[Federal Register Volume 76, Number 69 (Monday, April 11, 2011)]
[Proposed Rules]
[Pages 20090-20178]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-7592]
[[Page 20089]]
Vol. 76
Monday,
No. 69
April 11, 2011
Part II
Department of Energy
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10 CFR Part 430
Energy Conservation Program: Energy Conservation Standards for
Fluorescent Lamp Ballasts; Proposed Rule
Federal Register / Vol. 76 , No. 69 / Monday, April 11, 2011 /
Proposed Rules
[[Page 20090]]
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DEPARTMENT OF ENERGY
10 CFR Part 430
[Docket Number EE-2007-BT-STD-0016]
RIN 1904-AB50
Energy Conservation Program: Energy Conservation Standards for
Fluorescent Lamp Ballasts
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking (NOPR) and public meeting.
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SUMMARY: The Energy Policy and Conservation Act (EPCA) prescribes
energy conservation standards for various consumer products and
commercial and industrial equipment, including fluorescent lamp
ballasts (ballasts). EPCA also requires the U.S. Department of Energy
(DOE) to determine if amended standards for ballasts are
technologically feasible and economically justified, and would save a
significant amount of energy, and to determine whether to adopt
standards for additional ballasts not already covered by Federal
standards. In this NOPR, DOE proposes amended energy conservation
standards for those ballasts currently subject to standards, and new
standards for certain ballasts not currently covered by standards. This
NOPR also announces a public meeting to receive comment on these
proposed standards and associated analyses and results.
DATES: DOE will hold a public meeting on May 10, 2011, from 9 a.m. to 4
p.m., in Washington, DC. The meeting will also be broadcast as a
webinar. See section 0, ``Public Participation,'' for webinar
registration information, participant instructions, and information
about the capabilities available to webinar participants.
DOE will accept comments, data, and information regarding this
notice of proposed rulemaking (NOPR) before and after the public
meeting, but no later than June 10, 2011. See section 0, ``Public
Participation,'' of this NOPR for details.
ADDRESSES: The public meeting will be held at the U.S. Department of
Energy, Forrestal Building, Room GE-086, 1000 Independence Avenue, SW.,
Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at
(202) 586-2945. Please note that foreign nationals visiting DOE
Headquarters are subject to advance security screening procedures. Any
foreign national wishing to participate in the meeting should advise
DOE as soon as possible by contacting Ms. Brenda Edwards at (202) 586-
2945 to initiate the necessary procedures.
Any comments submitted must identify the NOPR for Energy
Conservation Standards for Fluorescent Lamp Ballasts and provide docket
number EE-2007-BT-STD-0016 and/or regulatory information number (RIN)
number 1904-AB50. Comments may be submitted using any of the following
methods:
1. Federal eRulemaking Portal: http://www.regulations.gov. Follow
the instructions for submitting comments.
2. E-mail: [email protected]. Include the docket
number and/or RIN in the subject line of the message.
3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building
Technologies Program, Mailstop EE-2J, 1000 Independence Avenue, SW.,
Washington, DC 20585-0121. If possible, please submit all items on a
CD. It is not necessary to include printed copies.
4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of
Energy, Building Technologies Program, 950 L'Enfant Plaza, SW., Suite
600, Washington, DC 20024. Telephone: (202) 586-2945. If possible,
please submit all items on a CD. It is not necessary to include printed
copies.
Written comments regarding the burden-hour estimates or other
aspects of the collection-of-information requirements contained in this
proposed rule may be submitted to Office of Energy Efficiency and
Renewable Energy through the methods listed above and by e-mail to
[email protected].
For detailed instructions on submitting comments and additional
information on the rulemaking process, see section 0 of this document
(Public Participation).
Docket: The docket is available for review at http://www.regulations.gov, including Federal Register notices, framework
documents, public meeting attendee lists and transcripts, comments, and
other supporting documents/materials. All documents in the docket are
listed in the http://www.regulations.gov index. Not all documents
listed in the index may be publicly available, such as information that
is exempt from public disclosure.
A link to the docket web page can be found at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/fluorescent_lamp_ballasts.html. This web page will contain a link to
the docket for this notice on regulations.gov. The regulations.gov web
page contains simple instructions on how to access all documents,
including public comments, in the docket. See section 0 for further
information on how to submit comments through http://www.regulations.gov.
For further information on how to submit or review public comments
or participate in the public meeting, contact Ms. Brenda Edwards at
(202) 586-2945 or e-mail: [email protected].
FOR FURTHER INFORMATION CONTACT:
Dr. Tina Kaarsberg, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Program, EE-2J,
1000 Independence Avenue, SW., Washington, DC 20585-0121. Telephone:
(202) 287-1393. E-mail: [email protected].
Ms. Elizabeth Kohl, U.S. Department of Energy, Office of the General
Counsel, GC-71, 1000 Independence Avenue, SW., Washington, DC 20585-
0121. Telephone: (202) 586-7796. E-mail: [email protected].
SUPPLEMENTARY INFORMATION:
I. Summary of the Proposed Rule
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for Fluorescent Lamp Ballasts
3. Compliance Date
III. Issues Affecting the Scope of This Rulemaking
A. Additional Fluorescent Lamp Ballasts for Which DOE Is
Proposing Standards
1. Scope of EPCA Requirement That DOE Consider Standards for
Additional Ballasts
2. Identification of the Additional Ballasts for Which DOE
Proposes Standards
3. Summary of Fluorescent Lamp Ballasts to Which DOE Proposes To
Extend Coverage
B. Off Mode and Standby Mode Energy Consumption Standards
IV. General Discussion
A. Test Procedures
B. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
C. Energy Savings
1. Determination of Savings
2. Significance of Savings
D. Economic Justification
1. Specific Criteria
2. Rebuttable Presumption
V. Methodology and Discussion
A. Market and Technology Assessment
1. General
2. Product Classes
3. Technology Options
B. Screening Analysis
C. Engineering Analysis
1. Approach
[[Page 20091]]
2. Representative Product Classes
3. Baseline Ballasts
4. Selection of More Efficient Ballasts
5. Efficiency Levels
6. Price Analysis
7. Results
8. Scaling to Product Classes Not Analyzed
D. Markups To Determine Product Price
1. Distribution Channels
2. Estimation of Markups
3. Summary of Markups
E. Energy Use Analysis
F. Life-Cycle Cost and Payback Period Analyses
1. Product Cost
2. Installation Cost
3. Annual Energy Use
4. Energy Prices
5. Energy Price Projections
6. Replacement and Disposal Costs
7. Product Lifetime
8. Discount Rates
9. Compliance Date of Standards
10. Ballast Purchasing Events
G. National Impact Analysis--National Energy Savings and Net
Present Value Analysis
1. Annual Energy Consumption per Unit
2. Shipments
3. Site-to-Source Energy Conversion
H. Consumer Sub-Group Analysis
I. Manufacturer Impact Analysis
1. Overview
2. GRIM Analysis
3. Discussion of Comments
4. Manufacturer Interviews
J. Employment Impact Analysis
K. Utility Impact Analysis
L. Environmental Assessment
M. Monetizing Carbon Dioxide and Other Emissions Impacts
1. Social Cost of Carbon
2. Valuation of Other Emissions Reductions
VI. Analytical Results
A. Trial Standard Levels
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
2. Economic Impacts on Manufacturers
3. National Impact Analysis
4. Impact on Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
C. Proposed Standards
1. Trial Standard Level 3
D. Backsliding
VII. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866
B. Review Under the Regulatory Flexibility Act
1. Description and Estimated Number of Small Entities Regulated
2. Description and Estimate of Compliance Requirements
3. Duplication, Overlap, and Conflict With Other Rules and
Regulations
4. Significant Alternatives to the Proposed Rule
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Review Under the Information Quality Bulletin for Peer Review
VIII. Public Participation
A. Attendance at Public Meeting
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
IX. Approval of the Office of the Secretary
I. Summary of the Proposed Rule
The Energy Policy and Conservation Act (42 U.S.C. 6291 et seq.;
EPCA or the Act), as amended, requires that any new or amended energy
conservation standard DOE prescribes for certain products, such as
fluorescent lamp ballasts (ballasts), be designed to achieve the
maximum improvement in energy efficiency that is technologically
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A))
Furthermore, the new or amended standard must result in a significant
conservation of energy. (42 U.S.C. 6295(o)(3)(B)) In accordance with
these and other statutory provisions discussed in this notice, DOE
proposes new and amended energy conservation standards for ballasts.
The proposed standards are shown in Table I.1. These proposed
standards, if adopted, would apply to all products listed in Table I.1
and manufactured in, or imported into, the United States on or after
June 30, 2014.
Table I.1--Proposed Standards
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Percent improvement over current
Product class * Proposed standard ** standard or baseline +
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IS and RS ballasts that operate:
4-foot MBP lamps................... 1.32 * Ln (total lamp arc 1.9 to 13.4.
power) + 86.11.
8-foot slimline lamps..............
PS ballasts that operate:
4-foot MBP lamps................... 1.79 * ln (total lamp arc 9.3 to 12.6.
power) + 83.33.
4-foot MiniBP SO lamps.............
4-foot MiniBP HO lamps.............
IS and RS ballasts that operate 8-foot 1.49 * ln (total lamp arc 34.7.
HO lamps. power) + 84.32.
PS ballasts that operate 8-foot HO 1.46 * ln (total lamp arc 32.0.
lamps. power) + 82.63.
Ballasts that operate 8-foot HO lamps 1.49 * ln (total lamp arc 31.7.
in cold temperature outdoor signs. power) + 81.34.
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* IS = instant start; RS = rapid start; MBP = medium bipin; PS = programmed start; SO = standard output; HO =
high output.
** The proposed standards are based on an equation that is a function of the natural logarithm (ln) of the total
lamp arc power operated by the ballast.
\+\ Range is applicable to the representative ballasts analyzed.
DOE's analyses indicate that the proposed standards would save a
significant amount of energy--an estimated 3.7-6.3 quads of cumulative
energy over 30 years (2014 through 2043). This amount is equivalent to
the annual energy use of approximately 18.5 million to 31.5 million
U.S. homes.
The cumulative national net present value (NPV) of total consumer
costs and savings of the proposed standards for products shipped in
2014-2043, in 2009$, ranges from $8.1 billion (at a 7-percent discount
rate) to $24.7 billion (at a 3-percent discount rate).\1\ The NPV
[[Page 20092]]
is the estimated total value of future operating-cost savings during
the analysis period, minus the estimated increased product costs,
discounted to 2011. The industry net present value (INPV) is the sum of
the discounted cash flows to the industry from the base year through
the end of the analysis period (2014 to 2043). Using a real discount
rate of 7.4 percent, DOE estimates that INPV for manufacturers of all
fluorescent lamp ballasts in the base case ranges from $853 million to
$1.24 billion in 2009$. If DOE adopts the proposed standards, it
expects that manufacturer INPV may change from a loss of 7.7 percent to
a loss of 34.7 percent, or approximately a loss of $95.3 million to a
loss of $296.2 million. Using a 7-percent discount rate, the NPV of
consumer costs and savings from today's proposed standards would amount
to 27-119 times the total estimated industry losses. Using a 3-percent
discount rate, the NPV would amount to 53-246 times the total estimated
industry losses.
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\1\ DOE uses discount rates of 7 and 3 percent based on guidance
from the Office of Management and Budget (OMB Circular A-4, section
E, September 17, 2003). See section IV.G for further information.
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The projected economic impacts of the proposed standards on
individual consumers are generally positive. For example, the estimated
average life-cycle cost (LCC) savings are approximately $11-$25 for 2-
lamp IS and RS ballasts that operate common 4-foot T8 lamps in the
commercial sector.\2\ When more than one baseline existed for a
representative ballast type, DOE performed separate LCC analyses
comparing replacement lamp-and-ballast systems to each baseline.
Because T8 systems are generally more efficient than T12 systems, the
incremental energy savings in a T8 baseline case are considerably lower
than when comparing the same efficiency levels to a T12 baseline. It
was only in these dual-baseline (i.e., T12 and T8) cases that DOE
observed negative economic impacts at the proposed standard levels, as
the incremental energy and operating cost savings in the T8 baseline
cases were not sufficient to offset the increased prices of more
efficient replacements.
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\2\ The LCC is the total consumer expense over the life of a
product, consisting of purchase and installation costs plus
operating costs (expenses for energy use, maintenance and repair).
To compute the operating costs, DOE discounts future operating costs
to the time of purchase and sums them over the lifetime of the
product.
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In addition, the proposed standards would have significant
environmental benefits. The energy saved is in the form of electricity,
and DOE expects the energy savings from the proposed standards to
eliminate the need for approximately 4.37-7.22 gigawatts (GW) of
generating capacity by 2043. The savings would result in cumulative
(undiscounted) greenhouse gas emission reductions of approximately 40-
121 million metric tons (MMt) \3\ of carbon dioxide (CO2)
between 2014 and 2043. During this period, the proposed standards would
result in undiscounted emissions reductions of approximately 32-44
thousand tons of nitrogen oxides (NOX) and 0.59-1.67 tons of
mercury (Hg).\4\ DOE estimates the net present monetary value of the
CO2 emissions reduction is between $0.18 and $6.67 billion,
expressed in 2009$ and discounted to 2011, based on a range of discount
rates discussed in section 0. DOE also estimates the net present
monetary value of the NOX emissions reduction, expressed in
2009$ and discounted to 2011, is between $19 and $35 million at a 7-
percent discount rate, and between $42 and $65 million at a 3-percent
discount rate.\5\
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\3\ A metric ton is equivalent to 1.1 short tons. Results for
NOX and Hg are presented in short tons.
\4\ DOE calculates emissions reductions relative to the most
recent version of the Annual Energy Outlook (AEO) Reference case
forecast. As noted in chapter 16 of the TSD, this forecast accounts
for regulatory emissions reductions through 2008, including the
Clean Air Interstate Rule (CAIR, 70 FR 25162 (May 12, 2005)), but
not the Clean Air Mercury Rule (CAMR, 70 FR 28606 (May 18, 2005)).
Subsequent regulations, including the proposed CAIR replacement rule
and the proposed Clean Air Transport Rule (75 FR 45210 (August 2,
2010)), do not appear in the forecast.
\5\ DOE is aware of multiple agency efforts to determine the
appropriate range of values used in evaluating the potential
economic benefits of reduced Hg emissions. DOE has decided to await
further guidance regarding consistent valuation and reporting of Hg
emissions before it once again monetizes Hg in its rulemakings.
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The benefits and costs of today's proposed standards, for products
sold in 2014-2043, can also be expressed in terms of annualized values.
The annualized monetary values shown in Table I.2 are the sum of (1)
the annualized national economic value, expressed in 2009$, of the
benefits from consumer operation of products that meet the proposed
standards (consisting primarily of operating cost savings from using
less energy, minus increases in equipment purchase and installation
costs, which is another way of representing consumer NPV), and (2) the
annualized monetary value of the benefits of emission reductions,
including CO2 emission reductions.\6\ The value of the
CO2 reductions, otherwise known as the Social Cost of Carbon
(SCC), is calculated using a range of values per metric ton of
CO2 developed by a recent interagency process. The monetary
costs and benefits of emissions reductions are reported in 2009$ to
permit comparisons with the other costs and benefits in the same dollar
units. The derivation of the SCC values is discussed in section 0.
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\6\ DOE used a two-step calculation process to convert the time-
series of costs and benefits into annualized values. First, DOE
calculated a present value in the same year used for discounting the
NPV of total consumer costs and savings. To calculate the present
value, DOE used discount rates of three and seven percent for all
costs and benefits except for the value of CO2
reductions. For the latter, DOE used a range of discount rates, as
shown in Table I.2. From the present value, DOE then calculated the
corresponding time-series of fixed annual payments over a 30-year
period starting in the same year used for discounting the NPV of
total consumer costs and savings. The fixed annual payment is the
annualized value. Although DOE calculated annualized values, this
does not imply that the time-series of cost and benefits from which
the annualized values were determined would be a steady stream of
payments.
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Although combining the values of operating savings and
CO2 emission reductions provides a useful perspective, two
issues should be considered. First, the national operating savings are
domestic U.S. consumer monetary savings that occur as a result of
market transactions while the value of CO2 reductions is
based on a global value. Second, the assessments of operating cost
savings and CO2 savings are performed with different methods
that use quite different time frames for analysis. The national
operating cost savings is measured for the lifetime of ballasts shipped
between 2014 and 2043. The SCC values, on the other hand, reflect the
present value of all future climate-related impacts resulting from the
emission of one ton of CO2 in each year. These impacts go
well beyond 2100.
Using a 7-percent discount rate and the SCC value of $21.40/ton in
2010 (in 2007$), which was derived using a 3-percent discount rate (see
note below Table I.2), the cost of the standards proposed in today's
rule is $276 million-437 million per year in increased equipment costs,
while the annualized benefits are $931 million-1,359 million per year
in reduced equipment operating costs, $44 million-111 million in
CO2 reductions, and $1.6 million-2.8 million in reduced
NOX emissions. In this case, the net benefit amounts to $701
million-1,036 million per year. Using a 3-percent discount rate and the
SCC value of $21.40/ton in 2010 (in 2007$), the cost of the standards
proposed in today's rule is $311 million-539 million per year in
increased equipment costs, while the benefits are $1,153 million-1,800
million per year in reduced operating costs, $44 million-111 million in
CO2 reductions, and $2.1 million-3.3 million in reduced
NOX emissions. At a 3-
[[Page 20093]]
percent discount rate, the net benefit amounts to $887 million-1,376
million per year.
Table I.2--Annualized Benefits and Costs of Proposed Standards for Ballasts for 2014-2043 Analysis Period
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Monetized million 2009$/year
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Low estimate High estimate
Discount rate (emerging (existing
Primary estimate technologies, roll- technologies,
up scenario) shift scenario)
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Benefits
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Operating Cost Savings.......... 7%................ 1,145............. 931............... 1,359.
3%................ 1,477............. 1,153............. 1,800.
CO2 Reduction at $4.7/t *....... 5%................ 20................ 12................ 28.
CO2 Reduction at $21.4/t *...... 3%................ 78................ 44................ 111.
CO2 Reduction at $35.1/t *...... 2.5%.............. 122............... 68................ 177.
CO2 Reduction at $64.9/t *...... 3%................ 237............... 134............... 340.
NOX Reduction at $2,519/t *..... 7%................ 2.2............... 1.6............... 2.8.
3%................ 2.7............... 2.1............... 3.3.
Total (Operating Cost Savings, 7% plus CO2 range. 1,167 to 1,384.... 945 to 1,067...... 1,389 to 1,702.
CO2 Reduction and NOx 7%................ 1,225............. 977............... 1,473.
Reduction)[dagger]. 3%................ 1,557............. 1,199............. 1,915.
3% plus CO2 range. 1,499 to 1,716.... 1,167 to 1,289.... 1,831 to 2,144.
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Costs
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Incremental Product Costs....... 7%................ 357............... 276............... 437.
3%................ 425............... 311............... 539.
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Net Benefits/Costs
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Total (Operating Cost Savings, 7% plus CO2 range. 810 to 1,027...... 669 to 790........ 952 to 1,264.
CO2 Reduction and NOx 7%................ 868............... 701............... 1,036.
Reduction, Minus Incremental 3%................ 1,131............. 887............... 1,376.
Product Costs)[dagger]. 3% plus CO2 range. 1,074 to 1,291.... 856 to 977........ 1,292 to 1,604.
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* The CO2 values represent global monetized values (in 2007$) 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-percent, 3-percent, and 2.5-percent discount rates, respectively. The value of $64.9 per
ton represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. The
value for NOx (in 2009$) is the average of the low and high values used in DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at
a 3-percent discount rate, which is $21.4/ton in 2010 (in 2007$). In the rows labeled as ``7% plus CO2 range''
and ``3% plus CO2 range,'' the operating cost and NOx benefits are calculated using the labeled discount rate,
and those values are added 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.
DOE has tentatively concluded that the proposed standards represent
the maximum improvement in energy efficiency that is technologically
feasible and economically justified, and would result in the
significant conservation of energy. DOE further notes that products
achieving these standard levels are already commercially available for
all product classes covered by today's proposal. Ballasts are
commercially available at the proposed standard level for all
representative ballast types. Based on the analyses described above,
DOE found the benefits of the proposed standards to the nation (energy
savings, positive NPV of consumer benefits, consumer LCC savings, and
emission reductions) outweigh the burdens (loss of INPV for
manufacturers and LCC increases for some consumers).
Based on consideration of the public comments DOE receives in
response to this notice and related information collected and analyzed
during the course of this rulemaking effort, DOE may adopt energy use
levels presented in this notice that are either higher or lower than
the proposed standards, or some combination of level(s) that
incorporate the proposed standards in part.
II. Introduction
The following section briefly discusses the statutory authority
underlying today's proposal as well as some of the relevant historical
background related to the establishment of standards for fluorescent
lamp ballasts.
A. Authority
Title III of EPCA sets forth a variety of provisions designed to
improve energy efficiency. Part B of Title III (42 U.S.C. 6291-6309)
provides for the Energy Conservation Program for Consumer Products
Other than Automobiles.\7\ EPCA covers consumer products and certain
commercial equipment (referred to collectively hereafter as ``covered
products''), including the types of fluorescent lamp ballasts that are
the subject of this rulemaking.\8\ (42 U.S.C. 6292(a)(13)) EPCA
prescribes energy conservation standards for these products (42 U.S.C.
[[Page 20094]]
6295(g)(5), (6), and (8)), and also requires that DOE conduct two
rulemakings to determine (1) whether EPCA's original standards for
ballasts in 42 U.S.C. 6295(g)(5) should be amended, including whether
such standards should apply to the ballasts in 42 U.S.C. 6295(g)(6) and
other fluorescent ballasts; and (2) whether the standards then in
effect for ballasts should be amended, including whether such standards
should apply to additional ballasts. (42 U.S.C. 6295(g)(7)(A)-(B)) As
explained in further detail in section II.C, ``Background,'' this
rulemaking is the second of the two required rulemakings. In this
rulemaking, DOE considers whether to amend the existing standards for
ballasts, including those in 42 U.S.C. 6295(g)(8), and also considers
standards for additional ballasts. See section 0 for a discussion of
additional fluorescent lamp ballasts DOE considered for coverage. In
addition, under 42 U.S.C. 6295(m), DOE must periodically review
established energy conservation standards for covered products.
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\7\ This part was titled Part B in EPCA, but was subsequently
codified as Part A in the U.S. Code for editorial reasons.
\8\ Ballasts are used primarily in the commercial and industrial
sectors. While Part B includes a range of consumer products that are
used primarily in the residential sector, such as refrigerators,
dishwashers, and clothes washers, Part B also includes several
products used primarily in the commercial sector, including
fluorescent lamp ballasts. (Part C of Title III--Certain Industrial
Equipment, codified in the U.S. Code as Part A-1, concerns products
used primarily in the commercial and industrial sectors, such as
electric motors and pumps, commercial refrigeration equipment, and
packaged terminal air conditioners and heat pumps.)
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Under EPCA, DOE's energy conservation program for covered products
consists essentially of four parts: (1) Testing, (2) labeling, (3) the
establishment of Federal energy conservation standards, and (4)
certification and enforcement procedures. The Federal Trade Commission
(FTC) is primarily responsible for labeling, and DOE implements the
remainder of the program. EPCA authorizes DOE, subject to certain
criteria and conditions, to develop test procedures to measure the
energy efficiency, energy use, or estimated annual operating cost of
each covered product. (42 U.S.C. 6293) Manufacturers of covered
products must use the prescribed DOE test procedure as the basis for
certifying to DOE that their products comply with the applicable energy
conservation standards adopted under EPCA and when making
representations to the public regarding the energy use or efficiency of
those products. (42 U.S.C. 6293(c) and 6295(s)) Similarly, DOE must use
these test procedures to determine whether the products comply with
standards adopted under EPCA. Id. The test procedures for ballasts
currently appear at title 10, Code of Federal Regulations (CFR), part
430, subpart B, appendix Q.
EPCA provides criteria for prescribing amended standards for
covered products. As indicated above, any amended standard for a
covered product must be designed to achieve the maximum improvement in
energy efficiency that is technologically feasible and economically
justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, EPCA precludes DOE
from adopting any standard that would not result in a significant
conservation of energy. (42 U.S.C. 6295(o)(3)) Moreover, DOE may not
prescribe a standard: (1) For certain products, including ballasts, if
no test procedure has been established for the product, or (2) if DOE
determines by rule that the proposed standard is not technologically
feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B)) EPCA
also provides that, in determining whether a proposed standard is
economically justified, DOE must determine whether the benefits of the
standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must do
so after receiving comments on the proposed standard, and by
considering, to the greatest extent practicable, the following seven
factors:
1. The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
2. The savings in operating costs throughout the estimated average
life of the covered products in the type (or class) compared to any
increase in the price, initial charges, or maintenance expenses for the
covered products that are likely to result from the imposition of the
standard;
3. The total projected amount of energy, or as applicable, water,
savings likely to result directly from the imposition of the standard;
4. Any lessening of the utility or the performance of the covered
products likely to result from the imposition of the standard;
5. The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
imposition of the standard;
6. The need for national energy and water conservation; and
7. Other factors the Secretary of Energy (Secretary) considers
relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
EPCA also contains what is known as an ``anti-backsliding''
provision, which prevents the Secretary from prescribing any amended
standard that either increases the maximum allowable energy use or
decreases the minimum required energy efficiency of a covered product.
(42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended
or new standard if interested persons have established by a
preponderance of the evidence that the standard is likely to result in
the unavailability in the United States of any covered product type (or
class) of performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as those generally available in the United States. (42 U.S.C.
6295(o)(4))
Further, EPCA establishes a rebuttable presumption that a standard
is economically justified if the Secretary finds that the additional
cost to the consumer of purchasing a product complying with an energy
conservation standard level will be less than three times the value of
the energy savings during the first year that the consumer will receive
as a result of the standard, as calculated under the applicable test
procedure. See 42 U.S.C. 6295(o)(2)(B)(iii).
EPCA requires DOE to specify a different standard level than that
which applies generally to a type or class of products for any group of
covered products that have the same function or intended use if DOE
determines that products within such group (A) consume a different kind
of energy from that consumed by other covered products within such type
(or class); or (B) have a capacity or other performance-related feature
which other products within such type (or class) do not have and such
feature justifies a higher or lower standard. (42 U.S.C. 6294(q)(1)) In
determining whether a performance-related feature justifies a different
standard for a group of products, DOE must consider such factors as the
utility to the consumer of the feature and other factors DOE deems
appropriate. Id. Any rule prescribing such a standard must include an
explanation of the basis on which such higher or lower level was
established. (42 U.S.C. 6295(q)(2))
Federal energy conservation requirements generally supersede State
laws or regulations concerning energy conservation testing, labeling,
and standards. (42 U.S.C. 6297(a)-(c)) DOE can, however, grant waivers
of Federal preemption for particular State laws or regulations, in
accordance with the procedures and other provisions of section 327(d)
of the Act. (42 U.S.C. 6297(d))
Finally, EPCA requires that energy conservation standards address
standby mode and off mode energy use. (42 U.S.C. 6295(gg))
Specifically, when DOE adopts a standard for a covered product after
July 1, 2010, DOE must, if justified by the criteria for adoption of
standards in 42 U.S.C. 6295(o), incorporate standby mode and off mode
energy use into the standard, if feasible. If incorporation is not
feasible, DOE must adopt a separate standard for such energy use for
that product, if justified under 42 U.S.C. 6295(o). (42 U.S.C.
6295(gg)(3)(A)-(B)) DOE has determined
[[Page 20095]]
that ballasts do not operate in an ``off mode'' as defined by EPCA (42
U.S.C. 6291(gg)(1)(A)(ii)), and that the only ballasts that consume
power in a ``standby mode'' as defined by EPCA (42 U.S.C.
6291(gg)(1)(A)(iii)) are those that incorporate an electronic circuit
enabling the ballast to communicate with and be part of a lighting
control system. DOE's current test procedures for ballasts address such
standby mode energy use. 74 FR 54455 (October 22, 2009); 10 CFR part
430, subpart B, appendix Q, section 3.5. In this rulemaking, as
discussed in section 0, DOE has not proposed amended standards for
dimming ballasts currently covered by standards (42 U.S.C. 6295(g)(8))
because DOE has not found any of these covered products in the
marketplace. As the scope of coverage does not include any additional
dimming ballasts, this NOPR does not include energy conservation
standards for standby mode energy use.
B. Background
1. Current Standards
The current Federal energy conservation standards for ballasts are
set forth in Table II.1 and Table II.2 below. The standards in Table
II.1 were adopted in a final rule published on September 19, 2000, 65
FR 56739, which completed the first of the two rulemakings required
under 42 U.S.C. 6295(g)(7) to consider amending the standards for
ballasts (hereafter referred to as the 2000 Ballast Rule). The
standards in Table II.2 were established by amendments to EPCA in the
Energy Policy Act of 2005 (EPACT 2005), Public Law 109-58.
Table II.1--Energy Conservation Standards From the 2000 Ballast Rule
----------------------------------------------------------------------------------------------------------------
Ballast
Application for operation of Ballast input Total nominal efficacy
voltage lamp watts factor
----------------------------------------------------------------------------------------------------------------
One F40T12 lamp................................................. 120 40 2.29
277 40 2.29
Two F40T12 lamps................................................ 120 80 1.17
277 80 1.17
Two F96T12 lamps................................................ 120 150 0.63
277 150 0.63
Two F96T12HO lamps.............................................. 120 220 0.39
277 220 0.39
----------------------------------------------------------------------------------------------------------------
10 CFR 430.32(m)(3).
Table II.2--Energy Conservation Standards from EPACT 2005
----------------------------------------------------------------------------------------------------------------
Ballast
Application for operation of Ballast input Total nominal efficacy
voltage lamp watts factor
----------------------------------------------------------------------------------------------------------------
One F34T12 lamp................................................. 120/277 34 2.61
Two F34T12 lamps................................................ 120/277 68 1.35
Two F96T12/ES lamps............................................. 120/277 120 0.77
Two F96T12/HO/ES lamps.......................................... 120/277 190 0.42
----------------------------------------------------------------------------------------------------------------
(42 U.S.C. 6295(g)(8)(A); 10 CFR 430.32(m)(5))
In summary, as reflected in the foregoing two tables, the ballasts
currently regulated under EPCA consist of ballasts that are designed to
operate:
One and two nominally 40-watt (W) and 34W 4-foot T12
medium bipin (MBP) lamps (F40T12 and F34T12);
Two nominally 75W and 60W 8-foot T12 single-pin (SP)
slimline lamps (F96T12 and F96T12/ES); and
Two nominally 110W and 95W 8-foot T12 recessed double
contact high output lamps (F96T12 and F96T12/ES) at nominal input
voltages of 120 or 277 volts (V) with an input current frequency of 60
hertz (Hz).
2. History of Standards Rulemaking for Fluorescent Lamp Ballasts
EPCA establishes energy conservation standards for certain ballasts
and requires that DOE conduct two cycles of rulemakings to determine
whether to amend the standards for ballasts, including whether to adopt
standards for additional ballasts. (42 U.S.C. 6295(g)(5)-(8)) As
indicated above, DOE completed the first of these rulemaking cycles in
the 2000 Ballast Rule. 65 FR 56740 (Sept. 19, 2000). In this
rulemaking, the second rulemaking cycle required by 42 U.S.C.
6295(g)(7), DOE considers whether to amend the existing standards for
ballasts and whether to adopt standards for additional ballasts.
DOE initiated this rulemaking on January 14, 2008 by publishing in
the Federal Register a notice announcing the availability of the
``Energy Conservation Standards Rulemaking Framework Document for
Fluorescent Lamp Ballasts.'' (A PDF of the framework document is
available at http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/ballast_framework_011408.pdf. In this
notice, DOE also announced a public meeting on the framework document
and requested public comment on the matters raised in the document. 73
FR 3653 (Jan. 22, 2008). The framework document described the
procedural and analytical approaches that DOE anticipated using to
evaluate energy conservation standards for the ballasts, and identified
various issues to be resolved in conducting this rulemaking.
DOE held the public meeting on February 6, 2008, where it:
presented the contents of the framework document; described the
analyses it planned to conduct during the rulemaking; sought comments
from interested parties on these subjects; and in general, sought to
inform interested parties about, and facilitate their involvement in,
the rulemaking. Interested parties at the public meeting discussed the
active mode test procedure and several major analyses related to this
rulemaking. At the meeting and during the period for commenting on the
framework document, DOE received many
[[Page 20096]]
comments that helped identify and resolve issues involved in this
rulemaking.
DOE then gathered additional information and performed preliminary
analyses to help develop potential energy conservation standards for
ballasts. DOE published in the Federal Register an announcement of the
availability of the preliminary technical support document (the
preliminary TSD) and of another public meeting to discuss and receive
comments on the following matters: the product classes DOE planned to
analyze; the analytical framework, models, and tools that DOE was using
to evaluate standards; the results of the preliminary analyses
performed by DOE; and potential standard levels that DOE could
consider. 75 FR 14319 (March 24, 2010) (the March 2010 notice). DOE
also invited written comments on these subjects. Id. The preliminary
TSD is available at http://www1.eere.energy.gov/buildings/appliance_standards/residential/fluorescent_lamp_ballasts_ecs_prelim_tsd.html. In the notice, DOE requested comment on other relevant issues
that would affect energy conservation standards for ballasts or that
DOE should address in this notice of proposed rulemaking (NOPR). Id. at
14322.
The preliminary TSD provided an overview of the activities DOE
undertook in developing standards for ballasts, and discussed the
comments DOE received in response to the framework document. It also
described the analytical framework that DOE uses in this rulemaking,
including a description of the methodology, the analytical tools, and
the relationships among the various analyses that are part of the
rulemaking. The preliminary TSD presented and described in detail each
analysis DOE performed up to that point, including descriptions of
inputs, sources, methodologies, and results. These analyses were as
follows:
A market and technology assessment addressed the scope of
this rulemaking, identified the potential product classes for ballasts,
characterized the markets for these products, and reviewed techniques
and approaches for improving their efficiency;
A screening analysis reviewed technology options to
improve the efficiency of ballasts, and weighed these options against
DOE's four prescribed screening criteria;
An engineering analysis estimated the manufacturer selling
prices (MSPs) associated with more energy-efficient ballasts;
An energy use analysis estimated the annual energy use of
ballasts;
A markups analysis converted estimated MSPs derived from
the engineering analysis to consumer prices;
A life-cycle cost analysis calculated, for individual
consumers, the discounted savings in operating costs throughout the
estimated average life of the product, compared to any increase in
installed costs likely to result directly from the imposition of a
given standard;
A payback period (PBP) analysis estimated the amount of
time it takes individual consumers to recover the higher purchase
expense of more energy efficient products through lower operating
costs;
A shipments analysis estimated shipments of ballasts over
the time period examined in the analysis, which was used in performing
the national impact analysis (NIA);
A national impact analysis assessed the national energy
savings, and the national net present value of total consumer costs and
savings, expected to result from specific, potential energy
conservation standards for ballasts; and
A preliminary manufacturer impact analysis took the
initial steps in evaluating the effects on manufacturers of new
efficiency standards.
The public meeting announced in the March 2010 notice took place on
April 26, 2010. At this meeting, DOE presented the methodologies and
results of the analyses set forth in the preliminary TSD. Interested
parties discussed the following major issues at the public meeting: the
pros and cons of various efficiency metrics; how test procedure
variation might affect efficiency measurements; special requirements
for electromagnetic interference (EMI)-sensitive environments; product
class divisions; MSPs and overall pricing methodology; markups; the
maximum technologically feasible ballast efficiency; cumulative
regulatory burden; and shipments. The comments received since
publication of the March 2010 notice, including those received at the
April 2010 public meeting, have contributed to DOE's proposed
resolution of the issues in this rulemaking. This NOPR responds to the
issues raised in the comments received.
Since the April 2010 public meeting, additional changes have been
proposed to the active mode test procedure that have directly impacted
this rulemaking. After reviewing comments submitted in response to the
active mode test procedure NOPR (75 FR 14287, March 24, 2010) and
conducting additional research, DOE issued a supplemental NOPR (SNOPR)
proposing a lamp-based ballast efficiency metric instead of the
resistor-based metric proposed in the NOPR. 75 FR 71570 (November 24,
2010). DOE believes the lamp-based metric more accurately assesses the
real-life performance of a ballast. In the SNOPR, DOE sought additional
comment on this approach. This NOPR evaluates standards for fluorescent
lamp ballasts in terms of the new metric proposed in the active mode
test procedure SNOPR. Please refer to section 0 for more details.
3. Compliance Date
EPCA contains specific guidelines regarding the compliance date for
any standards amended by this rulemaking. EPCA requires DOE to
determine whether to amend the standards in effect for fluorescent lamp
ballasts and whether any amended standards should apply to additional
ballasts. (42 U.S.C. 6295(g)(7)(B)). As stated above, the existing
standards for ballasts are the standards established in the 2000
Ballast Rule and the standards established through the EPCA amendments
to EPACT 2005. EPCA specifies that any amended standards established in
this rulemaking shall apply to products manufactured after a date that
is five years after--(i) The effective date of the previous amendment;
or (ii) if the previous final rule did not amend the standards, the
earliest date by which a previous amendment could have been effective;
except that in no case may any amended standard apply to products
manufactured within three years after publication of the final rule
establishing such amended standard. (42 U.S.C. 6295(g)(7)(C)). DOE is
required by consent decree to publish any amended standards for
ballasts by June 30, 2011.\9\ As a result, and in compliance with 42
U.S.C. 6295(g)(7)(C), DOE expects the compliance date to be 3 years
after the publication of any final amended standards, by June 30, 2014.
---------------------------------------------------------------------------
\9\ Under the consolidated Consent Decree in New York v. Bodman,
No. 05 Civ. 7807 (S.D.N.Y. filed Sept. 7, 2005) and Natural
Resources Defense Council v. Bodman, No. 05 Civ. 7808 (S.D.N.Y.
filed Sept. 7, 2005) the U.S. Department of Energy is required to
publish a final rule amending energy conservation standards for
fluorescent lamp ballasts no later than June 30, 2011.
---------------------------------------------------------------------------
[[Page 20097]]
III. Issues Affecting the Scope of This Rulemaking
A. Additional Fluorescent Lamp Ballasts for Which DOE Is Proposing
Standards
1. Scope of EPCA Requirement That DOE Consider Standards for Additional
Ballasts
As discussed above, amendments to EPCA established energy
conservation standards for certain fluorescent lamp ballasts, (42
U.S.C. 6295(g)(5), (6), and (8)) and directed DOE to conduct two
rulemakings to consider amending the standards. The first amendment was
completed with the publication of the 2000 Ballast Rule. This
rulemaking fulfills the statutory requirement to determine whether to
amend standards a second time. EPCA specifically directs DOE, in this
second amendment, to determine whether to amend the standards in effect
for fluorescent lamp ballasts and whether such standards should be
amended so that they would be applicable to additional fluorescent lamp
ballasts. (42 U.S.C. 6295(g)(7)(B))
The preliminary TSD notes that a wide variety of fluorescent lamp
ballasts are not currently covered by energy conservation standards,
and they are potential candidates for coverage under 42 U.S.C.
6295(g)(7). DOE encountered similar circumstances in a recent
rulemaking that amended standards for general service fluorescent and
incandescent reflector lamps (hereafter referred to as the 2009 Lamps
Rule).\10\ 74 FR 34080, 34087-8 (July 14, 2009). In that rule, DOE was
also directed by EPCA to consider expanding its scope of coverage to
include additional products: General service fluorescent lamps (GSFL).
EPCA defines general service fluorescent lamps as fluorescent lamps
that can satisfy the majority of fluorescent lamp applications and that
are not designed and marketed for certain specified, non-general
lighting applications. (42 U.S.C. 6291(30)(B)) As such, the term
``general service fluorescent lamp'' is defined by reference to the
term ``fluorescent lamp,'' which EPCA defines as ``a low pressure
mercury electric-discharge source in which a fluorescing coating
transforms some of the ultraviolet energy generated by the mercury
discharge into light,'' and as including the four enumerated types of
fluorescent lamps for which EPCA already prescribes standards. (42
U.S.C. 6291(30)(A); 42 U.S.C. 6295(i)(1)(B)) To construe ``general
service fluorescent lamp'' in 42 U.S.C. 6295(i)(5) as limited by those
types of fluorescent lamps would mean there are no GSFL that are not
already subject to standards, and hence, there would be no
``additional'' GSFL for which DOE could consider standards. Such an
interpretation would conflict with the directive in 42 U.S.C.
6295(i)(5) that DOE consider standards for ``additional'' GSFL, thereby
rendering that provision a nullity.
---------------------------------------------------------------------------
\10\ Documents for the 2009 Lamps Rule are available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/incandescent_lamps.html.
---------------------------------------------------------------------------
Therefore, DOE concluded that the term ``additional general service
fluorescent lamps'' in 42 U.S.C. 6295(i)(5) allows DOE to set standards
for GSFL other than the four enumerated lamp types specified in the
EPCA definition of ``fluorescent lamp.'' As a result, the 2009 Lamps
Rule defined ``fluorescent lamp'' to include:
(1) Any straight-shaped lamp (commonly referred to as 4-foot
medium bipin lamps) with medium bipin bases of nominal overall
length of 48 inches and rated wattage of 25 or more;
(2) Any U-shaped lamp (commonly referred to as 2-foot U-shaped
lamps) with medium bipin bases of nominal overall length between 22
and 25 inches and rated wattage of 25 or more;
(3) Any rapid start lamp (commonly referred to as 8-foot high
output lamps) with recessed double contact bases of nominal overall
length of 96 inches;
(4) Any instant start lamp (commonly referred to as 8-foot
slimline lamps) with single pin bases of nominal overall length of
96 inches and rated wattage of 52 or more;
(5) Any straight-shaped lamp (commonly referred to as 4-foot
miniature bipin standard output lamps) with miniature bipin bases of
nominal overall length between 45 and 48 inches and rated wattage of
26 or more; and
(6) Any straight-shaped lamp (commonly referred to 4-foot
miniature bipin high output lamps) with miniature bipin bases of
nominal overall length between 45 and 48 inches and rated wattage of
49 or more.
10 CFR 430.2
In this rulemaking, DOE is directed to consider whether any amended
standard should be applicable to additional fluorescent lamp ballasts.
(42 U.S.C. 6295(g)(7)(B)) EPCA defines a ``fluorescent lamp ballast''
as ``a device which is used to start and operate fluorescent lamps by
providing a starting voltage and current and limiting the current
during normal operation.'' (42 U.S.C. 6291(29)(A)) For this rule, DOE
proposes to reference the definition of fluorescent lamp adopted by the
2009 Lamps Rule. This definition allows DOE to consider expanding
coverage to include additional fluorescent lamp ballasts while not
eliminating coverage of any ballasts for which standards already exist.
2. Identification of the Additional Ballasts for Which DOE Proposes
Standards
In considering whether to amend the standards in effect for
fluorescent lamp ballasts so that they apply to ``additional''
fluorescent lamp ballasts as specified in section 325(g)(7)(B) of EPCA,
DOE will consider all fluorescent lamp ballasts (for which standards
are not already prescribed) that operate fluorescent lamps, as defined
in 10 CFR 430.2. For each additional fluorescent lamp ballast, DOE
considers potential energy savings, technological feasibility and
economic justification when determining whether to include them in the
scope of coverage. In its analyses, DOE assessed the potential energy
savings from market share estimates, potential ballast designs that
improve efficiency, and other relevant factors. For market share
estimates, DOE used both quantitative shipment data and information
obtained during manufacturer interviews. DOE also assessed the
potential to achieve energy savings in certain ballasts by considering
whether those ballasts could serve as potential substitutes for other
regulated ballasts.
In the preliminary TSD, DOE considered extending the scope of
coverage to several additional ballast types including those that
operate: Additional numbers and diameters of 4-foot MBP lamps,
additional numbers and diameters of 8-foot high output (HO) lamps,
additional numbers and diameters of 8-foot slimline lamps, 4-foot
miniature bipin (miniBP) standard output (SO) lamps, 4-foot miniBP high
output lamps, and 8-foot high output cold temperature lamps commonly
used in outdoor signs. DOE also considered whether to extend coverage
to dimming ballasts, but determined that those ballasts represent a
very small portion of the overall market and are unlikely to be
substituted for covered products due to their high first cost. The
California investor-owned utilities (the California Utilities), and the
Northwest Energy Efficiency Alliance (NEEA) and Northwest Power and
Conservation Council (NPCC) agreed with the expanded scope of coverage
presented in the preliminary TSD. In particular, the California
Utilities commented that there is a wide range of efficiencies among
the products included in the proposed coverage and that cost-effective
standards will lead to significant energy savings. The National
Electrical Manufacturers Association (NEMA) generally agreed with the
expanded scope of coverage, but requested a specific exemption for
[[Page 20098]]
magnetic ballasts that operate in EMI-sensitive applications. (NEMA,
No. 29 at p. 2; California Utilities, No. 30 at p. 1; NEEA and NPCC,
No. 32 at p. 2) \11\ The sections below discuss the comments received
in more detail.
---------------------------------------------------------------------------
\11\ A notation in the form ``NEMA, No. 29 at p. 2'' identifies
a written comment that DOE has received and has included in the
docket of this rulemaking. This particular notation refers to a
comment: (1) Submitted by NEMA; (2) in document number 29 of the
docket, and (3) on page 2 of that document.
---------------------------------------------------------------------------
a. Dimming Ballasts
Historically, energy conservation standards have exempted ballasts
designed for dimming to 50 percent or less of their maximum output. (10
CFR 430.32(m)(4, 6-7)) However, in 2010, exemptions included in EPACT
2005 expired for dimming ballasts that operate certain reduced-wattage
lamps. (10 CFR 430.32(m)(6-7)) DOE research has revealed no dimming
ballasts currently on the market that operate these lamps because the
gas composition of reduced-wattage lamps makes them undesirable for use
in dimming applications. Additionally, dimming ballasts employ cathode
heating to facilitate dimming and therefore operate lamps with two
pins. Because 8-foot slimline lamps have only a single pin, these lamps
are not suitable for use with dimming ballasts. Based on data from the
2005 U.S. Census and interviews with manufacturers, DOE determined in
the preliminary TSD that dimming ballasts of all types had less than 1
percent market share. DOE also concluded that these ballasts are
already used in energy-saving systems. After examining the potential
for substitution from other ballast types, DOE believed there was
little risk of dimming ballasts becoming a substitute for other covered
ballast types. Dimming ballasts are more expensive than comparable
fixed-light-output ballasts. Moreover, dimming ballasts require
specialized control systems, resulting in additional up-front cost. For
all of these reasons, DOE did not consider expanding coverage of
dimming ballasts in the preliminary TSD.
NEMA, the California Utilities, and the NEEA and NPCC agreed with
the exclusion of additional dimming ballasts. (NEMA, No. 29 at p. 2;
California Utilities, No. 30 at p. 1; NEEA and NPCC, No. 32 at p. 3)
Philips and Osram Sylvania emphasized that dimming ballasts are part of
high-efficiency systems that realize greater energy savings than fixed-
light-output systems. (Philips, Public Meeting Transcript, No. 34 at
pp. 122-123; OSI, No. 34, Public Meeting Transcript, No. 34 at pp. 124-
125) The California Utilities and the NEEA and NPCC also cited the lack
of an industry-standard test procedure as a potential barrier to
including dimming ballasts in this rulemaking. NEMA concurred, stating
that industry has not agreed on the appropriate dimmed level for
evaluation and that measuring at many levels is burdensome. (California
Utilities, No. 30 at p. 1; NEEA and NPCC, No. 32 at p. 3; NEMA, No. 29
at p. 2)
DOE agrees that dimming ballasts have a very small market share and
are already used in energy-saving systems. They are unlikely to become
a substitute for fixed-light output ballasts due to their high up-front
cost. The lack of an industry-standardized test procedure for newer
dimming products makes it difficult for DOE to determine whether energy
conservation standards for additional dimming ballasts are
technologically feasible. For these reasons, DOE is not proposing to
expand the coverage of dimming ballasts in this NOPR. However, the
dimming ballasts that operate the four reduced-wattage lamp
combinations described in 10 CFR 430.32(m)(5) (EPACT 2005 standards)
will continue to be covered by existing energy conservation standards.
b. Sign Ballasts
Current energy conservation standards exclude ballasts designed to
operate two F96T12HO lamps at ambient temperatures of 20 degrees
Fahrenheit ([deg]F) or less and for use in an outdoor sign. (10 CFR
430.32(m)) In the preliminary TSD, DOE considered whether to include
these ballasts in the scope of coverage for this rulemaking. DOE found
that the market share of cold temperature sign ballasts was about 1
percent in 2005. Despite their relatively small market share, the
energy savings potential per ballast is substantial due to their
operation of large numbers of high output lamps. Replacing a magnetic
with an electronic \12\ sign ballast could reduce energy consumption by
as much as 25 percent to 35 percent. Given that sign ballasts exist at
more than one level of efficiency, DOE has determined it is
technologically feasible to improve the energy efficiency of sign
ballasts. Preliminary results from the LCC and NIA analyses indicated
that setting standards would be economically justified. For these
reasons, DOE included them in the scope of coverage in the preliminary
TSD.
---------------------------------------------------------------------------
\12\ When DOE refers to an electronic ballast throughout this
document, it is referring to a high frequency ballast as defined by
as defined in ANSI C82.13-2002. Similarly, when DOE refers to a
magnetic ballast, it is referring to a low frequency ballast as
defined by the same ANSI standard.
---------------------------------------------------------------------------
The Appliance Standards Awareness Project (ASAP) and the NEEA and
NPCC agreed with DOE's decision to expand coverage to include cold
temperature outdoor sign ballasts. Although these products comprise a
relatively small percentage of overall fluorescent ballast shipments,
the NEEA and NPCC note that these ballasts have much higher energy use
compared to other covered ballast types due to their high system input
power and low efficiency of present systems. (ASAP, Public Meeting
Transcript, No. 34 at pp. 121-122; NEEA and NPCC, No. 32 at p. 3) DOE
received no comments suggesting that DOE should not include these
ballasts in the scope of coverage for this rulemaking. Therefore, for
the reasons set forth above, DOE proposes to include them in the scope
of coverage for this NOPR. Cold temperature ballasts for outdoor signs
are typically designed to operate a range of lamp lengths and numbers
of lamps. Based on product catalogs and conversations with
manufacturers, DOE found that a single sign ballast can be designed to
operate a range of loads including HO lamps between 1.5 feet and 10
feet with one to six lamps per ballast. Because only 8-foot HO lamps
are included in the definition of fluorescent lamp (10 CFR 430.2), DOE
proposes to include sign ballasts that can operate 8-foot HO lamps in
the scope of coverage.
c. T5 Ballasts
In the preliminary TSD, DOE considered whether to expand the scope
of coverage to include ballasts that operate standard output and high
output 4-foot miniBP T5 lamps. The U.S. Census reports that T5 HO
ballasts comprised about 4 percent of the ballast market in 2005.
Shipment data are available only for T5 high output ballasts, so the
actual market share is likely larger. T5 ballast shipments have been
steadily increasing since the shipments were first reported in 2002.
Furthermore, DOE research indicates that T5 high output ballasts are
rapidly taking market share from metal halide systems used in high-bay
industrial applications. The shipment analysis confirms that T5 SO and
T5 HO ballasts represent a significant portion of the market. Because
higher-efficiency versions of some of these ballasts are already
present in the market, DOE concluded that standards to increase the
energy efficiency of these ballasts were technologically feasible.
Based on LCC and NIA results in the preliminary TSD, coverage of T5
ballasts would be economically justified. For these reasons, DOE
included T5 ballasts in the
[[Page 20099]]
scope of coverage in the preliminary TSD.
DOE did not receive any adverse comment to its inclusion of T5
ballasts in the scope of coverage for the preliminary TSD. Therefore,
for the reasons stated above, DOE proposes to include them in the scope
in this NOPR. DOE found that T5 ballasts and lamps exist in a variety
of lengths and wattages. Although standard T5 lamps include wattages
ranging from 14W to 80W, and lengths ranging from nominally 2 feet to 6
feet, the primary driver of T5 ballast and lamp market share growth is
substitution for currently regulated 4-foot T8 MBP ballasts and lamps.
Therefore, DOE proposes to cover ballasts designed to operate nominally
4-foot lengths of standard output and high output T5 miniBP lamps.
d. Residential Ballasts
In the preliminary TSD, DOE considered whether to include
residential ballasts in the scope of coverage. Residential ballasts,
defined as ballasts that have a power factor less than 0.9 and are
designed for use only in residential building applications, are
currently exempt from existing energy conservation standards. Only
magnetic residential ballast shipments are reported in the U.S. Census.
The market for residential magnetic ballasts held steady at about 7
percent between 1995 and 2002, and then decreased to about 1.5 percent
in 2005. In the preliminary TSD, DOE stated its belief that the 2005
market share and total shipments of residential ballasts was much
higher than the 1.5 percent reported for magnetic residential ballasts
in the U.S. census. First, many residential ballasts are manufactured
overseas by foreign companies that do not share shipment data with the
U.S. Census. Second, electronic ballasts are a common option for
residential fluorescent lighting fixtures, but they were not reported
in the Census data. Because of these omissions, DOE believes
residential ballasts represent a more sizeable portion of the overall
ballast market and represent significant potential energy savings.
DOE also found that residential ballasts exist at a range of
efficiencies. They can be magnetic or electronic and exist for both T8
and T12 lamps. Therefore, DOE believed standards to increase the energy
efficiency of residential ballasts were technologically feasible.
Preliminary results in the LCC and NIA indicated that standards for
residential ballasts were economically justified. For these reasons,
DOE included residential ballasts in the scope of coverage in the
preliminary TSD.
ASAP and the NEEA and NPCC agreed with DOE's decision to expand
coverage to include residential ballasts. The NEEA and NPCC noted that
the residential ballast market is expected to grow substantially as
residential lighting energy codes become more stringent. They noted
that California, Oregon, and Washington have codes that require
fluorescent or higher-efficacy systems. Similarly, the 2009
International Energy Conservation Code requires that 50 percent of all
permanently installed lighting in residences have a minimum efficacy of
45 lumens per watt. (ASAP, Public Meeting Transcript, No. 34 at pp.
121-122; NEEA and NPCC, No. 32 at pp. 2-3) DOE did not receive any
adverse comments regarding coverage of residential ballasts. Therefore,
for the reasons stated above, DOE proposes to include residential
ballasts that operate 4-foot medium bipin or 2-foot U-shaped lamps in
the scope of coverage for this NOPR.
e. Ballasts That Operate T8 4-Foot MBP and 2-Foot U-Shaped Lamps
Existing energy conservation standards do not apply to ballasts
that operate T8 lamps. In the preliminary TSD, DOE considered whether
to extend coverage to these types of ballasts. Ballasts that operate 4-
foot T8 MBP and 2-foot T8 U-shaped lamps exhibit a range of
efficiencies, indicating that standards to increase the energy
efficiency of these ballasts are technologically feasible. According to
the U.S. Census, the market share of 4-foot T8 MBP and 2-foot T8 U-
shaped ballasts represented 55 percent of shipments in 2005. In
addition, due to existing energy conservation standards promulgated for
T12 ballasts, shipments of T8 ballasts have been increasing. T8
ballasts are being purchased and installed in applications previously
popular for T12 systems. Thus, there is potential for significant
energy savings by regulating the 4-foot T8 ballast market. Furthermore,
preliminary results in the LCC and NIA demonstrated the potential for
significant economic savings, indicating that standards for these
ballasts would be economically justified. For these reasons, DOE
included ballasts that operate 4-foot T8 MBP and 2-foot T8 U-shaped
lamps in the scope of coverage in the preliminary TSD.
DOE did not receive any adverse comments regarding coverage of
these ballasts. Therefore, for the reasons stated above, DOE proposes
to include ballasts that operate 4-foot T8 MBP and 2-foot T8 U-shaped
lamps in the scope of coverage for this NOPR.
f. Ballasts That Operate T8 8-Foot Slimline Lamps
Similar to ballasts that operate 4-foot T8 MBP and 2-foot T8 U-
shaped lamps, ballasts that operate 8-foot T8 slimline lamps are also
not subject to existing energy conservation standards. According to the
U.S. Census, 8-foot slimline T8 ballasts had about 2 percent market
share in 2005, while 8-foot slimline T12 ballasts had about 3 percent
market share. Although the market share for 8-foot slimline T8 ballasts
as reported by the U.S. Census is relatively small, the 2009 Lamps Rule
will eliminate all currently commercially available T12 lamps in 2012,
further increasing demand for T8 lamp-and-ballast systems. In addition,
while some 8-foot slimline T12 systems are being replaced by two 4-foot
T8 systems, others are being replaced by 8-foot slimline T8 systems. In
addition, given that these ballasts exist at a range of efficiencies,
DOE believes that energy conservation standards are technologically
feasible. Thus, DOE believes there is potential for significant energy
savings by covering ballasts that operate 8-foot slimline T8 lamps.
Based on DOE's preliminary LCC and NIA results for these ballasts,
coverage of these ballasts would be economically justified. For these
reasons, in the preliminary TSD, DOE included ballasts that operate 8-
foot SP slimline T8 lamps in the scope of coverage.
DOE did not receive any adverse comments regarding coverage of
these ballasts. Therefore, for the reasons stated above, DOE proposes
to include ballasts that operate 8-foot SP slimline T8 lamps in the
scope of coverage for this NOPR.
g. Ballasts That Operate T8 8-Foot HO Lamps
In the preliminary TSD, DOE considered whether to cover ballasts
designed to operate recessed double contact (RDC) HO T8 lamps.
According to the U.S. Census, the market share of 8-foot HO (T8 and
T12) ballasts (excluding cold temperature sign ballasts) was about 0.5
percent in 2005. Because shipments of 8-foot RDC HO lamps are mostly
T12 lamps, DOE believes most of the 8-foot HO ballasts currently
shipped are T12. However, according to analysis conducted for the 2009
Lamps Rule, most currently commercially available T12 HO lamps do not
meet energy conservation standards that come into effect in 2012.
Therefore, DOE believes that T8 HO ballast shipments will increase in
[[Page 20100]]
response to those standards. There is a range of efficiency levels for
8-foot T8 HO ballasts currently in the market; therefore, energy
conservation standards to increase the energy efficiency of these
ballasts are technologically feasible. In addition, preliminary LCC and
NIA results demonstrated the potential for significant economic
savings. Based on these findings, DOE included 8-foot HO T8 ballasts in
the scope of coverage in the preliminary TSD.
DOE did not receive any adverse comments regarding coverage of
these ballasts. Therefore, for the reasons stated above, DOE proposes
to include ballasts that operate 8-foot RDC HO T8 lamps in the scope of
coverage for this NOPR.
h. Ballasts That Operate in EMI-Sensitive Environments
At the public meeting, Philips commented that magnetic ballasts are
currently used in certain EMI-sensitive environments, and that the
proposals in the preliminary TSD would not allow these types of
ballasts to exist in the future. (Philips, Public Meeting Transcript,
No. 34 at pp. 125-126) GE agreed with Philips and cited critical care
suites, surgery suites, airport control towers, and nuclear medicine
laboratories as examples of situations where ballasts that generate low
or no EMI are needed. (GE, Public Meeting Transcript, No. 34 at p. 126)
In written comments, NEMA stated that DOE needs to address an exemption
for magnetic ballasts in EMI-sensitive applications and proposed that
they should be high-performance T8 ballasts, which would be more
expensive than electronic ballasts (NEMA, No. 29 at p. 2).
DOE conducted research and interviews with fluorescent lamp ballast
and fixture manufacturers to identify the following applications as
potentially sensitive to EMI: Medical operating room telemetry or life
support systems; airport control systems; electronic test equipment;
radio communication devices; radio recording studios; correctional
facilities; clean rooms; facilities with low signal-to-noise ratios;
and aircraft hangers or other buildings with predominantly metal
construction.
To understand the specifications that ballast consumers require for
different applications, DOE researched existing regulations for EMI.
DOE identified EMI standards for general applications such as
commercial buildings, residential buildings, naval vessels, and other
spaces. These standards include (1) the Federal Communications
Commission (FCC) standards in 47 CFR part 18 for conducted EMI and (2)
Department of Defense MIL-STD-461F \13\ CE102 limits for all
applications for conducted emissions from power leads between 10kHz and
10MHz. Table III.1 below shows the existing FCC and military standards
for conducted electromagnetic interference. The frequency column
indicates the frequency of the electromagnetic interference rather than
the frequency at which the ballast operates.
---------------------------------------------------------------------------
\13\ Department of Defense MIL-STD-461F is available at http://www.cvel.clemson.edu/pdf/MIL-STD-461F.pdf.
Table III.1--Conducted EMI Requirements for Fluorescent Lamp Ballasts
----------------------------------------------------------------------------------------------------------------
FCC Title 47 Part 18
conducted EMI, Maximum RF
line voltage measured with a CE 102 MIL-STD 461F, limit level for
Frequency (MHz) 50 micro Henry ([mu]H)/50 conducted emissions for all applications
ohm line impedance ([mu]V)
stabilization network
(LISN) micro volt ([mu]V)
----------------------------------------------------------------------------------------------------------------
Non-consumer equipment:
0.45 to 1.6....................... 1,000 1,000
1.6 to 30......................... 3,000 1,000 *Applies up to 10 MHz
Consumer equipment:
0.45 to 2.51...................... 250 1,000
2.51 to 3.0....................... 3,000 1,000
3.0 to 30......................... 250 1,000 *Applies up to 10 MHz
----------------------------------------------------------------------------------------------------------------
In addition to using low-frequency magnetic ballasts in fixtures,
DOE researched other ways that fixture manufacturers can reduce EMI. It
is possible to install an external EMI filter on the input side of the
ballast to limit conducted EMI that escapes the ballast from continuing
to propagate through the building wiring. In addition, a grid lens can
be installed to cover the lamp chamber to increase the impedance to a
specific frequency or to bring radiated EMI to ground. DOE received
mixed feedback from manufacturers concerning whether inline filters,
special lenses, grounding cages, fixture design, and other external
filters would be sufficient to reduce EMI from electronic ballasts to
acceptable levels for EMI-sensitive applications. Electronic ballasts
typically operate at a frequency above 20 kHz, which can turn the
fluorescent lamp arc into an emitter of high-frequency electromagnetic
waves. The switch mode power supply within electronic ballasts can also
radiate high-frequency electromagnetic waves. Because the intensity of
EMI is directly proportional to its frequency, the EMI from lighting
systems containing high-frequency electronic ballasts may penetrate
grid lenses and may affect other equipment over a farther range than
the EMI from magnetic ballasts.
DOE learned from manufacturer interviews that magnetic ballasts are
typically recommended for situations in which EMI has been or is
expected to be a concern. These manufacturers believe the engineering
investment to develop specialty electronic ballasts for EMI-sensitive
applications would be burdensome and not economically justifiable given
the very limited demand. Furthermore, manufacturers indicated
uncertainty over the effectiveness of these measures for each
individual application. DOE was also unable to determine whether EMI
related issues with electronic ballasts could be eliminated with the
methods described above. Manufacturers
[[Page 20101]]
suggested that an exemption for T8 magnetic ballasts would not
constitute a risk for magnetic ballast substitution in current
electronic ballast applications because magnetic ballasts are generally
heavier, more expensive, and use more energy than electronic ballast
alternatives. Customers generally prefer magnetic ballasts only in
situations where EMI is a particular concern.
Based on its analysis of EMI-sensitive ballast applications, DOE
proposes that T8 magnetic ballasts designed and labeled for use in EMI-
sensitive environments only and shipped by the manufacturer in packages
containing not more than 10 ballasts be exempt from the standards
established in this NOPR. Because of the diversity in magnetic T8
ballast applications, DOE has designed the exemption similar to the
previous fluorescent lamp ballast exemptions for replacement ballasts.
DOE believes the exemption is necessary because in some environments,
EMI can pose a serious safety concern that is best mitigated with
magnetic ballast technology. DOE does not believe magnetic ballasts
would likely be used as substitutes in current electronic ballast
applications due to their higher cost and weight. See appendix 5E of
the TSD for more details.
3. Summary of Fluorescent Lamp Ballasts to Which DOE Proposes To Extend
Coverage
With the exception of the comments discussed above, DOE received no
other input related to coverage of fluorescent lamp ballasts. In
addition, DOE's revised analyses indicate that energy conservation
standards for the ballasts to which DOE preliminarily decided to extend
coverage in the preliminary TSD are still expected to be
technologically feasible, economically justified, and would result in
significant energy savings. Therefore, in summary, DOE is proposing to
cover the following additional fluorescent lamp ballasts:
(1) Ballasts that operate 4-foot medium bipin lamps with a rated
wattage \14\ of 25W or more, and an input voltage at or between 120V
and 277V;
---------------------------------------------------------------------------
\14\ The 2009 Lamps Rule adopted a new definition for rated
wattage that can be found in 10 CFR 430.2.
---------------------------------------------------------------------------
(2) Ballasts that operate 2-foot medium bipin U-shaped lamps with a
rated wattage of 25W or more, and an input voltage at or between 120V
and 277V;
(3) Ballasts that operate 8-foot high output lamps with an input
voltage at or between 120V and 277V;
(4) Ballasts that operate 8-foot slimline lamps with a rated
wattage of 52W or more, and an input voltage at or between 120V and
277V;
(5) Ballasts that operate 4-foot miniature bipin standard output
lamps with a rated wattage of 26W or more, and an input voltage at or
between 120V and 277V;
(6) Ballasts that operate 4-foot miniature bipin high output lamps
with a rated wattage of 49W or more, and an input voltage at or between
120V and 277V;
(7) Ballasts that operate 4-foot medium bipin lamps with a rated
wattage of 25W or more, an input voltage at or between 120V and 277V, a
power factor of less than 0.90, and are designed and labeled for use in
residential applications; and
(8) Ballasts that operate 8-foot high output lamps with an input
voltage at or between 120V and 277V, and operate at ambient
temperatures of 20 degrees F or less and are used in outdoor signs.
B. Off Mode and Standby Mode Energy Consumption Standards
EPCA requires energy conservation standards adopted for a covered
product after July 1, 2010 to address standby mode and off mode energy
use. (42 U.S.C. 6295(gg)(3)) Because DOE is required by consent decree
to publish a final rule establishing any amended standards for
fluorescent lamp ballasts by June 30, 2011, this rulemaking is subject
to this requirement. DOE determined that it is not possible for the
ballasts at issue in this rulemaking to meet the off-mode criteria
because there is no condition in which a ballast is connected to the
main power source and is not in a mode already accounted for in either
active or standby mode. In the test procedure addressing standby mode
energy consumption, DOE determined that the only ballasts that consume
energy in standby mode are those that incorporate an electronic circuit
that enables the ballast to communicate with and be part of a lighting
control interface (e.g., DALI-enabled ballasts). 74 FR 54445, 54447-8
(October 22, 2009). DOE believes that the only commercially available
ballasts that incorporate an electronic circuit to communicate with a
lighting control interface are dimming ballasts.
As discussed in section 0, DOE does not propose to expand the scope
of coverage to include additional dimming ballasts. Therefore, the only
covered dimming ballasts are the products that operate the four
reduced-wattage lamp combinations specified in 10 CFR 430.32(m)(5). DOE
research has not revealed any dimming ballasts currently on the market
that operate these lamps because the gas composition of reduced-wattage
lamps makes them undesirable for use in dimming applications.
Additionally, these ballasts employ cathode heating to facilitate
dimming and therefore operate lamps with two pins. Because 8-foot
slimline lamps have only a single pin, these lamps are not suitable for
use with dimming ballasts. Because DOE did not discover any dimming
products that are covered by existing standards, DOE was not able to
characterize standby mode energy consumption. Thus, DOE is not able to
set standards for standby mode energy consumption for these ballasts in
accordance with 42 U.S.C. 6295(o). DOE did not receive any comments
regarding this subject in response to the preliminary TSD. Therefore,
for the reasons stated above, DOE does not propose to adopt provisions
to address ballast operation in standby mode as part of the energy
conservation standards that are the subject of this rulemaking.
IV. General Discussion
A. Test Procedures
As noted above, DOE's current test procedures for ballasts appear
at 10 CFR part 430, subpart B, appendix Q. DOE issued a NOPR in which
it proposed revisions to these test procedures. 75 FR 14288 (March 24,
2010). The principal change DOE proposed to the existing test methods,
in an effort to reduce measurement variation, was to eliminate
photometric measurements used to determine ballast efficacy factor
(BEF). Instead, DOE proposed to use electrical measurements to
determine ballast efficiency (BE), which could then be converted to BEF
using empirically derived transfer equations. The proposed changes also
specified that the ballast operate a resistive load rather than a lamp
load during performance testing. No changes were proposed for the
measurement of ballast factor (which required photometric measurements)
for consistency with previous methods. Finally, DOE also proposed an
update to an industry standard referenced in the existing test
procedure. Id. at 14290, 14308. DOE also proposed to add methods for
testing ballasts that are not currently covered by energy conservation
standards, but that DOE is considering for standards in this
rulemaking. Id. at 14289-91. Finally, DOE proposed provisions for
manufacturers to report to DOE on the compliance of their ballasts with
applicable standards. Id. at 14289, 14290, 14309.
More recently, DOE published a supplementary NOPR in which it
proposed revisions to its test procedures
[[Page 20102]]
for fluorescent lamp ballasts established under EPCA. 75 FR 71570 (Nov.
24, 2010). This test procedure proposes to measure a new metric,
ballast luminous efficiency (BLE), which more directly assesses the
electrical losses in a ballast compared to the existing ballast
efficacy factor (BEF) metric. Rather than testing a ballast while
operating a resistive load, the BLE test procedure measures the
performance of a ballast while it is operating a fluorescent lamp. DOE
found that a resistive load can model the effective resistance of a
lamp operated only at a particular ballast factor, requiring multiple
ballast factor specific resistors to be specified and increasing the
testing cost to manufacturers. In written comments in response to the
NOPR, NEMA suggested that ballast factor be calculated using a
combination of electrical measurements and reference lamp arc power
values from ANSI C78.81-2010. The SNOPR proposal outlines a new method
for determination of ballast factor which requires only electrical
measurements.
DOE also notes that EPCA requires DOE to amend its test procedures
for all covered products, including those for ballasts, to include the
measurement of standby mode and off mode energy consumption, except
where current test procedures fully address such energy consumption or
where an integrated or separate standard is technically infeasible. (42
U.S.C. 6295(gg)(2)) As indicated above, ballasts do not operate in the
off mode and DOE has already amended its test procedures for ballasts
to address standby mode energy use. 74 FR 54445 (Oct. 22, 2009). As a
result, DOE's current test procedure rulemaking for ballasts does not
address standby or off mode energy use.
B. Technological Feasibility
1. General
In each standards rulemaking, DOE conducts a screening analysis
based on information it has gathered on all current technology options
and prototype designs that could improve the efficiency of the products
or equipment that are the subject of the rulemaking. As the first step
in such analysis, DOE develops a list of design options for
consideration in consultation with manufacturers, design engineers, and
other interested parties. DOE then determines which of these means for
improving efficiency are technologically feasible. DOE considers
technologies incorporated in commercially available products or in
working prototypes to be technologically feasible. 10 CFR part 430,
subpart C, appendix A, section 4(a)(4)(i).
Once DOE has determined that particular design options are
technologically feasible, it further evaluates each of these design
options in light of the following additional screening criteria: (1)
Practicability to manufacture, install, or service; (2) adverse impacts
on product utility or availability; and (3) adverse impacts on health
or safety. Section 0 of this notice discusses the results of the
screening analysis for ballasts, particularly the designs DOE
considered, those it screened out, and those that are the basis for the
trial standard levels (TSLs) in this rulemaking. For further details on
the screening analysis for this rulemaking, see Chapter 4 of the NOPR
TSD.
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt an amended standard for a type or class
of covered product, it must determine the maximum improvement in energy
efficiency or maximum reduction in energy use that is technologically
feasible for that product. (42 U.S.C. 6295(p)(1)) Accordingly, DOE
determined the maximum technologically feasible (``max tech'') ballast
efficiency in the engineering analysis, using the design options
identified in the screening analysis (see chapter 5 of the NOPR TSD).
As a first step to identifying the maximum technologically feasible
efficiency level, DOE conducted testing of commercially available
ballasts. In the preliminary analysis, DOE was not able to identify
working prototypes that had a higher efficiency than the tested
products. Therefore, the ``max tech'' level determined for the
preliminary analysis was based on the most efficient commercially
available ballasts tested. DOE presented additional research in
appendix 5D of the preliminary TSD to explore whether technologies used
in products similar to ballasts could be used to improve the efficiency
of ballasts currently on the market.
DOE received several comments regarding its determination of max
tech ballast efficiency. These comments are discussed in section 0. For
this NOPR, DOE conducted additional analysis to determine the
appropriate max tech levels for fluorescent lamp ballasts. Based on the
additional testing conducted for this NOPR, DOE has determined that TSL
3 represents the highest efficiency level that is technologically
feasible for a sufficient diversity of products (spanning several
ballast factors, number of lamps per ballast, and types of lamps
operated) within each product class. Table IV.1 presents the max tech
efficiency levels for each product class.
Table IV.1--Max Tech Levels
------------------------------------------------------------------------
Product class Equation\*\
------------------------------------------------------------------------
IS and RS ballasts that operate........ 1.32 * ln (total lamp arc
power) + 86.11.
4-foot MBP lamps...................
8-foot slimline lamps..............
PS ballasts that operate............... 1.79 * ln (total lamp arc
power) + 83.33.
4-foot MBP lamps...................
4-foot MiniBP SO lamps.............
4-foot MiniBP HO lamps.............
IS and RS ballasts that operate........ 1.49 * ln (total lamp arc
power) + 84.32.
8-foot HO lamps....................
PS ballasts that operate............... 1.46 * ln (total lamp arc
power) + 82.63.
8-foot HO lamps....................
Ballasts that operate.................. 1.49 * ln (total lamp arc
power) + 81.34.
8-foot HO lamps in cold temperature
outdoor signs.
------------------------------------------------------------------------
*Equation includes 0.8 percent reduction for testing variation.
------------------------------------------------------------------------
[[Page 20103]]
Although DOE identified certain ballasts that achieved efficiencies
higher than TSL 3, these ballasts were suitable for only a limited
range of applications within their product class. DOE does not have
sufficient data at this time to determine that a higher efficiency
level is technologically feasible for the full range of ballast
applications with alternate ballast factors, numbers of lamps, and lamp
types. Before making this determination, DOE evaluated the possibility
of improving the efficiency of three selected ballasts by inserting
improved components in the place of existing components of commercially
available ballasts. DOE's experiments with improving ballast efficiency
through component substitution did not result in prototypes with
improved overall ballast efficiency.
DOE is still considering whether an efficiency level higher than
TSL 3 is technologically feasible for a sufficient diversity of lamp
types, ballast factors, and numbers of lamps within each product class.
Although DOE was unable to improve the efficiency of commercially
available ballasts, DOE recognizes that component substitution is not
the only method available for incrementally improving ballast
efficiency. For example, further improvements may be possible through
the incorporation of newly designed integrated circuits into the new
ballast designs.
In Appendix 5F of the NOPR TSD, DOE presents additional analysis on
the potential for an instant-start ballast efficiency level that
exceeds TSL 3. DOE requests comments on its selection of the maximum
technologically feasible level and whether it is technologically
feasible to attain such higher efficiencies for the full range of
instant start ballast applications. Specifically, DOE seeks
quantitative information regarding the potential change in efficiency,
the design options employed, and the associated change in cost. Any
design option that DOE considers to improve efficiency must meet the
four criteria outlined in the screening analysis: technological
feasibility; practicability to manufacture, install, and service;
adverse impacts on product or equipment utility to consumers or
availability; and adverse impacts on health or safety. DOE also
requests comments on any technological barriers to an improvement in
efficiency above TSL 3 for all or certain types of ballasts.
C. Energy Savings
1. Determination of Savings
DOE used its NIA spreadsheet to estimate energy savings from new or
amended standards for the ballasts that are the subject of this
rulemaking. (The NIA spreadsheet model is described in section 0 of
this notice and in chapter 11 of the TSD.) DOE forecasted energy
savings beginning in 2014, the year that compliance with any new and
amended standards is proposed to be required, and ending in 2043 for
each TSL. DOE quantified the energy savings attributable to each TSL as
the difference in energy consumption between the standards case and the
base case. The base case represents the forecast of energy consumption
in the absence of new and amended mandatory efficiency standards, and
considers market demand for higher-efficiency products. For example,
DOE models a shift in the base case from covered fluorescent lamp
ballasts toward emerging technologies such as light emitting diodes
(LEDs).
The NIA spreadsheet model calculates the electricity savings in
``site energy'' expressed in kilowatt-hours (kWh). Site energy is the
energy directly consumed by ballasts at the locations where they are
used. DOE reports national energy savings on an annual basis in terms
of the aggregated source (primary) energy savings, which is the savings
in energy used to generate and transmit the site energy. (See NOPR TSD
chapter 11) To convert site energy to source energy, DOE derived
conversion factors, which change with time, from the model used to
prepare the Energy Information Administration's (EIA's) Annual Energy
Outlook 2010 (AEO2010).
2. Significance of Savings
As noted above, under 42 U.S.C. 6295(o)(3)(B) DOE is prohibited
from adopting a standard for a covered product if such standard would
not result in ``significant'' energy savings. While the term
``significant'' is not defined in the Act, the U.S. Court of Appeals,
in Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 1373
(D.C. Cir. 1985), indicated that Congress intended ``significant''
energy savings in this context to be savings that were not ``genuinely
trivial.'' The energy savings for all of the TSLs considered in this
rulemaking are nontrivial, and therefore DOE considers them
``significant'' within the meaning of section 325 of EPCA.
D. Economic Justification
1. Specific Criteria
As noted in section II.B, EPCA provides seven factors to be
evaluated in determining whether a potential energy conservation
standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)) The
following sections discuss how DOE addresses each of those seven
factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of a new or amended standard on
manufacturers, DOE first determines the quantitative impacts using an
annual cash-flow approach. This includes both a short-term assessment--
based on the cost and capital requirements during the period between
the announcement of a regulation and when the regulation comes into
effect--and a long-term assessment over the 30-year analysis period.
The impacts analyzed include INPV (which values the industry based on
of expected future cash flows), cash flows by year, changes in revenue
and income, and other measures of impact, as appropriate. Second, DOE
analyzes and reports the impacts on different types of manufacturers,
including an analysis of impacts on small manufacturers. Third, DOE
considers the impact of standards on domestic manufacturer employment
and manufacturing capacity, as well as the potential for standards to
result in plant closures and loss of capital investment. DOE also takes
into account cumulative impacts of different DOE regulations and other
regulatory requirements on manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and the PBP associated with new or amended standards.
The LCC, which is separately specified as one of the seven factors to
consider when determining the economic justification for a new or
amended standard, (42 U.S.C. 6295(o)(2)(B)(i)(II)), is discussed in the
following section. For consumers in the aggregate, DOE calculates the
net present value from a national perspective of the economic impacts
on consumers over the forecast period used in a particular rulemaking.
b. Life-Cycle Costs
The LCC is the sum of the purchase price of a product (including
its installation) and the operating expense (including energy and
maintenance and repair expenditures) discounted over the lifetime of
the product. The LCC savings for the considered efficiency levels are
calculated relative to a base case that reflects likely trends in the
absence of new or amended standards. The LCC analysis required a
variety of inputs, such as product prices, product energy consumption,
energy prices, maintenance and repair costs, product lifetime, and
consumer discount rates. DOE assumed in its analysis that
[[Page 20104]]
consumers purchase the product in 2014.
To account for uncertainty and variability in specific inputs, such
as product lifetime and discount rate, DOE uses a distribution of
values with probabilities attached to each value. A distinct advantage
of this approach is that DOE can identify the percentage of consumers
estimated to achieve LCC savings or experiencing an LCC increase, in
addition to the average LCC savings associated with a particular
standard level. In addition to identifying ranges of impacts, DOE
evaluates the LCC impacts of potential standards on identifiable sub-
groups of consumers that may be disproportionately affected by a
national standard.
c. Energy Savings
While significant conservation of energy is a separate statutory
requirement for imposing an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) DOE uses
the NIA spreadsheet results in its consideration of total projected
savings.
d. Lessening of Utility or Performance of Products
In establishing classes of products, and in evaluating design
options and the impact of potential standard levels, DOE seeks to
develop standards that would not lessen the utility or performance of
the products under consideration. The efficiency levels considered in
today's NOPR will not affect any features valued by consumers, such as
starting method, ballast factor, or cold temperature operation.
Therefore, DOE believes that none of the TSLs presented in section 0
would reduce the utility or performance of the ballasts considered in
the rulemaking. (42 U.S.C. 6295(o)(2)(B)(i)(IV))
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider any lessening of competition likely to
result from standards. It directs the Attorney General to determine the
impact, if any, of any lessening of competition likely to result from a
proposed standard and to transmit such determination to the Secretary,
not later than 60 days after the publication of a proposed rule,
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)) DOE has transmitted a copy of
today's proposed rule to the Attorney General and has requested that
the Department of Justice (DOJ) provide its determination on this
issue. DOE will address the Attorney General's determination in any
final rule.
f. Need of the Nation to Conserve Energy
The non-monetary benefits of the proposed standards are likely to
be reflected in improvements to the security and reliability of the
nation's energy system. Reduced demand for electricity may also result
in reduced costs for maintaining the reliability of the nation's
electricity system. DOE conducts a utility impact analysis to estimate
how standards may affect the Nation's needed power generation capacity.
Energy savings from the proposed standards are also likely to
result in environmental benefits in the form of reduced emissions of
air pollutants and greenhouse gases (GHG) associated with energy
production. DOE reports the environmental effects from the proposed
standards--and from each TSL it considered for ballasts--in the
environmental assessment contained in the NOPR TSD. DOE also reports
estimates of the economic value of reduced emissions reductions
resulting from the considered TSLs.
g. Other Factors
The Act allows the Secretary of Energy to consider any other
factors he or she deems relevant in determining whether a standard is
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) Under this
provision, DOE considered subgroups of consumers that may be adversely
affected by the standards proposed in this rule. DOE specifically
assessed the impact of standards on low-income consumers, institutions
of religious worship, and institutions that serve low-income
populations. In considering these subgroups, DOE analyzed variations on
electricity prices, operating hours, discount rates, and baseline
ballasts. See section 0 of this notice for further detail.
2. Rebuttable Presumption
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA provides for a
rebuttable presumption that an energy conservation standard is
economically justified if the additional cost to the consumer of a
product that meets the standard is less than three times the value of
the first-year energy (and, as applicable, water) savings resulting
from the standard, as calculated under the applicable DOE test
procedure. DOE's LCC and PBP analyses generate values that calculate
the payback period for consumers of potential new and amended energy
conservation standards. These analyses include, but are not limited to,
the 3-year payback period contemplated under the rebuttable presumption
test. However, DOE routinely conducts an economic analysis that
considers the full range of impacts to the consumer, manufacturer,
nation, and environment, as required under 42 U.S.C. 6295(o)(2)(B)(i).
The results of this analysis serve as the basis for DOE to evaluate
definitively the economic justification for a potential standard level
(thereby supporting or rebutting the results of any preliminary
determination of economic justification). The rebuttable presumption
payback calculation is discussed in section 0 of this NOPR.
V. Methodology and Discussion
DOE used two spreadsheet tools to estimate the impact of today's
proposed standards. The first spreadsheet calculates LCCs and payback
periods of potential new energy conservation standards. The second
provides shipments forecasts and then calculates national energy
savings and net present value impacts of potential new energy
conservation standards. The Department also assessed manufacturer
impacts, largely through use of the Government Regulatory Impact Model
(GRIM).
Additionally, DOE estimated the impacts of energy efficiency
standards on utilities and the environment. DOE used a version of EIA's
National Energy Modeling System (NEMS) for the utility and
environmental analyses. The NEMS model simulates the energy sector of
the U.S. economy. EIA uses NEMS to prepare its Annual Energy Outlook, a
widely known baseline energy forecast for the United States. The
version of NEMS used for appliance standards analysis is called NEMS-
BT, and is based on the AEO2010 version with minor modifications. The
NEMS-BT offers a sophisticated picture of the effect of standards,
because it accounts for the interactions between the various energy
supply and demand sectors and the economy as a whole.
The EIA approves the use of the name ``NEMS'' to describe only an
AEO version of the model without any modification to code or data.
Because the present analysis entails some minor code modifications and
runs the model under various policy scenarios that deviate from AEO
assumptions, the name ``NEMS-BT'' refers to the model as used here. (BT
stands for DOE's Building Technologies Program.) For more information
on NEMS, refer to The National Energy Modeling System: An Overview,
DOE/EIA-0581 (98) (Feb. 1998), available at: http://
[[Page 20105]]
tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf.
A. Market and Technology Assessment
1. General
When beginning an energy conservation standards rulemaking, DOE
develops information that provides an overall picture of the market for
the products concerned, including the purpose of the products, the
industry structure, and market characteristics. This activity includes
both quantitative and qualitative assessments based on publicly
available information. The subjects addressed in the market and
technology assessment for this rulemaking include product classes and
manufacturers; historical shipments; market trends; regulatory and non-
regulatory programs; and technologies or design options that could
improve the energy efficiency of the product(s) under examination. See
chapter 3 of the TSD for further discussion of the market and
technology assessment.
2. Product Classes
In evaluating and establishing energy conservation standards, DOE
divides covered products into classes by the type of energy used, or by
capacity or other performance-related feature that justifies a
different standard for products having such feature. (See 42 U.S.C.
6295(q)) In deciding whether a feature justifies a different standard,
DOE must consider factors such as the utility of the feature to users.
Id. DOE establishes energy conservation standards for different product
classes based on the criteria set forth in 42 U.S.C. 6295(o).
In the preliminary TSD, DOE evaluated the performance of a ballast
using the BEF metric. DOE considered several potential class-setting
factors and ultimately separated product classes based on lamp length,
ballast factor, lumen package, maximum number of lamps operated,
starting method, and market sector. In general, when considering the
above characteristics, DOE identified three main factors as affecting
consumer utility: (1) The lumen package of the lamp-and-ballast system;
(2) the physical constraints of the lamp-and-ballast system; and (3)
the use of the ballast in an application for which other ballasts are
not suitable. Philips, along with the NEEA and NPCC, generally agreed
with DOE's initial determination of the product class structure. (NEEA
and NPCC, No. 32 at p. 3; Philips, Public Meeting Transcript, No. 34 at
pp. 153-154)
After the April 2010 public meeting, DOE received comments from
interested parties that caused it to reevaluate the test method
proposed in the active mode test procedure NOPR. As discussed in
section 0, DOE published an SNOPR for the active mode test procedure on
November 24, 2010. In that document, DOE proposed a lamp-based test
procedure for measuring ballast luminous efficiency. Thus, when
considering product classes in this NOPR, DOE evaluates potential
class-setting factors by considering features that affect BLE instead
of BEF.
a. Power Versus Efficiency Relationship
As described in section 0, DOE undertook extensive testing of
fluorescent lamp ballasts to evaluate the impact of numerous ballast
characteristics on BLE. In its written comments on the active mode test
procedure, NEMA suggested that a relationship existed between lamp arc
power and BLE such that the product class structure from the
preliminary TSD could be greatly simplified. NEMA suggested that
instant start ballasts with input power less than or equal to 45 W,
greater than 45 W and less than or equal to 125 W, and greater than 125
W could be subject to standards of 85 percent, 88 percent, and 90
percent efficiency respectively. For programmed start ballasts, NEMA
recommended standards for the same wattage bins, but with a downward
adjustment of 3 percent compared to the instant start values. NEMA
provided supplementary information showing that these standard levels
in many cases were similar to the levels proposed by DOE in the
preliminary TSD. NEMA noted it was only sharing a methodology that
could be employed by DOE, not making a formal proposal. (NEMA, No. 15
at p. 9-10) \15\ NEMA had previously discussed this methodology as a
possible approach at a meeting with DOE in April 2010, subsequent to
the public workshop.\16\
---------------------------------------------------------------------------
\15\ This comment is from the docket for the fluorescent lamp
ballast active mode test procedure, which is docket number EERE-
2009-BT-TP-0016.
\16\ A summary of the meeting is available at http://www.gc.energy.gov/documents/Ex_parte_Meeting_NEMA_05_25_2010.pdf.
---------------------------------------------------------------------------
Although not a formal proposal for the energy conservation
standards rulemaking, this methodology was supported by several
manufacturers during interviews for this NOPR. Manufacturers indicated
that ballasts that operate similar lamp powers often share similar
topologies and component, and thus, should have similar efficiencies.
DOE analyzed its test data to attempt to characterize a relationship
between BLE and lamp arc power.
It is DOE's understanding that there are both fixed and variable
losses in any fluorescent ballast. Fixed losses consist of switching
losses, due to components such as transistors, and fixed voltage drops
across certain components, such as diodes. These components are
necessary for proper ballast operation but will always contribute some
amount to overall ballast losses. In ballasts that operate at low
powers, fixed losses comprise a significant amount of the power lost.
Variable losses consist primarily of resistive losses (also referred to
as I\2\R losses) which increase as current increases. Ballasts that
operate at higher powers also operate at a higher current and therefore
have greater resistive losses. At a certain power level, resistive
losses will be greater than fixed losses, as resistive losses continue
to increase as power increases.
Using test data, DOE empirically found a relationship between the
BLE metric and the natural log of lamp arc power. The logarithmic
relationship is consistent with current energy conservation standards
for external power supplies.\17\ 42 USC 6295(u)(3)(A). In general, as
lamp arc power increases, BLE increases as well. DOE believes this is
because the fixed losses of a ballast become proportionally less
significant at higher lamp arc powers. Using this relationship has
several benefits for determining product classes compared to DOE's
approach in the preliminary TSD. Equations allow DOE to set efficiency
levels as a function of lamp arc power across a wide range, which
simplifies the product class structure and the amount of scaling
required between product classes. Furthermore, setting efficiency
levels in this manner allows for greater flexibility regarding future
innovation. For example, an equation would account for the introduction
of new ballast factors. It would also not necessarily have to be
revised if the test procedure were modified to require testing with
reduced-wattage lamps. By contrast, other approaches could require
separate product classes for factors that affect the total wattage
operated by a ballast (such as lumen output, ballast factor, and number
of lamps operated).
---------------------------------------------------------------------------
\17\ External power supplies perform a related function to
fluorescent lamp ballasts in that they convert AC to DC, filter
unwanted frequencies, and can step up or down voltage.
---------------------------------------------------------------------------
The sections below discuss specific class-setting factors
considered in the preliminary TSD and whether product classes based on
these factors are necessary given the power-efficiency relationship.
[[Page 20106]]
b. Starting Method
In the preliminary TSD, DOE considered establishing separate
product classes based on starting method. DOE found RS and PS ballasts
to be inherently less efficient than IS ballasts because RS and PS
ballasts provide filament power to the lamp. Although some PS ballasts
cut out the filament power during normal operation (using the cathode
cutout technology option discussed in chapter 3 of the NOPR TSD), the
extra circuitry to remove this power still consumes some amount of
power. Whereas RS and IS ballasts are commonly used as substitutes for
each other, PS ballasts are not. Programmed start ballasts are commonly
used in combination with occupancy sensors because of their ability to
maintain the lifetime of the fluorescent lamp. The lifetime of a lamp
operated on a PS ballast with occupancy sensors can be as much as three
times longer than the lifetime of a lamp operated on an IS or RS
ballast in the same application. Thus, DOE's research indicates that
use of instant start ballasts with occupancy sensors can result in a
significant reduction in lamp lifetime. Because the application in
which they are used significantly affects lamp lifetime, programmed
start ballasts offer the user a distinct utility. In consideration of
their affect on both BEF and utility, DOE established separate product
classes for programmed start ballasts in the preliminary TSD.
Philips agreed that RS and PS ballasts would have lower BEFs than
IS ballasts. Philips stated that cathode heating of RS and PS ballasts
would make the lamps more efficient, which would increase ballast
factor and therefore increase overall system efficacy, or BEF. The
corresponding increase in ballast input power for these ballasts,
however, would offset any overall gain in BEF. Despite this difference
in BEF for RS and PS ballasts compared to IS ballasts, Philips did not
think NEMA would object to the inclusion of rapid and instant start
ballasts in the same product class. Whereas IS and RS ballasts offer
the consumer similar utility, Philips believed PS ballasts offered
consumers unique utility because of the application in which they are
used. Regarding the impact of starting method on ballast efficiency,
Philips pointed out that a metric of lamp arc power divided by ballast
input power would consider power used to heat cathodes as losses. GE
and Philips believed that this should be considered when defining
product classes and setting standards. (GE, Public Meeting Transcript,
No. 34 at p. 43; Philips, Public Meeting Transcript, No. 34 at pp. 44-
46, 71-72)
DOE agrees with GE and Philips that cathode heating is counted as a
loss in the BLE metric because it does not directly contribute to the
creation of light. Thus, similar to BEF, RS and PS ballasts have lower
BLEs than comparable IS ballasts. Because starting method affects BLE
in the same way it affects BEF, and DOE has already established a
unique utility associated with PS ballasts, DOE proposes to maintain
product class divisions for starting method in this NOPR and establish
separate product classes for programmed start ballasts and instant and
rapid start ballasts.
c. Ballast Factor
Ballast factor (BF) is the ratio of light output of a reference
lamp operated by a ballast to the light output of the same lamp
operated by a reference ballast. It is typically used to adjust the
lumen package of a lamp-and-ballast system. The ballasts proposed for
coverage in this rulemaking are available with a variety of ballast
factors. In the preliminary TSD, DOE classified a low BF as less than
or equal to 0.78, a normal BF as greater than 0.78 but less than 1.1,
and a high BF as greater than or equal to 1.1. In its previous
analysis, DOE found that ballasts with high or low BFs had lower BEFs
than ballasts with a normal ballast factor. Because BF affected the
lumen output of the lamp-and-ballast system, DOE observed that
consumers tended to use ballasts with different ballast factors for
different applications. DOE believed this behavior constituted a unique
utility. Therefore, because of the impact on BEF and utility, DOE
established separate product classes in the preliminary TSD for low,
normal, and high ballast factor when these products existed for covered
ballast types. In the preliminary TSD, however, DOE did not establish
separate product classes for high, low, and normal BF for 4-foot T5
MiniBP HO, 8-foot HO, residential, or sign ballasts because products in
this category were predominantly offered in one ballast factor range.
The California Utilities commented that DOE should divide
residential ballasts into high, normal, and low BF categories because
test results showed that residential products existed at more than one
BF. (California Utilities, No. 30 at p. 5) Philips commented that the
range considered for normal BF was unreasonably large. For T8 ballasts,
industry typically considers normal BF to be from 0.85 to 1.00, whereas
for T5 ballasts industry considers normal BF to be about 1.00.
(Philips, Public Meeting Transcript, No. 34 at p. 136-137)
Because DOE is evaluating a new metric for this NOPR, DOE analyzed
the impact of ballast factor on BLE. During interviews, manufacturers
stated that as ballast factor increases, BLE should also increase. This
is the same observation as the one discussed in section 0, that BLE
increases as overall lamp arc power increases, but on a smaller scale.
As ballast factor increases, the ballast drives the lamp harder, which
increases measured lamp arc power. Because the ballast operates at
higher power, its fixed losses become proportionally less significant
in comparison to lower BFs. Because BF affects the total power operated
by a ballast, and DOE has established a relationship relating total
lamp arc power to ballast efficiency, DOE believes the efficiency
equation will account for any changes in BF. Thus, in this NOPR, DOE
does not propose to establish separate product classes for high, low,
or normal BF.
d. Lumen Package
Lumen package refers to the quantity of light that a lamp-and-
ballast system provides to a consumer. To obtain a high lumen package,
certain lamps are designed to operate with ballasts that run the lamps
at high currents. For example, 8-foot HO lamps and 4-foot MiniBP HO
lamps tend to operate at higher currents than 8-foot slimline lamps and
4-foot MiniBP SO lamps, respectively. This difference in operating
design increases the quantity of light per unit of lamp length. High
output lamps generally operate at higher wattages than comparable (same
length, diameter) standard output lamps. In the preliminary TSD, DOE
observed that this difference in lamp wattage caused ballasts that
operate high output lamps to have lower BEFs than ballasts that operate
comparable standard output lamps.
In addition, consumers tend to use systems with different lumen
packages for different applications. For example, high-lumen-output
systems may be installed in certain high-ceiling or outdoor
applications where large quantities of light are needed. Alternatively,
standard-lumen-output systems might be installed in lower-ceiling
applications such as offices or hospitals, where the distance between
the light source and the illuminated surface is not as large. Notable
differences in the application of ballasts designed to operate SO lamps
versus HO lamps indicate a difference in utility. Therefore, given the
observed utility distinctions and notable efficiency differences, DOE
established
[[Page 20107]]
separate product classes in the preliminary TSD for ballasts that
operate SO lamps and ballasts that operate HO lamps.
DOE did not receive any adverse comment to its separation of
ballasts that operate HO lamps from those that operate SO lamps due to
the impact of larger input powers on BEF. In this NOPR, however, DOE
proposes standards based on the BLE metric. Therefore, DOE evaluated
the impact of HO lamp operation versus SO lamp operation on BLE. DOE
found that BLE is not dependent on system light output, but rather on
the total power operated by the ballast. As HO lamps have higher rated
powers than SO lamps, DOE believes ballasts that operate HO lamps would
be more efficient than comparable ballasts that operate SO lamps. An
analysis of test data generally confirmed this prediction. Therefore,
because the power-efficiency equation accounts for HO versus SO lamp
operation, DOE does not propose to establish separate product classes
for ballasts that operate HO lamps, with one exception as explained in
the following paragraph.
DOE found that ballasts that operate 8-foot HO lamps did not follow
the expected relationship. Compared to 8-foot slimline ballasts, DOE
found that 8-foot HO ballasts exhibited lower BLEs although they
operated higher lamp powers. DOE believes a separate product class is
necessary for 8-foot HO ballasts because there is a significant change
in lumen package accompanied by a decrease in BLE. Based on
manufacturer interviews, DOE believes 8-foot HO ballasts may have
different topology, or circuit design, than other ballast types (e.g.
4-foot MBP and 8-foot slimline ballasts). Because DOE has established
that lumen package offers a unique utility, and in this case a change
in lumen package is accompanied by a change in BLE from what the
efficiency equation would predict, DOE proposes to establish a separate
product class for ballasts that operate 8-foot HO lamps. DOE requests
comment on this decision in section 0.
e. Lamp Diameter
Differences in lamp diameter can be accompanied by differences in
rated lamp wattage and lumen output. In the preliminary TSD, DOE
observed that T8 ballasts generally had higher BEFs than T12 ballasts
due to T8 lamps having a lower rated wattage than T12 lamps. DOE noted,
however, that T8 lamp-and-ballast systems are commonly used as
substitutes for T12 lamp-and-ballast systems, suggesting that there was
no unique utility associated with T12 systems. Although the lamps have
different wattages, the two systems often have the same lamp lengths
and bases, offer comparable lumen output, and can fit within the same
fixtures. For these reasons, DOE included T8 and T12 ballasts in the
same product class in the preliminary TSD.
In contrast, DOE established separate product classes for ballasts
that operate T5 lamps. DOE observed that 4-foot T5 ballasts generally
had lower input powers (due to the lower wattage of the test lamp), and
therefore higher BEFs, than comparable T8 or T12 ballasts. T5 lamp-and-
ballast systems, however, are not always interchangeable with T8 and
T12 systems. Because T5 lamps have similar total lumen output to T8 and
T12 lamps over a significantly smaller surface area, T5 lamp-and-
ballast systems are often marketed as too bright for use in direct
lighting fixtures. Because of the impact on BEF and consumer utility,
DOE established a separate product class in the preliminary TSD for
ballasts that operate T5 lamps.
The California Utilities and the NEEA and NPCC supported DOE's
conclusion in the preliminary TSD to include T8 and T12 ballasts in the
same product class based on their use as substitutes for one another.
(California Utilities, No. 30 at p. 1; NEEA and NPCC, No. 32 at p. 3)
However, Philips believed that because BEF includes a measure of light
output, it should be used to compare ballasts of similar light output
only. Philips noted that because F96T12HO/ES lamps have a 13-percent
greater lumen output than F96T8HO lamps, ballasts that operate these
lamps should not be subject to the same BEF standard. NEMA agreed with
Philips and supported different BEF standards for ballasts that operate
these lamps. However, NEMA did comment that a single ballast efficiency
standard could be set for ballasts that operate F96T8HO and F96T12HO/ES
lamps. (Philips, Public Meeting Transcript, No. 34 at pp. 16, 50; NEMA,
No. 29 at p. 3, 7)
In this NOPR, DOE considered the impact of lamp diameter on the BLE
metric. As described above, differences in lamp diameter can be
accompanied by differences in rated lamp wattage and lumen output.
Because the efficiency equation sets standards specific to the total
lamp power operated by the ballast of interest, the equation will also
account for the impact of lamp diameter if there is an associated
change in lamp arc power (as is the case with T8HO versus T12HO lamps).
In addition, DOE believes that T5HO ballasts operate similar total lamp
powers and employ similar technologies to 4-lamp 4-foot MBP PS ballasts
that are able to meet the most efficient levels. Furthermore, 2-lamp 4-
foot MBP PS ballasts operate similar total lamp power and employ
similar technologies to 2-lamp T5 SO ballasts that are able to meet the
most efficient levels. Therefore, DOE does not propose to establish
separate product classes for ballasts that have different lamp
diameters.
f. Lamp Length
Of the fluorescent ballasts DOE proposes to include in the scope of
coverage, all are designed to operate lamps with lengths of 4 or 8
feet. As lamp length increases, lamp arc power tends to increase as
well. In the preliminary TSD, DOE observed that this increase in lamp
power resulted in lower BEFs for ballasts that operate 8-foot lamps as
compared to those that operate 4-foot lamps. Furthermore, DOE concluded
that because consumers are often physically constrained by their
building ceiling layout, systems operating 8-foot and 4-foot lamps are
not always substitutable for each other. Given the impact on both BEF
and utility, DOE established separate product classes in the
preliminary TSD for ballasts that operate different lamp lengths.
In this NOPR, DOE evaluates impacts of lamp length on BLE. Test
data showed that ballasts that operate 8-foot slimline lamps are more
efficient than comparable ballasts that operate the same number of 4-
foot MBP lamps due to the increased lamp wattage operated by these
ballasts. As described in section 0, DOE has developed an efficiency
equation for the relationship between BLE and lamp arc power, which
accounts for differences in lamp length if there is an associated
change in lamp arc power. Therefore, DOE does not propose to establish
separate product classes for ballasts that operate 4-foot versus 8-foot
lamps.
g. Number of Lamps
Fluorescent lamp ballasts are designed to operate a certain maximum
number of lamps. For example, ballasts designed to operate 4-foot MBP
lamps can operate as few as one or as many as six lamps. In the
preliminary TSD, DOE found that BEF decreased with each additional lamp
operated because additional lamps increased the ballast's input power.
DOE determined that the ability to operate different maximum number of
lamps impacts utility because this capacity affects the space required
by fixtures (a four-lamp fixture requires more physical space than one-
lamp fixture). Given the impact on both BEF and consumer utility, DOE
established
[[Page 20108]]
separate product classes in the preliminary TSD based on the maximum
number of lamps operated by a ballast.
Philips agreed that based on BEF data, 1-lamp ballasts are less
efficient than 4-lamp ballasts. (Philips, Public Meeting Transcript,
No. 34 at pp. 137-139) In this NOPR, DOE analyzed the impact of
operating different numbers of lamps on BLE. Test data generally showed
that the more lamps a ballast operates the higher the BLE for that
ballast. DOE believes this is because as a ballast operates a larger
total lamp power, fixed losses are diluted over a greater power. DOE
believes that this relationship is accounted for in the efficiency
equation described in section 0, because an increase in the number of
lamps operated is associated with an increase in total lamp arc power.
Therefore, DOE does not propose to establish separate product classes
for ballasts that operate different numbers of lamps.
h. Residential Ballasts
Separate minimum power factor and electromagnetic interference
requirements exist for residential and commercial ballasts. Residential
ballasts have more stringent (or lower maximum allowable) EMI
requirements than commercial ballasts; they also have less stringent
(or lower minimum allowable) power factor requirements.\18\ In the
preliminary TSD, DOE concluded these requirements impact utility
because they serve distinct market sectors and applications. In
addition, DOE believed that the differing requirements caused
residential ballasts to have lower BEFs than commercial ballasts. For
these reasons, in the preliminary TSD, DOE established a separate
product class for ballasts that are designed for use in the residential
sector.
---------------------------------------------------------------------------
\18\ ANSI C82.77-2002 requires residential ballasts to have a
minimum power factor of 0.5 and commercial ballasts to have a
minimum power factor of 0.9.
---------------------------------------------------------------------------
Philips agreed that the FCC has more stringent EMI requirements for
residential ballasts than commercial ballasts. The NEEA and NPCC
commented that they have not seen evidence of any impact on efficiency
due to the FCC EMI standards. Philips disagreed, stating that the FCC
Class B requirements necessitate a more sophisticated EMI filter that
results in greater losses than the commercial FCC requirements. Philips
noted, however, these losses are offset by the difference in power
factor requirements for the two market sectors. The power losses
associated with the high power factor requirements in the commercial
sector are greater than the losses associated with the more stringent
EMI requirements in the residential sector. As evidence, Philips
indicated that compliance data from the California Energy Commission
(CEC) database indicates that some residential ballasts have higher
BEFs than commercial ballasts. (Philips, Public Meeting Transcript, No.
34 at p. 134-6; NEEA and NPCC, Public Meeting Transcript, No. 34 at p.
135)
In this NOPR, DOE evaluated the impact of the more stringent EMI
and less stringent power factor requirements on the BLE of residential
ballasts. DOE tested several residential ballasts including models with
the highest reported BLEs in the CEC database. DOE found that
residential ballasts achieved the same efficiencies as their commercial
counterparts. DOE believes that because these two ballast types can
achieve the same efficiency, it is not necessary to establish a
separate product class for residential ballasts, and therefore does not
propose to do so in this NOPR.
i. Sign Ballasts
Ballasts designed for use in cold temperature outdoor signs have
slightly different characteristics than those ballasts that operate in
the commercial sector. First, sign ballasts are designed to operate in
cold temperature environments--as low as negative 20 degrees Fahrenheit
(F). Second, sign ballasts are classified by the total length (in feet)
of lamps they can operate as well as the total number of lamps. To
operate in cold temperature environments and to be able to handle
numerous lamp combinations, sign ballasts contain more robust
components compared to regular 8-foot HO ballasts in the commercial
sector. Thus, sign ballasts are inherently less efficient. In the
preliminary TSD, DOE concluded that regular 8-foot HO ballasts cannot
serve as substitutes for sign ballasts due to their inability to
operate in cold temperature environments. For these reasons, DOE
believes that cold temperature sign ballasts offer the consumer a
distinct utility. Therefore, DOE established a separate product class
for cold temperature sign ballasts in the preliminary TSD.
At the public meeting, DOE received several comments regarding
which characteristics distinguish sign ballasts from regular ballasts
designed to operate 8-foot HO lamps. OSI stated that a ``cold
temperature starting'' label means the ballast can start a lamp at
temperatures typically as low as -20 degrees F. (OSI, Public Meeting
Transcript, No. 34 at pp. 116-117) Philips stated that there are two UL
safety ratings for outdoor environments: type 1 outdoor which requires
a basic moisture resistant enclosure, and type 2 outdoor which requires
a hermetic enclosure to prevent all moisture from entering the ballast.
However, the outdoor rating is not of concern regarding efficiency.
Instead, Philips stated that a cold-temperature sign ballast delivers
increased ignition voltages to the lamp, resulting in more resistive
losses in the secondary transformer. If two high output ballasts have
the same input power but one has a higher open circuit voltage, the
ballast with the higher open circuit voltage will generally be less
efficient. (Philips, Public Meeting Transcript, No. 34 at pp. 118-119,
139-140) The California Utilities, however, questioned whether cold-
temperature sign ballasts were inherently less efficient because they
noted some regular 8-foot HO ballasts are capable of starting lamps at
temperatures of negative 20 degrees F or lower. (California Utilities,
No. 30 at p. 2)
In this NOPR, DOE reviewed whether sign ballasts had different BLEs
than regular 8-foot HO ballasts. Based on its test data, DOE found that
sign ballasts did not achieve the expected BLE predicted by the power-
efficiency relationship. Test data indicated these ballasts were not as
efficient as regular 8-foot HO ballasts. DOE believes this is because
sign ballasts are generally more robust and flexible. For example, sign
ballasts are often specified to operate multiple-lamp-length
combinations as well as both T12HO and T8HO lamps. As a result, a sign
ballast is not optimized for the operation of a particular lamp whereas
a regular 8-foot HO ballast is designed specifically for a T8HO or
T12HO lamp. Regular 8-foot HO ballasts cannot always serve as
substitutes for sign ballasts due to their lack of moisture seals and
the more limited load specifications. For these reasons--and the
associated differences in BLE compared to ballasts of similar lamp arc
power--DOE proposes to establish separate a product class for sign
ballasts.
j. Premium Features
During product research and manufacturer interviews, DOE found that
several high-efficiency ballasts possess premium features such as a low
temperature rating, type CC protection, lamp striation control, and
small can size. Below DOE discusses each feature and considers whether
to propose separate product classes for them.
[[Page 20109]]
Low Temperature Rating
DOE surveyed the market and found that all ballast types covered by
this rulemaking have cold temperature ratings. This rating was
typically associated with high-performance products; standard-
efficiency ballasts were less likely to have this feature. Ballasts
with low temperature ratings (-20 degrees F) can be used in
applications such as parking garages, warehouses, and cold storage
areas. In cold temperature environments, a fluorescent ballast must
supply a higher starting voltage to establish the lamp arc. To create
this higher voltage, the output transformer may have additional
windings. In addition, components throughout the ballast must be able
to withstand this higher voltage, even if only for a short amount of
time. The additional windings and slightly different components may
increase resistive losses.
DOE conducted research to determine how this rating might impact
BLE. DOE was unable to find pairs of the same ballasts in which one had
a cold temperature rating and one did not. Thus, DOE looked at groups
of ballasts that achieved the same efficiency level based on its test
data. The data showed no clear trend of a cold temperature rating
impacting BLE. In most cases, DOE found the most efficient ballast in a
particular category had the lowest rated starting temperature. Thus,
DOE believes that the rated starting temperature of a ballast does not
substantively impact overall efficiency. Therefore, DOE does not
propose to establish a separate product class based on this feature.
Type CC
Arcing can occur when a lamp is not well connected to its socket or
when it is removed from a fixture. To prevent this phenomenon, UL 1598
requires luminaires using instant start ballasts with bipin lamp
holders to: (1) Include ballasts identified as Type CC, or (2) be
constructed with lampholders marked with a circle ``I.'' Ballasts
labeled as Type CC include extra circuitry to monitor frequency and
remove power to the lamp if any unwanted arcing is detected. Additional
circuitry has the potential to increase resistive losses.
A survey of the market found that ballasts with Type CC protection
were available, although far fewer models were offered with this
feature than without it. Analysis of catalog data found that ballasts
with Type CC protection had slightly lower BEFs than ballasts without
this feature. However, as UL 1598 can be met with different lampholders
rather than adding circuitry within the ballast itself, DOE believes
that Type CC protection does not provide a unique utility. Therefore,
DOE does not propose to establish a separate product class for ballasts
with a Type CC rating.
Lamp Striation Control
Lamp striations are a series of bright and dim regions in a
fluorescent lamp and are considered an undesirable visual effect.
Striations are most common when ballasts operate reduced-wattage,
energy-saving lamps due to their different fill-gas composition. To
prevent this effect from occurring, ballasts with lamp striation
control usually have additional circuitry, which has the potential to
increase resistive losses.
During manufacturer interviews, DOE learned that striation control
is a necessary feature for ballasts that can operate reduced-wattage,
energy-saving lamps. DOE observed that most ballasts already offer lamp
striation control as a standard feature on both regular and high-
efficiency product lines. Test data showed that the most efficient 4-
foot MBP and 8-foot slimline ballasts already included lamp striation
control. Thus, this feature does not prevent ballasts from reaching the
highest efficiency levels identified by this rulemaking. Therefore, DOE
does not propose to establish a separate product class for ballasts
with lamp striation control.
Small Case Size
During interviews, DOE learned that smaller fixtures can have
reduced material costs and higher optical efficiency. Optical
efficiency describes the percentage of light emanated from the lamps
that exits the fixture or reaches the desired surface. Therefore,
ballast manufacturers are beginning to offer ballasts with smaller case
sizes than what is offered as standard in the industry. A ballast with
a small case size may use different components due to size restraints.
With a limited number of small case size ballasts commercially
available, DOE is uncertain of the relationship between ballast
enclosure size and efficiency. Furthermore, interested parties did not
provide comments on the product class structure put forward in the
preliminary TSD suggesting that DOE should not include ballasts of all
enclosure sizes in the same product class. Based on this uncertainty
and absence of contrary comments in the preliminary TSD, DOE proposes
to include ballasts of all enclosure sizes in the same product class.
k. Summary
In summary, after evaluating all potential class-setting factors,
DOE decided to establish separate product classes based on starting
method, ballasts that operate 8-foot HO lamps, and ballasts designed
for use in cold-temperature outdoor signs. Table V.1 summarizes the
five product classes.
Table V.1--Fluorescent Lamp Ballast NOPR Product Classes
------------------------------------------------------------------------
Description Product class number **
------------------------------------------------------------------------
IS and RS ballasts that operate
4-foot MBP lamps *......................... 1
8-foot slimline lamps
PS ballasts that operate
4-foot MBP lamps *......................... 2
4-foot MiniBP SO lamps
4-foot MiniBP HO lamps
IS and RS ballasts that operate
8-foot HO lamps............................ 3
PS ballasts that operate
8-foot HO lamps............................ 4
Ballasts that operate
8-foot HO lamps in cold temperature outdoor 5
signs.....................................
------------------------------------------------------------------------
* Includes both commercial and residential ballasts.
** Efficiency levels for all product classes are based on an equation.
[[Page 20110]]
3. Technology Options
In the technology assessment, DOE identifies technology options
that appear to improve product efficiency. This assessment provides the
technical background and structure on which DOE bases its screening and
engineering analyses. DOE received one comment on the technology
options identified in the preliminary TSD.
Philips agreed that ballasts that employ integrated circuits can
have higher efficiencies but pointed out that the integrated circuit
itself does not provide the efficiency, but rather integrated circuits
are required by more efficient topologies. Philips also noted that
integrated circuits are generally used with topologies that operate
lamps in series rather than those that operate lamps in parallel. For
parallel lamp operation, integrated circuits may be cost prohibitive.
(Philips, Public Meeting Transcript, No. 34 at pp. 142-143)
In response, DOE agrees with Philips that in many cases inclusion
of an integrated circuit does not increase efficiency on its own. DOE
believes, however, that some integrated circuits directly influence
BLE. For example, there is an integrated circuit that can increase
ballast efficiency by replacing transistors in the direct current (DC)
to alternating current (AC) inverter.\19\ Therefore, DOE proposes to
maintain integrated circuits as a technology option in this NOPR.
Regarding the high cost of an integrated circuit, DOE does not evaluate
technology options based on cost. Rather, DOE calculates prices for
each efficiency level in the engineering analysis and evaluates
economic impacts on consumers, manufacturers, and the nation in
subsequent analyses.
---------------------------------------------------------------------------
\19\ International Rectifier. International Rectifier Introduces
Robust Self-Oscillating Electronic Ballast Lighting Control IC.
November 22, 2005. (Last accessed October 25, 2010.) http://www.irf.com/whats-new/nr051122.html
---------------------------------------------------------------------------
B. Screening Analysis
As discussed in chapter 3 of the preliminary TSD, DOE consults with
industry, technical experts, and other interested parties to develop a
list of technology options for consideration. The purpose of the
screening analysis is to determine which options to consider further
and which to screen out. DOE uses the following four screening criteria
to determine which design options are suitable for further
consideration in a standards rulemaking:
1. Technological feasibility. DOE will consider technologies
incorporated in commercially available 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 compliance with the standard is
required, then DOE will consider that technology practicable to
manufacture, install, and service.
3. Adverse impacts on product utility or product availability. If
DOE determines a technology would have 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.
10 CFR part 430, subpart C, appendix A, (4)(a)(4) and (5)(b).
For the preliminary TSD analysis, DOE consulted with industry,
technical experts, and other interested parties to develop a list of
technology options for consideration. DOE identified the following
technology options that could improve the efficiency of a ballast:
Table V.2--Technology Options
------------------------------------------------------------------------
------------------------------------------------------------------------
Technology option Description
------------------------------------------------------------------------
Electronic Ballast Use an electronic
ballast design.
------------------------------------------------------------------------
Improved Components........... Transformers..... Use grain-oriented
silicon steel,
amorphous steel, or
laminated sheets of
amorphous steel to
reduce core losses.
Use litz wire to
reduce winding
losses.
Diodes........... Use diodes with lower
losses.
Capacitors....... Use capacitors with a
lower effective
series resistance.
Transistors...... Use transistors with
low drain-to-source
resistance.
Improved Circuit Design....... Cathode Cutout... Remove filament
heating after the
lamp has started.
Integrated Substitute discrete
Circuits. components with an
integrated circuit.
Starting Method.. Use IS instead of RS
as a starting method
for lamp operation.
------------------------------------------------------------------------
In the preliminary TSD, DOE screened out ``using laminated sheets
of amorphous steel'' because this option increases the size and weight
of the ballast and therefore is not ``practicable to manufacture,
install, and service.'' Larger magnetic components could cause problems
in installing and servicing ballasts because the ballast could be too
large to fit in a fixture. DOE also stated that this technology option
could have adverse impacts on consumer utility. Specifically,
increasing the size and weight of the ballast could limit the places a
consumer could use the ballast in a building.
The NEEA and NPCC agreed with DOE's decision to eliminate laminated
sheets of amorphous steel as a design option. (NEEA and NPCC, No. 32 at
p. 4) Earthjustice commented, however, that size and weight constraints
for ballasts needed to be defined before DOE could screen out a
technology option based on increased size or weight. (Earthjustice,
Public Meeting Transcript, No. 34 at p. 148) Regarding size
constraints, the NEEA and NPCC commented that new ballasts being
installed during retrofits are significantly smaller than older
ballasts being removed. They believe that technology options that would
result in small increases in ballast size are not necessarily
problematic for retrofits because new ballasts would still fit in the
fixtures designed for older ballasts. (NEEA and NPCC, Public Meeting
Transcript, No. 34 at pp. 148-149) Philips disagreed with the idea that
increasing ballast size was not
[[Page 20111]]
problematic, commenting that newer ballasts have smaller cross-sections
than older ballasts. Smaller ballasts have allowed luminaire
manufacturers to decrease the size and material requirements of their
luminaires while also improving optics. (Philips, Public Meeting
Transcript, No. 34 at pp. 149-150) Acuity Brands agreed with Philips
that newer luminaires are designed around the smaller sizes of current
ballasts and confirmed that the smaller designs have improved optics.
Acuity Brands stated that a few luminaires could accommodate an
increase in the length of the ballast, but that many luminaires are
already designed around the smaller size of current ballasts. (Acuity
Brands, Public Meeting Transcipt, No. 34 at p. 150)
While older ballasts can be larger than newer ones, DOE's research
indicates that the overall market trend is to create increasingly
smaller ballast sizes for use in smaller and more highly optimized
fixtures. As the trend toward smaller fixtures has existed for a number
of years, new building designs are already incorporating smaller plenum
spaces. Thus, an increase in the size of a ballast could affect its
ability to be used in certain existing buildings or in new
construction. Accordingly, DOE considers any increase in the existing
footprint of a ballast to have adverse impacts on product utility and
product availability.
Based on the above discussion, DOE maintains the elimination of
laminated sheets of amorphous steel as a design option because it fails
to meet the screening criteria of practicality to manufacture, install,
and service, and adverse impacts on product utility. DOE considers the
remaining technology options as design options in the engineering
analysis.
C. Engineering Analysis
1. Approach
The engineering analysis develops cost-efficiency relationships to
show the manufacturing costs of achieving increased efficiency. DOE has
identified the following three methodologies to generate the
manufacturing costs needed for the engineering analysis: (1) The
design-option approach, which provides the incremental costs of adding
to a baseline model design options that will improve its efficiency;
(2) the efficiency-level approach, which provides the relative costs of
achieving increases in energy efficiency levels, without regard to the
particular design options used to achieve such increases; and (3) the
cost-assessment (or reverse engineering) approach, which provides
``bottom-up'' manufacturing cost assessments for achieving various
levels of increased efficiency, based on detailed data as to costs for
parts and material, labor, shipping/packaging, and investment for
models that operate at particular efficiency levels.
In the preliminary TSD, DOE determined that an efficiency level
approach paired with reverse engineering cost estimates would yield the
most realistic data. In this way, DOE would not rely solely on product
lists or minimum cost data supplied by manufacturers. DOE conducted
teardowns for unpotted ballasts and ballasts removed from a
manufacturing facility before the potting procedure because potting (a
tar-like fill material) inhibits visual observation of the components).
Details of the engineering analysis are in NOPR TSD chapter 5. The
following discussion summarizes the general steps of the engineering
analysis:
Determine Representative Product Classes. DOE first reviews covered
ballasts and the associated product classes. When multiple product
classes exist, DOE selects certain classes as ``representative''
primarily because of their high market volumes. DOE extrapolates the
efficiency levels (ELs) from representative product classes to those
product classes it does not analyze directly.
Select Baseline Ballasts. For each representative product class,
DOE establishes baseline ballasts. The baseline serves as a reference
point for each product class, against which DOE measures changes
resulting from potential amended energy conservation standards. For
ballasts subject to existing Federal energy conservation standards, a
baseline ballast is a commercially available ballast that just meets
existing standards and provides basic consumer utility. If no standard
exists for that specific ballast type, the baseline ballast represents
the typical ballast sold within a product class with the lowest tested
ballast efficiency. To determine energy savings and changes in price,
DOE compares each higher energy-efficiency level with the baseline
unit.
DOE tested a range of ballasts from multiple manufacturers to
identify baseline ballasts and determine their BLE. Appendix 5C of the
NOPR TSD presents the test results. DOE selects specific
characteristics such as starting method, ballast factor, and input
voltage to characterize the most common ballast at the baseline level.
DOE also selects multiple baseline ballasts in certain product classes
to ensure consideration of different ballast types and their associated
consumer economics.
Select Representative Ballasts. DOE selects commercially available
ballasts with higher BLEs as replacements for each baseline ballast in
the representative product classes by considering the design options
identified in the technology assessment and screening analysis (NOPR
TSD chapter 4). In general, DOE can identify the design options
associated with each more efficient ballast. Where design options
cannot be identified by the product number or catalog description, DOE
determines the design options likely to be used in the ballast to
achieve a higher BLE based on information gathered during manufacturer
interviews. In identifying more efficient substitutes, DOE uses a
database of commercially available ballasts. DOE then tests these
ballasts to establish their appropriate BLE. Appendix 5C of the NOPR
TSD presents these test results.
Because fluorescent lamp ballasts are designed to operate
fluorescent lamps, DOE considers properties of the entire lamp and
ballast system in the engineering analysis. Though ballasts are capable
of operating several different lamp wattages, DOE chooses the most
common fluorescent lamp used with each ballast for analysis. DOE also
includes two substitution cases in the engineering analysis. In the
first case, the consumer is not able to change the spacing of the
fixture and therefore replaces one baseline ballast with a more
efficient ballast. This generally represents the lighting retrofit
scenario where fixture spacing is predetermined by the existing
installation. In this case, light output is generally maintained to
within 10 percent of the baseline system lumen output.\20\ In the
second case, the consumer is able to change the spacing of the fixture
and either purchases more or fewer ballasts to maintain light output.
This represents a new construction scenario in which the consumer has
the flexibility to assign fixture spacing based on the light output of
the new system. In this case, DOE normalizes the light output relative
to the baseline ballast.
---------------------------------------------------------------------------
\20\ In some instances (e.g., when switching from T12 to T8
ballasts), light output exceeds these limits.
---------------------------------------------------------------------------
Determine Efficiency Levels. DOE develops ELs based on two factors:
(1) The design options associated with the specific ballasts studied;
and (2) the maximum technologically feasible efficiency level. As
discussed in section 0, DOE's efficiency levels are based on
[[Page 20112]]
test data collected from products currently on the market.
Conduct Price Analysis. DOE generated a bill of material (BOM) by
disassembling multiple manufacturers' ballasts that spanned a range of
efficiency levels for some of the representative ballast types. DOE
generated BOMs for two- and four-lamp T8 MBP IS, two-lamp T8 MBP PS,
and 2-lamp, 8-foot slimline ballasts only because these ballasts were
not filled with potting (a tar like substance). As stated previously,
potting obscures the identification of individual components. The BOMs
describe the products in detail, including all manufacturing steps
required to make and/or assemble each part. DOE then developed a cost
model that converts the BOMs for each efficiency level into
manufacturer production costs (MPCs). By applying derived manufacturer
markups to the MPCs, DOE calculated the manufacturer selling prices
\21\ and constructed industry cost-efficiency curves. In those cases
where DOE was not able to generate a BOM for a given ballast, DOE
estimated an MSP based on the relationship between teardown data, blue
book prices, and manufacturer-supplied MSPs.
---------------------------------------------------------------------------
\21\ The MSP is the price at which the manufacturer can recover
all production and non-production costs and earn a profit. Non-
production costs include selling, general, and administration (SG&A)
costs, the cost of research and development, and interest.
---------------------------------------------------------------------------
a. Metric
One change to engineering approach from the preliminary TSD is the
use of a new metric, BLE. Although DOE evaluates ballast efficiency in
terms of the BLE metric in this NOPR, DOE received several comments
regarding the relationship between ballast efficiency (as determined by
the method proposed in the active mode test procedure NOPR) and ballast
efficacy factor (BEF). OSI commented that there might be variation
introduced into the BEF values due to the fact that it is correlated to
BE, and both of these metrics have a distribution of error. (OSI,
Public Meeting Transcript, No. 34 at p. 166-167) GE agreed that there
was error in the correlation equations because a BEF for a 2-lamp 4-
foot normal BF IS ballast could be correlated back to 93 percent
efficiency, which is higher than any efficiency measured during NEMA's
round robin testing. (GE, Public Meeting Transcript, No. 34 at p. 171)
The NEEA and NPCC pointed out that it is not worth discussing the
measurement variation associated with the ballast efficiency metric if
correlating it to BEF introduces significant error. (NEEA and NPCC,
Public Meeting Transcript, No. 34 at pp. 167-168) On the other hand,
Philips commented that when considering only their products, the BEFs
determined by the correlation equations were very close to the values
obtained during testing in their own lab. (Philips, Public Meeting
Transcript, No. 34 at p. 168)
DOE agrees with stakeholders that calculating BEF as a function of
ballast efficiency could introduce error into the BEF value. In the
separate test procedure SNOPR, however, DOE proposes to directly
evaluate ballasts using BLE, and the measurement variation present in
the BLE metric is significantly less than that which existed for BEF
due to the elimination of photometric measurements. More detail
regarding measurement variation can be found in section 0 of this
notice or in the active mode test procedure SNOPR.
b. Test Data
In the preliminary TSD, DOE conducted an extensive amount of
testing in support of the active mode test procedure. DOE provided this
data in appendix 5C. The appendix contained various ballast
characteristics such as starting method, maximum number of lamps
operated, ballast factor, and other relevant characteristics. It also
contained each ballast's BEF value as measured by the existing light-
output based procedure and, for some ballasts, ballast efficiency as
measured by the resistor-based method proposed in the active mode test
procedure NOPR. DOE provided the raw data in the appendix so that
interested parties could form their own conclusions regarding the two
metrics. Throughout the rest of the chapters and appendices in the
preliminary TSD, however, the BEF values used in the analysis were
calculated using the correlation equations specified in the active mode
test procedure NOPR. DOE received several comments related to the test
data.
The California Utilities, ASAP, and the NEEA and NPCC commented on
the discrepancy between the tested BEF values and the values contained
in other sources--such as product catalogs and the CEC database. The
California Utilities cited an example of the CEC database containing
several ballasts with a reported BEF higher than the max tech BEF for
the relevant product class in the preliminary TSD. The NEEA and NPCC
noted that the largest discrepancies existed for IS and RS ballasts
that operate T12 and T8 lamps. They concluded that these differences
are due to manufacturers overstating catalog data. The NEEA and NPCC
believe that this practice can adversely affect a building's lighting
systems to the extent that it may not meet code requirements.
(California Utilities, Public Meeting Transcript, No. 34 at pp. 157-8;
ASAP, Public Meeting Transcript, No. 34 at p. 160; NEEA and NPCC, No.
32 at p. 2)
DOE agrees with the above-mentioned groups that the tested BEF
values are different than those presented in catalogs or the CEC
database. To gather BEF values for various ballasts, DOE could have
consulted manufacturer catalogs, the CEC database, or its own database
of tested ballasts. It became clear during DOE's initial testing that
manufacturers were overstating BEF values in their catalogs. Thus, DOE
sought an alternate source of information. The CEC maintains a public
database of BEF values submitted to show compliance with state-level
energy conservation standards. Philips pointed out that the CEC
database should, by definition, contain test data from certified
laboratories whereas catalogs do not. (Philips, Public Meeting
Transcript, No. 34 at pp. 162-163) Although the California Utilities
pointed out that the CEC database reported higher BEFs than the max
tech level reported in the preliminary TSD, Philips commented that the
highest candidate standard level (CSL) in the 2-lamp 4-foot MBP IS/RS
product class was close enough to the higher values in the CEC database
to be within the margin of error associated with the BEF metric.
(Philips, Public Meeting Transcript, No. 34 at pp. 158-159)
While the CEC database represented an improvement over catalog
data, commenters voiced concern with the information in the database.
Philips commented that according to the CEC database, some
manufacturers reported the same BEF for multiple ballast models.
(Philips, Public Meeting Transcript, No. 34 at pp. 158-9) This
indicates that all ballast models listed may not have been individually
tested. In addition, Philips cited several other factors to consider
when reviewing data from the CEC database, such as: Different
manufacturers offering their most efficient ballasts at different
efficiencies, measurement variation between testing labs; and
measurement variation due to the test procedure itself. (Philips,
Public Meeting Transcript, No. 34 at pp. 162-163)
DOE agrees that because each manufacturer likely tested their
ballasts in different labs, the CEC database does not provide the best
comparison. It is less meaningful for DOE to compare the BEF of a
ballast tested in lab A to the
[[Page 20113]]
BEF of a different ballast tested in lab B, as measurement variation
will exist between the two labs. DOE also acknowledges that there will
be additional measurement variation within a lab due to tolerances
allowed in the BEF test procedure. Although test procedure variation
cannot be eliminated, the lab-to-lab variation can be eliminated by
testing all ballasts in the same lab. Thus, in the preliminary TSD and
this NOPR, DOE chose to rely on data obtained from its own testing. DOE
acknowledges that manufacturers may use different labs for testing and
certification purposes. Therefore, DOE accounts for both these sources
of variation by decreasing efficiency levels by 0.8 percent. See
section 0 for more details.
The California Utilities and the NEEA and NPCC noticed the
discrepancy between DOE's test data contained in Appendix 5C and the
values reported in chapter 5 of the preliminary TSD. They noted that
the measured input power reported for a representative unit in the
chapter 5 of the preliminary TSD did not match the input power listed
in Appendix 5C for a ballast with the same BEF. In addition, all CSLs
reported in the chapter 5 of the preliminary TSD for T5 standard output
ballasts were lower than the BEFs reported in Appendix 5C. (California
Utilities, No. 30 at p. 3; NEEA and NPCC, No. 32 at p. 5)
DOE acknowledges that the BEFs are not the same. The reason for the
differences is that the data provided in Appendix 5C included DOE's
test results for BEF and BE. BEF was measured according to the test
procedure outlined in 10 CFR Part 430, Subpart B, Appendix Q--a
procedure which includes photometric measurements. Ballast efficiency
was measured according to the resistor-based method in the active mode
test procedure NOPR. In chapter 5 of the preliminary TSD, DOE presented
data based on its proposed test procedure--which included measuring a
resistor-based ballast efficiency and using a correlation equation to
calculate BEF. Thus, the BEFs presented in chapter 5 of the preliminary
TSD are calculated values, whereas the BEFs presented in Appendix 5C
are actual measured values.
DOE also received several comments regarding the ballasts it
selected for testing. The NEEA and NPCC believed that DOE did not
select any low- or high-BF products for testing. They therefore
expressed concern that DOE had scaled efficiency levels to two-thirds
of the product classes but had not obtained any test data for those
classes. The NEEA and NPCC encouraged DOE to conduct additional testing
to look at the relationship between low-, normal-, and high-ballast
factor. (NEEA and NPCC, No. 32 at pp. 3, 4) For the preliminary TSD,
DOE did measure BEF and resistor-based BE for low-, normal-, and high-
ballast factor products. As described in the active mode test procedure
NOPR, however, DOE needed to create separate correlation equations for
low, normal, and high BF ballasts because all testing was conducted
with resistors corresponding to normal BF. 75 FR 14288, 14303-4 (Mar.
24, 2010). For this NOPR, DOE continued to test low and high BF
products in addition to those with normal BF.
The California Utilities expressed concern that DOE's testing may
not have captured the entire ballast market. They stated that their
alternate sources of data indicated a larger range of BEFs than the
range shown by the test data contained in Appendix 5C of the
preliminary TSD. (California Utilities, Public Meeting Transcript, No.
34 at pp. 157-158) DOE found after conducting its own testing for the
preliminary TSD that the actual range of BEF values was much narrower
than indicated by catalog values. DOE believes its testing accurately
characterized the market because it selected ballasts to capture
variations in manufacturer, standard and high-efficiency product lines,
lamp diameter, starting method, and other relevant factors. These
variations have also been captured in the lamp-based BE testing that
DOE has conducted to determine efficiency levels for this NOPR.
To ensure that DOE establishes the appropriate max tech level, the
California Utilities recommended DOE test the ballasts with the highest
BEF values as indicated in the CEC and CEE databases. (California
Utilities, No. 30 at p. 2) DOE tested the most efficient (highest BEF)
ballast in the CEC database for each representative ballast type
identified in this NOPR. DOE did not review the CEE database as values
submitted to this program are based on catalogs. Catalog data typically
is not based on the DOE test procedure for every unit presented.
Instead manufacturers often assign the same BEF to a family of products
or approximate the BEF based on constituent measurements such as input
power.
2. Representative Product Classes
For the preliminary TSD, DOE was not able to analyze all 70 product
classes. Instead, DOE selected representative product classes to
analyze based primarily on their high market volumes, and then scaled
its analytical findings for those representative product classes to
other product classes that were not analyzed. In the preliminary TSD,
DOE identified 10 product classes as representative: (1) 2-lamp 4-foot
MBP normal-BF IS/RS ballasts in the commercial sector; (2) 4-lamp 4-
foot MBP normal-BF IS/RS ballasts in the commercial sector; (3) 2-lamp
4-foot MBP normal-BF PS ballasts; (4) 4-lamp 4-foot MBP normal-BF PS
ballasts; (5) 2-lamp 4-foot MiniBP SO normal-BF ballasts; (6) 2-lamp 4-
foot MiniBP HO ballasts; (7) 2-lamp 8-foot slimline normal-BF ballasts;
(8) 2-lamp 8-foot HO IS/RS ballasts; (9) 2-lamp 4-foot MBP normal-BF
IS/RS ballasts in the residential sector; and (10) 4-lamp sign
ballasts. For each ballast type, DOE selected product classes with the
highest volume of shipments to be representative. DOE analyzed at least
one representative product class for each ballast type included in the
scope of coverage. For the most prevalent ballast types (e.g., for
ballasts that operate 4-foot MBP and 2-foot U-shaped lamps), DOE chose
to analyze multiple representative product classes. While DOE received
several stakeholder comments regarding methods of scaling (discussed in
section 0), DOE did not receive objections to the decision to analyze
certain product classes as representative and scale to those not
analyzed. Thus, DOE maintains this methodology in this NOPR.
DOE also did not receive any objections to the product classes it
chose as representative. Due to the changes in product class structure
discussed above, however, DOE's selection of representative classes for
this NOPR differs from that presented in the preliminary TSD. Instead
of 70 product classes, there are now a total of 5 classes. DOE defines
separate product classes based on starting method (PS and IS/RS), 8-
foot HO ballasts, and sign ballasts. The first product class indicated
in Table V.1 includes IS and RS ballasts that operate 4-foot MBP and 8-
foot slimline lamps. According to the U.S. Census, the market share of
4-foot T8 MBP ballasts represented 55 percent of shipments in 2005.
While this data is not segregated by starting method, based on product
catalogs and manufacturer interviews, DOE believes that over half of
the 4-foot MBP T8 ballast shipments are IS. In addition, the U.S.
Census indicates that 8-foot slimline ballasts had about 5-percent
market share in 2005. As these ballast types represent significant
shipments relative to the overall fluorescent ballast market, DOE
analyzes this product class as representative.
The third product class indicated in Table V.1 includes PS ballasts
that
[[Page 20114]]
operate 4-foot MBP, 4-foot T5 MiniBP SO, and 4-foot T5 MiniBP HO lamps.
The U.S. Census reports that T5 ballasts comprised about 4 percent of
the ballast market in 2005. Shipment data are available only for T5
high output ballasts, so the actual market share is likely larger. T5
ballast shipments have been steadily increasing since the shipments
were first reported in 2002. Furthermore, DOE research indicates that
T5 high output ballasts are rapidly taking market share from metal
halide systems used in high bay industrial applications. DOE therefore
concluded that T5 ballasts are a growing market segment of significant
size. As mentioned above, ballasts that operate 4-foot MBP lamps
represent a significant portion of the overall fluorescent ballast
market. Although PS ballasts are not as popular as IS ballasts, DOE
believes that 4-foot MBP PS ballasts represent a sizeable portion of
the market due to the increasing use of occupancy sensors. Because of
the large portion of ballast shipments contained within this product
class, DOE analyzes this product class as representative.
According to the U.S. Census, the market share of 8-foot HO (T8 and
T12) ballasts (excluding cold temperature sign ballasts) was about 0.5
percent in 2005. In the preliminary TSD, DOE concluded that IS and RS
ballasts were more popular than PS ballasts. These conclusions were
supported by product catalogs and manufacturer interviews. DOE received
no adverse comment regarding its selection of the 2-lamp IS and RS 8-
foot HO ballast product class as representative in the preliminary TSD
and continues to analyze IS and RS 8-foot HO ballasts as representative
for this NOPR. DOE identified less than five 8-foot HO PS ballasts
currently being sold by major manufacturers, limiting the potential for
a detailed direct analysis. Instead, DOE scaled its results from the
larger 8-foot RDC HO IS and RS product class to the PS product class as
described in section 0.
In the preliminary TSD, DOE analyzed 4-lamp sign ballasts, or those
that operate a maximum of 32 feet of lamps, as the representative
product class for that ballast type because it believed that to be the
most common lamp-and-ballast system. DOE received no objection to its
decision to analyze sign ballasts as a representative product class in
the preliminary TSD and continues to analyze sign ballasts as a
representative product class for this NOPR.
3. Baseline Ballasts
Once DOE identified the representative product classes for
analysis, DOE selected representative ballast types to analyze from
within each product class. For each ballast type analyzed, DOE selected
a baseline ballast from which to measure improvements in efficiency.
Baseline ballasts are what DOE believes to be the most common, least
efficacious ballasts for each representative ballast type. For ballasts
subject to existing Federal energy conservation standards, a baseline
ballast is a commercially available ballast that just meets existing
standards and provides basic consumer utility. If no standard exists
for that specific ballast type, the baseline ballast represents the
typical ballast sold within a representative ballast type with the
lowest tested ballast efficiency. In cases where two types of ballasts
(each operates a different lamp diameter) are included in the same
representative ballast type, DOE chose multiple baseline ballasts.
DOE considered each ballast's characteristics in choosing the most
appropriate baseline ballast for each ballast type. These
characteristics include the ballast's starting method (e.g., rapid
start, instant start, or programmed start), input voltage (277 V versus
120 V), type (magnetic versus electronic), power factor (PF), total
harmonic distortion, ballast factor, ballast luminous efficiency, and
whether the ballast can operate at multiple voltages \22\ (universal
voltage) or only one (dedicated voltage).
---------------------------------------------------------------------------
\22\ Universal voltage ballasts can operate at 120V or 277V.
---------------------------------------------------------------------------
a. IS and RS Ballasts
In this NOPR, DOE combined several product classes from the
preliminary TSD into one product class. Thus, the IS and RS product
class in this NOPR refers to IS and RS ballasts that operate 4-foot MBP
and 8-foot slimline lamps. This product class contains the following
representative product classes from the preliminary TSD: (1) 2-lamp 4-
foot MBP IS and RS normal BF; (2) 4-lamp 4-foot MBP IS and RS normal
BF; (3) 2-lamp 8-foot slimline normal BF; and (4) 2-lamp 4-foot MBP IS
and RS ballasts in the residential sector. DOE analyzed these classes
in the preliminary TSD because DOE chose at least one representative
product class for each ballast type and these classes contained the
highest volume of shipments. In this NOPR, DOE continues to analyze
products for each ballast type included in the proposed scope of
coverage. DOE also continues to analyze more than one representative
ballast type if shipments suggest that there is more than one high-
volume unit (e.g. DOE analyzes both 2- and 4-lamp 4-foot MBP ballasts).
Thus, although several ballast types are combined within the IS and RS
product class, DOE analyzes the following representative ballast types
within that class: (1) Ballasts that operate two 4-foot MBP lamps; (2)
ballasts that operate four 4-foot MBP lamps; (3) ballasts that operate
two 8-foot slimline lamps; and (4) ballasts that operate two 4-foot MBP
lamps in the residential sector.
Two 4-Foot MBP Lamps
In the preliminary TSD, DOE analyzed two baselines for 2-lamp 4-
foot MBP IS and RS ballasts. Census data indicated that 2001 shipments
of 4-foot MBP T12 ballasts represented 14 percent of all 4-foot MBP
ballast shipments, while 4-foot MBP T8 ballasts represented 86 percent
of all shipments for this ballast type.\23\ Therefore, DOE analyzed
both a T12 and T8 ballast as baselines. Though the 2009 Lamps Rule will
eliminate all currently commercially available T12 lamps as of July
2012, DOE learned that some lamp manufacturers planned to produce a T12
lamp that just met the 2009 Lamp Rule efficacy standards. Therefore,
DOE included an F34T12 lamp in its analysis, assigning it performance
parameters that would comply with the 2009 Lamps Rule. DOE analyzed
only those T12 ballasts that operate F34T12 lamps because only the most
efficient T12 lamps will be available when compliance with any amended
standards established in this ballast rulemaking is required (by June
30, 2014). For the T8 baseline, DOE analyzed only those ballasts that
operate the F32T8 lamp because it is the most common 4-foot MBP T8
lamp.
---------------------------------------------------------------------------
\23\ More recent census data for ballasts are available.
However, shipments of T12 ballasts have not been publicly released
for all product classes after 2001. DOE used 2001 Census data when
selecting baselines for all ballast types.
---------------------------------------------------------------------------
The Federal minimum energy conservation standard for ballasts that
operate two F34T12 lamps became effective for ballasts manufactured on
or after July 1, 2009, sold by the manufacturer on or after October 1,
2009, or incorporated into a luminaire by a luminaire manufacturer
after July 1, 2010. (10 CFR 430.32 (m)(5)). This energy conservation
standard now effectively allows only electronic F34T12 ballasts.
Therefore, DOE chose an electronic model as the F34T12 baseline
ballast. Currently there is no Federal minimum energy conservation
standard for ballasts that operate F32T8 lamps. Therefore, in choosing
the baseline ballast for this lamp type, DOE
[[Page 20115]]
chose the most common, least efficient ballast on the market.
ASAP commented that because electronic T12 ballasts are more
expensive than comparable T8 ballasts and also use a more expensive
lamp, the market is going to shift to T8 ballasts, leading them to
believe the T8 ballast is a more appropriate baseline. Philips agreed
with ASAP that a T8 ballast was a more appropriate baseline because an
electronic T8 instant start ballast is the dominant ballast sold.
(ASAP, Public Meeting Transcript, No. 34 at p. 255; Philips, Public
Meeting Transcript, No. 34 at p. 256) DOE agrees with Philips that, in
recent years, T8 ballast shipments have overtaken T12 shipments. For
this reason, DOE analyzes a T8 ballast as a baseline. DOE continues to
analyze a T12 ballast as a baseline ballast, however, because while
electronic T12 ballasts may have a lower shipment volume, they are the
least efficient products available that operate two 2-foot MBP lamps.
Four 4-Foot MBP Lamps
Although Census data indicated that both T12 and T8 ballasts
operate 4-foot MBP lamps, DOE's research found that only T8 ballasts
operate four lamps. Therefore, in the preliminary TSD, DOE analyzed
only a T8 ballast as a baseline for 4-lamp 4-foot MBP IS and RS
ballasts. Because there is no Federal energy conservation standard, DOE
chose a baseline for this ballast type that exhibits the
characteristics of the least efficient and most common ballast on the
market. DOE paired this ballast with an F32T8 lamp because this lamp is
the most common 4-foot MBP T8 lamp. DOE did not receive any adverse
comment regarding its methodology for selecting a baseline for 4-lamp
4-foot MBP IS and RS ballasts. Therefore, for these reasons, DOE
maintains this methodology for this NOPR.
Two 8-Foot Slimline Lamps
For ballasts that operate two 8-foot slimline lamps, DOE analyzed
two baseline ballasts in the preliminary TSD. Census data indicated
that 2001 shipments of 8-foot slimline T12 ballasts represented
approximately 50 percent of all shipments for this ballast type,
whereas T8 ballasts represented the remaining 50 percent.\24\
Therefore, DOE analyzed both a T12 and T8 ballast as baselines. The
2009 Lamps Rule will eliminate all currently commercially available T12
lamps as of July 2012. However, DOE learned that some lamp
manufacturers planned to produce a T12 lamp that just meets the 2009
Lamp Rule efficacy standards. Therefore, DOE included an F96T12/ES lamp
in its analysis, assigning it performance parameters that would comply
with the 2009 Lamps Rule. For the T8 baseline, DOE analyzed only those
ballasts that operate the F96T8 lamp because this lamp is the most
common 8-foot SP slimline T8 lamp.
---------------------------------------------------------------------------
\24\ While more recent census data for ballasts is available,
shipments of T12 ballasts have not been publicly released after
2001. T12 shipments for this ballast type also include data for the
6-foot SP slimline ballast, which DOE estimates is negligible
compared to the 8-foot shipments.
---------------------------------------------------------------------------
The Federal minimum energy conservation standards for ballasts that
operate two F96T12/ES lamps became effective for ballasts manufactured
on or after July 1, 2009. (10 CFR Part 430.32 (m)(5)). This energy
conservation standard effectively allowed only electronic T12 products.
Therefore, DOE chose an electronic ballast as the T12 baseline for this
ballast type. Currently there is no Federal minimum energy conservation
standard for ballasts that operate F96T8 lamps. Therefore, DOE analyzed
the most common, least efficient ballast on the market as the baseline.
DOE did not receive any adverse comment regarding this methodology and
maintains this approach in this NOPR.
Two 4-Foot MBP Lamps, Residential Sector
Through manufacturer interviews, DOE learned that both T12 and T8
ballasts are popular in the residential market. Therefore, DOE analyzed
both a T12 and T8 ballast as baselines in the preliminary TSD.
Currently there are federal minimum energy conservation standards for
ballasts that operate F34T12 lamps in the residential sector. These
standards became effective for ballasts manufactured on or after July
1, 2010 or sold by the manufacturer on or after October 1, 2010. (10
CFR 430.32 (m)(5-6)). This energy conservation standard now effectively
allows only electronic F34T12 residential ballasts. Therefore, DOE
chose an electronic model as the F34T12 baseline ballast. Because no
federal minimum energy conservation standard exists for T8 residential
ballasts, DOE chose the most common, least efficient ballast on the
market. DOE research discovered that most ballasts sold in the
residential market are sold as part of a fixture. Therefore, DOE
researched the most common fixtures sold in the residential market. DOE
then obtained the fixtures, removed the ballast, and tested the ballast
to determine the least efficient and most common option. DOE tested a
range of F32T8 ballasts from multiple ballast manufacturers and in
multiple fixtures.
Though the 2009 Lamps Rule will eliminate all currently
commercially available T12 lamps as of July 2012, DOE learned that some
lamp manufacturers planned to produce a T12 lamp that just met the 2009
Lamps Rule efficacy standards. Therefore, DOE included an F34T12 lamp
in its analysis, assigning it performance parameters that would comply
with the 2009 Lamps Rule. Because only the most efficient T12 lamps
will be available when compliance with any amended standards
established by this ballast rulemaking is required, DOE analyzed only
those T12 ballasts that operate F34T12 lamps. For the T8 baseline, DOE
paired its T8 baseline ballast with an F32T8 lamp because DOE believed,
based on catalogs and feedback from manufacturers, that that was the
most common wattage lamp at that diameter.
DOE received several comments on its selection of a baseline in the
residential sector. The California Utilities and the NEEA and NPCC
believed that DOE's baseline selection underestimated the energy
savings possible in the residential sector. They believed that the most
common 2-lamp residential fixture had a higher ballast factor than that
represented in the preliminary TSD. The NEEA and NPCC pointed out that
the quality of a linear fluorescent product designed for use in a
kitchen, utility room, or other inside space may be different than the
quality of a shop or strip light typically used in garages.
Furthermore, the NEEA and NPCC believed that because the residential
market represented a frequent switching environment, programmed start
ballasts should be considered. (California Utilities, No. 30 at p. 5;
NEEA and NPCC, No. 32 at p. 7, 8)
DOE appreciates the comments regarding the residential baselines
and reexamined the selection of baseline ballasts for this NOPR. DOE
conducted additional testing in this market and found that the least
efficient T12 ballast had a higher ballast factor than that presented
in the preliminary TSD. Thus, the input power for this baseline ballast
is also higher, which results in greater energy savings. Regarding
programmed start ballasts, DOE agrees that the residential market may
represent a frequent switching environment. Based on catalog data and
manufacturer interviews, however, DOE continues to believe that IS and
RS ballasts are the most common in this market sector. Therefore, DOE
continues to analyze residential ballasts with these starting methods
for this NOPR.
[[Page 20116]]
b. PS Ballasts
In this NOPR, the PS product class refers to PS ballasts that
operate 4-foot MBP, 4-foot MiniBP SO, and 4-foot MiniBP HO lamps. The
PS product class contains the following representative product classes
from the preliminary TSD: (1) 2-lamp 4-foot MBP PS normal BF; (2) 4-
lamp 4-foot MBP PS normal BF; (3) 2-lamp 4-foot T5 MiniBP SO normal BF;
and (4) 2-lamp 4-foot T5 MiniBP HO ballasts. DOE analyzed these classes
in the preliminary TSD because DOE chose at least one representative
product class for each ballast type and these classes contained the
highest volume of shipments. As described in the section above, DOE
continues to analyze products for each ballast type included in the
proposed scope of coverage. DOE also continues to analyze more than one
representative ballast type if shipments suggest that there is more
than one high volume unit. Thus, although several ballast types are
combined within the PS product class, DOE analyzes the following as
representative ballast types within that class: (1) Ballasts that
operate two 4-foot MBP lamps; (2) ballasts that operate four 4-foot MBP
lamps; (3) ballasts that operate two 4-foot T5 SO lamps; and (4)
ballasts that operate two 4-foot T5 HO lamps.
Two 4-Foot MBP Lamps and Four 4-Foot MBP Lamps
In the preliminary TSD, DOE analyzed one baseline for both 2-lamp
and 4-lamp 4-foot MBP PS ballasts. DOE found that no T12 ballasts
existed with this starting method. DOE paired the T8 baseline with an
F32T8 lamp because it is the most common 4-foot MBP T8 lamp. As there
are currently no Federal minimum energy conservation standards for
ballasts that operate F32T8 lamps, DOE chose the most common, least
efficient ballast on the market to be the baseline. DOE did not receive
any adverse comment regarding its methodology for selecting a baseline
for 2-lamp and 4-lamp 4-foot MBP PS ballasts and maintains this
methodology for this NOPR.
Two 4-Foot T5 SO Lamps and Two 4-Foot T5 HO Lamps
In the preliminary TSD, DOE chose to analyze one baseline for both
2-lamp 4-foot T5 SO and 2-lamp 4-foot T5 HO ballasts. For ballasts that
operate standard output T5 lamps, DOE believes that F28T5 lamps
encompass the vast majority of these lamp sales.\25\ Therefore, DOE
chose a baseline ballast that operates two F28T5 lamps. For high output
T5 lamps, DOE believes that F54T5HO lamps are the most common and
therefore chose a baseline ballast that operates this lamp type.\26\
Currently there are no federal minimum energy conservation standards
for either T5 ballast type. In addition, only electronic T5 ballasts
are sold on the U.S. market. In the preliminary TSD, however, DOE
modeled the potential substitution of less efficient T5 ballasts by
examining the difference between magnetic and electronic ballasts.
Inclusion of less efficient T5 ballasts in the preliminary TSD led to
increased energy consumption in the absence of standards and to
increased energy savings with the adoption of T5 standards. Although
DOE did not receive any comments on this methodology, for this NOPR,
DOE developed baseline T5 ballasts by evaluating the difference in BLE
between the baseline and more efficient replacements for 2-lamp 4-foot
MBP PS ballasts. Rather than assume magnetic ballasts would be the less
efficient substitute, DOE instead approximates the less efficient
substitute through comparison to a similar PS product that uses
inefficient electronic ballast technology.
---------------------------------------------------------------------------
\25\ Currently only one manufacturer sells a 4-foot MiniBP T5
lamp that is not a F28T5. This lamp is a reduced wattage (F26T5).
\26\ Currently only two manufacturers sell a 4-foot MiniBP T5 HO
lamp that is not a F54T5HO. One manufacturer sells a reduced wattage
(F51T5HO). Another manufacturer sells a F49T5HO.
---------------------------------------------------------------------------
c. 8-Foot HO Ballasts
As described in section 0, DOE analyzed the IS and RS 8-foot HO
product class as representative. This product class contains IS and RS
ballasts that operate a maximum of one or two 8-foot HO lamps. In the
preliminary TSD, DOE estimated that the majority of 8-foot HO ballasts
are 2-lamp ballasts and therefore analyzed the two-lamp model as
representative. DOE received no objection to its decision to analyze 2-
lamp 8-foot HO ballasts and continues to analyze these ballasts as
representative in this NOPR.
In the preliminary TSD, DOE analyzed two baselines for this ballast
type. DOE believes most of the 8-foot HO ballasts currently shipped are
T12. Though the 2009 Lamps Rule will eliminate all currently
commercially available T12 lamps as of July 2012, DOE learned that some
lamp manufacturers planned to produce a T12 lamp that just met the 2009
Lamp Rule efficacy standards. Therefore, DOE included an F96T12HO/ES
lamp in its analysis, assigning it performance parameters that would
comply with the 2009 Lamps Rule. Therefore, DOE analyzed both T12 and
T8 ballasts as baselines. The Federal minimum energy conservation
standards for ballasts that operate two F96T12HO/ES lamps became
effective for ballasts manufactured on or after July 1, 2009. 10 CFR
Part 430.32 (m)(5). These standards did not eliminate magnetic ballasts
from the market. Therefore, DOE chose a magnetic ballast for the T12
baseline. Because there are currently no Federal minimum energy
conservation standards for ballasts that operate F96T8HO lamps, DOE
analyzed the most common, least efficient ballast on the market. For
this T8 baseline, DOE paired the ballast with an F96T8HO lamp because
this lamp is the most common 8-foot HO T8 lamp. DOE received no adverse
comment regarding this methodology and continues to use the same
approach for this NOPR.
d. Sign Ballasts
In this NOPR, the sign ballast product class includes sign ballasts
that operate 8-foot HO lamps. In the preliminary TSD, DOE found the
most common lamp-and-ballast combination for this ballast type to be
sign ballasts operating a maximum of four 8-foot HO cold temperature
lamps. DOE received no adverse comment regarding this selection and
continues to analyze 4-lamp sign ballasts as representative in this
NOPR.
In the preliminary TSD, DOE research indicated that ballasts that
operate in outdoor signs or in other cold temperature applications are
designed for use with T12 lamps. Therefore, DOE chose a T12 ballast as
a baseline for this ballast type. Current Federal energy conservation
standards cover sign ballasts that operate two F96T12HO/ES lamps. These
standards became effective for ballasts manufactured on or after July
1, 2010 or sold by the manufacturer on or after October 1, 2010. (10
CFR Part 430.32 (m)(5-6)). However, DOE analyzed sign ballasts that
operate four 8-foot HO lamps because this is the most common lamp and
ballast combination. DOE chose the most common and least efficient
ballast on the market to be the baseline unit. DOE paired this baseline
ballast with an F96T12HO lamp that represented the most common cold
temperature lamp available on the market. DOE received no adverse
comment regarding this approach and maintains this methodology in this
NOPR.
4. Selection of More Efficient Ballasts
As described in the preliminary TSD, in the engineering analysis,
DOE considered only ``design options''--
[[Page 20117]]
technology options used to improve ballast efficiency that were not
eliminated in the screening analysis. DOE's selection of design options
guided its selection of ballast designs and efficiency levels. For
example, DOE noted separation in efficiencies due to electronic ballast
design, starting method, and improved components. All more efficient
ballast alternatives DOE identified are based on commercially available
ballasts.
In the preliminary TSD, for each representative product class, DOE
surveyed and tested many of the manufacturers' product offerings to
identify the efficiency levels corresponding to the highest number of
models. DOE identified the most prevalent BEF values in the range of
available products and established CSLs based on those products. To
determine the max tech level in the preliminary TSD, DOE conducted a
survey of the fluorescent lamp ballast market and the research fields
that support the market. DOE found that within a given product class,
no working prototypes existed that had a distinguishably higher BEF
than currently available ballasts. Therefore, the highest CSL
presented--which represented the most efficient tier of commercially
available ballasts--was the max tech level that DOE determined for the
preliminary TSD. DOE presented additional research in appendix 5D of
the preliminary TSD to explore whether technologies used in products
similar to ballasts could be used to improve the efficiency of ballasts
currently on the market. DOE considered the use of active rectification
(a technology used in some power supplies) and improved (lower
electrical loss) components. Power supplies perform a similar power
conversion function as fluorescent lamp ballasts, and improved
components could potentially be substituted into the existing ballast
circuit.
a. Max Tech Ballast Efficiency
DOE received several comments regarding its determination of max
tech ballast efficiency. GE stated the importance of looking at ballast
efficiency and converting it to BEF rather than looking at BEF catalog
values and calculating the ballast efficiency. GE supported this
approach because ballast efficiency test data avoids error measurement
associated with the BEF test procedure and is therefore more accurate.
(GE, Public Meeting Transcript, No. 34 at pp. 165-166) DOE agrees with
GE's suggestion to consider tested ballast efficiency rather than
calculated ballast efficiency when determining the max tech level. As
discussed in the active mode test procedure SNOPR, DOE proposed a lamp-
based procedure to measure ballast efficiency. 75 FR 71570, 71573
(November 24, 2010). For this NOPR, DOE evaluates standards in terms of
ballast efficiency, using the BLE metric.
The California Utilities commented that in attempting to identify
the max tech level commercially available, DOE should not limit itself
to evaluating ballasts from the four major manufacturers. (California
Utilities, Public Meeting Transcript, No. 34 at pp. 171-172) DOE agrees
with the California Utilities that all manufacturers should be
considered when identifying the max tech level. DOE reviewed the
California Energy Commission's (CEC's) ballast database to identify the
most efficient ballast in terms of BEF (because ballast efficiency data
was not provided in the database) for each analyzed ballast type. DOE
then tested those ballasts to ensure that it considered the most
efficient products regardless of manufacturer.
DOE received several comments supporting DOE's conclusion from the
preliminary TSD that commercially available ballasts are also the
maximum technologically feasible. NEMA and Philips commented that
premium products are approaching the point of diminishing returns.
Furthermore, Philips believes that the premium products of all
manufacturers are very close to max tech. In support of this point,
Philips stated that fixed-output fluorescent ballasts are a mature
technology and that the state-of-the-art product on the market today
represents a high-performance, cost-effective product. Philips would
prefer regulations that existing high-performance products can meet. If
DOE were to set a standard at an efficiency higher than that achievable
by commercially available products, Philips stated that engineering
resources would be pulled from developing areas like control systems,
solid-state lighting and new light sources. (Philips, Public Meeting
Transcript, No. 34 at pp. 144-145, 155-156, 163; NEMA, No. 29 at p. 17)
In addition to commenting that DOE should not set a standard that
would require a redesign of existing products, Philips commented that
all major manufacturers are concentrating their resources on lighting
controls. Philips cited the New York Times building as an example in
which lighting controls contributed to energy savings of 60 percent.
Philips stated DOE should not require manufacturers to redesign
existing ballasts to pursue efficiency gains of 1 or 2 percent when
they can dedicate resources to lighting controls, which have the
potential to achieve 30 percent-60 percent energy savings. (Philips,
Public Meeting Transcript, No. 34 at p. 156)
In contrast to the manufacturers, the California Utilities and the
NEEA and NPCC commented that DOE should further consider the technology
options described in Appendix 5D of the preliminary TSD. They commented
that the technologies DOE identified to improve efficiency, such as
improved components and active rectification, have been employed in
other electronic products similar to ballasts, including power
supplies. They believe that both active rectification and Schottky
diodes could be incorporated into fluorescent ballasts and could
generate savings in the range DOE estimated, or greater. They also
believe active rectification may be becoming more common in inexpensive
consumer products. Additionally, the California Utilities pointed out
that savings of 1 to 2 percent are significant when considering that
for many ballast types, the efficiency savings identified by DOE are
about 2 to 7 percent. They suggested that DOE conduct research with
manufacturers of power supplies incorporating active rectification,
because cost and efficiency estimates for power supplies may be
applicable to electronic ballasts as well. (California Utilities, No.
30 at p. 2; NEEA and NPCC, No. 32 at p. 4)
Osram Sylvania and NEMA stated that active rectification could
potentially achieve energy savings of about one percent, depending on
the line voltage and power levels of the ballast. Lower input voltage
ballasts have higher currents, which can result in potentially higher
energy savings due to active rectification. Because DOE's active mode
test procedure proposes testing ballasts at 277 volts (and most
commercial ballasts operate at 277V), the full one percent energy
savings will not be realized for most ballasts covered by this
rulemaking. NEMA and Philips stated that the industry is not currently
using active rectification because it would be prohibitively more
expensive than passive rectification. Furthermore, energy savings in
one- or two-lamp ballasts have not been proven. (NEMA, No. 29 at p. 16;
OSI, Public Meeting Transcript, No. 34 at p. 141; Philips, Public
Meeting Transcript, No. 34 at pp. 144-145)
DOE also believed that the efficiency of commercially available
ballasts could be improved by substituting more efficient components,
in addition to active rectification. NEMA had several comments
regarding the more efficient components identified by DOE in Appendix
5D. Philips commented that
[[Page 20118]]
Schottky diodes do not exist in the voltage ranges that are required
for the input stage as these components tend to be low voltage devices.
Osram Sylvania and NEMA commented that using silicon carbide Schottky
diodes for the input rectifier stage would be about 10 times more
expensive than the existing components. Using them in other parts of
the circuit, such as the power factor correction stage, could save some
power, but these components are much better suited to ballasts with
power levels of 250 W or higher. As the majority of fluorescent
ballasts are around 120 W or below, existing designs do not employ
these components. (Philips, Public Meeting Transcript, No. 34 at p.
142; OSI, Public Meeting Transcript, No. 34 at p. 141; NEMA, No. 29 at
p. 16)
Osram Sylvania, Philips, and NEMA commented that the improved
transformer core materials cited by DOE in Appendix 5D are typically
used in magnetic ballasts. These technologies are being phased out or
are not in use in most newer ballast designs. The ferrite material used
in transformers and other magnetic components present in electronic
ballasts is appropriate for the ballasts' 45 kilohertz (kHz) operating
frequency. If the operating frequency were above 500 kHz, a higher
quality core material may increase ballast performance. Similarly, litz
wire is used with magnetic components when the frequency is high enough
to justify it. (OSI, Public Meeting Transcript, No. 34 at pp. 141-142;
Philips, Public Meeting Transcript, No. 34 at pp. 146-147; NEMA, No. 29
at pp. 16-17)
NEMA also provided feedback on the use of more efficient
transistors and capacitors. NEMA commented that transistors have both
conductive and switching losses. Minimizing one type of losses may
increase the other so the appropriate balance must be considered when
selecting these components. Regarding capacitors, NEMA commented that
electrolytic capacitors offer the best value when high storage
capability is needed. The losses due to effective series resistance are
minimal in these components and are related to ripple current. (NEMA,
No. 29 at p. 17)
DOE appreciates manufacturers' comments regarding the potential
energy savings due to lighting controls and agrees that adding controls
to a lamp-and-ballast system significantly increases the potential
energy savings of the system. EPCA requires DOE to conduct this
rulemaking to determine whether to amend the existing standards for
ballasts and set standards for additional ballasts. Any new or amended
standards established by DOE must achieve the maximum improvement in
energy efficiency that is technologically feasible and economically
justified. DOE also appreciates the above comments on active
rectification and improved components as a means of increasing ballast
efficiency. In this NOPR, DOE determined the maximum technologically
feasible efficiency level to be the highest efficiency level that is
technologically feasible for a sufficient diversity of products
(spanning several ballast factors, number of lamps per ballast, and
types of lamps operated) within each product class. DOE's max tech
efficiency levels are supported by a significant amount of DOE test
data. All representative ballast types have products commercially
available at the max tech ELs for their respective product classes.
Before making this determination, DOE evaluated the possibility of
improving the efficiency of three selected ballasts by inserting
improved components in the place of existing components of commercially
available ballasts. DOE's experiments with improving ballast efficiency
through component substitution did not result in prototypes with
improved overall ballast efficiency. However, DOE recognizes that
component substitution is not the only method available for
incrementally improving ballast efficiency. For example, further
improvements may be possible through the incorporation of newly
designed integrated circuits into the new ballast designs. Therefore,
DOE is still considering whether an efficiency level higher than TSL 3
is technologically feasible for a sufficient diversity of lamp types,
ballast factors, and numbers of lamps within each product class. In
Appendix 5F of the NOPR TSD, DOE presents additional analysis on the
potential for an instant-start ballast efficiency level that exceeds
TSL 3. DOE requests comments in section 0 on its selection of the
maximum technologically feasible level and whether it is
technologically feasible to attain higher efficiencies for the full
range of instant start ballast applications.
b. Lumen Output
In the preliminary TSD, DOE based its engineering analysis on two
substitution cases. In the first case, the consumer is not able to
change the spacing of fixtures and therefore replaces one baseline
ballast with a more efficient ballast. In this case, light output is
maintained to within 10 percent of the light output of the baseline
system, when possible. In the second case, the consumer is able to
change the spacing of the fixture. To show how energy savings would
change due to this change in fixture spacing, DOE provided a normalized
system input power.
DOE received several comments regarding lumen output and the two
analyzed substitution cases. When consumers are not able to change
fixture spacing, the California Utilities and the NEEA and NPCC believe
that DOE incorrectly assumed that standards-case replacements will not
always maintain the baseline light level. In some cases, both the light
output and system wattage increased at higher CSLs. The California
Utilities believed this was highly unlikely for two reasons: (1)
Higher-BEF replacements that also have high ballast factors can be
redesigned to maintain efficiency at lower ballast factors and (2)
lighting retrofits allow consumers to maintain lumen output at desired
levels. Although the products may not exist in today's market, the
California Utilities and the NEEA and NPCC assert that manufacturers
will be able to provide similar-BEF products that will not require
significant increases in ballast factor. In addition, the California
Utilities believe that consumers can change several factors to maintain
lumen output: Manufacturer, ballast factor, number of lamps, type of
lamp, and fixture reflector. The NEEA and NPCC suggested that because
it is possible to maintain light output during ballast replacement, DOE
should simplify the analysis by analyzing normalized system input power
in all cases. (California Utilities, No. 30 at pp. 3-5; NEEA and NPCC,
No. 32 at pp. 6-7) Philips disagreed that light output could be
maintained in all substitution cases. They specifically cited the
residential sector as an example of a market in which luminaire spacing
could not be changed and consumers would simply have more light output
when installing a more efficient system. (Philips, Public Meeting
Transcript, No. 34 at p. 227)
DOE appreciates these comments but believes, based on its test
data, that light output is not always maintained when directly
replacing a baseline system with a more efficient one. Although DOE
acknowledges that ballast factors may be modified in the future to
better maintain light output of popular lamp-and-ballast systems, DOE
relied on current product offerings when selecting units for this
analysis, and believes that two substitution cases do in fact exist.
For this NOPR, DOE maintained this methodology for the LCC analysis,
which it believes reflects anticipated product offerings facing the
individual consumer in the near term (see section
[[Page 20119]]
0 below). However, DOE used normalized system input power in the NIA to
reflect the ballast technology options and system configurations that
could be available to consumers over the 30-year analysis period, as
well as increase the simplicity and transparency of its NIA spreadsheet
model (see section 0 below).
c. Other Regulations
In the preliminary TSD, NEMA commented that several possible
upcoming regulations would affect the engineering and LCC analysis for
fluorescent lamp ballasts. Specifically, NEMA was concerned about four
possible regulations: Safety requirements for system interconnects,
safety requirements for lamp end-of-life (EOL) protection,
electromagnetic field requirements, and hazardous material regulation.
NEMA stated that these potential requirements could result in lower
ballast efficiency and affect payback calculations. (NEMA, No. 11 at p.
6; NEMA, Public Meeting Transcript, No. 9 at pp. 133-134) DOE agreed
that the above requirements could affect ballast efficiency, cost, or
both. DOE requested information on the quantitative impacts of these
requirements so that it could modify ballast efficiency or cost if
these regulations were to become final prior to publication of the
final rule.
Philips commented that the International Electrotechnical
Commission (IEC) recently adopted requirements for end-of-life (EOL)
circuitry for ballasts operating T8 lamps. Previously, the IEC required
this circuitry only for ballasts that operate T5 or smaller diameter
lamps. If CSA and UL adopted this requirement, as they adopted the
requirement for T5 and smaller diameter lamps, U.S. companies would
have started redesigning their products to accommodate it. The
additional control circuitry required to implement an EOL regulation
would decrease ballast efficiency. Ballasts that operate one or two
lamps would notice a greater decrease than ballasts that operate three
or four lamps because the fixed losses would be smaller relative to the
total output power. (Philips, Public Meeting Transcript, No. 34 at pp.
185-186; NEMA, No. 29 at p. 10)
DOE appreciates the comments regarding EOL circuitry and
acknowledges that the additional circuitry will likely decrease
efficiency. During interviews, manufacturers noted that T8 lamps in the
U.S. are different than the T8 lamps used in Europe. For this reason,
manufacturers believe it is unlikely that EOL requirements will be
adopted in the U.S. If such requirements are adopted in advance of the
publication of the final rule, DOE will consider them in its analysis.
Another regulation that could potentially affect ballasts is the
adoption of hazardous substance regulation in the U.S. The European
Union Directive on the restriction of the use of certain hazardous
substances in electrical and electronic equipment 2002/95/EC, usually
referred to as the Restriction of Hazardous Substances Directive or
RoHS, restricts the use of six hazardous materials (lead, mercury,
hexavalent chromium, cadmium, polybrominated biphenyls, and
polybrominated diphenyl ethers) in the manufacture of various types of
electronic and electrical equipment, including fluorescent lamp
ballasts. RoHS has been in force since July 2006. If these restrictions
were adopted in the U.S., Philips commented that complying with RoHS
would increase capital and component costs. (Philips, Public Meeting
Transcript, No. 34 at pp. 186-187)
DOE appreciates Philips' comments. During interviews, some
manufacturers confirmed that they already comply with RoHS as part of a
proactive effort coordinated by NEMA. For these manufacturers, no
adjustments to ballast efficiency and price would be necessary if
hazardous material regulation were adopted prior to publication of the
final rule for this rulemaking. Other manufacturers stated that if all
of their products did not already comply, full compliance was expected
by the time they would need to comply with any amended ballast
standards. If RoHS regulations are adopted, DOE will consider whether
any adjustments to its analysis are warranted.
OSI commented that stricter EMI requirements might affect ballast
efficiency but did not provide any quantitative data regarding the
impacts of stricter EMI requirements on efficiency or cost. (OSI,
Public Meeting Transcript, No. 34 at p. 188) DOE conducted significant
research regarding EMI emitted by fluorescent lamp ballasts, as
discussed in section 0. DOE found that most manufacturers have not
altered internal ballast designs to meet the strict standards required
by a few special applications. Rather, luminaire manufacturers have
employed magnetic ballasts or electronic ones in combination with an
external EMI filter and modified fixture. Therefore, DOE has not been
able to quantify impacts of more stringent EMI standards on ballast
efficiency or price. If the U.S. adopts stricter EMI standards, DOE
will consider whether adjustments to its analysis are warranted for the
final rule.
5. Efficiency Levels
a. Preliminary TSD Approach
In the preliminary TSD, DOE surveyed and tested many of the
manufacturers' product offerings to identify the efficiency levels
corresponding to the highest number of models. DOE identified the most
prevalent BEF values in the range of available products and established
CSLs based on those products. Because the baseline ballasts had
different BEF values and represented various design options, in some
product classes CSLs affected only one of the two baseline ballasts.
For example, CSL1 may have required a more efficient T12 ballast than
the baseline T12 ballast, but not have required a ballast more
efficient than the T8 baseline. However, the full range of CSLs
ultimately specified requirements that were above the BEF values of all
the baseline ballasts sold, and therefore affected all baseline
ballasts. The highest CSL presented, which represents the most
efficient tier of commercially available ballasts, was also the max
tech level that DOE determined for the preliminary TSD.
b. NOPR Approach
Based on comments and feedback received during manufacturer
interviews, DOE sought to determine whether developing an equation that
relates total lamp arc power to BLE could be an effective means of
setting energy conservation standards for fluorescent lamp ballasts. As
discussed in section 0, DOE tested many different types of ballasts
from various manufacturers. DOE conducted extensive testing of the
representative ballast types as well as certain ballasts with different
numbers of lamps, starting methods, and ballast factor permutations.
After compiling the test data, DOE plotted BLE versus total lamp arc
power for both standard- and high-efficiency product lines from
multiple manufacturers. Though each product line was slightly
different, DOE observed the expected positive sloping curve whose slope
decreased with increasing total lamp arc power. DOE also observed
distinct groupings when comparing a single manufacturer's high and
standard-efficiency product families.
After developing several regression lines, DOE found that a
logarithmic relationship best modeled the observed trend between total
lamp arc power and BLE. A logarithmic relationship has a positive slope
that is largest (steepest) at low lamp arc power levels and has a
decreasing slope with increasing lamp power. Furthermore, the use of a
natural
[[Page 20120]]
logarithm to relate total lamp arc power to BLE is consistent with
current energy conservation standards for external power supplies,
which also use an equation to define efficiency as a function of output
power.
Next, DOE plotted curves that aligned with certain key divisions in
product offerings. Using an equation of the form:
BLE = coefficient * ln (total lamp arc power) + constant
DOE adjusted the coefficient and constant to delineate different
efficiency levels. In general, DOE found that ballasts that generate a
total lamp arc power of 50 W or less had a greater range of efficiency
than ballasts that operated a total lamp arc power of 50 W or more. DOE
also found that the more efficient ballast product lines generally had
a reduced (flatter) slope than the standard-efficiency products. To
reflect this observation, DOE decreased the coefficient of the more
efficient EL equations and increased the coefficient of the less
efficient EL equations. Based on analysis of test data for
representative ballast types, DOE identified certain natural divisions
in BLE and generated curves that corresponded to these divisions. The
equations presented in the following sections also reflect a 0.8
percent reduction to account for lab-to-lab variation and the
compliance requirements. This reduction is discussed in more detail in
section 0.
i. IS and RS Ballasts
DOE developed three efficiency levels for the IS and RS product
class. DOE found commercially available ballasts for all representative
ballast types in these product classes. The least efficient level (EL1)
takes the form:
BLE = 2.98 * ln(total lamp arc power) + 72.61
While the least efficient 2-lamp MBP T8 electronic ballasts (commercial
and residential) would meet this level, 2-lamp T12 MBP electronic
ballasts would not. The least efficient 4-lamp MBP and 2-lamp T12
slimline ballasts already meet EL1. Next, EL2 takes the form:
BLE = 2.48 * ln(total lamp arc power) + 79.16
The least efficient universal voltage 4-foot MBP T8 and 8-foot T8
slimline ballasts would meet this level. The least efficient universal
voltage 2-lamp MBP T8 ballast (in the commercial sector) also meets
EL2. Finally, EL3 takes the form:
BLE = 1.32 * ln(total lamp arc power) + 86.11
EL3 represents a level met by high efficiency 4-foot MBP T8 (commercial
and residential) and 8-foot T8 slimline ballasts.
ii. PS Ballasts
For the PS product class, DOE developed three efficiency levels.
The least efficient level (EL1) takes the form:
BLE = 2.48 * ln(total lamp arc power) + 77.87
After plotting the test data, DOE observed three distinct efficiency
levels in addition to a baseline level. The least efficient T5 standard
and high output ballasts (as calculated by section 0) and the least
efficient 4-foot MBP ballasts (those that had BLEs between 82 and 86
percent) would not meet this EL. DOE did not identify any 2-lamp 4-foot
MBP PS ballasts at the efficiency level represented by EL1, but did
identify ballasts of this type at higher efficiency levels. Next, EL2
took the form:
BLE = 2.48 * ln(total lamp arc power) + 78.86
EL2 represents high efficiency 4-foot MBP, T5 SO, and T5 HO ballasts.
DOE did not identify any 4-lamp, 4-foot MBP PS ballasts at the
efficiency level represented by EL2, but did identify ballasts of this
type at the highest efficiency level. Finally, DOE developed EL3, which
took the form:
BLE = 1.79 * ln(total lamp arc power) + 83.33
EL3 is designed to represent the most efficient PS ballasts tested by
DOE. The single most efficient 2-lamp T5 standard output, 2-lamp T5
high output, 2-lamp MBP PS and 4-lamp MBP PS ballasts tested meet this
level.
iii. 8-foot HO Ballasts
For the 8-foot HO IS and RS product class, DOE developed three
efficiency levels. For this product class, DOE tested ballasts that
operate two lamps, the most popular lamp-and-ballast combination.
Because the resulting test data did not provide a sufficient range in
total lamp arc power for DOE to develop EL equations directly using the
same methodology as for the IS and RS, PS, and sign ballast product
classes, DOE used the shape of the curves developed for the sign
ballast product class. For EL1, EL2, and EL3, DOE used the coefficient
of the sign ballast EL1 equation. One- and 2-lamp sign ballasts operate
similar lamp powers as regular 8-foot HO ballasts and use the same
starting methods (IS and RS). Based on the similarity in lamp power and
starting method, DOE believes the coefficient of the equation that
represents the most efficient IS electronic sign ballasts is a
reasonable approximation of the coefficient for 8-foot HO ballasts. EL1
took the form:
BLE = 1.49 * ln(total lamp arc power) + 72.22
The least efficient T12 electronic ballasts meet EL1. EL2 took the
form:
BLE = 1.49 * ln(total lamp arc power) + 83.33
EL2 is met with T8 electronic HO ballasts and represents a division in
efficiency between the most efficient T12 electronic ballasts and the
high-efficiency T8 electronic ballast. Finally, DOE developed EL3, a
standard level that represents the most efficient 2-lamp, 8-foot HO
ballast tested by DOE. EL3 took the form:
BLE = 1.49 * ln(total lamp arc power) + 84.32
iv. Sign Ballasts
For the sign ballast product class, DOE identified one efficiency
level. The sign ballast market is primarily comprised of magnetic and
electronic ballasts that operate T12 HO lamps. DOE tested sign ballasts
that operate up to one, two, three, four, or six 8-foot T12 HO lamps.
The test data showed that sign ballasts exist at two levels of
efficiency. Therefore, DOE analyzed a baseline and one efficiency level
above that baseline. Using its test data, DOE developed an equation for
EL1 that was met by the most efficient 4-lamp sign ballast
(representative ballast type) and the corresponding 1-lamp sign
ballast. This EL represents an electronic sign ballast efficiency level
and the most efficient sign ballast tested for the representative
ballast type. EL1 took the form:
BLE = 1.49 * ln(total lamp arc power) + 81.34
c. Measurement Variation and Compliance
In the preliminary TSD, DOE calculated the average ballast
efficiency for a sample size of three ballasts. DOE then used this
average value to represent the efficiency of a model when analyzing
data to determine efficiency levels. DOE received several comments
regarding this approach. Regarding sample size, Philips stated that a
sample size of three is not statistically significant, especially when
ballasts are purchased from one location and may all have the same date
code. The California Utilities encouraged DOE to increase the sample
size of tested models. Philips commented that although a larger sample
size is necessary to obtain a statistically significant average,
testing a large number of ballasts would be highly burdensome.
(Philips, Public Meeting Transcript, No. 34 at pp. 176-178, 180-181;
California Utilities, No. 30 at p. 2)
[[Page 20121]]
In this NOPR, DOE modified its approach to testing in light of
these comments. For the representative ballast types analyzed in this
NOPR, DOE tested five samples of each model number and used the average
to represent the overall efficiency of the model. For non-
representative ballast types, DOE maintained its approach from the
preliminary TSD to use the average of three samples. DOE believes that
testing five ballasts for its representative product classes improves
the reliability of the efficiency calculated for the representative
ballast types.
DOE received several comments regarding its specification of
efficiency levels using the ballast's average efficiency. Earthjustice
noted that in the preliminary TSD, DOE did not follow the compliance
testing requirements when it determined efficiency levels. Philips
commented that DOE cannot use average values to specify an efficiency
level and then require that 95 percent of products meet that level.
When determining an efficiency level, Philips also encouraged DOE to
consider measurement error. Because of measurement error inherent in
the test procedure, Philips believed it was inappropriate for DOE to
require all manufacturers to meet the highest claimed tested value when
setting standards. Products that do not meet that highest measurement
value are not necessarily out of compliance, but rather may be within
the test procedure's range of accuracy. Philips encouraged DOE to
adjust efficiency levels such that high-efficiency products would
comply with the level even with the expected measurement variation.
(Earthjustice, Public Meeting Transcript, No. 34 at p. 177; Philips,
Public Meeting Transcript, No. 34 at pp. 173-174, 176, 177-178)
DOE acknowledges that compliance requirements and measurement
variation affect reported efficiency. The current and proposed active
mode test procedure requires manufacturers to report the lower of
either the sample average or the value calculated by an equation
intended to account for small sample sizes. DOE's analysis of its own
test data showed that it was more likely that manufacturers would be
reporting the result of the compliance equation, as this proved to be
the lower of the two values. Thus, DOE calculated how much lower the
value determined by the compliance equation was compared to the sample
mean and reduced the efficiency levels, based on average BLEs, by this
value.
Furthermore, DOE also agrees with manufacturers that measurement
variation should be considered when determining efficiency levels. DOE
tested ballasts at more than one lab and found that tested efficiencies
for the ballast models sent to the independent lab were slightly lower
than the values measured at the main test facility. Therefore, DOE
evaluated the data to determine the average variation between the
independent facilities.
Combined with the adjustment for using the compliance equation, DOE
calculated that a 0.8 percent reduction was necessary. The 0.8 percent
reduction corresponds to a 0.6 percent average difference in efficiency
between data collected at the two laboratories used by DOE, and a
reported value that is on average 0.2 percent less than the average of
the samples included in testing. Therefore, in this NOPR, DOE adjusts
the efficiency levels, which are based on average ballast efficiency
data, downward by 0.8 percent to account for compliance requirements
and lab-to-lab measurement variation.
6. Price Analysis
In the preliminary TSD, developing the manufacturer selling price
for different fluorescent lamp ballasts involved two main inputs, a
teardown analysis to develop the manufacturer production costs and a
markup analysis to arrive at the MSP.
DOE summed the cost of direct materials, labor, and overhead costs
used to manufacture a product to calculate the MPC.\27\ Direct material
costs represent the direct purchase price of components (resistors,
connecting wires, etc.). DOE estimated the manufacturer overhead from a
representative electronic fabrication company's U.S. Securities and
Exchange Commission (SEC) 10-k's aggregated confidential manufacturer
selling prices. DOE believed that the teardown prices reflected the
long term average and were independent of long term commodity prices.
For more detail, see chapter 5 and appendix 5A of the preliminary TSD.
---------------------------------------------------------------------------
\27\ When viewed from the company-wide perspective, the sum of
all material, labor, and overhead costs equals the company's sales
cost, also referred to as the cost of goods sold (COGS).
---------------------------------------------------------------------------
DOE selected ballasts for the teardown analysis to estimate
manufacturer production costs. DOE mapped out a matrix of product
specifications and selected ballasts so that comparisons could be made
among ballasts that differed by only one characteristic (such as
starting method or input voltage). Ballasts are described by a long
list of specifications, so DOE concentrated on those that were expected
to have the greatest impact on efficiency--high versus regular
advertised efficiency, maximum number of lamps driven, starting method,
and universal versus single input voltage. DOE conducted teardown
analyses on 13 ballasts. When possible, in the preliminary TSD, DOE
assigned the MPC from the teardown directly to the CSL.
DOE notes that it was able to select only unpotted ballasts for the
teardown analysis. As explained previously, some ballast manufacturers
add potting, a type of black pitch, to the ballast enclosure to improve
durability and manage heat distribution. Because the sticky potting
inhibits visual observation of the components, DOE was unable to
reverse engineer potted ballasts through a teardown analysis.
To estimate MPCs for ballasts that were not submitted for
teardowns, DOE used online ballast supplier pricing to develop ratios
relating online prices to teardown-sourced MPCs. After developing a
ratio specific to each manufacturer, DOE then estimated the MPC for a
particular CSL. DOE identified ballasts from multiple manufacturers
that just meet the CSL and then marked down the online prices to the
MPC using the manufacturer-specific MPC ratio. DOE averaged the MPCs
for all the ballasts just meeting the CSL to calculate the MPC.
The last step in determining preliminary TSD manufacturer selling
prices was developing markups to scale the MPCs assigned to each CSL to
MSPs. DOE relied on income statements found in 10-K reports from
publicly owned ballast manufacturing companies. Using multi-year
average financial data, DOE used the ratio of net sales to cost of
goods sold to mark up the MPC to the MSP.
NEMA and Philips commented that a teardown analysis is an
unreliable way to develop manufacturer production costs. They stated
that it is difficult even for a ballast manufacturer to determine
prices of competitors' ballasts using this method. As an example,
Philips and NEMA pointed out that DOE's teardown analysis determined
that the most efficient ballast was cheaper than a less efficient
ballast. NEMA strongly disagreed with DOE's conclusion. At the public
meeting, Philips stated that NEMA was attempting to provide industry-
average incremental MPC values for all efficiency levels. (NEMA, Public
Meeting Transcript, No. 34 at p. 17; Philips, Public Meeting
Transcript, No. 34 at pp. 183-184, 204; NEMA, No. 29 at p. 19) ASAP
commented that it is valuable to have industry provide that kind of
pricing information, but
[[Page 20122]]
encouraged DOE to continue with a teardown approach as well. (ASAP,
Public Meeting Transcript No. 34 at pp. 184-185) Regarding scaling from
retail prices to MSP, the NEEA and the NPCC agreed that DOE's scaling
methods to determine MSPs are valid (NEEA and NPCC, No. 32 at p. 6).
OSI agreed, citing an example that a T12 electronic ballast (price
determined using retail scaling method) is generally more expensive
than a T8 electronic ballast (OSI, No. 34 at p. 254).
DOE agrees that a teardown analysis may be sensitive to the dynamic
nature of the electrical component market, but believes the teardown
results should still be used considering limited pricing information is
publicly available. In the NOPR, DOE amended its teardown approach such
that incremental differences between two efficiency levels were based
on increments between single manufacturers' ballasts rather than basing
prices directly from teardowns of different manufacturers. DOE notes
that the industry was unable to provide average incremental MPC values.
Instead, some manufacturers provided confidential data on an individual
basis.
For the NOPR, DOE developed prices using three main inputs. The
first input was teardown data from the preliminary TSD. DOE compared
teardown-sourced MSPs from the same manufacturer to establish
incremental costs between ELs for a representative ballast type. The
second input was blue book prices from manufacturer price lists. DOE
estimated MSPs from these blue-book prices by using manufacturer-
specific ratios between blue book prices and teardown- or aggregated
manufacturer-sourced MSPs. The third input was confidential
manufacturer-supplied MSPs and incremental MPC values. DOE aggregated
these inputs to establish MSPs for efficiency levels of representative
ballast types for which all data were available. DOE used ratios of
online supplier retail prices to scale to ELs where both teardown and
blue book prices were unavailable. In general, DOE used a combination
of the teardown- and blue book-sourced prices throughout the analysis
and used the aggregated manufacturer-supplied MSPs for normalization
and comparison purposes.
For the teardown-sourced prices, DOE used the teardown data
generated during the preliminary TSD. As discussed in section 0, DOE
revised the manufacturer markup (used to convert MPC to MSP) from 1.5
to 1.4 based on inputs from manufacturer interviews. As a result, the
teardown-sourced MSPs decreased slightly from the values presented in
the preliminary TSD. In the preliminary TSD, DOE used the teardown-
sourced MSP that corresponded directly to the representative ballast at
each efficiency level. DOE noticed, however, that teardowns of ballasts
from different manufacturers sometimes resulted in different MSPs,
although they had approximately the same measured BLE. DOE believed
this could potentially be due to differences in the brand of component
used in the ballasts. As a result, DOE normalized the teardown-sourced
MSPs so that the incremental difference between ELs would be less
impacted by differences in component prices from one manufacturer to
another. Using this technique, DOE assigned teardown-sourced MSPs to
efficiency levels at which a ballast was torn down.
For the blue book-sourced MSPs, DOE developed manufacturer-specific
discount ratios between blue book prices and either teardown-sourced
MSPs or aggregated manufacturer-supplied MSPs. If teardown-sourced MSPs
were available, DOE used these values to create discount ratios;
otherwise, DOE used an aggregated manufacturer-supplied MSP. When a
blue book value was not available from any manufacturer for a
particular EL, DOE used a retail price scaling technique. DOE scaled
the blue book-sourced price of an adjacent efficiency level using a
ratio of retail prices (from a single online supplier) between ballasts
in the adjacent EL and the EL without a blue book-sourced price. For
example, if a blue book value was not available for EL2, a ratio of
retail prices between EL2 and EL3 could be used to scale the blue book-
sourced MSP from EL3 to EL2.
In the NOPR, DOE assigned MSPs to efficiency levels for
representative ballast types according to the following methodology.
For representative ballast type ELs with teardown-sourced MSPs, DOE
averaged the teardown-sourced MSP with the blue book-sourced MSP. For
the representative ballast type efficiency levels without teardown-
sourced MSPs, DOE used the blue-book sourced MSP directly. For the two
theoretical inefficient T5 baselines, neither a teardown- nor blue
book-sourced MSP was available. As discussed in section 0, DOE
established T5 standard output and high output baselines to model the
situation in which inefficient T5 ballast entered the market in future
years. To establish a price for the T5 standard output baseline, DOE
scaled the EL1 blue book-sourced MSP using the ratio of the baseline
and EL2 blue book-sourced MSPs for the 2-lamp, 4-foot MBP PS
representative ballast type. To establish a price for the T5 high
output baseline, DOE scaled the EL1 blue book-sourced MSP using the
ratio of the baseline and EL1 blue book-sourced MSPs for the 4-lamp, 4-
foot MBP PS representative ballast type. More detail on this
methodology is provided in chapter 5 of the NOPR TSD.
In the preliminary TSD, DOE mentioned several possible regulations
that could affect the price of fluorescent ballasts. NEMA expressed
concern that safety requirements for system interconnects and safety
requirements for lamp end-of-life protection could result in lower
ballast efficiency and affect payback calculations. NEMA also commented
that current internationally accepted EMI levels may be modified, which
could lower the efficiency of commercially available ballasts. NEMA
identified a final issue concerning hazardous material regulations that
may be implemented which would affect component availability and raise
the cost of ballasts. The NEEA and NPCC believe that the costs of the
EOL and EMI features are very small or non-existent once they are
engineered into most or all products (NEEA and NPCC, No. 32 at p. 6).
They also believe the lead-free solder would affect ballasts of
different efficiency levels equally and should therefore be ignored
from the purposes of this rulemaking (NEEA and NPCC, No. 32 at p. 6).
DOE appreciates these comments. Because none of these potential
regulations have been promulgated, however, DOE has not included the
effect of these potential regulations on ballast price or efficiency in
this rulemaking. DOE will consider making changes to its analysis for
the final rule if any of these potential regulations are adopted.
7. Results
In this NOPR, DOE changed its methodology from that presented in
the preliminary TSD. DOE proposes to set standards in terms of an
equation that relates total lamp arc power to BLE. For both the IS and
RS product class and PS product class, DOE developed three efficiency
levels and analyzed four representative ballast types. For the 8-foot
HO IS and RS product class, DOE developed three efficiency levels and
analyzed one representative ballast type. Finally, for sign ballasts,
DOE developed one efficiency level and analyzed one representative
ballast type. For each EL of each representative ballast type, DOE
specified characteristics of a representative unit at that level and
calculated an MSP. These values were used in the LCC, NIA, and
[[Page 20123]]
MIA analyses to model the impact of setting standards on consumers, the
nation, and manufacturers, respectively. The table below summarizes the
efficiency levels developed by DOE for each representative product
class based on average tested BLE and total lamp arc power values. The
efficiency level equations presented in Table V.3 incorporate the 0.8
percent reduction for lab to lab testing variation and compliance
requirements and are the equations used to establish energy
conservation standards for fluorescent lamp ballasts.
Table V.3--NOPR Efficiency Levels for Representative Product Classes With 0.8 Percent Variation Reduction
----------------------------------------------------------------------------------------------------------------
Representative product class Efficiency level BLE
----------------------------------------------------------------------------------------------------------------
IS and RS ballasts that operate.. EL1 2.98 * n(total lamp arc power) + 72.61.
4-foot MBP lamps............. EL2 2.48 * n(total lamp arc power) + 79.16.
8-foot slimline lamps........ EL3 1.32 * n(total lamp arc power) + 86.11.
----------------------------------------------------------------------------------------------------------------
PS ballasts that operate......... EL1 2.48 * n(total lamp arc power) + 77.87.
4-foot MBP lamps............. EL2 2.48 * n(total lamp arc power) + 78.86.
4-foot MiniBP SO lamps....... EL3 1.79 * n(total lamp arc power) + 83.33.
4-foot MiniBP HO lamps ................... ........................................................
----------------------------------------------------------------------------------------------------------------
IS and RS ballasts that operate 8- EL1 1.49 * n(total lamp arc power) + 72.22.
foot HO lamps.
EL2 1.49 * n(total lamp arc power) + 83.33.
EL3 1.49 * n(total lamp arc power) + 84.32.
----------------------------------------------------------------------------------------------------------------
Ballasts that operate 8-foot HO EL1 1.49 * n(total lamp arc power) + 81.34.
lamps in cold temperature
outdoor signs.
----------------------------------------------------------------------------------------------------------------
8. Scaling to Product Classes Not Analyzed
As discussed above, DOE identified and selected certain product
classes as ``representative'' product classes where DOE would
concentrate its analytical effort. DOE chose these representative
product classes and the representative units within them primarily
because of their high market volumes. The following section discusses
how DOE scaled efficiency standards from those product classes it
analyzed to those it did not.
In the preliminary TSD, DOE created scaling relationships for
number of lamps, starting method, and ballast factor. DOE used
extensive test data obtained for ballasts that operate 4-foot MBP lamps
and developed equations relating total rated lamp power to BEF for each
ballast type. DOE identified a reduction to apply to the BEF of an IS
ballast to calculate the BEF of a comparable programmed start ballast.
DOE also determined a relationship between ballasts with low, normal,
and high ballast factor. Both high and low BF ballasts were found to
have, on average, lower BEFs than comparable normal BF ballasts.
Therefore, DOE applied a discount factor to calculate the appropriate
BEFs for ballasts with low and high ballast factors. When applying this
scaling methodology, DOE first scaled by number of lamps, then starting
method, and finally ballast factor. DOE received several comments on
its scaling methodology and results presented in the preliminary TSD.
Philips stated that DOE's scaling techniques were valid based on an
analysis using data contained in the CEC's ballast database. (Philips,
Public Meeting Transcript, No. 34 at pp. 17, 155) As discussed in the
paragraphs that follow, however, manufacturers recommended adjustments
to bring the scaled results more in line with actual data.
For number of lamps, Philips requested a greater allowance for one-
lamp ballasts because the difference between one- and two-lamp ballasts
was greater than indicated by DOE's scaling. Philips found the average
BEF of one-lamp ballasts to be 3.5 percent lower than that of
comparable two-lamp ballasts. Philips also commented that they found
ballasts that operate four lamps to be about two percent more efficient
than those that operate two lamps. In contrast, the NEEA and NPCC found
that DOE's scaling factors for number of lamps seemed valid because
there seems to be a strong correlation between BEF and lamp power.
(Philips, Public Meeting Transcript, No. 34 at pp. 17, 103-104, 137-
139; NEEA and NPCC, No. 32 at p. 5)
DOE also received several comments related to its ballast factor
scaling techniques. Philips commented that high-BF ballasts do not
necessarily have lower BEFs than normal-BF ballasts, and tend to be
more efficient. Philips believes that DOE's results indicating that
normal-BF ballasts have the highest BEF may be due to DOE's measurement
procedures using the same resistors for low-, normal-, and high-BF
ballasts. Philips also commented that low-BF ballasts do have lower BEF
than normal-BF ballasts and that they may seek a larger reduction for
those ballasts than that applied in the preliminary TSD. Based on the
data in the CEC database, Philips concluded that a low-BF ballast is
about one percent less efficient than a normal-BF ballast, whereas a
high-BF ballast is about one percent more efficient than a normal-BF
ballast. (Philips, Public Meeting Transcript, No. 34 at pp. 17-18, 103-
104, 137) The California Utilities also noted that, based on the data
provided in Appendix 5C, DOE's scaling factors did not accurately
capture the relationship between BF and BEF. The NEEA and NPCC agreed,
noting that while DOE used a very consistent set of scaling factors to
scale the test results from normal ballast factor products to low- and
high-ballast factor products, the test data was not nearly as
consistent as the scaling factors. They did not believe that high
ballast factor ballasts necessarily had lower BEFs than normal ballast
factor products. The NEEA and NPCC believed DOE should proceed in a way
that eliminates the need to use scaling factors to determine baseline
models and efficiency levels for the low- and high-BF products. For
example, if efficiency increased with ballast factor, it would be
reasonable to set standards as a function of ballast factor, similar to
the way refrigeration products are regulated in terms of refrigerated
volume. (California Utilities, No. 30 at p. 3; NEEA and NPCC, No. 32 at
pp. 3, 5)
Regarding starting method, GE commented that DOE's scaling yields
slightly higher efficiency ratings for some programmed start ballasts
[[Page 20124]]
compared to instant start ballasts, which is not consistent with what
is found in the industry. Philips' analysis found that the scaling
factor for programmed start should be 3 percent relative to instant
start ballasts instead of the 2.2 percent calculated by DOE. The NEEA
and NPCP suggested that DOE re-verify its scaling factor for starting
method in light of the differences between DOE's scaling factors and
those found by Philips. (GE, Public Meeting Transcript, No. 34 at pp.
25-26; Philips, Public Meeting Transcript, No. 34 at p. 190; NEEA and
NPCC, No. 32 at p. 6)
As discussed in section 0, DOE found that BLE could be modeled as a
function of total lamp arc power. In this NOPR, DOE proposes to set
standards in terms of an equation that assigns a BLE value based on the
total rated lamp power operated by the ballast. This equation
eliminates the need for scaling relationships based on number of lamps
and ballast factor that were necessary in the preliminary TSD. A
scaling factor was still necessary for starting method, as described
below.
Although DOE set efficiency levels for some PS ballasts directly,
DOE did not analyze 8-foot HO PS ballasts directly. Thus, it was
necessary to develop a scaling relationship for this starting method.
To do so, DOE compared 4-foot MBP IS ballasts to their PS counterparts.
DOE found the average reduction in BLE to be 2 percent. Thus, DOE
proposes to apply this scaling factor to the efficiency levels for 8-
foot HO IS ballasts to determine the appropriate values for programmed
start products.
D. Markups To Determine Product Price
By applying markups to the MSPs estimated in the engineering
analysis, DOE estimated the amounts consumers would pay for baseline
and more efficient products. At each step in the distribution channel,
companies mark up the price of the product to cover business costs and
profit margin. Identifying the appropriate markups and ultimately
determining consumer product price depend on the type of distribution
channels through which the product moves from manufacturer to consumer.
1. Distribution Channels
Before it could develop markups, DOE needed to identify
distribution channels (i.e., how the products are distributed from the
manufacturer to the end user) for the ballast designs addressed in this
rulemaking. Most ballasts used in commercial and industrial
applications pass through one of two types of distribution channels--an
original equipment manufacturer (OEM) channel and a wholesaler channel.
The OEM distribution channel applies to ballasts installed in fixtures.
In this distribution channel, the ballast passes from the manufacturer
to a fixture OEM who in turn sells it to an electrical wholesaler
(i.e., distributor); from the wholesaler it passes to a contractor, and
finally to the end user. The wholesaler distribution channel applies to
ballasts not installed in fixtures (e.g., replacement ballasts). In
this distribution channel, the ballast passes from the manufacturer to
an electrical wholesaler, then to a contractor, and finally to the end
user.
The NEEA and NPCC asked why DOE had not considered a distribution
channel for residential ballasts in its preliminary TSD. (NEEA and
NPCC, Public Meeting Transcript, No. 12 at p. 225; NEEA and NPCC, No.
32 at p. 8) The NEEA and NPCC and Philips noted that end users of
residential ballasts would typically purchase an entire new fixture
rather than replace a ballast in an existing fixture; GE questioned
this generalization. (NEEA and NPCC, Public Meeting Transcript, No. 22
at pp. 225-226; Philips, Public Meeting Transcript, No. 7 at p. 258;
GE, Public Meeting Transcript, No. 16 at p. 259) DOE agreed that a
separate distribution channel is applicable for residential ballasts,
and included it in the revised markups analysis. Because DOE could not
obtain retailer sales data detailing the breakdown between fixture
ballasts and replacement ballasts, however, DOE assumed for the markups
analysis that the manufacturer sells the residential ballast to a
fixture OEM who in turn sells it in a fixture to a home improvement
retailer, where it is purchased by the end user.
2. Estimation of Markups
Publicly-owned companies must disclose financial information
regularly through filings with the U.S. Securities and Exchange
Commission (SEC). Filed annually, SEC form 10-K provides a
comprehensive overview of the company's business and financial
conditions. To estimate OEM, wholesaler, and retailer markups, DOE used
financial data from 10-K reports from publicly owned lighting fixture
manufacturers, electrical wholesalers, and home improvement retailers.
DOE's markup analysis developed both baseline and incremental
markups to transform the ballast MSP into an end user equipment price.
DOE used the baseline markups to determine the price of baseline
designs. Incremental markups are coefficients that relate the change in
the MSP of higher-efficiency designs to the change in the OEM,
wholesaler, and retailer sales prices. These markups refer to higher-
efficiency designs sold under market conditions with new energy
conservation standards. The calculated average baseline markups for
fixture OEM companies, electrical wholesalers, and home improvement
retailers were 1.50, 1.23, and 1.51, respectively. The average
incremental markups for OEMs, wholesalers, and home improvement
retailers were 1.17, 1.05, and 1.15, respectively.
Several commenters expressed concern that markups based on
companies' overall financial data might not represent actual markups
for ballasts. (Osram Sylvania, Public Meeting Transcript, No. 2 at p.
205; NEEA and NPCC, No. 32 at p. 6; NEMA, No. 29 at pp. 12-13) In
contrast, ASAP supported DOE's markups estimation method, citing the
public availability of SEC data. (ASAP, No. 2 at p. 207) While
recognizing that SEC form 10-K data is not product-specific, DOE
assumes that actual product markups are generally business-sensitive.
DOE contacted the National Association of Electrical Distributors
(NAED) and received feedback from two NAED member companies, both
confirming that DOE's calculated wholesaler markups were consistent
with their actual ballast markups. With assistance from NEMA, DOE
sought a similar evaluation of ballast markups from several
representative fixture OEMs, but did not receive feedback in time for
publication of the proposed rule. DOE will consider any data received
in response to this NOPR in developing markups for the final rule.
To estimate markups for residential ballast designs, DOE requested
financial data for representative home improvement retailers. The NEEA
and NPCC commented that Home Depot and Lowe's together account for a
significant portion of the home improvement retail market. (NEEA and
NPCC, Public Meeting Transcript, No. 12 at p. 225) Philips corroborated
this point. (Philips, Public Meeting Transcript, No. 7 at p. 258) DOE
contacted Home Depot and Lowe's regarding price markups for fluorescent
lighting products, but both organizations declined to comment, citing
competition concerns. Consequently, DOE based its retailer markups on
financial data from 10-K reports.
For ballasts used in commercial and industrial applications, DOE
adjusted the calculated average baseline and incremental markups to
reflect estimated proportions of ballasts sold through the OEM and
wholesaler distribution channels. DOE assumed ballasts in the fixture
OEM channel
[[Page 20125]]
represent 63 percent of the market and ballasts in the wholesaler
channel represent 37 percent. These percentages are from chapter 3
(engineering analysis) of the final TSD for the 2000 Ballast Rule and
were based on a comment submitted by NEMA for that rulemaking. DOE then
multiplied the resulting weighted average markups by a contractor
markup of 1.13 (also from the 2000 Ballast Rule, and used in the 2009
Lamps Rule) and sales tax to develop total weighted baseline and
incremental markups, which reflect all individual markups incurred in
the ballast distribution channels. For residential ballasts, DOE
assumed that end users purchased ballasts--already installed in
fixtures--directly from home improvement retailers with no contractor
involvement or markup. DOE used OEM and retailer markups and sales tax
to calculate total baseline and incremental markups for residential
ballasts.
The sales tax represents state and local sales taxes applied to the
end user equipment price. DOE derived state and local taxes from data
provided by the Sales Tax Clearinghouse.\28\ These data represent
weighted averages that include state, county and city rates. DOE then
derived population-weighted average tax values for each census division
and large State, and then derived U.S. average tax values using a
population-weighted average of the census division and large State
values. This approach provided a national average tax rate of 7.25
percent.
---------------------------------------------------------------------------
\28\ The Sales Tax Clearinghouse. Available at https://thestc.com/STRates.stm. (Last accessed July 20, 2010.)
---------------------------------------------------------------------------
3. Summary of Markups
Table V.4 summarizes the markups at each stage in the distribution
channel and the overall baseline and incremental markups, and sales
taxes, for each of the three identified channels. For commercial and
industrial ballasts, weighting the markups in each channel by the share
of shipments in that channel yields an average overall baseline markup
of 1.96 and an average overall incremental markup of 1.41. For
residential ballasts, DOE calculated an overall baseline markup of 2.43
and an overall incremental markup of 1.43.
Table V.4--Summary of Ballast Distribution Channel Markups
----------------------------------------------------------------------------------------------------------------
Commercial/industrial ballasts Residential ballasts
-----------------------------------------------------------------------------------
OEM distribution (ballasts Wholesaler distribution Retailer distribution
VI. in fixtures) (ballasts only) (ballasts in fixtures)
-----------------------------------------------------------------------------------
Baseline Incremental Baseline Incremental Baseline Incremental
----------------------------------------------------------------------------------------------------------------
Fixture OEM................. 1.50 1.17 ............ ............ 1.50 1.17
Electrical Wholesaler 1.23 1.05 1.23 1.05 ............ ............
(Distributor)..............
Home Improvement Retailer... ............ ............ ............ ............ 1.51 1.15
Contractor or Installer..... 1.13 1.13 1.13 1.13 ............ ............
----------------------------------------------------------------------------------------------------------------
Sales Tax................... 1.07
1.07
1.07
----------------------------------------------------------------------------------------------------------------
Overall..................... 2.24 1.48 1.49 1.27 2.43 1.43
----------------------------------------------------------------------------------------------------------------
Assumed Market Percentage... 63
37
100
----------------------------------------------------------------------------------------------------------------
Overall (Weighted).......... 1.96 (Baseline)
1.41 (Incremental) 2.43 1.43
----------------------------------------------------------------------------------------------------------------
Using these markups, DOE generated ballast end user prices for each
efficiency level it considered, assuming that each level represents a
new minimum efficiency standard. Chapter 7 of the TSD provides
additional detail on the markups analysis.
A. Energy Use Analysis
For the energy use analysis, DOE estimated the energy use of
ballasts in the field (i.e., as they are actually used by consumers).
The energy use analysis provided the basis for other DOE analyses,
particularly assessments of the energy savings and the savings in
consumer operating costs that could result from DOE's adoption of new
and amended standard levels.
To develop annual energy use estimates, DOE multiplied annual usage
(in hours per year) by the lamp-and-ballast system input power (in
watts). DOE characterized representative lamp-and-ballast systems in
the engineering analysis, which provided measured and normalized system
input power ratings (the latter used to compare baseline- and
standards-case systems on an equal light-output basis). To characterize
the country's average use of lamp-and-ballast systems for a typical
year, DOE developed annual operating hour distributions by sector,
using data published in the U.S. Lighting Market Characterization:
Volume I (LMC),\29\ the Commercial Building Energy Consumption Survey
(CBECS),\30\ the Manufacturer Energy Consumption Survey (MECS),\31\ and
the Residential Energy Consumption Survey (RECS).\32\ DOE assumed,
based on its market and technology assessment, that PS ballasts
operating 4-foot MBP T8 lamps in the commercial sector were operated on
occupancy sensors. Based on its survey of available literature, DOE
assumed that occupancy sensors would result, on average, in a 30-
percent reduction in annual operating hours.
---------------------------------------------------------------------------
\29\ U.S. Department of Energy, Office of Energy Efficiency and
Renewable Energy. U.S. Lighting Market Characterization. Volume I:
National Lighting Inventory and Energy Consumption Estimate. 2002.
Available at http://apps1.eere.energy.gov/buildings/publications/pdfs/corporate/lmc_vol1.pdf.
\30\ U.S. Department of Energy, Energy Information Agency.
Commercial Building Energy Consumption Survey: Micro-Level Data,
File 2 Building Activities, Special Measures of Size, and Multi-
building Facilities. 2003. Available at http://www.eia.doe.gov/emeu/cbecs/public_use.html.
\31\ U.S. Department of Energy, Energy Information Agency.
Manufacturing Energy Consumption Survey, Table 1.4: Number of
Establishments Using Energy Consumed for All Purpose. 2006.
Available at http://www.eia.doe.gov/emeu/mecs/mecs2006/2006tables.html.
\32\ U.S. Department of Energy, Energy Information Agency.
Residential Energy Consumption Survey: File 1: Housing Unit
Characteristics. 2005. Available at http://www.eia.doe.gov/emeu/recs/recspubuse05/pubuse05.html.
---------------------------------------------------------------------------
The NEEA and NPCC generally approved of DOE's analysis of lighting
end-use profiles and the resulting annual operating hour estimates.
(NEEA and NPCC, No. 32 at p. 7) NEMA agreed, but asked if the
commercial average operating hours accounted for retailers
[[Page 20126]]
with longer or continuous daily operations. (NEMA, No. 29 at p. 11) As
noted in the LMC final report, some expected data points are lost in
the averaging process. For example, 24-hour retailers are outweighed in
the commercial sector by the volume of office and retail space that
does not operate 24 hours per day. For the proposed rule, DOE retained
its approach for estimating average sector operating hours, the values
for which changed slightly based on updated census data inputs.
Based on a range of published estimates, DOE assumed energy savings
of 30 percent for lamp-and-ballast systems using occupancy sensors in
the commercial sector. To account for these energy savings, DOE reduced
average operating hours for analyzed PS ballast systems by 30 percent.
Lutron's literature review indicated savings from 17 percent-60
percent, and they agreed that 30 percent was a reasonable average
value. (Lutron, Public Meeting Transcript, No. 4 at p. 206) While
noting that the use of occupancy sensors is not limited to the
commercial sector, NEMA agreed with DOE's assumption that PS ballasts
were used with occupancy sensors and commented that DOE's 30-percent
savings estimate was conservative. (NEMA, No. 29 at p. 12) DOE agrees
that occupancy sensor use is not limited to the commercial sector, but
notes that the analyzed PS ballast designs (which operate 4-foot MBP T8
lamps) are intended primarily for commercial applications. The analyzed
ballasts for 4-foot MiniBP T5 lamps (SO and HO) are also PS designs;
however, unlike T8 systems, PS ballast design is intrinsic to T5
systems and not conditioned on occupancy sensor use. Therefore, DOE did
not assume operating hour reductions for T5 SO (commercial sector) and
T5 HO (industrial sector) lamp-and-ballast systems in its energy use
analysis.
Chapter 6 of the TSD provides a more detailed description of DOE's
energy use analysis for ballasts.
B. Life-Cycle Cost and Payback Period Analyses
DOE conducted LCC and PBP analyses to evaluate the economic impacts
of potential energy conservation standards for ballasts on individual
consumers. The LCC is the total consumer expense over the life of a
product, consisting of purchase and installation costs and operating
costs (expenses for energy use, maintenance, and repair). To compute
the operating costs, DOE discounted future operating costs to the time
of purchase and summed them over the lifetime of the product. The PBP
is the estimated amount of time (in years) it takes consumers to
recover the increased purchase cost (including installation) of a more
efficient product through lower operating costs. DOE calculates the PBP
by dividing the change in purchase cost (normally higher) by the change
in average annual operating cost (normally lower) that results from the
more efficient standard.
For any given efficiency or energy use level, DOE measures the PBP
and the change in LCC relative to an estimated base-case product
efficiency or energy use level. The base-case estimate reflects the
market without new or amended mandatory energy conservation standards,
including the market for products that exceed the current energy
conservation standards.
Inputs to the calculation of total installed cost include the cost
of the product--which includes MSPs, distribution channel markups, and
sales taxes--and installation costs. Inputs to the calculation of
operating expenses include annual energy consumption, energy prices and
price projections, repair and maintenance costs, product lifetimes,
discount rates, and the year that proposed standards take effect. To
account for uncertainty and variability, DOE created value
distributions for selected inputs, including: operating hours,
electricity prices, discount rates and sales tax rates, and disposal
costs. For example, DOE created a probability distribution of annual
energy consumption in its energy use analysis, based in part on a range
of annual operating hours. The operating hour distributions capture
variation across census divisions and large States, building types, and
lamp-and-ballast systems for three sectors (commercial, industrial, and
residential). In contrast, ballast MSPs were specific to the
representative ballast designs evaluated in DOE's engineering analysis;
and price markups were based on limited publicly available financial
data. Consequently, DOE used discrete values instead of distributions
for these inputs.
The computer model DOE uses to calculate the LCC and PBP, which
incorporates Crystal Ball (a commercially available software program),
relies on a Monte Carlo simulation to incorporate uncertainty and
variability into the analysis. The Monte Carlo simulations randomly
sample input values from the probability distributions and ballast user
samples, performing more than 10,000 iterations per simulation run. The
NOPR TSD chapter 8 and its appendices provide details on the
spreadsheet model and of all the inputs to the LCC and PBP analyses.
Table V.5 summarizes the approach and data DOE used to derive
inputs to the LCC and PBP calculations for the preliminary TSD as well
as the changes made for today's NOPR. The subsections that follow
discuss the initial inputs and DOE's changes to them. In addition, as
noted in section 0 ``Issues on Which DOE Seeks Comment'', DOE seeks
comment on the appropriateness of including T12 ballasts in the
baseline analysis for life cycle costs.
Table V.5--Summary of Inputs and Key Assumptions in the LCC and PBP Analyses*
----------------------------------------------------------------------------------------------------------------
Inputs Preliminary TSD Changes for the proposed rule
----------------------------------------------------------------------------------------------------------------
Product Cost....................... Derived by multiplying ballast MSPs No change.
by distribution channel markups and
sales tax.
Installation Cost.................. Derived costs using estimated labor Updated labor rates from 2008$ to
times, and applicable labor rates 2009$.
from RS Means Electrical Cost Data
(2007) and U.S. Bureau of Labor
Statistics.
Annual Energy Use.................. Determined operating hours by Used the most recent available
associating building type-specific versions of building energy
operating hours with regional consumption survey data: LMC
distributions of various building (2002), CBECS (2003), MECS (2006),
types using lighting market and and RECS (2005).
building energy consumption survey
data (see section 0 above).
Energy Prices...................... Electricity: Based on EIA's Form 861 Electricity: Updated using Form 826
data for 2007. data for 2009.
Variability: Regional energy prices Variability: Energy prices
determined for 13 regions. determined at state level.
[[Page 20127]]
Energy Price Projections........... Forecasted using Annual Energy Forecasts updated using AEO2010.
Outlook 2009 AEO2009.
Replacement and Disposal Costs..... Commercial/Industrial: Included labor Updated labor rates from 2008$ to
and materials costs for lamp 2009$.
replacement, and disposal costs for Variability: Assumed commercial and
failed lamps. industrial consumers pay recycling
Residential: Included only materials costs in approximately 30 percent
cost for lamps, with no lamp of lamp failures and 5 percent of
disposal costs. ballast failures.
Product Lifetime................... Ballasts: Lifetime based on average No change.
lifetimes from the 2000 Ballast Rule
(and used in the 2009 Lamps Rule).
Lamps: assumed as 91 percent-94
percent of rated life, to account
for lamp type and relamping
practices.
Discount Rates..................... Commercial/Industrial: Estimated cost Variability: Developed a
of capital to affected firms and distribution of discount rates for
industries; developed weighted each end-use sector.
average of the cost to the company
of equity and debt financing.
Residential: Estimated by examining
all possible debt or asset classes
that might be used to purchase
ballasts.
Compliance Date of Standards....... 2014................................. No change.
Ballast Purchasing Events.......... Assessed two events: Ballast failure No change.
and new construction/renovation.
----------------------------------------------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided in the sections following the table or in
chapter 8 of the NOPR TSD.
1. Product Cost
To calculate consumer product costs, DOE multiplied the MSPs
developed in the engineering analysis by the distribution channel
markups described above (along with sales taxes). DOE used different
markups for baseline products and higher-efficiency products, because
the markups estimated for incremental costs differ from those estimated
for baseline models. In response to comments on the preliminary TSD,
DOE's revised analysis included a distribution channel with
corresponding markups for residential ballasts.
On February 22, 2011, DOE published a Notice of Data Availability
(NODA, 76 FR 9696) stating that DOE may consider improving regulatory
analysis by addressing equipment price trends. Consistent with the
NODA, DOE examined historical producer price indices (PPI) for
fluorescent ballasts and found both positive and negative real price
trends depending on the specific time period examined. Therefore, in
the absence of a definitive trend, DOE assumes in its price forecasts
for this NOPR that the real prices of fluorescent ballasts are constant
in time and that fluorescent ballast prices will trend the same way as
prices in the economy as a whole. DOE is aware that there have been
significant changes in both the regulatory environment and mix of
fluorescent ballast technologies during this period that create
analytical challenges for estimating longer-term product price trends
from the product-specific PPI data. DOE performed price trends
sensitivity calculations to examine the dependence of the analysis
results on different analytical assumptions. A more detailed discussion
of price trend modeling and calculations is provided in Appendix 8A of
the TSD. DOE invites comment on methods to improve its equipment price
forecasting for fluorescent lamp ballasts beyond the assumption of
constant real prices, as well as any data supporting alternate methods.
2. Installation Cost
The installation cost is the total cost to the consumer to install
the equipment, excluding the marked-up consumer product price.
Installation costs include labor, overhead, and any miscellaneous
materials and parts. As detailed in the preliminary TSD, DOE considered
the total installed cost of a lamp-and-ballast system to be the
consumer product price (including sales taxes) plus the installation
cost. DOE applied installation costs to lamp-and-ballast systems
installed in the commercial and industrial sectors, treating an
installation cost as the product of the average labor rate and the time
needed for installation. Using the same approach, DOE assumed that
residential consumers must pay for the installation of a fixture
containing a lamp-and-ballast system, and calculated installation price
in the same manner.
3. Annual Energy Use
As discussed above, DOE estimated the annual energy use of
representative lamp-and-ballast systems using system input power
ratings and sector operating hours. The annual energy use inputs to the
LCC and PBP analyses are based on average annual operating hours,
whereas the Monte Carlo simulation draws on a distribution of annual
operating hours to determine annual energy use.
4. Energy Prices
For the LCC and PBP, DOE derived average energy prices for 13 U.S.
geographic areas consisting of the nine census divisions, with four
large States (New York, Florida, Texas, and California) treated
separately. For census divisions containing one of these large States,
DOE calculated the regional average excluding the data for the large
State. The derivation of prices was based on data from EIA Form 861,
``Annual Electric Power Industry Database,'' and EIA Form 826,
``Monthly Electric Utility Sales and Revenue Data.''
5. Energy Price Projections
To estimate the trends in energy prices for the preliminary TSD,
DOE used the price forecasts in AEO2009. To arrive at prices in future
years, DOE multiplied current average prices by the forecast of annual
average price changes in AEO2009. Because AEO2009 forecasts prices to
2035, DOE followed past EIA guidelines and used the average rate of
change from 2020 to 2035 to estimate the price trend for electricity
after 2035. For today's proposed rule, DOE used the same approach, but
updated its energy price
[[Page 20128]]
forecasts using AEO2010. DOE intends to update its energy price
forecasts for the final rule based on the latest available AEO. In
addition, the spreadsheet tools that DOE used to conduct the LCC and
PBP analyses allow users to select price forecasts from AEO's low-
growth, high-growth, and reference case scenarios to estimate the
sensitivity of the LCC and PBP to different energy price forecasts.
The California Utilities commented that DOE should address the
time-dependent value of energy to account for the potentially higher
value of energy savings that occur during peak demand periods.
(California Utilities, No. 30 at p. 5) DOE acknowledges that using peak
and off-peak electricity prices in estimating the value of energy
savings is consistent with using marginal electricity prices to assign
value to energy savings, with the assumption that standards reduce
energy consumption at the margin. A 1999 DOE report presents a
procedure for deriving marginal prices for rulemaking and compares
resulting marginal prices to average prices in the commercial and
residential sectors.\33\ Even though the variation in differences
between marginal and average prices was high (from -85 percent to 51
percent), marginal prices were lower than average prices by 5.2 percent
on average; the median value for the difference was 3.3 percent. For
the proposed rule, DOE's analytical tools allow users to select between
the low, high, and reference case scenario AEO. DOE believes this
approach captures variation in energy prices (and in the value of
energy savings) within a range similar to the difference between
marginal and average prices.
---------------------------------------------------------------------------
\33\ U.S. Department of Energy, Office of Energy Efficiency and
Renewable Energy. Marginal Energy Prices Report. July 1999.
Available at http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/marg_eprice_0799.pdf.
---------------------------------------------------------------------------
6. Replacement and Disposal Costs
In its preliminary TSD, DOE addressed lamp replacements occurring
within the analysis period as part of operating costs for considered
lamp-and-ballast system designs. Replacement costs in the commercial
and industrial sectors included the labor and materials costs
associated with replacing a lamp at the end of its lifetime, discounted
to $2011. For the residential sector, DOE assumed that consumers would
install their own replacement lamps and incur no related labor costs.
Some consumers recycle failed lamps and ballasts, thus incurring a
disposal cost. In its research, DOE found average disposal costs of 10
cents per linear foot for GSFL and $3.50 for each ballast.\34\ A 2004
report by the Association of Lighting and Mercury Recyclers noted that
approximately 30 percent of lamps used by businesses and 2 percent of
lamps in the residential sector are recycled nationwide.\35\ Consistent
with the 2009 Lamps Rule, DOE considered the 30-percent lamp-recycling
rate to be significant and incorporated lamp disposal costs into the
LCC analysis for commercial and industrial consumers. DOE was not able
to obtain ballast recycling rate data, but assumed that higher disposal
costs would largely discourage voluntary ballast recycling by
commercial and industrial consumers, and did not include ballast
disposal costs in the LCC analysis. Given the very low (2 percent)
estimated lamp recycling rate in the residential sector, DOE assumed
that residential consumers would be even less likely to voluntarily
incur the higher disposal costs for ballasts. Therefore, DOE excluded
the disposal costs for lamps or ballasts from the LCC analysis for
residential ballast designs.
---------------------------------------------------------------------------
\34\ Environmental Health and Safety Online's fluorescent lights
and lighting disposal and recycling Web page--Recycling Costs.
Available at http://www.ehso.com/fluoresc.php. (Last accessed Sept.
26, 2010.)
\35\ Association of Lighting and Mercury Recyclers, ``National
Mercury-Lamp Recycling Rate and Availability of Lamp Recycling
Services in the U.S.'' Nov. 2004.
---------------------------------------------------------------------------
DOE received no comments on the preliminary TSD concerning these
assumed recycling rates, disposal costs, and their application in the
LCC analysis. The Monte Carlo simulation for the proposed rule allowed
DOE to examine variability in recycling practices; consequently, DOE
assumed that commercial and industrial consumers pay recycling costs in
5 percent of ballast failures--as well as the 30 percent of lamp
failures assumed in the LCC analysis. As in the LCC analysis, DOE
assumed that residential lamp and ballast disposal rates were
insignificant, and excluded the related disposal costs from the Monte
Carlo simulation for residential ballast designs.
7. Product Lifetime
Chapter 8 of the preliminary TSD detailed DOE's basis for average
ballast lifetimes, which were based on assumptions used in the 2000
Ballast Rule and the 2009 Lamps Rule. For ballasts in the commercial
and industrial sectors, DOE used an average ballast lifetime of 49,054
hours that, when combined the respective average annual operating
hours, yielded average ballast lifetimes of approximately 13 years and
10 years, respectively. Consistent with the 2000 Ballast Rule and the
2009 Lamps Rule, DOE assumed an average ballast lifetime of
approximately 15 years in the residential sector, which corresponds
with 11,835 hours total on an assumed 789 hours per year operating
schedule. To account for a range of group and spot relamping practices,
DOE assumed that lamps operated, on average, for 91 percent-94 percent
of rated life, depending on lamp type.
DOE received several general comments on ballast design and
lifetime. Philips and NEMA noted that lead-free solder used per RoHS
directives could affect ballast lifetime, but that its effects on
reliability were still largely unknown. (Philips, Public Meeting
Transcript, No. 8 at p. 187; NEMA, No. 29 at p. 14) Philips agreed with
DOE's assumption that lifetime would not increase with more efficient
ballast designs, based in part on the trend toward smaller luminaires
and higher operating temperatures. (Philips, Public Meeting Transcript,
No. 18 at pp. 231-232) In contrast, the NEEA and NPCC saw no reason to
assume that ballast lifetime would be affected by luminaire or ballast
enclosure size, but conceded that related ballast failure data is
limited. (NEEA and NPCC, No. 32 at p. 8) There was general agreement
that ballast lifetime can vary widely and encompasses both physical
failure and economic lifetime (e.g., replacement of functioning
ballasts due to retrofits). (NEMA, Public Meeting Transcript, No. 20 at
pp. 244-246; NEEA and NPCC, No. 32 at p. 8) However, NEMA agreed with
DOE's assumed average ballast lifetimes of 10-15 years used in the LCC
analysis. (NEMA, No. 29 at p. 14)
Based on comments received to date, DOE believes that its assumed
average ballast lifetimes are appropriate and applied these lifetimes
in the LCC analysis for today's proposed rule. DOE also agrees that
ballast lifetimes can vary due to both physical failure and economic
factors (e.g., early replacements due to retrofits). Consequently, DOE
accounted for variability in lifetime in LCC and PBP via the Monte
Carlo simulation, and in the shipments and NIA analyses by assuming a
Weibull distribution for lifetimes to accommodate failures and
replacement.
8. Discount Rates
The discount rate is the rate at which future expenditures are
discounted to estimate their present value. In its preliminary TSD, DOE
derived separate discount rates for commercial,
[[Page 20129]]
industrial, and residential consumers. For commercial and industrial
consumers, DOE estimated the cost of capital to affected firms and
industries, from which it developed a weighted average of the cost to
the company of equity and debt financing. DOE estimated the discount
rate for residential consumers by looking across all possible debt or
asset classes that might be used to purchase ballasts. For the proposed
rule, DOE also developed a distribution of discount rates for each end-
use sector from which the Monte Carlo simulation samples.
For the industrial and commercial sectors, DOE assembled data on
debt interest rates and the cost of equity capital for representative
firms that use ballasts. DOE determined a distribution of the weighted-
average cost of capital for each class of potential owners using data
from the Damodaran online financial database.\36\ DOE used the same
distribution of discount rates for the commercial and industrial
sectors. The average discount rates in DOE's analysis, weighted by the
shares of each rate value in the sectoral distributions, are 6.86
percent for commercial end users and 7.15 percent for industrial end
users.
---------------------------------------------------------------------------
\36\ The data are available at http://pages.stern.nyu.edu/
~adamodar.
---------------------------------------------------------------------------
For the residential sector, DOE assembled a distribution of
interest or return rates on various equity investments and debt types
from a variety of financial sources, including the Federal Reserve
Board's ``Survey of Consumer Finances'' (SCF) in 1989, 1992, 1995,
1998, 2001, and 2004. DOE added 2007 SCF data for today's proposed rule
and assigned weights in the distribution based on the shares of each
financial instrument in household financial holdings according to SCF
data. The weighted-average discount rate for residential product owners
is 5.55 percent.
In response to the preliminary LCC analysis, NEMA commented that
DOE should examine the effects of applying higher discount rates to the
value of projected energy savings, contending that consumers will
discount future benefits heavily and place greater emphasis on a
product's first cost. (NEMA, Public Meeting Transcript, No. 2 at p.
251) DOE believes that its weighted-average discount rates are
representative and appropriate for the LCC analysis because they are
grounded in a vetted, transparent methodology and publicly-available
financial data. DOE lacks a defensible basis for estimating a
representative, individual discount rate, which would vary
significantly by company and product type. However, DOE also considered
a distribution of discount rates (lower and higher than the average) in
its Monte Carlo simulation for today's proposed rule.
9. Compliance Date of Standards
The compliance date is the date when a covered product is required
to meet a new or amended standard. EPCA requires that any amended
standards established in this rule apply to products manufactured after
a date that is five years after--(i) the effective date of the previous
amendment; or (ii) if the previous final rule did not amend the
standards, the earliest date by which a previous amendment could have
been effective; except that in no case may any amended standard apply
to products manufactured within three years after publication of the
final rule establishing such amended standard. (42 U.S.C.
6295(g)(7)(C)). DOE is required by consent decree to publish any
amended standards for ballasts by June 30, 2011. As a result, and in
compliance with 42 U.S.C. 6295(g)(7)(C), DOE expects the compliance
date to be three years after the publication of any final amended
standards, by June 30, 2014. DOE received no comments on its expected
effective date of June 2014 and calculated the LCC for all end users as
if each one would purchase a new ballast in the year compliance with
the standard is required.
10. Ballast Purchasing Events
DOE designed the LCC and PBP analyses for this rulemaking around
scenarios where consumers need to purchase a ballast. Each of these
events may give the consumer a different set of ballast or lamp-and-
ballast designs and, therefore, a different set of LCC savings for a
certain efficiency level. The two scenarios were (1) ballast failure
and (2) new construction/renovation. In the ballast failure scenario,
DOE assumed that the consumer would generally select a standards-
compliant lamp-and-ballast combination such that the system light
output never drops below 10 percent of the baseline system. For new
construction/renovation, DOE assumed that consumers were not
constrained by existing fixture layouts, and could design a new
installation that matched the overall light output of a base-case
system, independent of individual system light output. DOE used rated
system input power to calculate annual energy use for the ballast
failure scenario. For new construction/renovation, DOE used normalized
system input power, adjusted to yield equivalent light output from both
the base-case and substitute systems.
The California Utilities stated that failure replacements were rare
and commented that DOE should include a separate ballast purchasing
event for retrofits in its LCC analysis, as the California Utilities
consider that the more common purchasing event. (California Utilities,
No. 30 at p. 4) In its review of available studies and EIA data, DOE
found that predicted retrofit rates for the nation were comparatively
low (i.e., less than 5 percent). DOE assumes that retrofit rates in
areas with utility incentive programs would typically be higher;
however, DOE could not substantiate extending these higher retrofit
rates to all consumers and therefore did not consider a separate
retrofit scenario in its LCC analysis.
As discussed in section 0 above, the California Utilities and the
NEEA and NPCC and the California Utilities believe that DOE was
incorrect in assuming consumers would not be able to normalize
individual system light output in a ballast failure replacement
scenario. Both sets of commenters contended that ballast designs will
be available that maintain efficiency across different ballast factors
and system light outputs. The California Utilities also noted that
users can also maintain system light output by adjusting the number of
lamps, lamp type, or fixture reflectors. To simplify the analysis, the
NEEA and NPCC suggested that DOE should analyze normalized system input
power in all scenarios. (California Utilities, No. 30 at pp. 3-5; NEEA
and NPCC, No. 32 at pp. 6-7) Philips disagreed that light output could
be maintained in all substitution cases. (Philips, Public Meeting
Transcript, No. 34 at p. 227)
For this NOPR, DOE maintained the input power distinction (i.e.,
rated versus normalized) for purchasing scenarios in the LCC analysis,
which it believes reflects product offerings facing the individual
consumer in the near term (i.e., 2014). With the exception of system
input power, the ballast failure and new construction/renovation
scenarios differ only slightly, with the latter scenario requiring an
additional 2.5 minutes of labor for installing a luminaire disconnect.
The results for the new construction/renovation scenario could,
therefore, be considered similar to a ballast failure replacement
scenario based on normalized system input power. For the proposed rule,
DOE used normalized system input power only in the NIA, for reasons
discussed in section 0 below.
[[Page 20130]]
C. National Impact Analysis--National Energy Savings and Net Present
Value Analysis
DOE's NIA assessed the national energy savings (NES) and the
national net present value (NPV) of total consumer costs and savings
that they would be expect to result from new or amended standards at
specific efficiency levels. (``Consumer'' in this context refers to
consumers of the regulated product.)
DOE used an MS Excel spreadsheet model to calculate the energy
savings and the national consumer costs and savings from each TSL. In
addition, the TSD and other documentation that DOE provides during the
rulemaking help explain the models and how to use them, allowing
interested parties to review DOE's analyses by changing various input
quantities within the spreadsheet.
DOE used the NIA spreadsheet to calculate the NES and NPV, based on
the annual energy consumption and total installed cost data from the
energy use and LCC analyses. DOE forecasted the energy savings, energy
cost savings, product costs, and NPV of consumer benefits for each
product class for products sold from 2014 through 2043. The forecasts
provided annual and cumulative values for all four output parameters.
DOE examines sensitivities in the NIA by analyzing different efficiency
scenarios, such as Roll-up and Shift.
DOE evaluated the impacts of new and amended standards for ballasts
by comparing base-case projections with standards-case projections. The
base-case projections characterize energy use and consumer costs for
each product class in the absence of new or amended energy conservation
standards. DOE compared these projections with projections
characterizing the market for each product class if DOE adopted new or
amended standards at specific energy efficiency levels (i.e., the TSLs
or standards cases) for that class. In characterizing the base and
standards cases, DOE considers historical shipments, the mix of
efficiencies sold in the absence of new standards, and how that mix may
change over time. Additional information about the NIA spreadsheet is
in NOPR TSD chapter 11.
Table V.6 summarizes the approach and data DOE used to derive the
inputs to the NES and NPV analyses for the preliminary TSD, as well as
the changes to the analyses for the proposed rule. A discussion of
selected inputs and changes follows. See chapter 11 of the NOPR TSD for
further details.
Table V.6--Approach and Data Used for National Energy Savings and
Consumer Net Present Value Analyses
------------------------------------------------------------------------
Changes for the
Inputs Preliminary TSD proposed rule
------------------------------------------------------------------------
Shipments................... Derived annual See Table V.7.
shipments from
shipments model.
Compliance Date of Standard. 2014................ No change.
Annual Energy Consumption Established in the Energy use
per Unit. energy use characterization
characterization updated using most
(preliminary TSD recent available
chapter 6). inputs; based
annual unit energy
consumption on
normalized system
input power.
Rebound Effect.............. 1 percent in No change.
commercial and
industrial sectors,
8.5 percent in
residential sector.
Electricity Price Forecast.. AEO2008............. AEO2010.
Energy Site-to-Source Used average Used marginal
Conversion Factor. conversion factors conversion factors
based on AEO2008. generated by NEMS-
BT; factors held
constant after
2035.
Discount Rate............... 3% and 7% real...... No change.
Present Year................ 2009................ 2011.
------------------------------------------------------------------------
1. Annual Energy Consumption per Unit
As discussed in section 0 above, the California Utilities and the
NEEA and NPCC suggested that both individual ballast failure
replacements and system installations for new construction/renovation
could be normalized for light output at any given efficiency level.
This could be accomplished through foreseeable ballast design options
and/or lighting system modifications (e.g., number of lamps, lamp type,
or fixture reflector). NEEA and NPCC contended that DOE could then
simplify its analyses by applying normalized system input power
throughout. (California Utilities, No. 30 at pp. 3-5; NEEA and NPCC,
No. 32 at pp. 6-7)
In its preliminary analysis, DOE used both rated and normalized
system input power in determining the annual unit energy consumption
for the NIA. As in the LCC analysis, ballast shipments for failure
replacements were assigned rated system input power, and this
assumption was applied across the entire 30-year analysis period. DOE
agrees that the lighting system modifications noted by the California
Utilities can have the practical effect of normalizing light output for
individual replacement systems. Therefore, DOE believes that normalized
system input power provides a reasonable basis for estimating future
energy savings.
For the proposed rule, DOE revised the shipments and NIA
spreadsheet models to reflect the revised product class structure, and
provide increased flexibility and transparency for the spreadsheet
user. Using only normalized system input power also simplified the
accounting functions within the NIA model, compared to the combined
(rated and normalized input power) approach used in the preliminary
analysis.
DOE also examined the relative effects of applying normalized
versus rated input power in determining energy savings. Normalizing the
input power of replacement systems typically reduces the differences in
input power between the baseline system and replacement systems;
consequently, DOE found that normalized values resulted in lower energy
savings estimates than those based on rated input power. However, DOE
believes that the differences in estimated NES between a normalized-
only and combined approach would be minor, particularly compared to the
range of NES bounded by DOE's two ballast shipment scenarios (existing
and emerging technologies, discussed in section 0 below).
In summary, DOE believes that its revised NIA using normalized
system input power produces a range of estimated NES that captures the
[[Page 20131]]
potential--and significant--energy savings for ballasts.
2. Shipments
Product shipments are an important component of any estimate of the
future impact of a standard. Using a three-step process, DOE developed
the shipments portion of the NIA spreadsheet, a model that uses
historical data as a basis for projecting future ballast shipments.
First, DOE used 1990-2005 shipment data from the U.S. Census Bureau to
estimate the total historical shipments for each ballast type analyzed.
Second, DOE calculated an installed stock for each ballast type based
on an assumed service lifetime distribution. Third, by modeling ballast
market segments (i.e., purchasing events) and applying growth rate,
lifetime distribution, and emerging technologies penetration rate
assumptions, DOE developed annual shipment projections for the analysis
period 2014-2043. In projecting ballast shipments, DOE accounted for
two market segments: (1) Replacement of failed equipment and (2)
retrofits/renovation and new construction. Table V.7 summarizes the
approach and data DOE used to derive the inputs to the shipments
analysis for the preliminary TSD and the changes DOE made for today's
proposed rule. A discussion of these inputs and changes follows. For
details on the shipments analysis, see chapter 10 of the NOPR TSD.
Table V.7--Approach and Data Used for the Shipments Analysis
------------------------------------------------------------------------
Changes for the
Inputs Preliminary TSD proposed rule
------------------------------------------------------------------------
Historical Shipments........ Used historical Used same historical
shipments for 1990- data and changed
2005 to develop lifetime
shipments and stock distribution and
projections for the growth assumptions,
analysis period; mitigating
growth pattern oscillations in
exhibited shipment
oscillations in projections.
shipments
projections for
some ballast types.
Ballast Stock............... Based projections on No change for
the shipments that projection
survive up to a methodology;
given date; assumed assumed Weibull
simplified lifetime lifetime
distribution. distribution.
Growth...................... Assumed the same Updated using 2010
growth rate for AEO projections for
commercial/ floorspace growth.
industrial and
residential
floorspace.
Base Case Scenarios......... Analyzed both No change.
existing technology
and emerging
technology
scenarios.
Standards Case Scenarios.... Analyzed Shift and No change.
Roll-up scenarios
based on both
existing and
emerging technology
cases.
------------------------------------------------------------------------
a. Historical Shipments
For the preliminary TSD, DOE used U.S. Census Bureau Current
Industrial Reports (CIR) to estimate historical shipments for affected
ballast designs. The census CIR data cover the period 1990-2005 and
contain NEMA shipments for individual ballast designs (e.g., 2-lamp
F96T8), as well as aggregated shipments for multiple designs to prevent
disclosing data for individual companies. For some ballast designs, the
CIR withheld shipments data entirely to avoid disclosing data for
individual companies.
For CIR reporting years for which specific shipments data were
aggregated or unavailable, DOE estimated historical shipments using
trends within the available data and/or market trends identified in
ballast manufacturer interviews, the 2009 Lamps Rule, and the 2000
Ballast Rule. DOE then increased these estimates to account for the
volume of ballasts that non-NEMA companies import or manufacture. To
validate its estimation methods for the preliminary TSD, DOE requested
historical ballast and residential fixture shipments from NEMA, but was
unable to obtain these data due to confidentiality concerns of some
affected manufacturers.
In their comments on the preliminary shipments analysis, the NEEA
and NPCC noted that census CIR data are incomplete, do not address non-
NEMA shipments, and should not be relied on if their deficiencies
cannot be remedied. (NEEA and NPCC, No. 32 at p. 10) NEMA agreed in
general with DOE's modeled shipment trends in the preliminary TSD.
(NEMA, No. 29 at p. 15) DOE acknowledges the shortcomings of CIR data,
which are truncated at 2005 (the U.S. Census Bureau discontinued
ballast CIR reports in 2006), but believes that census data are the
only practical basis for estimating shipments because actual shipments
data are either withheld by manufacturers due to confidentiality
concerns or not retained in company records, as discussed below. DOE
also notes that it accounted for imports and other non-NEMA
manufacturers in its preliminary historical shipments analysis, and
provides additional discussion in chapter 10 of the NOPR TSD.
To validate its NOPR analysis, DOE again requested historical
ballast shipment data from NEMA, but was informed that neither NEMA nor
its member companies typically retain data of the vintage in question
(1990-2005). Where possible, DOE refined its historical shipment
estimates with additional data collected in manufacturer interviews
during the NOPR analysis. Based on review of available data and NEMA's
general validation of the preliminary shipments model, DOE concludes
that census data remain the most reasonable basis for estimating
historical ballast shipments, and retains this approach for today's
proposed rulemaking.
b. Ballast Stock Projections
In its preliminary shipments analysis, DOE calculated the installed
ballast stock using historical shipments estimated from U.S. Census
Bureau CIR data (1990-2005) and projected shipments for future years.
DOE typically estimates the installed stock during the analysis period
by taking ballast shipments and calculating how many will survive up to
a given year based on a lifetime distribution for each ballast type.
The estimated historical shipments for electronic ballasts exhibited
striking growth in 1990-2005, a trend not consistent with a mature
market. For the preliminary TSD, DOE reasoned that this significant
growth in shipments did not translate to equivalent growth in ballast
stock, assuming instead a 2-percent annual growth rate in shipments for
new construction and attributing the additional shipments to retrofits.
NEMA, as well as the NEEA and NPCC, questioned attributing the
[[Page 20132]]
historical growth in electronic ballast shipments to retrofits, rather
than of absolute growth in ballast stock. (NEMA, Public Meeting
Transcript, No. 7 at p. 248; NEEA and NPCC, No. 32 at p. 9) NEMA
contended that strong growth in non-residential construction explained
a larger share of new ballast demand than assumed by DOE. (NEMA, Public
Meeting Transcript, No. 14 at p. 248) Philips noted that DOE did not
account for a corresponding decline in shipments of magnetic ballasts
during the period 1990-2005. (Philips, Public Meeting Transcript, No. 6
and No. 15 at p. 244) However, commenters also acknowledged the
continuing influence of retrofits driven by utility incentive programs
and new lighting technologies. (NEEA and NPCC, Public Meeting
Transcript, No. 20 at pp. 246-247; NEMA, Public Meeting Transcript, No.
11 at p. 248)
In its revised analysis, DOE examined census data for ballast
shipments and confirmed that magnetic ballast shipments declined
significantly in 1990-2005, corresponding with the increase in
electronic ballast shipments during the same period. These trends
suggest that electronic ballasts (e.g., for 4-foot MBP T8 systems) were
eroding shipments of magnetic ballasts (e.g., for 4-foot MBP T12
systems) for retrofits and new construction. Available data do not
support NEMA's claim of strong non-residential construction growth in
1990-2005; according to EIA estimates (e.g., in AEO1996 and AEO2000),
commercial floorspace growth averaged approximately 1.35 percent
annually during this period. A recent DOE lighting report suggests that
replacements of failed lighting equipment and lighting retrofits
contribute more to shipments than new construction.\37\ Based on
available information, DOE maintains that the growth rate for
historical ballast stock was less than the growth rate for historical
shipments of electronic ballasts, which instead reflected a market
transition from magnetic to electronic ballasts.
---------------------------------------------------------------------------
\37\ U.S. Department of Energy, Office of Energy Efficiency and
Renewable Energy. Energy Savings Potential of Solid-State Lighting
in General Illumination Applications, 2010 to 2030. February 2010.
Available at http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_energy-savings-report_10-30.pdf.
---------------------------------------------------------------------------
c. Projected Shipments
By modeling ballast market segments and applying lifetime
distribution, growth and emerging technologies penetration rate
assumptions, and efficiency scenarios, DOE developed annual shipment
projections for the analysis period (2014-2043). DOE could not obtain
historical ballast shipments data from NEMA to validate its preliminary
or NOPR analyses; however, NEMA agreed with DOE's preliminary TSD
shipment trends and emerging technology forecasts in general. (NEMA,
No. 29 at p. 2; NEMA No. 29 at p. 15) The subsections below address the
lifetime, emerging technology, market trend, and efficiency scenario
issues that DOE considered in its shipments analysis for the proposed
rule.
i. Shipment Patterns and Ballast Lifetime Assumptions
Estimated historical shipments varied from year to year and, when
combined with preliminary assumptions for ballast lifetimes, lifetime
distributions and floorspace growth, produced periodic oscillations in
shipment projections for some ballast types (e.g., ballasts operating
4-foot MBP T8 lamps). For the preliminary TSD, DOE assumed that ballast
lifetimes were distributed across the last 3 years of the average
physical lifetime for each analyzed ballast type.
DOE received multiple comments regarding the oscillations in its
preliminary shipment projections and its underlying assumptions about
average ballast lifetimes and lifetime distributions. NEMA commented
that the oscillations were too pronounced to be attributed to
historical market trends or ballast performance. (NEMA, Public Meeting
Transcript, No. 18 at pp. 248-249) The NEEA and NPCC agreed with NEMA
that the oscillations were not realistic and suggested that the
shipment patterns might stem from DOE's narrow assumed lifetime
distributions. (NEEA and NPCC, No. 32 at p. 8) NEMA agreed with DOE's
assumed average physical lifetimes for ballasts, but other commenters
noted that ballast lifetime distributions should encompass ``economic
lifetime'' (e.g., retrofits of functioning ballasts) as well as
physical lifetime (e.g., replacement of failed ballasts). (NEMA, No. 29
at p. 14; Philips, Public Meeting Transcript, No. 25 at pp. 245-246;
NEEA and NPCC, No. 32 at p. 9)
DOE agrees that its preliminary ballast shipment projections did
not account for a sufficient range of economic and physical lifetimes.
In its revised shipment analysis, DOE retained the original average
physical lifetimes and used Weibull distributions for ballast lifetimes
to better accommodate failures and retrofits. In combination with DOE's
revised growth assumptions, the expanded lifetime distributions largely
eliminated the pronounced shipment oscillations seen for some ballast
types in the preliminary TSD.
ii. Emerging Technology Shipment Forecasts
In its preliminary TSD, DOE modeled the impacts of emerging solid-
state lighting (SSL) technologies on shipments of analyzed ballasts
used in the commercial sector (e.g., ballasts operating 4-foot MBP T8
lamps). Philips commented that some projections showed SSL technologies
capturing as much as 50 percent of the lighting market within 10 years.
(Philips, Public Meeting Transcript, No. 22 at pp. 18-19) NEMA agreed
with the overall trends in DOE's emerging technology shipment forecasts
(excluding oscillations); however, Philips noted that DOE had not
included sign ballasts in the same forecasts. (NEMA, No. 29 at p. 2;
Philips, Public Meeting Transcript, No. 24 at pp. 234-235) While
acknowledging some SSL market penetration, the NEEA and NPCC contended
that fluorescent technologies would retain a large share of the signage
market, particularly in backlighting applications. (NEEA and NPCC, No.
32 at p. 3)
For its revised shipments analysis, DOE retained its original
emerging technology assumptions, with SSL penetration increasing to a
maximum of 40 percent by 2028, resulting in decreased shipments for
affected ballast types. DOE added sign ballasts to its revised emerging
technology shipment forecasts, but agrees that SSL will have only
limited penetration of backlit signage applications that currently use
linear fluorescent sources based on DOE's previous research of SSL
niche applications, which indicated that SSL is viable for neon and
channel letter signage but is not yet suitable for fluorescent
backlighting applications. Consequently, DOE assumed lower SSL
penetration for sign ballast shipments, increasing to a maximum of 20
percent by 2028.
iii. Anticipated Market Trends
DOE also received comments about anticipated market trends for the
period 2014-2043, addressing utility incentive programs, ballast
replacement options, and new construction and renovation. NEEA and NPCC
observed that utility incentive programs have driven lighting retrofits
for many years and suggested that this trend would continue as more
locations adopted incentive programs. (NEEA and NPCC, No. 32 at p. 9)
NEEA and NPCC also commented that (1) new commercial construction will
remain depressed but will be accompanied by an upsurge in major
renovation and
[[Page 20133]]
lighting retrofits, and (2) overall ballast shipments may hold steady,
exclusive of emerging technology penetration. (NEEA and NPCC, No. 32 at
p. 10) At the same time, NEEA and NPCC were concerned that DOE lacked
adequate market data to apportion ballast shipments between failure
replacements and retrofits/new construction; further, they suggested
that DOE should eliminate these distinctions if they have significant
effects on selection of TSLs or final standards. (NEEA and NPCC, No. 32
at p. 7) However, NEMA supported DOE's assumption that replacements
would dominate future shipments of these ballasts, contending that the
majority of building owners that already use T8 fluorescent systems
would not retrofit their fixtures. (NEMA, Public Meeting Transcript,
No. 10 at p. 250) The NEEA and NPCC believed that the market for
ballasts in the residential sector would grow substantially as
residential energy codes became more stringent and contended that DOE
underestimated the associated savings potential for this product class.
(NEEA and NPCC, No. 32 at pp. 2-3)
DOE agrees that retrofits (incentive-induced, efficiency-induced,
or both) will continue to contribute to future ballast shipments. For
owners of existing improved lighting systems (e.g., 4-foot MBP T8,
commercial sector), DOE agrees that these consumers will be less likely
to retrofit their systems than to replace failed ballasts in kind
because incremental efficiency gains would not justify the expense of
system retrofits. DOE's research of available economic data also
indicates that new commercial construction will remain relatively flat
during the period 2014-2043. DOE agrees that residential energy codes
will drive the market toward higher efficacy lighting systems, such as
fluorescent; however, DOE believes that the related market growth will
be greater for CFL-based fixtures than for 4-foot MBP fluorescent
systems. DOE's review of available residential fixture surveys confirms
that linear fluorescent fixtures are typically relegated to utility
room, laundry, and some kitchen applications. Recent California
tracking reports for residential lamps no longer address linear
fluorescent lamps, given the dramatically increased adoption of screw-
base CFLs, and a comparison of residential lighting data for 2005 \38\
and 2009 \39\ shows no significantly increased penetration for linear
fluorescent systems. Viewing these trends in combination, DOE believes
it has a reasonable basis for the market segments underlying its
shipment projections (i.e., replacements of failed ballasts, retrofits,
and new construction), and believes that these trends will contribute
to modest future growth in ballast shipments and stock (exclusive of
SSL penetration).
---------------------------------------------------------------------------
\38\ RLW Analytics, ``2005 California statewide residential
lighting and appliance efficiency saturation study, Final Report.''
August 2005. Available at: http://www.calmac.org/.
\39\ Abstract for ongoing KEMA California residential lighting
inventory and metering study available at: http://www.cee1.org/eval/db_pdf/1268.pdf.
---------------------------------------------------------------------------
iv. Efficiency Scenarios
Several of the inputs for determining NES (e.g., the annual energy
consumption per unit) and NPV (e.g., the total annual installed cost
and the total annual operating cost savings) depend on product
efficiency. For the preliminary analysis, DOE developed two shipment
efficiency scenarios: ``Roll-up'' and ``Shift.'' The Roll-up scenario
represents a standards case in which all product efficiencies in the
base case that do not meet the standard would roll up to meet the new
standard level. Consumers in the base case who purchase ballasts above
the standard level are not affected as they are assumed to continue to
purchase the same base-case ballast or lamp-and-ballast system. The
Roll-up scenario characterizes consumers primarily driven by the first-
cost of the analyzed products.
In contrast, the Shift scenario models a standards case in which
the standard affects all base-case consumer purchases (regardless of
whether their base-case efficiency is below the standard). In this
scenario, any consumer may purchase a more efficient ballast,
preserving the same relationship to the baseline ballast efficiency.
For example, if a consumer purchased a ballast one efficiency level
above the baseline, he would do the same after a standard is imposed.
For this rulemaking, DOE assumed product efficiencies in the base case
that do not meet the standard would roll up to meet the new standard
level, as in a roll-up scenario. However, product efficiencies at or
above the new standard level would shift to higher efficiency levels.
As the standard level increases, market share incrementally accumulates
at the highest standard level because it represents max tech (i.e.,
moving beyond this efficiency level is not achievable with today's
technology).
DOE received no comments to the preliminary TSD regarding its Roll-
up and Shift efficiency scenarios, and retained this approach for the
proposed rule shipments analysis.
3. Site-to-Source Energy Conversion
To estimate the national energy savings expected from appliance
standards, DOE uses a multiplicative factor to convert site energy
consumption (at the home or commercial building) into primary or source
energy consumption (the energy required to convert and deliver the site
energy). These conversion factors account for the energy used at power
plants to generate electricity and losses in transmission and
distribution, as well as for natural gas losses from pipeline leakage
and energy used for pumping. For electricity, the conversion factors
vary over time due to projected changes in generation sources (i.e.,
the types of power plants projected to provide electricity to the
country). The factors that DOE developed are marginal values, which
represent the response of the system to an incremental decrease in
consumption associated with appliance standards.
In the ballasts preliminary analysis, DOE used annual site-to-
source conversion factors based on the version of NEMS that corresponds
to AEO2009. For today's NOPR, DOE updated its conversion factors based
on the NEMS that corresponds to AEO2010, which provides energy
forecasts through 2035. For 2036-2043, DOE used conversion factors that
remain constant at the 2035 values.
Section 1802 of the Energy Policy Act of 2005 (EPACT 2005) directed
DOE to contract a study with the National Academy of Science (NAS) to
examine whether the goals of energy efficiency standards are best
served by measurement of energy consumed, and efficiency improvements,
at the actual point of use or through the use of the full fuel cycle,
beginning at the source of energy production. (Pub. L. 109-58 (Aug. 8,
2005)) NAS appointed a committee on ``Point-of-Use and Full-Fuel-Cycle
Measurement Approaches to Energy Efficiency Standards'' to conduct the
study, which was completed in May 2009. The NAS committee defined full-
fuel-cycle (FFC) energy consumption as including, in addition to site
energy use, the following: Energy consumed in the extraction,
processing, and transport of primary fuels such as coal, oil, and
natural gas; energy losses in thermal combustion in power generation
plants; and energy losses in transmission and distribution to homes and
commercial buildings.\40\
---------------------------------------------------------------------------
\40\ The National Academies, Board on Energy and Environmental
Systems, Letter to Dr. John Mizroch, Acting Assistant Secretary,
U.S. DOE, Office of EERE from James W. Dally, Chair, Committee on
Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy
Efficiency Standards, May 15, 2009.
---------------------------------------------------------------------------
[[Page 20134]]
In evaluating the merits of using point-of-use and FFC measures,
the NAS committee noted that DOE uses what the committee referred to as
``extended site'' energy consumption to assess the impact of energy use
on the economy, energy security, and environmental quality. The
extended site measure of energy consumption includes the energy
consumed during the generation, transmission, and distribution of
electricity; unlike the FFC measure, however, it does not include the
energy consumed in extracting, processing, and transporting primary
fuels. A majority of the NAS committee concluded that extended site
energy consumption understates the total energy consumed to make an
appliance operational at the site. As a result, the NAS committee
recommended that DOE consider shifting its analytical approach over
time to use a FFC measure of energy consumption when assessing national
and environmental impacts, especially with respect to the calculation
of GHG emissions. The NAS committee also recommended that DOE provide
more comprehensive information to the public through labels and other
means, such as an enhanced Web site. For those appliances that use
multiple fuels (e.g., water heaters), the NAS committee indicated that
measuring FFC energy consumption would provide a more complete picture
of energy consumption and would allow comparisons across many different
appliances as well as an improved assessment of impacts.
In response to the NAS recommendations, DOE issued, on August 20,
2010, a Notice of Proposed Policy proposing to incorporate an FFC
analysis into the methods it uses to estimate the likely impacts of
energy conservation standards on energy use and emissions.
Specifically, DOE proposed to use FFC measures of energy and GHG
emissions, rather than the primary (extended site) energy measures it
currently uses. Additionally, DOE proposed to work collaboratively with
the Federal Trade Commission (FTC) to make FFC energy and GHG emissions
data publicly available, which would enable consumers to make cross-
class comparisons. On October 7, 2010, DOE held an informal public
meeting to discuss and receive comments on its planned approach. The
Notice, a transcript of the public meeting and all public comments
received by DOE are available at http://www.regulations.gov/search/Regs/home.html#docketDetail?R=EERE-2010-BT-NOA-0028. Following the
close of the public comment period, DOE intends to develop a final
policy statement on these subjects and then take steps to implement
that policy in rulemakings and other activities.
D. Consumer Sub-Group Analysis
In analyzing the potential impact of new or amended standards on
consumers, DOE evaluates the impact on identifiable sub-groups of
consumers (e.g., low-income households) that a national standard may
disproportionately affect. DOE received no comments regarding specific
sub-groups and, therefore, evaluated the same sub-groups addressed in
the 2009 Lamps Rule, assuming that consumers using GSFL would share
similar characteristics with ballast consumers. Specifically, DOE
evaluated the following consumer sub-groups for the proposed rule: Low-
income households; institutions of religious worship; and institutions
that serve low-income populations (e.g., small nonprofits).
The NOPR TSD chapter 12 presents the consumer subgroup analysis.
E. Manufacturer Impact Analysis
1. Overview
DOE performed a manufacturer impact analysis (MIA) to estimate the
financial impact of new and amended energy conservation standards on
manufacturers of ballasts, and to calculate the impact of such
standards on employment and manufacturing 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 using inputs
specific to this rulemaking. The key GRIM inputs are data on the
industry cost structure, product costs, shipments, and assumptions
about markups and conversion expenditures. The key output is the
industry net present value (INPV). Different sets of shipment and
markup assumptions (scenarios) will produce different results. The
qualitative part of the MIA addresses factors such as product
characteristics, characteristics of and impacts on particular sub-
groups of firms, as well as important market and product trends.
Chapter 13 of the NOPR TSD outlines the complete MIA.
DOE conducted the MIA for this rulemaking in three phases. In Phase
1, Industry Profile, DOE prepared an industry characterization. Phase
2, Industry Cash Flow, focused on the financial aspects of the industry
as a whole. In this phase, DOE used the GRIM to prepare an industry
cash-flow analysis based on publicly available information gathered in
Phase 1. This information enabled DOE to adapt the GRIM structure to
analyze the impact of new and amended standards on ballast
manufacturers specifically. In Phase 3, Sub-Group Impact Analysis, the
Department conducted structured, detailed interviews with a
representative cross-section of manufacturers that represent more than
90 percent of domestic ballast sales. During these interviews, DOE
discussed engineering, manufacturing, procurement, and financial topics
specific to each company, and obtained each manufacturer's view of the
industry as a whole. The interviews provided valuable information that
the Department used to evaluate the impacts of new and amended
standards on manufacturers' cash flows, manufacturing capacities, and
employment levels. Each of these phases is discussed in further detail
below.
a. Phase 1: Industry Profile
In Phase 1 of the MIA, DOE prepared a profile of the ballast
industry based on the market and technology assessment prepared for
this rulemaking. Before initiating the detailed impact studies, DOE
collected information on the present and past structure and market
characteristics of the industry. This information included market share
data, product shipments, manufacturer markups, and the cost structure
for various manufacturers. The industry profile includes: (1) Further
detail on the overall market and product characteristics; (2) estimated
manufacturer market shares; (3) financial parameters such as net plant,
property, and equipment; selling, general, and administrative (SG&A)
expenses; cost of goods sold; and other parameters; and (4) trends in
the ballast market, including the number of firms, technology, sourcing
decisions, and pricing.
The industry profile included a top-down cost analysis of ballast
manufacturers that DOE used to derive preliminary financial inputs for
the GRIM (e.g., revenues; material, labor, overhead, and depreciation
expenses; SG&A expenses; and research and development (R&D) expenses).
DOE also used public sources of information to further calibrate its
initial characterization of the industry, including Security and
Exchange Commission 10-K filings (available at http://www.sec.gov),
Standard & Poor's stock reports (available at http://www2.standardandpoors.com), and corporate annual reports. DOE
[[Page 20135]]
supplemented this public information with data released by privately
held companies.
b. Phase 2: Industry Cash-Flow Analysis
Phase 2 of the MIA focused on the financial impacts of the
potential new and amended energy conservation standards on the industry
as a whole. New or amended energy conservation standards can affect
manufacturer cash flow in three distinct ways: (1) By creating a need
for increased investment, (2) by raising production costs per unit, and
(3) by altering revenue due to higher per-unit prices and possible
changes in sales volumes. To quantify these impacts, in Phase 2 DOE
used the GRIM to perform a preliminary cash-flow analysis of the
ballast industry. In performing this analysis, DOE used the financial
values determined during Phase 1 and the shipment scenarios used in the
NIA.
c. Phase 3: Sub-Group Impact Analysis
In Phase 3, DOE conducted interviews with manufacturers and refined
its preliminary cash-flow analysis. Many of the manufacturers
interviewed also participated in interviews for the engineering
analysis. As indicated above, the MIA interviews broadened the
discussion from primarily technology-related issues to include
business-related topics. One key objective for DOE was to obtain
feedback from the industry on the assumptions used in the GRIM and to
isolate key issues and concerns. See section 0 for a description of the
key issues manufacturers raised during the interviews.
Using average cost assumptions to develop an industry cash-flow
estimate does not adequately assess differential impacts of new or
amended standards among manufacturer sub-groups. For example, small
manufacturers, niche manufacturers, or manufacturers exhibiting a cost
structure that largely differs from the industry average could be more
negatively affected. To address this possible impact, DOE used the
results of the industry characterization analysis in Phase 1 to group
manufacturers that exhibit similar production and cost structure
characteristics. Furthermore, interview discussions that focused on
financial topics specific to each manufacturer allowed DOE to gauge the
potential for differential impacts on any sub-groups of manufacturers.
DOE identified two sub-groups for a separate impact analysis--small
manufacturers and sign ballast manufacturers. For its small business
manufacturer sub-group analysis DOE used the small business size
standards published by the Small Business Administration (SBA) to
determine whether a company is considered a small business 65 FR 30836,
30848 (May 15, 2000), as amended at 65 FR 53533, 53544 (Sept. 5, 2000)
and codified at 13 CFR part 121. To be categorized as a small business,
a fluorescent lamp ballast manufacturer and its affiliates may employ a
maximum of 750 employees. The 750-employee threshold includes all
employees in a business's parent company and any other subsidiaries.
Based upon this classification, DOE identified at least ten small
fluorescent lamp ballast manufacturers that qualify as small businesses
per the applicable SBA definition.
DOE investigated sign ballast manufacturers as a second sub-group.
Unlike the traditional fluorescent lamp ballast market, which is
dominated by four large manufacturers with high-volume product lines,
the sign ballast market is significantly more fragmented, with many
small manufacturers providing products in low volumes to distinct
markets. The fluorescent lamp ballast sub-groups are discussed in
chapter 13 of the TSD and in section 0 of today's notice, and small
business impacts are analyzed in section VII.B.
2. GRIM Analysis
DOE uses the GRIM to quantify the changes in cash flow that result
in a higher or lower industry value. The GRIM analysis uses a standard,
annual cash-flow analysis that incorporates manufacturer costs,
markups, shipments, and industry financial information as inputs, and
models changes in costs, investments, and manufacturer margins that
would result from new and amended energy conservation standards. The
GRIM spreadsheet uses the inputs to arrive at a series of annual cash
flows, beginning with the base year of the analysis, 2011, and
continuing to 2043. DOE calculated INPVs by summing the stream of
annual discounted cash flows during this period. For ballasts, DOE uses
a real discount rate of 7.4 percent for all products. DOE's discount
rate estimate was derived from industry financials then modified
according to feedback during manufacturer interviews.
The GRIM calculates cash flows using standard accounting principles
and compares changes in INPV between a base case and various TSLs (the
standards cases). The difference in INPV between the base case and a
standards case represents the financial impact of the amended standard
on manufacturers. As discussed previously, DOE collected this
information on the critical GRIM inputs from a number of sources,
including publicly available data and interviews with a number of
manufacturers (described in the next section). The GRIM results are
shown in section 0. Additional details about the GRIM can be found in
chapter 13 of the TSD.
DOE typically presents its estimates of industry impacts by groups
of the major product types served by the same manufacturers. In the
fluorescent lamp ballast industry, four major manufacturers sell the
vast majority of shipments in nearly all product classes, with the
exception of sign ballasts, although some major manufacturers sell into
that market as well. As such, DOE decided to present the GRIM results
for all four analyzed product classes in one product grouping. The
impacts on sign ballast manufacturers are broken out separately as a
sub-group analysis in section 0.
a. GRIM Key Inputs
i. Manufacturer Production Costs
Manufacturing a higher-efficiency product is typically more
expensive than manufacturing a baseline product due to the use of more
complex components, which are more costly than baseline components. The
changes in the MPCs of the analyzed products can affect the revenues,
gross margins, and cash flow of the industry, making these product cost
data key GRIM inputs for DOE's analysis.
To calculate MPCs at each EL, DOE followed a two-step process.
First, DOE derived MSPs for each analyzed product and efficiency level
from blue book, online retail, and teardown-sourced prices as described
in section 0 above. Next, DOE discounted these MSPs by the manufacturer
markup to arrive at the MPCs. For all product classes, DOE used a 1.4
manufacturer markup based on manufacturer feedback. DOE also used
confidential information from manufacturer interviews to verify its MPC
estimates. In addition, DOE used teardown cost data to disaggregate the
MPCs into material, labor, and overhead costs.
ii. Base-Case Shipments Forecast
The GRIM estimates manufacturer revenues based on total unit
shipment forecasts and the distribution of these values by efficiency
level. Changes in sales volumes and efficiency mix over time can
significantly affect manufacturer finances. For this analysis, the GRIM
uses the NIA's annual shipment forecasts from 2011 to 2043, the end of
the analysis period. In the
[[Page 20136]]
shipments analysis, DOE also estimated the distribution of efficiencies
in the base case for all product classes. See chapter 10 of the TSD for
additional details.
iii. Product and Capital Conversion Costs
New and amended energy conservation standards will cause
manufacturers to incur conversion costs to bring their production
facilities and product designs into compliance. For the MIA, DOE
classified these conversion costs into two major groups: (1) Product
conversion costs and (2) capital conversion costs. Product conversion
costs are investments in research, development, testing, marketing, and
other non-capitalized costs necessary to make product designs comply
with the new or amended energy conservation standard. Capital
conversion costs are investments in property, plant, and equipment
necessary to adapt or change existing production facilities such that
new product designs can be fabricated and assembled.
DOE's interviews with manufacturers revealed that the majority of
the conversion costs manufacturers expect to incur at various TSLs
derive from the need to develop new and improved circuit designs,
rather than the purchase of new capital equipment. Due to the flexible
nature of most ballast production equipment, manufacturers do not
expect new or amended standards to strand a significant share of their
production assets. As opposed to other more capital-intensive appliance
industries, much of the cash outlay required to achieve higher
efficiency levels would be expensed through research and development,
engineering, and testing efforts.
DOE based its estimates of the product conversion costs that would
be required to meet each TSL on information obtained from manufacturer
interviews, the engineering analysis, the NIA shipment analysis, and
market information about the number of models and stock-keeping units
(SKUs) each major manufacturer supports. DOE estimated the product
development costs manufacturers would incur for each model that would
need to be converted in response to new or amended energy conservation
standards based on the necessary engineering and testing resources
required to redesign each model. The R&D resources required to reach
the efficiency levels represented at each TSL varied according to
whether models could be converted based on minor upgrades, redesigns
based on existing topologies, or full redesigns. In addition to per-
model R&D costs, DOE considered testing and validation costs for every
SKU, which included internal testing, UL testing, additional
certifications, pilot runs, and product training. DOE then multiplied
these per-model and per-SKU estimates by the total number of ballast
models and SKUs offered based on information from manufacturer catalogs
and interviews to calculate the total potential costs each manufacturer
could incur to redesign its products. Next, to assign these costs to
particular representative product classes, DOE multiplied this total
for each manufacturer by the percentage of models in each product class
based on the NIA shipment analysis and manufacturer feedback. Lastly,
to consider the models manufacturers offered that already met
efficiency levels above baseline, DOE multiplied the total costs for
each product class by the percentage of models DOE determined would
need to be redesigned at each efficiency level based on data from the
engineering analysis and manufacturer catalogs.
This methodology derived total product conversion cost estimates
for most product classes and efficiency levels. For residential
ballasts, DOE assumed a smaller redesign cost per model. According to
manufacturer interviews, the residential ballast market does not
support manufacturer attempts to differentiate through better designs,
product variation, or additional value-added features. As such,
suppliers, often Asian manufacturers selling directly to fixture
manufacturers, make little attempt to compete on anything other than
price. Interviews suggested suppliers would leverage R&D invested in
the larger, more valuable commercial market, making minor design
adjustments to meet minimum requirements of the residential market. For
sign ballasts, DOE determined the number of magnetic models on the
market based on manufacturer catalogs and estimated testing and
redesign costs for each of these models. DOE's estimates of the product
conversion costs for fluorescent lamp ballasts addressed in this
rulemaking can be found in section 0, below and in chapter 13 of the
NOPR TSD.
As discussed above, DOE also estimated the capital conversion costs
manufacturers would incur to comply with potential amended energy
conservation standards represented by each TSL. During interviews, DOE
asked manufacturers to estimate the capital expenditures required to
expand the production of higher-efficiency products. These estimates
included the required tooling and plant changes that would be necessary
if product lines meeting the potential required efficiency level did
not currently exist. Estimates for capital conversion costs varied
greatly from manufacturer to manufacturer, as manufacturers anticipated
different paths to compliance based on the modernity, flexibility, and
level of automation of the equipment already existing in their
factories. However, all manufacturers DOE interviewed indicated that
capital costs would be relatively moderate compared to the required
engineering effort. The modular nature of ballast production and the
flexibility of the necessary production capital allows for significant
equipment sharing across product lines. Based on interviews, DOE
assumed that for most manufacturers, design changes would require
moderate product conversion costs but would not require significant
changes to existing production lines and equipment. It is therefore
unlikely that most manufacturers would require high levels of capital
expenditures compared to ordinary capital additions or existing net
plants, property, and equipment (PPE).
To calculate its estimates of capital conversion costs, DOE
aggregated its estimated capital costs for the major players in the
industry rather than scaled up a ``typical'' manufacturer's expected
conversion costs. Two considerations drove this choice in methodology.
First, manufacturer feedback varied widely, making it impossible to
characterize a ``typical'' manufacturer for conversion cost purposes.
Second, the expected costs often depended upon the timing of the
manufacturers' last redesign efforts and its strategy regarding the
capital intensity of their plants and sourcing decisions. DOE estimated
that some manufacturers would incur very minor capital expenditures per
product class for testing equipment, even at max tech levels, as their
factories' capital equipment would not require significant modification
to produce higher-efficiency ballasts. For other manufacturers, DOE
assumed greater investments would be necessary to upgrade lines for
each product class with new wave solder equipment, reflow solder
systems and surface mount device placement machines. The placement
machines become increasingly important as ballasts become more complex
with additional circuitry and components. DOE estimates capital
conversion costs would rise most rapidly at high-efficiency levels not
only because of the
[[Page 20137]]
new production and testing equipment described above but also because
manufacturers would need to expand capacity to account for lower
throughput on high-efficiency lines.
For residential ballasts, DOE assumed the same magnitude of
conversion costs as for commercial ballasts of the same starting
method. While residential ballasts are generally not produced by the
major four manufacturers, the Asian manufacturers who source them to
domestic companies would be required to make similar modifications to
their production lines in response to standards. For sign ballasts, DOE
was unable to interview a representative sample of the industry.
However, DOE recognizes that magnetic ballast lines have more capital
exposure to changes in efficiency standards than electronic lines due
to the change in technology. Because several manufacturers produce
magnetic sign ballasts, DOE assumed new lines would be needed to
convert magnetic products to electronic ballasts and scaled these line
costs to the entire sign ballast market for this product class.
Finally, DOE estimated industry capital conversion costs for all
analyzed product classes other than residential ballasts and sign
ballasts by extrapolating the interviewed manufacturers' costs for each
product class to account for the companies that DOE did not interview.
DOE's estimates of the capital conversion costs for fluorescent lamp
ballasts can be found in section 0, below and in chapter 13 of the NOPR
TSD.
b. GRIM Scenarios
i. Shipment Scenarios
In the NIA, DOE modeled a roll-up and a shift scenario to represent
two possible standards case efficiency distributions for the years
beginning 2014, the year that compliance with revised standards is
proposed to be required, through 2043. The GRIM uses each of these
forecasts as alternative scenarios. The roll-up scenario represents the
case in which all shipments in the base case that do not meet the new
standard roll up to meet the new standard level. Consumers in the base
case who purchase ballasts above the standard level are not affected as
they are assumed to continue to purchase the same base-case ballast or
lamp-and-ballast system in the standards case. In contrast, in a shift
scenario, DOE assumes that any consumer may purchase a more efficient
ballast. The shift scenario models a standards case in which all base-
case consumer purchases are affected by the standard (regardless of
whether their base-case efficiency is below the standard). As the
standard level increases, market share migrates to, and accumulates at,
the highest efficiency level because it represents ``max tech'' for
each representative ballast type (i.e., moving beyond it is impossible
given available technology options). See chapter 10 of the NOPR TSD for
more information on the ballasts standards-case shipment scenarios.
ii. Technology Scenarios
Each shipment scenario (roll-up and shift) described above is
modeled in combination with the existing and emerging technologies base
case shipment scenarios, resulting in four sets of shipments. The GRIM
uses each set of shipment results to separately model impacts on INPV.
In the existing technologies scenario, no technologies outside of those
covered by this rulemaking were analyzed for market penetration.
However, DOE recognizes that rapidly emerging new lighting technologies
could penetrate the fluorescent lighting market and significantly
affect ballast shipment forecasts. Therefore, in the emerging
technologies scenario, DOE calculated the market penetration of light
emitting diode (LED) and ceramic metal halide (CMH) systems annually
through 2043, assessing each sector separately. DOE decreased the
analyzed market size in each year in each sector by the amount that
corresponded to the highest level of market penetration achieved by LED
or CMH systems. The assumptions and methodology that drive these
scenarios and the details specific to each are described in chapter 10
of the NOPR TSD.
iii. Markup Scenarios
As discussed above, manufacturer selling prices include direct
manufacturing production costs (i.e., labor, material, and overhead
estimated in DOE's MPCs) and all non-production costs (i.e., SG&A, R&D,
and interest), along with profit. To calculate the MSPs in the GRIM,
DOE applied markups to the MPCs estimated in the engineering analysis
for each product class and efficiency level. Modifying these markups in
the standards case yields different sets of impacts on manufacturers.
For the MIA, DOE modeled two standards-case markup scenarios to
represent the uncertainty regarding the potential impacts on prices and
profitability for manufacturers following the implementation of amended
energy conservation standards: (1) A preservation of operating profit
markup scenario, and (2) a two-tier markup scenario. These scenarios
lead to different markups values, which, when applied to the inputted
MPCs, result in varying revenue and cash flow impacts.
DOE implemented the preservation of operating profit markup
scenario because manufacturers stated that they do not expect to be
able to markup the full cost of production given the highly competitive
market, in the standards case. The preservation of operating profit
markup scenario assumes that manufacturers are able to maintain only
the base-case total operating profit in absolute dollars in the
standards case, despite higher product costs and investment. The base-
case total operating profit is derived from marking up the cost of
goods sold for each product by a flat percentage (the baseline markup,
discussed in chapter 5 of the NOPR TSD) to cover standard SG&A
expenses, R&D expenses, and profit. To derive this percentage, DOE
evaluated publicly available financial information for manufacturers of
ballasts. DOE also requested feedback on this value during manufacturer
interviews. DOE adjusted the manufacturer markups in the GRIM at each
TSL to yield approximately the same earnings before interest and taxes
in the standards case in the year after the compliance date of the
amended standards as in the base case. DOE assumed that the industry-
wide impacts would occur under the new minimum efficiency levels. DOE
altered the markups only for the minimally compliant products in this
scenario, with margin impacts not occurring for products that already
exceed the amended energy conservation standard. The preservation of
operating profit markup scenario represents the upper bound of industry
profitability following amended energy conservation standards. Under
this scenario, while manufacturers are not able to yield additional
operating profit from higher production costs and the investments
required to comply with the amended energy conservation standard, they
are able to maintain the same operating profit in the standards case as
was earned in the base case.
DOE also modeled a lower bound profitability scenario. During
interviews, multiple manufacturers stated that they offer two tiers of
product lines that are differentiated, in part, by efficiency level.
The higher-efficiency tier typically earns a premium over the baseline
efficiency tier. Several manufacturers suggested that the premium
currently earned by the higher-efficiency tier would erode under new or
amended standards due to the
[[Page 20138]]
disappearance of the baseline efficiency tier, which would
significantly harm profitability. Because of this pricing dynamic
described by manufacturers and because of the pressure from luminaire
manufacturers to commoditize the baseline efficiency tier, DOE also
modeled a two-tier markup scenario. In this scenario, DOE assumed that
the markup on fluorescent lamp ballasts varies according to two
efficiency tiers in both the base case and the standards case. During
the MIA interviews, manufacturers provided information on the range of
typical efficiency levels in those two tiers and the change in
profitability at each level. DOE used this information, retail prices
derived in its product price determination, and industry average gross
margins to estimate markups for fluorescent lamp ballasts under a two-
tier pricing strategy in the base case. In the standards case, DOE
modeled the situation in which portfolio reduction squeezes the margin
of higher-efficiency products as they become the new baseline,
presumably high-volume products. This scenario is consistent with
information submitted during manufacturing interviews and responds to
manufacturers' concern that DOE standards could severely disrupt
profitability.
3. Discussion of Comments
During the April 2010 public meeting, interested parties commented
on the assumptions and results of the preliminary TSD. Oral and written
comments discussed several topics, including conversion costs, impact
on competition, potential benefits to ballast manufacturers, and
manufacturer information. DOE addresses these comments below.
a. Conversion Costs
Several manufacturers expressed concerns about the capital and
product conversion costs that would be necessary to meet particular
efficiency levels. Philips stated that improvements would yield only
minor efficiency gains, but may require redesigning entire product
lines. As such, the manufacturer questioned whether the potential
returns merited these large investments in time and resources. Philips
noted that this phenomenon of diminishing returns is particularly true
for those efficiency levels DOE identified as max tech. (Philips,
Public Meeting Transcript, No. 12 at p. 155-156)
In this NOPR, DOE estimates the capital and product conversion
costs required to meet all TSLs, including the max tech level. These
conversion costs are a key input into the GRIM and directly impact the
change in INPV (which is outputted from the model) due to standards.
DOE conducts the manufacturing impact analysis, including the
calculation of conversion costs, regardless of the energy savings that
result from a given TSL. When determining which TSL to propose, DOE
weighs the benefits, such as energy savings, against the burdens, such
as loss of INPV, to determine the highest TSL that is both
technologically feasible and economically justified.
Philips and NEMA also expressed concern that the investments made
to meet new or amended energy conservation standards may never be
recouped because of potential changes to the lighting market landscape.
Philips stated that the industry is transitioning from traditional
fixed light output lighting to alternatives such as control systems and
solid-state lighting, so the opportunity for investment payback will be
severely diminished. (Philips, Public Meeting Transcript, No. 12 at p.
274-275) NEMA similarly stated that the additional cost required to
meet max tech standard levels would be a burden for manufacturers
without subsequent benefit because the demand for fixed output ballasts
is expected to significantly decline in the future. (NEMA, No. 29 at p.
17-18)
As stated in section 0 above, DOE recognizes that rapidly emerging
new lighting technologies, such as LEDs, could penetrate the
fluorescent lighting market and significantly affect ballast shipment
forecasts. Therefore, DOE modeled an emerging technologies scenario in
its shipments analysis. DOE input this scenario into the GRIM to
demonstrate the impact that reduced demand could have on fluorescent
lamp ballast manufacturers. The INPV results presented under the
emerging technologies scenario show the impacts of the capital and
product conversion costs required to meet each TSL under the base-case
assumption that emerging lighting technologies will penetrate the
ballast market. The INPV results for the existing and emerging
technologies scenarios are shown in section 0, and more information on
the methodology behind these scenarios can be found in chapter 10 of
the NOPR TSD.
NEMA was also concerned about the conversion costs required for a
particular product class. NEMA noted that for 8-foot HO lamps product
offerings are limited and the power levels involved can make
development of a reliable product more time-consuming than the other
product categories considered. (NEMA, No. 29 at p. 7) DOE takes
development time into account in its product conversion cost estimates.
The increased development time for 8-foot HO lamps is reflected through
higher estimated R&D costs due to the need to put more resources toward
product design for a longer period of time.
b. Impact on Competition
NEMA stated that adoption of NEMA Premium levels for national
requirements could impose a disproportionate burden on companies that
do not currently have product lines compliant with the NEMA Premium
program, which could unfairly impact the competitive nature of the
marketplace. (NEMA, No. 29 at p. 4) Similarly, NEMA stated that
adoption of the max tech levels in the preliminary analysis could
impose a disproportionate burden on companies that do not currently
have product lines utilizing the latest technology from the major
manufacturers. (NEMA, No. 29 at p. 6)
According to a NEMA Premium publication \41\ that lists qualifying
electronic ballast models, at least fourteen ballast manufacturers
already have product lines compliant with the NEMA Premium program.
These manufacturers represent both large manufacturers, with over 90
percent of fluorescent lamp ballast market share, and smaller, niche
manufacturers. While DOE will solicit the views of the Attorney General
on impacts of these proposed standards as required by EPCA, DOE does
not believe at this time that setting standards at NEMA Premium levels
would unfairly impact competition in the ballast market because a large
quantity and variety of manufacturers already offer NEMA Premium
models. DOE agrees, however, that adoption of max tech levels presented
in the preliminary analysis could impose a disproportionate burden on
smaller manufacturers. During manufacturer interviews, DOE questioned
whether any firms held intellectual property that gave them a
competitive advantage. DOE did not learn of any technologies that some
manufacturers employ that enable them to meet max tech levels that
other manufacturers cannot. However, DOE believes that smaller
manufacturers may not be able to redesign all of their product
offerings within the 3-year compliance period because of limited R&D
resources and low shipment volumes over which to spread out conversion
costs. See the Regulatory
[[Page 20139]]
Flexibility Analysis in section 0 for a full discussion on DOE's
assessment of potential impacts on small manufacturers.
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\41\ http://www.nema.org/gov/energy/efficiency/upload/nema_premium_electronic_ballast_program.pdf.
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c. Potential Benefits to Ballast Manufacturers
Earthjustice stated that if DOE concludes that amended standards
for fluorescent lamp ballasts would result in a market shift to other
lighting products such as LEDs, DOE must take into account any positive
impacts of that market shift on fluorescent lamp ballast manufacturers
who also produce those substitute technologies. Earthjustice further
commented that EPCA requires DOE to consider positive impacts (due to
revenues from substitute products) in addition to any negative impacts
from new or amended standards because DOE must consider the impact on
the entire company rather than only the ballasts division.
(Earthjustice, No. 31 at p. 1-2)
DOE does believe that there is potential for the market to
increasingly migrate from traditional fixed light output fluorescent
lamp ballasts to alternate technologies such as LEDs. For this reason,
DOE models the emerging technologies shipment scenario as described in
section 0 above and in chapter 10 of the NOPR TSD. This market shift to
emerging technologies occurs in the base case. That is, the shift is
not standards-induced. DOE excludes the revenue from substitute
technologies earned by manufacturers who produce ballasts in the GRIM
since the revenue stream would be present in both the base case and the
standards case, resulting in no impact on the change in INPV.
4. Manufacturer Interviews
DOE interviewed manufacturers representing more than 90 percent of
fluorescent lamp ballast sales. These interviews were in addition to
those DOE conducted as part of the engineering analysis. The
information gathered during these interviews enabled DOE to tailor the
GRIM to reflect the unique financial characteristics of the ballasts
industry. All interviews provided information that DOE used to evaluate
the impacts of potential new and amended energy conservation standards
on manufacturer cash flows, manufacturing capacities, and employment
levels. Appendix 13A of the NOPR TSD contains the interview guides DOE
used to conduct the MIA interviews.
During the manufacturer interviews, DOE asked manufacturers to
describe their major concerns about this rulemaking. The following
sections describe the most significant issues identified by
manufacturers. DOE also includes additional concerns in chapter 13 of
the TSD.
a. Component Shortage
An ongoing shortage of electronic components critical to the
production of ballasts remains a key concern for all ballast
manufacturers. Because the shortage is particularly acute for those
components critical to high efficiency ballasts, new and amended
standards could exacerbate the market situation, according to
manufacturers.
During the recent economic downturn, component suppliers
significantly scaled back production. When demand recovered as the
recession ended, electronics suppliers lacked the capacity to meet
demand beginning in the fall of 2009. Since then, component suppliers
have been reluctant to invest in additional capacity because of
concerns that the downturn has not actually ended. Additionally,
component manufacturers have seen customers place duplicate orders with
several suppliers (only to later cancel the orders with all but one
supplier), a practice that has reinforced supplier skepticism over
market demand. Electrolytic capacitors and transistors, which are
produced almost entirely in Asia, are key examples of ballast
components in relatively short supply. The fact that these components
are shared among many electronics industries has exacerbated the
problem for the ballast industry. Manufacturers of more expensive
electronic applications, such as televisions and cell phones, can more
easily absorb what for them are relatively smaller cost increases. In
turn, these other industries can afford to pay more and receive
priority over the ballast industry.
As a result, manufacturers have faced longer lead times and higher
rush-order charges to fill their own customers' orders. Manufacturers
predicted the component shortage will last at least into 2011 and were
concerned that energy conservation standards for fluorescent lamp
ballasts would exacerbate the ongoing component shortage.
b. Market Erosion
Manufacturers stated that emerging technologies are penetrating the
fluorescent lamp ballasts market. Several manufacturers worried that
new and amended energy conservation standards for ballasts would force
them to invest in a shrinking market. Depending on the pace of market
penetration of emerging technologies--such as LEDs--these investments
might never be recouped. Also, manufacturers were concerned that new
and amended standards on ballasts could hasten the switch to emerging
technologies by lowering the difference in their first-cost price. If
the standard did increase the natural migration toward new technology,
manufacturers said they would be less likely to make the substantial
investments to modify ballasts production equipment for some of their
product lines. (To address emerging technologies issues discussed by
manufacturers, DOE included several shipment scenarios in both the NIA
and the GRIM. See chapter 10 and chapter 13 of the NOPR TSD for a
discussion of the shipment scenarios used in the respective analyses.)
c. Opportunity Cost of Investments
Manufacturers also stated that the financial burden of developing
products to meet amended energy conservation standards has an
opportunity cost due to the limited pool of capital and R&D dollars.
Currently, manufacturers are reinvesting a significant share of the
cash flow from fluorescent lamp ballast operations into emerging
technologies such as LEDs and control systems. Any investments incurred
to meet amended ballast standards would therefore reflect foregone
investments in these emerging technologies, which the industry believes
offer both better prospects for market growth and greater potential for
energy savings than traditional fixed-light-output fluorescent lamp
ballasts. Compared to these emerging technologies, manufacturers stated
that they have little room for efficiency improvements within their
ballast product lines.
d. Maintaining Product Tiers
Several manufacturers stated that they would not want standards to
be so stringent that they eliminate the ability to carry two efficiency
tiers within a product class. Most manufacturers--and all major
manufacturers--currently offer both standard-efficiency and high-
efficiency product lines. The standard-efficiency product lines are
typically lower cost and lower margin. These high-volume products
provide economies of scale and, by establishing a market presence and
brand, enhance manufacturers' ability to enter the more profitable
retrofit and aftermarket sales. Meanwhile, the high-efficiency product
lines allow manufacturers to bundle other features within these
products, which allows them to command a better margin. Utility rebates
and other similar programs also play a large role in driving the
purchase of higher efficiency ballasts.
[[Page 20140]]
If DOE set standards that did not leave room for a high-efficiency
product to differentiate itself from a baseline product, manufacturers
believe the new standard would commoditize these now-premium products.
In turn, prices of the high-efficiency ballasts would fall to the level
of what were formerly the lower-tier products, harming manufacturer
profitability. Utility companies and other programs would have little
incentive to offer rebates for these former upper-tier products, which
would then be baseline units. Without rebate incentives, sales to the
energy retrofit market could decrease greatly due to cost, which would
diminish the potential for energy savings due to the standard.
e. Adequate Compliance Periods
A number of manufacturers expressed concern about the timing
between the announcement of the standard and the compliance date of the
standard. Manufacturers stated that they need adequate time to develop
products that meet the amended efficiency standards. Without enough
development time, manufacturers may not have the resources to redesign
and test all of their product lines before the required compliance
date, which could result in lost sales opportunities in the market.
F. Employment Impact Analysis
DOE considers employment impacts in the domestic economy as one
factor in selecting a proposed standard. Employment impacts consist of
direct and indirect impacts. Direct employment impacts are any changes
in the number of employees working for manufacturers of the appliance
products that are the subject of this rulemaking, their suppliers, and
related service firms. Indirect employment impacts are changes in
employment within the larger economy that occur due to the shift in
expenditures and capital investment caused by the purchase and
operation of more efficient appliances. The MIA addresses the direct
employment impacts that concern ballast manufacturers in section 0.
The indirect employment impacts of standards consist of the net
jobs created or eliminated in the national economy, outside of the
manufacturing sector being regulated, due to: (1) Reduced spending on
energy by end users; (2) reduced spending on new energy supplies by the
utility industry; (3) increased spending on new products to which the
new standards apply; 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, and
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 of such shifts in
economic activity on the demand for labor is to compare sector
employment statistics developed by the Labor Department's Bureau of
Labor Statistics (BLS). (Data on industry employment, hours, labor
compensation, value of production, and the implicit price deflator for
output for these industries are available upon request by calling the
Division of Industry Productivity Studies (202-691-5618) or by sending
a request by e-mail to [email protected]. These data are also available
at http://www.bls.gov/news.release/prin1.nr0.htm.) 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.
Energy conservation standards have the effect of reducing consumer
utility bills. Because reduced consumer expenditures for energy likely
lead to increased expenditures in other sectors of the economy, the
general effect of efficiency standards is to shift economic activity
from a less labor-intensive sector (i.e., the utility sector) to more
labor-intensive sectors (e.g., the retail and manufacturing sectors).
Thus, based on the BLS data alone, the Department believes net national
employment will increase due to shifts in economic activity resulting
from new and amended standards for ballasts.
In developing today's proposed standards, DOE estimated indirect
national employment impacts using an input/output model of the U.S.
economy called Impact of Sector Energy Technologies (ImSET). ImSET is a
spreadsheet model of the U.S. economy that focuses on 188 sectors most
relevant to industrial, commercial, and residential building energy
use. (Roop, J. M., M. J. Scott, and R. W. Schultz, ImSET: Impact of
Sector Energy Technologies (PNNL-15273 Pacific Northwest National
Laboratory) (2005). Available at http://www.pnl.gov/main/publications/external/technical_reports/PNNL-15273.pdf.) ImSET is a special purpose
version of the ``U.S. Benchmark National Input-Output'' (I-O) model,
designed to estimate the national employment and income effects of
energy-saving technologies. The ImSET software includes a computer-
based I-O model with structural coefficients to characterize economic
flows among the 188 sectors. ImSET's national economic I-O structure is
based on a 1997 U.S. benchmark table (Lawson, Ann M., Kurt S. Bersani,
Mahnaz Fahim-Nader, and Jiemin Guo, ``Benchmark Input-Output Accounts
of the U.S. Economy, 1997,'' Survey of Current Business (Dec. 2002) pp.
19-117), specially aggregated to the 188 sectors. DOE estimated changes
in expenditures using the NIA spreadsheet. Using ImSET, DOE estimated
the net national, indirect-employment impacts on employment by sector
of potential new efficiency standards for ballasts. For more details on
the employment impact analysis, see NOPR TSD chapter 15.
G. Utility Impact Analysis
The utility impact analysis estimates the effects of the adopting
new or amended standards on the utility industry. For this analysis,
DOE used the NEMS-BT model to generate forecasts of electricity
consumption, electricity generation by plant type, and electric
generating capacity by plant type that would result from each TSL. DOE
conducted the impact analysis as a scenario that departed from the
latest AEO reference case. In other words, the estimated impacts of a
standard are the differences between values forecasted by NEMS-BT and
the values in the AEO2010 reference case.
Chapter 14 of the TSD accompanying this notice presents results of
the utility impact analysis.
H. Environmental Assessment
Pursuant to the National Environmental Policy Act of 1969 and the
requirements of 42 U.S.C. 6295(o)(2)(B)(i)(VI) and 6316(a), DOE has
prepared a draft environmental assessment (EA) of the impacts of the
potential standards for the fluorescent lamp ballasts in today's
proposed rule, which it has included as chapter 16 of the NOPR TSD.
In the EA, DOE estimated the reduction in power sector emissions of
carbon dioxide (CO2), nitrogen oxides (NOX), and
mercury (Hg) using the NEMS-BT computer model. In the EA, NEMS-BT is
run similarly to the AEO NEMS, except that ballast energy use is
[[Page 20141]]
reduced by the amount of energy saved (by fuel type) due to each TSL.
The inputs of national energy savings come from the NIA spreadsheet
model, while the output is the forecasted physical emissions. The net
benefit of each TSL in today's proposed rule is the difference between
the forecasted emissions estimated by NEMS-BT at each TSL and the AEO
2010 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. For today's NOPR, DOE
used the AEO2010. For the final rule, DOE intends to revise the
emissions analysis using the most current version of NEMS.
SO2 emissions from affected electric generating units
(EGUs) are subject to nationwide and regional emissions cap-and-trade
programs, and DOE has preliminarily determined that these programs
create uncertainty about the potential amended standards' impact on
SO2 emissions. Title IV of the Clean Air Act sets an annual
emissions cap on SO2 for affected EGUs in the 48 contiguous
States and the District of Columbia (DC). SO2 emissions from
28 eastern states and D.C. are also limited under the Clean Air
Interstate Rule (CAIR; 70 FR 25162 (May 12, 2005)), which created an
allowance-based trading program. Although CAIR has been remanded to EPA
by the U.S. Court of Appeals for the District of Columbia Circuit (D.C.
Circuit), see North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008), it
remains in effect temporarily, consistent with the D.C. Circuit's
earlier opinion in North Carolina v. EPA, 531 F.3d 896 (D.C. Cir.
2008). On July 6, 2010, EPA issued the Transport Rule proposal, a
replacement for CAIR, which would limit emissions from EGUs in 32
states, potentially through the interstate trading of allowances, among
other options. 75 FR 45210 (Aug. 2, 2010).
The attainment of emissions caps is typically flexible among EGUs
and is enforced through the use of emissions allowances and tradable
permits. Under existing EPA regulations, and under the Transport Rule
if it is finalized, any excess SO2 emissions allowances
resulting from the lower electricity demand caused by the imposition of
an efficiency standard could be used to permit offsetting increases in
SO2 emissions by any regulated EGU. However, if the amended
standards resulted in a permanent increase in the quantity of unused
emissions allowances, there would be an overall reduction in
SO2 emissions from the standards. While there remains some
uncertainty about the ultimate effects of efficiency standards on
SO2 emissions covered by the existing cap-and-trade system,
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.
A cap on NOX emissions, affecting electric generating
units in the CAIR region, means that the energy conservation standards
for ballasts may have little or no physical effect on NOX
emissions in the 28 eastern States and the DC covered by CAIR or any
States covered by the proposed Transport Rule if the Transport Rule if
finalized. The proposed standards would, however, reduce NOX
emissions in those 22 states not affected by the CAIR. As a result, DOE
used NEMS-BT to forecast emission reductions from the standards
considered for today's NOPR.
Similar to emissions of SO2 and NOX, future
emissions of Hg would have been subject to emissions caps. In May 2005,
EPA issued the Clean Air Mercury Rule (CAMR). 70 FR 28606 (May 18,
2005). CAMR would have permanently capped emissions of mercury for new
and existing coal-fired power plants in all states by 2010. However, on
February 8, 2008, the D.C. Circuit issued a decision in New Jersey v.
Environmental Protection Agency, 517 F.3d 574 (D.C. Cir. 2008), in
which it vacated CAMR. EPA has decided to develop emissions standards
for power plants under Section 112 of the Clean Air Act, consistent
with the DC Circuit's opinion on CAMR. See http://www.epa.gov/air/mercuryrule/pdfs/certpetition_withdrawal.pdf. Pending EPA's
forthcoming revisions to the rule, DOE is excluding CAMR from its
environmental assessment. In the absence of CAMR, a DOE standard would
likely reduce Hg emissions and DOE used NEMS-BT to estimate these
reductions. However, DOE continues to review the impact of rules that
reduce energy consumption on Hg emissions, and may revise its
assessment of Hg emission reductions in future rulemakings.
I. Monetizing Carbon Dioxide and Other Emissions Impacts
As part of the development of this proposed rule, DOE considered
the estimated monetary benefits likely to result from the reduced
emissions of CO2 and NOX that are expected to
result from each of the TSLs considered. In order to make this
calculation similar to the calculation of the NPV of consumer benefit,
DOE considered the reduced emissions expected to result over the
lifetime of products shipped in the forecast period for each TSL. This
section summarizes the basis for the monetary values used for each of
these emissions and presents the values considered in this rulemaking.
For today's NOPR, DOE is relying on a set of values for the social
cost of carbon (SCC) that was developed by an interagency process. A
summary of the basis for these values is provided below, and a more
detailed description of the methodologies used is provided as an
appendix to chapter 16 of the TSD.
1. Social Cost of Carbon
Under section 1(b) of Executive Order 12866, agencies must, to the
extent permitted by law, ``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 monetized 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
increasing knowledge of the science and economics of climate impacts.
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.
a. Monetizing Carbon Dioxide Emissions
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. Estimates of the SCC are provided
in dollars per metric ton of carbon dioxide.
When attempting to assess the incremental economic impacts of
carbon dioxide emissions, the analyst faces a
[[Page 20142]]
number of serious challenges. A recent report from the National
Research Council \42\ 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.
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\42\ National Research Council. Hidden Costs of Energy: Unpriced
Consequences of Energy Production and Use. National Academies Press:
Washington, DC (2009).
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Despite the serious limits of both quantification and monetization,
SCC estimates can be useful in estimating the social benefits of
reducing carbon dioxide emissions. Consistent with the directive in
Executive Order 12866 quoted above, the purpose of the SCC estimates
presented here is to make it possible for Federal 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 agency can estimate the benefits from
reduced (or costs from increased) emissions in any future year 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. This concern is not applicable to this notice, and DOE does
not attempt to answer that question here.
At the time of the preparation of this notice, the most recent
interagency estimates of the potential global benefits resulting from
reduced CO2 emissions in 2010, expressed in 2009$, were
$4.9, $22.1, $36.3, and $67.1 per metric ton avoided. For emissions
reductions that occur in later years, these values grow in real terms
over time. Additionally, the interagency group determined that a range
of values from 7 percent to 23 percent should be used to adjust the
global SCC to calculate domestic effects,\43\ although preference is
given to consideration of the global benefits of reducing
CO2 emissions.
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\43\ It is recognized that this calculation for domestic values
is approximate, provisional, and highly speculative. There is no a
priori reason why domestic benefits should be a constant fraction of
net global damages over time.
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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 improves
over time. Specifically, the interagency group has set a preliminary
goal of revisiting the SCC values within 2 years or at such time as
substantially updated models become available, and to continue to
support research in this area. In the meantime, the interagency group
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
U.S. Department of Transportation (DOT) used both a ``domestic'' SCC
value of $2 per ton of CO2 and a ``global'' SCC value of $33
per ton of CO2 for 2007 emission reductions (in 2007$),
increasing both values at 2.4 percent per year.\44\ DOT also included a
sensitivity analysis at $80 per ton of CO2. See Average Fuel
Economy Standards Passenger Cars and Light Trucks Model Year 2011, 74
FR 14196 (March 30, 2009) (Final Rule); Final Environmental Impact
Statement Corporate Average Fuel Economy Standards, Passenger Cars and
Light Trucks, Model Years 2011-2015 at 3-90 (Oct. 2008) (Available at:
http://www.nhtsa.gov/fuel-economy). 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.
---------------------------------------------------------------------------
\44\ Throughout this section, references to tons of
CO2 refer to metric tons.
---------------------------------------------------------------------------
A 2008 regulation proposed by DOT assumed a domestic SCC value of
$7 per ton of CO2 (in 2006$) for 2011 emission reductions
(with a range of $0-$14 for sensitivity analysis), also increasing at
2.4 percent per year. See Average Fuel Economy Standards, Passenger
Cars and Light Trucks, Model Years 2011-2015, 73 FR 24352 (May 2, 2008)
(Proposed Rule); Draft Environmental Impact Statement Corporate Average
Fuel Economy Standards, Passenger Cars and Light Trucks, Model Years
2011-2015 at 3-58 (June 2008) (Available at: http://www.nhtsa.gov/fuel-economy). A regulation for packaged terminal air conditioners and
packaged terminal heat pumps finalized by DOE in October of 2008 used a
domestic SCC range of $0 to $20 per ton CO2 for 2007
emission reductions (in 2007$). 73 FR 58772, 58814 (Oct. 7, 2008) 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. See Regulating Greenhouse Gas
Emissions Under the Clean Air Act, 73 FR 44354 (July 30, 2008). EPA's
global mean values were $68 and $40 per ton CO2 for discount
rates of approximately 2 percent and 3 percent, respectively (in 2006$
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$) of $55, $33,
$19, $10, and $5 per ton of CO2. 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.
[[Page 20143]]
c. Current Approach and Key Assumptions
Since the release of the interim values, the interagency group
reconvened on a regular basis to generate improved SCC estimates, which
were considered for this proposed rule. Specifically, the group
considered public comments and further explored the technical
literature in relevant fields. The interagency group relied on three
integrated assessment models (IAMs) commonly used to estimate the SCC:
The FUND, DICE, and PAGE models.\45\ These models are frequently cited
in the peer-reviewed literature and were used in the last assessment of
the Intergovernmental Panel on Climate Change. Each model was given
equal weight in the SCC values that were developed.
---------------------------------------------------------------------------
\45\ The models are described in appendix 16-A of the TSD.
---------------------------------------------------------------------------
Each model takes a slightly different approach to model how changes
in emissions result in changes in economic damages. A key objective of
the interagency process was to enable a consistent exploration of the
three models while respecting the different approaches to quantifying
damages taken by the key modelers in the field. An extensive review of
the literature was conducted to select three sets of input parameters
for these models: climate sensitivity, socio-economic and emissions
trajectories, and discount rates. A probability distribution for
climate sensitivity was specified as an input into all three models. In
addition, the interagency group used a range of scenarios for the
socio-economic parameters and a range of values for the discount rate.
All other model features were left unchanged, relying on the model
developers' best estimates and judgments.
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. For emissions
(or emission reductions) that occur in later years, these values grow
in real terms over time, as depicted in Table V.8.
Table V.8--Social Cost of CO2, 2010-2050 (in 2007 Dollars per Metric
Ton)
------------------------------------------------------------------------
Discount rate
-------------------------------
VII. 2.5% 3%
5% Avg 3% Avg Avg 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
------------------------------------------------------------------------
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 Research
Council report mentioned above 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 Federal agencies participating in the
interagency process to estimate the SCC.
DOE recognizes the uncertainties embedded in the estimates of the
SCC used for cost-benefit analyses. As such, DOE and others in the U.S.
Government intend to periodically review and reconsider those estimates
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.
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 GDP
price deflator values for 2008 and 2009. For each of the four cases
specified, the values used for emissions in 2010 were $4.9, $22.1,
$36.3, and $67.1 per metric ton avoided (values expressed in
2009$).\46\ To monetize the CO2 emissions reductions
expected to result from amended standards for ballasts, 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 in appendix 16-A of the NOPR TSD, appropriately adjusted to
2009$. To calculate a present value of the stream of monetary values,
DOE discounted the values in each of the four cases using the specific
discount rate that had been used to obtain the SCC values in each case.
---------------------------------------------------------------------------
\46\ Table A1 presents SCC values through 2050. For DOE's
calculation, it derived values after 2050 using the 3-percent per
year escalation rate used by the interagency group.
---------------------------------------------------------------------------
1. Valuation of Other Emissions Reductions
DOE investigated the potential monetary benefit of reduced
NOX 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
the CAIR. DOE estimated the monetized value of NOX emissions
reductions resulting from each of the TSLs considered for today's NOPR
based on environmental damage estimates found in the relevant
scientific literature. Available estimates suggest a very wide range of
monetary values, 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 $4,591 per ton in 2009$).\47\ In accordance with
OMB guidance, DOE conducted two calculations of the monetary benefits
derived using each of the economic values used for NOX, one
using a real discount rate of 3 percent and another using a real
discount rate of 7 percent.\48\
---------------------------------------------------------------------------
\47\ For additional information, refer to U.S. Office of
Management and Budget, Office of Information and Regulatory Affairs,
2006 Report to Congress on the Costs and Benefits of Federal
Regulations and Unfunded Mandates on State, Local, and Tribal
Entities, Washington, DC.
\48\ OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003).
---------------------------------------------------------------------------
DOE is aware of multiple agency efforts to determine the
appropriate range of values used in evaluating the potential economic
benefits of reduced Hg emissions. DOE has decided to await further
guidance regarding consistent valuation and reporting of Hg emissions
before it once again monetizes Hg emissions in its rulemakings.
Commenting on the preliminary TSD, NEEA and NPCC supported DOE
monetizing emissions reductions, but urged that the monetary values be
accounted for in the NIA, and not used only as a qualitative decision
factor. (NEEA and NPCC, No. 32 at p. 11) In contrast, NEMA advocated
keeping the environmental assessment and NIA separate, citing the
ranges of emission dollar values and other uncertainties in DOE's
emissions monetization
[[Page 20144]]
approach. (NEMA, No. 29 at p. 18) In the NIA, DOE estimates the
national net present value of total consumer costs and savings that
would be expected to result from new or amended standards at specific
efficiency levels. Separately, DOE considers 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
considered TSLs. 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.
In section 0 of today's NOPR, DOE presents the NPV values that result
from adding the estimates of the potential economic benefits resulting
from reduced CO2 and NOX emissions in each of
four valuation scenarios to the NPV of consumer savings calculated for
each TSL considered in this rulemaking, at both a 7-percent and 3-
percent discount rate.
VIII. Analytical Results
A. Trial Standard Levels
DOE analyzed the benefits and burdens of a number of TSLs for the
ballasts that are the subject of today's proposed rule. Table VIII.1
presents the trial standard levels and the corresponding product class
efficiency levels. See the engineering analysis in section 0 of this
NOPR for a more detailed discussion of the efficiency levels.
In this section, DOE presents the analytical results for the TSLs
of the product classes that DOE analyzed directly (the ``representative
product classes''). DOE scaled the standards for these representative
product classes to create standards for other product classes that were
not directly analyzed (programmed start ballasts that operate 8-foot HO
lamps), as set forth in chapter 5 of the TSD.
Table VIII.1--Trial Standard Levels
----------------------------------------------------------------------------------------------------------------
Representative product class TSL 1 TSL 2 TSL 3
----------------------------------------------------------------------------------------------------------------
IS and RS ballasts that operate:
4-foot MBP lamps, 8-foot slimline EL1 EL2 EL3
lamps.
PS ballasts that operate:
4-foot MBP lamps, 4-foot MiniBP SO EL1 EL2 EL3
lamps, 4-foot MiniBP HO lamps.
IS and RS ballasts that operate 8-foot EL1 EL2 EL3
HO lamps.
Ballasts that operate 8-foot HO lamps EL1 EL1 EL1
in cold temperature outdoor signs.
----------------------------------------------------------------------------------------------------------------
TSL 1, which would set energy conservation standards at EL1 for all
product classes, would eliminate currently available 2-lamp MBP T12 RS
(commercial and residential), low-efficiency 2-lamp 4-foot MBP T8 PS,
magnetic 8-foot HO, and magnetic sign ballasts. TSL 1 would require IS
and RS 2-lamp MBP ballasts that operate T8 lamps. TSL 1 does not impact
8-foot slimline or 4-lamp MBP IS and RS ballasts. TSL 1 also prevents
the baseline inefficient T5 standard and high output ballasts from
becoming prevalent in future years. For the reasons explained in
section 0, sign ballasts have only one EL, so TSL 1 represents the max
tech level for the sign ballast representative product class. TSL 2 and
TSL 3 also require EL1 for sign ballasts.
TSL 2 would set energy conservation standards at EL2 for the IS and
RS, PS, and 8-foot HO IS and RS product classes. This level would
eliminate standard-efficiency, dedicated voltage 2-lamp MBP T8 IS
ballasts (commercial and residential), but can be met with standard-
efficiency universal input voltage 2-lamp MBP T8 IS ballasts commercial
ballasts and high-efficiency dedicated input voltage 2-lamp MBP T8 IS
residential ballasts. TSL 2 eliminates the least efficient T12 2-lamp
slimline ballasts, and is just met by the least efficient T8 8-foot
slimline ballasts. TSL 2 does not affect 4-lamp MBP T8 IS ballasts. For
PS ballasts, high-efficiency 4-foot MBP and high-efficiency T5 standard
and high output ballasts are required at TSL 2. This TSL would
eliminate the least efficient currently available standard and high
output T5 ballasts. TSL 2 for the 8-foot HO IS and RS product class
results in the elimination of current T12 electronic ballasts, but can
be met with T8 electronic ballasts. All three of these ELs represent
the elimination of the least efficient T8 electronic ballasts.
TSL 3 would set energy conservation standards at EL3 for the IS and
RS, PS, and 8-foot HO IS and RS product class. TSL 3 represents the
highest EL analyzed in all representative product classes and is the
max tech TSL. Ballasts that meet TSL 3 represent the most efficient
models tested by DOE in their respective representative product
classes.
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
Consumers affected by new or amended standards usually experience
higher purchase prices and lower operating costs. Generally, these
impacts on individual consumers are best captured by changes in LCCs
and by the payback period. Therefore, DOE calculated the LCC and PBP
analyses for the potential standard levels considered in this
rulemaking. DOE's LCC and PBP analyses provide key outputs for each
TSL, which are reported by product class in Table VIII.2-Table VIII.15
below. Each table includes the average total LCC and the average LCC
savings, as well as the fraction of product consumers for which the LCC
will either decrease (net benefit), or increase (net cost) relative to
the base-case forecast. The last outputs in the tables are the median
PBPs for the consumer that is purchasing a design compliant with the
TSL. Negative PBP values indicate standards that reduce both operating
costs and installed costs. Entries of ``N/A'' indicate standard levels
that do not reduce operating costs; which prevents the consumer from
recovering the increased purchase cost. This occurred with residential
ballasts operating 4-foot MBP lamps (T8 baseline), where the system
input power ratings for the standards-case replacements were greater
than that for the baseline system. As discussed in section 0 above, the
replacement systems use more energy but produce more light with greater
efficiency than the baseline T8 system.
The results for each TSL are relative to the energy use
distribution in the base case (no amended standards), based on energy
consumption under conditions of actual product use. The rebuttable
presumption PBP is based on test values under conditions prescribed by
the DOE test procedure, as required by EPCA. (42 U.S.C.
6295(o)(2)(B)(iii))
[[Page 20145]]
Table VIII.2--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Commercial, T12 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period *
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 64.63 234.65 299.28 ........... ........... ........... ...........
1................................... 1...................... 55.91 225.82 281.73 17.54 0.0 100.0 -8.99
2................................... 2...................... 58.58 215.70 274.27 25.00 0.0 100.0 -2.88
3................................... 3...................... 59.16 197.70 256.87 42.41 0.0 100.0 -1.35
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 67.02 234.65 301.66 ........... ........... ........... ...........
1................................... 1...................... 58.30 199.89 258.19 43.47 0.0 100.0 -2.29
2................................... 2...................... 60.97 191.12 252.09 49.58 0.0 100.0 -1.27
3................................... 3...................... 61.55 187.43 248.98 52.68 0.0 100.0 -1.06
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.
Table VIII.3--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Commercial, T8 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period *
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 55.08 225.82 280.90 ........... ........... ........... ...........
2................................... 2...................... 57.74 215.70 273.44 7.46 0.0 100.0 2.43
3................................... 3...................... 58.33 197.70 256.03 24.87 0.0 100.0 1.07
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 57.47 225.82 283.29 ........... ........... ........... ...........
2................................... 2...................... 60.13 215.79 275.92 7.37 0.0 100.0 2.46
3................................... 3...................... 60.72 211.57 272.28 11.00 0.0 100.0 2.11
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VIII.4--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Residential, T12 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period *
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 52.99 67.73 120.72 ........... ........... ........... ...........
1................................... 1...................... 45.02 56.40 101.42 19.29 0.0 100.0 -7.60
2, 3................................ 3...................... 46.24 57.30 103.53 17.18 0.0 100.0 -6.99
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 55.38 67.73 123.10 ........... ........... ........... ...........
1................................... 1...................... 47.41 56.00 103.40 19.70 0.0 100.0 -7.34
2, 3................................ 3...................... 48.63 53.54 102.16 20.94 0.0 100.0 -5.14
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.
[[Page 20146]]
Table VIII.5--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Residential, T8 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period *
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 44.11 56.40 100.51 ........... ........... ........... ...........
2, 3................................ 3...................... 45.33 57.30 102.63 -2.11 100.0 0.0 N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 46.50 56.40 102.90 ........... ........... ........... ...........
2, 3................................ 3...................... 47.72 53.93 101.65 1.26 10.6 89.4 5.37
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Entries of ``N/A'' indicate standard levels that do not reduce operating costs.
Table VIII.6--Product Class 1--IS and RS Ballasts That Operate Four 4-Foot MBP Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ Baseline/2............. 76.77 407.73 484.49 ........... ........... ........... ...........
3................................... 3...................... 79.33 398.46 477.79 6.70 0.0 100.0 2.56
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ Baseline/2............. 79.16 407.73 486.88 ........... ........... ........... ...........
3................................... 3...................... 81.72 402.21 483.94 2.95 0.7 99.3 4.31
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VIII.7--Product Class 1--IS and RS Ballasts That Operate Two 8-Foot Slimline Lamps (T12 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period *
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 90.06 434.50 524.56 ........... ........... ........... ...........
2................................... 2...................... 89.34 413.71 503.05 21.50 0.0 100.0 -0.31
3................................... 3...................... 89.68 401.02 490.69 33.86 0.0 100.0 -0.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 92.45 434.50 526.94 ........... ........... ........... ...........
2................................... 2...................... 91.73 420.63 512.37 14.58 0.0 100.0 -0.47
3................................... 3...................... 92.07 414.38 506.45 20.50 0.0 100.0 -0.17
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.
[[Page 20147]]
Table VIII.8--Product Class 1--IS and RS Ballasts That Operate Two 8-Foot Slimline Lamps (T8 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ Baseline/2............. 90.03 413.71 503.74 ........... ........... ........... ...........
3................................... 3...................... 90.37 401.02 491.38 12.36 0.0 100.0 0.24
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ Baseline/2............. 92.42 413.71 506.13 ........... ........... ........... ...........
3................................... 3...................... 92.75 407.57 500.33 5.80 0.0 100.0 0.50
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VIII.9--Product Class 2--PS Ballasts That Operate Two 4-Foot MBP Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 57.92 202.24 260.16 ........... ........... ........... ...........
1, 2................................ 2...................... 59.17 188.88 248.04 12.12 0.0 100.0 1.07
3................................... 3...................... 59.60 186.40 246.00 14.17 0.0 100.0 1.22
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 60.31 202.24 262.55 ........... ........... ........... ...........
1, 2................................ 2...................... 61.55 188.79 250.34 12.21 0.0 100.0 1.06
3................................... 3...................... 61.99 186.62 248.60 13.95 0.0 100.0 1.23
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VIII.10--Product Class 2--PS Ballasts That Operate Four 4-Foot MBP Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 75.31 372.68 448.00 ........... ........... ........... ...........
1................................... 1...................... 79.20 368.71 447.92 0.08 71.7 28.3 11.27
2, 3................................ 3...................... 81.28 359.20 440.48 7.52 1.3 98.7 5.09
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 77.70 372.68 450.39 ........... ........... ........... ...........
1................................... 1...................... 81.59 340.40 421.99 28.39 0.0 100.0 1.39
2, 3................................ 3...................... 83.67 332.50 416.17 34.22 0.0 100.0 1.71
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VIII.11--Product Class 2--PS Ballasts That Operate Two 4-Foot MiniBP SO Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 63.45 252.21 315.66 ........... ........... ........... ...........
[[Page 20148]]
1................................... 1...................... 63.55 238.21 301.76 13.90 0.0 100.0 0.06
2................................... 2...................... 65.04 228.05 293.09 22.57 0.0 100.0 0.61
3................................... 3...................... 69.84 243.99 313.83 1.83 39.1 60.9 7.19
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 65.84 252.21 318.05 ........... ........... ........... ...........
1................................... 1...................... 65.94 238.21 304.15 13.90 0.0 100.0 0.06
2................................... 2...................... 67.43 236.07 303.50 14.55 0.0 100.0 0.91
3................................... 3...................... 72.23 230.07 302.30 15.75 0.0 100.0 2.67
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VIII.12--Product Class 2--PS Ballasts That Operate Two 4-Foot MiniBP HO Lamps: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 63.55 338.93 402.49 ........... ........... ........... ...........
1................................... 1...................... 67.70 315.58 383.28 19.21 0.0 100.0 1.28
2................................... 2...................... 70.65 310.87 381.52 20.96 0.0 100.0 1.82
3................................... 3...................... 73.52 308.29 381.81 20.68 0.0 100.0 2.34
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 65.94 338.93 404.88 ........... ........... ........... ...........
1................................... 1...................... 70.08 315.58 385.67 19.21 0.0 100.0 1.28
2................................... 2...................... 73.04 312.98 386.02 18.85 0.0 100.0 1.97
3................................... 3...................... 75.91 310.04 385.95 18.92 0.0 100.0 2.48
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VIII.13--Product Class 3--IS and RS Ballasts That Operate Two 8-Foot HO Lamps (T12 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period *
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 116.92 619.03 735.95 ........... ........... ........... ...........
1................................... 1...................... 111.77 554.36 666.13 69.82 0.0 100.0 -0.57
2................................... 2...................... 96.97 404.53 501.51 234.45 0.0 100.0 -0.67
3................................... 3...................... 101.02 398.16 499.18 236.77 0.0 100.0 -0.52
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 119.31 619.03 738.34 ........... ........... ........... ...........
1................................... 1...................... 114.15 574.24 688.39 49.95 0.0 100.0 -0.83
2................................... 2...................... 99.36 499.29 598.65 139.69 0.0 100.0 -1.21
3................................... 3...................... 103.41 494.49 597.89 140.45 0.0 100.0 -0.93
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.
[[Page 20149]]
Table VIII.14--Product Class 3--IS and RS Ballasts That Operate Two 8-Foot HO Lamps (T8 Baseline): LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period *
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ Baseline/2............. 94.07 404.53 498.61 ........... ........... ........... ...........
3................................... 3...................... 98.12 398.16 496.28 2.33 13.2 86.8 4.57
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ Baseline/2............. 96.46 404.53 501.00 ........... ........... ........... ...........
3................................... 3...................... 100.51 400.71 501.22 -0.22 70.4 29.6 7.62
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VIII.15--Product Class 5--Ballasts That Operate Four 8-Foot HO Lamps in Cold Temperature Outdoor Signs: LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period *
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 163.93 1,403.06 1,566.99 ........... ........... ........... ...........
1, 2, 3............................. 1...................... 157.45 1,019.63 1,177.07 389.91 0.0 100.0 -0.16
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 166.32 1,403.06 1,569.38 ........... ........... ........... ...........
1, 2, 3............................. 1...................... 159.84 1,177.81 1,337.64 231.73 0.0 100.0 -0.27
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.
b. Consumer Sub-Group Analysis
Using the LCC spreadsheet model, DOE determined the impact of the
trial standard levels on the following consumer sub-groups: Low-income
consumers, institutions of religious worship, and institutions that
serve low-income populations. Representative ballast designs used in
the industrial sector (e.g., ballasts operating HO lamps) are not
typically used by the identified sub-groups, and were not included in
the sub-group analysis. Similarly, DOE assumed that low-income
consumers use residential ballasts only, and did not include commercial
ballast designs in the LCC analysis for this sub-group. DOE assumed
that institutions of religious worship and institutions that serve low-
income populations use commercial ballasts only, and did not include
residential ballast designs in their sub-group analysis.
To reflect conditions faced by the identified subgroups, DOE
adjusted particular inputs to the LCC model. For low-income consumers,
DOE adjusted electricity prices to represent rates paid by consumers
living below the poverty line. DOE assumed that institutions of
religious worship have lower annual operating hours than the commercial
sector average used in the main LCC analysis. For institutions serving
low-income populations, DOE assumed that the majority of these
institutions are small nonprofits, and used a higher discount rate of
10.7 percent (versus 6.9 percent for the main commercial sector
analysis).
Table VIII.16 through Table VIII.25 below show the LCC impacts and
payback periods for identified sub-groups that purchase ballasts.
Negative PBP values indicate standards that reduce operating costs and
installed costs. Entries of ``N/A'' indicate standard levels that do
not reduce operating costs. In general, the average LCC savings for the
identified sub-groups at the considered efficiency levels are not
significantly different from the average for all consumers.
[[Page 20150]]
Table VIII.16--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Commercial, T12 Baseline): LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period *
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 64.63 185.70 250.33 ........... ........... ........... ...........
1................................... 1...................... 55.91 178.85 234.76 15.57 0.0 100.0 -15.61
2................................... 2...................... 58.58 170.82 229.40 20.93 0.0 100.0 -5.00
3................................... 3...................... 59.16 156.54 215.71 34.62 0.0 100.0 -2.35
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 67.02 185.70 252.72 ........... ........... ........... ...........
1................................... 1...................... 58.30 158.28 216.58 36.14 0.0 100.0 -3.98
2................................... 2...................... 60.97 151.32 212.29 40.43 0.0 100.0 -2.21
3................................... 3...................... 61.55 148.39 209.95 42.77 0.0 100.0 -1.84
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 64.63 198.59 263.22 ........... ........... ........... ...........
1................................... 1...................... 55.91 191.11 247.02 16.20 0.0 100.0 -8.99
2................................... 2...................... 58.58 182.54 241.12 22.10 0.0 100.0 -2.88
3................................... 3...................... 59.16 167.32 226.48 36.74 0.0 100.0 -1.35
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 67.02 198.59 265.61 ........... ........... ........... ...........
1................................... 1...................... 58.30 169.17 227.47 38.14 0.0 100.0 -2.29
2................................... 2...................... 60.97 161.75 222.71 42.90 0.0 100.0 -1.27
3................................... 3...................... 61.55 158.63 220.18 45.43 0.0 100.0 -1.06
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.
Table VIII.17--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Commercial, T8 Baseline): LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period *
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 55.08 178.85 233.93 ........... ........... ........... ...........
2................................... 2...................... 57.74 170.82 228.56 5.37 0.1 99.9 4.23
3................................... 3...................... 58.33 156.54 214.87 19.06 0.0 100.0 1.86
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 57.47 178.85 236.32 ........... ........... ........... ...........
2................................... 2...................... 60.13 170.89 231.02 5.29 0.1 99.9 4.27
3................................... 3...................... 60.72 167.54 228.26 8.06 0.0 100.0 3.66
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 55.08 191.11 246.19 ........... ........... ........... ...........
2................................... 2...................... 57.74 182.54 240.29 5.90 0.0 100.0 2.43
3................................... 3...................... 58.33 167.32 225.64 20.54 0.0 100.0 1.07
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 20151]]
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 57.47 191.11 248.58 ........... ........... ........... ...........
2................................... 2...................... 60.13 182.62 242.75 5.82 0.0 100.0 2.46
3................................... 3...................... 60.72 179.05 239.77 8.81 0.0 100.0 2.11
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VIII.18--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Residential, T12 Baseline): LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period *
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Low-Income Consumers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 52.99 67.85 120.84 ........... ........... ........... ...........
1................................... 1...................... 45.02 56.51 101.53 19.31 0.0 100.0 -7.60
2, 3................................ 3...................... 46.24 57.41 103.64 17.20 0.0 100.0 -6.99
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 55.38 67.85 123.23 ........... ........... ........... ...........
1................................... 1...................... 47.41 56.10 103.51 19.72 0.0 100.0 -7.43
2, 3................................ 3...................... 48.63 53.64 102.27 20.96 0.0 100.0 -5.14
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.
Table VIII.19--Product Class 1--IS and RS Ballasts That Operate Two 4-Foot MBP Lamps (Residential, T8 Baseline): LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period *
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Low-Income Consumers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 44.11 56.51 100.62 ........... ........... ........... ...........
2, 3................................ 3...................... 45.33 57.41 102.74 -2.12 100.0 0.0 N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 46.50 56.51 103.01 ........... ........... ........... ...........
2, 3................................ 3...................... 47.72 54.03 101.75 1.26 10.6 89.4 5.37
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Entries of ``N/A'' indicate standard levels that do not reduce operating costs.
[[Page 20152]]
Table VIII.20--Product Class 1--IS and RS Ballasts That Operate Four 4-Foot MBP Lamps: LCC and PBP Results: LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period *
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ Baseline/2............. 76.77 323.00 399.77 ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
3................................... 3...................... 79.33 315.65 394.98 4.78 0.3 99.7 4.45
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ Baseline/2............. 79.16 323.00 402.16 ........... ........... ........... ...........
3................................... 3...................... 81.72 318.63 400.35 1.81 13.7 86.3 7.48
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ Baseline/2............. 76.77 345.04 421.81 ........... ........... ........... ...........
3................................... 3...................... 79.33 337.21 416.54 5.27 0.0 100.0 2.56
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ Baseline/2............. 79.16 345.04 424.20 ........... ........... ........... ...........
3................................... 3...................... 81.72 340.38 422.10 2.10 6.7 93.3 4.31
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VIII.21--Product Class 1--IS and RS Ballasts That Operate Two 8-Foot Slimline Lamps (T12 Baseline): LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period *
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 90.06 343.91 433.97 ........... ........... ........... ...........
2................................... 2...................... 89.34 327.51 416.86 17.12 0.0 100.0 -0.55
3................................... 3...................... 89.68 317.44 407.12 26.85 0.0 100.0 -0.18
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 92.45 343.91 436.36 ........... ........... ........... ...........
2................................... 2...................... 91.73 333.01 424.74 11.68 0.0 100.0 -0.81
3................................... 3...................... 92.07 328.05 420.11 16.25 0.0 100.0 -0.30
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 90.06 367.73 457.79 ........... ........... ........... ...........
2................................... 2...................... 89.34 350.13 439.48 18.31 0.0 100.0 -0.31
3................................... 3...................... 89.68 339.39 429.07 28.72 0.0 100.0 -0.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... Baseline/1............. 92.45 367.73 460.18 ........... ........... ........... ...........
2................................... 2...................... 91.73 355.99 447.72 12.45 0.0 100.0 -0.47
3................................... 3...................... 92.07 350.70 442.77 17.41 0.0 100.0 -0.17
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.
[[Page 20153]]
Table VIII.22--Product Class 1--IS and RS Ballasts That Operate Two 8-Foot Slimline Lamps (T8 Baseline): LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ Baseline/2............. 90.03 327.51 417.55 ........... ........... ........... ...........
3................................... 3...................... 90.03 317.44 407.81 9.74 0.0 100.0 0.42
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ Baseline/2............. 92.42 327.51 419.93 ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
3................................... 3...................... 92.75 322.64 415.40 4.54 0.0 100.0 0.88
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ Baseline/2............. 90.03 350.13 440.16 ........... ........... ........... ...........
3................................... 3...................... 90.37 339.39 429.76 10.41 0.0 100.0 0.24
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ Baseline/2............. 92.42 350.13 442.55 ........... ........... ........... ...........
3................................... 3...................... 92.75 344.94 437.69 4.86 0.0 100.0 0.50
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VIII.23--Product Class 2--PS Ballasts That Operate Two 4-Foot MBP Lamps: LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 57.92 147.32 205.24 ........... ........... ........... ...........
1, 2................................ 2...................... 59.17 137.56 196.73 8.51 0.0 100.0 1.85
3................................... 3...................... 59.60 135.76 195.35 9.89 0.0 100.0 2.11
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 60.31 147.32 207.63 ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ 2...................... 61.55 137.50 199.05 8.58 0.0 100.0 1.84
3................................... 3...................... 61.99 135.91 197.90 9.73 0.0 100.0 2.14
Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 57.92 161.44 219.37 ........... ........... ........... ...........
1, 2................................ 2...................... 59.17 150.78 209.94 9.42 0.0 100.0 1.07
3................................... 3...................... 59.60 148.80 208.40 10.97 0.0 100.0 1.22
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 60.31 161.44 221.76 ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2................................ 2...................... 61.55 150.71 212.26 9.49 0.0 100.0 1.06
3................................... 3...................... 61.99 148.97 210.96 10.79 0.0 100.0 1.23
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 20154]]
Table VIII.24--Product Class 2--PS Ballasts That Operate Four 4-Foot MBP Lamps: LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 75.31 271.57 346.88 ........... ........... ........... ...........
1................................... 1...................... 79.20 268.67 347.87 -0.99 94.4 5.6 19.57
2, 3................................ 3...................... 81.28 261.72 343.01 3.88 22.4 77.6 8.84
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 77.70 271.57 349.27 ........... ........... ........... ...........
1................................... 1...................... 81.59 248.00 329.60 19.67 0.0 100.0 2.41
2, 3................................ 3...................... 83.67 242.23 325.91 23.36 0.0 100.0 2.97
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 75.31 297.48 372.80 ........... ........... ........... ...........
1................................... 1...................... 79.20 294.31 373.52 -0.72 89.3 10.7 11.27
2, 3................................ 3...................... 81.28 286.72 368.00 4.79 11.2 88.8 5.09
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 77.70 297.48 375.18 ........... ........... ........... ...........
1................................... 1...................... 81.59 271.72 353.31 21.87 0.0 100.0 1.39
2, 3................................ 3...................... 83.67 265.41 349.08 26.10 0.0 100.0 1.71
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table VIII.25--Product Class 2--PS Ballasts That Operate Two 4-Foot MiniBP SO Lamps: LCC and PBP Sub-Group Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ Life-cycle cost savings
------------------------------------------------------------------------------ Median
Percent of consumers payback
Trial standard level Efficiency level Installed Discounted Average that experience period
cost operating LCC savings -------------------------- years
cost 2009$ Net cost Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 63.45 199.70 263.15 ........... ........... ........... ...........
1................................... 1...................... 63.55 188.59 252.15 11.01 0.0 100.0 0.11
2................................... 2...................... 65.04 180.53 245.58 17.57 0.0 100.0 1.06
3................................... 3...................... 69.84 193.18 263.02 0.13 72.9 27.1 12.49
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 65.84 199.70 265.54 ........... ........... ........... ...........
1................................... 1...................... 65.94 188.59 254.53 11.01 0.0 100.0 0.11
2................................... 2...................... 67.43 186.89 254.33 11.21 0.0 100.0 1.58
3................................... 3...................... 72.23 182.14 254.37 11.17 0.5 99.5 4.64
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sub-Group: Institutions Serving Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event I: Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 63.45 213.44 276.90 ........... ........... ........... ...........
1................................... 1...................... 63.55 201.60 265.15 11.75 0.0 100.0 0.06
2................................... 2...................... 65.04 193.00 258.05 18.85 0.0 100.0 0.61
3................................... 3...................... 69.84 206.49 276.33 0.57 67.0 33.0 7.19
--------------------------------------------------------------------------------------------------------------------------------------------------------
Event II: New Construction/Renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 65.84 213.44 279.29 ........... ........... ........... ...........
1................................... 1...................... 65.94 201.60 267.54 11.75 0.0 100.0 0.06
[[Page 20155]]
2................................... 2...................... 67.43 199.79 267.22 12.07 0.0 100.0 0.91
3................................... 3...................... 72.23 194.72 266.94 12.34 0.0 100.0 2.67
--------------------------------------------------------------------------------------------------------------------------------------------------------
c. Rebuttable Presumption Payback
As discussed above, EPCA provides a rebuttable presumption that an
energy conservation standard is economically justified if the increased
purchase cost for a product that meets the standard is less than three
times the value of the first-year energy savings resulting from the
standard. DOE's LCC and PBP analyses generate values that calculate the
payback period for consumers of potential energy conservation
standards, which includes, but is not limited to, the 3-year payback
period contemplated under the rebuttable presumption test discussed
above. However, DOE routinely conducts a full economic analysis that
considers the full range of impacts--including those on consumers,
manufacturers, the nation, and the environment--as required under 42
U.S.C. 6295(o)(2)(B)(i).
In the present case, DOE calculated a rebuttable presumption
payback period for each TSL. Rather than using distributions for input
values, DOE used discrete values and, as required by EPCA, based the
calculation on the assumptions in the DOE test procedures for ballasts.
As a result, DOE calculated a single rebuttable presumption payback
value, rather than a distribution of payback periods, for each TSL.
Table VIII.26 shows the rebuttable presumption payback periods that are
less than 3 years. Negative PBP values indicate standards that reduce
operating costs and installed costs.
While DOE examined the rebuttable-presumption criterion, it
considered whether the standard levels considered for today's rule are
economically justified through a more detailed analysis of the economic
impacts of these levels pursuant to 42 U.S.C. 6295(o)(2)(B)(i). The
results of this analysis serve as the basis for DOE to evaluate the
economic justification for a potential standard level definitively
(thereby supporting or rebutting the results of any preliminary
determination of economic justification).
Table VIII.26--Ballast Efficiency Levels With Rebuttable Payback Period Less Than Three Years
----------------------------------------------------------------------------------------------------------------
Mean payback period * years
-----------------------------------
IX. Product class X. Ballast type XI. Efficiency Event II: New
level Event I: construction/
Replacement renovation
----------------------------------------------------------------------------------------------------------------
1.................................. IS and RS ballasts that operate:
Two 4-foot MBP 1 -8.99 -2.29
lamps
(commercial, T12
baseline).
2 -2.88 -1.27
3 -1.35 -1.06
Two 4-foot MBP 2 2.43 2.46
lamps
(commercial, T8
baseline).
3 1.07 2.11
Two 4-foot MBP 1 -7.60 -7.34
lamps
(residential, T12
baseline).
2, 3 -6.99 -5.14
Four 4-foot MBP 3 2.56 ................
lamps.
Two 8-foot 2 -0.31 -0.47
slimline lamps
(T12 baseline).
3 -0.10 -0.17
Two 8-foot 3 0.24 0.50
slimline lamps
(T8 baseline).
----------------------------------------------------------------------------------------------------------------
2.................................. PS ballasts that operate:
Two 4-foot MBP 1, 2 1.07 1.06
lamps.
3 1.22 1.23
Four 4-foot MBP 1 ................ 1.39
lamps.
3 ................ 1.71
Two 4-foot MiniBP 1 0.06 0.06
SO lamps.
2 0.61 0.91
3 ................ 2.67
Two 4-foot MiniBP 1 1.28 1.28
HO lamps.
2 1.82 1.97
3 2.34 2.48
----------------------------------------------------------------------------------------------------------------
3.................................. IS and RS ballasts that operate:
Two 8-foot HO 1 -0.57 -0.83
lamps (T12
baseline).
2 -0.67 -1.21
[[Page 20156]]
3 -0.52 -0.93
----------------------------------------------------------------------------------------------------------------
5.................................. Ballasts that operate:
Four 8-foot HO 1, 2, 3 -0.16 -0.27
lamps in cold
temperature
outdoor signs.
----------------------------------------------------------------------------------------------------------------
* Negative PBP values indicate standards that reduce operating costs and installed costs.
1. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of amended energy
conservation standards on manufacturers of fluorescent lamp ballasts.
The section below describes the expected impacts on manufacturers at
each TSL. Chapter 13 of the TSD explains the analysis in further
detail.
The tables below depict the financial impacts (represented by
changes in INPV) of amended energy standards on manufacturers as well
as the conversion costs that DOE estimates manufacturers would incur at
each TSL. DOE shows the results for all product classes in one group,
as most product classes are generally made by the same manufacturers.
DOE breaks out results for the sign ballast manufacturer sub-group in
section 0 below. To evaluate the range of cash flow impacts on the
ballast industry, DOE modeled eight different scenarios using different
assumptions for markups, shipments, and technologies that correspond to
the range of anticipated market responses to new and amended standards.
Each scenario results in a unique set of cash flows and corresponding
industry value at each TSL. Two of these scenarios are presented below,
corresponding to the bounds of a range of market responses that DOE
anticipates could occur in the standards case. In the following
discussion, the INPV results refer to the difference in industry value
between the base case and the standards case that result from the sum
of discounted cash flows from the base year (2011) through the end of
the analysis period. The results also discuss the difference in cash
flow between the base case and the standards case in the year before
the compliance date for new and amended energy conservation standards.
This figure represents how large the required conversion costs are
relative to the cash flow generated by the industry in the absence of
new and amended energy conservation standards. In the engineering
analysis, DOE presents its findings of the common technology options
that achieve the efficiencies for each of the representative product
classes. To refer to the description of technology options and the
required efficiencies at each TSL, see section 0 of today's notice.
a. Industry Cash-Flow Analysis Results
The set of results below shows two tables of INPV impacts: The
first table reflects the lower (less severe) bound of impacts and the
second represents the upper bound. To assess the lower end of the range
of potential impacts, DOE modeled the preservation of operating profit
markup scenario. As discussed in section 0, the preservation of
operating profit markup scenario assumes that in the standards case,
manufacturers would be able to earn the same operating margin in
absolute dollars in the standards case as in the base case. In general,
the larger the product price increases, the less likely manufacturers
are to preserve the cash flow from operations calculated in this
scenario because it is less likely that manufacturers would be able to
markup these larger cost increases to the same degree.
DOE also incorporated the existing technologies scenario and the
shift shipment scenario to assess the lower bound of impacts. Under the
existing technologies scenario, base-case shipments of fluorescent lamp
ballasts are not impacted by any emerging technologies that could
potentially penetrate the market over the analysis period. Under the
shift shipment scenario, all base-case consumer purchases are affected
by the standard (regardless of whether their base-case efficiency is
below the standard) as consumers may seek to shift to a higher
efficiency level. Of all the scenario combinations analyzed in the MIA,
conditions for generating cash flow are greatest under the preservation
of operating profit markup, existing technologies, and shift shipment
scenarios--the annual shipment volume, efficiency mix, and the ability
to preserve operating margins is greatest. Thus, this scenario set
yields the greatest modeled industry profitability.
Through its discussions with manufacturers, DOE found that many
manufacturers typically offer two tiers of product lines differentiated
by efficiency level, with the higher efficiency tier earning a premium
over the baseline efficiency tier. Several manufacturers expected that
the premium currently earned by the higher efficiency tier would erode
under new or amended standards due to the disappearance of the baseline
efficiency tier. The market effect would be to commoditize the higher
tier product line (the new baseline in the standards case), which would
significantly harm profitability. Therefore, to assess the higher (more
severe) end of the range of potential impacts, DOE modeled a two-tier
markup scenario in which higher energy conservation standards result in
lower manufacturer markups for products that earn a premium in the base
case. In this scenario, DOE assumed that the markup on fluorescent lamp
ballasts varies according to two efficiency tiers in both the base case
and the standards case. In the standards case, DOE modeled the
situation in which portfolio reduction squeezes the margin of higher-
efficiency products as they become lower-relative-efficiency-tier
products. This commoditization would occur for several reasons. The
large fixture manufacturers have substantial purchasing power due to
the share of the market they represent (approximately two-thirds of the
ballast market) and the high-volume orders placed by the largest
fixture OEMs. Ballast manufacturers must compete aggressively for this
business, not simply because of the volume of sales, but also because
of the need to keep factories utilized and achieve economies of scale.
By manufacturing in high volumes, ballast manufacturers can drive down
fixed costs per unit, as they
[[Page 20157]]
spread overhead over more volume. Manufacturers can also lower variable
costs per unit. Large volumes allow manufacturers to order from their
component suppliers in large quantities, enabling better purchasing
terms, thereby reducing per unit costs.
Price is often the primary rationale in purchasing decisions for
fixture manufacturers, so ballast manufacturers face intense pressure
to make their baseline models as cost-competitive as possible, even if
the baseline model was once a premium model. To meet the needs of these
price-driven customers by reducing costs, ballast manufacturers may
have to remove features in the new baseline models that had commanded a
price premium when bundled with high-efficiency. Without being able to
use these extra features as a selling point, margins could decrease
even further. As a result, ballast manufacturers would earn the same
markup on these new high-volume baseline models as they did on their
lower efficiency, former baseline models. This scenario represents the
upper end (more severe) of the range of potential impacts on
manufacturers because units that commanded a higher markup under the
base case earn a lower markup under the standards case.
DOE also incorporated the emerging technologies scenario and the
roll-up shipment scenario to assess the upper bound of impacts. Under
the emerging technologies scenario fluorescent lamp ballasts lose
market share to emerging technologies such as LEDs over the analysis
period. Under the roll-up shipment scenario, no consumer purchases
beyond those that do not meet the new standard level are affected by
the standard, so premium pricing tiers are not continually maintained.
Thus, under the two-tier markup scenario, emerging technologies
scenario, and roll-up shipment scenario, the quantity of annual
shipments is lowest and manufacturers have the least ability to pass on
costs to consumers.
Table VIII.27--Manufacturer Impact Analysis for Fluorescent Lamp Ballasts--Preservation of Operating Profit
Markup, Existing Technologies, and Shift Shipment Scenario
----------------------------------------------------------------------------------------------------------------
Trial standard level
XII. Units Base case --------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
INPV................................ (2009$ millions)...... 1,241 1,221 1,189 1,145
Change in INPV...................... (2009$ millions)...... ........... (19.4) (51.6) (95.3)
(%)................... ........... -1.6% -4.2% -7.7%
Product Conversion Costs............ (2009$ millions)...... ........... 5 24 57
Capital Conversion Costs............ (2009$ millions)...... ........... 11 25 34
Total Conversion Costs.............. (2009$ millions)...... ........... 17 49 91
----------------------------------------------------------------------------------------------------------------
Table VIII.28--Manufacturer Impact Analysis for Fluorescent Lamp Ballasts--Two-Tier Markup, Emerging
Technologies, and Roll-Up Shipment Scenario
----------------------------------------------------------------------------------------------------------------
Trial standard level
XIII. Units Base case --------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
INPV................................ (2009$ millions)...... 853 740 635 557
Change in INPV...................... (2009$ millions)...... ........... (112.7) (217.9) (296.2)
(%)................... ........... -13.2% -25.5% -34.7%
Product Conversion Costs............ (2009$ millions)...... ........... 5 24 57
Capital Conversion Costs............ (2009$ millions)...... ........... 11 25 34
Total Conversion Costs.............. (2009$ millions)...... ........... 17 49 91
----------------------------------------------------------------------------------------------------------------
TSL 1 represents EL1 for all four representative product classes.
At TSL 1, DOE estimates impacts on INPV to range from -$19.4 million to
-$112.7 million, or a change in INPV of -1.6 percent to -13.2 percent.
At this proposed level, industry free cash flow is estimated to
decrease by approximately 11.9 percent to $43.8 million, compared to
the base-case value of $49.7 million in the year leading up to the
proposed energy conservation standards.
The INPV impacts at TSL 1 are relatively minor, in part because the
vast majority of shipments already meet EL1. DOE estimates that in
2014, the year in which compliance with any new and amended standards
is proposed to be required, 98 percent of product class 1 shipments, 69
percent of product class 2 shipments, 88 percent of product class 3
shipments, and 64 percent of product class 5 shipments would meet EL1
or higher in the base case. The majority of shipments that are at
baseline efficiency levels and would need to be converted at TSL 1 are
2-lamp, 4-foot MBP IS/RS residential ballasts in product class 1, 2-
lamp and 4-lamp, 4ft MBP PS ballasts in product class 4, and 4-lamp
sign ballasts in product class 5.
Because most fluorescent lamp ballast shipments already meet the
efficiency levels analyzed at TSL 1, DOE expects conversion costs to be
small compared to the industry value. DOE estimates product conversion
costs of $5 million due to the research, development, testing, and
certification costs needed to upgrade product lines that do not meet
TSL 1. For capital conversion costs, DOE estimates $11 million for the
industry, largely driven by the cost of converting all magnetic sign
ballast production lines to electronic sign ballast production lines.
Under the preservation of operating profit markup scenario, impacts
on manufacturers are marginally negative because while manufacturers
earn the same operating profit as is earned in the base case for 2015
(the year following the compliance date of amended standards), they are
faced with $17 million in conversion costs. INPV impacts on
manufacturers are not as significant under this scenario as in other
scenarios because despite most shipments already meeting TSL 1, the
shift shipment scenario moves products beyond the eliminated baseline
to higher-price (and higher gross profit) levels. This results in a
shipment-weighted average MPC increase of 7.8 percent applied to a
growing market
[[Page 20158]]
over the analysis period. While total shipments increase under both
technology scenarios, shipments under the existing technologies
scenario are 216 percent greater than shipments under the emerging
technologies scenario by the end of the analysis period. At TSL 1, the
moderate price increase applied to a large quantity of shipments
lessens the impact of the minor conversion costs estimated at TSL 1,
resulting in slightly negative impacts at TSL 1 under the preservation
of operating profit markup scenario.
Under the two-tier markup scenario, manufacturers are not able to
fully pass on additional costs to consumers and are not guaranteed
base-case operating profit levels. Rather, products that once earned a
higher-than-average markup at EL1 become commoditized once baseline
products are eliminated at TSL 1. Thus, the average markup drops below
the base-case average markup (which is equal to the flat manufacturer
markup of 1.4). There is a slight increase in shipment-weighted average
MPC (less than 1 percent) under the roll-up scenario, but this increase
is much smaller than under the shift scenario because shipments above
the baseline do not move to higher efficiencies with greater costs.
This MPC increase is outweighed by a lower average markup of 1.38 and
$17 million in conversion costs, resulting in more negative impacts at
TSL 1 under the two-tier markup scenario. These impacts increase on a
percentage basis under the emerging technologies scenario relative to
the existing technologies scenario because the base-case INPV against
which changes are compared is 31 percent lower.
TSL 2 represents EL1 for product class 5 (4-lamp sign ballasts).
For product classes 1 (4-foot MBP IS/RS and 8-foot SP Slimline), 2 (4-
foot MBP PS, 4-foot T5 MiniBP SO, and 4-foot T5 MiniBP HO),and 3 (2-
lamp 8-foot HO), TSL 2 represents EL2. At TSL 2, DOE estimates impacts
on INPV to range from -$51.6 million to -$217.9 million, or a change in
INPV of -4.2 percent to -25.5 percent. At this proposed level, industry
free cash flow is estimated to decrease by approximately 32.9 percent
to $33.3 million, compared to the base-case value of $49.7 million in
the year leading up to the proposed energy conservation standards.
Because product class 5 remains at EL1 at TSL 2, the additional
impacts at TSL 2 relative to TSL 1 result from increasing product
classes 1, 2, and 3 to EL2. At TSL 2, DOE estimates that 40 percent of
product class 1 shipments, 13 percent of product class 2 shipments, and
27 percent of product class 3 shipments would meet EL2 or higher in the
base case. Since product class 3 represents only 0.1 percent of the
fluorescent lamp ballast market, the vast majority of impacts at TSL 2
relative to TSL 1 result from changes in product classes 1 and 2.
At TSL 2, conversion costs nearly triple compared to TSL 1 but
remain small compared to the industry value. Product conversion costs
increase to $24 million due to the increase in the number of product
lines within product classes 1 and 2 that would need to be redesigned
at TSL 2. Capital conversion costs grow to $25 million at TSL 2 because
manufacturers would need to invest in additional testing equipment and
convert some production lines.
Under the preservation of operating profit markup scenario, INPV
impacts are negative because manufacturers are not able to fully pass
on higher product costs to consumers. The shipment-weighted average MPC
increases by 11.1 percent compared to the baseline MPC, but this
increase does not generate enough cash flow to outweigh the $49 million
in conversion costs at TSL 2, resulting in a -4.2 percent change in
INPV at TSL 2 compared to the base case.
Under the two-tier markup scenario, more products are commoditized
to a lower markup at TSL 2. The impact of this lower average markup of
1.36 outweighs the impact of a 10.3 percent increase in shipment-
weighted average MPC, resulting in a negative change in INPV at TSL 2.
The $49 million in conversion costs further erodes profitability, and
the lower base case INPV against which the change in INPV is compared
under the emerging technologies scenario increases impacts on a
percentage basis.
TSL 3 represents EL1 for product class 5 and EL3 for product
classes 1, 2, and 3. At TSL 3, DOE estimates impacts on INPV to range
from -$95.3 million to -$296.2 million, or a change in INPV of -7.7
percent to -34.7 percent. At this proposed level, industry free cash
flow is estimated to decrease by approximately 57.4 percent to $21.2
million, compared to the base-case value of $49.7 million in the year
leading up to the proposed energy conservation standards.
Because product class 5 remains at EL1 at TSL 3, the additional
impacts at TSL 3 relative to TSL 2 result from increasing product
classes 1, 2, and 3 to EL3. At TSL 3, DOE estimates that only 20
percent of product class 1 shipments, 5 percent of product class 2
shipments, and 2 percent of product class 3 shipments would meet the
efficiency levels proposed by TSL 3 or higher in the base case.
At TSL 3, conversion costs nearly double again compared to TSL 2.
Product conversion costs increase to $57 million because a far greater
number of product lines within product classes 1, 2, and 3 would need
to be redesigned at TSL 3. Capital conversion costs rise to $34 million
at TSL 3 because manufacturers would need to invest in equipment such
as surface-mount device placement machinery and solder machines to
convert production lines for the manufacturing of more efficient
ballast designs.
Under the preservation of operating profit markup, existing
technologies, and shift shipment scenarios, INPV decreases by 7.7
percent at TSL 3 compared to the base case, which is nearly double the
percentage impact at TSL 2. The shipment-weighted average MPC increases
by 19.5 percent, but manufacturers are not able to pass on the full
amount of these higher costs to consumers. This MPC increase is
outweighed by the $91 million in conversion costs at TSL 3.
Under the two-tier markup scenario, at TSL 3, products are
commoditized to a lower markup to an even greater extent. The impact of
this lower average markup of 1.34 outweighs the impact of a 19.3
percent increase in shipment-weighted average MPC, resulting in a
negative change in INPV at TSL 3 compared to TSL 2. Profitability is
further impacted by the $91 million in conversion costs and the lower
base-case INPV over which change in INPV is compared under the emerging
technologies scenario.
a. Impacts on Employment
DOE typically presents modeled quantitative estimates of the
potential changes in production employment that could result following
amended energy conservation standards. However, for this rulemaking,
DOE determined that none of the major manufacturers, which compose more
than 90 percent of the market, have domestic fluorescent lamp ballast
production. Although a few niche manufacturers have relatively limited
domestic production, based on interviews, DOE believes there are very
few domestic production employees in the United States Because many
niche manufacturers did not respond to interview requests, DOE is
unable to fully quantify domestic production employment. Therefore,
while DOE qualitatively discusses potential employment impacts below,
DOE did not model direct employment impacts explicitly because the
results would not be meaningful given the very low
[[Page 20159]]
number of domestic production employees.
Based on interviews, DOE believes that direct employment impacts of
relatively significant magnitude would only occur in the event that one
or more businesses chose to exit the market due to new standards.
Discussions with manufacturers indicated that, at the highest
efficiency level (TSL 3), some small manufacturers will be faced with
the decision to make the investments necessary to remain in the market
based on their current technical capabilities. In general, however, DOE
believes that TSL 3, the level proposed in today's notice, will not
have significant adverse impacts on employment because achieving these
levels is within the expertise of most manufacturers, including small
manufacturers, due to the lack of intellectual property restrictions
and similarity of products among manufacturers.
In summary, however, given the low number of production employees
and the unlikelihood that manufacturers would exit the market at the
efficiency levels proposed in today's notice, DOE does not expect a
significant impact on direct employment following new and amended
energy conservation standards.
DOE notes that the employment impacts discussed here are
independent of the employment impacts from the broader U.S. economy,
which are documented in chapter 15, Employment Impact Analysis, of the
NOPR TSD.
b. Impacts on Manufacturing Capacity
Manufacturers stated that new and amended energy conservation
standards could harm manufacturing capacity due to the current
component shortage discussed in section 0 above. Manufacturers
presently are struggling to produce enough fluorescent lamp ballasts to
meet demand because of a worldwide shortage of electrical components.
The components most affected by this shortage are high-efficiency
parts, for which demand would increase even further following new and
amended conservation standards. The increased demand could exacerbate
the component shortage, thereby impacting manufacturing capacity in the
near term. While DOE recognizes that the component shortage is
currently a significant issue for manufacturers, DOE believes it is a
relatively short term phenomenon to which component suppliers will
ultimately adjust. According to manufacturers, suppliers have the
ability to ramp up production to meet ballast component demand by the
compliance date of potential new standards, but those suppliers have
hesitated to invest in additional capacity due to economic uncertainty
and skepticism about the sustainability of demand. The state of the
macroeconomic environment through 2014 will likely impact the duration
of the component shortage. However, potential mandatory standards could
create more certainty for suppliers about the eventual demand for these
components. Additionally, the components at issue are not new
technologies; rather, they have simply not historically been demanded
in large quantities by ballast manufacturers.
c. Impacts on Sub-Groups of Manufacturers
As discussed in section 0, using average cost assumptions to
develop an industry cash-flow estimate is inadequate to assess
differential impacts among manufacturer sub-groups. DOE used the
results of the industry characterization to group ballast manufacturers
exhibiting similar characteristics. DOE identified two sub-groups that
would experience differential impacts: Small manufacturers and sign
ballast manufacturers. For a discussion of the impacts on the small
manufacturer sub-group, see the Regulatory Flexibility Analysis in
section 0 and chapter 13 of the NOPR TSD.
DOE is not presenting results under the two-tier markup scenario
for sign ballasts because it did not observe this two-tier effect in
the sign ballast market. Electronic ballasts at EL1 neither command a
higher price nor a higher markup in the base case. Additionally, roll-
up and shift scenarios do not have separate impacts for sign ballasts
because there are no higher ELs above the new baseline to which
products could potentially shift in the standards case. As such, the
tables below present the cash-flow analysis results under the
preservation of operating profit markup and roll-up shipment scenarios
with existing or emerging technologies for sign ballast manufacturers.
Table VIII.29--Manufacturer Impact Analysis for Sign Ballasts--Preservation of Operating Profit Markup, Existing
Technologies, and Roll-up Shipment Scenario
----------------------------------------------------------------------------------------------------------------
Trial standard level
XIV. Units Base case --------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
INPV................................ (2009$ millions)...... 142 138 138 138
Change in INPV...................... (2009$ millions)...... ........... (4.2) (4.2) (4.2)
(%)................... ........... -2.9% -2.9% -2.9%
Product Conversion Costs............ (2009$ millions)...... ........... 2 2 2
Capital Conversion Costs............ (2009$ millions)...... ........... 6 6 6
Total Conversion Costs.............. (2009$ millions)...... ........... 8 8 8
----------------------------------------------------------------------------------------------------------------
Table VIII.30--Manufacturer Impact Analysis for Sign Ballasts--Preservation of Operating Profit Markup, Emerging
Technologies, and Roll-up Shipment Scenario
----------------------------------------------------------------------------------------------------------------
Trial standard level
XV. Units Base case --------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
INPV................................ (2009$ millions)...... 116 111 111 111
Change in INPV...................... (2009$ millions)...... ........... (5.1) (5.1) (5.1)
(%)................... ........... -4.4% -4.4% -4.4%.
Product Conversion Costs............ (2009$ millions)...... ........... 2 2 2
Capital Conversion Costs............ (2009$ millions)...... ........... 6 6 6
[[Page 20160]]
Total Conversion Costs.............. (2009$ millions)...... ........... 8 8 8
----------------------------------------------------------------------------------------------------------------
For sign ballasts (product class 5), DOE analyzed only one
efficiency level; thus, the results are the same at each TSL. TSLs 1
through 3 represent EL1 for product class 5. At TSLs 1 through 3, DOE
estimates impacts on INPV to range from -$4.2 million to -$5.1 million,
or a change in INPV of -2.9 percent to -4.4 percent. At these proposed
levels, industry free cash flow is estimated to decrease by
approximately 38.4 percent to $4.9 million, compared to the base-case
value of $7.9 million in the year leading up to the proposed energy
conservation standards.
As shown by the results, DOE expects sign ballast manufacturers to
face small negative impacts under TSLs 1 through 3. DOE estimates that
64 percent of product class 5 shipments would meet EL1 in the base
case. This means that many manufacturers already produce electronic
sign ballasts, which is the design option represented by EL1. However,
many other manufacturers produce only magnetic T12 sign ballasts and
therefore would face significant capital exposure moving from magnetic
to electronic to meet TSLs 1 through 3. For that reason, DOE estimates
relatively high capital conversion costs of $6 million for sign ballast
manufacturers. Product redesign and testing costs are expected to total
$2 million for sign ballasts.
Unlike most product classes, sign ballasts are expected to decrease
rather than increase in price moving from baseline to EL1 by a
shipment-weighted average decrease in MPC of 4.5 percent. This is
because electronic ballasts are a cheaper alternative to magnetic
ballasts, even though the industry has not fully moved toward
electronic production yet. During interviews, manufacturers stated that
consumers were reluctant to convert to electronic ballasts although
there were no technical barriers to doing so. Under the preservation of
operating profit markup scenario, however, manufacturers are able to
maintain the base-case operating profit for the year following the
compliance date of amended standards despite lower production costs, so
the average markup increases slightly to 1.41 to account for the
decrease in MPC. Despite this markup increase, revenue is lower at TSLs
1 through 3 than in the base case because of the lower average unit
price, and the $8 million in conversion costs increases the negative
impact. When the preservation of operating profit markup is combined
with the existing technologies scenario rather than the emerging
technologies scenario, the impact of this maximized revenue per unit is
greatest because it is applied to a larger total quantity of shipments.
a. Cumulative Regulatory Burden
While any one regulation may not impose a significant burden on
manufacturers, the combined effects of recent or impending regulations
may have serious consequences for some manufacturers, groups of
manufacturers, or an entire industry. Assessing the impact of a single
regulation may overlook this cumulative regulatory burden. In addition
to energy conservation standards, other regulations can significantly
affect manufacturers' financial operations. Multiple regulations
affecting the same manufacturer can strain profits and lead companies
to abandon product lines or markets with lower expected future returns
than competing products. For these reasons, DOE conducts an analysis of
cumulative regulatory burden as part of its rulemakings pertaining to
appliance efficiency.
During previous stages of this rulemaking DOE identified a number
of requirements, in addition to amended energy conservation standards
for ballasts, that manufacturers of these products will face for
products and equipment they manufacture within approximately 3 years
prior to and 3 years after the anticipated compliance date of the
amended standards. The following section briefly addresses comments DOE
received with respect to cumulative regulatory burden and summarizes
other key related concerns that manufacturers raised during interviews.
NEMA stated that the effects of most safety, electromagnetic
interference (EMI), and toxic materials regulations are the same on all
ballast manufacturers. (NEMA, No. 29 at p. 9) DOE agrees that all
ballast manufacturers are subject to the same requirements as described
in this section and in chapter 13 of the NOPR TSD. Small manufacturers
may be impacted differentially and are therefore analyzed as a
manufacturer sub-group in section 0.
NEMA also stated that regulatory actions generally limit
competitiveness and force ballast manufacturers to add cost to their
base designs to comply with the regulatory requirements. (NEMA, No. 29
at p. 9) DOE asked manufacturers to quantify impacts of regulatory
actions where possible, and in the engineering analysis, DOE modified
the ballast efficiency, cost, or both at each analyzed efficiency level
according to the impacts of these regulations. These specific
regulatory actions and DOE's treatment of their impacts are discussed
below and in section 0.
NEMA further suggested that regulatory pressure on traditional
ballasts takes investments away from efforts to further develop dimming
ballasts and their related controls. (NEMA, No. 29 at p. 12) DOE
recognizes that there is an opportunity cost associated with any
investment, and this opportunity cost is reflected in the discount rate
used in the GRIM. In deciding which TSL to propose, DOE weighs the
potential benefits of new and amended energy conservation standards
against the potential burdens, including the impact on manufacturers,
to determine which TSL is technologically feasible and economically
justified.
Several manufacturers expressed concern during interviews about the
overall volume of DOE energy conservation standards with which they
must comply. Most fluorescent lamp ballast manufacturers also make a
full range of lighting products and share engineering and other
resources with these other internal manufacturing divisions for
different products (including certification testing for regulatory
compliance). For example, DOE amended standards in 2009 for general
service fluorescent lamps and incandescent reflector lamps for which
compliance will be required in 2012. Manufacturers were concerned that
the other products facing new or amended energy conservation standards
would compete for the same engineering and financial resources.
[[Page 20161]]
DOE takes into account the cost of compliance with other published
Federal energy conservation standards, such as those established in the
2009 lamps rule, in weighing the benefits and burdens of today's
proposed rulemaking. These costs and the extent to which they could be
incurred by fluorescent lamp ballast manufacturers are provided in
chapter 13 of the NOPR TSD. DOE does not include the impacts of
standards that have not yet been finalized because any impacts would be
speculative.
Several manufacturers noted the safety requirements ballast
manufacturers must meet. NEMA described the need to add a line voltage
disconnect to certain lighting systems and the need to use UL Type CC
rated (anti-arcing) ballasts or high temperature circle ``I'' rated
lampholders in OEM fixtures and UL-marked retrofit kits. The Type CC
rating requires control circuitry to implement, and these circuits will
consume system power, which decreases overall ballast electrical
efficiency. (NEMA, No. 29 at p. 9) DOE appreciates this information on
safety requirements, but DOE has not adjusted its engineering analysis
according to these potential impacts. The burden for line voltage
disconnect requirements falls solely on luminaire manufacturers rather
than on ballast manufacturers. For anti-arcing protection, most fixture
manufacturers comply with UL 1598 by using circle ``I'' lampholders.
Fixture manufacturers can also comply by purchasing premium Type CC
rated ballasts, which are often bundled with high-efficiency to command
a higher markup. Because providing Type CC ballasts to fixture
manufacturers is not required, DOE does not believe UL 1598 warrants
adjustment of the TSLs proposed in today's notice. See section 0 in the
engineering analysis for more information on Type CC protection.
Further detail on UL 1598 and the burden it imposes is provided in
chapter 13 of the NOPR TSD.
Manufacturers also discussed requirements regarding EMI. Currently,
ballasts are tested only for conducted emissions under FCC Part 18,
which is not as rigorous as the CISPR 15 requirements effective in
Europe. The burden of proof for existing EMI tests rests with the
luminaire manufacturers. (NEMA, No. 29 at p. 10) Manufacturers noted
that they could be required to comply with the model European EMI
regulation in the future, which would result in design changes that
could decrease efficiency. (NEMA, No. 29 at p. 10; OSI, Public Meeting
Transcript, No. 12 at p. 188) DOE has not adjusted its estimates for
ballast efficiency or price because NEMA's comment refers to potential
EMI regulations, but DOE will consider adjusting its analysis for the
final rule if these regulations are required prior to issuance of the
final rule.
Manufacturers also stated that lamp end-of-life (EOL) requirements
are a regulatory burden. T5 ballasts are required to have EOL
protection systems that detect characteristic electrical signals of a
lamp in distress and activate control functions in the ballast to limit
energy supplied to the lamp. Compliance with EOL requirements has added
cost and design complexity to these systems. (NEMA, No. 29 at p. 9-10)
In the future, T8 and T12 ballasts could also require EOL protection,
which could add cost and decrease efficiency. (NEMA, No. 29 at p. 10;
Philips, Public Meeting Transcript, No. 12 at p. 185-186) DOE agrees
that EOL requirements have affected the cost and design of T5 ballasts,
but because all T5 ballasts on the market, including those selected as
representative ballast types for DOE's engineering analysis, already
include these EOL protection systems, the effects of this requirement
are already taken into account. As stated in section 0, DOE does not
expect EOL protection to be required for T8 and T12 ballasts in the
United States as required in Europe due to significant differences
between the lamps used in the United States and Europe. If EOL
requirements change prior to the issuance of the final rule, DOE will
consider adjusting its analysis.
Manufacturers also expressed concern about the increasing
stringency of international energy efficiency standards and materials
requirements. Compliance with many regulations such as the Restriction
of Hazardous Substances (RoHS) directive in Europe on the use of lead-
based solder and other toxic materials is currently optional but could
become a requirement in the future. Compliance with toxic material
regulations could result in cost increases, component shortages, and
product quality concerns. (NEMA, No. 29 at p. 10, 13; Philips, Public
Meeting Transcript, No. 12 at p. 186-188; GE, Public Meeting
Transcript, No. 12 at p. 243-244) As described in section 0, DOE does
not believe any adjustment to ballast price or efficiency is necessary
to comply with toxic material regulations because compliance is
optional, but DOE will consider adjusting its analysis for the final
rule if these regulations are required prior to issuance of the final
rule.
DOE discusses these and other requirements, and includes the full
details of the cumulative regulatory burden analysis, in chapter 13 of
the NOPR TSD.
2. National Impact Analysis
a. Significance of Energy Savings
To estimate the energy savings through 2043 attributable to
potential standards for ballasts, DOE compared the energy consumption
of these products under the base case to their anticipated energy
consumption under each TSL. The table below presents DOE's forecasts of
the national energy savings for each TSL, calculated using the AEO2010
energy price forecast. This table presents the results of the two
scenarios that represent the maximum and minimum energy savings
resulting from all the scenarios analyzed. Chapter 11 of the NOPR TSD
describes these estimates in more detail.
Table VIII.31--Summary of Cumulative National Energy Savings for Ballasts (2014-2043)
----------------------------------------------------------------------------------------------------------------
National energy savings quads
-------------------------------------------------
XVI. Trial standard level XVII. Product class and Emerging
ballast type Existing technologies, shift technologies,
roll-up
----------------------------------------------------------------------------------------------------------------
1................................. 1--IS and RS ballasts that ............................. .................
operate: 1.42 0.002
Two 4-foot MBP lamps
(commercial).
Two 4-foot MBP lamps 0.22 0.01
(residential).
Four 4-foot MBP lamps.. 0 0
Two 8-foot slimline 0 0
lamps.
2--PS ballasts that ............................. .................
operate: 0.19 0.09
Two 4-foot MBP lamps......
[[Page 20162]]
Four 4-foot MBP lamps.. 0.45 0.22
Two 4-foot MiniBP SO 0.37 0.18
lamps.
Two 4-foot MiniBP HO 0.20 0.19
lamps.
3--IS and RS ballasts that
operate:
Two 8-foot HO lamps.... 0.0003 0.0003
5--Ballasts that operate:
Four 8-foot HO lamps in 0.90 0.68
cold temperature
outdoor signs.
-------------------------------------------------
Total................ 3.74 1.38
----------------------------------------------------------------------------------------------------------------
2................................. 1--IS and RS ballasts that ............................. .................
operate: 1.42 0.68
Two 4-foot MBP lamps
(commercial).
Two 4-foot MBP lamps 0.23 0.21
(residential).
Four 4-foot MBP lamps.. 0 0
Two 8-foot slimline 0.02 0.001
lamps.
2--PS ballasts that ............................. .................
operate: 0.19 0.09
Two 4-foot MBP lamps......
Four 4-foot MBP lamps.. 0.55 0.29
Two 4-foot MiniBP SO 0.72 0.32
lamps.
Two 4-foot MiniBP HO 0.36 0.32
lamps.
3--IS and RS ballasts that
operate:.
Two 8-foot HO lamps.... 0.0003 0.0002
5--Ballasts that operate:
Four 8-foot HO lamps in 0.90 0.68
cold temperature
outdoor signs.
-------------------------------------------------
Total................ 4.39 2.59
----------------------------------------------------------------------------------------------------------------
3................................. 1--IS and RS ballasts that ............................. .................
operate: 1.97 1.02
Two 4-foot MBP lamps
(commercial).
Two 4-foot MBP lamps 0.23 0.21
(residential).
Four 4-foot MBP lamps.. 0.32 0.17
Two 8-foot slimline 0.02 0.02
lamps.
2--PS ballasts that
operate:
Two 4-foot MBP lamps... 0.22 0.11
Four 4-foot MBP lamps.. 0.55 0.29
Two 4-foot MiniBP SO 1.52 0.71
lamps.
Two 4-foot MiniBP HO 0.52 0.49
lamps.
3--IS and RS ballasts that ............................. .................
operate: 0.0006 0.0005
Two 8-foot HO lamps.......
5--Ballasts that operate:
Four 8-foot HO lamps in 0.90 0.68
cold temperature
outdoor signs.
-------------------------------------------------
Total................ 6.25 3.70
----------------------------------------------------------------------------------------------------------------
a. Net Present Value of Consumer Costs and Benefits
DOE estimated the cumulative NPV to the nation of the total costs
and savings for consumers that would result from particular standard
levels for ballasts. In accordance with the OMB's guidelines on
regulatory analysis (OMB Circular A-4, section E, September 17, 2003),
DOE calculated NPV using both a 7-percent and a 3-percent real discount
rate. The 7-percent rate is an estimate of the average before-tax rate
of return to private capital in the U.S. economy, and reflects the
returns to real estate and small business capital as well as corporate
capital. DOE used this discount rate to approximate the opportunity
cost of capital in the private sector, because recent OMB analysis has
found the average rate of return to capital to be near this rate. In
addition, DOE used the 3-percent rate to capture the potential effects
of standards on private consumption (e.g., through higher prices for
products and the purchase of reduced amounts of energy). This rate
represents the rate at which society discounts future consumption flows
to their present value. This rate can be approximated by the real rate
of return on long-term government debt (i.e., yield on Treasury notes
minus annual rate of change in the Consumer Price Index), which has
averaged about 3 percent on a pre-tax basis for the last 30 years.
The table below shows the consumer NPV results for each TSL DOE
considered for ballasts, using both a 7-percent and a 3-percent
discount rate. Similar to the results presented for NES, this table
presents the results of the two scenarios that represent the maximum
and minimum NPV resulting from all the scenarios analyzed. See chapter
11 of the NOPR TSD for more detailed NPV results.
[[Page 20163]]
Table VIII.32--Summary of Cumulative Net Present Value for Ballasts (2014-2043)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Net present value (billion 2009$)
---------------------------------------------------------------
Existing technologies, shift Emerging technologies, roll-up
XVIII. Trial standard level XIX. Product class and ballast type ---------------------------------------------------------------
7 Percent 3 Percent 7 Percent 3 Percent
discount rate discount rate discount rate discount rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.............................................. 1--IS and RS ballasts that operate:
Two 4-foot MBP lamps (commercial)... 3.11 6.82 0.004 0.006
Two 4-foot MBP lamps (residential).. 0.44 0.97 0.15 0.24
Four 4-foot MBP lamps............... 0 0 0 0
Two 8-foot slimline lamps........... 0 0 0 0
2--PS ballasts that operate:
Two 4-foot MBP lamps................ 0.48 0.93 0.27 0.50
Four 4-foot MBP lamps............... 0.97 2.10 0.58 1.16
Two 4-foot MiniBP SO lamps.......... 0.88 1.95 0.56 1.08
Two 4-foot MiniBP HO lamps.......... 0.32 0.66 0.32 0.66
3--IS and RS ballasts that operate:
Two 8-foot HO lamps................. 0.02 0.03 0.001 0.001
5--Ballasts that operate:
Four 8-foot HO lamps in cold 2.72 5.12 2.33 4.27
temperature outdoor signs.
---------------------------------------------------------------
Total............................... 8.93 18.58 4.21 7.91
--------------------------------------------------------------------------------------------------------------------------------------------------------
2.............................................. 1--IS and RS ballasts that operate:
Two 4-foot MBP lamps (commercial)... 3.11 6.82 1.79 3.65
Two 4-foot MBP lamps (residential).. 0.45 0.98 0.45 0.98
Four 4-foot MBP lamps............... 0 0 0 0
Two 8-foot slimline lamps........... 0.06 0.11 0.01 0.01
2--PS ballasts that operate:
Two 4-foot MBP lamps................ 0.48 0.93 0.27 0.50
Four 4-foot MBP lamps............... 1.15 2.50 0.71 1.45
Two 4-foot MiniBP SO lamps.......... 1.06 2.50 0.67 1.38
Two 4-foot MiniBP HO lamps.......... 0.26 0.60 0.26 0.59
3--IS and RS ballasts that operate:
Two 8-foot HO lamps................. 0.03 0.04 0.03 0.04
5--Ballasts that operate: ..............
Four 8-foot HO lamps in cold 2.72 5.12 2.33 4.27
temperature outdoor signs.
---------------------------------------------------------------
Total............................... 9.31 19.62 6.51 12.88
---------------------------------------------------------------
3.............................................. 1--IS and RS ballasts that operate:
Two 4-foot MBP lamps (commercial)... 4.52 9.84 2.84 5.73
Two 4-foot MBP lamps (residential).. 0.45 0.98 0.45 0.98
Four 4-foot MBP lamps............... 0.44 1.02 0.28 0.62
Two 8-foot slimline lamps........... 0.06 0.12 0.06 0.12
2--PS ballasts that operate:
Two 4-foot MBP lamps................ 0.53 1.04 0.31 0.58
Four 4-foot MBP lamps............... 1.15 2.50 0.71 1.45
Two 4-foot MiniBP SO lamps.......... 1.31 3.42 0.88 2.07
Two 4-foot MiniBP HO lamps.......... 0.25 0.63 0.25 0.63
3--IS and RS ballasts that operate:
Two 8-foot HO lamps................. 0.03 0.04 0.03 0.04
5--Ballasts that operate: .............. .............. .............. ..............
Four 8-foot HO lamps in cold 2.72 5.12 2.33 4.27
temperature outdoor signs.
---------------------------------------------------------------
Total............................. 11.43 24.71 8.13 16.49
--------------------------------------------------------------------------------------------------------------------------------------------------------
a. Impacts on Employment
DOE develops estimates of the indirect employment impacts of
potential standards on the economy in general. As discussed above, DOE
expects energy conservation standards for ballasts to reduce energy
bills for ballast customers and the resulting net savings to be
redirected to other forms of economic activity. These shifts in
spending and economic activity could affect the demand for labor. As
described in section 0 above, DOE used an input/output model of the
U.S. economy to estimate these effects.
The input/output model suggests that today's proposed standards are
likely to increase the net demand for labor in the economy. However,
the gains would most likely be very small relative to total national
employment, and neither the BLS data nor the input/output model DOE
uses includes the quality or wage level of the jobs. As discussed in
section 0 above, the major manufacturers interviewed for this
rulemaking indicate they have no domestic ballast production. DOE
[[Page 20164]]
believes, therefore, that new and amended standards for ballasts will
not have a significant impact on the limited number of production
workers directly employed by ballast manufacturers in the U.S.
Table VIII.33 presents the estimated net indirect employment
impacts from the TSLs that DOE considered in this rulemaking. See NOPR
TSD chapter 15 for more detailed results.
Table VIII.33--Net Change in Jobs From Indirect Employment Effects Under Ballast TSLs
----------------------------------------------------------------------------------------------------------------
Net national change in jobs
(thousands)
XXI. Trial -----------------------------------
XX. Analysis period year standard Existing Emerging
level technologies, technologies,
shift roll-up
----------------------------------------------------------------------------------------------------------------
2020........................................................... 1 12.64 3.67
2 2.89 2.59
3 3.63 3.31
----------------------------------------------------------------------------------------------------------------
2043........................................................... 1 123.75 31.79
2 63.21 37.07
3 89.47 51.06
----------------------------------------------------------------------------------------------------------------
1. Impact on Utility or Performance of Products
As presented in section 0 of this notice, DOE concluded that none
of the TSLs considered in this notice would reduce the utility or
performance of the products under consideration in this rulemaking.
Furthermore, manufacturers of these products currently offer ballasts
that meet or exceed the proposed standards. (42 U.S.C.
6295(o)(2)(B)(i)(IV))
2. Impact of Any Lessening of Competition
DOE has also considered any lessening of competition that is likely
to result from new and amended standards. The Attorney General
determines the impact, if any, of any lessening of competition likely
to result from a proposed standard, and transmits such determination to
the Secretary, 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))
To assist the Attorney General in making such determination, DOE
has provided DOJ with copies of this notice and the TSD for review. DOE
will consider DOJ's comments on the proposed rule in preparing the
final rule, and DOE will publish and respond to DOJ's comments in that
document.
3. Need of the Nation To Conserve Energy
An improvement in the energy efficiency of the products subject to
today's rule is likely to improve the security of the nation's energy
system by reducing overall demand for energy. Reduced electricity
demand may also improve the reliability of the electricity system. As a
measure of this reduced demand, Table VIII.34 presents the estimated
reduction in generating capacity in 2043 for the TSLs that DOE
considered in this rulemaking.
Table VIII.34--Reduction in Electric Generating Capacity in 2043 Under
Ballast TSLs
------------------------------------------------------------------------
Reduction in electric generating
capacity (gigawatts)
-----------------------------------
XXII. Trial standard level Existing Emerging
technologies, technologies,
shift roll-up
------------------------------------------------------------------------
1................................... 4.17 1.51
2................................... 5.20 2.99
3................................... 7.22 4.37
------------------------------------------------------------------------
Energy savings from amended standards for ballasts could also
produce environmental benefits in the form of reduced emissions of air
pollutants and greenhouse gases associated with electricity production.
Table VIII.35 provides DOE's estimate of cumulative CO2,
NOX, and Hg emissions reductions projected to result from
the TSLs considered in this rulemaking. DOE reports annual
CO2, NOX, and Hg emissions reductions for each
TSL in the environmental assessment in chapter 16 of the NOPR TSD.
Table VIII.35--Summary of Emissions Reduction Estimated for Ballast TSLs
[Cumulative for 2014 through 2043]
----------------------------------------------------------------------------------------------------------------
Cumulative reduction in emissions (2014 through
2043)
-----------------------------------------------------
Existing technologies, Emerging technologies,
XXIII. Trial standard level shift roll-up
-----------------------------------------------------
CO2 CO2
MMt NOX kt Hg t MMt NOX kt Hg t
----------------------------------------------------------------------------------------------------------------
1......................................................... 70 26 0.96 14 11 0.20
2......................................................... 87 32 1.20 27 22 0.40
[[Page 20165]]
3......................................................... 121 44 1.67 40 32 0.59
----------------------------------------------------------------------------------------------------------------
As discussed in section 0, DOE did not report sulfur dioxide
(SO2) emissions reductions from power plants because there
is uncertainty about the effect of energy conservation standards on the
overall level of SO2 emissions in the United States due to
SO2 emissions caps. DOE also did not include NOX
emissions reduction from power plants in States subject to CAIR because
an energy conservation standard would not affect the overall level of
NOX emissions in those States due to the emissions caps
mandated by CAIR.
As part the analysis for this proposed rule, DOE estimated monetary
benefits likely to result from the reduced emissions of CO2
and NOX that DOE estimated for each of the TSLs considered.
As discussed in section 0, DOE used values for the SCC developed by an
interagency process. The four values for CO2 emissions
reductions resulting from that process (expressed in 2007$) are $4.7/
ton (the average value from a distribution that uses a 5-percent
discount rate), $21.4/ton (the average value from a distribution that
uses a 3-percent discount rate), $35.1/ton (the average value from a
distribution that uses a 2.5-percent discount rate), and $64.9/ton (the
95th-percentile value from a distribution that uses a 3-percent
discount rate). These values 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. For
each TSL, DOE calculated the global present values of CO2
emissions reductions, using the same discount rate as was used in the
studies upon which the dollar-per-ton values are based. DOE calculated
domestic values as a range from 7 percent to 23 percent of the global
values.
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 NOPR 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 ballast standards.
Estimated monetary benefits for CO2, NOX and Hg
emission reductions are detailed in chapter 16 of the NOPR TSD.
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
VIII.36 shows an example of the calculation of the combined NPV
including benefits from emissions reductions for the case of TSL 3 for
ballasts. The CO2 values used in the table correspond to the
four scenarios for the valuation of CO2 emission reductions
presented in section 0.
Table VIII.36--Adding Net Present Value of Consumer Savings To Present
Value of Monetized Benefits From CO2 and NOX Emissions Reductions at TSL
3 for Ballasts (Existing Technologies, Shift)
------------------------------------------------------------------------
Present value
Category million 2009$ Discount rate (%)
------------------------------------------------------------------------
Benefits
------------------------------------------------------------------------
Operating Cost Savings............. 16,858 7
35,284 3
CO2 Reduction Monetized Value (at 429 5
$4.7/Metric Ton)*.................
CO2 Reduction Monetized Value (at 2,185 3
$21.4/Metric Ton)*................
CO2 Reduction Monetized Value (at 3,699 2.5
$35.1/Metric Ton)*................
CO2 Reduction Monetized Value (at 6,668 3
$64.9/Metric Ton)*................
NOX Reduction Monetized Value (at 35 7
$2,519/Ton)*......................
65 3
Total Monetary Benefits **......... 19,078 7
37,534 3
------------------------------------------------------------------------
Costs
------------------------------------------------------------------------
Total Incremental Installed Costs.. 5,425 7
10,573 3
------------------------------------------------------------------------
[[Page 20166]]
Net Benefits/Costs
------------------------------------------------------------------------
Including CO2 and NOX**............ 13,653 7
26,961 3
------------------------------------------------------------------------
* These values represent global values (in 2007$) 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 percent, 3 percent, and 2.5 percent discount rates,
respectively. The value of $64.9 per ton represents the 95th
percentile of the SCC distribution calculated using a 3 percent
discount rate. See section 0 for details.
** Total Monetary Benefits for both the 3 percent and 7 percent cases
utilize the central estimate of social cost of CO2 emissions
calculated at a 3 percent discount rate (averaged across three IAMs),
which is equal to $21.4/ton in 2010 (in 2007$).
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; and (2) the assessments of consumer savings and emission-
related benefits are performed with different computer models, leading
to different timeframes for analysis. For ballasts, the present value
of national consumer savings is measured for the period in which units
shipped (2014-2043) 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 CO2 in that year, out to 2300.
Chapter 16 of the NOPR TSD presents calculations of the combined
NPV including benefits from emissions reductions for each TSL.
A. Proposed Standards
DOE recognizes that when it considers proposed standards, it is
subject to the EPCA requirement that any new or amended energy
conservation standard for any type (or class) of covered product be
designed to achieve the maximum improvement in energy efficiency that
the Secretary determines is technologically feasible and economically
justified. (42 U.S.C. 6295(o)(2)(A)) In determining whether a standard
is economically justified, the Secretary must determine whether the
benefits of the standard exceed its burdens to the greatest extent
practicable, in light of the seven statutory factors discussed
previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or amended standard
must also result in a significant conservation of energy. (42 U.S.C.
6295(o)(3)(B))
DOE considered the impacts of standards at each trial standard
level, beginning with the maximum technologically feasible level, to
determine whether that level met the evaluation criteria. If the max
tech level was not justified, DOE then considered the next most
efficient level and undertook the same evaluation until it reached the
highest efficiency level that is both technologically feasible and
economically justified and saves a significant amount of energy.
DOE discusses the benefits and/or burdens of each trial standard
level in the following sections. DOE bases its discussion on
quantitative analytical results for each trial standard level
(presented in section 0) such as national energy savings, net present
value (discounted at 7 and 3 percent), emissions reductions, industry
net present value, life-cycle cost, and consumers' installed price
increases. Beyond the quantitative results, DOE also considers other
burdens and benefits that affect economic justification, including how
technological feasibility, manufacturer costs, and impacts on
competition may affect the economic results presented.
To aid the reader as DOE discusses the benefits and burdens of each
trial standard level, DOE has included tables below that present a
summary of the results of DOE's quantitative analysis for each TSL. In
addition to the quantitative results presented in the tables, DOE also
considers other burdens and benefits that affect economic
justification. Section 0 presents the estimated impacts of each TSL for
these subgroups.
Table VIII.37--Summary of Results for Ballasts
[Existing Technologies, Shift]
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3
----------------------------------------------------------------------------------------------------------------
National Energy Savings (quads). 3.74..................... 4.39..................... 6.25.
----------------------------------------------------------------------------------------------------------------
NPV of Consumer Benefits (2009$ billion)
----------------------------------------------------------------------------------------------------------------
3% discount rate................ 18.58.................... 19.62.................... 24.71.
7% discount rate................ 8.93..................... 9.31..................... 11.43.
----------------------------------------------------------------------------------------------------------------
Industry Impacts
----------------------------------------------------------------------------------------------------------------
Industry NPV (2009$ million).... 1,221.................... 1,189.................... 1,145.
Industry NPV (% change)......... -1.6%.................... -4.2%.................... -7.7%.
----------------------------------------------------------------------------------------------------------------
[[Page 20167]]
Cumulative Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (MMt)....................... 70....................... 87....................... 121.
NOX (kt)........................ 26....................... 32....................... 44.
Hg (t).......................... 0.96..................... 1.20..................... 1.67.
----------------------------------------------------------------------------------------------------------------
Value of Cumulative Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (2009$ billion) *........... 0.25 to 3.85............. 0.31 to 4.80............. 0.43 to 6.67.
NOX--3% discount rate (2009$ 37....................... 47....................... 65.
million).
NOX--7% discount rate (2009$ 20....................... 25....................... 35.
million).
----------------------------------------------------------------------------------------------------------------
Mean LCC Savings (replacement event) ** (2009$)
----------------------------------------------------------------------------------------------------------------
Product Class 1
IS and RS ballasts that operate:
Two 4-foot MBP lamps 17.54 to 19.29........... -2.11 to 25.00........... -2.11 to 42.41.
(commercial).
Two 4-foot MBP lamps
(residential).
Four 4-foot MBP lamps.......
Two 8-foot slimline lamps...
Product Class 2
PS ballasts that operate:
Two 4-foot MBP lamps........ 0.08 to 19.21............ 7.52 to 22.57............ 1.83 to 20.68.
Four 4-foot MBP lamps.......
Two 4-foot MiniBP SO lamps..
Two 4-foot MiniBP HO lamps..
Product Class 3
Ballasts that operate:
Two 8-foot HO lamps......... 69.82.................... 234.45................... 2.33 to 236.77.
Product Class 5
Ballasts that operate:
Four 8-foot HO lamps in cold- 389.91................... 389.91................... 389.91.
temperature outdoor signs.
----------------------------------------------------------------------------------------------------------------
Median PBP (replacement event) *** (years)
----------------------------------------------------------------------------------------------------------------
Product Class 1................. -8.99 to -7.60........... -6.99 to N/A............. -6.99 to N/A.
Product Class 2................. 0.06 to 11.27............ 0.61 to 5.09............. 1.22 to 7.19.
Product Class 3................. -0.57.................... -0.67.................... -0.52 to 4.57.
Product Class 5................. -0.16.................... -0.16.................... -0.16.
----------------------------------------------------------------------------------------------------------------
Distribution of Consumer LCC Impacts (see Table VIII.16 through Table VIII.25 above)
----------------------------------------------------------------------------------------------------------------
Generation Capacity Reduction 4.17..................... 5.20..................... 7.22.
(GW) [dagger].
----------------------------------------------------------------------------------------------------------------
Employment Impacts
----------------------------------------------------------------------------------------------------------------
Indirect Domestic Jobs 123.75................... 63.21.................... 89.47.
(thousands) [dagger].
----------------------------------------------------------------------------------------------------------------
* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2
emissions.
** For LCCs, a negative value means an increase in LCC by the amount indicated.
*** For PBPs, negative values indicate standards that reduce operating costs and installed costs; ``N/A''
indicates standard levels that do not reduce operating costs.
[dagger] Changes in 2043.
Table VIII.38--Summary of Results for Ballasts
[Emerging Technologies, Roll-up]
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3
----------------------------------------------------------------------------------------------------------------
National Energy Savings (quads). 1.38..................... 2.59..................... 3.70.
----------------------------------------------------------------------------------------------------------------
NPV of Consumer Benefits (2009$ billion)
----------------------------------------------------------------------------------------------------------------
3% discount rate................ 7.91..................... 12.88.................... 16.49.
7% discount rate................ 4.21..................... 6.51..................... 8.13.
----------------------------------------------------------------------------------------------------------------
Industry Impacts
----------------------------------------------------------------------------------------------------------------
Industry NPV (2009$ million).... 740...................... 635...................... 557.
Industry NPV (% change)......... -13.2%................... -25.5%................... -34.7%.
----------------------------------------------------------------------------------------------------------------
[[Page 20168]]
Cumulative Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (MMt)....................... 14....................... 27....................... 40.
NOX (kt)........................ 11....................... 22....................... 32.
Hg (t).......................... 0.20..................... 0.40..................... 0.59.
----------------------------------------------------------------------------------------------------------------
Value of Cumulative Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (2009$ billion) *........... 0.06 to 0.90............. 0.13 to 1.79............. 0.18 to 2.62.
NOX--3% discount rate (2009$ 14....................... 29....................... 42.
million).
NOX--7% discount rate (2009$ 7........................ 13....................... 19.
million).
----------------------------------------------------------------------------------------------------------------
Mean LCC Savings (replacement event) ** (2009$)
----------------------------------------------------------------------------------------------------------------
Product Class 1
IS and RS ballasts that operate:
Two 4-foot MBP lamps 17.54 to 19.29........... -2.11 to 25.00........... -2.11 to 42.41.
(commercial).
Two 4-foot MBP lamps
(residential).
Four 4-foot MBP lamps.......
Two 8-foot slimline lamps...
Product Class 2
PS ballasts that operate:
Two 4-foot MBP lamps........ 0.08 to 19.21............ 7.52 to 22.57............ 1.83 to 20.68.
Four 4-foot MBP lamps.......
Two 4-foot MiniBP SO lamps..
Two 4-foot MiniBP HO lamps..
Product Class 3
Ballasts that operate:
Two 8-foot HO lamps......... 69.82.................... 234.45................... 2.33 to 236.77.
Product Class 5
Ballasts that operate:
Four 8-foot HO lamps in cold- 389.91................... 389.91................... 389.91.
temperature outdoor signs.
----------------------------------------------------------------------------------------------------------------
Median PBP (replacement event) *** (years)
----------------------------------------------------------------------------------------------------------------
Product Class 1................. -8.99 to -7.60........... -6.99 to N/A............. -6.99 to N/A.
Product Class 2................. 0.06 to 11.27............ 0.61 to 5.09............. 1.22 to 7.19.
Product Class 3................. -0.57.................... -0.67.................... -0.52 to 4.57.
Product Class 5................. -0.16.................... -0.16.................... -0.16.
----------------------------------------------------------------------------------------------------------------
Distribution of Consumer LCC Impacts (see Table VIII.16 through Table VIII.25 above)
----------------------------------------------------------------------------------------------------------------
Generation Capacity Reduction 1.51..................... 2.99..................... 4.37.
(GW)[dagger].
----------------------------------------------------------------------------------------------------------------
Employment Impacts
----------------------------------------------------------------------------------------------------------------
Indirect Domestic Jobs 31.79.................... 37.07.................... 51.06.
(thousands)[dagger].
----------------------------------------------------------------------------------------------------------------
* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2
emissions.
** For LCCs, a negative value means an increase in LCC by the amount indicated.
*** For PBPs, negative values indicate standards that reduce operating costs and installed costs; ``N/A''
indicates standard levels that do not reduce operating costs.
[dagger] Changes in 2043.
As discussed in previous DOE standards rulemakings and a recent
Notice of Data Availability (76 FR 9696, Feb. 22, 2011), DOE also notes
that the economics literature provides a wide-ranging discussion of how
consumers trade off upfront costs and energy savings in the absence of
government intervention. Much of this literature attempts to explain
why consumers appear to undervalue energy efficiency improvements. This
undervaluation suggests that regulation that promotes energy efficiency
can produce significant net private gains (as well as producing social
gains by, for example, reducing pollution). There is evidence that
consumers undervalue future energy savings as a result of (1) a lack of
information, (2) a lack of sufficient savings to warrant delaying or
altering purchases (e.g., an inefficient ventilation fan in a new
building or the delayed replacement of a water pump), (3) inconsistent
(e.g., excessive short-term) weighting of future energy cost savings
relative to available returns on other investments, (4) computational
or other difficulties associated with the evaluation of relevant
tradeoffs, and (5) a divergence in incentives (e.g., renter versus
owner; builder vs. purchaser). Other literature indicates that with
less than perfect foresight and a high degree of uncertainty about the
future, consumers may trade off these types of investments at a higher
than expected rate between current consumption and uncertain future
energy cost savings. In the abstract, it may be difficult to say how a
welfare gain from correcting under-investment compares in magnitude to
the potential welfare losses associated with no longer purchasing a
machine or switching to an
[[Page 20169]]
imperfect substitute, both of which still exist in this framework.
Other literature indicates that with less than perfect foresight
and uncertainty about the future, consumers may trade off these types
of investments at a higher than expected rate between current
consumption and uncertain future energy cost savings. Some studies
suggest that this seeming undervaluation may be explained in certain
circumstances by differences between tested and actual energy savings,
or by uncertainty and irreversibility of energy investments.
The mix of evidence in the empirical literature suggests that if
feasible, analysis of regulations mandating energy efficiency
improvements should explore the potential for both welfare gains and
losses and move toward fuller economic framework where all relevant
changes can be quantified.\49\ While DOE is not prepared at present to
provide a fuller quantifiable framework for this discussion, DOE seeks
comments on how to assess these possibilities.\50\
---------------------------------------------------------------------------
\49\ A good review of the literature related to this issue can
be found in Gillingham, K., R. Newell, K. Palmer. (2009). ``Energy
Efficiency Economics and Policy,'' Annual Review of Resource
Economics, 1: 597-619; and Tietenberg, T. (2009). ``Energy
Efficiency Policy: Pipe Dream or Pipeline to the Future?'' Review of
Environmental Economics and Policy. Vol. 3, No. 2: 304-320.
\50\ A draft paper, ``Notes on the Economics of Household Energy
Consumption and Technology Choice,'' proposes a broad theoretical
framework on which an empirical model might be based and is posted
on the DOE Web site along with this notice at http://www.eere.energy.gov/buildings/appliance_standards.
---------------------------------------------------------------------------
1. Trial Standard Level 3
DOE first considered the most efficient level, TSL 3, which would
save an estimated total of 3.7 to 6.3 quads of energy through 2043--a
significant amount of energy. For the nation as a whole, TSL 3 would
have a net savings of $8.1 billion-$11.4 billion at a 7-percent
discount rate, and $16.5 billion-24.7 billion at a 3-percent discount
rate. The emissions reductions at TSL 3 are estimated at 40-121 MMt of
CO2, 32-44 kilotons (kt) of NOX, and 0.59-1.67
tons of Hg. Total generating capacity in 2043 is estimated to decrease
compared to the reference case by 4.37-7.22 gigawatts under TSL 3. As
seen in section 0, for almost all representative ballast types,
consumers have available ballast designs which result in positive LCC
savings, ranging from $1.83-$389.91, at TSL 3. The consumers that
experience negative LCC savings at TSL 3 are those that currently have
a 2-lamp 8-foot HO T8 ballast (for the new construction/renovation
event only) or a 2-lamp 4-foot MBP T8 ballast in the residential sector
(for the replacement event only). The projected change in industry
value would range from a decrease of $95.3 million to a decrease of
$296.2 million, or a net loss of 7.7 percent to a net loss of 34.7
percent in INPV.
DOE based TSL 3 on the most efficient commercially available
products for each representative ballast type analyzed. This TSL
represents the highest efficiency level that is technologically
feasible for a sufficient diversity of products (spanning several
ballast factors, number of lamps per ballast, and types of lamps
operated) within each product class. Although consumers that currently
have a 2-lamp 8-foot HO T8 ballast or a 2-lamp 4-foot MBP T8 ballast in
the residential sector experience negative LCC savings of -$0.22 and -
$2.11 respectively, overall LCC savings for consumers of these ballast
types are positive.
After considering the analysis, comments on the preliminary
analysis, and the benefits and burdens of TSL 3, the Secretary has
reached the following tentative conclusion: TSL 3 offers the maximum
improvement in efficiency that is technologically feasible and
economically justified, and will result in significant conservation of
energy. The Secretary has reached the initial 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, and positive life-cycle cost
savings would outweigh the potentially large reduction in INPV for
manufacturers and increased LCC for a small subset of consumers.
Therefore, DOE today proposes to adopt the energy conservation
standards for ballasts at TSL 3. DOE seeks comment on its proposal of
TSL 3. DOE will consider the comments and information received in
determining the final energy conservation standards.
B. Backsliding
As discussed in section 0, EPCA contains what is commonly known as
an ``anti-backsliding'' provision, which mandates that the Secretary
not prescribe any amended standard that either increases the maximum
allowable energy use or decreases the minimum required energy
efficiency of a covered product. (42 U.S.C. 6295(o)(1)) Because DOE is
evaluating amended standards in terms of ballast luminous efficiency,
DOE converted the existing BEF standards to BLE to verify that the
proposed standards did not constitute backsliding. The following
describes how DOE completed this comparison.
Ballast efficacy factor is defined as ballast factor divided by
input power times 100. Ballast factor, in turn, is currently defined as
the test system light output divided by a reference system light
output. As mentioned in section 0, the active mode test procedure SNOPR
proposed a new method for calculating ballast factor. 75 FR 71570,
71577-8 (November 24, 2010). The new methodology entails measuring the
lamp arc power of the test system and dividing it by the lamp arc power
of the reference system. Because this new method calculates a ballast
factor equivalent to the existing method, DOE believes this definition
can be incorporated into the equation for BEF. After this substitution,
BEF can be converted to BLE by dividing by 100 and multiplying by the
appropriate reference arc power. Table VIII.39 below contains the
existing standard in terms of BEF, the existing standard in terms of
BLE, and the proposed standard in terms of BLE.
Table VIII.39--Existing Federal BEF Standards and the Corresponding BLE
----------------------------------------------------------------------------------------------------------------
Equivalent BLE Proposed
Application for operation of BEF ------------------------ BLE
standard Low freq High freq standard *
----------------------------------------------------------------------------------------------------------------
One F40T12 lamp................................................. 2.29 80.4 83.2 89.9
Two F40T12 lamps................................................ 1.17 82.1 85.0 91.0
Two F96T12 lamps................................................ 0.63 85.1 89.7 92.2
Two F96T12/HO lamps............................................. 0.39 74.4 78.0 90.4
One F34T12 lamp................................................. 2.61 75.2 77.8 89.4
Two F34T12 lamps................................................ 1.35 77.8 80.5 90.6
Two F96T12/ES lamps............................................. 0.77 83.9 88.4 91.8
[[Page 20170]]
Two F96T12/HO/ES lamps.......................................... 0.42 68.0 71.3 90.1
----------------------------------------------------------------------------------------------------------------
* For ballast types that could be in more than one product class, this table presents the lowest standard the
ballast would be required to meet. For example, 8-foot HO ballasts can have a PS starting method in addition
to IS or RS. Therefore, DOE presents the standard for the PS product class as it is the lowest. The proposed
BLE standard includes a 0.8 percent reduction for lab to lab variation and compliance requirements.
As seen in the table above, the standards proposed in this NOPR are
higher than the existing standards, regardless of low or high frequency
operation. As such, the proposed standards do not decrease the minimum
required energy efficiency of the covered products and therefore do not
violate the anti-backsliding provision in EPCA.
XXIV. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify
the problem that it intends to address, including, where applicable,
the failures of private markets or public institutions that warrant new
agency action, as well as to assess the significance of that problem.
The problems that today's standards address are as follows:
(1) There is a lack of consumer information and/or information
processing capability about energy efficiency opportunities in the
lighting market.
(2) There is asymmetric information (one party to a transaction has
more and better information than the other) and/or high transactions
costs (costs of gathering information and effecting exchanges of goods
and services).
(3) There are external benefits resulting from improved energy
efficiency of ballasts that are not captured by the users of such
equipment. These benefits include externalities related to
environmental protection and energy security that are not reflected in
energy prices, such as reduced emissions of greenhouse gases.
In addition, DOE has determined that today's regulatory action is
an ``economically significant regulatory action'' under section 3(f)(1)
of Executive Order 12866. Accordingly, section 6(a)(3) of the Executive
Order requires that DOE prepare a regulatory impact analysis (RIA) on
today's rule and that the Office of Information and Regulatory Affairs
(OIRA) in the Office of Management and Budget (OMB) review this rule.
DOE presented to OIRA for review the draft rule and other documents
prepared for this rulemaking, including the RIA, and has included these
documents in the rulemaking record. The assessments prepared pursuant
to Executive Order 12866 can be found in the technical support document
(Chapter 17) for this rulemaking. 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.
DOE has also reviewed this regulation pursuant to Executive Order
13563, issued on January 18, 2011 (76 FR 3281, Jan. 21, 2011). EO 13563
is supplemental to and reaffirms the principles, structures, and
definitions governing regulatory review established in Executive Order
12866. To the extent permitted by law, agencies are required by these
Executive Orders to, among other things: (1) Propose or adopt a
regulation only upon a reasoned determination that its benefits justify
its costs (recognizing that some benefits and costs are difficult to
quantify); (2) tailor regulations to impose the least burden on
society, consistent with obtaining regulatory objectives, taking into
account, among other things, and to the extent practicable, the costs
of cumulative regulations; (3) select, in choosing among alternative
regulatory approaches, those approaches that maximize net benefits
(including potential economic, environmental, public health and safety,
and other advantages; distributive impacts; and equity); (4) to the
extent feasible, specify performance objectives, rather than specifying
the behavior or manner of compliance that regulated entities must
adopt; and (5) identify and assess available alternatives to direct
regulation, including providing economic incentives to encourage the
desired behavior, such as user fees or marketable permits, or providing
information upon which choices can be made by the public. For the
reasons stated in the preamble, DOE believes that today's proposed rule
is consistent with these principles.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (IRFA) for
any rule that by law must be proposed for public comment, unless the
agency certifies that the rule, if promulgated, will not have a
significant economic impact on a substantial number of small entities.
As required by 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 the potential
standard levels considered in today's NOPR under the provisions of the
Regulatory Flexibility Act and the procedures and policies published on
February 19, 2003.
As a result of this review, DOE has prepared an IRFA for
fluorescent lamp ballasts, a copy of which DOE will transmit to the
Chief Counsel for Advocacy of the SBA for review under 5 U.S.C. 605(b).
As presented and discussed below, the IFRA describes potential impacts
on small ballast manufacturers associated with the required capital and
product conversion costs at each TSL and discusses alternatives that
could minimize these impacts.
A statement of the reasons for the proposed rule, and the
objectives of, and legal basis for, the proposed rule, are set forth
elsewhere in the preamble and not repeated here.
1. Description and Estimated Number of Small Entities Regulated
a. Methodology for Estimating the Number of Small Entities
For manufacturers of fluorescent lamp ballasts, the Small Business
[[Page 20171]]
Administration (SBA) has set a size threshold, which defines those
entities classified as ``small businesses'' for the purposes of the
statute. DOE used the SBA's small business size standards to determine
whether any small entities would be subject to the requirements of the
rule. 65 FR 30836, 30850 (May 15, 2000), as amended at 65 FR 53533,
53545 (Sept. 5, 2000) and codified at 13 CFR part 121.The size
standards are listed by North American Industry Classification System
(NAICS) code and industry description and are available at http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf. Fluorescent lamp ballast manufacturing is classified
under NAICS 335311, ``Power, Distribution and Specialty Transformer
Manufacturing.'' The SBA sets a threshold of 750 employees or less for
an entity to be considered as a small business for this category.
To estimate the number of companies that could be small business
manufacturers of products covered by this rulemaking, DOE conducted a
market survey using all available public information to identify
potential small manufacturers. DOE's research involved industry trade
association membership directories (including NEMA), product databases
(e.g., CEC and CEE databases), individual company Web sites, and market
research tools (e.g., Dun and Bradstreet reports) to create a list of
every company that manufactures or sells fluorescent lamp ballasts
covered by this rulemaking. DOE also asked stakeholders and industry
representatives if they were aware of any other small manufacturers
during manufacturer interviews and at previous DOE public meetings. DOE
contacted select companies on its list, as necessary, to determine
whether they met the SBA's definition of a small business manufacturer
of covered fluorescent lamp ballasts. DOE screened out companies that
did not offer products covered by this rulemaking, did not meet the
definition of a ``small business,'' or are foreign owned and operated.
DOE initially identified at least 54 potential manufacturers of
fluorescent lamp ballasts sold in the U.S. DOE reviewed publically
available information on these 54 potential manufacturers and
determined 30 were large manufacturers, manufacturers that are foreign
owned and operated or did not manufacture ballasts covered by this
rulemaking. DOE then attempted to contact the remaining 24 companies
that were potential small business manufacturers. Though many companies
were unresponsive, DOE was able to determine that approximately 10 meet
the SBA's definition of a small business and likely manufacture
ballasts covered by this rulemaking.
b. Manufacturer Participation
Before issuing this NOPR, DOE attempted to contact the small
business manufacturers of fluorescent lamp ballasts it had identified.
Two of the small businesses consented to being interviewed during the
MIA interviews, and DOE received feedback from one additional small
business through a survey response. DOE also obtained information about
small business impacts while interviewing large manufacturers.
c. Fluorescent Lamp Ballast Industry Structure
Four major manufacturers with non-domestic production supply the
vast majority of the marketplace. None of the four major manufacturers
is considered a small business. The remaining market share is held by
foreign manufacturers and several smaller domestic companies with
relatively negligible market share. Even for these U.S.-operated firms,
most production is outsourced to overseas vendors or captive overseas
manufacturing facilities. Some very limited production takes place in
the United States--mostly magnetic ballasts for specialty applications.
DOE is unaware of any fluorescent lamp ballast companies, small or
large, that produce only domestically. See chapter 3 of the TSD for
further details on the fluorescent lamp ballast market.
d. Comparison Between Large and Small Entities
The four large manufacturers typically offer a much wider range of
designs of covered ballasts than small manufacturers. Ballasts can be
designed, or optimized, to operate different lamp lengths and numbers
of lamps under various start methods, often in combination with various
additional features. Large manufacturers typically offer many SKUs per
product line to meet this wide range of potential specifications.
Generally, one product family shares some fundamental characteristic
(i.e., lamp diameter, number of lamps, etc.) and hosts a large number
of SKUs that are manufactured with minor variations on the same product
line. Some product lines, such as the 4-foot MBP IS ballast, are
manufactured in high volumes, while other products may be produced in
much lower volumes but can help manufacturers meet their customers'
specific needs and provide higher margin opportunities. For their part,
small manufacturers generally do not have the volume to support as wide
a range of products.
Beyond variations in ballast types and features, the large
manufacturers also offer multiple tiers of efficiency, typically
including a baseline efficiency product and a high-efficiency product
within the same family. On the other hand, some small manufacturers
frequently only offer one efficiency level in a given product class to
reduce the number of SKUs and parts they must maintain. This strategy
is important to small-scale manufacturers because many product
development costs (e.g., testing, certification, and marketing) are
relatively fixed per product line.
Small manufacturers are able to compete in the fluorescent lamp
ballast industry despite the dominance of the four major manufacturers
due, in large part, to the fragmented nature of the fixture industry.
The largest four fixture manufacturers compose about 60 percent of the
industry, while as many as 200 smaller fixture manufacturers hold the
remaining share. Many small ballast manufacturers have developed
relationships with these small fixture manufacturers, whose production
volumes may not be attractive to the larger players. The same structure
applies to the electrical distributor market--while small ballast
manufacturers often cannot compete for the business of the largest
distributors, they are able to successfully target small distributors,
often on a regional basis.
Lastly, like the major manufacturers, small manufacturers usually
offer products in addition to those fluorescent lamp ballasts covered
by this rulemaking, such as additional dimming ballasts, LED drivers,
and compact fluorescent ballasts.
2. Description and Estimate of Compliance Requirements
At TSL 3, the level proposed in today's notice, DOE estimates
capital conversion costs of $0.3 million and product conversion costs
of $1.3 million for a typical small manufacturer, compared to capital
and product conversion costs of $7.6 million and $12.7 million,
respectively, for a typical large manufacturer. These costs and their
impacts are described in detail below.
a. Capital Conversion Costs
Those small manufacturers DOE interviewed did not expect increased
capital conversion costs to be a major concern because most of them
source all or the majority of their products from Asia. Those that
source their products would likely not make the direct capital
[[Page 20172]]
investments themselves. Small manufacturers experience the impact of
sourcing their products through a higher cost of goods sold, and thus a
lower operating margin, as compared to large manufacturers. The capital
costs estimated are largely associated with those small manufacturers
producing magnetic ballasts. DOE estimates capital costs of
approximately $340,000 for a typical small manufacturer at TSL 3, based
on the cost of converting magnetic production lines, such as sign
ballasts, to electronic production lines.
Another challenge facing the industry is the component shortage
discussed in the section 0. As with large manufacturers, the component
shortage is a significant issue for small manufacturers, but some small
manufacturers stated that the shortage does not differentially impact
them. At times, they actually can obtain components more easily than
large manufacturers: because their volumes are lower, they generally
pay higher prices for parts than their larger competitors, which
incentivizes suppliers to fill small manufacturers' orders relatively
quickly. The lower-volume orders also allow small manufacturers to
piggyback off the orders for certain components that are used
throughout the consumer electronics industry.
b. Product Conversion Costs
While capital conversion costs were not a large concern to the
small manufacturers DOE interviewed, product conversion costs could
adversely impact small manufacturers at TSL 3, the level proposed in
today's notice. To estimate the differential impacts of the proposed
standard on small manufacturers, DOE compared their cost of compliance
with that of the major manufacturers. First, DOE examined the number of
basic models and SKUs available from each manufacturer to determine an
estimate for overall compliance costs. The number of basic models and
SKUs attributed to each manufacturer is based on information obtained
during manufacturer interviews and an examination of the different
models advertised by each on company Web sites. DOE assumed that the
product conversion costs required to redesign basic models and test and
certify all SKUs to meet the standard levels presented in today's
notice would be lower per model and per SKU for small manufacturers, as
detailed below. (A full description of DOE's methodology for developing
product conversion costs is found in section 0 above and in chapter 13
of the NOPR TSD.) The table below compares the estimated product
conversion costs of a typical small manufacturer as a percentage of
annual R&D expense to those of a typical large manufacturer.
Table XXIV.1--Comparison of a Typical Small and Large Manufacturer's Product Conversion Costs to Annual R&D Expense
--------------------------------------------------------------------------------------------------------------------------------------------------------
Large manufacturer Small manufacturer
---------------------------------------------------------------------------------------
Product conversion Product conversion Product conversion Product conversion
XXV. costs for a typical costs as a costs for a typical costs as a
large manufacturer percentage of annual small manufacturer percentage of annual
(2009$ millions) R&D expense (%) (2009$ millions) R&D expense (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................................ $0.00 0 $0.00 0
TSL 1........................................................... 1.48 17 0.15 39
TSL 2........................................................... 10.19 116 1.05 269
TSL 3........................................................... 12.73 145 1.31 336
--------------------------------------------------------------------------------------------------------------------------------------------------------
Based on discussions with manufacturers, DOE estimated that the
cost to fully redesign every ballast model for large manufacturers is
approximately $120,000 per model and the cost to test and certify every
SKU is approximately $20,000 per SKU. A typical major manufacturer
offers approximately 80 basic covered models and 300 SKUs. Based on
DOE's GRIM analysis, a typical major manufacturer has an annual R&D
expense of $8.6 million. Because not all products would need to be
redesigned at TSL 3, DOE estimates $12.7 million in product conversion
costs for a typical major manufacturer at TSL 3 (compared to $15.5
million if all products had to be fully redesigned), which represents
145 percent of its annual R&D expense. This means that a typical major
manufacturer could redesign its products in under a year and a half if
it were to devote its entire R&D budget for fluorescent lamp ballasts
to product redesign and could retain the engineering resources.
On the other hand, DOE's research indicated that a typical small
manufacturer offers approximately 50 basic covered models and 100 SKUs.
However, based on manufacturer interviews, DOE does not believe that
small manufacturers would incur the same level of costs per model and
SKU as large manufacturers. Small manufacturers would not be as likely
to redesign models in-house as large manufacturers. Instead, they would
source and rebrand products from the Asian manufacturers who supply
their ballasts. As a result, DOE assumed a lower R&D investment, in
absolute dollars, per model. Because this design is effectively
sourced, DOE believes smaller manufacturers would face a higher level
of cost of goods sold (i.e. a higher MPC). Therefore, in a competitive
environment, small manufacturers would earn a lower markup than their
larger peers and consequently operate at lower margins. Small
manufacturers would also have to test and certify every SKU they offer,
but they would not conduct the same extent of pilot runs and internal
testing as large manufacturers because less production takes place in
internal factories. As such, DOE estimates that their testing and
certification costs are expected to be $10,000 per SKU for UL and other
certifications. Thus, the product conversion costs for a typical small
manufacturer could total $1.6 million, but because not all products
would need to be fully redesigned at TSL 3, DOE estimates product
conversion costs of $1.3 million at TSL 3. Based on scaling GRIM
results to an average small-manufacturer market share of 1.0 percent,
DOE assumed that a small manufacturer has an annual R&D expense of $0.4
million, so the estimated product conversion costs at TSL 3 would
represent 336 percent of its annual R&D expense. This means that a
typical small manufacturer could redesign its products in a little over
the three year compliance period if it were to devote its entire R&D
budget for fluorescent lamp ballasts to product redesign and could
retain the engineering resources.
[[Page 20173]]
a. Summary of Compliance Impacts
Although the conversion costs required can be considered
substantial for all companies, the impacts could be relatively greater
for a typical small manufacturer because of much lower production
volumes and the relatively fixed nature of the R&D resources required
per model. The table below compares the total conversion costs of a
typical small manufacturer as a percentage of annual revenue and
earnings before taxes and interest (EBIT) to those of a typical large
manufacturer.
Table XXIV.2--Comparison of a Typical Small and Large Manufacturer's Total Conversion Costs to Annual Revenue and EBIT
--------------------------------------------------------------------------------------------------------------------------------------------------------
Large manufacturer Small manufacturer
-----------------------------------------------------------------------------------------------------------
Total conversion Total conversion Total conversion Total conversion
XXVI. costs for a costs as a Total conversion costs for a costs as a Total conversion
typical large percentage of costs as a typical small percentage of costs as a
mfr. (2009$ annual revenue percentage of mfr. (2009$ annual revenue percentage of
millions) (%) annual EBIT (%) millions) (%) annual EBIT (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.................................... $0.00 0 0 $0.00 0 0
TSL 1....................................... 4.06 2 21 0.27 3 38
TSL 2....................................... 15.85 7 81 1.30 12 184
TSL 3....................................... 20.33 9 104 1.65 16 233
--------------------------------------------------------------------------------------------------------------------------------------------------------
As seen in the table above, the impacts for a typical small
manufacturer are relatively greater than for a large manufacturer at
TSL 3. Total conversion costs represent 233 percent of annual EBIT for
a typical small manufacturer compared to 104 percent of annual EBIT for
a typical large manufacturer. DOE believes these estimates reflect a
worst-case scenario because they assume small manufacturers would
redesign all proprietary models immediately, and not take advantage of
the industry's supply chain dynamics or take other steps to mitigate
the impacts. However, DOE anticipates that small manufacturers would
take several steps to mitigate the costs required to meet new and
amended energy conservation standards.
At TSL 3, it is more likely that ballast manufacturers may
temporarily reduce the number of SKUs they offer as in-house designs to
keep their product conversion costs at manageable levels in the year
preceding the compliance date. As noted above, the typical small
manufacturer business model is not predicated on the supply of a wide
range of models and specifications. They frequently either focus on a
few niche markets or on customers seeking only basic, low-cost
solutions. They therefore can satisfy the needs of their customers with
a smaller product portfolio than large manufacturers who often compete
on brand reputation and the ability to offer a full product offering.
As such, DOE believes that under the proposed standards small
businesses would likely selectively upgrade existing product lines to
offer products that are in high demand or offer strategic advantage.
Small manufacturers could then spread out further investments over a
longer time period by upgrading some product lines prior to the
compliance date while sourcing others until resources allow--and the
market supports--in-house design. Furthermore, while the initial
redesign costs are relatively large, the estimates assume small
manufacturers would bring compliant designs to market in concert with
large manufacturers. In reality, there is a possibility some small
manufacturers would conserve resources by selectively upgrading certain
products until new baseline designs become commonplace to the point
where their in-house development is less resource-intensive. The
commonality of many consumer electronics components, designs, and
products fosters considerable sharing of experience throughout the
electronics supply chain, particularly when unrestricted by proprietary
technologies. DOE did not find any intellectual property restrictions
that would prevent small manufacturers from achieving the technologies
necessary to meet today's proposed levels.
DOE seeks comment on the potential impacts of amended standards on
the small fluorescent lamp ballast manufacturers. (See Issue 0 under
``Issues on Which DOE Seeks Comment'' in section 0 of this NOPR.)
1. Duplication, Overlap, and Conflict With Other Rules and Regulations
DOE is not aware of any rules or regulations that duplicate,
overlap, or conflict with the rule being considered today.
2. Significant Alternatives to the Proposed Rule
The Manufacturer Impact Analysis discussion in Section VI.B.2
analyzes impacts on small businesses that would result from the other
TSLs DOE considered. Though TSLs lower than the proposed TSLs are
expected to reduce the impacts on small entities, DOE is required by
EPCA to establish standards that achieve the maximum improvement in
energy efficiency that are technically feasible and economically
justified, and result in a significant conservation of energy. As
discussed in Section VI.C, DOE has weighed the costs and benefits of
the TSLs considered in today's proposed rule and rejected the lower
TSLs based on the criteria set forth in EPCA and set forth in Section
II.A.
In addition to the other TSLs being considered, the NOPR TSD
includes a regulatory impact analysis in chapter 17. For fluorescent
lamp ballasts, this report discusses the following policy alternatives:
(1) No standard, (2) consumer rebates, (3) consumer tax credits, (4)
manufacturer tax credits, and (5) early replacement. DOE does not
intend to consider these alternatives further because they are either
not feasible to implement, or not expected to result in energy savings
as large as those that would be achieved by the standard levels under
consideration.
DOE continues to seek input from businesses that would be affected
by this rulemaking and will consider comments received in the
development of any final rule.
B. Review Under the Paperwork Reduction Act
Manufacturers of fluorescent lamp ballasts must certify to DOE that
their product complies with any applicable energy conservation
standard. In certifying compliance, manufacturers must test their
product according to the DOE test procedure for fluorescent lamp
ballasts, including any amendments adopted for that test procedure. DOE
has
[[Page 20174]]
proposed regulations for the certification and recordkeeping
requirements for all covered consumer products and commercial
equipment, including ballasts. 75 FR 56796 (Sept. 16, 2010). The
collection-of-information requirement for the certification and
recordkeeping is subject to review and approval by OMB under the
Paperwork Reduction Act (PRA). This requirement has been submitted to
OMB for approval. Public reporting burden for the certification is
estimated to average 20 hours per response, including the time for
reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
Public comment is sought regarding: whether this proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information shall
have practical utility; the accuracy of the burden estimate; ways to
enhance the quality, utility, and clarity of the information to be
collected; and ways to minimize the burden of the collection of
information, including through the use of automated collection
techniques or other forms of information technology. Send comments on
these or any other aspects of the collection of information to Dr. Tina
Kaarsberg (see ADDRESSES) and by e-mail to [email protected].
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the PRA, unless that collection of information displays
a currently valid OMB Control Number.
C. Review Under the National Environmental Policy Act of 1969
DOE has prepared a draft environmental assessment (EA) of the
impacts of the proposed rule pursuant to the National Environmental
Policy Act of 1969 (42 U.S.C. 4321 et seq.), the regulations of the
Council on Environmental Quality (40 CFR parts 1500-1508), and DOE's
regulations for compliance with the National Environmental Policy Act
of 1969 (10 CFR part 1021). This assessment includes an examination of
the potential effects of emission reductions likely to result from the
rule in the context of global climate change, as well as other types of
environmental impacts. The draft EA has been incorporated into the NOPR
TSD as chapter 16. Before issuing a final rule for fluorescent lamp
ballasts, DOE will consider public comments and, as appropriate,
determine whether to issue a finding of no significant impact (FONSI)
as part of a final EA or to prepare an environmental impact statement
(EIS) for this rulemaking.
D. Review Under Executive Order 13132
Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 10,
1999) imposes certain requirements on agencies formulating and
implementing policies or regulations that preempt State law or that
have federalism implications. The Executive Order requires agencies to
examine the constitutional and statutory authority supporting any
action that would limit the policymaking discretion of the States and
to carefully assess the necessity for such actions. The Executive Order
also requires agencies to have an accountable process to ensure
meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.
On March 14, 2000, DOE published a statement of policy describing the
intergovernmental consultation process it will follow in the
development of such regulations. 65 FR 13735. EPCA governs and
prescribes Federal preemption of State regulations as to energy
conservation for the products that are the subject of today's proposed
rule. States can petition DOE for exemption from such preemption to the
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) No
further action is required by Executive Order 13132.
E. 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,'' 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. 61 FR
4729 (Feb. 7, 1996). Section 3(b) of Executive Order 12988 specifically
requires that Executive agencies make every reasonable effort to ensure
that the regulation: (1) Clearly specifies the preemptive effect, if
any; (2) clearly specifies any effect on existing Federal law or
regulation; (3) provides a clear legal standard for affected conduct
while promoting simplification and burden reduction; (4) specifies the
retroactive effect, if any; (5) adequately defines key terms; and (6)
addresses other important issues affecting clarity and general
draftsmanship under any guidelines issued by the Attorney General.
Section 3(c) of Executive Order 12988 requires Executive agencies to
review regulations in light of applicable standards in section 3(a) and
section 3(b) to determine whether they are met or it is unreasonable to
meet one or more of them. DOE has completed the required review and
determined that, to the extent permitted by law, this proposed rule
meets the relevant standards of Executive Order 12988.
F. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, section 201 (codified at 2 U.S.C.
1531). For a proposed regulatory action likely to result in a rule that
may cause the expenditure by State, local, and Tribal governments, in
the aggregate, or by the private sector of $100 million or more in any
one year (adjusted annually for inflation), section 202 of UMRA
requires a Federal agency to publish a written statement that estimates
the resulting costs, benefits, and other effects on the national
economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal
agency to develop an effective process to permit timely input by
elected officers of State, local, and Tribal governments on a proposed
``significant intergovernmental mandate,'' and requires an agency plan
for giving notice and opportunity for timely input to potentially
affected small governments before establishing any requirements that
might significantly or uniquely affect small governments. On March 18,
1997, DOE published a statement of policy on its process for
intergovernmental consultation under UMRA. 62 FR 12820; also available
at http://www.gc.doe.gov.
Although today's proposed rule does not contain a Federal
intergovernmental mandate, it may impose expenditures of $100 million
or more on the private sector. Specifically, the proposed rule will
likely result in a final rule that could impose expenditures of $100
million or more. Such expenditures may include (1) investment in
research and development and in capital expenditures by fluorescent
lamp ballast manufacturers in the years between the final rule and the
compliance date for the new standard, and (2) incremental additional
expenditures by consumers to purchase higher-efficiency ballasts,
starting in 2014.
Section 202 of UMRA authorizes an agency to respond to the content
[[Page 20175]]
requirements of UMRA in any other statement or analysis that
accompanies the proposed rule. 2 U.S.C. 1532(c). The content
requirements of section 202(b) of UMRA relevant to a private sector
mandate substantially overlap the economic analysis requirements that
apply under section 325(o) of EPCA and Executive Order 12866. The
SUPPLEMENTARY INFORMATION section of the notice of proposed rulemaking
and the ``Regulatory Impact Analysis'' section of the TSD for this
proposed rule respond to those requirements.
Under section 205 of UMRA, the Department is obligated to identify
and consider a reasonable number of regulatory alternatives before
promulgating a rule for which a written statement under section 202 is
required. 2 U.S.C. 1535(a). DOE is required to select from those
alternatives the most cost-effective and least burdensome alternative
that achieves the objectives of the rule unless DOE publishes an
explanation for doing otherwise or the selection of such an alternative
is inconsistent with law. As required by 42 U.S.C. 6295(h) and (o),
6313(e), and 6316(a), today's proposed rule would establish energy
conservation standards for fluorescent lamp ballasts that are designed
to achieve the maximum improvement in energy efficiency that DOE has
determined to be both technologically feasible and economically
justified. A full discussion of the alternatives considered by DOE is
presented in the ``Regulatory Impact Analysis'' section of the TSD for
today's proposed rule.
G. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This rule would not have any impact on the autonomy or integrity of the
family as an institution. Accordingly, DOE has concluded that it is not
necessary to prepare a Family Policymaking Assessment.
H. Review Under Executive Order 12630
DOE has determined, under Executive Order 12630, ``Governmental
Actions and Interference with Constitutionally Protected Property
Rights'' 53 FR 8859 (March 18, 1988), that this regulation would not
result in any takings that might require compensation under the Fifth
Amendment to the U.S. Constitution.
I. 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 (Feb. 22, 2002), and
DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has
reviewed today's NOPR under the OMB and DOE guidelines and has
concluded that it is consistent with applicable policies in those
guidelines.
J. 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 OIRA
at OMB, a Statement of Energy Effects for any proposed significant
energy action. A ``significant energy action'' is defined as any action
by an agency that promulgates or is expected to lead to promulgation of
a final rule, and that (1) Is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the action and their expected
benefits on energy supply, distribution, and use.
DOE has tentatively concluded that today's regulatory action, which
sets forth energy conservation standards for fluorescent lamp ballasts,
is not a significant energy action because the proposed standards are
not likely to have a significant adverse effect on the supply,
distribution, or use of energy, nor has it been designated as such by
the Administrator at OIRA. Accordingly, DOE has not prepared a
Statement of Energy Effects on the proposed rule.
K. Review Under the Information Quality Bulletin for Peer Review
On December 16, 2004, OMB, in consultation with the Office of
Science and Technology (OSTP), issued its Final Information Quality
Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 2005).
The Bulletin establishes that certain scientific information shall be
peer reviewed by qualified specialists before it is disseminated by the
Federal Government, including influential scientific information
related to agency regulatory actions. The purpose of the bulletin is to
enhance the quality and credibility of the Government's scientific
information. Under the Bulletin, the energy conservation standards
rulemaking analyses are ``influential scientific information,'' which
the Bulletin defines as ``scientific information the agency reasonably
can determine will have or does have a clear and substantial impact on
important public policies or private sector decisions.'' 70 FR 2667.
In response to OMB's Bulletin, DOE conducted formal in-progress
peer reviews of the energy conservation standards development process
and analyses and has prepared a Peer Review Report pertaining to the
energy conservation standards rulemaking analyses. Generation of this
report involved a rigorous, formal, and documented evaluation using
objective criteria and qualified and independent reviewers to make a
judgment as to the technical/scientific/business merit, the actual or
anticipated results, and the productivity and management effectiveness
of programs and/or projects. The ``Energy Conservation Standards
Rulemaking Peer Review Report'' dated February 2007 has been
disseminated and is available at the following Web site: http://www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.
XXVII. Public Participation
A. Attendance at Public Meeting
The time, date and location of the public meeting are listed in the
DATES and ADDRESSES sections at the beginning of this document. If you
plan to attend the public meeting, please notify Ms. Brenda Edwards at
(202) 586-2945 or [email protected]. As explained in the
ADDRESSES section, foreign nationals visiting DOE Headquarters are
subject to advance security screening procedures.
In addition, you can attend the public meeting via webinar. Webinar
registration information, participant instructions, and information
about the capabilities available to webinar participants will be
published on DOE's Web site (http://www1.eere.energy.gov/buildings/appliance_standards/residential/fluorescent_lamp_ballasts.html).
Participants are responsible for ensuring
[[Page 20176]]
their systems are compatible with the webinar software.
B. Procedure for Submitting Prepared General Statements for
Distribution
Any person who has plans to present a prepared general statement
may request that copies of his or her statement be made available at
the public meeting. Such persons may submit requests, along with an
advance electronic copy of their statement in PDF (preferred),
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to
the appropriate address shown in the ADDRESSES section at the beginning
of this NOPR. The request and advance copy of statements must be
received at least one week before the public meeting and may be e-
mailed, hand-delivered, or sent by mail. DOE prefers to receive
requests and advance copies via e-mail. Please include a telephone
number to enable DOE staff to make a follow-up contact, if needed.
C. Conduct of Public Meeting
DOE will designate a DOE official to preside at the public meeting
and may also use a professional facilitator to aid discussion. The
meeting will not be a judicial or evidentiary-type public hearing, but
DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C.
6306). A court reporter will be present to record the proceedings and
prepare a transcript. DOE reserves the right to schedule the order of
presentations and to establish the procedures governing the conduct of
the public meeting. After the public meeting, interested parties may
submit further comments on the proceedings as well as on any aspect of
the rulemaking until the end of the comment period.
The public meeting will be conducted in an informal, conference
style. DOE will present summaries of comments received before the
public meeting, allow time for prepared general statements by
participants, and encourage all interested parties to share their views
on issues affecting this rulemaking. Each participant will be allowed
to make a general statement (within time limits determined by DOE),
before the discussion of specific topics. DOE will permit, as time
permits, other participants to comment briefly on any general
statements.
At the end of all prepared statements on a topic, DOE will permit
participants to clarify their statements briefly and comment on
statements made by others. Participants should be prepared to answer
questions by DOE and by other participants concerning these issues. DOE
representatives may also ask questions of participants concerning other
matters relevant to this rulemaking. The official conducting the public
meeting will accept additional comments or questions from those
attending, as time permits. The presiding official will announce any
further procedural rules or modification of the above procedures that
may be needed for the proper conduct of the public meeting.
A transcript of the public meeting will be included in the docket,
which can be viewed as described in the Docket section at the beginning
of this notice. In addition, any person may buy a copy of the
transcript from the transcribing reporter.
D. Submission of Comments
DOE will accept comments, data, and information regarding this
proposed rule before or after the public meeting, but no later than the
date provided in the DATES section at the beginning of this proposed
rule. Interested parties may submit comments using any of the methods
described in the ADDRESSES section at the beginning of this notice.
Submitting comments via regulations.gov. The regulations.gov Web
page will require you to provide your name and contact information.
Your contact information will be viewable to DOE Building Technologies
staff only. Your contact information will not be publicly viewable
except for your first and last names, organization name (if any), and
submitter representative name (if any). If your comment is not
processed properly because of technical difficulties, DOE will use this
information to contact you. If DOE cannot read your comment due to
technical difficulties and cannot contact you for clarification, DOE
may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment or in any documents attached to your comment.
Any information that you do not want to be publicly viewable should not
be included in your comment, nor in any document attached to your
comment. Persons viewing comments will see only first and last names,
organization names, correspondence containing comments, and any
documents submitted with the comments.
Do not submit to regulations.gov information for which disclosure
is restricted by statute, such as trade secrets and commercial or
financial information (hereinafter referred to as Confidential Business
Information (CBI)). Comments submitted through regulations.gov cannot
be claimed as CBI. Comments received through the Web site will waive
any CBI claims for the information submitted. For information on
submitting CBI, see the Confidential Business Information section.
DOE processes submissions made through regulations.gov before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
simultaneously, your comment may not be viewable for up to several
weeks. Please keep the comment tracking number that regulations.gov
provides after you have successfully uploaded your comment.
Submitting comments via e-mail, hand delivery, or mail. Comments
and documents submitted via e-mail, hand delivery, or mail also will be
posted to regulations.gov. If you do not want your personal contact
information to be publicly viewable, do not include it in your comment
or any accompanying documents. Instead, provide your contact
information on a cover letter. Include your first and last names, e-
mail address, telephone number, and optional mailing address. The cover
letter will not be publicly viewable as long as it does not include any
comments.
Include contact information each time you submit comments, data,
documents, and other information to DOE. E-mail submissions are
preferred. If you submit via mail or hand delivery, please provide all
items on a CD, if feasible. It is not necessary to submit printed
copies. No facsimiles (faxes) will be accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are not secured, written in English and are free of any defects or
viruses. Documents should not contain special characters or any form of
encryption and, if possible, they should carry the electronic signature
of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
Confidential Business Information. According to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
e-mail, postal mail, or hand delivery two well-marked copies: one copy
of the document marked confidential including all the
[[Page 20177]]
information believed to be confidential, and one copy of the document
marked non-confidential with the information believed to be
confidential deleted. Submit these documents via e-mail or on a CD, if
feasible. DOE will make its own determination about the confidential
status of the information and treat it according to its determination.
Factors of interest to DOE when evaluating requests to treat
submitted information as confidential include: (1) A description of the
items; (2) whether and why such items are customarily treated as
confidential within the industry; (3) whether the information is
generally known by or available from other sources; (4) whether the
information has previously been made available to others without
obligation concerning its confidentiality; (5) an explanation of the
competitive injury to the submitting person which would result from
public disclosure; (6) when such information might lose its
confidential character due to the passage of time; and (7) why
disclosure of the information would be contrary to the public interest.
It is DOE's policy that all comments may be included in the public
docket, without change and as received, including any personal
information provided in the comments (except information deemed to be
exempt from public disclosure).
E. Issues on Which DOE Seeks Comment
The Department is particularly interested in receiving comments and
views of interested parties concerning:
(1) The appropriateness of creating an exemption for T8 magnetic
ballasts as a solution to the problems caused by excessive EMI from
electronic ballasts in EMI sensitive environments;
(2) The appropriateness of establishing efficiency standards using
an equation dependent on lamp-arc power;
(3) The appropriateness of combining several product classes from
the preliminary TSD. In particular, DOE requests feedback on the
decision to include several IS and RS ballasts (IS and RS ballasts that
operate 4-foot MBP and 8-foot slimline lamps) and PS ballasts in the
same product class (PS ballasts that operate 4-foot MBP and 4-foot T5
lamps);
(4) The appropriateness of including residential ballasts in the
same product class as those that operate in the commercial sector;
(5) The appropriateness of establishing a separate product class
for ballasts that operate 8-foot HO lamps;
(6) The methodology DOE used to calculate manufacturer selling
prices;
(7) The efficiency levels DOE considered for fluorescent ballasts,
in particular the efficiency level identified for sign ballasts.
(8) The selection of the maximum technologically feasible level and
whether it is technologically feasible to attain such higher
efficiencies for the full range of instant start ballast applications.
Specifically, DOE seeks quantitative information regarding the
potential change in efficiency, the design options employed, and the
associated change in cost. Any design option that DOE considers to
improve efficiency must meet the four criteria outlined in the
screening analysis: technological feasibility; practicability to
manufacture, install, and service; adverse impacts on product or
equipment utility to consumers or availability; and adverse impacts on
health or safety. DOE also requests comments on any technological
barriers to an improvement in efficiency above TSL 3 for all or certain
types of ballasts.
(9) Typical markups, as well as ballast pricing data, that it could
use to verify the price markups it developed for the proposed rule;
(10) The appropriateness of including T12 ballasts in the baseline
analysis for life cycle costs.
(11) The magnitude and timing of its forecasted ballast shipment
trends (e.g., rising and declining shipments, plateaus, etc.) as well
as the impacts of current regulatory initiatives on future ballast
shipments;
(12) The methodology and inputs DOE used for the manufacturer
impact analysis--specifically, DOE's assumptions regarding markups,
capital costs, and conversion costs;
(13) The potential impacts of amended standards on the small
fluorescent lamp ballast manufacturers.
(14) The appropriateness of the TSLs DOE considered for fluorescent
ballasts, in particular the combinations of efficiency levels for each
product class;
(15) The proposed standard level for fluorescent ballasts;
(16) Potential approaches to maximize energy savings while
mitigating impacts to certain fluorescent ballast consumer subgroups;
XXVIII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of today's
proposed rule.
List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Imports,
Intergovernmental relations, Small businesses.
Issued in Washington, DC, on March 24, 2011.
Henry Kelly,
Acting Assistant Secretary, Energy Efficiency and Renewable Energy.
For the reasons set forth in the preamble, DOE proposes to amend
chapter II, subchapter D, of title 10 of the Code of Federal
Regulations, as set forth below:
PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS
1. The authority citation for part 430 continues to read as
follows:
Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
2. Section 430.2 is amended by adding the definition of ``Ballast
luminous efficiency'' in alphabetical order to read as follows:
Sec. 430.2 Definitions.
* * * * *
Ballast luminous efficiency means the total fluorescent lamp arc
power divided by the fluorescent lamp ballast input power multiplied by
the appropriate frequency adjustment factor.
* * * * *
3. Section 430.32 is amended by:
a. Revising paragraph (m)(1) introductory text.
b. Adding paragraphs (m)(8), (m)(9), and m(10).
These revisions and additions read as follows:
Sec. 430.32 Energy and water conservation standards and their
effective dates.
* * * * *
(m)(1) Fluorescent lamp ballasts (other than specialty application
mercury vapor lamp ballasts). Except as provided in paragraphs (m)(2),
(m)(3), (m)(4), (m)(5), (m)(6), (m)(7), (m)(8), (m)(9), and (m)(10) of
this section, each fluorescent lamp ballast--
* * * * *
(8) Except as provided in paragraph (m)(9) of this section, each
fluorescent lamp ballast--
(i) Manufactured on or after [date 3 years after publication of the
Fluorescent Lamp--Ballast Energy Conservation Standard final rule];
(ii) Designed--
(A) To operate at nominal input voltages of 120 or 277 volts;
(B) To operate with an input current frequency of 60 Hertz; and
(C) For use in connection with fluorescent lamps (as defined in
Sec. 430.2)
[[Page 20178]]
(iii) Shall have--
(A) A power factor of 0.9 or greater except for those ballasts
defined in paragraph (m)(8)(iii)(B) of this section;
(B) A power factor of 0.5 or greater for residential ballasts,
which meet FCC consumer limits as set forth in 47 CFR part 18 and are
designed and labeled for use only in residential applications;
(C) A ballast luminous efficiency of not less than the following:
----------------------------------------------------------------------------------------------------------------
Description Shall have a minimum ballast luminous efficiency of--
----------------------------------------------------------------------------------------------------------------
Instant start and rapid start ballasts that
are designed to operate:
4-foot linear or 2-foot U-shaped medium 1.32 * ln (total lamp arc power) + 86.11.
bipin lamps.
8-foot slimline lamps..................
Programmed start ballasts that are designed
to operate:
4-foot linear or 2-foot U-shaped medium 1.79 * ln (total lamp arc power) + 83.33.
bipin lamps.
4-foot miniature bipin standard output
lamps.
4-foot miniature bipin high output
lamps.
Instant start and rapid start ballasts that
are designed to operate:
8-foot HO lamps........................ 1.49 * ln (total lamp arc power) + 84.32.
Programmed start ballasts that are designed
to operate:
8-foot HO lamps........................ 1.46 * ln (total lamp arc power) + 82.63.
Ballasts that are designed to operate:
8-foot high output lamps at ambient 1.49 * ln (total lamp arc power) + 81.34.
temperatures of -20 [deg]F or less
that are used in outdoor signs.
----------------------------------------------------------------------------------------------------------------
(9) The standards described in paragraph (m)(8) of this section do
not apply to:
(i) A ballast that is designed for dimming to 50 percent or less of
the maximum output of the ballast except for those specified in m(10);
and
(ii) A low frequency ballast that:
(A) Is designed to operate T8 diameter lamps;
(B) Is designed and labeled for use in EMI-sensitive environments
only;
(C) Is shipped by the manufacturer in packages containing not more
than 10 ballasts.
(10) Each fluorescent lamp ballast--
(i) Manufactured on or after [Date 3 Years after publication of the
Fluorescent Lamp Ballast Energy Conservation Standard final rule];
(ii) Designed--
(A) To operate at nominal input voltages of 120 or 277 volts;
(B) To operate with an input current frequency of 60 Hertz; and
(C) For use in connection with fluorescent lamps (as defined in
Sec. 430.2);
(D) For dimming to 50 percent or less of the maximum output of the
ballast
(iii) Shall have--
(A) A power factor of 0.9 or greater except for those ballasts
defined in paragraph (m)(8)(iii)(B) of this section;
(B) A power factor of 0.5 or greater for residential ballasts,
which meet FCC Part B consumer limits and are designed and labeled for
use only in residential applications;
(C) A ballast luminous efficiency of not less than the following:
----------------------------------------------------------------------------------------------------------------
Ballast luminous
efficiency
Ballast Total -------------------------
Designed for the operation of input nominal Low High
voltage lamp watts frequency frequency
ballasts ballasts
----------------------------------------------------------------------------------------------------------------
One F34T12 lamp............................................. 120/277 34 75.2 77.8
Two F34T12 lamps............................................ 120/277 68 77.8 80.5
Two F96T12/ES lamps......................................... 120/277 120 83.9 88.4
Two F96T12HO/ES lamps....................................... 120/277 190 68.0 71.3
----------------------------------------------------------------------------------------------------------------
* * * * *
[FR Doc. 2011-7592 Filed 4-8-11; 8:45 am]
BILLING CODE 6450-01-P