why the association believes that the
efficacy levels need to be revised, including (1) the appropriateness
of using ANSI rated wattages in the calculation of lumens per watt; (2)
consideration of variability in production of GSFL; (3) manufacturing
process limitations related to specialty products; (4) consideration of
adjustments to photometry calibrations; and (5) the appropriateness of
establishing efficacy levels to the nearest tenth of a lumen per watt.
74 FR 16920, 16945-46 (April 13, 2009).
---------------------------------------------------------------------------
\12\ DOE used rated wattages listed in ANSI C78.81-2005 to
determine lamp efficacies. DOE proposed a definition of ``rated
wattage'' in section III.C.1 that referred to an ANSI standard to
prevent manufacturers from circumventing standards by rating lamps
at artificially low wattages.
---------------------------------------------------------------------------
After considering NEMA's comments, DOE agreed that tolerances
incorporated into ANSI rated wattages and variability in production of
GSFL warranted changes to the efficacy levels presented in the March
2008 ANOPR. Therefore, in the April 2009 NOPR, DOE revised the efficacy
levels for GSFL by using lamp efficacy values submitted to DOE over the
past 10 years for the purpose of compliance with existing energy
conservation standards. Using compliance reports as a basis for
efficacy standards allowed DOE to more accurately characterize the
tested performance of GSFL, by accounting for the measured wattage
effects and wattage and lumen output variability. 74 FR 16920, 16946-47
(April 13, 2009).
DOE received several comments on its proposed efficacy levels in
the NOPR. NEMA commented that the range of efficacy levels considered
was appropriate. (NEMA, No. 81 at p. 21) Both ACEEE and NEMA supported
DOE's usage of compliance reports to establish efficacy levels.
However, NEMA commented that it has additional data on variability that
has been observed in lamp production. (ACEEE, Public Meeting
Transcript, No. 38.4 at p. 79-80; NEMA, Public Meeting Transcript, No.
38.4 at pp. 89-90) NEMA recommended a slight lowering of certain GSFL
efficacy levels so that an assessment of multiple lamps in a product
line would find that the lamps were in conformance when tested under
the DOE GSFL test procedure. (NEMA, Public Meeting Transcript, No. 38.4
at pp. 90-91) NEMA also claimed that required adjustments to photometry
facilities used for NIST and NVLAP testing over time have resulted in a
reduction of reported lumens for some products, which DOE did not
account for in the April 2009 NOPR. NEMA therefore advised DOE to use
only ``sufficiently current'' compliance data to determine efficacy
levels. (NEMA, Public Meeting Transcript, No. 38.4 at pp. 75-76; NEMA,
No. 81 at p.10-11) To account for all of these factors, NEMA stated
that DOE should adopt the efficacy levels NEMA recommended in response
to the March 2008 ANOPR. These levels recommended by NEMA achieve the
desired technology goals as outlined by DOE. (NEMA, No. 81 at pp. 1-2,
10-11, 23) ACEEE opposed a further downward adjustment of the
efficiency levels, as it would allow less-efficacious products to
remain on the market. (ACEEE, Public Meeting Transcript, No. 38.4 at p.
80)
While DOE is aware that manufacturers may have additional data on
production variability, NEMA has not provided such data to DOE.
Therefore, DOE has maintained its approach (as presented in the April
2009 NOPR) to develop GSFL efficacy levels. Additionally, DOE believes
that by using the compliance reports it is accounting for variability
in production as it exists today, for the reasons that follow. First,
the product efficacy reported for compliance purposes is related to the
lower limit of the 95-percent confidence interval. As explained in
DOE's May 1997 lamps test procedure final rule, this interval
represents variation over the whole population of production, not only
the sample size. 62 FR 29222, 29230 (May 29, 1997). In addition,
regarding any changes in calibration requirements that may have
occurred that could affect reported lamp efficacy, DOE has reevaluated
its efficacy levels based on the latest compliance reports, many of
which were submitted to DOE after the NOPR analysis had been completed.
Following the same methodology as presented in the April 2009 NOPR, DOE
compared the efficacy values for each product class to all available
compliance report data and assessed whether the April 2009 NOPR levels
achieved the technology goals outlined in chapter 5 of the TSD. For 4-
foot MBP lamps, DOE determined that the efficacy levels proposed in the
April 2009 NOPR must be revised to accurately represent those goals.
For 4-foot MBP lamps with CCTs less than or equal to 4500K, DOE
adjusted the efficacy values because new compliance reports: (1)
Provided recent data for an existing basic model; (2) provided data for
a new basic model; or (3) provided 12-month average production data
whereas only initial data had been previously reported.
[[Page 34104]]
NEMA also did not believe it was necessary to raise EL3 for 4-foot
MBP lamps from their recommended 83 lumens per watt to 84 lumens per
watt as proposed in the April 2009 NOPR. NEMA stated that this increase
was not required to achieve the technology goal specified for TSL3 and,
furthermore, would have significant consequences for the residential
consumer because it eliminated nearly all T12 lamps. (NEMA, No. 81 at
p. 2)
In response, DOE reassessed its efficacy levels based compliance
report data from 2008 and 2009. As a result of this analysis, DOE
determined that the efficacy values for 4-foot MBP low CCT EL3 and EL5
required adjustments. DOE also does not believe that the value for EL3
will have significant consequences for the residential consumer. See
section V.C.8 for a discussion of this topic.
For 8-foot SP slimline lamps and 8-foot RDC HO lamps, DOE analyzed
recent compliance reports and determined that not enough data existed
in those reports to maintain all of the levels proposed in the April
2009 NOPR. Therefore, DOE modified ELs 1, 2, and 5 for 8-foot SP
Slimline lamps and EL2 for 8-foot RDC HO lamps to reflect the levels
that NEMA recommended. The revised efficacy levels are shown in section
VII.A.1.
b. 4-Foot MiniBP Efficacy Levels
As discussed in the April 2009 NOPR, DOE established efficacy
levels for 4-foot MiniBP SO and 4-foot MiniBP HO lamps based on catalog
rated efficacies. 74 FR 16920, 16947 (April 13, 2009). Then, in order
to account for manufacturer variation, DOE used the average reductions
in efficacy values due to manufacturer variation calculated for the
highest-efficacy 4-foot T8 medium bipin lamps, and applied those same
reductions to the 4-foot miniature bipin rated efficacy values. DOE was
unable to directly use 4-foot MiniBP lamp compliance data because these
products have not been regulated in the past.
As mentioned earlier, NEMA and GE commented that efficacy levels
for these 4-foot MiniBP lamps should reflect testing at an ambient
temperature of 25 [deg]C rather than 35 [deg]C, the temperature at
which standards for 4-foot MiniBP lamps in the April 2009 NOPR were
based. (NEMA, No. 81 at pp. 3, 7, 8, 9, 22; GE, Public Meeting
Transcript, No. 38.4 at pp. 72-73) ACEEE agreed that 4-foot MiniBP
lamps should be tested at 25 [deg]C. (ACEEE, Public Meeting Transcript,
No. 38.4 at p. 79) As stated earlier, DOE agrees that 4-foot MiniBP
efficacy levels should be based on testing at 25 [deg]C and notes that
based on catalog data, efficacies at 25 [deg]C are 10 percent lower
than efficacies at 35 [deg]C. Therefore, in this final rule, DOE has
revised the efficacy levels for the 4-foot MiniBP product classes
accordingly.
In addition, NEMA commented that reductions applied to the 4-foot
MiniBP efficacy levels in the April 2009 NOPR were insufficient to
fully account for variability in production. (NEMA, No. 81 at pp. 3, 9,
22) NEMA recommended that DOE adopt 86 lm/W and 76 lm/W as EL1 for the
4-foot MiniBP SO and HO product classes, respectively. DOE recognizes
that because it does not have compliance report information for 4-foot
MiniBP lamps, it may not be able to accurately assess the manufacturing
tolerance required for these lamps. Based on DOE's calculations, NEMA's
recommended efficacy levels represent manufacturer tolerances within
the range required by other lamp types. Therefore, in this final rule,
DOE has revised EL1 for 4-foot MiniBP SO and HO lamps to be 86 lm/W and
76 lm/W respectively. For consistency with those allowed manufacturer
tolerances DOE has also revised EL2 for 4-foot MiniBP SO lamps to be 90
lm/W. For the purposes of comparison, DOE estimates that 4-foot MiniBP
SO and HO halophosphor lamps would have efficacies of 77 lm/W and 69
lm/W when tested at 25 [deg]C. See Chapter 5 of the TSD for further
detail on 4-foot MiniBP efficacy levels.
c. IRL Manufacturing Variability
For incandescent reflector lamps, in the April 2009 NOPR, DOE
established efficacy levels based on commercially-available and
prototype IRL technologies. 73 FR 16920, 16944 (April 13, 2009). In
response to those efficacy levels, Philips commented that DOE did not
account for manufacturing variability when developing the efficacy
levels for incandescent reflector lamps and stressed the importance of
accounting for this variability when setting minimum efficacy
standards. (Philips, Public Meeting Transcript, No. 38.4 at p. 102-103)
Similarly, the International Association of Lighting Designers (IALD)
wrote that there are currently IRL on the market that meet TSL4 but
only by very small amounts; these products could be eliminated if TSL4
is not carefully set. (IALD, No. 71 at p. 2) Philips also wrote that it
is in support of TSL4 for IRL once it is lowered to account for
manufacturing variability. (Philips, No. 75 at pp. 1-2) DOE supports
the consideration of manufacturing variability in the development of
efficacy requirements. In response, DOE examined IRL compliance reports
submitted by manufacturers and discovered that reported efficacies of
IRL do in fact vary from the catalog efficacies. Similar to GSFL, the
efficacy reported for IRL product compliance is related to the lower
limit of the 95-percent confidence interval. 62 FR 29222, 29230 (May
29, 1997). Therefore, in some cases, given significant variability in
production, the reported efficacy of IRL may be lower than the long-
term mean efficacy presented in lamp catalogs. The compliance reports
also indicated that different efficacy levels (or technologies) require
different efficacy reductions. Thus, similar to the approach taken in
developing revised GSFL efficacy levels, DOE used IRL compliance report
data to adjust the efficacy levels presented in the April 2009 NOPR
downward to better reflect the observed efficacies of commercially-
available lamps that feature the described technologies of each EL as
discussed in chapter 5 of the TSD. Table VII.2 shows the final rule
coefficients A in the equation A*P[caret]0.27, which represents the
efficacy level requirement for IRL. P is the rated wattage of the lamp.
See chapter 5 of the TSD for further detail on the compliance reports
used in the analysis.
5. Scaling to Product Classes Not Analyzed
a. 2-Foot U-Shaped Lamps
For the April 2009 NOPR, DOE developed efficacy levels for 2-foot
U-shaped GSFL by assessing the catalog efficacies of U-shaped lamps
that utilize the same design options used for the 4-foot medium bipin
GSFL lamps that DOE analyzed. 74 FR 16920, 16948 (April 13, 2009). To
develop the April 2009 NOPR ELs for U-shaped lamps while taking into
account manufacturing variability, DOE assessed compliance reports of
U-shaped lamps. Where U-shaped lamp compliance report data was
unavailable, DOE augmented its assessment of manufacturing variability
with compliance report data for 4-foot medium bipin lamps due to the
technological similarities between U-shaped and 4-foot medium bipin
lamps. In the April 2009 NOPR, the maximum reduction in efficacy
requirements for U-shaped lamps in comparison with the 4-foot medium
bipin ELs was 7.7 percent at EL1 (the 4-foot medium bipin EL1
requirement of 78 lm/W vs. the U-shaped EL1 requirement of 72 lm/W).
At the public meeting, GE commented that it is in general agreement
with the approach that DOE used to develop the efficacy levels for 2-
foot U-shaped lamps for the April 2009 NOPR. (GE, Public Meeting
Transcript, No. 38.4 at p.
[[Page 34105]]
119-120) GE indicated, however, that the reduction in efficacy for U-
shaped lamps compared to 4-foot medium bipin lamps should be
approximately 8 percent, as the production of the bend in U-shaped
lamps adds additional manufacturing variability. (GE, Public Meeting
Transcript, No. 38.4 at pp. 123-124) In writing, NEMA then commented
that the assumptions that DOE used to develop U-shaped lamp reduction
factors were incorrect; NEMA proposed that DOE set EL3 at 76 lm/W for
U-shaped lamps with CCTs less than or equal to 4500K and 71 lm/W for U-
shaped lamps with CCTs greater than 4500K. NEMA warned that an EL3
efficacy requirement higher than these would remove all T12 U-shaped
lamps from the market and that the setting of EL4 or higher as a
standard would negatively impact competition; according to comment, the
setting of EL5 would eliminate from the market all energy-efficient U-
shaped lamps that feature a 6-inch spacing and the ability to fit into
2x2-foot luminaires. (NEMA, No. 81 at pp. 2-3, 11)
In response, DOE grouped U-shaped lamp compliance data sent to DOE
in 2007 and 2008 into efficacy levels based on the design options
featured in the 4-foot medium bipin lamps that DOE analyzed for the
April 2009 NOPR, as follows: 700-series U-shaped 40W T12 lamps were
grouped into EL1, and 800-series U-shaped 32W T8 lamps were grouped
into either EL3, EL4, or EL5 based on catalog efficacy. DOE did not
have any compliance reports from 2007 and 2008 for U-shaped 34W T12
lamps. DOE found that it did not have enough data at ELs 1 through 5 to
confidently assess the manufacturing variability of U-shaped lamps on
the market. For EL1 through EL3, DOE thus selected the levels proposed
by NEMA in response to the March 2008 ANOPR. (NEMA, No. 26 at p. 7) For
EL4 and EL5, NEMA did not propose levels for U-shaped lamps. Thus, DOE
used NEMA's suggested 8-percent value as a scaling factor from the
linear 4-foot medium bipin efficacy levels. (NEMA, Public Meeting
Transcript, No. 38.4 at pp. 123-124). The efficacy levels for low-CCT
U-shaped lamps for this final rule are shown in chapter 5 of the TSD.
DOE notes that two manufacturers currently produce U-shaped lamps
that meet the EL4 proposed in the April 2009 NOPR and retained by DOE
in this final rule. DOE acknowledges that currently, only one
manufacturer produces U-shaped lamps that meet EL5. DOE is not aware of
technological barriers or legal barriers (such as the utilization of a
proprietary technology by this manufacturer) that would prevent other
manufacturers from producing U-shaped lamps at EL5. For this reason,
DOE is using 87 lm/W as the EL5 efficacy level requirement for U-shaped
lamps in this final rule.
b. Lamps With Higher CCTs
Because DOE received a number of comments related to its
determination of efficacy levels based on compliance reports, DOE
decided to reevaluate its efficacy levels at higher CCT levels using
the latest compliance report data. For 4-foot MBP lamps with CCTs
greater than 4500K, DOE discovered that the efficacy values proposed in
the April 2009 NOPR required significant revision to achieve the
technology goals outlined in chapter 5 of the TSD. Therefore, to
determine efficacy values for these lamps, DOE employed the same
methodology as was used to determine efficacy values for 4-foot MBP
lamps with CCTs less than or equal to 4500K. Thus, as summarized in
section V.B.4.a, DOE selected commercially available lamps for each
efficacy level that represented that level's desired technology goal.
These revised efficacy levels are supported by data contained in
compliance reports submitted in 2008. The updated efficacy values for
these lamps are shown in chapter 5 of the TSD.
DOE also compared NEMA's proposed efficacy levels for 8-foot lamps
against its proposed efficacy levels in the April 2009 NOPR. For 8-foot
SP Slimline lamps with CCTs greater than 4500 K, efficacy levels 1, 2,
and 5 were higher than those levels proposed by NEMA. For 8-foot RDC HO
lamps with high CCTs, only efficacy level 2 was greater than what NEMA
proposed. DOE analyzed recent compliance reports submitted and
determined that not enough data existed in those reports to maintain
the levels proposed in the April 2009 NOPR for these lamps. Therefore,
DOE modified ELs 1, 2, and 5 for 8-foot SP Slimline lamps and EL2 for
8-foot RDC HO lamps to reflect the levels that NEMA proposed. The
revised efficacy levels are shown in section VII.A.1.
For U-shaped lamps, NEMA proposed that DOE set EL1, EL2, and EL3 at
65, 67, and 71 lm/W, respectively, for U-shaped lamps with CCTs greater
than 4500K. (NEMA, No. 26 at p. 7; NEMA, No. 81 at p. 2) DOE did not
have enough recent compliance report data for U-shaped lamps with CCTs
above 4500K to accurately assess the manufacturing variability of U-
shaped lamps on the market. For this reason, DOE adopted NEMA's
proposed requirements for this final rule. NEMA did not propose
efficacy level requirements at EL4 and EL5. To develop requirements at
these levels for U-shaped lamps with CCTs above 4500K, DOE used NEMA's
suggested 8-percent value as a scaling factor and applied the factor to
the high-CCT linear 4-foot medium bipin efficacy levels. (NEMA, Public
Meeting Transcript, No. 38.4 at pp. 123-124). The efficacy levels for
high-CCT U-shaped lamps for the April 2009 NOPR and for this final rule
are shown in section VII.A.1.
c. Modified Spectrum IRL
DOE received a number of comments on the reduction factor that DOE
applied to the standard-spectrum IRL efficacy levels in order to
develop efficacy levels for the modified-spectrum IRL product class. At
the public meeting, NEMA commented that industry uses an efficacy
reduction of 20 to 25 percent for modified-spectrum IRL (in comparison
with standard-spectrum IRL of otherwise identical characteristics) and
that the typical efficacy reduction is closer to 20 percent than 25
percent. (NEMA, Public Meeting Transcript, No. 38.4 at pp. 128-129)
After publication of the April 2009 NOPR, however, NEMA commented in
writing that DOE's April 2009 NOPR analysis was based only on 50W
modified-spectrum lamps and that DOE should choose a reduction factor
of 25 percent for the modified-spectrum IRL product class in order to
retain a diversity of modified-spectrum products on the market. (NEMA,
No. 81 at p. 12) On the other hand, PG&E, ASAP, ACEEE, and NRDC
commented in writing that if DOE does retain a modified-spectrum IRL
product class for the final rule, the class should feature an efficacy
reduction of no greater than 10 percent from the standard-spectrum IRL
efficacy requirements so that manufacturers cannot produce modified-
spectrum IRL using technologies that are cheaper than technologies that
would be needed to produced a standard-spectrum IRL of the same
efficacy level, creating a loophole. (PG&E, ASAP, NRDC, No. 59 at p. 1-
2; NRDC, No. 82 at pp. 2, 4-5; ACEEE, No. 76 at p. 5) DOE generally
does not believe that a modified-spectrum IRL product class will be
utilized by manufacturers as a loophole that ultimately undermines
energy savings. This is because DOE expects that designers of modified-
spectrum IRL will likely utilize the same design options featured in
standard-spectrum IRL that meet a particular efficacy requirement (such
as improved HIR technologies at EL4). Thus, in response to the comments
of EEI, PG&E, ASAP, and NRDC, DOE expects modified-
[[Page 34106]]
spectrum IRL to have a similar cost as standard-spectrum IRL that
comply with standards, minimizing migration to modified-spectrum IRL on
a first-cost basis. In addition, modified-spectrum IRL are of lower
lumen output than standard-spectrum IRL that otherwise have the same
characteristics (particularly rated wattage) due to the subtractive
filtering that is employed for spectrum modification. Consumers
replacing standard-spectrum IRL with modified-spectrum IRL of the same
rated wattage are likely to experience lower light levels, further
discouraging migration.
DOE acknowledges, however, that some manufacturers may attempt to
produce modified-spectrum IRL using cheaper technologies if the
efficacy reduction for modified-spectrum IRL permits this to occur. For
the April 2009 NOPR, DOE analyzed two modified-spectrum IRL and found
an average efficacy reduction of approximately 19 percent, in general
support of NEMA's comment concerning a 20 to 25 percent efficacy
reduction utilized by industry. PG&E commented, however, that DOE
should analyze more than two modified-spectrum IRL in order to
determine an appropriate efficacy reduction for the product class.
(PG&E, Public Meeting Transcript, No. 38.4 at p. 132-133) PG&E, ASAP,
and NRDC commented in writing that it tested commercially-available
modified-spectrum cover glasses with a variety of commercially-
available IRL burner/reflector assemblies and found that one assembly
produced a MacAdam step shift of more than six MacAdam steps, which is
more than necessary to meet the modified-spectrum definition
requirement of a four-MacAdam-step shift. The interested parties
suggested that a smaller MacAdam-step shift would enable a more-
efficacious lamp that still provides modified-spectrum utility. (PG&E,
ASAP, NRDC, No. 59 at p. 2)
DOE supports the notion that additional information could enable a
more accurate determination of the average efficacy reduction featured
by modified-spectrum lamps and prevent a possible loophole. DOE also
agrees that greater MacAdam-step shifts inherently reduce lamp efficacy
by greater amounts, as more subtractive filtering is necessary to
produce a larger shift in color point; the setting of a standard that
can be met by commercially-available technologies that produce color
points near the four-MacAdam-step boundary would thus preserve
modified-spectrum utility on the IRL market while reducing the chance
of a loophole. However, DOE was unable to find more modified-spectrum
lamps on the market than those already found and utilized for the April
2009 NOPR analysis. Thus, to assess the impact of varying degrees of
spectrum modification through neodymium (which DOE found to be the most
common method of modifying IRL spectra) in IRL cover glasses, DOE
developed a model that correlated cover glass neodymium concentration
with cover glass light output reduction and MacAdam-step shift in color
point. Increasing neodymium concentrations produce greater light output
reduction. DOE found that a 15-percent light output reduction
correlated with a MacAdam-step shift slightly greater than four steps.
To validate the model, DOE then obtained five commercially-available
HIR IRL capsules and then assembled reflector lamps utilizing the
capsules in combination with either standard-spectrum or modified-
spectrum commercially-available IRL cover glasses and reflectors. DOE
then tested the lamps with the two cover glass types and determined
their efficacies. The reduction in efficacy between the standard-
spectrum and modified-spectrum lamps utilizing the five commercially-
available HIR capsules obtained by DOE, averaged across the lamps, was
approximately 16 percent. DOE believes that this value is in line with
the output of the neodymium concentration model that it developed for
the analysis. DOE also believes that manufacturers will be able to vary
the neodymium concentration for cover glasses associated with a variety
of lamp shapes such that modified-spectrum utility is preserved while
standards are met. Thus, DOE is implementing a 15-percent reduction in
efficacy levels for the modified-spectrum IRL product class in this
final rule.
While PG&E, ASAP, and NRDC mentioned that no more than a 10 percent
reduction would be necessary for a modified-spectrum product class, DOE
believes that this value is specific to the IRL featuring prototype
(not commercially-available) technologies that these interested parties
tested with a modified-spectrum cover glass. In writing, the three
interested parties acknowledged that commercially-available IRL burner/
reflector assemblies tested with the same cover glass did not meet the
modified-spectrum definition. (PG&E, ASAP, NRDC, Appendix 1, No. 63 at
pp. 11-12) Because PG&E, ASAP, and NRDC did not indicate the filament
temperature of the prototype IRL nor specify color point data, DOE
could not determine the color of the IRL lumen output when operated
with either the standard-spectrum or the modified-spectrum glasses.
Thus, DOE has insufficient data to determine whether a 10-percent
efficacy reduction could be achieved by manufacturers producing
currently-available modified-spectrum lamps or if such a reduction
would instead eliminate currently-available modified-spectrum lamps
from the market. For this reason, DOE has chosen to use an efficacy
reduction of 15 percent for the modified-spectrum IRL product class in
this final rule, based on commercially-available IRL technologies.
d. Small Diameter IRL
In the April 2009 NOPR, DOE recognized that the size of small-
diameter (PAR20) lamps vs. PAR30 and PAR38 lamps provides a specific
utility to consumers (e.g. the ability to fit into smaller fixtures)
but also results in an inherent efficacy reduction. Thus, DOE
established a separate product class for small-diameter lamps in order
to preserve the small-diameter utility in the IRL marketplace in the
face of standards. 74 FR 16920, 16939 (April 13, 2009). Based on a
comparison between the efficacies of commercially-available PAR20 lamps
and their PAR30 and PAR38 counterparts, DOE selected an efficacy
reduction factor of 12 percent vs. the large-diameter IRL product class
and utilized this factor to develop the efficacy levels for the small-
diameter IRL product class.
DOE received a number of comments on its choice of a 12-percent
efficacy reduction factor for the small-diameter IRL product class. The
California Stakeholders expressed that a 12-percent factor adequately
describes the observed efficacy differences due to optics between PAR20
and larger-diameter lamps; the California Stakeholders also warned DOE
that the selection of a larger reduction factor would allow small-
diameter IRL to meet DOE's standards using less-efficient components,
undermining DOE's energy savings goals. (California Stakeholders, No.
63 at pp. 2, 22) NEMA and GE, on the other hand, commented that the 12-
percent reduction factor is inappropriate for the product class because
75W and 50W PAR20 lamps utilize single-ended halogen burner
technologies and a double-ended burner (which is more efficacious than
a single-ended burner) will not fit into a PAR20 lamp, thus eliminating
PAR20 lamps from the market in the face of a TSL4 or TSL5 standard.
(NEMA, No. 81 at p. 7, pp. 12-13; GE, No. 80 at p. 6-7; GE, Public
Meeting Transcript, No. 38.4 at pp. 60-61) Philips acknowledged that a
12-percent factor describes the observed
[[Page 34107]]
efficacy differences between PAR20 lamps and larger-diameter lamps, but
the interested party concurred with GE and NEMA concerning technical
limitations that prevent double-ended burners from being installed into
PAR20 lamps. (Philips, Public Meeting Transcript, No. 38.4 at p. 135-
136, p. 138) NEMA also commented that the smaller envelope featured on
small-diameter lamps limits heat dissipation, which would cause such
lamps to run hotter and increase the susceptibility to early failure if
the highest-efficacy halogen IR burners were installed. (NEMA, No. 81
at p. 13) In writing, NEMA recommended that DOE employ a reduction
factor of 15 percent to 25 percent from the large-diameter efficacy
levels for small-diameter lamps; the range represents the range of
efficacies observed across small-diameter lamps on the market
(considering a variety of manufacturers). (NEMA, No. 81 at p. 4) The
California Stakeholders then commented in writing that PAR20 lamps will
be able to accommodate double-ended burners by utilizing bent burner
leads or cover glasses with a greater bulge and thus reach TSL5, as
illustrated by two sources: A Philips MR16 lamp (which has a smaller
diameter than a PAR20 lamp) on the European market that features a
double-ended burner and bulged cover glass, and drawings from a
lighting company that show the potential for a double-ended burner with
a bent lead to be fitted into a PAR20 without a bulged cover glass.
(California Stakeholders, No. 63 at pp. 22-24)
Based on comments, DOE acknowledges that the installation of
double-ended burners into small-diameter lamps could be problematic.
DOE notes that the outer dimensions of a PAR20 lamp, including the
shape of the bulge, are dictated by ANSI Standard C78.21 (most recently
updated in 2003). DOE notes that it is unaware of any standard
dictating the inner dimensions of a PAR20 lamp, nor is DOE aware of a
standard dictating the dimensions of double-ended burners. Thus, DOE
believes that some technical innovations may make the installation of a
double-ended burner into a PAR20 lamp feasible. Interested parties did
not provide additional data to DOE indicating the efficacy impacts of
bending the lead of a double-ended burner so that it can be installed
into a PAR20 lamp, however; DOE also could not obtain other data
addressing these impacts. Also, DOE believes that manufacturers would
not be able to position a double-ended burner at the optimum position
for maximum efficacy in a PAR20 lamp due to the lamp's reduced size;
thus, DOE believes that a greater reduction factor than 12 percent is
warranted for PAR20 lamps at EL4 and EL5 even if a double-ended burner
could be fitted into a PAR20 lamp.
DOE acknowledges the Philips MR16 lamp that features a double-ended
burner and also acknowledges that the MR16 format is smaller than the
PAR20 format. The MR16 format, however, is a low-voltage format, and
low-voltage lamps have different inherent characteristics than lamps
designed for line-voltage operation. DOE thus does not believe that it
can make assumptions about line-voltage small-diameter lamp designs by
assessing low-voltage lamps. The California Stakeholders provided
information showing a prototype low-voltage lamp with integrated
transformer that can meet the April 2009 NOPR level of EL5 for IRL, but
this interested party did not provide details about the lifetime of the
lamp or the impacts of the transformer on efficacy. (CA Stakeholders,
Appendix 4, No. 63 at pp. 1-5) While DOE is aware of low-voltage PAR20
lamps utilizing integrated transformers for direct connection to line-
voltage sources, DOE does not have the data required to assess the
impacts of such transformers on IRL efficacy; DOE thus could not
confidently develop an efficacy level based on an IRL with an
integrated transformer. See section VI.B.2.c for a further discussion
of the integrated-transformer IRL design option. Because DOE cannot
assess the effects of bent burner leads on lamp efficacy, acknowledges
that double-ended burners cannot be optimally positioned in PAR20
lamps, cannot make design assumptions for line-voltage lamps based on
low-voltage lamps, and cannot assess the impacts of an integrated
transformer on lamp efficacy, DOE is revising its PAR20 EL4 and EL5
efficacy requirements in this final rule so that PAR20 lamps will not
require double-ended burners to meet a standard established at EL4 or
EL5.
In order to determine the efficacy reduction that would result from
using a single-ended burner instead of a double-ended burner in a lamp,
DOE obtained a commercially-available single-ended HIR capsule and
measured the location and dimensions of the lead wire inside of the
capsule, which prevents a certain amount of energy from reaching the
capsule wall and being reflected back to the capsule filament. (A
double-ended burner features a lead wire outside of the capsule, where
it does not interfere with the reflectance of energy from the capsule
wall back to the capsule filament.) DOE then created a model to
determine the efficacy impacts of the lead wire's presence inside of
the capsule. DOE also simulated manufacturing variability by modeling
the effects of changing the capsule dimensions and lead wire
positioning. With the resulting data from the model, DOE determined the
reduction in efficacy that results from the presence of the lead wire
inside of a single-ended HIR capsule in comparison with a double-ended
capsule, which features an external lead wire. This reduction was
determined to be approximately 3.5 percent. For EL4 and EL5, DOE is
thus changing the reduction factor for small-diameter lamps from the
April 2009 NOPR value of 12 percent to the value of 15.5 percent for
this final rule. This is within the reduction factor range proposed by
NEMA for small-diameter IRL. (NEMA, No. 81 at p. 4) The small-diameter
IRL reduction factors in the April 2009 NOPR and in this final rule are
shown in Table V.3. 74 FR 16920, 16950 (April 13, 2009).
Table V.3--Small-Diameter IRL Reduction Factors in the April 2009 NOPR
and in This Final Rule
------------------------------------------------------------------------
Efficacy level NOPR Final rule
------------------------------------------------------------------------
EL1........................................... 12% 12%
EL2........................................... 12% 12%
EL3........................................... 12% 12%
EL4........................................... 12% 15.5%
EL5........................................... 12% 15.5%
------------------------------------------------------------------------
Concerning heat dissipation, DOE acknowledges that the smaller size
of a PAR20 in comparison with larger-diameter lamps limits heat
dissipation, which would cause a given filament to operate at a higher
temperature if simply transplanted from a larger-diameter lamp to a
PAR20 lamp without any other changes. DOE notes, however, that HIR R20
lamps currently exist on the market, thus proving that high
temperature-HIR technology in small-diameter lamps is technologically
feasible. In addition, in its research, DOE found no ANSI standard that
indicated a required seal temperature. In fact on product
specifications, DOE found that commercially-available lamps have a
variety of seal temperatures. In consideration of all of these factors,
DOE believes that the 15.5 percent reduction for EL4 and EL5 is
appropriate for small-diameter lamps.
e. IRL With Rated Voltages Greater Than or Equal to 125 Volts
In the April 2009 NOPR, DOE proposed that covered IRL with rated
[[Page 34108]]
voltages greater than or equal to 125V must be 15 percent more
efficacious than covered IRL with rated voltages less than 125V. At the
public meeting, DOE received numerous comments on this proposal. NEMA
commented that the proposed standard for 130V would not be technically
feasible to achieve; 130V IRL are less efficacious than 120V IRL so
that lifetime is preserved, and the effective elimination of 130V IRL
would reduce utility for certain regions of the country with line
voltages near 130V (since 120V IRL operated at 130V have reduced
lifetimes). (NEMA, Public Meeting Transcript, No. 38.4 at pp. 60-62,
66-67, 139-140) NEMA instead requested the elimination of a 130V IRL
product class and the development of standards based strictly upon
lamps' rated voltages. (NEMA, Public Meeting Transcript, No. 38.4 at
pp. 61-62, 67; NEMA, No. 81 at pp. 7, 24) On the other hand, EEI
commented in writing on its support of higher efficacy standards for
lamps with rated voltages higher than 125V, while ACEEE commented at
the public meeting that many 130V IRL are used on 120V lines as longer-
life lamps. (EEI, No. 39 at p. 3; ACEEE, Public Meeting Transcript, No.
38.4 at pp. 65-66) Philips acknowledged that 130V IRL lose 15 percent
in efficacy when operated at 120V but commented that there were other
ways apart from separate product classes to prevent the usage of 130V
IRL on 120V lines. (Philips, Public Meeting Transcript, No. 38.4 at pp.
62, 139-140)
DOE shares ACEEE's concern that without a more-stringent 130V IRL
product class, 130V IRL that meet a particular IRL efficacy requirement
will be purchased and used on 120V lines as longer-life lamps that no
longer meet the efficacy requirement. While DOE agrees with NEMA's
comment that 130V lamps use less power than their rated power when
operated at 120V, DOE also supports NEMA's comments that 130V lamps are
less efficacious than 120V lamps. (NEMA, Public Meeting Transcript, No.
38.4 at p. 67; NEMA, No. 81 at p. 13) Specifically, a 130V lamp with a
specific rated power, rated lumen output, efficacy, and rated lifetime
will have lower power consumption, lower lumen output, lower efficacy,
and longer lifetime when operated at 120V. By maintaining a separate
product class for 130V IRL with a 15 percent increase in stringency
relative to 120V IRL standards, DOE ensures that 130V IRL operated on
120V lines will be as efficacious during operation as 120V IRL that
comply with standards. DOE acknowledges that designers of 130V IRL may
have to make certain tradeoffs to meet the efficacy requirements, but
DOE also believes that there are a number of ways to make compliant
130V IRL (such as by adjusting lamp lifetime). Therefore, DOE has kept
the 130V IRL product class and its associated 15-percent stringency
increase for the Final Rule.
In writing, EEI also asked for clarification that the efficacy
requirements shown in the April 2009 NOPR for IRL with rated voltages
greater than or equal to 125V apply when the IRL are tested at 120V.
(EEI, No. 39 at p. 3) In response, DOE notes that IRL must be tested
for compliance according to the test procedure in section 4.3 of
Appendix R to Subpart B of 10 CFR 430, which states in part that
``[l]amps shall be operated at the rated voltage.'' Thus, IRL rated at
130V should be operated at 130V during the efficacy measurement
process. DOE believes that IRL operated at 130V are generally 15
percent more efficacious than when they are operated at 120V; thus,
retaining a separate product class for 130V IRL, with a 15-percent
increase over 120V IRL standards, allows DOE to take into account the
efficacy reduction that 130V IRL will experience when operated at 120V.
C. Life-Cycle Cost and Payback Period Analysis
This section describes the LCC and payback period analyses and the
spreadsheet model DOE used for analyzing the economic impacts of
possible standards on individual consumers. Details of the spreadsheet
model, and of all the inputs to the LCC and PBP analyses, are contained
in chapter 8 and appendix 8A of the TSD. DOE conducted the LCC and PBP
analyses using a spreadsheet model developed in Microsoft Excel. When
combined with Crystal Ball (a commercially-available software program),
the LCC and PBP model generates a Monte Carlo simulation \13\ to
perform the analysis by incorporating uncertainty and variability
considerations. For further details on the LCC and PBP Monte Carlo
simulations, see the TSD appendix 8B, in which probable ranges of LCC
results are presented.
---------------------------------------------------------------------------
\13\ Monte Carlo simulations model uncertainty by utilizing
probability distributions instead of single values for certain
inputs and variables.
---------------------------------------------------------------------------
The LCC analysis estimates the impact of a standard on consumers by
calculating the net cost of a lamp (or lamp-and-ballast system) under a
base-case scenario (in which no new energy conservation standard is in
effect) and under a standards-case scenario (in which the proposed
energy conservation regulation is applied). As part of the LCC and PBP
analyses, DOE developed data that it used to establish product prices,
sales taxes, installation costs, disposal costs, operating hours,
product energy consumption, energy prices, product lifetime, and
discount rates.
As discussed in the April 2009 NOPR, the life-cycle cost of a
particular lamp design is a function of the total installed cost (which
includes manufacturer selling price, sales taxes, distribution chain
mark-ups, and any installation cost), operating expenses (due to
purchases of energy as well as repair and maintenance costs), product
lifetime, and discount rate. 74 FR 16920, 16950 (April 13, 2009). DOE
also incorporated a residual value calculation to account for any
remaining lifetime of lamps (or ballasts) at the end of the analysis
period. 74 FR 16920, 16950 (April 13, 2009). The residual value is an
estimate of the product's value to the consumer at the end of the life-
cycle cost analysis period, which embodies the assumption that a lamp
system continues to function beyond the end of the analysis period. DOE
calculates the residual value by linearly prorating the product's
initial cost consistent with the methodology described in the Life-
Cycle Costing Manual for the Federal Energy Management Program.\14\
---------------------------------------------------------------------------
\14\ Fuller, Sieglinde K. and Stephen R. Peterson, National
Institute of Standards and Technology Handbook 135 (1996 Edition);
Life-Cycle Costing Manual for the Federal Energy Management Program
(Prepared for U.S. Department of Energy, Federal Energy Management
Program, Office of the Assistant Secretary for Conservation and
Renewable Energy) (Feb. 1996). Available at: http://fire.nist.gov/fire/firedocs/build96/PDF/b96121.pdf.
---------------------------------------------------------------------------
DOE also calculates a payback period for each standards-case lamp
or lamp-and-ballast system. The payback period is the change in total
installed cost of the more-efficient product compared to the baseline
product, divided by the change in annual operating cost of that product
compared to the baseline product. Stated more simply, the payback
period is the time period for which a consumer must operate a more-
efficient product to recoup the assumed increased total installed cost
(compared to the baseline product) through savings from reduced
operating costs. DOE expresses this period in years.
In addition, in the April 2009 NOPR and in today's final rule, DOE
analyzes five types of events that would prompt a consumer to purchase
a fluorescent lamp. These events account for the various economic
impacts incurred by consumers depending upon the situations under which
they are
[[Page 34109]]
purchasing a lamp., Described in detail in the April 2009 NOPR, these
events are: Lamp Failure (Event I), Standards-Induced Retrofit (Event
II), Ballast Failure (Event III), Ballast Retrofit (Event IV), and New
Construction and Renovation (Event V). 74 FR 16920, 16958 (April 13,
2009). Although described primarily in the context of GSFL, lamp
purchase events can be applied to IRL as well. However, considering
that IRL are generally not used with a ballast, the only lamp purchase
events applicable to IRL are lamp failure (Event I) and new
construction and renovation (Event V).
Table V.4 summarizes the approach and data that DOE used to derive
the inputs to the LCC and PBP calculations for the April 2009 NOPR and
the changes made for today's final rule. The following sections discuss
the comments DOE received regarding its presentation of the LCC and PBP
analyses in the April 2009 NOPR and the responses and changes DOE made
to these analyses as a result.
Table V.4--Summary of Inputs and Key Assumptions Used in the NOPR and Final Rule LCC Analyses
----------------------------------------------------------------------------------------------------------------
Inputs April 2009 NOPR Changes for the final rule
----------------------------------------------------------------------------------------------------------------
Consumer Product Price................ Applied discounts to manufacturer No change.
catalog (``blue-book'') pricing in
order to represent low, medium, and
high prices for all lamp categories.
Discounts were also applied to develop
a price for ballasts.
Sales Tax............................. Derived weighted-average tax values for Updated the sales tax using
each Census division and four large the latest information from
States from data provided by the Sales the Sales Tax
Tax Clearinghouse.\2\ Clearinghouse.\3\ Updated
population estimates using
2008 U.S. Census Bureau
data.\4\
Installation Cost..................... Derived costs using the RS Means No change.
Electrical Cost Data, 2007 \5\ to
obtain average labor times for
installation, as well as labor rates
for electricians and helpers based on
wage rates, benefits, and training
costs. For GSFL, included 2.5 minutes
of installation time to the new
construction, major retrofit, and
renovation events in the commercial and
industrial sectors to capture the time
needed to install luminaire disconnects.
Disposal Cost......................... GSFL: Included a recycling cost of 10 No change.
cents per linear foot in the commercial
and industrial sectors.
IRL: Not included.......................
Annual Operating Hours................ Determined operating hours by Updated the regional
associating building-type-specific distribution of residential
operating hours data with regional buildings using the 2005
distributions of various building types Residential Energy
using the 2002 U.S. Lighting Market Consumption Survey.\10\
Characterization \6\ and the Energy
Information Administration's (EIA) 2003
Commercial Building Energy Consumption
Survey (CBECS),\7\ 2001 Residential
Energy Consumption Survey,\8\ and 2002
Manufacturing Energy Consumption
Survey.\9\
Product Energy Consumption Rate....... Determined lamp input power (or lamp-and- No change.
ballast system input power for GSFL)
based on published manufacturer
literature. Used a linear fit of GSFL
system power on several different
ballasts with varying ballast factors
in order to derive GSFL system power
for all of the ballasts used in the
analysis.
Electricity Prices.................... Price: Based on EIA's 2006 Form EIA-861 Updated with EIA's 2007 Form
data.\11\ EIA-861.\12\
Variability: Regional energy prices
determined for 13 regions.
Electricity Price Trends.............. Forecasted with EIA's Annual Energy Updated with EIA's April 2009
Outlook (AEO) 2008.\13\ AEO2009, which includes the
impacts of the American
Recovery and Reinvestment Act
of February 2009.\14\
Lifetime.............................. Commercial and industrial sector ballast DOE added residential sector
lifetime based on average ballast life GSFL LCC analysis scenarios
of 49,054 from 2000 Ballast Rule; \15\ where a consumer preserves
developed separate ballast lifetime the lamp during a fixture
estimate for the residential sector replacement and installs the
using measured life reports. Lamp preserved lamp on a new
lifetime based on published fixture. The analysis periods
manufacturer literature where for these scenarios are based
available. DOE assumed a lamp operating on the full lifetime of the
time of 3 hours per start. Where baseline lamp.
manufacturer literature was not
available, DOE derived lamp lifetimes
as part of the engineering analysis.
Residential GSFL: 4-foot medium bipin
lamp lifetime is dependent on the
fixture lifetime (i.e., for average
residential lamp operating hours, the
fixture reaches end of life before the
lamp reaches end of life, and, thus,
the lamp is retired before it fails.)
Discount Rate......................... Residential: Approach based on the For the residential sector,
finance cost of raising funds to included data from the 2007
purchase lamps either through the Survey of Consumer Finances
financial cost of any debt incurred to and the Cost of Savings Index
purchase product or the opportunity dataset covering 1984 to
cost of any equity used to purchase 2008.\24\
equipment, based on the Federal
Reserve's Survey of Consumer Finances
data \16\ for 1989, 1992, 1995, 1998,
2001, and 2004.
Commercial and industrial: Derived
discount rates using the cost of
capital of publicly-traded firms in the
sectors that purchase lamps, based on
data in the 2003 CBECS,\17\ Damodaran
Online,\18\ Ibbotson's Associates,\19\
the 2007 Value Line Investment
survey,\20\ Office of Management and
Budget (OMB) Circular No. A-94,\21\
2008 State and local bond interest
rates,\22\ and the U.S. Bureau of
Economic Analysis.\23\
[[Page 34110]]
Analysis Period....................... Commercial and industrial GSFL: Based on No change.
the longest baseline lamp life in a
product class divided by the annual
operating hours of that lamp.
Residential GSFL: Based on the useful
lifetime of the baseline lamp.
Lamp Purchasing Events................ Commercial and industrial sectors: DOE No change.
assessed five events: lamp failure,
standards-induced retrofit, ballast
failure (GSFL only), ballast retrofit
(GSFL only), and new construction/
renovation.
Residential sector: DOE assessed three
events: lamp failure, ballast failure
(GSFL only), and new construction/
renovation.
----------------------------------------------------------------------------------------------------------------
\1\ U.S. Bureau of Labor Statistics, Table Containing History of CPI-U U.S. All Items Indexes and Annual Percent
Changes from 1913 to Present (Last accessed Feb. 20, 2009). Available at: ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt.
\2\ The four large States are New York, California, Texas, and Florida.
\3\ Sales Tax Clearinghouse, Aggregate State Tax Rates (2009) (Last accessed Feb. 20, 2009). Available at: http://thestc.com/STrates.stm. The February 20, 2009 material from this Web site is available in Docket EE-
2006-STD-0131. For more information, contact Brenda Edwards at (202) 586-2945.
\4\ U.S. Census Bureau, Population change: April 1, 2000 to July 1, 2008 (NST-EST2008-popchg2000-2008). Last
accessed February 20, 2009. Available at: http://www.census.gov/popest/states/files/NST-EST2008-popchg2000-2008.csv.
\5\ R. S. Means Company, Inc., 2007 RS Means Electrical Cost Data (2007).
\6\ U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Energy Conservation Program for
Consumer Products: Final Report: U.S. Lighting Market Characterization, Volume I: National Lighting Inventory
and Energy Consumption Estimate (2002). Available at: http://www.eere.energy.gov/buildings/info/documents/pdfs/lmc_vol1_final.pdf.
\7\ U.S. Department of Energy, Energy Information Administration, Commercial Building Energy Consumption Survey:
Micro-level data, file 2 Building Activities, Special Measures of Size, and Multi-building Facilities (2003).
Available at: http://www.eia.doe.gov/emeu/cbecs/public_use.html.
\8\ U.S. Department of Energy, Energy Information Administration, Residential Energy Consumption Survey: File 1:
Housing Unit Characteristic (2006). Available at: http://www.eia.doe.gov/emeu/recs/recs2001/publicuse2001.html.
\9\ U.S. Department of Energy, Energy Information Administration, Manufacturing Energy Consumption Survey, Table
1.4: Number of Establishments by First Use of Energy for All Purposes (Fuel and Nonfuel) (2002). Available at:
http://www.eia.doe.gov/emeu/mecs/mecs2002/data02/shelltables.html.
\10\ U.S. Department of Energy, Energy Information Administration, Residential Energy Consumption Survey: File
1: Housing Unit Characteristics (2008). Available at: http://www.eia.doe.gov/emeu/recs/recspubuse05/datafiles/RECS05file1.csv.
\11\ U.S. Department of Energy, Energy Information Administration, Form EIA-861 for 2006 (2006). Available at:
http://www.eia.doe.gov/cneaf/electricity/page/eia861.html.
\12\ U.S. Department of Energy, Energy Information Administration, Form EIA-861 for 2007 (2007). Available at:
http://www.eia.doe.gov/cneaf/electricity/page/eia861.html.
\13\ U.S. Department of Energy, Energy Information Administration, Annual Energy Outlook 2008 with Projections
to 2030 (June 2008). Available at: http://www.eia.doe.gov/oiaf/archive/aeo08/index.html.
\14\ U.S. Department of Energy, Energy Information Administration, An Updated Annual Energy Outlook 2009
Reference Case Reflecting Provisions of the American Recovery and Reinvestment Act and Recent Changes in the
Economic Outlook (April 2009). Available at: http://www.eia.doe.gov/oiaf/servicerpt/stimulus/index.html.
\15\ U.S. Department of Energy, Energy Efficiency and Renewable Energy, Office of Building Research and
Standards, Technical Support Document: Energy Efficiency Standards for Consumer Products: Fluorescent Lamps
Ballast Final Rule (Sept. 2000). Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/gs_fluorescent_0100_r.html.
\16\ The Federal Reserve Board, Survey of Consumer Finances. Available at: http://www.federalreserve.gov/PUBS/oss/oss2/scfindex.html.
\17\ U.S. Department of Energy, Energy Information Administration, Commercial Building Energy Consumption Survey
(2003). Available at: http://www.eia.doe.gov/emeu/cbecs/.
\18\ Damodaran Online, The Data Page: Historical Returns on Stocks, Bonds, and Bills--United States (2006) (Last
accessed Sept. 12, 2007). Available at: http://pages.stern.nyu.edu/~~adamodar. The September 12, 2007 material
from this Web site is available in Docket EE-2006-STD-0131. For more information, contact Brenda
Edwards at (202) 586-2945.
\19\ Ibbotson's Associates, Stocks, Bonds, Bills, and Inflation, Valuation Edition, 2001 Yearbook (2001).
\20\ Value Line, Value Line Investment Survey (2007). Available at: http://www.valueline.com.
\21\ U.S. Office of Management and Budget, Circular No. A-94 Appendix C (2008). Available at: http://www.whitehouse.gov/omb/circulars/a094/a094.html.
\22\ Federal Reserve Board, Statistics: Releases and Historical Data--Selected Interest Rates--State and Local
Bonds (2008). Available at: http://www.federalreserve.gov/releases/h15/data/Monthly/H15_SL_Y20.txt.
\23\ U.S. Department of Commerce, Bureau of Economic Analysis, Table 1.1.9 Implicit Price Deflators for Gross
Domestic Product (2008). Available at: http://www.bea.gov/national/nipaweb/SelectTable.asp?Selected=N.
\24\ Mortgage-X, Mortgage Information Service. Cost of Savings Index (COSI), Index History. 2009. Last accessed,
February 25, 2009. http://mortgage-x.com/general/indexes/default.asp.
1. Consumer Product Price
In the April 2009 NOPR, DOE used a variety of sources to develop
consumer equipment prices, including lamp and ballast prices in
manufacturers' suggested retail price lists (``blue books''), State
procurement contracts, large electrical supply distributors, hardware
and home improvement stores, Internet retailers, and other similar
sources. DOE then developed low, medium, and high prices based on its
findings. 74 FR 16920, 16952 (April 13, 2009).
At the public meeting, Philips commented that DOE's estimated costs
of IRL in the residential sector reported in the proposed rule appear
too low in comparison with the costs of commercial IRL. (Philips,
Public Meeting Transcript, No. 38.4 at pp. 179-181) In response, DOE
notes that the costs of all commercial IRL in the LCC and PBP analyses
include $1.10 to account for the labor cost of a four-minute
installation time at a labor rate of $16.55 per hour. (Using the
consumer price index for 2008, the labor rate for this final rule was
inflated to 2008 dollars, as compared to the April 2009 NOPR value of
$15.94 per hour in 2007 dollars.) Conversely, DOE assumes that
consumers in the residential sector will replace their own lamps and,
therefore, does not model labor costs for IRL in the residential
sector; this difference in
[[Page 34111]]
methodology contributes to the relative price difference between
commercial and residential IRL. In addition, DOE acknowledges that
lamps sold through various distribution chains may have differing end-
user prices. For this reason, DOE conducts the LCC analysis on the high
and low lamp prices as sensitivities, DOE believes that the sources and
methodologies used to develop IRL prices for the April 2009 NOPR
reflect the variety of IRL prices encountered by consumers in the
residential and commercial sectors. The results of the IRL price
sensitivities analysis can be found in Appendix 8B of the TSD.
Philips also commented that the incremental price differential for
more-efficacious IRL appears too small. (Philips, Public Meeting
Transcript, No. 38.4 at pp. 179-181) Additionally NEMA and Philips
stated that the prices of IRL will be uncertain due to expected
capacity constraints in 2012. (NEMA, Philips, Public Meeting
Transcript, No. 38.4 at pp. 286-287)
DOE recognizes that the imposition of a standard will commoditize
higher-efficacy IRL that may be sold today as premium products at
higher markups (from manufacturing costs to end-user prices) than
lower-efficacy IRL. Prices of IRL in DOE's analysis are meant to
reflect commoditization of these higher-efficacy products in the face
of standards. DOE assessed discounts between blue book prices and end-
user prices of currently-available lower-efficacy IRL to obtain
information about how commoditization affects IRL price. DOE took this
information into account during the development of prices for the IRL
that comply with each EL shown in today's final rule. Furthermore,
although DOE recognizes that there may be uncertainty regarding future
IRL prices, interested parties did not provide additional data to DOE
as would cast doubt on its overall pricing methodology or as would
support an alternative methodology. For these reasons, DOE has not
changed the April 2009 NOPR IRL methodologies or prices for this final
rule. For further information on the development of IRL prices, see
chapter 7 of the final rule TSD.
2. Sales Tax
In the April 2009 NOPR, DOE obtained State and local sales tax data
from the Sales Tax Clearinghouse. (April 2009 NOPR TSD chapter 7) The
data represented weighted averages that include county and city rates.
DOE used the data to compute population-weighted average tax values for
each Census division and four large States (New York, California,
Texas, and Florida). For the final rule, DOE retained this methodology
and used updated sales tax data from the Sales Tax Clearinghouse \15\
and updated population estimates from the U.S. Census Bureau.\16\
---------------------------------------------------------------------------
\15\ Sales Tax Clearinghouse, ``Aggregate State Tax Rates''
(2009) (Last accessed February 20, 2009). Available at: http://thestc.com/STrates.stm. The February 20, 2009, material from this
Web site is available in Docket EE-2006-STD-0131. For more
information, contact Brenda Edwards at (202) 586 2945.
\16\ U.S. Census Bureau, ``Population Change: April 1, 2000 to
July 1, 2008'' (July 2008). Available at: http://www.census.gov/popest/states/files/NST-EST2008-popchg2000-2008.csv.
---------------------------------------------------------------------------
3. Annual Operating Hours
As discussed in the April 2009 NOPR, DOE developed annual operating
hours for IRL and GSFL by combining building type-specific operating
hours data from the 2002 U.S. Lighting Market Characterization (LMC)
\17\ with data in the 2003 Commercial Building Energy Consumption
Survey (CBECS),\18\ the 2001 Residential Energy Consumption Survey
(RECS),\19\ and the 2002 Manufacturing Energy Consumption Survey
(MECS),\20\ which describe the probability that a particular building
type exists in a particular region. 74 FR 16920, 16954-55 (April 13,
2009). For this final rule, DOE updated the residential annual
operating hours estimates using the 2005 RECS.\21\ Residential-sector
average operating hours changed from 789 to 791 hours per year for GSFL
and from 884 hours per year in the April 2009 NOPR to 889 hours per
year for this final rule for IRL. DOE did not receive any further
comments on residential-sector operating hours. For further details on
the annual operating hours used in the analyses, see chapter 6 of the
TSD.
---------------------------------------------------------------------------
\17\ U.S. Department of Energy, Office of Energy Efficiency and
Renewable Energy, ``U.S. Lighting Market Characterization. Volume I:
National Lighting Inventory and Energy Consumption Estimate
(2002).'' Available at: http://www.netl.doe.gov/ssl/PDFs/lmc_vol1_final.pdf.
\18\ U.S. Department of Energy, Energy Information Agency,
``Commercial Building Energy Consumption Survey: Micro-Level Data,
File 2 Building Activities, Special Measures of Size, and Multi-
building Facilities (2003).'' Available at: www.eia.doe.gov/emeu/cbecs/public_use.html.
\19\ U.S. Department of Energy, Energy Information
Administration, Residential Energy Consumption Survey: File 1:
Housing Unit Characteristic (2006). Available at: http://www.eia.doe.gov/emeu/recs/recs2001/publicuse2001.html.
\20\ U.S. Department of Energy, Energy Information Agency,
``Manufacturing Energy Consumption Survey, Table 1.4: Number of
Establishments by First Use of Energy for All Purposes (Fuel and
Nonfuel) (2002).'' Available at: www.eia.doe.gov/emeu/mecs/mecs2002/data02/shelltables.html.
\21\ U.S. Department of Energy, Energy Information
Administration, Residential Energy Consumption Survey: File 1:
Housing Unit Characteristic (2009). Available at: http://www.eia.doe.gov/emeu/recs/recspubuse05/pubuse05.html.
---------------------------------------------------------------------------
4. Electricity Prices and Electricity Price Trends
As explained in the April 2009 NOPR, DOE determined energy prices
by deriving regional average prices for 13 geographic areas consisting
of the nine U.S. Census divisions, with four large States (New York,
Florida, Texas, and California) treated separately. 74 FR 16920, 16955-
56 (April 13, 2009). For the April 2009 NOPR, DOE derived electricity
prices based on data from the 2006 publication of EIA Form 861. Id. At
the public meeting, ACEEE commented that DOE should use the latest
available electricity prices and electricity price trends in its
analysis for the final rule. (ACEEE, Public Meeting Transcript, No.
38.4 at pp. 154-155)
DOE agrees with ACEEE and has updated the related electricity price
and electricity price trend sources for the final rule analysis. For
electricity price data, the analysis now utilizes EIA's Form 861
electricity price data from the year 2007.\22\ DOE obtained electricity
price trend data from EIA's latest AEO2009,\23\ which was published in
April 2009 and is a special update of the March 2009 AEO2009 (the
initial release of EIA's AEO2009) \24\ that includes the impacts of the
American Recovery and Reinvestment Act (ARRA) of February 2009 (Pub. L.
111-5). To project electricity prices to the end of the LCC analysis
period, DOE used the reference economic growth projection in the April
AEO2009. As done for the April 2009 NOPR, DOE used the price trend
average rate of change during 2020-2030 to estimate the price trends
after 2030. See chapter 8 of the April 2009 NOPR TSD \25\ as well as
chapter 8 of the final rule TSD. The spreadsheet tools and LCC
sensitivity scenarios featured in the April 2009 NOPR also included
high-economic-growth and low-economic-growth electricity price trend
[[Page 34112]]
cases from EIA. The April 2009 AEO2009 did not include these cases,
however. To generate them, DOE utilized the difference between the
reference economic-growth case and the high- and low-economic-growth
cases in the March 2009 AEO2009 as scaling factors to produce high- and
low-economic-growth estimates for the spreadsheet tools and LCC
sensitivity scenarios addressed in this final rule.
---------------------------------------------------------------------------
\22\ U.S. Department of Energy, Energy Information
Administration, Form EIA-861 for 2007 (2007). Available at: http://www.eia.doe.gov/cneaf/electricity/page/eia861.html.
\23\ U.S. Department of Energy, Energy Information
Administration, An Updated Annual Energy Outlook 2009 Reference Case
Reflecting Provisions of the American Recovery and Reinvestment Act
and Recent Changes in the Economic Outlook (April 2009). Available
at: http://www.eia.doe.gov/oiaf/servicerpt/stimulus/index.html.
\24\ U.S. Department of Energy, Energy Information
Administration, Annual Energy Outlook 2009 with Projections to 2030
(March 2009). Available at: http://www.eia.doe.gov/oiaf/aeo/.
\25\ U.S. Department of Energy. Chapter 8: Life-Cycle Cost and
Payback Period Analyses. Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/ch_8_lamps_standards_nopr_tsd.pdf.
---------------------------------------------------------------------------
The results of DOE's analysis using the reference economic-growth
projections are presented in this notice, with a full set of results
displayed in chapter 8 of the TSD. DOE also presents LCC and PBP
results for the low-economic-growth and high-economic-growth cases from
AEO2009 in appendix 8B of the final rule TSD.
5. Ballast Lifetime
For the April 2009 NOPR, DOE used a commercial and industrial
sector ballast lifetime of approximately 50,000 hours, which is the
average ballast life used in the 2000 final rule for fluorescent lamp
ballasts (2000 Ballast Rule).\26\ 65 FR 56740 (Sept. 19, 2000). In the
primary commercial sector LCC and PBP analysis, this is equivalent to a
lifetime of approximately 14.2 years (based on an average of 3,435
operating hours per year in the commercial sector).
---------------------------------------------------------------------------
\26\ U.S. Department of Energy. April 2009 NOPR Technical
Support Document. Chapter 4. Life-Cycle Costs and Payback Periods.
Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/chap4.pdf.
---------------------------------------------------------------------------
At the public meeting, Lutron Electronics agreed that a ballast
lifetime of 50,000 hours is common, and a 14.2 year lifetime is
appropriate for a ballast that is operated approximately 3,500 hours
per year. However, Lutron Electronics also commented that the ballast
service life (in years) will change as operating hours change. (Lutron
Electronics, Public Meeting Transcript, No. 38.4 at pp. 152-153) DOE
agrees with Lutron Electronics and verifies that in its commercial and
industrial LCC analyses, for the Monte Carlo simulations (that analyze
a distribution of operating hours) and for the consumer subgroup
analyses, DOE varies ballast service life as operating hours change.
For the residential sector LCC and PBP analysis in the April 2009
NOPR, DOE used a ballast lifetime of 15 years, based on measure life
reports that discuss ballast lifetime in terms of
years.27 28 74 FR 16920, 16959 (April 13, 2009). In other
words, DOE assumed that a ballast installed in the residential sector
would remain in place for an average of 15 years, regardless of its
annual operating hours. The measure life reports, published in 2005 and
2007, incorporate both magnetic and electronic ballasts. DOE used the
measure life reports because DOE believes they best capture the true
service life of ballasts in the residential sector.
---------------------------------------------------------------------------
\27\ GDS Associates, Inc., Engineers and Consultants, Measure
Life Report: Residential and Commercial/Industrial Lighting and HVAC
Measures (The New England State Program Working Group) (2007).
\28\ Economic Research Associates, Inc., and Quantec, LLC,
Revised/Updated EULs Based On Retention And Persistence Studies
Results (Southern California Edison) (2005).
---------------------------------------------------------------------------
At the NOPR public meeting, ACEEE stated that in 2005, the vast
majority of ballasts were magnetic, suggesting that the measure life
that DOE assumed may not be appropriate. ACEEE also commented that the
ballast lifetimes, when expressed in hours (15 years in place is
equivalent to 11,869 hours of life based on average residential GSFL
operating hours), appeared too low for the residential sector. (ACEEE,
Public Meeting Transcript, No. 38.4 at pp. 154, 169-170) In response,
DOE notes that it did not receive any data that indicate the measure
life of electronic ballasts differs from magnetic ballasts. Thus, DOE
does not believe there is a difference in the lifetimes of the two
ballast types that is substantial enough to affect the results of the
analyses. First, it is worth noting that the 2000 Ballast Rule assumes
no difference between the two ballast lifetimes.\29\ Second,
manufacturer product literature does not generally suggest or market a
difference in lifetimes between magnetic and electronic ballasts.
Third, in interviews, manufacturers mentioned that there was no
substantial difference in reliability (a proxy for service life)
between magnetic and electronic ballasts. Finally, DOE understands that
most ballasts are rated for longer lifetimes (in hours) than the
lifetimes that DOE used in its analyses. DOE reiterates, however, that
the measure life reports estimate the lifetimes of actual ballasts in
the field, accounting for not only ballast failure at its rated life,
but also premature failure, fixture removal, and replacement during
renovation. For all of these reasons, DOE continues to use the measure
life reports to determine ballast service life in the residential
sector.
---------------------------------------------------------------------------
\29\ U.S. Department of Energy. Chapter 4. Life-Cycle Costs and
Payback Periods. Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/chap4.pdf.
---------------------------------------------------------------------------
6. Lamp Lifetime
When possible, for the April 2009 NOPR, DOE used manufacturer
literature to determine lamp lifetimes. 74 FR 16920, 16956-57 (April
13, 2009). When published manufacturer literature was not available--as
was the case for some IRL--DOE derived lamp lifetimes as part of the
engineering analysis. DOE also considered the impact of group re-
lamping practices on GSFL lifetimes in the commercial and industrial
sectors in this final rule. 74 FR 16920, 16954 (April 13, 2009). For
details, see chapter 5 of the final rule TSD.
For GSFL, DOE based its lamp lifetimes on lamp start cycles of 3
hours per start. At the public meeting, Southern California Edison
commented that residential GSFL may experience much shorter start
cycles than 3 hours per start, thereby lowering their lifetimes from
rated values. (Southern California Edison, Public Meeting Transcript,
No. 38.4 at pp. 166-167) DOE acknowledges that some residential GSFL
may indeed experience shorter start cycles than 3 hours per start,
thereby reducing lamp lifetime due to increased electrode degradation.
Research indicated to DOE that the effective lifetimes of lamps
operated at start cycles other than 3 hours per start is highly
variable and depends directly on the lamp type as well as the type of
ballast (i.e., program start, instant start, or rapid start) to which
the lamp is connected. Southern California Edison did not provide data
to illustrate the expected lifetimes of any of the residential GSFL
(either base-case or standards-case) featured on any of the ballasts
that DOE presents in the LCC analysis, nor did it provide data
indicating the prevalence of various start cycles in the residential
sector. In response to these comments, DOE conducted research but was
unable to find data sources for the residential sector that specified
any of this information. For this reason, DOE has chosen to maintain
the usage of rated lamp lifetimes based on 3 hour start cycles for this
final rule.
7. Discount Rates
In the April 2009 NOPR, DOE derived residential discount rates by
identifying all possible debt or asset classes that might be used to
purchase replacement products, including household assets that might be
affected indirectly. DOE estimated the average proportions of the
various debt and equity classes in the average U.S. household equity
and debt portfolios using data from the Survey of Consumer Finances
(SCF) sources from 1989 to 2004. DOE used the mean share of each class
across the six sample years as a basis for estimating the effective
financing rate for replacement equipment. DOE estimated interest or
[[Page 34113]]
return rates associated with each type of equity and debt using SCF
data and other sources. The mean real effective rate across the classes
of household debt and equity, weighted by the shares of each class, was
5.6 percent for the April 2009 NOPR. 74 FR 16920, 16957 (April 13,
2009). For this final rule, DOE updated the sources used to compute the
discount rate in the residential sector. The analysis now features data
from the 2007 Survey of Consumer Finances and the Cost of Savings Index
dataset covering 1984 to 2008. Based on these updates, the residential
sector average discount rate for the final rule is 4.8 percent.
For the commercial sector and industrial sector, DOE derived the
discount rate from the cost of capital of publicly-traded firms in the
sectors that purchase lamps, as done for the April 2009 NOPR 74 FR
16920, 16957 (April 13, 2009). Because DOE received no comments on its
commercial and industrial sector discount rates and all sources used
remain the most current sources available, for this final rule, DOE has
continued to use discount rates of 7.0 percent and 7.6 percent for the
commercial and industrial sectors, respectively.
8. Residential Fluorescent Lamp Analysis
In the April 2009 NOPR, DOE produced a residential sector GSFL
life-cycle cost and payback period analysis based upon measure life
reports that indicated an average residential GSFL fixture lifetime of
15 years. 74 FR 16920, 16956 (April 13, 2009). Under average operating
hours (791 hours per year), DOE determined that a 4-foot MBP lamp would
live approximately 19 years. In the April 2009 NOPR LCC analysis, DOE
assumed that consumers would discard their lamps during fixture
replacement, effectively ending the life of the lamps, thus resulting
in no lamp-only replacements in the residential sector under average
operating hours. The 2.5-year analysis period used by DOE for the
residential GSFL lamp failure events represented DOE's belief that
under high operating hours (1,210 hours per year), if a baseline lamp
and fixture were purchased at the same time, the baseline lamp would
fail after approximately 12.5 years and the fixture would be replaced
2.5 years after the lamp failure (for a total fixture life of 15
years). Thus, after a lamp failure, the replacement lamp would have 2.5
years in which to operate before the fixture is replaced. DOE's
analysis period for calculating the LCC savings for residential
consumers responding to a lamp failure was therefore 2.5 years.
Both Southern California Edison and the California Stakeholders
commented that the 2.5-year analysis period utilized by DOE in the NOPR
to model the residential GSFL lamp failure events is too short and that
the energy savings should be considered over the full life of the
replacement lamp, in other words 12.5 years. In their suggested
revisions to the LCC analysis, the stakeholders imply that upon fixture
replacement, consumers will retain their previously-installed
replacement lamp and reinstall it on a new fixture. According to the
comments, analyzing such a scenario under high operating hours results
in significant life-cycle cost savings for the residential lamp failure
event when consumers are forced to retrofit their T12 systems with T8
systems. (Southern California Edison, No. 53 at p. 1-7; California
Stakeholders, No. 63 at p. 9)
DOE acknowledges that in the residential sector, consumers may
choose to preserve a lamp instead of discarding it upon fixture
replacement, though in its research, DOE was unable to determine which
situation was more likely. DOE recognizes that retaining a lamp beyond
the fixture or ballast life would extend the useful lamp life, and,
thus, the analysis period. Modeling this scenario would take into
account operating cost savings over a longer period of time and
additional equipment costs to the consumer, who in the base case is
replacing their T12 lamp and will need to purchase a new ballast at
some point in the future. Therefore, for this final rule, DOE has
analyzed an additional scenario in the residential sector LCC analysis
modeling this preservation of lamp behavior. This analysis shows that
some residential consumers with T12 systems do in fact obtain LCC
savings when forced to retrofit their T12 ballast with a T8 system.
However, DOE also notes that the results of this analysis are highly
dependent on the remaining years of lifetime left on the T12 ballast
when the lamp is replaced. DOE presents the LCC results for this
additional scenario in section VII.C.1.a of this final rule as well as
in chapter 8 and appendix 8B of the TSD.
In contrast to Southern California Edison and the California
Stakeholders who implied that DOE's analysis understated the consumer
economic savings to the residential sector of retrofitting from a T12
to T8 system, GE commented that such a retrofit presents a best-case
estimate of a 50-year payback period, and, therefore, is not
economically justified. (GE, No. 80 at pp. 1-3; GE, Public Meeting
Transcript, No. 38 at p. 81)
While DOE acknowledges that the standards presented in this final
rule place some burden on some residential T12 GSFL users, DOE believes
that the LCC analysis performed for this final rule accurately reflects
this burden. DOE notes that as discussed below, payback period
calculations do not account for expenses incurred by consumers who
purchase new fixtures in the middle of the analysis period. In
addition, DOE notes that the assumptions of electricity prices, labor
rates, system energy savings, and operating hours that GE used to
produce the payback estimate in its written comment do not align with
the inputs that DOE presented in the April 2009 NOPR and updated for
this final rule. DOE recognizes that there may be some variability in
these inputs, but believes that DOE estimates represent those
experienced for the average consumer. In addition, DOE notes that it
did not receive specific adverse comments on these inputs themselves.
9. Rebuttable Payback Period Presumption
The payback period (PBP) is the amount of time it takes a consumer
to recoup the assumed incremental costs of a more-efficient product
through lower operating costs. In the April 2009 NOPR and today's final
rule, DOE used a ``simple'' PBP, so named because the PBP does not take
into account other changes in operating expenses over time or the time
value of money. 74 FR 16920, 16957-58 (April 13, 2009). As inputs to
the PBP analysis, DOE used the total installed cost of the product to
the consumer for each efficacy level, as well as the first year annual
operating costs for each efficacy level. The calculation requires the
same inputs as the LCC, except for energy price trends and discount
rates; only energy prices for the year the standard takes effect (2012
in this case) are needed.
At the public meeting, Earthjustice commented that there is a
presumption that an energy conservation standard is economically
justified if the payback period of products that comply with the
standard is less than three years. (Earthjustice, Public Meeting
Transcript, No. 38.4 at pp. 186-187) Earthjustice further stated that
DOE did not calculate a rebuttable presumption payback period for each
trial standard level presented in the April 2009 NOPR and that DOE
cannot ignore the rebuttable presumption payback period out of
preference for the seven-factor test described in 42 U.S.C.
6295(o)(2)(B)(i). ACEEE similarly commented in writing that ``[a]
higher burden of proof is required to overcome the rebuttable
[[Page 34114]]
presumption.'' (Earthjustice, No. 60 at p. 6; ACEEE, No. 76 at p. 6)
DOE is aware of the rebuttable presumption payback period test in 42
U.S.C 6295(o)(B)(iii), which states that ``[i]f the Secretary finds
that the additional cost to the consumer of purchasing a product
complying with an energy conservation standard level will be less than
three times the value of the energy * * * savings during the first year
that the consumer will receive as a result of the standard, as
calculated under the applicable test procedure, there shall be a
rebuttable presumption that such standard level is economically
justified.'' While DOE acknowledges that the rebuttable presumption
payback period computation can have value, DOE emphasizes that the
presumption is rebuttable, specifically because DOE is required by law
to consider the specific criteria in 42 U.S.C. 6295(o)(2)(B)(i) when
prescribing new standards, such as impacts on utility, competition, and
the Nation as a whole. Thus, DOE's analyses of these criteria serve to
either support or rebut any initial determination that a standard is
economically justified based on the rebuttable payback period
presumption. There is no statutory provision that requires DOE to
emphasize the rebuttable presumption payback period test over the
specific criteria that must be considered according to 42 U.S.C.
6295(o)(2)(B)(i); thus, DOE disagrees that ``[a] higher burden of proof
is required to overcome the rebuttable presumption.'' There is also no
statutory requirement for DOE to present a single rebuttable
presumption payback period for each trial standard level. DOE has
conducted the full set of economic analyses required by 42 U.S.C.
6295(o)(B)(i) for this final rule. The results of this analysis serve
as the basis for DOE to definitively evaluate the economic
justification for a potential standard level.
The payback periods shown in chapter 8 and appendix 8B of the final
rule TSD are ``simple payback periods'' computed using the same
methodology that would be utilized to compute payback periods for a
rebuttable presumption payback period test; DOE's seven-factor analysis
serves to confirm or rebut any assumption of economic justification
based on payback periods that are shorter than three years. DOE
stresses, however, that there are several factors for which the LCC
analysis accounts, but the payback period analysis does not. For
example, the LCC analysis includes financing effects and utilizes
energy costs that vary over time. In addition, DOE notes that the
simple payback period values computed for some lamp purchase events and
scenarios do not fully express the equipment costs experienced by
consumers in these scenarios. Payback period calculations take into
account only the installed costs incurred at the very beginning of the
analysis period. Thus, the calculation excludes the economic impacts of
any additional costs (e.g., a new ballast purchase, recycling costs)
that may be incurred in the middle or at the end of the analysis
period. For these reasons, DOE believes that the LCC analysis and other
analyses performed for this final rule serve as a higher-fidelity
assessment of economic impacts than the computation of payback periods
alone. In other words, the LCC results serve to support or rebut the
results of the PBP analysis. Therefore, DOE is continuing to utilize
these higher-fidelity analyses as a definitive evaluation of the
economic impacts of the standards presented and chosen in this final
rule.
D. National Impact Analysis--National Energy Savings and Net Present
Value Analysis
DOE's NIA assesses the national energy savings (NES) and the
national net present value (NPV) of total customer costs and savings
that would be expected to result from new standards at specific
efficacy levels.
For the final rule analysis, DOE used the same spreadsheet model
(with updated inputs as discussed below) described and used in the NOPR
to calculate the NES and NPV based on the annual energy consumption and
total installed cost data employed in the LCC analysis. 74 FR 16920,
16958-71 (April 13, 2009). DOE forecasts energy savings, energy cost
savings, equipment costs, and NPV for each product class from 2012
through 2042. The forecasts provide annual and cumulative values for
all four output parameters. DOE also examines impact sensitivities by
analyzing various lamp shipment scenarios (such as Roll-up and Shift).
To arrive at these output parameters, DOE first develops a base-
case forecast for each analyzed lamp type. This forecast characterizes
energy use and consumer costs (lamp purchase and operation) in the
absence of new or revised energy conservation standards. To evaluate
the impacts of such standards on these lamps, DOE compares this base-
case projection with projections characterizing the market if DOE were
to promulgate new or amended standards (i.e., the standards case). In
characterizing the base and standards cases, DOE considers historical
shipments, its shipment projections, emerging technologies, the mix of
efficacies sold in the absence of any new standards, and how that mix
might change over time. Inputs and issues associated with the NIA and
any changes made in this final rule are discussed in more detail
immediately below.
1. Overview of NIA Changes in This Notice
Based on the comments it received regarding the April 2009 NOPR,
DOE made a number of changes to the NIA. Table V.5 summarizes the
approach and data DOE used to derive the inputs to the NES and NPV
analyses for the April 2009 NOPR, as well as the changes it made for
this final rule in response to comments and updated information. As
demonstrated by the table, DOE changed several inputs due to the
availability of updated sources. For example, DOE updated projected
electricity prices from EIA's AEO2008 estimates to AEO2009. In
addition, DOE calculated new annual marginal site-to-source conversion
factors based on the version of the National Energy Modeling System
(NEMS) that corresponds to AEO2009. Following the table, DOE details
additional inputs and changes, and summarizes and responds to each of
the NIA-related comments it received at the public meeting and in
written comments. See TSD chapters 10 and 11 for further details.
Table V.5--Approach and Data Used To Derive the Inputs to the National
Energy Savings and Net Present Value Analyses
------------------------------------------------------------------------
April 2009 NOPR Changes for the
Inputs description final rule
------------------------------------------------------------------------
Shipments................... Annual shipments See Table V.6 and
from shipments Table V.7.
model.
Effective date of standard.. 2012................ No change.
Analysis period............. 2012 to 2042........ No change.
[[Page 34115]]
Unit energy consumption (kWh/ Established in the Residential
yr). energy-use operating hours
characterization, updated based on
TSD chapter 6, by RECS 2005 (from
lamp or lamp-and- RECS 2001).
ballast design and
sector.
Total installed cost........ Established in the No change.
product price
determination, TSD
chapter 7 and the
LCC analysis,
chapter 8, by lamp-
and-ballast designs.
Electricity price forecast.. Based on AEO2008 Updated for AEO2009
forecasts (to 2030) (used version
and an informed by impacts
extrapolation for of the American
beyond 2030. (See Reinvestment and
TSD chapter 8). Recovery Act).
Energy site-to-source Conversion varies Updated for AEO2009
conversion. yearly and was (used version
generated by DOE/ informed by impacts
EIA's NEMS program of the American
(a time-series Reinvestment and
conversion factor; Recovery Act).
includes electric
generation,
transmission, and
distribution
losses).
Conversion factors
for beyond 2030 are
held constant.
HVAC interaction savings.... 6.25% of total No change.
energy savings in
all sectors.
Rebound effect.............. 1% of total energy No change.
savings in the
commercial and
industrial sectors.
8.5% of total energy
savings in the
residential sector.
Discount rate............... 3% and 7% real...... No change.
Present year................ Future costs and Future costs and
savings are savings are
discounted to 2007. discounted to 2009.
------------------------------------------------------------------------
2. Shipments Analysis
Lamp shipments are an important input to the NIA. In the April 2009
NOPR, DOE explained how it developed separate shipment models for GSFL
and IRL. 74 FR 16920, 16959-70 (April 13, 2009). In general, to
forecast shipments for these two categories of lamps, DOE followed a
four-step process. First, DOE used 2001-to-2005 historical shipment
data from NEMA and other publicly-available sources to estimate the
total historical shipments (i.e., NEMA member and non-NEMA member
shipments) of each lamp type analyzed. Second, based on these
historical shipments and the average service lifetime of each lamp
type, DOE calculated the installed stock of lamps for each lamp type in
2005. Third, by modeling lamp purchasing events, and applying growth
rate, replacement rate, and emerging technologies penetration rate
assumptions, DOE developed annual shipment projections from 2006 to
2042. (NEMA had not provided publically-available data for years after
2005). Specifically, DOE modeled lamp (and ballast for GSFL) shipments
based on four lamp-purchasing market events: (1) New construction; (2)
ballast failure (GSFL only); (3) lamp replacement; and (4) standards-
induced retrofit (for the standards case). DOE also calibrated its
shipments model to reflect confidential shipment data provided by NEMA
for 2006 and 2007. Finally, because the shipments of lamp designs and
lamp-and-ballast designs (for GSFL) often depend on their properties
(e.g., ballast factor and efficacy), DOE developed base-case and
standards-case market-share matrices as another model input. The
market-share matrices characterize the efficacy, power rating, light
output, and lifetime of the lamp and lamp-and-ballast designs. The
matrices input the percentage market share of each design into the
shipment model. DOE used these market-share matrices to forecast lamp
stock and shipments, taking into account each design's respective
lifetime.
Table V.6 and Table V.7 summarize the approach and data DOE used
for GSFL and IRL, respectively, to derive the inputs to the shipments
analysis for the April 2009 NOPR, as well as the changes DOE made for
the final rule. A discussion of comments DOE received on these inputs
and of the changes implemented for the final rule follows.
Table V.6--Approach and Data Used to Derive the Inputs to GSFL Shipments
Analysis
------------------------------------------------------------------------
2009 NOPR Changes for the
Inputs description final rule
------------------------------------------------------------------------
Historical shipments........ 2001-2005 shipment No change.
data provided
publicly by NEMA
(except for T5
lamps; see NOPR TSD
chapter 10).
Assumed NEMA data
represented 90
percent of GSFL
shipments.
Calibrated 2006-
2007 forecasted
shipments based on
confidential
historical shipment
data NEMA provided
for those years.
Lamp inventory.............. Calculated stock in No change.
2005. Then used
growth, emerging
technologies, and
shipment
assumptions to
establish lamp
inventory from 2006
to 2042.
Growth...................... Based commercial and Updated commercial
residential growth and residential
on AEO2008 growth for AEO2009
estimates for (used version
future floor space informed by impacts
growth. For the of the American
residential sector, Reinvestment and
modeled variations Recovery Act).
in number of lamps
per new home. For
the industrial
sector, projected
floor space growth
using the 2002
Manufacturer Energy
Consumption Survey
(MECS 2002).
Base-case scenarios......... Developed two base- Updated LED prices
case scenarios, one and performance
of which modeled projections for
the market DOE's Solid State
penetration of LEDs Lighting Research
based on projected and Development
payback period. Multi-Year Program
Plan FY'09-FY'15.
[[Page 34116]]
Market-share matrices....... Developed product Revised product
distributions based distributions based
on comments, on comments, NEMA
interviews, and survey data and
catalog research. further research.
Matrices apportion
a share of
shipments for each
lamp-and-ballast
design option.
Standards-case scenarios.... Considered two sets No change
of scenarios to
characterize
consumer behavior
in response to
standards: the
Shift and Roll-up
scenarios and the
High and Market
Segment-Based
Lighting Expertise
scenarios.
------------------------------------------------------------------------
Table V.7--Approach and Data Used to Derive the Inputs to IRL Shipments
Analysis
------------------------------------------------------------------------
2009 NOPR Changes for the
Inputs description final rule
------------------------------------------------------------------------
Historical shipments........ 2001-2005 shipment Received additional
data provided historical
publicly by NEMA. shipments (2004-
Assumed NEMA data 2008) from NEMA
represented 85 with which DOE
percent of IRL verified growth,
shipments. projected
Calibrated 2006- shipments, and
2007 projected emerging
shipments based on technologies
confidential assumptions.
historical shipment
data NEMA provided
for those years.
Lamp inventory.............. Calculated stock in No change.
2005 based on
average lifetime
and historical
shipments. Then
used growth,
replacement rate,
and emerging
technologies
assumptions to
establish lamp
inventory from 2006
to 2042.
Growth...................... Shipment growth Updated for AEO2009
driven by socket (used version
growth. Socket informed by impacts
growth based on of the American
AEO2008 estimates Reinvestment and
for future Recovery Act).
commercial floor
space and
residential
buildings. Also
accounted for trend
of increasing
sockets per home.
Base-case R-CFL and emerging Developed two base- Updated LED prices
technologies. case scenarios and performance
modeling the market projections for
penetration of DOE's Solid State
light emitting Lighting Research
diodes (LEDs), and Development
ceramic metal Multi-Year Program
halides (CMH), and Plan FY'09-FY'15.
reflector compact
fluorescent lamps
(R-CFL) based on
projected payback
period.
Market-share matrices....... Considered mix of No change.
technologies
consumers select in
the base case and
standards case, as
well as each of the
scenarios analyzed.
Standards-case scenarios.... Modeled both Roll-up
and Shift
scenarios.
Revised BR lamp Modeled migration to
sensitivity only exempted BR
scenario, creating lamps in the new
two new standards- ``BR Product
case scenarios also Substitution''
accounting for scenario, which
additional replaced the ``No
migration to R-CFL: Product
``Product Substitution''
Substitution'' and scenario.
``No Product Modeled migration to
Substitution.'' only R-CFL in the
new ``R-CFL Product
Substitution,''
which replaced the
``Product
Substitution''
scenario.
Added the ``Baseline
Lifetime''
scenarios modeling
sale of lamps with
lifetimes similar
to the baseline
lamps in the
standards case.
(See section VI.C)
------------------------------------------------------------------------
3. Macroeconomic Effects on Growth
In the April 2009 NOPR, as part of its shipments forecasts, DOE
established commercial floor space and residential buildings growth
based on AEO2008. Because AEO2008 does not provide industrial floor
space forecasts, DOE used historical MECS floor space values to
establish a growth rate for the industrial sector. 74 FR 16920, 16961
(April 13, 2009). OSI stated that growth will be subject to economic
shocks over time, and pointed to the current decline in the commercial
market as evidence to that fact. (OSI, Public Meeting Transcript, No.
38.4 at p. 213-214) Southern California Edison commented that DOE
should look at past economic dislocations to better forecast lamp
shipments through 2042. (Southern California Edison, Public Meeting
Transcript, No. 38.4 at p. 214) The California Stakeholders urged DOE
not to change its NIA assumptions with respect to the recent
macroeconomic downturn reasoning that such a modification would add no
value to DOE's analysis because no one can accurately predict the
timing and extent of an economic recovery. An attempt by DOE to do so
would unduly burden its efforts to publish a final rule by the
deadline. (California Stakeholders, No. 63 at p. 8)
While DOE agrees that future shipments will be subject to general
economic shocks over time, DOE believes there is no practical way of
projecting the timing of those shocks throughout the analysis period.
DOE's projections (of sockets and thus shipment growth) incorporate
AEO2009's assumption of average gross domestic product (GDP) growth of
2.5 percent annually. That is consistent with historical growth, which
has averaged 2.85 percent annually over the last 30 years, covering
both recessionary and expansionary cycles.\30\ Because of this
consistency with historical trends and the incorporation of future
economic growth considerations, DOE believes its approach of using
AEO's projections is superior to extrapolating from specific historical
economic events.
---------------------------------------------------------------------------
\30\ National Economic Accounts, Bureau of Economic Analysis,
U.S. Department of Commerce (Last accessed on Feb. 28, 2009).
Available at: http://www.bea.gov/national/nipaweb/Index.asp.
---------------------------------------------------------------------------
[[Page 34117]]
4. Reflector Market Growth
To establish IRL shipment forecasts in the April 2009 NOPR, DOE
first modeled the projected growth in the total reflector lamp market.
To do this, DOE utilized the year-to-year commercial floor space and
residential building growth projections in AEO2008. DOE also accounted
for a trend toward more fixtures in new and renovated homes. To do
this, DOE obtained historical California data\31\ on recessed cans per
home, categorized by home age. Using this data, DOE estimated the
average number of recessed cans per home to grow from 4.82 in 2005 to
8.52 in 2042. To estimate the growth rate in each year, DOE multiplied
this growth in the number of recessed cans in homes by the projected
stock of homes according to AEO2008. Combining these two sources, DOE
predicted an average growth rate of sockets of 2.6 percent between 2006
and 2042. 74 FR 16920, 16961 (April 13, 2009).
---------------------------------------------------------------------------
\31\ RLW Analytics, Inc., ``California Statewide Residential
Lighting and Appliance Efficiency Saturation Survey'' (August 2005)
(Last accessed on Sept. 29, 2008). Available at: www.calresest.com/docs/2005CLASSREPORT.pdf.
---------------------------------------------------------------------------
In response to DOE's shipment forecasts, NEMA commented that DOE's
stated average annual growth rate of 2.6 percent for IRL was not
realistic. NEMA also provided additional historical IRL shipment data
from 2004 to 2008 that show shipments of PAR38 lamps decreasing
approximately 8 percent per year and shipments of PAR30 and PAR20 lamps
only marginally increasing. (NEMA, No. 81 at p. 14-15) In response, DOE
notes that the 2.6 percent growth rate in sockets presented in the
April 2009 NOPR does not represent growth in overall IRL shipments. DOE
used that growth in sockets and then applied varying penetrations of
non-IRL technologies into those sockets to determine IRL shipment
forecasts, as discussed in section V.D.5. In fact, after accounting for
these non-IRL technologies, DOE's resulting 2004 to 2008 IRL shipments
decline at a rate consistent with NEMA's historical shipments.
At the NOPR public meeting, EEI commented that data from RECS show
that California homes historically have been smaller than the national
average. Therefore, using the California study as a proxy for the
nation as a whole may not be appropriate. Additionally, in recent
years, EEI stated that new U.S. homes have stopped growing in terms of
average floor space. EEI suggested that DOE research other State
studies and regional studies from the National Association of Home
Builders to obtain more values for growth rates of lighting fixtures.
Philips agreed and stated a preference for much more pessimistic IRL
growth projections than those used by DOE, due to the economic
slowdown, houses getting smaller, and the penetration of CFLs and other
emerging technologies. (EEI, Public Meeting Transcript, No. 38.4 at p.
196; Philips, Public Meeting Transcript, No. 38.4 at p. 197; EEI, No.
38.4 at pp. 3,4)
In response, DOE agrees that RECS data shows that the average home
in California is smaller than the average home in the U.S. However,
that fact does not mean DOE's extrapolation of the California trend
(showing increasing number of light sources per home) to the nation is
inappropriate. As discussed above and in TSD chapter 10, DOE used the
growth rate of sockets per California home as an input into its
national shipment projections, not the absolute number of sockets per
home. It is the growth in the size of California homes relative to the
growth of all U.S. homes that is important to the analysis, not the
absolute size of the homes. Therefore, as long as the floor space
growth rate of new homes in California is consistent with rest of the
country, the trend toward more sockets in California is applicable in
this instance to the country as a whole. To that point, Census data
from 1973 to 2008 show that average floor space of new homes in the
West has grown at roughly the same rate as in the nation overall--1.11
percent versus 1.20 percent. Therefore, DOE believes the application of
the California data to the rest of the country is appropriate in this
instance and has not changed its methodology for the final rule.
With regard to the comment that homes are no longer growing in
size, DOE's analysis of census housing data shows positive annual
single-family home floor space growth in each year from 1994 to 2007.
In 2008, the overall U.S. average did indeed decline by 0.5 percent.
However, while year-to-year average growth has varied over 35 years,
the long-term trend is clearly upward--as mentioned above, the average
floor space of new homes has grown at a compounded annual rate of 1.2
percent since 1973. AEO2009 projections for average residential square
footage, which incorporate macroeconomic effects, also predict a long-
term trend of positive floor space growth. Therefore, DOE believes
projecting continued growth in the number of sockets per home is
appropriate and has not changed its methodology for the final rule.
This enables DOE to continue to use AEO forecasts, which capture
macroeconomic conditions--as many comments have urged DOE to do--in its
socket and shipment growth projections. With regard to the comment
suggesting DOE obtain more regional housing data, DOE notes that
AEO2009 projections for residential housing stock growth are based off
Census data on the nine Census Divisions. AEO projects housing stocks
separately for each Census Division. Given the purposes of this
analysis and the nationwide applicability of standards, DOE believes
this methodology incorporates a sufficient level of geographic
granularity.
5. Penetration of R-CFLs and Emerging Technologies
As discussed in more detail in the April 2009 NOPR (74 FR 16920,
16962-63 (April 13, 2009)) DOE developed and analyzed two base-case
shipment scenarios for IRL that estimated varying penetrations of non-
IRL technologies into the reflector market. For the Existing
Technologies scenario, DOE only considered the market penetration of
technologies that are currently readily available and have reached
maturation in terms of price and efficacy, namely R-CFL. In the
Emerging Technologies scenario, DOE attempted to forecast the market
penetration of mature technologies and those technologies that are
still undergoing significant changes in price and efficacy.
Specifically, DOE considered the market penetration of R-CFL, LED
lamps, and CMH lamps in the Emerging Technologies scenario. Because the
lamps employing emerging technologies are beyond the scope of the
rulemaking, DOE did not consider them design options for improving IRL
or GSFL efficacy. Instead, DOE considered these technologies potential
substitutes for the lamps covered in this rulemaking. DOE assumed that
the price of emerging technologies relative to covered technologies is
related to the likelihood that a consumer will buy an emerging
technology instead of a covered lamp.
DOE developed price, performance, and efficacy forecasts for each
of the analyzed R-CFL and emerging technologies. For the LED forecasts,
DOE used data from its Solid State Lighting Multi-Year Program Plan.
(For this final rule, DOE updated its LED forecasts for DOE's latest
Multi-Year Program Plan.)\32\ With these inputs, DOE calculated the
payback period (PBP) of each technology in the relevant
[[Page 34118]]
sector using the difference between its purchase price, annual
electricity cost, and annual lamp replacement cost relative to the lamp
it replaces. (See TSD chapter 10 for further details.) DOE then used a
relationship between PBP and market penetration to predict the market
penetration of each technology in the relevant sector in every year
from 2006 to 2042. DOE received several comments on how it estimated R-
CFL and emerging technologies penetrations into the IRL market, as
discussed below.
---------------------------------------------------------------------------
\32\ Multi-Year Program Plan FY'09 to FY'15: Solid-State
Lighting Research and Development (March 2009). Available at: http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_mypp2009_web.pdf.
---------------------------------------------------------------------------
At the public meeting, EEI commented that dimmable CFLs could
dramatically impact IRL growth if the dimmable technology improves.
(EEI, Public Meeting Transcript, No. 38.4 at p. 202) In contrast, ADLT
commented that DOE overestimated the penetration of R-CFLs in the
commercial market in its April 2009 NOPR analysis. ADLT stated that
many commercial lighting applications require directional lighting for
which R-CFLs are ineffective. (ADLT, No. 72 at p. 5)
In response to EEI's comment, DOE agrees that enhanced utility
features of various emerging technologies may change the rate at which
they are adopted. DOE also acknowledges that there is considerable
uncertainty in predicting the penetration of non-IRL technologies into
the IRL market. It is for this very reason that DOE models two base-
case scenarios that encompasses a large range of potential
penetrations. DOE believes that its Emerging Technologies forecast
adequately captures the effects of any increased penetration of R-CFLs
through advances in dimming technology. As discussed in TSD chapter 10,
based on payback period calculations, in the Emerging Technologies
forecast, DOE predicts that R-CFLs will have a significant impact on
IRL shipments only in the first few years of the analysis period.
Thereafter, LEDs, which have dimming capability (and thus can provide
the utility at issue in the comment), become more cost-effective and
dominate the emerging technologies forecast, despite any potential
future improvement in R-CFL dimming capabilities.
With regard to ADLT's comment, DOE recognizes that there are
several qualities of R-CFLs (such as form factor, beam spread, color
quality, directionality, and dimming capability) which may result in
consumers' unwillingness to purchase them for IRL applications. DOE has
attempted account for these factors by reducing the penetration of R-
CFLs by approximately 40 percent relative to the penetrations predicted
by the payback period-penetration calculations. However, considering
the significant uncertainty regarding these penetrations, DOE verified
its R-CFL penetration by comparing its modeled shipments from 2005 to
2008 to NEMA's historical shipments. As discussed earlier, DOE found
that during this time period, the rate of decline in historical IRL
shipments (which is primarily due to R-CFL penetration) is consistent
with DOE's modeled shipments. For this reason, DOE does not feel it
necessary or that there is an analytical basis and data to modify its
R-CFL penetration estimates.
Pertaining to the Emerging Technology forecasts, NEMA commented
that the April 2009 NOPR analysis incorrectly projected IRL shipments
to increase after reaching a minimum level. NEMA asserted that DOE
should remodel its expected energy savings with a continued decline in
IRL shipments after 2024. (NEMA, No. 81, p. 15) DOE believes that its
IRL forecasts are reasonable. As emerging technologies continue to
improve and their prices continue to decrease, DOE agrees that IRL
shipments will further decline as market share shifts from IRL to LED.
However, as these emerging technologies reach maturation, DOE believes
that their relative market share will stabilize, consistent with their
mature cost and performance features. Thus, as the total number of
reflector lamp sockets continues to increase (due to new construction),
it is reasonable to predict that IRL shipments will experience a
moderate increase as well. However, as DOE acknowledges that there is
considerable uncertainty regarding its forecasts, DOE performed a
sensitivity analysis for the Emerging Technologies scenario in which
IRL shipments continue to decline until emerging technologies reach a
maximum market penetration, which is upheld for the rest of the
analysis period. This sensitivity analysis results in approximately a 6
percent decrease in energy savings over the analysis period.
6. Building Codes
In response to the April 2009 NOPR, GE commented that increasingly-
stringent building codes will most likely be phased in over time,
causing IRL growth to slow and decline. (GE, Public Meeting Transcript,
No. 38.4 at pp. 205-206) EEI also stated that the most recent model
building codes would have an effect on lighting technologies and
efficiencies. EEI added that the 2009 International Energy Conservation
Code (IECC) for residential construction calls for 50 percent of
lighting to be high-efficiency. Once DOE certifies the IECC, EEI
stated, States have one year to update their codes to meet or exceed
the IECC 2009, which will alter the growth of IRL. (EEI, Public Meeting
Transcript, No. 38.4, pp. 206-207, 315; EEI, No. 45 at pp. 5-6).
In response, to evaluate the effects of more-stringent building
codes being phased in over the analysis period, DOE identified and
evaluated three of the most influential building codes across the
country. These included: (1) California's Title 24,\33\ which is
mandatory in the State; (2) the latest International Energy
Conservation Code (IECC 2009), which is a model energy code and which
some States voluntarily incorporate by reference into their building
codes, and (3) ASHRAE/IESNA Standard 90.1-2004. Each code has sections
that pertain to residential and commercial lighting. For example, IECC
2009 requires that high-efficacy light bulbs be installed in at least
50 percent of permanent lighting fixtures in new residential homes.
``High-efficacy'' is defined as:
---------------------------------------------------------------------------
\33\ California Energy Commission, ``Residential Compliance
Manual For California's Energy Efficiency Standards,'' Chapter 6
(April 2005) (Last accessed: June 18, 2009). Available at: http://www.energy.ca.gov/2005publications/CEC-400-2005-005/chapters_4/q/6_Lighting.pdf.
---------------------------------------------------------------------------
``A lighting fixture that does not contain a medium screw base
socket (E24/E26) and whose lamps have a minimum efficacy of:
1. 60 lumens per watt for lamps over 40 watts,
2. 50 lumens per watt for lamps over 15 watts to 40 watts,
3. 40 lumens per watt for lamps 15 watts or less.'' \34\
---------------------------------------------------------------------------
\34\ International Code Council, ``International Energy
Conservation Code: Excerpt From the 2007 Supplement'' (July 2007)
(Last accessed: June 18, 2009). Available at: http://www.iccsafe.org/cs/codes/2007-08cycle/2007Supplement/IECC07S.pdf.
---------------------------------------------------------------------------
The California Building Standards Code (Title 24) requires that all
luminaires that are permanently installed via new construction,
alterations, or additions (including replacements) be high-efficacy.
Title 24's definition of ``high-efficacy'' is very similar to that in
IECC 2009.
DOE also researched ASHRAE/IESNA Standard 90.1-2004, a commonly-
referenced code for commercial buildings. Although it rarely references
lumen-per-watt metrics directly, the code does impose lighting power
density requirements and requires controls for many building types and
sizes, while providing various allowances and exemptions for many
applications.
When evaluating how such codes will affect lamp shipments, it is
important to note that DOE does not have the authority to mandate that
States enact
[[Page 34119]]
residential building codes, as EEI suggested (although for commercial
codes DOE can require the adoption of a certain code it determines will
improve the energy efficiency of the nation's commercial building
stock). (42 U.S.C. 6833(b)(2)(A)) To clarify, EPCA requires DOE to
determine whether updates to IECC's residential energy efficiency code
will improve the energy efficiency of the nation's residential housing
stock. When DOE makes such a positive determination, States are
required to review (but not necessarily adopt) the energy provisions of
the code and to determine whether it would be appropriate to revise
residential building codes to meet or exceed the model code on which
DOE made a positive determination. (42 U.S.C. 6833(b)(1)). States must
complete their review within two years of DOE's positive determination.
Given a variety of policy considerations and the absence of a direct
mandate under EPCA that States adopt such building codes, currently,
the stringency of residential codes adopted varies widely throughout
the country.\35\ The most recent and stringent codes are not
necessarily adopted by States. Furthermore, in some States, local
governments have authority over their building codes (known as ``Home
Rule''), making it even more likely that the stringency of building
codes will vary widely throughout the country. For these reasons, DOE
does not believe that it should explicitly assume that new, more
stringent codes will necessarily be adopted, implemented, and enforced.
Furthermore, building codes are informed by product capabilities, IESNA
recommended light levels, and lamp and ballast efficiencies, rather
than vice versa. With that said, however, while not a driver of
development of more efficient technology, DOE agrees that increasingly-
stringent residential building codes are likely to contribute to a
greater share of shipments being higher-efficacy lamps by the end of
the analysis period as compared to the start of the period. Consistent
with this trend, DOE's market share matrices show migration to higher-
efficacy lamps in the base case, which allow for the effects of more-
energy-efficient building codes, although DOE did not directly analyze
those effects. See chapter 10 of the TSD for the full market-share
matrices in 2012 and 2042.
---------------------------------------------------------------------------
\35\ See: http://www.energycodes.gov/implement/state_codes/index.stm.
---------------------------------------------------------------------------
7. GSFL Shipments Growth
NEMA also commented on several aspects of the GSFL shipment
forecasts. NEMA commented that DOE should forecast shipments that
account for a migration to GSFL with longer lifetimes. NEMA argued that
this phenomenon, currently occurring through both the increased
shipments of T8 lamps relative to T12 lamps and through a movement from
short-life T8 lamps to long-life T8 lamps, will result in a decline of
overall GSFL shipments. NEMA stated that such an effect would
materially affect DOE's economic justification of GSFL standard levels.
(NEMA, No. 81 at p. 14) In response to NEMA's concern, DOE agrees that
it is important to account for the economic effects of consumers
purchasing longer-life GSFL and has done so. In its NOPR analyses and
in chapter 11 of the TSD, DOE has fully accounted for this migration
toward longer-life lamps in its calculations of consumer equipment
costs and industry revenues, which are inputs into its calculations of
NPV and INPV. According to the NIA model, the average commercial sector
4-foot MPB T8 shipped in 2012 has a lifetime of approximately 6 years;
in 2042, the average lifetime is approximately 7 years.
NEMA also commented that DOE overlooked the trend toward more
lighting controls and occupancy sensors in the commercial sector and,
therefore, did not account for this effect in slowing shipment growth
and reducing potential energy savings. NEMA asserted that this
highlights the flaw in the current rulemaking approach (e.g.,
considering lamps instead of lighting systems). (NEMA, No. 81 at p. 14)
In response, DOE researched the issue of lighting controls and how
their deployment may affect the potential energy savings from more-
efficient lamps. DOE agrees that lighting controls are penetrating the
commercial buildings sector and as these technologies advance, building
managers seek to control costs, and more recent commercial building
energy codes are adopted. DOE's research suggested this trend is almost
entirely in the new construction and major renovation market segments.
A 2003 study suggested such controls are already common to roughly 60
percent of newly-constructed commercial square footage.\36\ DOE has
determined that the impacts of lighting controls are captured by the
operating-hours data derived from CBECS and employed in DOE's analysis.
However, as NEMA pointed out, given the additional time for the
continued market penetration of these controls throughout the analysis
period and the fact that buildings larger than 5,000 square feet
require automatic shutoff controls to be in compliance with the most
recent versions of the most referenced energy codes,\37\ higher
penetration rates are possible in the future. Therefore, to evaluate
the potential increased penetration of lighting controls, DOE conducted
a sensitivity analysis in which it estimated that all new commercial
building floor space after 2012 featured automated lighting controls,
such as occupancy sensors and scheduling systems.
---------------------------------------------------------------------------
\36\ DiLouie, Craig, ``Lighting Controls: Current Use, Major
Trends and Future Direction,'' Lighting Controls Association (2003).
\37\ See, for example, http://resourcecenter.pnl.gov/cocoon/morf/ResourceCenter/article/1566. (Last accessed June 16, 2009).
---------------------------------------------------------------------------
Next, DOE estimated the reduced operating hours due to these
lighting controls based on industry references. A Lighting Research
Center study on savings potential from occupancy sensors found a range
of 17 percent to 60 percent, depending on the application and tenant
behavior.\38\ This finding was in line with other industry estimates.
For its analysis, DOE assumed the midpoint of these findings (38.5
percent) as the energy savings achieved by new commercial buildings
employing lighting controls. DOE then reduced commercial operating
hours by the product of the energy savings, increase in commercial
square footage with lighting controls, and the average proportion of
the lighting market serving newly-constructed commercial buildings over
the analysis period. Based on these inputs, DOE calculated
approximately a 0.5 percent decline in national energy savings and an
average reduction in shipments of 0.5 percent over the analysis period.
Although this reflects a relatively small impact, DOE considered this
information in weighing the economic justification of the final rule.
See TSD chapter 11 for more details on the lighting controls
sensitivity analysis.
---------------------------------------------------------------------------
\38\ VonNeida, Bill; Maniccia, Dorene; Tweed, Alan, An Analysis
of the Energy and Cost Savings Potential of Occupancy Sensors for
Commercial Lighting Systems, Lighting Research Center and
Environmental Protection Agency (August 2000).
---------------------------------------------------------------------------
8. Residential Installed GSFL Stock
In the April 2009 NOPR, DOE allotted a portion of the 4-foot MBP
installed stock in 2012 to the residential sector. To model this, DOE
chose the representative system as a 40W T12, 4-foot MBP lamp on a
magnetic low-ballast-factor ballast. 74 FR 16920, 16942-16943 (April
13, 2009). DOE
[[Page 34120]]
received comments on its residential sector analysis for the GSFL NIA.
These comments are discussed below.
NEMA stated that DOE's analysis overlooked the fact that a small
portion of the residential installed base is already composed of T8
lamps, thereby resulting in an overstatement of energy savings. NEMA
stated that fixture manufacturers have begun to sell more T8 fixtures
for the residential sector and that one luminaire manufacturer reported
sales in the sector are currently split evenly between T8 and T12
fixtures. (NEMA, No. 81 at p. 8)
DOE acknowledges that in there is some present migration to T8
lamps in the residential sector. However, DOE also believes that the
vast majority of the installed GSFL stock in the residential sector is
T12 lamps. This view was communicated in public meetings, comments, and
manufacturer interviews, as noted in the April 2009 NOPR. 74 FR 16920,
16942 (April 13, 2009). For example, in earlier comments, NEMA stated
that the residential sector is projected to use more than 75 percent of
all 4-foot medium bipin T12 lamps sold by 2012 and this level would be
expected to persist, given that the 2000 Ballast Rule allows continued
use of the most common residential magnetic ballast. (NEMA, No. 21, at
p. 20; OSI, Public Meeting Transcript, No. 20 at p. 276) DOE's
estimates are roughly in line with this estimate. Furthermore, DOE's
approach is consistent with a 2008 PG&E study that assumed, based on
discussions with fixture manufacturers and distributors, all current
residential fixtures were T12 systems.\39\ Based on these comments,
interviews, and its own research, DOE chose to analyze the 4-foot
medium bipin T12 lamp as the representative system in the residential
sector. Taken together, PG&E's study and the public comments DOE
received do not compel a change in this approach. However, DOE does
assume and account for rapid migration to T8 lamps in the residential
sector in the base case, reflecting the trend noted by NEMA. For
example, in the base case, DOE assumes the stock of 4-foot medium bipin
T8 lamps in the residential sector will grow more than 10-fold in the
first decade after the effective date, or roughly at a 28-percent
compounded annual growth rate. Therefore, DOE has retained its
methodology in this respect.
---------------------------------------------------------------------------
\39\ ''Codes and Standards Enhancement (CASE) Initiative for
PY2008: Title 20 Standards Development,'' Analysis of Standards
Options for Linear Fluorescent Fixtures (Prepared for PG&E by ACEEE,
Lighting Wizards, and Energy Solutions). (Last modified May 14,
2008)
---------------------------------------------------------------------------
EEI commented that 34W T12 lamps are being sold now in hardware
stores for the residential market, and, therefore, DOE should not
assume that the entire residential market is composed of 40W T12 lamps.
Southern California Edison commented that only about 25 percent of T12
lamps are 40W (DOE's baseline lamp) in California. On the other hand,
GE commented that the overwhelming majority of GSFL in the residential
market are 40W lamps. (EEI, Public Meeting Transcript, No. 38.4 at p.
222; Southern California Edison, Public Meeting Transcript, No. 38.4 at
pp. 188-189; GE, Public Meeting Transcript, No. 38.4 at p. 189)
DOE acknowledges that some 34W T12 lamps may be sold to residential
consumers. Therefore, DOE has revised its residential 4-foot T12
market-share matrix to reflect this effect. In addition, DOE revised
its 4-foot T12 market-share matrices in both the commercial and
residential markets to better reflect confidential manufacturer survey
data, as it relates to triphosphor and halophosphor shipment
categories. As a result of these two changes, DOE now assumes that in
the 2012 base case, 8 percent of 4-foot T12 lamp shipments in the
residential sector are 34W, and 92 percent are 40W (down from 100
percent in the April 2009 NOPR). Overall, for this final rule, DOE
allocated 90 percent (up from 67 percent) of the commercial 4-foot T12
market to 34W lamps and 10 percent to 40W.
9. GSFL Lighting Expertise Scenarios
In the April 2009 NOPR, DOE considered two sets of standards-case
scenarios for GSFL shipments: (1) Roll-up and Shift scenarios; (2) High
and Market Segment-Based Lighting Expertise scenarios. 74 FR 16920,
16967-16968 (April 13, 2009). The Roll-up and Shift scenarios address
the issue of whether consumers who currently purchase lamps with
efficacies that exceed (not just meet) the minimum standard would be
likely to shift to even higher efficacy lamps in the face of amended
standards. These scenarios and the comments DOE received on them are
described below. For further details on the scenarios DOE analyzed and
developed, see TSD chapter 10.
For the April 2009 NOPR, DOE modeled the Lighting Expertise
scenarios that analyzed the lamp and ballast purchase decisions
consumers are likely to make when required to purchase higher-efficacy
lamps. DOE analyzed these scenarios because how consumers respond to
this situation could substantially affect the potential energy savings
and NPV that will result from amended standards. For example, to
maintain lumen output with a new higher-efficacy lamp, some consumers
may select a reduced-wattage lamp to replace a less-efficacious
predecessor. Others may simply replace the lamp with one of the same
wattage, not make any other adjustments, and accept higher light
output. For GSFL, which operate on ballasts, consumers may also choose
to run the higher-efficacy lamps on lower-ballast-factor ballasts. To
the extent that lower ballast factors (BF) can achieve the appropriate
lumen output, DOE incorporated them into the technology choices facing
consumers.
The Lighting Expertise scenarios estimate the extent to which
consumers in the standards case may migrate to energy-saving, reduced-
wattage lamps, or, when reduced-wattage lamps are not available or
feasible, pair the new lamps with a lower-BF ballast (i.e., ballast
factor ``tuning''). With the results of this analysis, DOE developed
two standards-case scenarios called the ``High'' and ``Market Segment-
Based'' Lighting Expertise scenarios. This set of scenarios
characterizes the likelihood consumers will maintain equivalent light
output upon the purchase of a new higher-efficacy lamp or accept higher
lighting levels. In the High Expertise scenario, consumers who can
maintain lumen levels, do so. Conversely, in the Market Segment-Based
scenario, DOE assumes only a percentage of consumers will have the
expertise, based primarily on their market segment and purchase event,
to make this energy savings decision.
In general, NEMA supported the modeling of the Market Segment-Based
Lighting Expertise scenario as the more realistic outcome of amended
energy conservation standards. NEMA stated that despite an increase in
efficacy, triphosphor lamps (particularly those at TSL4 and TSL5) will
not save consumers any energy, because the lamps will be the same
wattage as those they replace (with consumers simply realizing higher
lighting levels). (Philips, Public Meeting Transcript, No. 38.4 at pp.
253-254; GE, Public Meeting Transcript, No. 38.4 at pp. 256-7; NEMA,
No. 81 at p. 19) NEMA also commented that original equipment
manufacturer (OEM) sales data indicates that roughly 90 percent of OEM
luminaires (used in the fixture replacement, renovation, and new
construction markets), are shipped with ballasts with a normal ballast
factor. Therefore, NEMA commented, DOE's estimate of consumers with
high expertise for new construction and
[[Page 34121]]
renovation in the commercial sector (69 percent and 78 percent,
respectively) are likely overstated and should probably be closer to
what it estimates for the fixture replacement (34 percent) market.
(OSI, Public Meeting Transcript, No. 38.4 at pp. 233-235, NEMA, No. 81,
pp. 15-16)
In response to the comments it received, DOE conducted further
research and interviews on this issue. Specifically, DOE reevaluated
its assumptions based on confidential sales channel data on instant-
start electronic T8 ballast sales that DOE received. The data were
categorized by ballast type (standard or high-efficiency), ballast
factor, and sales channel. OEM sales, which represent ballasts
generally sold to fixture manufacturers, best match the fixture
replacement, renovation, and new construction purchase events in DOE's
analysis.
While the OEM sales data suggest, as NEMA noted, that most ballasts
shipped for new fixtures have normal ballast factors, DOE does not
believe such a distribution will necessarily characterize the lamp/
ballast market in the standards case for the following reasons. First,
the current distribution of ballast factors cannot be assumed to be
predictive of the standards-case distribution. As more efficient lamps
are introduced, a key variable--lumen output--in the utility of
fixtures will have changed, all other things being equal. If, in the
standards case, fixture OEMs were agnostic to ballast factor and
continued to purchase the same distribution of high, normal, and low
ballast factors, they would be altering and perhaps jeopardizing this
utility the consumer derives from their product. Because fixtures are
often designed and marketed for a typical lumen output, DOE does not
believe it is likely that OEMs would be disinterested in the light
output of their product in the standards case. This is reinforced by
the emphasis on the cost of ownership estimates provided by fixture
manufacturers in their specifications sheets and marketing materials.
Given higher-efficacy lamps, DOE believes fixture manufacturers will
continue to market energy savings as before, which will require pairing
reduced-wattage lamps (if sold with the fixture) or low BF ballasts
with their fixtures.
Next, discussions with fixture manufacturers and DOE's product
research indicate fixture manufacturers have the flexibility to meet
the demand of their end-users. There are no inherent substitutability
issues that would pose obstacles in migrating from normal ballast
factor to a low ballast factor. In interviews, fixture manufacturers
communicated their desire and that of their customers to ``match''
lumens--i.e., not over-light or under-light relative to the system
being replaced. For example, one fixture manufacturers noted that it
was common for them to replace three-lamp fixtures with two-lamp
fixtures.
Manufacturers stated during the public meeting that the commercial
sector is mostly characterized by a high level of lighting
sophistication. (Philips, Public Meeting Transcript, No. 38.4 at pp.
239-240) For all of these reasons, DOE believes that fixture OEMs would
be likely to consider lower BF ballasts, if more-efficacious lamps were
required due to standards. Therefore, DOE decided not to change its
lighting expertise assumptions for this final rule and continues to use
the results of its analysis to characterize the Market-Segment-Based
Lighting Expertise scenario. However, whereas DOE believes it has
modeled market behavior which is consistent with the available
research, DOE acknowledges the uncertainty in these estimates, and,
therefore, modeled a sensitivity scenario in which it assumed that 34
percent (as recommended by NEMA) of consumers in the new construction
and renovation markets migrate to lower-ballast-factor ballasts or low-
wattage lamps. Generally, this sensitivity scenario reduces energy
savings and NPV by approximately 20 percent and 25 percent,
respectively (depending on the TSL and scenario). NPV and NES remain
highly positive. See TSD chapter 11 for results of this sensitivity
analysis.
In the April 2009 NOPR, DOE characterized residential consumers as
having low lighting expertise in the Market-Segment-Based Lighting
Expertise scenario and assumed 0 percent of these consumers would
migrate to lower-BF ballasts or lower-wattage lamps in this standards-
case scenario. 74 FR 16920, 16968 (April 13, 2009). ASAP commented that
the residential consumer's expertise, or lack thereof, is not as
relevant as what is on the store shelf and what is on sale. Therefore,
ASAP argued, 0 percent choosing a lower BF ballast or reduced wattage
is likely not accurate for fixture replacement in the residential
sector. (ASAP, Public Meeting Transcript, No. 38.4 at pp. 236-237)
DOE reiterates that how consumers behave in this respect is highly
uncertain. What is on sale in the store clearly has an effect, but to
assert that it is the only determinate would be to disregard the impact
of consumer choice. Additionally, what is on sale depends largely on
the expertise of the agent deciding what the store should stock, and
how responsive this agent is to consumer demand. As discussed in the
April 2009 NOPR, because of the uncertainty around this issue DOE
decided to consider both the High and Market Segment-Based Lighting
Expertise scenarios. 74 FR 16920, 16967-68 (April 13, 2009). With these
scenarios, DOE attempts to capture this range of potential impacts,
with the Market Segment-Based scenario characterizing the lower bound.
DOE decided for this final rule to continue to assume, in the Market
Segment-Based lighting expertise scenario, that 0 percent of
residential fixture replacement purchases will pair lower ballast
factors with higher-efficacy lamps, or purchase reduced-wattage lamps.
In contrast, the High Lighting Expertise scenario is meant to represent
the upper bound of impacts and assumes that 100 percent of residential
decision-makers have high lighting expertise.
10. IRL Product Substitution Scenarios
In the April 2009 NOPR, DOE modeled two sets of standards-case
scenarios for IRL: Shift/Roll-up and Product Substitution/No Product
Substitution. 74 FR 16920, 16969-70 (April 13, 2009). Similar to GSFL,
the Shift/Roll-up scenarios consider whether consumers purchasing lamps
with efficacies that exceed (not just meet) the minimum standard would
be likely to shift to even higher efficacy lamps in the face of amended
standards. In the Product Substitution scenario, DOE assumed consumers
purchasing covered IRL in the base case do not necessarily continue to
purchase regulated IRL in the standards case. Accordingly, DOE modeled
a shift to both exempted BR lamps (namely the 65W BR30 lamp) and to R-
CFL in the standards case. In the ``No Production Substitution''
scenario, DOE assumed consumers who purchase covered IRL technology in
the base case continue to purchase covered IRL technology in the
standards case (i.e., the total number of installed covered IRL in the
base case is the same as that in the standards case throughout the
analysis period). In this scenario, DOE did not model any additional
shift in the standards case to non-regulated reflector technologies.
For more information about the IRL standards-case scenarios, see
chapter 10 of the NOPR TSD.
DOE received several comments on the merits of modeling the Product
Substitution and No Product Substitution scenarios. ASAP and the
Alliance to Save Energy commented that DOE should model migration to R-
CFL and migration to exempt BR lamps
[[Page 34122]]
separately in order to better determine the effects of standards. ASAP
suggested that DOE's decision to simultaneously model R-CFL and BR
lamps obscured standards-case impacts because it combined two
offsetting effects-migration to BR lamps, which would decrease energy
savings, and migration to R-CFL, which would increase energy savings.
(ASAP, Public Meeting Transcript, No. 38.4. at p. 241; Alliance to Save
Energy, Public Meeting Transcript, No 38.4. at pp. 243-244). ACEEE and
ADLT commented that because DOE intends to cover previously-exempted
lamps in a separate rulemaking, it should eliminate or greatly reduce
modeled migration to these lamps in the standards case. (ACEEE, No. 76
at p. 6, ADLT, No. 72 at p. 4) Philips also commented that DOE's
assumption in the No Product Substitution scenario--that consumers who
purchase covered IRL in the base case will continue to do so in the
standards case--is incorrect because standards will increase the cost
of covered IRL. This increase will tend to accelerate the penetration
of competing technologies, which the No Product Substitution scenario
fails to incorporate. (Philips, Public Meeting Transcript, No. 38.4 at
p. 239)
First, DOE notes that currently exempted BR lamps, which are not
included in the current rulemaking but are largely at issue in this
discussion, may be analyzed for energy conservation standards in a
separate rulemaking. At this time, DOE cannot predict what minimum
efficacy requirements, if any, may be established for BR lamps.
Therefore, it is impossible to determine how lamps exempted from this
rulemaking (BR lamps) will compare in cost and efficacy to those IRL
covered by today's final rule. As a result, there is a great deal of
uncertainty in estimating the number of consumers likely to migrate to
BR lamps. For this very reason, DOE maintains the following two
scenarios. In the first scenario, no migration to the exempted 65W BR
lamp is modeled (representative of a situation in which the exempted
lamps are regulated at the same efficacy level as those IRL in this
rulemaking) and only migration to R-CFL occurs. In the second scenario,
DOE models the same migration to the 65W BR lamp as in the NOPR
(representative of a situation in which the exempted lamps remain
unregulated).
However, DOE agrees that modeling the two separate offsetting
standards-case impacts (migration to R-CFL and migration to the 65W BR
lamp together) conflates two variables that may be more illustrative
when modeled separately. Therefore, for this final rule, DOE is
modifying what was called the Product Substitution scenario in the
April 2009 NOPR and by dividing it into two scenarios and renaming them
the ``R-CFL Product Substitution'' and ``BR Product Substitution''
scenarios, respectively. In the R-CFL Product Substitution scenario,
DOE models migration to only R-CFL in response to standards (for the
reasons addressed in the comments and responses above). Similarly, in
the BR Product Substitution scenario, DOE models migration only to BR
lamps. DOE believes this approach best isolates the potential energy
savings impacts of migration to the two different technologies. DOE has
maintained its approach of modeling incrementally greater migration to
R-CFL and BR lamps for higher TSLs in these scenarios; it also
maintained the magnitude of these increases. In consideration of
Philips's comment, DOE is no longer analyzing the ``No Product
Substitution Scenario.'' DOE received several comments on the merits of
modeling the ``No Product Substitution'' scenario for determining
manufacturer impacts due to standards. These comments are discussed in
section V.F.
Philips commented that it would be unlikely for the commercial
sector to migrate to BR lamps in the standards case because the sector
is driven by life-cycle costs (which are generally higher for BR lamps)
and because most commercial entities have high lighting knowledge. As
for the residential sector, Philips noted that BR lamps are not
suitable for outdoor applications, limiting the pool of applications
for which BR lamps are suitable to be potential replacements for
covered IRL in the standards case. (Philips, Public Meeting Transcript,
No. 38.4 at p. 239)
DOE agrees that PAR lamps may be more suitable for outdoor
applications than the exempted BR lamps. However, as noted in the April
2009 NOPR and based on residential estimates that 40 percent of all
residential IRL are PAR lamps,\40\ DOE believes that a considerable
portion of residential PAR lamps are used in non-outdoor applications
that are suitable for both PAR and the exempted BR lamps. 74 FR 16920,
16970 (April 13, 2009). Thus, DOE maintains for this final rule that
some residential consumers may move to exempted IRL in the standards
case, although a great deal of uncertainty remains. For this reason DOE
models a separate scenario which reflects no migration to the 65W BR
lamps. Regarding NEMA's assertion that commercial consumers are more
sensitive to life-cycle cost, DOE agrees that the penetration rates of
less-cost-effective lamps will be lower in the commercial sector than
the residential sector. In the April 2009 NOPR, DOE took this factor
into account in its analysis by using separate payback period-
penetration relationships for each sector. 74 FR 16920, 16963 (April
13, 2009). For the reasons discussed above, for this final rule, DOE
maintains the same migration to the 65W BR lamp as modeled in the April
2009 NOPR in the Product Substitution scenario.
---------------------------------------------------------------------------
\40\ New York State Energy Research and Development Authority,
Incandescent Reflector Lamps Study of Proposed Energy Efficiency
Standards for New York State (2006) (Last accessed Oct. 7, 2006).
Available at: http://www.nyserda.org/publications/Report%2006-07-Complete%20report-web.pdf.
---------------------------------------------------------------------------
IALD commented that DOE did not consider all the possible
substitution scenarios in the April 2009 NOPR. For example, consumers
may switch to fixtures with exempted AR (aluminum reflector) and MR
(multi-faceted reflector) lamps because of the lower upfront cost, or
lamp manufacturers may choose to produce 39W lamps (outside the scope
of coverage of DOE's regulations). (IALD, No. 71 at p. 2, 3) In
response, DOE believes that a migration to AR and MR lamps is unlikely
to have a material impact on energy savings due to the unique
characteristics (e.g., lamp size, voltage, or socket) of these lamps
and because they generally cannot be interchanged with other
reflectorized lamps.\41\ In addition, DOE does not expect a significant
migration to 39W lamps as a result of standards for the following
reason. If these lamps were manufactured at lower efficacies without
halogen technology (thereby circumventing the standard), they would
likely have much lower lumen output than needed to meet the demand of
consumers of the existing lamp, thereby making it an unacceptable
replacement.
---------------------------------------------------------------------------
\41\ Lighting Resource Center, NLPIP Lighting Answers: Volume 6,
Issue 2 (Sept. 2002) (Last accessed: June 21, 2009). Available at:
http://www.lrc.rpi.edu/programs/nlpip/lightingAnswers/mr16/reflectorizedLamps.asp.
---------------------------------------------------------------------------
For more information about the R-CFL Product Substitution and BR
Product Substitution standards-case scenarios, see chapter 10 of the
TSD.
11. Discount Rates
In its analyses, DOE multiplies monetary values in future years by
a discount factor in order to determine its present value. DOE
estimated national impacts using both a 3-percent and a 7-percent real
discount rate as the average real rate of return on private investment
[[Page 34123]]
in the U.S. economy. NRDC argued that DOE should use a 2-percent or 3-
percent discount rate and should not apply it to the value of carbon
emissions. (NRDC, No. 82 at p. 5).
In response, DOE notes that it follows the guidelines on discount
factors set forth by the Office of Management and Budget (OMB).
Specifically, DOE uses these discount rates in accordance with guidance
that OMB provides to Federal agencies on the development of regulatory
analysis (OMB Circular A-4 \42\ (Sept.17, 2003), particularly section
E, ``Identifying and Measuring Benefits and Costs''). Accordingly, DOE
is continuing to use 3-percent and 7-percent real discount rates for
the relevant calculations for this final rule. Furthermore, DOE
continues to report both undiscounted and discounted values of carbon
emission reductions. DOE believes this allows for consideration of a
range of policy perspectives, one of which is the view that a reduction
in emissions today is more valuable than one in thirty years.
---------------------------------------------------------------------------
\42\ Available at: http://www.whitehouse.gov/omb/assets/regulatory_matters_pdf/a-4.pdf.
---------------------------------------------------------------------------
E. Consumer Sub-Group Analysis
In analyzing the potential impact of new or amended standards on
commercial customers, DOE evaluates the impact on identifiable groups
(i.e., sub-groups) of customers, such as different types of businesses
that may be disproportionately affected by a National standard level.
In the April 2009 NOPR, DOE identified low-income consumers,
institutions of religious worship, and institutions that serve low-
income populations, and consumers of T12 electronic ballasts as lamp
consumer sub-groups that could be disproportionately affected, and
examined the impact of proposed standards on this group. 74 FR 16920,
16971-72 (April 13, 2009). DOE determined the impact on this consumer
sub-group using the LCC spreadsheet model. DOE did not receive comments
on sub-groups chosen to analyze nor on the assumptions applied to those
sub-groups. DOE relied on the same methodology outlined in the April
2009 NOPR for the final rule analysis. The results of DOE's LCC sub-
group analysis are briefly summarized in section VII.C.1.b and
described in detail in chapter 12 of the TSD.
F. Manufacturer Impact Analysis
DOE performed a manufacturer impact analysis (MIA) to estimate the
financial impact of energy conservation standards on manufacturers of
GSFL and IRL, and to assess the impact of such standards on employment
and manufacturing capacity. DOE's MIA methodology is discussed in
detail in the April 2009 NOPR (74 FR 16920, 16972-77 (April 13, 2009))
and in chapter 13 of the TSD. DOE conducted the MIA for GSFL and IRL in
three phases. Phase 1 (Industry Profile) consisted of preparing an
industry characterization, including data on market share, sales
volumes and trends, pricing, employment, and financial structure. Phase
2 (Industry Cash Flow Analysis) focused on the industries as a whole.
In this phase, DOE used the Government Regulatory Impact Model (GRIM)
to prepare an industry cash-flow analysis for each industry (GSFL and
IRL). Using publicly-available information developed in Phase 1, DOE
adapted the GRIM's generic structure to perform an industry cash flow
analysis for manufacturers of GSFL and IRL both with and without energy
conservation standards. In Phase 3 (Sub-Group Impact Analysis) DOE
conducted interviews with manufacturers representing the majority of
domestic GSFL and IRL sales. During these interviews, DOE discussed
engineering, manufacturing, procurement, and financial topics specific
to each company and obtained each manufacturer's view of the
industries. The interviews provided valuable information DOE used to
evaluate the impacts of an energy conservation standard on manufacturer
cash flows, manufacturing capacities, and employment levels. DOE then
finalized its assumptions for the cash flow analysis and described the
qualitative impacts on manufacturers due to amended energy conservation
standards.
The GRIM inputs consist of data regarding the cost structures for
GSFL and IRL industries, shipments, and revenues. These include
information from many of the analyses described above, such as retail
prices from the product price determination analysis and shipments
forecasts from the NIA.
For the final rule, DOE incorporates a number of changes to GRIM
inputs that were made in the other analyses for this rulemaking. The
GRIM uses the medium prices in the product price determination analysis
to calculate the manufacturer production costs (MPCs) for each
equipment class at each TSL. By multiplying the production costs by
different sets of markups, DOE derives the manufacturer selling prices
used to calculate industry revenues. Following the NOPR, DOE updated
its product price determination analysis using the CPI. DOE uses these
updated prices in the GRIM for the final rule.
The GRIM estimates manufacturer revenues based on total-unit-
shipment forecasts and the distribution of these shipments by efficacy.
Changes in the efficacy mix at each standard level are a significant
driver of manufacturer finances. For the final rule analysis, DOE
updated the GSFL and IRL MIA results based on the total shipments and
efficacy distribution estimated in the final rule NIA.
As described in section V.D.10, DOE updated the substitution
scenarios in the IRL GRIM. For the April 2009 NOPR, DOE modeled a set
of standards-case IRL scenarios called the ``Product Substitution'' and
``No Product Substitution'' scenarios. 74 FR 16920, 16969-70 (April 13,
2009). In the Product Substitution scenario, DOE assumed consumers
purchasing covered IRL in the base case do not necessarily purchase
covered IRL in the standards case. DOE modeled a shift to both exempted
BR R-CFL in the standards case. In the ``No Production Substitution''
scenario, DOE assumed consumers who purchase covered IRL technology in
the base case continue to purchase covered IRL technology in the
standards case.
In response to comments by ASAP, for today's final rule, DOE
modified the IRL shipments scenarios. The Product Substitution is
modified by dividing it into two and renaming them the ``R-CFL Product
Substitution'' and ``BR Product Substitution'' scenarios. In the R-CFL
Product Substitution scenario, DOE models migration to only R-CFL in
response to standards. Similarly, in the BR Product Substitution
scenario, DOE models migration only to BR lamps. For further detail in
DOE's modification of the Product Substitution scenarios and its
response to ASAP's comments regarding this issue, see section V.D.10 of
today's notice.
For the April 2009 NOPR, DOE determined the total capital
conversion costs that would be required for the IRL industry to convert
existing production to meet demand at each TSL. For the NOPR, DOE
scaled the IRL capital conversion costs using the Existing Technologies
base-case shipments to account for the decline in shipments before
standards become effective. DOE used the same capital conversion costs
for all scenarios. For today's final rule, DOE updated the capital and
product conversion costs to 2008$ using the PPI for NAICS code 335110
(electric lamp bulb and part manufacturing) for both GSFL and IRL.
Additionally, for the final rule, DOE is using two sets of capital
conversion costs. For all IRL scenarios in the Existing Technologies
base case, DOE scales its updated
[[Page 34124]]
estimate of the capital conversion costs using the Existing
Technologies base-case shipments. For all IRL scenarios in the Emerging
Technology base case, DOE scales its updated estimate of the capital
conversion costs using the Emerging Technologies base-case shipments.
Scaling the IRL capital conversion costs for each base case results in
lower capital conversion costs in the Emerging Technologies base case
than in the Existing Technologies base case. DOE believes this approach
to scaling capital conversion cost with shipments more accurately
captures the capital costs that the IRL industry could incur in each
scenario.
For today's final rule and in response to comments, DOE developed a
shortened lifetime scenario for IRL to investigate the effects of
shorter lamp lifetime at higher TSLs. In this sensitivity scenario, DOE
changes the lifetime and prices of the higher-efficacy representative
lamps at TSL 4 and TSL 5. These changes in characteristics also
simulate certain lamps becoming a commodity product in response to
energy conservation standards. These alterations cause higher shipments
in the standards case and result in reduced negative impacts on the
industry. See section VI.C.1 of today's final rule for an explanation
of the lifetime sensitivity scenario. For the INPV results in the
lifetime sensitivity scenario, see section VII.C.2.a of today's notice
and chapter 13 of the TSD.
For the April 2009 NOPR, DOE used a set of markup scenarios to
calculate manufacturer selling prices in order to estimate industry
revenues in its cashflow analysis. 74 FR 16920, 16977 (April 13, 2009).
In both the IRL and GSFL GRIM, DOE modeled a Flat Markup scenario. This
scenario assumed that the cost of goods sold for each lamp is marked up
by a flat percentage to cover standard selling, general, and
administrative (SG&A) expenses, research and development (R&D)
expenses, and profit. To derive this percentage, DOE evaluated
publicly-available financial information for manufacturers of lighting
equipment. For today's final rule, DOE continues to model a Flat Markup
scenario in both the IRL and GSFL GRIM.
For GSFL only, DOE also modeled a Four-Tier markup scenario for the
April 2009 NOPR. 74 FR 16920, 16977 (April 13, 2009). In this scenario,
DOE assumed that the markup on lamps varies by efficacy in both the
base case and the standards case. DOE used information provided by
manufacturers, the medium prices in its product price determination,
and industry average gross margins to estimate markups for GSFL under a
four-tier pricing strategy in the base case. In this scenario premium
products have a higher markup at each increasing tier of efficacy
(i.e., a higher markup for each increasing phosphor series). In the
standards case, DOE modeled the situation in which a reduction in
product portfolios squeezes the margins of higher-efficacy products as
they are ``demoted'' to lower-relative-efficacy-tier products.
For today's final rule, DOE incorporates additional assumptions in
its Four-Tier markup scenario for both the base case and standards
case. For the final rule, DOE continues to model a base-case pricing
strategy in which each phosphor series earns a separate markup. However
these mark-ups are changing over time during the analysis period to
take into account commoditization of more-efficient lamps as they gain
market share. Depending on the product class of GSFL, the market share
of either 800 or 800 plus series lamps overtakes the market share of
700 series lamps. This capture of market share is fully realized at
later dates (between 2035 and 2040, depending on the base-case scenario
and product class). The original markups for 700, 800, and 800 plus
series lamps converge to a single, lower markup over time. The Four-
Tier markup standards case continues to ``squeeze'' the margins of
commoditized lamps, but the impacts are reduced because the margins are
already lowered in the base case. For an extensive explanation of the
revised Four-Tier markup scenario, see chapter 13 of the TSD.
During the NOPR public meeting OSI commented that the INPV results
for GSFL show that the manufacturer impacts were taken into
consideration in DOE's arrival at the appropriate proposed energy
conservation standard. However, the negative INPV results for IRL,
especially at the proposed TSL 4, indicated that the impact on
manufacturers was not considered in DOE's proposed energy conservation
standard for IRL (OSRAM/Sylvania, Public Meeting Transcript, No. 38 at
pp 284-286). Similarly, NEMA commented that DOE failed to give adequate
consideration to the negative INPV at TSL4 (NEMA, No. 81 at p. 4).
Philips added that the analysis for IRL showed a large increase in NPV
at TSL 3, the first TSL to require exclusively infrared technology. The
benefit to consumers moving past TSL 3 was incremental whereas the
impacts on manufacturers were worse at TSL 4 than TSL 3 (Philips,
Public Meeting Transcript, No. 38 at pp 292-293).
For the April 2009 NOPR, DOE presented the results of the MIA and
its determination of proposed energy conservation standard levels for
GSFL and IRL based on the EPCA criteria. Specifically, EPCA provides
that any such standard for a covered product must be designed to
achieve the maximum improvement in energy efficiency that the Secretary
determines is technologically feasible and economically justified and
that results in significant conservation of energy. (42 U.S.C.
6295(o)(2)(A) and (3)(B)) In determining whether a standard is
economically justified, the Secretary must determine whether the
benefits of the standard exceed its burdens, to the greatest extent
practicable, considering the seven factors. (42 U.S.C.
6295(o)(2)(B)(i)) DOE believes that the industry commenters took a
contrasting approach to the agency's analysis under the relevant
statutory criteria by attempting to frame the issue as one of comparing
incremental benefits to consumers relative to impacts on manufacturers
at in moving from TSL3 to TSL 4. Instead, DOE interprets the proper
application of statutory criteria, to require atop-down approach, which
implies DOE must first analyze the TSL that would save the maximum
amount of energy. If that TSL is not economically justified (i.e., the
benefits do not exceed the burdens), DOE must then analyze the TSL with
the next greatest energy savings until it reaches a TSL that it
determines is economically justified and technologically feasible.
Impacts on manufacturers and consumers are specific criteria that DOE
must consider in its analysis. (42 U.S.C. 6295 (o)(2)(B)(i)(I)) In the
April 2009 NOPR, DOE found that TSL 5 was not economically justified
for IRL. DOE then analyzed TSL 4 and found that it was economically
justified and technologically feasible. 74 FR 16920, 17018 (April 13,
2009).
For the April 2009 NOPR, DOE considered the negative impacts on
INPV for IRL manufacturers at TSL 4. However, the Secretary reached the
initial conclusion that the benefits of energy savings, emissions
reductions, the positive net economic savings to the Nation, and
positive life-cycle cost savings at TSL 4 would outweigh the
potentially large reduction in INPV for manufacturers. 74 FR 16920,
17018 (April 13, 2009). For the final rule, DOE continues to base its
determination of whether a standard level is economically justified
using all seven EPCA factors. While the impacts on consumers and
manufacturers are both considered in making this
[[Page 34125]]
determination, none of these factors are reviewed in isolation.
Although DOE gathers information on each of the seven statutory factors
individually, the Secretary must ultimately consider the seven factors
collectively in determining whether a standard is economically
justified.
In its comments on DOE's April 2009 NOPR, ADLT stated that DOE's
use of longer lifetimes at TSL 4 and TSL 5 is counter to manufacturer
interviews. According to ADLT, because longer lamp lifetimes would have
a significant impact on IRL shipments, the MIA overstates the impact on
manufacturers. (ADLT, No. 72 at p. 3)
DOE acknowledges that lifetimes of analyzed lamps have a
significant impact on IRL shipments. For the April 2009 NOPR, DOE
presented its assumptions for lamp lifetimes and shipment projections.
74 FR 16920, 16956-57, 16959-65 (April 13, 2009). DOE also acknowledges
that shipments are a significant driver of INPV results, especially in
the IRL industry. To analyze the effects of lower lifetimes on IRL
shipments at TSL 4 and TSL 5, DOE included a lifetime sensitivity
analysis for today's final rule. The INPV results for the sensitivity
scenario show that reduced lamp lifetimes at TSL 4 and TSL 5
significantly reduce the negative impacts on IRL manufacturers. DOE
agrees with ADLT that the impacts on the IRL industry would be lower if
manufacturers reduced lamp lifetimes in response to the energy
conservation standards. See section VI.C.1 of today's final rule for an
explanation of the lifetime sensitivity scenario. For the INPV results
in the lifetime sensitivity scenario, see section VII.C.2.a of today's
notice and chapter 13 of the TSD.
The CA Stakeholders are concerned that DOE's analysis of the burden
on the GSFL industry may have focused primarily on the worst case
scenario, rather than on the more likely combination of scenarios. The
CA Stakeholders argue that if DOE were to average the impacts on GSFL
manufacturers in the 16 possible scenarios, the industry losses would
be less than half of the losses associated with the worst case scenario
(CA Stakeholders, No. 63 at p. 11).
In arriving at the energy conservation standards in this final
rule, DOE considered the full range of potential impacts on GSFL
manufacturers. To determine the range of potential impacts on GSFL
manufacturers, DOE performed an analysis which included 16 different
industry cash flow scenarios. These scenarios considered numerous
variables which influence the analysis (level of emerging technologies,
markup strategies, product substitution, consumer lighting expertise,
and product mix). To better explain the basis of its decision DOE
describes how it balanced the likelihood of the scenarios and the range
of uncertainty in arriving at today's standards. For a more detailed
explanation of how DOE arrived at its decision for today's final rule,
see section VII.D of today's notice.
All manufacturers expressed the view that the supply of standards-
compliant lamps would be constrained. OSI commented that the large,
negative INPV impacts for IRL manufacturers show that after the
effective date of the standard, only the current volumes of standards-
compliant lamps will be produced by manufacturers. (OSI, Public Meeting
Transcript, No. 38 at p. 286). Philips stated that there is not an
opportunity to invest in IRL because of negative impacts on
manufacturers at the proposed level and the limited time horizon of the
investment due to emerging technology. According to Philips, these
factors could cause the IRL industry to experience a capacity
constraint of HIR lamps (Philips, Public Meeting Transcript, No. 38 at
pp. 287-288). GE agreed that this rulemaking forces a decision upon
manufacturers in terms of whether to invest in a technology whose
market is expected to decline over time. This limited investment will
lead to a constrained IRL HIR lamp market (GE, Public Meeting
Transcript, No. 38 at pp. 292-293). Similarly, NEMA commented that TSL
4 or above is essentially unthinkable for the industry and would cause
capacity issues. NEMA added that TSL 3 or above for IRL would require
manufacturers to over-invest to increase capacity of HIR lamps that
will no longer be needed in a few years. NEMA believes these
investments, which may never be recovered, cannot be justified
financially and economically because of the diminishing market of
covered IRL as a result of emerging technology. (NEMA, No. 81 at pp. 5,
10)
In the April 2009 NOPR, DOE included the capital conversion costs
that would be required to meet the entire industry demand at each TSL.
74 FR 16920, 17001-02 (April 13, 2009). DOE based these estimates on
interviews with manufacturers that produce the vast majority of IRL for
sale in the United States. DOE obtained financial information through
these manufacturer interviews and aggregated the results to mask any
proprietary or confidential information from any one manufacturer.
These estimates were found to be consistent with financial ratios for
plant, property, and equipment reported in manufacturer financial
statements. For TSL 5, because some manufacturers did not provide
capital costs since they had no access to the needed technology, DOE
supplemented manufacturer information with information provided by a
supplier of coating technology. Therefore, DOE believes that the large
capital conversion costs identified are representative of the
expenditures that would be required for the industry to increase the
production of higher-efficacy lamps at each TSL. DOE also cited these
large capital conversion costs as a primary driver of the large,
negative impacts on INPV. 74 FR 16920, 17002-03 (April 13, 2009).
In the April 2009 NOPR, DOE acknowledged manufacturers' concern
about the potential for emerging technologies to further erode the IRL
market. 74 FR 16920, 17002-03 (April 13, 2009). DOE also noted that an
IRL standard would be unique because it would force investments in a
market that could shrink over the entire lifetime of the investment.
These large capital conversion costs continue to be a significant
driver of the large, negative INPV values.
DOE believes that the large, negative INPV results compared to the
industry value using the Emerging Technologies base case accurately
captures manufacturer concerns about the lack of a financial return
from large capital conversion in a shrinking market.
Philips commented that the capacity constraint would be worse at
TSL 4 than at TSL 3, even though both these TSLs involve HIR
technology. According to Philips, the additional time needed for the
manufacturing processes associated with IRL lamps that meet TSL 4 could
lead to additional capacity constraints because fewer products can be
produced after the effective date of the standards. (Philips, Public
Meeting Transcript, No. 38 at pp. 292-293)
DOE agrees that the INPV impacts at TSL 4 are larger than at TSL 3.
The production of improved infrared capsules is more time consuming
than the production of standard HIR lamps. The improvements to standard
HIR lamps lower the output of each coating machine because production
run would require additional cycle time for the coating process and
quality control. The additional capital conversion costs at TSL 4
include the additional production equipment required to meet industry
demand with a lower production output rate. DOE believes that there is
sufficient lead time for manufacturers to convert their existing
facilities to meet market demand with standards-compliant lamps.
Manufacturers could mitigate possible capacity constraints by
[[Page 34126]]
installing additional coaters, purchasing infrared burners from a
supplier, and using existing excess capacity.
The CA Stakeholders and ACEEE commented that DOE's capital
conversion and product conversion costs for IRLs should have addressed
the fact that massive investments in advanced IR technologies will
likely be happening absent standards. According to the CA Stakeholders,
due to great potential improvements and consumer preferences, IRL
manufacturers will already be making investments in advanced burner
technology to meet the EISA 2007 requirement for general service
incandescent lamps. These investments include coating machines and
coating technology that can be applied to both general service lamp
burners and reflector lamp burners. (CA Stakeholders, No. 63 at p. 27)
(ACEEE, No. 76 at p. 5)
DOE believes that the energy conservation standards set by today's
final rule are more stringent than the EISA 2007 requirements for
general service incandescent lamps in 2012, and, therefore, these GSIL
investments are not pertinent to the IRL analysis. The EISA 2007 GSIL
standards that are effective in 2020 are similar to the IRL energy
conservation standards for today's final rule. If manufacturers use the
same technology in 2020, improved capsule technology could be used to
reach prescribed GSIL efficacy levels. However, it is uncertain that a
similar pathway for GSIL will be used to reach the prescribed efficacy
levels in 2020 since emerging technologies may offer a better solution.
Because the GSIL regulation is effective eight years after the
effective date for today's IRL energy conservation standard and because
manufacturers will have already made investments for IRL, any GSIL
investments to meet the 2020 requirements will not impact the magnitude
of investments needed by the IRL industry to meet today's final rule.
OSI stated that an additional concern about the declining market
share of IRL due to emerging technology is that IRL are manufactured
mostly in the United States, whereas the alternative technologies are
not. The commenter argued that a standard that hastens the shift to
alternative technologies would have negative impacts on domestic
employment in the IRL industry. (OSI, Public Meeting Transcript, No. 38
at p. 286)
In response, DOE notes that in the April 2009 NOPR, DOE includes
two base-case scenarios which examine the employment impacts of energy
conservation standards. The Emerging Technologies base case models the
situation in which emerging technologies such as LED and CMH lamps take
an increasing share of covered IRL. Shipments of IRL are eroded in both
the Existing Technologies and Emerging Technologies scenarios by R-CFL
(a fully mature technology). In the Emerging Technology base case, IRL
shipments are replaced by CMH, LEDs, and other emerging technologies
that have the potential to replace a greater percentage of recessed can
fixtures. DOE treats the erosion of the IRL market as a base-case
issue, since the market decline is occurring without standards. In the
April 2009 NOPR and in today's final rule, DOE acknowledges that the
differential between employment levels in the Existing Technologies and
Emerging Technologies base cases is large. However, the impact caused
by standards is much less than the difference in employment between the
two base cases. In any scenario, energy conservation standards have a
small impact on the average employment levels in the IRL industry.
At the NOPR public meeting, GE expressed concern that the GSFL
energy conservation standards could shift production overseas. (GE,
Public Meeting Transcript, No. 38 at pp. 278-279)
DOE agrees that energy conservation standards will require
significant capital conversion costs that could cause manufacturers to
consider sourcing decisions, but DOE believes that many other factors
could mitigate the decision to relocate production facilities abroad in
response to amended standards. For example, the majority of GSFL are
produced domestically on high-speed lines. The large capital conversion
costs required at higher TSLs involve converting these existing high-
speed lines to ones capable of producing smaller-diameter lamps. While
these capital conversion costs are large, moving production outside the
United States would require additional costs to transport existing
production lines and to build a green field facility, none of which
would eliminate the cost to convert the lines for smaller-diameter
lamps. Furthermore, the highly-capitalized production process causes
the labor content of GSFL to be a relatively small portion of the
overall cost of each lamp. Because the vast majority of GSFL production
costs are material costs, the labor cost savings from moving abroad
would be relatively low. Most of the GSFL labor cost results from
skilled workers that monitor and control the production process. There
are relatively few unskilled workers in the production process, which
further reduces the labor cost savings from relocation. Instead, the
labor content of GSFL represents intellectual capital for GSFL
production, so this would present another hurdle that would need to be
addressed with relocation. A final mitigating factor that could prevent
relocation of domestic production is increased shipping costs. Higher
shipping costs, especially if production required oceanic freight,
would likely outweigh any labor cost savings. For further information
of conversion costs and possible employment impacts due to today's
energy conservation standards, see chapter 13 of the TSD.
While DOE describes the factors that could mitigate a decision by
U.S. manufacturers to relocate production facilities abroad due to
amended energy conservation standards, DOE also recognizes that access
to rare earth phosphors could also impact sourcing decisions. As
described in section VI.G, most of the current supply of rare earth
phosphors is controlled by China. A drastic change to export quotas or
tariffs could influence the sourcing decision of U.S. manufacturers
more significantly than amended energy conservation standards. If
export quotas continue to decrease, companies could decide to relocate
to China in order to gain access to the available rare earth phosphors
supply, regardless of the energy conservation standard. However, DOE's
direct employment conclusions do not account for the possible
relocation of domestic manufacturing to other countries as a result of
changes in export quotas or tariffs on materials used (e.g., rare earth
phosphors) because the potential for relocation is uncertain.
During the public meeting, Energy Solutions inquired if the IRL
analysis considered that emerging technology and other IRL replacements
are often made by the same manufacturers (Energy Solutions, Public
Meeting Transcript, No. 38, at pp. 288-289). The CA Stakeholders,
ACEEE, and NRDC commented that DOE's INPV analyses should consider the
positive impacts to lamp manufacturers associated with the increased
sales of the non-covered products resulting from standards. (CA
Stakeholders, No. 63 at p. 4) (ACEEE, No. 76 at p. 6) (NRDC, No. 82 at
pp. 4-5) The CA Stakeholders, ACEEE, and NRDC claimed the MIA impacts
are overstated because the IRL and GSFL products that might see a
reduction in shipment volume are generally made by the same
manufacturers who sell the emerging technologies that may see a
resulting increase in shipment volume. (CA Stakeholders, No. 63 at p.
7) (ACEEE, No. 76 at p. 6) (NRDC, No. 82 at pp. 4-5) Accordingly, the
CA
[[Page 34127]]
Stakeholders agreed with the petitioners'\43\ argument in appealing
that the Secretary must fully consider, ``the economic impact of the
standard on the manufacturers * * * of the products subject to such
standard.'' (42 U.S.C. 6295(o)(2)(B)(i)I). The CA Stakeholders stated
that because one of the impacts ``of the standard on the
manufacturers'' of IRL and GSFL products will be increased sales (at
higher markups) of exempt or non-covered lamps made by the same
manufacturers, the statutory language requires that these positive
impacts also be taken into account. Similarly, EEI commented that
manufacturer impacts should account for the lost sales of baseline
products as well as increased sales of high-efficiency products. (EEI,
No. 39 at p. 4)
---------------------------------------------------------------------------
\43\ (States of New York, Connecticut, New Jersey, and
California, Commonwealth of Massachusetts, City of New York, and
California Energy Commission) in the United States Court of Appeals
in a petition regarding DOE's Furnace Rulemaking (State of New York
v. U.S. Dep't of Energy, No. 08-0311 (2d Cir. filed January 17,
2008))
---------------------------------------------------------------------------
In response, the Emerging Technologies scenario describes how
emerging technologies may erode the market for covered products in the
base case, absent standards. The penetration of emerging technology
reduces the number of covered lamps sold in future years in the same
manner as a reduction in commercial floor space over time might reduce
demand for covered IRL and GSFL lamps. The level of base-case reduction
in lamp sales is independent of the energy conservation standard. The
Emerging Technologies base case has lower energy savings in the NIA and
lower base-case INPV in the GRIM, as compared to the Existing
Technologies scenario.
The situation described for the furnaces and boilers rulemaking
only exists for IRL in this rulemaking. In the furnaces and boilers
rulemaking, the MIA analysis captured the product switching from gas
furnaces to electric heat pumps induced by amended energy conservation
standards. 72 FR 65136, 65158-61 (Nov. 19, 2007). The analogous
situation for IRL occurs when the higher prices of covered lamps induce
sales of non-covered BR lamps and R-CFLs. This migration from covered
IRL to non-covered products was modeled in the April 2009 NOPR in the
Product Substitution scenario. 74 FR 16920, 16969-70 (April 13, 2009).
For the final rule, this situation was modeled in both the BR Product
Substitution scenario and the R-CFL Product Substitution scenario.
Thus, DOE modeled the impacts on the IRL industry from reduced sales of
covered IRL due to price effects. The difference in INPV of including
or excluding the sales of non-covered products was found to be small.
Including these sales in the GRIM is not a major driver of the INPV
results.
Instead, the larger declines in INPV in the Emerging Technologies
scenario (compared to the Existing Technologies scenario) are not due
to the exclusion of emerging technology sales from the analysis or to
the declining sales of covered products, since the covered products are
also declining in the base case. Instead, the larger impacts are caused
by the overinvestment in the standards-compliant technology. In the
Emerging Technologies scenario, manufacturers must invest in production
levels anticipated for 2012, but the sales of covered products
immediately begin to fall. In the base case, sales of covered products
also decline, but manufacturers do not need to make extraordinary
capital expenses. These extraordinary capital expenses cause the
industry's cash flow to decrease significantly in comparison to the
base case, causing an overall decrease of estimated INPV.
The CA Stakeholders claimed that by focusing on decreased sales of
the specific technology being regulated, DOE is interpreting the
statute to favor the status quo over more-efficient alternative
technologies that are not being specifically regulated. According to
the CA Stakeholders, there is nothing in the statue that limits DOE's
review to only consider the impacts on regulated IRL and GSFL. (CA
Stakeholders, No. 63 at p. 8) The CA Stakeholders recommended that DOE
should focus its analysis on the economic impact on lighting
manufacturers as a whole, rather than on the impacts of the specific
technology being regulated. (CA Stakeholders, No. 63 at p. 8)
Similarly, Earthjustice commented that the INPV results shown in the
MIA should be bounded around the corporation, not the profit center
that makes the covered products (Earthjustice, Public Meeting
Transcript, No. 38, at p. 295). Agreeing with Earthjustice, the
Appliance Standards Awareness Project stated that INPV impacts shown in
the MIA should be bounded around the corporation and added that the
difficulty in analyzing the impacts at the corporation level does not
remove DOE's obligation to do so (ASAP, Public Meeting Transcript, No.
38, at pp. 290-291 and pp. 295-297). EEI also commented that DOE should
not try to analyze the impacts of the lighting standard on all
operations of manufacturers, especially those with multiple product
lines and multiple global production facilities. EEI stated that such
an analysis would take too much time and could possibly delay the
issuance of a standard. (EEI, No. 39 at p. 4)
In response, DOE recognizes that the energy conservation standards
may induce sales of non-covered products which are in whole or in part
manufactured by the same manufacturers as the products covered by this
rulemaking. These sales will increase the revenues and possibly
increase the profits of the manufacturers that make covered IRL and
GSFL. To include these revenues and profits in the GRIM analysis
requires the same level of information about the product costs,
required investments to increase sales, and the profitability as
covered products. This information greatly increases both the
complexity and uncertainty of the analysis of the products covered by
this rulemaking. Much of this analysis is also outside the scope of
this rulemaking. However, understanding that this can be a major driver
of the GRIM results for some rulemakings, DOE attempted to bound the
potential impact of the product substitutions on the industry value.
For this reason, in the April 2009 NOPR, DOE ran the No Product
Substitution scenario in the GRIM analysis. For today's final rule, DOE
ran both the BR Substitution and the R-CFL Substitution scenarios. The
difference in impacts between the Product Substitution and No Product
Substitution scenarios represented the lost sales and profits to
manufacturers. The difference in industry value from including the
revenue from induced sales of BR lamps in the BR Product Substitution
scenario and excluding the revenue represents the potential benefits of
these sales to manufacturers of covered IRL. The difference in industry
value from including the revenue from induced sales of R-CFL lamps in
the R-CFL Product Substitution scenario and excluding the revenue
represents the potential benefits of these sales to manufacturers of
covered IRL. DOE reports these differences and qualitatively describes
those factors which might mitigate the impact on those firms which
produce both types of produces. The analysis shows that the inclusion
of the additional revenues has minimum impacts on the estimated INPVs.
For further qualitative and quantitative information on the scenarios
and results for the MIA, see chapter 13 of the TSD.
Although IRL manufacturers may receive revenue from additional
sales of R-CFL and exempted BR lamps, it is not certain that this would
be a net benefit to manufacturers. In both the R-CFL
[[Page 34128]]
Substitution and BR Substitution scenarios, covered IRL sales are not
completely replaced by the additional sales of R-CFL and exempted BR
lamps.. To provide an upper bound of the potential benefit to IRL
manufacturers, DOE includes the revenue from R-CFL and exempted BR
lamps but does not consider any capital conversion costs to increase
sales of these products. In any scenario, the potential benefits of
these sales to IRL manufacturers have far less impact on INPV than the
capital and product conversion costs needed to reach higher TSLs for
covered IRL. In any of the April 2009 NOPR and today's final rule
substitution scenarios, the large capital conversion costs are the
biggest driver of the large, negative impacts on INPV. Thus, any
additional benefit from sales of non-covered IRL products are not
enough to mitigate the impacts on INPV due to the necessary estimated
capital and product conversion costs.
The CA Stakeholders, ACEEE, and NRDC commented that the American
Recovery and Reinvestment Act of 2009 (ARRA) has tax provisions that
could possibly mitigate the impacts on manufacturers due to energy
conservation standards. Specifically, the commenters cited provisions
in ARRA offer low-interest ``industrial development bonds'' for
expanding manufacturing capabilities, as well as an advanced energy
project tax credit for manufacturers of covered products. According to
the commenters, these provisions would help manufacturers cover
possible conversion costs associated with energy conservation
standards. (CA Stakeholders, No. 63 at p. 7) (ACEEE, No. 76 at pp. 5-6)
(NRDC, No. 82 at p. 3)
DOE acknowledges that manufacturers of GSFL and IRL may qualify for
the industrial development bonds and advanced energy project tax credit
programs. If GSFL and IRL manufacturers do apply and receive the bonds
and/or tax credit, these benefits could help mitigate some of the
impacts of energy conservation standards. However, structures for the
industrial development bonds and advanced energy project tax credit
programs have not been finalized, and there is insufficient information
available to do a thorough analysis of their potential impacts.
Accordingly, DOE cannot determine with certainty that manufacturers of
covered IRL and GSFL are eligible for either program. Any quantitative
analysis of the industrial development bonds program or the advanced
energy project tax credit program and their possible impacts on the
GSFL and IRL industry would be highly speculative. Therefore, DOE did
not include the bonds or tax credit in its analysis of potential
impacts on the GSFL and IRL industries.
According to the CA Stakeholders and ACEEE, the MIA does not
consider pending legislation that could help mitigate the impacts due
to energy conservation standards. Specifically, the CA Stakeholders
cite three examples of pending legislation that could help to mitigate
the impacts on GSFL and IRL manufacturers due to amended energy
conservation standards: (1) Restoring America's Manufacturing
Leadership through Energy Efficiency Act of 2009; (2) 21st Century
Energy Technology Deployment Act of 2009; and (3) American Clean Energy
and Security Act of 2009. (CA Stakeholders, No. 63 at p. 7) (ACEEE, No.
76 at p. 6)
If adopted in present form, DOE acknowledges that the proposed
legislation cited by the CA Stakeholders could potentially mitigate the
impacts of energy conservation standards on GSFL and IRL manufacturers
if they were to qualify for the benefits in the proposed legislation.
However, because the legislation is pending and has not become public
law, passage of such proposed legislation or the final form of those
provisions are the matters of speculation. Therefore, DOE does not
include the proposed legislation's potential to mitigate the impacts on
GSFL and IRL manufactures in its analysis nor has it considered the
pending legislation in its decision for today's rule.
The CA Stakeholders commented that energy conservation standards
have consistently spurred innovation, resulting in even higher-
efficiency products. However, in its analysis, DOE assumes that high-
lumen T8 lamps represent the only opportunity for manufacturers to
maintain profit margins through 2042. (CA Stakeholders, No. 63 at p 13)
Additionally, the CA Stakeholders and ACEEE argued that DOE did not
consider that GSFL manufacturers at TSL 4 and TSL 5 will be able to
maintain high margins on a variety of other covered and non-covered
products in their portfolio. These other covered products include T5s
and extremely-high-lumen T8s, while non-covered products include solid
state lighting such as LEDs. According to the CA Stakeholders, ACEEE,
and NRDC, GSFL have other characteristics that could command higher
margins besides efficacy, including long life, low wattage, resistance
to high and low temperature, and low mercury content. If any of these
upsell opportunities commanded higher markups, the positive impacts on
INPV would be significant and should be reflected in DOE's analysis.
(CA Stakeholders, No. 63 at pp. 13-14) (ACEEE, No. 76 at p. 4) (NRDC,
No. 82 at p. 3).
In response, DOE recognizes that manufacturers will attempt to
devise product differentiation strategies to compensate for a
compression of the efficacy range of their product lines as a result of
energy conservation standards. These strategies may include redefining
efficacy tiers to more narrow bands, introducing more efficacious lamps
than are currently offered, or stressing product attributes other than
efficacy. The great number of assumptions required to model all
possible markup strategies in the GRIM would not add to DOE's
qualitative description of how these upsells would impact INPV. As
described previously, the Flat Markup scenario captures the INPV
effects, assuming that manufacturers fully compensate for a reduced
range of efficacy values in their product portfolio. Thus, DOE's
consideration of the factors evoked by the CA Stakeholders and ACEEE is
encompassed in the inclusion of a Flat Markup scenario and in its
discussion of the relative weight it places on the markup scenarios for
each of the TSLs.
In comments on DOE's April 2009 NOPR, the CA Stakeholders stated
that based on a sensitivity analysis of the GSFL GRIM, DOE's concern
that standards could eliminate higher margins currently earned by more-
efficacious products was a significant driver in determining the total
impacts on the GSFL industry. The CA Stakeholders pointed out that the
Four-Tier markup scenario had the greatest effect in determining the
INPV impacts on the GSFL industry. (CA Stakeholders, No. 63 at p. 12)
For the April 2009 NOPR, DOE modeled two different markup scenarios
to capture potential pricing schemes manufacturers apply to their
products. 74 FR 16920, 16977 (April 13, 2009). The Flat Markup scenario
applies a single markup to all products regardless of their efficacy.
This scenario also assumes that manufacturers maintain their gross
margin as a constant percentage throughout the analysis period,
regardless of standards. The Four-Tier markup scenario applied a
different markup to four different tiers of products (that correspond
to the four phosphor series). As higher efficacies are required by
energy conservation standards, manufacturers' product portfolios are
reduced, squeezing the gross margins of higher-efficacy products as
they are ``demoted'' to lower-relative-efficacy-tier products.
[[Page 34129]]
DOE agrees with the CA Stakeholders that the markup strategy is the
primary driver of INPV for GSFL manufacturers. Therefore, to capture
the full range of potential impacts of energy conservation standards on
the GSFL INPV, DOE used the two markup scenarios for the April 2009
NOPR. For today's final rule, DOE continues to use both the Flat Markup
and the Four-Tier markup scenarios to bound the potential impacts of
energy conservation standards on the GSFL INPV.
The CA Stakeholders and ACEEE commented that the base cases
overestimated the margins that manufacturers will be able to maintain
for high-lumen T8 lamps as the market naturally shifts to more-
efficient products. (CA Stakeholders, No. 63 at p. 4) (ACEEE, No. 76 at
p. 4) Additionally, the CA Stakeholders commented that as products
become more efficient, absent standards and in a competitive market,
higher-efficacy products will not maintain their current margins. (CA
Stakeholders, No. 63 at p. 12) The CA Stakeholders also argued that
DOE's Four-Tier markup analysis for the four-foot medium bi-pin lamps
appears to show manufacturers will maintain the estimated markup for
800 series high-lumen T8 lamps meeting TSL 5 indefinitely. According to
the CA Stakeholders, high-lumen T8s have been available for several
years and are already being commoditized. However, DOE's own analysis
has shown that the market is shifting to higher-efficacy products
without energy conservation standards. (CA Stakeholders, No. 63 at p.
12)
For the April 2009 NOPR, DOE modeled two different markup
scenarios. 74 FR 16920, 16977 (April 13, 2009). The first scenario
applies a single markup to all products regardless of their efficacy.
The second markup scenario applies a different markup to four tiers of
product efficacies that correspond to the four phosphor series. As the
CA Stakeholders correctly stated, DOE assumed these two markup
structures would be maintained throughout the analysis period. The CA
Stakeholders also correctly stated that markups are the primary driver
of INPV for GSFL. The CA Stakeholders believe that higher-efficacy
lamps are already being commoditized and that non-covered, emerging
technology will command high margins for manufacturers. While this
assumption is not certain, DOE agrees that the premium GSFL covered in
this rulemaking will likely follow a typical product life cycle, in
which the average margins decrease over time in the base case, thereby
resulting in a lower INPV than quantified by the Four-Tier markup
scenario presented in the April 2009 NOPR. DOE also agrees that it is
likely that as more-efficacious lighting products enter or replace GSFL
in the market, premium products which currently command higher markups
will become commoditized over time, and margins will erode. As non-
covered emerging technologies reduce the size of the GSFL market, the
overall margins of the GSFL market will also be reduced. Based on these
additional assumptions, DOE has revised the Four-Tier markup scenario
for today's final rule as previously described. DOE estimates that this
commoditization reduces the base-case industry value and, to a lesser
degree, the INPV impacts in the standards case. For further explanation
of the Four-Tier markup scenario and the revised INPV results, see
chapter 13 of the TSD.
NRDC commented that commoditization of features and margin
reduction will occur regardless of the standard set for the GSFL
industry, but technological innovation will result in the introduction
of new premium products as well. NRDC added that DOE has forecasted two
scenarios and compared them to determine the manufacturer impact.
According to NRDC's comments, the reality will certainly be somewhere
in between a no-standards situation and the product commoditization
scenario. NRDC concluded that the MIA results are likely to be
significantly overstated because the true impacts will be in between
these two situations (NRDC, No. 82 at p. 3).
In the April 2009 NOPR, DOE requested comment on the ability of
GSFL manufacturers to maintain margins through differentiation by other
means and how the ability to differentiate products might vary over
time. 74 FR 16920, 17001 (April 13, 2009). At TSL 5, DOE believes that
the ability for manufacturers to differentiate products by means other
than efficacy by the year 2012 is limited. Currently, only the most
efficient lamps available meet this efficacy level. This ability could
improve in later years as other features and higher efficacy products
are introduced. However, given the discounting of future cash flows,
the effect of this gradual improvement will be small. For this reason,
DOE believes that the INPV results would be greater than the midpoint
of the range of impacts. At TSL 4, manufacturers maintain some ability
to create tiers of efficacy, which will mitigate some of the effects of
commoditization of premium GSFL. However, DOE disagrees with the
statement that the impacts on manufacturers are likely to be
significantly overstated. DOE believes the revisions to the Four-Tier
markup scenario have addressed the Advocates' concerns regarding an
unrealistic change in profitability in the standards cases.
The CA Stakeholders commented that DOE should conduct its own
research and/or seek alternate sources of information to calculate the
manufacturer margins and conversion costs for T12 and T8 lamps. The CA
Stakeholders argued that because manufacturer margins and conversion
costs are two of the most significant GRIM inputs, to preserve the
transparency of its analysis, DOE should not rely primarily on
confidential data provided by one set of stakeholders (CA Stakeholders,
No. 63 at p. 14).
In response, DOE understands the need for transparent and accurate
data on which to base its analysis. Profit margin data at the product-
line level are possibly the most sensitive data for any company, and
therefore, are not readily available to the public. DOE attempts to
validate any sensitive data provided by manufacturers, including
information about profit margins, by first requesting any documentary
evidence. DOE also compares the data submittals for each manufacturer
for consistency. To the extent possible DOE has developed and will
continue to develop its own estimates of key parameters for the MIA,
such as manufacturing costs and pricing, by researching published
sources, contacting tooling suppliers, and retaining the services of
industry consultants. To maintain confidentiality and transparency at
the same time, DOE makes its estimates of manufacturer margins and
conversion costs available for public comment in an industry-aggregated
form. This process allows DOE to further refine its assumptions and
estimates based on the responses provided by interested parties.
The CA Stakeholders commented that the MIA's assumptions should not
be revised to consider the current economic recession. The CA
Stakeholders argued that such revisions would not add any practical
value, given that it is impossible to accurately predict the direction
of short-term economic cycles. (CA Stakeholders, No. 63 at p. 8)
As previously stated, for today's final rule, DOE has updated the
GSFL and IRL GRIMs with revised NIA shipments and scenarios and used
the updated product price determination inputs. DOE also revised the
conversion costs using the appropriate PPI. These changes are typical
revisions for energy conservation rulemakings and are not
[[Page 34130]]
specifically attributable to current economic conditions. DOE agrees
with CA Stakeholders and has not made revisions to the MIA specifically
in response to the current near-term economic downturn. For additional
information on the updates to the NIA and product price determination,
see section V.D of today's notice, respectively. For further
explanation of inputs and updates to the GSFL and IRL GRIMs, see
chapter 13 of the TSD.
The CA Stakeholders commented that the effective date of today's
final rule for GSFL and IRL energy conservation standards has a
significant impact on the reported INPVs, and that any prorogation of
the effective date would help mitigate impacts on the industry due to
energy conservation standards. The CA Stakeholders recommended that DOE
should establish an effective date for GSFL for their proposed Tier 1
standards (TSL4) in 2012 and for Tier 2 (TSL5) in 2016. (CA
Stakeholders, No. 63 at p. 2, 14). Similarly, ACEEE argued that a
phase-in standard would allow additional lead time for manufacturers
and capture maximum energy savings. However, ACEEE requested expedited
phase-in dates for GSFL standards at Tier 1 (July 2012) and Tier 2
(July 2015) (ACEEE, No. 76 at p. 2). ACEEE presented the alternative of
a later effective date for choosing TSL 5 for all covered GSFL (2013 or
2014), because it provides manufacturers additional time to spread
conversion cost, thereby minimizing the impacts on INPV (ACEEE, No. 76
at pp. 2-3). Similar to ACEEE's alternative effective date, OSI
requested a one-year extension of the effective date for IRL products
only. OSI commented that the extension would allow sufficient time to
replace its capital base for covered IRL and allow for manufacturing of
the higher-efficacy products to stabilize (OSI, No. 84 at p. 1).
DOE agrees that the effective date of energy conservation standards
(i.e., compliance date) has a significant impact on INPV. In the GRIM
cashflow analyses, the conversion costs are implemented in the years
between the announcement of the final rule and the effective date of
the standards. By delaying the effective date and the required capital
and product conversion costs, it would in theory be possible to reduce
the negative impacts on INPV calculated for the proposed standards
case, due to discounting the negative cash flows for conversion costs
in later years. However, for the reasons discussed in section VI.I, for
today's final rule, DOE is not using a tiered approach to set energy
conservation standards. Similarly, for the reasons discussed in section
VI.I, DOE is not considering a later effective date for either the GSFL
or the IRL energy conservation standard. The implications of a later
effective date on the GSFL and IRL INPV are not being considered.
For a detailed discussion of the MIA, see chapter 13 of the TSD
accompanying this notice.
G. Employment Impact Analysis
DOE considers employment impacts in the domestic economy as one
factor in setting energy conservation standards. Employment impacts
include direct and indirect impacts. Direct employment impacts are
changes in the number of employees for manufacturers of the appliance
products that are subject to standards, their suppliers, and related
service firms. The MIA addresses these impacts. 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, due to: (1) Reduced spending by end users on energy; (2)
reduced spending on new energy supply by the utility industry; (3)
increased consumer spending on the purchase of new products; and (4)
the effects of those three factors throughout the economy. DOE expects
the net monetary savings from standards to be redirected to other forms
of economic activity. DOE also expects these shifts in spending and
economic activity to affect the demand for labor in the short term.
In developing the April 2009 NOPR and today's final rule, DOE
estimated indirect national employment impacts using an input/output
model of the U.S. economy called Impact of Sector Energy Technologies
(ImSET \44\). ImSET is a spreadsheet model of the U.S. economy that
focuses on 188 sectors most relevant to industrial, commercial, and
residential building energy use. ImSET is a special-purpose version of
the ``U.S. Benchmark National Input-Output'' (I-O) model designed to
estimate the national employment and income effects of energy-saving
technologies. The ImSET software includes a computer-based I-O model
with structural coefficients to characterize economic flows among the
188 sectors. ImSET's national economic I-O structure is based on a 1997
U.S. benchmark table, especially aggregated to those sectors. For
further details, see chapter 15 of the TSD accompanying this notice.
---------------------------------------------------------------------------
\44\ Roop, J. M., M. J. Scott, and R. W. Schultz, ImSET: Impact
of Sector Energy Technologies (PNNL-15273 Pacific Northwest National
Laboratory) (2005). Available at http://www.pnl.gov/main/publications/external/technical_reports/PNNL-15273.pdf.
---------------------------------------------------------------------------
As described in section V.G, DOE uses ImSet to consider indirect
employment impacts when evaluating alternative standard levels. Direct
employment impacts on the manufacturers that produce IRL and GSFL are
analyzed in the manufacturer impact analysis, as discussed in section
V.F.
H. Utility Impact Analysis
The utility impact analysis determines the changes to energy supply
and demand (and forecasted power generation capacity) that result from
the end-use energy savings due to new or amended energy conservation
standards. DOE used a version of EIA's National Energy Modeling System
(NEMS) for this utility impact analysis. NEMS, which is available in
the public domain, is a large, multisectoral, partial-equilibrium model
of the U.S. energy sector. EIA uses NEMS to produce its AEO, a widely-
recognized baseline energy forecast for the United States. The version
of NEMS used for appliance standards analysis is called NEMS-BT \45\
and is primarily based on the April Update of the AEO 2009 \46\ with
minor modifications. The analysis output includes a forecast of the
total electricity generation capacity at each TSL.
---------------------------------------------------------------------------
\45\ EIA approves the use of the name NEMS to describe only an
official AEO version of the model without any modification to code
or data. Because the present analysis entails some minor code
modifications and runs the model under various policy scenarios that
deviate from AEO assumptions, the name NEMS-BT refers to the model
as used here. (``BT'' stands for DOE's Building Technologies
Program.) For more information on NEMS, refer to ``The National
Energy Modeling System: An Overview,'' DOE/EIA-0581 (98) (Feb.
1998). Available at http://tonto.eia.doe.gov/ftproot/forecasting/058198.pdf.
\46\ An Updated Annual Energy Outlook 2009 Reference Case
Reflecting Provisions of the American Recovery and Reinvestment Act
and Recent Changes in the Economic Outlook, April 2009.
---------------------------------------------------------------------------
DOE obtained the energy savings inputs associated with electricity
consumption savings from the NIA. These inputs reflect the effects on
electricity of efficiency improvements due to the deployment of GSFL
and IRL that would meet the energy conservation standards set forth in
this rulemaking. Chapter 14 of the TSD accompanying this notice
presents details on the utility impact analysis.
DOE received comments to the ANOPR requesting that DOE report gas
and electricity price impacts, and the economic benefits of reduced
need for new electric power plants and infrastructure. The expectation
is that lower electricity demand will lead to
[[Page 34131]]
lower prices for both electricity and natural gas that would benefit
consumers.
DOE considered reporting gas and electricity price impacts but
found that the uncertainty of price projections, together with the
fairly small impact of the standards relative to total electricity
demand, makes these price changes highly uncertain. As a result, DOE
believes that they should not be weighed heavily in the decision
concerning the standard level. Given the current complexity of utility
regulation in the United States (with significant variances among
States), it does not seem appropriate to attempt to measure impacts on
infrastructure costs and prices where there is likely to be significant
overlap.
I. Environmental Assessment
Pursuant to the National Environmental Policy Act of 1969 (NEPA)
(42 U.S.C. 4321 et seq.) 42 U.S.C. 6295(o)(2)(B)(i)(VI), DOE prepared
an environmental assessment (EA) of the potential impacts of the
proposed standards it considered for today's final rule which it has
included as chapter 16 of the TSD for the final rule. DOE found the
environmental effects associated with the standards for GSFL and IRL to
be insignificant. Therefore, DOE is issuing a Finding of No Significant
Impact (FONSI), pursuant to NEPA, the regulations of the Council on
Environmental Quality (40 CFR parts 1500-1508), and DOE's regulations
for compliance with NEPA (10 CFR part 1021). The FONSI is available in
the docket for this rulemaking.
In the EA, DOE estimated the reduction in total emissions of
CO2 and NOX using the NEMS-BT computer model. DOE
also calculated a range of estimates for reduction in mercury (Hg)
emissions using power sector emission rates. The EA does not include
the estimated reduction in power sector impacts of sulfur dioxide
(SO2), because DOE has determined that any such reduction
resulting from an energy conservation standard would not affect the
overall level of SO2 emissions in the United States due to
the presence of national caps on SO2 emissions. These topics
are addressed further below; see chapter 16 of the TSD for additional
detail.
EEI commented that DOE should consider the environmental impacts of
the production processes especially if higher efficiency standards
would result in more manufacturing overseas. (EEI, No. 45 at p. 4) As
discussed in the manufacturer impact analysis (see section V.F), DOE
does not expect a migration of production of IRL overseas as a result
of this rule. In addition, as the migration of GSFL production overseas
is highly speculative, DOE does not feel it appropriate to incorporate
the environmental impacts of production processes if moved overseas.
Earthjustice stated that DOE must calculate the amount of
reductions in emissions of particulate matter (PM) that will result
from standards for GSFLs and IRLs (and monetize the value).
Earthjustice stated that even if DOE believes that the impacts on
secondary PM emissions were physically impossible to estimate due to
their complexity, it would not justify DOE ignoring the impact of
standards on primary emissions of PM from power plants. (Earthjustice,
No. 60 at pg 8) PM emissions reductions are much more difficult to
estimate than other emissions due to the wide range of power plant
controls and individual plant operations that impact PM emissions. DOE
is not currently able to run a model that can make these estimates
reliably at the national level.
NEMS-BT is run similarly to the AEO2009 NEMS, except that lighting
energy use is reduced by the amount of energy saved (by fuel type) due
to the trial standard levels. The inputs of national energy savings
come from the NIA analysis. For the EA, the output is the forecasted
physical emissions. The net benefit of a standard is the difference
between emissions estimated by NEMS-BT and the Updated AEO2009
Reference Case. The NEMS-BT tracks CO2 emissions using a
detailed module that provides results with broad coverage of all
sectors and inclusion of interactive effects.
The Clean Air Act sets an emissions cap on SO2 for all
affected Electric Generating Units. The attainment of the emissions cap
is flexible among generators and is enforced through the use of
emissions allowances and tradable permits. In other words, with or
without a standard, total cumulative SO2 emissions will
always be at or near the ceiling, and there may be some timing
differences among yearly forecasts. Thus, it is unlikely that there
will be reduced overall SO2 emissions from standards as long
as the emissions ceilings are enforced. Although there may be no actual
reduction in SO2 emissions, there still may be an economic
benefit from reduced demand for SO2 emission allowances.
Electricity savings decrease the generation of SO2 emissions
from power production, which can lessen the need to purchase
SO2 emissions allowance credits, and thereby decrease the
costs of complying with regulatory caps on emissions.
NOX emissions from 28 eastern States and the District of
Columbia (DC) are limited under the Clean Air Interstate Rule (CAIR),
published in the Federal Register on May 12, 2005.\47\ Although CAIR
has been remanded to EPA by the DC Circuit, it will remain in effect
until it is replaced by a rule consistent with the Court's July 11,
2008 opinion in North Carolina v. EPA.\48\ Because all States covered
by CAIR opted to reduce NOX emissions through participation
in cap-and-trade programs for electric generating units, emissions from
these sources are capped across the CAIR region.
---------------------------------------------------------------------------
\47\ 70 FR 25162 (May 12, 2005).
\48\ 531 F.3d 896 (D.C. Cir. 2008); see also North Carolina v.
EPA, 550 F.3d 1176 (D.C. Cir. 2008).
---------------------------------------------------------------------------
For the 28 eastern States and D.C. where CAIR is in effect, no
NOX emissions reductions will occur due to the permanent
cap. Under caps, physical emissions reductions in those States would
not result from the energy conservation standards under consideration
by DOE, but standards might have produced an environmentally-related
economic impact in the form of lower prices for emissions allowance
credits, if they were large enough. However, DOE determined that in the
present case, such standards would not produce an environmentally-
related economic impact in the form of lower prices for emissions
allowance credits, because the estimated reduction in NOX
emissions or the corresponding allowance credits in States covered by
the CAIR cap would be too small to affect allowance prices for
NOX under the CAIR. In contrast, new or amended energy
conservation standards would reduce NOX emissions in those
22 States that are not affected by CAIR. As a result, the NEMS-BT does
forecast emissions reductions from the proposed amended standards
considered in today's final rule.
In the April 2009 NOPR, however, DOE provided a different estimate
of NOX reductions, because DOE assumed that the CAIR had
been vacated. 74 FR 16920, 17009-14 (April 13, 2009). This is because
the CAIR rule was vacated by the U.S. Court of Appeals for the District
of Columbia Circuit (DC Circuit) in its July 11, 2008 decision in North
Carolina v. Environmental Protection Agency.\49\ Although the DC
Circuit, in a December 23, 2008 opinion,\50\ decided to allow the CAIR
rule to remain in effect until it is replaced by a rule consistent with
the
[[Page 34132]]
Court's earlier opinion, DOE retained its analysis of NOX
emissions reductions based on an assumption that the CAIR rule was not
in effect, because: (1) The NOPR was so advanced at the time that the
December 23, 2008 opinion was issued that revisiting the analysis would
have caused undue delay; and (2) neither the July 11, 2008, nor the
December 23, 2008 decisions of the D.C. Circuit changed the standard-
setting proposals offered in the NOPR.
---------------------------------------------------------------------------
\49\ 531 F.3d 896 (D.C. Cir. 2008).
\50\ See 550 F.3d 1176 (D.C. Cir. 2008).
---------------------------------------------------------------------------
Thus, for the April 2009 NOPR, DOE established a range of
NOX reductions based on low and high emissions rates (in
metric kilotons of NOX emitted per terawatt-hour (TWh) of
electricity generated) derived from the AEO2008. DOE anticipated that,
in the absence of the CAIR's trading program, the new or amended energy
conservation standards would reduce NOX emissions
nationwide, not just in 22 States.
Similar to SO2 and NOX, future emissions of
Hg would have been subject to emissions caps under the Clean Air
Mercury Rule \51\ (CAMR), which would have permanently capped emissions
of mercury for new and existing coal-fired plants in all States by
2010, but the CAMR was vacated by the DC Circuit in its decision in New
Jersey v. Environmental Protection Agency \52\ prior to publication of
the April 2009 NOPR. However, the NEMS-BT model DOE initially used to
estimate the changes in emissions for the proposed rule assumed that Hg
emissions would be subject to CAMR emission caps.
---------------------------------------------------------------------------
\51\ 70 FR 28606 (May 18, 2005).
\52\ 517 F 3d 574 (D.C. Cir. 2008).
---------------------------------------------------------------------------
After CAMR was vacated, DOE was unable to use the NEMS-BT model to
estimate any changes in the quantity of mercury emissions (anywhere in
the country) that would result from standard levels it considered for
the proposed rule. Instead, DOE used an Hg emissions rate (in metric
tons of Hg per energy produced) based on the AEO2008 for the April 2009
NOPR. Because virtually all mercury emitted from electricity generation
is from coal-fired power plants, DOE based the emissions rate on the
metric tons of mercury emitted per TWh of coal-generated electricity.
To estimate the reduction in mercury emissions, DOE multiplied the
emissions rate by the reduction in coal-generated electricity
associated with the standards considered. Because the CAMR remains
vacated, DOE continued to use the approach it used for the April 2009
NOPR to estimate the Hg emission reductions due to standards for
today's final rule.
EEI commented that, ``if the standard leads to more use of compact
fluorescent technology as replacements for incandescent reflector
lamps, there will be an increase in mercury use and disposal issues
compared to the baseline technologies.'' (EEI, No. 45 at p. 4). DOE
estimates that any increase in use of CFLs, as compared to having no
new or amended GSFL and IRL standards, would be minimal and any related
mercury releases would be environmentally insignificant and
speculative, particularly since only a fraction of CFLs are improperly
disposed of and only a small fraction of the mercury in those CFLs
leaches into the environment.
Earthjustice and NRDC argue that DOE should incorporate the value
of CO2 emissions reductions into the LCC and NPV analyses
because the value of CO2 emissions reductions affects the
economic justification of standards, DOE must incorporate these effects
into the LCC and NPV analyses. (Earthjustice, No. 60, at pgs 7-8 and
(NRDC and Earthjustice, Issue Paper, No. 82 at p. 1)) New York, et al.
also recommended that DOE prioritize energy savings and reduced
CO2 emissions and allocate at least as much weight to the
monetary value of reduced carbon emissions as it does to other monetary
impacts. (NY et al., No. 88 at p. 1)\53\ On the other hand, NEMA
expressed support of the approach used by DOE in the NOPR to reflect a
range for monetized values and report environmental benefits separately
from the net benefits of energy savings. (NEMA, No. 81 at p. 21)
---------------------------------------------------------------------------
\53\ A joint comment by the States of New York, California,
Connecticut, Delaware, Illinois, Massachusetts, New Hampshire, New
Jersey, Ohio, Vermont, and Washington.
---------------------------------------------------------------------------
DOE notes that neither EPCA nor NEPA requires that the economic
value of emissions reduction be incorporated in the LCC or NPV analysis
of energy savings. DOE has chosen to report these benefits separately
from the net benefits of energy savings. A summary of the monetary
results is shown in section VII.C.6 of this notice. DOE considered both
values when weighing the benefits and burdens of standards.
J. Monetizing Carbon Dioxide and Other Emissions Impacts
DOE also calculated the possible monetary benefit of
CO2, NOX, and Hg reductions. Cumulative monetary
benefits were determined using discount rates of 3 and 7 percent. DOE
monetized reductions in CO2 emissions due to the standards
in this final rule based on a range of monetary values drawn from
studies that attempt to estimate the present value of the marginal
economic benefits (based on the avoided marginal social costs of
carbon) likely to result from reducing greenhouse gas emissions. The
marginal social cost of carbon is an estimate of the monetary value to
society of the environmental damages of CO2 emissions.
Several parties provided comments regarding the economic valuation
of CO2 for the April 2009 NOPR. NRDC commented that New
England now has a CO2 trading price that could be used by
DOE (NRDC, Public Meeting Transcript, No. 38.4 at p. 311-312) NRDC and
Earthjustice argue that DOE should incorporate an assumption of a
mandatory cap on CO2 emissions or at the very least revise
the range of CO2 valuation. (NRDC and Earthjustice, Issue
Paper, No. 82, p. 1-14) NY et al. also criticized the range of
CO2 values used in the NOPR and recommended the use of a
long-run marginal abatement cost of CO2 for monetizing
CO2 emission reductions, rather than the damage costs given
the highly uncertain nature of the latter (NY et al., No. 88, p. 9-10).
As discussed in section VII.C.6, DOE has updated the approach described
in the April 2009 NOPR (74 FR 16920, 17009 (Apr. 13, 2009)) for its
monetization of environmental emissions reductions for today's rule.
Although this rulemaking does not affect SO2 emissions
or NOX emissions in the 28 eastern States and D.C. where
CAIR is in effect, there are markets for SO2 and
NOX emissions allowances. The market clearing price of
SO2 and NOX emissions allowances is roughly the
marginal cost of meeting the regulatory cap, not the marginal value of
the cap itself. Further, because national SO2 and
NOX emissions are regulated by a cap-and-trade system, the
cost of meeting these caps is included in the price of energy. Thus,
the value of energy savings already includes the value of
SO2 and NOX control for those consumers
experiencing energy savings. The economic cost savings associated with
SO2 and NOX emissions caps is approximately equal
to the change in the price of traded allowances resulting from energy
savings multiplied by the number of allowances that would be issued
each year. That calculation is uncertain because the energy savings
from new or amended standards for IRL and GSFL would be so small
relative to the entire electricity generation market that the resulting
emissions savings would have almost no impact on price formation in the
allowances market. These savings would most likely be outweighed by
uncertainties in the
[[Page 34133]]
marginal costs of compliance with SO2 and NOX
emissions caps.
EEI commented that the cost of remediating emissions such as
CO2, NOX, SO2, and mercury were
already included in electricity rates paid by consumers and therefore
emission reductions should not be ``monetized'' because it would lead
to double counting. (EEI, No. 78 at p. 4-5). As described above, DOE
has only monetized the value of emissions not covered by existing caps,
such as NOX in regions not covered by CAIR. The monetization
of these emissions is based on estimates of their damage costs (i.e.,
health effects) that are not included in economic prices.
EEI also commented that DOE should consider the most recent trends
in electricity generation, including reductions in emissions, the rise
of renewable portfolio standards, and the possibility of an upcoming
CO2 cap-and-trade program which would reduce the amount of
CO2 produced per kWh generated. (EEI, No. 45 at p. 5)
Earthjustice stated that Federal caps will likely be in place by the
time new standards become effective, so DOE should increase its
electricity prices to reflect the cost of complying with emission caps.
Earthjustice also noted that there are regional cap-and-trade programs
in effect in the Northeast (Regional Greenhouse Gas Initiative (RGGI))
and the West (Western Climate Initiative (WCI)) that will affect the
price of electricity but are not reflected in the AEO energy price
forecasts. (Earthjustice, No. 60 at p. 6-7) NY et al. also recommended
including some level of CO2 pricing in its modeling. (NY et
al., No. 88, at p. 25)
In response, DOE incorporated current trends in its analysis, but
expressly did not include possible future legislation in this
rulemaking. The current NEMS-BT model used in projecting the
environmental impacts includes the CAIR rule, as described above, which
is projected to reduce SO2 and NOX emissions.
NEMS-BT also takes into account the current set of State level
renewable portfolio standards, the effect of the RGGI, and utility
investor reactions to the possibility of future CO2 cap and
trade programs, all of which impact electricity prices and reduce the
projected carbon intensity of generation.\54\
---------------------------------------------------------------------------
\54\ For more information, see the Update to the AEO2009 and the
AEO2009 Assumptions documentation [add proper cites].
---------------------------------------------------------------------------
VI. Discussion of Other Key Issues and Comments
A. Sign Industry Impacts
The CA Stakeholders supported the adoption of TSL3 for the 8-foot
SP Slimline and 8-foot RDC HO product classes partially due to concern
for the outdoor sign industry. Based on communication with the Director
of Technical & Regulatory Affairs for the International Sign
Association, the CA Stakeholders believed that the outdoor sign
industry would experience significant negative impacts if covered 8-
foot T12 lamps were eliminated by DOE proposing TSL4. (CA Stakeholders,
No. 63 at p. 10) However, DOE does not believe that such an impact
exists. The definition of ``general service fluorescent lamp'' exempts
any fluorescent lamp designed and marketed for cold temperature
applications. 10 CFR 430.2. Because outdoor signs typically require
lamps and ballasts designed for cold temperature operation, they should
be minimally impacted by an energy conservation standard. If owners of
outdoor signs are in fact using covered 8-foot T12 lamps, they have the
option to replace those lamps with either a covered 8-foot T8 lamp or
an exempted 8-foot T12 lamp designed for use in cold temperature
applications. Thus, the outdoor sign industry will not be negatively
impacted by DOE adopting TSL4.
B. Max-Tech IRL
As required under 42 U.S.C. 6295(p)(1) and described in the April
2009 NOPR, DOE identified the efficacy levels that would achieve the
maximum improvements in energy efficiency that are technologically
feasible (max-tech levels) for GSFL and IRL. 74 FR 16920, 16933-35
(April 13, 2009). For IRL, DOE tentatively determined that the maximum
technologically feasible efficacy level would incorporate the highest-
efficiency technologically feasible reflector, halogen infrared
coating, and filament design. Id. Combining all three of these high-
efficiency technologies simultaneously results in the maximum
technologically feasible level. However, because the only technology
pathway to this level is dependent on a proprietary technology, DOE did
not consider this level further in its analyses. In the April 2009
NOPR, DOE analyzed TSL5, which is the most efficient commercially-
available IRL and employs a silver reflector, an improved (but not
most-efficient) IR coating, and a filament design that results in a
lifetime of 4,200 hours. Although this commercially-available lamp uses
the patented silver technology, DOE believes that there are alternate
pathways to achieve this level. A combination of redesigning the
filament to achieve higher temperature operation (and thus reducing
lifetime to 3,000 hours), employing other non-proprietary high-
efficiency reflectors, and applying a higher-efficiency IR coating has
the potential to result in an IRL that meets an equivalent efficacy
level (for more information regarding these technologies, see chapter 3
of the TSD). Therefore, in the April 2009 NOPR, DOE concluded that TSL5
is the maximum technologically feasible level for IRL that is not
dependent on the use of a proprietary technology. Id.
1. Treatment of Proprietary Technologies
Several stakeholders commented that DOE did not analyze the max-
tech level for IRL as required by EPCA because IRL can achieve
efficacies even higher than TSL5. (ASAP, Public Meeting Transcript, No.
38.4 at p. 96; ADLT, Public Meeting Transcript, No. 38.4 at p. 113;
Earthjustice, No. 60 at pp. 2-3; CA Stakeholders, No. 63 at p. 14;
ACEEE, No. 76 at p. 5; NRDC, No. 82 at p. 2) Commenters disagreed with
DOE's conclusion that it could not establish a TSL that required the
use of a proprietary technology. (Earthjustice, No. 60 at pp. 3-4; CA
Stakeholders, No. 63 at p. 14; ACEEE, No. 76 at p. 5) These
stakeholders claimed that DOE must either analyze the economic impacts
of the true max-tech level, which would incorporate the proprietary
technology, or show that standards based on the proprietary silverized
reflector are not technologically feasible. (Earthjustice, No. 60 at p.
4; CA Stakeholders, No. 63 at pp. 14-15)
DOE agrees with the stakeholders that max-tech level for IRL is
different than TSL5. While TSL5 is the highest efficiency level on
which DOE performed the full range of economic analyses (including LCC,
national impacts, and manufacturer impacts), DOE maintains that it did
in fact consider and analyze the max-tech level consistent with EPCA.
According to EPCA, DOE is required to establish energy conservation
standards that ``shall be designed to achieve the maximum improvement
in energy efficiency * * * which the Secretary determines is
technologically feasible and economically justified.'' (42 U.S.C.
6295(o)(2)(A)) To determine economic justification, DOE considers
(among other factors) ``the economic impact of the standard on the
manufacturers'' and ``the impact of any lessening of competition * * *
that is likely to result
[[Page 34134]]
from the imposition of a standard.'' (42 U.S.C. 6295(o)(2)(B)(i)(I) and
(V))
The observation that DOE did not label the max tech level as TSL6
does not mean that DOE did not consider this efficiency level. As noted
in the April 2009 NOPR and further explained below, DOE rejected this
level because it required the use of a proprietary technology. However,
DOE is not broadly screening out proprietary technologies or otherwise
eliminating them from its analysis. In contrast to the present case,
most patents do not convey market power to their owners because close
substitutes for these inventions exist. Licensors will pay no more for
these technologies than the cost advantage they provide over the next
best alternative pathway to compliance with the efficiency standard.
Ultimately the availability of cost-effective alternate technology
pathways is what limits the ability of the owner of a proprietary
technology to extract high fees for its use.
However, it is DOE's opinion that a standard level which can only
be met with a single proprietary technology which comes without
assurances of open and free technology access should be rejected
because it carries great risk of resulting in an anti-competitive
market, a principle consistently applied in past DOE rulemakings. In
such a situation, the standards-setting process itself would convey
great market power because there would be no alternative means to
satisfy the standard. DOE believes that this is sufficient cause to
conclude that the max-tech level in question is not economically
justified. Having made this determination, there was no need or benefit
to performing additional analyses relevant to the other statutory
criteria. In fact, in Natural Resources Defense Council v. Herrington,
the DC Circuit recognized that a complete analysis of all factors in
not always required: `` If no standard could have been based on
prototypes without requiring manufacturers to accomplish the
impossible, we agree that DOE could reasonably deem all such standards
economically unjustified without trudging through the remaining
statutory factors.'' 768 F.2d 1355, 1396-97 (D.C. Cir. 1985).
At the NOPR public meeting, ASAP suggested that DOE should consider
cross-licensing as a vehicle for manufacturers to access proprietary
technologies if such technologies might comprise the only pathway to
compliance with a certain standard level. (ASAP, Public Meeting
Transcript, No. 38.4 at p. 97) While DOE acknowledges that
manufacturers of proprietary technologies can create cross-licensing
agreements with other organizations, DOE continues to reject the notion
that a standard requiring a specific proprietary technology can be
established under the EPCA criteria, for several reasons. First, the
availability and the price of the proprietary technology could change
after the efficiency standards are established, if the patent owner
attempts to extract the value added by the standard-setting process in
royalty fees for the technology required to meet the max-tech level.
Second, DOE believes that the terms of cross-licensing agreements are
generally not made public, so it is difficult to assess historical
trends as to the impact of such agreements on the market. Thus, DOE
cannot assess the cost implications of current or future cross-
licensing agreements made in the industry; by extension, DOE cannot
assess the manufacturer, consumer, or nationwide impact of a standard
that requires the usage of a proprietary technology.
In consideration of all of these factors, DOE maintains that it
considers a standard level which can be met by only one proprietary
design to be economically unjustified. Thus, DOE has rejected the max-
tech level for IRL, and conducted the full range of economic analyses
on what it believes to be the next highest efficiency level (not
dependent on a proprietary design), TSL5.
2. Other Technologies
In response to the April 2009 NOPR, DOE received a number of
comments suggesting that even without the use of a proprietary
technology, several existing technologies could be utilized to produce
IRL with efficacies that meet or exceed TSL5. (ADLT, Public Meeting
Transcript, No. 38.4 at pp. 107-110, 113; CA Stakeholders, No. 63 at
pp. 16-17; ADLT, No. 72 at p. 2; ACEEE, No. 76 at p. 5; NRDC, No. 82 at
p. 4) Manufacturers also commented on the burdens and barriers
associated with implementing some of these technologies. Comments
received regarding alternate technologies that could be used to meet or
exceed TSL5 are summarized below.
a. High-Efficiency IR Coatings
DOE analyzed advanced IR coatings in the April 2009 NOPR as a
possible technology pathway to achieving TSL5 without the use of the
proprietary silverized reflector. 74 FR 16920, 16944-45 (April 13,
2009). As part of its analysis (documented in the Appendix 5D of the
TSD), DOE obtained several halogen burners on which advanced IR
coatings were deposited.\55\ Using a combination of testing and
engineering calculations, DOE determined the maximum lamp efficacy that
could result from implementing an advanced IR coating and non-
proprietary aluminum reflector, while maintaining a lamp lifetime
similar to the baseline lamp lifetime.
---------------------------------------------------------------------------
\55\ Halogen infrared (HIR) lamps that are commercially
available today typically use infrared (IR) coatings with
alternating layers of two materials (i.e., SIO2 and a
second material of either Ta2O5 or
Nb2O5) and have layer counts ranging from 45
to 75. In contrast, the most-efficient HIR lamps have a coating made
of three materials: SiO2, Ta2O5,
and TiO2, the latter in the high-index rutile phase. This
three-material coating, described as a Hybrid\TM\ by Advanced
Lighting Technologies, Inc. (hereafter referred to as ``advanced IR
coating ''), has an effective IR reflectance significantly higher
than that of the two-material coatings used in the commercially-
available examples, thereby resulting in enhanced lumen-per-watt
(lm/W) values.
---------------------------------------------------------------------------
In response to the April 2009 NOPR, several stakeholders noted that
DOE's maximum lamp efficacy as presented in Appendix 5D of the TSD, far
exceeds that of TSL5 and, thus, should have been considered as a higher
TSL6. (PG&E, Public Meeting Transcript, No. 38.4 at p. 99; CA
Stakeholders, No. 63 at p. 15) The CA Stakeholders further agreed with
DOE's statement in appendix 5D that advanced IR coatings are not a
developmental product. (CA Stakeholders, No. 63 at p. 17) ADLT
confirmed that the uncoated burner tested by DOE for appendix 5D has
been used in products for several years in the United States and that
the coating applied to this burner has been in production in Europe on
12V burners for several years. (ADLT, No. 72 at p. 3)
In contrast, NEMA commented that because DOE's lamp efficacies
calculated in Appendix 5D are based on prototype burners, and not on
product that is currently in production, these values overestimate the
final performance that would be achieved after making all design and
process tradeoffs necessary to implement a complete high-speed, high-
volume assembly process. (NEMA, No. 81 at pp. 28-29) In addition, both
Philips and ADLT agreed that there is a difference between the efficacy
that can be attained in a laboratory production process and that which
can be attained in an industrial environment. ADLT acknowledged that
this difference is more pronounced when employing higher-efficiency IR
coatings. (Philips, Public Meeting Transcript, No. 38.4 at p. 111;
ADLT, Public Meeting Transcript, No. 38.4 at pp. 112-113)
While DOE considers advanced IR coatings to be a valid design
option for increasing IRL efficacy and has not screened it out of the
analysis, DOE also
[[Page 34135]]
recognizes that it lacks the data to accurately estimate the
performance of lamps utilizing this design option when manufactured at
the production volumes needed to service the IRL market. Although all
individual components of the prototype have been produced in high
volume for separate products, that alone does not prove that a lamp
with that combination of parts would have the same efficacy when
manufactured on a large scale. In addition, as the analysis performed
in appendix 5D of the TSD was based on an IR coating deposited in a
laboratory environment, it is reasonable to assume that the efficacy of
similar burners when manufactured in an industrial environment will be
lower. While DOE recognizes that advanced IR coatings will likely
produce higher-efficacy IRL, because DOE does not have adequate data to
accurately estimate this efficacy, DOE is no longer considering the
tested burners in establishing the max-tech level or alternate
technology pathways to achieving other TSLs.
b. Silverized Reflectors
Commenters stated that in addition to the patent for GE's
silverized reflector, two other patents exist for manufacturing
coatings of reflective silver. Another company possesses a provisional
patent for a silverized lamp reflector (``Reflector A''), a technology
(currently in development) that has been demonstrated in prototypes
that have tested performances at least equal to that of the patented
technology. A third entity has a patent for a ``durable silver
reflective coating'' (``Reflector B'') that could be used for lamp
applications. (CA Stakeholders, No. 63 at p. 19-20; ADLT, No. 72 at p.
2)
While recognizing the promise of these reflective silver
technologies, DOE notes that significant uncertainty remains as to the
successful implementation of both of these designs in commercial
products at the scale needed to service the IRL market. In addition,
DOE has no data on the performance of Reflector A. Although stakeholder
have provided tested efficacies of lamps utilizing Reflector B, similar
to the discussion regarding advance IR coatings, DOE is unable
accurately estimate the performance of these lamps when produced at
high volumes in industrial environments. For this reason, although DOE
considers silverized reflectors as an IRL design option, DOE has
concluded that it cannot base its establishing of max-tech or adoption
of any other TSL on the potential performance of these reflectors.
c. Integrally-Ballasted Low-Voltage IRL
In the April 2009 NOPR, DOE screened out integrally-ballasted low-
voltage IRL as a technology option, because it was unaware of any IRL
with integrated transformers that stepped down voltage from 120V line
voltage. 74 FR 16920, 16940 (April 13, 2009). Therefore, DOE could not
conclusively determine if this technology option was technologically
feasible. (See the Chapter 4 of the NOPR TSD). To demonstrate
technological feasibility, the California Stakeholders contracted a
consulting company to combine existing lamp components to make several
prototypes of 120V IRL utilizing low-voltage capsules. The tested
efficacies of these prototype indicated that low-voltage capsules could
be used as a technology pathway to meeting TSL4 and TSL5. (California
Stakeholders, No. 63 at pp. 20-21) Regarding the technological
feasibility of low-voltage IRL, Philips commented that higher mains
voltages found in Europe (such as 220V and 240V) allow greater
improvements in efficiency to be obtained by IRL with integrated
transformers, but such improvements could not be obtained as easily in
the U.S., where a mains voltage of 120V is used. (Philips, Public
Meeting Transcript, No. 38.4 at pp. 318-319)
In response, because the California Stakeholders have demonstrated
that an integrally-ballasted low-voltage IRL operating on 120V mains is
technologically feasible, DOE is no longer screening out this
technology option in its screening analysis. However, because one of
the tested prototypes (in particular, the only one claimed to meet
TSL5) combined the low-voltage capsule with a developmental silverized
reflector (see section V.B.5.d), DOE believes that there is significant
uncertainty regarding the actual efficacies when such a product is
manufactured on large scales. In addition, as stakeholders did not
provide the lifetime of their tested prototypes, DOE cannot confirm
that the resulting efficacies represent products with lifetimes similar
to the baseline lamps DOE analyzed. Therefore, although DOE recognizes
the potential of integrally-ballasted low-voltage IRL to reach high
efficacies, due to the lack of definitive data DOE cannot base the
establishing of max tech or the adoption of any other TSL on the test
data provided.
3. Lamp Lifetime
Because lamp lifetime affects lamp efficacy, certain commenters
suggested that the max-tech level should reflect a typical baseline
lamp with a lifetime of between 1,000 and 2,000 hours. (CA
Stakeholders, No. 63 at p. 15) ADLT acknowledged that a relationship
exists between lamp lumens and lifetime in which, all other things
remaining equal, one cannot be changed without affecting the other.
ADLT suggested that DOE should analyze lamps with lifetimes between
2,000 and 3,000 hours, which represents lifetimes commonly found in the
commercial and residential markets. (ADLT, No. 72 at p. 3)
DOE agrees that the max-tech level should be based on a lamp with a
lifetime typical to the baseline lamp, and it conducted its rulemaking
analyses accordingly. As discussed in Chapter 5 of the TSD and
consistent with ADLR's recommendation, DOE believes typical lifetimes
of IRL regulated by this rulemaking are currently 2,500 to 3,000 hours.
As discussed in section I.A.2, DOE has already considered that the
maximum technologically feasible level would incorporate the highest-
efficiency filament design, and such a filament would increase
operating temperature (and efficacy) to a point that would result in a
lifetime equivalent to the baseline lamp lifetime. However, because
this level requires the use of the proprietary silverized reflector,
DOE rejected this level as not economically-justified.
In addition, DOE has reevaluated whether TSL5 represents the
maximum technologically feasible level not dependent on a single
proprietary technology. In the April 2009 NOPR, DOE based TSL5 on a
commercially-available IRL which employs a proprietary silver
reflector, an improved (but not most-efficient) IR coating, and a
filament design that results in a lifetime of 4,200 hours. However, DOE
also stated that it believed that other technology pathways (not
dependent on the proprietary technology) may exist. This belief was
largely based on advanced IR coated capsules DOE tested (as documented
in Appendix 5D). However, as discussed in section VI.B.2.a, DOE does
not have the required certainty regarding these tested efficacies, and,
therefore, is not considering them in establishing standard levels for
this final rule. To verify that an alternate technology pathway exists
to achieving TSL5, DOE evaluated commercially-available lamps at TSL4
(that generally have lifetimes of 4,000 hours) and modeled their
efficacies at a reduced life-time similar to the baseline (2,500
hours). Using the 9th edition of the IESNA Lighting Handbook and by
developing a relationship between lifetime, lumens,
[[Page 34136]]
and wattage, DOE determined that a reduced lifetime TSL4 lamp (not
using the proprietary silver reflector) would in fact just meet the
efficacy requirements of TSL5. Therefore, DOE believes that TSL5
represents the maximum technologically feasible level not dependent on
a single proprietary technology, taking into account all lifetime
considerations.
C. IRL Lifetime
1. Baseline Lifetime Scenario
As discussed earlier, DOE's NOPR analyses were primarily based on
commercially-available lamps, modeling 4,000-hour-lifetime and 4,200-
hour-lifetime lamps at TSL4 and TSL5. DOE received a number of comments
on the anticipated availability of IRL of various lifetimes under
amended standards. Specifically, NEMA stated that it is possible to
achieve higher efficacy levels (e.g., TSL4 and TSL5), but that only
shorter-lifetime lamps are likely to be offered at those levels. NEMA
also argued that PAR halogen lamps must have lifetimes of at least
2,000 hours (and more typically 3,000 hours) in order to be
economically viable to consumers. (NEMA, No. 81 at pp. 5, 31) In
addition, ADLT commented that the market determines the appropriate
combination of efficacy and lifetime, it predicted that, in the future,
higher-efficacy lamps would have shorter lifetimes than those proposed
by DOE at TSL4 and TSL5 in the April 2009 NOPR. (ADLT, No. 72 at p. 3-
4) The CA Stakeholders also disagreed with DOE's selection of longer-
lifetime lamps at TSL4 and TSL5. They stated that on a technology
basis, lamp lifetime does not necessarily increase with the use of
improved halogen technology. The CA Stakeholders believed that because
manufacturers will be able to produce lamps with different combinations
of lamp life and efficacy at TSL4 and TSL5, DOE's shipment analysis
should not assume any change in average lamp life at those levels. (CA
Stakeholders, No. 63 at p. 28)
Although DOE acknowledges that there is a technology trade-off
between IRL lifetime and efficacy, based on the current stock of
commercially-available product, DOE has concluded that lamp lifetimes
of 4,000 hours and 4,200 hours are technologically feasible at TSL4 and
TSL5, respectively. However, DOE also recognizes that given the issues
regarding proprietary technologies, some manufacturers may choose to
meet these higher efficacy levels by reducing lifetime to 2,500 hours
and 3,000 hours. In addition, DOE also agrees with the CA Stakeholders,
that beyond issues regarding proprietary technologies, given their
ability to provide similar offerings of lamp lifetime, manufacturers
will likely choose to offer lamps at lifetime similar to the baseline
lamps (2,500 to 3,000 hours). Finally, DOE agrees with stakeholders
that such an assumption will likely change the impacts of amended
standards on consumers and manufacturers from those presented in the
April 2009 NOPR.
For this reason, DOE developed a Baseline Lifetime scenario (in
which it analyzed LCC savings, NPV, and manufacturer impacts) to
investigate the effects of shorter lamp lifetime at TSL4 and TSL5. DOE
determined it was not necessary to apply this scenario to TSL1 through
TSL3, because at those levels, DOE already analyzes lamps with
lifetimes similar to those of the baseline lamp lifetimes. However, for
this scenario at TSL4, for each of the three baseline lumen packages,
DOE analyzed an additional IRL with a lifetime equivalent to the
baseline lamp's lifetime (2500 hours for the 90W lumen package, 2500
hours for the 75W lumen package, 3000 hours for the 50W lumen package).
The efficacy and wattages of the additional IRL were the same as those
analyzed at TSL4 in the April 2009 NOPR. In addition, as DOE had no
indication that a less-costly technology could be utilized to meet TSL4
at these lower lifetimes, DOE modeled that the price of these
additional lamps would be the same as the long-lifetime TSL4 lamps.
For the Baseline Lifetime scenario at TSL5, as discussed in section
VI.B.3, DOE's calculations indicate that the operating temperature of
the 4,000 hour TSL4 lamp could be increased so as to result in a 2,500
hour lifetime lamp with an efficacy that would just meet TSL5.
Therefore, at TSL5, DOE models three additional lamps (one for each
baseline lumen package) which have lifetimes of 2,500 hours, the same
prices of the TSL4 lamps (since these lamps would use the same
technologies), and the same wattages and efficacies of the previously
analyzed TSL5 lamps. The results of this Baseline Lifetime scenario are
presented with the Commercial Product Lifetime scenario in sections
VII.B, VII.C.1, VII.C.2 and VII.C.3.
2. Minimum Lamp Lifetime Requirement
Some stakeholders expressed concern regarding the possibility of
extremely low lifetime lamps entering the market if DOE were to adopt
TSL4 or TSL5. As mentioned above, NEMA stated that a PAR halogen lamp
must have a lifetime of at least 2,000 hours, and more typically 3,000
hours, to be economically viable. (NEMA, No. 81 at p. 31) NEMA stated
that shorter-lifetime lamps are unacceptable for long-life applications
and negatively impacted the environment, because more lamps must be
manufactured, transported, and disposed of. (NEMA, No. 81 at pp. 5, 31)
Thus, NEMA commented that DOE should have considered a minimum lamp
life when setting efficacy standards. (NEMA, Public Meeting Transcript,
No. 38.4 at pp. 104, 111-112) Edison Electric Institute recommended
that DOE should consider setting a minimum lifetime standard for IRL,
as was done for CFL via the Energy Policy Act of 2005 (EPACT 2005).
(EEI, Public Meeting Transcript, No. 38.4 at p. 117)
While DOE acknowledges that EPACT 2005 set a minimum lifetime
standard for CFL based on the August 9, 2001 version of the Energy Star
Program Requirements for Compact Fluorescent Lamps (42 U.S.C.
6295(bb)), DOE does not have the authority to set minimum lifetime
standards for incandescent reflector lamps, because lamps lifetime is
not an energy efficiency metric. Under 42 U.S.C. 6291(6), ``energy
conservation standard'' is defined as: (1) A performance standard which
prescribes a minimum level of energy efficiency or a maximum quantity
of energy use; or (2) a design requirement (only for specifically
enumerated products, which do not include incandescent reflector
lamps). Because a standard for lamp lifetime would not fall under the
definition of ``energy conservation standard'' as defined by 42 U.S.C.
6291(6), DOE cannot adopt a minimum lifetime requirement for IRL in
this final rule.
3. 6,000-Hour-Lifetime Lamps
In response to these comments, DOE notes that it selected IRL
designs for its Commercial Product Lifetime scenario that would
preserve the lifetime of the baseline IRL analyzed in this rulemaking,
even though DOE understands that manufacturers can increase IRL
efficacy by reducing IRL lifetime. 73 FR 13620, 13650 (March 13, 2008).
DOE notes that improved HIR lamps, as well as lamps introduced to meet
TSL5 in the April 2009 NOPR have lifetimes greater than 4,000 hours,
demonstrating that longer-life lamps can meet higher standard levels.
DOE also believes that the life-cycle cost analysis results presented
in this rulemaking accurately indicate the economic benefits to
consumers, as the life-cycle cost analysis inherently considers lamp
lifetime as well as the time value of money. Furthermore, in the April
2009
[[Page 34137]]
NOPR, DOE expressed its belief that lamp lifetime is an economic issue
rather than a utility issue because lifetime does not change the light
output of the lamp. 74 FR 16920, 16939 (April 13, 2009). Nevertheless,
DOE analyzed whether long-life lamps would be available at higher TSLs.
At TSL5, DOE has determined that manufacturers can provide lamps with a
lifetime of at least 4,200 hours, but is unable to confirm that they
could offer lamps with a lifetime of 6,000 hours. However, at TSL4, DOE
believes that manufacturers can achieve lifetimes of 6,000 hours by
decreasing the efficacy of a lamp compliant with TSL5. Thus, 6,000-
hour-lifetime lamps would not be eliminated at this standard level.
In summary, DOE understands that lifetime and IRL efficacy are
related, but believes that the selection of an IRL lifetime by a lamp
designer does not automatically determine the efficacy of the lamp.
There are a variety of methods that lamp designers can utilize to meet
DOE's standard levels, and these methods are analyzed in this
rulemaking. DOE considers how lamp lifetime affects consumers in its
LCC analysis.
D. Impact on Competition
1. Manufacturers
DOE received several comments related to the impact of IRL
standards on industry competition. Philips believed that because most
technologies employed to manufacture advanced IR coatings were
proprietary, the adoption of IRL standards that required such a
technology would adversely affect competition among lamp manufacturers.
(Philips, Public Meeting Transcript, No. 38.4 at pp. 111-112)
ADLT disagreed that advanced IR coatings required proprietary
technology. (ADLT, Public Meeting Transcript, No. 38.4 at p. 112) The
CA Stakeholders also disagreed and instead supported DOE's assertion in
appendix 5D that advanced IR coatings were not a developmental product,
and were presently not patented and were available to all lamp
manufacturers. (CA Stakeholders, No. 63 at p. 17) ADLT confirmed that
the uncoated burner tested by DOE for appendix 5D has been in
production for several years in the United States. Furthermore, the
coating applied to this burner has been in production in Europe on 12V
burners for several years. (ADLT, No. 72 at p. 3)
The California Stakeholders asserted that adoption of a high
standard level for IRL would not cause a significant lessening of
competition. They commented that because manufacturers invest in new
technologies at different times in competition with rivals,
manufacturers currently offer products of different efficacies. The
California Stakeholders added further that manufacturers have already
invested significant capital to develop efficient burners and
reflectors, which is reflected by the fact that they offer products
currently meeting TSL 4 and TSL 5. (California Stakeholders, No. 63 at
pp. 24-25)
In response, DOE does not believe that the adoption of a high
standard level will adversely affect competition between lamp
manufacturers. Consumers purchase lamps for a variety of utility
features (size, color, dimming capability, directional light, lifetime,
etc.) other than efficacy. Because consumer choice among these many
features will remain unrestricted by this final rule, manufacturers
have many grounds on which to compete. Furthermore, continued
innovation in incandescent technology--driven, in part, by the desire
to maintain a schedule of margins based on efficiency (as opposed to
simply the utility features noted above)--is likely to maintain or even
promote competition. DOE also acknowledges the proprietary silverized
reflector technology at issue. As discussed in section VI.A, DOE
believes there are alternative technologies to meeting higher efficacy
levels and therefore believes that this final rule does not provide for
any technological advantage that doesn't already exist in the
marketplace. A more detailed discussion of the impact of the adopted
IRL standard on industry competition is contained in section VII.C.5.
DOE also received comment regarding the impact of the effective
date for IRL standards on industry competition. To DOE's knowledge, two
of the three major manufacturers of IRL currently sell a full product
line (across common wattages) that meet TSL4. However, it is DOE's
understanding that OSI employs a technology platform that, due to the
positioning of the filament in the HIR capsule, is inherently less
efficient. Therefore, it is likely that in order to meet TSL4, OSI
would have to make considerably higher investments than the other
manufacturers, placing it at a competitive disadvantage. OSI commented
that they required one additional year to obtain the requisite
approval, design, build, and install equipment, and stabilize high
volume production if DOE were to adopt TSL4. (OSI, No. 84 at p. 1)
While DOE recognizes the challenges inherent in gaining access to
technology and building capacity needed to begin production, as
detailed in section VI.I of this notice DOE does not have the statutory
authority to extend the implementation period. OSI did not provide the
detailed information which DOE would need to appreciate why what is
achievable in 4 years cannot be accomplished in the 3 years lead time
specified by EPCA. For example DOE believes that proprietary
technologies are not required to meet TSL 4 and that suppliers could
provide HIR capsules if these could not be manufactured in-house.
Furthermore it is unclear how it might be possible to stabilize high
volume production without producing high volumes of lamps. For this
reason DOE believes that a 3 year lead time will be sufficient to
ensure that the IRL market is supplied.
2. Suppliers
DOE also received several comments related to the potential impact
of the adopted IRL standard on the competition between technology
suppliers. The Applied Coatings Group (ACG) expressed concern regarding
the adoption of an IRL standard that could only be met using an
advanced IR coating manufactured by ADLT (this coating is described in
appendix 5D of the TSD). ACG believed that such an action may create a
monopoly for DSI, a subsidiary of ADLT, which would be detrimental for
the lighting industry and consumers. (ACG, No. 52 at p. 2)
Conversely, the CA Stakeholders believed that there is already
competition to manufacture advanced coatings for lamps. They provided a
list of companies that had either already invested in the technology or
were considering such an investment. (CA Stakeholders, No. 63 at p. 18)
DSI, a U.S. company which is owned by ADLT, applies coatings using a
sputtering process in a vacuum chamber. Auer Lighting, a German company
also owned by ADLT, manufactures a similar coating of comparable
efficiency and price using plasma impulse chemical vapor deposition
(PICVD). Furthermore, a patent is pending on a third process to apply
an IR coating to improve lamp efficacy (CA Stakeholders, No. 63 at pp.
17-18) The CA Stakeholders believe that the IRL standards adopted by
this rulemaking and the GSIL standards imposed by EISA 2007 will only
increase the level of competition in the advanced coatings industry.
(CA Stakeholders, No. 63 at pp. 18-19)
DOE agrees with the CA Stakeholders that the adopted standard for
IRL will not create a monopoly for DSI because sufficient competition
exists in the advanced coatings industry. As
[[Page 34138]]
discussed above, other companies are currently investing in advanced IR
coating technology or are considering such an investment prior to DOE
adopting revised IRL standards in this final rule. Furthermore,
technology pathways exist other than advanced IR coatings that can meet
or exceed the highest efficacy level. Thus, it is extremely unlikely
for one company to become a monopoly as a result of DOE's adopted
standards because there is more than one technology pathway to meet the
most efficient level. For these reasons, DOE believes that the IRL
standards adopted in today's final rule will not adversely impact
competition among technology suppliers.
E. Xenon
In response to the March 2008 ANOPR, DOE received comments
regarding the price and availability of xenon. Manufacturers believed
that because of xenon's high price and limited supply, it should not be
considered for use as a higher efficiency inert fill gas. (NEMA, No. 21
at p. 9) Although price is not considered in the screening analysis,
DOE did conduct an in-depth market assessment of the supply of xenon,
and the potential impact of xenon supply limitations on IRL standard
levels. DOE determined that although xenon is a rare gas, its supply is
sufficiently large to incorporate into all IRL and that the xenon
supply would not affect IRL product availability (see appendix 3B of
the TSD for more details). As such, in the April 2009 NOPR, DOE
believed that the use of xenon as a higher efficiency inert fill gas
satisfied the screening criteria and considered it as a design option
when developing efficacy levels.
The CA Stakeholders agreed with DOE's analysis and conclusions in
appendix 3B of the TSD that xenon is not likely to impact
manufacturers' ability to produce IRL at higher standard levels. (CA
Stakeholders, No. 63 at p. 22) NEMA agreed with DOE's observations
regarding the fluctuating demand for xenon and its price being affected
by demand in other industries. However, NEMA reiterated that DOE must
consider the increased cost of xenon in its LCC analysis because NEMA
estimates these costs to be substantial ($0.50 to $0.75 per lamp).
(NEMA, No. 81 at p. 20)
In response, DOE did consider the impact of the price of xenon on
LCC savings in the April 2009 NOPR and has updated its analysis with
NEMA's inputs. DOE performed an analysis, described in appendix 3B, in
which it calculated how much the price of xenon would have to increase
before LCC savings became negative. DOE concluded that, in general, the
price of xenon could approximately triple before it significantly
negatively impacted LCC savings. However, DOE notes that when examining
LCC savings for lamps modeled in the Baseline Lifetime scenario (see
section VI.C.1), the economic benefits of moving to higher efficacy
lamps is much reduced. Therefore, increases in the price of xenon could
in fact turn LCC savings to LCC increases for some consumers. DOE also
maintains its conclusion that the availability of xenon will not be
impacted by this final rule because historical evidence shows that
supply slowly increases until it meets demand. For more details, see
appendix 3B of the TSD.
F. IRL Hot Shock
In interviews, manufacturers of IRL expressed concern that halogen
and HIR IRL are susceptible to a premature failure mode known as ``hot
shock'' when installed in energized sockets, which could reduce LCC
savings for consumers. The hot shock condition occurs when the lamp
filament contacts another part of itself due to vibration or torque,
causing an electrical short within the lamp. In written comments, both
NEMA and GE expressed that hot shock is a significant concern for
efficacious IRL, especially in the residential sector, where IRL in
recessed ceiling cans of multi-floor houses may experience hot shock
due to vibrations caused by the movement of people on the upper floors
shared by the ceilings where IRL are installed. (NEMA, No. 81 at p. 6,
p. 10, pp. 27-28; GE, No. 80 at p. 7-8) In contrast, the California
Stakeholders provided three reasons why they believed that the hot
shock failure mode is not prevalent enough to prevent DOE from
selecting a standard level that may require higher efficiency
technologies. (California Stakeholders, No. 63 at pp. 21-22) Firstly,
the California Stakeholders stated that in product documentation,
manufacturers describe simple ways to avoid hot shock, primarily by
avoiding installing or directing lamps while circuits are on. Secondly,
the California Stakeholders stated that a patented technology
(specifically a voltage reduction circuit) exists that claims to
eliminate the risk of hot shock. Lastly, the California Stakeholders
argued that as manufacturers have been selling halogen and HIR lamps
for many years, if hot shock was a significant concern, there would be
a noticeable adverse market response and mentioning of consumer
dissatisfaction (of which their research found neither).
DOE acknowledges that halogen and HIR IRL are susceptible to hot
shock during installation in energized sockets or due to vibration that
occurs during operation. DOE cannot set standards that necessitate the
usage of a proprietary technology due to the adverse impacts on
manufacturers and industry competition that may result. Thus, DOE is
not considering the patent described by the California Stakeholders as
a feasible way of preserving LCC savings. See section VI.B.1 for
further details. DOE does agree, however, that halogen and HIR products
are readily available on the market despite the risk of hot shock. DOE
was unable to determine the prevalence of hot shock in the commercial
or residential sectors due to a lack of available data, so DOE
determined at what lifetime a standards-compliant lamp purchased by a
commercial or residential consumer would experience negative LCC
savings. The results are shown in Table VI.1 for commercial consumers
and Table VI.2 for residential consumers. Entries of ``N/A'' represent
lamps that already give negative LCC savings to consumers. DOE also
notes, as discussed in the April 2008 NOPR, during interviews
manufacturers stated hot shock could decrease lifetime by 25 to 30
percent.
Table VI.1--IRL Lifetime for Negative LCC Savings in the Commercial Sector
----------------------------------------------------------------------------------------------------------------
IRL lifetime (hours)
Efficacy level -----------------------------------------------
90W baseline 75W baseline 50W baseline
----------------------------------------------------------------------------------------------------------------
EL1............................................................. N/A N/A N/A
EL2--6,000 hr................................................... 2587 2587 3277
EL2--3,000 hr................................................... 2242 2242 N/A
EL3............................................................. 1897 1897 2932
EL4............................................................. 1897 2242 3277
[[Page 34139]]
EL5............................................................. 1897 1897 3277
----------------------------------------------------------------------------------------------------------------
Table VI.2--IRL Lifetime for Negative LCC Savings in the Residential Sector
----------------------------------------------------------------------------------------------------------------
IRL lifetime (hours)
Efficacy level -----------------------------------------------
90W baseline 75W baseline 50W baseline
----------------------------------------------------------------------------------------------------------------
EL1............................................................. 2443 N/A N/A
EL2--6,000 hr................................................... 2355 2532 3233
EL2--3,000 hr................................................... 1999 2177 2977
EL3............................................................. 1644 1821 2621
EL4............................................................. 1733 1910 2977
EL5............................................................. 1644 1910 3243
----------------------------------------------------------------------------------------------------------------
G. Rare Earth Phosphors
During manufacturer interviews, manufacturers asserted that higher
TSLs for GSFL would require substantially larger amounts of triphosphor
to attain those efficiency levels. As compared to halophosphor,
triphosphor is composed of more expensive rare earth elements that
increase many performance features of GSFL, including efficacy, lumen
maintenance, and color rendition. Manufacturers commented that a
standards-induced increase in triphosphor demand would drive up prices
for the rare earth elements used to make triphosphor, and might
potentially exceed what the market could supply. In response, for the
April 2009 NOPR, DOE conducted a market assessment of the rare earth
phosphor industry (see April 2009 NOPR TSD Appendix 3C). DOE focused on
the key rare earth elements used in high-efficacy GSFL--yttrium,
terbium, and europium--because they are major cost drivers of
triphosphor and were the subject of manufacturer concerns over
availability. After completing the assessment, DOE did not believe it
had sufficient information to project phosphor prices by modeling
future supply and demand curves. Instead, DOE compared the LCC savings
of consumers purchasing high-efficacy lamps to potential increases in
the incremental first cost of rare-earth-based 800-series lamps that
would result from higher rare earth phosphor prices. In general, DOE
found that in most commercial and residential purchase events, consumer
LCC savings was sufficiently high to remain positive even in the face
of potentially dramatic increases in phosphor prices. DOE also stated
that higher prices were likely to attract mining firms into the market
and make less-concentrated rare earth deposits economically viable. 74
FR 16920, 16974 (April 13, 2009)
NEMA disagreed with DOE's analysis in the April 2009 NOPR and
conclusion on four major points: First, DOE underestimated the increase
in standards-induced triphosphor demand; second, DOE did not
appropriately consider the problems with supply in the industry; third,
higher efficacy levels will have a negative environmental impact due to
the required increase in mining operations; fourth, the cumulative
effect of the above factors would lead to dramatic increases in costs
to manufactures and consumers.
Specifically, on the magnitude of standards-induced triphosphor
demand, NEMA argued that TSL 1 or TSL 2 would prohibit halophosphor
lamps, which would double manufacturer triphosphor demand. NEMA
commented that shifting all lamps to TSL 4 or TSL 5 would increase the
industry's triphosphor needs by an additional factor of three. In sum,
NEMA estimated TSL 1, TSL 2, TSL 3, TSL 4, and TSL 5 would require 175
percent, 200 percent, 230 percent, 250 percent, and 350 percent of
current triphosphor usage, respectively. (Philips, Public Meeting
Transcript, No 38.4 at pp. 247-248, 251-252; NEMA, No. 81 at pp. 3, 18-
19) Conversely, NRDC argued that the conversion of T12 lamps to T8 and
T5 lamps would mitigate the increase in phosphor demand. (NRDC, No. 82
at p. 3)
In response to all comments, DOE conducted additional research on
the rare earth industry, including several interviews with agents along
the triphosphor value chain and other industry experts. Based on these
interviews, manufacturer comments, further research and analysis of
additional data obtained, DOE reevaluated its rare earth phosphor
market analysis and assumptions.
To determine how much trisphosphor demand would increase at each
TSL, DOE determined the amount of triphosphor required in each lamp
type at each TSL, using assumptions from manufacturer interviews and
industry interviews. For example, DOE used Philips' estimate that high
performance 800-series lamps require three to four times as much
triphosphor as standard 700-series lamps to establish the difference in
triphosphor weight between the two phosphor series. DOE then multiplied
these amounts by its shipments projections (see section V.D.2) for each
phosphor series. (See TSD appendix 3C for a more detailed discussion of
DOE's methodology.)
Based on this analysis, DOE agrees with the industry commenters
that amended standards will lead to significant increases in
manufacturers' need for triphosphor, and by extension, europium (Eu),
terbium (Tb), and yttrium (Y). DOE estimates that at TSL 3, TSL 4, and
TSL 5, manufacturer demand for triphosphor in covered products in 2012
would be 171 percent, 183 percent, and approximately 230 percent of
base-case usage, respectively. These ranges reflect DOE's upper-bound
and lower-bound energy savings scenarios, which DOE used to capture the
effect of consumers selecting different phosphor series lamps in
response to standards. In the lower-bound scenario, triphosphor usage
actually declines from TSL 3 to TSL 4, as the increase in triphosphor
usage due to higher-efficacy lamps is offset by the decline in usage
from the elimination of high-efficacy T12 lamps. At TSL 5, there is a
large incremental jump in usage under any scenario.
[[Page 34140]]
DOE believes its own estimate of the standards-induced triphosphor
demand differs from NEMA's estimate for several reasons. First, DOE's
estimate is relative to the 2012 market as opposed to current usage.
DOE's analysis attempts to isolate the impact on triphosphor usage from
the energy conservation standards under consideration in this
rulemaking, net of the expected increase between now and the effective
date. As such, DOE accounts for a currently-ongoing trend toward
triphosphor lamps in the base case due to the increased penetration of
triphosphor T8 lamps relative to halophosphor T12 lamps. Supporting
this base-case increase in triphosphor usage, one industry supplier
told DOE it expected triphosphor demand for linear GSFL to double in
five to six years in the base case. Another said it expects continued
double-digit growth in terbium demand. Second, DOE's estimate does not
assume that all T8 lamps are 700-series in the 2012 base case. For
example, 22 percent of 4-foot medium bipin lamps T8 are 800-series or
high-performance 800-series lamps.
Regarding NEMA's second point regarding the total available supply
of rare earth phosphors, Philips commented that Rhodia, a major
phosphor supplier, told them in 2006 that there was only a 14-year
terbium supply left in the ground, meaning that if demand doubled due
to standards, the lamp industry would struggle to obtain sufficient
amounts of terbium in six to seven years. NEMA commented that Rhodia
predicted that even without changes to DOE's energy conservation
standards, terbium, and europium would be in short supply within five
years. (Philips, Public Meeting Transcript, No 38.4 at pp. 254-255,
258-259, 263)
NEMA also highlighted China's monopolistic position in the rare
earth market as a threat to supply. NEMA stated that China, in an
attempt to move manufacturing of products such as GSFL to their
country, is setting production caps, reducing export quotas and
licenses, and placing taxes on exports of rare earth commodities.
According to NEMA, Chinese mine operators will not flood the market
with the more abundant elements because that would depress their value.
(NEMA, No. 81 at pp. 16-18)
NEMA also rejected the notion that mines outside China, induced by
higher phosphor prices, could augment supply by the amount China is
restricting it. NEMA asserted that DOE should focus not on rare earths
in general but rather those that are important to GSFL, particularly
terbium and europium, because they represent only a tiny fraction of
the rare earth mined. NEMA stated that DOE's list of potential mines in
the April 2009 NOPR TSD (appendix 3b) does not indicate the presence of
significant phosphor elements needed for GSFL manufacturing. For
example, one mine DOE had listed as a potential source is in Mountain
Pass, California. However, NEMA stated that its ore contained only 0.2
percent europium and no measure of terbium, according to the U.S.
Geological Survey. (NEMA, No. 81 at p. 16-19) Even if other mines
eventually go into production, Philips argued, they will not come
online quickly enough to meet standards-induced demand. (Philips,
Public Meeting Transcript, No 38.4 at pp. 253, 259) NEMA commented that
DOE's conclusion that higher rare earth prices will attract additional
mining operations is not supported by the record or anyone with
knowledge of the subject. (NEMA, No. 81 at p. 19)
As it relates to the physical availability of Y, Tb, and Eu, DOE
reevaluated its analysis on the supply and demand of the key rare
earths to the lighting industry given manufacturer comments. DOE agrees
that the availability of rare earth phosphors (particularly with regard
to terbium and europium) is a serious issue. As stated above, DOE
agrees that manufacturers will most likely require large increases in
rare earth phosphors to meet the standard established by this final
rule. DOE interviewed industry experts and suppliers along the
triphosphor value chain about the quantity of the key elements likely
to be available over the near, intermediate, and long term. DOE
received conflicting reports from those within the field regarding
future supplies of these key materials. Many factors obscure the amount
of recoverable rare earth that will be available to manufacturers,
including future Chinese policy and strategic priorities, policies of
countries outside China, demand from other applications, reclamation
efforts, and lack of transparency in the industry. Industry experts
have suggested there are sufficient amounts available to meet expected
demand for anywhere from 15 years to indefinitely. That is not to say
that a supply shortage of these key elements and other rare earths is
unlikely. Indeed, many of those experts that DOE interviewed expect
shortages of most rare earths--not because of this rulemaking, but
because of Chinese policy. Based on its interviews and research, DOE
has concluded that the pivotal issue governing the risk to the physical
availability of rare earths is Chinese policy. China currently supplies
some 95 percent of the rare earth market and has taken steps to
restrict the exportation of rare earths resources. Many in the field,
as noted by manufacturers, consider this to be more a reflection of
China's strategic decision to compel rare earth-dependent industries
(which tend to be burgeoning high-technology fields) to host operations
in China,\56\ rather than an indication of limitation in terms of the
physical availability of the resource.\57\ DOE does not dispute such a
strategy could restrict rare earth phosphor supplies. However, DOE
again notes this is substantially not a function of this final rule,
but of external factors that may or may not affect industry in the base
case as well as the standards case.
---------------------------------------------------------------------------
\56\ Latimer, Cole; Kim, Jieun, Kim; Tahara-Stubbs, Mia; Wang,
Yumin, ``China's Rare Earth Monopoly Threatens Global Suppliers,
Rival Producers Claim,'' Financial Times (May 29, 2009).
\57\ Richardson, Ed, Thomas & Skinner, ``High Performance
Magnets,'' Strategic Minerals Conference (April 2009).
---------------------------------------------------------------------------
In terms of other mining operations outside China, DOE found
differing opinions on whether such operations have the potential to
appreciably increase the supply of the key rare earths. DOE understands
the key difference between those elements critical to the lighting
industry and rare earths in general (discussed below) and agrees with
NEMA that simply increasing production of rare earths is not sufficient
to meet the specific needs of lamp manufacturers. While DOE also agrees
that new projects outside of China could take years to come online,
industry experts related that part of the reason for this is the threat
of China increasing supply, thereby reducing prices, just as other
facilities embark on the large capital costs required to develop mines.
While this does imply a limited role for non-Chinese suppliers, it
necessarily also implies an increase in rare earth phosphor supply.
DOE continues to believe that any sharp increase in demand over the
long term will send strong price signals to rare earth suppliers and
potential suppliers around the globe, thereby increasing investment in
the exploration and recovery of rare earths, as discussed in appendix
3B of the TSD. Another view common to the industry is that nations
outside China will be forced to view rare earths as a strategic
resource and take steps to secure access. The United States Geological
Survey estimates that 58 percent of rare earth reserves base are in
China,\58\ meaning
[[Page 34141]]
there could be other sources of rare earths, although reserves of those
specific rare earth elements key to lighting use may be more highly
concentrated in China than all rare earths. (Please see appendix 3C of
the TSD for a list of potential rare earth development projects.) Two
potential domestic rare earth sources are the Mountain Pass, California
site and the Pea Ridge iron ore mine in Missouri. NEMA and Philips
noted that while 20,000 tons of rare earths could potentially be mined
at Mountain Pass, only 0.2% was europium. Regardless of the likelihood
of the mine in Mountain Pass reopening, DOE notes that that amount
equates to 40 tons of europium annually, a figured DOE confirmed by
interviews with the mine's operators. Production could in fact be
higher, and such an amount is not insignificant amount given that
estimated total worldwide demand for europium was 300 tons in 2007 and
was projected to be 420 tons in 2012.\59\ While estimates vary, a
Rhodia presentation estimates terbium demand to be 420 tons in 2012,
not the 600 tons NEMA noted. The company also told DOE that it expects
supply and demand to be in balance in the near term for terbium and
europium. Reports of the Pea Ridge resource indicate it is relatively
rich in the rare earths key to the lighting industry, including
terbium.\60\ Molycorp, the company that owns the Mountain Pass site,
also told DOE that it is currently exploring four other sites outside
China that have significant concentrations of the heavy rare earths
(the group to which the critical rare earths such as terbium belong).
---------------------------------------------------------------------------
\58\ Hedrick, James B., Mineral Commodity Summaries, United
States Geological Survey (Jan. 2009).
\59\ Cuif. Jean-Pierre, Rhodia Silcea--Electronics BU, ``Is
there enough rare earth for the ``green switch'' and flat Tvs?'',
Phosphor Global Summit 2008 (March 2008).
\60\ Available at: http://www.wingsironore.com/data/wings_enterprises_reo_quick_summary.pdf
---------------------------------------------------------------------------
NEMA also commented on phosphor reclamation as another source of
rare earth supply. Philips stated that Rhodia has said there physically
will not be enough phosphor beyond 2015 without reclamation. NEMA
argued that while reclamation could augment supply, it would require
significant infrastructure investment and still bring issues such as
mercury contamination into play with regard to international transport
(as many phosphor manufacturers are overseas). Such infrastructure and
systems of collection and handling currently do not exist. Therefore,
NEMA argued, while it expects recycling to emerge in response to the
impending shortage, it is ``entirely speculative'' to assume
reclamation can impact the rare earth phosphor shortage in this decade.
Philips stated that only one of the two types of the green phosphor can
currently be recycled; the type commonly used in CFLs cannot. In
addition, GE stated that at TSL 4 and TSL 5, reclamation will not
enlarge supply because reclaimed phosphor does not perform well enough
to meet those levels. (Philips, Public Meeting Transcript, No 38.4 at
pp. 261, 262; NEMA, No. 81 at p. 18)
Based on interviews, DOE believes that reclamation efforts can play
a significant role in augmenting supply, but only in the longer term.
Rhodia estimates that by 2015 there will be more than 250 tons of rare
earth oxide in recycled lamps.\61\ Rhodia already has reclamation
ability and is ramping up its capacity, but technical and economic
challenges of commercial-scale operations remain. First, the
infrastructure to collect recycled GSFL must be in place. With this
infrastructure, a commercial-scale, technically-viable process for
distilling the rare earths from the other lamp materials--glass,
alumina, halophosphate, etc.--must be established. This will have to
include chemical treatments, mercury removal, and waste disposal.
---------------------------------------------------------------------------
\61\ Rhodia, ``Phosphor Recycling: Dream or New Source of Rare
Earths?'' Presentation at Phosphor Global Summit 2009 (March 2009).
---------------------------------------------------------------------------
While DOE agrees that reclaimed phosphor is too degraded to be used
at TSL 4 or TSL 5, DOE notes that Rhodia stated that it can still meet
the needs of high-performance lamps because the company refines the
triphosphor back down into its original elements (e.g., terbium,
europium) and then remanufactures the triphosphor. Because this process
clearly adds cost to the reclaimed triphosphor, it is likely only
higher price points will trigger additional supply via reclamation.
The attractiveness of reclamation will depend not only on the cost
of the process versus the price of normal rare earth acquisition, but
also the amount of rare earth available for recovery in the retiring
lamp stock. Currently, the universe of retiring lamps was installed
several years ago; they are mostly halophosphor lamps. Therefore, the
yield of rare earth oxides from recycling these lamps would be unlikely
to make commercial-scale reclamation economically attractive in the
very near future. As such, in light of the other details, DOE agrees
that large-scale reclamation is unlikely to occur before 2015. However,
in several years, Rhodia expects the amount of recoverable useful rare
earth to grow significantly as high-performance GSFL become
commonplace.\62\ Just as energy conservation standards will increase
the demand for rare earth phosphor in 2012, they will provide larger
volumes available for reclamation when they retire. At such time, it is
entirely possible that reclamation eventually could augment supply.
---------------------------------------------------------------------------
\62\ Rhodia, ``Phosphor Recycling: Dream or New Source of Rare
Earths?'', Presentation at Phosphor Global Summit 2009 (March 2009).
---------------------------------------------------------------------------
On its third point regarding the impact of rare earth mining, NEMA
argued that those who think TSL 5 is environmentally sound are not
considering the environmental impact that will arise from such an
increase in demand. Philips argued that the goal of the U.S. should not
be to quadruple strip mining operations around the world. According to
Philips, TSL 5 would increase mining by 300 percent relative to TSL 3,
depleting natural resources more rapidly and increasing the cost to the
consumer. (Philips, Public Meeting Transcript, No 38.4 at pp. 253, 259;
NEMA, No. 81 at p. 19)
DOE agrees with NEMA and Philips that increased demand could
require additional mining operations. However, mining for rare earths
reflects a small portion of all global mining operations. DOE does not
believe that the increase in global demand resulting from this final
rule will come close to requiring the mining increase suggested by
Philips as industry experts also noted that rare earths in many
instances could be mined as byproducts and, therefore, not create the
same footprint as an entirely new project.
On its fourth point, NEMA and Philips argued that a massive price
spike in rare earth phosphors will occur in 2012 when manufacturers
supplying the U.S. market have to double their requirements as China
continues to reduce quotas. GE commented that this would lead to very
expensive lamps for consumers. (GE, Public Meeting Transcript, No 38.4
at pp. 256; Philips, Public Meeting Transcript, No 38.4 at pp. 248-249;
NEMA, No. 81 at p. 18) Conversely, the California Stakeholders
commented that they agreed with DOE's April 2009 NOPR analysis related
to rare earth phosphors, stating that rare earth phosphor prices and
availability would not affect product availability or consumers' life
cycle cost savings. (California Stakeholders, No. 63 at p. 11) ACEEE
commented that it does not expect the availability of rare earth
phosphors to result in excessive price volatility. (ACEEE, No. 76 at p.
2)
In response, as discussed in the April 2009 NOPR, DOE believes that
the standards case, all other things being
[[Page 34142]]
equal, will result in higher prices for yttrium, europium, and terbium.
(74 FR 16920, 16974 (April 13, 2009) As in the April 2009 NOPR, DOE
does not believe is it possible to generate reasonable price forecasts,
particularly given the historical volatility in rare earth prices,
trade restrictions, trade policies, lack of publically-available data
from China, and potential supply sources coming online. As an example
of the price volatility, terbium prices on May 20, 2009 were roughly
half what they averaged in 2008,\63\ this after increasing dramatically
in previous years.
---------------------------------------------------------------------------
\63\ See http://lynascorp.com/page.asp?category_id=1&page_id=25.
---------------------------------------------------------------------------
However, given that DOE believes standards-induced demand increase
has the potential to affect the worldwide demand of europium, terbium,
and yttrium, DOE has concluded that it is possible prices will rise for
these elements, all other things being equal. To broadly gauge the
potential impact of standards on prices, DOE assessed the standards-
induced increase of their demand in the context of the international
market for these materials, as these key rare earths have many
applications and are transacted in a global market. DOE estimates that
this final rule will increase worldwide demand for terbium and europium
relative to the 2012 base case by roughly 10 percent. DOE used Rhodia
estimates for the 2012 base case.\64\
---------------------------------------------------------------------------
\64\ Cuif. Jean-Pierre, Rhodia Silcea--Electronics BU, ``Is
there enough rare earth for the ``green switch'' and flat Tvs?'',
Phosphor Global Summit 2008 (March 2008).
---------------------------------------------------------------------------
DOE's interviews and research showed that there are many value-
added processes in the supply chain of triphosphor. Some of the cost
attendant to these processes is not directly driven by the demand (and
scarcity) of these rare earth elements themselves, but by the mining,
chemical processing and concentrating, and blending costs that are
inherent to triphosphor production. According to interview
participants, these processes are highly driven by energy costs, which
will be mostly equivalent in the base case and standards cases. This is
supported by the fact that despite the prospect of increasing demand,
the prices of the key rare earths declined significantly from summer
2008 to spring 2009, more in line with oil and other commodity prices.
Other important cost drivers to manufacturers include a 25-percent
tariff on the export of key rare earths from China, which will also be
the same in the base case and standards cases.
As it did in the April 2009 NOPR, DOE conducted a sensitivity
analysis for this final rule to address the potential increases in end-
user lamp prices attributable to higher rare earth input costs. And
despite the fact that price increases in the key rare earth elements
are unlikely to be equal to triphosphor costs (because of the many
other cost inputs), to be conservative, DOE assumed that such a
relationship existed. That is, if Eu, Y, and Tb prices--weighted for
their proportional use in triphosphor--doubled, DOE assumed the price
of triphosphor also doubled. DOE used the analysis to determine how
robust consumer LCC savings are at TSL 3, TSL 4, and TSL 5. DOE
compares the LCC savings due to purchasing higher-efficacy GSFL (as
calculated in chapter 8) to LCC savings under scenario with higher
phosphor prices. As discussed in appendix 3C of the TSD, DOE determined
the quantity of each rare earth phosphor required to manufacture each
phosphor series of GSFL. DOE then estimated how a range of prices for
the key rare earth phosphors would affect manufacturing lamp costs.
Next, by applying manufacturer and retail markups, DOE analyzed how
increases in rare earth phosphor prices may affect LCC savings for a
consumer of each lamp type.
DOE found that for most commercial and residential purchase events,
consumer LCC savings were sufficiently high to remain positive even if
there were dramatic increases in triphosphor prices and manufacturers
were forced to pass those cost increases on to the consumer with
current markup levels. In fact, all events that yield positive LCC
savings at TSL 4 at current triphosphor prices would maintain positive
LCC savings despite dramatic increases in trisphosphor prices (as a
result of rare earth price increases). By the same token, DOE
calculated that the dramatic decline in rare earths prices since the
summer of 2008 likely did not significantly affect consumer LCC
savings.
In conclusion, regardless of the differences between DOE and NEMA's
phosphor usage estimates, it is worth noting that moving from TSL 3 to
TSL 4 results in a much smaller increase in triphosphor usage than any
other incremental step up in efficacy levels, according to each
estimate. As noted above, NEMA estimates a relatively small increase in
usage at TSL 4 relative to TSL 3 (250 percent vs. 230 percent) and both
show a much larger increase in moving to TSL 5 (350 percent). Given
that NEMA commented that TSL 3 could be implemented in terms of
triphosphor, despite more than doubling domestic usage, DOE believes
the relatively small incremental demand increase of moving to TSL 4
works to justify the latter, higher efficacy level. (NEMA, No. 81 at p.
2; GE, Public Meeting Transcript, No 38.4 at pp. 254-255) Similarly,
while it is impossible to guarantee the amount of recoverable rare
earth in the ground, or predict the supply impacts of Chinese policy,
DOE does not believe the slight incremental impact of TSL 4 relative to
TSL 3 significantly exacerbates these concerns. However, given the
large increases in rare earth phosphor required at TSL 5 relative to
TSL 4, DOE is concerned about the impact of TSL 5 on product
availability as well as the potential environmental impact of producing
the necessary rare earth resources.
For all of these reasons--a relative small increase in triphosphor
needs at TSL4 relative to TSL 3, which industry acknowledged was
acceptable; continued LCC savings for the consumer even with higher
triphosphor prices and tariffs; greater potential for additional supply
resources and reclamation with higher rare earth prices; and,
significantly, the fact that the major factors in rare earth
availability and prices are largely independent of this rulemaking--DOE
concludes that TSL 1 through TSL 4 are appropriate with respect to rare
earth phosphor availability, prices, and environmental impact.
H. Product and Performance Feature Availability
1. Dimming Functionality
NEMA expressed concern about the loss of dimming capability as IRL
consumers migrate to other technologies. NEMA acknowledged that
although no data exists to characterize the dimming market, industry
believes there is ``considerable overlap'' between dimmer and IRL
installations. Thus, for both the commercial and residential sector,
NEMA believes that a significant number of installed halogen lamps are
used in combination with dimmers. NEMA commented that at TSL4 and TSL5
specifically, the high price of covered IRL will likely force consumers
to buy lower cost, but non-dimmable technologies. NEMA argued this
would disappoint end-users, especially those in the residential sector,
as they are more likely to purchase a lamp based on its first cost.
Furthermore, NEMA argued that because a significant percentage of
installed halogen lamps are used in dimming applications (and therefore
consume less energy when dimmed), the energy saving benefit of an
alternative non-dimmable replacement is reduced. (NEMA, No. 81 at p.
29-30) Lutron also urged DOE to account for this functional loss in its
[[Page 34143]]
analysis. (Lutron, No. 38.4 at p. 316) Similarly, IALD commented that
IRL provide utility, such as high CRI and dimming capability, that is
unlikely to be met with emerging technologies and used in special
applications, such as auditorium and art gallery lighting. (IALD, No.
71 at p. 2)
In response, DOE believes that it has already accounted for dimming
functionality in its analysis. First, DOE's efficacy levels do not
eliminate any dimming capability from the market. Thus, DOE is not
assuming this functionality must be met with emerging technologies.
Covered IRL are available at every TSL for use in dimming applications.
Second, DOE's emerging and existing scenarios already incorporate the
effect of consumers who make purchasing decisions based only on a
lamp's first cost. Third, DOE disagrees that the percentage of covered
lamps used in dimming applications would affect DOE's projected energy
savings. While DOE agrees with NEMA that when lamps are dimmed they
consume less energy, DOE expects the usage of dimmers to remain the
same in both the base and standards case. It is unlikely that a
consumer would dim a lamp more or less only because he/she is using a
standards-compliant lamp. Lastly, DOE believes consumers who would be
``greatly disappointed'' without dimming functionality would not be
deterred from an incrementally higher first cost associated with
retaining that functionality. For these reasons, DOE has already
accounted for dimming functionality in its analysis.
2. GSFL Product Availability
NEMA wrote that TSL4 and TSL5 cannot be economically justified,
partly because these efficacy levels would preserve T8 lamps that are
mostly incompatible with today's installed base of T8 ballasts; NEMA
also stated that higher standards for U-shaped lamps would negatively
impact competition and eliminate energy-efficient U-shaped lamps with
6-inch spacing. (NEMA, Public Meeting Transcript, No. 38.4 at pp. 24,
38, NEMA, No. 81 at pp. 2-3)
DOE disagrees with NEMA that TSL 3 would remove nearly all T12
lamps from the market by the effective date. Certain T12 lamps still
meet TSL 3, as presented in NOPR, a point that NEMA does not dispute.
Moreover, given the magnitude of the current T12 shipments,
particularly in the residential sector, where, as NEMA has noted, the
most common residential magnetic ballast is exempted, DOE believes that
T12 lamps will remain on the market at TSL 3.
Next, DOE has accounted for compatibility with existing ballasts,
as well as the need for a new ballast purchases (when applicable), in
all its analyses, as discussed in the April 2009 NOPR. While DOE agrees
TSL 4 or higher may eliminate T12 lamps from the market, as presented
in DOE's market share matrices, at least five T8 lamps meet TSL 4, and
two providing residential consumers with product options. Therefore,
DOE does not believe this final rule presents a possibility of product
shortages.
I. Alternative Standard Scenarios
In the April 2009 NOPR, DOE noted that although it was proposing
TSL3, serious consideration would be given to a more stringent standard
level for GSFL in the final rule. Accordingly, DOE requested comment on
alternative scenarios for GSFL standards that could achieve greater
energy savings than the proposed TSL3. In addition to consideration of
a standard that would eliminate T12 lamps as presented in TSL4 and
TSL5, DOE also provided two examples of alternative standard scenarios
that may be considered: (1) A standard with a delayed implementation
date (i.e., extended lead time); and (2) a standard with differentiated
residential and commercial levels. 74 FR 16920, 17017, 17025 (April 13,
2009). In response, DOE received several comments on these example
scenarios.
1. Tiered Standard
ACEEE, the California stakeholders, NEMA, and NEEP all recommended
various forms of tiered standards. (ACEEE, No. 55 at pp. 1-3; NEEP, No.
61 at p. 4; NEMA, No. 81 at p. 23, 24; California Stakeholders, No. 2
at p. 2) ACEEE and the California Stakeholders also argued that DOE set
a precedent for such a tiered, phased-in standard in 2001 with
residential clothes washers, when DOE issued a final rule making one
efficiency level effective in 2004 and second level effective in 2007.
(California Stakeholders, No. 61 at p. 9; ACEEE, No. 55 at p. 2)
DOE analyzed the impacts of a tiered, phased-in standard, as
suggested by many stakeholders. Under such approach, DOE's analysis
showed a mitigation of manufacturer INPV, similar to a delayed
effective date alternative scenario but to a lesser extent. Again, the
lower capital costs (due to more time for the base-case migration away
from T12s), time value of money effects, and longer retention of
higher-margin sales, all mitigate the negative INPV impacts. DOE,
however, again carefully reviewed the governing statute and has
determined that it does not have the authority to implement tiered,
phased-in standards under EPCA.
DOE carefully evaluated the legality of tiered standards based on
the language in EPCA. 42 U.S.C. 6295(i)(3) requires amended standards
for GSFL and IRL to apply to products manufactured ``on or after'' the
36-month period beginning on the date such final rule is published. DOE
interprets this provision to mean that the standard will be in place
for covered lamps that are manufactured precisely three years after
publication of the final rule and prospectively thereafter. DOE
reasoned that it would be illogical to give separate meaning to the
terms ``on'' and ``after'', an interpretation that could conceivably
allow for a second-tier standard effective at some point subsequent to
the date 36 months after the publication date of the rule, because this
interpretation would also allow for a rule that requires compliance
with the established standards on only the exact date 36 months from
the publication date. Therefore, DOE concluded that section 6295(i)(3)
of EPCA does not allow tiered standards for the final GSFL and IRL
rule. This is in contrast to EPCA's general service lamps provisions at
42 U.S.C. 6295(i)(6)(A)(iv), where Congress explicitly directed DOE to
consider phased-in effective dates. DOE notes that 42 U.S.C.
6295(i)(5), relating to ``additional'' GSFL lamps, contains a different
formulation providing that the standards shall apply to products
manufactured ``after'' a date that is 36 months after the date the rule
is published. However, it is DOE's understanding that the
``additional'' GSFL covered by subsection (i)(5) are not those products
which significantly alter INPV or consumer LCC savings in this
rulemaking. In light of the above, DOE chose not to adopt tiered
standards for these lamps.
2. Delayed Effective Date
ACEEE and the California Stakeholders, as well as NEMA and Osram
Sylvania, stated that DOE should consider various delayed effective
dates, although the California Stakeholders suggested that this should
be a last resort. (California Stakeholders, No. 61 at p. 4; ACEEE, No.
55 at p. 2; NEMA, No. 81 at pp. 2, 24-26; Osram Sylvania, No. 84 at p.
2)
DOE carefully evaluated the legality of delayed implementation
dates based on the language in EPCA. DOE concluded that a delayed
effective date which sets no standards for compliance on or about June
30, 2012, which is the anticipated date ``on or after the 36-month
period beginning on the date
[[Page 34144]]
such final rule is published,'' would not be permissible under EPCA (42
U.S.C. 6295(i)(3)). As in the discussion above for tiered standards,
DOE interprets the language of 42 U.S.C. 6295(i)(3) to mean that a
standard will be in place for covered lamps that are manufactured
precisely three years after publication of the final rule and
prospectively thereafter. This is again in contrast to EPCA's general
service lamps provisions at 42 U.S.C. 6295(i)(6)(A)(iv), where Congress
explicitly directed DOE to consider phased-in effective dates. DOE also
carefully considered 42 U.S.C. 6295(i)(5), which provides that the
final rule for ``additional'' GSFL shall apply to products
``manufactured after a date which is 36 months after the date such rule
is published'' and could potentially support a later effective date for
``additional'' GSFL. However, it is DOE's understanding that
``additional'' GSFL are not those products which significantly alter
INPV or consumer LCC savings in this rulemaking. In light of the above,
DOE chose not to use delayed effective dates for those lamps as
recommended by commenters.
3. Residential Exemption
NEEP, GE and NEMA recommended various forms of residential
exemptions and/or labeling for T12 lamps as alternate standard
scenarios. (NEEP, No. 61 at p. 4; NEMA, No. 81 at pp. 2, 24-26; (GE,
No. 80 at pp. 1-3) ACEEE and the California Stakeholders opposed
separate treatment for the residential sector through a bifurcated
standard. (California Stakeholders, No. 61 at p. 9; ACEEE, No. 55 at p.
3; NEMA, No. 81 at pp. 2, 24-26)
DOE considered the option of having differentiated standards for
residential consumers and commercial consumers. Absent a specific
statutory directive (e.g., one conveying product labeling or packaging
authority), it has long been DOE's position that it regulates
equipment, rather than product use. In general, DOE has sought to avoid
interfering with manufacturing decisions related to product use,
marketing, or packaging. This approach is also reflective of the
inherent difficulties in enforcing product usage requirements and the
potential loopholes that may be created.
In the present case, DOE notes that in contrast to situations where
it sets product classes whose efficiency-related differences (e.g., in
terms of utility, capacity, type of energy use) warrant different
standard levels, the lamps under consideration here have no significant
technical differences as would support different standard levels. Given
the identical nature of T12 lamps used in residential and commercial
settings, it would be potentially easy for commercial customers to
purchase and install T12 lamps marketed for residential use. DOE is
concerned that this option could significantly undermine the energy
savings potential to the Nation of the lamps standard. Therefore, DOE
has decided not to consider such an approach further.
4. Conclusions Regarding Alternative Standard Scenarios
In considering whether to adopt a more stringent standard for GSFL
than the proposed TSL3, DOE sought to explore various approaches (e.g.,
tiered standards, delayed effective dates) to mitigate the impacts on
manufacturers and certain consumers. However, after careful examination
of the relevant provisions of EPCA, for the reasons explained above,
DOE has determined that none of these options is available.
Accordingly, the effective date of this final rule for all covered
product classes will be three years from the date of publication.
J. Benefits and Burdens
Since DOE opened the docket for this rulemaking, it has received
more than 80 written comments, with hundreds of signatories, from a
diverse set of parties, including manufacturers and their
representatives, state attorney generals, members of Congress, energy
conservation advocates, consumer advocacy groups, private citizens, and
electric and gas utilities. DOE also received more than 20,000 email
form letter submissions recommending DOE strengthen the proposed energy
conservation standards. All substantive comments on the analytic
methodologies DOE used are discussed heretofore in sections of this
final rule notice. DOE also received many comments related to the
relative merits of various TSLs. Generally, these comments either
stated a certain TSL was economic justified, technologically feasible,
and maximized energy, or they argued how DOE should weight the various
factors that go into making that determination. See section VII for a
discussion of DOE's analytic results and how it weighed those factors
in establishing today's final rule.
PSI stated that DOE should adopt GSFL and IRL standards that align
with or surpass the European Union's ``Eco-Design Standards for Energy-
Using Product (EuP) Directive.'' On the other hand, a private citizen
wrote to DOE expressing that DOE's proposed standards for GSFL and IRL
will not save significant energy, will negatively impact the work of
lighting designers, and may have a negative impact on the quality of
work and living spaces; the citizen expressed that conservation in
other areas could yield greater reduction in energy usage. (Private
Citizen, No. 48 at pp. 1-3)
VII. Analytical Results and Conclusions
A. Trial Standard Levels
DOE analyzed the costs and benefits of five TSLs each for the GSFL
and IRL covered in today's final rule. Table VII.1 and Table VII.2
present the TSLs and the corresponding product class efficacy
requirements for GSFL and IRL. See the engineering analysis in section
V.B.4 of this final rule for a more detailed discussion of the efficacy
levels. In this trial standard levels section, DOE presents the
analytical results for the TSLs of all product classes that DOE
analyzed, including scaled product classes. See chapter 5 of the final
rule TSD for further information on representative and scaled product
class efficacy levels.
1. General Service Fluorescent Lamps
As discussed in section V.B.2, the following lamps with a CCT less
than 4,500K compose the five representative GSFL product classes: (1)
4-foot medium bipin; (2) 8-foot single pin slimline; (3) 8-foot
recessed double contact HO lamps; (4) 4-foot miniature bipin T5 SO; and
(5) 4-foot miniature bipin T5 HO lamps. U-shaped lamps with a CCT less
than 4,500K are a scaled product class. The six lamp types (including
U-shaped lamps) with CCTs greater than or equal to 4500K compose six
additional product classes, which are also scaled product classes. DOE
developed TSLs that generally follow a trend of increasing efficacy by
using higher-quality phosphors. The TSLs also represent a general move
from higher-wattage technologies to lower-wattage, lower-diameter lamps
with higher efficacies. Table VII.1 shows the TSLs for GSFL. DOE
composed each TSL utilizing the same methodology employed in the April
2009 NOPR. TSL5 represents all maximum technologically feasible GSFL
efficacy levels, as in the April 2009 NOPR. 74 FR 16920, 16980 (April
13, 2009).
For this final rule, DOE revised the efficacy levels for 4-foot T5
MiniBP standard-output and high-output lamps to reflect testing at
25[deg] C as well as manufacturing variability. The April 2009 NOPR EL1
requirements for T5 standard-output lamps have thus been revised from
103 lm/W to 86 lm/W, and the April 2009 NOPR EL2 requirements have been
revised from 108 lm/W to 90 lm/W. The April 2009 NOPR EL1
[[Page 34145]]
requirements for T5 high-output lamps have been revised from 89 lm/W to
76 lm/W. 74 FR 16920, 16980 (April 13, 2009). The EPCA standard for
GSFL in the representative product classes of this final rule are shown
in Table I.3. Trial standard levels for all GSFL product classes in
this final rule are shown in Table VII.1.
Table VII.1--Trial Standard Levels for GSFL--Efficacy Levels for all GSFL Product Classes
----------------------------------------------------------------------------------------------------------------
Trial standard level
CCT Lamp type -------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
<=4,500K............................. 4-foot medium bipin 78 81 85 89 93
(representative).
2-foot U-shaped........ 70 72 76 84 87
8-foot single pin 86 92 95 97 98
slimline
(representative).
8-foot recessed double 83 86 88 92 95
contact HO
(representative).
4-foot T5 miniature 86 86 86 86 90
bipin SO
(representative).
4-foot T5 miniature 76 76 76 76 76
bipin HO
(representative).
>4,500K and <=7,000K................. 4-foot medium bipin.... 77 79 82 88 92
2-foot U-shaped........ 65 67 71 81 85
8-foot single pin 83 87 91 93 94
slimline.
8-foot recessed double 80 83 84 88 91
contact HO.
4-foot T5 miniature 81 81 81 81 85
bipin SO.
4-foot T5 miniature 72 72 72 72 72
bipin HO.
----------------------------------------------------------------------------------------------------------------
2. Incandescent Reflector Lamps
As discussed in section V.B.4, DOE has established five efficacy
levels based on an equation relating efficacy to lamp wattage. As also
discussed in section V.B.2, DOE only directly analyzed the standard-
spectrum IRL with a diameter greater than 2.5 inches and voltage less
than 125 volts; DOE then scaled minimum efficacy requirements to other
product classes. This is consistent with what DOE did for the April
2009 NOPR. 74 FR 16920, 16981 (April 13, 2009).
The EPCA standard for IRL is shown in Table I.4. The efficacy
levels for all IRL product classes are shown as coefficients for the
efficacy level requirement equation A*P[caret]0.27 in Table VII.2 for
the TSLs to which they correspond, where A is the coefficient shown in
the table for a specific product class and TSL, and P represents the
rated wattage of the lamp. TSL5 represents the maximum technologically
feasible level, as in the April 2009 NOPR. 74 FR 16920, 16981-2 (April
13, 2009). For this final rule, DOE revised the April 2009 NOPR
efficacy levels for the representative IRL product class in order to
account for IRL manufacturing variability, as described in chapter 5 of
the TSD.
Table VII.2--Trial Standard Levels for IRL-Coefficients of Efficacy Levels for all IRL Product Classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Diameter Trial standard level
Lamp wattage Lamp type (in Voltage -------------------------------------------------
inches) 1 2 3 4 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
40W-205W..................................... Standard-spectrum.............. > 2.5 >=125V 5.3 5.5 6.2 6.8 7.4
<125V\1\ 4.6 4.8 5.4 5.9 6.4
<=2.5 >=125V 4.7 4.9 5.5 5.7 6.2
<125V 4.0 4.2 4.8 5.0 5.4
40W-205W..................................... Modified-spectrum.............. >2.5 >=125V 4.5 4.7 5.3 5.8 6.3
<125V 3.9 4.1 4.6 5.0 5.4
<=2.5 >=125V 4.0 4.1 4.6 4.9 5.3
<125V 3.4 3.6 4.0 4.2 4.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\(Representative.)
At the public meeting, Energy Solutions suggested that DOE present
efficacy levels for IRL in terms of lumen output rather than wattage
because lumen output is a more appropriate measure of the functional
performance of a lamp. (Energy Solutions, Public Meeting Transcript,
No. 38.4 at pp. 94-95) DOE understands that the primary function of a
lamp is to provide light for the consumers' applications. Market
research indicated that the most common IRL baselines on the market
today provide three distinct levels of initial lumen output: 1,310
lumens from a 90W baseline, 1,050 lumens from a 75W baseline, and 630
lumens from a 50W baseline, respectively. Based on this understanding,
DOE utilized a ``lumen package'' perspective in the April 2009 NOPR to
select and analyze more-efficacious replacements for these three IRL
baselines such that their lumen output is no greater than 10% below the
baseline lumen output. 74 FR 16920, 16944 (April 13, 2009). DOE
believes that the usage of lumen classes allows DOE to take into
account consumers' interests in light output when developing efficacy
levels based on IRL wattage. Thus, DOE has not changed its presentation
of efficacy levels for the final rule.
B. Significance of Energy Savings
To estimate the energy savings through 2042 due to potential
standards, DOE compared the energy consumption of GSFL and IRL under
the base case (no standards) to energy consumption of these products
under each standards case (each TSL that DOE has considered). Table
VII.3 and Table VII.4 show the forecasted national energy savings
(including rebound effect and HVAC interactions where applicable) in
[[Page 34146]]
quads (quadrillion BTU) at each TSL for GSFL and IRL. As discussed in
section V.D.1, DOE models two base-case shipment scenarios and several
standards-case shipment scenarios. For each lamp type, these scenarios
combined produce eight possible sets of NES results. The tables below
present the results of the two scenarios that represent the maximum and
minimum energy savings resulting from all the scenarios analyzed.
For GSFL, DOE presents ``Existing Technologies, High Lighting
Expertise, Shift'' and ``Emerging Technologies, Market Segment-Based
Lighting Expertise, Roll-Up'' in Table VII.3 as the scenarios that
produce the maximum and minimum energy savings, respectively. Due to a
larger reduction in the installed stock of lamps affected by standards,
the Emerging Technologies base-case forecast results in lower energy
savings than the Existing Technologies base-case forecast. In addition,
because a portion of consumers purchasing non-energy-saving, higher-
lumen-output systems in the Market Segment-Based Lighting Expertise
scenario, it results in lower energy savings than the High Lighting
Expertise scenario. Finally, because in the Shift scenario more
consumers move to higher-efficacy lamps than in the Roll-Up scenario,
the Shift scenario results in higher energy savings than the Roll-Up
scenario.
Table VII.3 presents total national energy savings for each TSL
(labeled as ``Total'' savings). The table also reports national energy
savings due to individually regulating each type of GSFL (presented
next to the lamp type names), assuming no amended standard on all other
lamp types. However, it is important to note that individual lamp type
energy savings (due to separate regulation) do not sum to equal total
energy savings achieved at the trial standard levels due to standards-
induced substitution effects between lamp types. Instead, these savings
are provided merely to illustrate the approximate relative energy
savings of each lamp type under a TSL. Please see the NOPR for a
discussion of the affect of various TSLs on NES. 74 FR 16920, 17005-06
(April 13, 2009).
Table VII.3--Summary of Cumulative National Energy Savings for GSFL
----------------------------------------------------------------------------------------------------------------
National energy savings (quad btu)
---------------------------------------
Emerging
TSL/EL Lamp type Existing technologies,
technologies, high market segment-
lighting based lighting
expertise, shift expertise, roll-up
----------------------------------------------------------------------------------------------------------------
1......................................... 4-foot MBP.................. 0.89 0.61
8-foot SP Slimline.......... 0.25 0.25
8-foot RDC HO............... 0.17 0.02
4-foot MiniBP SO............ 0.69 0.11
4-foot MiniBP HO............ 0.96 0.53
2-foot U-Shaped............. 0.04 0.03
---------------------------------------------------------------------
Total.................... 3.01 1.54
----------------------------------------------------------------------------------------------------------------
2......................................... 4-foot MBP.................. 0.99 0.75
8-foot SP Slimline.......... 0.28 0.27
8-foot RDC HO............... 0.22 0.19
4-foot MiniBP SO............ 0.69 0.11
4-foot MiniBP HO............ 0.96 0.53
2-foot U-Shaped............. 0.05 0.03
---------------------------------------------------------------------
Total.................... 3.19 1.88
----------------------------------------------------------------------------------------------------------------
3......................................... 4-foot MBP.................. 4.17 1.81
8-foot SP Slimline.......... 0.32 0.32
8-foot RDC HO............... 0.23 0.19
4-foot MiniBP SO............ 0.69 0.11
4-foot MiniBP HO............ 0.96 0.53
2-foot U-Shaped............. 0.19 0.08
---------------------------------------------------------------------
Total.................... 6.59 3.06
----------------------------------------------------------------------------------------------------------------
4......................................... 4-foot MBP.................. 6.96 2.30
8-foot SP Slimline.......... 0.37 0.23
8-foot RDC HO............... 0.56 0.56
4-foot MiniBP SO............ 0.69 0.11
4-foot MiniBP HO............ 0.96 0.53
2-foot U-Shaped............. 0.32 0.10
---------------------------------------------------------------------
Total.................... 9.94 3.83
----------------------------------------------------------------------------------------------------------------
5......................................... 4-foot MBP.................. 8.79 3.32
8-foot SP Slimline.......... 0.37 0.24
8-foot RDC HO............... 0.62 0.57
4-foot MiniBP SO............ 0.82 0.26
4-foot MiniBP HO............ 0.96 0.53
[[Page 34147]]
2-foot U-Shaped............. 0.40 0.15
---------------------------------------------------------------------
Total.................... 12.00 5.08
----------------------------------------------------------------------------------------------------------------
For IRL, DOE presents ``Existing Technologies, R-CFL Production
Substitution, Shift'' and ``Emerging Technologies, BR Product
Substitution, Roll-Up'' in Table VII.4 as the scenarios that produce
the maximum and minimum energy savings, respectively. Similar to GSFL,
the Existing Technologies base-case forecast results in higher energy
savings than the Emerging Technologies base-case forecast due to the
greater installed stock of IRL affected by standards. The BR Product
Substitution scenario, which includes migration to exempted BR lamps
but not to R-CFL, results in lower energy savings than the R-CFL
Product Substitution scenario, which accounts for the reverse effect.
In addition, while the effect is greater for GSFL than for IRL, the
Shift scenario (only affecting commercial consumers because DOE assumes
residential consumers always purchase the lowest first-cost lamp) also
represents higher energy savings than the Roll-Up scenario for IRL. As
seen in the table below, TSL 5 achieves maximum energy savings for both
scenarios. As discussed in section VI.C.1, DOE also analyzed a
``Baseline Lifetime Scenario.'' Although this scenario considers
shortened lifetimes as TSL 4 and TSL 5, national energy savings do not
change because shipments remain the same as the normal lifetime
scenario.
Table VII.4--Summary of Cumulative National Energy Savings for
Incandescent Reflector Lamps
------------------------------------------------------------------------
National energy savings (quads)
-------------------------------------
Existing Emerging
TSL technologies, R- technologies, BR
CFL product product
substitution, substitution,
shift roll-up
------------------------------------------------------------------------
1................................. 0.45 0.16
2................................. 1.09 0.40
3................................. 1.91 0.81
4................................. 2.39 0.94
5................................. 2.72 1.12
------------------------------------------------------------------------
C. Economic Justification
1. Economic Impact on Consumers
a. Life-Cycle Costs and Payback Period
Consumers affected by new or amended standards usually experience
higher purchase prices and lower operating costs. Generally, these
impacts are best captured by changes in life-cycle costs. DOE designed
the LCC analysis around lamp purchasing events and calculated the LCC
savings relative to the baseline for each lamp replacement event
separately in each lamp product class, as done for the April 2009 NOPR.
74 FR 16920, 16982 (April 13, 2009). The separate computation of the
impacts on each event and each product class allowed DOE to view the
results of many subgroup populations in the LCC analyses. The following
discussion presents salient results from the LCC analysis. When a
standard results in ``positive LCC savings,'' the life cycle cost of
the standards-compliant lamp or lamp-and-ballast system is less than
the life cycle cost of the baseline lamp or lamp-and-ballast system,
and the consumer benefits economically. When a standard results in
``negative LCC savings,'' the life cycle cost of the standards-
compliant lamp or lamp-and-ballast system is higher than the life cycle
cost of the baseline lamp or lamp-and-ballast system, and the consumer
is adversely affected economically. The results at some efficacy levels
are presented as ranges, which reflect the results of multiple systems
(i.e., multiple lamp-ballast pairings) that consumers could purchase to
meet those specific efficacy levels.
The LCC results shown in this notice reflect a subset of all of the
lamp purchasing events analyzed by DOE, although they represent the
most prevalent purchasing events. As done in the April 2009 NOPR, DOE
is also presenting the installed prices of the lamp-and-ballast systems
in order to allow comparisons of the up-front costs that consumers must
bear when purchasing baseline or standards-case systems. 74 FR 16920,
16982 (April 13, 2009). All of the LCC results shown in this notice
were generated using the April 2009 AEO2009 reference case electricity
price trend (which includes the impact of ARRA) as well as medium-range
lamp and ballast prices. In many cases, DOE omitted Events IB (Lamp
Failure: Lamp & Ballast Replacement) and IV (Ballast Retrofit) in this
notice, because DOE believes these lamp purchase events to be
relatively less frequent. In addition, DOE has chosen not to present
detailed PBP results by efficacy level in this final rule notice
because DOE believes that LCC results are a better measure of cost-
effectiveness. However, a full set of both LCC and PBP results for the
systems DOE analyzed is available in chapter 8 and appendix 8B of the
TSD. Chapter 8 presents LCC results for all lamp
[[Page 34148]]
purchasing events analyzed by DOE. Furthermore, chapter 8 includes the
LCC results presented in this notice along with additional presented
details, such as system design option details, start-year operating
cost savings, and payback periods. Appendix 8B presents Monte Carlo
simulation results performed by DOE as part of the LCC analysis and
also presents sensitivity results, such as LCC savings under the
AEO2009 high-economic-growth and low-economic-growth cases.
i. General Service Fluorescent Lamps
Table VII.5 through Table VII.12 present the results for the
baseline lamps in each of the five GSFL product classes DOE analyzed
(i.e., 4-foot medium bipin, 4-foot miniature bipin SO, 4-foot miniature
bipin HO, 8-foot single pin slimline, and 8-foot recessed double
contact HO). Not all baselines have suitable replacement options for
every lamp purchasing event at every efficacy level. For instance,
because DOE assumed that consumers wish to purchase systems or lamp
replacements with a lumen output within 10 percent of their baseline
system output, in some cases, the only available replacement options
produce less light than this. Thus, the replacement options are
considered unsuitable substitutions. These cases are marked with ``LL''
(less light) in the LCC results tables below. In some cases, when
consumers who currently own a T12 system need to replace their lamps,
no T12 energy saving lamp replacements are available. In these cases,
in order to save energy, the consumers must switch to other options,
such as a T8 lamp and appropriate ballast. These cases are marked with
``NER'' (no energy-saving replacement) in tables.
Because some baseline lamps already meet higher efficacy levels
(e.g., the baseline 32W 4-foot T8 MBP lamp achieves EL2), LCC savings
at the levels below the baseline are zero. In these cases, ``BAE''
(baseline above efficacy level) is listed in the tables to indicate
that the consumer makes the same purchase decision in the standards-
case as they do in the base-case. Also, not all lamp purchase events
apply for all baseline lamps or efficacy levels. For example, DOE
assumed that the standards-induced retrofit event does not apply to the
32W T8 system, because it is already the most efficacious 4-foot medium
bipin GSFL system. For these events, an ``EN/A'' (event not applicable)
exists in the table. Finally, because LCC savings are not relevant when
no energy conservation standard is established, ``N/A'' (not
applicable) exists in the LCC savings column for the baseline system.
Overall, based on the NIA model, DOE estimates that at TSL4 and
TSL5 in 2012, approximately 2 percent of 4-foot MBP shipments result in
negative LCC savings, and 9 percent of shipments are associated with
the high installed price increases due to forced retrofits. At TSL5,
all 4-ft T5 miniature bipin standard output shipments result in
positive LCC savings; For 8-foot SP slimline at TSL4 and TSL5,
approximately 24 percent of 2012 shipments would result in negative LCC
savings, and 65 percent of shipments would be associated with the high
installed price increases due to forced retrofits. DOE estimates that
at TSL5 in 2012, approximately 33 percent of 8-foot RDC HO shipments
would result in negative LCC savings, and 86 percent of shipments would
be associated with the high installed price increases due to forced
retrofits.
For 4-foot MiniBP T5 standard-output lamps, TSL4 would require
these lamps to meet EL1, resulting in positive LCC savings of $1.10 for
lamp replacement and $43.30 for new construction or renovation (seen in
Table VII.9). At TSL5 (EL2 for standard output T5 lamps), all consumers
have available lamp designs which result in positive LCC savings of
$1.10 (for lamp replacement) and $45.67 to $47.49 (for new construction
or renovation).
For 4-foot MiniBP T5 high-output lamps, TSL4 and TSL5 have
identical life-cycle cost impacts: Consumers of high-output lamps who
need only a lamp replacement would experience negative LCC savings of -
$3.03 (approximately 44 percent of shipments, according the NIA model).
However, purchasing a T5 high-output system for new construction or
renovation would result in positive LCC savings of $65.69 to $67.06.
Table VII.5 presents the findings of an LCC analysis on various 3-
lamp 4-foot medium bipin GSFL systems operating in the commercial
sector. The analysis period (based on the longest-lived baseline lamp's
lifetime) for this product class in the commercial sector is 5.5 years.
As seen in the table, DOE analyzes three baseline lamps: (1) 40W T12;
(2) 34W T12; and (3) 32W T8. For a complete discussion of the 4-foot
MBP LCC results, see chapter 8 of the TSD and the April 2009 NOPR. 74
FR 16920, 16984 (April 13, 2009).
BILLING CODE 6450-01-P
[[Page 34149]]
[GRAPHIC] [TIFF OMITTED] TR14JY09.000
BILLING CODE 6450-01-C
Table VII.7 presents the LCC results for a 4-foot medium bipin
system operating in the residential sector under average operating
hours. Under average operating hours, only the ballast failure event
(Event III) applies because the ballast and fixture reach the end of
their 15 year life before the baseline lamp (which would otherwise have
a lifetime of 19 years when operated for 791 hours per year) fails. DOE
uses a 15-year analysis period, based on the effective service life of
the lamp (limited by the fixture or ballast life). 74 FR 16920, 16985
(April 13, 2009).
[[Page 34150]]
Table VII.6--LCC Results for a 2-Lamp Four-Foot Medium Bipin GSFL System Operating in the Residential Sector
With Average Operating Hours
----------------------------------------------------------------------------------------------------------------
LCC savings Installed price
------------------------------------------------------
2008$ 2008$
Baseline Efficacy level ------------------------------------------------------
Event III: Ballast
failure* Event III: Ballast failure
----------------------------------------------------------------------------------------------------------------
40 Watt T12....................... Baseline............. N/A................. 51.38.
EL1.................. 7.03 to 10.25....... 49.04 to 56.19.
EL2.................. 6.82 to 19.17....... 50.51 to 56.39.
EL3.................. 1.06 to 18.86....... 52.66 to 60.19.
EL4.................. 18.57 to 24.36...... 52.96 to 56.15.
EL5.................. 20.21 to 22.32...... 53.13 to 54.04.
----------------------------------------------------------------------------------------------------------------
*Analysis period is 15.0 years.
N/A: Not Applicable.
In addition to conducting the LCC analysis under average operating
hours, DOE also computed residential LCC results under high operating
hours (1,210 hours per year) in order to analyze the economic impacts
of the lamp failure event (Event I). Table VII.7 presents these LCC and
installed-price results for a 2-lamp four-foot medium bipin GSFL system
under the lamp failure event and high operating hours. As seen in Table
VII.7, DOE divides the residential GSFL lamp failure event into Events
IA (Lamp Failure: Lamp Replacement) and IB (Lamp Failure: Lamp and
Ballast Replacement). Event IA, presented also in the commercial sector
analysis, solely models a lamp purchase (in response to lamp failure)
in both the base case and standards case. With high operating hours,
DOE calculates that the baseline lamp initially purchased with a
ballast fails after 12.4 years. Thus, a replacement lamp will operate
for only 2.6 additional years before the fixture is removed. To compute
the results shown in Table VII.7, DOE assumes that residential-sector
GSFL consumers will discard their replacement lamp when the fixture is
removed and therefore uses a 2.6 year analysis period.
Table VII.7--LCC Results for a 2-Lamp Four-Foot Medium Bipin GSFL System Operating in the Residential Sector With High Operating Hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
Efficacy level Installed price
----------------------------------------------------------------------------------------------------------------------
2008$ 2008$
Baseline ------------------------------------------------------------------------------------------------
LCC savings Event IA: Lamp Event IB: Lamp and Event IA: Lamp Event IB: Lamp and ballast
replacement* ballast replacement* replacement replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
40 Watt T12...................... Baseline............ N/A................. N/A................. 4.13............... 4.13.
EL1................. LL.................. EN/A................ LL................. EN/A.
EL2................. LL.................. EN/A................ LL................. EN/A.
EL3................. -5.53............... EN/A................ 12.94.............. EN/A.
EL4................. NR.................. -4.13 to -2.04...... NR................. 52.96 to 56.15.
EL5................. NR.................. -3.52 to -2.87...... NR................. 53.13 to 54.04.
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Analysis period is 2.6 years.
N/A: Not Applicable; LL: Available Options Produce Less Light; EN/A: Event Not Applicable; NR: No Replacement.
As discussed in section V.C.8, DOE analyzed additional residential-
sector GSFL lamp failure LCC scenarios for this final rule based on the
understanding that some residential-sector GSFL consumers may preserve
their lamps during fixture end-of-life and then install those lamps on
a new fixture instead of discarding them. Consumers exhibiting this
behavior can operate lamps for their full lifetimes and thus will
eventually experience a lamp failure even when operating with average
operating hours. When operated for average operating hours, the
baseline lamp has a lifetime of 19 years; therefore, DOE uses 19 years
as the analysis period. This analysis shows that some residential
consumers with T12 systems do in fact obtain LCC savings when forced to
retrofit their T12 ballast with a T8 system at EL4 and EL5. However,
DOE also notes that the results of this analysis are highly dependent
on the remaining years of lifetime left on the T12 ballast when the
lamp is replaced. Therefore, as seen in Table VII.8 DOE computes LCC
savings for several scenarios of remaining ballast life at the time of
lamp replacement. At EL3, under the scenario where consumers retain
their lamp upon ballast replacement, consumers obtain LCC savings. At
EL4, consumers can achieve positive LCC savings if their ballast have
less than 8 years of life remaining at the point of lamp failure. In
other words, consumers who would need to purchase a ballast within 8
years after replacing their lamp would benefit from a standard at EL4.
At EL5, standards-case consumers can achieve positive LCC savings if
their fixtures have less than 7 years of life remaining.
[[Page 34151]]
[GRAPHIC] [TIFF OMITTED] TR14JY09.001
Table VII.9 presents the results for an electronically-ballasted 4-
foot T5 miniature bipin standard-output, baseline system operating in
the commercial sector. Table VII.10 presents the results for an
electronically-ballasted 4-foot T5 miniature bipin high-output baseline
system operating in the industrial sector. For further discussion on
the 4-foot MiniBP LCC results see the April 2009 NOPR and Chapter 8 of
the TSD. 74 FR 16920, 16987 (April 13, 2009).
Table VII.9--LCC Results for a 2-Lamp Four-Foot Miniature Bipin Standard Output GSFL System Operating in the Commercial Sector
--------------------------------------------------------------------------------------------------------------------------------------------------------
LCC savings Installed price
----------------------------------------------------------------------------------------------
2008$ 2008$
Baseline Efficacy level ----------------------------------------------------------------------------------------------
Event V: New
Event IA: Lamp construction/ Event IA: Lamp Event V: New construction/
replacement* renovation* replacement renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
28 Watt T5........................ Baseline............. N/A N/A................. 9.75 71.87.
EL1.................. NER 43.30............... 13.66 75.78.
EL2.................. 1.10 45.67 to 47.49...... 15.44 77.56 to 78.06.
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Analysis period is 5.5 years.
N/A: Not Applicable; NER: No Energy-Saving Replacement.
Table VII.10--LCC Results for a 2-Lamp Four-Foot Miniature Bipin High Output GSFL System Operating in the Industrial Sector
--------------------------------------------------------------------------------------------------------------------------------------------------------
LCC savings Installed price
----------------------------------------------------------------------------------------------
2008$ 2008$
Baseline Efficacy level ----------------------------------------------------------------------------------------------
Event V: New
Event IA: Lamp construction/ Event IA: Lamp Event V: New construction/
replacement* renovation* replacement renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
54 Watt T5........................ Baseline............. N/A N/A................. 10.84 74.09.
EL1.................. -3.03 65.69 to 67.06...... 20.61 79.31 to 83.87.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Analysis period is 3.9 years.
N/A: Not Applicable; NER: No Energy-Saving Replacement.
Table VII.11 presents the results for an 8-foot single-pin slimline
GSFL system operating in the commercial sector. The analysis period is
4 years. For this product class, DOE analyzes three baseline lamps: (1)
75W T12; (2) 60W T12; and (3) 59W T8. For further discussion on the 8-
foot SP slimline LCC results, see the April 2009 NOPR and chapter 8 of
the TSD. 74 FR 16920, 16988 (April 13, 2009).
[[Page 34152]]
[GRAPHIC] [TIFF OMITTED] TR14JY09.002
Table VII.12 shows LCC results for an 8-foot recessed double-
contact GSFL system operating in the industrial sector. The analysis
period for this product class is 2.3 years. DOE analyzes 110W T12 and
95W T12 baseline lamps on magnetic ballasts. For further discussion on
the 8-foot RDC HO LCC results see the April 2009 NOPR and chapter 8 of
the TSD. 74 FR 16920, 16990 (April 13, 2009).
[[Page 34153]]
[GRAPHIC] [TIFF OMITTED] TR14JY09.003
ii. Incandescent Reflector Lamps
Table VII.13 shows the commercial and residential sector LCC
results for IRL. The results are based on the reference case April 2009
AEO2009 electricity price forecast (which includes the impact of the
ARRA) and medium-range lamp prices. The analysis period is 3.4 years
for the residential sector and 0.9 years for the commercial sector. In
general, the results of the LCC analysis are consistent with those
presented in the April 2009 NOPR. 74 FR 16920, 16991 (April 13, 2009).
As discussed in section VI.C.1, DOE analyzed an additional scenario,
called the Baseline Lifetime scenario, for the LCC analysis, NIA and
MIA that modeled lamps at EL4 and EL5 with similar lifetimes to that of
the baseline lamp lifetimes. The LCC results for both the Baseline
Lifetime scenario and the Commercial Lifetime scenario (in which lamps
at EL4 and EL5 have lifetimes of 4,000 hours and 4,200 hours,
respectively) are shown as ranges at EL4 and EL5. As seen in Table
VII.13, the lower range of LCC savings, representing the Baseline
Lifetime scenario lamps, are negative for the 50W baseline in both
sectors at EL5 and only in the commercial sector at EL4.
[[Page 34154]]
Table VII.13--LCC Results for Incandescent Reflector Lamps
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
LCC savings (2008$)
Installed price (2008$)
-------------------------------------------------------------------------------
Baseline Efficacy level Event I: Lamp replacement/event V: New construction and renovation
-------------------------------------------------------------------------------
Commercial * Residential ** Commercial Residential
--------------------------------------------------------------------------------------------------------------------------------------------------------
90 Watt PAR38....................................... Baseline N/A N/A 6.43 5.33
EL1 -0.12 0.14 7.41 6.31
EL2 3.72 to 6.12 3.19 to 4.94 7.88 to 8.06 6.78 to 6.96
EL3 6.01 5.81 8.06 6.96
EL4 2.61 to 7.95 3.78 to 7.45 9.43 8.33
EL5 4.26 to 9.14 5.65 to 9.10 9.43 to 10.02 8.33 to 8.92
75 Watt PAR38....................................... Baseline N/A N/A 6.43 5.33
EL1 -0.40 -0.17 7.41 6.31
EL2 3.17 to 5.76 2.57 to 4.54 7.88 to 8.06 6.78 to 6.96
EL3 4.64 4.25 8.06 6.96
EL4 1.51 to 6.85 2.54 to 6.20 9.43 8.33
EL5 2.42 to 7.30 3.56 to 7.01 9.43 to 10.02 8.33 to 8.92
50 Watt PAR30....................................... Baseline N/A N/A 5.80 4.70
EL1 -0.37 -0.29 6.78 5.68
EL2 -0.07 to 2.74 0.11 to 2.36 7.25 to 7.43 6.15 to 6.33
EL3 0.63 0.92 7.43 6.33
EL4 -0.25 to 1.81 0.11 to 1.75 8.80 7.70
EL5 -3.17 to 1.36 -1.64 to 1.51 8.80 to 9.39 7.70 to 8.29
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Analysis period is 0.9 years.
**Analysis period is 3.4 years.
b. Consumer Subgroup Analysis
Certain consumer subgroups may be disproportionately affected by
standards. As done for the April 2009 NOPR, DOE performed LCC subgroup
analyses as part of its proposal for low-income consumers, institutions
of religious worship, and institutions that serve low-income
populations. 74 FR 16920, 16991 (April 13, 2009). See section V.C for a
review of the inputs to the LCC analysis. DOE found the impacts on
these consumer subgroups to be generally consistent with those
presented in the April 2009 NOPR with one exception: for institutions
that serve low-income populations, with updates to electricity prices
in this final rule, consumers who in the base case purchase a 75W T12
replacement lamp, no longer obtain LCC savings. 74 FR 16920, 16996
(April 13, 2009). For further detail on the consumer subgroup analysis,
see chapter 12 of the TSD.
2. Economic Impact on Manufacturers
DOE estimated the impact of amended energy conservation standards
for covered products on the INPV of the industries that manufacture the
products. The impact of amended standards on INPV consists of the
difference between the INPV in the base case and the INPV in the
standards case. INPV is the primary metric used in the MIA and
represents one measure of the fair value of the GSFL and IRL industries
in 2008$. For each industry affected by today's rule, DOE calculated
INPV by summing all of the net cash flows, discounted at the industry's
cost of capital or discount rate.
Table VII.14 through Table VII.17 show the changes in INPV that
bound the range of impacts that DOE estimates would result from the
TSLs considered for this final rule.
Table VII.14--Manufacturer Impact Analysis for GSFL With the Flat Markup Scenario Under the Existing Technology Base Case--High Lighting Expertise--
Shift in Efficiency Distributions
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -----------------------------------------------------------
1 2 3 4 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV.......................................... (2008$ millions)................ 639 697 695 721 635 671
Change in INPV................................ (2008$ millions)................ .......... 58 56 82 -4 33
(%)............................. .......... 9.11% 8.83% 12.82% -0.64% 5.09%
Amended Energy Conservation Standards Product (2008$ millions)................ .......... 3.3 8.8 8.8 11.6 29.6
Conversion Costs.
Amended Energy Conservation Standards Capital (2008$ millions)................ .......... 38.5 60.5 104.5 181.5 181.5
Conversion Costs.
-----------------------------------------------------------------------
Total Investment Required................. (2008$ millions)................ .......... 41.8 69.3 113.3 193.1 211.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VII.15--Manufacturer Impact Analysis for GSFL With the Four-Tier Markup Scenario Under the Emerging Technology Base Case--Market Segment Lighting
Expertise--Rollup in Efficiency Distributions
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -----------------------------------------------------------
1 2 3 4 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV.......................................... (2008$ millions)................ 527 662 629 432 365 316
[[Page 34155]]
Change in INPV................................ (2008$ millions)................ .......... 134 102 -95 -162 -211
(%)............................. .......... 25.47% 19.29% -18.08% -30.74% -40.04%
Amended Energy Conservation Standards Product (2008$ millions)................ .......... 3.3 8.8 8.8 11.6 29.6
Conversion Costs.
Amended Energy Conservation Standards Capital (2008$ millions)................ .......... 38.5 60.5 104.5 181.5 181.5
Conversion Costs.
-----------------------------------------------------------------------
Total Investment Required................. (2008$ millions)................ .......... 41.8 69.3 113.3 193.1 211.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VII.16--Manufacturer Impact Analysis for IRL Under the Existing Technologies Base Case--No Product Substitution Scenario--Shift in Efficiency
Distribution
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -----------------------------------------------------------
1 2 3 4 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV.......................................... (2008$ millions)................ 301 293 233 221 199 190
Change in INPV................................ (2008$ millions)................ .......... (8) (68) (81) (102) (111)
(%)............................. .......... -2.80% -22.71% -26.78% -34.02% -36.90%
Amended Energy Conservation Standards Product (2008$ millions)................ .......... $3 $3 $2 $3 $7
Conversion Costs.
Amended Energy Conservation Standards Capital (2008$ millions)................ .......... $32 $83 $134 $167 $185
Conversion Costs.
-----------------------------------------------------------------------
Total Investment Required................. (2008$ millions)................ .......... $35 $87 $137 $170 $192
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VII.17--Manufacturer Impact Analysis for IRL Under the Emerging Technology Base Case--Product Substitution--Roll-Up in Efficiency Distributions
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -----------------------------------------------------------
1 2 3 4 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV.......................................... (2008$ millions)................ 221 205 158 139 123 117
Change in INPV................................ (2008$ millions)................ .......... (15) (63) (81) (98) (104)
(%)............................. .......... -6.87% -28.58% -36.80% -44.36% -47.18%
Amended Energy Conservation Standards Product (2008$ millions)................ .......... $3 $3 $2 $3 $7
Conversion Costs.
Amended Energy Conservation Standards Capital (2008$ millions)................ .......... $29 $77 $125 $155 $172
Conversion Costs.
-----------------------------------------------------------------------
Total Investment Required................. (2008$ millions)................ .......... $33 $81 $127 $158 $179
--------------------------------------------------------------------------------------------------------------------------------------------------------
The April 2009 NOPR provides a detailed discussion of the estimated
impact of amended standards for GSFL and IRL on INPVs. 74 FR 16920,
16999-17003 (April 13, 2009). This qualitative discussion on the
estimated impacts of amended GSFL and IRL standards in INPVs for the
final rule can be found in chapter 13 of the TSD.
a. Industry Cash Flow Analysis Results for the IRL Lifetime Sensitivity
For the final rule, DOE analyzed the effects of the Baseline
Lifetime scenario as a sensitivity. The impacts of this scenario on
INPV are presented below. For a full description of the scenario, see
section VI.C.1 of today's final rule.
Table VII.18--Manufacturer Impact Analysis for IRL Under the Existing Technologies Base Case--BR Substitution
Scenario--Roll-Up in Efficiency Distribution--Baseline Lifetime Scenario*
----------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -------------------------------
4 5
----------------------------------------------------------------------------------------------------------------
INPV.................................. (2008$ millions)........ 301 281 258
Change in INPV........................ (2008$ millions)........ .............. (21) (43)
(%)..................... .............. -6.81% -14.24%
Amended Energy Conservation Standards (2008$ millions)........ .............. $3 $7
Product Conversion Costs.
[[Page 34156]]
Amended Energy Conservation Standards (2008$ millions)........ .............. $167 $167
Capital Conversion Costs.
-----------------------------------------------
Total Investment Required......... (2008$ millions)........ .............. $170 $174
----------------------------------------------------------------------------------------------------------------
* The scenarios that bound the INPV results in the sensitivity scenario are different than the scenarios that
bound the INPV results in the normal standards cases.
Table VII.19--Manufacturer Impact Analysis for IRL Under the Emerging Technology Base Case--R-CFL Product
Substitution--Shift in Efficiency Distributions--Baseline Lifetime Scenario*
----------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -------------------------------
4 5
----------------------------------------------------------------------------------------------------------------
INPV.................................. (2008$ millions)........ 221 160 171
Change in INPV........................ (2008$ millions)........ .............. (61) (49)
(%)..................... .............. -27.52% -22.35%
Amended Energy Conservation Standards (2008$ millions)........ .............. $3 $7
Product Conversion Costs.
Amended Energy Conservation Standards (2008$ millions)........ .............. $155 $155
Capital Conversion Costs.
-----------------------------------------------
Total Investment Required......... (2008$ millions)........ .............. $158 $162
----------------------------------------------------------------------------------------------------------------
* The scenarios that bound the INPV results in the sensitivity scenario are different than the scenarios that
bound the INPV results in the normal standards cases.
The sensitivity results show that decreasing the lifetime of the
standards-compliant lamps at TSL 4 and TSL 5 lowers the estimated range
of INPV impacts relative to the no sensitivity results. In the base
case, the lamps that meet TSL 4 and TSL 5 are premium products with
longer life than standard HIR lamps. If manufacturers decreased the
lifetime of the lamps in response to the energy conservation standards,
the industry revenues in the standards case are greater due to higher
total shipments at TSL 4 and TSL 5. The higher revenues help to
mitigate the impacts of the significant capital conversion costs
required to comply with the energy conservation standards.
b. Cumulative Regulatory Burden
The April 2009 NOPR notes that one aspect of DOE's assessment of
manufacturer burden is the cumulative impact of multiple regulatory
actions that affect manufacturers. 74 FR 16920, 17003 (April 13, 2009).
In addition to DOE's energy conservation regulations for GSFL and IRL,
DOE identified other requirements that manufacturers face for these and
other products and equipment they manufacture in the three years before
and after the anticipated effective date of the amended DOE
regulations. Id. DOE believes that the EISA 2007 requirements for GSIL
are significant and could have the greatest cumulative burden on
manufacturers, but that they will not pose insurmountable challenges.
Id.
Chapter 13 of the TSD addresses in greater detail the issue of
cumulative regulatory burden.
c. Impacts on Employment
As discussed in the April 2009 NOPR, and for today's final rule,
DOE believes that amended energy conservation standards will not alter
domestic employment levels of the GSFL industry. 74 FR 16920, 17003
(April 13, 2009). During interviews with manufacturers, DOE learned
that GSFL are produced on high-speed, fully-automated lines. Production
workers are not involved in the physical assembly of the final product
(e.g., in inserting components, transferring partly assembled lamps,
soldering lamp bases). The employment levels required for these tasks
are a function of the total volume of the facility, not the labor
content of the product mix produced by the plant. Since higher TSLs
involve using more-efficient phosphors, employment will not be impacted
because standards will not change the overall scale of the facility.
As discussed in the April 2009 NOPR, and for today's final rule,
DOE believes that amended energy conservation standards will not
significantly impact IRL direct employment. 74 FR 16920, 17004 (April
13, 2009). The impact that new standards will have on employment is far
less significant than the potential impact from emerging technologies.
Both scenarios show that the absolute magnitudes of employment impacts
due to standards are small. Whether standards have a positive or
negative impact on employment is largely determined by the extent to
which consumers elect to substitute IRL with other lamp technologies
(such as R-CFL or exempted IRL) in the standards case.
Further support for these conclusions is set forth in chapter 13 of
the TSD.
d. Impacts on Manufacturing Capacity
DOE stated its view in the April 2009 NOPR, 74 FR 16920, 17004
(April 13, 2009), that amended standards would not significantly affect
GSFL production capacity. Over the long-term, any redesign of GSFL
needed to meet standards would largely be a materials issue that would
not affect manufacturing capacity. In the short term, although higher
are expediting the shift from T12 shipments to T8 shipments and require
shutting down and retooling production lines, manufacturers are able to
temporarily ramp up production before shutdowns occur to maintain
shipments during retooling. For today's final rule, DOE maintains its
belief that amended energy conservation standards for GSFL will
[[Page 34157]]
not significantly impact manufacturing capacity.
In the NOPR, DOE stated it did not believe there would be a
capacity constraint at the proposed standard level. DOE stated that
manufacturers could install additional coaters, purchase infrared
burners from a supplier, and use existing excess capacity. These
options would allow IRL manufacturers to maintain production capacity
levels and continue to meet market demand. 74 FR 16920, 17004 (April
13, 2009). In response to the April 2009 NOPR, manufacturers did raise
concerns that the energy conservation standards in today's final rule
could result in a constrained market. However, none of the comments DOE
received indicated that that the energy conservation standards would
result in the unavailability of standards-compliant products. At worst,
the energy conservation standards could result in a short-term
disruption in which the one manufacturer that requested additional time
in between the announcement and effective date does not supply covered
IRL. DOE did not receive comment that would indicate the other
manufacturers would not have the necessary volume of standards-
compliant lamps by the effective date of the final rule. For today's
final rule, DOE maintains its belief that manufacturers will be able to
maintain production capacity of covered IRLs and will be able to meet
market demand.
e. Impacts on Manufacturers That Are Small Businesses
As discussed in the April 2009 NOPR, 74 FR 16920, 17004 (April 13,
2009), DOE identified no small manufacturers of IRL but did identify
one small manufacturer that produces covered GSFL and is unlikely to be
significantly affected by today's final rule.\65\ In response to the
April 2009 NOPR, one small business requested it be included in DOE's
small business manufacturer impact analysis. For today's final rule,
DOE re-analyzed its list of potential small business manufacturers,
including those that submitted comments. DOE still has not identified
any small manufacturer of covered IRL. However, DOE continues to
identify the one small manufacturer that produces covered GSFL. For a
discussion of the impacts on small business manufacturers, see chapter
13 of the TSD and section VIII.B of today's notice.
---------------------------------------------------------------------------
\65\ As discussed in the April 2009 NOPR, 74 FR 17004-05, DOE
identified only manufacturer of covered GSFL or IRL that met the
criteria to be classified as a small business. For further detail on
DOE's inquiry regarding small manufacturers, please see section
VIII.B on the review under the Regulatory Flexibility Act.
---------------------------------------------------------------------------
3. National Net Present Value and Net National Employment
The NPV analysis is a measure of the cumulative benefit or cost of
standards to the Nation, discounted to $2008 dollars. In accordance
with the OMB's guidelines on regulatory analysis,\66\ DOE calculated
NPV using both a 7-percent and a 3-percent real discount rate. The 7-
percent rate is an estimate of the average before-tax rate of return to
private capital in the U.S. economy, and reflects the returns to real
estate and small business capital, as well as corporate capital. DOE
used this discount rate to approximate the opportunity cost of capital
in the private sector because recent OMB analysis has found the average
rate of return to capital to be near this rate. DOE also used the 3-
percent rate to capture the potential effects of standards on private
consumption (e.g., through higher prices for equipment and the purchase
of reduced amounts of energy). This rate represents the rate at which
society discounts future consumption flows to their present value. This
rate can be approximated by the real rate of return on long-term
government debt (i.e., yield on Treasury notes minus annual rate of
change in the Consumer Price Index), which has averaged about 3 percent
on a pre-tax basis for the last 30 years.
---------------------------------------------------------------------------
\66\ OMB Circular A-4, section E (Sept. 17, 2003).
---------------------------------------------------------------------------
The tables below show the forecasted net present value at each
trial standard level for GSFL and IRL. As shown above for NES results,
Table VII.20 presents the ``Existing Technologies, High Lighting
Expertise, Shift'' scenario and the ``Emerging Technologies, Market
Segment-Based Lighting Expertise, Roll Up'' scenario as the maximum and
minimum NPVs for GSFL, respectively. In general, the NPV results at
each trial standard level are a reflection of the life-cycle cost
savings at the corresponding efficacy levels. As seen in section
VII.C.1.a, for most lamp purchasing events and most baseline lamps,
increasing efficacy levels generally result in increased LCC savings.
See the April 2009 NOPR and chapter 11 of the TSD for a description of
the effect of various TSLs on NPV. 74 FR 16920, 17006-07 (April 13,
2009).
Table VII.20--Summary of Cumulative Net Present Value for GSFL
----------------------------------------------------------------------------------------------------------------
NPV (billion 2008$)
---------------------------------------------------
Existing technologies, Emerging technologies,
high lighting expertise, market segment-based
TSL/EL Product class shift lighting expertise, roll-
-------------------------- up
-------------------------
7% Discount 3% Discount 7% Discount 3% Discount
----------------------------------------------------------------------------------------------------------------
1........................... 4-foot MBP.................... 3.30 6.86 1.11 2.88
8-foot SP Slimline............ 0.55 1.40 0.51 1.34
8-foot RDC HO................. 0.54 0.88 -0.19 -0.24
4-foot MiniBP SO.............. 1.47 3.37 0.08 0.26
4-foot MiniBP HO.............. 2.22 4.81 1.19 2.63
2-foot U-Shaped............... 0.15 0.31 0.05 0.13
---------------------------------------------------
Total...................... 8.24 17.63 2.75 7.00
----------------------------------------------------------------------------------------------------------------
2........................... 4-foot MBP.................... 2.63 5.99 0.75 2.60
8-foot SP Slimline............ 0.60 1.53 0.58 1.50
8-foot RDC HO................. 0.68 1.09 0.77 1.20
4-foot MiniBP SO.............. 1.47 3.37 0.08 0.26
4-foot MiniBP HO.............. 2.22 4.81 1.19 2.63
[[Page 34158]]
2-foot U-Shaped............... 0.12 0.27 0.03 0.12
---------------------------------------------------
Total...................... 7.73 17.07 3.41 8.31
----------------------------------------------------------------------------------------------------------------
3........................... 4-foot MBP.................... 9.40 20.06 2.68 7.05
8-foot SP Slimline............ 0.82 1.82 0.82 1.82
8-foot RDC HO................. 0.32 0.59 0.22 0.39
4-foot MiniBP SO.............. 1.47 3.37 0.08 0.26
4-foot MiniBP HO.............. 2.22 4.81 1.19 2.63
2-foot U-Shaped............... 0.43 0.91 0.12 0.32
---------------------------------------------------
Total...................... 14.81 31.80 5.18 12.60
----------------------------------------------------------------------------------------------------------------
4........................... 4-foot MBP.................... 18.66 37.88 6.34 14.22
8-foot SP Slimline............ 0.84 1.97 0.24 0.91
8-foot RDC HO................. 1.87 3.17 1.87 3.17
4-foot MiniBP SO.............. 1.47 3.37 0.08 0.26
4-foot MiniBP HO.............. 2.22 4.81 1.19 2.63
2-foot U-Shaped............... 0.85 1.72 0.29 0.65
---------------------------------------------------
Total...................... 26.31 53.53 10.02 21.84
----------------------------------------------------------------------------------------------------------------
5........................... 4-foot MBP.................... 22.79 45.79 6.12 14.24
8-foot SP Slimline............ 0.84 1.97 0.33 1.07
8-foot RDC HO................. 1.98 3.36 1.81 3.10
4-foot MiniBP SO.............. 1.91 4.29 0.32 0.91
4-foot MiniBP HO.............. 2.22 4.81 1.19 2.63
2-foot U-Shaped............... 1.04 2.08 0.28 0.65
---------------------------------------------------
Total...................... 30.93 62.55 10.05 22.57
----------------------------------------------------------------------------------------------------------------
For IRL, DOE presents the ``Existing Technologies, R-CFL Product
Substitution, Shift'' and ``Emerging Technologies, BR Product
Substitution, Roll-Up'' scenarios as the maximum and minimum NPVs,
respectively. As seen in Table VII.21, NPV increases with TSL,
consistent with LCC savings generally increasing with efficacy level.
In particular, for the BR Product Substitution scenario, the negative
NPV at TSL1 results because the life-cycle cost savings at EL1 (the
associated EL) are primarily negative. However, as seen in the R-CFL
Product Substitution scenario, TSL1 achieves positive NPV due to
primarily the increased movement to highly cost-effective R-CFLs. For
further discussion of the NPV results see the April 2009 NOPR and
chapter 11 of the TSD. 74 FR 16920, 17006-07 (April 13, 2009).
Table VII.21--Summary of Cumulative Net Present Value for Incandescent Reflector Lamps
----------------------------------------------------------------------------------------------------------------
NPV (billion 2008$)
---------------------------------------------------------------
Existing technologies, R-CFL Emerging technologies, BR
TSL product substitution, shift product substitution, roll-up
---------------------------------------------------------------
7% Discount 3% Discount 7% Discount 3% Discount
rate rate rate rate
----------------------------------------------------------------------------------------------------------------
1............................................... 0.45 1.11 -0.09 -0.04
2............................................... 4.59 8.94 2.08 3.93
3............................................... 6.34 12.50 3.04 5.84
4............................................... 9.06 17.81 4.20 8.02
5............................................... 10.16 20.01 4.90 9.38
----------------------------------------------------------------------------------------------------------------
As discussed in section VI.C, DOE developed a Baseline Lifetime
scenario (which it analyzed the LCC savings, NPV, and manufacturer
impacts) to investigate the effects of shorter lamp lifetime at TSL4
and TSL5. DOE did not feel it necessary to apply this scenario to TSL1
through TSL3 because DOE already analyzes lamps with lifetimes similar
to that of the baseline lamp lifetimes. Relative to the normal lifetime
scenario, NPV decreases due to the significant increase in incremental
equipment costs, since more lamps need
[[Page 34159]]
to be shipped as they have shorter lifetimes.
Table VII.22--Summary of Cumulative Net Present Value for Incandescent Reflector Lamps--``Baseline Lifetime
Scenario''
----------------------------------------------------------------------------------------------------------------
NPV (billion 2008$)
---------------------------------------------------------------
Existing technologies, R-CFL Emerging technologies, BR
TSL product substitution, shift product substitution, roll-up
---------------------------------------------------------------
7% Discount 3% Discount 7% Discount 3% Discount
rate rate rate rate
----------------------------------------------------------------------------------------------------------------
4............................................... 5.22 10.81 1.83 3.78
5............................................... 4.86 10.13 2.53 5.12
----------------------------------------------------------------------------------------------------------------
DOE also estimated the national employment impacts that would
result from each TSL. In addition to considering the direct employment
impacts for the manufacturers of products covered in this rulemaking
(discussed above), DOE also developed estimates of the indirect
employment impacts of energy conservation standards on the economy in
general. As Table VII.23 and Table VII.24 show, DOE estimates that any
net monetary savings from GSFL and IRL standards would be redirected to
other forms of economic activity. DOE also expects these shifts in
spending and economic activity would affect the demand for labor. DOE
estimated that net indirect employment impacts from energy conservation
standards for GSFL and IRL would be positive (see Tables below), but
very small relative to total national employment. This increase would
likely be sufficient to fully offset any adverse impacts on employment
that might occur in the lamp products industries. Earthjustice
commented that the value of this additional employment should be
monetized using a wage rate and included in the justification of the
TSL selected. (Earthjustice, No. 60 at pg 6) However, this would double
count the consumer savings that are the source of the job creation. DOE
believes it more appropriate to consider job benefits separately from
the direct benefits of energy savings similar to DOE's approach for
considering environmental emissions benefits. For details on the
employment impact analysis methodology and results, see chapter 15 of
the TSD accompanying this notice.
Table VII.23--Net National Change in Indirect Employment for GSFL, Jobs
in 2042
------------------------------------------------------------------------
Net national change in jobs
(thousands)
-------------------------------------
Emerging
Trial standard level Existing technologies,
technologies, roll-up, market
shift, high segment based
expertise expertise
------------------------------------------------------------------------
1................................. 12.0 6.5
2................................. 12.2 5.5
3................................. 15.1 10.7
4................................. 18.4 13.3
5................................. 19.6 15.5
------------------------------------------------------------------------
Table VII.24--Net national change in indirect employment for IRL, jobs
in 2042
------------------------------------------------------------------------
Net national change in jobs
(thousands)
-------------------------------------
Trial standard level Existing Emerging
technologies, technologies,
shift, R-CFL roll-up, BR lamp
substitution substitution
------------------------------------------------------------------------
1................................. 1.7 0.7
2................................. 4.3 2.5
3................................. 6.9 4.8
4................................. 9.5 6.0
5................................. 10.4 6.8
------------------------------------------------------------------------
4. Impact on Utility or Performance of Products
As indicated in sections IV.D.d and VI.B.4 of the April 2009 NOPR,
DOE has concluded that TSLs it considered for GSFL and IRL would not
lessen the utility or performance of any GSFL or IRL covered by this
rulemaking. 74 FR 16920, 17009 (April 13, 2009)
5. Impact of Any Lessening of Competition
As discussed in the April 2009 NOPR, 74 FR 16920, 16936, 17009
(April 13, 2009), and in section IV.D.e of this preamble, DOE considers
any lessening
[[Page 34160]]
of competition likely to result from standards; the Attorney General
determines the impact, if any, of any such lessening of competition.
The DOJ concluded that the GSFL standards contained in the proposed
rule would not likely lead to a lessening of competition. DOJ has not
determined the impact on competition of more stringent standards than
those proposed in the April 2009 NOPR (DOJ, No. 77 at p. 1). Although
DOJ did not evaluate the impacts on competition of TSL 4 for GSFL, DOE
believes that TSL 4 does not raise competitive issues. For all product
classes analyzed DOE found that all manufacturers offered product at
TSL 4. Further, the product modifications needed to reach TSL 4 involve
the use of more efficient phosphor blends which do not entail
proprietary barriers.
For IRL, DOJ concluded that the proposed TSL 4 could adversely
affect competition. IRL standards proposed in the April 2009 NOPR would
increase the minimum efficiency levels to the second highest level
under consideration in this rulemaking. DOJ commented that the IRL
market is highly concentrated, with three domestic manufacturers. Based
on its review, DOJ stated that it appears that only two of the large
manufacturers identified may currently manufacture IRLs that would meet
the new standard and that these firms produce only limited quantities
of such products for high-end applications. The current producers may
not have the capacity to meet demand. In addition, one of these
manufacturers uses proprietary technology currently unavailable to
other manufacturers. Given the capital investments new entrants or
providers would be required to make, and the potential that
manufacturers may have to obtain proprietary technology, there is a
risk that one or more IRL manufacturers will not produce products that
meet the proposed standard. Note also that the National Impact Analysis
does not consider the possibility of lessened competition effects, and
so, depending on their magnitude, such effects may negatively impact
the Net Present Value of the standards. DOJ requested that DOE consider
the possibility of new technology in this area as it settles on
standards in this field. (DOJ, No. 77 at pp. 1-2)
DOE agrees with DOJ that the IRL market is highly concentrated,
with three major manufacturers supplying the vast majority of the U.S.
market. However, for the April 2009 NOPR, DOE stated that all
manufacturers produced at least one lamp that met TSL 4, even though
one manufacturer did not produce a full line of product at this
efficacy. 74 FR 16920, 17003 (April 13, 2009).
In the NOPR, DOE indicated that it believed manufacturers could
maintain production capacity levels and continue to meet market demand
at the proposed IRL standard (TSL 4). DOE noted that the current volume
of these improved HIR lamps is many times lower than the volume of
standard halogen lamps for all three major manufacturers. DOE used
market research and analysis of HIR capsule production, and interviews
with manufacturers of lamps and suppliers of HIR capsules and coating
decks to analyze if manufacturers of IRL would be able to supply the
market if lamp manufacturers outsourced all or part of their capsule
production. In the NOPR, DOE stated it did not believe there would be a
capacity constraint at the proposed standard level. DOE stated that
manufacturers could install additional coaters, purchase infrared
burners from a supplier, and use existing excess capacity. All these
stated options would allow IRL manufacturers to maintain production
capacity levels and continue to meet market demand for all IRL standard
levels. 74 FR 16920, 17004 (April 13, 2009).
For today's final rule, DOE did not receive comments that indicated
that the energy conservation standards would result in the
unavailability of standards-compliant products. DOE did receive
comments about the potential for a short-term market disruption. One
major manufacturer requested additional time in between the
announcement and effective date to allow more time to stabilize
improved HIR manufacturing before the regulation mandates the improved
technology. (OSI, No. 84 at p. 1) Another major manufacturer responded
to April 2009 NOPR by commenting that TSL 4 allows the continued
manufacture and sale of energy efficient products to the market and
that these products have also been proven manufacturable by at least
two major lighting companies. (Philips, No. 75 at p. 1) In its
individual comment, the third major manufacturer did not comment on its
intention to make the required capital investments. DOE believes that
this manufacturer will not have difficulty supplying at least part of
the market at the proposed standards because this manufacturer
currently has a full line of products at both TSL 4 and TSL 5. Although
DOE received comments that there could be a constrained market, other
comments suggest that this constraint will at worst be a short-term
problem. However, since all three large manufacturers currently
manufacture product at the efficacies required by today's final rule, a
short-term constraint would not be a competitive issue.
DOE does not believe manufacturers will have to obtain proprietary
technology to meet the energy conservation standards set forth by
today's rule. As stated in section VI.B.2, all major manufacturers have
access to alternative technology pathways to meet TSL 4 without the use
of proprietary technology. In the April 2009 NOPR, DOE stated that all
major manufacturers produce two or more lamps that exceed TSL 4, some
of which are not dependent on proprietary technology. DOE listed
alternative technologies to meet TSL 4 including other non-patented
types of improved reflectors and higher-efficiency IR coatings. 74 FR
16920, 16945 (April 13, 2009). DOE did not receive additional
information or comments that would indicate that the identified
alternative technologies necessary to meet energy conservation
standards set forth by today's final rule will lead to any lessening of
competition. Section VI.B of today's final rule further discusses
alternative technology pathways and proprietary technology.
The Attorney General's response is reprinted at the end of today's
rulemaking.
6. Need of the Nation To Conserve Energy
Improving the energy efficiency of GSFL and IRL, where economically
justified, would likely improve the security of the Nation's energy
system by reducing overall demand for energy, thus reducing the
Nation's reliance on foreign sources of energy. Reduced demand might
also improve the reliability of the electricity system, particularly
during peak-load periods. As a measure of this reduced demand, DOE
expects the energy savings from the adopted standards to eliminate the
need for approximately 1.8 to 6.2 gigawatts (GW) of generating capacity
for GFSL and up to 200 to 1,100 megawatts (MW) for IRL by 2042.
Enhanced energy efficiency also produces environmental benefits in
the form of reduced emissions of air pollutants and greenhouse gases
associated with energy production. Table VII.25 and Table VII.26
provide DOE's estimate of cumulative CO2, NOX,
and Hg emissions reductions that would result from the TSLs considered
in this rulemaking. The expected energy savings from these GSFL and IRL
standards may also reduce the cost of maintaining nationwide emissions
standards and constraints. In the environmental assessment (EA; chapter
[[Page 34161]]
16 of the TSD accompanying this notice), DOE reports estimated annual
changes in CO2, NOX, and Hg emissions
attributable to each TSL.
Table VII.25--Summary of Emissions Reductions for GSFL
[Cumulative reductions for products sold from 2012 to 2042]
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL1 TSL2 TSL3 TSL4 TSL5
--------------------------------------------------------------------------------------------------------------------------------------------------------
(i) Existing Technologies, Shift, High Lighting Expertise
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (MMT).................................. ........................... 130.3 133.9 296.6 487.6 552.0
NOX (kt)................................... ........................... 11.7 10.0 17.0 36.8 58.1
Hg (t)..................................... low........................ 0.0 0.0 0.0 0.0 0.0
Hg (t)..................................... high....................... 2.0 2.4 4.8 7.3 8.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Emerging Technologies, Roll Up, Market Segment Based Lighting Expertise
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (MMT).................................. ........................... 66.4 86.0 148.3 174.6 262.0
NOX (kt)................................... ........................... 1.9 5.1 7.3 11.0 12.9
Hg (t)..................................... low........................ 0.0 0.0 0.0 0.0 0.0
Hg (t)..................................... high....................... 1.2 1.4 2.3 2.8 4.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VII.26--Summary of Emissions Reductions for IRL
[(Cumulative reductions for products sold from 2012 to 2042)]
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL1 TSL2 TSL3 TSL4 TSL5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Existing Technologies, Shift, R-CFL Substitution
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (MMT).................................. ........................... 19.8 48.9 85.1 105.7 118.1
NOX (kt)................................... ........................... 1.9 5.5 7.6 8.4 9.3
Hg (t)..................................... low........................ 0.0 0.0 0.0 0.0 0.0
Hg (t)..................................... high....................... 0.3 0.7 1.3 1.7 1.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Emerging Technologies, Roll Up, BR Lamp Substitution
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (MMT).................................. ........................... 7.5 19.1 37.8 44.0 53.3
NOX (kt)................................... ........................... 1.3 3.2 5.4 6.4 8.1
Hg (t)..................................... low........................ 0.0 0.0 0.0 0.0 0.0
Hg (t)..................................... high....................... 0.1 0.3 0.6 0.7 0.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
MMt = million metric tons.
kt = thousand metric tons.
t = metric tons.
Note: The derivation for the emission ranges are described below.
As discussed in section IV.I of this final rule, DOE does not
report SO2 emissions reductions from power plants because
reductions from an energy conservation standard would not affect the
overall level of SO2 emissions in the United States due to
the emissions caps for SO2.
NOX emissions from 28 eastern States and the District of
Columbia (DC) are limited under the Clean Air Interstate Rule (CAIR),
published in the Federal Register on May 12, 2005.\67\ Although CAIR
has been remanded to EPA by the D.C. Circuit, it will remain in effect
until it is replaced by a rule consistent with the Court's December 23,
2008, opinion in North Carolina v. EPA.\68\ Because all States covered
by CAIR opted to reduce NOX emissions through participation
in cap-and-trade programs for electric generating units, emissions from
these sources are capped across the CAIR region.
---------------------------------------------------------------------------
\67\ 70 FR 25162 (May 12, 2005).
\68\ North Carolina v. EPA, 550 F.3d 1176 (DC Cir. 2008).
---------------------------------------------------------------------------
For the 28 eastern States and D.C. where CAIR is in effect, no
NOX emissions reductions will occur due to the permanent
cap. Under caps, physical emissions reductions in those States would
not result from the energy conservation standards under consideration
by DOE, but standards might have produced an environmentally related
economic impact in the form of lower prices for emissions allowance
credits, if they were large enough. However, DOE determined that in the
present case, such standards would not produce an environmentally
related economic impact in the form of lower prices for emissions
allowance credits, because the estimated reduction in NOX
emissions or the corresponding allowance credits in States covered by
the CAIR cap would be too small to affect allowance prices for
NOX under the CAIR. In contrast, new or amended energy
conservation standards would reduce NOX emissions in those
22 States that are not affected by CAIR. As a result, the NEMS-BT does
forecast emission reductions from the proposed amended standards
considered in today's final rule.
In the April 2009 NOPR, however, DOE provided a different estimate
of NOX reductions because DOE assumed that the CAIR rule had
been vacated. This is because the CAIR rule was vacated by the U.S.
Court of Appeals for the District of Columbia Circuit (DC Circuit) in
its July 11, 2008 decision in North Carolina v. Environmental
Protection Agency.\69\ Although the D.C. Circuit, in a December 23,
2008, opinion,\70\ decided to allow the CAIR rule to remain in effect
until it is replaced by a rule consistent with the
[[Page 34162]]
court's earlier opinion, DOE retained its analysis of NOX
emissions reductions based on an assumption that the CAIR rule was not
in effect because: (1) The NOPR rulemaking was sufficiently advanced at
the time that the December 23, 2008, opinion was issued that revisiting
the analysis would have caused undue delays; and (2) neither the July
11, 2008, nor the December 23, 2008, decisions of the D.C. Circuit
changed the standard-setting proposals offered in the NOPR.
---------------------------------------------------------------------------
\69\ 531 F.3d 896 (D.C. Cir. 2008).
\70\ See North Carolina v. EPA, 550 F.3d 1176 (DC Cir. 2008).
---------------------------------------------------------------------------
Thus, for the April 2009 NOPR, DOE established a range of
NOX reductions based on low and high emission rates (in
metric kilotons of NOX emitted per terawatt-hour (TWh) of
electricity generated) derived from the AEO2008. DOE anticipated that,
in the absence of the CAIR Rule's trading program, the new or amended
conservation standards would reduce NOX emissions nationwide
not just in 22 statues.
As noted in section IV.I, DOE was able to estimate the changes in
Hg emissions associated with an energy conservation standard as
follows. DOE notes that the NEMS-BT model used for the NOPR, used as an
integral part of today's rulemaking, does not estimate Hg emission
reductions due to new energy conservation standards, as it assumed that
Hg emissions would be subject to EPA's CAMR.\71\ CAMR would have
permanently capped emissions of mercury for new and existing coal-fired
plants in all States by 2010. As with SO2 and
NOX, DOE assumed that under such a system, energy
conservation standards would have resulted in no physical effect on
these emissions, but might have resulted in an environmentally related
economic benefit in the form of a lower price for emissions allowance
credits if those credits were large enough. DOE estimated that the
change in the Hg emissions from energy conservation standards would not
be large enough to influence allowance prices under CAMR.
---------------------------------------------------------------------------
\71\ 70 FR 28606 (May 18, 2005).
---------------------------------------------------------------------------
On February 8, 2008, the DC Circuit issued its decision in New
Jersey v. Environmental Protection Agency \72\ to vacate CAMR. In light
of this development and because the NEMS-BT model could not be used to
directly calculate Hg emission reductions, DOE used the Hg emission
rates discussed below to calculate emissions reductions in the NOPR.
This same methodology is used for the Final Rule as well due to the
continued fluid environment ``* * * with many States planning to enact
new laws or make existing laws more stringent.'' \73\ The NEMS-BT has
only rough estimates of mercury emissions, and it was felt that the
range of emissions used in the NOPR remain appropriate given these
circumstances.
---------------------------------------------------------------------------
\72\ 517 F.3d 574 (DC Cir. 2008).
\73\ Energy Information Administration, Annual Energy Outlook
2009 (March 2009), page 18.
---------------------------------------------------------------------------
Therefore, rather than using the NEMS-BT model, DOE established a
range of Hg rates to estimate the Hg emissions that could be reduced
through standards. DOE's low estimate assumed that future standards
would displace electrical generation only from natural gas-fired power
plants, thereby resulting in an effective emission rate of zero. (Under
this scenario, coal-fired power plant generation would remain
unaffected.) The low-end emission rate is zero because natural gas-
fired power plants have virtually zero Hg emissions associated with
their operation. Earthjustice stated that basing the low end of the
range on the displacement of only gas-fired power plants was
inconsistent with DOE's utility impact analysis (Earthjustice, No. 60
at pg. 8-9). DOE believes that the estimate should provide the full
range of possible outcomes and has selected the low and high values to
bracket the uncertainties associated with estimating mercury emission
reductions.
DOE's high estimate, which assumed that standards would displace
only coal-fired power plants, was based on an estimate of the 2006
nationwide mercury emission rate from AEO2008. (Under this scenario,
DOE assumed that gas-fired power plant generation would remain
unaffected and that no future reductions in the rate of mercury
emissions from such sources would occur.) Because power plant emission
rates are a function of local regulation, scrubbers, and the mercury
content of coal, it is extremely difficult to identify a precise high-
end emission rate. Therefore, the most reasonable high estimate is
based on the assumption that all displaced coal generation would have
been emitting at the 2006 average emission rate for coal generation as
specified by the April Update to AEO2009. This is viewed as a high
estimate because it is likely that future emission controls will be
installed at coal-fired power plants which will reduce their average
emission rate. As noted previously, because virtually all mercury
emitted from electricity generation is from coal-fired power plants,
DOE based the emission rate on the tons of mercury emitted per TWh of
coal-generated electricity. Based on the emission rate for 2006, DOE
derived a high-end emission rate of 0.0255 tons per TWh. To estimate
the reduction in mercury emissions, DOE multiplied the emission rate by
the reduction in coal-generated electricity due to the standards
considered in the utility impact analysis. These changes in Hg
emissions are small, ranging from 0.2 to 1.0 percent of the national
base-case emissions forecast by NEMS-BT for GFSL, depending on the TSL
and scenario, and less than 0.2 percent for all IRL levels.
In the April 2009 NOPR, DOE considered accounting for a monetary
benefit of CO2 emission reductions associated with
standards. To put the potential monetary benefits from reduced
CO2 emissions into a form that would likely be most useful
to decision makers and interested parties, DOE used the same methods it
used to calculate the net present value of consumer cost savings. DOE
converted the estimated yearly reductions in CO2 emissions
into monetary values that represented the present value, in that year,
of future benefits resulting from that reduction in emissions, which
were then discounted from that year to the present using both 3-percent
and 7-percent discount rates.
In the April 2009 NOPR, DOE proposed to use the range $0 to $20 per
ton for the year 2007 in 2007$. 74 FR 16920, 17012 (April 13, 2009).
These estimates were originally derived to represent the lower and
upper bounds of the costs and benefits likely to be experienced in the
United States. The lower bound was based on an assumption of no benefit
and the upper bound was based on an estimate of the mean value of
worldwide impacts due to climate change that was reported by the
Intergovernmental Panel on Climate Change (IPCC).\74\ DOE expected that
such domestic values would be 10% or less of comparable global values;
however, there were no consensus estimates for the U.S. benefits likely
to
[[Page 34163]]
result from CO2 emission reductions. Because U.S.-specific
estimates were unavailable, DOE used the global mean value as an upper
bound U.S. value.
---------------------------------------------------------------------------
\74\ During the preparation of its review of the state of
climate science, the IPCC identified various estimates of the
present value of reducing CO2 emissions by 1 ton over the
life that these emissions would remain in the atmosphere. The
estimates reviewed by the IPCC spanned a range of values. Absent a
consensus on any single estimate of the monetary value of
CO2 emissions, DOE used the estimates identified by the
study cited in ``Summary for Policymakers,'' prepared by Working
Group II of the IPCC's ``Fourth Assessment Report,'' to estimate the
potential monetary value of CO2 reductions likely to
result from standards considered in this rulemaking. According to
IPCC, the mean social cost of carbon (SCC) reported in studies
published in peer-reviewed journals was $43 per ton of carbon. This
translates into about $12 per ton of CO2. The literature
review (Tol 2005) from which this mean was derived did not report
the year in which these dollars were denominated. However, DOE
understands this estimate was for the year 1995 denominated in
1995$. Updating that estimate to 2007$ yields a SCC for the year
1995 of $15 per ton of CO2.
---------------------------------------------------------------------------
Given the uncertainty surrounding estimates of the social cost of
carbon, DOE previously concluded that relying on any single estimate
may be inadvisable because that estimate will depend on many
assumptions. Working Group II's contribution to the ``Fourth Assessment
Report'' of the IPCC notes the following:
The large ranges of SCC are due in the large part to differences
in assumptions regarding climate sensitivity, response lags, the
treatment of risk and equity, economic and non-economic impacts, the
inclusion of potentially catastrophic losses, and discount
rates.\75\
---------------------------------------------------------------------------
\75\ ``Climate Change 2007--Impacts, Adaptation and
Vulnerability.'' Contribution of Working Group II to the ``Fourth
Assessment Report'' of the IPCC, 17. Available at www.ipcc.ch/
ipccreports/ar4-wg2.htm (last accessed Aug. 7, 2008).
Because of this uncertainty, DOE used the SCC value from Tol
(2005), which was presented in the IPCC's ``Fourth Assessment Report''
and provided a comprehensive meta-analysis of estimates for the value
of SCC. 74 FR 16920, 17012 (April 13, 2009).
NRDC and Earthjustice and NY et al. commented that DOE should use
global, rather than U.S. based estimates for CO2 values
(NRDC, Issue Paper, No. 82 at p. 13 and NY et al., Attachment, No. 88
at p. 3). NY et al. recommended DOE use $80 per short ton
CO2 ($88 metric) in 2009$ based on recent meta-analysis of
GHG abatement cost analyses published by international agencies and
multinational consultancies. NY et al., also criticized the range of
CO2 values used in the NOPR and recommended the use of a
long-run marginal abatement cost of CO2 for monetizing
CO2 emission reductions, rather than the damage costs given
the highly uncertain nature of the latter (NY et al., No. 88, p. 9-10).
DOE continues to use SCC values in today's final rule. DOE has not
adopted using an abatement cost because the actual costs of reducing
CO2 emissions are highly variable. They range from negative
costs, such as energy efficiency improvement measures that produce net
economic benefits, to hundreds of dollars per ton of CO2,
such as emission reductions that might require the early abandonment of
large capital investments in power plants, industrial facilities or
buildings. In order to identify a specific marginal cost per ton of
CO2 reduced usually requires the establishment of key
parameters, such as the scope of the emissions covered, the quantity of
emission reductions to be achieved and the timeframe for the
achievement of these reductions. These parameters must be determined
through legislative or regulatory processes. Moreover, the use of SCC
is consistent with the IPCC Fourth Assessment Report. However, if a
nationwide regulatory mandate is established to limit or reduce U.S.
greenhouse gas emissions, the marginal costs of reducing emissions that
are imposed by such a mandate might be the basis for valuing such
emission reductions in the future.
For today's final rule, DOE is relying on an updated range of
values consistent with that presented in the Model Year 2011 fuel
economy standard final rule issued by the National Highway Traffic
Safety Administration (NHTSA): $2, $33 and $80 per ton. In the MY 2011
fuel economy standard final rule, NHTSA relied on a range of estimates
representing the uncertainty surrounding global values of the SCC,
while also encompassing, at the low end, possible domestic values.
These three values encompass much of the variability in the estimates
of the global value of the SCC. The lower end of this range, $2, also
approximates possible mean value for domestic benefits. The middle of
the range, $33, is equal to the mean value in Tol (2008) and the high
end of the range, $80, represents one standard deviation above the mean
global value. 74 FR 14196, 14346 (March 30, 2009).
The global value of $33 is based on Tol's (2008) expanded and
updated survey of 211 estimates of the global SCC.\76\ Tol's 2008
survey encompasses a larger number of estimates for the global value of
reducing carbon emissions than its previously-published counterpart,
Tol (2005), and continues to represent the only recent, publicly-
available compendium of peer-reviewed estimates of the SCC that has
itself been peer-reviewed and published.
---------------------------------------------------------------------------
\76\ Richard S.J. Tol (2008), The social cost of carbon: Trends,
outliers, and catastrophes, Economics--the Open-Access, Open-
Assessment E-Journal, 2 (25), 1-24.
---------------------------------------------------------------------------
The domestic value ($2) was developed by NHTSA by using the mean
estimate of the global value of reduced economic damages from climate
change resulting from reducing CO2 emissions as a starting
point; estimating the fraction of the reduction in global damages that
is likely to be experienced within the U.S.; and applying this fraction
to the mean estimate of global benefits from reducing emissions to
obtain an estimate of the U.S. domestic benefits from lower GHG
emissions. NHTSA constructed the estimate of the U.S. domestic benefits
from reducing CO2 emissions using estimates of U.S. domestic
and global benefits from reducing greenhouse gas emissions developed by
EPA and reported in EPA's Technical Support Document accompanying its
advance notice of proposed rulemaking on motor vehicle CO2
emissions.\77\
---------------------------------------------------------------------------
\77\ U.S. EPA, Technical Support Document on Benefits of
Reducing GHG Emissions, June 12, 2008.
---------------------------------------------------------------------------
A complete discussion of NHTSA's analysis is available in Chapter
VIII of the Final Regulatory Analysis of the Corporate Average Fuel
Economy for MY 2011 Passenger Cars and Light Trucks (NHTSA, March
2009).
After considering comments and the currently available information
and analysis, which was reflected in the approach employed by NHTSA,
DOE concluded that it was appropriate to consider the global benefits
of reducing CO2 emissions, as well as the domestic benefits.
Consequently, DOE considered in its decision-process for this final
rule the potential benefits resulting from reduced CO2
emissions valued at $2, $33 and $80. The resulting range is based on
current peer-reviewed estimates of the value of SCC and, DOE believes,
fairly represents the uncertainty surrounding the global benefits
resulting from reduced CO2 emissions and, at the $2 level,
also encompasses the likely domestic benefits, DOE also concluded,
based on the most recent Tol analysis, that it was appropriate to
escalate these values at 3% \78\ per year to represent the expected
increases, over time, of the benefits associated with reducing
CO2 and other greenhouse gas emissions.
---------------------------------------------------------------------------
\78\ Estimates of SCC are assumed to increase over time since
future emissions are expected to produce larger incremental damages
as physical and economic systems become more stressed as the
magnitude of climate change increases. Although most studies that
estimate economic damages caused by increased GHG emissions in
future years produce an implied growth rate in the SCC, neither the
rate itself nor the information necessary to derive its implied
value is commonly reported. Given the limited amount of debate thus
far about the appropriate growth rate of the SCC, applying a rate of
3%/yr seems appropriate at this stage. This value is consistent with
the range recommended by IPCC (2007).
---------------------------------------------------------------------------
The tables below present the resulting estimates of the potential
range of net present value benefits associated with reducing
CO2 emissions.
[[Page 34164]]
Table VII.27--Estimates of Value of CO2 Emissions Reductions for GSFL Under Trial Standard Levels at Seven-Percent and Three-Percent Discount Rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
Value of estimated CO2 emission reductions (billion Value of estimated CO2 emission reductions
Estimated 2008$) at 7% discount rate (billion 2008$) at 3% discount rate
GSFL TSL cumulative CO2 --------------------------------------------------------------------------------------------------------
(MMt) emission CO2 value of $2/ CO2 value of $33/ CO2 value of $80/ CO2 value of $2/ CO2 value of CO2 value of
reductions ton CO2 ton CO2 ton CO2 ton CO2 $33/ton CO2 $80/ton CO2
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................ 66 to 130....... 0.1 to 0.1...... 1.1 to 2.1...... 2.6 to 5.1...... 0.1 to 0.3..... 2.3 to 4.5..... 5.6 to 10.9.
2............................ 86 to 134....... 0.1 to 0.1...... 1.5 to 2.2...... 3.6 to 5.3...... 0.2 to 0.3..... 3.0 to 4.6..... 7.2 to 11.2.
3............................ 148 to 297...... 0.2 to 0.3...... 2.5 to 4.9...... 6.1 to 11.9..... 0.3 to 0.6..... 5.1 to 10.3.... 12.5 to 24.9.
4............................ 175 to 488...... 0.2 to 0.5...... 3.1 to 8.4...... 7.5 to 20.4..... 0.4 to 1.0..... 6.0 to 16.9.... 14.7 to 40.9.
5............................ 262 to 552...... 0.3 to 0.6...... 4.6 to 9.6...... 11.1 to 23.4.... 0.6 to 1.2..... 9.1 to 19.1.... 22.0 to 46.4.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VII.28--Estimates of Value of CO2 Emissions Reductions for IRL Under Trial Standard Levels at Seven-Percent and Three-Percent Discount Rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
Value of estimated CO2 emission reductions (billion Value of estimated CO2 emission reductions
Estimated 2008$) at 7% discount rate (billion 2008$) at 3% discount rate
IRL TSL cumulative CO2 --------------------------------------------------------------------------------------------------------
(MMt) emission CO2 value of $2/ CO2 value of $33/ CO2 value of $80/ CO2 value of $2/ CO2 value of CO2 value of
reductions ton CO2 ton CO2 ton CO2 ton CO2 $33/ton CO2 $80/ton CO2
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................ 7 to 20......... 0.0 to 0.0...... 0.1 to 0.3...... 0.3 to 0.8...... 0.0 to 0.0..... 0.3 to 0.7..... 0.6 to 1.7.
2............................ 19 to 49........ 0.0 to 0.1...... 0.4 to 0.8...... 0.8 to 2.1...... 0.0 to 0.1..... 0.7 to 1.7..... 1.6 to 4.1.
3............................ 38 to 85........ 0.0 to 0.1...... 0.7 to 1.5...... 1.7 to 3.6...... 0.1 to 0.2..... 1.3 to 2.9..... 3.2 to 7.1.
4............................ 44 to 106....... 0.0 to 0.1...... 0.8 to 1.8...... 1.9 to 4.4...... 0.1 to 0.2..... 1.5 to 3.7..... 3.7 to 8.9.
5............................ 53 to 118....... 0.1 to 0.1...... 1.0 to 2.0...... 2.3 to 4.9...... 0.1 to 0.2..... 1.8 to 4.1..... 4.5 to 9.9.
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE is well aware that scientific and economic knowledge about the
contribution of CO2 and other green house gas emissions
(GHG) to changes in the future global climate and the potential
resulting damages to the world economy continues to evolve rapidly.
Thus, any value placed in this rulemaking on reducing CO2
emissions is subject to likely change.
The Department of Energy, together with other Federal agencies, is
reviewing various methodologies for estimating the monetary value of
reductions in CO2 and other greenhouse gas emissions. This
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, such as whether the appropriate
values should represent domestic U.S. benefits, as well as global
benefits (and costs). Given the complexity of the many issues involved,
this review is ongoing. However, consistent with DOE's legal
obligations, and taking into account the uncertainty involved with this
particular issue, DOE has included in this final rule the most recent
values and analyses employed in a rulemaking by another Federal agency.
DOE also investigated the potential monetary benefit of reduced
SO2, NOX, and Hg emissions from the TSLs it
considered. As previously stated, DOE's initial analysis assumed the
presence of nationwide emission caps on SO2 and Hg, and caps
on NOX emissions in the 28 States covered by CAIR. In the
presence of these caps, DOE concluded that no physical reductions in
power sector emissions would occur, but that the standards could put
downward pressure on the prices of emissions allowances in cap-and-
trade markets. Estimating this effect is very difficult because of
factors such as credit banking, which can change the trajectory of
prices. DOE has concluded that the effect from energy conservation
standards on SO2 allowance prices is likely to be negligible
based on runs of the NEMS-BT model. See chapter 16 of the TSD
accompanying this notice for further details.
Because the courts have decided to allow the CAIR rule to remain in
effect, projected annual NOX allowances from NEMS-BT are
relevant.\79\ As noted above, standards would not produce an economic
impact in the form of lower prices for emissions allowance credits in
the 28 eastern States and D.C. covered by the CAIR cap. New or amended
energy conservation standards would reduce NOX emissions in
those 22 States that are not affected by CAIR. For the area of the
United States not covered by CAIR, DOE estimated the monetized value of
NOX emissions reductions resulting from each of the TSLs
considered for today's final rule based on environmental damage
estimates from the literature. Available estimates suggest a very wide
range of monetary values for NOX emissions, ranging from
$370 per ton to $3,800 per ton of NOX from stationary
sources, measured in 2001$ (equivalent to a range of $432 per ton to
$4,441 per ton in 2007$).\80\
---------------------------------------------------------------------------
\79\ The Update to the AEO2009 based version of NEMS-BT includes
the representation of CAIR.
\80\ Office of Management and Budget Office of Information and
Regulatory Affairs, ``2006 Report to Congress on the Costs and
Benefits of Federal Regulations and Unfunded Mandates on State,
Local, and Tribal Entities,'' Washington, DC (2006).
---------------------------------------------------------------------------
For Hg emissions reductions, DOE estimated the national monetized
values resulting from the TSLs considered for today's rule based on
environmental damage estimates from the literature. DOE conducted
research for today's final rule and determined that the impact of
mercury emissions from power plants on humans is considered highly
uncertain. However, DOE identified two estimates of the environmental
damage of mercury based on two estimates of the adverse impact of
childhood exposure to methyl mercury on IQ for American children, and
subsequent loss of lifetime economic productivity resulting from these
IQ losses. The high-end estimate is based on an estimate of the current
aggregate cost of the loss of IQ in American children that results from
exposure to mercury of U.S. power plant origin ($1.3 billion per year
in year 2000$), which works out to $32.6 million per ton emitted per
year
[[Page 34165]]
(2007$).\81\ The low-end estimate is $0.66 million per ton emitted (in
2004$) or $0.729 million per ton (in 2007)$. DOE derived this estimate
from a published evaluation of mercury control using different methods
and assumptions from the first study, but also based on the present
value of the lifetime earnings of children exposed.\82\ Table VI.28 and
Table VI.29 present the resulting estimates of the potential range of
present value benefits associated with reduced national NOX
and Hg emissions from the TSLs DOE considered.
---------------------------------------------------------------------------
\81\ Trasande, L., et al., ``Applying Cost Analyses to Drive
Policy that Protects Children,'' 1076 Ann. N.Y. Acad. Sci. 911
(2006).
\82\ Ted Gayer and Robert Hahn, ``Designing Environmental
Policy: Lessons from the Regulation of Mercury Emissions,''
Regulatory Analysis 05-01, AEI-Brookings Joint Center for Regulatory
Studies, Washington, DC (2004). A version of this paper was
published in the Journal of Regulatory Economics in 2006. The
estimate was derived by back-calculating the annual benefits per ton
from the net present value of benefits reported in the study.
Table VII.29--Estimates of Savings From NOX Emissions Reductions for GSFL
----------------------------------------------------------------------------------------------------------------
Value of estimated NOX Value of estimated NOX
Estimated cumulative emission reductions emission reductions
TSL NOX (kt) emission (million 2008$) at 7% (million 2008$) at 3%
reductions discount rate discount rate
----------------------------------------------------------------------------------------------------------------
1.................................... 1.9 to 11.7............ $0.7 to $23.8.......... $0.8 to $34.5.
2.................................... 5.1 to 10.0............ $1.5 to $21.9.......... $1.9 to $30.4.
3.................................... 7.3 to 17.0............ $2.2 to $41.1.......... $2.7 to $54.7.
4.................................... 11.0 to 36.8........... $4.2 to $107.2......... $4.6 to $132.4.
5.................................... 12.9 to 58.1........... $5.0 to $125.6......... $5.5 to $173.9.
----------------------------------------------------------------------------------------------------------------
Table VII.30--Estimates of Savings From NOX Emissions Reductions for IRL
----------------------------------------------------------------------------------------------------------------
Value of estimated NOX Value of estimated NOX
Estimated cumulative emission reductions emission reductions
TSL NOX (kt) emission (million 2007$) at 7% (million 2007$) at 3%
reductions discount rate discount rate
----------------------------------------------------------------------------------------------------------------
1.................................... 1.3 to 1.9............. $0.3 to $4.6........... $0.4 to $6.0.
2.................................... 3.2 to 5.5............. $0.8 to $13.8.......... $1.1 to $17.9.
3.................................... 5.4 to 7.6............. $1.5 to $19.7.......... $1.9 to $25.2.
4.................................... 6.4 to 8.4............. $1.8 to $24.4.......... $2.2 to $30.0.
5.................................... 8.1 to 9.3............. $2.2 to $27.0.......... $2.7 to $33.1.
----------------------------------------------------------------------------------------------------------------
Table VII.31--Estimates of Savings From Hg Emissions Reductions for GSFL
----------------------------------------------------------------------------------------------------------------
Value of estimated Hg Value of estimated Hg
Estimated cumulative Hg emission reductions emission reductions
TSL (tons) emission (million 2007$) at 7% (million 2007$) at 3%
reductions discount rate discount rate
----------------------------------------------------------------------------------------------------------------
1.................................... 0.0 to 2.0............. $0 to $16.5............ $0 to $32.7.
2.................................... 0.0 to 2.4............. $0 to $20.3............ $0 to $39.6.
3.................................... 0.0 to 4.8............. $0 to $41.4............ $0 to $80.2.
4.................................... 0.0 to 7.3............. $0 to $67.7............ $0 to $125.6.
5.................................... 0.0 to 8.8............. $0 to $84.5............ $0 to $154.4.
----------------------------------------------------------------------------------------------------------------
Table VII.32--Estimates of Savings From Hg Emissions Reductions for IRL
----------------------------------------------------------------------------------------------------------------
Value of estimated Hg Value of estimated Hg
Estimated cumulative Hg emission reductions emission reductions
TSL (tons) emission (million 2007$) at 7% (million 2007$) at 3%
reductions discount rate discount rate
----------------------------------------------------------------------------------------------------------------
1.................................... 0.0 to 0.3............. $0 to $2.7............. $0 to $5.2.
2.................................... 0.0 to 0.7............. $0 to $6.7............. $0 to $12.5.
3.................................... 0.0 to 1.3............. $0 to $11.7............ $0 to $22.1.
4.................................... 0.0 to 1.7............. $0 to $15.0............ $0 to $28.1.
5.................................... 0.0 to 1.8............. $0 to $16.0............ $0 to $30.2.
----------------------------------------------------------------------------------------------------------------
7. Other Factors
EPCA allows the Secretary of Energy, in determining whether a
standard is economically justified, to consider any other factors that
the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)
and 6316(e)(1)) In adopting today's standards, the Secretary considered
the potential for GSFL and IRL standards to adversely affect low-income
consumers, institutions of religious worship, historical facilities,
institutions that serve low-income populations, and consumers of T12
electronic ballasts.
D. Conclusion
EPCA contains criteria for prescribing new or amended energy
conservation standards. It provides that any such standard for GSFL and
IRL must be designed to achieve the maximum improvement in energy
efficiency that the Secretary determines is technologically feasible
and economically justified. (42 U.S.C. 6295(o)(2)(A)) As stated above,
in determining whether a standard is economically justified, the
Secretary must determine whether the benefits of the standards exceed
its burdens considering the seven factors discussed
[[Page 34166]]
in section IV.D. (42 U.S.C. 6295(o)(2)(B)(i)) A determination of
whether a standard level is economically justified is not made based on
any one of these factors in isolation. The Secretary must weigh each of
these seven factors in total in determining whether a standard is
economically justified. Further, the Secretary may not establish an
amended standard if such standard would not result in ``significant
conservation of energy,'' or ``is not technologically feasible or
economically justified.'' (42 U.S.C. 6295(o)(3)(B))
As discussed in section V.A.1, DOE established a separate set of
TSLs for GSFL and for IRL. Therefore, DOE analyzed each lamp type (GSFL
or IRL) separately when considering various TSLs and eventually
proposing standards. The following discussion briefly explains the
development of the TSLs, consideration of the TSLs (starting with the
most stringent) under the statutory factors, and the conclusion as to
the GSFL standards and IRL standards that most improve energy
efficiency that DOE has determined would most improve energy-efficiency
and would be technologically feasible and economically justified.
For GSFL, DOE considered five TSLs in the April 2009 NOPR, with
TSL5 being the most stringent level for which DOE performed full
analyses. 74 FR 16920, 16979-82 (April 13, 2009). It is noted that DOE
also considered the potential for a standard level beyond TSL5 that
would require GSFL to use a higher-efficiency gas fill composition,
which would have been the maximum technologically feasible level.
Although more-efficient fill gases (often including higher molecular
weight gases) are appropriate for and are currently used in some lamp
applications, DOE is also aware employing this technology can cause
lamp instability resulting in striations or flickering in some
circumstances. DOE's research indicated that a potential standard level
that would require the use of higher-efficiency fill gases would
significantly reduce (or in some cases eliminate) the utility and
performance of the covered GSFL. DOE concluded on this basis that a
level with such an adverse impact on product utility would not be
economically justified.\83\ (42 U.S.C. 6295(o)(2)(B)(i)(IV) and (3)(B))
Having made this determination, there was no need to perform additional
analyses relevant to the other statutory criteria. (See section I.A.2
for additional detail.) Consequently, TSL5 represents the most-
efficient level analyzed for GSFL.
---------------------------------------------------------------------------
\83\ DOE notes that it did not eliminate higher-efficiency fill
gases from further consideration as a technology under the screening
analysis, because that technology may be appropriate for low-wattage
lamp applications.
---------------------------------------------------------------------------
For IRL, DOE's engineering analysis considered the maximum
technologically feasible level, which would require the use of a silver
reflector. However, this level utilized a proprietary technology that
represents a unique pathway to achieving that efficiency level.
Accordingly, DOE determined that such level was likely to have
significant anti-competitive effects on the markets for such lamps and
ultimately concluded that it is not economically justified. (42 U.S.C.
6295(o)(3)(B)) Therefore, TSL5, which does not require installation of
the proprietary silver reflector, represents the most efficient level
analyzed for IRL. (See sections VI.B and VII.A.2 of this notice for
more information on maximum technologically feasible levels and other
efficacy levels DOE analyzed.)
DOE then considered the impacts of standards at each trial standard
level that was identified and analyzed, beginning with the most
efficient level, to determine whether the given level was economically
justified. DOE then considered less efficient levels until it reached
the highest level that meets the key statutory criteria in terms of
being technologically feasible, economically justified, and saving a
significant amount of energy.
DOE discusses the benefits and/or burdens of each trial standard
level in the following sections. DOE bases its discussion on
quantitative analytical results for each trial standard level
(presented in section VII) such as national energy savings, net present
value (discounted at 7 percent and 3 percent), emissions reductions,
industry net present value, life-cycle cost, and consumers installed
price increases. In addition to providing a summary of results, DOE
discusses below the life-cycle cost and consumer installed price
increase results for each product class and baseline, where
appropriate. Beyond the quantitative results, DOE also considers other
burdens and benefits that affect economic justification, including how
the impacts of standards on competition, supply constraints, and lamp
input prices may affect the economic benefits and burdens presented.
1. General Service Fluorescent Lamps Conclusion
In addition to the results presented above, DOE also calculates the
annualized benefits and costs of each TSL. The table below presents
these values for GSFL.
Table VII.33--Annualized Benefits and Costs for GSFL
----------------------------------------------------------------------------------------------------------------
Primary estimate Low estimate High estimate
TSL Category Unit -----------------------------------------------------------------
7% 3% 7% 3% 7% 3%
----------------------------------------------------------------------------------------------------------------
1....... Benefits
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 650 741 445 504 855 978
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Annualized CO2 (Mt)......... 2.73 2.98 1.83 2.01 3.64 3.96
Quantified.
NOX (kT)......... 0.37 0.28 0.17 0.10 0.57 0.46
Hg (T)........... 0.02 0.03 0.00 0.00 0.05 0.06
-------------------------------------------------------------------------------------------------------
Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 123 80 181 128 64 31
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Net Benefits/Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 527 661 264 375 791 946
Monetized
($millions/year).
----------------------------------------------------------------------------------------------------------------
[[Page 34167]]
2....... Benefits
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 761 842 586 633 936 1051
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Annualized CO2 (Mt)......... 3.22 3.41 2.68 2.73 3.76 4.08
Quantified.
NOX (kT)......... 0.45 0.33 0.38 0.25 0.52 0.40
Hg (T)........... 0.03 0.04 0.00 0.00 0.07 0.07
-------------------------------------------------------------------------------------------------------
Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 224 160 255 186 192 134
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Net Benefits/Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 537 683 330 448 744 918
Monetized
($millions/year).
----------------------------------------------------------------------------------------------------------------
3....... Benefits
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 1528 1663 1017 1089 2038 2237
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Annualized CO2 (Mt)......... 6.50 6.89 4.51 4.67 8.49 9.11
Quantified.
NOX (kT)......... 0.76 0.55 0.55 0.37 0.98 0.73
Hg (T)........... 0.07 0.07 0.00 0.00 0.14 0.15
-------------------------------------------------------------------------------------------------------
Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 577 484 522 417 633 550
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Net Benefits/Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 950 1179 495 671 1405 1688
Monetized
($millions/year).
----------------------------------------------------------------------------------------------------------------
4....... Benefits
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 2302 2420 1329 1387 3275 3452
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Annualized CO2 (Mt)......... 10.48 10.60 5.76 5.69 15.20 15.52
Quantified.
NOX (kT)......... 1.78 1.19 1.03 0.63 2.54 1.76
Hg (T)........... 0.11 0.11 0.00 0.00 0.22 0.23
-------------------------------------------------------------------------------------------------------
Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 582 425 378 230 786 621
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Net Benefits/Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 1720 1994 951 1158 2489 2831
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Incremental Net Benefits/Costs Relative to TSL3
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 770 815 456 487 1084 1143
Monetized
($millions/year).
----------------------------------------------------------------------------------------------------------------
5....... Benefits
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 2850 2988 1738 1811 3961 4165
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Annualized CO2 (Mt)......... 12.95 13.07 8.33 8.41 17.57 17.73
Quantified.
NOX (kT)......... 2.10 1.53 1.21 0.75 2.98 2.31
Hg (T)........... 0.14 0.14 0.00 0.00 0.27 0.28
-------------------------------------------------------------------------------------------------------
Costs
-------------------------------------------------------------------------------------------------------
Annualized 2009$............ 911 737 783 613 1039 861
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Net Benefits/Costs
-------------------------------------------------------------------------------------------------------
Annualized 2009$............ 1939 2251 955 1197 2922 3304
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Incremental Net Benefits/Costs Relative to TSL4
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 219 257 4 39 433 473
Monetized
($millions/year).
----------------------------------------------------------------------------------------------------------------
Note: Annualized values are for the period from 2012 to 2042.
[[Page 34168]]
a. Trial Standard Level 5
For GSFL, DOE first considered the most efficient level, TSL5,
which would save an estimated total of 5.1 to 12.0 quads of energy
through 2042--a significant amount of energy. For the Nation as a
whole, TSL5 would have a net savings of $10.0 billion to $30.9 billion
at a 7-percent discount rate and $22.6 billion to $62.6 billion at a 3-
percent discount rate. The emissions reductions at TSL5 are estimated
at 262 to 552 MMt of CO2, 13 to 58 kt of NOX, up
to 9 metric tons of Hg. Total generating capacity in 2042 is estimated
to decrease compared to the reference case by 2.7 to 7.3 GW under TSL5.
The monetized values of emissions reductions are estimated at $5.0 to
$125.6 million for NOX and up to $84.5 million for Hg at a
7-percent discount rate and $5.5 to $173.9 million for NOX
and up to $154.4 million for Hg at a 3-percent discount rate. The
estimated benefits of reducing CO2 emissions using the mid-
range of the CO2 value (using $33 per ton) is $4.6 to $9.6
billion and $9.1 to $19.1 billion at 7-percent and 3-percent discount
rates respectively. The full range of likely benefits of CO2
emission reductions is $0.3 billion to $23.4 billion at a 7-percent
discount rate and $0.6 billion to $46.4 billion at a 3-percent discount
rate.
The impacts on manufacturers at TSL5 result from the
commoditization of high-efficacy lamps and the need to convert all T12
lines to T8 lines, requiring a capital investment of $211 million. The
projected change in industry value ranges from a decrease of $211
million to an increase of $33 million. The extent of the industry
impacts is driven primarily by how successful manufacturers will be in
maintaining their current gross margins at near their current levels as
efficient products become commoditized. Currently, manufacturers obtain
higher margins for more-efficient products; therefore, to avoid the
higher end of the anticipated impacts, manufacturers are likely to have
to find new ways to differentiate GSFL to maintain full product lines.
At TSL5, DOE recognizes the risk of very large negative impacts if the
high end of the range of impacts is reached, resulting in a net loss of
40 percent in INPV.
At TSL5, DOE projects that most GSFL consumers would experience
life-cycle cost savings. The following discussion summarizes the
specific life-cycle cost impacts of TSL5 on the separate product
classes and baseline lamps.
Table VII.5 presents the findings of an LCC analysis on various
three-lamp, 4-foot medium bipin GSFL systems operating in the
commercial sector. Regardless of the baseline lamp currently employed,
consumers have lamp designs available which result in positive LCC
savings at TSL5. At this standard level, users of 40W or 34W 4-foot MBP
T12 baseline lamps installed on a magnetic ballast who need to replace
their lamp would incur the cost of a lamp and ballast replacement
($65.96 to $73.94) because no T12 lamp currently meets the efficacy
requirements of TSL5. Comparing this cost of lamp-and-ballast
replacements to the cost of only baseline lamp replacements ($11.65 to
$14.50) results in installed price increases of $52.83 to $59.44. These
ranges in prices depend on the specific baseline lamps previously owned
by consumers and the specific combinations of lamps and ballasts they
select in the standards case. However, over the life of the lamp, these
consumers would save $13.93 to $24.16.
Table VII.6 presents LCC results for a two-lamp 4-foot MBP system
operating in the residential sector under average operating hours. The
results are presented for a system operating 40W T12 lamps with a
magnetic ballast, as this configuration is typical of the installed
base of residential GSFL systems. As discussed in the NOPR, DOE
believes that the vast majority of lamps sold in the residential market
are sold with new ballasts or luminaires. 74 FR 16920, 16951 (April 13,
2009) At TSL5, residential consumers are expected to purchase T8 lamps
with electronic ballasts in lieu of the T12 lamps with magnetic
ballasts that they would purchase absent standards. These consumers
would see LCC savings of $20.21 to $22.32. DOE recognizes that not all
residential GSFL lamps would be sold in conjunction with a new ballast
or luminaire in the base case. In particular, consumers with higher
operating hours or consumers who choose to not discard their lamps upon
fixture or ballast replacement may need to replace their lamp on an
existing system. However, at TSL5, there are no standards-compliant T12
replacement lamps available. As seen in Table VII.8, the consumer
economics of retrofitting a T12 system with a T8 system for a
residential 4-foot MBP system depend on the remaining life of the T12
ballast. For those consumers who replace a T12 system with less than 7
years of life remaining in 2012, the LCC savings are positive. Those
consumers who have greater than 7 years of life remaining in their T12
systems in 2012 will experience negative LCC savings. Considering an
average system life of 15 years, and estimating that 10 percent of T12
lamps sold to residential sector are replacement lamps, DOE calculates
that fewer than 6 percent of current purchasers of T12 lamps in the
residential sector will experience increases in LCC. The first-costs
increase for residential consumers forced to retrofit to T8 systems
would be $49.00 to $49.91 ($53.13 to $54.04 for an installed T8 system
compared to $4.13 for two new T12 lamp).
With regard to 4-foot MBP consumer subgroups, all consumer
subgroups analyzed achieve similar LCC savings to the average consumer
with the exception of commercial consumers who own 40W or 34W 4-foot
MBP T12 lamps installed on electronic ballasts. These consumers, upon
lamp failure, are forced to retrofit their existing ballasts, resulting
in negative LCC savings of -$12.43 to -$7.00. Overall, based on the
NIA, DOE estimates that at TSL5 in 2012, less than 2 percent of 4-foot
MBP shipments result in negative LCC savings, and 9 percent of
shipments are associated with the high installed price increases due to
forced retrofits.
Table VII.11 presents the findings of an LCC analysis on various
two-lamp, 8-foot SP slimline GSFL systems operating in the commercial
sector. Except for consumers who purchase reduced-wattage 60W T12 lamps
absent standards (and experience a lamp failure), all other consumers
have available lamp designs that result in positive LCC savings at
TSL5. At this standard level, users of 75W or 60W 8-foot SP slimline
T12 baseline lamps installed on a magnetic ballast who need to replace
their lamp would incur the cost of a lamp and ballast replacement
($97.41 to $98.80) because no T12 lamp currently meets the efficacy
requirements of TSL5. Comparing the cost of a lamp-and-ballast
replacement to the cost of only a baseline lamp replacement ($11.77 to
$16.79) results in an installed price increase of $82.01 to $87.03. In
addition, users of 60W T12 lamps who need to replace their lamp
experience negative LCC savings of -$15.81 to -$13.89. On the other
hand, over the life of the lamp, users of 75W T12 lamps who require a
lamp replacement would save $9.68.
With regard to 8-foot SP slimline consumer subgroups, all consumer
subgroups analyzed achieve similar LCC savings to the average consumer
with the exception of consumers of T12 lamps operating in religious
institutions, consumers of T12 lamps
[[Page 34169]]
operating in institutions that serve low-income populations, and users
of T12 lamps installed on electronic ballasts. These consumers, upon
lamp failure, are forced to retrofit their existing ballasts, resulting
in negative LCC savings. In particular, consumers in institutions of
religious worship (which have low operating hours in comparison with
the average commercial-sector consumer) and consumers in institutions
serving low income populations (experience negative LCC savings of -
$30.56 to -$0.44. Consumers with T12 lamps installed on electronic
ballasts experience negative LCC savings of -$33.55 to -$15.82.
Overall, based on the NIA model, DOE estimates that at TSL5 in 2012,
approximately 24 percent of 8-foot SP slimline shipments would result
in negative LCC savings, and 65 percent of shipments would be
associated with the high installed price increases due to forced
retrofits.
Table VII.12 presents the findings of an LCC analysis on various
two-lamp, 8-foot RDC HO GSFL systems operating in the industrial
sector. With the exception of consumers who purchase reduced-wattage
95W T12 lamps absent standards (and purchase a lamp in response to a
lamp failure), all other consumers have available lamp designs that
result in positive LCC savings at TSL5. At this standard level, users
of 110W or 95W 8-foot RDC HO T12 baseline lamps installed on a magnetic
ballast who need to replace their lamp would incur the cost of a lamp
and ballast replacement ($131.38) because no T12 lamp currently meets
the efficacy requirements of TSL5. Comparing the cost of a lamp-and-
ballast replacement to the cost of only a baseline lamp replacement
($14.46 to $20.51) results in an installed price increase of $110.87 to
$116.92. Users of 95W T12 lamps who need to replace their lamp
experience negative LCC savings of -$7.97. On the other hand, over the
life of the lamp, users of 110W T12 lamps who require a lamp
replacement would save $13.07.
With regard to 8-foot RDC HO consumer subgroups, all consumer
subgroups analyzed achieve similar LCC savings to the average consumer
except consumers who own T12 lamps installed on electronic ballasts.
These consumers, upon lamp failure, are forced to retrofit their
existing ballasts, resulting in negative LCC savings of -$20.50 to -
$5.31. Overall, based on the NIA model, DOE estimates that at TSL5 in
2012, approximately 33 percent of 8-foot RDC HO shipments would result
in negative LCC savings, and 86 percent of shipments would be
associated with the high installed price increases due to forced
retrofits.
Table VII.9 and Table VII.10 present the LCC analyses on two-lamp
4-foot MiniBP T5 standard-output and high-output systems, respectively.
The standard-output system is modeled as operating in the commercial
sector, and the high-output system is modeled as operating in the
industrial sector. The baseline lamps for these systems are the model
28W and 54W halophosphor lamps, respectively, as discussed in section
V.B.3. At TSL5 (EL2 for standard output T5 lamps), all consumers of
standard output lamps have available lamp designs which result in
positive LCC savings of $1.10 (for lamp replacement) and $45.67 to
$47.49 (for new construction or renovation). At TSL5 (EL1 for high
output T5 lamps), consumers of high-output lamps who need only a lamp
replacement would experience negative LCC savings of -$3.03. However,
purchasing a T5 high-output system for new construction or renovation
would result in positive LCC savings of $65.69 to $67.06.
At TSL 5, the demand for rare-earth phosphors is significantly
increased compared to current levels. DOE understands that it is
difficult to predict the effects of new energy conservation standards
on rare earth phosphor demand. However, DOE is sensitive to the trade
vulnerability inherent in the concentrated geographical location of
these resources and the possible incentives for manufacturers to
relocate production (and associated employment) outside the U.S. It is
particularly challenging to draw a line below which the risks are
manageable and above which the risks become unacceptable. DOE notes
that in its comments, NEMA views TSL 3 as a level that allows
manufacturers to retain the flexibility needed to manage the impact of
increased worldwide rare earth phosphor usage. In their comments, NEMA
provided their estimate of the relative increase in rare earth phosphor
demand for each TSL. This analysis showed the impacts at TSL 3 and TSL
4 to be very similar, increases of 230 percent and 250 percent,
respectively. In contrast, the impacts at estimated by NEMA at TSL 5
are shown to be significantly larger at 350 percent. DOE concludes from
this that NEMA perceives considerably larger risks at TSL 5 than at TSL
4 or TSL 3.
At TSL 5, product availability is also a concern, particularly the
elimination of reduced-wattage 25W lamps, due to increased standard
levels. DOE agrees with comments received that 25W lamps are valuable
energy-saving products, because they provide a simple pathway to energy
savings that does not require ballast replacements or design
assistance. (California Stakeholders, No. 63 at p. 9) As demonstrated
in DOE's national impact analysis, the level of expertise required to
implement certain design choices is a key factor in determining energy
savings, as well as consumer and national NPV benefits.
In summary, after carefully considering the analysis discussed
above and weighing the benefits and burdens of TSL5, the Secretary has
determined the following: At TSL 5, the benefits of energy savings,
emissions reductions (both in terms of physical reductions and the
monetized value of those reductions, including the likely U.S. and
global benefits of reduced emissions of CO2), and the
positive net economic savings to the Nation (over 31 years) is
outweighed by the economic burden on some consumers (as indicated by
the large increase in total installed cost), the potentially large
reduction in INPV for manufacturers resulting from large conversion
costs and reduced gross margins, the elimination of certain low-wattage
lamps, and the risks associated with significantly increased demand for
rare-earth phosphors. Consequently, the Secretary has concluded that
TSL 5 is not economically justified.
b. Trial Standard Level 4
Next, DOE considered TSL 4, which would save an estimated total of
3.8 to 9.9 quads of energy through 2042--a significant amount of
energy. For the Nation as a whole, TSL4 would have a net savings of
$10.0 billion to $26.3 billion at a 7-percent discount rate and $21.8
billion to $53.5 billion at a 3-percent discount rate. The emissions
reductions at TSL4 are estimated at 175 to 488 MMt of CO2,
11 to 37 kt of NOX, and up to 7.3 metric tons of Hg. Total
generating capacity in 2042 is estimated to decrease compared to the
reference case by 1.8 to 6.2 GW under TSL4. The monetized values of
emissions reductions are estimated at $4.2 to $107.2 million for
NOX and up to $67.7 million for Hg at a 7-percent discount
rate and $4.6 to $132.4 million for NOX and up to $125.6
million for Hg at a 3-percent discount rate. The estimated benefits of
reducing CO2 emissions using the mid-range of the
CO2 value (using $33 per ton) is $3.1 to $8.4 billion and
$6.0 to $16.9 billion at 7-percent and 3-percent discount rates
respectively. The full range of likely benefits of CO2
emission reductions is $0.2 billion to $20.4 billion at a 7-percent
discount rate and $0.4 billion to
[[Page 34170]]
$40.9 billion at a 3-percent discount rate.
Similar to TSL5, the level of impacts on manufacturers would depend
primarily on their ability to differentiate their product offerings to
offset the reduced range of efficacy levels. TSL 4 would also require a
complete conversion of all T12 4-foot MBP, 8-foot SP slimline, and 8-
foot RDC HO lines to T8 lines, a capital investment of $193 million.
The projected change in industry value ranges from a decrease of $162
million to a decrease of $4 million. Because manufacturers have a
broader range of efficiency available at TSL 4 than at TSL 5 (thereby
permitting greater product differentiation and increased gross
margins), DOE believes the impacts at TSL 4 will be significantly less
than at TSL 5 and that the high range of impacts is less likely to
occur.
As seen in Table VII.5 through Table VII.12, at TSL4, DOE projects
that 4-foot MBP, 8-foot SP slimline, and 8-foot RDC HO consumers would
experience similar life-cycle cost savings and increases as they would
experience at TSL5. Like TSL5, most consumers who own T12 ballasts
prior to 2012 at TSL4 would likely experience negative economic
impacts, either through life-cycle cost increases or by large increases
in total installed cost. For 4-foot MiniBP T5 standard-output lamps,
TSL4 would require these lamps to meet EL1, resulting in positive LCC
savings of $1.10 for lamp replacement and $43.30 for new construction
or renovation (seen in Table VII.9). For 4-foot MiniBP T5 high-output
lamps, TSL4 would require the same efficacy level (EL1) as TSL5,
resulting in identical life-cycle cost impacts.
At TSL 4, the demand for rare-earth phosphors, although
significantly increased compared to current levels, is similar to the
demand at TSL 3, a level that manufacturers have suggested would allow
them to retain the flexibility needed to manage the impacts of
increased worldwide rare earth phosphor usage. In consideration of the
small increased demand of rare-earth phosphors over a level that
industry has indicated to be acceptable, DOE believes that risks of
trade vulnerability and potential relocation of lamp production
overseas in response to a standard adopted at TSL4 are low.
In contrast to TSL5, at TSL 4, consumers have several energy-saving
lamp options including the reduced-wattage 25W and 30W 4-foot MBP
lamps. The presence of these lamps on the market provides consumers
with more simple pathways to achieving energy savings. As demonstrated
in DOE's national impact analysis, the level of expertise required to
implement certain design choices is a key factor in determining energy
savings, as well as consumer and national NPV benefits.
In summary, after carefully considering the analysis discussed
above and weighing the benefits and burdens of TSL4, the Secretary has
determined the following: At TSL4, the benefits of energy savings,
emissions reductions (both in terms of physical reductions and the
monetized value of those reductions, including the likely U.S. and
global benefits of reduced emissions of CO2), and the
positive net economic savings to the Nation (over 31 years) outweighs
the economic burden on some consumers (as indicated by the large
increase in total installed cost), the potential reduction in INPV for
manufacturers, and the risks associated with increased demand for rare
earth phosphors. Consequently, the Secretary has concluded that TSL4
offers the maximum improvement in efficacy that is technologically
feasible and economically justified, and will result in significant
conservation of energy. Therefore, DOE is adopting the energy
conservation standards for GSFL at trial standard level 4.
2. Incandescent Reflector Lamps Conclusion
In addition to the results presented above, DOE also calculates the
annualized benefits and costs of each TSL. The table below presents
these values for GSFL.
Table VII.34--Annualized Benefits and Costs for IRL
----------------------------------------------------------------------------------------------------------------
Primary estimate Low estimate High estimate
TSL Category Unit -----------------------------------------------------------------
7% 3% 7% 3% 7% 3%
----------------------------------------------------------------------------------------------------------------
1....... Benefits
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 120 130 68 72 173 188
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Annualized CO2 (Mt)......... 0.43 0.43 0.24 0.24 0.62 0.63
Quantified.
NOX (kT)......... 0.09 0.07 0.07 0.05 0.11 0.08
Hg (T)........... 0.00 0.00 0.00 0.00 0.01 0.01
-------------------------------------------------------------------------------------------------------
Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 103 100 77 74 129 127
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Net Benefits/Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 18 29 -9 -2 44 61
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
2....... Benefits
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 293 313 176 182 410 443
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Annualized CO2 (Mt)......... 1.1 1.1 0.66 0.63 1.53 1.56
Quantified.
NOX (kT)......... 0.26 0.19 0.21 0.14 0.32 0.23
Hg (T)........... 0.01 0.01 0.00 0.00 0.02 0.02
-------------------------------------------------------------------------------------------------------
Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ -33 -39 -28 -32 -39 -46
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
[[Page 34171]]
Net Benefits/Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 326 352 203 215 449 489
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
3....... Benefits
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 531 603 349 389 712 817
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Annualized CO2 (Mt)......... 1.97 1.98 1.29 1.25 2.66 2.7
Quantified.
NOX (kT)......... 0.42 0.3 0.37 0.26 0.47 0.33
Hg (T)........... 0.02 0.02 0.00 0.00 0.04 0.04
-------------------------------------------------------------------------------------------------------
Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 72 71 52 50 92 92
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Net Benefits/Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 459 532 297 339 620 725
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
4....... Benefits
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 650 696 406 424 894 968
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Annualized CO2 (Mt)......... 2.39 2.4 1.51 1.45 3.28 3.35
Quantified.
NOX (kT)......... 0.51 0.35 0.45 0.31 0.58 0.4
Hg (T)........... 0.02 0.02 0.00 0.00 0.05 0.05
-------------------------------------------------------------------------------------------------------
Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 118 106 227 218 9 -6
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Net Benefits/Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 532 590 179 207 885 973
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Incremental Net Benefits/Costs Relative to TSL3
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 73 58 -118 -132 265 248
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
5....... Benefits
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 750 802 480 502 1020 1103
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Annualized CO2 (Mt)......... 2.76 2.76 1.83 1.76 3.69 3.75
Quantified.
NOX (kT)......... 0.59 0.4 0.54 0.37 0.65 0.44
Hg (T)........... 0.02 0.03 0.00 0.00 0.05 0.05
-------------------------------------------------------------------------------------------------------
Incremental Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 126 116 232 222 26 9
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Net Benefits/Costs
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 621 687 247 280 994 1093
Monetized
($millions/year).
-------------------------------------------------------------------------------------------------------
Incremental Net Benefits/Costs Relative to TSL4
-------------------------------------------------------------------------------------------------------
Annualized 2008$............ 89 97 68 73 109 120
Monetized
($millions/year).
----------------------------------------------------------------------------------------------------------------
Note: Annualized values are for the period from 2012 to 2042.
a. Trial Standard Level 5
For IRL, DOE first considered the most efficient level, TSL5, which
would save an estimated total of 1.12 to 2.72 quads of energy through
2042--a significant amount of energy. For the Nation as a whole, TSL5
would have a net savings of $4.9 billion to $10.2 billion at a 7-
percent discount rate and $9.4 billion to $20.0 billion at a 3-percent
discount rate. The emissions reductions at TSL5 are estimated at 53 to
118 MMt of CO2, 8 to 9 kt of NOX, and up to 2
metric tons of Hg. Total generating capacity in 2042 is estimated to
decrease compared to the reference case by 300 to 1400 MW under TSL5.
The monetized values of emissions reductions are estimated at $2.2 to
$27.0 million for NOX and up to $16.0 million for Hg at a 7-
percent discount rate and $2.7 to $33.1 million for NOX and
up to $30.2 million for Hg at a 3-percent
[[Page 34172]]
discount rate. The estimated benefits of reducing CO2
emissions using the mid-range of the CO2 value (using $33
per ton) is $1.0 to 2.0 billion and $1.8 to $4.1 billion at 7-percent
and 3-percent discount rates respectively. The full range of likely
benefits of CO2 emission reductions is $0.1 billion to $4.9
billion at a 7-percent discount rate and $0.1 billion to $9.9 billion
at a 3-percent discount rate.
As seen in Table VII.13, regardless of the baseline lamp purchased
absent standards, commercial-sector consumers have available lamp
designs at TSL5 which would result in positive LCC savings ranging from
$1.36 to $9.14, while residential-sector consumers have available lamp
designs which would result in positive LCC savings ranging from $1.51
to $9.10.
The projected change in industry value at TSL5 would range from a
decrease of $104 million to $111 million, or a net loss of 37 to 47
percent in INPV. The range in impacts is attributed in part to
uncertainty concerning the future share of emerging technologies in the
IRL market, as well as the expected migration to R-CFL and exempted IRL
technologies under standards.
DOE based TSL5 on commercially-available IRL which employ a silver
reflector, an improved IR coating, and a filament design that results
in a lifetime of 4,200 hours. To DOE's knowledge, only one manufacturer
currently sells products that meet TSL5. In addition, it is DOE's
understanding that the silver reflector is a proprietary technology
that all manufacturers may not be able to employ. However, DOE
considered TSL5 in its analysis because it believes that there is an
alternate, non-proprietary pathway to achieve this level. This pathway
consists in redesigning the filament to achieve higher-temperature
operation and, thus, reducing lifetime to 2,500 hours.
DOE conducted a complete set of analyses to capture the economic
impacts of a TSL5 lamp designed to operate with a lifetime of 2500
hours instead of 4200 hours. Whereas the energy savings and emission
reductions do not change for the Nation as a whole, a reduced-life lamp
would result in much reduced net savings (NPV) of $2.53 billion to
$4.86 billion at a 7-percent discount rate and $10.1 billion to $5.1
billion at a 3-percent discount rate. As seen in Table VII.13, as
compared to one of the baseline lamps purchased absent standards,
consumers would experience negative LCC savings, ranging from -$3.17
(in the commercial sector) to -$1.64 (in the residential sector), at
TSL5. Because reduced lamp life results in greater IRL shipments, the
projected change in industry value would be greatly reduced to a
decrease of $43 million to $49 million, or a net loss of 14 to 22
percent in INPV.
The reduced LCC savings at TSL 5 for the reduced-life lamps brings
added concern to the issue of hot shock, which is when vibrations that
occur while the lamp is energized cause premature lamp failure. It is
DOE's understanding that hot shock can reduce lamp life by 25 percent
to 30 percent for some consumers. For a lamp rated at 2500 hours, this
means that service life could be reduced to 1750 hours. As demonstrated
in Tables Table VI.1 and Table VI.2, DOE expects that a lamp with price
and efficacy associated with TSL5 and a lifetime of 1750 hours would
result in negative LCC savings for the vast majority of consumers.
Furthermore, DOE is also concerned about the possible lessening of
competition at TSL5. Only one manufacturer currently sells product that
meets TSL5. This commercially-available product employs a proprietary
technology, and while DOE has some evidence that alternative non-
proprietary technologies may be used to meet this level, these
alternative technologies have not been manufactured in large quantities
and questions remain as to their cost and performance, as discussed
above. Because DOE has not been able to verify manufacturer costs
associated with these alternative technologies, it is possible that
these approaches may not be cost-competitive with the currently-
available product employing the proprietary technology. While DOE
recognizes that a 2500-hour lamp at TSL 5 is technologically feasible
and would not require the use of proprietary technologies, the LCC
results show that these shortened-life lamps are likely to be less
attractive to consumers and, therefore, at a competitive disadvantage.
In summary, after carefully considering the analysis discussed
above and weighing the benefits and burdens of TSL5, the Secretary has
determined the following: At TSL5, the benefits of energy savings,
emissions reductions (both in terms of physical reductions and the
monetized value of those reductions, including the likely U.S. and
global benefits of reducing CO2 emissions), the positive net
economic savings to the Nation (over 31 years) is outweighed by the
large capital conversion costs that could result in a reduction in INPV
for manufacturers, possible negative LCC savings for some consumers of
2500-hour lamps, and the possible lessening of competition.
Consequently, the Secretary has concluded that TSL5 is not economically
justified.
b. Trial Standard Level 4
Next, DOE considered TSL4, which would save an estimated total of
0.94 to 2.39 quads of energy through 2042--a significant amount of
energy. For the Nation as a whole, TSL4 would have a net savings of
$4.20 billion to $9.06 billion at a 7-percent discount rate and $17.8
billion to $8.0 billion at a 3-percent discount rate. The emissions
reductions at TSL4 are estimated at 44 to 106 MMt of CO2,
6.4 to 8.4 kt of NOX, and up to 2 metric tons of Hg. Total
generating capacity in 2042 is estimated to decrease compared to the
reference case by 200 to 1,100 MW under TSL4. The monetized values of
emissions reductions are estimated at $1.8 to $24.4 million for
NOX and up to $15.0 million for Hg at a 7-percent discount
rate and $2.2 to $30.0 million for NOX and up to $28.1
million for Hg at a 3-percent discount rate. The estimated benefits of
reducing CO2 emissions using the mid-range of the
CO2 value (using $33 per ton) is $0.8 to $1.8 billion and
$1.5 to $3.7 billion at 7-percent and 3-percent discount rates
respectively. The full range of likely benefits of CO2
emission reductions is $50 million to $4.4 billion at a 7-percent
discount rate and $0.1 billion to $8.9 billion at a 3-percent discount
rate.
The projected change in industry value at TSL4 would range from a
decrease of $98 million to $102 million, or a net loss of 34 to 44
percent in INPV. The range in impacts is attributed in part to
uncertainty concerning the future share of emerging technologies in the
IRL market, as well as the expected migration to R-CFL and exempted IRL
technologies under standards.
As seen in Table VII.13, regardless of the baseline lamp currently
employed, commercial-sector consumers have available lamp designs at
TSL4 which would result in positive LCC savings ranging from $1.81 to
$7.95, while residential-sector consumers have available lamp designs
which would result in positive LCC savings ranging from $1.75 to $7.45.
DOE does not believe TSL4 requires the use of a single proprietary
technology. To DOE's knowledge, two manufacturers currently sell a
full-range of lamp wattages that meet TSL4. Unlike TSL5, where it is
possible that some manufacturers would not be able to achieve the level
without lowering lamp lifetime, DOE believes that the existence of
multiple technology pathways to TSL4 would not necessarily result in
the reduction in lamp lifetime at TSL4. However, DOE also recognizes
that
[[Page 34173]]
manufacturers may choose to sell products with reduced lifetimes.
Therefore, DOE conducted a complete set of analyses to capture the
economic impacts of a TSL4 lamp designed to operate with a lifetime of
2500 hours and 3000 hours instead of 4000 hours. Whereas the energy
savings and emission reductions do not change for the Nation as a
whole, a reduced-life lamp would result in much reduced net savings
(NPV) of $1.83 billion to $5.22 billion at a 7-percent discount rate
and $10.8 billion to $3.8 billion at a 3-percent discount rate. As seen
in Table VII.13, as compared to one of the baseline lamps purchased
absent standards, commercial consumers would experience small negative
LCC savings of -$0.25 at TSL4. Because reduced lamp life results in
greater IRL shipments, the projected change in industry value would be
greatly reduced to a decrease of $21 million to $61 million, or a net
loss of 7 to 28 percent in INPV.
Hot shock is less of a concern at TSL4 than at TSL5. DOE
understands that manufacturers may choose to reduce their negative
impacts by providing lamps with lifetimes less than 4000 hours at TSL4.
However, because 4000-hour TSL4 lamps can be produced without the use
of proprietary technologies, manufacturers may be able to implement
technological changes in their lamps to prevent hot shock, while
retaining lifetimes above 3000 hours.
In addition, competitive impacts are less severe at TSL4 than at
TSL5. To DOE's knowledge, two of the three major manufacturers of IRL
currently sell a full product line (across common wattages) that meet
this potential standard level. It is DOE's understanding that the third
manufacturer employs a technology platform that, due to the positioning
of the filament in the HIR capsule, is inherently less efficient.
Therefore, it is likely that in order to meet TSL4, this manufacturer
would have to make higher investments than the other manufacturers,
placing it at a competitive disadvantage. This manufacturer has
commented that it could manufacture products at TSL4 if the standards
implementation lead time were extended by an additional one year. While
DOE recognizes the challenges inherent in gaining access to technology
and building capacity needed to begin production, as detailed in
section VI.D.1 of this notice, DOE does not have the statutory
authority to extend the implementation period.
In summary, after considering the analysis discussed above and
comments on the April 2009 NOPR, and weighing the benefits and burdens
of TSL4, the Secretary has determined the following: At TSL4, the
benefits of energy savings, emissions reductions (both in terms of
physical reductions and the monetized value of those reductions,
including the likely U.S. and global benefits of reduced CO2
emissions), the positive net economic savings to the Nation (over 31
years), and positive life-cycle cost savings outweighs the reduction in
INPV for manufacturers. Consequently, the Secretary has concluded that
TSL4 offers the maximum improvement in efficacy that is technologically
feasible and economically justified, and will result in significant
conservation of energy. Therefore, DOE is adopting the energy
conservation standards for IRL at trial standard level 4.
VIII. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866
Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify
the problem it intends to address that warrants agency action such as
today's final rule (including, where applicable, the failures of
private markets or public institutions), and to assess the significance
of that problem in evaluating whether any new regulation is warranted.
DOE included a description of market failures in its April 2009 NOPR.
74 FR 16920, 17018-19 (April 13, 2009). DOE believes, in this final
rule, that these market failures continue to persist.
In addition, because today's regulatory action is a significant
regulatory action under section 3(f)(1) of Executive Order 12866,
section 6(a)(3) of that Executive Order requires DOE to prepare and
submit for review to the Office of Information and Regulatory Affairs
(OIRA) in the Office of Management and Budget (OMB) an assessment of
the costs and benefits of today's rule. Accordingly, DOE presented to
OIRA for review the draft final rule and other documents prepared for
this rulemaking, including a regulatory impact analysis (RIA). These
documents are included in the rulemaking record and are available for
public review in the Resource Room of DOE's Building Technologies
Program, 950 L'Enfant Plaza, SW., 6th Floor, Washington, DC 20024,
(202) 586-9127, between 9:00 a.m. and 4:00 p.m., Monday through Friday,
except Federal holidays.
Carlins Consulting stated that regulations were not necessary for
consumers to adopt energy efficient lighting because the marketplace
has provided the consumer with adequate options to choose a proper
light source for any application given many variables. Specifically,
the commenter cited the shift in office lighting from incandescent to
fluorescent, then from T12 fluorescent lamps to T8 fluorescent lamps,
the extinction of mercury vapor lamps after the introduction of metal
halide lamps, and most recently--the popularity of lighting controls as
evidence of the marketplace and economic incentives leading to the
creation of energy efficient products. (Carlins Consulting, No. 57 at
p. 1)
In response, the April 2009 NOPR contained a summary of the RIA,
which evaluated the extent to which major alternatives to standards for
GSFL and IRL could achieve significant energy savings at reasonable
cost, as compared to the effectiveness of the proposed rule. 74 FR
16920, 17019-22 (April 13, 2009). The complete RIA (Regulatory Impact
Analysis for Proposed Energy Conservation Standards for General Service
Fluorescent Lamps and Incandescent Reflector Lamps) is contained in the
TSD prepared for today's rule. The RIA consists of: (1) A statement of
the problem addressed by this regulation, and the mandate for
government action; (2) a description and analysis of the feasible
policy alternatives to this regulation; (3) a quantitative comparison
of the impacts of the alternatives; and (4) the national economic
impacts of today's standards.
DOE sought additional information to further develop its analysis
(i.e., information to verify estimates of the percentages of consumers
purchasing efficient lighting and the extent to which consumers will
continue to purchase more-efficient lighting in future years), and to
conduct additional analyses in support of its conclusions (i.e., data
on the correlation between the efficacy of existing lamps, usage
patterns, and associated electricity price), but received no additional
information or data in response to the April 2009 NOPR.
The major alternatives to the standards that DOE analyzed are: (1)
No new regulatory action; (2) consumer rebates; (3) consumer tax
credits; (4) manufacturer tax credits; (5) voluntary energy-efficiency
targets; (6) bulk government purchases; and (7) early replacement. Each
of these alternatives was analyzed in the RIA, with the exception of
early replacement, because DOE found that the lifetimes of the lamps
analyzed are too short for early replacement to result in significant
savings. As explained in the April 2009 NOPR, DOE determined that none
of
[[Page 34174]]
these alternatives would save as much energy or have an NPV as high as
the proposed standards, TSL3 for GSFL and TSL4 for IRL. That same
conclusion applies to the standards in today's rule. DOE has determined
that none of the alternatives save as much energy or have an NPV as
high as the adopted standards, TSL4 for GSFL and TSL4 for IRL. (DOE
further notes that for GSFL, the final rule standard set at TSL4 would
save more energy and have a higher NPV than the proposed standard at
TSL3.) Also, several of the alternatives would require new enabling
legislation, since authority to carry out those alternatives does not
presently exist. Additional detail on the regulatory alternatives is
found in the RIA report in the TSD.
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 for any rule
that by law must be proposed for public comment, and a final regulatory
flexibility analysis for any such rule that an agency adopts as a final
rule, unless the agency certifies that the rule, if promulgated, will
not have a significant economic impact on a substantial number of small
entities. A regulatory flexibility analysis examines the impact of the
rule on small entities and considers alternative ways of reducing
negative impacts. Also, as required by Executive Order 13272, ``Proper
Consideration of Small Entities in Agency Rulemaking,'' 67 FR 53461
(August 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 Web site: http://www.gc.doe.gov.
The Small Business Administration (SBA) classifies manufacturers of
GSFL and IRL as small businesses if they have 1,000 or fewer
employees.\84\ DOE used this small business size standard, published at
65 FR 30386 (May 15, 2000) and codified at 13 CFR part 121, to
determine whether any small entities would be required to comply with
today's rule. The size standard is listed by North American Industry
Classification System (NAICS) code and industry description. GSFL and
IRL manufacturing are classified under NAICS 335110, ``Electric Lamp
Bulb and Part Manufacturing.''
---------------------------------------------------------------------------
\84\ See http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.
---------------------------------------------------------------------------
As explained in the April 2009 NOPR, DOE reviewed the proposed rule
under the provisions of the Regulatory Flexibility Act and the
procedures and policies published on February 19, 2003 (68 FR 7990). On
the basis of that review, DOE certified that the proposed rule, if
promulgated, ``would not have a significant economic impact on a
substantial number of small entities.'' 74 FR 16920, 17022-23 (April
13, 2009). Therefore, DOE did not prepare an initial regulatory
flexibility analysis for the proposed rule. DOE set forth its
certification to the Chief Counsel for Advocacy of the SBA and the
statement of factual basis for that certification.
DOE received comments from Tailored Lighting Inc. in response to
the Regulatory Flexibility Act discussion in the April 2009 NOPR.
Tailored Lighting Inc. stated that DOE incorrectly characterizes the
small business manufactures in the market by not including Tailored
Lighting Inc. and possibly other businesses like it. (Tailored Lighting
Inc., No. 73 at p. 2)
For the April 2009 NOPR, DOE conducted an extensive
characterization of the GSFL and IRL industries and presented its
findings for review and comment. In its characterization, DOE found
that the majority of covered GSFL and IRL are manufactured by three
large companies. A very small percentage of the market is manufactured
by either large or small companies that primarily specialize in lamps
not covered by this rulemaking. 74 FR 16920, 17022-23 (April 13, 2009).
During its market survey for the April 2009 NOPR, DOE created a
list of every company that manufactures covered and non-covered GSFL
and IRL for sale in the United States. DOE also asked stakeholders and
industry representatives if they were aware of any other small
manufacturers. DOE then reviewed publicly-available data and contacted
companies on its list, as necessary, to determine whether they met the
SBA's definition of a small business manufacturer in the GSFL or IRL
industries. In total, DOE contacted 57 companies that could potentially
be small businesses. During initial review of the 57 companies in its
list, DOE either contacted or researched each company to determine if
it sold covered GSFL and IRL. Research included reviewing each
company's product catalogs and reviewing company's independent research
reports.\85\ Based on its research, DOE screened out companies that did
not offer lamps covered by this rulemaking or if research reports
indicated they were large manufacturers. Initially, DOE estimated that
only 12 out of 57 companies listed were potentially small business
manufacturers of covered products. 74 FR 16920, 17023 (April 13, 2009).
Out of those 12 companies, DOE interviewed the four companies that
consented to be interviewed. From these interviews, DOE determined that
one manufacturer was not a small business. Two of the companies sold
covered products, but were not manufacturers. The remaining company was
the small business manufacturer DOE identified in the NOPR.
---------------------------------------------------------------------------
\85\ Dun and Bradstreet provides independent research regarding
company cash flows, revenues, employees, and credit-worthiness.
---------------------------------------------------------------------------
For today's final rule, DOE contacted the remaining eight companies
again and conducted additional research. Out of the eight other
companies, DOE determined that seven did not manufacture covered
products or were not the manufacturer of the covered products that they
offered. DOE was unable to determine if the remaining company was a
small business manufacturer.
DOE also reviewed the product offerings of Tailored Lighting to
determine whether that company is a small business manufacturer
impacted by this rule. DOE determined that Tailored Lighting Inc is not
a ``small business'' manufacturer within the context of the present
rulemaking because it does not currently manufacture covered products.
For the final rule, DOE continued to indentify the small GSFL
manufacturer discussed in the April 2009 NOPR as the only small
business manufacturer of products covered by this rulemaking. In the
April 2009 NOPR, DOE found that the small manufacturer of covered GSFL
shared some of the same concerns about energy conservation standards as
large manufacturers. DOE summarized the key issues in the April 2009
NOPR. 74 FR 16920, 16974-75 (April 13, 2009). However, the small
manufacturer was less concerned about the potential of standards to
severely harm its business. Because the small manufacturer is more
focused on specialty products not covered by this rulemaking, covered
GSFL represents a smaller portion of its revenue and product portfolio.
In addition, this manufacturer stated that it is possible to pass along
cost increases to consumers, thereby limiting margin impacts due to
energy conservation standards.
DOE could not use the GSFL GRIM to model the impacts of energy
conservation standards on the small business manufacturer of covered
GSFL.
[[Page 34175]]
The GSFL GRIM models the impacts on GSFL manufacturers if concerns
about margin pressure and significant capital investments necessitated
by standards are realized. The small manufacturer did not share these
concerns, and, therefore, the GRIM model would not be representative of
the identified small business manufacturer. Like large manufacturers,
the small business manufacturer stated that more-efficient products
earn a premium; however, unlike larger manufacturers, the small
manufacturer stated that it could pass costs along to its customers (a
statement expected to apply to both the proposed TSL3 and the final
rule's TSL4). Since the GSFL GRIM models the financial impact of the
standards commoditizing premium products, it is not representative of
the small business manufacturer because the small business manufacturer
did not share these concerns. Because of its focus on specialized
products, the small manufacturer was more concerned about being able to
offer the products to their customers than the impact on its bottom
line. For further information about the scenarios modeled in the GRIM,
see section V.F of today's notice and chapter 13 of the TSD.
DOE reviewed the standard levels considered in today's final rule
under the provisions of the Regulatory Flexibility Act and the
procedures and policies published on February 19, 2003. On the basis of
the foregoing, DOE reaffirms the certification. Therefore, DOE has not
prepared a final regulatory flexibility analysis for this rule.
C. Review Under the Paperwork Reduction Act
DOE stated in the April 2009 NOPR that this rulemaking would impose
no new information and recordkeeping requirements, and that OMB
clearance is not required under the Paperwork Reduction Act (44 U.S.C.
3501 et seq.). 74 FR 16920, 17023 (April 13, 2009). DOE received no
comments on this in response to the April 2009 NOPR, and, as with the
proposed rule, today's rule imposes no information and recordkeeping
requirements. Therefore, DOE has taken no further action in this
rulemaking with respect to the Paperwork Reduction Act.
D. Review Under the National Environmental Policy Act
DOE prepared an environmental assessment of the impacts of today's
standards, which it published as chapter 16 within the TSD for the
final rule. DOE found the environmental effects associated with today's
standards for GSFL and IRL to be not significant, and, therefore, it is
issuing a Finding of No Significant Impact (FONSI) pursuant to the
National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et
seq.), the regulations of the Council on Environmental Quality (40 CFR
parts 1500-1508), and DOE's regulations for compliance with the NEPA
(10 CFR part 1021). The FONSI is available in the docket for this
rulemaking.
E. Review Under Executive Order 13132
Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4,
1999), imposes certain requirements on agencies formulating and
implementing policies or regulations that preempt State law or that
have Federalism implications. In accordance with DOE's statement of
policy describing the intergovernmental consultation process it will
follow in the development of regulations that have Federalism
implications, 65 FR 13735 (March 14, 2000), DOE examined the proposed
rule and determined that the rule 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. 74 FR 16920,
17023 (April 13, 2009). DOE received no comments on this issue in
response to the April 2009 NOPR, and its conclusions on this issue are
the same for the final rule as they were for the proposed rule. This
statement remains true even though DOE has adopted energy conservation
standards for GSFL in this final rule (TSL4) that are at a higher level
than those proposed (TSL3). Therefore, DOE is taking no further action
in today's final rule with respect to Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform,'' 61 FR 4729 (Feb. 7, 1996), 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; and (3) provide a clear legal standard for
affected conduct rather than a general standard and promote
simplification and burden reduction. Section 3(b) of Executive Order
12988 specifically requires that Executive agencies make every
reasonable effort to ensure that the regulation: (1) Clearly specifies
the preemptive effect, if any; (2) clearly specifies any effect on
existing Federal law or regulation; (3) provides a clear legal standard
for affected conduct while promoting simplification and burden
reduction; (4) specifies the retroactive effect, if any; (5) adequately
defines key terms; and (6) addresses other important issues affecting
clarity and general draftsmanship under any guidelines issued by the
Attorney General. Section 3(c) of Executive Order 12988 requires
Executive agencies to review regulations in light of applicable
standards in section 3(a) and section 3(b) to determine whether they
are met or it is unreasonable to meet one or more of them. DOE has
completed the required review and determined that, to the extent
permitted by law, the final regulations meet the relevant standards of
Executive Order 12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
As indicated in the April 2009 NOPR, DOE reviewed the proposed rule
under Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4) (UMRA), which imposes requirements on Federal agencies when
their regulatory actions will have certain types of impacts on State,
local, and Tribal governments and the private sector. 74 FR 16920,
17024 (April 13, 2009). DOE concluded that, although this rule would
not contain an intergovernmental mandate, it may result in expenditure
of $100 million or more in one year by the private sector. Id.
Therefore, in the April 2009 NOPR, DOE addressed the UMRA requirements
that it prepare a statement as to the basis, costs, benefits, and
economic impacts of the proposed rule, and that it identify and
consider regulatory alternatives to the proposed rule. Id. DOE received
no comments concerning the UMRA in response to the April 2009 NOPR, and
its conclusions on this issue are the same for the final rule as they
were for the proposed rule. This statement remains true even though DOE
has adopted energy conservation standards for GSFL in this final rule
(TSL4) that are at a higher level than those proposed (TSL3).
Therefore, DOE is taking no further action in today's final rule with
respect to the UMRA.
H. Review Under the Treasury and General Government Appropriations Act
of 1999
DOE determined that, for this rulemaking, it need not prepare a
Family Policymaking Assessment under Section 654 of the Treasury and
General Government Appropriations Act, 1999 (Pub. L. 105-277). Id. DOE
received no comments concerning Section 654 in response to the April
2009 NOPR, and, therefore, takes no further action in today's final
rule with respect to this provision.
[[Page 34176]]
I. Review Under Executive Order 12630
DOE determined, under Executive Order 12630, ``Governmental Actions
and Interference with Constitutionally Protected Property Rights,'' 53
FR 8859 (March 18, 1988), that the proposed rule would not result in
any takings which might require compensation under the Fifth Amendment
to the U.S. Constitution. 74 FR 16920, 17024 (April 13, 2009). DOE
received no comments concerning Executive Order 12630 in response to
the April 2009 NOPR, and, today's final rule also would not result in
any takings which might require compensation under the Fifth Amendment.
Therefore, DOE takes no further action in today's final rule with
respect to this Executive Order.
J. Review Under the Treasury and General Government Appropriations Act
of 2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most
disseminations of information to the public under guidelines
established by each agency pursuant to general guidelines issued by
OMB. The OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002),
and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE
has reviewed today's 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
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355
(May 22, 2001) requires Federal agencies to prepare and submit to the
OIRA a Statement of Energy Effects for any significant energy action.
DOE determined that the proposed rule was not a ``significant energy
action'' within the meaning of Executive Order 13211 because the rule,
which sets energy efficiency standards for covered GSFL and IRL, would
not have a significant adverse effect on the supply, distribution, or
use of energy, nor has it been designated as a significant energy
action by the Administrator of OIRA. 74 FR 16920, 17024 (April 13,
2009). Accordingly, DOE did not prepare a Statement of Energy Effects
on the proposed rule. DOE received no comments on this issue in
response to the April 2009 NOPR. As with the proposed rule, DOE has
concluded that today's final rule is not a significant energy action
within the meaning of Executive Order 13211. This statement remains
true even though DOE has adopted energy conservation standards for GSFL
in this final rule (TSL4) that are at a higher level than those
proposed (TSL3). Accordingly, DOE has not prepared a Statement of
Energy Effects on the rule.
L. Review Under the Information Quality Bulletin for Peer Review
On December 16, 2004, the OMB, in consultation with the Office of
Science and Technology, issued its Final Information Quality Bulletin
for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 2005). The purpose
of the Bulletin is to enhance the quality and credibility of the
Government's scientific information. The Bulletin establishes that
certain scientific information shall be peer reviewed by qualified
specialists before it is disseminated by the Federal Government. As
indicated in the April 2009 NOPR, this includes influential scientific
information related to agency regulatory actions, such as the analyses
in this rulemaking. 74 FR 16920, 17024-25 (April 13, 2009).
As more fully set forth in the April NOPR, DOE conducted formal
peer reviews of the energy conservation standards development process
and analyses, and has prepared a Peer Review Report pertaining to the
energy conservation standards rulemaking analyses. The ``Energy
Conservation Standards Rulemaking Peer Review Report,'' dated February
2007, has been disseminated and is available at: http://www.eere.energy.gov/buildings/appliance_standards/peer_review.html.
M. Congressional Notification
As required by 5 U.S.C. 801, DOE will submit to Congress a report
regarding the issuance of today's final rule. DOE also will submit the
supporting analyses to the Comptroller General in the U.S. Government
Accountability Office (GAO) and make them available to each House of
Congress.
IX. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of today's final
rule.
List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Imports,
Incorporation by reference, Intergovermental relations, Small
businesses.
Issued in Washington, DC, on June 26, 2009.
Cathy Zoi,
Assistant Secretary, Energy Efficiency and Renewable Energy.
0
For the reasons set forth in the preamble, chapter II, subchapter D, of
Title 10, Code of Federal Regulations, Parts 430 is amended as set
forth below:
PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS
0
1. The authority citation for part 430 continues to read as follows:
Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
0
2. Section 430.2 is amended by revising the definition of ``colored
fluorescent lamp,'' ``fluorescent lamp,'' and ``rated wattage'' to read
as follows:
Sec. 430.2 Definitions.
* * * * *
Colored fluorescent lamp means a fluorescent lamp designated and
marketed as a colored lamp and not designed or marketed for general
illumination applications with either of the following characteristics:
(1) A CRI less than 40, as determined according to the method set
forth in CIE Publication 13.3 (incorporated by reference; see Sec.
430.3); or
(2) A correlated color temperature less than 2,500K or greater than
7,000K as determined according to the method set forth in IESNA LM-9
(incorporated by reference; see Sec. 430.3).
* * * * *
Fluorescent lamp means a low pressure mercury electric-discharge
source in which a fluorescing coating transforms some of the
ultraviolet energy generated by the mercury discharge into light,
including only the following:
(1) Any straight-shaped lamp (commonly referred to as 4-foot medium
bipin lamps) with medium bipin bases of nominal overall length of 48
inches and rated wattage of 25 or more;
(2) Any U-shaped lamp (commonly referred to as 2-foot U-shaped
lamps) with medium bipin bases of nominal overall length between 22 and
25 inches and rated wattage of 25 or more;
(3) Any rapid start lamp (commonly referred to as 8-foot high
output lamps) with recessed double contact bases of nominal overall
length of 96 inches;
(4) Any instant start lamp (commonly referred to as 8-foot slimline
lamps) with single pin bases of nominal overall length of 96 inches and
rated wattage of 52 or more;
(5) Any straight-shaped lamp (commonly referred to as 4-foot
[[Page 34177]]
miniature bipin standard output lamps) with miniature bipin bases of
nominal overall length between 45 and 48 inches and rated wattage of 26
or more; and
(6) Any straight-shaped lamp (commonly referred to 4-foot miniature
bipin high output lamps) with miniature bipin bases of nominal overall
length between 45 and 48 inches and rated wattage of 49 or more.
* * * * *
Rated wattage means:
(1) With respect to fluorescent lamps and general service
fluorescent lamps:
(i) If the lamp is listed in ANSI C78.81 (incorporated by
reference; see Sec. 430.3) or ANSI C78.901 (incorporated by reference;
see Sec. 430.3), the rated wattage of a lamp determined by the lamp
designation of Clause 11.1 of ANSI C78.81 or ANSI C78.901;
(ii) If the lamp is a residential straight-shaped lamp, and not
listed in ANSI C78.81 (incorporated by reference; see Sec. 430.3), the
wattage of a lamp when operated on a reference ballast for which the
lamp is designed; or
(iii) If the lamp is neither listed in one of the ANSI standards
referenced in (1)(i) of this definition, nor a residential straight-
shaped lamp, the electrical power of a lamp when measured according to
the test procedures outlined in Appendix R to subpart B of this part.
(2) With respect to general service incandescent lamps and
incandescent reflector lamps, the electrical power measured according
to the test procedures outlined in Appendix R to subpart B of this
part.
* * * * *
0
3. Section 430.3 is amended by:
0
A. Removing paragraph (c)(1);
0
B. Redesignating paragraphs (c)(2) through (13) as (c)(1) through (12);
0
C. Revising newly redesignated paragraph (c)(1); and
0
D. In newly redesignated paragraph (c)(5), add ``430.32,'' after
``430.2,''.
The revision reads as follows:
Sec. 430.3 Materials incorporated by reference.
* * * * *
(c) * * *
(1) ANSI C78.3-1991 (``ANSI C78.3''), American National Standard
for Fluorescent Lamps-Instant-start and Cold-Cathode Types-Dimensional
and Electrical Characteristics, approved July 15, 1991; IBR approved
for Sec. 430.32.
* * * * *
0
4. Appendix R to Subpart B of Part 430 is amended by adding paragraphs
4.1.2.3, 4.1.2.4, and 4.1.2.5 to read as follows:
Appendix R to Subpart B of Part 430--Uniform Test Method for Measuring
Average Lamp Efficacy (LE) and Color Rendering Index (CRI) of Electric
Lamps
* * * * *
4.1.2.3 8-foot slimline lamps shall be operated using the
following reference ballast settings:
(a) T12 lamps: 625 volts, 0.425 amps, and 1280 ohms.
(b) T8 lamps: 625 volts, 0.260 amps, and 1960 ohms.
4.1.2.4 8-foot high output lamps shall be operated using the
following reference ballast settings:
(a) T12 lamps: 400 volts, 0.800 amps, and 415 ohms.
(b) T8 lamps: 450 volts, 0.395 amps, and 595 ohms.
4.1.2.5 4-foot miniature bipin standard output or high output
lamps shall be operated using the following reference ballast
settings:
(a) Standard Output: 329 volts, 0.170 amps, and 950 ohms.
(b) High Output: 235 volts, 0.460 amps, and 255 ohms.
* * * * *
0
5. Section 430.32 is amended by revising paragraph (n) to read as
follows:
Sec. 430.32 Energy and water conservation standards and effective
dates.
* * * * *
(n) General service fluorescent lamps and incandescent reflector
lamps. (1) Except as provided in paragraphs (n)(2) and (n)(3) of this
section, each of the following general service fluorescent lamps
manufactured after the effective dates specified in the table shall
meet or exceed the following lamp efficacy and CRI standards:
----------------------------------------------------------------------------------------------------------------
Minimum
Nominal lamp average lamp
Lamp type wattage Minimum CRI efficacy (lm/ Effective date
W)
----------------------------------------------------------------------------------------------------------------
4-foot medium bipin............ >35W 69 75.0 Nov. 1, 1995.
<=35W 45 75.0 Nov. 1, 1995.
2-foot U-shaped >35W 69 68.0 Nov. 1, 1995.
8-foot slimline................ <=35W 45 64.0 Nov. 1, 1995.
>65W 69 80.0 May 1, 1994.
>65W 45 80.0 May 1, 1994.
8-foot high output............. >100W 69 80.0 May 1, 1994.
<=100W 45 80.0 May 1, 1994.
----------------------------------------------------------------------------------------------------------------
(2) The standards described in paragraph (n)(1) of this section do
not apply to:
(i) Any 4-foot medium bipin lamp or 2-foot U-shaped lamp with a
rated wattage less than 28 watts;
(ii) Any 8-foot high output lamp not defined in ANSI C78.81
(incorporated by reference; see Sec. 430.3) or related supplements, or
not 0.800 nominal amperes; or
(iii) Any 8-foot slimline lamp not defined in ANSI C78.3
(incorporated by reference; see Sec. 430.3).
(3) Each of the following general service fluorescent lamps
manufactured after July 14, 2012, shall meet or exceed the following
lamp efficacy standards shown in the table:
------------------------------------------------------------------------
Minimum
average
Lamp type Correlated color lamp
temperature efficacy
(lm/W)
------------------------------------------------------------------------
4-foot medium bipin................ <=4,500K.............. 89
>4,500K and <=7,000K.. 88
2-foot U-shaped.................... <=4,500K.............. 84
[[Page 34178]]
>4,500K and <=7,000K.. 81
8-foot slimline.................... <=4,500K.............. 97
>4,500K and <=7,000K.. 93
8-foot high output................. <=4,500K.............. 92
>4,500K and <=7,000K.. 88
4-foot miniature bipin standard <=4,500K.............. 86
output.
>4,500K and <=7,000K.. 81
4-foot miniature bipin high output. <=4,500K.............. 76
>4,500K and <=7,000K.. 72
------------------------------------------------------------------------
(4) Except as provided in paragraph (n)(5) of this section, each of
the following incandescent reflector lamps manufactured after November
1, 1995, shall meet or exceed the lamp efficacy standards shown in the
table:
------------------------------------------------------------------------
Minimum average
Nominal lamp wattage lamp efficacy (lm/
W)
------------------------------------------------------------------------
40-50................................................ 10.5
51-66................................................ 11.0
67-85................................................ 12.5
86-115............................................... 14.0
116-155.............................................. 14.5
156-205.............................................. 15.0
------------------------------------------------------------------------
(5) Each of the following incandescent reflector lamps manufactured
after July 14, 2012, shall meet or exceed the lamp efficacy standards
shown in the table:
----------------------------------------------------------------------------------------------------------------
Minimum average
Rated lamp wattage Lamp spectrum Lamp diameter Rated voltage lamp efficacy
(inches) (lm/W)
----------------------------------------------------------------------------------------------------------------
40-205............................. Standard Spectrum....... >2.5 >=125V 6.8*P\0.27\
<125V 5.9*P\0.27\
<=2.5 >=125V 5.7*P\0.27\
<125V 5.0*P\0.27\
40-205............................. Modified Spectrum....... >2.5 <=125V 5.8*P\0.27\
<125V 5.0*P\0.27\
<=2.5 >=125V 4.9*P\0.27\
<125V 4.2*P\0.27\
----------------------------------------------------------------------------------------------------------------
Note 1: P is equal to the rated lamp wattage, in watts.
Note 2: Standard Spectrum means any incandescent reflector lamp that does not meet the definition of modified
spectrum in 430.2.
(6) (i)(A) Subject to the exclusions in paragraph (n)(6)(ii) of
this section, the standards specified in this section shall apply to ER
incandescent reflector lamps, BR incandescent reflector lamps, BPAR
incandescent reflector lamps, and similar bulb shapes on and after
January 1, 2008.
(B) Subject to the exclusions in paragraph (n)(6)(ii) of this
section, the standards specified in this section shall apply to
incandescent reflector lamps with a diameter of more than 2.25 inches,
but not more than 2.75 inches, on and after June 15, 2008.
(ii) The standards specified in this section shall not apply to the
following types of incandescent reflector lamps:
(A) Lamps rated at 50 watts or less that are ER30, BR30, BR40, or
ER40 lamps;
(B) Lamps rated at 65 watts that are BR30, BR40, or ER40 lamps; or
(C) R20 incandescent reflector lamps rated 45 watts or less.
Appendix
[The following letter from the Department of Justice will not
appear in the Code of Federal Regulations.]
Department of Justice, Antitrust Division, Main Justice Building,
950 Pennsylvania Avenue, NW., Washington, DC 20530-0001, (202) 514-
2401/(202) 616-2645(f), [email protected], http://www.usdoj.gov/atr.
June 15, 2009.
Warren Belmar, Esq.,
Deputy General Counsel for Energy Policy, Department of Energy,
Washington, DC 20585.
Dear Deputy General Counsel Belmar: I am responding to your
letter seeking the views of the Attorney General about the potential
impact on competition of proposed amended energy conservation
standards for general service fluorescent lamps (``GSFL'') and
incandescent reflector lamps (``IRL''). Your request was submitted
pursuant to Section 325(o)(2)(B)(i)(V) of the Energy Policy and
Conservation Act, as amended, (``ECPA''), 42 U.S.C.
6295(o)(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 CFR 0.40(g).
In conducting its analysis the Antitrust Division examines
whether a proposed standard may lessen competition, for example, by
substantially limiting consumer choice, leaving consumers with fewer
competitive alternatives, placing certain manufacturers of a product
at an unjustified competitive disadvantage compared to other
manufacturers, or by inducing avoidable inefficiencies in production
or distribution of particular products.
We have reviewed the proposed standards contained in the Notice
of Proposed Rulemaking (``NOPR'') (74 FR 16920, April 13, 2009) and
the supplementary information submitted to the Attorney General, and
attended the February 3, 2009 public hearing on the proposed
standards.
Based on this review, the Department of Justice does not believe
that the proposed standard for GSFLs would likely lead to a
lessening of competition. Our review has focused upon the standards
DOE has
[[Page 34179]]
proposed adopting; we have not determined the impact on competition
of more stringent standards than those proposed in the NOPR.
With respect to IRLs, the Department is concerned that the proposed
Trial Standard Level 4 could adversely affect competition. The NOPR
would increase the minimum efficiency levels for IRLs to the second
highest level under consideration in this rulemaking. The IRL market is
highly concentrated, with three domestic manufacturers. Based on our
review, it appears that only two of these firms may currently
manufacture IRLs that would meet the new standard. It is our
understanding that these firms produce only limited quantities of such
products for high-end applications. The current producers may not have
the capacity to meet demand. In addition, one of these manufacturers
uses proprietary technology currently unavailable to other
manufacturers.
Given the capital investments new entrants or providers would be
required to make, and the potential that manufacturers may have to
obtain proprietary technology, there is a risk that one or more IRL
manufacturers will not produce products that meet the proposed
standard. We request that the Department of Energy consider the
possibility of new technology in this area as it settles on standards
in this field.
Sincerely,
Christine A. Varney,
Assistant Attorney General.
[FR Doc. E9-15710 Filed 7-13-09; 8:45 am]
BILLING CODE 6450-01-P