[Federal Register Volume 75, Number 45 (Tuesday, March 9, 2010)]
[Rules and Regulations]
[Pages 10874-10948]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-4358]
[[Page 10873]]
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Part II
Department of Energy
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10 CFR Part 431
Energy Conservation Program: Energy Conservation Standards for Small
Electric Motors; Final Rule
Federal Register / Vol. 75, No. 45 / Tuesday, March 9, 2010 / Rules
and Regulations
[[Page 10874]]
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DEPARTMENT OF ENERGY
10 CFR Part 431
[Docket Number EERE-2007-BT-STD-0007]
RIN 1904-AB70
Energy Conservation Program: Energy Conservation Standards for
Small Electric Motors
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Final rule.
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SUMMARY: The U.S. Department of Energy (DOE) is adopting energy
conservation standards for small electric motors. DOE has determined
that these standards will result in significant conservation of energy,
and are technologically feasible and economically justified.
DATES: Effective Date: The effective date of this rule is April 8,
2010. The standards established in today's final rule will be
applicable starting March 9, 2015.
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. (Note: DOE's Freedom
of Information Reading Room no longer houses rulemaking materials.) You
may also obtain copies of certain previous rulemaking documents in this
proceeding (i.e., framework document, notice of public meeting and
availability of preliminary technical support document, 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://www.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.html).
FOR FURTHER INFORMATION CONTACT: Mr. James Raba, 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, (202) 586-8654, e-mail: [email protected].
Mr. Michael Kido, U.S. Department of Energy, Office of General
Counsel, GC-72, 1000 Independence Avenue, SW., Washington, DC 20585,
(202) 586-8145, e-mail: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Summary of the Final Rule and Its Benefits
A. Energy Conservation Standards Levels
B. Benefits and Burdens to Customers of Small Electric Motors
C. Impact on Manufacturers
D. National Benefits
E. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Energy Conservation Standards
2. History of Standards Rulemaking for Small Electric Motors
III. 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 Motor Customers and Manufacturers
b. Life-Cycle Costs
c. Energy Savings
d. Lessening of Utility or Performance of Equipment
e. Impact of Any Lessening of Competition
f. Need of the Nation to Conserve Energy
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Comments on Methodology
A. Market and Technology Assessment
1. Definition of Small Electric Motor
a. Motor Categories
b. Horsepower Ratings
c. Performance Requirements
d. Motor Enclosures
e. Frame Sizes
f. Insulation Class Systems
g. Service Factors
h. Metric Equivalents and Non-Standard Horsepower and Kilowatt
Ratings
i. Summary
2. Product Classes
B. Screening Analysis
C. Engineering Analysis
1. Product Classes Analyzed
2. Baseline Models
a. Baseline Efficiencies
b. Baseline Temperature Rise
c. Baseline Motor Performance
3. Higher Efficiency Motor Designs
a. Electrical Steel
b. Thermal Analysis
c. Performance Requirements
d. Stray Load Loss
e. Stack Length and Core Diameter
4. Cost Model
5. Efficiency Scaling
6. Cost-Efficiency Results
D. Markups to Determine Equipment Price
E. Energy Use Characterization
1. Applications
2. Annual Hours of Operation and Motor Loading
F. Life-Cycle Cost and Payback Period Analysis
1. Installation Cost
2. Energy Prices
3. Energy Price Trend
4. Maintenance and Repair Costs
5. Equipment Lifetime
6. Discount Rates
7. Space-Constrained Applications and the After-Market
8. Standard Compliance Date
G. National Impact Analysis--National Energy Savings and Net
Present Value Analysis
1. General
2. Shipments
3. Space Constraints
4. Base-Case and Standards-Case Efficiency Distributions
5. Annual Energy Consumption per Unit
H. Customer Sub-Group Analysis
I. Manufacturer Impact Analysis
1. Capital Conversion and Equipment Conversion Costs
2. Manufacturer Selling Prices
3. Markup Scenarios
4. Premium Electrical Steels
J. Employment Impact Analysis
K. Utility Impact Analysis
L. Environmental Assessment
M. Monetizing Carbon Dioxide and Other Emissions Impacts
1. Social Cost of Carbon
a. Monetizing Carbon Dioxide Emissions
b. Social Cost of Carbon Values Used in Past Regulatory Analyses
c. Approach and Key Assumptions
2. Monetary Values of Non-Carbon Emissions
V. Discussion of Other Comments
A. Trial Standard Levels
B. Enforcement
C. Nominal Full-Load Efficiency
VI. Analytical Results and Conclusions
A. Trial Standard Levels
B. Significance of Energy Savings
C. Economic Justification
1. Economic Impact on Motor Customers
a. Life-Cycle Costs and Payback Period
b. Life-Cycle Cost Sensitivity Calculations
c. Customer Subgroup Analysis
d. Rebuttable Presumption Payback
2. Economic Impact on Manufacturers
a. Industry Cash-Flow Analysis Results
b. Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Subgroups of Manufacturers
e. Cumulative Regulatory Burden
3. National Net Present Value and Net National Employment
4. Impact on Utility or Performance of Equipment
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
D. Conclusion
VII. 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
[[Page 10875]]
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Review Under the Information Quality Bulletin for Peer Review
M. Congressional Notification
VIII. Approval of the Office of the Secretary
I. Summary of the Final Rule and Its Benefits
A. Energy Conservation Standards Levels
The Energy Policy and Conservation Act, as amended (42 U.S.C. 6291
et seq.; EPCA or the Act), directs the U.S. Department of Energy (DOE)
to adopt energy conservation standards for those small electric motors
for which standards would be technologically feasible and economically
justified, and would result in significant energy savings (42 U.S.C.
6317(b)(1)-(2)). The standards in today's final rule satisfy these
requirements and will achieve the maximum improvements in energy
efficiency that are technologically feasible and economically
justified. Table I.1 and Table I.2 show these standard levels, which
will apply to all small electric motors manufactured for sale in the
United States, or imported into the United States, starting five years
after publication of this final rule.
Table I.1--Standard Levels for Polyphase Small Electric Motor
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Motor output power Six poles Four poles Two poles
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0.25 Hp/0.18 kW........................................... 67.5 69.5 65.6
0.33 Hp/0.25 kW........................................... 71.4 73.4 69.5
0.5 Hp/0.37 kW............................................ 75.3 78.2 73.4
0.75 Hp/0.55 kW........................................... 81.7 81.1 76.8
1 Hp/0.75 kW.............................................. 82.5 83.5 77.0
1.5 Hp/1.1 kW............................................. 83.8 86.5 84.0
2 Hp/1.5 kW............................................... N/A 86.5 85.5
3 Hp/2.2 kW............................................... N/A 86.9 85.5
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* Standard levels are expressed in terms of average full-load efficiency.
** These efficiencies correspond to a modified Trial Standard Level 4b for polyphase motors. For horsepower/pole
configurations with efficiency standards higher than the for general purpose electric motors (subtype I), DOE
reduced the standard level to align with regulations in 10 CFR 431.25. See section VI for further discussion.
Table I.2--Standard Levels for Capacitor-Start Induction-Run and Capacitor-Start Capacitor-Run Small Electric
Motors
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Motor output power Six poles Four poles Two poles
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0.25 Hp/0.18 kW........................................... 62.2 68.5 66.6
0.33 Hp/0.25 kW........................................... 66.6 72.4 70.5
0.5 Hp/0.37 kW............................................ 76.2 76.2 72.4
0.75 Hp/0.55 kW........................................... 80.2 81.8 76.2
1 Hp/0.75 kW.............................................. 81.1 82.6 80.4
1.5 Hp/1.1 kW............................................. N/A 83.8 81.5
2 Hp/1.5 kW............................................... N/A 84.5 82.9
3 Hp/2.2 kW............................................... N/A N/A 84.1
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* Standard levels are expressed in terms of full-load efficiency.
** These efficiencies correspond to a modified Trial Standard Level 7 for capacitor-start motors. DOE reduced
efficiency standards for capacitor-start induction run motors such that they harmonize with adopted capacitor-
start capacitor-run motor efficiency standards. See section VI for further discussion.
B. Benefits and Burdens to Customers of Small Electric Motors
Table I.3 presents the implications of today's standards for
consumers of small electric motors. The economic impacts of the
standards on consumers as measured by the average life-cycle cost (LCC)
savings are positive, even though the standards may increase some
initial costs. For example, a typical polyphase motor has an average
installed price of $517 and average lifetime operating costs
(discounted) of $751. To meet the amended standards, DOE estimates that
the average installed price of such equipment will increase by $72,
which will be more than offset by savings of $100 in average lifetime
operating costs (discounted).
Table I.3--Implications of Standards for Commercial Consumers
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Average
Energy Average installed Average life- Median payback
Equipment class conservation installed price increase cycle cost period years
standard % price* $ % savings $
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Polyphase, 1-horsepower, 4-pole. 83.5 589 72 28 7.8
Capacitor-start induction-run, 76.2 996 502 -369 12.4
\1/2\-horsepower, 4-pole.......
Capacitor-start capacitor-run, 81.8 599 51 24 5.9
\3/4\-horsepower, 4-pole.......
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* For a baseline model.
[[Page 10876]]
C. Impact on Manufacturers
Using a real corporate discount rate of 9.7 percent, which DOE
calculated by examining the financial statements of motor
manufacturers, DOE estimates the industry net present value (INPV) of
the small electric motor manufacturing industry to be $70 million for
polyphase small electric motors and $279 million for capacitor-start,
or single-phase motors (both figures in 2009$). DOE expects the impact
of the standards on the INPV of manufacturers of small electric motors
to range from a increase of 4.8 percent to a loss of 7.8 percent (an
increase of $3.4 million to a loss of $5.4 million) for polyphase
motors and an increase of 6.6 percent to a loss of 12.2 percent (an
increase of $32.2 million to a loss of $42.2 million) for single-phase
motors. Based on DOE's interviews with the major manufacturers of small
electric motors, DOE expects minimal plant closings or loss of
employment as a result of the standards.
D. National Benefits
The standards will provide significant benefits to the Nation. DOE
estimates the standards will save approximately 2.2 quads (quadrillion
(10\15\) British thermal units (BTU)) of energy over 30 years (2015-
2045). This is equivalent to about 2.2% of total annual U.S. energy
consumption.
By 2045, DOE expects the energy savings from the standards to
eliminate the need for approximately eight new 250-megawatt (MW) power
plants. These energy savings will result in cumulative greenhouse gas
emission reductions of approximately 112 million tons (Mt) of carbon
dioxide (CO2), or an amount equal to that produced by
approximately 25 million new cars in a year. Additionally, the
standards will help alleviate air pollution by resulting in
approximately 81 thousand tons (kt) of nitrogen oxides (NOX)
emission reductions and approximately 0.49 ton of cumulative mercury
(Hg) emission reductions from 2015 through 2045. The estimated net
present monetary value of these emissions reductions is between $385
and $6,081 million for CO2, (expressed in 2009$). The
estimated net present monetary values of these emissions reductions are
between $13.2 and $63.4 million for NOX (expressed in 2009$)
and $0.12 and $5.14 million for Hg (expressed in 2009$) at a 7-percent
discount rate (discounted to 2010). At a 3 percent discount rate, the
estimated net present values of these emissions reductions are between
$17.1 and $175.5 million (2009$) for NOX and $0.22 and $9.66
million (2009$) for Hg.
The national NPV of the standards is $5.3 billion using a seven-
percent discount rate and $12.5 billion using a three-percent discount
rate, cumulative from 2015 to 2045 in 2009$. This is the estimated
total value of future savings minus the estimated increased equipment
costs, discounted to the year 2009.
The benefits and costs of today's rule can also be expressed in
terms of annualized (2009$) values from 2015-2045. Estimates of
annualized values are shown in Table I.4. The annualized monetary
values are the sum of the annualized national economic value of
operating savings benefits (energy, maintenance and repair), expressed
in 2009$, plus the monetary value of the benefits of CO2
emission reductions, otherwise known as the Social Cost of Carbon
(SCC), calculated using the average value derived using a 3% discount
rate (equivalent to $21.40 per metric ton of CO2 emitted in
2010, in 2007$). This value is a central value from a recent
interagency process. The monetary benefits of cumulative emissions
reductions are reported in 2009$ so that they can be compared with the
other costs and benefits in the same dollar units. The derivation of
this value is discussed in section IV.M. Although comparing the value
of operating savings to the value of CO2 reductions provides
a valuable perspective, please note the following: (1) The national
operating savings are domestic U.S. consumer monetary savings found in
market transactions while the value of CO2 reductions is
based on a global value. Also, note that the central value is only one
of four SCC developed by the interagency workgroup. Other marginal SCC
values for 2010 are $4.70, $35.10, and $64.90 per metric ton (2007$ for
emissions in 2010), which reflect different discount rates and, for the
highest value, the possibility of higher-than-expected impacts further
out in the tails of the SCC distribution. (2) The assessments of
operating savings and CO2 savings are performed with
different computer models, leading to different time frames for
analysis. The national operating cost savings is measured for the
lifetime of small electric motors shipped in the 31-year period 2015-
2045. The value of CO2, on the other hand, reflects the
present value of all future climate related impacts due to emitting a
ton of carbon dioxide in that year, out to 2300.
Using a 7-percent discount rate for the annualized cost analysis,
the combined cost of the standards proposed in today's proposed rule
for small electric motors is $263.9 million per year in increased
equipment and installation costs, while the annualized benefits are
$855.1 million per year in reduced equipment operating costs, $115.6
million in CO2 reductions, $3.89 million in reduced
NOX emissions, and $0.30 million in reduced Hg emissions,
for a net benefit of $711.0 million per year. Using a 3-percent
discount rate, the cost of the standards proposed in today's rule is
$263.7 million per year in increased equipment and installation costs,
while the benefits of today's standards are $989.5 million per year in
reduced operating costs, $115.6 million in CO2 reductions,
$5.58 million in reduced NOX emissions, and $0.29 million in
reduced Hg emissions, for a net benefit of $847.3 million per year.
Table I.4--Annualized Benefits and Costs for Small Electric Motors
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Units
Category Primary estimate (AEO Low estimate (low High estimate (high ---------------------------------------------------
reference case) energy price case) energy price case) Year dollars Disc. rate Period covered
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Benefits
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Energy Annualized Monetized 855.1................ 831.8................ 870.3................ 2009 7%................ 31
(millions$/year). 989.5................ 964.8................ 1000.5............... 2009 3%................ 31
Annualized Quantified.......... 2.29 CO2 (Mt)........ 2.29 CO2 (Mt)........ 2.29 CO2 (Mt)........ NA 7%................ 31
1.55 NOX (kt)........ 1.55 NOX (kt)........ 1.55 NOX (kt)........ NA 7%................ 31
0.017 Hg (t)......... 0.017 Hg (t)......... 0.017 Hg (t)......... NA 7%................ 31
3.13 CO2 (Mt)........ 3.13 CO2 (Mt)........ 3.13 CO2 (Mt)........ NA 3%................ 31
2.22 NOX (kt)........ 2.22 NOX (kt)........ 2.22 NOX (kt)........ NA 3%................ 31
0.017 Hg (t)......... 0.017 Hg (t)......... 0.017 Hg (t)......... NA 3%................ 31
[[Page 10877]]
CO2 Monetized Value (at $4.7/ 31.5................. 31.5................. 31.5................. 2009 5%................ 31
Metric Ton, millions$/year)*.
CO2 Monetized Value (at $21.4/ 115.6................ 115.6................ 115.6................ 2009 3%................ 31
Metric Ton, millions$/year)*.
CO2 Monetized Value (at $35.1/ 179.2................ 179.2................ 179.2................ 2009 2.5%.............. 31
Metric Ton, millions$/year)*.
CO2 Monetized Value (at $64.9/ 352.5................ 352.5................ 352.5................ 2009 3%................ 31
Metric Ton, millions$/year)*.
NOX Monetized Value (at $2,437/ 3.89................. 3.89................. 3.89................. 2009 7%................ 31
Metric Ton, millions$/year). 5.58................. 5.58................. 5.58................. 2009 3%................ 31
Hg Monetized Value (at $17 0.3.................. 0.3.................. 0.3.................. 2009 7%................ 31
million/Metric Ton, millions$/ 0.29................. 0.29................. 0.29................. 2009 3%................ 31
year).
Total Monetary Benefits 890.8-1211.8......... 867.5-1188.5......... 906.0-1227.0......... 2009 7% Range.......... 31
(millions$/year)**. 974.9................ 951.6................ 990.1................ 2009 7%................ 31
1111.0............... 1086.3............... 1121.9............... 2009 3%................ 31
1026.9-1347.9........ 1002.2-1323.2........ 1037.8-1358.8........ 2009 3% Range.......... 31
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Costs
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Annualized Monetized (millions$/ 263.9................ 263.9................ 263.9................ 2009 7%................ 31
year).
263.7................ 263.7................ 263.7................ 2009 3%................ 31
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Net Benefits/Costs
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Annualized Monetized, including 626.9-947.9.......... 603.6-924.6.......... 642.1-963.1.......... 2009 7% Range.......... 31
CO2 Benefits (million$/year)**. 711.0................ 687.7................ 726.2................ 2009 7%................ 31
847.3................ 822.6................ 858.3................ 2009 3%................ 31
763.2-1084.3......... 738.5-1059.6......... 774.2-1095.2......... 2009 3% Range.......... 31
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* These values represent global values (in 2007$) of the social cost of CO2 emissions in 2010 under several scenarios. The values of $4.7, $21.4, and
$35.1 per ton are the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The value of $64.9 per ton
represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. See section IV.M for details.
** Total Monetary Benefits for both the 3% and 7% cases utilize the central estimate of social cost of CO2 emissions calculated at a 3% discount rate
(averaged across three IAMs), which is equal to $21.4/ton in 2010 (in 2007$). The rows labeled as ``7% Range'' and ``3% Range'' calculate consumer,
Hg, and NOX cases with the labeled discount rate but add these values to the full range of CO2 values with the $4.7/ton value at the low end, and the
$64.9/ton value at the high end.
E. Conclusion
DOE has concluded that the benefits (energy savings, consumer LCC
savings, national NPV increases, and emissions reductions) to the
Nation of today's standards for small electric motors outweigh their
costs (loss of manufacturer INPV and consumer LCC increases for some
users of small electric motors). DOE has also concluded that these
standards are technologically feasible and economically justified, and
will result in significant energy savings. Small electric motors that
are commercially available or working prototypes use or have used the
technologies needed to meet the new standard levels.
II. Introduction
A. Authority
Title III of EPCA sets forth a variety of provisions designed to
improve energy efficiency. Part A of Title III (42 U.S.C. 6291-6309)
provides for the Energy Conservation Program for Consumer Products
Other than Automobiles. Part A-1 of Title III (42 U.S.C. 6311-6317)
establishes a similar program for ``Certain Industrial Equipment,''
which includes small electric motors, the subject of this
rulemaking.\1\ DOE publishes today's final rule pursuant to Part A-1 of
Title III, which provides for test procedures, labeling, and energy
conservation standards for small electric motors and certain other
equipment, and authorizes DOE to require information and reports from
manufacturers. The test procedures DOE recently adopted for small
electric motors, 74 FR 32059 (July 7, 2009), appear at Title 10, Code
of Federal Regulations (CFR), sections 431.443, 431.444, and 431.445.
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\1\ These two parts were titled Parts B and C in EPCA, but were
codified as Parts A and A-1 in the United States Code for editorial
reasons.
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The Act defines ``small electric motor'' as follows:
[A] NEMA [National Electrical Manufacturers Association] general
purpose alternating current single-speed induction motor, built in a
two-digit frame number series in accordance with NEMA Standards
Publication MG1-1987.
(42 U.S.C. 6311(13)(G)) EPCA requires DOE to prescribe energy
conservation standards for those small electric motors for which DOE:
(1) Has determined that standards would be technologically feasible and
economically justified and would result in significant energy savings,
and (2) has prescribed test procedures. (42 U.S.C. 6317(b)) However,
pursuant to section 346(b)(3) of EPCA (42 U.S.C. 6317(b)(3)), no
standard prescribed for small electric motors shall apply to any such
motor that is a component of a covered product under section 322(a) of
EPCA (42 U.S.C. 6292(a)), or of covered equipment under section 340 (42
U.S.C. 6311).
Additionally, EPCA requires DOE, in establishing standards for
small electric motors, to consider whether the standards themselves
will result in a significant conservation of energy, are
technologically feasible, and are cost effective as described in 42
U.S.C. 6295(o)(2)(B)(i). (42 U.S.C. 6316(a)) These criteria, along with
requirements that any standards be economically justified, are largely
incorporated into
[[Page 10878]]
42 U.S.C. 6295(o), which sets forth the criteria for prescribing
standards for ``covered products,'' i.e., consumer products as defined
in EPCA. (42 U.S.C. 6291(1) and (2)) Under 42 U.S.C. 6316(a), portions
of 42 U.S.C. 6295, including subsection (o), also apply when DOE
promulgates standards for certain specified commercial and industrial
equipment--``covered equipment'' as defined in EPCA (42 U.S.C.
6311(1))--including small electric motors. (EPCA states that the term
``equipment'' shall be substituted for ``product'' in applying the
consumer product-related provisions of EPCA to commercial and
industrial equipment. (42 U.S.C. 6316(a)(3))
Therefore, as indicated above, DOE analyzed whether today's
standards for small electric motors will achieve the maximum
improvement in energy efficiency that is technologically feasible and
economically justified. (42 U.S.C. 6295(o)(2)(A)) Additionally, DOE
examined whether each of today's standards for this equipment is
economically justified, after receiving comments on the proposed
standards, by determining whether the benefits of the standard exceed
its burdens by considering, to the greatest extent practicable, the
following seven factors that are set forth in 42 U.S.C.
6295(o)(2)(B)(i):
1. The economic impact of the standard on manufacturers and
consumers of the equipment subject to the standard;
2. The savings in operating costs throughout the estimated average
life of the covered equipment in the type (or class) compared to any
increase in the price, initial charges, or maintenance expenses for the
covered equipment that are likely to result from the 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
equipment 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 [of Energy] considers relevant.
In developing today's energy conservation standards, DOE also has
applied certain other provisions of 42 U.S.C. 6295 as it is required to
do. First, DOE would not prescribe a standard for small electric motors
if interested persons established by a preponderance of the evidence
that the standard is likely to result in the unavailability in the
United States of any type (or class) of this product with performance
characteristics, features, sizes, capacities, and volume that are
substantially the same as those generally available in the United
States. (42 U.S.C. 6295(o)(4))
Second, DOE has applied 42 U.S.C. 6295(o)(2)(B)(iii), which
establishes a rebuttable presumption that a standard is economically
justified if the Secretary finds that ``the additional cost to the
consumer of purchasing a product complying with an energy conservation
standard level will be less than three times the value of the energy *
* * savings during the first year that the consumer will receive as a
result of the standard, as calculated under the applicable test
procedure.''
Third, in setting standards for a type or class of equipment that
has two or more subcategories, DOE specifies a different standard level
than that which applies generally to such type or class of equipment
``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)) In determining whether a performance-related feature
justifies such a different standard for a group of products, DOE
considers such factors as the utility to the consumer of such a feature
and other factors DOE deems appropriate. Any rule prescribing such a
standard must include an explanation of the basis on which DOE
establishes such higher or lower level. (42 U.S.C. 6295(q)(2))
Federal energy efficiency requirements for equipment covered under
EPCA generally supersede State laws or regulations concerning energy
conservation testing, labeling, and standards. (42 U.S.C. 6297(a)-(c)
and 42 U.S.C. 6316(a)) DOE can, however, grant waivers of preemption
for particular State laws or regulations, in accordance with the
procedures and other provisions of section 327(d) of the Act. (42
U.S.C. 6297(d) and 42 U.S.C. 6316(a))
B. Background
1. Current Energy Conservation Standards
As indicated above, at present there are no national energy
conservation standards for small electric motors.
2. History of Standards Rulemaking for Small Electric Motors
To determine the small electric motors for which energy
conservation standards would be technologically feasible and
economically justified, and would result in significant energy savings,
DOE first concluded that the EPCA definition of ``small electric
motor'' covers only those motors that meet the definition's frame-size
requirements, and that are either three-phase, non-servo motors
(referred to below as polyphase motors) or single-phase, capacitor-
start motors, including both capacitor-start, induction run (CSIR) and
capacitor-start, capacitor-run (CSCR) motors. 71 FR 38799, 38800-01
(July 10, 2006). In June 2006, DOE issued a report in which it analyzed
and estimated the likely range of energy savings and economic benefits
that would result from standards for these motors.\2\ The report did
not address motors that are a component of a covered product or
equipment, consistent with 42 U.S.C. 6317. After receiving comments on
the report, DOE performed further analysis to determine whether
standards are warranted for small electric motors and then issued the
following determination on June 27, 2006:
---------------------------------------------------------------------------
\2\ http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/small_motors_tsd.pdf.
Based on its analysis of the information now available, the
Department [of Energy] has determined that energy conservation
standards for certain small electric motors appear to be
technologically feasible and economically justified, and are likely
to result in significant energy savings. Consequently, the
Department [of Energy] will initiate the development of energy
efficiency test procedures and standards for certain small electric
---------------------------------------------------------------------------
motors. 71 FR 38807.
Thereafter, in 2007, DOE initiated this rulemaking by issuing and
seeking public comment on the ``Energy Conservation Standards
Rulemaking Framework Document for Small Electric Motors,'' which
described the approaches DOE anticipated using to develop energy
conservation standards for small electric motors and the issues to be
resolved in the rulemaking. See 72 FR 44990 (August 10, 2007). This
document is also available on the aforementioned DOE Web site. On
September 13, 2007, DOE held a public
[[Page 10879]]
meeting to present the contents of 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. Manufacturers, trade associations, electric utilities,
environmental advocates, regulators, and other interested parties
provided comments at this meeting, and submitted written comments, on
the Framework Document. They addressed a range of issues.
On December 19, 2008, after having considered these comments,
gathering additional information, and performing preliminary analyses
as to standards for small electric motors, DOE announced an informal
public meeting and the availability on its Web site of a preliminary
technical support document (preliminary TSD). 73 FR 79723 (December 30,
2008). The preliminary TSD discussed the comments DOE had received in
this rulemaking and described the actions DOE had taken, the analytical
framework DOE was using, and the content and results of DOE's
preliminary analyses. Id. at 79724-25. DOE's preliminary analyses were
largely based on comments received from industry; including those
focusing on what constitutes small electric motors and corresponding
shipment estimates. DOE convened the public meeting to discuss, and
receive comments on, these subjects, DOE's proposed product classes,
potential standard levels that DOE might consider, and other issues
participants believed were relevant to the rulemaking. Id. at 79723,
79725. DOE also invited written comments on all of these matters. The
public meeting took place on January 30, 2009. Eighteen interested
parties participated, and ten submitted written comments during the
comment period.
On November 24, 2009, DOE published a notice of proposed rulemaking
(NOPR) to establish small electric motor energy conservation standards.
74 FR 61410. Shortly after, DOE also published on its Web site the
complete technical support document (TSD) for the proposed rule, which
incorporated the completed analyses DOE conducted and technical
documentation for each analysis. These analyses were developed using,
in part, NEMA-supplied data. The TSD included the LCC spreadsheet, the
national impact analysis spreadsheet, and the manufacturer impact
analysis (MIA) spreadsheet--all of which are available at http://www.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.html. The energy efficiency standards DOE proposed in
the NOPR were as follows:
Table II.1--Proposed Standard Levels for Polyphase Small Electric Motors
----------------------------------------------------------------------------------------------------------------
Motor output power Six poles Four poles Two poles
----------------------------------------------------------------------------------------------------------------
0.25 Hp/0.18 kW........................................... 77.4 72.7 69.8
0.33 Hp/0.25 kW........................................... 79.1 75.6 73.7
0.5 Hp/0.37 kW............................................ 81.1 80.1 76.0
0.75 Hp/0.55 kW........................................... 84.0 83.5 81.6
1 Hp/0.75 kW.............................................. 84.2 85.2 83.6
1.5 Hp/1.1 kW............................................. 85.2 87.1 86.6
2 Hp/1.5 kW............................................... 89.2 88.0 88.2
>= 3 Hp/2.2 kW............................................ 90.8 90.0 90.5
----------------------------------------------------------------------------------------------------------------
* Standard levels are expressed in terms of full-load efficiency.
** These efficiencies corresponded to NOPR Trial Standard Level 5 for polyphase motors.
Table II.2--Proposed Standard Levels for Capacitor-Start Induction-Run Small Electric Motors
----------------------------------------------------------------------------------------------------------------
Motor output power Six poles Four poles Two poles
----------------------------------------------------------------------------------------------------------------
0.25 Hp/0.18 kW........................................... 65.4 69.8 71.4
0.33 Hp/0.25 kW........................................... 70.7 72.8 74.2
0.5 Hp/0.37 kW............................................ 77.0 77.0 76.3
0.75 Hp/0.55 kW........................................... 81.0 80.9 78.1
1 Hp/0.75 kW.............................................. 84.1 82.8 80.0
1.5 Hp/1.1 kW............................................. 87.7 85.5 82.2
2 Hp/1.5 kW............................................... 89.8 86.5 85.0
>= 3 Hp/2.2 kW............................................ 92.2 88.9 85.6
----------------------------------------------------------------------------------------------------------------
* Standard levels are expressed in terms of full-load efficiency.
** These efficiencies corresponded to NOPR Trial Standard Level 7 for capacitor-start motors.
Table II.3--Proposed Standard Levels for Capacitor-Start Capacitor-Run Small Electric Motors
----------------------------------------------------------------------------------------------------------------
Motor output power Six poles Four poles Two poles
----------------------------------------------------------------------------------------------------------------
0.25 Hp/0.18 kW........................................... 63.9 68.3 70.0
0.33 Hp/0.25 kW........................................... 69.2 71.6 72.9
0.5 Hp/0.37 kW............................................ 75.8 76.0 75.1
0.75 Hp/0.55 kW........................................... 79.9 80.3 77.0
1 Hp/0.75 kW.............................................. 83.2 82.0 79.0
1.5 Hp/1.1 kW............................................. 87.0 84.9 81.4
2 Hp/1.5 kW............................................... 89.1 86.1 84.2
>= 3 Hp/2.2 kW............................................ 91.7 88.5 84.9
----------------------------------------------------------------------------------------------------------------
* Standard levels are expressed in terms of full-load efficiency.
** These efficiencies corresponded to NOPR Trial Standard Level 7 for capacitor-start motors.
[[Page 10880]]
In the NOPR, DOE also identified issues on which it was
particularly interested in receiving the comments and views of
interested parties. DOE requested comment on the proposed energy
efficiency levels for polyphase and single-phase motors, product
classes, covered insulation class systems, its selection of baseline
models, markups used in the engineering analysis, design option and
limitations used in the engineering analysis, the approach to scaling
the results of the engineering analysis, the proposed definition of
nominal efficiency, the manufacturer impact analysis scenarios, capital
investment costs used, market interaction between CSIR and CSCR motors,
market response to standards, behavior of customers with space
constraints, the combined effect of certain market assumptions, the
appropriateness of other discount rates besides seven and three percent
to discount future emissions, and the anticipated environmental
impacts. The NOPR also included additional background information on
the history of this rulemaking. 74 FR 61416-17.
DOE held a public meeting in Washington, DC on December 17, 2009,
to hear oral comments on, and solicit information relevant to, the
proposed rule. DOE has also received written comments and information
in response to the NOPR.
III. General Discussion
A. Test Procedures
On July 7, 2009, DOE published a final rule that incorporated by
reference Institute of Electrical and Electronics Engineers, Inc.
(IEEE) Standard 112-2004 (Test Method A and Test Method B), IEEE
Standard 114-2001, and Canadian Standards Association Standard C747-94
as the DOE test procedures to measure energy efficiency small electric
motors. 74 FR 32059.
In addition to incorporating by reference the above industry
standard test procedures, the small electric motors test procedure
final rule also codified the statutory definition for the term ``small
electric motor;'' clarified the definition of the term ``basic model'';
and the relationship of the term to certain product classes and
compliance certification reporting requirements; and codified the
ability of manufacturers to use an alternative efficiency determination
method (AEDM) to reduce testing burden when certifying their equipment
as compliant but maintaining efficiency measurement accuracy and
ensuring compliance with potential future energy conservation
standards. The test procedure notice also discussed matters of
laboratory accreditation, compliance certification, and enforcement of
energy conservation standards for small electric motors.
DOE notes that complete certification and enforcement provisions
for small electric motors have not yet been developed. DOE intends to
propose such provisions in a separate test procedure supplementary
NOPR, at which time DOE will invite comments on how small electric
motor efficiency standards can be effectively enforced. Section V.B of
this final rule summarizes comments received in response to the NOPR
that will be further addressed in the test procedure supplemental NOPR.
B. Technological Feasibility
1. General
As stated above, any standards that DOE establishes for small
electric motors must be technologically feasible. (42 U.S.C.
6295(o)(2)(A); 42 U.S.C. 6316(a)) 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 commercially available equipment 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 NOPR.
(See chapter 5 of the TSD.) All the evaluated technologies have been
used (or are being used) in commercially available products or working
prototypes. Therefore, DOE has determined that all of the efficiency
levels evaluated in this notice are technologically feasible.
2. Maximum Technologically Feasible Levels
As required by EPCA, (42 U.S.C. 6295(p)(1) and 42 U.S.C. 6316(a)),
in developing the NOPR, DOE identified the efficiency levels that would
achieve the maximum improvements in energy efficiency that are
technologically feasible (max-tech levels) for small electric motors.
74 FR 61418. Table III.1 lists the max-tech levels that DOE determined
for this rulemaking. DOE identified these levels as part of the
engineering analysis (chapter 5 of the TSD), using the most efficient
design parameters that lead to the highest full-load efficiencies for
small electric motors.
Table III.1--Max-Tech Efficiency Levels for Representative Product Classes *
----------------------------------------------------------------------------------------------------------------
Motor category Poles Horsepower Efficiency %
----------------------------------------------------------------------------------------------------------------
Polyphase............................................. 4 1 87.7
CSIR.................................................. 4 0.5 77.6
CSCR.................................................. 4 0.75 87.5
----------------------------------------------------------------------------------------------------------------
* These max-tech efficiency levels are only for the representative product classes described in section IV.C.2.
Max-tech efficiency levels for the remaining product classes are determined using the scaling methodology
outlined in section IV.C.5.
DOE developed maximum technologically feasible efficiencies by
creating motor designs for each product class analyzed, which use all
the viable design options that DOE considered. The efficiency levels
shown in Table III.1 correspond to designs that use a maximum increase
in stack length, a copper rotor design, a premium electrical steel
(Hiperco 50), a maximum slot-fill percentage (65-percent), a change in
run-capacitor rating (CSCR motors only), and an optimized end ring
design. All of the design options used to create these max-tech motors
remain in the analysis and are options that DOE considers
technologically feasible.
C. Energy Savings
DOE forecasted energy savings in its national energy savings (NES)
analysis, through the use of an NES spreadsheet tool, as discussed in
the NOPR. 74 FR 61418, 61440-42, 61470-72.
One of the criteria that govern DOE's adoption of standards for
small electric motors is that the standard must result in
``significant'' energy savings. (42 U.S.C. 6317(b)) While the term
``significant'' is not defined by EPCA, a D.C. Circuit indicated that
Congress intended ``significant'' energy savings to be savings that
were not ``genuinely
[[Page 10881]]
trivial.'' Natural Resources Defense Council v. Herrington, 768 F.2d
1355, 1373 (D.C. Cir. 1985) The energy savings for the standard levels
DOE is adopting today are non-trivial, and therefore DOE considers them
``significant'' as required by 42 U.S.C. 6317.
D. Economic Justification
1. Specific Criteria
The following section discusses how DOE has addressed each of the
seven factors that it uses to determine if energy conservation
standards are economically justified.
a. Economic Impact on Motor Customers and Manufacturers
DOE considered the economic impact of today's new standards on
purchasers and manufacturers of small electric motors. For purchasers
of small electric motors, DOE measured the economic impact as the
change in installed cost and life-cycle operating costs, i.e., the LCC.
(See section IV.F of this preamble, and chapter 12 of the TSD.) DOE
investigated the impacts on manufacturers through the manufacturer
impact analysis (MIA). (See sections IV.I and VI.C.2 of this preamble
and chapter 13 of the TSD.) The economic impact on purchasers and
manufacturers is discussed in detail in the NOPR. 74 FR 61418-19,
61436-40, 61442-46, and 61454-70.
b. Life-Cycle Costs
DOE considered life-cycle costs of small electric motors, as
discussed in the NOPR. 74 FR 61436-40, 61442, 61454-64. In considering
these costs, 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 savings that small motors purchasers would
expect to achieve due to the standards.
c. Energy Savings
Although significant conservation of energy is a separate statutory
requirement for imposing an energy conservation standard, EPCA also
requires DOE, in determining the economic justification of a standard,
to consider the total projected energy savings that are expected to
result directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III) and
42 U.S.C. 6316(a)) As in the NOPR (74 FR 61440-42, 61470-72), for
today's final rule, DOE used the NES spreadsheet results in its
consideration of total projected energy savings that are directly
attributable to the standard levels DOE considered.
d. Lessening of Utility or Performance of Equipment
In selecting today's standard levels, DOE avoided selection of
standards that lessen the utility or performance of the equipment under
consideration in this rulemaking. (See 42 U.S.C. 6295(o)(2)(B)(i)(IV)
and 42 U.S.C. 6316(a)) 74 FR 61419, 61476. The efficiency levels DOE
considered maintain both motor performance and power factor in order to
preserve consumer utility. DOE considered end-user size constraints by
developing designs with size increase restrictions (limited to a 20-
percent increase in stack length), as well as designs with less
stringent constraints (100-percent increase in stack length). The
designs adhering to the 20-percent increase in stack length maintain
all aspects of consumer utility and were created for all efficiency
levels, but these designs may become very expensive at higher
efficiency levels when compared with DOE's other designs.
e. Impact of Any Lessening of Competition
DOE considered any lessening of competition that is likely to
result from standards. As discussed in the NOPR, 74 FR 61419, 61476,
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 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)
and 42 U.S.C. 6316(a))
To assist the Attorney General in making such a determination, DOE
provided the Department of Justice (DOJ) with copies of the November
24, 2009 proposed rule and the NOPR TSD for review. The Attorney
General's response is discussed in IV.F.7 below, and is reprinted at
the end of this rule. DOJ concluded that TSL 5 for polyphase small
electric motors and TSL 7 for single-phase small electric motors are
likely to affect the replacement market for certain applications. DOJ
requested that DOE consider this potential impact and, as warranted,
allow exemptions from the proposed standard levels the manufacture and
marketing of certain replacement small electric motors.
f. Need of the Nation To Conserve Energy
In considering standards for small electric motors, the Secretary
must consider the need of the Nation to conserve energy. (42 U.S.C.
6295(o)(2)(B)(i)(VI) and 42 U.S.C. 6316(a)) The Secretary recognizes
that energy conservation benefits the Nation in several important ways.
The non-monetary benefits of the standard are likely to be reflected in
improvements to the security and reliability of the Nation's energy
system. Today's standard will also result in environmental benefits. As
discussed in the NOPR, 74 FR 61419, 61447-61453, 61476-61484, and in
section VI.C.6 of this final rule, DOE considered these factors in
adopting today's standards.
g. Other Factors
The Secretary of Energy, in determining whether a standard is
economically justified, considers any other factors that the Secretary
of Energy deems relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII) and 42
U.S.C. 6316(a)) In adopting today's standards, the Secretary considered
the following: (1) Harmonization of standards for small electric motors
with existing standards under EPCA for medium-sized polyphase general
purpose motors; (2) the impact, on consumers who need to use CSIR
motors, and on the prices for such motors at potential standard levels;
and (3) the potential for standards to reduce reactive power demand and
thereby lower costs for supplying electricity.\3\ 74 FR 61419-20,
61484. These issues are addressed in section VI.C.7 below.
---------------------------------------------------------------------------
\3\ In an alternating current power system, the reactive power
is the root mean square (RMS) voltage multiplied by the RMS current,
multiplied by the sine of the phase difference between the voltage
and the current. Reactive power occurs when the inductance or
capacitance of the load shifts the phase of the voltage relative to
the phase of the current. While reactive power does not consume
energy, it can increase losses and costs for the electricity
distribution system. Motors tend to create reactive power because
the windings in the motor coils have high inductance.
---------------------------------------------------------------------------
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) and 42 U.S.C.
6316(a)) DOE's LCC and payback period (PBP) analyses generate values
that calculate the PBP of potential energy conservation standards. The
calculation includes, but is not limited to, the three-year PBP
contemplated under the rebuttable presumption test just described.
However, DOE routinely
[[Page 10882]]
conducts a full economic analysis that considers the full range of
impacts, including those to the customer, manufacturer, Nation, and
environment, as required under 42 U.S.C. 6295(o)(2)(B)(i) and 42 U.S.C.
6316(a). The results of this analysis serve as the basis for DOE to
evaluate definitively the economic justification for a potential
standard level (thereby supporting or rebutting any presumption of
economic justification).
IV. 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 data obtained from interviews with
manufacturers, in its MIA to determine the impacts of standards on
manufacturers. Finally, DOE developed an approach using the National
Energy Modeling System (NEMS) to estimate impacts of standards for
small electric motors on electric utilities and the environment. The
NOPR discusses each of these analytical tools in detail, 74 FR 61420,
61436-53, as does the TSD.
As a basis for this final rule, DOE has continued to use the
spreadsheets and approaches explained in the 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. DOE also added new analysis based on the comments it received
from interested parties. The following paragraphs address 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 equipment concerned, including the purpose of the equipment, the
industry structure, and market characteristics. This activity includes
both quantitative and qualitative assessments based primarily on
publicly available information. The subjects addressed in the market
and technology assessment for this rulemaking include scope of
coverage, product classes, manufacturers, quantities, and types of
equipment sold and offered for sale; retail market trends; and
regulatory and non-regulatory programs. See chapter 3 of the TSD for
further discussion of the market and technology assessment.
1. Definition of Small Electric Motor
EPCA defines a small electric motor as ``a NEMA general purpose
alternating current single-speed induction motor, built in a two-digit
frame number series in accordance with NEMA Standards Publication MG1-
1987.'' 42 U.S.C. 6311(13)(G). NEMA Standards Publication MG1-1987 is
an industry guidance document that addresses, among other things,
various aspects related to small and medium electric motors. As denoted
in the title, this version of MG1 was prepared in 1987, more than 20
years before the date of today's final rule. NEMA has since published
updated versions of this document, the latest of which was released in
2006. Of particular significance is the difference in what was
considered in 1987 a general purpose, alternating current motor (only
open construction motors) compared to what NEMA currently considers a
general purpose alternating current motor (both open and enclosed
construction motors).\4\
---------------------------------------------------------------------------
\4\ An open motor is constructed with ventilating openings that
permit external cooling air to pass over and around the windings of
the motor. An enclosed motor is constructed to prevent the free
exchange of air between the inside and outside of the housing.
---------------------------------------------------------------------------
DOE explained its view in the NOPR as to how it currently reads 42
U.S.C. 6311(13)(G). 74 FR 61421. DOE indicated that the statute refers
to MG1-1987 for purposes of ascertaining what constitutes a small
electric motor. The agency explained and articulated certain
assumptions in the NOPR regarding the scope of categories of motors,
frame sizes, performance characteristics, insulation systems, and motor
enclosures that it examined within the proposed scope of this
rulemaking.
DOE received several comments criticizing the scope of DOE's
coverage in its analyses. Manufacturers indicated that DOE's scope was
too broad because, in their view, many of the motors DOE examined in
ascertaining the energy savings potential for small electric motors,
were not small electric motors under MG1-1987. For example, Emerson
commented that in order for standards to be enforceable, DOE should
adhere strictly to MG1-1987 in defining scope. (Emerson, No. 28 at p.
2) NEMA made similar comments echoing the same concern and argued that
DOE's analysis should have been limited to the performance
characteristics contained in MG1-1987. (See, e.g., NEMA, No. 8 at pp.
2-5)
In contrast, Earthjustice and UL both commented that DOE was
unnecessarily constraining itself by adhering to NEMA MG1-1987. See
Earthjustice, Public Meeting Transcript, No. 20.4 at pp. 49-50; UL,
Public Meeting Transcript, No. 20.4 at pp. 89-90. UL asserted that
DOE's scope would create a negligible impact on the market, which has
been shifting from the motors covered under the NOPR to other motor
types (such as electronically commutated motors). (UL, Public Meeting
Transcript, No. 20.4 at p. 182, UL, No. 21 at pp. 2) Earthjustice
advised DOE that it should expand the scope of the rulemaking to
include any ``covered equipment'' that it finds are justified.
(Earthjustice, No. 22 at pp. 1-3) It had also noted during the
preliminary analysis public meeting, that DOE could adopt a different
reading of the definition by applying the phrase MG1-1987 only to the
two digit frame number series requirement. Earthjustice, Public Meeting
Transcript, at 47-49 (January 30, 2009).
After careful consideration of all of the comments, DOE believes
that its scope of coverage in this final rule is appropriate. As such,
DOE is declining to revise its scope of coverage for this equipment
within this rulemaking. While DOE is continuing to adhere to the
approach proposed in its NOPR and accompanying TSD, DOE may revisit
this issue in the future and re-examine its interpretation of the small
electric motor definition in 42 U.S.C. 6311(13)(G). Any such re-
examination would be performed within the context of the rulemaking
process and offer an opportunity for public comment.
a. Motor Categories
The motor categories examined by DOE are tied in part to the
terminology and performance requirements in NEMA MG1-1987. These
requirements were established for (1) general-purpose alternating-
current motors, (2) single-speed induction motors, and (3) the NEMA
system for designating (two-digit) frame sizes. Single-speed induction
motors, as delineated and described in MG1-1987, fall into five
categories: split-phase, shaded-pole, capacitor-start (both CSIR and
CSCR), permanent-split capacitor (PSC), and polyphase. Of these five
motor categories, DOE determined for purposes of this rulemaking that
only CSIR, CSCR, and polyphase motors are able to meet performance
requirements in NEMA MG1 and are widely considered general purpose
alternating current motors, as shown by the listings found in
manufacturers' catalogs. Therefore, in the NOPR DOE proposed
[[Page 10883]]
to only cover those three motor categories.
Underwriters Laboratories stated that they believe DOE should cover
the split-phase, shaded-pole, and PSC motor categories because they are
much more common in the current market. (Underwriters Laboratories, No.
21 at p. 2) It is DOE's understanding that the motors suggested for
coverage by UL do not meet the requirements for a NEMA general purpose
motors and, consequently, are outside the scope of this rulemaking
despite being more common. As a result, DOE continues to maintain that
CSIR, CSCR, and polyphase motors are the only motor categories that are
general purpose motors for purposes of this rulemaking.
b. Horsepower Ratings
In DOE's preliminary and NOPR analyses on small electric motors,
DOE presented a range of horsepower ratings from \1/4\-horsepower up to
3-horsepower. The range of horsepower ratings was the same for all
three motor categories covered: CSIR, CSCR, and polyphase motors as
well as all three pole configurations: Two, four, and six. This range
of horsepower ratings was consistent with what DOE believed to be the
range of ratings where manufacturers build NEMA general purpose motors
in a two-digit frame number series.
In response to the NOPR, NEMA and Baldor commented that the
horsepower range for the products classes DOE proposed was incorrect.
Baldor stated that horsepower ratings higher than \1/2\-horsepower for
six-pole motors, \3/4\-horsepower for four-pole motors, and 1-
horsepower for two-pole motors are not standard ratings for small
electric motors as defined in NEMA MG1, in particular, as listed in
Table 10-1 of MG1-1987. Therefore, NEMA and Baldor stated that motors
with such ratings are not NEMA general purpose motors and should be
excluded from DOE's scope of coverage. (Baldor, Public Meeting
Transcript, No. 20.4 at pp. 38-41; NEMA, No. 24 at pp. 1-5, 7)
DOE understands that NEMA MG1-1987 does not provide ratings for
small motors of the identified higher horsepower ratings. However, DOE
does not believe this precludes certain higher horsepower ratings built
in a two-digit NEMA frame consistent with NEMA MG1-1987 from coverage.
In addition, upon review of NEMA manufacturer product catalogs, DOE
noted that two-digit frame size motors of higher horsepower ratings are
commonly marketed as general purpose. DOE also observed from NEMA
shipment data provided to DOE for the determination analysis that when
NEMA surveyed its members and requested shipments of general purpose
motors built in a two-digit frame number series, responding
manufacturers provided shipments data in horsepower ratings exceeding
those listed in the comments above. Although NEMA argued that these
motors do not fall within this rulemaking, NEMA did not deny that these
motors are considered general purpose motors. Thus, DOE believes that
even though NEMA MG1-1987 does not provide standard ratings for higher
horsepower small electric motors, many of these motors are considered
NEMA general purpose motors that could be considered for coverage by
DOE.
DOE notes that there is precedent for clarifying the scope of
coverage of these motors. At industry's request during the test
procedure rulemaking for small electric motors, DOE clarified the small
electric motor definition to incorporate metric-equivalent motors that
are built in accordance with the International Electrotechnical
Commission's requirements. See Baldor, Public Meeting Transcript, No. 8
at p. 75; NEMA, No. 12 at p. 2. This expansion of the small electric
motor definition, which was added to ensure that DOE provided adequate
coverage over small electric motors generally, was incorporated into 10
CFR 431.442. See also 74 FR 32061-62 and 32072.
While DOE believes that many of the horsepower ratings recommended
for exclusion by NEMA and Baldor could be included in the definition of
small electric motors, upon examining manufacturer catalogs, DOE found
that motors did not exist for some horsepower ratings/pole
configuration combinations included in NOPR. Specifically, DOE found
that no open construction, two-digit frame size motors have horsepower
ratings greater than 3-horsepower. In addition, DOE found no small
electric polyphase motors built with a 2- or 3-horsepower rating and a
six-pole configuration. DOE also found that small electric single-phase
motors (CSIR and CSCR) do not exist with a 1\1/2\-horsepower rating or
higher for six-poles or a 3-horsepower rating for four-poles. As there
is no evidence that these motors, if manufactured, would be considered
general purpose motors, and because DOE lacks data on which to base
energy conservation standards for these motors, DOE is not including
them in the scope of this rulemaking. Today's final rule reflects this
decision as no standards are being adopted in those product classes.
Table IV.1 presents the horsepower ratings for which DOE believes no
small electric motors are currently commercially available.
Table IV.1--Horsepower Ratings for Which No Motors Exist
----------------------------------------------------------------------------------------------------------------
Motor category Two-pole Four-pole Six-pole
----------------------------------------------------------------------------------------------------------------
Polyphase........................... ....................... ....................... >= 2 Hp.
Single-Phase........................ ....................... >= 3 Hp................ >= 1.5 Hp.
----------------------------------------------------------------------------------------------------------------
c. Performance Requirements
NEMA defines several performance requirements, including breakdown
torque, locked rotor torque, and locked rotor current that motors must
meet in order to be considered general-purpose. Because DOE's
assessment of the small electric motors market (through analysis of
commercially-available products sold) indicates that the vast majority
of motors meet the previously listed requirements, DOE believes that a
motor must meet these performance characteristics as a condition for
coverage.
PG&E commented that a loophole exists in the rulemaking since the
current definition of a small general purpose motor is so narrow with
respect to design and performance characteristics. (PG&E, Public
Meeting Transcript, No. 20.4 at pp. 259-60) PG&E added that DOE's
reliance on MG1-1987 provides another loophole where NEMA could update
its standards such that manufacturers could still make a NEMA general
purpose motor that is not covered under today's rulemaking. (PG&E,
Public Meeting Transcript, No. 20.4 at pp. 260-61) NEEA/NPCC agreed
with PG&E that a manufacturer could easily circumvent any standards
whose coverage was based around NEMA performance requirements, by
simply constructing the motor such that it slightly deviates from NEMA
requirements, but still provides similar utility to the consumer.
(NEEA/NPCC, No. 27, pp. 2-3) Baldor
[[Page 10884]]
stated that the tables of performance requirements in NEMA MG1 are
designed to let customers know how motors will perform from
manufacturer to manufacturer and they have been established for many
years and there would be no reason to change them. (Baldor, Public
Meeting Transcript, No. 20.4 at pp. 266-67)
DOE understands the concerns expressed by PG&E, but agrees with
Baldor that considering that the relevant performance requirements in
NEMA MG1 have not changed substantially in over 20 years, these
performance standards are unlikely to change should NEMA develop a new
version of MG1. DOE believes that to do so would constitute a major
change to the industry and performance characteristics that customers
have been accustomed to over the years. Therefore, DOE believes that
small electric motors must meet certain requirements in NEMA MG1-1987
shown in Table IV.6. For those combinations of horsepower rating and
pole configuration that do not have performance requirements for two-
digit frame sizes, DOE has no performance requirements. Instead, DOE
will cover only those motors widely considered general purpose and
marketed as such in manufacturer catalogs.
d. Motor Enclosures
In the NOPR, DOE stated that in ascertaining what constitutes a
small electric motor, only the 1987 version of MG1 applies within the
context of the statutory definition. Under that interpretation, DOE
stated that only open construction motors were considered covered
products. DOE is continuing to adhere to this approach.
As DOE's proposed scope did not extend beyond open motors as
covered products, Baldor and NEMA commented that the revision to 10 CFR
Part 431 proposed in the NOPR should clearly mention that the table of
efficiency values for section 431.446 applies only to open motors.
(Baldor, Public Meeting Transcript, No. 20.4 at pp. 47-48, NEMA, No. 24
at p. 5) To clarify the application of the new efficiency values, DOE
is modifying the efficiency standards tables in section 431.446 from
today's final rule to include the words, ``open motors'' in the
headings.
e. Frame Sizes
As for the frame sizes of motors that are covered by DOE standards
for small electric motors, EPCA defines a small electric motor, in
relevant part, as a motor ``built in a two-digit frame number series in
accordance with NEMA Standards Publication MG1-1987.'' (42 U.S.C.
6311(13)(G)) MG1-1987 establishes a system for designating motor frames
that consisting of a series of numbers in combination with letters that
correspond to a specific size. The 1987 version of MG1 designates three
two-digit frame series: 42, 48, and 56. These frame series have
standard dimensions and tolerances necessary for mounting and
interchangeability that are specified in sections MG1-11.31 and MG1-
11.34.
DOE understands that manufacturers produce motors in other two-
digit frame sizes, namely a 66 frame size. The 66 frame size is used
for definite-purpose or special-purpose motors and not used in general-
purpose applications and are not covered under the EPCA definition of
``small electric motor.'' In the NOPR, DOE stated that it was unaware
of any other motors with two-digit frame sizes that are built in
accordance with NEMA MG1-1987. Should such frame sizes appear on the
market, DOE will consider evaluating whether to include that equipment.
For the NOPR, DOE received no comments regarding this issue and as a
result, is maintaining its stance on this topic for this final rule.
f. Insulation Class Systems
Because DOE's interpretation of the statutory definition of a small
electric motor is largely influenced by what NEMA defines as a general-
purpose alternating-current motor under MG1-1987, DOE has taken into
account the criteria that comprise a general purpose motor. Among these
criteria are the applicable insulation classes. NEMA MG1-1987 paragraph
1-1.05, provides that a general-purpose motor must incorporate a
``Class A insulation system with a temperature rise as specified in MG
1-12.42 for small motors or Class B insulation system with a
temperature rise as specified in MG 1-12.43 for medium motors.''
In NEMA MG1-1987, paragraphs 1.66 and 12.42.1 define four
insulation class systems: Class A, Class B, Class F, and Class H. They
are divided into classes based on the thermal endurance and each system
has a different temperature rise \5\ that the insulating material must
be able to withstand without degradation. The temperature rise
requirement for Class A systems is the lowest of the four systems
defined in NEMA MG1-1987, which means that all other insulation classes
meet Class A requirements. Because all insulation class systems meet
the Class A requirements, DOE proposed to cover motors that incorporate
any of the other insulation class systems in the NOPR. A joint comment
submitted by Pacific Gas and Electric Company (PG&E), Southern
California Edison (SCE), Southern California Gas Company (SCGC), and
San Diego Gas and Electric Company (SDGE) supported DOE's decision to
include insulation Classes B, F, and H in addition to Class A. (Joint
Comment, No. 23 at p. 2) NEMA and Baldor commented that although it is
prudent to cover insulation class systems other than Class A, in order
for a motor to be considered covered it must adhere to the temperature
rise limits required of Class A motors by NEMA MG1. For example, if a
motor contains a Class B insulation system, but the temperature rise
exceeds the threshold for Class A insulation systems, the commenters
stated that that motor should be excluded from coverage. (Baldor,
Public Meeting Transcript, No. 20.4 at pp. 25-26; Baldor, No. 15 at p.
3-4, NEMA, No. 24 at pp. 5-7)
---------------------------------------------------------------------------
\5\ Temperature rise refers to the increase in temperature over
the ambient temperature of the motor when operated at service factor
load. NEMA MG1 provides maximum temperature rises (as measured on
the windings of the motor) for each insulation class system.
---------------------------------------------------------------------------
DOE disagrees with Baldor and NEMA's assessment regarding
temperature rise and in today's final rule maintains that the scope of
coverage includes motors with any insulation class system Class A or
higher, regardless of whether a motor meets the Class A temperature
rise requirements. First, DOE notes that NEMA MG1 does not require
small motors to meet the temperature rise for a Class A insulation
system. Rather, it only requires that the motor incorporates an
insulation system that meets Class A requirements, which DOE has
determined could be Class A, B, F, or H.
Second, DOE believes that it is unreasonable to apply a more
stringent temperature rise requirement on motors with higher insulation
class systems. These motors often incorporate the higher insulation
class systems in order to protect the motors from degradation at high
temperatures. As a result, the accompanying temperature rise, which
serves as a marker of how much heat a particular insulation class can
withstand to prevent the motor from damage, will generally increase as
a higher grade of insulation is used. Baldor's suggestion that a lower
temperature rise (70 [deg]C) must be used for each higher grade of
insulation that offers protection at higher temperatures is one that
DOE declines to adopt.
Furthermore, according to NEMA Standards publication MG1-1987,
paragraph 10.39.1, although insulation class system designation is a
required
[[Page 10885]]
marking on the nameplate of small electric motors, temperature rise is
not. If DOE were to limit scope based on the temperature rise
requirements of Class A systems, DOE would have no way of determining
whether motors of insulation class systems greater than Class A meet
the required temperature rise and are therefore subject to energy
conservation standards. As only 2 percent of small electric motor
models sold are labeled with Class A insulation systems, 98 percent of
small electric models would have unknown temperature rises (relative to
Class A requirements). DOE believes that including all insulation
classes and temperature rises satisfies the statutory definition and
avoids creating an unenforceable standard for a large number of motors
that do not list temperature rise.
g. Service Factors
Some CSIR, CSCR, and polyphase motors may fail to meet the NEMA
definition of general purpose alternating current motor because they do
not meet NEMA service factor requirements. See, e.g. NEMA MG1-1987
Table 12-2. Service factor is a measure of the overload capacity at
which a motor can operate without thermal damage, while operating
normally within the correct voltage tolerances. The rated horsepower
multiplied by the service factor determines that overload capacity. For
example, a 1-horsepower motor with a 1.25 service factor can operate at
1.25 horsepower (1-horsepower x 1.25 service factor). For the NOPR, DOE
concluded that motors that fail to meet service factor requirements in
MG1-12.47 of MG1-1987 (now 12.51.1 of MG1-2006) are not ``small
electric motors'' as EPCA uses that term. Receiving no comments to the
contrary, DOE maintains that position in today's final rule and energy
efficiency standards do not apply to them.
h. Metric Equivalents and Non-Standard Horsepower and Kilowatt Ratings
DOE's interpretation of a small electric motor is largely based on
the construction and rating system in NEMA MG1-1987. (42 U.S.C.
6311(13)(G)) This system uses English units of measurement and power
output ratings in horsepower. In contrast, general-purpose electric
motors manufactured outside the United States and Canada are defined
and described with reference to the International Electrotechnical
Commission (IEC) Standard 60034-1 series, ``Rotating electrical
machines,'' which employs terminology and criteria different from those
in EPCA. The performance attributes of these IEC motors are rated
pursuant to IEC Standard 60034-1 Part 1: ``Rating and performance,''
which uses metric units of measurement and construction standards
different from MG1, and a rating system based on power output in
kilowatts instead of power output in horsepower. The Institute of
Electrical and Electronics Engineers (IEEE) Standard 112 recognizes
this difference in the market and defines the relationship between
horsepower and kilowatts. Furthermore, in 10 CFR 431.12, DOE defined
``electric motor'' in terms of both NEMA and IEC equivalents even
though EPCA's corresponding definition and standards were articulated
in terms of MG1 criteria and English units of measurement. 64 FR 54114
(October 5, 1999) The test procedure final rule adopted a definition
for small electric motor that explicitly indicated that IEC equivalent
motors are considered small electric motors. 10 CFR 431.442. 74 FR
32062, 72.
In the NOPR, DOE addressed how IEC metric or kilowatt-equivalent
motors can perform identical functions as NEMA small electric motors
and provide comparable rotational mechanical power to the same machines
or equipment. Moreover, IEC metric or kilowatt-equivalent motors can
generally be interchangeable with covered small electric motors.
Consistent with the codified definition of ``small electric motor in 10
CFR 431.442, DOE interpreted EPCA to apply the term ``small electric
motor'' to any motor that is identical or equivalent to a motor
constructed and rated in accordance with NEMA MG1, which includes IEC
metric motors. DOE also proposed that motors with non-standard kilowatt
and horsepower ratings would be required to meet small electric motor
energy conservation standards. 74 FR 61422.
A joint comment submitted by PG&E, SCE, SCGC, and SDGE indicated
support for DOE's decision to include IEC-rated motors in today's
rulemaking. (Joint Comment, No. 23 at p. 2) NEMA and Baldor commented
that, even though they agreed with DOE's approach in the NOPR, they
believed that given the statutory definition's dependence on MG1-1987
(and the ratings contained in that standard) more justification is
needed to include non-standard metric or English-rated motors in its
scope of coverage. (Public Meeting Transcript, No. 20.4 at pp. 288-89;
NEMA, No. 24 at pp. 24-25)
DOE appreciates these comments and in this final rule maintains its
position regarding the inclusion of non-standard IEC metric and
English-rated motors. Though NEMA MG1 does not provide ratings for
these non-standard motors, DOE recognizes that they can perform
identical functions as those NEMA motors with standard horsepower
ratings. Therefore, as DOE did within the context of its codified
definition of the term ``small electric motor'' found in 10 CFR 431.442
to include IEC metric-equivalent motors, DOE believes that non-standard
horsepower and kilowatt rated motors should be considered NEMA general
purpose and included in the scope of coverage of this rulemaking.
i. Summary
During the public meeting, Baldor and NEMA commented that DOE did
not include the definition of NEMA general purpose motor in 10 CFR
431.442, and suggested that DOE include the definition for clarity and
completeness. (Baldor, Public Meeting Transcript, No. 20.4 at p. 46;
NEMA, No. 24 at p. 5) A.O. Smith also requested clarification of the
term ``small electric motor,'' and suggested that the definition align
with NEMA established guidelines. (A.O. Smith, No. 26 at p. 2)
DOE has discussed the covered motor categories, horsepower ratings,
motor enclosures, frame sizes, insulation class systems, service
factors, and metric equivalents. As discussed in section IV.A.1.b,
because DOE has found several horsepower/pole configurations for which
small electric motors are not commercially available, DOE has made
slight modifications in the range of horsepower ratings for which it is
adopting standards in this final rule. The motors covered by today's
rule include polyphase motors from \1/4\- to 3-horsepower for motors
equipped with two poles, \1/4\- to 3-horsepower for motors with four
poles, and \1/4\- to \1/2\-horsepower for motors with six pole motors
as long as they are built in a two-digit frame number series and with
an open construction; the CSIR and CSCR motors covered by today's rule
include motors from \1/4\- to 3-horsepower motors equipped with two
poles, \1/4\- to 2-horsepower for motors with four poles, and \1/4\- to
1-horesepower for motors with six poles as long as they are built in a
two-digit frame number series and with an open construction. A motor
will not be excluded because of its insulation class system or its
temperature rise. However, it will be excluded if it fails to meet NEMA
general purpose service factor requirements. Any metric-equivalent
motor or motor with a non-standard horsepower or kilowatt rating that
has performance characteristics and construction equivalent to those
listed
[[Page 10886]]
above is also a covered product and must meet the energy efficiency
standards of this rulemaking. Although today's final rule DOE does not
codify a definition for ``NEMA general purpose motor'', DOE will
consider proposing a definition for this term in the electric motor
test procedure supplemental NOPR.
2. Product Classes
When evaluating and establishing energy conservation standards, DOE
generally divides covered equipment into classes by the type of energy
used, capacity, or other performance-related features that affect
efficiency. (42 U.S.C. 6295(q)) DOE routinely establishes different
energy conservation standards for different product classes based on
these criteria.
At the NOPR public meeting, DOE presented its rationale for
creating 72 product classes. The 72 product classes were based on
combinations of three different characteristics: motor category, number
of poles, and horsepower. As these motor characteristics change, so
does the utility and efficiency of the small electric motor.
The motor category divides the small electric motors market into
three major groups: CSIR, CSCR, and polyphase. For each motor category,
DOE divided the product classes by all combinations of eight different
horsepower ratings (i.e., \1/4\ to >= 3) and three different pole
configurations (i.e., 2, 4, and 6). A change in motor category can
constitute a change in the type of power used, three-phase power for
polyphase motors versus single-phase power for capacitor-start motors.
Alternatively, it might be a change in consumer utility that affects
efficiency. The addition of a run-capacitor on a CSCR motors can make
the motor more efficient as well as constitute dimensional changes as
the run-capacitor is usually mounted externally on the housing.
Horsepower rating is directly related to a motor's capacity, and its
pole configuration is directly related to the theoretical maximum speed
at which a motor can operate. For the NOPR, DOE received no comments
contrary to disaggregating product classes with these characteristics,
but did receive other comments regarding product classes.
Consistent with their comments on scope (discussed in section
IV.A.1), NEMA and Baldor stated that certain combinations of horsepower
and speed (or pole-configuration) ratings should be excluded from DOE's
product classes because, in their view, they are not small electric
motors within the context of MG1-1987. Specifically, they stated that
motors with horsepower ratings greater than 1-horsepower for two-pole
motors, greater than \3/4\-horsepower for four-pole motors, and greater
than \1/2\-horsepower for six-pole motors do not meet the statutory
definition. (Baldor, Public Meeting Transcript, No. 20.4 at pp. 39-41;
NEMA, No. 24 at pp. 3-4) As discussed in section IV.A.1, DOE examined
the statutory definition of small electric motor and disagrees that the
aforementioned horsepower and speed ratings are not covered under this
rulemaking. Therefore, in this final rule DOE is maintaining coverage
of combinations of horsepower and pole configurations higher than those
recommended by NEMA and Baldor. However, as discussed in section
IV.A.1.b, DOE is not adopting standards for motors which are not
currently commercially available. Accordingly, DOE has removed these
proposed product classes in the final rule, resulting in 62 total
product classes.
NEMA and Baldor also commented that DOE should include frame size
among the characteristics that define a product class. They stated that
smaller frame size motors will not be able to achieve as high an energy
efficiency rating as the larger frame sized motors, thus warranting
separate product classes. (Baldor, Public Meeting Transcript, No. 20.4
at pp. 43-44, NEMA, No. 24 at pp. 4-5, 23)
DOE acknowledges that motors built with smaller dimensions, namely
core diameters, may not be able to achieve the same efficiency as a
motor with larger dimensions. The smaller diameter limits the amount of
active material that is used to reduce motor losses and therefore
limits the maximum efficiency rating possible as well. However, frame
size, which relates to the frame housing and not the core diameter, is
a measurement of height from the bottom of the mounting feet to the
center of the shaft of the motor. Frame size does not always correlate
to the core diameter of the motor and amount active material. For
example, DOE found that some motors with larger frame sizes have core
diameters equivalent to those motors built in smaller frame sizes,
which means that these motors have an efficiency potential equivalent
to that of a motor in a smaller frame size. Consequently, frame size
alone does not necessarily change the efficiency of a small electric
motor.
Additionally, NEMA MG1 does not differentiate breakdown torque,
locked-rotor torque, and locked-rotor current requirements for small
general-purpose motors by frame size. DOE believes that if performance
requirements other than efficiency for small motors are not different
for different frame sizes, there is no need or precedent for DOE to
differentiate efficiency standards for small electric motors based on
frame size.
However, as stated earlier, DOE recognizes that core diameter
affects efficiency. If DOE were to set a standard based on an analysis
of a motor of larger core diameter, it could potentially be eliminating
from market smaller core diameter motors. However, because core
diameter is not a standardized dimension across all small electric
motors, DOE has chosen to address this issue in the engineering
analysis. As discussed in section IV.C DOE based its representative
unit and scaling analyses on what it perceived as the greatest
dimensionally constrained motors on the market for each product class.
By doing this, DOE ensures that all existing consumer utility in the
marketplace of smaller core diameter motors is maintained with energy
conservation standards.
Chapter 3 of the TSD accompanying today's notice provides
additional detail on the product classes defined for the standards
proposed in this final rule, and Table IV.2 through Table IV.4 below
enumerate these product classes. For the final rule, DOE considers 62
product classes.
Table IV.2--Product Classes for Polyphase Motors With an Open Construction
----------------------------------------------------------------------------------------------------------------
Motor horsepower/standard
kilowatt equivalent Six poles Four poles Two poles
----------------------------------------------------------------------------------------------------------------
\1/4\ hp/0.18 kW................. PC 1............ PC 2........... PC 3.
\1/3\ hp/0.25 kW................. PC 4............ PC 5........... PC 6.
\1/2\ hp/0.37 kW................. PC 7............ PC 8........... PC 9.
\3/4\ hp/0.55 kW................. PC 10........... PC 11.......... PC 12.
1 hp/0.75 kW..................... PC 13........... PC 14.......... PC 15.
1\1/2\ hp/1.1 kW................. PC 16........... PC 17.......... PC 18.
2 hp/1.5 kW...................... ......................... PC 19.......... PC 20.
[[Page 10887]]
3 hp/2.2 kW...................... ......................... PC 21.......... PC 22.
----------------------------------------------------------------------------------------------------------------
Table IV.3--Product Classes for Capacitor-Start Induction-Run Motors With an Open Construction
----------------------------------------------------------------------------------------------------------------
Motor horsepower/standard
kilowatt equivalent Six poles Four poles Two poles
----------------------------------------------------------------------------------------------------------------
\1/4\ hp/0.18 kW................. PC 23........... PC 24.......... PC 25.
\1/3\ hp/0.25 kW................. PC 26........... PC 27.......... PC 28.
\1/2\ hp/0.37 kW................. PC 29........... PC 30.......... PC 31.
\3/4\ hp/0.55 kW................. PC 32........... PC 33.......... PC 34.
1 hp/0.75 kW..................... PC 35........... PC 36.......... PC 37.
1\1/2\ hp/1.1 kW................. ......................... PC 38.......... PC 39.
2 hp/1.5 kW...................... ......................... PC 40.......... PC 41.
3 hp/2.2 kW...................... ......................... ........................ PC 42.
----------------------------------------------------------------------------------------------------------------
Table IV.4--Product Classes for Capacitor-Start Capacitor-Run Motors With an Open Construction
----------------------------------------------------------------------------------------------------------------
Motor horsepower/standard
kilowatt equivalent Six poles Four poles Two poles
----------------------------------------------------------------------------------------------------------------
\1/4\ hp/0.18 kW................. PC 43........... PC 44.......... PC 45.
\1/3\ hp/0.25 kW................. PC 46........... PC 47.......... PC 48.
\1/2\ hp/0.37 kW................. PC 49........... PC 50.......... PC 51.
\3/4\ hp/0.55 kW................. PC 52........... PC 53.......... PC 54.
1 hp/0.75 kW..................... PC 55........... PC 56.......... PC 57.
1\1/2\ hp/1.1 kW................. ......................... PC 58.......... PC 59.
2 hp/1.5 kW...................... ......................... PC 60.......... PC 61.
3 hp/2.2 kW...................... ......................... ........................ PC 62.
----------------------------------------------------------------------------------------------------------------
B. Screening Analysis
The purpose of the screening analysis is to evaluate the technology
options identified as having the potential to improve the efficiency of
equipment, to determine which technologies to consider further and
which to screen out. DOE consulted with industry, technical experts,
and other interested parties to develop a list of technologies for
consideration. DOE then applied the following four screening criteria
to determine which design options are suitable for further
consideration in a standards rulemaking:
1. Technological feasibility. DOE considers technologies
incorporated in commercial products or in working prototypes to be
technologically feasible.
2. Practicability to manufacture, install, and service. If mass
production and reliable installation and servicing of a technology in
commercial products could be achieved on the scale necessary to serve
the relevant market at the time the standard comes into effect, then
DOE considers that technology practicable to manufacture, install, and
service.
3. Adverse impacts on product utility or product availability. If
DOE determines a technology would have a significant adverse impact on
the utility of the product to significant subgroups of consumers, or
would result in the unavailability of any covered product type with
performance characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as products
generally available in the United States at the time, it will not
consider this technology further.
4. Adverse impacts on health or safety. If DOE determines that a
technology will have significant adverse impacts on health or safety,
it will not consider this technology further.
See 10 CFR part 430, subpart C, appendix A, (4)(a)(4) and (5)(b).
DOE identified the following technology options that could improve
the efficiency of small electric motors: Utilizing a copper die-cast
rotor, reducing skew on the rotor stack (i.e. straightening the rotor
conductor bars), increasing the cross-sectional area of rotor conductor
bars, increasing the end ring size, changing the copper wire gauge used
in the stator, manipulating the stator slot size, changing capacitor
ratings, decreasing the air gap between the rotor and stator, improving
the grades of electrical steel, using thinner steel laminations,
annealing steel laminations, adding stack length, using high efficiency
steel lamination materials, using plastic bonded iron powder (PBIP),
installing better ball bearings and lubricant, and installing a more
efficient cooling system. For a description of how each of these
technology options improves small electric motor efficiency see TSD
chapter 3. For the NOPR, DOE screened out two of these technology
options: PBIP and decreasing the air gap below .0125 inch. DOE received
no comments regarding these two technology options and therefore
maintains its exclusion of these technology options in today's final
rule. However, DOE did receive comments concerning the availability of
premium electrical steels (such as Hiperco) and copper rotors, two
design options that it did not screen out in the NOPR. Please see
section IV.I for a discussion of those issues.
DOE believes that all of the efficiency levels discussed in today's
notice are technologically feasible. The technologies that DOE examined
have been used (or are being used) in commercially available equipment
or working prototypes. These technologies all incorporate materials and
components that are commercially available in today's supply markets
for the motors that are the subject of this final rule.
C. Engineering Analysis
The engineering analysis develops cost-efficiency relationships to
show the manufacturing costs of achieving increased energy efficiency.
As discussed in the NOPR, to conduct the
[[Page 10888]]
engineering analysis, DOE used a combined design-option and efficiency
level approach in which it employed a motor design software technical
expert to develop motor designs at several efficiency levels for each
analyzed product class. Based on these simulated designs and
manufacturer and component supplier data, DOE calculated manufacturing
costs and selling prices associated with each efficiency level. DOE
decided on this approach after receiving insufficient response to its
request for the manufacturer data needed to execute an efficiency-level
approach for the preliminary analyses. The design-option approach
allowed DOE to make its engineering analysis methodologies,
assumptions, and results publicly available in the NOPR, thereby
permitting all interested parties the opportunity to review and comment
on this information. The design options considered in the engineering
analysis include: Copper die-cast rotor, reduced skew on the rotor
stack, increased cross-sectional area of rotor conductor bars, increase
end-ring size, changing the gauge of copper wire in the stator,
manipulating stator slot size, decreased air gap between rotor and
stator to .0125 inch, improved grades of electrical steel, use thinner
steel laminations, annealed steel laminations, increased stack height,
modified capacitors ratings, improved ball bearings and lubricant, and
more efficient cooling systems. Chapter 5 of the TSD contains a
detailed description of the engineering analysis methodology and
chapter 3 of the TSD contains a detailed description of how the design
options listed above increase motor efficiency.
1. Product Classes Analyzed
As discussed in section IV.A.2 of this notice, DOE is establishing
a total of 62 product classes for small electric motors, based on the
motor category (polyphase, CSIR, or CSCR), horsepower rating, and pole
configuration. DOE carefully selected certain product classes to
analyze, and then scaled its analytical findings for those
representative product classes to other product classes that were not
directly analyzed. Further discussion of DOE's scaling methodology is
presented in section IV.C.5
For the NOPR, DOE analyzed three representative product classes:
(1) 1-horsepower, four-pole, polyphase motor, (2) \1/2\-horsepower,
four-pole, CSIR motors, and (3) \3/4\-horsepower, four-pole, CSCR
motor. By choosing these three product classes, DOE ensured that each
motor category (polyphase, CSIR, and CSCR) was represented. DOE
achieved this by selecting horsepower ratings for each motor category
that are commonly available from most manufacturers, thus increasing
the quantity of available data on which to base the analysis. Finally,
DOE chose four-pole motors for each motor category, consistent with
NEMA-provided shipments data (see TSD chapter 9), which indicated that
these motors had the highest shipment volume in 2007. See TSD chapter 5
for additional detail on the product classes analyzed.
In response to the NOPR, Baldor and NEMA commented that the product
class selected for polyphase motors was inappropriate. They asserted
that according to NEMA's standard ratings in MG1-1987, a 1-horsepower,
four-pole, polyphase motor would not be considered a small motor or
NEMA general purpose small motor, and therefore falls out of the scope
of this rulemaking. (Baldor, Public Meeting Transcript, No. 20.4 at pp.
62-63; NEMA, No. 24 at p. 7) However, as discussed in section IV.A.1,
DOE disagrees with Baldor and NEMA's interpretation of scope, and in
this final rule, DOE is including small electric motors with horsepower
ratings ranging from \1/4\- to 3-horsepower and pole configurations of
two, four, and six poles. In consideration of this scope, DOE believes
that the representative product classes selected in the NOPR
engineering analysis are appropriate and is continuing to use these
same representative product classes in today's final rule.
2. Baseline Models
The engineering analysis DOE conducted calculates the incremental
costs for equipment with efficiency levels above the baseline in each
product class analyzed. For the NOPR analysis, DOE established the
baseline motor efficiency and design for the three representative
product classes by purchasing what it believed to be the lowest
efficiency motors on the market for each of these classes. To select
these baseline motors, DOE interviewed manufacturers and used catalog
data on motor efficiency and physical dimensions. DOE recognizes that
motors with smaller core diameters, may be unable to achieve
efficiencies as high as those with larger core diameters. In order to
preserve the availability of these smaller core diameter motors, DOE
selected baselines which it believed represented the most dimensionally
constrained, in terms of core diameter, and least efficient motors
currently available on the market.
After purchasing the three baseline small electric motors, DOE
tested the motors according to the appropriate IEEE test procedures (as
dictated by DOE's small electric motor test procedure discussed in
section III.A). After performing the appropriate test procedures, DOE
then tore down each baseline motor to obtain internal dimensions,
copper wire gauges, steel grade, and any other pertinent design
information. Those parameters and tests were then used as inputs into
the design software, allowing DOE to model the motor and calibrate its
software to the tested efficiencies. All subsequent higher-efficiency
motor designs employed the design options discussed earlier to model
incremental improvements in efficiency and increases in cost over the
baseline.
a. Baseline Efficiencies
At the NOPR public meeting, DOE received several comments regarding
the validity of the baseline motor efficiencies used in the engineering
analysis. Emerson Motor Company pointed out that it is common to see a
spread in efficiencies within a population of motors of a particular
design. Emerson questioned if an analysis was conducted to determine if
the baseline polyphase motor chosen and tested had an efficiency value
that was at the high-end, low-end, or near the average compared to the
population of motors of that model type. (Emerson, Public Meeting
Transcript, No. 20.4 at pp. 73-75) Similarly, Baldor and NEMA noted
that the baseline polyphase motor's tested efficiency (77 percent)
varied significantly from the catalog efficiency (74 percent). They
commented that using 77 percent as the efficiency of the baseline motor
in the engineering analysis assumed that a single tested value of
efficiency is equal to the true arithmetic mean of the full-load
efficiencies of the population of motors. They argued that given the
distribution of efficiencies commonly seen across a population of
motors, due in part to factors such as manufacturing variability, this
would be an inappropriate assumption. In addition, they also cited the
electric motor compliance provisions (in 10 CFR 431.17) for support.
These provisions state that the lowest full-load efficiency in a sample
can differ from the nominal full load efficiency by as much as 15
percent due to variations in losses attributable to variability in
manufacturing and testing facilities. Baldor and NEMA asserted that
similar conditions should be expected for small motors. Baldor and NEMA
recommended that absent any other
[[Page 10889]]
data, DOE should use the manufacturer-rated catalog efficiency of the
polyphase motor (74 percent) as the baseline efficiency. (Baldor,
Public Meeting Transcript, No. 20.4 at pp. 120-121, 125; NEMA, No. 24
at p. 11, 13)
DOE agrees that it is possible that one tested efficiency value
does not represent the average efficiency over a population of motors.
Inconsistencies in motor laminations and processing during
manufacturing can result in motors of a single design having a
distribution of efficiencies, most commonly seen as variability in core
and stray load losses. However, as manufacturers were not required to
report its catalog efficiencies for these motors based on the results
of the DOE test procedures, DOE does not agree with NEMA's assertion
that catalog efficiencies should be used as the baseline efficiencies.
In consideration of the comments received, DOE conducted additional
testing to validate the polyphase baseline efficiency. DOE tested five
additional polyphase motors (for a total of six tests, exceeding the
minimum five required by the DOE sampling requirements for electric
motors in 10 CFR 431.17) of the same baseline model, purchased from
five separate warehouses in order to ensure the maximum variability in
production. DOE then used the average of the six tests as the baseline
efficiency for the polyphase motor. For the single-phase baseline
motors, because the tested values did not deviate significantly from
the catalog efficiency values and as DOE did not receive specific
comments opposing these values, DOE used the single-tested efficiency
values as the baseline efficiencies.
Because DOE modified the efficiencies of the baseline designs
relative to that which was calculated in the motor design software, DOE
felt it necessary to evaluate whether the efficiencies of the higher
efficiency designs modeled in the software would also change. As stated
earlier, DOE calibrated its software model to the NOPR tested
efficiencies of the baseline models, and all subsequent higher
efficiency motor designs were generated as incremental efficiency gains
and cost increases over this baseline design. Thus, a change in the
baseline efficiency would likely affect the efficiencies of the other
motor designs. Therefore, for this final rule, DOE shifted the baseline
modeled efficiencies to match the tested values described above.
Similarly, subsequent, more efficient designs were shifted by the same
percentage change in losses as the baseline shifts. For example, the
baseline polyphase model in the design software predicted an efficiency
of 77.7 percent. This value was decreased to the average tested
efficiency value of 75.3 percent, constituting an increase in motor
losses of roughly 14 percent. The modeled efficiencies of the more
efficient designs were then shifted down in efficiency by a 14 percent
increase in motor losses as well.
Table IV.5--Efficiency Values of Baseline Models
----------------------------------------------------------------------------------------------------------------
Polyphase 1 hp, 4 CSIR \1/2\ hp, 4 CSCR \3/4\ hp, 4
pole pole pole
----------------------------------------------------------------------------------------------------------------
Catalog Rated Efficiency (%)........................... 74.0 59.0 72.0
Software Modeled Efficiency (%)........................ 77.7 57.9 70.7
Baseline/Tested Efficiency (%)......................... \6\ 75.3 \7\ 57.9 \7\ 71.4
Shift in Losses from Modeled Values (%)................ 14 0 -3
----------------------------------------------------------------------------------------------------------------
In the NOPR, DOE stated that an accredited laboratory performed
IEEE Standard 112 Test Methods A and B and IEEE Standard 114 to find
efficiency data for its baseline models. However, at the public meeting
on December 17, 2009, Baldor commented that according to NEMA and the
National Voluntary Laboratory Accreditation Program Handbook 150-10,
accreditation is based on motor testing in accordance with IEEE
Standard 112 Test Method B only, and that it does not currently cover
testing in accordance with IEEE Standard 112 Method A or IEEE Standard
114. (Baldor, Public Meeting Transcript, No. 20.4 at pp. 114-115)
Therefore, Baldor suggested that DOE's statement about motor tests was
misleading because no accreditation exists for two of the three listed
methods. DOE clarifies its previous statement to say that a laboratory
accredited to perform IEEE Standard 112 Test Method B performed the
tests.
---------------------------------------------------------------------------
\6\ This efficiency represents the average of tests conducted on
six separate units of the same model number.
\7\ These values were incorrectly presented in the NOPR as 57.7
and 71.0 for CSIR and CSCR, respectively. These values presented in
the NOPR represent the NOPR modeled efficiencies. 74 FR 61427.
---------------------------------------------------------------------------
b. Baseline Temperature Rise
NEMA MG1 defines several temperature rise requirements for general
purpose alternating current single-speed induction motors. In the NOPR
TSD, DOE reported the modeled temperature rise characteristics of the
baseline motors selected in the engineering analysis. In response to
those values, Baldor reasoned that because the reported temperature
rises (78 [deg]C for the polyphase motor and 86 [deg]C for the CSIR
motor at full load) would far exceed the NEMA temperature rise limit of
70 [deg]C at service factor load, for a Class A motor, the selected
baseline motors were inappropriate selections. (Baldor, Public Meeting
Transcript, No. 20.4 at pp. 27-30) After receiving Baldor's comments,
DOE reviewed the data from thermal tests conducted on the purchased
baseline motors and found that the winding temperature tests indicated
that all three baseline motors in fact meet NEMA temperature rise
requirements for Class A insulation systems. See chapter 5 of the TSD
for the tested temperature rise data for each baseline motor. However,
because the modeled temperature rises in the design software were
inconsistent with these tests, DOE revised the operating temperature
inputs to the design software to agree with the tested temperature rise
data. This change in operating temperature results in slight changes in
the baseline modeled efficiencies. Namely as operating temperature
decreases, motor efficiency generally increases. Though these motors
meet temperature rise requirements for Class A insulation systems, DOE
emphasizes again, that its scope of coverage is not bound to those
motors with temperature rises of less than Class A requirements, but
rather motors that contain insulation class systems rated A or higher.
c. Baseline Motor Performance
In the NOPR TSD, DOE presented the modeled performance
characteristics for the baseline motors selected. Baldor and NEMA both
commented that none of the baseline motors meet all of the general
purpose performance characteristics for locked-rotor torque, locked-
rotor
[[Page 10890]]
current, and breakdown torque as defined in NEMA MG1-1987. They argued
that these motors cannot be considered small electric motors (under the
statutory definition) and therefore, should have never been chosen as
baseline motors. For polyphase motors, they cited comparisons to
performance characteristics in NEMA MG1-1987 intended for ``medium''
motors. (Baldor, Public Meeting Transcript, No. 20.4 at pp. 64-67;
NEMA, No. 24 at pp. 7-8) The NEEA/NPCC disagreed and stated that
because the performance of the motors selected by DOE were
representative of products on the market, they were appropriate
baseline models. (NEEA/NPCC, No. 27 at pp. 8-9)
DOE examined the performance characteristics of the three baseline
motors, and determined that they meet all small electric motor
performance requirements of NEMA MG1. Thus, DOE believes that they are
appropriate baseline motors and are representative of covered small
electric motors on the market. Table IV.6 below presents references to
NEMA MG1-1987 sections containing performance characteristics that DOE
believes are relevant to single-phase and polyphase small electric
motors.
Table IV.6--NEMA MG1-1987 Performance Requirements Relevant to General
Purpose Small Motors
------------------------------------------------------------------------
Single phase Polyphase
------------------------------------------------------------------------
Breakdown Torque.............. 12.32.1.......... 12.37.
Locked Rotor Current.......... 12.33.2.......... None.*
Locked Rotor Torque........... 12.32.2.......... None.
------------------------------------------------------------------------
* Because NEMA MG1-1987 section 12.35 is labeled as applying to only
medium motors, DOE does not believe there are polyphase locked rotor
current requirements for small motors. However, NEMA commented at the
preliminary analysis stage that it is common industry practice to use
the limits for Design B medium motors for small motors. (NEMA. No. 13,
p. 6).
DOE notes that in the NOPR TSD, DOE presented these performance
characteristics at full load, steady state operating temperature. When
extrapolated down to an ambient temperature of 25[deg] C, the
temperature at which NEMA specifies that breakdown torque requirements
must be met, all baseline motors meet the necessary small motor
performance requirements in MG1. A direct comparison of those values,
as requested by Baldor (Baldor, No. 25 at p. 2; Baldor, Public Meeting
Transcript, No. 20.4 at p. 66) is available in TSD chapter 5.
3. Higher Efficiency Motor Designs
After establishing baseline models, DOE next used the motor design
software to incorporate design options (generated in the market and
technology assessment and screening analysis) to increase motor
efficiency. In response to the NOPR engineering analysis, DOE received
several comments that addressed issues regarding the application of the
design options in the engineering analysis and the validity of the
results outputted from the design software.
In general, manufacturers questioned whether DOE adequately
verified that its design software accurately predicts motor efficiency.
NEMA and Baldor stated that DOE seemingly used an AEDM to generate
motor designs and scaled efficiencies for other product classes without
meeting DOE's own substantiation requirements of an AEDM. Emerson
stated that in order for manufacturers to use an AEDM for compliance
and certification with energy conservation standards, DOE requires that
the AEDM must be applied to 5 basic models of small electric motors,
and it be shown to accurately predict motor efficiency under real-world
testing. Collectively, this constitutes a total of 25 tests
manufacturers must complete in order to verify their design software.
(Emerson, Public Meeting Transcript, No. 20.4 at p. 105) Baldor and
NEMA contended that DOE must be held to these same verification
standards if it uses an AEDM in establishing energy conservation
standards. (Baldor, Public Meeting Transcript, No. 20.4 at pp. 118-24,
145-146; NEMA, No. 24 at p. 11-12)
NEEA/NPCC disagreed with these comments, stating that requirements
of certification and compliance with Federal efficiency regulations are
wholly unrelated and inapplicable to DOE's analysis methodology. The
motor design software used in the engineering analysis was simply being
used to create motor models for analysis, not as an alternative
compliance tool. Thus, DOE is under no obligation to meet the
verification standards of an AEDM. NEEA/NPCC stated that based on the
description of the design software, the technical qualifications of the
consultants, and the motor testing and teardowns conducted to verify
the accuracy of software tools, it has satisfied with DOE's engineering
analysis methodology. (NEEA/NPCC, No. 27 at pp 6-7).
DOE agrees with NEEA/NPCC that substantiation of an AEDM is a
concept intended for certifying compliance with energy efficiency
standards. It is a tool for manufacturers to use to help ensure that
equipment they manufacture comply with the standards that DOE sets. It
is not a tool for assessing whether a particular energy efficiency
level under consideration by DOE satisfies the EPCA criteria.
Accordingly, the use of the AEDM in the manner suggested by industry
would not be relevant for the purposes of this engineering analysis,
which is geared toward DOE's standards rulemaking.
Moreover, on the bases of the baseline motor efficiency
verification process which included physical teardowns for numerous
small motors, DOE has confidence in the software program it has
selected and believes it to be appropriate to analyze efficiency levels
for small electric motors.\8\ Though the supporting data for these
tests are based on confidential manufacturer data, the performances of
these motors verify the software predictions.
---------------------------------------------------------------------------
\8\ DOE notes that the software used for its analysis has been
employed by numerous motor manufacturers to develop designs that
have then been used to produce lines of motors, including capacitor-
start and polyphase motors.
---------------------------------------------------------------------------
In addition, as discussed in the NOPR, to the extent that it was
feasible, DOE substantiated the resulting cost-efficiency curves by
testing and tearing down higher efficiency motors. In response to that
NOPR discussion, NEMA asserted that as seen in Table 12.1 and Table
12.2 in appendix 5A of the NOPR, DOE did not compare the test results
to the calculated results for the representative product classes.
(NEMA, No. 24 at p. 24) DOE wishes to clarify that Table 12.1 and Table
12.2 in appendix 5A of the NOPR TSD contained test results for motors
that were used as part of DOE's scaling methodology. The results of the
cost-efficiency curve validation testing for representative product
classes are shown in Figure 4.1 through Figure 4.3 of appendix 5A of
the NOPR and final rule TSDs.
[[Page 10891]]
a. Electrical Steel
In the NOPR engineering analysis, DOE modeled the use improved
grades of electrical steel and thinner laminations to achieve higher
motor efficiency. In response to that analysis Baldor and NEMA
commented that because DOE's design software bases loss calculations on
Epstein core loss values, they believe DOE's modeled efficiencies using
improved steel types may overestimate the actual achievable efficiency
for a particular motor design. Baldor cited its experience with
building and testing multiple motors using various steel types, stating
that it has never been shown that the core loss in a motor with round
laminations and rotating flux field is directly related to the results
of Epstein testing. (Baldor, Public Meeting Transcript, No. 20.4 at pp.
276-80, Baldor, No. 25 at pp. 5-7; NEMA, No. 24 at pp. 23-24) As a
result, Baldor asserted that DOE should not rely on steel manufacturer
core loss data unless it is able to produce an actual motor to verify
its design assumptions. (Baldor, Public Meeting Transcript, No. 20.4 at
p. 277) NEEA/NPCC encouraged DOE to investigate the claims made by
Baldor at the public meeting and revise the engineering analysis if
necessary. (NEEA/NPCC, No. 27 at pp. 9-10)
DOE recognizes that in analyzing motor performance, calculated core
losses based on Epstein tests may deviate from actual core losses in
the motor.\9\ This is primarily due to the harmonic effects created by
the distortion of the flux density waveform. When motor core losses are
modeled or measured at solely the fundamental frequency, it is possible
that additional losses due to these harmonics may not be accounted for,
which may yield an overall underestimation of losses. While DOE
acknowledges that this phenomenon exists, DOE also believes it has
accounted for this effect in its analysis.
---------------------------------------------------------------------------
\9\ Epstein tests are performed by steel manufacturers to
determine expected core loss values in electrical steel. The results
of these tests are usually provided by steel manufacturers and are
used by motor design engineers to predict motor performance.
---------------------------------------------------------------------------
As Baldor suggests, one way to ensure that a software model is
calibrated correctly to account for effects such as these is to build
prototype motors and examine their performance characteristics. Though
DOE did not perform such an exercise specifically for this rulemaking,
the design software DOE employed for this analysis has been used in the
past to design many small motors, whose performance characteristics
compare favorably with the model predictions. Baldor did not provide
any additional data from which DOE could refine its analysis or perform
sensitivity analyses, even though it stated the values of core loss
used in DOE's software model were inaccurate.
DOE believes that the variances between Epstein losses and actual
motor losses are not an issue for its engineering analysis. It is DOE's
understanding that the Epstein core loss data begin to vary
significantly from actual motor core losses when various components of
the core steel are driven into magnetic saturation. Magnetic saturation
is when the amplitude of the magnetic field excitation is large enough
to force the flux density (of the magnetic field) into the nonlinear
region of the B-H curve. At this point the harmonic components of the
electromagnetic field increase.\10\ As these harmonic components
increase, motor efficiency may be adversely affected and predicted core
losses from the Epstein tests will deviate from actual core losses seen
in the motor. In order to assess the degree to which these harmonic
effects may impact the efficiency of motors analyzed in the engineering
analysis, DOE examined the magnetic flux densities at full-load for
each motor design. By using steel manufacturer-provided magnetization
curves, DOE first determined the saturation point for each of the
lamination types. DOE then evaluated each of its motor designs to
determine whether it operates near magnetic saturation. The results of
this analysis indicated that only two motor designs, the CSIR baseline
design and the polyphase efficiency level (EL) 1 design, operate close
to the point of magnetic saturation at full load. Based on these
results, DOE believes that for all other motor designs, reliance on the
Epstein core loss data is appropriate to model motor efficiency.
---------------------------------------------------------------------------
\10\ Yamazaki, Katsumi; Watanabe, Yuta. ``Stray Load Loss
Calculation of Induction Motors Using Electromagnetic Field
Analysis.'' IEEJ Transactions on Industry Applications, Volume 128,
Issue 1, pp. 56-63.
---------------------------------------------------------------------------
DOE recognizes that for motors designs operating near the point of
magnetic saturation (i.e., CSIR baseline and polyphase EL 1 designs),
the modeled efficiency might deviate from a tested efficiency if a
prototype were built. With regards to the CSIR baseline design, DOE
notes that, as discussed in section IV.C.2.a, the efficiency associated
with that design was based on a tested efficiency, rather than a
modeled efficiency. Therefore, the baseline efficiency for the CSIR
motor should adequately account for any harmonic core loss effects. For
the polyphase EL 1 design, DOE recognizes that there may be significant
uncertainty in its modeled efficiency. However, as discussed in section
VI DOE has found that an efficiency level higher than EL 1 is
technologically feasible and economically justified based on the net
benefits to the nation and individual consumers. Therefore, DOE's
standards-setting decisions in this final rule are not dependent on any
uncertainties associated with the polyphase EL1 motor design. Please
refer to TSD chapter 5 for additional information regarding the steels
used in DOE engineering analysis, their respective saturation levels,
and the flux densities of the designs using those steels.
Baldor also questioned the validity of using several higher
efficiency steel types in small motors, citing an AK steel publication.
Baldor commented that several of the lamination types modeled, namely
24M19 and 29M15, are not recommended for use in motors with less than a
100 horsepower rating. (Baldor, No. 25 at p. 7) DOE has reviewed the
referenced AK Steel publication \11\ and disagrees with Baldor's
assertion. The AK Steel publication does not suggest that 24M19 and
29M15 steels should not be used in motors with less than a 100
horsepower rating; rather it only indicates that small electric motors
currently on the market do not typically use these steel grades. In
addition, DOE has not received any comments explaining why these
lamination types, commonly used in medium motors, would not be
applicable to small electric motors. Therefore, in this final rule, DOE
continues to use higher efficiency steel grades and thinner laminations
in the engineering analysis.
---------------------------------------------------------------------------
\11\ AK Steel Product Data Bulletin. Nonoriented Electrical
Steels. http://www.aksteel.com/pdf/markets_products/electrical/Non_Oriented_Bulletin.pdf.
---------------------------------------------------------------------------
b. Thermal Analysis
NEMA and Baldor also questioned whether a thermal analysis was
conducted for the higher efficiency motors modeled, stating the
importance of verifying the thermal viability of motor designs. (NEMA,
No. 24 at pp. 6-7, Baldor, Public Meeting Transcript, No. 20.4 at pp.
28-29) Emerson commented that the NOPR analysis disregarded MG1
performance requirements, including operating temperatures, potentially
cause conflicts with the National Electrical Code. (Emerson, No. 28, p.
2) In response to these comments, DOE has refined its thermal analysis
methodology to ensure that it is accurately modeling motor efficiency
and that all motor designs
[[Page 10892]]
evaluated are thermally viable. As mentioned in section IV.C.2.b, to
establish the baseline motors' operating temperatures, DOE conducted
tests in accordance with the relevant IEEE test procedures and
monitored the temperature rises of the motors. DOE was then able to
calculate a thermal resistance for each of the baseline motors. The
thermal resistance of each subsequent design was modified to reflect
the improved thermal transfer of the more efficient design. As each
higher efficiency design was modeled, DOE calculated a new temperature
rise. These calculations indicate that as motor efficiency increases
(through an increase in the amount of active material and decrease in
I\2\R losses \12\), the temperature rise of the motor continually
decreases. For this reason, DOE believes that all higher efficiency
motor designs analyzed in the engineering analysis have lower
temperature rises than their respective baseline motors and are
thermally viable. See TSD chapter 5 for additional information
regarding the actual temperature rises calculated for each of DOE's
designs.
---------------------------------------------------------------------------
\12\ I\2\R losses refer to resistive losses, stemming from
current flow through the copper windings in the stator and conductor
bars in the rotor and manifest as waste heat which adversely affects
the efficiency of a motor.
---------------------------------------------------------------------------
c. Performance Requirements
As discussed in section IV.C.2.c, NEMA, through its MG1
publication, lays out a number of performance requirements (breakdown
torque, locked rotor torque, and locked rotor current) that motors must
meet in order to be considered ``general purpose.'' In response to the
small electric motor designs presented in the NOPR, manufacturers
commented that some of DOE's more efficient designs do not meet certain
performance requirements. Emerson added that many of the design changes
that would be necessary to meet these requirements, such as increasing
resistance at locked rotor or increasing the number of turns of the
stator coils, could actually decrease efficiency. (Baldor, No. 25 at p.
4; Baldor, Public Meeting Transcript, No. 20.4 at pp. 67, 86-87;
Baldor, No. 25 at pp. 1-3; Emerson, Public Meeting Transcript, No. 20.
4 at pp. 192-93; Emerson, No. 28, p. 1) Emerson also noted that the
costs for the designs might increase when the motors are adjusted to
meet these performance characteristics. (Emerson, Public Meeting
Transcript, No. 73) In light of these comments, DOE revisited its
engineering designs and found that when new performance values were
calculated at operating temperatures of 25 [deg]C (as was done for the
baseline designs), the vast majority of motors met applicable NEMA
standards. For the motors that did not meet breakdown torque, locked
rotor torque, or locked rotor current requirements (as presented in TSD
Chapter 5), DOE revised these designs such that they adhered to all
performance requirements. DOE notes that in some cases, as predicted by
manufacturers, the design revisions led to increases in costs to
maintain the same level of efficiency. See Chapter 5 of the TSD for
further details on the performance characteristics of motor designs
analyzed in the engineering analysis and comparisons to NEMA
performance requirements.
Baldor also noted that many small electric motors are rated in a
broad voltage range (208V to 230V) and asserted (without clarifying)
that the NEMA standard specifies these motors must be able to meet NEMA
performance requirements over the entire voltage range. Baldor
questioned whether DOE's proposed efficiency levels are achievable when
motors are operated across this entire voltage range (specifically at
208V). (Baldor, Public Meeting Transcript, No. 20.4 at pp. 271-72) As
indicated by Emerson (Emerson, Public Meeting Transcript, No. 20.4 at
pp. 273-74), it is DOE's understanding the 208V rating constitutes an
unusual service condition. Thus, DOE's engineering analysis was based
on motor operation at 230V.
DOE notes that although the NEMA standard may require that certain
performance characteristics (such as breakdown torque) be met through
the entire rated voltage range, there is no such requirement for
Federal efficiency standards. In fact, DOE's test procedures for small
electric motors, IEEE 112 (Section 6.1) and IEEE 114 (Section 8.2.1)
state that efficiency shall be determined at the rated voltage, without
specifying which voltage shall be used in cases where motors are rated
with broad voltages or dual voltages. DOE understands that it is at the
manufacturer's discretion under which single voltage condition to test
its motor. Because the test procedure outputs an efficiency value at a
single input voltage, DOE did not conduct an additional analysis at
208V.
Baldor and NEMA stated that MG1 has additional requirements for
small electric motors such as voltage unbalance, variation from rated
speed, occasional excess current, stall time, overspeed, and sound
quality. (Baldor, No. 25 at p. 3; NEMA, No. 24 at p. 9) In examining
the variation from rated speed requirements, DOE notes that these are
only applicable to medium motors, and thus not relevant to DOE's small
electric motor designs. With regard to the other specifications, DOE
believes that because it purchased the baseline motors from NEMA
manufacturers, it is reasonable to assume that the motors meet NEMA MG1
requirements.
In addition DOE has evaluated each of its motor designs and
believes for the following reasons that because the baseline motors
likely meet all specifications, then the higher efficiency motors are
expected to meet them as well. Specifically, whether a motor is able to
meet voltage unbalance, excess current, and stall time requirements is
often related to whether a motor overheats at those specified
conditions. As the I\2\R losses in higher efficiency motors modeled are
generally lower than that of the baseline motors (thus, resulting in a
lower temperature rise), DOE believes that overheating effects will not
be exacerbated with higher efficiency.
For the overspeed requirement, DOE understands that there are
several mechanical failure modes that may cause the motor to be unable
to withstand speeds above the rated speed. Two primary reasons are the
failure of the motor bearings and the potential for the motor shaft to
bend, causing the rotor and stator to contact. In addition, DOE
understands this issue to be more problematic for medium motors (with
larger inertia) than small motors. Finally, for sound quality,
decreased current and magnetic flux densities in higher efficiency
motors will likely cause the magnitude of the torque pulsations of the
motor to decrease during running conditions, reducing noise. The added
mass of higher efficiency motors also serves as a dampener to reduce
motor vibrations and noise. Given all of these reasons, DOE believes
that all motor designs analyzed in the engineering analysis meet the
additional performance requirements identified by the commenters.
DOE also received comments at the public meeting regarding the
power factor associated with its designs. Baldor commented that during
the preliminary analysis stage of the rulemaking some parties preferred
that the power factor levels be above 85 percent, but that DOE's
analyses utilized a power factor around 71 to 73 percent for polyphase
motors. (Baldor, Public Meeting Transcript, No. 20.4 at pp. 275-76) As
discussed in the NOPR, DOE understands that sacrificing power factor to
obtain gains in efficiency is counterproductive because of the
[[Page 10893]]
negative effects on line efficiency. 74 FR 61429 For this reason, DOE
maintained or increased the power factor of the baseline motor for each
more efficient design. While power factor is generally considered when
evaluating the potential benefits related to a particular efficiency
level, it is not a design option that necessarily improves the energy
efficiency of small electric motors. Increasing power factor could
yield results that reduce the energy efficiency of individual units or
impose higher costs without an increase in energy efficiency. For this
reason, DOE opted not to require its designs to have an 85 percent
power factor in its design analysis.
d. Stray Load Loss
In the NOPR, DOE presented values of stray load loss that were
modeled in the design software for the baseline and higher efficiency
motor designs. The polyphase designs had a value of 2.4 percent for
stray load loss, while the CSIR and CSCR designs had a value of 1.8
percent. In response to the NOPR, DOE received several comments
regarding the stray load loss values used in its designs. Baldor
commented that in the absence of a tested stray load loss value, the
IEEE Standard 112 Test Method A (which is referenced as the DOE test
procedure for polyphase motors of 1-horsepower or lower) indicates that
a value of 1.8 percent should be used. As a result, Baldor questioned
the source of DOE's polyphase motor stray load loss value. Baldor was
concerned that DOE actually performed IEEE Standard 112 Test Method B,
which calculates stray load loss but may yield a different tested
efficiency value than Test Method A. In Baldor's view, using Test
Method B could potentially skew the analysis. (Baldor, Public Meeting
Transcript, No. 20.4 at pp. 280-82; NEMA, No. at pp. 23-24)
Baldor and NEMA also questioned why the stray load loss value of
1.8 percent was used for the single-phase motors when the IEEE Standard
114 test procedure calls for a measurement of stray load losses.
(Baldor, Public Meeting Transcript, No. 20.4 at p. 282; NEMA, No. 24 at
p. 24) They were concerned that DOE did not follow the IEEE Standard
114 test procedure for the single-phase motors since the stray load
loss value used did not appear to be a measured value. (Baldor, Public
Meeting Transcript, No. 20.4 at p. 286) Advanced Energy supported DOE's
assumptions, commenting that even though IEEE Standard 114 calls for a
separation of losses, it also allows an assumed stray load loss value
of 1.8 percent when a measured value cannot be determined. (Advanced
Energy, Public Meeting Transcript, No. 20.4 at pp. 285-87) NEEA/NPCC
also commented that DOE's stray load loss assumptions were appropriate.
(NEEA/NPCC, No. 27 at p. 10)
To clarify, DOE tested the polyphase baseline motor according to
both the IEEE Standard 112 Method A and Method B test procedures. While
Method A is the appropriate DOE test procedure for a 1-horsepower,
four-pole small electric motor, Method B determines efficiency by
segregating motor losses. When DOE compared the results of Method A and
Method B, it found that there was no material difference between the
resulting tested efficiencies for this particular motor. Therefore, DOE
assumed that it would be most accurate to model the stray load losses
determined by IEEE Standard 112 Method B (i.e. 2.4 percent) rather than
an assumed value (i.e. 1.8 percent).
The two baseline single-phase motors were tested according to IEEE
Standard 114. As stated by Advanced Energy, the IEEE Standard 114 test
procedure provides that if stray load loss is not measured, then the
value of stray load loss at rated load may be assumed to be 1.8 percent
of the rated load, consistent with DOE's assumption for CSCR and CSIR
motors. DOE recognizes that losses can be segregated using the IEEE
Standard 114 test procedure and therefore also calculated the stray
load losses for the baseline motors. The results of these tests showed
that the stray load losses for the CSIR and CSCR baseline motors were
1.8 percent and 1.7 percent. Given the similarity to IEEE Standard 114
assumed value and NEMA's previous recommendation to use this value, DOE
believes that the use of 1.8 percent stray load loss for the single-
phase motors was appropriate and has used it again for today's final
rule.
Additionally, NEMA and Baldor questioned DOE's decision to maintain
a constant stray load loss across its designs within a representative
product class, stating that it would be unlikely that the use of
thinner electrical steels in a longer core length would have resulted
in the same level of stray load loss as in the baseline design. (NEMA,
No. 24 at p. 24; Baldor, Public Meeting Transcript, No. 20.4 at pp.
281-83) In response, DOE affirms that its assumptions of stray load
loss for higher efficiency motor designs are appropriate. DOE
recognizes that several factors, such as manufacturing process and
harmonic effects, may affect the quantity of stray load loss for a
particular motor. However, as discussed earlier, DOE has determined
that the majority of motor designs evaluated operate below the point of
magnetic saturation, thus reducing the impact of harmonic effects.
Additionally, DOE understands that it is common practice for motor
design engineers to assume a value of stray load loss either based on
experience or as recommended by IEEE test procedures when creating new,
potentially more efficient, motor designs. Finally, DOE also notes that
both the polyphase and single-phase IEEE test procedures provide
precedent for the assumption of constant stray load losses across
several motor designs.
e. Stack Length and Core Diameter
In the NOPR, DOE considered an increase in stack length as a viable
option for increasing motor efficiency. DOE recognized, however, that
limitations for certain motor applications exist because an increase in
stack length may cause the motor to exceed the space constraints of the
application into which it would reside. Thus, DOE followed a suggestion
made by NEMA during the preliminary analysis stage and limited the
stack length increases for space-constrained applications to no more
than a 20 percent increase over the baseline motor. (NEMA, No. 13, at
p. 4) For applications that DOE considered non-space constrained, the
stack length of the motor was allowed to increase by up to 100 percent
of the stack length of the baseline motor (i.e. it could double).
In response to the NOPR analysis, several interested parties
commented on DOE's assumptions of space constraints and stack length
increases. WEG questioned if the 20 percent increase in stack length
for space constrained applications is an appropriate tolerance. (WEG,
Public Meeting Transcript, No. 20.4 at p. 83) A.O. Smith commented that
doubling the stack length in non-space constrained applications will be
somewhat impractical for customers' applications. (A.O. Smith, Public
Meeting Transcript, No. 20.4 at p. 81).
In response to the manufacturers' comments, DOE maintains that the
20 percent increase in stack length for space-constrained applications
that was used in the NOPR is still an acceptable tolerance. DOE notes
that NEMA reiterated its support for this design constraint in its
comments responding to the NOPR, by citing its recommendation from the
preliminary analysis. (NEMA, No. 24 at p. 9) Regarding doubling the
stack length of the motor, DOE also believes this is an appropriate
tolerance for non-space constrained applications. When DOE solicited
engineering cost-efficiency
[[Page 10894]]
curves from manufacturers for the preliminary analysis, all
participating manufacturers suggested that increasing stack height
would be one of the first design options used to achieve greater
efficiencies because of the relative cost of this design option versus
a change in steel type lamination. In designs provided by all of these
manufacturers, stack increases of well over 100 percent relative to the
baseline were used to achieve target efficiency levels that DOE
provided to manufacturers. Accordingly, DOE believes that for those
applications that are non-space constrained, a stack increase of 100
percent is an appropriate and even a likely design option that
manufacturers could employ. DOE accounts for the costs associated with
increasing a motor's stack length in markups analysis (see section
IV.D).
Emerson also commented that the NOPR efficiency levels would
require several motors to increase in frame size. (Emerson, No. 28 at
p.1) However, DOE disagrees with Emerson's comments and notes that for
all higher efficiency designs developed in the engineering analysis,
core diameter was held constant to the baseline value. As only an
increase in core diameter would force a frame size increase, DOE
believes that all efficiency levels analyzed can be achieved without
increasing frame size.
4. Cost Model
For the NOPR engineering analysis, DOE estimated the manufacturing
production cost (MPC) of small electric motors by using outputs of the
design software to generate a complete bill of materials. The bill of
materials was marked up to account for scrap, overhead (which includes
depreciation) and associated non-production costs such as interest
payments, research and development, and sales and general
administration. To account for the increased depreciation of equipment
associated with manufacturing a copper rotor, DOE used separate
overhead markups for motor designs using copper and aluminum rotors.
The software output also included an estimate of labor time associated
with each step of motor construction. DOE multiplied these estimates by
a fully burdened labor rate to obtain an estimate of labor costs.
DOE estimated input costs by using an inflation-adjusted 5-year
average of prices for each of the input commodities: Steel laminations,
copper wiring, and aluminum and copper for rotor die-casting. This
method for calculating costs is consistent with past rulemakings where
material costs were a significant part of manufacturers' costs. In
calculating the 5-year average prices for these commodities, DOE
adjusted historical prices to 2008 terms using the historical Producer
Price Index (PPI) for that commodity's industry. For this final rule,
DOE updated material prices using the PPI to reflect 2009$. After
calculating the MPC, DOE applied a 1.45 manufacturer markup to arrive
at the MSP.
Emerson commented that it was concerned that DOE had not
appropriately accounted for the significant costs associated with
implementing the technology to manufacture motors with copper die-cast
rotors in the engineering analysis. (Emerson, Public Meeting
Transcript, No. 20.4 at p. 94) DOE recognizes that there are additional
costs associated with implementing copper die-cast rotors and has
incorporated higher depreciation costs in the Engineering Analysis for
designs requiring this technology.
With regard to the accounting of higher depreciation for equipment
used to manufacture copper die-cast rotors, NEEA/NPCC supported DOE's
approach to using different overhead markups for designs with copper
rotors and those with aluminum rotors. (NEEA/NPCC, No. 27 at p. 9) NEMA
commented that since motor manufacturers typically standardize its
production process for a product line, the higher overhead attributable
to the application of advanced technologies will be applied over all
production unless the manufacturer exits that portion of the market.
(NEMA, No. 24 at p. 9) As all comments supported the use of higher
markups when manufacturing copper rotors, DOE maintained this approach
in the engineering analysis for the final rule. See section IV.C.4 for
further details.
5. Efficiency Scaling
For the NOPR, in order to scale efficiency levels from the
representative product classes to the other product classes, DOE used
data on commercially-available motors to investigate how changing
horsepower or pole configuration affects efficiency, DOE evaluated
product lines of different manufacturers separately. In developing
these efficiency relationships, DOE considered only motors of the most
restrictive frame size for a given product class to ensure that the
most dimensionally-constrained motors on the market would be able to
meet all efficiency levels derived. DOE then converted these efficiency
relationships across product class into motor loss relationships. DOE
applied these relationships (as a percentage change in motor losses) to
each efficiency level analyzed for the representative product classes,
ultimately deriving corresponding efficiency levels for product classes
not directly analyzed in the engineering analysis. DOE repeated this
analysis for each manufacturer's product line for which sufficient data
were available. Finally, DOE averaged the results based on each of the
manufacturer's product lines to obtain aggregated scaled efficiency
levels for all product classes.
DOE received several comments on the results and methodology of the
proposed scaling analysis. While NEAA/NPCC supported DOE's scaling
methodology (NEEA/NPCC, No. 27 at p. 9), Baldor stated that the scaling
presented is likely not accurate because of the difficulty in
predicting efficiencies when changing frame sizes, horsepower, and pole
configurations. Instead, Baldor commented that DOE should create a
motor design for each non-representative product class to verify the
scaled efficiencies. (Baldor, Public Meeting Transcript, No. 20.4 at p.
97; Baldor, No. 25 at p. 8) WEG also commented that the scaling should
take into account not only the change in efficiency associated with
altering horsepower or pole configuration, but also the drop in
efficiency associated with moving from a 56-frame to a 48-frame, and
potentially a smaller core diameter. (WEG, Public Meeting Transcript,
No. 20.4 at p. 220)
In addition, with regard to the polyphase motor scaling, several
manufacturers pointed to the efficiencies at high horsepower ratings as
evidence that DOE scaling was flawed. Specifically, they remarked that
although the proposed level for the representative polyphase product
class harmonized with medium motor NEMA Premium efficiency standards,
the 3-horsepower, six-pole polyphase motor had a scaled efficiency
greater than the NEMA Premium level.\13\ They also noted that because
the comparable medium motor for that product class is built in a 213 T-
frame (larger than a 56-frame), it may be unreasonable to require a 56-
frame motor to have a higher efficiency. (A.O. Smith, No. 26 at p. 2;
Baldor, No. 25 at p. 8; Baldor, Public Meeting Transcript, No. 20.4 at
pp. 100-101, 212-213; Regal-Beloit,
[[Page 10895]]
Public Meeting Transcript, No. 20.4 at pp.105)
---------------------------------------------------------------------------
\13\ NEMA Premium refers to efficiency levels for three-digit
frame series medium electric motors developed by NEMA to identify
high efficiency motors. Congress subsequently adopted those levels
for medium electric motors. See EISA 2007, Sec. 313(b).
---------------------------------------------------------------------------
DOE agrees that the efficiency behavior at high horsepower ratings
for polyphase motors indicated a lack of accuracy in the NOPR scaling,
and has revised its analysis for the final rule. Baldor's
recommendation to generate motor designs to validate scaling
essentially constitutes developing an additional engineering analysis
for every product class, which is atypical for DOE rulemakings and
unnecessary because it defeats the purpose of using a scaling
methodology. In addition, DOE notes that in its comments on the
preliminary analysis, NEMA recommended that DOE utilize product
literature to derive efficiency levels for product classes not directly
analyzed in the engineering analysis, which was a significant reason
why DOE maintained a scaling approach based partially on publicly
available data. (NEMA, No. 13, at p. 10) Thus, DOE believes scaling is
an appropriate approach to developing efficiency levels. As interested
parties did not recommend a new methodology for scaling, DOE based it
revised scaling on the same general methodology (establishing
relationships in efficiency across horsepower ratings and pole
configurations), but utilized additional sources of data to refine its
inputs.
One new source of data DOE utilized was the NEMA recommended
standard levels for polyphase, CSIR, and CSCR motors built in small
frames (42- and 48-frames) and in 56-frames. These recommended standard
levels included efficiencies for motors with horsepower ratings less
than and equal to 1-horsepower and with two-, four-, or six-pole
configurations. (NEMA, No. 24 at p. 1) DOE first examined this data to
see how it compared to the efficiency data of motors currently on the
market. DOE noted that the efficiency relationships that NEMA presented
between product classes were comparable to the market data that DOE had
collected for the NOPR. For this reason, DOE concludes that NEMA's
recommended standard levels can be used to establish appropriate
efficiency (or loss) relationships for lower horsepower polyphase,
CSIR, and CSCR motors.
For the high horsepower (greater than or equal to 1-horsepower)
polyphase motors, DOE utilized the relationships found in the NEMA
Premium standards for electric motors. As seen in Table IV.7, the
majority of the NEMA Premium standards between 1- and 3-horsepower are
based on motors with a frame size in the 140T series, which has the
same foot to shaft dimension as the 56-frame motor. Therefore, for
these 140T series product classes, DOE used NEMA Premium efficiencies
to develop relationships across horsepower ratings and poles. DOE did
not use the efficiency relationships found from NEMA Premium classes
associated with larger frame sizes (182T). For these horsepower/pole
configurations, DOE did not have sufficient efficiency data to
determine appropriate scaling relationships. Thus, though efficiency
generally increases with horsepower, in order to ensure that all
efficiency levels are technologically feasible, DOE decided that the 3-
horsepower, four-pole motor and 1\1/2\-horsepower, two pole motor would
have the same minimum efficiency standards as the 2-horsepower, four-
pole motor and 1-horsepower, two-pole motor, respectively.
Table IV.7--Frame Sizes Associated With NEMA Premium Standards
----------------------------------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent Six poles Four poles Two poles
----------------------------------------------------------------------------------------------------------------
1 hp/0.75 kW.................................................... 56 143T 145T
1\1/2\ hp/1.1 kW................................................ 143T 145T 182T
2 hp/1.5 kW..................................................... 145T 145T ..............
3 hp/2.2 kW..................................................... 145T 182T ..............
----------------------------------------------------------------------------------------------------------------
In the absence of any standardized efficiency levels above 1-
horsepower for CSIR motors (such as those provided in the NEMA Premium
table for polyphase motors), DOE continued to use market efficiency
data. Since this approach, when used in the NOPR, resulted in some
aberrations (abnormally high efficiencies) for high horsepower
polyphase motors, DOE modified its methodology slightly for the final
rule to result in more appropriate scaling relationships. As stated
earlier, for the NOPR, because some manufacturers showed larger
increases in efficiency with increasing horsepower than others, DOE
averaged data from several manufacturer product lines to create
efficiency relationships. However, for this final rule, to ensure the
technological feasibility of all scaled efficiency levels, instead of
averaging data from all manufacturers, DOE selected the product line
which resulted in the most achievable efficiency levels.
As mentioned in the NOPR, DOE was unable to locate sufficient
market data for CSCR motors. However, DOE data indicate that CSCR
motors exhibit scaling relationships similar to CSIR motors. For these
reasons, DOE decided to continue utilizing CSIR market data to
characterize the efficiency (or loss) relationships present in the CSCR
market at high horsepower ratings.
Next, DOE addressed changes in physical dimensions of motors across
horsepower ratings and pole configurations. As discussed earlier, DOE
recognizes that core diameter affects the amount of active material
that is used to reduce motor losses, thus impacting efficiency. If DOE
were to set a standard based on an analysis of a motor of larger core
diameter, it could potentially eliminate smaller core diameter motors
from the market. Therefore, after establishing the efficiency
relationships (by using the NEMA recommended levels, the NEMA Premium
levels, and market data), DOE accounted for the fact that for some
horsepower/pole configurations, 48-frame size motors are commercially
available, while for others, only 56-frame size motors are commercially
available.
As stated by WEG at the NOPR public meeting, a reduction in frame
size (or core diameter) should accompanied by a reduction in
efficiency. To determine the appropriate efficiency reduction of
shifting from a motor with a core diameter representative of a 56-frame
to a core diameter representative of a 48-frame, DOE again utilized the
NEMA recommended efficiencies. From these efficiency values, DOE noted
that according to NEMA a shift in frame size constitutes approximately
a 20 percent change in losses. DOE applied this 20 percent reduction in
losses to product classes for which 42 frame or 48-frame motors are
commercially available. DOE intends for its loss scaling analysis to
reflect motors in the smallest commercially available frame size for
each product class.
After deriving efficiency relationships accounting for changes in
horsepower, pole configuration, and core diameter, DOE then applied
these relationships (as a percentage change in motor losses)
[[Page 10896]]
to each efficiency level of the representative product classes,
ultimately deriving corresponding efficiency levels for the non-
representative product classes.
6. Cost-Efficiency Results
The results of the engineering analysis are reported as cost-
efficiency data (or ``curves'') in the form of MSP (in dollars) versus
full-load efficiency (in percentage). These data form the basis for
subsequent analyses in the final rule. As discussed in the NOPR, DOE
developed two curves for each product class analyzed, one for the
space-constrained set of designs restricted by a 20-percent increase in
stack height and one for the non-space constrained set of designs
restricted by a 100-percent increase in stack height relative to the
baseline.
NEMA recommended efficiency levels for small electric motors that
it believed would be technologically feasible to implement by 2015.
NEMA presented six separate sets of efficiency levels, one for 56-frame
size motors in each of the three motor categories and one for 42- and
48-frame size motors in each of the three motor categories. (NEMA, No.
24 at p. 1) When DOE revised its engineering analysis, it ensured that
each of its representative units had an efficiency level that
corresponded to one of those sets of standards. For CSIR motors, NEMA
proposed an efficiency value of 72.0 percent for a 48-frame size, four-
pole \1/2\-horsepower motor. This proposal roughly corresponds to DOE's
efficiency level 4 for CSIR motors. For CSCR motors NEMA proposed an
efficiency value of 80.0 percent for a 56-frame size, four-pole, \3/4\-
horsepower motor. This proposal corresponds to DOE's efficiency level 2
for CSCR motors.
For polyphase motors, NEMA did not present an efficiency value for
the four-pole, 1-horsepower product class. In light of this, DOE
utilized its scaling model to identify the projected efficiency for the
four-pole, 1-horsepower product class according to NEMA's
recommendations for the 42- and 48-frame size motors. DOE used the 42/
48-frame size proposed levels to apply to its representative product
class because the core diameter of its baseline model is representative
of 48-frame size motors. DOE projects this efficiency value to be
approximately 82.6 percent for the representative polyphase motor. As
this efficiency lies between the designs analyzed for EL 4 and EL5, DOE
created an additional efficiency level at 82.6 percent, denoted EL 4b.
DOE developed a new space constrained and non-space constrained design
at this efficiency level that adhered to all of DOE's design
limitations.
Table IV.8 through Table IV.10 show the efficiency value and
manufacturer selling price data for each EL examined in the final rule.
Table IV.8--Efficiency and Manufacturer Selling Price Data for Polyphase
Motor
------------------------------------------------------------------------
Efficiency (%) Manufacturer selling
Efficiency level (Design 1/Design 2) price ($) (Design 1/
* Design 2) *
------------------------------------------------------------------------
Baseline.................... 75.3 98.54
EL 1........................ 77.3 104.83
EL 2........................ 78.8 108.17
EL 3........................ 80.5 114.24
EL 4........................ 81.1 118.54
EL 4b....................... 83.5/83.5 135.62/134.04
EL 5........................ 85.3/85.2 230.92/153.92
EL 6........................ 86.2/86.3 237.70/186.37
EL 7 (Max-tech)............. 87.7/87.8 1,766.06/326.18
------------------------------------------------------------------------
* Design 1 denotes the space-constrained design, and Design 2 denotes
the non-space-constrained design. If only one value is listed, then
the space-constrained design is the same as the non-space-constrained
design.
Table IV.9--Efficiency and Manufacturer Selling Price Data for Capacitor-
Start, Induction-Run Motor
------------------------------------------------------------------------
Efficiency (%) Manufacturer selling
Efficiency level (Design 1/Design 2) price ($) (Design 1/
* Design 2) *
------------------------------------------------------------------------
Baseline.................... 57.9 91.24
EL 1........................ 61.1 95.43
EL 2........................ 63.5 98.45
EL 3........................ 65.7 99.58
EL 4........................ 70.6/70.5 114.31/106.99
EL 5........................ 71.8/71.8 117.07/118.00
EL 6........................ 73.1/73.3 182.09/132.22
EL 7 (Max-tech)............. 77.6/77.7 1,200.98/151.25
------------------------------------------------------------------------
* Design 1 denotes the space-constrained design, and Design 2 denotes
the non-space-constrained design. If only one value is listed, then
the space-constrained design is the same as the non-space-constrained
design.
Table IV.10--Efficiency and Manufacturer Selling Price Data for
Capacitor-Start, Capacitor-Run Motor
------------------------------------------------------------------------
Efficiency (%) Manufacturer selling
Efficiency level (Design 1/Design 2) price ($) (Design 1/
* Design 2) *
------------------------------------------------------------------------
Baseline.................... 71.4 111.72
EL 1........................ 75.1 117.13
EL 2........................ 79.5/79.5 137.20/129.88
[[Page 10897]]
EL 3........................ 81.7/81.8 142.63/135.56
EL 4........................ 82.8/82.8 146.44/142.76
EL 5........................ 84.1/84.0 154.55/151.91
EL 6........................ 84.8/84.6 236.98/158.25
EL 7........................ 86.8/86.7 244.03/175.75
EL 8 (Max-tech)............. 88.1/87.9 1,771.47/327.69
------------------------------------------------------------------------
* Design 1 denotes the space-constrained design, and design 2 denotes
the non-space-constrained design. If only one value is listed, then
the space-constrained design is the same as the non-space-constrained
design.
D. Markups To Determine Equipment Price
To calculate the equipment prices faced by small electric motor
purchasers, DOE multiplied the manufacturing costs developed from the
engineering analysis by the supply chain markups it developed (along
with sales taxes). In the NOPR, DOE explained how it developed the
distribution channel markups used. 74 FR 61434.
DOE did not receive comments on these markups; however, in written
comments, NEMA and DOJ commented that some original equipment
manufacturers (OEMs) could incur additional design costs to redesign
their products to accommodate the increased size of more efficient
motor designs. (NEMA, No. 24 at p.19 and DOJ No. 29 at p. 2) DOE
recognizes that motors produced following the introduction of the
standards described in this rule will likely be different in size and
shape from motors produced today. In particular, the designs produced
in DOE's engineering analysis exhibit longer stack length to increase
efficiency. DOE also projects that the standards may result in
significant increases in market share for CSCR motors (which have an
extra external capacitor). DOE understands that these changes may
result in the need for some OEMs who incorporate these motors to
redesign their products. Nationally, about 2.5% of U.S. gross domestic
product is spent on research and development (R&D; National Science
Board. 2010. Science and Engineering Indicators 2010. Arlington, VA:
National Science Foundation (NSB 10-01)). DOE estimates that R&D by
equipment OEMs, including the design of new products, generally
represents approximately 2 percent of company revenue. This percentage
is slightly less than the national average to account for high
technology companies that generally spend a much larger fraction of
revenue on R&D than OEMs of equipment that incorporate small motors.
DOE accounted for the additional costs to redesign products and
incorporate differently-shaped motors by adding 2% to the OEM markup,
increasing the baseline OEM markup from 1.37 to 1.39 and the
incremental OEM markup from 1.27 to 1.29 for OEMs without a
distributor, and 1.33 to 1.35 for OEMs that purchase motors through
distributors.
DOE used these markups, along with sales taxes, installation costs,
and manufacturer selling prices (MSPs) developed in the engineering
analysis, to arrive at the final installed equipment prices for
baseline and higher efficiency small electric motors. As explained in
the NOPR (74 FR 61434), DOE defined three distribution channels for
small electric motors to describe how the equipment passes from the
manufacturer to the customer. DOE retained the same distribution
channel market shares described in the NOPR.
Table IV.11 summarizes for each of the three identified
distribution channels the baseline and incremental markups at each
stage and the overall markups, including sales taxes. Weighting the
markups in each channel by its share of shipments yields an average
overall baseline markup of 2.52 and an average overall incremental
markup of 1.86. DOE used these markups for all three types of motors.
Table IV.11--Summary of Small Electric Motor Distribution Channel Markups
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct to OEMs 65% Via distributors to OEMs 30% Via distributors to end-users
---------------------------------------------------------------- 5%
-------------------------------
Baseline Incremental Baseline Incremental Baseline Incremental
--------------------------------------------------------------------------------------------------------------------------------------------------------
Wholesale Distributor................................... .............. .............. 1.28 1.10 1.28 1.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
OEM..................................................... 1.39 1.29 1.39 1.35 .............. ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Retail and Post-OEM Distributor......................... 1.43 1.18 1.43 1.18 1.44 1.18
--------------------------------------------------------------------------------------------------------------------------------------------------------
Contractor or Installer................................. 1.10 1.10 1.10 1.10 1.10 1.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sales Tax............................................... 1.0684
1.0684
1.0684
--------------------------------------------------------------------------------------------------------------------------------------------------------
Overall................................................. 2.34 1.79 2.99 2.06 2.17 1.53
--------------------------------------------------------------------------------------------------------------------------------------------------------
Using these markups, DOE generated motor end-user prices for each
efficiency level it considered, assuming that each level represents a
new minimum efficiency standard. Because it generated a range of price
estimates,
[[Page 10898]]
DOE describes prices within a range of uncertainty.
Chapter 7 of the TSD provides additional detail on the markups
analysis.
E. Energy Use Characterization
The energy use characterization estimates the annual energy
consumption of small electric motors. This estimate is used in the
subsequent LCC and PBP analyses (chapter 8 of the TSD) and National
Impacts Analysis (NIA) (chapter 11 of the TSD). DOE determined the
annual energy consumption of small electric motors by multiplying the
energy use while in operation by the annual hours of operation. The
energy use in operation is a function of the motor loading and the
losses resulting from motor operation, based on the motor designs
characterized in the engineering analysis. DOE's motor designs are also
characterized by their power factor, which allows DOE to estimate the
reactive power requirements of each analyzed motor.
1. Applications
DOE's shipments analysis indicates that small electric motors are
used in five application categories: Pumps; fans and blowers; air
compressors; conveyors and material handling; and general industrial or
miscellaneous applications. Motor energy use depends on application
because different applications have different annual hours of operation
and different average motor loading.
In the NOPR, DOE presented the results of an analysis of motor
shipments into the five application categories. Table IV.12 shows the
distribution of motor shipments by application presented in the NOPR.
Table IV.12--Distribution of Motors by Application and Motor Type
----------------------------------------------------------------------------------------------------------------
Motor application Polyphase (%) CSIR (%) CSCR (%)
----------------------------------------------------------------------------------------------------------------
Reference Case:
Air and gas compressors..................................... 17.3 14.9 14.9
Conveyors & packaging equipment............................. 13.3 11.9 11.9
General industrial machinery................................ 11.3 12.5 12.5
Indus. and comm. fans and blowers........................... 7.3 6.9 6.9
Pumps and pumping equipment................................. 50.7 53.7 53.7
Service industry............................................ 0.0 0.0 0.0
----------------------------------------------------------------------------------------------------------------
Total................................................... 100.0 100.0 100.0
----------------------------------------------------------------------------------------------------------------
Sensitivity (NEMA Survey):
Air and gas compressors..................................... 45 22 45
Conveyors & packaging equipment............................. 5 2 2
General industrial machinery................................ 7 1 1
Indus. and comm. fans and blowers........................... 23 51 29
Pumps and pumping equipment................................. 15 13 12
Service industry............................................ 5 11 11
----------------------------------------------------------------------------------------------------------------
Total................................................... 100.0 100.0 100.0
----------------------------------------------------------------------------------------------------------------
In written comments, NEMA submitted the results of a survey of
their OEM customers for motors which NEMA considers to be covered
products. (NEMA, No. 24 at pp. 19 to 21) The survey reports
distributions by application and owner type, estimates of annual hours
of operation, and the fraction of motors that are space-constrained.
NEMA also provided information on a sixth application not included in
DOE's NOPR, service industry motors. The distribution by application
and motor type provided by NEMA is also shown in Table IV.13.
DOE has concerns about the accuracy of the results of this survey.
It is not clear which OEMs were contacted for the survey, how many
responded, how representative the respondents are of the small motor
market, and what specific questions were asked. It is also not clear
that the survey results represent an accurate picture of the entire
U.S. market for small motors, or how all OEMs will respond to today's
rule. In contrast, the distributions by motor application that DOE used
in the NOPR were based on analysis conducted in the early stages of the
rulemaking, supplemented by a review of U.S. Census and U.S. Customs
data regarding production and imports of motors and equipment
containing motors. For these reasons, DOE retained its assumptions
regarding the distribution of motors by application and sector;
however, DOE did run a sensitivity case that reflects the results of
the NEMA survey. This sensitivity is discussed in Section VI, and the
detailed results are presented in the TSD.
Table IV.13 shows the distributions of motors by sector within each
application used in the NOPR, as well as the results provided by the
NEMA survey.
Table IV.13--Distribution of Motors by Application and Sector
----------------------------------------------------------------------------------------------------------------
Sector
----------------------------------------------------------------
Application Agricultural Residential Total (%)
Industrial (%) Commercial (%) (%) (%)
----------------------------------------------------------------------------------------------------------------
Reference Case:
Air and gas compressors..... 40 40 10 10 100
Conveyors & Packaging 40 50 10 0 100
Equipment..................
General industrial machinery 50 40 10 0 100
Indus. and comm. fans and 50 50 0 0 100
blowers....................
[[Page 10899]]
Pumps and pumping equipment. 40 35 20 5 100
Service industry............ 0 0 0 0 N/A
----------------------------------------------------------------------------------------------------------------
Sensitivity (NEMA Survey):
Air and gas compressors..... 0 15 15 70 100
Conveyors & Packaging 65 35 0 0 100
Equipment..................
General industrial machinery 80 20 0 0 100
Indus. and comm. fans and 20 80 0 0 100
blowers....................
Pumps and pumping equipment. 10 40 20 30 100
Service industry............ 10 80 0 10 100
----------------------------------------------------------------------------------------------------------------
2. Annual Hours of Operation and Motor Loading
In the NOPR, and in today's final rule, DOE characterized the motor
loading and annual hours of operation with distributions for each
analyzed motor application. DOE's estimates of the average motor
loading in each application are unchanged from the NOPR to today's
final rule. Table IV.14 shows the average loading in each application.
DOE assumed that the motor loading distribution took the form of a
normal distribution, centered on the average value, with a standard
deviation equal to one fifth of the average loading. Details on these
calculations are provided in chapter 6 of the TSD.
Table IV.14--Average Motor Loading By Application
------------------------------------------------------------------------
Average
Application loading (%)
------------------------------------------------------------------------
Air and gas compressors.................................... 85
Conveyors & Packaging Equipment............................ 50
General industrial machinery............................... 70
Indus. and comm. fans and blowers.......................... 80
Pumps and pumping equipment................................ 65
Service industry........................................... 70
------------------------------------------------------------------------
In the NOPR, DOE assumed distributions of the annual hours of
operation in each application with means and medians as shown in Table
IV.15. At the December 17, 2009 public meeting, Emerson commented that
the average hours of operation within each application assumed by DOE
are too high (Emerson, Public Meeting Transcript No. 20.4 at pp. 197-
99). According to Emerson, the distribution of hours of operation that
DOE assumed for each application, detailed in the TSD, is a highly
skewed distribution in which the mean and median can be significantly
different. As a result of its survey of OEMs, NEMA reported lower hours
of operation only for compressors, and reported that service industry
motors run 1000 hours per year on average, with a median of 400 hours.
However, by including in the table in their written comments the
operating hour assumptions DOE used in the NOPR for the other
applications, NEMA appears to accept DOE's assumptions of hours of
operation for conveyors, general industrial machinery, fans and
blowers, and pumps. The mean and median hours of operation in each
application in the reference and sensitivity case are shown in Table
IV.15.
Table IV.15--Median and Mean Annual Hours of Operation and Fraction That Run All the Time, by Motor Application
----------------------------------------------------------------------------------------------------------------
Annual Hours of Operation Fraction of
-------------------------------- motors that
Application run all the
Median Mean time (%)
----------------------------------------------------------------------------------------------------------------
Reference Case:
Air and gas compressors..................................... 375 600 0
Conveyors & Packaging Equipment............................. 2000 3000 8
General industrial machinery................................ 1200 2000 4
Indus. and comm. fans and blowers........................... 2825 4500 40
Pumps and pumping equipment................................. 1850 3000 12
Service industry............................................ NA NA NA
----------------------------------------------------------------------------------------------------------------
Sensitivity (NEMA Survey):
Air and gas compressors..................................... 100 200 0
Conveyors & Packaging Equipment............................. 2000 3000 0
General industrial machinery................................ 1200 2000 4
Indus. and comm. fans and blowers........................... 2825 4500 10
Pumps and pumping equipment................................. 1850 3000 12
Service industry............................................ 400 1000 2
----------------------------------------------------------------------------------------------------------------
[[Page 10900]]
F. Life-Cycle Cost and Payback Period Analysis
In response to the requirements of section 325(o)(2)(B)(i) of the
Act, DOE conducted LCC and PBP analyses to evaluate the economic
impacts of possible amended energy conservation standards on small
electric motor customers. This section of the notice describes these
analyses. DOE conducted the analysis using a spreadsheet model
developed in Microsoft (MS) Excel for Windows 2003.
The LCC is the total consumer expense over the life of the
equipment, including purchase and installation expense and operating
costs (energy expenditures, repair costs, and maintenance costs). The
PBP is the number of years it would take for the consumer to recover
the increased costs of a higher-efficiency equipment through energy
savings. To calculate the LCC, DOE discounted future operating costs to
the time of purchase and summed them over the lifetime of the
equipment. DOE measured the change in LCC and the change in PBP
associated with a given efficiency level relative to a base case
forecast of equipment efficiency. The base case forecast reflects the
market in the absence of amended mandatory energy conservation
standards. As part of the LCC and PBP analyses, DOE developed data that
it used to establish equipment prices, installation costs, annual
energy consumption, energy and water prices, maintenance and repair
costs, equipment lifetime, and discount rates.
Table IV.16 summarizes the approaches and data DOE used to derive
the inputs to the LCC and PBP calculations for the NOPR. For today's
final rule, DOE did not introduce changes to the LCC and PBP analyses
methodology described in the NOPR, but incorporated changes to the
inputs to the analysis to account for updates to the engineering
analysis and energy price trends and to analyze the sensitivity of the
results using the survey data NEMA provided. Chapter 8 of the TSD
contains detailed discussion of the methodology utilized for the LCC
and PBP analyses as well as the inputs developed for the analyses.
Table IV.16--Summary of Inputs and Key Assumptions in the Life-Cycle
Cost and Payback Period Analyses
------------------------------------------------------------------------
Changes for the
Inputs NOPR Final Rule
------------------------------------------------------------------------
Affecting Installed Costs
------------------------------------------------------------------------
Equipment Price............. Derived by No change.
multiplying
manufacturer cost
by manufacturer,
distributor and OEM
markups, and sales
tax.
Installation Cost........... Based on data from No change.
RSMeans.
------------------------------------------------------------------------
Affecting Operating Costs
------------------------------------------------------------------------
Annual Energy Use........... Derived by No change in
multiplying hours operating hours in
of operation by the reference case;
losses, accounting changes to
for motor loading. operating hours of
Reactive power compressors in the
demand calculated sensitivity cases.
from power factor. Losses, loading and
reactive power
changed slightly,
as a result of the
updated engineering
analysis.
Energy Prices............... Electricity: No change.
Distribution of
values for each
sector, updated
using EIA's 2007
Form 861 data.
Energy Price Trends......... Energy: Reference AEO 2010 for the
Case forecast reference; ratios
updated with EIA's from AEO 2009 March
AEO 2009 April release used for
Release. High-Price high and low.
and Low-Price
forecasts updated
with EIA's AEO 2009
March Release.
Carbon Cap and
Trade case from
Lieberman-Warner.
Repair and Maintenance Costs Unchanging with No change.
efficiency.
------------------------------------------------------------------------
Affecting Present Value of Annual Operating Cost Savings
------------------------------------------------------------------------
Equipment Lifetime.......... Mean of 7 and 9 No change.
years. Lifetime is
correlated with
annual hours of
operation.
Discount Rates.............. Approach based on No change.
cost of capital of
publicly traded
firms in the
sectors that
purchase small
electric motors.
Primary data source
is Damodaran
Online.\14\
------------------------------------------------------------------------
Affecting Installed and Operating Costs
------------------------------------------------------------------------
Space Constraints........... Assumed 20% of No change in
motors in OEM reference case;
applications face analyzed 62% and
space constraints. 95% sensitivity
cases.
Effective Date of New 2015................ No change.
Standard.
------------------------------------------------------------------------
1. Installation Cost
Installation costs include labor, overhead, and any miscellaneous
materials and parts. For the NOPR and today's final rule, DOE used data
from the RS Means Mechanical Cost Data, 2008 on labor requirements to
estimate installation costs for small electric motors. DOE estimates
that installation costs do not increase with equipment efficiency.
---------------------------------------------------------------------------
\14\ Please see the following Web site for further information:
http://pages.stern.nyu.edu/adamodar/.
---------------------------------------------------------------------------
2. Energy Prices
For both the NOPR and today's final rule, DOE developed nationally
representative distributions of electricity prices for different
customer categories (industrial, commercial, and residential) from 2007
Energy Information Administration (EIA) Form 861 data, the most recent
data available.
[[Page 10901]]
DOE estimates that marginal energy prices for electric motors are close
to average prices, which vary by customer type and utility. The average
prices (in 2009$) for each sector are 7.5 cents for the industrial and
agricultural sectors, 10.4 cents for the commercial sector, and 11.7
cents for the residential sector. DOE also estimated an average
reactive power charge of $0.51 per kilovolt-amps reactive (kVAr) per
month using survey data provided in written comments submitted during
the preliminary analysis stage of the rulemaking by Edison Electric
Institute. The data identified those customers who are subject to a
reactive power charge. (EEI, No. 14 at p. 6)
3. Energy Price Trend
To estimate the trends in electricity prices for the NOPR, DOE used
the price forecasts in the 2009 Annual Energy Outlook (AEO 2009) April
Release.\15\ To arrive at prices in future years, DOE multiplied the
average prices described above by the forecast of annual average price
changes. Because the AEO 2009 forecasts prices only to 2030, DOE
followed past guidelines provided to the Federal Energy Management
Program by EIA and used the average rate of change during 2020-2030 to
estimate the price trends beyond 2030. For today's final rule, DOE had
updated its analysis to use the price forecasts in the AEO 2010 Early
Release, which includes price forecasts until 2035. DOE used the
average rate of change from 2025 to 2035 to estimate price trends
beyond 2035.
---------------------------------------------------------------------------
\15\ All AEO publications are available online at: http://www.eia.doe.gov/oiaf/aeo/.
---------------------------------------------------------------------------
The spreadsheet tools used to conduct the LCC and PBP analysis
allow users to select either the AEO's high-price case or low-price
case price forecasts to estimate the sensitivity of the LCC and PBP to
different energy price forecasts. The AEO 2009 April Release and AEO
2010 Early Release only provide forecasts for the Reference Case.
Therefore, for the NOPR, DOE used the AEO 2009 March Release high-price
or low-price forecasts directly to estimate high-price and low-price
trends. For today's final rule, DOE updated the low-price ad high-price
forecasts to be based on the ratio between the AEO 2009 March Release
low- or high-price forecasts and the AEO 2009 March Release reference
case. DOE then applied these ratios to the AEO 2010 Early Release
reference case to construct its high-price and low-price forecasts.
4. Maintenance and Repair Costs
Small electric motors are not usually repaired, because they often
outlast the equipment in which they are installed. DOE found no
evidence that repair or maintenance costs would increase with higher
motor energy efficiency. In response to the preliminary analysis, no
interested parties provided any comments or data indicating that
maintenance or repair costs are likely to change with motor efficiency.
Thus, in today's final rule DOE did not change the repair and
maintenance costs for motors that are more efficient than baseline
products that were presented in the NOPR.
5. Equipment Lifetime
For the NOPR and today's final rule, DOE developed motor lifetime
distributions for each motor application, with a mean of seven years
for capacitor-start motors and a mean of nine years for polyphase
motors. Each distribution incorporates a correlation between the motor
annual hours of operation and the motor lifetime. Motor lifetime is
governed by two Weibull distributions. One characterizes the motor
lifetime in total operating hours while the other characterizes the
lifetime in years of use in the application. Motors are retired from
service at the age when they reach either of these limits.
6. Discount Rates
The discount rate is the rate at which future expenditures are
discounted to estimate their present value. DOE used the classic
economic definition that discount rates are equal to the cost of
capital. The cost of capital is a combination of debt interest rates
and the cost of equity capital to the affected firms and industries.
For each end-use sector, DOE developed a distribution of discount
rates. DOE's methodology and inputs for calculating discount rates are
unchanged from the NOPR (74 FR 61440), and details are available in
chapter 8 of the TSD. In response to the NOPR, DOE did not receive any
comments regarding customer discount rates.
7. Space-Constrained Applications and the After-Market
Comments at the NOPR public meeting (WEG, Emerson, and Regal-
Beloit, Public Meeting Transcript, No. 20.4 at pp. 184-85, 191-92), and
in written comments (NEMA, No. 24 at p. 19; DOJ, No. 29 at p. 2),
expressed concerns regarding the challenges faced by users who purchase
motors to replace existing motors within their applications. (This
market is referred to as the ``after-market.'') In particular, these
customers might face difficulty replacing motors in space-constrained
applications with new motors of different size. Motors are sold to
these customers through distributors or OEMs. DOE was unable to obtain
data on the size and structure of the space-constrained portion of this
market. However, DOE's motor lifetime function, which differentiates
between motors retired due to mechanical failure and motors retired
when the application in which they reside is retired, indicates that
approximately 25-percent of small electric motors retire because of
mechanical failure. Only users of these motors would be participants in
the after-market, as other users replace their complete application
rather than the motor alone. DOE has assumed that 20-percent of motor
application are space-constrained, indicating that approximately 5-
percent of motors are both space-constrained and retire due to
mechanical failure--these users would participate in the after-market.
As discussed above in section IV.E, the NEMA survey reported on the
fraction of motors purchased by OEMs that face space constraints inside
their application. NEMA reported that 62 percent of the OEMs responding
to the survey stated that any increase in size would negatively impact
their ability to use the motor in their current applications, and that
33-percent stated that their applications could accept ``only a slight
increase'' in size; only 5 percent stated that their application had
few space constraints.
While DOE appreciates the information provided by NEMA, the agency
has concerns regarding how well the sample represents total U.S. small
motor shipments and possible survey response bias. In addition, as part
of its written comments, NEMA has proposed alternative standards. These
alternative standards appear to indicate that if nearly all OEMs face
space constraints for motors in their products, it would be difficult
for motor manufacturers to achieve the efficiency level called for in
the NEMA standard levels without large cost increases. For these
reasons, DOE has retained its assumption that 20-percent of the small
motors are installed in applications that cannot accommodate any size
increases.
OEMs that manufacture applications with space constraints on their
motors have several options: (1) Redesign their application to
accommodate a motor with a longer stack and/or a run capacitor; (2)
purchase a stockpile of motors not covered by today's rule to install
in future production of their application; (3) replace a less efficient
[[Page 10902]]
CSIR motor with a more efficient CSCR motor without increasing stack
length; or (4) replace their motor with a motor not covered by today's
rule. DOE estimates the likelihood and effect of each of these outcomes
in its analysis of national impacts, by: Increasing the OEM baseline
and incremental markups by 2 percent to either pay for redesign of
their products to accommodate larger motors or purchase a stockpile of
existing motors of the correct size; applying a model that estimates
the migration from CSIR to CSCR motors, based on the relative
difference in equipment and operating costs of the two types of motors
and the assumed fraction that are space-constrained; and changing the
assumption in the reference case regarding the elasticity of demand for
small electric motors to a change in purchase price (from zero, or
inelastic, to -0.25), thereby increasing the number of motors expected
to migrate to totally enclosed motors not covered by today's rule.
These assumptions result in nearly the entire CSIR market migrating to
CSCR motors under the proposed standards, with net benefits to the
average motor customer.
In response to this comment, DOE analyzed the impact of increasing
the space-constrained fraction to 62 percent and to 95 percent of all
motors in its sensitivity case (the additional 2-percent markup is not
included in these two scenarios). These results are summarized in
section VI below.
Emerson also pointed out that the OEMs whose products have space
constraints are typically smaller companies that have a hard time re-
engineering their product when changes in size occur. (Emerson, Public
Meeting Transcript, No. 20.4 at pp. 83-85) DOE recognizes that smaller
OEMs that manufacture products which cannot readily be altered to
accommodate a larger motor may be adversely affected by today's rule.
In analyzing the potential impact of today's standards on customers,
DOE evaluated the impact on identifiable groups of end-use motor
customers (i.e., subgroups), such as small businesses, that may not be
equally affected by a national standard level. The results of the
subgroup analysis for small businesses can be found in section VI.C.1.b
of this notice.
8. Standard Compliance Date
The date by which all small electric motor manufacturers must
manufacture motors that satisfy the new standards announced in today's
rule is statutorily-prescribed under EPCA. See 42 U.S.C. 6317(b).
Therefore, the effective date of any new energy conservation standards
for these products will be February 2015. DOE calculated the LCC for
all end users assuming that each one would purchase a new piece of
equipment in the year the standard takes effect.
G. National Impact Analysis--National Energy Savings and Net Present
Value Analysis
1. General
DOE's National Impact Analysis (NIA) assesses the national energy
savings, as well as the national Net Present Value (NPV) of total
consumer costs and savings, expected to result from new standards at
specific efficiency levels. DOE applied the NIA spreadsheet to perform
calculations of energy savings and NPV, using the annual energy
consumption and total installed cost data from the LCC analysis. DOE
forecasted the energy savings, energy cost savings, equipment costs,
and NPV for each equipment class from 2015 to 2045. The forecasts
provide annual and cumulative values for all four parameters. In
addition, DOE incorporated into its NIA spreadsheet the capability to
analyze the sensitivity of the results to forecasted energy prices and
equipment efficiency trends. Table IV.17 summarizes the approach and
data DOE used to derive the inputs to the NES and NPV analyses for the
NOPR. It also summarizes the changes DOE made in this analysis for
today's final rule. These changes are described in the following
sections, and more details are available in chapter 11 of the final
rule TSD.
Table IV.17--Approach and Data Used To Derive the Inputs to the National
Energy Savings and NPV Analyses
------------------------------------------------------------------------
2009 NOPR Changes for the
Inputs description final rule
------------------------------------------------------------------------
Shipments................... Annual shipments Updated shipments
from Shipments drivers to AEO 2010
Model. Shipments for reference case.
inelastic to Total shipments
changes in motor elasticity changed
price. Two CSIR- from 0 to -0.25.
CSCR cross- Single cross-
elasticity cases. elasticity case in
which market shares
are fixed beginning
in 2015.
Space Constraints........... Assumed 20% of No change in
motors in OEM reference case;
applications face analyzed 62% and
space constraints. 95% sensitivity
cases.
Effective Date of Standard.. 2015................ No change.
Base-Case Forecasted Efficiency Efficiency
Efficiencies. distribution distribution
determined by the updated to reflect
number of currently changes in
available models engineering
meeting the analysis, including
efficiency the additional
requirements of polyphase motor
each TSL. design
Standards-Case Forecasted Roll-up scenario. No change.
Efficiencies. Efficiency
distribution held
constant over
forecast period.
Annual Energy Consumption Annual weighted- Updated to account
per Unit. average values as a for correlation
function of between average
efficiency energy use and
distribution. motor age.
Total Installed Cost per Annual weighted- No change.
Unit. average values as a
function of
efficiency
distribution.
Energy Cost per Unit........ Annual weighted- No change.
average values a
function of the
annual energy
consumption per
unit and energy
prices.
Repair Cost and Maintenance None................ No change.
Cost per Unit.
Escalation of Energy Prices. Energy Prices: AEO Updated to AEO 2010
2009 April Release Early Release
forecasts for the forecasts for the
Reference Case. AEO Reference Case.
2009 April Release High-Price and Low-
does not provide Price forecasts
High-Price and Low- created using
Price forecasts; ratios of AEO 2009
used AEO 2009 March March release High-
Release High-Price and Low-Price
and Low-Price forecasts to the
forecasts to AEO 2009 March
estimate high- and Reference Case.
low-growth price
trends.
[[Page 10903]]
Energy Site-to-Source Conversion varies No change.
Conversion. yearly and is
generated by DOE/
EIA's NEMS program
(a time-series
conversion factor;
includes electric
generation,
transmission, and
distribution
losses).
Effect of Standards on Determined but found No change.
Energy Prices. not to be
significant.
Discount Rate............... 3% and 7% real...... No change.
Present Year................ Future expenses Future expenses
discounted to year discounted to year
2009. 2010.
------------------------------------------------------------------------
2. Shipments
The shipments portion of the NIA spreadsheet is a shipments model
based on macroeconomic drivers for small electric motor shipments. In
the NOPR, DOE estimated that shipments to the industrial sector are
proportional to the manufacturing output, shipments to the commercial
sector are proportional to commercial floor-space, and shipments to the
residential sector are proportional to the number of households. DOE
used the AEO 2009 April Release to forecast these three drivers. For
today's final rule, DOE has updated the drivers in the reference case
to the AEO 2010 Early Release.
In the NOPR, DOE examined three alternate shipments scenarios. Two
of these scenarios were based on the AEO 2009 March Release High-Growth
and Low-Growth cases, while the third was a ``falling market share''
case, in which forecast shipments remain constant at their 2008 levels
independent of economic growth. The NEEA/NPCC commented that DOE should
retain the falling market share case because of uncertainties regarding
the size of the future demand for small motors covered by this rule, as
well as the current economic climate. NEEA/NPCC added that DOE should
give additional weight to this scenario when making its policy decision
(NEEA, No. 27 at p. 10). These shipments scenarios are presented in
Chapter 9 of the TSD.
In its analysis for the NOPR, DOE assumed that customers would not
respond to standards by changing to enclosed motors, due to different
ventilation requirements, and analyzed two different elasticities to
enclosed motors, -0.25 and -0.5, as sensitivities. Several comments
(Emerson, Public Meeting Transcript, No. 20.4 at pp. 176-77; NEEA/NPCC,
No. 27 at pp. 5-6; NEMA, No. 24 at p. 19), pointed out that if, as a
result of standards, open-construction motors become more expensive
than enclosed motors, customers may choose to purchase enclosed motors.
DOE's analysis indicates that enclosed small electric motors are, on
average, 18-percent more expensive than open motors. For today's final
rule, DOE has changed its reference scenario to the -0.25 elasticity
scenario for both polyphase and capacitor-start motors. As a result,
DOE estimates that, depending on the TSL selected, up to 12 percent of
the capacitor-start motor market might migrate to enclosed motors;
however, today's rule would result in a reduction of less than 1
percent for the capacitor-start motor market. DOE has retained the
inelastic and -0.5 elasticity scenarios as sensitivities.
For the NOPR, DOE developed a cross-elasticity model to forecast
the impact of standards on the relative market shares of CSIR and CSCR
motors within each combination on motor horsepower and number of poles.
DOE used this model to develop two reference cases for the NIA
analysis. One case assumed that the market share shift described by the
model would be complete by 2015, the date by which manufacturers must
comply with the standard, while the other case arbitrarily assumed that
the transition would begin in 2015 and be complete by 2025. At the
December 17, 2009, Public Meeting, WEG Electric commented that their
engineers had examined motor designs necessary to meet the CSIR and
CSCR standard levels proposed in the NOPR. Their engineers concluded
that motors meeting these efficiencies were manufacturable, but that
the designs would include a run capacitor (making them all CSCR motors)
that might present another issue for space constrained applications.
(WEG, Public Meeting Transcript No. 20.4 at pp. 185-86)
When examining the cross-elasticity between CSIR and CSCR motors,
DOE built a demand-based model that assumed that manufacturers would
produce the products demanded by the modeled motor customer behavior.
This model has significant uncertainty because of the difficulty in
predicting the extent and timeframe of the market response to standards
and an absence of data on changes in the small electric motor market.
However, in view of WEG's comment, DOE has placed greater emphasis on
the influence of decisions made by manufacturers on market share. In
particular, in cases where DOE's model predicts that the market will
result in a complete or nearly complete shift from CSIR to CSCR motors,
DOE expects that the market share shift will take place prior to the
introduction of standards in 2015 because manufacturers will change
their production by that date. Therefore, for today's final rule, DOE
has decided to use the scenario in which the market share shift is
complete by 2015 as its single reference case for the shipments model.
NEMA disagreed with DOE's statement that the standard levels
proposed in the NOPR would ``maintain a supply of both categories of
motors (CSIR and CSCR) in the single-phase motor market,'' especially
since DOE was estimating that the purchase price of a CSIR motor would
increase dramatically over that of the baseline motor. DOE wishes to
clarify that the NOPR analysis predicted that nearly all, but not the
entire, CSIR market would migrate to CSCR motors under the proposed
standard level, TSL 7. DOE's elasticity model for capacitor-start
motors incorporates both elasticity to products not covered by today's
final rule (enclosed motors) and cross-elasticity between CSIR and CSCR
motors. DOE expects that the open-construction CSIR motor market will
migrate to open CSCR motors, rather than enclosed CSIR motors, because
enclosed CSIR motors are only less expensive than open CSCR motors in
the case of relatively inefficient enclosed CSIR motors.
Chapter 9 of the TSD describes the shipments and elasticity models
and their results in detail.
3. Space Constraints
As discussed above in Section F, DOE retained its assumption that
20-percent
[[Page 10904]]
of the small motors are installed in applications that cannot
accommodate any size increases. DOE has added 2-percent to the OEM
markups in its reference case to account for estimated increases in OEM
costs to redesign their products to accommodate larger, more efficient
motors, or to purchase a stockpile of replacement motors of the correct
size. In addition, in response to the survey results presented by NEMA,
DOE has analyzed the impact of increasing the space-constrained
fraction from 20 percent to 62 percent and to 95 percent of all motors
in a pair of sensitivity case (the additional 2 percent markup is not
included in these two scenarios). These sensitivity cases have little
impact on the national impacts for capacitor-start motors because at
the capacitor-start efficiency levels in today's rule, DOE estimates
that 97 percent of the CSIR market will migrate to CSCR motors assuming
only 20 percent of the market is space-constrained. Therefore,
increasing the assumption of the fraction of space-constrained CSIR
motors to 95-percent only affects the 3-percent of the CSIR market that
had not already migrated to CSCR motors under DOE's reference case, and
has little effect on the estimates of national energy savings.
Appendices 9A and 10A of the TSD present the results of this and other
sensitivity cases in more detail.
4. Base-Case and Standards-Case Efficiency Distributions
In its analysis for the NOPR, DOE developed base-case and
standards-case efficiency distributions based on the distribution of
currently available models for which motor catalogs list efficiency. In
preparing today's final rule, DOE developed new scaling relationships
governing the relationship between the efficiency of each product class
to the efficiency of the representative product class for its motor
category. These changes resulted in some motor models that met the
criteria for one TSL in the NOPR analysis also meeting the criteria for
a different TSL in the analysis for today's rule. The resulting base-
case efficiency distributions are shown in Table IV.18 DOE's use of a
roll-up method to determine the efficiency in the standards-cases is
unchanged from the NOPR to the final rule analysis.
Table IV.18--Base Case Efficiency Market Shares by Motor Type
----------------------------------------------------------------------------------------------------------------
Motor type
-----------------------------------------------------------------------------------------------------------------
Base Case Market Share (%) by
Efficiency Level Baseline EL 1 EL 2 EL 3 EL 4 EL 4b EL 5 EL 6 EL 7
----------------------------------------------------------------------------------------------------------------
Polyphase........................... 54 6 13 7 12 5 3 0 0
----------------------------------------------------------------------------------------------------------------
Baseline EL 1 EL 2 EL 3 EL 4 EL 5 EL 6 EL 7 EL 8
----------------------------------------------------------------------------------------------------------------
CSIR................................ 40 30 13 15 2 0 0 0 NA
CSCR................................ 37 33 4 11 11 0 4 0 0
----------------------------------------------------------------------------------------------------------------
5. Annual Energy Consumption per Unit
In the analysis conducted for the NOPR, DOE developed a model for
motor lifetime that incorporates a correlation between annual hours of
motor operation and the lifetime of the motor. This correlation was
incorporated into the life-cycle cost analysis, which provides average
energy use values for the NIA. In the analysis developed for today's
final rule, DOE added a correction factor related to this correlation
to its NIA model. This correction factor accounts for the higher
removal rate of motors with higher annual energy usage levels when
compared to motors with lower annual energy usage levels. This
relationship is reflected in DOE's lifetime model.
H. Customer Sub-Group Analysis
For the NOPR and today's final rule, DOE analyzed the potential
effects of small electric motor standards on two subgroups: (1)
Customers with space-constrained applications, and (2) small
businesses. For customers with space-constrained applications, DOE used
the price and energy use estimates developed for space-constrained
designs from the engineering analysis to conduct its life-cycle cost
analysis. For small businesses, DOE analyzed the potential impacts of
standards by conducting the analysis with different discount rates,
because small businesses do not have the same access to capital as
larger businesses. DOE estimated that for businesses purchasing small
electric motors, the average discount rate for small companies is 4.2
percent higher than the industry average. Due to the higher costs of
conducting business, as evidenced by their higher discount rates, the
benefits of small electric motor standards for small businesses are
estimated to be slightly lower than for the general population of small
electric motor owners.
More details on the consumer subgroup analysis can be found in
chapter 12 of the final rule TSD.
I. Manufacturer Impact Analysis
DOE conducted a manufacturer impact analysis (MIA) to estimate the
financial impact of new energy conservation standards on small electric
motors manufacturers, and to calculate the impact of such standards on
domestic manufacturing employment and capacity. The MIA has both
quantitative and qualitative aspects. The quantitative part of the MIA
primarily relies on the GRIM--an industry-cash-flow model customized
for this rulemaking. The GRIM inputs are data characterizing the
industry cost structure, investments, shipments, and revenues. The key
output is the industry net present value (INPV). Different sets of
assumptions (scenarios) produce different results. The qualitative part
of the MIA addresses factors such as equipment characteristics, market
and equipment trends, as well as an assessment of the impacts of
standards on subgroups of manufacturers. DOE outlined its methodology
for the MIA in the NOPR. 74 FR 61442-46. The complete MIA for the NOPR
is presented in chapter 12 of the NOPR TSD.
For today's final rule, DOE updated the MIA to reflect changes in
the outputs of two other key DOE analyses, which feed into the GRIM. In
the Engineering Analysis, DOE updated manufacturer production costs
(MPCs) and inflated them to 2009$ from 2008$ using the producer price
index (PPI). In the NIA, DOE updated its shipment forecasts and
efficiency distributions. In turn, DOE updated the GRIM for these new
estimates. DOE also inflated its capital and equipment conversion costs
to 2009$ from 2008$ using the PPI for Motor and Generator Manufacturing
(North American Industry Classification System (NAICS) 335312). Based
on these changes, DOE used the GRIM to revise the MIA results from the
NOPR.
[[Page 10905]]
For direct employment calculations, DOE revised the GRIM to include the
U.S. Census information that was revised for 2007.
The following sections discuss interested parties comments on the
NOPR MIA. In general, the format is as follows: DOE provides background
on an issue that was raised by interested parties, summarizes the
interested parties' comment, and discusses whether and how DOE modified
its analysis in light of the comments.
1. Capital Conversion and Equipment Conversion Costs
For the NOPR, DOE estimated capital conversion costs for a typical
manufacturer using estimates provided by manufacturers and information
provided by industry experts. DOE estimated the tooling cost for each
separate design at each incremental efficiency level. In addition to
these capital expenditures, DOE also estimated equipment conversion
expenses such as research and development, testing, and product
literature development associated with new energy conservation
standards. Because DOE did not receive specific feedback from all
manufacturers in the industry, DOE then scaled these costs from a
typical manufacturer to account for the entire industry where
appropriate.
More specifically, DOE estimated the tooling costs for: (1) Total
number of laminations over baseline designs; (2) grade of steel
including the use of premium electrical steels; (3) increases in stack
length; (4) necessary rewiring; (5) replacement of end rings; and (6)
rotor redesigns to use copper (if applicable). For rotor redesigns to
use copper, DOE estimated the costs to purchase new presses, new end
rings, and additional tooling. For changes to the grade of steel, DOE
estimated the costs for punch press dyes. For increases in stack
length, DOE estimated the costs of switching more production equipment
to accommodate a higher volume of larger sized small electric motors.
For necessary rewiring, DOE estimates the cost of crimp tools. For
replacement of end rings, DOE estimated the tooling changes for
different dimensional changes to the end rings. For increases in
laminations, DOE estimated the purchase of presses and tooling for
winding machinery.
In written comments, NEMA stated that the capital conversion costs
DOE assumed in the NOPR represent only 25- to 30-percent of the capital
investments required by manufacturers at the proposed level for CSCR
and CSIR. Specifically, NEMA argued that DOE did not account for
progressive lam dies, new winding retooling, and other equipment
conversion costs (e.g., engineering time, and manufacture and customer
agency approvals). (NEMA, No. 24 at p.18) Emerson and A.O. Smith added
that such investments needed to reach the proposed standards could
cause manufacturers to exit the small electric motors market. (Emerson,
No. 28 at p. 1; A.O. Smith, No. 27 at p. 2)
As discussed above, in the NOPR and in today's final rule, DOE
accounts for lam dies, new winding retooling and other capital
investments at the TSLs that require such tooling. DOE also notes that
equipment conversion costs associated with R&D, testing, and other non-
capital expenses are included in its equipment conversion costs
assumptions. However, in part because the proposed TSL did not require
copper rotors or premium electric steel for the CSCR or polyphase
markets, DOE cannot reconcile its investment totals at TSL 7 for CSCR
and CSIR with the $150 million to $180 million range implied by NEMA's
comment. However, in response to other comments, discussed immediately
below, DOE has modified its approach to calculating the investments
required of a typical manufacturer producing space constrained and non-
space constrained motors.
In the NOPR, DOE examined the complete tooling requirements
necessary for both space-constrained and non-space constrained designs.
That is, DOE first calculated tooling costs assuming shipments were
100-percent space constrained, then calculated tooling costs assuming
shipments were 100-percent non-space constrained. Next, DOE calculated
the overall tooling costs by weighting these values by the fraction of
shipments dedicated to space-constrained and non-space-constrained
applications as forecast in the shipments model (20-percent and 80-
percent, respectively).
Emerson and NEMA commented that the proposed TSLs require the use
of different materials for electrical steel and rotors for different
types of motors, which will lead to high capital costs. (Emerson, No.
28 at p. 1; NEMA, No. 24 at p. 18). Baldor Electric commented that
manufacturers would lose economies of scope at the proposed TSLs
because they would not be able to standardize along one type of steel
for different classes of motors. Combined with the high capital costs,
particularly for CSIR, this lack of standardization may lead
manufacturers to choose to exit portions of the market. (Baldor
Electric, Public Meeting Transcript, No. 20.4 at pp. 246-47; Emerson,
Public Meeting Transcript, No. 20.4 at pp. 248)
For today's final rule, DOE modified its calculation of investments
based on changes to the shipments forecasts related to the split
between space-constrained and non-space constrained motors. For many
manufacturers, it will not be possible to invest in tooling equipment
for space constrained and non-space-constrained motors in a manner that
is proportional to the relative market share of the two types of
motors. Particularly given the uncertainty with regard to the future
market demand and the resulting product mix, DOE believes it is more
appropriate to look at the specific investment needs of a typical
manufacturer at each TSL for both space constrained and non-space
constrained investments for each motor design. For many design options,
this leads to investments that are additive--not weighted by shipment
share--across space-constrained and non-space constrained motors.
Furthermore, DOE does not assume economies of scope in its assumptions
regarding capital investments among the three classes of motors. That
is, DOE assumed investment in each class independently and assumed they
were additive when appropriate across the classes. To be clear, DOE is
not modifying the shipments scenarios from the NIA in this scenario. It
is modifying the capital investment assumptions to more completely
capture the business decisions firms will likely have to make.
As mentioned in the comments referenced above, the business case
for making the large capital investments required for certain types of
motors becomes less compelling as shipment volumes decrease at higher
TSLs (including the TSL established in today's final rule). DOE agrees
with Emerson and A.O. Smith that some manufacturers are likely to exit
this portion of their market, as is reflected by the shipments
analysis, which shows a dramatic migration away from CSIR motors. For
space-constrained motors within the CSIR class DOE projects no
shipments after standards take effect. To capture this dynamic, at
certain TSLs DOE calculated investments to include those associated
with the CSCR line and the CSIR non-space constrained line. Without
forecasting a significant volume of space-constrained CSIR shipments,
it would be inappropriate to assume all manufacturers would invest in
the premium electrical steel and copper technologies required to meet
the standard level. For further details of the investments, see chapter
12 of the TSD and or section IV.I of today's notice.
[[Page 10906]]
In written comment, Emerson further argues that the exit of the
market by certain manufacturers in response to amended standards would
reduce competition and domestic employment. (Emerson, No. 28 at p. 1)
As previously discussed, DOE believes that some manufacturers could
exit the small electric motors market segment covered by this rule in
response to amended standards. However, it should be noted that covered
small electric motors comprise only a small portion of overall motor
sales for these companies. At the efficiency levels established by this
final rule, DOE's analysis and manufacturer interviews indicated that
the majority of manufacturers would likely remain in the small electric
motors market following the implementation of amended standards.
Additionally, DOE learned that a number of covered motors are already
manufactured overseas and that foreign competition continues to make
inroads into the covered motors segment. As for a potential reduction
in domestic employment, DOE's analysis indicates that even with the
potential departure by some manufacturers from segments of the small
electric motors market, overall direct employment will remain
relatively constant due to the increased labor content of more
efficient motors.
2. Manufacturer Selling Prices
In the NOPR, DOE calculated weighted manufacturer selling prices
(MSPs) based on a shipments split of 20-percent space-constrained and
80-percent non-space constrained motors. However, the shipments
analysis in today's final rule models a mix of space-constrained and
non-space constrained motors that varies by TSL. As such, DOE has
updated its MSPs in the GRIM using the same shipment weights used in
the shipments analysis at each TSL. For further information on the
shipment analysis, see chapter 9 of the TSD.
3. Markup Scenarios
In the NOPR, DOE analyzed two markup scenarios in the MIA: the
preservation-of-return-on-invested-capital scenario and the
preservation-of-operating-profits scenario. These scenarios reflected
the upper and lower bounds of industry profitability, respectively. In
written comments, NEMA contended that DOE had inappropriately
discounted the likelihood of the lower-bound scenario occurring when it
stated its belief that design changes necessary for TSL 5 would not
force all manufacturers to significantly redesign all of their
polyphase small electric motors and production processes. (NEMA, No. 24
at p. 16)
In response, DOE first clarifies that it did not and is not
assigning probabilities to the preservation of operating profit
scenario or the preservation of return on invested capital scenario.
The two markup scenarios are meant to estimate the range of potential
impacts. Second, in the NOPR, and for this final rule, DOE accounted
for equal investments in the GRIM under both the lower and upper bound
profitability scenarios. Therefore, changes in markup assumptions--not
changes in investments--drive the profitability difference between the
scenarios. For example, in this final rule DOE assumes industry wide
capital conversion investments for TSL 5 of approximately $7.1 million
for polyphase small motors in each markup scenario. Thus, the
likelihood of either scenario occurring with respect to the other is
independent of the investment level assumed in the GRIM.
NEMA further argued that in discounting the likelihood of the
lower-bound profitability scenario, DOE ignored cost increases and
equipment investments associated with specialty steels and copper
rotors necessary for polyphase motors to meet TSL 5. (NEMA, No. 24 at
p. 16).
DOE disagrees with NEMA's suggestion that TSL 5 requires copper
rotors and premium electrical steels (such as Hiperco) for polyphase
motor designs. DOE continues to believe, as discussed in the
Engineering Analysis, that both space-constrained and non-space
constrained motors can achieve TSL 5 through the use of additional
laminations. As discussed above, DOE included the attendant costs of
the additional lams, steel-grade lam dies, end ring investment for both
space constrained and non-space constrained motors, and a crimping
tool. No investments for copper rotors design were assumed at TSL 5 for
polyphase motors. NEMA ostensibly agreed that the proposed TSL did not
require copper rotors when it commented that the ``proposed standards
for polyphase and CSCR small electric motors are based on the use of
cast aluminum rotors.'' (NEMA, No. 24 at p. 18)
Baldor and NEMA stated that the proposed levels of efficiency in
the NOPR are based on the assumption that manufacturers must use three
different types of electrical steel including 24M19, 29M15, and Hiperco
50. According to NEMA, each type of electrical steel requires different
methods for processing the rolled steel into laminations acceptable for
use in electric motors. NEMA further adds that to remain competitive,
manufacturers must minimize the number of different types of materials
and processes used in a manufacturing facility and suggested that DOE
adopt a standard level that is achievable with the same electrical
steel for all motor categories. (Baldor, Public Meeting Transcript, No.
20.4 at pp. 246-47; NEMA, No. 24 at p. 17.
In the NOPR, DOE predicted that manufacturers would achieve the
proposed efficiency levels with three types of steels including 24M19,
29M15, and Hiperco 50. During manufacturer interviews, DOE requested
information on the type of processes needed to achieve each efficiency
level, as well as the costs associated with each process. In regard to
types of steel used and the cost of switching from one steel process to
another, all interviewed manufacturers reported the use of additional
lamination dies to accommodate the different thickness of steel.
Accordingly, DOE included additional lamination dies per manufacturer
in its estimates whenever a change of steel grade was applicable, as
described in chapter 12 of the TSD. The cost per die was derived based
on manufacturer's estimates and information provide by industry
experts. See chapter 12 of the TSD for additional details on each type
of investment at each efficiency level including all design options
analyzed. DOE acknowledges that manufacturers in general, regardless of
industry, reduce the number of manufacturing processes to lower costs
and thus increase margins. For today's amended standards, DOE does not
prescribe designs nor how manufacturers achieve each efficiency level.
Because DOE accounts for all the relevant costs associated with using
the various steel types in both the engineering analysis and MIA, it
believes it accurately captures the potential costs to manufacturers in
using different steel grades. Therefore, DOE believes that potential
burden on manufacturers has been accounted for in today's final rule.
In response to the NOPR, NEMA commented that manufacturers are not
aware of any other pathways to achieving the proposed efficiencies for
space constrained CSIR motors but the ones analyzed in this rulemaking.
NEMA argued that because there are no other pathways to achieving the
proposed efficiencies, DOE is dictating that manufacturers use
different electrical steels and different materials for the rotor
construction in order to meet the proposed efficiencies for the three
motor types. (NEMA, No. 24 at p. 16).
[[Page 10907]]
DOE acknowledges that TSL 7 reflects the max-tech efficiency levels
for CSIR; as such, DOE estimates manufacturers may have to employ both
copper rotors and premium electrical steels to achieve that level. In
the engineering analysis, which subsequently carries over to the MIA,
DOE models a pathway for space-constrained and non-space constrained
application motors with the use of these technologies. However, in
setting new standards for small electric motors, as described in
today's notice, DOE selects efficiency levels for each motor category
and does not prescribe designs.
4. Premium Electrical Steels
In response to the NOPR, Regal-Beloit and NEMA argue that DOE
proposed an efficiency level for motors that would force manufacturers
to utilize specific electrical steels that are in scarce supply. NEMA
further argues that DOE should not establish standards that require
manufacturers to use materials that are supply constrained. NEMA stated
that a market analysis for the scarce materials is needed to prove
otherwise. (Regal-Beloit, Public Meeting Transcript, No. 20.4 at pp.
245-46; NEMA, No. 24 at pp. 17-18). Similarly, NEMA asked DOE to
consider any spillover effects on the supply of steel for medium
electric motors. (NEMA, No. 24 at p.18)
DOE acknowledges the concern that Hiperco may be supply constrained
in the short run should manufacturers pursue that design option. As
such, to investigate these steel concerns, DOE contacted Hiperco 50
steel and other premium electrical steel suppliers and used steel
manufacturer's annual reports to examine past shipment volumes of
premium steels. DOE then compared estimated shipments of these steel to
volumes that would be necessary for motors if should the base case mix
of space constrained and non space constrained persist at all TSLs.
Based on that analysis, DOE estimates that the entire small electric
motor industry would need approximately 1.3 million pounds of premium
steels (such as Hiperco) in 2015 for the level established by this
rule. For the steel manufacturer that had available annual reports, the
estimated pounds of premium steels needed by the motor manufacturers
constitutes less than one percent of total steel shipments for 2008.
How much of that volume reflects premium steels is not publically
available. However, annual reports for the publicly traded manufacturer
of premium steels suggest that shipments of these steels have decreased
by close to 20 percent from the previous year, suggesting this
manufacturer has over capacity and the ability to meet the possible
increase in demand of premium steels. Given the time lag for the market
to prepare for the compliance date of the standard and the low volumes
of motors that may require premium steel, DOE believes that the
proposed standard level will not threaten the supply of the steel, even
if manufacturers decide to pursue this option. DOE's analysis does not
forecast shipments of motors that require premium steel and, as a
result, DOE does not believe that, based on the available data, there
will be a significant impact (``spillover'') on the medium motor market
due to higher demand of the material in the small motor market.
NEMA stated that the proposed efficiency level mandates the use of
copper rotor casting technology along with aluminum rotor casting
technology in the same manufacturing facilities. NEMA argued that
copper rotor casting technology is in its infancy and is not a fully
developed process that can be adapted in all present facilities where
small electric motors are built. Additionally, NEMA and A.O. Smith are
concerned that copper rotor casting technology has significant safety
issues related to the high temperatures needed for the process.
According to NEMA, manufacturers may be required to use a few outside
companies that may not have sufficient capacity to meet all of the
copper rotor volume required to meet the needs for all of the CSIR
small electric motors. Additionally, NEMA argues that standards must be
based on the use of aluminum rotors only. (A.O. Smith, No. 26 at p. 2;
NEMA, No. 24 at p. 18)
DOE acknowledges manufacturers' concerns related to the processes
for die-casting copper rotors. In its analysis, DOE accounted for the
increased capital requirements as they would likely occur depending on
the efficiency level and motor type at issue. As stated in the NOPR,
the use of copper rotors could lead manufacturers to outsource their
die-casting processes, as indicated by NEMA in its comments. (74 FR
61467-68). Ultimately, this is a business decision. In its engineering
analysis for this rulemaking, DOE included a copper rotor design at
efficiency level 6 or above for polyphase motors, efficiency level 5 or
above for CSIR motors, and efficiency level 4 or above for CSCR motors.
The inclusion of copper rotor designs at each efficiency level varies
depending on the necessary efficiency and space constraints. However,
DOE reiterates that different manufacturers will not necessarily employ
the same design options to make their motors achieve higher efficiency
levels where DOE estimates copper rotors may be used, with the
exception of the max-tech efficiency levels. In fact, for the NOPR and
today's final rule, DOE has analyzed motors up to efficiency level 5
for CSIR motors and efficiency level 6 for CSCR motors that use an
aluminum die-cast rotor.
J. Employment Impact Analysis
DOE considers employment impacts in the domestic economy as one
factor in selecting a proposed standard. Employment impacts include
direct and indirect impacts. Direct employment impacts are changes in
the number of employees for manufacturers of equipment 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 (electricity, gas (including liquefied petroleum
gas), and oil); (2) reduced spending on new energy supply by the
utility industry; (3) increased spending on the purchase price of new
equipment; 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, as explained below.
One method for assessing the possible effects on the demand for
labor of such shifts in economic activity is to compare employment
statistics in different economic sectors, which are compiled and
published by the Bureau of Labor Statistics (BLS). The BLS regularly
publishes its estimates of the number of jobs per million dollars of
economic activity in different sectors of the economy, as well as the
jobs created elsewhere in the economy by this same economic activity.
Data from BLS indicate that expenditures in the utility sector
generally create fewer jobs (both directly and indirectly) than
expenditures in other sectors of the economy. There are many reasons
for these differences, including wage differences and the fact that the
utility sector is more capital intensive and less labor intensive than
other sectors. (See Bureau of Economic Analysis, Regional Multipliers:
A User Handbook for the Regional Input-Output Modeling System (RIMS
II), Washington, DC, U.S. Department of Commerce, 1992.) Efficiency
standards have the effect of reducing consumer utility bills. Because
[[Page 10908]]
reduced consumer expenditures for energy likely lead to increased
expenditures in other sectors of the economy, the general effect of
efficiency standards is to shift economic activity from a less labor-
intensive sector (i.e., the utility sector) to more labor-intensive
sectors (e.g., the retail and manufacturing sectors). Thus, based on
the BLS data alone, DOE believes net national employment will increase
due to shifts in economic activity resulting from standards for small
electric motors.
In developing the NOPR, DOE estimated indirect national employment
impacts using an input/output model of the U.S. economy called Impact
of Sector Energy Technologies (ImSET).\16\ 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 188 sectors most relevant to industrial, commercial, and
residential building energy use. For today's final rule, DOE has made
no change to its method for estimating employment impacts. For further
details, see chapter 15 of the final rule TSD.
---------------------------------------------------------------------------
\16\ More information regarding ImSET is available online at:
http://www.pnl.gov/main/publications/external/technical_reports/PNNL-15273.pdf.
---------------------------------------------------------------------------
K. Utility Impact Analysis
The utility impact analysis estimates the change in the forecasted
power generation capacity for the Nation that would be expected to
result from adoption of new standards. For the NOPR and today's final
rule, DOE calculated this change using the NEMS-BT computer model.
NEMS-BT models certain policy scenarios such as the effect of reduced
energy consumption by fuel type. The analysis output provides a
forecast for the needed generation capacities at each TSL. While DOE
was able to use the forecasts from the AEO 2010 Early Release for
energy prices and macroeconomic indicators, the NEMS-BT model
corresponding to this case is not yet available. The estimated net
benefit of the standard in today's final rule is the difference between
the forecasted generation capacities by NEMS-BT and the AEO 2009 April
Release Reference Case. DOE obtained the energy savings inputs
associated with efficiency improvements to small electric motors from
the NIA. These inputs reflect the effects of both fuel (natural gas)
and electricity consumption savings. Chapter 14 of the final rule TSD
presents results of the utility impact analysis.
NEEA/NPCC claimed that only a small fraction of the total costs of
avoided generation are currently counted in any rulemaking. They note
that DOE uses the NEMS-BT model to calculate the avoided generation
facilities produced by a standard and that the cost of construction and
operation of these plants are rolled into average rates that all
electricity consumers must pay, not just those purchasing the product
in question. As a result, they believe that the NPV difference in the
value of total electricity sales between the NEMS-BT forecasts with and
without the standards may serve as a reasonable proxy for the economic
value to all electricity consumers of the proposed standards. The
difference value of total retail electricity sales is necessary to
capture all of the cost of the avoided generation, since as noted
above, users of small general purpose motors impacted by the standard
will pay only a portion of those cost at embedded rates. (NEEA/NPPC,
No. 27, p. 7-8)
DOE investigated the possibility of estimating the impact of
specific standard levels on electricity prices in its rulemaking for
general service fluorescent lamps and incandescent reflector lamps.
(See U.S. Department of Energy--Office of Energy Efficiency and
Renewable Energy: Energy Conservation Standards for General Service
Fluorescent Lamps and Incandescent Reflector Lamps; Proposed Rule, 74
FR 16920, 16978-979 (April 13, 2009).) It concluded that caution is
warranted in reporting impacts of appliance standards on electricity
prices due to the complexity of the power industry (including the
variety of utility regulation in the U.S.) and the relatively small
impact of equipment efficiency standards on demand. In addition,
electricity price reductions cannot be viewed as equivalent to societal
benefits because part of the price reductions result from transfers
from producers to consumers. The electric power industry is a complex
mix of fuel suppliers, producers, and distributors. While the
distribution of electricity is regulated everywhere, its institutional
structure varies, and upstream components are complex. Because of the
difficulty in accurately estimating electricity price impacts, and the
uncertainty with respect to transfers from producers to consumers, DOE
did not estimate the value of potentially reduced electricity costs for
all consumers associated with standards for small electric motors.
L. 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 a
draft environmental assessment (EA) of the potential impacts of the
standards for small electric motors in today's final rule, which it has
included as chapter 15 of the TSD. DOE found that the environmental
effects associated with the standards for small electric motors were
not significant. 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 power sector emissions of
CO2, NOX, and Hg using the NEMS-BT computer
model. In the EA, NEMS-BT is run similarly to the AEO NEMS, except that
small electric motor energy use is reduced by the amount of energy
saved (by fuel type) due to the TSLs. The inputs of national energy
savings come from the NIA analysis; the output is the forecasted
physical emissions. The estimated net benefit of the standard in
today's final rule is the difference between the forecasted emissions
by NEMS-BT at each TSL and the AEO 2009 April Early Release Reference
Case. NEMS-BT tracks CO2 emissions using a detailed module
that provides results with broad coverage of all sectors and inclusion
of interactive effects.
DOE has determined that sulfur dioxide (SO2) emissions
from affected Electric Generating Units (EGUs) are subject to
nationwide and regional emissions cap and trading programs that create
uncertainty about the impact of energy conservation standards on
SO2 emissions. Title IV of the Clean Air Act sets an annual
emissions cap on SO2 for all affected EGUs. SO2
emissions from 28 eastern States and the District of Columbia (D.C.)
are also limited under the Clean Air Interstate Rule (CAIR, published
in the Federal Register on May 12, 2005; 70 FR 25162 (May 12, 2005),
which creates an allowance-based trading program that will gradually
replace the Title IV program in those States and D.C. (The recent legal
history surrounding CAIR is discussed below.) The attainment of the
emissions caps is flexible among EGUs and is enforced through the use
of emissions allowances and tradable permits. Energy conservation
standards
[[Page 10909]]
could lead EGUs to trade allowances and increase SO2
emissions that offset some or all SO2 emissions reductions
attributable to the standard. DOE is not certain that there will be
reduced overall SO2 emissions from the standards. The NEMS-
BT modeling system that DOE uses to forecast emissions reductions
currently indicates that no physical reductions in power sector
emissions would occur for SO2. The above considerations
prevent DOE from estimating SO2 reductions from standards at
this time.
Even though DOE is not certain that there will be reduced overall
emissions from the standard, there may be an economic benefit from
reduced demand for SO2 emission allowances. Electricity
savings from standards decrease the generation of SO2
emissions from power production, which can lessen the need to purchase
emissions allowance credits, and thereby decrease the costs of
complying with regulatory caps on emissions.
Much like SO2 emissions, NOX emissions from
28 eastern States and the District of Columbia (D.C.) are limited under
the CAIR. Although CAIR has been remanded to EPA by the U.S. Court of
Appeals for the District of Columbia Circuit (D.C. 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. 531 F.3d 896
(D.C. Cir. 2008); see also North Carolina v. EPA, 550 F.3d 1176 (D.C.
Cir. 2008). These court positions were taken into account in the
analysis conducted for the NOPR and in today's final rule. 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.
In the 28 eastern States and D.C. where CAIR is in effect, DOE's
forecasts indicate that no NOX emissions reductions will
occur due to energy conservation standards because of the permanent
cap. Energy conservation standards have the potential to produce an
economic impact in the form of lower prices for NOX
emissions allowances, if their impact on electricity demand is large
enough. However, DOE has concluded that the standards in today's final
rule will not have such an effect because the estimated reduction in
electricity demand in States covered by the CAIR cap would be too small
to affect allowance prices for NOX under the CAIR.
New or amended energy conservation standards would reduce
NOX emissions in those 22 States that are not affected by
the CAIR. DOE used the NEMS-BT to forecast emission reductions from the
small electric motor standards in today's final rule.
Similar to emissions of SO2 and NOX, future
emissions of Hg would have been subject to emissions caps. The Clean
Air Mercury Rule (CAMR) would have permanently capped emissions of
mercury from new and existing coal-fired plants in all States beginning
in 2010 (70 FR 28606). However, the CAMR was vacated by the D.C.
Circuit in its decision in New Jersey v. Environmental Protection
Agency, 517 F 3d 574 (D.C. Cir. 2008) Thus, DOE was able to use the
NEMS-BT model to estimate the changes in Hg emissions resulting from
the proposed rule.
NEMA noted that the TSD for the NOPR provides a qualitative
assessment of upstream emissions (i.e., emissions from energy losses
during coal and natural gas production) in addition to quantifying the
emissions at power plants. NEMA states that if DOE is making an
assessment of upstream emissions, it should also account for the
emissions related to the construction of more efficient small electric
motors, such as those related to the mining of additional raw
materials, processing of the additional materials, transportation of
the additional materials, and the manufacture of the motor itself.
(NEMA, No. 24 at p. 22)
As noted in the TSD for the NOPR, DOE developed qualitative
estimates of affects on upstream fuel-cycle emissions because NEMS-BT
does a thorough accounting only of emissions at the power plant due to
downstream energy consumption. In other words, NEMS-BT does not account
for upstream emissions. Therefore, the Environmental Assessment for
today's final rule reports only power plant emissions.
When setting performance standards for industrial equipment, EPCA
prescribes that an energy efficiency standard be a minimum level of
energy efficiency or maximum allowable energy use. EPCA defines the
term ``energy use'' within this limited context for commercial and
industrial equipment as being the quantity of energy directly consumed
by an article of industrial equipment at the point of use. See 42
U.S.C. 6311(4). In ascertaining the appropriate level of efficiency,
DOE must balance seven criteria to develop a standard that is
economically justified and technically feasible. While DOE believes
that the majority of the energy and other costs associated with the
manufacturing of more efficient motors are reflected in its analysis,
some of the costs associated with certain environmental impacts and
other externalities are not incorporated. Even though DOE estimates and
considers the impacts of standards on the energy and emissions
associated with electricity generation, it does not specifically assess
the energy and emissions associated with the manufacturing of more
efficient motors or the manufacturing of the equipment required to
produce and supply energy. The main reason for not assessing such
indirect costs and benefits is the absence of a reliable and
comprehensive method of doing so. Such an assessment would require
accounting for a variety of variables, including the energy required to
build and service the energy production, generation, and transmission
infrastructure needed to deliver the energy, as well as accounting for
the energy expended to manufacture energy-using equipment.
M. Monetizing Carbon Dioxide and Other Emissions Impacts
As part of the development of this final rule, DOE considered the
estimated monetary benefits likely to result from the reduced emissions
of CO2 and other pollutants that are expected to result from
each of the Trial Standard Levels considered. This section summarizes
the basis for the estimated monetary values used for each of these
emissions and presents the benefits estimates considered.
For today's final rule, DOE is relying on a new set of values for
the social cost of carbon SCC that were recently developed by an
interagency process. A summary of the basis for these new values is
provided below, and a more detailed description of the methodologies
used is provided as an Annex to Chapter 15 of the Technical Support
Document.
1. Social Cost of Carbon
Under Executive Order 12866, agencies are required, to the extent
permitted by law, ``to assess both the costs and the benefits of the
intended regulation and, recognizing that some costs and benefits are
difficult to quantify, propose or adopt a regulation only upon a
reasoned determination that the benefits of the intended regulation
justify its costs.'' The purpose of the SCC estimates presented here is
to allow agencies to incorporate the social benefits of reducing
CO2 emissions into cost-benefit analyses of regulatory
actions that have small, or ``marginal,'' impacts on cumulative global
emissions. The estimates are presented with an acknowledgement of the
many uncertainties involved and with a clear understanding that they
should be updated over time to reflect
[[Page 10910]]
increasing knowledge of the science and economics of climate impacts.
The SCC is an estimate of the monetized damages associated with an
incremental increase in carbon emissions in a given year. It is
intended to include (but is not limited to) changes in net agricultural
productivity, human health, property damages from increased flood risk,
and the value of ecosystem services due to climate change.
As part of the interagency process that developed these SCC
estimates, technical experts from numerous agencies met on a regular
basis to consider public comments, explore the technical literature in
relevant fields, and discuss key model inputs and assumptions. The main
objective of this process was to develop a range of SCC values using a
defensible set of input assumptions grounded in the existing scientific
and economic literatures. In this way, key uncertainties and model
differences transparently and consistently inform the range of SCC
estimates used in the rulemaking process.
The interagency group selected four SCC values for use in
regulatory analyses. Three values are based on the average SCC from
three integrated assessment models, at discount rates of 2.5, 3, and 5
percent. The fourth value, which represents the 95th percentile SCC
estimate across all three models at a 3 percent discount rate, is
included to represent higher-than-expected impacts from temperature
change further out in the tails of the SCC distribution.
Table IV.19--Social Cost of CO2, 2010-2050
[In 2007 dollars]
----------------------------------------------------------------------------------------------------------------
Discount year 5% Avg 3% Avg 2.5% Avg 3% 95th
----------------------------------------------------------------------------------------------------------------
2010............................................ 4.7 21.4 35.1 64.9
2015............................................ 5.7 23.8 38.4 72.8
2020............................................ 6.8 26.3 41.7 80.7
2025............................................ 8.2 29.6 45.9 90.4
2030............................................ 9.7 32.8 50.0 100.0
2035............................................ 11.2 36.0 54.2 109.7
2040............................................ 12.7 39.2 58.4 119.3
2045............................................ 14.2 42.1 61.7 127.8
2050............................................ 15.7 44.9 65.0 136.2
----------------------------------------------------------------------------------------------------------------
a. Monetizing Carbon Dioxide Emissions
The ``social cost of carbon'' (SCC) is an estimate of the monetized
damages associated with an incremental increase in carbon emissions in
a given year. It is intended to include (but is not limited to) changes
in net agricultural productivity, human health, property damages from
increased flood risk, and the value of ecosystem services. Estimates of
the social cost of carbon are provided in dollars per metric ton of
carbon dioxide.\17\
---------------------------------------------------------------------------
\17\ In this document, DOE presents all values of the SCC as the
cost per metric ton of CO2 emissions. Alternatively, one
could report the SCC as the cost per metric ton of carbon emissions.
The multiplier for translating between mass of CO2 and
the mass of carbon is 3.67 (the molecular weight of CO2
divided by the molecular weight of carbon = 44/12 = 3.67).
---------------------------------------------------------------------------
When attempting to assess the incremental economic impacts of
carbon dioxide emissions, the analyst faces a number of serious
challenges. A recent report from the National Academies of Science
(Hidden Costs of Energy: Unpriced Consequences of Energy Production and
Use. National Academies Press. 2009) points out that any assessment
will suffer from uncertainty, speculation, and lack of information
about (1) future emissions of greenhouse gases, (2) the effects of past
and future emissions on the climate system, (3) the impact of changes
in climate on the physical and biological environment, and (4) the
translation of these environmental impacts into economic damages. As a
result, any effort to quantify and monetize the harms associated with
climate change will raise serious questions of science, economics, and
ethics and should be viewed as provisional.
Despite the serious limits of both quantification and monetization,
SCC estimates can be useful in estimating the social benefits of
reducing carbon dioxide emissions. Under Executive Order 12866,
agencies are required, to the extent permitted by law, ``to assess both
the costs and the benefits of the intended regulation and, recognizing
that some costs and benefits are difficult to quantify, propose or
adopt a regulation only upon a reasoned determination that the benefits
of the intended regulation justify its costs.'' The purpose of the SCC
estimates presented here is to make it possible for agencies to
incorporate the social benefits from reducing carbon dioxide emissions
into cost-benefit analyses of regulatory actions that have small, or
``marginal,'' impacts on cumulative global emissions. Most Federal
regulatory actions can be expected to have marginal impacts on global
emissions.
For such policies, the benefits from reduced (or costs from
increased) emissions in any future year can be estimated by multiplying
the change in emissions in that year by the SCC value appropriate for
that year. The net present value of the benefits can then be calculated
by multiplying each of these future benefits by an appropriate discount
factor and summing across all affected years. This approach assumes
that the marginal damages from increased emissions are constant for
small departures from the baseline emissions path, an approximation
that is reasonable for policies that have effects on emissions that are
small relative to cumulative global carbon dioxide emissions. For
policies that have a large (non-marginal) impact on global cumulative
emissions, there is a separate question of whether the SCC is an
appropriate tool for calculating the benefits of reduced emissions; we
do not attempt to answer that question here.
An interagency group convened on a regular basis to consider public
comments, explore the technical literature in relevant fields, and
discuss key inputs and assumptions in order to generate SCC estimates.
Agencies that actively participated in the interagency process include
the Environmental Protection Agency, and the Departments of
Agriculture, Commerce, Energy, Transportation, and Treasury. This
process was convened by the Council of Economic Advisers and the Office
of Management and Budget, with active participation and regular input
from the Council on Environmental Quality,
[[Page 10911]]
National Economic Council, Office of Energy and Climate Change, and
Office of Science and Technology Policy. The main objective of this
process was to develop a range of SCC values using a defensible set of
input assumptions that are grounded in the existing literature. In this
way, key uncertainties and model differences can more transparently and
consistently inform the range of SCC estimates used in the rulemaking
process.
The interagency group selected four SCC estimates for use in
regulatory analyses. For 2010, these estimates are $5, $21, $35, and
$65 (in 2007 dollars). The first three estimates are based on the
average SCC across models and socio-economic and emissions scenarios at
the 5, 3, and 2.5 percent discount rates, respectively. The fourth
value is included to represent the higher-than-expected impacts from
temperature change further out in the tails of the SCC distribution.
For this purpose, we use the SCC value for the 95th percentile at a 3
percent discount rate. The central value is the average SCC across
models at the 3 percent discount rate. For purposes of capturing the
uncertainties involved in regulatory impact analysis, we emphasize the
importance and value of considering the full range. These SCC estimates
also grow over time. For instance, the central value increases to $24
per ton of CO2 in 2015 and $26 per ton of CO2 in
2020. See Appendix A of the Annex to Chapter 15 of the Technical
Support Document for the full range of annual SCC estimates from 2010
to 2050.
It is important to emphasize that the interagency process is
committed to updating these estimates as the science and economic
understanding of climate change and its impacts on society improve over
time. Specifically, we have set a preliminary goal of revisiting the
SCC values within two years or at such time as substantially updated
models become available, and to continue to support research in this
area. In the meantime, we will continue to explore the issues raised by
this analysis and consider public comments as part of the ongoing
interagency process.
b. Social Cost of Carbon Values Used in Past Regulatory Analyses
To date, economic analyses for Federal regulations have used a wide
range of values to estimate the benefits associated with reducing
carbon dioxide emissions. In the final model year 2011 CAFE rule, the
Department of Transportation (DOT) used both a ``domestic'' SCC value
of $2 per ton of CO2 and a ``global'' SCC value of $33 per
ton of CO2 for 2007 emission reductions (in 2007 dollars),
increasing both values at 2.4 percent per year. It also included a
sensitivity analysis at $80 per ton of CO2. A domestic SCC
value is meant to reflect the value of damages in the United States
resulting from a unit change in carbon dioxide emissions, while a
global SCC value is meant to reflect the value of damages worldwide.
A 2008 regulation proposed by DOT assumed a domestic SCC value of
$7 per ton CO2 (in 2006 dollars) for 2011 emission
reductions (with a range of $0-$14 for sensitivity analysis), also
increasing at 2.4 percent per year. A regulation finalized by DOE in
October of 2008 used a domestic SCC range of $0 to $20 per ton
CO2 for 2007 emission reductions (in 2007 dollars). In
addition, EPA's 2008 Advance Notice of Proposed Rulemaking for
Greenhouse Gases identified what it described as ``very preliminary''
SCC estimates subject to revision. EPA's global mean values were $68
and $40 per ton CO2 for discount rates of approximately 2
percent and 3 percent, respectively (in 2006 dollars for 2007
emissions).
In 2009, an interagency process was initiated to offer a
preliminary assessment of how best to quantify the benefits from
reducing carbon dioxide emissions. To ensure consistency in how
benefits are evaluated across agencies, the Administration sought to
develop a transparent and defensible method, specifically designed for
the rulemaking process, to quantify avoided climate change damages from
reduced CO2 emissions. The interagency group did not
undertake any original analysis. Instead, it combined SCC estimates
from the existing literature to use as interim values until a more
comprehensive analysis could be conducted.
The outcome of the preliminary assessment by the interagency group
was a set of five interim values: global SCC estimates for 2007 (in
2006 dollars) of $55, $33, $19, $10, and $5 per ton of CO2.
The $33 and $5 values represented model-weighted means of the published
estimates produced from the most recently available versions of three
integrated assessment models--DICE, PAGE, and FUND--at approximately 3
and 5 percent discount rates. The $55 and $10 values were derived by
adjusting the published estimates for uncertainty in the discount rate
(using factors developed by Newell and Pizer (2003)) at 3 and 5 percent
discount rates, respectively. The $19 value was chosen as a central
value between the $5 and $33 per ton estimates. All of these values
were assumed to increase at 3 percent annually to represent growth in
incremental damages over time as the magnitude of climate change
increases.
These interim values represent the first sustained interagency
effort within the U.S. government to develop an SCC for use in
regulatory analysis. The results of this preliminary effort were
presented in several proposed and final rules and were offered for
public comment in connection with proposed rules, including the joint
EPA-DOT fuel economy and CO2 tailpipe emission proposed
rules.
c. Approach and Key Assumptions
Since the release of the interim values, the interagency group
reconvened on a regular basis to generate improved SCC estimates
considered for this final rule. Specifically, the group considered
public comments and further explored the technical literature in
relevant fields.
It is important to recognize that a number of key uncertainties
remain, and that current SCC estimates should be treated as provisional
and revisable since they will evolve with improved scientific and
economic understanding. The interagency group also recognizes that the
existing models are imperfect and incomplete. The National Academy of
Science (2009) points out that there is tension between the goal of
producing quantified estimates of the economic damages from an
incremental ton of carbon and the limits of existing efforts to model
these effects. There are a number of concerns and problems that should
be addressed by the research community, including research programs
housed in many of the agencies participating in the interagency process
to estimate the SCC.
The U.S. Government will periodically review and reconsider
estimates of the SCC used for cost-benefit analyses to reflect
increasing knowledge of the science and economics of climate impacts,
as well as improvements in modeling. In this context, statements
recognizing the limitations of the analysis and calling for further
research take on exceptional significance. The interagency group offers
the new SCC values with all due humility about the uncertainties
embedded in them and with a sincere promise to continue work to improve
them.
In summary, in considering the potential global benefits resulting
from reduced CO2 emissions, DOE used the most recent values
identified by the interagency process, adjusted to 2009$ using the
standard GDP deflator values for 2008 and 2009. For each of the four
cases specified, the values for emissions
[[Page 10912]]
in 2010 used were approximately $5, $22, $36, and $67 per metric ton
avoided (values expressed in 2009$). To monetize the CO2
emissions reductions expected to result from amended standards for
small electric motors in 2015-2045, DOE used the values identified in
Table A1 of the ``Social Cost of Carbon for Regulatory Impact Analysis
Under Executive Order 12866,'' which is reprinted as an Annex to
Chapter 15 of the Technical Support Document, appropriately escalated
to 2009$.
2. Monetary Values of Non-Carbon Emissions
As previously stated, DOE's analysis assumed the presence of
nationwide emission caps on SO2 and caps on NOX
emissions in the 28 States covered by CAIR. In the presence of these
caps, the NEMS-BT modeling system that DOE used to forecast emissions
reduction indicated that no physical reductions in power sector
emissions would occur (although there remains uncertainty about whether
physical reduction of SO2 will occur), but that the
standards could put slight downward pressure on the prices of emissions
allowances in cap-and-trade markets. Estimating this effect is very
difficult because factors such as credit banking can change the
trajectory of prices. From its modeling to date, DOE is unable to
estimate a benefit from energy conservation standards on the prices of
emissions allowances at this time. See the environmental assessment in
the final rule TSD for further details.
DOE also investigated the potential monetary benefit of reduced
NOX and Hg emissions from the TSLs it considered. As noted
above, new or amended energy conservation standards would reduce
NOX emissions in those 22 States that are not affected by
CAIR, in addition to the reduction in site NOX emissions
nationwide. 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 $447 to $4,591 per ton in 2009$). Refer
to the OMB, 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, for additional information.
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. The impact of
mercury emissions from power plants on humans is considered highly
uncertain. However, DOE identified two estimates of the environmental
damage of Hg based on 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 of $1.3 billion per year in 2000$ (which works
out to $33.7 million per ton emitted per year in 2009$) is based on an
estimate of the current aggregate cost of the loss of IQ in American
children that results from exposure to Hg of U.S. power plant
origin.\18\ DOE's low-end estimate of $0.66 million per ton emitted in
2004$ ($0.764 million per ton in 2008$) was derived from an evaluation
of mercury control that used different methods and assumptions from the
first study, but was also based on the present value of the lifetime
earnings of children exposed to Hg.\19\
---------------------------------------------------------------------------
\18\ Trasande, L., et al., ``Applying Cost Analyses to Drive
Policy that Protects Children,'' 1076 Ann. N.Y. Acad. Sci. 911
(2006).
\19\ 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.
---------------------------------------------------------------------------
V. Discussion of Other Comments
Since DOE opened the docket for this rulemaking, it has received
more than 20 comments from a diverse set of parties, including
manufacturers and their representatives, States, energy conservation
advocates, and electric utilities. Section IV of this preamble
discusses comments DOE received on the analytical methodologies it has
used in this rulemaking. Additional comments DOE received in response
to the NOPR addressed the information DOE used in its analyses, results
of and inferences drawn from the analyses, impacts of standards, the
merits of the different TSLs and standards options DOE considered,
other issues affecting adoption of standards for small electric motors,
and the DOE rulemaking process. DOE addresses these comments below.
A. Trial Standard Levels
In selecting the proposed energy conservation standards for both
classes of small electric motors for consideration in today's final
rule, DOE started by examining the standard levels with the highest
energy savings, and determined whether those levels were economically
justified. If DOE found those levels not to be justified, DOE
considered TSLs sequentially lower in energy savings until it reached
the level with the greatest energy savings that was both
technologically feasible and economically justified. In the NOPR
document, DOE proposed TSL 5 for polyphase motors and TSL 7 for single-
phase motors.
Emerson commented that while it is in favor of efficiency standards
in general, it is not in favor of the proposed standards for small
electric motors. This is because it diverts a manufacturer's attention
and funding away from other energy efficient technologies that it is
developing, which are actually being used to replace these covered
motors. In its written comments, Emerson asked that DOE not regulate
small electric motors. (Emerson, Public Meeting Transcript, No. 20.4 at
pp. 267-69; Emerson, No. 28 at p. 3) Underwriters Laboratories (UL)
submitted written comments stating that over the past five years the
majority of fractional horsepower motors it has seen have been
electronically commutated motors (ECM), which reach efficiency levels
in the high 90 percent range. However, UL continued on to state that
DOE should not set efficiency levels for the covered motors that
reinforce the status quo, but rather encourage greater efficiency,
which it states the proposed standard levels would not achieve. (UL,
No. 21 at pp. 1-2) QM Power added that high standards would cause
alternative technologies to be sold in higher volumes and as a result
bring their relative prices down. (QM Power, Public Meeting Transcript,
No. 20.4 at pp. 290-91) Finally, a joint comment submitted by PG&E,
SCE, SCGC, and SDGE indicated support for the standard levels chosen by
DOE in the NOPR phase. (Joint Comment, No. 23 at p. 2)
DOE notes that it is legally required to issue standards for small
electric motors and reiterates that it selects the standard level with
the highest energy savings that is both technologically feasible and
economically justified. The standards set in today's final rule
represent the efficiency level with the greatest energy savings that is
both technologically feasible and economically justified. While other
classes of motors, such as electronically commutated motors (ECMs) may
offer higher efficiency levels than the levels selected by DOE in
today's rulemaking,
[[Page 10913]]
DOE must consider and evaluate the covered motors when selecting
efficiency levels.
NEMA commented that a statement in the NOPR indicated that the
proposed polyphase standard was closely aligned with the EPACT 1992
efficiency levels. NEMA was confused by this statement because the
levels proposed in the NOPR were greater than the EPACT 1992 levels.
(NEMA, No. 24 at p. 22) NEMA also stated that the NOPR indicates ``TSL
7 corresponds to the NEMA Premium equivalent efficiency for CSCR
motors,'' (74 FR 61469) but that there is no defined level of NEMA
Premium efficiency for any \3/4\-horsepower, four-pole motor. (NEMA,
No. 24 at p. 24)
DOE would like to clarify these statements. In the NOPR, DOE stated
``DOE proposes a standard for polyphase small motors * * * that is
closely aligned with the EPACT 1992 standard for medium motors.'' 74 FR
61419-20. This text should have read that DOE proposed efficiency
levels (TSL 5) for polyphase small electric motors are closely aligned
with the NEMA Premium efficiency levels for 1-horsepower, four-pole
medium electric motors. This statement was restated and asserted at
other times throughout the NOPR document and DOE regrets any confusion
it may have caused.
In this final rule, due to revisions in the baseline efficiencies,
modeling of higher efficiency motor designs, and scaling analysis, TSL
4b now most closely aligns with NEMA Premium efficiency levels (and
medium electric motor standards) for motors greater than 1 horsepower.
DOE recognizes the value to manufacturers of having a single efficiency
requirement for similar models of motors. Because some efficiency
values associated with TSL 4b are slightly higher than the NEMA Premium
efficiency requirements, DOE is reducing these values to harmonize with
NEMA Premium efficiency. DOE does not anticipate that this reduction
will result in a significant loss of energy savings. For this reason,
DOE is implementing this change after conducting its analyses and in
the final stage of standard-setting. For further detail on the
polyphase efficiencies analyzed for TSL 4b, see chapter 5 of the TSD.
DOE also understands that NEMA Premium levels exist neither for any
\3/4\-horsepower, four-pole motors nor single-phase. DOE drew this
comparison to NEMA Premium because manufacturers had recommended,
during the preliminary analysis, that DOE examine such a standard level
for its CSCR motor with the aforementioned ratings, and the
manufacturers used that terminology when providing their
recommendations to DOE.
In addition, Regal-Beloit and A.O. Smith commented that a CSCR
motor should be able to generate a higher efficiency level than a
comparable CSIR motor, but pointed out that DOE's NOPR proposed
efficiency levels would require CSIR motors to have higher efficiencies
than corresponding CSCR motors. (Regal-Beloit, Public Meeting
Transcript, No. 20.4 at pp. 107-08; A.O. Smith, Public Meeting
Transcript, No. 20.4 at p. 108) NEMA also questioned the validity of
DOE's scaling analysis, citing the fact that the proposed CSIR levels
were in fact slightly higher than the proposed CSCR levels. (NEMA, No.
24 at pp. 9-10) They added that though DOE indicated that the proposed
efficiency levels for CSIR and CSCR were the same, they were not
exactly equivalent. (NEMA, No. 24 at pp. 25-26)
DOE would like to clarify that it was not alleging that CSCR motors
cannot be as efficient as CSIR motors. DOE is aware that CSCR motors
are inherently more efficient than CSIR motors, as indicated by the
NOPR and final rule's max-tech efficiency levels for these two types of
motors. DOE had proposed a standard level where the pairing of
efficiency standards for both motor categories were approximately
equivalent. DOE analyzed several TSLs for single-phase motors, some of
which result in higher minimum efficiency requirements for CSCR motors
than CSIR motors. However, as discussed in section VI.D, TSL 7, which
adopt levels for CSIR and CSCR that are approximately equivalent, has
been determined to the level that achieves the maximum energy savings,
while being technologically feasible and economically justified.
In consideration of the comments received regarding the exact
equivalence of the CSIR and CSCR levels, DOE believes it appropriate to
harmonize the levels of the two categories of motors for the standard
selected in today's final rule. Because the TSL 7 represents the
maximum technologically feasible level for CSIR motors, DOE has opted
to lower these levels to equal the CSCR standard levels for TSL 7. DOE
does not expect that this shift in CSIR motor efficiency will have a
significant impact on the comparative economics or energy savings of
the varying TSLs, and thus will not change the decision of which TSL to
adopt. For this reason, DOE has decided to apply this efficiency shift
at the standard-setting phase of the analyses. For further detail on
the CSIR efficiencies analyzed for TSL 7, see chapter 5 of the TSD.
B. Enforcement
Thus far in the rulemaking process, DOE has not laid out any plans
for the enforcement of efficiency standards for small electric motors.
Typically, efficiency standard rulemakings do not outline a plan for
enforcement, which occurs independently from the rulemaking process.
DOE received a number of comments pertaining to the enforcement of
today's final rule and what steps DOE will take to enforce these
efficiency standards. Regal-Beloit, A.O. Smith, and WEG all expressed
the concern that some manufacturers, most notably from overseas, may
not comply with the standards, and they wished to see a plan for how
these standards would be enforced. (Regal-Beloit, Public Meeting
Transcript, No. 20.4 at pp. 182-83; A.O. Smith, No. 26 at p. 3; WEG,
Public Meeting Transcript, No. 20.4 at pp. 261-66) A joint comment
submitted by PG&E, SCE, SCGC, and SDGE also stressed the importance of
developing a plan for enforcement. (Joint Comment, No. 23 at p. 2)
Emerson agreed with the joint commenters that a lack of enforcement
would put the domestic manufacturers who comply with today's standard
at a disadvantage in the marketplace because they would incur the costs
necessary to increase efficiency. (Joint Comment, No. 23 at p. 2;
Emerson, No. 28 at p. 2)
Additionally, DOE received comments offering suggestions for how to
improve the enforcement of today's rule. Both Regal-Beloit commented
that DOE should require a marking on the motor to indicate that it
complies with the efficiency standard, such as is done with NEMA
Premium motors. (Regal-Beloit, Public Meeting Transcript, No. 20.4 at
pp. 229-30) Regal-Beloit also suggested that DOE perform some sort of
audit of the motors on the market to ensure compliance with today's
rule. (Regal-Beloit, Public Meeting Transcript, No. 20.4 at p. 230)
Finally, Earthjustice requested that today's final rule outline a
specific date on which DOE will layout plans for enforcement of the
small electric motors standards. (Earthjustice, Public Meeting
Transcript, No. 20.4 at pp. 20-21)
NEMA's written comment reiterated these concerns about enforcement,
and outlined several steps DOE should take to ensure proper compliance.
First, it recommended that DOE expand its present Compliance
Certification number system that is used for electric motors to include
small electric motors. Second, it recommended a means to
[[Page 10914]]
notify DOE of potential violations. Third, it suggested maintaining a
Web site that lists manufacturers and OEMs who have submitted
compliance certificates. Fourth, it supported penalties for repeat
violations of the law. Finally, it stressed the importance of securing
the appropriate funds for implementing and maintaining an enforcement
program. (NEMA, No. 24 at pp. 26-27) NEEA and NPCC also commented on
the importance of appropriating funds for enforcement of today's
standards. (NEEA/NPCC, No. 27 at p. 7)
Additionally, NEMA's written comment indicated that DOE must
publish the small electric motors SNOPR soon in order for manufacturers
to have sufficient time to ensure compliance with today's standards.
(NEMA, No. 24 at p. 25)
DOE agrees that the plans for enforcing today's final rule are very
important, and appreciates the suggestions provided by manufacturers.
While it is uncommon for a standard rulemaking to address issues of
enforcement, DOE would like to highlight its intention to outline
concrete steps for enforcing today's efficiency standards. Given the
numerous rulemakings that the agency must promulgate pursuant to its
court consent decree and statutory requirements, DOE plans to issue
this supplemental notice as expeditiously as possible to invite comment
from interested parties and to ensure that the motor industry has
sufficient time to adjust to any new provisions that DOE proposes.
C. Nominal Full-Load Efficiency
As discussed in section IV.C.2 of today's final rule, it is common
in the motor industry to observe variation in motor performance for a
population of motors of identical designs, including tested efficiency.
This variation can be due to variations in material quality,
manufacturing processes, and even testing equipment. NEMA has
established the term ``nominal full-load efficiency'' and uses the term
for medium electric motors customers with a guaranteed efficiency given
the variations in motor manufacturing and testing. As the tolerances
due to manufacturing and testing variations guaranteed by NEMA's
definition of nominal full load efficiency are based on test procedures
and data for medium electric motors, DOE elected to alter the
definition in its NOPR and as it pertains to small electric motors. In
the NOPR, DOE defined the term nominal full-load efficiency as the
arithmetic mean of the full load efficiency of a population of motors
of duplicate design.
At the NOPR public meeting, Baldor made several comments regarding
DOE's proposed definition for ``nominal full-load efficiency''
pertaining to small electric motors. First, Baldor commented that the
proposed definition was too similar to the existing definition for
``average full-load efficiency,'' and that it differed from the
definition in NEMA MG-1, which would create confusion for users.
(Baldor, Public Meeting Transcript, No. 20.4 at pp. 112, 126-27) Next,
Baldor commented that the proposed definition provided no stipulation
for what constitutes a population of motors, and suggested that the
term be clarified. (Baldor, Public Meeting Transcript, No. 20.4 at pp.
112-13) These two comments were reiterated by NEMA in its written
comments. (NEMA, No. 24 at pp. 10-16) Finally, Baldor commented that
the proposed definition infers that the arithmetic mean of the full-
load efficiencies of the population of motors is known and that the
nominal full-load efficiency must be specified to be equal to the
arithmetic mean, which would provide no limit to the number of
different values of efficiency that might be marked on nameplates. As
such, Baldor requested further clarification on the determination of
any relationship between nominal full-load efficiency and calculated
efficiency. (Baldor, Public Meeting Transcript, No. 20.4 at pp. 114,
125)
Additionally, Baldor recommended improvements to DOE's usage of
nominal full-load efficiency. Baldor stated that the standard levels
set by DOE should follow a pattern similar to the one already
established in Table 12-6(a), which provides a logical sequence of
numbers, and is familiar to motor users. (Baldor, Public Meeting
Transcript, No. 20.4 at pp. 129-31) Baldor also pointed out that DOE is
able to use the nominal values in Table 12-6(a) without using the
minimum values, which are just provided for user information but not
for compliance. (Baldor, Public Meeting Transcript, No. 20.4 at pp.
142-43) Again, NEMA supported these statements in its written comments.
(NEMA, No. 24 at p. 14) Finally, Baldor and NEMA stated that DOE does
not need to establish energy conservation standards in terms of nominal
efficiency, but rather identify the characteristic of the efficiency
value assigned to a motor to which a value in the table applies.
(Baldor, Public Meeting Transcript, No. 20.4 at pp. 134-35; NEMA, No.
24 at pp. 15-16)
DOE considered all of these comments when it established energy
conservation standards for small electric motors in today's final rule.
DOE agrees with NEMA and Baldor that its energy efficiency standards
are not mandated to be in terms of nominal full-load efficiency.
Instead, DOE believes that nominal efficiency is an issue more related
to certifying compliance. Therefore, DOE has elected to establish
energy conservation standards in terms of average full-load efficiency.
DOE will address comments related to nominal efficiency and propose
provisions for certifying compliance with small electric motor energy
efficiency standards in its supplemental test procedure NOPR for
electric motors.
VI. Analytical Results and Conclusions
A. Trial Standard Levels
DOE examined eight TSLs for polyphase small electric motors and
eight for capacitor-start small motors. Table VI.1 and Table VI.2
present the TSLs and the corresponding efficiencies for the three
representative product classes analyzed for today's final rule. TSL 8
is the max-tech efficiency level for the polyphase motors, and TSL 7 is
the max-tech level for the capacitor-start motors.
Table VI.1--Trial Standard Levels for Polyphase Small Electric Motors *
------------------------------------------------------------------------
Polyphase four-
pole 1-
horsepower %
------------------------------------------------------------------------
TSL 1................................................... 77.3
TSL 2................................................... 78.3
TSL 3................................................... 80.5
TSL 4................................................... 81.1
TSL 4b.................................................. 83.5
TSL 5................................................... 85.2
TSL 6................................................... 86.2
TSL 7................................................... 87.7
------------------------------------------------------------------------
* Standard levels are expressed in terms of full-load efficiency.
DOE's polyphase TSLs represent the increasing efficiency of the
range of motors DOE modeled in its engineering analysis. DOE
incorporated one additional TSL since the NOPR, which is the new TSL
4b. This TSL approximately aligns with the efficiency values proposed
by NEMA in their written comments.
TSLs 1, 2, and 3 represent incremental improvements in efficiency
as a result of increasing the stack height and the slot fill
percentage. TSL 4 represents the efficiency level possible by
increasing stack height by 20 percent while maintaining the baseline
steel
[[Page 10915]]
grade and an aluminum rotor. TSL 4b approximately aligns with the
efficiency levels proposed by NEMA in its written comment, and for the
representative product class is comparable to the efficiency of a
three-digit frame series medium electric motor that meets the
efficiency requirements of EPCA. TSL 5 represents the highest
efficiency value for a space-constrained design before switching to a
copper rotor. TSL 6 represents a level at which DOE has reached the 20
percent limit of increased stack height, increased grades of steel and
included a copper die-cast rotor. Also, TSL 6 is comparable to the
efficiency standard of a three-digit frame series medium electric motor
that meets the NEMA Premium level, which Congress has set as an energy
conservation standard for medium motors through section 313(b) of EISA
2007. At TSL 7, the max-tech efficiency level, for the restricted
designs DOE has reached the design limit using the maximum increase in
stack height of 20 percent and increased grades of steel. At this
level, DOE has also implemented a premium steel type (Hiperco 50), a
copper die-cast rotor, a maximum slot fill percentage of nearly 65
percent. For the lesser space-constrained design, DOE has decreased the
stack height from the design used at TSL 6. This design incorporates a
copper rotor while reaching the design limitation maximum slot fill
percentage.
Table VI.2--Trial Standard Levels for Capacitor-Start Small Electric
Motors*
------------------------------------------------------------------------
Capacitor- Capacitor-
start, start,
induction-run capacitor-run
4-pole 0.50 4-pole 0.75
horsepower horsepower
motors (%) motors (%)
------------------------------------------------------------------------
TSL 1................................... 70.5 (EL 4) 79.5 (EL 2)
TSL 2................................... 70.5 (EL 4) 81.7 (EL 3)
TSL 3................................... 71.8 (EL 5) 81.7 (EL 3)
TSL 4................................... 73.1 (EL 6) 82.8 (EL 4)
TSL 5................................... 73.1 (EL 6) 81.7 (EL 3)
TSL 6................................... 77.6 (EL 7) 87.9 (EL 8)
TSL 7................................... 77.6 (EL 7) 81.7 (EL 3)
TSL 8................................... 77.6 (EL 7) 86.7 (EL 7)
------------------------------------------------------------------------
* Standard levels are expressed in terms of full-load efficiency.
Each TSL for capacitor-start small motors consists of a combination
of efficiency levels for induction-run and capacitor-run motors. CSIR
and CSCR motors are used in similar applications and generally can be
used interchangeably provided the applications are not bound by strict
space constraints and will allow the presence of a second capacitor
housing of the motor. DOE believes that the standards set by today's
rule will impact the relative market share of CSIR and CSCR motors for
general-purpose single-phase applications by changing the upfront cost
of motors as well as their estimated losses. Section IV.G of this final
rule and chapter 9 of the TSD describe DOE's model of this market
dynamic.
DOE developed seven possible efficiency levels for CSIR motors and
eight possible efficiency levels for CSCR motors. Rather than present
all possible combinations of these efficiency levels, DOE chose a
representative set of 8 TSLs that span the range from low energy
savings to the maximum national energy savings. Because of the
interaction between the CSIR and CSCR market share, there is no simple
relationship between the combination of efficiency levels and the
resulting energy savings. DOE's capacitor-start cross-elasticity model
was used to evaluate the impacts of each TSL on motor shipments in each
product class. The model predicts that TSLs 1 through 5 result in
relatively minor changes in product class market shares, while TSLs 6,
7, and 8 result in more significant changes. Uncertainties in the
cross-elasticity model, and in the timescale of market share response
to standards, lead to greater uncertainty in the national impacts of
TSLs 6, 7, and 8, than with TSLs 1 through 5. A summary of results for
all combinations of CSIR and CSCR efficiency levels is presented in
chapter 10 of the TSD.
TSL 1 is a combination consisting of the fourth efficiency level
analyzed for CSIR motors and the second efficiency level for CSCR
motors. This TSL uses similar engineering design options for both CSIR
and CSCR motors and corresponds to an efficiency level roughly
equivalent to the standards levels recommend for 42/48-frame-size CSIR
motors and 56-frame size CSCR motors by NEMA. TSL 2 increases the
efficiency level of the CSCR motor to the third efficiency level, which
corresponds to the minimum life-cycle cost. The efficiency level for
the CSIR motor remains the same as in TSL 1. TSL 3 raises the CSIR
efficiency level, which DOE's model meets by implementing a copper die-
cast rotor, increasing slot fill, and reaching the 20 percent limit on
increased stack height, or by doubling the original stack height and
increasing slot fill. However, the CSCR efficiency level remains at the
minimum LCC.
TSLs 4 and 5 both show the same efficiency level for CSIR motors,
but different efficiency levels for CSCR motors. To obtain the
efficiency level for CSIR motors, DOE had to use either a copper rotor
in combination with a thinner and higher grade of steel and a stack
increase of 20 percent, or only a higher grade of steel with a stack
exceeding a 20-percent increase but no longer than a 100-percent
increase. The 82.2-percent efficiency level for CSCR motors in TSL 5
corresponds again to the same design and efficiency level for TSL 2 and
3. To achieve the 83.2-percent efficiency level for CSCR motors in TSL
4, DOE created designs with a 20-percent increase in stack height and a
higher grade of steel or used a copper rotor with a stack height above
a 20-percent increase. TSL 4 represents the combination of the highest
CSIR and CSCR levels that have more customers who benefit than
customers who do not according to DOE's LCC analysis. TSL 5 increases
energy savings relative to TSL 4 because DOE anticipates there will be
a greater CSCR market share, and the CSCR efficiency level again
corresponds with the minimum LCC.
TSL 6 represents max-tech efficiency levels for CSIR and CSCR
motors, as determined by DOE's engineering analysis; at this level CSCR
motors are very expensive relative to CSIR motors, and DOE forecasts a
nearly complete market shift to CSIR motors. TSLs 7 and 8 represent
cases in which CSIR motors are, on average, very expensive relative to
CSCR motors as a result of standards, and DOE forecasts near-to-
complete market shifts to CSCR motors in both of its reference
scenarios. Because CSCR motors are more efficient at these levels,
national energy savings are increased beyond that of the max-tech
efficiency level, TSL 6. TSL 7 pairs the max-tech efficiency
requirements for CSIR motors with the minimum LCC efficiency level for
CSCR motors, while TSL 8 pairs max-tech CSIR efficiency requirements
with the second-highest CSCR motor efficiency level that DOE analyzed.
The ordering of TSLs 5, 6, 7, and 8, with respect to energy savings is
robust in the face of uncertainties in the inputs to, and the
parameters of, DOE's cross-elasticity model.
B. Significance of Energy Savings
To estimate the energy savings through year 2045 from potential
standards, DOE compared the energy consumption attributable to small
electric motors under the base case (no new standards) to energy
consumption attributable to this equipment under each standards case
(each TSL that DOE has considered). Table VI.3 and Table VI.4 show
DOE's national energy savings estimates, which are based on the AEO
2010 Early Release, for each TSL for polyphase and capacitor-start
[[Page 10916]]
small electric motors, respectively. Chapter 10 of the TSD describes
these estimates in more detail. DOE reports both undiscounted and
discounted values of energy savings. Discounted energy savings
represent a policy perspective where energy savings farther in the
future are less significant than energy savings closer to the present.
Estimating the energy savings due to revised and new energy
efficiency standards required DOE to compare the energy consumption of
small electric motors under the base case to energy consumption of
these products under the trial standard levels. As described in section
IV.G DOE used scaling relations for energy use and equipment price to
extend its average energy use and price for representative product
classes (analyzed in the LCC analysis) to all product classes, and then
developed shipment-weighted sums to estimate the national energy
savings. As described in section IV.G, DOE conducted separate national
impact analyses for polyphase and capacitor-start (single-phase)
motors. Efficiency standards for CSIR and CSCR motors are reflected in
the capacitor-start energy savings and NPV results, which account for
the interchangeability of CSIR and CSCR motors in many applications.
Table VI.3 and Table VI.4 show the forecasted national energy
savings through year 2045 at each of the TSLs. The tables also show the
magnitude of the energy savings if the savings are discounted at rates
of seven and three percent. The energy savings (undiscounted) from
implementing standards for polyphase small electric motors range from
0.05 to 0.37 quad and the savings for capacitor-start small electric
motors range from 1.18 to 2.33 quads.
Table VI.3--Summary of Cumulative National Energy Savings for Polyphase Small Electric Motors
[Energy savings between 2015 and 2045]
----------------------------------------------------------------------------------------------------------------
National energy savings (quads)
Trial standard level --------------------------------------------------------
Not discounted Discounted at 3% Discounted at 7%
----------------------------------------------------------------------------------------------------------------
1...................................................... 0.05 0.03 0.01
2...................................................... 0.09 0.05 0.02
3...................................................... 0.17 0.09 0.04
4...................................................... 0.19 0.10 0.05
4b..................................................... 0.29 0.15 0.07
5...................................................... 0.34 0.18 0.09
6...................................................... 0.37 0.19 0.09
7...................................................... 0.37 0.20 0.09
----------------------------------------------------------------------------------------------------------------
Table VI.4--Summary of Cumulative National Energy Savings for Capacitor-Start Small Electric Motors
[Energy savings between 2015 and 2045]
----------------------------------------------------------------------------------------------------------------
National energy savings (quads)
Trial standard level --------------------------------------------------------
Not discounted Discounted at 3% Discounted at 7%
----------------------------------------------------------------------------------------------------------------
1...................................................... 1.18 0.63 0.31
2...................................................... 1.19 0.64 0.31
3...................................................... 1.36 0.73 0.36
4...................................................... 1.47 0.79 0.39
5...................................................... 1.47 0.79 0.39
6...................................................... 1.61 0.87 0.43
7...................................................... 1.91 1.03 0.51
8...................................................... 2.33 1.25 0.62
----------------------------------------------------------------------------------------------------------------
DOE conducted a wide range of sensitivity analyses, including
scenarios demonstrating the effects of variation in shipments, response
of customers to higher motor prices, the cost of electricity due to a
carbon cap and trade regime, reactive power costs, and (for capacitor-
start motors) the dynamics of CSIR/CSCR consumer choice. These
scenarios show a range of possible outcomes from projected energy
conservation standards, and illustrate the sensitivity of these results
to different input and modeling assumptions. In general, however, they
do not dramatically change the relationship between results at one TSL
with those at another TSL and the relative economic savings and energy
savings of different TSLs remain roughly the same. The estimated
overall magnitude of savings, however, can change substantially, which
can be due to a change in the estimated total number of small electric
motors in use. Details of each scenario are available in chapter 10 of
the TSD and its appendices, along with the national energy savings
estimated for each scenario.
Customers currently appear to favor CSIR motors over CSCR motors,
even if their initial costs and losses are almost identical. DOE's
market-share model includes an ``unfamiliarity cost'' parameter that
attempts to account for this observed behavior. For the shipments
sensitivity analysis, DOE analyzed the total energy savings from
capacitor-start motors when this unfamiliarity cost is significantly
lower (high CSCR model) or higher (low CSCR model) than DOE's reference
case. These scenarios can have a significant impact on the relative
energy savings in different TSLs. Table VI.5 shows the results for the
national energy savings (through year 2045) in these scenarios.
[[Page 10917]]
Table VI.5--Undiscounted Cumulative National Energy Savings for Capacitor-Start Small Electric Motors Under
Different CSIR/CSCR Market Share Scenarios
[Energy savings between years 2015 and 2045]
----------------------------------------------------------------------------------------------------------------
National energy savings quads
--------------------------------------------------------
Trial standard level Reference High CSCR
Low CSCR scenario scenario scenario
----------------------------------------------------------------------------------------------------------------
1...................................................... 1.17 1.18 1.30
2...................................................... 1.17 1.19 1.38
3...................................................... 1.34 1.36 1.52
4...................................................... 1.43 1.47 1.67
5...................................................... 1.43 1.47 1.65
6...................................................... 1.61 1.61 1.62
7...................................................... 1.87 1.91 1.92
8...................................................... 2.17 2.33 2.37
----------------------------------------------------------------------------------------------------------------
C. Economic Justification
In examining the potential for energy savings for small electric
motors, DOE analyzed whether standards would be economically justified.
As part of this examination, a variety of elements were examined. These
elements are based on the various criteria specified in EPCA. See
generally, 42 U.S.C. 6295.
1. Economic Impact on Motor Customers
DOE analyzed the economic impacts on small electric motor customers
by looking at the effects standards would have on the LCC, PBP, and on
various subgroups. DOE also examined the effects of the rebuttable
presumption payback period set out in 42 U.S.C. 6295. All of these
analyses are discussed below.
a. Life-Cycle Costs and Payback Period
Customers of equipment 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.
Therefore, DOE calculated the LCC and PBP for the standards levels
considered in this proceeding. DOE's LCC and PBP analyses provided five
key outputs for each TSL, which are reported in Table VI.6 through
Table VI.8 below. The first three outputs are the proportion of small
motor purchases where the purchase of a design that complies with the
TSL would create a net life-cycle cost, no impact, or a net life-cycle
savings for the consumer. The fourth output is the average net life-
cycle savings from the purchase of a complying design.
Finally, the fifth output is the average PBP for the consumer
purchase of a design that complies with the TSL. The PBP is the number
of years it would take for the customer to recover, as a result of
energy savings, the increased costs of higher-efficiency equipment,
based on the operating cost savings from the first year of ownership.
The payback period is an economic benefit-cost measure that uses
benefits and costs without discounting. DOE's PBP analysis and its
analysis under the rebuttable presumption test both address the payback
period for a standard. DOE based its estimates of the average PBPs for
small electric motors on energy consumption under conditions of actual
use of these motors and also analyzed the amount of energy consumption
for purposes of the rebuttable presumption calculations using the
conditions prescribed by the DOE test procedure. See 42 U.S.C.
6295(o)(2)(B)(iii). Moreover, as discussed above, while DOE examined
the rebuttable-presumption criteria (see TSD section VI.C.1.d), it
determined today's standard levels to be economically justified through
a more detailed analysis of the economic impacts of increased
efficiency pursuant to section 325(o)(2)(B)(i) of EPCA. (42 U.S.C.
6295(o)(2)(B)(i)) Detailed information on the LCC and PBP analyses can
be found in TSD Chapter 8.
DOE analyzed the life-cycle cost for three representative motors,
as shown in Table VI.6 through Table VI.8. A Monte Carlo simulation was
performed to incorporate uncertainty and variability into the analysis.
A random sample of 10,000 motors was drawn from the distributions of
current national shipments by motor type, application, owner type,
operating hours, and other inputs, using Crystal Ball, a commercially
available software program. The model calculated the LCC and PBP for
equipment at each efficiency level for each of the 10,000 motors
sampled. For a 1-horsepower polyphase motor, customers experience net
LCC savings, on average, through efficiency level 4b. Efficiency level
3 has the minimum average life-cycle cost. For a \1/2\-horsepower CSIR
motor, customers experience net LCC savings, on average, through
efficiency level 6. CSIR efficiency level 4 has the minimum average
life-cycle cost. For a \3/4\-horsepower CSCR motor, customers
experience net LCC savings, on average, through efficiency level 5.
CSCR efficiency level 3 has the greatest average life-cycle cost
savings. The average payback periods in the tables are substantially
longer than the median payback periods because a fraction of customers
run their motors very few hours per year. This results in
extraordinarily long payback periods for this fraction of customers and
results in average payback periods that far exceed the median payback
period. DOE believes that the median payback period represents the
anticipated experience of the typical customer more accurately than the
average payback period.
[[Page 10918]]
Table VI.6--Polyphase Small Electric Motors: Life-Cycle Cost and Payback Period Results for a One Horsepower Motor
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period years
--------------------------------------------------------------------------------------------------------
Efficiency Average Average Average Customers with
Energy efficiency level % Average annual annual life- Average ----------------------
installed energy use operating cycle savings $ Net cost Net Average Median
price $ kWh cost $ cost $ % benefit %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................... 74.0 517 1,892 130 1,268 ......... ......... ......... ......... .........
1................................. 76.1 530 1,729 127 1,261 8 46.8 53.2 21.8 7.1
2................................. 77.7 537 1,686 123 1,249 19 41.3 58.7 17.8 5.8
3................................. 79.4 549 1,630 119 1,237 31 40.6 59.4 17.7 5.6
4................................. 80.1 558 1,615 118 1,240 29 45.1 54.9 20.4 6.5
4b................................ 82.6 589 1,540 113 1,240 28 51.2 48.8 24.8 7.8
5................................. 84.4 655 1,508 110 1,291 -23 65.8 34.3 41.5 12.4
6................................. 85.3 711 1,488 109 1,339 -71 77.4 22.6 54.2 16.9
7................................. 87.0 1,477 1,462 107 2,095 -827 96.8 3.2 243.0 51.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VI.7--Capacitor-Start Induction-Run Motors: Life-Cycle Cost and Payback Period Results for a One-Half Horsepower Motor
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period years
--------------------------------------------------------------------------------------------------------
Efficiency Average Average Average Customers with
Energy efficiency level % Average annual annual life- Average ----------------------
installed energy use operating cycle savings $ Net cost Net Average Median
price $ kWh cost $ cost $ % benefit %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................... 59.0 494 1,250 91 915 ......... ......... ......... ......... .........
1................................. 62.2 502 1,170 85 896 19 27 73 8.6 2.7
2................................. 64.5 508 1,116 81 884 31 28 72 8.8 2.8
3................................. 66.7 511 1,064 77 869 46 24 76 7.5 2.3
4................................. 71.5 529 976 71 857 58 32 68 10.5 3.2
5................................. 72.7 549 951 69 868 47 42 58 15.1 4.7
6................................. 74.0 593 920 67 902 13 55 45 24.9 7.2
7................................. 78.4 996 860 63 1,285 -369 66 34 108.2 12.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VI.8--Capacitor-Start Capacitor-Run Motors: Life-Cycle Cost and Payback Period Results for a Three-Quarter Horsepower Motor
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period years
--------------------------------------------------------------------------------------------------------
Efficiency Average Average Average Customers with
Energy efficiency level % Average annual annual life- Average ----------------------
installed energy use operating cycle savings $ Net cost Net Average Median
price $ kWh cost $ cost $ % benefit %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................... 72.0 548 1,425 104 1,026 ......... ......... ......... ......... .........
1................................. 75.7 559 1,360 99 1,014 12 36 64 13.4 4.3
2................................. 80.0 587 1,250 91 1,005 21 46 54 18.5 5.8
3................................. 82.2 599 1,205 88 1,002 24 48 52 19.1 5.9
4................................. 83.2 612 1,214 88 1,015 11 55 45 24.4 7.8
5................................. 84.5 630 1,201 88 1,029 -3 62 38 29.5 9.4
6................................. 85.2 670 1,179 86 1,062 -36 70 30 40.3 11.8
7................................. 87.1 697 1,146 84 1,078 -52 75 25 43.5 13.1
8................................. 88.4 1,485 1,115 81 1,856 -830 99 1 250.0 49.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE analyzed the average life-cycle cost for a shipment-weighted
distribution of product classes, as shown in Table VI.9, Table VI.10
and Table VI.11. The results in these tables account for motors of
different horsepower and pole configuration from the three
representative motors shown in Table VI.6 through Table VI.8.
Table VI.9--Polyphase Motors: Life-Cycle Cost and Payback Period Results for a Shipment-Weighted Product Class Distribution
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period years
--------------------------------------------------------------------------------------------------------
Efficiency Average Average Average Customers with
Energy efficiency level % Average annual annual life- Average ----------------------
installed energy use operating cycle savings $ Net cost Net Average Median
price $ kWh cost $ cost $ % benefit %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................... 78.8 515 1934 139.52 1,323 ......... ......... ......... ......... .........
1................................. 80.6 528 1883 135.85 1,314 9 44.7 55.3 21.1 6.6
2................................. 82.0 535 1836 132.45 1,302 22 39.2 60.8 17.2 5.3
3................................. 83.4 547 1775 128.07 1,287 36 38.7 61.3 17.1 5.2
[[Page 10919]]
4................................. 84.0 556 1759 126.91 1,289 34 42.7 57.3 19.6 6.0
4b................................ 86.1 587 1678 121.06 1,288 36 49.2 50.8 23.9 7.3
5................................. 87.6 651 1643 118.52 1,337 -13 63.2 36.8 39.1 11.5
6................................. 88.4 707 1622 116.99 1,383 -60 74.8 25.2 51.8 15.7
7................................. 89.7 1,465 1594 114.96 2,131 -808 96.2 3.8 220.4 47.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VI.10--Capacitor-Start Induction-Run Motors: Life-Cycle Cost and Payback Period Results for a Shipment-Weighted Product Class Distribution
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period years
--------------------------------------------------------------------------------------------------------
Average Average Average Average Customers with
Energy efficiency level efficiency Average annual annual life- Average ----------------------
% installed energy use operating cycle savings $ Net cost Net Average Median
price $ kWh cost $ cost $ % benefit %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................... 49.9 496 1265 92.12 920 ......... ......... ......... ......... .........
1................................. 53.2 504 1182 86.03 900 20 26.9 73.1 8.5 2.5
2................................. 55.7 510 1125 81.89 888 33 27.7 72.3 8.7 2.6
3................................. 58.1 513 1071 77.96 871 49 24.0 76.0 7.4 2.2
4................................. 63.5 531 979 71.28 859 62 30.7 69.3 10.4 3.1
5................................. 64.8 551 953 69.40 870 51 40.2 59.8 14.9 4.5
6................................. 66.3 595 920 67.00 903 17 54.1 45.9 24.5 7.0
7................................. 71.5 1,000 858 62.48 1,287 -367 65.1 34.9 104.4 11.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VI.11--Capacitor-Start Capacitor-Run Motors: Life-Cycle Cost and Payback Period Results for a Shipment-Weighted Product Class Distribution
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period years
--------------------------------------------------------------------------------------------------------
Average Average Average Average Customers with
Energy efficiency level efficiency Average annual annual life- Average ----------------------
% installed energy use operating cycle savings $ Net cost Net Average Median
price $ kWh cost $ cost $ % benefit %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................... 73.2 582 2310 167.38 1,349 ......... ......... ......... ......... .........
1................................. 76.7 594 2208 160.02 1,325 24 29.3 70.7 10.9 3.3
2................................. 80.9 626 2036 147.55 1,299 50 38.4 61.6 14.9 4.4
3................................. 83.0 639 1965 142.43 1,289 60 39.7 60.3 15.4 4.6
4................................. 84.0 653 1979 143.43 1,304 45 46.1 53.9 19.8 5.9
5................................. 85.2 673 1959 141.96 1,318 32 52.6 47.4 23.9 7.2
6................................. 85.9 719 1923 139.37 1,351 -1 60.2 39.9 32.5 8.9
7................................. 87.8 749 1873 135.72 1,364 -15 65.1 35.0 35.1 10.1
8................................. 89.0 1,629 1824 132.17 2,228 -879 94.7 5.3 200.0 36.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
b. Life-Cycle Cost Sensitivity Calculations
DOE made sensitivity calculations for the case where CSIR motor
owners switch to CSCR motors. DOE reports the details of the
sensitivity calculations in chapter 8 of the TSD and the accompanying
appendices. Section VI.C.1.a above describes the relationship between
efficiency levels for the two categories of capacitor-start motors and
the TSLs. For TSLs where there is a large increase in first cost for
CSIR motors and only a moderate increase in price for CSCR motors, DOE
forecasts that a large fraction of CSIR motor customers will switch to
CSCR motors. Table VI.12 shows the shipments-weighted average of the
LCC for CSIR motors including those users that switch to CSCR. The
table shows that a negative average LCC is forecast for TSL 6, the
level at which both CSIR and CSCR motors are at the maximum
technologically feasible efficiency for space-constrained designs, and
at TSL 8, the level with the greatest energy savings.
[[Page 10920]]
Table VI.12--Capacitor-Start Induction-Run Motors: Shipment-Weighted Life-Cycle Cost and Payback Period Results for a One-Half Horsepower Motor with
Switching to CSCR
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings
-------------------------------------------------------------------------------------------------
Average Average Customers with
Trial standard level Average annual annual Average life Average ---------------------------
installed energy use operating cycle cost $ savings $ Net benefit
price $ kWh cost $ Net cost % %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline
1..................................................... 528 969 70.8 854 58 32.5 67.5
2..................................................... 528 969 70.8 854 58 32.5 67.5
3..................................................... 547 945 69.0 865 47 41.7 58.3
4..................................................... 590 913 66.7 897 15 55.0 45.0
5..................................................... 589 913 66.7 897 15 55.0 45.0
6..................................................... 994 854 62.4 1,282 -370 66.0 34.0
7..................................................... 601 863 63.1 891 23 53.7 46.3
8..................................................... 633 847 61.9 917 -3 60.6 39.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Additional sensitivity analyses examined the magnitude by which the
estimates varied when the results of the NEMA survey of OEMs (motor
distributions by application and sector, operating hours, and the
fraction of motors that are space-constrained in their applications)
were used. Other sensitivities were conducted by varying inputs such as
the cost of electricity, the purchase year of the motor, the motor
capacity, the number of poles and other inputs and assumptions of the
analysis. DOE reports the details of all of the sensitivity
calculations in chapter 8 of the TSD and the accompanying appendices.
As discussed in section IV.E.1 above, NEMA submitted the results of
a survey of their OEM customers that install motors covered by today's
rule in their products. The survey reports distributions by application
and owner type, estimates of annual hours of operation, and the
fraction of motors that are space-constrained. NEMA also provided
information on a sixth application not included in DOE's NOPR, service
industry motors. DOE ran a sensitivity analysis using the data NEMA
provided on motor distributions. Under this sensitivity, LCC savings
are reduced and payback periods are increased for polyphase and CSCR
motor customers, while LCC savings are increased and payback periods
reduced for CSIR motor customers. This is the result of average
operating hours of polyphase and CSCR motors being reduced by about 30
percent from the DOE reference case, while operating hours of CSIR
motors are increased by about 10 percent.
Details on these and other LCC sensitivity cases can be found in
TSD appendix 8A.
c. Customer Subgroup Analysis
Using the LCC spreadsheet model, DOE estimated the impacts of the
TSLs on the following customer subgroups: Small businesses and
customers with space-constrained applications. DOE analyzed the small
business subgroup because this group has typically had less access to
capital than larger businesses, which results in higher financing costs
and a higher discount rate than the industry average. 74 FR 61442,
61459. DOE estimated the LCC and PBP for the small business subgroup,
as shown in Table VI.13 through Table VI.15. The analysis indicates
that the small business subgroup is expected to have lower LCC savings
and longer payback periods than the industry average.
Chapter 12 of the TSD provides more detailed discussion on the LCC
subgroup analysis and results.
Table VI.13--Polyphase Motors: Small Business Customer Subgroup
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period years
----------------------------------------------------------------------------------------------------------
Average Consumers with
Energy efficiency level Average Average Average Average life- ----------------------
installed annual annual life-cycle cycle Average Median
price $ energy use operating cost $ cost Net cost Net
kWh cost $ savings $ % benefit %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..................................... 516 1888 137.84 1,192 ......... ......... ......... ......... .........
1............................................ 529 1838 134.21 1,186 6 51.9 48.1 22.0 6.9
2............................................ 536 1792 130.85 1,177 15 46.1 54.0 18.0 5.6
3............................................ 548 1733 126.54 1,167 25 45.5 54.5 17.9 5.5
4............................................ 556 1718 125.39 1,170 22 49.7 50.3 20.6 6.3
4b........................................... 588 1639 119.63 1,174 18 56.5 43.5 25.1 7.7
5............................................ 652 1604 117.13 1,226 -34 69.6 30.4 41.8 12.2
6............................................ 708 1584 115.60 1,274 -82 80.2 19.9 54.7 16.7
7............................................ 1,460 1557 113.63 2,017 -825 97.4 2.6 243.1 50.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 10921]]
Table VI.14--Capacitor-Start Induction Run Motors: Small Business Customer Subgroup
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period years
----------------------------------------------------------------------------------------------------------
Average Consumers with
Energy efficiency level Average Average Average Average life- ----------------------
installed annual annual life-cycle cycle Average Median
price $ energy use operating cost $ cost Net cost Net
kWh cost $ savings $ % benefit %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..................................... 497 1261 91.33 869 ......... ......... ......... ......... .........
1............................................ 506 1178 85.28 852 16 31.3 68.7 8.5 2.6
2............................................ 512 1121 81.16 842 27 32.4 67.6 8.7 2.7
3............................................ 514 1067 77.25 828 41 28.0 72.0 7.4 2.3
4............................................ 533 976 70.63 819 50 35.8 64.2 10.4 3.2
5............................................ 553 950 68.75 832 37 45.3 54.7 14.9 4.6
6............................................ 597 917 66.37 866 3 58.6 41.4 24.7 7.1
7............................................ 995 855 61.89 1,246 -377 68.5 31.5 108.4 11.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VI.15 Capacitor-Start Capacitor Run Motors: Small Business Customer Subgroup
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period years
----------------------------------------------------------------------------------------------------------
Average Consumers with
Energy efficiency level Average Average Average Average life- ----------------------
installed annual annual life-cycle cycle Average Median
price $ energy use operating cost $ cost Net cost Net
kWh cost $ savings $ % benefit %
--------------------------------------------------------------------------------------------------------------------------------------------------------
CSCR Baseline................................ 586 2339 169.80 1,273 ......... ......... ......... ......... .........
1............................................ 598 2236 162.36 1,253 20 33.6 66.4 10.8 3.3
2............................................ 630 2062 149.73 1,234 39 43.4 56.6 15.0 4.4
3............................................ 643 1991 144.55 1,226 47 44.7 55.3 15.5 4.6
4............................................ 657 2005 145.59 1,241 32 51.1 48.9 19.7 6.0
5............................................ 678 1985 144.09 1,256 17 58.0 42.0 23.9 7.3
6............................................ 723 1949 141.51 1,290 -17 65.1 34.9 32.8 9.1
7............................................ 754 1898 137.82 1,306 -33 69.7 30.4 35.4 10.2
8............................................ 1,633 1849 134.23 2,171 -898 96.0 4.0 205.3 37.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE has analyzed customers with space-constrained applications,
i.e., customers whose motor stack length can increase by no more than
20 percent, because they cannot realize the full economic benefit of
efficiency improvements in small electric motors. Increasing the stack
length of small motors is one way to improve their efficiency. But
customers with space-constrained applications cannot increase the stack
length of the motors they use without being subject to burdens to which
other small motor users are not. Furthermore, although small electric
motors without increased stack length could meet the TSLs DOE has
evaluated in this rulemaking, such motors use other, more costly design
options. Table VI.16 through Table VI.18 show the mean LCC savings and
the mean PBP (in years) for equipment that meets the energy
conservation standards in today's final rule for the subgroup of
customers with space-constrained applications.
The analysis indicates that the economic benefits of efficiency
improvements in small electric motors will be lower for customers
subject to space constraints than for those who do not face such
constraints, as well as for the industry average, particularly for
motors at the higher efficiency levels. For the standard levels
promulgated by today's rule, customers will still realize net benefits
from space-constrained polyphase and CSCR motors, but not from space-
constrained CSIR motors. OEMs whose applications have space constraints
can replace a less efficient CSIR motor with a more efficient CSCR
motor without increasing stack length, and still realize net benefits,
as shown in Table VI.12 above. If these applications cannot accommodate
a motor with a run capacitor, OEMs can either redesign their
application to accommodate a CSCR motor, purchase a stockpile of motors
not covered by today's rule to install in future production of their
application, or replace their motor with a fully enclosed motor not
covered by today's rule.
Chapter 11 of the TSD explains DOE's method for conducting the
customer subgroup analysis and presents the detailed results of that
analysis.
Table VI.16--Polyphase Motors: Space-Constrained Applications Subgroup
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period years
----------------------------------------------------------------------------------------------------------
Average Consumers with
Energy efficiency level Average Average Average Average life- ----------------------
installed annual annual life-cycle cycle Average Median
price $ energy use operating cost $ cost Net cost Net
kWh cost $ savings $ % benefit %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..................................... 512 1903 140.60 1,318 ......... ......... ......... ......... .........
1............................................ 524 1853 136.90 1,308 9 45.6 54.4 21.5 6.8
2............................................ 531 1807 133.49 1,296 22 40.2 59.8 17.5 5.5
3............................................ 543 1748 129.13 1,282 36 39.6 60.4 17.4 5.4
4............................................ 552 1732 127.96 1,284 34 43.7 56.3 20.0 6.3
4b........................................... 582 1650 121.98 1,280 37 49.7 50.3 24.2 7.5
5............................................ 756 1610 119.00 1,437 -120 84.8 15.2 71.8 22.3
6............................................ 769 1590 117.55 1,441 -123 84.3 15.7 70.7 22.1
[[Page 10922]]
7............................................ 3,548 1543 114.11 4,201 -2,883 100.0 0.0 728.2 226.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VI.17--Capacitor-Start Induction Run Motors: Space-Constrained Applications Customer Subgroup
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period years
----------------------------------------------------------------------------------------------------------
Average Consumers with
Energy efficiency level Average Average Average Average life- ----------------------
installed annual annual life-cycle cycle Average Median
price $ energy use operating cost $ cost Net cost Net
kWh cost $ savings $ % benefit %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..................................... 494 1274 92.66 923 ......... ......... ......... ......... .........
1............................................ 503 1190 86.56 903 20 26.7 73.3 8.5 2.6
2............................................ 509 1133 82.42 890 33 27.5 72.5 8.8 2.6
3............................................ 511 1079 78.48 873 49 23.6 76.4 7.5 2.2
4............................................ 539 976 71.00 867 56 37.2 62.8 12.9 3.9
5............................................ 544 955 69.45 864 58 38.0 62.0 13.4 4.0
6............................................ 665 925 67.28 976 -53 74.0 26.0 42.3 12.6
7............................................ 2,559 848 61.68 2,843 -1,921 100.0 0.0 418.9 124.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VI.18--Capacitor-Start Capacitor Run Motors: Space-Constrained Applications Customer Subgroup
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period years
----------------------------------------------------------------------------------------------------------
Average Consumers with
Energy efficiency level Average Average Average Average life- ----------------------
installed annual annual life-cycle cycle Average Median
price $ energy use operating cost $ cost Net cost Net
kWh cost $ savings $ % benefit %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..................................... 579 2313 167.74 1,355 ......... ......... ......... ......... .........
1............................................ 591 2212 160.38 1,331 24 29.2 70.8 10.9 3.3
2............................................ 633 2053 148.85 1,320 35 47.4 52.6 19.0 5.8
3............................................ 645 1998 144.88 1,312 43 47.2 52.8 19.2 5.9
4............................................ 653 1991 144.36 1,316 40 49.3 50.7 21.1 6.5
5............................................ 671 1981 143.61 1,330 26 55.4 44.6 25.3 7.8
6............................................ 839 1914 138.80 1,476 -121 84.3 15.7 60.1 18.4
7............................................ 854 1862 135.02 1,473 -118 82.5 17.5 56.3 17.1
8............................................ 3,992 1815 131.61 4,597 -3,242 100.0 0.0 634.4 193.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
d. Rebuttable Presumption Payback
As discussed in section III.D.2, EPCA provides a rebuttable
presumption that, in essence, an energy conservation standard is
economically justified if the increased purchase cost for a product
that meets the standard is less than three times the value of the
first-year energy savings resulting from the standard. However, DOE
routinely conducts a full economic analysis that considers the full
range of impacts, including those to the customer, manufacturer,
Nation, and environment, as required under 42 U.S.C. 6295(o)(2)(B)(i)
and 42 U.S.C. 6316(e)(1). The results of this analysis serve as the
basis for DOE to evaluate definitively the economic justification for a
potential standard level (thereby supporting or rebutting the results
of any preliminary determination of economic justification).
For comparison with the more detailed analysis results, DOE
calculated a rebuttable presumption payback period for each TSL. Table
VI.19 and Table VI.20 show the rebuttable presumption payback periods
for the representative product classes. No polyphase TSL has a
rebuttable presumption payback period of less than 3 years. For CSIR
and CSCR motors, TSLs 1 through 3 have rebuttable presumption payback
periods of less than 3 years.
Table VI.19--Rebuttable-Presumption Payback Periods for Representative
Polyphase Small Electric Motors (1 hp, 4 Poles)
------------------------------------------------------------------------
Payback
TSL period years
------------------------------------------------------------------------
1....................................................... 3.3
2....................................................... 3.0
3....................................................... 3.3
4....................................................... 3.8
4b...................................................... 4.9
5....................................................... 7.9
6....................................................... 10.2
7....................................................... 45.7
------------------------------------------------------------------------
[[Page 10923]]
Table VI.20--Rebuttable-Presumption Payback Periods for Representative Capacitor-Start Small Electric Motors
----------------------------------------------------------------------------------------------------------------
Induction-run (\1/2\ hp, 4 poles) Capacitor-run (\3/4\ hp 4 poles)
-----------------------------------------------------------------------
TSL Payback period Payback period
CSIR level years CSCR level years
----------------------------------------------------------------------------------------------------------------
1....................................... 4 1.7 2 1.5
2....................................... 4 1.7 3 2.7
3....................................... 5 2.5 3 2.7
4....................................... 6 4.1 4 3.3
5....................................... 6 4.1 3 2.7
6....................................... 7 17.7 8 35.5
7....................................... 7 17.7 3 2.7
8....................................... 7 17.7 7 6.0
----------------------------------------------------------------------------------------------------------------
2. Economic Impact on Manufacturers
For the NOPR, DOE used the INPV in the MIA to compare the financial
impacts of different TSLs on small electric motor manufacturers. 74 FR
61464-69. The INPV is the sum of all net cash flows discounted by the
industry's cost of capital (discount rate). DOE used the GRIM to
compare the INPV of the base case (no new energy conservation
standards) to that of each TSL for the small electric motor industry.
To evaluate the range of cash-flow impacts on this industry, DOE
constructed different scenarios using two different assumptions for
manufacturer markups: (1) The preservation-of-return-on-invested-
capital scenario, and (2) the preservation-of-operating-profit
(absolute dollars) scenario. These two scenarios correspond to the
range of anticipated market responses, and results in a unique set of
cash flows and corresponding industry value at each TSL. These steps
allowed DOE to compare the potential impacts on the industry as a
function of TSLs in the GRIM. The difference in INPV between the base
case and the standards case is an estimate of the economic impacts that
implementing that standard level would have on the entire industry. For
today's notice, DOE continues to use the above methodology and presents
the results in the subsequent sections. See chapter 12 of the TSD for
additional information on MIA methodology and results.
a. Industry Cash-Flow Analysis Results
Using the two different markup scenarios, DOE estimated the impact
of new standards for small electric motors on the INPV of the small
electric motors manufacturing industry. The impact 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 industry in today's
dollars. DOE calculated the INPV by summing all of the annual net cash
flows, discounted at the small electric motor industry's cost of
capital or discount rate.
To assess the lower end of the range of potential impacts for the
small electric motor industry, DOE considered a scenario where a
manufacturer's percentage return on working capital and capital
invested in fixed assets (net plant, property, and equipment), the year
after the new energy conservation standards become effective, is the
same as in the base case. This scenario is called the preservation-of-
return-on-invested-capital scenario. To assess the higher end of the
range of potential impacts for the small electric motor industry, DOE
considered a scenario in which the absolute dollar amount of the
industry's base-case operating profit (earnings before interest and
taxes) remains the same and does not increase in the year after
implementation of the standards. This scenario is called the
preservation-of-operating-profit (absolute dollars) scenario. For both
markup scenarios, DOE considered the same reference shipment scenario
found in the NIA. Table VI.21 through Table VI.24 show the range of
changes in INPV that DOE estimates could result from the TSLs DOE
considered for this final rule. The results present the impacts of
energy conservation standards for polyphase small electric motors
separately and combine the impacts for CSIR and CSCR small electric
motors. The tables also present the equipment conversion costs and
capital conversion costs that the industry would incur at each TSL.
Table VI.21--Manufacturer Impact Analysis for Polyphase Small Electric Motors
[Preservation of return on invested capital markup scenario]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base -------------------------------------------------------------------------------
case 1 2 3 4 4b 5 6 7
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV................................. 2009$ millions.......... 70 69 70 71 70 73 82 88 165
Change in INPV....................... 2009$ millions.......... ....... (0.19) 0.34 0.98 0.57 3.37 12.62 18.54 95.27
%....................... ....... (0.27) 0.49 1.41 0.82 4.84 18.15 26.65 136.95
Equipment Conversion Costs........... 2009$ millions.......... ....... 1.9 1.9 1.9 3.8 3.8 3.8 5.8 7.7
Capital Conversion Costs............. 2009$ millions.......... ....... 0.4 0.7 0.7 0.9 1.9 7.1 10.7 37.3
Total Investment Required............ 2009$ millions.......... ....... 2.3 2.6 2.7 4.7 5.7 10.9 16.5 45.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VI.22--Manufacturer Impact Analysis for Polyphase Small Electric Motors
[Preservation of operating profit markup scenario]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case ---------------------------------------------------------------------------------------
1 2 3 4 4b 5 6 7
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV............................ 2009$ millions..... 70 68 68 67 66 64 58 52 0
[[Page 10924]]
Change in INPV.................. 2009$ millions..... ......... (1.49) (1.86) (2.26) (3.58) (5.43) (11.80) (17.51) (69.47)
%.................. ......... (2.15) (2.67) (3.25) (5.15) (7.80) (16.96) (25.16) (99.85)
Equipment Conversion Costs...... 2009$ millions..... ......... 1.9 1.9 1.9 3.8 3.8 3.8 5.8 7.7
Capital Conversion Costs........ 2009$ millions..... ......... 0.4 0.7 0.7 0.9 1.9 7.1 10.7 37.3
Total Investment Required....... 2009$ millions..... ......... 2.3 2.6 2.7 4.7 5.7 10.9 16.5 45.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VI.23--Manufacturer Impact Analysis for CSIR and CSCR Small Electric Motors
[Preservation of return on invested capital markup scenario]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case ---------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV............................ 2009$ millions..... 279 287 289 295 311 308 466 297 325
Change in INPV.................. 2009$ millions..... ......... 8.40 9.46 16.27 32.15 28.48 186.60 18.40 46.35
%.................. ......... 3.01 3.39 5.83 11.52 10.20 66.87 6.59 16.61
Equipment Conversion Costs...... 2009$ millions..... ......... 16.7 16.7 24.9 25.3 24.9 33.7 24.9 25.3
Capital Conversion Costs........ 2009$ millions..... ......... 9.4 10.5 16.5 21.7 18.3 79.9 20.7 29.0
Total Investment Required....... 2009$ millions..... ......... 26.1 27.2 41.4 47.0 43.2 113.6 45.5 54.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VI.24--Manufacturer Impact Analysis for CSIR and CSCR Small Electric Motors
[Preservation of operating profit markup scenario]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case ---------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV............................ 2009$ millions..... 279 259 258 247 236 239 127 245 226
Change in INPV.................. 2009$ millions..... ......... (19.99) (20.79) (32.42) (43.15) (40.09) (152.05) (34.05) (52.58)
%.................. ......... (7.16) (7.45) (11.62) (15.46) (14.37) (54.49) (12.20) (18.84)
Equipment Conversion Costs...... 2009$ millions..... ......... 16.7 16.7 24.9 25.3 24.9 33.7 24.9 25.3
Capital Conversion Costs........ 2009$ millions..... ......... 9.4 10.5 16.5 21.7 18.3 79.9 20.7 29.0
Total Investment Required....... 2009$ millions..... ......... 26.1 27.2 41.4 47.0 43.2 113.6 45.5 54.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Polyphase Small Electric Motors
DOE estimated the impacts on INPV at TSL 1 to range from $0.19
million to -$1.49 million, or a change in INPV of -0.27 percent to -
2.15 percent. At this level, industry cash flow decreases by
approximately 13.3 percent, to $4.84 million, compared to the base-case
value of $5.58 million in the year leading up to the energy
conservation standards. TSL 1 represents an efficiency increase of 2
percent over the baseline for polyphase motors. The majority of
manufacturers have motors that meet this efficiency level. All
manufacturers that were interviewed stated that their existing motor
designs allow for simple modifications that would require minor capital
and equipment conversion costs to reach TSL 1. A possible modification
analyzed in the engineering analysis is a roughly 7 percent increase in
the number of laminations within both space-constrained and non space-
constrained motors. Manufacturers indicated that modifications like
increased laminations could be made within existing baseline motor
designs without significantly altering their size. In addition, these
minor design changes will not raise the production costs beyond the
cost of most motors sold today, resulting in minimal impacts on
industry value.
DOE estimated the impacts in INPV at TSL 2 to range from $0.34
million to -$1.86 million, or a change in INPV of 0.49 percent to 2.67
percent. At this level, industry cash flow decreases by approximately
15.6 percent, to $4.71 million, compared to the base-case value of
$5.58 million in the year leading up to the energy conservation
standards. TSL 2 represents an efficiency increase of 4 percent over
the baseline for polyphase motors. Similar to TSL 1, at TSL 2
manufacturers stated that their existing motor designs allow for simple
modifications that would entail only minor capital and equipment
conversion costs. A possible modification analyzed in the engineering
analysis increases the number of laminations by approximately 15
percent from the baseline within both space-constrained and non space-
constrained motors. Manufacturers indicated that these modifications
could be made within baseline motor designs without significantly
changing their size. At TSL 2, the production costs of standards
compliant motors do not increase enough to significantly affect INPV.
At TSL 3, DOE estimated the impacts in INPV to range from $0.98
million to -$2.26 million, or a change in INPV of 1.41 percent to -3.25
percent. At this level, industry cash flow decreases by approximately
16.4 percent, to $4.67 million, compared to the base-case value of
$5.58 million in the year leading up to the energy conservation
standards. TSL 3 represents an efficiency increase of 6 percent over
the baseline for polyphase motors. Similar to TSL 1 and TSL 2, at TSL 3
manufacturers stated that their existing motor designs would still
allow for
[[Page 10925]]
simple modifications that would not require significant capital and
equipment conversion costs. In the engineering analysis, standards
compliant motors that meet the efficiency requirements at TSL 3 have
17-percent increase in the number of laminations compared to the
baseline design within both space-constrained and non space-constrained
motors. These changes do not result in significant impacts on INPV.
At TSL 4, DOE estimated the impacts in INPV to range from $0.57
million to -$3.58 million, or a change in INPV of 0.82 percent to -5.15
percent. At this level, industry cash flow decreases by approximately
27.7 percent, to $4.03 million, compared to the base-case value of
$5.58 million in the year leading up to the energy conservation
standards. TSL 4 represents an efficiency increase of 7 percent over
the baseline for polyphase motors. Most manufacturers that were
interviewed are able to reach this level without significant redesigns.
At TSL 4, a possible design pathway for manufacturers could be to
increase the number of laminations by approximately 20 percent over the
baseline designs within space-constrained and non space-constrained
motors.
At TSL 4b, DOE estimated the impacts in INPV to range from $3.37
million to -$5.43 million, or a change in INPV of 4.84 percent to -7.80
percent. At this level, industry cash flow decreases by approximately
36.0 percent, to $3.57 million, compared to the base-case value of
$5.58 million in the year leading up to the energy conservation
standards. TSL 4b represents an efficiency increase of 8 percent over
the baseline for polyphase motors. Most manufacturers that were
interviewed are able to reach this level without significant redesigns.
A possible redesign for non space-constrained motors would include
increasing the number of laminations by 47 percent relative to the
baseline motor design. For space-constrained motors, redesigns could
require up to 20 percent more laminations of better grade electrical
steel. However, manufacturers reported that efficiency levels similar
to TSL 4b would be the highest achievable before required efficiencies
could significantly change motor designs and production equipment.
However, setting a level higher than TSL 4b may require significant
motor size changes.
At TSL 5, DOE estimated the impacts in INPV to range from $12.62
million to -$11.80 million, or a change in INPV of 18.15 percent to -
16.96 percent. At this level industry cash flow decreases by
approximately 77.7 percent, to $1.24 million, compared to the base-case
value of $5.58 million in the year leading up to the energy
conservation standards. TSL 5 represents an efficiency increase of 10
percent over the baseline for polyphase motors. TSL 5 is equivalent to
the current NEMA premium level that manufacturers produce for medium-
sized electric motors.
Although some manufacturers reported having existing small electric
motors that reach TSL 5, the designs necessary are more complex than
their cost optimized designs at lower TSLs. A possible redesign for non
space-constrained motors would include adding up to 49 percent more
laminations relative to the baseline motor design and improving the
grade of steel. For space-constrained motors, redesigns could require
up to 114 percent more laminations of a thinner and higher grade of
steel. Manufacturers are concerned that redesigns at TSL 5 could
increase the size of the motors if they do not currently have motors
that reach the NEMA premium efficiency levels. A shift to larger motors
could be detrimental to sales due to the inability of OEMs to use
standards-compliant motors as direct replacements in some applications.
According to manufacturers, at TSL 5, the industry would incur
significantly higher capital and equipment conversion costs in
comparison to the lower efficiency levels analyzed. DOE estimates that
the capital and equipment conversion costs required to make the
redesigns at TSL 5 would be approximately four times the amount
required to meet TSL 1. At TSL 5 manufacturers would also be required
to shift their entire production of baseline motors to higher priced
and higher efficiency motors, making their current cost-optimized
designs obsolete. These higher production costs could have a greater
impact on the industry value if operating profit does not increase.
Manufacturers indicated that setting energy conservation standards at
TSL 5 could cause some manufacturers to consider exiting the small
electric motor market because of the lack of resources, potentially
unjustifiable investments for a small segment of their business, and
the possibility of lower revenues if OEMs will not accept large motors.
At TSL 6, DOE estimated the impacts in INPV to range from $18.54
million to -$17.51 million, or a change in INPV of 26.65 percent to -
25.16 percent. At this level industry cash flow decreases by
approximately 117.2 percent, to -$0.96 million, compared to the base-
case value of $5.58 million in the year leading up to the energy
conservation standards. TSL 6 represents an efficiency increase of 12
percent over the baseline for polyphase motors. Currently, no small
electric motors are rated above the equivalent to the NEMA premium
standard (TSL 5). Possible redesigns for space-constrained motors at
TSL 6 include the use of copper rotors and a 114-percent increase in
the number of laminations of a thinner and higher grade of steel. These
changes would cause manufacturers to incur significant capital and
equipment conversion costs to redesign their space-constrained motors
due to the lack of experience in using copper.
According to manufacturers, copper tooling is significantly
costlier and not currently used by any manufacturers for the production
of small electric motors. If copper rotor designs are required,
manufacturers with in-house die-casting capabilities will need
completely new machinery to process copper. Manufacturers that
outsource rotor production would pay higher prices for their rotor
designs. In both cases, TSL 6 results in significant equipment
conversion costs to modify current manufacturing processes in addition
to redesigning motors to use copper in the applications of general
purpose small electric motors. Largely due to the significant changes
to space-constrained motors, DOE estimates that at TSL 6 manufacturers
would incur close to seven times the total conversion costs required at
TSL 1 (a total of approximately $16.5 million). However, for non space-
constrained motors, manufacturers are able to redesign their existing
motors without the use of copper rotors by using twice the number of
laminations that are contained in the baseline design. Therefore, for
non space-constrained motors the impacts at TSL 6 are significantly
less because manufacturers can maintain existing manufacturing
processes without the potentially significant changes associated with
copper rotors. At TSL 6 the impacts for non space-constrained motors
are mainly due to higher motor costs and the possible decrease in
profitability if manufacturers are unable to fully pass through their
higher production costs.
At TSL 7, DOE estimated the impacts in INPV to range from $95.27
million to -$69.47 million, or a change in INPV of 136.95 percent to -
99.85 percent. At this level industry cash flow decreases by
approximately 342.4 percent, to -$13.52 million, compared to the base-
case value of $5.58 million in the year leading up to the energy
conservation standards. TSL 7 represents an
[[Page 10926]]
efficiency increase of 14 percent over the baseline for polyphase
motors.
Currently, the market does not have any motors that reach TSL 7. At
TSL 7, space-constrained motor designs may require the use of copper
rotors and premium electrical steels, such as the Hiperco steel used in
DOE's design. There is some uncertainty about the magnitude of the
impacts on the industry of using Hiperco steel. Manufacturers were
unsure about the required conversion costs to reach TSL 7 because of
the unproven properties and applicability of the technology in the
general purpose motors covered by this rulemaking.
Significant R&D for both manufacturing processes and motor
redesigns would be necessary to understand the applications of premium
steels to general purpose small electric motors. According to
manufacturers, requiring this technology could cause some competitors
to exit the small electric motor market. If manufacturers' concerns of
having to use both copper rotors and new steels materialize,
manufacturers could be significantly impacted. For non space-
constrained motors, DOE estimates that manufacturers would require the
use of copper rotors but not premium steels. If manufacturers are
required to redesign non-spaced constrained motors with copper, the
total conversion costs for the industry increases greatly because all
motors require substantially different production equipment. Finally,
the production costs of motors that meet TSL 7 could be up to 18 times
higher than the production costs of baseline motors. The cost to
manufacture standards-compliant motors could have a significant impact
on the industry if operating profit does not increase with production
costs.
Capacitor-Start, Induction Run and Capacitor-Start, Capacitor-Run Small
Electric Motors
At TSL 1, DOE estimated the impacts in INPV to range from $8.4
million to -$19.99 million, or a change in INPV of 3.01 percent to -
7.16 percent. At this level, industry cash flow decreases by
approximately 41.3 percent, to $13.13 million, compared to the base-
case value of $22.38 million in the year leading up to the energy
conservation standards. TSL 1 represents an efficiency increase of 19-
percent over the baseline for CSIR motors and 10-percent over the
baseline for CSCR motors. At TSL 1 for CSIR motors, DOE estimates
manufacturers would need to increase the number of laminations for
space-constrained motors by approximately 33 percent and use a thinner
and higher grade of steel. For non space-constrained CSIR motors,
manufacturers could increase laminations by approximately 61 percent
with the use of a better grade of electric steel. For space-constrained
CSCR motors, manufacturers could increase laminations by ten percent
and use a higher grade of steel. For non space-constrained CSCR motors,
manufacturers could increase laminations by approximately 37 percent.
For both CSIR and CSCR motors, the additional stack length needed to
reach TSL 1 is still within the tolerances of many manufacturers'
existing motors. DOE estimates that these changes would cause the
industry to incur capital and equipment conversion costs of
approximately $26.1 million to reach TSL 1. While TSL 1 would increase
production costs, the cost increases are not enough to severely affect
INPV under the scenarios analyzed.
At TSL 2, DOE estimated the impacts in INPV to range from $9.46
million to -$20.79 million, or a change in INPV of 3.39 percent to -
7.45 percent. At this level, industry cash flow decreases by
approximately 43.5 percent, to $12.65 million, compared to the base-
case value of $22.38 million in the year leading up to the energy
conservation standards. TSL 2 represents an efficiency increase of 19
percent over the baseline for CSIR motors and 13-percent over the
baseline for CSCR motors. For CSIR motors, the same changes to meet TSL
1 are necessary for TSL 2. For CSCR motors, TSL 2 represents what
manufacturers would consider a NEMA Premium equivalent efficiency
level. The changes required for CSCR motors could cause manufacturers
to incur additional capital conversion costs to accommodate the
required increase in laminations. Imposing standards at TSL 2 would
increase production costs for both CSIR and CSCR motors, but the cost
increases for both types of motors are not enough to severely affect
INPV.
At TSL 3, DOE estimated the impacts in INPV to range from $16.27
million to -$32.42 million, or a change in INPV of 5.83 percent to -
11.62 percent. At this level, industry cash flow decreases by
approximately 66.5 percent, to $7.51 million, compared to the base-case
value of $22.38 million in the year leading up to the energy
conservation standards. TSL 3 represents an efficiency increase of 23
percent over the baseline for CSIR motors and 13 percent over the
baseline for CSCR motors. At TSL 3, space-constrained CSIR motors could
require redesigns that use copper rotors. Using copper rotors for
space-constrained CSIR motors could cause manufacturers to incur
approximately $41.4 million in capital and equipment conversion costs,
largely to purchase the equipment necessary to produce these redesigned
motors.
As with polyphase motors, manufacturers reported that copper rotor
tooling is significantly costlier than traditional aluminum rotor
tooling and not currently used by the industry for the production of
small electric motors. Similarly, in-house die-casting capabilities
would need completely new machinery to process copper and the
alternative of outsourcing rotor production would greatly increase
material costs. For non space-constrained CSIR motors, manufacturers
could redesign motors by increasing the number of laminations without
the use of copper rotors, resulting in significantly smaller impacts.
At TSL 3, the impacts for non-space-constrained motors are mainly due
to higher motor material costs and a possible decline in profit
margins. TSL 3 represents what manufacturers would consider a NEMA
Premium equivalent efficiency level for CSCR motors. The required
efficiencies for space-constrained CSCR motors could be met by
manufacturers by increasing the number of laminations by 15 percent and
using higher steel grades. The required efficiencies for non-spaced
constrained CSCR motors could be met by increasing the number of
laminations by 53 percent. Because the redesigns for CSCR motors are
less substantial, the impacts at TSL 3 are driven largely by the
required CSIR efficiencies.
At TSL 4, DOE estimated the impacts in INPV to range from $32.15
million to -$43.15 million, or a change in INPV of 11.52 percent to -
15.46 percent. At this level, industry cash flow decreases by
approximately 77.5 percent, to $5.02 million, compared to the base-case
value of $22.38 million in the year leading up to the energy
conservation standards. TSL 4 represents an efficiency increase of 27
percent over the baseline for CSIR motors and 15 percent over the
baseline for CSCR motors. TSL 4 currently represents a NEMA premium
equivalent level for CSIR motors. Possible redesigns for both CSIR and
CSCR motors to meet TSL 4 involve both increasing the number of
laminations as well as using higher grades of steel.
For space-constrained CSIR motors, redesigns could require the use
of copper rotors. Because of these redesigns, standards-compliant
motors at TSL 4 have significantly higher costs than manufacturers'
baseline motors.
[[Page 10927]]
These changes increase the engineering and capital resources that must
be employed, especially for CSCR motors. The negative impacts at TSL 4
are driven by the conversion costs that potentially require some
single-phase motors to use copper rotors, and the higher production
costs of standards-compliant motors.
At TSL 5, DOE estimated the impacts in INPV to range from $28.48
million to -$40.09 million, or a change in INPV of 10.20 percent to -
14.37 percent. At this level, industry cash flow decreases by
approximately 70.2 percent, to $6.66 million, compared to the base-case
value of $22.38 million in the year leading up to the energy
conservation standards. TSL 5 represents an efficiency increase of 27
percent over the baseline for CSIR motors and 13 percent over the
baseline for CSCR motors. TSL 5 represents NEMA premium equivalent
efficiency levels for both CSIR and CSCR motors.
At TSL 5, space-constrained CSIR motors could require the use of
copper rotors. The required efficiencies for non space-constrained CSIR
motors could be met by manufacturers by increasing the number of
laminations by 82 percent and using a higher grade of steel. The
required efficiencies for space-constrained CSCR motors could be met by
manufacturers by increasing the number of laminations by 15 percent and
using higher steel grades. The required efficiencies for non-spaced
constrained CSCR motors could be met by increasing the number of
laminations by 53 percent.
Although manufacturers reported that meeting TSL 5 is feasible, the
production costs of motors at TSL 5 increase substantially and require
approximately $43.2 million in total capital and equipment conversion
costs. The negative impacts at TSL 5 are driven by these conversion
costs that potentially require some CSIR motors to use copper rotors,
and the impacts on profitability if the higher production costs of
standards-compliant motors cannot be fully passed through to customers.
At TSL 6, DOE estimated the impacts in INPV to range from $186.60
million to -$152.05 million, or a change in INPV of 66.87 percent to -
54.49 percent. At this level, industry cash flow decreases by
approximately 205.8 percent, to -$22.67 million, compared to the base-
case value of $22.38 million in the year leading up to the energy
conservation standards. TSL 6 represents an efficiency increase of 33
percent over the baseline for CSIR motors and 23 percent over the
baseline for CSCR motors.
Currently, the market does not have any CSIR and CSCR motors that
reach TSL 6. TSL 6 represents the max-tech efficiency level for both
CSIR and CSCR motors. In addition to the possibility of using copper
rotors for both CSIR and CSCR motors, at TSL 6, space-constrained motor
designs could require premium steels, such as Hiperco. There is
uncertainty about the impact of Hiperco steel on the industry,
primarily due to uncertainty about capital conversion costs required to
use a new type of steel. Significant R&D in manufacturing processes
would be necessary to understand the applications of these premium
steels in general purpose small electric motors. Because all space-
constrained motors could require copper rotors and premium steels and
all non-spaced constrained motors could require copper rotors, the
capital conversion costs are a significant driver of INPV at TSL 6.
Finally, the production costs of motors that meet TSL 6 can be as high
as 13 times the production cost of baseline motors, which impact
profitability if the higher production costs cannot be fully passed
through to OEMs. Manufacturers indicated that the potentially large
impacts on the industry at TSL 6 could force some manufacturers to exit
the small electric motor market because of the lack of resources and
what could be an unjustifiable investment for a small segment of their
total business.
At TSL 7, DOE estimated the impacts in INPV to range from $18.40
million to -$34.05 million, or a change in INPV of 6.59 percent to -
12.20 percent. At this level, industry cash flow decreases by
approximately 74.7 percent, to $5.66 million, compared to the base-case
value of $22.38 million in the year leading up to the energy
conservation standards. TSL 7 represents an efficiency increase of 33
percent over the baseline for CSIR motors and 13 percent over the
baseline for CSCR motors.
TSL 7 corresponds to the NEMA premium equivalent efficiency for
CSCR motors. The required efficiencies for space-constrained CSCR
motors could be met by manufacturers by increasing the number of
laminations by 15 percent and using higher steel grades. The required
efficiencies for non space-constrained CSCR motors could be met by
increasing the number of laminations by 53 percent. Consequently, the
industry is not severely impacted by the CSCR efficiency requirements
at TSL 7 because these design changes could be met with relatively
minor changes to baseline designs.
However, there are no CSIR motors currently on the market that
reach TSL 7 (the max-tech efficiency level for CSIR). At TSL 7 space-
constrained CSIR redesigns could require the use of both copper rotors
and premium steels while non space-constrained CSIR motors could
require only copper rotors. Manufacturers continue to have the same
concerns about copper rotors and premium steels for CSIR motors as with
other efficiency levels that may require these technologies. The
impacts on INPV from CSIR motors are mainly associated with estimated
shipments of non-space constrained CSIR motors and how investments
exclude premium steels in motor redesigns. The INPV impacts for all
single-phase motors at TSL 7 are less severe than at TSL 6 due to a
change in balance of shipments between CSIR and CSCR motors. At TSL 7,
the possible high cost of CSIR motors would likely cause customers to
migrate to CSCR motors.
In its analysis, DOE assumed that manufacturers would not invest in
all the alternative technologies for CSIR motors in light of the
expected migration to CSCR motors. At TSL 7, the industry is impacted
(though to a lesser extent than at TSL 6) by the high conversion costs
for CSIR motors, for which manufacturers must invest even though these
are a small portion of total shipments after standards. However,
because the total volume of single-phase motors does not decline with
the shift from CSIR to CSCR motors, the higher revenues from standards-
compliant CSCR motors mitigate redesign costs for CSIR motors.
At TSL 8, DOE estimated the impacts in INPV to range from $46.35
million to -$52.58 million, or a change in INPV of 13.07 percent to -
16.17 percent. At this level, industry cash flow decreases by
approximately 92.1 percent, to $1.77 million, compared to the base-case
value of $22.38 million in the year leading up to the compliance date
for the energy conservation standards. TSL 8 represents an efficiency
increase of 33 percent over the baseline for CSIR motors and 20 percent
over the baseline for CSCR motors.
As with TSL 7, CSIR motors are at the max-tech efficiency level at
TSL 8. However, the impacts on INPV are worse at TSL 7 because the
efficiency requirements for CSCR motors increase. At TSL 8, both space-
constrained and non space-constrained CSCR motors could require the use
of copper, which increases the total conversion costs for the industry.
Manufacturers continue to share the same concerns about the copper and
premium steel investments for CSCR and CSIR motors as at TSL 6
[[Page 10928]]
and TSL 7. Like TSL 7, TSL 8 causes a migration of CSIR motors to CSCR
motors. DOE assumed that manufacturers would fully incur the required
conversion costs for CSCR, but partially for CSIR motors, due to the
low market share of CSIR motors after the energy conservation standards
must be met. After these standards apply, the shift to CSCR motors
increases total industry revenue and helps to mitigate impacts related
to capital conversion costs necessary for CSIR motors to use
alternative technologies.
b. Impacts on Employment
As discussed in the NOPR and for today's final rule, DOE does not
believe that standards would materially alter the domestic employment
levels of the small electric motors industry under any of the TSLs
considered for today's final rule. 74 FR 61469. Even if DOE set new
efficiency levels high enough to cause some manufacturers to exit the
small electric motor market, the direct employment impact would likely
be minimal. Id. Most covered small motors are manufactured on shared
production lines and in factories that also produce a substantial
number of other products. If a manufacturer decided to exit the market,
these employees would likely be used in some other capacity, reducing
the number of headcount reductions. These manufacturers estimated that
no production jobs would be lost due to energy conservation standards,
but rather the engineering departments could be reduced by up to one
engineer per dropped product line.
The employment impacts calculated by DOE are independent of the
employment impacts from the broader U.S. economy, which are documented
in chapter 15 of the TSD accompanying this notice and discussed in
section VI.C.3. Based on available data and its analyses, DOE does not
believe that the effects of today's rule would substantially impact
employment levels in the small electric motor industry. For further
information and results on direct employment see chapter 12 of the TSD.
c. Impacts on Manufacturing Capacity
As detailed in the NOPR, no change in the fundamental assembly of
small electric motors would be required by DOE adoption of any of the
TSLs considered for today's rule, and none of the TSLs would require
replacing or adding to existing facilities to manufacture. 74 FR 61469-
70. For today's final rule, DOE continues to believe manufacturers can
use any available excess capacity to mitigate any possible capacity
constraint as a result of energy conservation standards. In DOE's view,
it is more likely that some motors would be discontinued due to lower
demand after the promulgation of a standard. For further explanation of
the impacts on manufacturing capacity for small electric motors, see
chapter 12 of the TSD.
d. Impacts on Subgroups of Manufacturers
For the reasons stated in the NOPR, including its conclusion that
no small manufacturers produced small electric motors, DOE did not
analyze manufacturer subgroups in the small electric motor industry. 74
FR 61470. DOE did not receive further information or comment that would
otherwise change its views.
e. Cumulative Regulatory Burden
While any one regulation may not impose a significant burden on
manufacturers, the combined effects of several regulations may have
serious consequences for some manufacturers, groups of manufacturers,
or an entire industry. Assessing the impact of a single regulation may
overlook this cumulative regulatory burden.
DOE recognizes that each regulation can significantly affect
manufacturers' financial operations. Multiple regulations affecting the
same manufacturer can reduce manufacturers' profits and may cause
manufacturers to exit from the market. DOE did not identify any
additional DOE regulations that would affect the manufacturers of small
electric motors apart from the ones discussed in the NOPR. 74 FR 61470.
These included other DOE regulations and international standards. DOE
recognizes that each regulation has the potential to impact
manufacturers' financial operations. For further information about the
cumulative regulatory burden on the small electric motors industry, see
chapter 12 of the TSD.
3. National Net Present Value and Net National Employment
The NPV analysis estimates the cumulative benefits or costs to the
Nation, discounted to 2009$ in the year 2010, of particular standard
levels relative to a base case of no new standard. In accordance with
OMB guidelines on regulatory analysis (OMB Circular A-4, section E,
September 17, 2003), DOE estimated NPVs using both a 7 percent and 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. This rate 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, since recent OMB analysis has found the average rate of return
to capital to be near this rate. DOE also used the 3 percent discount
rate to capture the potential effects of standards on private
consumption (e.g., through higher prices for equipment and 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 (e.g., the yield on Treasury notes minus the 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.
The NPV was calculated using DOE's reference shipments forecast,
which is based on the AEO 2010 Early Release forecast. In this
scenario, shipments display an elasticity of -0.25, which allows for a
market shift to enclosed motors when open motors become more expensive
than their enclosed equivalents. DOE used its calibrated reference
model for the market dynamics of CSIR and CSCR motors. DOE's reference
scenario also includes 100 percent of the cost or benefit from changes
in reactive power charges, which are faced either by electricity
customers or by utilities (which then include them in electricity
rates). Table VI.25 and Table VI.26 show the estimated NPV at each of
the TSLs for polyphase and capacitor-start small electric motors. For
polyphase motors, the NPV is positive at TSLs 1 through 5 using a 7-
percent discount rate, and is positive for TSLs 1 through 6 using a 3-
percent discount rate. For capacitor-start motors, NPV is positive at
all TSLs except TSL 6. The latter TSL corresponds to max-tech
efficiency levels for both CSIR and CSCR motors, which have high
installed costs and negative lifecycle cost savings. See TSD Chapter 10
for more detailed NPV results.
Across motors, for certain TSLs, DOE estimates there will be a net
national savings or positive NPV from the standard, even though a
majority of motor customers may face life-cycle cost increases. Life-
cycle cost increases result from the large number of small electric
motors installed in applications with very low operating hours. The
consumers of these motors cannot recover the increased equipment costs
through decreased electricity costs, thus experiencing life-cycle cost
increases. On the other hand, a substantial minority of motors run at
nearly all hours of the day and thus obtain
[[Page 10929]]
relatively large savings from the standard.
Table VI.25 and Table VI.26 show DOE's estimates of net present
value for each TSL DOE considered for this final rule.
Table VI.25--Cumulative Net Present Value for Polyphase Small Electric
Motors (Impact for Equipment Sold From 2015 to 2045)
------------------------------------------------------------------------
Net present value
billion 2009$
Trial standard level -------------------------
7% Discount 3% Discount
rate rate
------------------------------------------------------------------------
1............................................. 0.10 0.26
2............................................. 0.22 0.55
3............................................. 0.41 1.01
4............................................. 0.42 1.05
4b............................................ 0.54 1.44
5............................................. 0.16 0.77
6............................................. -0.22 0.06
7............................................. -6.82 -12.65
------------------------------------------------------------------------
Table VI.26--Cumulative Net Present Value for Capacitor-Start Small
Electric Motors (Impact for Equipment Sold From 2015 to 2045)
------------------------------------------------------------------------
Net present value billion
2009$
Trial standard level -------------------------------
7% Discount 3% Discount
rate rate
------------------------------------------------------------------------
1....................................... 3.01 7.03
2....................................... 3.05 7.13
3....................................... 2.83 6.87
4....................................... 1.97 5.35
5....................................... 2.08 5.57
6....................................... -9.29 -16.23
7....................................... 4.74 11.08
8....................................... 3.03 8.14
------------------------------------------------------------------------
As discussed in section VI.C.1.b above, DOE estimated LCC and
payback periods under a sensitivity case using data on motor shipments
distributions provided by OEMs via a survey conducted by NEMA. Under
this sensitivity case lifecycle costs increase for polyphase and CSCR
motor users, but decrease for CSIR motor users. DOE estimates there is
a net increase in national benefits from the standards promulgated in
today's rule using the new information provided by NEMA, with energy
savings increasing from 2.20 to 2.68 quads, and NPV increasing from
$12.52 to $19.75 billion, using a 3 percent discount rate.
DOE also analyzed the effect of NEMA's assertion that 95 percent of
motors are used in space-constrained applications. However, at the
capacitor-start efficiency levels in today's rule, DOE estimates that
97 percent of the CSIR market will migrate to CSCR motors assuming only
20 percent of the market is space-constrained. Therefore, increasing
the assumption of the fraction of CSIR motors that is space-constrained
to 95-percent only affects the 3-percent of the CSIR market that had
not already migrated to CSCR motors under DOE's reference case, and has
little effect on the estimates of national energy savings.
Chapter 10 of the TSD has details on the national impacts for the
reference case, while the national impacts for these sensitivity cases
are presented in appendix 10A.
DOE also estimated for each TSL the indirect employment impact of
standards--the impact on the economy in general--in addition to
considering the direct employment impacts on manufacturers of products
covered in this rulemaking as discussed in section VI.C.2.b. 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. As shown
in Table VI.27 and Table VI.28, DOE estimates that net indirect
employment impacts from energy conservation standards for small
electric motors would be positive but very small relative to total
national employment. Specifically, DOE's analysis indicates that the
number of jobs that may be generated by 2045 through indirect impacts
ranges from 47 to 6,300 for the TSLs for polyphase small motors, and
from 1,100 to 18,700 for the TSLs for capacitor-start small motors.
These increases would likely be sufficient to offset fully any adverse
impacts on employment that might occur in the small electric motors
industry. For details on the employment impact analysis methods and
results, see TSD Chapter 14.
Table VI.27--Net Increase in National Indirect Employment Under Polyphase Small Electric Motor Trial Standards
Levels
----------------------------------------------------------------------------------------------------------------
2015 2020 2030 2045
Trial standard level thousands thousands thousands thousands
----------------------------------------------------------------------------------------------------------------
1........................................................... 0.047 0.136 0.222 0.299
2........................................................... 0.084 0.254 0.418 0.565
3........................................................... 0.151 0.463 0.761 1.030
4........................................................... 0.190 0.539 0.874 1.178
[[Page 10930]]
4b.......................................................... 0.356 0.915 1.446 1.942
5........................................................... 0.661 1.347 2.016 2.668
6........................................................... 0.901 1.679 2.448 3.219
7........................................................... 2.349 3.621 4.921 6.343
----------------------------------------------------------------------------------------------------------------
Table VI.28--Net Increase in National Indirect Employment Under Capacitor-Start Small Electric Motor Trial
Standards Levels
----------------------------------------------------------------------------------------------------------------
2015 2020 2030 2045
Trial standard level thousands thousands thousands thousands
----------------------------------------------------------------------------------------------------------------
1........................................................... 1.113 3.645 5.249 7.062
2........................................................... 1.119 3.674 5.293 7.123
3........................................................... 1.577 4.512 6.398 8.557
4........................................................... 2.287 5.561 7.716 10.236
5........................................................... 2.248 5.529 7.686 10.204
6........................................................... 8.042 12.159 15.350 19.569
7........................................................... 1.776 5.795 8.340 11.216
8........................................................... 2.322 9.591 13.880 18.701
----------------------------------------------------------------------------------------------------------------
4. Impact on Utility or Performance of Equipment
As explained in sections III.D.1.d and V.B.4 of the NOPR, users of
these motors will not face a reduction in small electric motor utility
or performance under the levels examined under this rulemaking. DOE has
not received any additional information suggesting that such a
reduction would occur. Accordingly, DOE has concluded that no lessening
of the utility or performance of the small electric motors under
consideration in this rulemaking would result from adoption of any of
the TSLs considered for this final rule. 74 FR 61419, 61476.
5. Impact of Any Lessening of Competition
As discussed in the November 2009 NOPR, 74 FR 61419, 61476, and in
section III.D.1.e of this final rule, DOE considers any lessening of
competition that is likely to result from standards. The Attorney
General determines the impact, if any, of any such lessening of
competition.
The DOJ concluded that the standards DOE proposed for small
electric motors in the November 2009 NOPR could increase costs for
consumers who need to replace either a polyphase or capacitor-start
small electric motor in existing equipment. This is because compliance
with these standards may require manufacturers to increase the size of
their motors such that the larger motors may not fit into existing
space-constrained equipment. In turn, owners with a broken motor may
need to replace the entire piece of equipment or attempt to have the
motor repaired, which could be costly. DOJ requested that DOE consider
this impact, and, as warranted, consider exempting from the standard
the manufacture and marketing of certain replacement small electric
motors for a limited period of time. (DOJ, No. 29 at pp. 1-2) DOJ does
not believe the proposed standard would likely lead to a lessening of
competition.
For its final rule on energy conservations standards for small
electric motors, DOE considered the issue raised by DOJ. DOE believes
it adequately accounts for the impacts on those consumers that purchase
motors for space-constrained applications by developing motors with
higher costs for what it estimates as space-constrained. Furthermore,
DOE does not believe it is necessary to exempt motors manufactured to
replace motors in space-constrained applications because these motors
are not marketed as ``for replacement purposes,'' enforcing such a
standard could be problematic. In addition, an exemption for
replacement motors would also apply to motors in non-space constrained
applications potentially significantly reducing energy savings of this
rule. Lastly, DOE believes that the five-year period before the
effective date will give customers or OEMs sufficient time to account
for any changes to motor sizes or to stockpile replacement motors for
their applications.
The Attorney General's response is reprinted at the end of this
rule.
6. Need of the Nation To Conserve Energy
Improving the energy efficiency of small electric motors, 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
electricity 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 today's
standards to eliminate the need for approximately 2.16 gigawatts (GW)
of generating capacity by 2045 and in 2045, to save an amount of
electricity greater than that generated by eight 250 megawatt power
plants.
Enhanced energy efficiency also produces environmental benefits in
the form of reduced emissions of air pollutants and greenhouse gases
associated with energy production. Table VI.29 and Table VI.30 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 standards may also
reduce the cost of maintaining nationwide emissions standards and
constraints. In the environmental assessment (EA; chapter 15 of the TSD
accompanying this notice), DOE reports estimated annual changes in
CO2, NOX, and Hg emissions attributable to each
TSL. The cumulative CO2, NOX, and Hg emissions
reductions from polyphase motors range up to 23.2 Mt, 16.9 kt, and
[[Page 10931]]
0.12 ton, respectively, and up to 121.7 Mt, 88.9 kt, and 0.47 ton,
respectively, from single-phase motors.
Table VI.29--Polyphase Small Electric Motors: Cumulative CO2 and Other
Emissions Reductions
[Cumulative reductions for products sold from 2015 to 2045]
------------------------------------------------------------------------
Emissions reductions
Trial standard level --------------------------------------
CO2 Mt NOX kt Hg tons
------------------------------------------------------------------------
1................................ 2.3 1.6 0.013
2................................ 4.6 3.3 0.025
3................................ 8.3 5.9 0.046
4................................ 9.3 6.7 0.051
4b............................... 15.4 11.0 0.085
5................................ 18.3 13.1 0.101
6................................ 19.5 13.9 0.108
7................................ 21.2 15.2 0.117
------------------------------------------------------------------------
Table VI.30--Capacitor-Start Small Electric Motors: Cumulative CO2 and
Other Emissions Reductions
[Cumulative reductions for products sold from 2015 to 2045]
------------------------------------------------------------------------
Emissions reductions
Trial standard level --------------------------------------
CO2 Mt NOX kt Hg tons
------------------------------------------------------------------------
1................................ 62.9 45.1 0.265
2................................ 63.5 45.5 0.267
3................................ 71.7 51.4 0.302
4................................ 80.5 57.7 0.339
5................................ 81.0 58.1 0.341
6................................ 88.5 63.5 0.373
7................................ 96.8 69.5 0.408
8................................ 111.4 80.0 0.469
------------------------------------------------------------------------
As noted in section IV.L of this final rule, DOE does not report
SO2 emissions reductions from power plants because DOE is
uncertain that an energy conservation standard would affect the overall
level of U.S. SO2 emissions due to emissions caps. DOE also
did not include NOX emissions reduction from power plants in
states subject to CAIR because an energy conservation standard would
likely not affect the overall level of NOX emissions in
those states due to the emissions caps mandated by CAIR.
In the NOPR, DOE also investigated and considered the potential
monetary benefit of any reduced CO2, SO2,
NOX, and Hg emissions that could result from the TSLs it
considered. 74 FR 61448-53, 61477-84. To estimate the likely monetary
benefits of CO2 emission reductions associated with the
potential standards, DOE valued the potential global benefits resulting
from such reductions at the interim values of $5, $10, $20, $34 and $57
per metric ton in 2007 (in 2008$), and also valued the domestic
benefits at approximately $1 per metric ton. 74 FR 61452. For today's
final rule DOE has updated its analysis to reflect the outcome of the
most recent interagency process regarding the social cost of carbon
dioxide emissions (SCC). See section IV.M for a full discussion. The
four values of CO2 emissions reductions resulting from that
process are $4.70/ton (the average value from a distribution that uses
a 5% discount rate), $21.40/ton (the average value from a distribution
that uses a 3% discount rate), $35.10/ton (the average value from a
distribution that uses a 2.5% discount rate), and $65/ton (the 95th
percentile value from a distribution that uses a 3% discount rate).
These values are expressed in 2007$ and correspond to the value of
emission reductions in 2010; the values for later years are higher due
to increasing damages as the magnitude of climate change increases.
Table VI.31 and Table VI.32 present the global values of emissions
reductions at each TSL. Domestic values are calculated as a range from
7% to 23% of the global values, and these results are presented in
Table VI.33 and Table VI.34.
Table VI.31--Estimates of Global Present Value of CO2 Emissions Reductions for the Period 2015-2045 Under Polyphase Small Electric Motor Trial Standard
Levels at SCC-Scenario-Consistent Discount Rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Global value of CO2 emission reductions, million 2009$
cumulative CO2 ---------------------------------------------------------------------------
TSL emission 5% discount rate, 3% discount rate, 2.5% discount 3% discount rate,
reductions, Mt average* average* rate, average* 95th percentile*
--------------------------------------------------------------------------------------------------------------------------------------------------------
1........................................................ 2.3 8 40 68 122
2........................................................ 4.6 16 81 138 248
3........................................................ 8.3 28 146 248 445
4........................................................ 9.3 32 165 280 502
4b....................................................... 15.4 52 272 462 828
5........................................................ 18.3 62 323 550 986
[[Page 10932]]
6........................................................ 19.5 66 344 585 1049
7........................................................ 21.2 72 375 638 1144
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Columns are labeled by the discount rate used to calculate the social cost of emissions and whether it is an average value or drawn from a different
part of the distribution. Values presented in the table are based on escalating 2007$ to 2009$ for consistency with other values presented in this
notice, and incorporate the escalation of the SCC with each year.
Table VI.32--Estimates of Global Present Value of CO2 Emissions Reductions for the Period 2015-2045 Under Capacitor-Start Small Electric Motor Trial
Standard Levels at SCC-Scenario-Consistent Discount Rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Global value of CO2 emission reductions, million 2009$
cumulative CO2 ---------------------------------------------------------------------------
TSL emission 5% discount rate, 3% discount rate, 2.5% discount 3% discount rate,
reductions, Mt average* average* rate, average* 95th percentile*
--------------------------------------------------------------------------------------------------------------------------------------------------------
1........................................................ 62.9 216 1118 1900 3410
2........................................................ 63.5 218 1129 1918 3444
3........................................................ 71.7 246 1275 2167 3890
4........................................................ 80.5 277 1432 2432 4367
5........................................................ 81.0 278 1441 2448 4394
6........................................................ 88.5 304 1574 2674 4801
7........................................................ 96.8 333 1722 2926 5253
8........................................................ 111.4 383 1982 3368 6046
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Columns are labeled by the discount rate used to calculate the social cost of emissions and whether it is an average value or drawn from a different
part of the distribution. Values presented in the table are based on escalating 2007$ to 2009$ for consistency with other values presented in this
notice, and incorporate the escalation of the SCC with each year.
Table VI.33--Estimates of Domestic Present Value of CO2 Emissions Reductions for the Period 2015-2045 Under
Polyphase Small Electric Motor Trial Standard Levels at SCC-Scenario-Consistent Discount Rate
----------------------------------------------------------------------------------------------------------------
Domestic value of CO2 emission reductions, million 2009$ *
---------------------------------------------------------------------------
TSL 5% discount rate, 3% discount rate, 2.5% discount 3% discount rate,
average** average** rate, average** 95th percentile**
----------------------------------------------------------------------------------------------------------------
1................................... 0.5-1.8 2.8-9.2 4.8-15.7 8.5-28.1
2................................... 1.1-3.6 5.7-18.7 9.7-31.8 17.3-57.0
3................................... 2.0-6.4 10.2-33.5 17.4-57.1 31.1-102.3
4................................... 2.2-7.3 11.5-37.9 19.6-64.4 35.1-115.5
4b.................................. 3.7-12 19.0-62.5 32.3-106.3 58.0-190.5
5................................... 4.3-14.3 22.6-74.4 38.5-126.5 69.0-226.8
6................................... 4.6-15.2 24.1-79.1 41.0-134.6 73.4-241.2
7................................... 5.0-16.6 26.3-86.3 44.7-146.7 80.1-263.0
----------------------------------------------------------------------------------------------------------------
* Domestic values are presented as a range between 7% and 23% of the global values.
** Columns are labeled by the discount rate used to calculate the social cost of emissions and whether it is an
average value or drawn from a different part of the distribution. Values presented in the table are based on
escalating 2007$ to 2009$ for consistency with other values presented in this notice, and incorporate the
escalation of the SCC with each year.
Table VI.34--Estimates of Domestic Present Value of CO2 Emissions Reductions for the Period 2015-2045 Under
Capacitor-Start Small Electric Motor Trial Standard Levels at SCC-Scenario-Consistent Discount Rate
----------------------------------------------------------------------------------------------------------------
Domestic value of CO2 emission reductions, million 2009$ *
---------------------------------------------------------------------------
TSL 5% discount rate, 3% discount rate, 2.5% discount 3% discount rate,
average** average** rate, average** 95th percentile**
----------------------------------------------------------------------------------------------------------------
1................................... 15-50 78-257 133-437 239-784
2................................... 15-50 79-260 134-441 241-792
3................................... 17-57 89-293 152-498 272-895
4................................... 19-64 100-329 170-559 306-1004
5................................... 19-64 101-331 171-563 308-1011
6................................... 21-70 110-362 187-615 336-1104
7................................... 23-77 121-396 205-673 368-1208
[[Page 10933]]
8................................... 27-88 139-456 236-775 423-1391
----------------------------------------------------------------------------------------------------------------
* Domestic values are presented as a range between 7% and 23% of the global values.
** Columns are labeled by the discount rate used to calculate the social cost of emissions and whether it is an
average value or drawn from a different part of the distribution. Values presented in the table are based on
escalating 2007$ to 2009$ for consistency with other values presented in this notice, and incorporate the
escalation of the SCC with each year.
DOE is well aware that scientific and economic knowledge about the
contribution of CO2 and other GHG emissions to changes in
the future global climate and the potential resulting damages to the
world economy continues to evolve rapidly. Thus, any value placed in
this rulemaking on reducing CO2 emissions is subject to
change. DOE, together with other Federal agencies, will continue to
review various methodologies for estimating the monetary value of
reductions in CO2 and other GHG emissions. This ongoing
review will consider the comments on this subject that are part of the
public record for this and other rulemakings, as well as other
methodological assumptions and issues. However, consistent with DOE's
legal obligations, and taking into account the uncertainty involved
with this particular issue, DOE has included in this rule the most
recent values and analyses resulting from the ongoing interagency
review process.
DOE also estimated a range for the cumulative monetary value of the
economic benefits associated with NOX and Hg emissions
reductions anticipated to result from amended standards for SEMs. The
dollar per ton values that DOE used are discussed in section IV.M of
this final rule. Table VI.35 through Table VI.38 present the estimates
calculated using seven percent and three percent discount rates,
respectively.
Table VI.35--Estimates of Value of Reductions of NOX and Hg Emissions Under Polyphase Small Electric Motor Trial
Standard Levels at a Seven Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
Value of NOX
Cumulative NOX emission Cumulative Hg Value of Hg emission
Polyphase TSL emission reductions, emission reductions, million
reductions, kt million 2009$ reductions, t 2009$
----------------------------------------------------------------------------------------------------------------
1.............................. 1.62 0.11 to 1.18..... 0.013 0.00 to 0.12.
2.............................. 3.29 0.23 to 2.39..... 0.025 0.01 to 0.25.
3.............................. 5.91 0.42 to 4.29..... 0.046 0.01 to 0.45.
4.............................. 6.67 0.47 to 4.84..... 0.051 0.01 to 0.51.
4b............................. 11.00 0.78 to 7.99..... 0.085 0.02 to 0.84.
5.............................. 13.09 0.92 to 9.51..... 0.101 0.02 to 1.00.
6.............................. 13.93 0.98 to 10.11.... 0.108 0.02 to 1.06.
7.............................. 15.19 1.07 to 11.03.... 0.117 0.03 to 1.16.
----------------------------------------------------------------------------------------------------------------
Table VI.36--Estimates of Value of Reductions of NOX and Hg Emissions Under Polyphase Small Electric Motor Trial
Standard Levels at a Three Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
Value of NOX
Cumulative NOX emission Cumulative Hg Value of Hg emission
Polyphase TSL emission reductions, emission reductions, million
reductions, kt million 2009$ reductions, t 2009$
----------------------------------------------------------------------------------------------------------------
1.............................. 1.62 0.34 to 3.46..... 0.013 0.01 to 0.24.
2.............................. 3.29 0.68 to 7.01..... 0.025 0.01 to 0.48.
3.............................. 5.91 1.22 to 12.59.... 0.046 0.02 to 0.87.
4.............................. 6.67 1.38 to 14.21.... 0.051 0.02 to 0.98.
4b............................. 11.00 2.28 to 23.45.... 0.085 0.04 to 1.62.
5.............................. 13.09 2.71 to 27.90.... 0.101 0.04 to 1.93.
6.............................. 13.93 2.89 to 29.68.... 0.108 0.05 to 2.05.
7.............................. 15.19 3.15 to 32.37.... 0.117 0.05 to 2.24.
----------------------------------------------------------------------------------------------------------------
[[Page 10934]]
Table VI.37--Estimates of Value of Reductions of NOX and Hg Emissions Under Capacitor-Start Small Electric Motor
Trial Standard Levels at a Seven Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
Value of NOX
Cumulative NOX emission Cumulative Hg Value of Hg emission
Capacitor-start TSL emission reductions, emission reductions, million
reductions, kt million 2009$ reductions, t 2009$
----------------------------------------------------------------------------------------------------------------
1.............................. 45.10 3.50 to 35.97.... 0.265 0.06 to 2.79.
2.............................. 45.54 3.53 to 36.23.... 0.267 0.06 to 2.82.
3.............................. 51.44 3.99 to 41.03.... 0.302 0.07 to 3.18.
4.............................. 57.74 4.48 to 46.05.... 0.339 0.08 to 3.57.
5.............................. 58.11 4.51 to 46.34.... 0.341 0.08 to 3.60.
6.............................. 63.48 4.93 to 50.63.... 0.373 0.09 to 3.93.
7.............................. 69.47 5.39 to 55.40.... 0.408 0.10 to 4.30.
8.............................. 79.95 6.20 to 63.76.... 0.469 0.11 to 4.95.
----------------------------------------------------------------------------------------------------------------
Table VI.38--Estimates of Value of Reductions of NOX and Hg Emissions Under Capacitor-Start Small Electric Motor
Trial Standard Levels at a Three Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
Value of NOX
Cumulative NOX emission Cumulative Hg Value of Hg emission
Capacitor-start TSL emission reductions emission reductions million
reductions (kt) million 2009$ reductions (t) 2009$
----------------------------------------------------------------------------------------------------------------
1.............................. 45.10 9.60 to 98.70.... 0.265 0.12 to 5.22.
2.............................. 45.54 9.69 to 99.66.... 0.267 0.12 to 5.27.
3.............................. 51.44 10.95 to 112.58.. 0.302 0.13 to 5.95.
4.............................. 57.74 12.29 to 126.37.. 0.339 0.15 to 6.68.
5.............................. 58.11 12.37 to 127.17.. 0.341 0.15 to 6.72.
6.............................. 63.48 13.52 to 138.94.. 0.373 0.17 to 7.34.
7.............................. 69.47 14.79 to 152.03.. 0.408 0.18 to 8.04.
8.............................. 79.95 17.02 to 174.97.. 0.469 0.21 to 9.25.
----------------------------------------------------------------------------------------------------------------
The NPV of the monetized benefits associated with emissions
reductions can be viewed as a complement to the NPV of the consumer
savings calculated for each TSL considered in this rulemaking. Table
VI.40 through Table VI.43 present the NPV values for small electric
motors that would result if DOE were to add the estimates of the
potential benefits resulting from reduced CO2,
NOX, and Hg emissions in each of four valuation scenarios to
the NPV of consumer savings calculated for each TSL considered in this
rulemaking, at both a seven percent and three percent discount rate.
The CO2 values used in the columns of each table correspond
with the four scenarios for the valuation of CO2 emission
reductions presented in section IV.M. Table VI.39 shows an example of
the calculation of the NPV including benefits from emissions reductions
for the case of TSL 7 for capacitor-start motors and TSL 4b for
polyphase motors.
Although adding the value of consumer savings to the values of
emission reductions provides a valuable perspective, the following
should be considered: (1) The national consumer savings are domestic
U.S. consumer monetary savings found in market transactions, while the
values of emissions reductions are based on estimates of marginal
social costs, which, in the case of CO2, are based on a
global value. (2) The assessments of consumer savings and emission-
related benefits are performed with different computer models, leading
to different time frames for analysis. For small electric motors, the
present value of national consumer savings is measured for the period
in which units shipped from 2015 to 2045 continue to operate. However,
the time frames of the benefits associated with the emission reductions
differ. For example, the value of CO2 emissions reductions
reflects the present value of all future climate-related impacts due to
emitting a ton of carbon dioxide in that year, out to 2300.
Table VI.39--Estimate of Adding Net Present Value of Consumer Savings to
Present Value of Global Monetized Benefits From CO2, NOX, and Hg
Emissions Reductions at TSL 7 for Capacitor-Start Motors and TSL 4b for
Polyphase Motors (2015-2045)
------------------------------------------------------------------------
Present
value Discount
Category billion rate
2009$ (percent)
------------------------------------------------------------------------
Benefits
------------------------------------------------------------------------
Operating Cost Savings....................... 7.6 7
17.1 3
CO2 Monetized Value.......................... ............
(at $4.7/Metric Ton) * 0.38 5
CO2 Monetized Value.......................... ............
(at $21.4/Metric Ton) * 1.99 3
CO2 Monetized Value.......................... ............
(at $35.1/Metric Ton) * 3.39 2.5
[[Page 10935]]
CO2 Monetized Value.......................... ............
(at $64.9/Metric Ton) * 6.08 3
NOX Monetized Value.......................... ............
(at $2,437/Metric Ton) 0.03 7
0.10 3
Hg Monetized Value........................... ............
(at $17 million/Metric Ton) 0.003 7
0.005 3
Total Monetary Benefits **................... 9.7 7
19.2 3
------------------------------------------------------------------------
Costs
------------------------------------------------------------------------
Total Monetary Costs......................... 2.4 7
4.5 3
------------------------------------------------------------------------
Net Benefits/Costs
------------------------------------------------------------------------
Including CO2, NOX, and Hg **................ 7.3 7
14.6 3
------------------------------------------------------------------------
* These values represent global values (in 2007$) of the social cost of
CO2 emissions in 2010 under several scenarios. The values of $4.7,
$21.4, and $35.1 per ton are the averages of SCC distributions
calculated using 5%, 3%, and 2.5% discount rates, respectively. The
value of $64.9 per ton represents the 95th percentile of the SCC
distribution calculated using a 3% discount rate. See section IV.M for
details.
** Total Monetary Benefits for both the 3% and 7% cases utilize the
central estimate of social cost of CO2 emissions calculated at a 3%
discount rate (averaged across three IAMs), which is equal to $21.4/
ton in 2010 (in 2007$).
Table VI.40--Estimates of Adding Net Present Value of Consumer Savings (at 7% Discount Rate) to Net Present Value of Low, Central, and High-End Global
Monetized Benefits From CO2, NOX, and Hg Emissions Reductions at All Trial Standard Levels for Polyphase Small Electric Motors (2015-2045)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer NPV at 7% discount rate added with:
-------------------------------------------------------------------------------------------------------
CO2 value of $4.7/metric CO2 value of $21.4/ CO2 value of $35.1/ CO2 value of $64.9/
TSL ton CO2* and low values metric ton CO2* and metric ton CO2* and metric ton CO2* and high
for NOX and Hg ** medium values for NOX medium values for NOX values for NOX and Hg
billion 2009$ and Hg *** billion 2009$ and Hg *** billion 2009$ **** billion 2009$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................... 0.11 0.14 0.17 0.22
2............................................... 0.24 0.30 0.36 0.47
3............................................... 0.44 0.56 0.66 0.86
4............................................... 0.45 0.59 0.70 0.93
4b.............................................. 0.59 0.82 1.01 1.38
5............................................... 0.22 0.49 0.72 1.16
6............................................... (0.15) 0.13 0.37 0.84
7............................................... (6.75) (6.44) (6.18) (5.66)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* These label values per ton represent the global negative externalities of CO2 in 2010, in 2007$. Their present values have been calculated with
scenario-consistent discount rates. See section IV.M for a full discussion of the derivation of these values.
** Low Values correspond to $447 per ton of NOX emissions and $0.764 million per ton of Hg emissions.
*** Medium Values correspond to $2,519 per ton of NOX emissions and $17.2 million per ton of Hg emissions.
**** High Values correspond to $4,591 per ton of NOX emissions and $33.7 million per ton of Hg emissions.
Table VI.41--Estimates of Adding Net Present Value of Consumer Savings (at 3% Discount Rate) to Net Present Value of Low, Central, and High-End Global
Monetized Benefits From CO2, NOX, and Hg Emissions Reductions at All Trial Standard Levels for Polyphase Small Electric Motors (2015-2045)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer NPV at 3% discount rate added with:
-------------------------------------------------------------------------------------------------------
CO2 value of $4.7/metric CO2 value of $21.4/ CO2 value of $35.1/ CO2 value of $64.9/
TSL ton CO2* and low values metric ton CO2* and metric ton CO2* and metric ton CO2* and high
for NOX and Hg ** medium values for NOX medium values for NOX values for NOX and Hg
billion 2009$ and Hg *** billion 2009$ and Hg *** billion 2009$ **** billion 2009$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................... 0.27 0.30 0.33 0.39
2............................................... 0.57 0.64 0.69 0.81
3............................................... 1.04 1.16 1.27 1.47
4............................................... 1.08 1.22 1.34 1.57
4b.............................................. 1.49 1.73 1.92 2.29
[[Page 10936]]
5............................................... 0.83 1.11 1.34 1.79
6............................................... 0.13 0.42 0.66 1.14
7............................................... (12.57) (12.26) (11.99) (11.47)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* These label values per ton represent the global negative externalities of CO2 in 2010, in 2007$. Their present values have been calculated with
scenario-consistent discount rates. See section IV.M for a full discussion of the derivation of these values.
** Low Values correspond to $447 per ton of NOX emissions and $0.764 million per ton of Hg emissions.
*** Medium Values correspond to $2,519 per ton of NOX emissions and $17.2 million per ton of Hg emissions.
**** High Values correspond to $4,591 per ton of NOX emissions and $33.7 million per ton of Hg emissions.
Table VI.42--Estimates of Adding Net Present Value of Consumer Savings (at 7% Discount Rate) to Net Present Value of Low, Central, and High-End Global
Monetized Benefits from CO2, NOX, and Hg Emissions Reductions at All Trial Standard Levels for Capacitor-Start Small Electric Motors (2015-2045)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer NPV at 7% discount rate added with:
-------------------------------------------------------------------------------------------------------
CO2 value of $4.7/metric CO2 value of $21.4/ CO2 value of $35.1/ CO2 value of $64.9/
TSL ton CO2* and low values metric ton CO2* and metric ton CO2* and metric ton CO2* and high
for NOX and Hg ** medium values for NOX medium values for NOX values for NOX and Hg
billion 2009$ and Hg *** billion 2009$ and Hg *** billion 2009$ **** billion 2009$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................... 3.23 4.15 4.93 6.46
2............................................... 3.27 4.20 4.99 6.53
3............................................... 3.08 4.13 5.02 6.76
4............................................... 2.25 3.43 4.43 6.39
5............................................... 2.36 3.55 4.56 6.52
6............................................... (8.98) (7.69) (6.59) (4.43)
7............................................... 5.08 6.50 7.70 10.05
8............................................... 3.42 5.05 6.44 9.14
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VI.43--Estimates of Adding Net Present Value of Consumer Savings (at 3% Discount Rate) to Net Present Value of Low, Central, and High-End Global
Monetized Benefits from CO2, NOX, and Hg Emissions Reductions at All Trial Standard Levels for Capacitor-Start Small Electric Motors (2015-2045)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer NPV at 3% discount rate added with:
-------------------------------------------------------------------------------------------------------
CO2 value of $4.7/metric CO2 value of $21.4/ CO2 value of $35.1/ CO2 Value of $64.9/
TSL ton CO2* and low values metric ton CO2* and metric ton CO2* and metric ton CO2* and high
for NOX and Hg ** medium values for NOX medium values for NOX values for NOX and Hg
billion 2009$ and Hg *** billion 2009$ and Hg *** billion 2009$ **** billion 2009$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................... 7.26 8.21 8.99 10.54
2............................................... 7.36 8.32 9.11 10.68
3............................................... 7.13 8.21 9.10 10.88
4............................................... 5.64 6.85 7.86 9.85
5............................................... 5.86 7.08 8.09 10.10
6............................................... (15.91) (14.58) (13.48) (11.28)
7............................................... 11.43 12.89 14.09 16.49
8............................................... 8.54 10.22 11.61 14.37
--------------------------------------------------------------------------------------------------------------------------------------------------------
* These label values per ton represent the global negative externalities of CO2 in 2010, in 2007$. Their present values have been calculated with
scenario-consistent discount rates. See section IV.M for a full discussion of the derivation of these values.
** Low Values correspond to $447 per ton of NOX emissions and $0.764 million per ton of Hg emissions.
*** Medium Values correspond to $2,519 per ton of NOX emissions and $17.2 million per ton of Hg emissions.
**** High Values correspond to $4,591 per ton of NOX emissions and $33.7 million per ton of Hg emissions.
7. Other Factors
In developing today's standards, the Secretary took into
consideration the following additional factors: (1) Harmonization of
standards for small electric motors with existing standards under EPCA
for medium-sized polyphase general purpose motors; (2) the impact, on
consumers who need to use CSIR motors, of substantially higher prices
for such motors caused by some
[[Page 10937]]
potential standard levels; and (3) the potential for standards to
reduce reactive power, and thereby cause lower costs for supplying
electricity.
D. Conclusion
EPCA contains criteria for prescribing new or amended energy
conservation standards. DOE must prescribe standards only for those
small electric motors for which DOE: (1) Has determined that standards
would be technologically feasible and economically justified and would
result in significant energy savings, and (2) has prescribed test
procedures. (42 U.S.C. 6295(o)(2)(B), 6316(a), and 6317(b)) Moreover,
any standards for this equipment must achieve the maximum improvement
in energy efficiency that is technologically feasible and economically
justified. (42 U.S.C. 6295(o)(2)(A) and 6316(a)) In determining whether
a standard is economically justified, DOE must determine whether the
benefits of the standard exceed its burdens when considering the seven
factors discussed in section III.D.1. (42 U.S.C. 6295(o)(2)(B)(i) and
6316(a))
In evaluating standards for small electric motors, DOE analyzed
polyphase and capacitor-start motors independently of one another, and
considered eight TSLs for polyphase equipment and eight TSLs for
capacitor-start equipment. For reasons explained in the NOPR, DOE
combined CSCR and CSIR motors into a single set of TSLs for capacitor-
start motors, with each TSL being a combination of CSIR and CSCR
efficiency levels. 74 FR 61484.
In selecting today's energy conservation standards for small
electric motors, DOE started by examining the TSL with the highest
energy savings, and determined whether that TSL was economically
justified. Upon finding a TSL not to be justified, DOE considered
sequentially lower TSLs until it identified the highest level that was
economically justified. (Such level would necessarily also be
technologically feasible and result in a significant conservation of
energy because all of the TSLs considered for this final rule meet
those criteria.) DOE notes that for polyphase small electric motors,
the TSL with the highest energy savings is also the max-tech efficiency
level, but, as explained in the NOPR, the same is not true for
capacitor-start motors. 74 FR 61484.
Table VI.44 and Table VI.45 summarize the results of DOE's
quantitative analysis, based on the assumptions and methodology
discussed above, of each TSL DOE considered for this rule. They will
aid the reader in the discussion of costs and benefits of each TSL. In
some cases, the tables present a range of results. The range of values
reported for industry impacts represents the results for the two markup
scenarios--preservation-of-return-on-invested-capital and preservation-
of-operating-profit (absolute dollars)--that DOE used to estimate
manufacturer impacts.
In addition to the quantitative results, DOE also considers other
burdens and benefits that affect economic justification. These include
pending standards for medium motors as a result of EISA 2007.
1. Polyphase Small Electric Motors
Table VI.44 presents a summary of the quantitative analysis results
for each TSL for polyphase small electric motors.
Table VI.44--Summary of Polyphase Small Electric Motors Analytical Results *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Criteria ----------------------------------------------------------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 4b TSL 5 TSL 6 TSL 7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary Energy Savings (quads)... 0.05 0.09 0.17 0.19 0.29 0.34 0.37 0.37
@ 7% Discount Rate........... 0.01 0.02 0.04 0.05 0.07 0.09 0.09 0.09
@ 3% Discount Rate........... 0.03 0.05 0.09 0.10 0.15 0.18 0.19 0.20
Generation Capacity Reduction 0.05 0.09 0.16 0.19 0.31 0.36 0.39 0.42
(GW)........................
NPV (2009$ billions)
@ 7% discount................ 0.10 0.22 0.41 0.42 0.54 0.16 (0.22) (6.82)
@ 3% discount................ 0.26 0.55 1.01 1.05 1.44 0.77 (0.06) (12.65)
Industry Impacts
Change in INPV (2009$ (0.19)-(1.49 0.34-(1.86) 0.98-(2.26) 0.57-(3.58) 3.37-(5.43) 12.62-(11.80) 18.54-(17.51) 95.27-(69.47)
millions)................... )
Change in INPV (%)........... (0.27)-(2.15 0.49-(2.67) 1.41-(3.25) 0.82-(5.15) 4.84-(7.80) 18.15-(16.96) 26.65-(25.16) 136.95-(99.85)
)
Cumulative Emission Reduction
CO2 (Mt)..................... 2.3 4.6 8.3 9.3 15.4 18.3 19.5 21.2
Value of CO2 reductions 8-122 16-248 28-445 32-502 52-828 62-986 66-1049 72-1144
(2009$ millions) **.........
NOX (kt)..................... 1.6 3.3 5.9 6.7 11.0 13.1 13.9 15.2
Value of NOX reductions at 7% 0.11-1.18 0.23-2.39 0.42-4.29 0.47-4.84 0.78-7.99 0.92-9.51 0.98-10.11 1.07-11.03
discount rate (2009$
millions)...................
Value of NOX reductions at 3% 0.34-3.46 0.68-7.01 1.22-12.59 1.38-14.21 2.28-23.45 2.71-27.90 2.89-29.68 3.15-32.37
discount rate (2009$
millions)...................
Hg (t)....................... 0.013 0.025 0.046 0.051 0.085 0.101 0.108 0.117
Value of Hg reductions at 7% 0.00-0.12 0.01-0.25 0.01-0.45 0.01-0.51 0.02-0.84 0.02-1.00 0.02-1.06 0.03-1.16
discount rate (2009$
millions)...................
Value of Hg reductions at 3% 0.01-0.24 0.01-0.48 0.02-0.87 0.02-0.98 0.04-1.62 0.04-1.93 0.05-2.05 0.05-2.24
discount rate (2009$
millions)...................
Life-cycle Cost of Rep. Product
Class
Customers with increase in 46.8 41.3 40.6 45.1 51.2 65.8 77.4 96.8
LCC (%).....................
Customers with savings in LCC 53.2 58.7 59.4 54.9 48.8 34.3 22.6 3.2
(%).........................
Mean LCC (2009$)............. 1,261 1,249 1,237 1,240 1,240 1,291 1,339 2,095
Mean LCC Savings (2009$)..... 8 19 31 29 28 (23) (71) (827)
[[Page 10938]]
Life-cycle Cost of all Product
Classes, Weighted by Shipments
Customers with increase in 44.7 39.2 38.7 42.7 49.2 63.2 74.8 96.2
LCC (%).....................
Customers with savings in LCC 55.3 69.8 61.3 57.3 50.8 36.8 25.2 3.8
(%).........................
Mean LCC (2009$)............. 1,314 1,302 1,287 1,289 1,288 1,337 1,383 2,131
Mean LCC Savings (2009$)..... 9 22 36 34 36 (13) (60) (808)
Payback Period (years)
Average...................... 21.1 17.3 17.2 19.8 24.1 40.2 52.6 234.6
Median....................... 6.7 5.4 5.3 6.2 7.4 11.7 16.1 48.7
Employment Impact
Indirect Impacts (2045) 0.30 0.57 1.03 1.18 1.94 2.67 3.22 6.34
(jobs, `000)................
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Parentheses indicate negative (-) values. For LCCs, a negative value means an increase in LCC by the amount indicated.
** Range of global values for the SCC of emissions reductions, representing a range of scenarios as described in section IV.M and summarized in Table
VI.31, with discount rates ranging from 2.5% to 5%.
First, DOE considered TSL 7, the most efficient level for polyphase
small electric motors. TSL 7 would save an estimated 0.37 quad of
energy through 2045, an amount DOE considers significant. Discounted at
seven percent, the projected energy savings through 2045 would be 0.09
quad. For the Nation as a whole, DOE projects that TSL 7 would result
in a net decrease of $6.82 billion in NPV, using a discount rate of
seven percent. The emissions reductions at TSL 7 are 21.2 Mt of
CO2, up to 15.2 kt of NOX, and up to 0.117 ton of
Hg. These reductions have a value of up to $1,144 million for
CO2 (using the 95th percentile value at a 3 percent discount
rate), and a value of up to $11.0 million for NOX, and $1.16
million for Hg at a discount rate of seven percent. At the central
value for the social cost of carbon, the estimated monetized benefit of
CO2 emissions reductions is $375 million at a discount rate
of three percent. DOE also estimates that at TSL 7, total electric
generating capacity in 2030 will decrease compared to the base case by
0.42 GW.
At TSL 7, DOE projects that the average polyphase small electric
motor customer purchasing equipment in 2015 will experience an increase
in LCC of $827 compared to the baseline. DOE estimates the fraction of
customers experiencing LCC increases will be 96.8 percent. The median
PBP for the average polyphase small electric motor customer at TSL 7,
48.7 years, is projected to be substantially longer than the mean
lifetime of the equipment. When all polyphase product classes are
considered and weighted by shipments, DOE estimates that small electric
motor customers experience slightly lower increases in LCC of $808.
The projected change in industry value ranges from a decrease of
$69.5 million to an increase of $95.3 million. The impacts are driven
primarily by the assumptions regarding the ability to pass on larger
increases in MPCs to the customer. At TSL 7, DOE recognizes the risk of
very large negative impacts if manufacturers' expectations about
reduced profit margins are realized. In particular, if the high end of
the range of impacts is reached as DOE expects, TSL 7 could result in a
net loss of 99.9 percent in INPV to the polyphase small motor industry.
DOE believes manufacturers would likely have a more difficult time
maintaining current gross margin levels with larger increases in
manufacturing production costs, as standards increase the need for
capital conversion costs, equipment retooling, and increased research
and development spending. Specifically, at this TSL, the majority of
manufacturers would need to significantly redesign all of their
polyphase small electric motors.
After carefully considering the analysis and weighing the benefits
and burdens of TSL 7, the Secretary has reached the following
conclusion: At TSL 7, the benefits of energy savings, emissions
reductions (both in physical reductions and the monetized value of
those reductions), would be outweighed by the economic burden of a net
cost to the Nation (over 30 years), the economic burden to customers
(as indicated by the large increase in life-cycle cost) and the
potentially large reduction in INPV for manufacturers resulting from
large conversion costs and reduced gross margins. Consequently, the
Secretary has concluded that trial standard level 7 is not economically
justified.
DOE then considered TSL 6, which would likely save an estimated
0.37 quad of energy through 2045, an amount DOE considers significant.
Discounted at seven percent, the projected energy savings through 2045
would be 0.09 quad. For the Nation as a whole, DOE projects that TSL 6
would result in a net decrease of $220 million in NPV, using a discount
rate of seven percent. The estimated emissions reductions at TSL 6 are
19.5 Mt of CO2, up to 13.9 kt of NOX, and up to
0.108 ton of Hg. These reductions have a value of up to $1,049 million
for CO2 (using the 95th percentile value at a 3 percent
discount rate), and a value of up to $10.1 million for NOX,
and $1.06 million for Hg, at a discount rate of seven percent. At the
central value for the social cost of carbon, the estimated monetized
benefit of CO2 emissions reductions is $344 million at a
discount rate of three percent. Total electric generating capacity in
2030 is estimated to decrease compared to the base case by 0.39 GW
under TSL 6.
At TSL 6, DOE projects that the average polyphase small electric
motor customer purchasing equipment in 2015 will experience an increase
in LCC of $71 compared to the baseline. DOE estimates the fraction of
customers experiencing LCC increases will be seven percent. The median
PBP for the average polyphase small electric motor customer at TSL 6,
16.1 years, is projected to be substantially longer than the mean
lifetime of the equipment. When all polyphase product classes are
considered and weighted by shipments, DOE estimates that small electric
motor customers experience slightly lower increases in LCC of $60.
The projected change in industry value ranges from a decrease of
$17.5 million to an increase of $18.5 million. The impacts are driven
primarily by the
[[Page 10939]]
assumptions regarding the ability to pass on larger increases in MPCs
to the customer. At TSL 6, DOE recognizes the risk of very large
negative impacts if manufacturers' expectations about reduced profit
margins are realized. In particular, if the high end of the range of
impacts is reached as DOE expects, TSL 6 could result in a net loss of
25.2 percent in INPV to the polyphase small motor industry. DOE
believes manufacturers would likely have a more difficult time
maintaining current gross margin levels with larger increases in
manufacturing production costs, as standards increase the need for
capital conversion costs, equipment retooling, and increased research
and development spending. Specifically, at this TSL, the majority of
manufacturers would need to significantly redesign all of their
polyphase small electric motors.
After carefully considering the analysis and weighing the benefits
and burdens of TSL 6, the Secretary has reached the following
conclusion: At TSL 6, the benefits of energy savings, emissions
reductions (both in physical reductions and the monetized value of
those reductions), would be outweighed by the economic burden of a net
cost to the Nation (over 30 years), the economic burden to consumers
(as indicated by the increased life-cycle cost), and the potential
reduction in INPV for manufacturers resulting from large conversion
costs and reduced gross margins. Consequently, the Secretary has
concluded that trial standard level 6 is not economically justified.
DOE then considered TSL 5, which provides for polyphase small
electric motors the maximum efficiency level that the analysis showed
to have positive NPV for the Nation. TSL 5 would likely save an
estimated 0.34 quad of energy through 2045, an amount DOE considers
significant. Discounted at seven percent, the projected energy savings
through 2045 would be 0.09 quad. For the Nation as a whole, DOE
projects that TSL 5 would result in a net increase of $160 million in
NPV, using a discount rate of seven percent. The estimated emissions
reductions at TSL 5 are 18.3 Mt of CO2, up to 13.1 kt of
NOX, and up to 0.101 ton of Hg. These reductions have a
value of up to $986 million for CO2 (using the 95th
percentile value at a 3 percent discount rate), and a value of up to
$9.5 million for NOX, and $1.0 million for Hg, at a discount
rate of seven percent. At the central value for the social cost of
carbon, the estimated benefit of CO2 emissions reductions is
$323 million at a discount rate of three percent. Total electric
generating capacity in 2030 is estimated to decrease compared to the
base case by 0.36 GW under TSL 5.
At TSL 5, DOE projects that the average polyphase small electric
motor customer purchasing the equipment in 2015 will experience an
increase in LCC of $23 compared to the baseline representative unit for
analysis (1 hp, 4 pole polyphase motor). This corresponds to
approximately a 1.8 percent increase in average LCC. Based on this
analysis, DOE estimates that approximately 66 percent of customers
would experience LCC increases and that the median PBP would be 11.7
years, which is longer than the mean lifetime of the equipment.
However, in consideration of the relatively small percentage increase
in LCC at TSL 5, DOE examined sensitivity analyses to assess the
likelihood of consumers in fact experiencing significant LCC increases.
These included calculating a shipment-weighted LCC savings.
At TSL 5, when accounting for the full-range of horsepowers and
pole configurations of polyphase motors, the average LCC increase is
reduced to $13. This corresponds to approximately 63 percent of
customers experiencing an increase in LCC, with the remaining 37
percent, those with greater operating hours, realizing net savings.
The projected change in industry value ranges from a decrease of
$11.8 million to an increase of $12.6 million. The impacts are driven
primarily by the assumptions regarding the ability to pass on larger
increases in MPCs to the customer. At TSL 5, DOE recognizes the risk of
negative impacts if manufacturers' expectations about reduced profit
margins are realized. If the high end of the range of impacts is
reached, TSL 5 could result in a net loss of 17.0 percent in INPV to
the polyphase small motor industry.
After carefully considering the analysis and weighing the benefits
and burdens of TSL 5, the Secretary has reached the following
conclusion: At TSL 5, the benefits of energy savings and emissions
reductions (both in physical reductions and the monetized value of
those reductions) would be outweighed by the economic burden to
consumers (as indicated by the increased life-cycle cost).
Consequently, the Secretary has concluded that trial standard level 5
is not economically justified.
DOE then considered TSL 4b, which is at an efficiency level added
to the analysis in response to comments presented on the NOPR. TSL 4b
would likely save an estimated 0.29 quad of energy through 2045, an
amount DOE considers significant. Discounted at seven percent, the
projected energy savings through 2045 would be 0.07 quad. For the
Nation as a whole, DOE projects that TSL 4b would result in a net
increase of $540 million in NPV, using a discount rate of seven
percent. The estimated emissions reductions at TSL 4b are 15.4 Mt of
CO2, up to 11.0 kt of NOX, and up to 0.085 ton of
Hg. These reductions have a value of up to $828 million for
CO2 (using the 95th percentile value at a 3 percent discount
rate), and a value of up to $8.0 million for NOX, and $0.8
million for Hg, at a discount rate of seven percent. At the central
value for the social cost of carbon, the estimated benefit of
CO2 emissions reductions is $272 million at a discount rate
of three percent. Total electric generating capacity in 2030 is
estimated to decrease compared to the base case by 0.31 GW under TSL
4b.
At TSL 4b, DOE projects that the average polyphase small electric
motor customer purchasing the equipment in 2015 will experience a
reduction in LCC of $28 compared to the baseline representative unit
for analysis (1 hp, 4 pole polyphase motor). This corresponds to
approximately a 2.2 percent reduction in average LCC. Based on this
analysis, DOE estimates that approximately 51 percent of customers
would experience LCC increases and that the median PBP would be 7.4
years, which is only slightly longer than the mean lifetime of the
equipment. However, in consideration of the relatively small percentage
decrease in LCC at TSL 4b, DOE examined sensitivity analyses to assess
the likelihood of consumers experiencing significant LCC increases.
These included calculating a shipment-weighted LCC savings.
At TSL 4b, when accounting for the full-range of horsepowers and
pole configurations of polyphase motors, the average LCC savings
increase to $36. This corresponds to approximately 49 percent of
customers experiencing an increase in LCC, with the remaining 51
percent realizing net savings.
The projected change in industry value ranges from a decrease of
$5.4 million to an increase of $3.4 million. The impacts are driven
primarily by the assumptions regarding the ability to pass on larger
increases in MPCs to the customer. At TSL 4b, DOE recognizes the risk
of negative impacts if manufacturers' expectations about reduced profit
margins are realized. If the high end of the range of impacts is
reached, TSL 4b could result in a net loss of 7.8 percent in INPV to
the polyphase small motor industry.
Trial standard level 4b has other advantages that are not directly
economic. This level sets standards for
[[Page 10940]]
many product classes that are approximately harmonized with the
efficiency level for medium motors to be implemented in 2010 which
requires four-pole, 1-hp polyphase motors to be at least 85.5%
efficient. Since many--but not all--three digit frame size polyphase
motors of this size can also be used in two-digit frames with minimal
adjustment, DOE believes that there is a benefit to harmonizing small
polyphase and medium polyphase motor efficiency standards in this size
range. In particular, DOE does not believe the design changes necessary
for TSL 4b would force all manufacturers to significantly redesign all
of their polyphase small electric motors or their production processes.
Therefore, DOE believes manufacturers are not at a significant risk to
experience highly negative impacts.
After considering the analysis and the benefits and burdens of
trial standard level 4b, the Secretary has reached the following
conclusion: Trial standard level 4b offers the maximum improvement in
energy efficiency that is technologically feasible and economically
justified, and will result in significant conservation of energy. The
Secretary has reached the conclusion that the benefits of energy
savings and emissions reductions (both in physical reductions and the
monetized value of those reductions) outweigh the potential reduction
in INPV for manufacturers and the economic burden on consumers, which
is relatively small on average. Therefore, DOE today adopts the energy
conservation standards for polyphase small electric motors at trial
standard level 4b.
2. Capacitor-Start Small Electric Motors
Table VI.45 presents a summary of the quantitative analysis results
for each TSL for capacitor-start small electric motors.
Table VI.45--Summary of Capacitor-Start Small Electric Motors Analytical Results *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Criteria ----------------------------------------------------------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 TSL 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary Energy Savings (quads)... 1.18 1.19 1.36 1.47 1.47 1.61 1.91 2.33
@ 7% Discount Rate........... 0.31 0.31 0.36 0.39 0.39 0.43 0.51 0.62
@ 3% Discount Rate........... 0.63 0.64 0.73 0.79 0.79 0.87 1.03 1.25
Generation Capacity Reduction 1.21 1.22 1.38 1.54 1.55 1.70 1.86 2.14
(GW)............................
NPV (2009$ billions)
@ 7% discount................ 3.01 3.05 2.83 1.97 2.08 (9.29) 4.74 3.03
@ 3% discount................ 7.03 7.13 6.87 5.35 5.57 (16.23) 11.08 8.14
Industry Impacts
Change in INPV (2009$ 8.40-(19.99) 9.46-(20.79) 16.27-(32.42 32.15-(42.15 28.48-(40.09 186.60-(152.05 18.40-(34.05) 46.35-(52.58)
millions)................... ) ) ) )
Change in INPV (%)........... 3.01-(7.16) 3.39-(7.45) 5.83-(11.62) 11.52-(15.46 10.20-(14.37 66.87-(54.49) 6.59-(12.20) 16.61-(18.84)
) )
Cumulative Emission Reduction
CO2 (Mt)..................... 6.29 63.5 71.7 80.5 81.0 88.5 96.8 111.4
Value of CO2 reductions 216-3410 218-3444 246-3890 277-4367 278-4394 304-4801 333-5253 383-6046
(2009$ millions) **.........
NOX (kt)..................... 45.1 45.54 51.44 57.74 58.11 63.48 69.47 79.95
Value of NOX reductions at 7% 3.5-36.0 3.5-36.2 4.0-41.0 4.5-46.0 4.5-46.3 4.9-50.6 5.4-55.4 6.2-63.8
discount rate (2009$
millions)...................
Value of NOX reductions at 3% 9.6-98.7 9.7-100.0 11.0-112.6 12.3-126.4 12.4-127.2 13.5-138.9 14.8-152.0 17.0-175.0
discount rate (2009$
millions)...................
Hg (t)....................... 0.265 0.267 0.302 0.339 0.341 0.373 0.408 0.469
Value of Hg reductions at 7% 0.06-2.79 0.06-2.82 0.07-3.18 0.08-3.57 0.08-3.60 0.09-3.93 0.10-4.30 0.11-4.95
discount rate (2009$
millions)...................
Value of Hg reductions at 3% 0.12-5.22 0.12-5.27 0.13-5.95 0.15-6.68 0.15-6.72 0.17-7.34 0.18-8.04 0.21-9.25
discount rate (2009$
millions)...................
Life-cycle Cost of Rep. Product
Class
CSIR
Customers with increase 32.0 32.0 41.6 54.9 54.9 65.6 65.6 65.6
in LCC (%)..............
Customers with savings in 68.0 68.0 58.4 45.1 45.1 34.5 34.5 34.5
LCC (%).................
Mean LCC (2009$)......... 857 857 868 902 902 1,285 1,285 1,285
Mean LCC Savings (2009$). 58 58 47 13 13 (369) (369) (369)
CSCR
Customers with increase 46.5 47.8 47.8 54.9 47.8 98.6 47.8 74.7
in LCC (%)..............
Customers with savings in 53.6 52.2 52.2 45.1 52.2 1.4 52.2 25.3
LCC (%).................
Mean LCC (2009$)......... 1,005 1,002 1,002 1,015 1,002 1,856 1,002 1,078
Mean LCC Savings (2009$). 21 24 24 11 24 (830) 24 (52)
CSIR migrating to CSCR weighted
results ***
Customers with increase in 32.5 32.5 41.7 55.0 55.0 66.0 53.7 60.6
LCC (%).....................
Customers with savings in LCC 67.5 67.5 58.3 45.0 45.0 34.0 46.3 39.4
(%).........................
Mean LCC (2009$)............. 854 854 865 899 899 1,282 891 917
[[Page 10941]]
Mean LCC Savings (2009$)..... 58 58 47 15 15 (370) 23 (3)
Life-cycle Cost of all Product
Classes, Weighted by Shipments
CSIR
Customers with increase 30.7 30.7 40.2 54.1 54.1 65.1 65.1 65.1
in LCC (%)..............
Customers with savings in 69.3 69.3 59.8 45.9 45.9 34.9 34.9 34.9
LCC (%).................
Mean LCC (2009$)......... 859 859 870 903 903 1,287 1,287 1,287
Mean LCC Savings (2009$). 62 62 51 17 17 (367) (367) (367)
CSCR
Customers with increase 38.4 39.7 39.7 46.1 39.7 94.7 39.7 65.0
in LCC (%)..............
Customers with savings in 61.6 60.3 60.3 53.9 60.3 5.3 60.3 35.0
LCC (%).................
Mean LCC (2009$)......... 1,299 1,289 1,289 1,304 1,289 2,228 1,289 1,364
Mean LCC Savings (2009$). 50 60 60 45 60 (879) 60 (15)
Market Share ****--CSIR (%)...... 99 98 98 96 95 100 3 7
Payback Period (years)
CSIR
Average.................. 10.5 10.5 15.1 24.9 24.9 108.5 108.5 108.5
Median................... 3.1 3.1 4.5 7.0 7.0 11.9 11.9 11.9
CSCR
Average.................. 14.8 15.3 15.3 19.5 15.3 200.0 15.3 34.8
Median................... 4.4 4.5 4.5 5.9 4.5 37.6 4.5 10.0
Employment Impact
Indirect Impacts (2045) 7.06 7.12 8.56 10.24 10.20 19.57 11.22 18.70
(jobs, `000)-...............
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Parentheses indicate negative (-) values. For LCCs, a negative value means an increase in LCC by the amount indicated.
** Range of global values for the SCC of emissions reductions, representing a range of scenarios as described in section IV.M and summarized in Table
VI.31, with discount rates ranging from 2.5% to 5%.
*** Shipments-weighted based on market share product switching model.
**** Base case market share is 95 percent CSIR and 5 percent CSCR.
First, DOE considered TSL 8, the combination of CSIR and CSCR
efficiency levels generating the greatest national energy savings. TSL
8 would likely save an estimated 2.33 quads of energy through 2045, an
amount DOE considers significant. Discounted at seven percent, the
projected energy savings through 2045 would be 0.62 quad. For the
Nation as a whole, DOE projects that TSL 8 would result in a net
benefit of $3.03 billion in NPV, using a discount rate of seven
percent. The estimated emissions reductions at TSL 8 are up to 111.4 Mt
of CO2, up to 80.0 kt of NOX, and up to 0.469 ton
of Hg. These reductions have a value of up to $6,046 million for
CO2 (using the 95th percentile value at a 3 percent discount
rate), and a value of up to $63.8 million for NOX, and $4.95
million for Hg at a discount rate of seven percent. At the central
value for the social cost of carbon, the estimated benefit of
CO2 emissions reductions is $1,982 million at a discount
rate of three percent. DOE also estimates that at TSL 8, total electric
generating capacity in 2030 will decrease compared to the base case by
2.14 GW.
At TSL 8, DOE projects that for the average customer, compared to
the baseline, the LCC of a CSIR and CSCR motor will increase by $369
and $52, respectively. At TSL 8, DOE estimates the fraction of
customers experiencing LCC increases will be 66 percent for CSIR motors
and 75 percent for CSCR motors. The median PBP for the average
capacitor-start small electric motor customers at TSL 8, 11.9 years for
CSIR motors and 10.0 years for CSCR motors, is projected to be
substantially longer than the mean lifetime of the equipment. DOE also
considered market migration between CSIR and CSCR users and how that
would affect the LCC of CSIR users at TSL 8. DOE estimates that at this
TSL it will be more cost-effective for many CSIR consumers to purchase
a CSCR motor instead, with only a slight $3 increase in the average LCC
over that of the baseline CSIR motor. In total, 61 percent of consumers
who migrate from a CSIR to a CSCR motor will experience LCC increases.
DOE also examined LCC savings using a full distribution of motor
sizes and speeds. Under these conditions, for the average customer, the
LCC of a CSIR and CSCR motor will increase by $367 and $15,
respectively, compared to the baseline. At TSL 8, DOE estimates the
fraction of customers experiencing LCC increases will be 65 percent for
both CSIR and CSCR motors.
The projected change in industry value ranges from a decrease of
$52.58 million to an increase of $46.35 million. The impacts are driven
primarily by the assumptions regarding the ability to pass on larger
increases in MPCs to the customer as well as the necessary estimated
investments. At TSL 8, DOE recognizes the risk of negative impacts if
manufacturers' expectations about reduced profit margins are realized.
In particular, if the high end of the range of impacts is reached as
DOE expects, TSL 8 could result in a net loss of 18.84 percent in INPV
to the capacitor-start small motor industry. DOE believes manufacturers
would likely have a more difficult time maintaining current gross
margin levels with larger increases in manufacturing production costs,
as standards increase the need for capital conversion costs, equipment
retooling, and increased research and development spending.
Specifically, at this TSL, the majority of manufacturers would need to
significantly redesign all of their capacitor-start small electric
motors.
After carefully considering the analysis and weighing the benefits
and
[[Page 10942]]
burdens of TSL 8, the Secretary has reached the following conclusion:
At TSL 8, the benefits of energy savings, emissions reductions (both in
physical reductions and the monetized value of those reductions), and
the positive net economic savings (over 30 years) would be outweighed
by the economic burden on existing CSCR customers and CSIR customers
who do not migrate from CSIR to CSCR motors (as indicated by the large
increase in LCC) and the potentially large reduction in INPV for
manufacturers resulting from large conversion costs and reduced gross
margins. Consequently, the Secretary has concluded that trial standard
level 8 is not economically justified.
DOE then considered TSL 7, which would likely save an estimated
1.91 quads of energy through 2045, an amount DOE considers significant.
Discounted at seven percent, the projected energy savings through 2045
would be 0.51 quad. For the Nation as a whole, DOE projects that TSL 7
would result in a net benefit of $4.74 billion in NPV, using a discount
rate of seven percent. The estimated emissions reductions at TSL 7 are
up to 96.8 Mt of CO2, up to 69.5 kt of NOX, and
up to 0.408 ton of Hg. These reductions have a value of up to $5,253
million for CO2 (using the 95th percentile value at a 3
percent discount rate), and a value of up to $55.4 million for
NOX, and $4.30 million for Hg at a discount rate of seven
percent. At the central value for the social cost of carbon, the
estimated benefit of CO2 emissions reductions is $1,722
million at a discount rate of three percent. Total electric generating
capacity in 2030 is estimated to decrease compared to the base case by
1.86 GW under TSL 7.
At TSL 7, DOE projects that for the average customer, the LCC of
capacitor-start small electric motors will increase by $369 for CSIR
motors and decrease by $24 for CSCR motors compared to the baseline. At
TSL 7, DOE estimates the fraction of CSIR customers experiencing LCC
increases will be 66 percent, but only 48 percent for CSCR motor
customers. However, DOE believes that at this TSL, which is the max-
tech efficiency level for CSIR motors, the relative difference in cost
between a CSIR motor and a CSCR motor becomes substantial and will have
large effects on customers. Rather than buy an expensive CSIR motor,
those customers whose applications permit them to will purchase a CSCR
motor with the same number of poles and horsepower ratings. DOE is
unsure of the magnitude of the migration of CSIR users to CSCR motors,
but estimates that customers that purchase a CSCR motor rather than a
CSIR motor will reduce their LCC by $23 on average, compared to the
baseline CSIR motor. On a national level, DOE estimates that the market
share of CSCR motors could grow from 5 percent of all capacitor-start
motors to 97 percent once the compliance date for these standards is
effective. Even though switching from a CSIR to a CSCR motor would
result in a reduction in LCC on average, DOE estimates that
approximately 54 percent of CSIR customers that switch would still
experience an LCC increase.
DOE also examined LCC savings with a full distribution of motor
sizes and speeds. Under these conditions, for the average customer,
compared to the baseline, the LCC of a CSIR and CSCR motor will
increase by $367 and decrease by $60, respectively. DOE also examined
what fraction of motors would have increases in LCC. At TSL 7, DOE
estimates that 65 percent of CSIR motor customers who do not switch to
CSCR motors, and 40 percent of CSCR motor customers, will experience
increased LCC.
The projected change in industry value ranges from a decrease of
$34.05 million to an increase of $18.40 million. The impacts are driven
primarily by the assumptions regarding the ability to pass on larger
increases in MPCs to the customer as well as the necessary estimated
investments. At TSL 7, DOE recognizes the risk of negative impacts if
manufacturers' expectations about reduced profit margins are realized.
In particular, if the high end of the range of impacts is reached as
DOE expects, TSL 7 could result in a net loss of 12.20 percent in INPV
to the capacitor-start small motor industry. At this TSL, the
combination of efficiency levels could cause a migration from CSIR
motors to CSCR motors; however, DOE believes that the capital
conversion costs, equipment retooling and R&D spending associated with
this migration would not be severe.
After carefully considering the analysis and weighing the benefits
and burdens of TSL 7, the Secretary has reached the following
conclusion: Trial standard level 7 offers the maximum improvement in
energy efficiency that is technologically feasible and economically
justified and will result in significant conservation of energy. The
Secretary has reached the conclusion that the benefits of energy
savings, emissions reductions (both in physical reductions and the
monetized value of those reductions), the positive net economic savings
to the Nation (over 30 years) and the harmonization of efficiency
requirements between CSIR and CSCR motors would outweigh the potential
reduction in INPV for manufacturers and the economic burden on those
CSIR customers who are unable to switch to CSCR motors. Further,
benefits from carbon dioxide reductions (at a central value calculated
using a three percent discount rate) would increase NPV by $1,722
million (2009$). These benefits from carbon dioxide emission
reductions, when considered in conjunction with the consumer savings
NPV and other factors described above support DOE's tentative
conclusion that trial standard level 7 is economically justified.
Therefore, DOE today adopts the energy conservation standards for
capacitor-start small electric motors at trial standard level 7.
VII. 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 (October 4, 1993), requires each agency to
identify the problem the agency intends to address that warrants new
agency action (including, where applicable, the failures of private
markets or public institutions), as well as assess the significance of
that problem, to enable assessment of whether any new regulation is
warranted. EPCA requires DOE to establish standards for the small
motors covered in today's rulemaking. In addition, today's standards
also address the following: (1) Misplaced incentives, which separate
responsibility for selecting equipment and for paying their operating
costs; and (2) Lack of consumer information and/or information
processing capability about energy efficiency opportunities. The market
for small electric motors is dominated by the presence and actions of
OEMs, who sell small electric motors to end-users as a component of a
larger piece of equipment. There is a very large diversity of equipment
types that use small electric motors and the market for any particular
type of equipment may be very small. Consumers lack information and
choice regarding the motor component. OEMs and consumers may be more
concerned with other aspects of the application system than with
selecting the most cost effective motor for the end user. Space
constraints may also restrict the ability of the consumer to replace
the motor with a more efficient model.
In addition, DOE has determined that today's regulatory action is a
``significant regulatory action'' under section 3(f)(1) of Executive
Order 12866. Accordingly, section 6(a)(3) of the Executive Order
required that DOE prepare a regulatory
[[Page 10943]]
impact analysis (RIA) on today's final rule and that the Office of
Information and Regulatory Affairs (OIRA) in the OMB review this rule.
DOE presented to OIRA for review the final rule and other documents
prepared for this rulemaking, including the RIA, and has included these
documents in the rulemaking record. They are available for public
review in the Resource Room of DOE's Building Technologies Program, 950
L'Enfant Plaza, SW., Suite 600, Washington, DC 20024, (202) 586-2945,
between 9 a.m. and 4 p.m., Monday through Friday, except Federal
holidays.
The NOPR contained a summary of the RIA, which evaluated the extent
to which major alternatives to standards for small electric motors
could achieve significant energy savings at reasonable cost, as
compared to the effectiveness of the proposed rule. 74 FR 61493-96. The
complete RIA (Regulatory Impact Analysis for Proposed Energy
Conservation Standards for Small Electric Motors) 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.
The major alternatives DOE analyzed were: (1) No new regulatory
action; (2) financial incentives, including tax credits and rebates;
(3) revisions to voluntary energy efficiency targets; and (4) bulk
government purchases. DOE evaluated each alternative in terms of its
ability to achieve significant energy savings at reasonable costs, and
compared it to the effectiveness of the proposed rule.
Table VII.1--Non-Regulatory Alternatives for Small Electric Motors
----------------------------------------------------------------------------------------------------------------
Net present value[dagger] billion $
Policy alternatives Energy savings ---------------------------------------
quads * 7% Discount rate 3% Discount rate
----------------------------------------------------------------------------------------------------------------
No New Regulatory Action............................ 0.00 0.00 0.00
Consumer Rebates at TSL 4b (Polyphase) and TSL 3 0.17 0.49 1.13
(Single-Phase).....................................
Consumer Rebates at TSL 4b (Polyphase) and TSL 2 0.27 0.72 1.69
(Single-Phase).....................................
Consumer Rebates at TSL 4b (Polyphase) and TSL 3 0.60 1.76 4.03
(Capacitor-Start Capacitor-Run Only)...............
Consumer Tax Credits................................ 0.11 0.35 0.80
Manufacturer Tax Credits............................ 0.07 0.25 0.56
Voluntary Efficiency Targets........................ 0.42 0.95 2.29
Bulk Government Purchases........................... 0.18 0.44 1.04
Proposed Standards at TSL 4b (Polyphase) and TSL 7 2.20 5.28 12.52
(Capacitor-Start)..................................
----------------------------------------------------------------------------------------------------------------
* Energy savings are in source quads from 2015 and 2045.
[dagger] Net present value (NPV) is the value of a time series of costs and savings. DOE determined the NPV from
2015 to 2065 in billions of 2009$.
The net present value amounts shown in Table VII.1 refer to the NPV
for consumers. The costs to the government of each policy (such as
rebates or tax credits) are not included in the costs for the NPV
since, on balance, consumers are both paying for (through taxes) and
receiving the benefits of the payments. For each of the policy
alternatives other than standards, Table VII.1 shows the energy savings
and NPV in the case where the CSIR and CSCR market share shift in
response to the policy prior to 2015, or immediately in 2015 when
compliance with the standards would be required. The NES and NPV in the
case of the proposed standard are shown as a range between this
scenario and a scenario in which the market shift takes ten years to
complete, and begins in 2015 . The following paragraphs discuss each of
the policy alternatives listed in Table VII.1. (For more details see
TSD, RIA.)
No new regulatory action. The case in which no regulatory action is
taken with regard to small electric motors constitutes the ``base
case'' (or ``No Action'') scenario. In this case, between 2015 and
2045, capacitor-start small electric motors purchased in or after 2015
are expected to consume 1.91 quads of primary energy (in the form of
losses), while polyphase small electric motors purchased in or after
2015 are expected to consume 0.29 quad of primary energy. Since this is
the base case, energy savings and NPV are zero by definition.
Rebates. DOE evaluated the possible effect of a rebate consistent
with current motor rebate practices in the promotion of premium
efficiency motors which cover a portion of the incremental price
difference between equipment meeting baseline efficiency levels and
equipment meeting improved efficiency requirements. The current average
motor rebate for an efficient 1-horsepower motor is approximately $25,
and DOE scaled this rebate to be approximately proportional to the
retail price of the motor. DOE evaluated rebates targeting TSL 4b for
polyphase motors, and evaluated several target efficiency levels for
capacitor-start motors (including TSLs 7, 5, 3, and 2). Existing rebate
programs for polyphase motors target three-digit frame series motors
with efficiencies equivalent to TSL 4b for small polyphase motors. At
rebate efficiency levels corresponding to TSL 7 and 5 for capacitor-
start motors, DOE estimates that rebates consistent with current
practice would have an insignificant impact on increasing the market
share of CSIR motors. For this case, meeting the target level requires
the purchase of a motor with a very high average first cost because for
TSL 7, CSIR motors are at the maximum technologically feasible
efficiency. As a result, rebates targeting TSLs 3 and 2 have larger
energy savings. TSLs 7, 5, 3, and 2 correspond to the same efficiency
level (EL 3) for CSCR motors.
For rebate programs targeting TSL 4b for polyphase motors and TSL 3
for capacitor start motors, DOE estimates the market share of equipment
meeting the energy efficiency levels targeted would increase from 0
percent to 0.4 percent for polyphase motors, from 0 percent to 0.2
percent for capacitor-start, induction-run motors, and from 26.0 to
42.6 percent for capacitor-start, capacitor-run motors. DOE assumed the
impact of this policy would be to permanently transform the market so
that the shipment-weighted efficiency gain seen in the first year of
the program would be maintained throughout the forecast period. At the
estimated participation rates, the rebates would provide 0.17 quad of
national energy
[[Page 10944]]
savings and an NPV of $0.49 billion (at a 7-percent discount rate).
DOE found that a rebate targeting the efficiency levels
corresponding to TSL 2 for capacitor-start motors would result in
larger energy savings than one targeting the efficiency levels of TSL
3, TSL 5 or TSL 7. Such rebates would increase the market share among
capacitor-start induction-run motors meeting the efficiency level
corresponding to TSL 2 from 2.0 percent to 11.7 percent. Combined with
unchanged polyphase motor rebates targeting TSL 4b, DOE estimates these
rebates would provide 0.27 quad of national energy savings and an NPV
of $0.72 billion (at a 7-percent discount rate).
DOE also analyzed an alternative rebate program for capacitor-start
motors which would give rebates of twice the value of the previously-
analyzed rebate for CSCR motors which meet the requirements of TSL 7 (a
$50 rebate for a 1 HP motor, scaled to other product classes), and no
rebates for CSIR motors. DOE estimates that these rebates would have no
effect on the efficiency distribution of capacitor-start induction-run
motors, and would increase the market share among capacitor-start
capacitor-run motors meeting TSL 7 from 26.0 percent to 89.4 percent.
Combined with unchanged polyphase motor rebates at TSL 4b, DOE
estimates these rebates would provide 0.60 quad of national energy
savings and an NPV of $1.76 billion (at a 7-percent discount rate).
Although DOE estimates that rebates will provide national benefits,
they are much smaller than the benefits resulting from national
performance standards. Thus, DOE rejected rebates as a policy
alternative to national performance standards.
Consumer Tax Credits. If customers were offered a tax credit
equivalent to the amount mentioned above for rebates, DOE's research
suggests that the number of customers buying a small electric motor
that would take advantage of the tax credit would be approximately 60
percent of the number that would take advantage of rebates. Thus, as a
result of the tax credit, the percentage of customers purchasing the
products with efficiencies corresponding to TSL 4b or higher for
polyphase motors would increase from 8.0 percent to 15.0 percent; the
market share of capacitor-start motors meeting TSL 3 would increase
from 0 percent to 0.1 percent for capacitor-start, induction-run
motors, and from 26.0 percent to 36.0 percent for capacitor-start,
capacitor-run motors. DOE assumed the impact of this policy would be to
permanently transform the market so that the shipment-weighted
efficiency gain seen in the first year of the program would be
maintained throughout the forecast period. DOE estimated that tax
credits would yield a fraction of the benefits that rebates would
provide. DOE rejected rebates, as a policy alternative to national
performance standards, because the benefits that rebates provide are
much smaller than those resulting from performance standards. Thus,
because consumer tax credits provide even smaller benefits than
rebates, DOE also rejected consumer tax credits as a policy alternative
to national performance standards.
Manufacturer Tax Credits. DOE believes even smaller benefits would
result from availability of a manufacturer tax credit program that
would effectively result in a lower price to the consumer by an amount
that covers part of the incremental price difference between products
meeting baseline efficiency levels and those meeting TSL 4b for
polyphase small electric motors and TSL 3 for capacitor-start small
electric motors. Because these tax credits would go to manufacturers
instead of customers, DOE believes that fewer customers would be aware
of this program relative to a consumer tax credit program. DOE assumes
that 50 percent of the customers who would take advantage of consumer
tax credits would buy more-efficient products offered through a
manufacturer tax credit program. Thus, as a result of the manufacturer
tax credit, the percentage of customers purchasing the more-efficient
products would increase from 8.0 percent to 11.5 percent (i.e., 50
percent of the impact of consumer tax credits) for polyphase motors,
from 0 percent to 0.1 percent for capacitor-start, induction-run
motors, and from 26.0 percent to 31.0 percent for capacitor-start,
capacitor-run motors.
DOE assumed the impact of this policy would be to permanently
transform the market so that the shipment-weighted efficiency gain seen
in the first year of the program will be maintained throughout the
forecast period. DOE estimated that manufacturer tax credits would
yield a fraction of the benefits that consumer tax credits would
provide. DOE rejected consumer tax credits as a policy alternative to
national performance standards because the benefits that consumer tax
credits provide are much smaller than those resulting from performance
standards. Thus, because manufacturer tax credits provide even smaller
benefits than consumer tax credits, DOE also rejected manufacturer tax
credits as a policy alternative to national performance standards.
Voluntary Energy-Efficiency Targets. There are no current Federal
or industry marketing efforts to increase the use of efficient small
electric motors which meet the requirements of TSL 4b for polyphase
small electric motors or TSL 7 for capacitor-start small electric
motors. NEMA and the Consortium for Energy Efficiency promote ``NEMA
Premium'' efficient three-digit frame series motors, and DOE analyzed
this program as a model for the market effects of a similar program for
small electric motors. DOE evaluated the potential impacts of such a
program that would encourage purchase of products meeting the trial
standard level efficiency levels. DOE modeled the voluntary efficiency
program based on this scenario and assumed that the resulting shipment-
weighted efficiency gain would be maintained throughout the forecast
period. DOE estimated that the enhanced effectiveness of voluntary
energy-efficiency targets would provide 0.42 quad of national energy
savings and an NPV of $0.95 billion (at a 7-percent discount rate).
Although this would provide national benefits, they are much smaller
than the benefits resulting from national performance standards. Thus,
DOE rejected use of voluntary energy-efficiency targets as a policy
alternative to national performance standards.
Bulk Government Purchases. Under this policy alternative, the
government sector would be encouraged to purchase increased amounts of
polyphase equipment that meet the efficiency levels in trial standard
level 4b and capacitor-start equipment that meets the efficiency levels
in trial standard level 7. Federal, State, and local government
agencies could administer such a program. At the Federal level, this
would be an enhancement to the existing Federal Energy Management
Program (FEMP). DOE modeled this program by assuming an increase in
installation of equipment meeting the efficiency levels of the target
standard levels among the commercial and public buildings and
operations which are run by government agencies. DOE estimated that
bulk government purchases would provide 0.18 quad of national energy
savings and an NPV of $0.44 billion (at a 7-percent discount rate),
benefits which are much smaller than those estimated for national
performance standards. DOE rejected bulk government purchases as a
policy alternative to national performance standards.
National Performance Standards. None of the regulatory alternatives
DOE
[[Page 10945]]
examined would save as much energy or have an NPV as high as the
standards in today's final rule. Also, several of the alternatives
would require new enabling legislation, because DOE does not have
authority to implement those alternatives. Additional detail on the
regulatory alternatives is found in the RIA chapter 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, unless the agency
certifies that the rule, if promulgated, will not have a significant
economic impact on a substantial number of small entities. As required
by Executive Order 13272, ``Proper Consideration of Small Entities 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.
DOE reviewed today's final rule under the provisions of the
Regulatory Flexibility Act and the procedures and policies published on
February 19, 2003. A regulatory flexibility analysis examines the
impact of the rule on small entities and considers alternative ways of
reducing negative impacts.
In the context of this rulemaking, ``small businesses,'' as defined
by the Small Business Administration (SBA), for the small electric
motor manufacturing industry are manufacturing enterprises with 1,000
employees or fewer. See http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf. DOE used this small business
definition to determine whether any small entities would be required to
comply with the rule. (65 FR 30836, 30850 (May 15, 2000), as amended at
65 FR 53533, 53545 (September 5, 2000) and codified at 13 CFR part 121.
The size standards are listed by NAICS code and industry description.
The manufacturers impacted by this rule are generally classified under
NAICS 335312, ``Motor and Generator Manufacturing,'' which sets a
threshold of 1,000 employees or less for an entity in this category to
be considered a small business.
As explained in the NOPR, DOE identified producers of equipment
covered by this rulemaking, which have manufacturing facilities located
within the United States and could be considered small entities, by two
methods: (1) Asking larger manufacturers in MIA interviews to identify
any competitors they believe may be a small business, and (2)
researching NEMA-identified fractional horsepower motor manufacturers.
DOE then looked at publicly-available data and contacted manufacturers,
as necessary, to determine if they meet the SBA's definition of a small
manufacturing company. In total, DOE identified 11 companies that could
potentially be small businesses. During initial review of the 11
companies in its list, DOE either contacted or researched each company
to determine if it sold covered small electric motors. Based on its
research, DOE screened out companies that did not offer motors covered
by this rulemaking. Consequently, DOE estimated that only one out of 11
companies listed were potentially small business manufacturers of
covered products. DOE then contacted this potential small business
manufacturer and determined that the company's equipment would not be
covered by this proposed rulemaking. Thus, based on its initial
screening and subsequent interviews, DOE did not identify any company
as a small business manufacturer based on SBA's definition of a small
business manufacturer for this industry. (74 FR 61410, 61496). For
today' final rule, DOE did not identify any additional companies that
would be potential small business manufacturer based on SBA's
definition of a small business manufacturer for the small electric
motor industry.
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
This rulemaking imposes no new information or recordkeeping
requirements. Accordingly, OMB clearance is not required under the
Paperwork Reduction Act. (44 U.S.C. 3501, et seq.)
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 15 within the TSD for the final
rule. DOE found the environmental effects associated with today's
standard levels for small electric motors to be insignificant.
Therefore, DOE is issuing a FONSI pursuant to 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 NEPA (10
CFR part 1021). The FONSI is available in the docket for this
rulemaking.
E. Review Under Executive Order 13132
DOE reviewed this rule pursuant to Executive Order 13132,
``Federalism,'' 64 FR 43255 (August 4, 1999), which 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 November 2009 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. See 74 FR 61497. DOE received no
comments on this issue in response to the NOPR, and its conclusions on
this issue are the same for the final rule as they were for the
proposed rule. Therefore, DOE has taken 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 (February 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
[[Page 10946]]
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 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. See 74 FR 61497. DOE
concluded that this rule would not contain an intergovernmental
mandate, but would likely result in expenditures of $100 million or
more after 2015 for private sector commercial and industrial users of
equipment with small electric motors. DOE estimated annualized impacts
for the final standards using the results of the national impacts
analysis. The national impact analysis results expressed as annualized
values are $961-$1,146 million in total annualized benefits from the
final rule, $264 million in annualized costs, and $698-$882 million in
annualized net benefits. Details are provided in chapter 10 of the TSD.
Therefore, DOE must publish a written statement assessing the costs,
benefits, and other effects of the rule on the national economy.
Section 205 of UMRA also requires DOE to identify and consider a
reasonable number of regulatory alternatives before promulgating a rule
for which UMRA requires such a written statement. DOE must select from
those alternatives the most cost-effective and least burdensome
alternative that achieves the objectives of the rule, unless DOE
publishes an explanation for doing otherwise or the selection of such
an alternative is inconsistent with law.
Today's energy conservation standards for small electric motors
would achieve the maximum improvement in energy efficiency that DOE has
determined to be both technologically feasible and economically
justified. A discussion of the alternatives considered by DOE is
presented in the regulatory impact analysis section of the TSD for this
rule. Also, Section 202(c) of UMRA authorizes an agency to prepare the
written statement required by UMRA in conjunction with or as part of
any other statement or analysis that accompanies the proposed rule. (2
U.S.C. 1532(c)) The TSD, preamble, and regulatory impact analysis for
today's final rule contain a full discussion of the rule's costs,
benefits, and other effects on the national economy, and therefore
satisfy UMRA's written statement requirement.
H. Review Under the Treasury and General Government Appropriations Act,
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). See 74
FR 61497. DOE received no comments concerning Section 654 in response
to the NOPR, and, therefore, has taken no further action in today's
final rule with respect to this provision.
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 today's rule would not result in any
takings that might require compensation under the Fifth Amendment to
the U.S. Constitution. See 74 FR 61497-98. DOE received no comments
concerning Executive Order 12630 in response to the NOPR, and,
therefore, has taken no further action in today's final rule with
respect to this Executive Order.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516, note) provides for agencies to review most
disseminations of information to the public under guidelines
established by each agency pursuant to general guidelines issued by
OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002),
and DOE's guidelines were published at 67 FR 62446 (October 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
Office of Information and Regulatory Affairs (OIRA) a Statement of
Energy Effects for any proposed significant energy action. DOE
determined that today's rule, which sets energy conservation standards
for small electric motors, is not a ``significant energy action''
within the meaning of Executive Order 13211. See 74 FR 61498.
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 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, and has not prepared a Statement of Energy
Effects on the final rule.
L. Review Under the Information Quality Bulletin for Peer Review
In consultation with the Office of Science and Technology Policy
(OSTP), OMB issued on December 16, 2004, its ``Final Information
Quality Bulletin for Peer Review'' (the Bulletin). 70 FR 2664. (January
14, 2005) The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal government, including influential
scientific information related to agency regulatory actions. The
purpose of the bulletin is to enhance the quality and credibility of
the Government's scientific information.
As set forth in the NOPR, DOE held formal in-progress peer reviews
of the types of analyses and processes that DOE has used to develop the
energy efficiency standards in today's rule, and issued a report on
these peer reviews. The report is available at http://www.eere.energy.gov/buildings/appliance_standards/peer_review.html.
See 74 FR 61498.
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 prior to the effective
date set forth at the outset of this notice. The report will state that
it has been determined that the rule is a ``major rule'' as defined by
5 U.S.C. 804(2). DOE also will submit the supporting analyses to the
Comptroller General in the U.S. Government Accountability Office
[[Page 10947]]
(GAO) and make them available to each House of Congress.
VIII. 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 431
Administrative practice and procedure, Confidential business
information, Energy conservation test procedures, Reporting and
recordkeeping requirements.
Issued in Washington, DC, on February 22, 2010.
Cathy Zoi,
Assistant Secretary, Energy Efficiency and Renewable Energy.
0
For the reasons stated in the preamble, DOE amends part 431 of chapter
II of title 10, of the Code of Federal Regulations, to read as set
forth below.
PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND
INDUSTRIAL EQUIPMENT
0
1. The authority citation for part 431 continues to read as follows:
Authority: 42 U.S.C. 6291-6317.
0
2. Section 431.446 is revised to read as follows:
Energy Conservation Standards
Sec. 431.446 Small electric motors energy conservation standards and
their effective dates.
(a) Each small electric motor manufactured (alone or as a component
of another piece of non-covered equipment) after February 28, 2015,
shall have an average full load efficiency of not less than the
following:
------------------------------------------------------------------------
Average full load efficiency
--------------------------------------
Polyphase
Motor horsepower/standard --------------------------------------
kilowatt equivalent Open motors (number of poles)
--------------------------------------
6 4 2
------------------------------------------------------------------------
0.25/0.18........................ 67.5 69.5 65.6
0.33/0.25........................ 71.4 73.4 69.5
0.5/0.37......................... 75.3 78.2 73.4
0.75/0.55........................ 81.7 81.1 76.8
1/0.75........................... 82.5 83.5 77.0
1.5/1.1.......................... 83.8 86.5 84.0
2/1.5............................ N/A 86.5 85.5
3/2.2............................ N/A 86.9 85.5
------------------------------------------------------------------------
Average full load efficiency
--------------------------------------
Capacitor-start capacitor-run and
Motor horsepower/standard capacitor-start induction-run
kilowatt equivalent --------------------------------------
Open motors (number of poles)
--------------------------------------
6 4 2
------------------------------------------------------------------------
0.25/0.18........................ 62.2 68.5 66.6
0.33/0.25........................ 66.6 72.4 70.5
0.5/0.37......................... 76.2 76.2 72.4
0.75/0.55........................ 80.2 81.8 76.2
1/0.75........................... 81.1 82.6 80.4
1.5/1.1.......................... N/A 83.8 81.5
2/1.5............................ N/A 84.5 82.9
3/2.2............................ N/A N/A 84.1
------------------------------------------------------------------------
(b) For purposes of determining the required minimum average full
load efficiency of an electric motor that has a horsepower or kilowatt
rating between two horsepower or two kilowatt ratings listed in any
table of efficiency standards in paragraph (a) of this section, each
such motor shall be deemed to have a listed horsepower or kilowatt
rating, determined as follows:
(1) A horsepower at or above the midpoint between the two
consecutive horsepower ratings shall be rounded up to the higher of the
two horsepower ratings;
(2) A horsepower below the midpoint between the two consecutive
horsepower ratings shall be rounded down to the lower of the two
horsepower ratings; or
(3) A kilowatt rating shall be directly converted from kilowatts to
horsepower using the formula 1 kilowatt = (1/0.746) hp, without
calculating beyond three significant decimal places, and the resulting
horsepower shall be rounded in accordance with paragraphs (b)(1) or
(b)(2) of this section, whichever applies.
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.
January 25, 2010.
Robert H. Edwards, Jr., Deputy General Counsel for Energy Policy,
Department of Energy, Washington, DC 20585.
Dear Deputy General Counsel Edwards: I am responding to your
November 19, 2009 letter seeking the views of the Attorney General
about the potential impact on competition of proposed energy
conservation standards for small electric motors. Your request was
submitted pursuant to Section 325(o)(2)(B)(i)(V) of the Energy
Policy and Conservation Act, as amended, (``EPCA''), 42 U.S.C. Sec.
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
[[Page 10948]]
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 Sec. 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 Fed. Reg. 61410) and attended
the December 17, 2009 public hearing on the proposed standard.
Based on our review of the record, the proposed standards for
small electric motors could increase costs for consumers who need to
replace small electric motors in existing equipment. Proposed Trial
Standard Level (TSL) 5 for polyphase small electric motors and TSL 7
for all capacitor-start small electric motors apply to motors sold
as replacements as well as to those built into original equipment.
We understand that compliance with those standards could require
manufacturers to increase the size of their motors such that the
larger motors will not fit into existing space constrained
equipment. In such a case, owners of existing equipment with a
broken motor would have to either replace the entire piece of
equipment or attempt to repair the motor. Such equipment owners
would not have the option of simply replacing the existing small
electric motor, thus limiting the range of competitive alternatives
available to them. This may be quite onerous to consumers when the
motor is only a small component of the total cost of the item and
repairing the motor is difficult or costly. We ask the Department of
Energy to take this possible impact into account and consider, as is
warranted, exempting from the proposed standard the manufacture and
marketing of certain replacement small electric motors for a limited
period in time.
Sincerely,
Christine A. Varney,
Assistant Attorney General.
[FR Doc. 2010-4358 Filed 3-8-10; 8:45 am]
BILLING CODE 6450-01-P